Corporate Greed is Killing Investment

It’s surprising how the media and academia refuse to take notice of well-established phenomena that are inconsistent with the ideology about how our present order works. Of course, the ideology serves to justify the operation of our current regime, so one can see why those in positions of influence would not want unflattering stories to become mainstream. Nevertheless, one would hope expect to see robust minority opinion on questions like whether “shareholder capitalism” works as advertised. Yet even though the media often laments big business short-termism, it typically fails to point out obvious implications of the sustained fixation on quarterly earnings, as opposed to longer-term performance.

This short post based on a Roosevelt Institute study, explains that reliance on a rosy-colored view of how capitalism works explains why policies meant to stimulate growth are mainly goosing the value of equities.

Mind you, this general line of thinking is hardly new. We described this phenomenon in a paper for the Conference Board Review in 2005. Its thesis:

http://www.nakedcapitalism.com/2015/03/corporate-greed-killing-investment.html