Bull and Bear Served at Fund Manager Dinner

Siegel, on Monday night, argued something completely different: that everyone has the numbers wrong. When you count U.S. company profits accurately, he said, they still take up a much smaller share of the economy than they did, say, 60 years ago. All that has happened in the past two decades, he argued, is that they have recovered ground lost during the '60s and '70s.

Why the discrepancy? The structure of the economy has changed, Siegel said. Decades ago, lots of firms were private partnerships, family businesses or mutual societies. Think of Wall Street investment giants like Goldman Sachs (GS Quote), big insurance societies like John Hancock, along with thousands of local thrifts and other companies.

Back then, these businesses made plenty of "profits," but they often didn't show up as such in the national statistics, Siegel said. Instead, partners drew surpluses as extra income. Mutual society members received benefits such as rates on accounts.

Today, many of those firms have joined the stock market or been sold to public corporations. And, said Siegel, those "surpluses" are now counted in the national accounts as "corporate profits." Same money, different label.

By his calculations, when you add all these surpluses together they are still well below the peak, as a share of national income, that they reached in the late 1940s.