Shareholder Primacy, Examined

March 18, 2022

How stock buybacks are hurting our economy.

The Roosevelt Rundown features our top stories of the week.

The Harms of Shareholder Primacy

In these first few months of 2022, stock buybacks have neared record highs, as companies try to boost per-share profit and reassure investors amid a volatile market. 

That’s bad for our economy, as Roosevelt Fellow Lenore Palladino explained at a hearing before the Joint Economic Committee this week—hurting workers; weakening innovation; and disproportionately benefiting wealthy, white households.

“[T]he focus on spending corporate funds on shareholders has left companies ill-equipped to face shocks and been used as a justification for holding down labor costs,” Palladino said in her written testimony. 

For example, while facing allegations of unsafe working conditions and poor compensation, “Walmart, and now Amazon, both spend billions of dollars on stock buybacks that could have been instead invested in their employees,” Palladino said.

[I]t is time to strengthen our commitment to American productivity by reorienting our public policy away from enabling a single-minded focus on share prices and towards enabling innovation.”

Read Palladino’s full testimony here. 


What Biden Can Do Now

This week, the Congressional Progressive Caucus released its recommendations for executive actions the Biden administration could take now—including canceling student debt and lowering drug prices. 

The list also calls for a move Roosevelt experts say could jump-start our green energy transition: declaring a national climate emergency and invoking the authorities of the Defense Production Act (DPA).

Learn more about the DPA in Todd N. Tucker’s “Priorities and Allocations: How the Defense Production Act Allows Government to Mobilize Industry to Ensure Popular Well-Being.”


The Movement for Baby Bonds

“Maybe I’m naive, but if you see a problem you directly redress it,” Roosevelt Senior Fellow Darrick Hamilton says in a new Bloomberg Businessweek profile about his work on baby bonds, a policy gaining traction in states across the country.

The idea: Give each newborn a savings account they can access when they turn 18—for academic, entrepreneurial, or asset-building purposes. The size of each account would depend on family income.

“Baby bonds would be almost an automatic stabilizer,” Hamilton says in the piece. It’s “a mechanism to redress some of the inheritable advantages or disadvantages that go along with families and life.”

Read more about Hamilton and the momentum of the baby bonds movement in “A Once Radical Idea to Close the Wealth Gap Is Actually Happening.”


Join the Conversation

This Tuesday, March 22, at noon ET, join the Roosevelt Institute and a panel of experts for our first virtual policy talk of the year: a conversation about how the US-EU Green Steel Deal could transform our economy and serve as a model for decarbonizing other industries.

Opening remarks by:

  • Ambassador Katherine Tai, United States Trade Representative
  • Felicia Wong, President and CEO, Roosevelt Institute


  • Erin Mayfield, Assistant Professor of Engineering, Dartmouth College
  • Tim Meyer, Professor of Law and Director of the International Legal Studies Program, Vanderbilt Law School
  • Saule Omarova, Senior Fellow, Roosevelt Institute and Professor of Law, Cornell Law School
  • Todd Tucker, Director of Industrial Policy and Trade, Roosevelt Institute (moderator)

Learn more and register now.


What We’re Reading

Biden’s Climate Action Woefully Inadequate to Meet Escalating Crisis [co-authored by Roosevelt’s Adrien Salazar] – Common Dreams

The Simplest, Most Revolutionary Approach to Ending Poverty – Vox

Hear Us: We Must Center Blackness in Housing – Next City

We Need to Talk about ProfitsThe American Prospect