A week ago I shared a graph that related the growth in the capital producing industries of financial institutions, insurance and real estate to overall domestic production. This data was obtained from Table 6.1 of NIPA, found on the web site for the Bureau of Economic Analysis. This data is not perfect, but far more valid and reliable than most data produced or cherry-picked by special interest groups such as The Heritage Foundation or the U. S. Chamber of Commerce. The stigma of government is attached to this data, but there is a significant difference between the part of the government that consists of party officials, elected or otherwise, seeking to reinforce their influence and department employees hired to do a job related to their training. There is still some politics involved, but at least there are some filters of validity and reliability. I have used the NIPA tables and Statistical Abstracts often as the sources of information for this site and will continue to do so.
From the same table here is a graph that relates the growth rate for service income to overall domestic income.
Keep in mind that income tracks closely with productivity. The previous graph from a week ago showed how fast producing capital grew in relation to overall domestic productivity. We produce 94 times the capital we did in 1948, compared to increasing production overall by 50 times. That ain’t nothun’. We produce 166 times the services.
Notice the sudden jump in service production in 1998. This is due to a change in the method of data collection and reporting. Since 1998 the table distinguishes these types of services: professional, social, entertainment and other. Adding these four categories together produces a greater number than the single service category used prior. Like I said, the data is not perfect but still pretty reliable. If you could remove the jump that occurs after 1998, shifting the curve down but maintaining the same slope that appears you probably have a pretty good idea of how the growth rate for services really increased.
This is not likely the first place where you have heard that we have become a service-oriented economy. What perhaps may be new to you is seeing that the acceleration of this trend occurred in the seventies, the same time that producing capital accelerated, the same time that the misinformation network of Puppet Libertarians and the Powell Cabal started to form and influence the direction of our economy.
Tags: Unbalanced Trends
