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 […]