A Better Solution to the Student Debt Crisis, A Shareholder First Economy, and Shifting Economic Power
February 9, 2018
By Kendra Bozarth
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top 5 stories of the week.
1. A Better Solution to the Student Debt Crisis
Higher education is commonly viewed as a pathway for economic mobility, but rising student debt holds many Americans back. A new report from the Levy Institute, co-authored by Roosevelt Research Director and Fellow Marshall Steinbaum, explores a radical solution to the student debt crisis: cancelling all of it. For Mic, Steinbaum explains how the idea “is actually something that could be done, and done in a way that has a moderately positive economic impact.” And Blavity’s Malinda Janay connects this bold policy proposal to Trump’s tax law: “Student loan debt can be crippling. Let’s cut loans, not taxes for the rich.”
2. A Shareholder First Economy
In “It’s Time to Ban Stock Buybacks,” The American Prospect’s Justin Miller examines self-serving corporate behavior. He writes, “The Trump tax cuts have exposed how the Shareholder First economy benefits Wall Street investors and CEOs at the expense of everyone else.” Citing the latest paper from Roosevelt Senior Economist and Policy Counsel Lenore Palladino, Miller outlines how corporations are acting more like banks that hold assets and less like businesses that invest in shared growth. For HillCast, Palladino underscores how the GOP tax cuts will encourage, not hinder, this harmful behavior and deepen economic inequality.
3. The Potential of Antitrust Policy
To tackle rising corporate power, we need better antitrust laws. For The Hill, Roosevelt Fellow Susan R. Holmberg discusses corporate mergers and their economic consequences, including higher prices for consumers and lower wages for workers. She calls on policymakers to “look beyond traditional antitrust policy and crack down on the predatory hedge funds often pushing these mergers.” One legislator working to rewrite these rules is Senator Cory Booker (D-NJ)—and Roosevelt is taking note: “Senator Booker has shown that he’s serious about reforming antitrust policy,” said Roosevelt’s Marshall Steinbaum. According to Bloomberg Law, Sen. Booker intends to use his new seat on the Judiciary Committee to “keep a public spotlight on the effects of corporate concentration.”
4. Who Holds Power?
Just last week, President Trump took credit for a booming stock market, but after the largest single-day drop in Dow Jones history, he now says “the stock market is rigged against him.” Market watchers are debating the cause of the crash, with some—including Federal Reserve officials—pointing to higher wages and the fear of inflation. Roosevelt Fellow J.W. Mason debunks this theory in The Intercept. “The link has broken between wages and inflation,” he says. Rather, as the authors suggest, CEOs and shareholders are panicked by rising worker power: They fear “that they’re losing their upper hand over a workforce that’s cutting increasingly into their record profits.” The Fed’s response—maintaining the status quo or putting forward bold policy—will determine who holds power in our economy and society.
5. Failed Leadership
Following last week’s State of the Union address and an immensely difficult 2017, Roosevelt Fellow David B. Woolner penned an op-ed: “Trump Has Failed the Test of Leadership.” From ongoing discriminatory statements to new rules that serve the top but hurt the most marginalized communities, President Trump has failed to uphold the standards of high office established by those who came before him. FDR championed the idea that with great power comes great responsibility. As Woolner writes, “It is Trump’s failure to recognize this fundamental principle … that renders him so dangerous.”
What We’re Reading
In another must-read article, Vox’s Dylan Matthews defended Social Security Disability Insurance (SSDI) this week. The program, which serves individuals with disabilities who are unable to work, has been mischaracterized by conservatives as a welfare giveaway and targeted by the Trump administration. As Matthews explains, “SSDI is not a gusher of free federal money for lazy people with backaches. It’s a stingy, hard-to-access program that helps some of the country’s most desperate citizens scrape by.” To preserve America’s safety net and our most vulnerable communities, it’s crucial to protect programs like SSDI.
During Black History Month, we will be hosting a series of Twitter chats on the hidden rules of race that shape our economy and society. Next Wednesday, Roosevelt Fellows Andrea Flynn and Marshall Steinbaum will be discussing the #HiddenRules of wealth alongside a group of racial and economic justice champions. Participants include The New School’s Darrick Hamilton, Insight CCED’s Jhumpa Bhattacharya, and Sandy Darity, Director of the Samuel DuBois Cook Center on Social Equity at Duke. Follow along or join the discussion here on Wednesday, February 14th at 3:00 PM EST.