In 12Q1, corporate profits surged and hit $1.88 trillion. Real corporate profits have never been higher since, despite recently lower tax rates. It’s because of the business cycle. Early in the cycle, when unemployment is high, wages stagnate and capital captures increases in worker productivity, boosting profits. As unemployment falls, wages rise, labor does better, but profits stagnate. This suggests profits should be good in 2021, wages, not so good.