New Survey Finds Inflation, Housing Costs And Eviction Threats Hitting Minorities Hardest

Minority communities have been the hardest hit financially by the current spike in consumer prices and housing costs, with high percentages of Black, Latino and Native American families reporting serious financial problems and even threats of eviction, according to a survey published Monday by the Harvard T. H. Chan School of Public Health, NPR and the Robert Wood Johnson Foundation.

With the annual increase in consumer prices hitting a 40-year high of 9.1% in June, Americans, by a wide margin, cite inflation as the number one problem facing the U.S. But the actual impact on individual households is more dispersed. For example, in the new survey, 58% of Black adults, 56% of Latinos and 69% of Native Americans say inflation has caused them serious financial problems, compared to 44% of white and 36% of Asian adults.

Soaring rents are similarly hitting certain minority households the hardest. In the new survey, 16% of Black renters, 10% of Latino renters and 21% of Native American renters reported they had been evicted or threatened with eviction in the past year. That compares to 9% of white and 4% of Asian families. “This is just a warning from this survey, that unless the government can provide some help for vulnerable populations, a year from now they are going to have more people who are homeless,” said Robert J. Blendon, co-director of the survey and an emeritus professor of Health Policy and political analysis at the Harvard T.H. Chan School of Public Health

Programs of emergency rental aid helped around 5 million American families during the early months of the pandemic, with 1.5 million fewer evictions compared to pre-pandemic levels. After 22 million Americans lost their jobs during the start of the pandemic, Congress provided $25 billion in emergency rental assistance in the Coronavirus Aid, Relief, and Economic Security Act (CAR AR +3%ES Act) passed in March 2020. A year later, in the American Rescue Plan, it added another $21.55 billion of rental assistance.

The CARES Act also included a temporary federal eviction moratorium that expired in the summer of 2020. It was later extended by the Centers for Disease Control (CDC), and then by Congress, and then again by the CDC. Finally, on August 3, 2021, after a surge in Covid-19 cases due to the Delta variant, the CDC extended the moratorium yet again. Later that month, the Supreme Court ruled against it.

Meanwhile, the emergency rental funds Congress appropriated have either been used up or are being returned to the federal government unspent. For example, last Thursday, Mississippi Governor Tate Reeves announced his state would halt the federally-funded Rental Assistance for Mississippians Program by Aug. 15, meaning as much as $130 million for the program would be returned to the federal government.

California, having used up its federal money, ended its Covid-19 rental assistance program on March 31, 2022. It sent more than $4 billion to 344,000 households –but around 5,400 tenants and landlords have received emails asking to return money received in Covid-19 rent relief.

The housing component of the CPI increased 5.6% in the 12 months ended in June, but that includes costs to both homeowners and renters. In many places renters have seen far greater increases. According to housing data collected by Redfin RDFN +14.3%, average asking rents in June were up 14% compared to June 2021. In some sunbelt cities like Miami, rent has increased nearly 40%.

The recent spike in rent prices leaves low-income and minority groups in particularly precarious situations. A May report by the Federal Reserve Board showed that as of last fall, about half of renters with income between $25,000 and $49,999 were already “cost burdened”—meaning they were spending more than 30% of their income on rent. In the Fed survey, 44% of Black households and 37% of Hispanic households reported they were renters, compared with just 21% of white households.

“Unless some sort of emergency help is provided, a substantial number of minority populations are going to be evicted over the next year,” Blendon warns.

MORE FROM FORBESMortgage Applications Rise In Potential Housing Market Respite-Could Home Buying Become More Affordable Soon?

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I’m a summer intern reporting for Forbes Money and Markets. I graduated from Boston University with a degree in Journalism

Source: New Survey Finds Inflation, Housing Costs And Eviction Threats Hitting Minorities Hardest

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Survey : Inflation is Costing Americans

The vast majority of Americans expect inflation to continue for at least six months. Meanwhile, Americans on both sides of the aisle say rising prices are hurting their families.

Nearly 8 in 10 Americans expect inflation to increase over the next six months, according to a Gallup poll released Wednesday, suggesting that an issue predominantly emphasized by Republicans that has loomed large over the Biden administration is perhaps crossing party lines.

Although Americans typically predict rising inflation, it’s unusual to this degree, Gallup says. The current expectation is the highest the group has ever measured, at 79% of those surveyed, with the prior record set in September 2005.

