In a new note from analysts at Goldman Sachs, the bank analyzes elevated corporate profit margins, which have been abnormally high for some time. The bank, laying out the arguments for and against a leveling off of the margins, suggests two scenarios: 1) profit margins will fall within a few years, or 2) well, let's talk more about what's going on with this "capitalism" idea.
The note, as first spotted by Bloomberg, says that if margins continue to stay high, "there are broader questions to be asked about the efficacy of capitalism." If, for some reason, profit margins have suddenly fallen out of the usual high-low business cycle — that would certainly be something to look into.
WOW. This is something you don't often see. Goldman Sachs says it may have to question capitalism itself pic.twitter.com/TxS8BxCPWK— Joseph Weisenthal (@TheStalwart) February 3, 2016
Goldman, an investment bank still best known among many for its role in the 2008 financial crisis, has, it's fair to say, placed a fairly hefty bet on capitalism.