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

[georgephillip]

And it's not Walmart who is costing us that t is the people who choose to work part time MW wage jobs and then use too easy to get government subsidies to make up the difference

Possibly because supplementing a single minimum wage part time job with government benefits produces a more secure economic environment for their families? Employers that can't pay a living wage shouldn't expect government to subsidize their failures.

 

[georgephillip]

What shareholders want is capital to be used efficiently or returned to them. Buybacks are a more tax efficient way of returning capital to shareholders

You're the one presenting two opposing options as the only possibilities when that isn't the case:
"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..."
Government could tax shareholder capital more efficiently and rebuild public infrastructure.
Billionaire Hanauer Hammers Stock Buybacks The Nader Page

 

[EdwardBaiamonte]

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..."

so you want your violent lib Nazi friends to confiscate all business profits for distribution as they see fit?

what other power would you give them? See the truth yet? You lack the IQ to understand capitalism so you want to run it just like Hitler Stalin and Mao did.

 

[SwimExpert]

the federal government could take from the shareholders

****. Off. Go get your own money and stop trying to steal from others.

 

[georgephillip]

****. Off. Go get your own money and stop trying to steal from others.

 

[CultureCitizen]

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.

Not quite. All that extra cheap money comes from QE which in turn comes from taxes or printed money.

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.

Wouldn't that money be better spent expanding the business ( creating more factories or distribution points) and therefore creating more jobs?
Unless... unless there is no market for their products in which case doing the buyback would surely be more proffitable.

 

[Toro]

What shareholders want is capital to be used efficiently or returned to them. Buybacks are a more tax efficient way of returning capital to shareholders

You're the one presenting two opposing options as the only possibilities when that isn't the case:
"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..."
Government could tax shareholder capital more efficiently and rebuild public infrastructure.
Billionaire Hanauer Hammers Stock Buybacks The Nader Page

You seem to misunderstand the concept:

Shareholders wanted their profits redistributed back to them. The money that would have been used to buy back stock would have been used to pay dividends.

It wouldn't have been used for investment, in plant or infrastructure. If it had been used for investment, it probably would have been used for investment in China.

 

[georgephillip]

Not quite. All that extra cheap money comes from QE which in turn comes from taxes or printed money.

Which, according to Michael Hudson, has benefited US stock and bond owners almost exclusively:
"So the Fed was pretty open in what quantitative easing is supposed to do since 2008. It's supposed to lower the interest rates, which raises bond prices, and it inflates the stock market. And since 2008, they've had the largest monetary inflation history--$4 trillion of quantitative easing by the Fed.

"But it's all gone into the stock market and the bond market.

"So what has this done? Well, it's helped stock and bond holders get richer. And who are the stock and bond holders?

"They're the 1 percent and they're the 10 percent. And people are wringing their hands and saying, why isn't the economy getting richer?

"Why is it since 2008 economic inequality and the distribution of wealth have worsened instead of gotten closer together?

"Well, it's because of quantitative easing.

"It's because quantitative easing has increased the value of the stocks and the bonds that the 1 percent or the 10 percent hold, and it hasn't helped the economy at all, because the Fed is really concerned with its constituency, which are the banks."

Quantitative Easing for Whom 1 2

 

[georgephillip]

Shareholders wanted their profits redistributed back to them. The money that would have been used to buy back stock would have been used to pay dividends.

"Shareholders wanted their profits redistributed back to them."

Maybe those profits never belonged to shareholders? Perhaps they belong to workers engaged in productive labor inside the US instead of China? Prior to 1982 shareholders who wanted their profits redistributed to them via stock buyback would have been charged with stock manipulation.

 

[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.

Not quite. All that extra cheap money comes from QE which in turn comes from taxes or printed money.

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.

Wouldn't that money be better spent expanding the business ( creating more factories or distribution points) and therefore creating more jobs?
Unless... unless there is no market for their products in which case doing the buyback would surely be more proffitable.

