In the News

CNN: The great debate: Will corporate tax cuts trickle up or down?, by Lydia DePillis, January 2, 2018

J.W. Mason, an assistant professor at the City University of New York and a fellow at the left-leaning Roosevelt Institute, has calculated that in 2014, shareholder payouts amounted to $1.2 trillion, while investments by shareholders through initial public offerings and venture capital came to only about $200 billion. In other words, bigger shareholder returns overall don’t necessarily drive investment in new businesses.

“You don’t usually hear businesses say ‘We invest more because our shareholders are wealthier,'” Mason said. “You invest more because you see more opportunities for investment.”

Mason says the best way for the federal government to increase investment is to spend money directly on infrastructure projects rather than tax cuts.


Financial Times: Both left and right could make big changes to how the Fed operates in the next recession, by Matthew Klein, December 11, 2017

The case for … using the central bank to directly give people credit was ably made by Mike Konczal and JW Mason in a recent paper for the left-leaning Roosevelt Institute. Many of their ideas — targeting the slope of the yield curve, buying a wider range of risky assets, providing subsidised loans to banks that extend credit to favoured sectors — have already been put into practice by the Bank of England, the European Central Bank, and the Bank of Japan, which makes them less radical than their rhetoric might imply. If the Democrats return to power in 2020, these ideas might end up on the menu.


Financial Times: Why offbeat policies could spearhead future recession battles [link], by Matt Klein, December 1, 2017

An important new paper from Mike Konczal and JW Mason, of the left-leaning Roosevelt Institute, argues it’s time to “abandon the idea that macroeconomic management can be carried out by setting one interest rate or any other single, economy-wide variable”. Instead, they believe central banks should target financial conditions across the economy through specific lending programmes and asset purchases, a feature of the Fed’s response after the financial crisis. … Traditionalists who find all this unappealing — Konczal and Mason say they want the Fed to “embrace its role” as “a central planner, shaping both the character and the level of economic activity” — should consider the alternative.


KPCC 89.3 FM Airtalk: Pasadena, Inglewood want rent control. But is that the best way to control high rents?

Radio interview.


The Hill: SEC nominees must not grant companies ‘safe harbor’ with buyback rule, by Lenore Palladino, November 9, 2017

Companies have a certain amount of cash to allocate between buybacks and dividends on the one hand, and other forms of investment on the other, including investing in their workers and R&D. Workers aren’t the only ones hurt: As my colleague J.W. Mason showed in “Disgorge the Cash,” and as William Lazonick showed in “Profits Without Prosperity,” buybacks hurt the long-run productivity of firms themselves by reducing investment in research and development.


Der Standard [Austria]: Verdeckte Arbeitslosigkeit und kaum Lohnzuwachs: Die Krise ist nicht vorbei


Social Europe: The Vicious Circle of Inequality, by Sandro Scocco, November 1, 2017

The economist J.W Mason stated: “On Mondays and Wednesdays, economists argue that wages are low because robots are taking people’s jobs. On Tuesdays and Thursdays, it’s that we can’t have wages rise because productivity growth is low. Both can’t be true.”


Bloomberg: Maybe Index Funds Will Destroy Capitalism, by Matt Levine, October 26, 2017

Here is an interview with leftist economist J.W. Mason about “finance’s role in capitalist society” that is fascinating throughout. Mason endorses a “functional view of finance, as the enforcement arm of the capitalist class as a whole”:

 There are people and institutions whose job it is to ensure that corporations remain within capitalist logic, that they remain oriented towards production for sale and for profit. On some level, this is the fundamental role of shareholders and their advocates, and of institutions like private equity.

I think that a lot of quite mainstream financial people would agree that one thing that shareholders do is ensure that the corporations they own “remain within capitalist logic,” sure. But Mason also points to the rise of index funds as undercutting capitalist logic: If all the companies are owned by the same handful of big diversified investing institutions, and if those institutions have no interest in competition between the companies they own, then what is the point of capitalism?


The Week: Democrats Need to Unabashedly Support Raising Taxes, by Ryan Cooper, October 25, 2017

Low tax rates on the top income bracket and capital gains encourage the rich to restructure American corporations away from research and investment in productive enterprise and towards payouts to stockholders and executives. As economist J.W. Mason demonstrates, this transformation has indeed happened over the last three decades — despite corporate profits which have been bumping up against postwar highs for eight straight years as a share of the economy, corporate investment has stayed near historic lows.


CNBC: Trump’s preferred way to judge trade deals is not a good measure of their success, by Leslie Shaffer, October 11, 2017

“All else equal, a more favorable trade balance will raise demand and boost employment. But all else is not equal,” J.W. Mason, an assistant professor of economics at John Jay College-CUNY and a Roosevelt Institute fellow, said in a note last year. He said that because the world essentially operates on a dollarstandard, similar to the previous gold standard, the U.S. can finance its trade deficits indefinitely, while other countries can’t.

“[P]olicies intended to improve the U.S. trade balance are likely to lead to lower growth elsewhere, imposing large costs on the rest of the world with little or no benefits here,” he wrote.

Mason advised that instead of “costly” efforts to reach a trade surplus, the U.S. would be better off with measures to increase productive investment in both the public and private sectors.


Macro Musings (podcast): JW Mason on Economic Recovery and Potential GDP, with David Beckworth, October 2, 2017

JW Mason is an assistant professor of economics at John Jay College and a fellow at the Roosevelt Institute. Today, he joins the show to discuss his recent paper, “What Recovery? The Case for Continued Expansionary Policy at the Fed?” JW argues that the recovery from the Great Recession was unusually weak. Furthermore, the American economy is still not at full employment, and, as a result, potential GDP is continually underestimated. In order to get the economy back to full employment, JW argues greater monetary expansion is needed.