The estimates come as a growing number of Americans – who have not had to deal with sharply rising prices in decades – have in recent months named the issue as a top problem facing the U.S., doing so at higher rates than in nearly 40 years.

But Americans are still more preoccupied with the government and the coronavirus pandemic, naming them as top issues over inflation. Still, concern over inflation and its longevity are expected to continue to increase, Gallup says, while more Americans will likely report financial hardship, spelling trouble for the Biden administration.

Among those most affected are lower-income households that are less able to accommodate the rising prices, Gallup says. And while just 10% of the country says inflation’s effects are so severe that their standard of living has been impacted, about half of Americans say higher prices are harming their finances in one way or another.

Meanwhile, Americans view the economy more negatively than positively overall. Just 23% describe economic conditions as good or excellent, while 77% think they are only fair or poor. And around two-thirds of Americans believe the economy is only getting worse.

Top Biden administration officials have taken to blaming inflation on the pandemic and global disruptions to the economy to counter negative polling, while touting such achievements as passage of the American Rescue Plan that put money into the pockets of Americans, rising wages and reductions in household poverty.

But the widespread expectation among Americans that inflation will climb in the next six months suggests that even among Democrats, the issue is top of mind.

According to Gallup, political considerations appear to influence to what degree people say rising prices are “hurting their families.” Whereas 60% of Republicans report experiencing hardship over rising prices and a similar share of independence agree, around 36% of Democrats say the same.

 

By

Kaia Hubbard is a general news reporter at U.S. News & World Report. She joined the company in 2020 as an intern, after previously writing for Willamette Week, her hometown paper. Kaia is a graduate of the University of San Diego, where she led her college paper as editor-in-chief, winning regional and national awards for her work.

Source: Americans Across Party Lines Are Feeling the Effects of Inflation: Survey | Economy | US News

.

Critics:

The hottest inflation in nearly four decades will cost millions of Americans an additional $3,500 in expenses this year, according to a new analysis published on Wednesday. Findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania’s Wharton School, show that most U.S. households will need to allocate at least 6% more of their budget in order to sustain last year’s spending level on goods and services.

That figure is even higher for low-income Americans, who need to increase their spending by at least 7%. The recent inflation burst is disproportionately hurting lower-income households, largely because they collectively spend more on energy – which has seen some of the wildest price swings over the past year – while wealthy Americans spend more on services, which has seen the smallest inflation increases. 

That could mean, based on 2020 spending data, that the bottom 20% of income-earners saw their consumption expenditure increase by 6.8% to $2,120 per household, while the top 5% saw a 6.1% increase, or roughly $7,636 per household. Middle-income earners also saw a large increase in expenses, with an increased consumption expenditure of $4,351, or an increase of 6.8%.

“Since higher-income groups had a bigger increase in expenditures in all categories, they also saw a bigger increase in total expenditure,” the analysis said. “However, because of variation in the composition of consumption bundles, we find that higher-income households had smaller percentage increases in their total expenditure.” 

The Penn Wharton analysis comes on the heels of a new government report that revealed consumer prices soared 6.8% in November from the previous year, the fastest pace since June 1982, when inflation hit 7.1%. 

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IRS Releases Child Tax Credit Payment Dates Here’s When Families Can Expect Relief

Treasury check on top of various currency bills - corona virus relief

The Internal Revenue Service said Monday it has begun sending letters to more than 36 million families likely eligible to receive payments starting in July under the newly expanded Child Tax Credit—one of the major antipoverty initiatives in President Biden’s stimulus plan—and announced the dates those payments are expected to hit bank accounts.

Key Facts

Biden’s $1.9 trillion American Rescue Plan significantly expanded the Child Tax Credit for the 2021 tax year: It will now provide eligible parents with a $3,000 credit for every child aged 6 to 17 and $3,600 for every child under age 6 (up from $2,000 per dependent child up to age 16).

Individuals earning up to $75,000 a year, heads of household up to $112,500 a year, and joint filers up to $150,000 a year are eligible to receive the full amount of the credit.

The amount of the payments will phase out by $50 for every $1,000 in adjusted gross income above those thresholds. The IRS will use information from 2019 or 2020 tax returns or the agency’s online Non-Filers tool to determine eligibility.

Some of that money will come in the form of advance payments, via either direct deposit or paper check, of up to $300 per month per qualifying child on July 15, August 13, September 15, October 15, November 15 and December 15, the IRS said Monday.

Families can claim the remainder of the credit on the 2021 tax returns they file next spring.

