Stock Buybacks: "the Biggest Scam Bankrupting Business and the Middle Class?"

[georgephillip]

Ralph Nader quotes Nick Hanauer's allegation that between 2003 and 2012 54% of corporate profits went to stock buybacks instead of "higher wages or increased investments in plants and equipment or in public investment."

All of the latter uses would have increased consumer demand while the buybacks increased the earnings per share value so crucial to skyrocketing executive compensation packages.

As Nader/Nick puts it:

"'...(o)ur crisis of income inequality wasn’t principally caused by the rich not paying enough tax, even though we don’t.

"'Rather, it is largely the product of the $1 trillion a year that once went to wages, but now goes to corporate profits.

"'And this consumer demand and investment-killing trillion-dollar-a-year transfer of wealth from the bottom 80 percent of households to the top 1 percent is the direct result of the economic and regulatory policies both Republicans and Democrats have imposed since the dawn of the trickle down era.'

"That was in 1982 when President Reagan loosened the rules that had made stock buybacks a form of illegal stock manipulation..."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[Skull Pilot]

So?

No business is required to use it's profits for higher wages or investments in equipment.

we are back to the old chestnut : what other people do with their money is none of your business.

 

[georgephillip]

we are back to the old chestnut : what other people do with their money is none of your business.

The key phrase being "their money." In this case, the $1 trillion a year transfer from the bottom 80% to the richest 1% was made possible by the rich bribing a sufficient numbers of Republicans AND Democrats in congress since 1982 to eliminate the prohibitions on stock manipulation.

 

[Skull Pilot]

we are back to the old chestnut : what other people do with their money is none of your business.

The key phrase being "their money." In this case, the $1 trillion a year transfer from the bottom 80% to the richest 1% was made possible by the rich bribing a sufficient numbers of Republicans AND Democrats in congress since 1982 to eliminate the prohibitions on stock manipulation.

You forgot the term voluntary.

No one forces anyone to do business with a company.

And if your really worried about politicians then work at stopping the sanctioned insider trading that goes on in congress

 

[georgephillip]

You forgot the term voluntary.

No one forces anyone to do business with a company.

I understand no one at Exxon Mobile, IBM, Caterpillar, Boeing, McDonalds, and ATT&T put a gun to any consumer's head in 2014 and forced the customer to buy their product.

I'm saying all those giant corporations then used some of the revenue from voluntary transactions to engage in massive (stock) buyback plans that contribute to reduced business investment and increase economic inequality.

Prior to 1982 such actions would have been illegal under regulations that made stock buybacks an illegal form of stock manipulation.

"Leading shareholder rights advocate and author, Robert Monks, has pointed out that stock buybacks reflect a serious failure of management. Corporations have not used this money for productive purposes and labor well-being, but rather for a paper increase in the earnings per share (EPS) to elevate the value of already skyrocketing executive compensation packages."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[boedicca]

we are back to the old chestnut : what other people do with their money is none of your business.

The key phrase being "their money." In this case, the $1 trillion a year transfer from the bottom 80% to the richest 1% was made possible by the rich bribing a sufficient numbers of Republicans AND Democrats in congress since 1982 to eliminate the prohibitions on stock manipulation.

"Transfer"? How did that work? The bottom 80% had $1T of wealth that the upper 1% stole?

Really?

 

[georgephillip]

And if your really worried about politicians then work at stopping the sanctioned insider trading that goes on in congress

They're not mutually exclusive.
Illegal stock manipulation and inside trading should both be discouraged, IMHO. Possibly, our upcoming dog-and-pony presidential election show would benefit from spotlighting the sort of corporate graft that Republicans AND Democrats both depend on for their campaign funds and retirements?

"There has been considerable discussion about the misallocation of public budgets toward bloated military expenditures and corporate welfare subsidies, giveaways, bailouts and extreme tax escapes.

"Get ready for another public spotlight on the misallocation of record, big corporate profits by their executives and boards of directors.

