Wall Street moves around billions, if not trillions of dollars every day. But the way companies are managing their assets may only be helping shareholders and stock prices without creating much real-world value, according to a recent study by the American Compass.
American Compass executive director Oren Cass found in a firm-level analysis of business investment that money once allocated to productive assets — including capital, wages and intellectual property — is mainly being diverted to shareholders. The report concluded that prioritizing these short-term payouts to investors over long-term investment is hindering growth and worsening inequality.
Policy Brief: Back to Basics for Corporate Finance
Ban stock buybacks and repeal business interest deductibility
At SVB, the Market Was the Failure
The market failure is that market actors are fallible and their efforts at pursuing their own interests do not necessarily lead smoothly to efficient outcomes that serve themselves or the common good.
Policy Brief: Public Pension Accountability
Require transparency in management of public money