Big Number

$4,380. That’s the average benefit over 90% of families with children will receive under the expanded credit, according to the Tax Policy Center.

Tangent

The American Rescue Plan also made the Child Tax Credit fully refundable for 2021. It was previously refundable only up to $1,400 per child, and families needed to earn at least $2,500 to be eligible for any of that money. That means many low-income families or families with no income at all that would have been ineligible for some or all the old credit (because they didn’t earn enough to owe taxes to qualify) can receive the full benefit in 2021.

What To Watch For

The IRS said it will send a second letter to eligible families with information about the estimated monthly payments they can expect to receive. The IRS is also expected to open an online portal where families can check their eligibility, update information about income and qualifying children, check the status of their payments and opt out of the program.

Key Background

The White House has proposed extending the expanded Child Tax Credit for another five years under the American Families Plan (which has yet to be taken up by Congress), but many progressives want to make the expanded credit permanent. “No recovery will be complete unless our tax code provides a sustained pathway to economic prosperity for working adults and families,” 41 Democratic senators wrote in a letter to President Biden in March. “Your forthcoming Recovery Plan is the opportunity we have to make the expansions of these credits permanent.“

Further Reading

Expanded Monthly Child Tax Benefit Will Begin Hitting Bank Accounts July 15 (Forbes)

Here’s Everything You Need To Know About The New Expanded Child Tax Credit (Forbes)

41 Democratic Senators Ask Biden To Support Permanent Child Tax Credit And Earned Income Tax Credit (Forbes)

How Much Money You Will Get From Stimulus Checks, Unemployment Benefits And Everything Else Inside Biden’s $1.9 Trillion Relief Bill (Forbes)

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.

Source: IRS Releases Child Tax Credit Payment Dates—Here’s When Families Can Expect Relief

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Critics:

There have been important changes to the Child Tax Credit that will help many families receive advance payments starting this summer. The American Rescue Plan Act (ARPA) of 2021 expands the Child Tax Credit (CTC) for tax year 2021 only.

The expanded credit means:

  • The credit amounts will increase for many taxpayers.
  • The credit for qualifying children is fully refundable, which means that taxpayers can benefit from the credit even if they don’t have earned income or don’t owe any income taxes.
  • The credit will include children who turn age 17 in 2021.
  • Taxpayers may receive part of their credit in 2021 before filing their 2021 tax return.

For tax year 2021, families claiming the CTC will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021. They will receive $3,600 per qualifying child under age 6 at the end of 2021. Under the prior law, the amount of the CTC was up to $2,000 per qualifying child under the age of 17 at the end of the year.

The increased amounts are reduced (phased out), for incomes over $150,000 for married taxpayers filing a joint return and qualifying widows or widowers, $112,500 for heads of household, and $75,000 for all other taxpayers.

Advance payments of the 2021 Child Tax Credit will be made regularly from July through December to eligible taxpayers who have a main home in the United States for more than half the year. The total of the advance payments will be up to 50 percent of the Child Tax Credit. Advance payments will be estimated from information included in eligible taxpayers’ 2020 tax returns (or their 2019 returns if the 2020 returns are not filed and processed yet).

The IRS urges people with children to file their 2020 tax returns as soon as possible to make sure they’re eligible for the appropriate amount of the CTC as well as any other tax credits they’re eligible for, including the Earned Income Tax Credit (EITC). Filing electronically with direct deposit also can speed refunds and future advance CTC payments.

Eligible taxpayers do not need to take any action now other than to file their 2020 tax return if they have not done so.

Eligible taxpayers who do not want to receive advance payment of the 2021 Child Tax Credit will have the opportunity to decline receiving advance payments. Taxpayers will also have the opportunity to update information about changes in their income, filing status or the number of qualifying children. More details on how to take these steps will be announced soon.

The IRS also urges community groups, non-profits, associations, education groups and anyone else with connections to people with children to share this critical information about the CTC. The IRS will be providing additional materials and information that can be easily shared by social media, email and other methods.

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Why Stocks Soared While America Struggled

You would never know how terrible the past year has been for many Americans by looking at Wall Street, which has been going gangbusters since the early days of the pandemic.

“On the streets, there are chants of ‘Stop killing Black people!’ and ‘No justice, no peace!’ Meanwhile, behind a computer, one of the millions of new day traders buys a stock because the chart is quickly moving higher,” wrote Chris Brown, the founder and managing member of the Ohio-based hedge fund Aristides Capital in a letter to investors in June 2020. “The cognitive dissonance is overwhelming at times.”