"Making both of these cruel power plays into major political issues during the next presidential campaign could be a very healthy antidote to an otherwise tedious, vapid, rhetorical exercise through the long primaries and general election days."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[boedicca]

And if your really worried about politicians then work at stopping the sanctioned insider trading that goes on in congress

They're not mutually exclusive.
Illegal stock manipulation and inside trading should both be discouraged, IMHO. Possibly, our upcoming dog-and-pony presidential election show would benefit from spotlighting the sort of corporate graft that Republicans AND Democrats both depend on for their campaign funds and retirements?

"There has been considerable discussion about the misallocation of public budgets toward bloated military expenditures and corporate welfare subsidies, giveaways, bailouts and extreme tax escapes.

"Get ready for another public spotlight on the misallocation of record, big corporate profits by their executives and boards of directors.

"Making both of these cruel power plays into major political issues during the next presidential campaign could be a very healthy antidote to an otherwise tedious, vapid, rhetorical exercise through the long primaries and general election days."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

Uh. ILLEGAL stock manipulations and Insider Trading are Already Illegal.

So to discourage them further, what do you suggest, lynchings?

 

[georgephillip]

"Transfer"? How did that work? The bottom 80% had $1T of wealth that the upper 1% stole?

Really?

Really!

Prior to 1982 when the Gipper gutted rules making stock buybacks a form of illegal stock manipulation, $1 trillion a year that once went to wages now goes to corporate profit.

"Between 2003 and 2012, stock buybacks amounted to an astounding 54% of corporate profits which could have gone to 'higher wages or increased investments in plants and equipment or in public investment,' such as infrastructure, all of which would have increased consumer demand, the engine of economic growth."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[boedicca]

"Transfer"? How did that work? The bottom 80% had $1T of wealth that the upper 1% stole?

Really?

Really!

Prior to 1982 when the Gipper gutted rules making stock buybacks a form of illegal stock manipulation, $1 trillion a year that once went to wages now goes to corporate profit.

"Between 2003 and 2012, stock buybacks amounted to an astounding 54% of corporate profits which could have gone to 'higher wages or increased investments in plants and equipment or in public investment,' such as infrastructure, all of which would have increased consumer demand, the engine of economic growth."

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

STOCK BUYBACKS are not and should not be Illegal Stock Manipulation. Businesses have four choices for profits: invest back into the business, hold as cash/monetary investments on balance sheet, pay dividends, and buy back stock. The profits belong to the shareholders. The board of directors' responsibility is to act in the interest of the shareholders. You don't like companies that buy back stock? Then Don't Own There Stock, Don't Buy Their Products, and Don't Work For Them.

 

[georgephillip]

Uh. ILLEGAL stock manipulations and Insider Trading are Already Illegal.

So to discourage them further, what do you suggest, lynchings?

Are you some kind of racist?

"The legislative process on Capitol Hill is often slow and grinding. There are committee hearings, filibuster threats and hours of floor debate. But sometimes, when Congress really wants to get something done, it can move blindingly fast.

"That's what happened when Congress moved to undo large parts of a popular law known as the STOCK Act last week.

"A year ago, President Obama signed the Stop Trading on Congressional Knowledge Act into law at a celebratory ceremony attended by a bipartisan cast of lawmakers.

"'I want to thank all the members of Congress who came together and worked to get this done,' he said..."

"But on Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.

"In the House, Majority Leader Eric Cantor, R-Va., shepherded the bill through. It was Friday afternoon at 12:52. Many members had already left for the weekend or were on their way out. The whole process took only 30 seconds. There was no debate."

How Congress Quietly Overhauled Its Insider-Trading Law It s All Politics NPR

 

[boedicca]

When you play the Race Card, you are admitting you are a Losing Loser Who Lost, bub.


thats racist by boedicca on US Message Board - Political Discussion Forum

 

[georgephillip]

When you play the Race Card, you are admitting you are a Losing Loser Who Lost, bub.


thats racist by boedicca on US Message Board - Political Discussion Forum

Where do all the rich racists live, I wonder?