National Review: Stay Open-Minded on Monetary Policy, by Theodore Kupfer, September 28, 2017

J. W. Mason, an economist at John Jay College and a fellow at the left-wing Roosevelt Institute, has a provocative analysis that is worth considering. In a paper called “What Recovery?” he marshals a large body of evidence in service of the argument that there is “substantial additional space for expansionary policy.” Mason examines the pre-2008 trend in GDP growth and finds that our recent growth has fallen short. He identifies “a mix of lower labor force participation and slower productivity growth” as the culprit. What looks like a tight labor market — today, unemployment clocks in 4.4 percent — has not yielded substantial wage gains, and that, Mason says, is because the labor market is weaker than it seems.


The Week: Janet Yellen Is a Terrible Detective, by Jeff Spross, September 22, 2017

Despite what the unemployment rate says, there are still many millions of employable Americans who haven’t been brought back into the workforce yet. As work by economists like Josh Bivens and J.W. Mason makes clear, the hole left by the Great Recession is still very far from filled in.


The Week: Stop Saying Economic Growth Will Rescue Us from Climate Change, by Ryan Cooper, September 7, 2017

Since 2008 both productivity and economic growth have been abysmally bad in the United States and Europe, far below the previous long-term average. Economist J.W. Mason argues this is due to a structural lack of demand that shows no sign of being fixed. That’s nearly a whole lost decade and counting failing to pile up about half of the wealth that is supposed to save us. And if Mason is right, then absent major policy changes, we might well continue in this low-growth state indefinitely.


EXAME (Brazil): O que vem primeiro, crescimento ou produtividade?, August 31, 2017

Economista J. W. Mason, professor assistente do John Jay College, desafiou essa noção em um artigo para o Instituto Roosevelt, uma organização que dissemina ideias progressistas. Seu argumento é que não é a produtividade que explica o crescimento, mas o crescimento que faz a produtividade aumentar.


Vox: Study: a universal basic income would grow the economy, by Dylan Matthews, August 30, 2017

The Roosevelt Institute has done a bunch of work on this theme, arguing that a shortfall in aggregate demand, tied to inequality, is strangling the economy. Roosevelt’s JW Mason argued in a June 2017 paper that the US economy is still quite far from full employment, and GDP is falling below its potential level, largely because of low demand; he argues for more aggressive Federal Reserve policy to correct the problem.


Bloomberg TV: Why the US Economy Still Isn’t At Full Capacity, August 21, 2017

J.W. Mason, City University of New York assistant professor of economics, explains why the Federal Reserve shouldn’t raise rates right now. He speaks with Bloomberg’s Joe Weisenthal, Lisa Abramowicz and Julie Hyman on “What’d You Miss?”


New York Magazine: The Trump Economy Is a Gilded Mediocrity, by Eric Levitz, August 20, 2017

In 2006, America’s labor-force-participation rate — the percentage of the population that either had jobs or were looking for them — was 66 percent. Today, that figure is 63. The innocuous explanation for this decline is that America is simply getting older. As Baby Boomers reach their golden years, we should expect the ranks of would-be workers to get thinner.

Economist J.W. Mason rejects this rosy view. And in a new paper for the Roosevelt Institute, he demonstrates that if we accept the standard assumptions about the effects of aging on the workforce, then the graying of America can only account for up to 40 percent of the fall in the worker-to-population ratio since 2007.


Slate: We’ve Sentenced Puerto Rico to a Greece-Like Economic Catastrophe, by Jordan Weissman, August 17, 2017

Debt-sustainability projections are notoriously too sanguine about the ability of governments to keep paying their creditors while absorbing deep budget cuts. We’ve seen this show play out repeatedly in Greece, where international technocrats spent years making fanciful projections about how the country could slash its spending, raise taxes, gradually bounce back from a depression, and somehow make good on its (reduced) debts. The difference is that, as John Jay College economics professor J.W. Mason notes, Puerto Rico is just now entering into an austerity plan after already experiencing an employment collapse similar to Greece’s.


Vox: The real “deep state” sabotage is happening at the Fed, by Matthew Yglesias, August 14, 2017

What [Trump] really needs are more people like Minneapolis Federal Reserve President Neel Kashkari, who warns that the Fed is currently fighting inflation based on a “ghost story.” Kashkari is a Republican, but he’s a very lonely voice in conservative economic policy circles today. Most of the people making the case for a more robust push for growth are on the left — often the far left, like the Roosevelt Institute’s J.W. Mason.


The Week: The Basic Assumption of Tax Reform Is Wrong, by Ryan Cooper, August 9, 2017

Careful examination of the effects of the Bush dividend tax cut by economist Danny Yagan found no increase in investment whatsoever. Further work by economists Marshall Steinbaum and Eric Bernstein finds that corporate tax cuts in general do not have the advertised effect. Finally, work by economist J.W. Mason finds all this as part and parcel of a broader restructuring of corporations away from investment and towards shareholder payouts.


Business Insider: Four Depressing Charts Show Why Americans Are Still Haunted by the Great Recession, by Pedro Nicolaci da Costa, August 9, 2017

“It is impossible for the wage share to ever rise if the central bank will not allow a period of ‘excessive’ wage growth,” writes J.W. Mason, who authored the report. “A rise in the wage share necessarily requires a period in which wages rise faster than would be consistent with longterm macroeconomic stability.” In other words, if Fed officials tighten monetary policy at the first sign of wage increases, they will never allow the imbalances that have built up, including deep income disparities, to be torn down. Average hourly earnings rose just 2.5% on a yearly basis in July, nothing to write home about and certainly not enough to begin the ground lost over the last decade and more.

Business investment, which is key to long-run economic growth, has also been dismal during the now eight-year expansion. “There is no precedent for the weakness of investment in the current cycle. Nearly ten years later, real investment spending remains less than 10% above its 2007 peak,” Mason writes.


