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Destructive Stock Buybacks—That You Pay For


#1

Destructive Stock Buybacks—That You Pay For

Ralph Nader

The monster of economic waste—over $7 trillion of dictated stock buybacks since 2003 by the self-enriching CEOs of large corporations—started with a little noticed change in 1982 by the Securities and Exchange Commission (SEC) under President Ronald Reagan. That was when SEC Chairman John Shad, a former Wall Street CEO, redefined unlawful ‘stock manipulation’ to exclude stock buybacks.


#2

Two, four, six, eight, who do we appreciate? Ralph Nader!


#3

Good profile of co-dependency a la addictive mind set. No wonder the drive to buy off “representatives” first squandered language itself by completely unhinging governance with “Citizens United”.

" unimaginative, incompetent or avaricious – or all of these "

These are symptoms of the condition of insatiable appetite to dominate - because the model is outright thievery in a profoundly sick rationalization of being a version of ‘the chosen people’ - arising from addiction to specious power, complete willingness to make genocide (now having fully crossed the financial colonizer’s race line) part of the “portfolio”. Really insidious part is hard to wrap your head around - because it is defined in the sphere of what is not named: the now ‘full spectrum dominance’ (remember that? it did not go away) of those pesky ‘externalized costs’. The latter now LITERALLY sucking on the full spectrum of the fabric of life.

Problem is, it has no notion of life being inextricably interconnected and interdependent, much less any capacity to recognize that failure to respect and foster this intricate reality results in consequences that shred the very fabric of life. The deeper the belief in magical thinking that it is possible to deny reality and still HAVE a reality - the deeper the dependency and acceleration of exponential factors. Its sort of like eating yourself for lunch and laughing that you’re so clever that you’re going to eat the other guy’s efforts for lunch. That dog don’t hunt. There is no there there.

Remember a philanderer named Petraeus? He literally helped write the book on militarization of anthropology with the “Counterinsurgency Manual”. Look at the profile - can you see a full spectrum dominance / psychosis / socio-pathology there? That was published and it is on sale to the public. An international group of anthropologists in 2009 wrote the Counter Counterinsurgency Manual to explain why they felt former is a distortion, employing plagiarism, taking social science premises out of context slapping together a “pastiche of platitudes” lacking “intellectual integrity” and decided it was necessary to utterly remove themselves from any association of its claims, methods and practices. Remember the psychologists who advised on torture? yuppers - this is what ‘full spectrum dominance’ looks like.

This is the model that claims to ‘win the hearts and minds’. I say bullshit. To ‘win hearts and minds’ has ONE PURPOSE: to subjugate diversity to a monoculture in deep downward spiral, terrified because it no longer has the capacity to acknowledge its complete denial. The only way to win hearts and minds is to respect the differences and diversity of countless social structures.


#4

Ralph - which would you rather see? Companies return money to shareholders, so it can be re-invested in businesses that are growing and are successful, or spent on buying other companies (which almost always ends up destroying value), or re-invested in the company providing a lower rate of return? The profits belong to the shareholders, and whether they receive it as dividends or through stock buybacks, its allowing them to re-invest the money more productively.


#5

In the past we’ve been told that CEO’s do this for increased share values which make them richer if they sell the stock? and large institutional shareholders more value?? The economy was driven by short term stock values?

" Because these executives have far more of their compensation package in manipulated stock options and incentive payments than they own in stock." This is confusing to me in regards to above acknowledge?? which now is erroneous.

Whatever, very shady and self serving and us taxpayers pick up pieces and for low wage workers we taxpayer pay for their welfare and then people complaining about the takers and republicans goes nuts trying to take welfare away. Disgusting


#6

Taxpayers are indeed paying for welfare for laid off GM workers.

When US taxpayers bailed out General Motors in 2009, GM used the money to buy back stock, close US factories, and expand production in China to the extent that those new Buicks you see on US dealers’ lots are made in China.


#7

The 2010 stock repurchase was buying back the preferred stock to pay back the government. Would you rather the government not get its money back?


