(as airlines are mentioned specifically, by name in this article, and airline CEO's are adamant that they will not accept loans with "no stockbuyback" clauses, this timely)The S.E.C. Rule That Destroyed the Universe

Anyone who wants to grok the genesis of the absolute evil that are "stock buybacks" needs to read the Rolling Stones article about the CFR Rule 10b-18 that changed everything way back in 1982. Prior to this rule change, a company repurchasing its own stocks in quantity was generally regarded as outright illegal stock price manipulation. With executives subject to jail time if they got caught. Previous to this rule, profits were mostly returned to shareholders via dividends or reinvested into the business.

From the article "Board members chosen by shareholders could raid their own companies assets to buy stock and goose share prices... Employees, customers, and society were suddenly in direct competition for resources with executives and shareholders. Should a company invest in a new factory, or should it just deliver instant millions to shareholders and executives paid in options?"

If you want to understand why trillions in profits for decades have been dumped into executive compensation and giant hedge fund stock holders, look no further. It's immoral, anti-capitalist, highly destructive, but thankfully, fixable. And now might be the time.

 

Actually, it’ immoral, highly destructive, and quintessentially capitalist. It’s emblematic of our out-of-control capitalism. Needs to be fixed.

 

Along that vein, this is a little more technical article from successful venture capitalist and Professor at NYU Stern School of Business. Capitalists or Cronyists - Scott Galloway.

If you want to know why people are furious at bailing out airlines, and why CEO's are adamant about "no strings attached" money from USG....

I'll quote the relevant part here:

"The rescue package should protect people, not businesses. From 2017 to 2019, the CEOs of Delta, American, United, and Carnival Cruises earned over $150 million in compensation. But, now … “We’re in this together” (i.e., “bail our asses out”).

The rescue package should protect people, not businesses. From 2017 to 2019, the CEOs of Delta, American, United, and Carnival Cruises earned over $150 million in compensation. But, now … “We’re in this together” (i.e., “bail our asses out”)."

 

Thanks Bernie!!

 

Reminds me of the Churchill quote:

"The problem with socialists is Socialism. The problem with Capitalism is capitalists."

 

Bernie 2024?

 

After the 33 year experiment with the 1987 rule change of 17 CFR 240 10b-18 - Purchases of certain equity securities by the issues and others...

Maybe something more than a little zinger would be in order?

These CEO's, and more specifically, airline CEO's are more corporate raiders than capitalists. They've done nothing illegal, but the old saying "The best way to rob a bank is to own one" comes to mind.

I'm not inclined to agree to any ALV reduction, or hourly wage reduction, or anything else. Based solely on the incredible waste of stock buybacks; something that was criminal until 1987, then magically wasn't, and while CEO pay has gone through the bloody roof, everyone else's wages have stagnated.

 

So change the law... Quit dumping it in the lap of “that darn capitalism!”

If you’ve got a better system than capitalism let’s hear it! And provide concrete examples of where it’s worked.....

 

Just to provide balance, another opinion,

https://www.aier.org/article/in-defe...hare-buybacks/

Companies that buy back their own stock don’t see better investment opportunities inside the company or industry. Holding lots of excess cash is an invitation for raider mischief. Taibbi mentions debt trades for stock. Well, the problem isn’t stock buybacks, it’s our stupid tax code taxing income wherever it is earned forcing companies to hold cash overseas rather than repatriate it. Ask any American expat how nasty the US code.

 

Keep the system but like you said, change the law. In order to change the law, we need to vote for people that will change the law. I don't know many Republicans that would vote to change this law.