The Week: What the Snap brouhaha reveals about the modern stock market, by Jeff Spross, August 4, 2017

As economist J.W. Mason explained to The Week, the classic defense of capitalism is that competition between companies improves social welfare. To get bigger market share and bigger profits, companies must invent better goods and services and drive down their costs, undercutting competitors. The great paradox of capitalism is that this pursuit of higher profits by each individual firm is supposed to actually drive aggregate profits across an entire industry or sector to zero.

But that paradox rests on a crucial assumption: That the people who own stock in and control a company are only interested in pursuing profits for that specific company. We think of corporations as pursuing profits, but also as pursuing the interests of their shareholders. “And traditionally we think of these two statements as almost being equivalent,” Mason said. “But that really changes when you get these institutional investors and index funds into the game.”


Slate: Trump’s Declaration of Independence, by Reihan Salam, August 1, 2017

Over the past few years, a number of economists, from centrists like Narayana Kocherlakota and Neel Kashkari to socialists like J.W. Mason, have been arguing that the Federal Reserve should worry less about inflation spiraling out of control and more about the persistence of low levels of labor force participation, especially among ex-offenders, young people, and Americans who live in small towns and rural areas. In a recent report for the left-of-center Roosevelt Institute, Mason makes the case that the best way to address sluggish productivity growth would be to boost demand through expansionary monetary policy.


Bloomberg: Private Equity Doesn’t Deserve Its Bad Reputation, by Noah Smith, July 28, 2017

The industry certainly has its detractors. In 2009, Josh Kosman published a book called “The Buyout of America: How Private Equity Will Cause the Next Great Credit Crisis,” claiming — among other things — that PE tends to increase bankruptcies. Mike Konczal, J.W. Mason and Amanda Page-Hoongrajok of the Roosevelt Institute, a liberal think tank, allege that PE exacerbates corporate short-termism. And Paul Krugman has claimed that leveraged buyouts made inequality worse.


The Week: The Great Recession Never Ended, by Ryan Cooper, July 27, 2017

Economist J.W. Mason, a professor at John Jay College and a fellow at the Roosevelt Institute, has compiled a detailed argument that lack of demand is still the major problem in a brilliant paper. The most obvious and jarring part of the case is the fact that from the end of the Second World War to 2007, inflation-adjusted American GDP per person trundled upwards at a rate of 2.2 percent per year. Any periods of slower growth were followed by periods of catch-up faster growth.

But after 2007, there was not only the worst economic crash since the Great Depression, but no catch-up growth whatsoever. On the contrary, the succeeding years after the immediate crash have seen much slower than average growth — and as a result, the gap between what forecasters thought the trajectory of economic output would be in 2006 is actually bigger today than it was in 2010, and getting steadily worse.


Boing Boing: American wages are so low, the robots don’t want your job, by Cory Doctorow, July 26, 2017

The orthodox explanation for the “productivity slump” is that the really cool inventions haven’t arrived yet, or maybe we just haven’t figured out how to use the inventions we have.

But in What Recovery? The Case for Continued Expansionary Policy at the Fed, a new paper from the Roosevelt Institute, economist JW Mason argues that the real problem is that all economic growth is captured by the rich and super-rich, leaving poor people without any money to spend. This means that there’s no demand for products (because poor people can’t buy them and rich people don’t buy enough extra paper towels or windex to made a difference) — and since wages are so low, there’s no reason for industrialists to invest in automation to replace expensive workers.


The New York Times: Maybe We’ve Been Thinking about the Productivity Slump All Wrong, by Neil Irwin, July 25, 2017

It’s a chicken or egg problem: Does low productivity cause slow growth, or does slow growth cause low productivity?  The second possibility is the provocative argument of a new paperpublished Tuesday by the Roosevelt Institute, a liberal think tank. The paper argues that the United States economy is not actually closing in on its full economic potential and has plenty of room for continued growth — so long as the Federal Reserve doesn’t put on the brakes of the expansion prematurely.

J. W. Mason, the author of the report, argues that soft productivity growth reflects not some unlucky dearth of new innovations, but rather is a consequence of depressed demand for goods and services and a slack labor market that has depressed wages. Maybe if the labor market were tighter and wages were rising faster, it would induce companies to invest more heavily in new labor-saving innovations.


The Mic: Why the Federal Reserve raised interest rates — and how it will affect your money, by James Dennin, June 14, 2017

The desire to return to “business as usual” appears to have outweighed any concerns, said J.W. Mason, an economist at the left-leaning Roosevelt Institute. “The Fed is not comfortable with this persistent zero, or very low rates,” Mason said. “They want to be back in the world of what they see as normal policy, they want things to look like they did in 2007 whether it’s what the economy needs or not.”


Jacobin: Class Struggle Still Gets the Goods, by Matthew Bruenig, May 22, 2017

The bulk of Piketty criticism has focused, rather boringly, on whether the rate of investment return will remain steady when the wealth-to-income ratio soars. But economists like Dean Baker, J. W. Mason, and now Naidu have pioneered a more interesting line of attack. According to them, Piketty has not made some mistake in judging elasticities. Rather, he has the entire order of events backwards. It is not an increase in the wealth-to-income ratio that prompts capital’s share to rise — it’s the exact opposite dynamic.


Chicago Reader: The secret history of Illinois’s rent control prohibition, by Maya Dutmaskova, May 17, 2017

“It’s become almost a textbook cliche: in any intro econ class you learn about why rent control is a bad idea,” says J.W. Mason, an economics professor at the John Jay College of Criminal Justice in New York. “I don’t think that’s justified and legitimate.”

