Originally published at http://www.commondreams.org/views/2019/11/07/run-dollar-due-panic-or-greed
Decades ago I read an essay by Ken Galbraith. He said the idea that execs run corporations for the benefit of the shareholders is a myth. Execs run corporations for their own benefit. From then on corporate behavior made more sense. Stock buy backs that raise prices do not benefit the shareholders as much as dividends do unless you are an exec with a compensation package that includes stock options.
During the New Deal stock buy backs were made illegal. They were considered market manipulation and were a contributing factor in the Crash of '29. Reagan like a good actor followed the directors from Wall Street to nullify that rule. He is to be forgiven since he was already suffering from Alzheimers and like another sufferer M. Thatcher could not comprehend another alternative.
Hopefully the Green New Deal will reinstate that old New Deal regulation on stock buy backs. The nation and the world will be better for it.