Stock Market Short-Termism: Understanding the Challenges to the American Economy

According to many political leaders, media outlets and corporate lawmakers, stock-market-driven short-termism is harming the American economy and greatly increasing environmental, climate, and social damage. But the data does not support this black-and-white representation of short-termism and thinking that it does takes our eyes off of real solutions to these problems.

Professor of law at Harvard, Mark J. Roe has been studying the large corporation’s role in society and in politics for decades, writing on the subject for academic journals and the financial press, and testifying for Congress and the administrative agencies on the subject. His research focuses on corporate structures and how they relate to politics, interest groups, and popular opinions of the corporation.

In his new book, Missing the Target: Why Stock Market Short-Termism Is Not the Problem, Roe shows that blaming short-termism overlooks the real causes of declining investment, R&D cutbacks, environmental deterioration, and workplace conflict.

In an eye-opening and insightful feature or interview, Roe can discuss:

The real impact of Wall Street’s hunger for short-term profits over long-term results
Crunching the numbers: An overview of what the data tells us about stock market short-termism
Why we so easily conflate climate change with stock market short-termism
Who wins: Why some executives and even some employees win when policymakers, media leaders, and interested voters think stock market short-termism is a big problem that’s holding the economy back
Why specific solutions—such as a tax on stock trading—that are widely thought to make the stock market and large corporations more long-term will not work
Stock buybacks: Why the proposed tax on stock buybacks will fail to make corporate America—and the economy—more strongly long-term. And how it could backfire.
R&D spending: Stock market short-termism cannot be blamed for the government withdrawing its longstanding support for breakthrough R&D.
Easy way out: Why blaming the stock market becomes an excuse that enables a leader to do nothing.
Clear and achievable policy recommendations to alleviate the real problems that stock market short-termism is often criticized for causing