Analysis and Commentary by Roosevelt Fellow Mike Konczal

Bernie Sanders gave a major speech yesterday outlining his definition of democratic socialism and how it relates to both his candidacy and American history. In doing so, he also described an expansive vision of economic security and fairness. The speech is important because it shows some of the strengths and weaknesses of left-liberalism at this moment, both through what it describes and, more interesting, what it doesn’t. It also clarifies how he can better contrast with Hillary Clinton on policy.

Here are eight random thoughts about the speech.

Last night’s GOP debate was the first to have an in-depth financial reform discussion. Unfortunately, the Republicans seemed like they were being introduced to these issues for the first time rather than a reflecting a deep understanding of debates that have been ongoing for eight years. (There was a weird detour into whether or not deposit insurance exists, which I’ll skip, and the less said about their embrace of the gold standard, the better.)

But it’s worthwhile to dig in now, as these talking points will be with us through the rest of the campaign. There are six statements I want to examine, the first four of which I believe to be outright wrong. This misdiagnosis causes Republicans to seek out the wrong solutions in the wrong places. The last two statements are interesting to debate. (Transcript via Washington Post.)

Today the Roosevelt Institute’s Financialization Project is releasing two new papers on short-termism:

Understanding Short-Termism: Questions and Consequences (pdf) by J.W. Mason.

Ending Short-Termism: An Investment Agenda for Growth (pdf) by Mike Konczal, J.W. Mason, and Amanda Page-Hoongrajok.

The first answers 12 common questions and complaints that are brought up when it comes to short-termism. It’s especially clear showing that investment in the most recent recovery is the weakest since the Great Depression, and that there’s no way to understand buybacks and dividends as representing funding for new businesses.

The second is our policy agenda, which goes beyond simply tackling short-termism by itself. Instead, it focuses on rebalancing power overall, limiting bad actors but also empowering good ones. This trend can only be combated by emboldening countervailing power in the marketplace while also emphasizing a new role for government.

I hope you check them out! Below is the Table of Content for policy agenda items and the questions about short-termism we answer in the two documents.

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With so much attention on short-termism these days, I’m excited to announce the Roosevelt Institute’s Financialization Project is launching two papers this Friday, November 6th, in Washington DC.

The first paper is from J.W. Mason, and it is an answer to the three most common criticisms about this topic. Namely, it isn’t happening, it is happening but is great for growth, and that it may not be great but it’s appropriate and even necessary. J.W. push back on all three. (Sneak previews of his responses to the first and second issue are already floating out there.)

The second is from me, J.W. Mason and Amanda Page-Hongrajook, and it’s a ten point policy agenda to combat short-termism. The points are broad, focusing on everything from pension guarantees to regulation of stock exchanges, but story is simple: the agenda needs to focus on building countervailing power when it comes to the strength of short-term interest holders.

I’m looking forward to sharing these with you, and I hope they move the debate forward on this crucial but still understudied and underdeveloped area. To RSVP, please contact Eric Bernstein


Event Details

On Friday, November 6, please join Roosevelt Institute Fellows Mike Konczal and J.W. Mason, with keynote speaker Senator Tammy Baldwin and moderator Jim Tankersley of The Washington Post, at the National Press Club as we release two papers on corporate short–termism. Opening remarks by Senator Baldwin will be followed by a panel with Cornell University’s Lynn Stout and the AFL-CIO’s Heather Slavkin Corzo.

An Agenda to End Short–Termism
Location: National Press Club
529 14th Street Northwest, Washington, D.C.
Breakfast will be available at 8:30 a.m.,
with the program to begin promptly at 8:50 a.m.

Rising shareholder payouts and declining investment have touched off widespread concern and debate about the corporate focus on short-term profits over long-term growth. In this set of papers, Mike Konczal proposes a broad policy agenda for curbing short–termism and J.W. Mason presents new research showing the depth of the problem and addressing common critiques.

To RSVP, please contact Eric Bernstein.

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The discussion over a Too Big To Fail (TBTF) subsidy, where the largest banks are able to borrow more cheaply as the result of potential future bailouts, is back in the discussion. Paul Krugman referenced it with a link to my review of two studies arguing the subsidy has largely declined since the crisis. Dean Baker has responded with critical thoughts on the studies.

My point isn’t to say that the subsidy is completely over. Nor, as I’ll explain in a bit, is it to say that TBTF is over. Instead, understanding this decline lets us know we should push forward with what we are doing. It debunks conservative narratives about Dodd-Frank being fundamentally a protective permanent bailout for the largest firms that we should scrap, and provides evidence against repealing it. And ideally it gets us to understand this subsidy as just one part of the more general TBTF problem that needs to be solved.

I’ll first respond to Dean Baker. Then I’ll map out four different ways of understanding what we mean by a TBTF subsidy, and what is and isn’t fixed, because that might clarify other responses I’ve been getting.

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A remarkable thing happened: one of the largest banks slimmed down just a bit because of Dodd-Frank’s capital requirements. It’s another piece of evidence that the core parts are working, and if scaled up could make a dramatic structural change in the financial system. In July, the Federal Reserve finalized its rule on the special

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Glass-Steagall (GS) has become a central part of the debate over financial reform in the 2016 election. Several commentators have portrayed it as a central objective of financial reform, verging on a litmus test for those who are serious about the topic. My opinion is that reinstating GS isn’t an important goal for financial reform.

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After Hillary Clinton released her financial reform agenda in early October, Roosevelt’s Mike Konczal compared her plan and Bernie Sanders’ plan against the “Elizabeth Warren test” for financial reform. The Elizabeth Warren test calls for five key pieces of financial reform: defending Dodd-Frank, increasing enforcement, reining in the shadow banking industry, a financial transaction tax, and breaking

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I have a new piece at Boston Review, Hail to the Pencil Pusher: American Bureaucracy’s Long and Useful History. It’s a review of four recent legal histories about the long rise of the administrative state and its place in securing and expanding liberty. Many of these histories, while academic, address the arguments that have become

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There’s been a lot of new data and analysis of student loans and colleges in the past week, including a new Brookings paper and the launch of the College Scorecard by the Department of Education. And with so much data coming out, it’s becoming more important that we keep our questions open-ended. The Brookings Report,

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