Providing affordable housing is just one aspect of rent control, Mason says, but that’s not its only function. The other is providing an opportunity for a neighborhood’s long-term residents to remain in place. “Not all rights are property rights,” as Mason puts it, and a tenant’s interests in remaining in a neighborhood are no less legitimate than the landlord’s interests in reaping maximum profits from his or her property. “That’s an ethical point that most normal people, though perhaps not most economists, would agree with,” Mason says.


City Limits: Is Automation a Threat to US Workers?, by Jarrett Murphy, March 27, 2017

What kind of a risk does automation present to U.S. workers, and are there rewards to think about, too? On Monday I discussed the issue with two non-robots, James Parrott from the Fiscal Policy Institute and JW Mason, an economics professor at John Jay College.


BRIC TV: Rise of the Machines: Will Robots Replace Human Workers? March 27, 2017


Financial Times Alphaville: America’s household debt binge *was* about income inequality, by Matthew Klein, March 1, 2017

JW Mason has released a draft of an intriguing new paper saying the standard story [about household debt] is wrong. According to him, the boom in debt can be explained by the failure of interest rates to fall in line with the slowdown in nominal income growth. Meanwhile, consumption growth has been overstated because of bad methodology. Measured properly, he argues, it hasn’t grown much and is probably being driven by high-earners.


The Week: Is President Trump About to Unleash Another Financial Crisis?, by Ryan Cooper, February 6, 2017

As economist J.W. Mason has demonstrated, finance in general has seen a major push over the last generation to transform into a tool of extracting wealth from the rest of the economy. The “shareholder value revolution” transformed corporations from entities that worked to preserve themselves to entities that existed only to kick money out to shareholders with share buybacks, dividends, and borrowing — even if it meant destroying themselves in the process.


KCBS radio (Bay area): Interview, November 29, 2016


Boing Boing: Giving companies more money (loans, tax-breaks) only increases investor payouts, not expansion, by Cory Doctorow, November 25, 2016

JW Mason’s longread about the rise of massive corporate payouts to investors — with executive compensation redesigned to reward execs who go along with it — builds on the existing literature on the hollowing out of American business, tying in neatly with Thomas Piketty’s carefully documented observations about the role of Reagan-era deregulation in the creation of today’s massive and growing wealth-divide.


The Washington Post: Why Markets are Panicked about the Possibility of a Trump Presidency, by Max Ehrenfreud, November 9, 2016

J.W. Mason of the liberal Roosevelt Institute in Washington has argued that if tariffs on China and Mexico prevented imports from those countries, U.S. manufacturing firms and their employees would be able to produce more to replace those foreign goods, limiting the effect on the U.S. economy.


The Nation: Here’s the Trade Policy Progressives Should Get Behind, by Mike Konczal, October 17, 2016

US debt is valuable to many countries as a means of payment and as a protection against financial collapse. If we were to resist that exchange, as Trump suggests, we would destabilize foreign economies and disrupt our own as well. As the economist J.W. Mason notes, we should be focused on channeling this foreign capital into productive investment at home, including job-creating infrastructure that can boost growth. A Green Keynesianism could use the trade deficit to combat global warming while creating good jobs for workers—a win for everyone across the globe.


The Week: How European Elites Set Greece Up for a Fascist Takeover, by Ryan Cooper, September 29, 2016

 As economist J.W. Mason explained at the time, a restoration of Greek economic sovereignty without a complete break from the euro isn’t too hard to imagine. Despite the common currency, the old Greek central bank is still around, complete with euro-printing capability, conducting the day-to-day operations of eurozone policy. Therefore, any anti-austerity program would involve seizing the Bank of Greece, announcing a backstop of all Greek bank deposits and Greek government debt, and simultaneously slamming down capital controls to prevent money fleeing the country.


The Washington Post: The U.S. Cities with the Most to Lose If Donald Trump Starts a Trade War, by Max Ehrenfreud, September 21, 2016

Moody’s, the private-sector research firm, developed the model on which the forecasts are based. This model has been criticized by liberal economists, including J.W. Mason of the Roosevelt Institute in Washington, for exaggerating the negative consequences of tariffs. Mason argues that U.S. manufacturers would be able to meet domestic demand in response to tariffs more rapidly, keeping prices in check and the economy moving.


Fortune: Hillary Clinton Says Trump Policies Would Cost Nearly 3.4 Million Jobs. Is She Right? by Chris Matthews, August 11, 2016

J.W. Mason, an economist at John Jay College who has written skeptically of how Zandi’s model treats new tariffs, argues that a trade war like Trump is proposing would have very little effect on the U.S. economy, though it could have a much larger impact on Mexico and China.


The Mirror (UK): So what would America look like if Donald J Trump really did become the next President?, by Adela Rye, July 22 2016

As for China, Professor J. W. Mason (a fellow at the Roosevelt Institute) has said: “There’s no way a tariff of this kind could deliver the kind of benefits that he’s talking about, and it’s quite wrong to think that the big problem for American workers has been foreign trade.”


The Week: The world wants to pay America to use the dollar. We should let them, by Ryan Cooper, June 10 2016.

The U.S. is not an ordinary country, as economist J.W. Mason explains in a brilliant paper for the Roosevelt Institute. Our trade deficit is in large part a result of the fact that the dollar is used as the world’s reserve currency — and that gives the U.S. a much larger capacity to carry a trade deficit. Essentially, the world wants to pay us to use dollars. We should let them.


Fortune: Forget Brexit, What Americans Should Really Worry About Is ‘Trexit’, by Chris Matthews, May 25, 2016

Other economists, like J.W. Mason of John Jay College, think that a trade war like Trump is proposing would have very little affect on the U.S. economy (though it could have a much larger impact on Mexico and China).


tbs eFM 101.3 (Seoul): Trade policies proposed by 2016 US presidential candidates, by Alex Jensen, May 9, 2016

Interview with English-language radio station in Korea.


