Profiting on Crisis

How Predatory Financial Investors Have Worsened Inequality in the Coronavirus Crisis

Bibliographic Data

ID3758098
AuthorsMegan Tobias Neely (0000-0002-7012-889X, Copenhagen Business School, Frederiksberg, Denmark, corresponding author), Donna Carmichael (0000-0002-2281-596X, London School of Economics and Political Science)
Year2021
Volume65
Issue12
Pages1649-1670
Publication date2021-11-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueAmerican Behavioral Scientist (JOURNAL)
Journal identifiersISSN: 0002-7642 • E-ISSN: 1552-3381
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/00027642211003162
PMID38603051
OpenAlexW3138821338
LanguageEN
Citations received4
References cited57

A once-in-a-century pandemic has sparked an unprecedented health and economic crisis. Less examined is how predatory financial investors have shaped the crisis and profited from it. We examine how U.S. shadow banks, such as private equity, venture capital, and hedge fund firms, have affected hardship and inequality during the crisis. First, we identify how these investors helped to hollow out the health care industry and disenfranchise the low-wage service sector, putting frontline workers at risk. We then outline how, as the downturn unfolds, shadow banks are shifting their investments in ways that profit on the misfortunes of frontline workers, vulnerable populations, and distressed industries. After the pandemic subsides and governments withdraw stimulus support, employment will likely remain insecure, many renters will face evictions, and entire economic sectors will need to rebuild. Shadow banks are planning accordingly to profit from the fallout of the crisis. We argue that this case reveals how financial investors accumulate capital through private and speculative investments that exploit vulnerabilities in the economic system during a time of crisis. To conclude, we consider the prospects for change and inequality over time

Business · Economic growth · Economic policy · Economics · Equity (law) · Financial crisis · Financial system · Inequality · Political science · Private sector · Recession · Shadow (psychology) · Stimulus (psychology) · Employment and Welfare Studies · Finance · Financial Literacy, Pension, Retirement Analysis · Housing, Finance, and Neoliberalism

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Open DOIOpen Access