By Rachel Goldfarb, originally published on Next New Deal
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Why Companies are Rewarding Shareholders Instead of Investing in the Real Economy (WaPo)
Lydia DePillis looks at Roosevelt Institute Fellow J.W. Mason's new white paper on how the shift towards increased shareholder payouts since the 1980s has decreased corporate investment.
If you’ve noticed the steep upward trajectory of the stock market over the past few years, looked around and wondered why cash doesn’t appear to be raining down upon your friends and neighbors, you’d be justified in wondering: What’s going on here? If corporate America is doing so well, shouldn’t we feel like things are getting better, too?
In the past several years, profits have been increasingly paid back out to shareholders, rather than invested in hiring more people and paying them better. And lately, companies have even been borrowing money to make those shareholder payouts, because with interest rates so low, it’s a relatively cheap way to push stock prices higher.
That’s according to a new paper from the Roosevelt Institute, a left-leaning think tank that's launching a project exploring how the financialization of the economy has unlinked corporates from the well-being of regular people.
Read J.W. Mason's paper, "Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment," here.
Follow below the fold for more.
Hewlett-Packard Shows How to Fatten Shareholders While Firing Workers (LA Times)
Referencing J.W. Mason's paper for context on the impact of shareholder payouts on the larger economy, Michael Hiltzik explains how H-P has managed to fire workers and increase payouts at once.
Don't Wait Until 2016 to Make Political Change (HuffPo)
Roosevelt Institute | Campus Network National Director Joelle Gamble argues for the need for young people to participate in governance, not just elections.
The Push for Net Neutrality Arose From Lack of Choice (NYT)
Steve Lohr speaks to Roosevelt Institute Fellow Susan Crawford, who agrees that the current approach to net neutrality makes sense while cable is most people's only option for high-speed Internet.
The Lawyer Who Went from Fighting for Guantánamo Bay Inmates to Going After Shady Banks (Vice)
David Dayen profiles Josh Denbeaux, a lawyer who is fighting back against foreclosure abuse in the courts and trying to develop class-action suits for homeowners facing illegal foreclosures.
New on Next New Deal
Launching Our Financialization Project with "Disgorge the Cash"
Roosevelt Institute Fellow Mike Konczal introduces our Financialization Project, which aims to define and explain the topic, as well as J.W. Mason's paper. Learn more about the project here.
Millennials Want More Than Obama’s Keystone Veto
Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment Torre Lavelle says the veto isn't good enough, because Millennials are seeking a real commitment to transforming energy usage.