The New York Times: Experts Warn of Backlash in Donald Trump’s Trade Policies, by Binyamin Applebaum, May 2, 2016

“There’s no way a tariff of this kind could deliver the kind of benefits that he’s talking about, and it’s quite wrong to think that the big problem for American workers has been foreign trade,” said J .W. Mason, a professor of economics at John Jay College and a fellow at the Roosevelt Institute, a liberal think tank. “But I think it could be very destructive for the rest of the world.”


Jacobin: Beltway Bullshit: Liberal wonks aren’t afraid of Bernie’s “inexperience.” They’re afraid of an economy where working people have power, by Michael Rozworski, April 15, 2016

Recently, J. W. Mason explained why Sanders’s plans, could, in fact, produce strong growth and employment. In this interview with Michal Rozworski, Mason explores these questions, looking at how strong growth hands power to workers and the political roots of the “wonksphere” opposition to Bernie Sanders.


Bloomberg TV: Are Banks Failing the Economy? , April 12, 2016

John Jay College economics professor J.W. Mason discusses negative rates as a basis of bank lending with Alix Steel, Scarlet Fu and Joe Weisenthal.


The Washington Post: Five Myths about Trade, by Jim Tankersley, April 8, 2016

A model by Moody’s Analytics, prepared at the request of The Post, predicts that Trump-style tariffs would push our economy into recession and throw millions of Americans out of work. A more optimistic model, from economist J.W. Mason of the Roosevelt Institute, estimates that tariffs would probably reduce America’s gross domestic product by about 1 percent — not a huge effect but also not the growth boom that opponents of free trade predict.


The Week: Why California is the perfect lab for a minimum wage hike, by Jeff Spross, March 29, 2016

The point isn’t that California isn’t taking a risk. It is. But while a minimum wage of $200 an hour would get us well past the tipping point, that doesn’t tell us how close we are to the tipping point now. “All the empirical evidence we have is that we’re still a long ways from it,” J.W. Mason, an economics professor at John Jay College, told The Week. “And the reality is how are you going to find out? You’re going to find out when you start seeing job losses.”


The Washington Post: Donald Trump’s Trade War Could Kill Millions of Jobs, by Jim Tankersley, March 25, 2016

J.W. Mason, an economist at the liberal Roosevelt Institute think tank, questioned the model’s forecasts and its underlying assumptions. He predicted tariffs would likely have a much smaller effect on growth and employment in the United States. A “more realistic” model, Mason said, “might get you higher or lower employment relative to the baseline, but either way the effects would be an order of magnitude smaller than this.” Mason is critical, in particular, of the model’s assumption that the tariffs would lead to little return to the United States of the roughly 1 million factory jobs that economists say have been lost to China over the past decade.


Slate: How One Famous Economist Summed Up Donald Trump’s Secret to Success, by Jordan Weissman, March 23, 2016

John Jay College economics professor J.W. Mason has a blog post Wednesday looking at a 1990 lecture Minsky delivered in which he framed Trump’s rise and fall as a classic bubble, similar to those that had blown up and burst in commodity exporters like Brazil and in Japan’s insane real estate market.


The Week: Who’s Afraid of John Maynard Keynes?, by Ryan Cooper, March 4, 2016

A large enough stimulus could be conceived as the force that returns the economy to its healthy state. Imagine, for example, a government public works projects giving people the employment history and income that they need to get a private job after the program winds down. Such an effect holds double for infrastructure improvements that ought to provide long-lasting structural benefits.

This is precisely what happened after World War II, by far the most aggressive fiscal stimulus in history, after which the Great Depression did not return. One could construct an analysis of the New Deal/wartime mobilization spending that would pop out truly colossal multipliers — and as economist J.W. Mason points out, the 1933-39 period is the only comparable historical period of economic slack.


Bloomberg TV: Can Bernie Sanders Revive the US Economy?, February 24, 2016

J.W. Mason, a John Jay College assistant professor, explains what a Bernie Sanders economy could look like. He speaks with Bloomberg’s Joe Weisenthal on “What’d You Miss?”


The Washington Post: The economist who vouched for Bernie Sanders’ big liberal plans is voting for Hillary Clinton, by Jim Tankersley, February 18, 2016

Some liberal economists this week endorsed the idea, at least in the abstract, that another big fiscal stimulus could boost growth. They include J.W. Mason, an economist at the progressive Roosevelt Institute.


Bloomberg View: The Next Big Idea in Economic Growth, by Noah Smith, February 16, 2016

Our theories assume such a tight connection between financial investment and business investment that we use the same word for both activities. But what if this system just doesn’t work as well as it should? If financial investors have short-term horizons, they may not push businesses to do the long-term investment that really boosts the economy. J.W. Mason, a researcher at the Roosevelt Institute, found that businesses have recently been borrowing money not to make real investments, but to make cash payouts to shareholders.


The American Prospect: What CEOs Do for a Living, by Harold Meyerson, January 28, 2016

In a paper for the Roosevelt Institute, economist J.W. Mason showed that the amount that the U.S. corporate sector showered on shareholders over the past decade was equal to all corporate borrowing.  In the 1960s and 1970s, about 40 cents of every dollar that a corporation either borrowed or realized in net earnings went into investment in its facilities, research, or new hires. Since the 1980s, however, just 10 cents on the dollar has gone to investment.

Indeed, when corporations take on debt, they do so increasingly to pay off shareholders. “The businesses that have been borrowing the most since the end of the recession have not been those with the highest levels of investment, but rather those with the highest dividend payments and share repurchases,” Mason writes. “Finance is no longer an instrument for getting money into productive businesses, but instead for getting money out of them.”


