Recently, the U.S. Treasury said that it is perfectly okay for companies to swindle employees out of their pension by offering one-time payments worth less than the pension that those employees are giving up. The Department of Labor, nominally responsible for protecting workers in retirement plans, said nothing. This isn’t the first time the government stood by […]
The Disconnect Between Corporate Borrowing and Investment
This paper provides evidence that the strong empirical relationship of corporate cash flow and borrowing to productive corporate investment has disappeared in the last 30 years and has been replaced with corporate funds and shareholder payouts. Whereas firms once borrowed to invest and improve their long-term performance, they now borrow to enrich their investors in […]
Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay
Wage stagnation experienced by the vast majority of American workers has emerged as a central issue in economic policy debates, with candidates and leaders of both parties noting its importance. This is a welcome development because it means that economic inequality has become a focus of attention and that policymakers are seeing the connection between […]
The American middle class isn’t coming back
It’s no secret that the American middle class has been on the ropes for a while now. The problem isn’t just a crippling recession and an economic “recovery” that has mostly gone to the richest one percent, but the larger shifting of wealth from the middle to the very top that’s taken place since the […]
Kuttner, Galston, and the Debate Over the Social Safety Net
I take exception to most of the assumptions and conclusions in William Galston’s piece. For starters, the debate about entitlement programs is needs to be located within a larger debate about the mixed economy. Galston begins by asserting: “I take it we agree that suitably structured and regulated markets generate wealth more effectively than other economic […]