Companies don’t get better because of buybacks. Shareholders only get richer. While railroads spent more on stock buybacks than rail safety, Warren Buffett’s wealth increased by $42 billion.
Researchers at Deloitte point out that buybacks and dividends have soared as a share of GDP, while corporate investments in equipment and infrastructure have stagnated. Many of the social costs of this failure to invest have been shifted to the public-at-large, as we saw in East Palestine.
Stock buybacks don’t create more jobs. They don’t increase wages. They don’t grow the economy.
Before 1982, it was illegal for corporations to purchase their own stock to artificially prop up share prices. Then Ronald Reagan’s SEC adopted a rule protecting corporations from being charged for this kind of stock manipulation.
Jump ahead to 2017 and the Trump-GOP tax cuts added fuel to the fire. Since then, stock buybacks have more than doubled, reaching a record high $1.2 trillion in 2022 alone.
That’s $1.2 trillion that did not go into improving quality of life for American workers or building the American economy. It just went straight into the pockets of already-wealthy shareholders and CEOs.
Once again, Wall Street gains at the expense of working families.
No comments:
Post a Comment