On this episode of Talkin’ (Policy) Shop, Oren and Chris are joined by American Compass policy advisor Gabriela Rodriguez to discuss how financialization has disconnected economic activity from productive activity in the real economy. To further amplify shareholder returns, firms are leveraging their balance sheets with tax-advantaged debt that discourages investment, reduces resilience, and shifts risk on to workers.

One solution: Ban stock buybacks and repeal business interest deductibility.

Further Reading:

• American Compass policy brief: Back to Basics for Corporate Finance
• Confronting Coin-Flip Capitalism (Oren Cass, American Compass)
• The Rise of Wall Street and the Fall of American Investment (Oren Cass, American Compass)
• The Corporate Erosion of Capitalism (Oren Cass, American Compass)
• Profits Without Prosperity (William Lazonick, Harvard Business Review)