FIRE economy

Last updated

A FIRE economy is any economy based primarily on the finance, insurance, and real estate sectors. [1] Finance, insurance, and real estate are United States Census Bureau classifications. Barry Popik describes some early uses as far back as 1982. [2] Since 2008, the term has been commonly used by Michael Hudson [1] and Eric Janszen. [3] It is New York City's largest industry and a prominent part of the service industry in the United States overall economy and other Western developed countries.

Contents

Census Bureau classification

This term is frequently used in the financial press and blogs. Its origin is in the realm of North American industrial classification. [2] "Finance, Insurance, and Real Estate" is the title of 1992 U.S. Census Bureau Standard Industrial Classification (SIC) Division H. [4] Its coverage [5] was "All domestic establishments that provide financial, insurance, or real estate services." Its coverage was elaborated [6] in two-digit SIC codes 60 through 67. The SIC was replaced by the North American (Canada, US, Mexico) Industry Classification System [7] (NAICS) starting in 1997. The SIC had ten top-level divisions, NAICS has twenty. The new NAICS essentially split the old Division H into code 52 Finance and Insurance [8] and code 53 Real Estate and Rental and Leasing. [9]

The newer NAIC two-digit codes, 52 and 53, are extensively elaborated – down to the five-digit level. They remain largely unchanged in the 2007 NAICS drill down chart [10] whose details are this for code 52 [11] and this for code 53. [12] [13] [14]

The second use of the term derives from the study of financial capital and income – as opposed to industrial capital and income. To characterize the so-called financial services industries, economists carved out part of the SIC/NAIS breakdown of types of industry: finance, insurance, and real estate. They contracted this to FIRE, deliberately invoking the negative connotations which were, at least then, contrary to conventional wisdom. The following table elaborates on this dichotomy in the header row and gives examples in ensuing rows (where?).

At the city scale, Sassen has done a lot of researches of the FIRE influences to the Global Cities, such New York, London and Tokyo, since 1984. [15] She and a group of scholars including Feistein, argued that FIRE aggravated social inequality and polarization of these cities.

Criticisms

Much criticism exists on the shifting of the US economy to a FIRE economy at the expense of a manufacturing and export-based economy. As the consumer of last resort, many believe that the United States has eschewed productive elements of its economy in favor of consumption to its long term detriment:[ citation needed ]

Particularly after 1973 [...] pundits of the status quo hailed the proliferation of the "FIRE" (finance, insurance, real estate) economy as the coming of a new "service" "post-industrial" economy that would replace the old "smokestack" economy and the jobs lost through plant closings, restructuring, and down-sizing [...]. [16]

See also

Related Research Articles

<span class="mw-page-title-main">Industry (economics)</span> Economic branch that produces raw materials, goods and/or services

In macroeconomics, an industry is a branch of an economy that produces a closely related set of raw materials, goods, or services. For example, one might refer to the wood industry or to the insurance industry.

<span class="mw-page-title-main">Tertiary sector of the economy</span> Service sector

The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model. The others are the primary sector and the secondary sector (manufacturing).

<span class="mw-page-title-main">North American Industry Classification System</span> Standard for classifying business establishments

The North American Industry Classification System or NAICS is a classification of business establishments by type of economic activity. It is used by government and business in Canada, Mexico, and the United States of America. It has largely replaced the older Standard Industrial Classification (SIC) system, except in some government agencies, such as the U.S. Securities and Exchange Commission (SEC).

Sic, as the label "[sic]" found immediately following a copy of text, indicates that a use that may seem erroneous is in fact transcribed faithfully.

The Standard Industrial Classification (SIC) was a system for classifying industries by a four-digit code as a method of standardizing industry classification for statistical purposes across agencies. Established in the United States in 1937, it is used by government agencies to classify industry areas. Similar SIC systems are also used by agencies in other countries, e.g., by the United Kingdom's Companies House.

