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Schumer and Sanders: Limit Corporate Stock Buybacks - The New York Times [1]
['Chuck Schumer', 'Bernie Sanders']
Date: 2019-02-03
From the mid-20th century until the 1970s, American corporations shared a belief that they had a duty not only to their shareholders but to their workers , their communities and the country that created the economic conditions and legal protections for them to thrive. It created an extremely prosperous America for working people and the broad middle of the country.
But over the past several decades, corporate boardrooms have become obsessed with maximizing only shareholder earnings to the detriment of workers and the long-term strength of their companies, helping to create the worst level of income inequality in decades.
One way in which this pervasive corporate ethos manifests itself is the explosion of stock buybacks.
So focused on shareholder value, companies, rather than investing in ways to make their businesses more resilient or their workers more productive, have been dedicating ever larger shares of their profits to dividends and corporate share repurchases. When a company purchases its own stock back, it reduces the number of publicly traded shares, boosting the value of the stock to the benefit of shareholders and corporate leadership.
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[1] Url:
https://www.nytimes.com/2019/02/03/opinion/chuck-schumer-bernie-sanders.html
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