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The Price of Stock
Buybacks
On Thursday, Roosevelt Institute Fellow Lenore Palladino
testified
before the House Committee on Financial Services for its "Examining
Corporate Priorities: The Impact of Stock Buybacks on Workers,
Communities, and Investors" hearing.
“[T]he current use of stock buybacks poses a threat to a productive
and equitable economy. In order to ensure that capital markets are not
manipulated by tremendous repurchase activity or the interests of a
small
group of executives and share-sellers, new
policies to rein in stock buybacks are required,” Palladino argued.
Watch
here.
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Buybacks 101: Learn more about stock buybacks and
extractive corporate power in Roosevelt’s latest buyback
factsheet. In a new explainer video—"How
American CEOs Got So Rich”—Vox explores how
buybacks have contributed to skyrocketing executive pay and record
inequality.
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Why this matters: In a must-watch
exchange between Rep. Chuy García (D-IL) and
United for Respect leader Janie Grice, García cited Palladino’s
eye-opening research on Walmart’s buybacks
program. “The Roosevelt Institute found that if Walmart had redirected
$10 million of [the company's latest round of buybacks] to 1 million
employees, they could have given those employees an hourly wage
increase of over $5.66 an hour,” García said.
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Moving forward: “When we finally start focusing on
stakeholder value as well as shareholder value, our companies will be
more successful, our communities will be more equal, our societies
will be more just and our planet will be healthier,” Salesforce
chairman and co-CEO Marc Benioff writes in an
op-ed for the New York Times.
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On the trail: Under Sen. Bernie Sanders’s new
corporate
accountability and democracy plan, “large-scale
stock buybacks will be treated like stock manipulation, just as they
were before 1982. This will be done by repealing the Securities and
Exchange Commission’s misguided Rule 10b-18.”
 Why a Wealth Tax
Is Only Fair
“Researched
and defended by economists Gabriel Zucman and Emmanuel Saez, a wealth
tax is one of the most progressive government levies available to us,
falling entirely on the extremely wealthy. It would help with some of
the evasion problems: Efforts to hide income as wealth would be
rendered futile, as that fortune would be taxed anyway,” Roosevelt
Fellow Mike Konczal writes for The Nation.
Read
on.
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What’s different: "Two years ago, nobody was talking
about wealth taxes. And now it’s the core new idea that everybody at
least has to respond to, if not adopt, on the Democratic side,”
Roosevelt Fellow Michael Linden says in the Washington Post.
Read
more.
 Students Not Profits
Introduced
yesterday by Rep. Pramila Jayapal (D-WA) and Sen.
Sherrod Brown (D-OH), the Students Not Profits Act calls for the
removal of tax-payer subsidies for for-profit colleges. As Roosevelt
Fellow Julie Margetta Morgan writes for the blog, “A ban on federal
subsidies is currently the only solution that truly confronts the
power imbalance that has built up in the for-profit education sector
and also ensures sustained improvement in affordability and equity for
all students.” Read
more and check out Rep.
Jayapal’s retweet of Margetta Morgan’s explainer
Twitter thread.
- Why this matters:
“[It’s] about spending on the financial sector and making investments
for endowments and stakeholders instead of focusing on student’s needs
and emphasizing their education and the affordability of their
education,” Roosevelt Network financialization
of higher education policy coordinator Angela Tsao
tells Teen Vogue. “So much of what’s happening all boils down
to: Where is the money coming from and why?” Read
on.
- Hidden rules of
race: “Only full cancellation completely protects the
vulnerabilities of Black students and students in general, while at
the same time establishing higher education as a universal right and
offering restitution to all those who have had to rely on debt
finance,” Roosevelt Fellows Naomi Zewde and Darrick Hamilton write for
Rewire.News. Keep
reading.
 An Anti-Monopoly Fund
Yesterday, Facebook co-founder and Roosevelt Senior Advisor Chris
Hughes announced that the Economic
Security Project—which he co-chairs—will be
launching a $10 million anti-monopoly fund to promote antitrust
research and advocacy. As
reported by the Washington Post, “The
fund, which will invest in projects until March 2021, aims to provide
financial support to a wide array of organizations. That includes
academic researchers studying mergers and market power, policy
advocates pursuing new rules to rein in tech and other industries, and
grassroots groups that have battled bigness on the ground.”
 Debate
Debrief
Ahead of this week’s Democratic
debate, a group of progressive organization
leaders including Roosevelt President & CEO Felicia Wong
released
a statement calling for a sharper focus on the
economy: “Debate questions should help voters evaluate what the
candidates are offering and what their overall economic approach would
look like. The moderators should also be careful not to inadvertently
advance outdated and disproven narratives about how the economy
works.” For Roosevelt Forward Program Director Katie Kirchner and
Program Manager Fernanda Borges Nogueira, the moderators’ debate-night
questions didn’t quite pass muster. For next time, they’ve got
five
questions they’d like answered.
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