The market was temporarily shaken in March 2020, as stocks plunged for about a month at the outset of the Covid-19 outbreak, but then something strange happened. Even as hundreds of thousands of lives were lost, millions of people were laid off and businesses shuttered, protests against police violence erupted across the nation in the wake of George Floyd’s murder, and the outgoing president refused to accept the outcome of the 2020 election — supposedly the market’s nightmare scenario — for weeks, the stock market soared. After the jobs report from April 2021 revealed a much shakier labor recovery might be on the horizon, major indexes hit new highs.

The disconnect between Wall Street and Main Street, between corporate CEOs and the working class, has perhaps never felt so stark. How can it be that food banks are overwhelmed while the Dow Jones Industrial Average hits an all-time high? For a year that’s been so bad, it’s been hard not to wonder how the stock market could be so good.

To the extent that there can ever be an explanation for what’s going on with the stock market, there are some straightforward financial answers here. The Federal Reserve took extraordinary measures to support financial markets and reassure investors it wouldn’t let major corporations fall apart.

Congress did its part as well, pumping trillions of dollars into the economy across multiple relief bills. Turns out giving people money is good for markets, too. Tech stocks, which make up a significant portion of the S&P 500, soared. And with bond yields so low, investors didn’t really have a more lucrative place to put their money.

To put it plainly, the stock market is not representative of the whole economy, much less American society. And what it is representative of did fine.“No matter how many times we keep on saying the stock market is not the economy, people won’t believe it, but it isn’t,” said Paul Krugman, a Nobel Prize-winning economist and New York Times columnist. “The stock market is about one piece of the economy — corporate profits — and it’s not even about the current or near-future level of corporate profits, it’s about corporate profits over a somewhat longish horizon.”

Still, those explanations, to many people, don’t feel fair. Investors seem to have remained inconceivably optimistic throughout real turmoil and uncertainty. If the answer to why the stock market was fine is basically that’s how the system works, the follow-up question is: Should it?

“Talking about the prosperous nature of the stock market in the face of people still dying from Covid-19, still trying to get health care, struggling to get food, stay employed, it’s an affront to people’s actual lived experience,” said Solana Rice, the co-founder and co-executive director of Liberation in a Generation, which pushes for economic policies that reduce racial disparities. “The stock market is not representative of the makeup of this country.”

Inequality is not a new theme in the American economy. But the pandemic exposed and reinforced the way the wealthy and powerful experience what’s happening so much differently than those with less power and fewer means — and force the question of how the prosperity of those at the top could be better shared with those at the bottom. There are certainly ideas out there, though Wall Street might not like them.

How the stock market boomed when American life soured

Many on Wall Street, like many people in America, were in denial about the realities of Covid-19 when it first began to take hold internationally in early 2020. In an interview with Vox last April, CNBC host Jim Cramer recalled wondering whether “another shoe will drop on this coronavirus outbreak” in early February, only to see stocks keep rising steadily. “But nothing happened. The market kept quiet,” Cramer told Vox. Indeed, stocks continued to reach record highs.

While stocks often rise slowly, they also fall fast. And once Wall Street caught on to the realities Covid-19 might bring, the market tumbled, wiping off some 30 percent of its value from mid-February to mid-March. “No one had any idea of what the future was going to be, how deep this is, how long it would be, how wide it would be,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

The S&P 500 bottomed out on March 23, just a week into New York’s shutdown, and after that, it made a remarkably strong recovery, month after month.

Most analysts and experts point to the Fed as the most important factor in supporting market confidence. The central bank announced a series of big measures to help support the economy and markets in March 2020, including saying that it would buy both investment-grade and high-yield corporate bonds (basically, debt that is risky and debt that is not).

“Not dissimilar to the global financial crisis, the Fed stepped in, and that was really a catalyst for a stock market recovery,” said Kristina Hooper, chief global market strategist at Invesco. “The Fed can be very, very powerful, almost omnipotent, when it comes to the stock market.”

Throughout the crisis, the Fed and Chair Jay Powell have made clear they will support markets and use every tool in their toolkit to do it. Powell has taken an extremely dovish tone and repeatedly said the Fed won’t raise interest rates — which would presumably slow down the economy and markets — preemptively. Basically, the markets let the Fed take the wheel.