 

[boedicca]

When you play the Race Card, you are admitting you are a Losing Loser Who Lost, bub.


thats racist by boedicca on US Message Board - Political Discussion Forum

Where do all the rich racists live, I wonder?

New York City, Washington DC, San Francisco, and LA.

 

[georgephillip]

STOCK BUYBACKS are not and should not be Illegal Stock Manipulation. Businesses have four choices for profits: invest back into the business, hold as cash/monetary investments on balance sheet, pay dividends, and buy back stock. The profits belong to the shareholders. The board of directors' responsibility is to act in the interest of the shareholders.

Shareholders and corporate managers are not the only factors in this economy. When Wal-Mart averages more than 6.5 billion dollars a year in stock buybacks over ten years, shareholders and management are taking an amount of money sufficient to give each of Wal-Marts 1.4 million US workers a $4,670 a- year pay raise.

It's also enough to repay the US taxpayers' estimated $6.2 billion contribution to Wal-Mart's workers' food stamp, Medicaid, and housing subsidies.

"Jeff Reeves, a Market Watch contributor, says that stock repurchases are a 'clever trick among Wall Street sharks…to buy back stock to maximize the value of stock awards to top executives.'

"In an article on March 12, 2015, he listed six giant companies who engaged in megastock buybacks in 2014 but didn’t succeed in increasing their shares’ prices.

"They are Exxon Mobil, IBM, Caterpillar, Boeing, McDonald’s and AT&T.

"He concluded that 'massive buyback plans cannot change the fundamentals of a business, and turn a stock in a tough spot into a good investment.'”

Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[georgephillip]

The rich are not job creators

 

[EdwardBaiamonte]

The rich are not job creators

yes Steve Jobs was not rich and he did not create anything, especially any jobs!! This is obvious!!

 

[Toro]

If companies weren't buying back their stock, they wouldn't be paying their employees more or investing more. They'd be paying higher dividends to their shareholders.

Why?

Because that's what shareholders want.

Shareholders are the owners of the company. They will determine what will be done with their profits.

Buybacks are the most tax efficient way to return profits to shareholders. If buybacks were banned, companies would merely increase the dividends to shareholders with the cash they would have otherwise used for buybacks.

That Nader and Hanauer think wages would be higher or there would be more jobs if there weren't buybacks merely demonstrates how utterly clueless they are.

 

[EdwardBaiamonte]

If companies weren't buying back their stock, they wouldn't be paying their employees more or investing more. They'd be paying higher dividends to their shareholders.

Why?

Because that's what shareholders want.

Shareholders are the owners of the company. They will determine what will be done with their profits.

Buybacks are the most tax efficient way to return profits to shareholders. If buybacks were banned, companies would merely increase the dividends to shareholders with the cash they would have otherwise used for buybacks.

That Nader thinks wages would be higher or there would be more jobs if there weren't buybacks merely demonstrates how utterly clueless he is.

yes buy backs increase the price of a stocks thus making them more valuable to those who own them.

 

[georgephillip]

yes Steve Jobs was not rich and he did not create anything, especially any jobs!! This is obvious!!

So....did Steve create the seed or the tree?
"What creates the jobs is a healthy economic ecosystem. Specifically, a healthy ecosystem that starts with the company's customers.

"An entrepreneur can have the most brilliant idea in the world and plenty of funding to develop and sell it, but if customers can't afford to buy the company's products, the entrepreneur and his or her investors won't create a single permanent job.

"Saying 'the entrepreneur and investors create the jobs,' in other words, is like saying a seed creates a tree."

No Entrepreneurs Like Steve Jobs Do Not Create Jobs By Inventing Products Like The iPhone - Business Insider


Read more: No Entrepreneurs Like Steve Jobs Do Not Create Jobs By Inventing Products Like The iPhone - Business Insider