<span class="mw-page-title-main">Product (business)</span> Anything that can be offered to a market

In marketing, a product is an object, or system, or service made available for consumer use as of the consumer demand; it is anything that can be offered to a market to satisfy the desire or need of a customer. In retailing, products are often referred to as merchandise, and in manufacturing, products are bought as raw materials and then sold as finished goods. A service is also regarded as a type of product.

The Global Industry Classification Standard (GICS) is an industry taxonomy developed in 1999 by MSCI and Standard & Poor's (S&P) for use by the global financial community. The GICS structure consists of 11 sectors, 25 industry groups, 74 industries and 163 sub-industries into which S&P has categorized all major public companies. The system is similar to ICB, a classification structure maintained by FTSE Group.

The Industry Classification Benchmark (ICB) is an industry classification taxonomy launched by Dow Jones and FTSE in 2005 and now used by FTSE International and STOXX. It is used to segregate markets into sectors within the macroeconomy. The ICB uses a system of 11 industries, partitioned into 20 supersectors, which are further divided into 45 sectors, which then contain 173 subsectors.

Australian and New Zealand Standard Industrial Classification (ANZSIC) was jointly developed by the Australian Bureau of Statistics and Statistics New Zealand in order to make it easier to compare industry statistics between the two countries and with the rest of the world.

The United Kingdom Standard Industrial Classification of Economic Activities, or UKSIC, is a Standard Industrial Classification that is intended to help classify businesses according to the type of their economic activity. One or more SIC codes can be attributed to a business. SIC codes identify what a business does.

<span class="mw-page-title-main">Construction industry of Iran</span>

The construction industry of Iran is divided into two main sections. The first is government infrastructure projects, which are central for the cement industry. The second is the housing industry. In recent years, the construction industry has been thriving due to an increase in national and international investment to the extent that it is now the largest in the Middle East region. The Central Bank of Iran indicate that 70 percent of the Iranians own homes, with huge amounts of idle money entering the housing market. Iran has three shopping malls among the largest shopping malls in the world. Iran Mall is the largest shopping mall in the world, located in Tehran. The annual turnover in the construction industry amounts to US$38.4 billion. The real estate sector contributed to 5% of GDP in 2008. Statistics from March 2004 to March 2005 put the number of total Iranian households at 15.1 million and the total number of dwelling units at 13.5 million, signifying a demand for at least 5.1 million dwelling units. Every year there is a need for 750,000 additional units as young couples embark on married life. At present, 2000 units are being built every day although this needs to increase to 2740 units. Iran's construction market will expand to $154.4 billion in 2016 from $88.7 billion in 2013.

<span class="mw-page-title-main">Statistical Classification of Economic Activities in the European Community</span>

The Statistical Classification of Economic Activities in the European Community, commonly referred to as NACE, is the industry standard classification system used in the European Union. The current version is revision 2 and was established by Regulation (EC) No 1893/2006. It is the European implementation of the UN classification ISIC, revision 4.

The Refinitiv Business Classification (TRBC) is an industry classification of global companies. It was developed by the Reuters Group under the name Reuters Business Sector Scheme (RBSS), was rebranded to Thomson Reuters Business Classification (TRBC) when the Thomson Corporation acquired the Reuters Group in 2008, forming Thomson Reuters, and was rebranded again, to The Refinitiv Business Classification (TRBC), in 2020. Since the creation of Refinitiv in October 2018, TRBC has been owned and operated by Refinitiv and is the basis for Refinitiv Indices.

Industry classification or industry taxonomy is a type of economic taxonomy that classifies companies, organizations and traders into industrial groupings based on similar production processes, similar products, or similar behavior in financial markets.

The New Jersey Department of Banking and Insurance (DOBI) is one of 15 principal departments in New Jersey government. The department's mission is to regulate the banking, insurance and real estate industries in a professional and timely manner that protects and educates consumers and promotes the growth, financial stability and efficiency of these industries. The Commissioner of DOBI is Marlene Caride.