Financial Times: Alphaville: Do demographics dictate lower returns to capital and faster inflation?, by Matthew C. Klein, January 15, 2016

For even more discussion of the role of government in the distribution of income and wealth, we encourage you to read JW Mason here and here on the importance of bargaining power and policy choices for explaining changes in the distribution of wealth and income.


International Business Times: US Economy In 2016: Here Are 3 Important Trends To Watch, by Owen Davis, December 31, 2015

As economics professor and Roosevelt Institute fellow J.W. Mason pointed out in a November report: “Instead of increasing, the share of investment coming from new and small companies is actually declining.” Shareholders may be bringing in historic sums, but they are not necessarily spreading the wealth to younger firms.


Bloomberg TV: How Sensitive Are Bank Profits to Rising Rates?, December 22, 2015

J.W. Mason, a Roosevelt Institute fellow, discusses the degree to which rates affect bank profits. He speaks with Bloomberg’s Joe Weisenthal and Alix Steel on “What’d You Miss?”


Marketplace: Is It Enough for Companies to Make Stuff These Days?, by Scott Tong, December 9, 2015

J.W. Mason, assistant professor at the City University of New York and a fellow at the Roosevelt Institute, said shareholders have exercised outsize influence on corporate America since the “shareholder revolution” of the mid-1980s. Dow and Dupont have given stockholders $9 billion through share buybacks the last couple years, and Mason said they didn’t do that in the past. In his view, the role of the stock market has flipped. “Finance was a tool for getting money into the corporate sector,” Mason said. “But now overwhelmingly finance is a tool for getting money out of the corporate sector.”


Bloomberg TV: The Harmful Effects of Buybacks and Short-Term Thinking, November 11, 2015

J.W. Mason, a Roosevelt Institute fellow, discusses the harmful effects of stock buybacks and short-term thinking with Bloomberg’s Joe Weisenthal, Alix Steel and Scarlet Fu on “What’d You Miss?”


Marketplace: Corporations cashing in on cheap debt while they can, by Kimberly Adams, November 10, 2015

[There was] a massive jump in corporate bond offerings this year, especially the so-called “jumbo deals” — bond offerings with more than $10 billion in proceeds. So far this year, there have been 13 jumbo deals, compared to just three in 2014. Economist J.W. Mason at the City University of New York says that money isn’t necessarily for growth.

“It’s not financing real investment — it’s not financing factories, it’s not financing research and development,” he said. Mason said many companies are using the debt to pay for mergers and acquisitions, or to pay better dividends. “From a shareholder’s point of view, that’s really just as good as the kind of earnings growth you would see in a more robust expansion,” Mason said.


Bloomberg View: Bonuses, Bail-Ins and Down Rounds, by Matt Levine, November 9, 2015

Probably the most interesting and thoughtful advocate of the case against stock buybacks and corporate short-termism is J.W. Mason, who has a new Q&A out for the Roosevelt Institute. He makes the case that the current wave of dividends and buybacks from big public companies is mostly not being reinvested in innovative smaller private companies, and that those dividends and buybacks can’t be justified just by saying that companies don’t have any better uses of the cash.


The Week: The Giant Corporate Money Hose to Nowhere, by Jeff Spross, November 9, 2015

study the Roosevelt Institute released on Friday says investment is shockingly low — well below where it’s been at an equivalent point in any other recovery since World War II. Now, according to official government statistics, investment as a share of gross domestic product (GDP), while below its peak of the early 1980s, is doing fine. But John Jay College economics professor J.W. Mason, the Roosevelt study’s author, pointed out that this is a deceptive metric… So what should we do about it? On this point, Mason and his colleagues released a companion report with a host of options. Some of it is more proactive regulation to combat stock buybacks. Some of it involves reforming corporate governance to force CEOs to take the long view on investment, and to empower other stakeholders in companies


Huffington Post, How Wall Street’s Short-Term Fixation Is Destroying The Economy, by Daniel Marens, November 6, 2015

Senator Tammy Baldwin  spoke at a panel discussion sponsored by the progressive think tank Roosevelt Institute on corporate “short-termism” — sometimes known as “quarterly capitalism.” The Roosevelt Institute convened the event to promote two new reports decrying companies that prioritize the short-term practices of paying dividends to investors and buying back stock above long-term investment and growth. A paper by J.W. Mason said the short-termism trend is deeply damaging to the economy. … Corporate investment has grown at a slower rate during the current economic recovery than in any business cycle since the 1950s, J.W. Mason’s paper demonstrates.


The Week: How Bank of America Exposes the False Promise of the Shareholder Revolution, by Jeff Spross, October 1 2015

As economist J.W. Mason laid out in a helpful paper, most all corporations were run as privately held, gargantuan family businesses in the late 1800s. The rise of shareholder ownership as the norm occurred around the turn of the century, and was such a new phenomenon that major economists like John Maynard Keynes marveled at the sudden turn corporations were taking to “socialize” themselves. … As Mason put it in another piece, capitalists aren’t interested in doing some particular social good. They’re interested in being able to liquidate that social good into cold hard cash at their convenience. Shareholders, CEOs, and corporate boards all fall under the definition of “capitalists” for these purposes. And the modern stock market provides the ATM they all use.


Vox: Arguments for Higher Interest Rates Are Getting Weirder and More Desperate, by Matthew Yglesias, September 23, 2015

The trend toward executives using borrowing to finance share buybacks rather than investment appears to be real (see JW Mason’s research for more on this), but it has nothing to do with the current state of interest rates. An executive has to make the calculation, “Is it better for the value of my stock options to invest this borrowed money or to spend it on share buybacks?” Interest rates plausibly influence the quantity of borrowing that companies do, since lower rates make borrowing cheaper. But there’s no reason for them to influence the split between buybacks and investment.


