My best estimate—and it’s a very rough one—is that an additional 1 million workers switched from restaurants and hotels to other industries during the pandemic.
On Monday, the Business Roundtable announced that nearly 200 of its leaders had signed onto a statement that appears to reverse 30 years of evolution in corporate governance. No longer is the purpose of corporations “principally to serve their shareholders,” as the BRT has held since 1997. Now the purpose is to serve both investors … Continue reading Shareholder Value Uber Alles
There are three stories of money, broadly speaking. The barter story is the most familiar. Long ago, traders found it’d be easier to conduct exchange using a finely divisible and intrinsically valuable medium, which could free them of the inconveniences of barter. Precious metals fit the bill. Money arises from exchange. A less familiar story … Continue reading Libra, MMT, and the Nature of Money
Two events Wednesday raised some interesting questions about the nature of corporations and the public good: the passing of Jack Bogle, founder of Vanguard Group, and release of the annual letter to CEOs from BlackRock co-founder and chief executive Laurence Fink. Vanguard is the investor-owned, ultra-low-fee asset manager that currently holds roughly $4 trillion for … Continue reading A Man of Words, A Man of Deeds
For financial journalists, pinpointing the source of the next meltdown is no easy task. The ones who did so pre-2008 were few. Yet today seems to be different. Read the business press and you'll get the impression there's a consensus as to the next recession trigger: profligate borrowing by corporations. The near-zero interest rates for much … Continue reading Sounding the Alarm on Sounding the Alarm on Corporate Debt
The Fed released a study this week that presents an important finding: companies that go public tend to invest more than similarly situated private companies. Firms listed on the stock exchange invest nearly 50 percentage points more than privately held ones, relative to tangible assets. Selling shares — or in the Fed’s words, “the financing of … Continue reading Asking The Right Questions On Short-Termism
Any one-sentence definition of capitalism will be incomplete, but as these things go, Schumpeter has a good one: “Capitalism is that form of private property economy in which innovations are carried out by means of borrowed money.” The emphasis is mine, but Schumpeter makes clear that capitalism isn’t capitalism without credit. It’s one of the … Continue reading Too Much Finance
Much of what Jeff Bezos does has been innovative; otherwise he wouldn't be the richest person on earth. But in other respects he's been a fairly conventional businessman. In his recent announcement that he'd be deploying around 1.2 percent of his current net worth to help homeless families and children, Bezos joined a long tradition … Continue reading The Problem With The Child As Customer
One of the best-explored economic phenomena is the tendency of retail prices to end in $0.99. This oddity, the subject of ample academic and lay interest, stems largely from consumers’ left-digit bias: we notice the dollar amount and ignore the cents. It’s the sort of fun behavioral quirk that keeps Freakonomics and Radiolab in business. … Continue reading The Price of Monopsony
We're in a season of big ambitious lefty policy proposals. Earlier this year everyone was arguing about the merits and feasibility of a jobs guarantee. Now we've moved on to the social wealth fund. A social (or sovereign) wealth fund is the "next big idea" for tackling inequality, reports Rachel Cohen at the Intercept, who … Continue reading Would A Social Wealth Fund Help Police Corporate Baddies?