The stock buybacks are not a byproduct of out of control capitalism, rather they are a misuse of capital at the hands of immoral managers. The corporate executives are not the ones who contributed the capital, yet they are given control over it, then abuse that control for self enrichment.
The proper method for returning capital to the owners is via dividends. IF a company repurchases shares, any equity/earnings based compensation should require a per share adjustment that reflects the reduced number of shares. A buyback must be accounted for in the same way a reverse split is treated by Wall Street.

 

Properly regulated capitalism is the best system there is. Bar none. But what we have no is out of control capitalism. Stock buybacks used to be illegal, one day, they are not. There are many other issues where we’ve done away with regulations, always to the benefit of the .001%

 

Reagan and the post-Reagan republican corporatists have destroyed what was once good about capitalism.

 

Bernie is my choice for capitalist #1.

 

Q1 earnings next week for many companies. I hope Bernie's one Netflix account for all senior citizens becomes a reality.

 

Weird how you blame Reagan, but the Speaker of the House in 1987 was one Jim Wright (D) of Texas, having followed Tip O’Neill (D) of Massachusetts that had held the position for the previous 10 years. Weirdly, Robert Byrd (D) of West Virginia of KKK fame was the majority leader in the Senate. Reagan must have really had some sort of mind control tricks to get get two democratic leaders, well seasoned in politics, to give him stock buybacks late during his second term.

I don’t disagree regarding the moral hazard of executive compensation and stock buybacks, but retreating to your priors (ie your ideological bent) to blame someone you don’t like is at best lazy and at worst intellectually dishonest. I would be much more interested in hearing ideas on how to entice executive talent without creating moral hazard for them to harm their own companies in order to line their own pockets.

 

Good article, and I appreciate you posting it.

I'm not an economist: but it stands to reason that there has to be a way to avoid raider mischief: Apple has an unreal amount of cash, but you don't see huge banks buying it out to raid their cash reserves. Which, since legal, would be a totally "capitalist" thing to do. At least for the purchaser...not so much for a hollowed out Apple.

Plenty of regulatory changes that need to happen; now seems like an extraordinarily good time to do it.

But at the very least, I'd rather see "excess" profits returned to shareholders via dividends.

 

i thought regulations were holding ‘Murica back?

/sarc

 

Maybe we need more "community reinvestment acts" that mandate relaxed lending and trillions in pumped up air to inflate, bust and reinflate real estate bubbles, for social justice and great success!

Housing is a "human right" though, so once its free it won't cost a thing.

 

I too hate it when human rights get in the way. I thought we were gonna MAGA that away?