RECOMMENDED READING
12/6/2023
Issues 2024: Wall Street
9/16/2020
Businesses With ‘Windfall’ Pandemic Profits Are Showering Them on Investors, Study Finds
3/25/2021
New Report: Most U.S. Companies Send Cash to Shareholders at Expense of Capital Base

Vast sums of money sloshing around the financial sector are enriching shareholders but producing little real-world value, according to a new analysis of business investment from American Compass, a conservative think tank.

The analysis by Oren Cass, a former senior fellow at the Manhattan Institute and a former adviser to Mitt Romney’s 2012 presidential campaign, finds that much of the money that businesses once funneled into productivity-increasing assets — structures, equipment and intellectual property — is now being diverted to shareholders instead.

This pursuit of short-term payouts over long-term investment appears to be depressing economic growth, the report finds, exacerbating inequality and making it harder than ever for American workers and their families to get ahead.

Historically, profitable businesses return some of their excess earnings to shareholders and invest much of the rest back into the company in the form of new machines, new buildings and intellectual property. These so-called capital investments have traditionally been one of the drivers of economic growth.

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Recommended Reading
December 6, 2023
• American Compass
Financialization, Understanding America
Issues 2024: Wall Street

For the American economy to boom again, financial markets will have to return to their proper role promoting productive investment.

September 16, 2020
• American Compass
Conservative Economics
Businesses With ‘Windfall’ Pandemic Profits Are Showering Them on Investors, Study Finds

American Compass’s Oren Cass criticizes corporate decision making’s disconnect from corporate obligation in Christopher Ingraham’s review of a recent economic report.

March 25, 2021
• American Compass
Financialization
New Report: Most U.S. Companies Send Cash to Shareholders at Expense of Capital Base

PRESS RELEASE—In an economic transformation over past 50 years, “Eroders” have overtaken “Sustainers,” according to a new report by American Compass executive director Oren Cass.