Rich hoarding money in stock buybacks, depriving economy

[Panich52]

“…despite this extra $1 trillion a year in corporate profits … our nation can no longer seem to afford even its most basic needs … Where did all this money go? … stock buybacks—more than $6.9 trillion of them since 2004 … these buybacks drain trillions of dollars of windfall profits out of the real economy and into a paper-asset bubble…”

http://m.theatlantic.com/politics/archive/2015/02/kill-stock-buyback-to-save-the-american-economy/385259/

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[no_hypocrisy]

1. Trickledown my ass

More like self-inflicted bloating

[Panich52]

3. "trickle down" is euphamism fn "Golden Shower"

[Divernan]

2. This is an incredibly important article - sorry it has not been responded to here on DU!

Stock buybacks are the engine driving the rise of the One Percent, and this article lays it out chapter and verse!

The shift toward stock-based compensation helped drive the rise of the 1 percent by inflating the ratio of CEO-to-worker compensation from twenty-to-one in 1965 to about 300-to-one today. Labor’s steadily falling share of GDP has inevitably depressed consumer demand, resulting in slower economic growth. A new study from the Organization for Economic Co-operation and Development finds that rising inequality knocked six points off U.S. GDP growth between 1990 and 2010 alone.

It is mathematically impossible to make the public- and private-sector investments necessary to sustain America’s global economic competitiveness while flushing away 4 percent of GDP year after year. That is why the federal government must reorient its policies from promoting personal enrichment to promoting national growth. These policies should limit stock buybacks and raise the marginal rate on dividends while providing real incentives to boost investment in R&D, worker training, and business expansion.

If business leaders hope to maintain broad public support for business, they must acknowledge that the purpose of the corporation is not to enrich the few, but to benefit the many. Once America’s CEOs refocus on growing their companies rather than growing their share prices, shareholder value will take care of itself and all Americans will share in the benefits of a renewed era of economic growth.