Missing the Target

A data-driven argument for why stock-market short-termism is not causing severe damage to the American economy According to most media outlets and corporate lawmakers, stock-market-driven short-termism-when corporations appear to prioritize immediate results in the next quarter over long-term interests-is crippling the American economy. This popular view claims that short-termism is causing widespread declines in research and development (R&D) spending, harmful environmental policies, and degradation of the workplace. But the data does not support this black-and-white representation of short-termism. Mark J. Roe uses economy-wide data on R&D spending trends and corporate financial analysis to show that stock-market short-termism is not the root of all of America's economic problems. The book shows that blaming short-termism overlooks the real causes of declining investment, R&D cutbacks, environmental deterioration, and workplace conflict. By pointing to other sources of tension like accelerating technology change, policy uncertainty, and an increasing sense of workplace insecurity, Missing the Target argues for a more nuanced understanding of the challenges to the American economy. Roe also disproves many of the core claims against short-termism by demonstrating that R&D spending is not in a complete decline. In fact, while government research spending may be down, corporate R&D expenditure is actually rising faster than the economy is growing. Missing the Target complicates the discussion of the American economy by explaining the many factors that contribute to current trends and by making a bold but straightforward claim: short-termism is not the problem.