Profiting on crisis: how predatory financial investors have worsened inequality in the coronavirus crisis

Neely, Megan Tobias and Carmichael, Donna (2021) Profiting on crisis: how predatory financial investors have worsened inequality in the coronavirus crisis. American Behavioral Scientist, 65 (12). 1649 - 1670. ISSN 0002-7642

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Abstract

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.

Item Type:	Article
Official URL:	https://journals.sagepub.com/home/abs
Additional Information:	© 2021 SAGE Publications.
Divisions:	Sociology
Subjects:	H Social Sciences > HG Finance R Medicine > RA Public aspects of medicine > RA0421 Public health. Hygiene. Preventive Medicine H Social Sciences > HV Social pathology. Social and public welfare. Criminology
Date Deposited:	19 Nov 2021 14:39
Last Modified:	23 Nov 2024 07:21
URI:	http://eprints.lse.ac.uk/id/eprint/112697

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