By Rachel Goldfarb, originally published on Next New Deal
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Corporate Borrowing Now Flows To Shareholders, Not Productive Investment: Study (IB Times)
Owen Davis reports on J.W. Mason's new white paper, "Disgorge the Cash," explaining how the paper fits into a growing body of research that suggests flaws in our basic understanding of economics.
How is it that amid stiff market competition and increasing debt loads, companies have found so much money to spend on shareholders?
A new paper by Mason helps explain the trend. Starting in the 1980s, Mason argues, corporate executives increasingly prioritized pleasing shareholders over making the meat-and-potatoes investments of the kind that built the transistor, the 747 and the middle class. As a result, he writes, “Finance is no longer an instrument for getting money into productive businesses, but getting money out of them.”
Mason’s study joins a growing body of research that suggests some of our most basic assumptions about the economy might be off -- or at least woefully outdated. “A lot of our ideas about corporate finance are still based on this older idea of how the world works,” Mason says.
Follow below the fold for more.
Students Question Own Role in Participatory Budgeting (Columbia Spectator)
Sasha Zeints reports on a Campus Network event discussing students' role in participatory budgeting. Chapter president Brit Byrd says students are well-suited to participate as volunteers.
The Federal Reserve Speaks in Mumbo Jumbo. Here's How to Fix That. (The Week)
Referencing Roosevelt Institute Fellow Mike Konczal, Jeff Sprots argues that the opacity of Federal Reserve statements could be solved by mandating a numerical target for the Fed.
The Real Meaning of $9 an Hour (Time)
Rana Foroohar says that Walmart's wage hike might not make a dramatic impact on the real economy, but it shows that workers can still get the largest companies in the world to change.
What Is ‘Middle-Class Economics’? (NYT)
Josh Barro points out that government policies that help the middle class are only able to produce small shifts. He says the best option might be to step back and hope positive trends continue.
The FCC Approves Strong Net Neutrality Rules (WaPo)
Cecilia Kang and Brian Fung report on the Federal Communications Commission's vote yesterday, which classified the Internet as a public utility to protect access for all.
New on Next New Deal
Make the Stop Overdose Stat Act a Priority for 2015
Roosevelt Institute | Campus Network Senior Fellow for Health Care Emily Cerciello explains why this bill targeting opioid overdose prevention should be on both parties' agendas this year.