International Business Times: Fed Rate Hike: Why Seven Years Of Near-Zero Interest Rates Failed To Boost Wages, by Owen Davis, September 16, 2015

In February, a study from the left-leaning Roosevelt Institute found that over the past several decades, corporations have devoted more borrowed cash to shareholders and less of it to research and capital expenditures.

“Firms use cheaper credit primarily to boost dividends and stock buybacks,” wrote J.W. Mason, the Roosevelt Institute fellow who conducted the research.


Bloomberg View: Swaps, Stocks and Accounting Clubs, by Matt Levine, September 1, 2015

“The most interesting person worrying about stock buybacks and short-termism is J.W. Mason.”


Al Jazeera America: Economists blame ‘global savings glut’ for destabilized markets, by Ned Resnikoff, August 26, 2015

“Joshua Mason, an economist at John Jay College in New York, argued that the cycle of excessive savings and inflating bubbles did not start with the great recession — instead, it goes back much further. “For 30 years, we’ve seen this rolling crisis moving from one part of the world to another,” Mason told Al Jazeera. “Every few years, there’s been this financial crisis in one part of the globe or another.” A handful of factors are to blame for these crises, according to Mason, including the ability of capital to move across national boundaries without impediment.”


The Intercept: SEC Admits It’s Not Monitoring Stock Buybacks to Prevent Market Manipulation, by David Dayen, August 13, 2015

“Returning profits to shareholders through buybacks and dividends accounted for 95 percent of all earnings in 2014. As a result, each additional dollar of corporate earnings now translates to under 10 cents of reinvestment, according to a study by J.W. Mason.”


The Week: How Wall Street is Ruining Twitter, by Jeff Spross, July 30, 2015

“As a lot of people have noted — what with the glut of stock buybacks and Hillary Clinton’s concerns with “quarterly capitalism” — we’ve entered an era in our economy where the “wealth maximization” drive is swallowing all other priorities. “True capitalists don’t want to make steel or restaurant deals or jumbo jets or search engines,” economist J.W. Mason wrote recently. “They want to make money.””


National Review: Is Corporate America Letting Us Down?, by Reihan Salam, July 30, 2015

“J. W. Mason, an iconoclastic economist and blogger who is always worth reading, has suggested that there appears to be no increase in the share of corporate investment attributable to smaller, younger corporations.”


The Huffington Post: Hillary Clinton’s Economic Speech A Total Letdown, by Zach Carter and Ben Walsh, July 24, 2015

“The problem Clinton is trying to address had been well documented. There has been a decades-long divergence between the money companies borrow and the money they invest, as the Roosevelt Institute’s Mike Konczal and J.W. Mason pointed out earlier this year. Rather than raising money to build better businesses, companies are, to a dramatic degree, raising money to pay shareholders.”


Al Jazeera America: Greece’s new deal: From austerity to ‘austerity squared’, by Ned Resnikoff, July 13, 2015

“Months of tense negotiations with international lenders have resulted in a deal that is largely “more of the same, with the emphasis on ‘more,’” said Joshua Mason, an economist at John Jay College of Criminal Justice. “There’s no reason to expect the outcome of these policies can be any different than what it’s been over the past five years,” Mason said.”


The Week: How Germany defeated Syriza — and reasserted its hegemony over the eurozone, by Ryan Cooper, July 13, 2015

“In a riveting interview, former Greek Finance Minister Yanis Varoufakis  says that eurozone elites were never negotiating in good faith. Instead they were stringing the Greeks along with pointless busywork (given this bargain, an easy thing to believe). He lost all faith in talks, and after the huge victory in the July 5 referendum, he proposed an aggressive scheme in line with what economist J. W. Mason has suggested: the introduction of euro-denominated IOUs to ease the liquidity crisis; a unilateral partial default; and greater autonomy for Greece’s central bank from the European Central Bank.”


Al Jazeera America: Greek woes exacerbated by demands not connected to debt, by Ned Resnikoff, June 29, 2015

“Greece’s creditors have often demanded regulatory adjustments and labor market reforms that did not have an obvious bearing on the country’s financial stability. “They’ve put forward a whole series of demands for policy reforms that have nothing to do with budget issues and are really more focused on labor market deregulation,” said Joshua Mason, an economist at John Jay College of Criminal Justice in New York.”


The Week: The simple tool that could’ve prevented Greece’s economic catastrophe, by Jeff Spross, June 23, 2015

“… according to J.W. Mason, an economics professor at John Jay College, that narrative leaves out a crucial detail. “There are no rules that say, because of the possibility of a Greek default on sovereign debt, ECB must cut off its assistance,” Mason said.

“If the central bank of Greece was willing to lend to the national banks of Greece, that would automatically generate the flows from the rest of Europe,” he continued. “They aren’t willing to do that. The choice has been made that Greek banks aren’t credit-worthy.” But this, according to Mason, was brazenly a political choice, as opposed to one driven by economic necessity.”


Salon: The 1 percent is right! Here’s how education could reduce inequality, by Elias Esquith, June 4, 2015

“As the economist and City University of New York professor J.W. Mason writes, “Since 2000 … while average incomes of the top 0.01 percent have increased another 20 percent, labor income for these households has fallen by almost half, down to $5.5 million.” Which means, effectively, that the “rise in income inequality since 2000 is not about earnings; the top of the distribution is no longer the working rich.” Who are they? Not a “CEO or even an elite professional,” Mason says. Instead, they’re people who “mostly just own stuff.””


Los Angeles Times: Corporate Stock Buybacks Take Off, Leaving Workers in the Dust, Michael Hiltzik, June 1, 2015

Fueling the buyback craze are low interest rates, which allow companies to borrow money cheaply. It’s the use to which they’re putting their borrowed funds that’s perverse. “Whereas firms once borrowed to invest and improve their long-term performance,” observed J.W. Mason of the Roosevelt Institute, “they now borrow to enrich their investors in the short-run.”