Even if it didn’t buy bonds itself, the knowledge that it would if necessary reinforced the markets — private investors swept in to take up corporate bond offerings from companies such as Boeing and Nike. Continued confidence in a dovish Fed has only reinforced market bullishness; while a bad jobs report may be bad for businesses and workers, to investors, it’s also more reassurance that low interest rates aren’t going anywhere.

The issue is, the Fed is a much more powerful force on Wall Street than it is Main Street. Its programs to help small and midsize businesses and states and cities have been far less effective than those set up to help corporations and asset prices.

“It now feels like policy, be it the Fed or something else, that the stock market should really never go down,” said Dan Egan, vice president of behavioral finance and investing at Betterment.

To be sure, the Fed’s role is monetary policy, and it would have been bad if markets were allowed to crash or a litany of major corporations went bankrupt. And luckily for many struggling people and businesses, Congress stepped in with fiscal policy that could be more effective in helping the broader economy — a move that, no doubt, also helped markets. It’s good for corporations that people have money to spend.

Still, some wonder whether the Fed couldn’t have tried to go further to make sure its programs to support corporations flow to people other than shareholders. “Obviously it was good, the Fed needed to do something,” said Alexis Goldstein, senior policy analyst at Americans for Financial Reform. “But the criticism I would weigh was that there were no real conditions that workers were protected or rehired, that all the gains just didn’t go to the top.”

Goldstein pointed to a September report from the House of Representatives’ Select Subcommittee on the Coronavirus Crisis that found the Fed bought corporate bonds from at least 95 companies that issued dividends to shareholders while also laying off workers. “Surely the Fed is also so powerful that it can say, look, we need you all to prioritize rehiring your workers or we’re not necessarily going to rescue you, we’re going to rescue other companies, and that should be impactful,” Goldstein said.

Companies have been ruled by the mantra of shareholder primacy, where maximizing profits for investors is the end-all, be-all, for decades. Worker pay has severely lagged gains in productivity. Those trends were unlikely to change during a pandemic.

“Shareholder primacy means the job of corporations is to increase their share prices for this very small elite, and that means downward pressure on costs, including workers, where possible,” said Lenore Palladino, an assistant professor of economics and public policy at the University of Massachusetts Amherst. “The fact that the stock market is booming is because of the financialization of our goods- and services-producing companies, not because the real economy is doing so well.”

The market felt better about the pandemic than you probably did

Jack Ablin, the founding partner of Cresset Capital, recalls calling clients in the spring of 2020 and telling them they didn’t know how long the lockdowns and virus would last, but they were “confident” that within a year, it would be done. “Of course, it wasn’t,” he told Vox. But the general attitude remains: The markets figured things would get better, sooner or later. “Part of it was saying, look, this is temporary, we will eventually get back to business. So we were trying to look past the valley to the other side of normality.”

Not everything had to break in Wall Street’s favor for the market rally to continue — as mentioned, between the Fed and the future promise of corporate profits, investors had plenty of reasons to be confident — but it doesn’t hurt that it kind of did. The vaccine, which at the outset of the pandemic some experts warned might be years away, appeared by the end of 2020. Donald Trump did not want to accept the results of the 2020 presidential election, which some investors feared would spark chaos before voting day, but by and large, the US saw a peaceful transfer of power (with the exception of a riot at the Capitol, that, while disturbing, didn’t have anything to do with the Dow).

Investors also seemed confident that Congress would come through with more fiscal support for the economy. This, too, was not a given. The $900 billion package passed in the lame-duck session in December for months seemed highly unlikely. Had Democrats not taken both US Senate seats in Georgia, the $1.9 trillion American Rescue Plan, signed into law in March, would not have happened. While neither provided direct support to the markets, they did support the broader economy that the markets have for months been bullish on. Putting money in people’s pockets means they’ll spend it. It’s good for Wall Street that Main Street America doesn’t fail.

Some people in the industry point to a certain level of faith in America, like the type legendary investor Warren Buffett channeled during the financial crisis and Great Recession when he told people to “buy American.”

“You have to have an existential faith in America in order to be in stocks over the long term,” said Nick Colas, the co-founder of DataTrek Research.

“What has happened in the last 14 months or so is we’re believing in America again, we’re believing in our companies,” said Brian Belski, chief investment strategist at BMO Capital Markets. “From every bear market and every depression, we transition from despair to hope, and the hope was defined by American companies.”

It does look like the US is poised to emerge from the pandemic much before the rest of the world and spend its way to an economic recovery that many other countries could not. Now, it’s the investors who sold out of the market when it was falling last year who have been left out.

