Corporate Profits After Tax

These are the after-tax profits of American corporations, adjusted for inventory and capital consumption. They roughly tripled between 2000 and 2007, fell off a cliff in late 2008 as the financial crisis hit, and were back above their pre-recession level within about two years.

Profits matter here because they are one of the two ways a firm can finance investment: spend its own earnings, or raise money from outside. A firm with profits this size can fund a great deal internally, which is why the chapter opens with them before turning to borrowing and issuing shares. The slider reads the series at any point; the values are sampled from the book's own figure.