CNN Global Economic Analyst Rana Foroohar spoke at the University of North Florida Tuesday to address the current state of the financial industry and how it has contributed to the success of populist political candidates such as Bernie Sanders and Donald Trump.
Foroohar, who was recently brought on as a global business columnist for Financial Times, also addressed some of the points made in her 2016 book Makers and Takers: The Rise of Finance and the Fall of American Business.
Citing a Kennedy School of Government survey of millenials and baby boomers, Foroohar explained that only 30% of millenials support the current U.S. capitalist system and consider themselves capitalists. Even more unexpected, only 50% of baby boomers reported the same. Foroohar cites an underlying economic trend in the past several decades as a reason behind the Kennedy findings.
This trend, she said, includes wages stagnating since approximately 2000, and earlier for the working class.
Foroohar also heavily addressed a massive amount of wealth owned by corporations, as well as the priorities of the current financial markets.
“Companies can make decisions while being detached from the issues of the country,” she said, also adding how the success of a nation’s companies is no longer reflective of the success of that nation’s economy.
She heavily referenced Apple Inc. to illustrate her point. Despite Apple owning around 10% of the nation’s liquid wealth, Foroohar said most of it is being held overseas in tax havens while the company borrows money from U.S. debt markets. Apple was able to do this with very low interest rates following the economic crisis.
Audience member and UNF student Katie Connors was shocked by Foroohar’s statistics on Apple.
“I knew tech held a lot of money, but I didn’t know just how much it truly was,” Connors said. “It really speaks a lot for the massive impact Apple has on the American people.”
According to Foroohar, Apple uses the money borrowed towards share buybacks and dividend payments, rather than research and development or U.S. factories. This results in money being given back to the nation’s wealthy and the success of corporations.
Stock markets are at an all-time high, yet Foroohar said the average American is struggling.
“Six out of the ten fastest-growing jobs are low wage,” she said.
Meanwhile, there is a lack in growth of middle-class-wage jobs. According to Foroohar, while Trump may have been an unlikely candidate in the past, his success in the 2016 election was due in part to American people losing faith in the current economic system. The current financial industry is geared towards benefitting Wall Street, she says, while Main Street is left struggling.
Bernie Sanders is another example Foroohar referenced with the rise of populism. While “socialism” might have had a negative connotation to older generations, she said millenials are more likely to align with it.
However, Foroohar made it clear that populism’s rise on both ends of the political spectrum is evidence that both Republicans and Democrats are displeased with current economic trends.
“Her talk seemed to resonate with so many different demographics,” said Emily Carson, an Accounting senior at UNF. “She also reported facts from both sides of the political spectrum, so I really appreciated that. And it’s good to see so a lot of young people interested in economic issues”