“There are two lessons to be learned over the past year. The first is that economic headlines are lagging and not leading indicators of the market; and second, market timing is a losers’ game,” said Saira Malik, chief investment officer of global equities at Nuveen, an asset manager.

Nuveen is currently interested in emerging markets for potential investment possibilities on the horizon — including countries such as Brazil, which continues to be ravaged by the pandemic. “We do feel like in the near term they are going to struggle. But the vaccines are becoming more and more available, and while they’re lagging a bit behind, we do think they’ll catch up, and they’ve tended to have the cheaper valuations to go with that,” Malik said.

At this point, it’s hard to wonder what, if anything, will truly unnerve investors.

There are still plenty of risks to the market, including that in the US, President Joe Biden and Democrats may take steps to raise taxes that would mean a hit for the bottom lines of corporations and investors. When chatter of the president’s capital gains tax proposal kicked up in late April, the markets took a small dip, but it was hardly catastrophic.

“We have an administration that clearly has ambitions and wants to pay for them by taxing capital, taxing corporate profits, now taxing capital gains. The resilience of the market in the face of all that is kind of interesting,” Krugman said. “There may be a little bit of determined resilience; there may be some element of when people are determined to be optimistic, facts don’t matter.”

Hooper, from Invesco, offered up the explanation of the Fed. “I do think on a short-term basis, we could see a sell-off if there is a risk that appears imminent, but we have to recognize that all current risks are being cushioned by this incredibly accommodative Fed, which does have an impact. It’s a powerful upward force on stocks that can counteract the downward forces.”

What the stock market does and doesn’t represent

How the stock market does matters to a lot of people. A little over half of all Americans report owning stocks, including in their retirement or pension plans. And during the pandemic, plenty of people got into day trading, for better and for worse. But some groups have much higher stakes in the market than others. More than 80 percent of stocks are owned by the wealthiest 10 percent of Americans, meaning when markets go up, they’re the ones who reap the most gains. White people are also the overwhelming majority of market beneficiaries — by Palladino’s estimates, 92 percent of corporate equity and mutual fund value is owned by white households, compared to less than 2 percent each by Black and Hispanic households.

“People often forget how concentrated corporate equity holdings are,” Palladino said. “They’re held mainly by wealthy white households.” Those are the people who disproportionately reaped the benefits of the stock market’s pandemic run, while people of color disproportionately suffered the health and economic consequences of the disease.

If the US wants to create a fairer, less extractive economy where corporations and shareholders aren’t living a very different reality than people trying to pay their rent or find a job, there are ways to do it. The federal government could raise corporate taxes and tax income from investments in the same way it does income from labor and seek to rein in CEO pay.

It could also clamp down on shareholder primacy and make sure companies base their decisions not only on making their investors rich but also on the well-being of their workers, customers, communities, and suppliers. In 2019, the Business Roundtable, a major business lobbying group, issued a statement that it would redefine the “purpose of a corporation” as one that fosters “an economy that serves all Americans.” The government and the public could find ways to hold them to it. Palladino, in her work, has outlined a number of proposals that would curb shareholder primacy, including requiring corporate boards to have worker representatives, banning stock buybacks, and boosting unions.

Beyond policy fixes, there’s also just the reality that the market measures very one specific thing — how investors think (rightly or wrongly) corporate profits are going to be in the future. And for many people, that measure is meaningless. “If you can assess that the economy is good when we’re in one of the worst economic moments of American history, then it’s a useless measure,” said Maurice BP-Weeks, co-executive director of the Action Center on Race and the Economy.

The past year has been a truly wild ride in America and for the stock market, though in different directions. Investors are reaching almost exuberant levels, from the GameStop saga to the crypto craze. Stocks are continuing their bull run, with no clear end in sight. There are plenty of warnings that investors are out over their skis, but then again, there always are.

It’s a far cry from a little over a year ago, when billionaire hedge funder Bill Ackman went on TV to warn that “hell is coming” because of Covid-19. Or maybe it did — just not for Wall Street.

Source: Why the stock market went up during the Covid-19 pandemic and high unemployment – Vox

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References

 

Saefong, Myra P.; Watts, William (28 February 2020). “U.S. oil futures suffer largest weekly percentage loss in over a decade”. MarketWatch. Dow Jones & Company. Archived from the original on 1 March 2020. Retrieved 15 March 2020.

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