#8

The real question is the why GM had to get bailed out ?

Had New Deal regulations that included prohibiting stock buybacks and other financial manipulation not been decriminalized during the previous three decades there would have been no 2008 crash that was allegedly the driver for the GM bailout.


#9

It was a mistake to bail out GM or any of the banks either. When government has the power to pick winners and losers, it will always pick the ones who pay off those who govern. The only solution is to keep government small enough that buying it off doesn’t matter.


#10

In 1976 POTUS Ford and Congress put six bankrupt northeast railroads under gubmit control, reorganized them as Conrail which became publicly traded once it was nurtured back to health and was sold to Norfolk Southern and CSX at a profit.

Railroading (especially in the northeast) is an inherently more complex industry than banking, so the gubmit should have taken control of the too big to fail banks when they crashed the economy in 2008 and only controlled 25% of US bank assets. Instead, taxpayer funded bailouts have resulted in those banks now controlling 50% of US bank assets with no end in sight of their march to monopoly.
The next time they crash the economy they will be able to extort even bigger taxpayer funded bailouts.


#12

With all the years of Q-easing I think this amount is ridiculously low.


#13

Bingo! The rigged crony capitalism of the last 45 years or so, bears little resemblance to Classic Capitalism. This current mutation of Capitalism is the primary cause of an unsustainable inequality that, if not rectified, will erupt into something terrible. Ralph Nader is trying to help people see through the “smoke and mirrors” of the bullshit “Free Market” economics so dear to “Conservatives”, who themselves are to traditional Conservatism as Orange Kool-Aid is to fresh-squeezed Orange Juice.


#14

Why should we even care to return back to “old fashioned” capitalism? There’s an assumption that it is something which is more ‘ok’ than what has been fashioned out of it. Many on the “liberal” side, especially corporate Democrats, seem to think that we’re on the right path with 1960’s capitalism.

No, that ain’t the case. It’s all so wrong, so perverse, so destructive. Stop it. Please, stop it.

The future is in cooperation, sharing and universal justice for all. Plain and simple.


#15

Do you realize this is a quandary inside a mindfuck inside a box inside a river? Pick, pick, and don’t look at the big picture. Boo!

Simplicity.


#16

Don’t know about RalphyBoy but I’d like to see them pay taxes and give the rest to share holders via dividends. They pay almost no taxes now, we need a VAT and a tax on their gross not net income. By giving stock away they ARe diluting the value of the company and cheating the shareholders in order to complete the Oligarchs total take over. That should be illegal.

Companies that commit Fraud like Wells Fargo need to be put down, the assets taken by the star and sold at auction or kept for the public good. Put the fear of losing money into these asses and they will get it.


#17

Given the tax code, stock buybacks are much more effective for everyone involved than dividends, and those shareholders who want to liquidate can, at capital gains rates. No problem with gross receipts taxes - not a fan of VAT - vertically integrated companies can play all kinds of games, and they encourage grey market transactions.

Wells Fargo should be sued into oblivion by the people they cheated.


#18

What’s the underlying causation for the heads of these companies resorting to what you to be consider illegal, until Reagan? I think they have run into Marx’s theory of the shrinking rate of profit and so have had to resort to shady practices in order to maintain the illusion, that capitalism can maintain growth into infinity.
They have also run directly into the problem created by holding down wages and increasing production through technological advances, to cut down labor costs and vastly improve the bottom line over the last 30 or 40 years and at same time drying up demand they need. One of those nasty little contradictions within capitalism that Marx pointed out.
Now they were able to get away with it for a time by handing out credit cards and letting the people charge away their lives to the banks and then mortgage industry got into the game too and all went fine, until the debt out stripped the economies ability to pay it, and in 2007-08 it all came tumbling down.
Neo- liberal economics is as economist Michael Hudson calls it, “junk economics".
Crooked is as crooked does and the capitalism we have today is not only built upon it but in a sick way justified by the idea, that oh well that is human nature. Well it is not my nature, or many others either.