The United States Economic Census is the U.S. federal government's official five-year measure of American business and the economy. It is conducted by the U.S. Census Bureau, and response is required by law. Forms go out to nearly 4 million businesses, including large, medium and small companies representing all U.S. locations and industries. Respondents are asked to provide a range of operational and performance data for their companies. Trade associations, chambers of commerce, and businesses use information from the economic census for economic development, business decisions, and strategic planning purposes. The last Economic Census was conducted for the year ending December 2017.

New England is far from the center of the country, is relatively small, and is relatively densely populated. It was the birthplace of the Industrial Revolution in the United States as well as being one of the first regions to experience deindustrialization. Today, it is the center of education, research, high technology, finance, and medicine.

<span class="mw-page-title-main">Boat livery</span>

A boat livery is a boathouse or dock on a lake or other body of water, where boats are let out for hire (rental), usually on an hourly, daily or weekly basis. Boats may be powered or sail craft or human powered like rowboats, paddleboats (pedalos) or inflatable boats. The primary use of the boats is recreational.

Soft infrastructure is all the services which are required to maintain the economic, health, and cultural and social standards of a population, as opposed to the hard infrastructure which is the physical infrastructure of roads, bridges etc. It includes both physical assets such as highly specialised buildings and equipment, as well as non-physical assets, such as communication, the body of rules and regulations governing the various systems, the financing of these systems, the systems and organisations by which professionals are trained, advance in their careers by acquiring experience, and are disciplined if required by professional associations. It includes institutions such as the financial system, the education system, the health care system, the system of government, and law enforcement, and emergency services.

The Nevada Department of Business and Industry is a cabinet-level Nevada government state agency that oversees business and consumer regulations in the state and promotes the development and growth of businesses in Nevada.

References

  1. 1 2 "What is the FIRE Economy?". Official FIRE Economy. iTulip Inc. 2008. Archived from the original on 17 May 2014.
  2. 1 2 Barry Popik (25 June 2005). "The Big Apple: FIRE (Finance, Insurance, Real Estate) & ICE (Intellectual, Cultural, Educational)". barrypopik.com.
  3. ↑ Horton, Scott (27 January 2008). "The Bubble Bursts". Harper's Magazine.
  4. ↑ "1992 U.S. Census Bureau Standard Industrial Classification (SIC) Division H".
  5. ↑ "CENSUS OF FINANCE, INSURANCE, AND REAL ESTATE". census.gov.
  6. ↑ "Archived copy". Archived from the original on 2013-11-20. Retrieved 2017-12-06.{{cite web}}: CS1 maint: archived copy as title (link)
  7. ↑ Classification Development Branch, Economic Statistical Methods Division. "North American Industry Classification System (NAICS) Main Page". www.census.gov.
  8. ↑ "Archived copy". Archived from the original on 2014-04-25. Retrieved 2017-12-06.{{cite web}}: CS1 maint: archived copy as title (link)
  9. ↑ "Archived copy". Archived from the original on 2014-04-25. Retrieved 2017-12-06.{{cite web}}: CS1 maint: archived copy as title (link)
  10. ↑ Pam Sadowski, SSSD. "NAICS Search". census.gov.
  11. ↑ Pam Sadowski, SSSD. "NAICS Search". census.gov.
  12. ↑ Pam Sadowski, SSSD. "NAICS Search". census.gov.
  13. ↑ "Archived copy". Archived from the original on 2014-02-15. Retrieved 2017-12-06.{{cite web}}: CS1 maint: archived copy as title (link)
  14. ↑ "Archived copy". Archived from the original on 2014-09-22. Retrieved 2017-12-06.{{cite web}}: CS1 maint: archived copy as title (link)
  15. ↑ The global city : New York, London, Tokyo (Princeton : Princeton University Press, 2001) updated 2d ed., original 1991; ISBN   0-691-07063-6.
  16. ↑ "Loren Goldner". Archived from the original on 2008-08-30.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.