How stock buybacks are hurting our economy.
The Roosevelt Rundown features our top stories of the week.
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** The Harms of Shareholder Primacy
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In these first few months of 2022, stock buybacks ([link removed]) have neared record highs ([link removed]) , as companies try to boost per-share profit and reassure investors amid a volatile market.
That’s bad for our economy, as Roosevelt Fellow Lenore Palladino explained at a hearing before the Joint Economic Committee ([link removed]) this week—hurting workers; weakening innovation; and disproportionately benefiting wealthy, white households.
“[T]he focus on spending corporate funds on shareholders has left companies ill-equipped to face shocks and been used as a justification for holding down labor costs,” Palladino said in her written testimony.
For example, while facing allegations of unsafe working conditions and poor compensation, "Walmart, and now Amazon, both spend billions of dollars on stock buybacks that could have been instead invested in their employees,” Palladino said.
“[I]t is time to strengthen our commitment to American productivity by reorienting our public policy away from enabling a single-minded focus on share prices and towards enabling innovation.”
Read Palladino’s full testimony here. ([link removed])
** What Biden Can Do Now
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This week, the Congressional Progressive Caucus released its recommendations ([link removed]) for executive actions the Biden administration could take now—including canceling student debt ([link removed]) and lowering drug prices.
The list also calls for a move Roosevelt experts say could jump-start our green energy transition: declaring a national climate emergency and invoking the authorities of the Defense Production Act (DPA).
Learn more about the DPA in Todd N. Tucker’s “Priorities and Allocations: How the Defense Production Act Allows Government to Mobilize Industry to Ensure Popular Well-Being.” ([link removed])
** The Movement for Baby Bonds
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“Maybe I’m naive, but if you see a problem you directly redress it,” Roosevelt Senior Fellow Darrick Hamilton says in a new Bloomberg Businessweek profile about his work on baby bonds, a policy gaining traction in states across the country.
The idea: Give each newborn a savings account they can access when they turn 18—for academic, entrepreneurial, or asset-building purposes. The size of each account would depend on family income.
“Baby bonds would be almost an automatic stabilizer,” Hamilton says in the piece. It’s “a mechanism to redress some of the inheritable advantages or disadvantages that go along with families and life.”
Read more about Hamilton and the momentum of the baby bonds movement in “A Once Radical Idea to Close the Wealth Gap Is Actually Happening.” ([link removed])
** Join the Conversation
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This Tuesday, March 22, at noon ET, join the Roosevelt Institute and a panel of experts for our first virtual policy talk of the year: a conversation about how the US-EU Green Steel Deal could transform our economy and serve as a model for decarbonizing other industries.
Opening remarks by:
* Ambassador Katherine Tai, United States Trade Representative
* Felicia Wong, President and CEO, Roosevelt Institute
Panelists:
* Erin Mayfield, Assistant Professor of Engineering, Dartmouth College
* Tim Meyer, Professor of Law and Director of the International Legal Studies Program, Vanderbilt Law School
* Saule Omarova, Senior Fellow, Roosevelt Institute and Professor of Law, Cornell Law School
* Todd Tucker, Director of Industrial Policy and Trade, Roosevelt Institute (moderator)
Learn more and register now. ([link removed])
** What We’re Reading
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Biden's Climate Action Woefully Inadequate to Meet Escalating Crisis [co-authored by Roosevelt’s Adrien Salazar] ([link removed]) - Common Dreams
The Simplest, Most Revolutionary Approach to Ending Poverty ([link removed]) - Vox
Hear Us: We Must Center Blackness in Housing ([link removed]) - Next City
We Need to Talk about Profits ([link removed]) - The American Prospect
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