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Shareholder Pandering and the End of the Economy

By Dan Markel, Ethan Leib, Rick Garnett, Matt Bodie, Paul Horwitz , Steve Vladeck, and Orly Lobel

I just read an interesting paper by Larry Mitchell about the cycle of bad business that seems particularly on point these days. As a former denizen of Wall Street (Morgan Stanley Public Finance & Chemical High Yield), I can assure you that just about everyone knows that the stock market creates an irrational focus on the price of equity in the short term -- whining stockholders are the bane of every good business executive with a decent long-term outlook. But most of us assumed that was the price we had to pay for all the equity stockholders pumped into the...

Full post as published by Prawfs on March 03, 2009 (boomark / email).