CNBC: What McDonald’s needs to do to turn around: Experts, by Michelle Fox, May 21, 2015

“McDonald’s needs to forget about big payouts to shareholders and instead focus on investing in its business if it wants to engineer a turnaround, economics professor Josh Mason said Thursday. Mason noted that the company earned about $5.5 billion last year, yet it paid out almost $6.5 billion to shareholders in buybacks.

“If you want to rebuild the business, you have to invest in the business. You’re not going to make the business succeed by disinvesting in it to the tune of $1 billion going out the door to shareholders,” the John Jay College professor said in an interview.”


Pacific Standard: In Defense of Rent Control, by Jake Blumgart, April 1, 2015

“The argument for rent control should be distinguished from the argument for affordability per-se,” says Joshua Mason, an economics professor at John Jay College. “The real goal of rent control is protecting the moral rights of occupancy. Long-term tenants who contributed to this being a desirable place to live have a legitimate interest in staying in their apartments. If we think that income diverse, stable neighborhoods, where people are not forced to move every few years, [are worth preserving] then we collectively have an interest in stabilizing the neighborhood.”


Demos Policy Shop: Might High Taxes and Weak Shareholders Increase Real Investment?, by Matt Bruenig, March 23, 2015

“Like everyone else in the economics blogging sphere, I have been impressed by the new Mason-Konczal project at the Roosevelt Institute. The headline argument, which was previewed by Mason at The New Inquiry a short time ago, is that the shareholder revolution has not delivered on its basic promise, but instead has put corporate managers under severe pressure to disgorge cash to shareholders rather than use it to make investments in production and jobs.”


The Week: How the rich devoured the American corporation — and what we can do about it, by Ryan Cooper, March 11, 2015

“Professor J.W. Mason, of City University of New York, has been developing a much more convincing thesis to explain the decline of corporate investment. He argues, most recently in a working paper for the Roosevelt Institute, that it is a result of a political struggle over the profits created by firms.”


Time Magazine: Why Finance Is Still a Problem, By Rana Foroohar, March 9, 2015

“Part of the problem with the rise of finance is that it encourages the culture of shareholder value over all else. That means CEOs focus more on buoying stock prices rather than making the best long-term decisions. The effects can be seen in the fact that since the 1980s, share buybacks and dividend payments have increased in direct proportion to a decrease in productive capital investment, according to a recent Roosevelt Institute paper entitled “Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment.” What’s more, says JW Mason, a Roosevelt fellow who authored the paper…”


Washington Post: Shareholders’ Big Skim, by Harold Meyerson, March 4, 2015

“A recent paper by J.W. Mason, an economist at the City University of New York and a fellow at the Roosevelt Institute, documents the great shift in what U.S. corporations have done with their money. In the 1960s and ’70s, about 40 cents of every dollar that a corporation either borrowed or realized in net earnings went into investment in its facilities, research or new hires. Since the ’80s, however, just 10 cents of those dollars have gone to investment. As a result of the shareholder revolution, the money that once went to expansion and new ventures has gone instead into shareholders’ pockets.”


Seattle Stranger: What William Gibson’s “New Rose Hotel” Got Wrong About the Future, by Owen Davis, March 3, 2015

“In Gibson’s story, the scale of the investments that corporations have made in R&D and human capital is such that new products flow from their labs at a dizzying pace. But what we find today (which is the future) are corporations spending more and more money on stock buybacks rather than on developing new products, new technologies. In fact, a recent paper by the economist J.W. Mason shows that corporations are even borrowing loads of money to pay shareholders. You are supposed to borrow money to make more money—that is actually capitalism. What on earth should we call this strange business of borrowing money to increase the returns of unproductive shareholders?”


Washington Post: The fringe economic theory that might get traction in the 2016 campaign, by Max Ehrenfreund, March 2, 2015

Excerpt: “Corporations used to issue bonds when they needed money for new projects, writes J.W. Mason, an economist at John Jay College, City University of New York. These days, according to Mason, data show that corporations aren’t using the money they borrow. Instead, he concludes, corporations are mainly borrowing money in order to issue dividends and repurchase shares from the public.”


International Business Times: Corporate Borrowing Now Flows To Shareholders, Not Productive Investment: Study, by Owen Davis, February 26, 2015

““Something is really operating differently in the world of corporate finance now,” says J.W. Mason, an economist and fellow at the left-leaning Roosevelt Institute. “There’s a lot of pressure from shareholders to take every dollar that comes in and send it out the door.””


Los Angeles Times: Hewlett-Packard shows how to fatten shareholders while firing workers, by Michael Hiltzik, February 25, 2015

“H-P isn’t alone in putting shareholders first through buybacks and dividends. A new study by the Roosevelt Institute documents the trend across the corporate landscape. ‘Whereas firms once borrowed to invest and improve their long-term performance,” observes its author, J.W. Mason, “they now borrow to enrich their investors in the short-run.’”


Washington Post: “Why companies are rewarding shareholders instead of investing in the real economy”, by Lydia DePillis, February 25, 2015

“The health of the financial system might matter less for the real economy than it once did,” writes J.W. Mason, an assistant professor of economics at John Jay College who wrote the paper, “because finance is no longer an instrument for getting money into productive businesses, but for getting money out of them.”


Washington Monthly: Frenzied Financialization, by Mike Konczal, December 2014

Economist J. W. Mason found that, before the 1980s, firms tended to borrow funds in order to fuel investment. Since 1980, that link has been broken. Now when firms borrow, they tend to use the money to fund dividends or buy back stocks. Indeed, even during the height of the housing boom, Mason notes, “corporations were paying out more than 100 percent of their cash flow to shareholders.”