Les Leopold recently published a piece on Alternet (http://tiny.cc/kgqthy) entitled "CNN Host's Attempt to Explain the U.S. Economy Was So Bad I Started Yelling at the TV" in which he characterized stock buy-backs as a luciferous addiction afflicting CEOs of major US corporations that has undermined the country's manufacturing base while driving the growth in inequality. Do you agree?
Stock buybacks reflect (1) a decline in mass purchasing power consequent upon growing US income and wealth inequalities, (2) thus a decline in real investment opportunities, (3) corporate governance rules that reward top executives with stock options etc as major parts of their payments, (4) historically low interest rates making it profitable to shareholders and top executives to borrow for stock buybacks as % rise in stock prices larger than % rise in interest costs....among the other factors helping to cause stock buybacks. Buybacks are effects of inequality as well as among its many causes. The search for "the" cause or chief cause is a hopeless and illogical enterprise. Stock buybacks are part of how contemporary capitalist system works. Its the system that is the problem here, not one detail of its workings.
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