You don't expand for the sake of expanding you expand when the business volume warrants it

 

[georgephillip]

You don't expand for the sake of expanding you expand when the business volume warrants it

And in an economy that is driven by consumer spending, business volume can't expand sufficiently when 1% to 10% of all consumers feel entitled to 95% of all income gains.
Some 95 of 2009-2012 Income Gains Went to Wealthiest 1 - Real Time Economics - WSJ

 

[EdwardBaiamonte]

[ when 1% to 10% of all consumers feel entitled to 95% of all income gains.

it not a question of feeling entitled its merely something that happened when liberals drove all the middle classs jobs away with the highest taxes in the world.

Do you understand??

 

[georgephillip]

it not a question of feeling entitled its merely something that happened when liberals drove all the middle classs jobs away with the highest taxes in the world.

Do you understand??

Do you?

 

[EdwardBaiamonte]

it not a question of feeling entitled its merely something that happened when liberals drove all the middle classs jobs away with the highest taxes in the world.

Do you understand??

Do you?

do I understand what, dopey liberal. How will you learn if you are afraid to try?

 

[iamwhatiseem]

The biggest thing killing the middle class?
Is the middle class not caring about anything but the lowest price when buying goods.
If just 10% of Americans stopped buying cheap foreign-made products when they can - our unemployment and underemployment problems would be solved.

Jeans and Shorts Made in USA by the All American Clothing Co
Made in America GE Appliances
Still Made in USA.com - American-Made Home Appliances
Lenox Made in America

It is not hard to find American made Products, you just have to look beyond Walmart.

 

[EdwardBaiamonte]

The biggest thing killing the middle class?
Is the middle class not caring about anything but the lowest price when buying goods.
If just 10% of Americans stopped buying cheap foreign-made products when they can - our unemployment and underemployment problems would be solved.

Jeans and Shorts Made in USA by the All American Clothing Co
Made in America GE Appliances
Still Made in USA.com - American-Made Home Appliances
Lenox Made in America

It is not hard to find American made Products, you just have to look beyond Walmart.

dear, if it made sense to buy just American we could just pass a law to make imports illegal. As a typical liberal you lack the IQ to understand why we allow free trade between individuals cities states regions and countries. Do you want to learn?

 

[iamwhatiseem]

The biggest thing killing the middle class?
Is the middle class not caring about anything but the lowest price when buying goods.
If just 10% of Americans stopped buying cheap foreign-made products when they can - our unemployment and underemployment problems would be solved.

Jeans and Shorts Made in USA by the All American Clothing Co
Made in America GE Appliances
Still Made in USA.com - American-Made Home Appliances
Lenox Made in America

It is not hard to find American made Products, you just have to look beyond Walmart.

dear, if it made sense to buy just American we could just pass a law to make imports illegal. As a typical liberal you lack the IQ to understand why we allow free trade between individuals cities states regions and countries. Do you want to learn?

I love to learn, but that makes no sense if the person trying to teach knows less than me.
1) I am far from a liberal. Far.
2) I would never suggest shutting down trade, that would be disastrous and kinda dumb for you to throw that in.
3) Lowest cost consumerism is a terrible problem across this country in every industry. It affects everything. It is one of the top problems, and one of the first reasons why, small businesses cannot compete and eventually close their doors.
4) You might note I said if just 10% of Americans would consider buying American goods.... I never said, or insinuated we shut our borders.

 

[EdwardBaiamonte]

4) You might note I said if just 10% of Americans would consider buying American goods.... I never said, or insinuated we shut our borders.

if it made sense we could simply pass a law baning 10% of imports. Do you know why both liberals and conservatives believe in free trade?

 

[iamwhatiseem]

4) You might note I said if just 10% of Americans would consider buying American goods.... I never said, or insinuated we shut our borders.

if it made sense we could simply pass a law baning 10% of imports. Do you know why both liberals and conservatives believe in free trade?

Obvious troll is obvious

 

[georgephillip]

do I understand what, dopey liberal. How will you learn if you are afraid to try?

"Supply-side economics is a school of macroeconomics that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services as well as invest in capital."
Supply-side economics - Wikipedia the free encyclopedia