‘Toon of the Day: Stock Buybacks


Source:   New Yorker

Tell us it ain’t so, Forbes, the bastion of capitalism and Wall Street.   Using such words as  “global political or financial cataclysm”  to warn us about the consequences of stock buybacks?   Double Yikes!

The decades-long diversion of business income to shareholders has resulted in a soaring stock market but also stagnating incomes for most of the population. If this gargantuan transfer of assets to the existing owners of shares is allowed to continue, nothing less than a global political or financial cataclysm—or both—is in the offing. The good news is that remedial action may be on the way.

Let’s be clear. A massive extraction of resources for shareholders is not the way capitalism used to work. What’s now happening would have been illegal only a few decades ago. The principal mechanism enabling this massive shift of resources—an estimated $1 trillion in 2018 alone—is a practice known as share buybacks: firms purchase their own shares so as to increase the value of each individual share and so enrich the existing owners of shares.
Forbes, July 8, 2018

This entry was posted in Cartoon of the Day, Uncategorized and tagged , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.