subgenius wrote:honorentheos wrote:That's a significant point people probably don't recognize as an issue because it seems like businesses doing what they do so it shouldn't concern the average person. But what that number represents is the amount of money that could have gone into the economy in ways that benefited people as jobs, equipment investment, or research that instead was diverted into boosting their stock price. It reflects how the Trump tax cuts essentially made a few people much more wealthy than they would have been otherwise while giving the American people as a whole a bill in the form of increased national debt. It should make your average pre-2016 Republican explode with rage if they were being consistent.
Your note here and the analysis suffer from the same myopia,
from the cited article:
"The problem with this analysis is that it assumes that the money from buybacks vanishes into thin air,”
No it doesn't. We know where buyback money goes. They boost share prices while putting the money in shareholder pockets. It is moving money around in a way that makes their shares seem more attractive without actually doing anything to expand the business. And you misread the comment. He was saying one of the models was built to just subtract out money that went to buybacks without accounting for it somewhere else. He was pointing out that approach would overestimate how much lower the market would be without the buybacks that occurred. In essence, he's saying if that money had gone to other things we'd see those improvements show up in the value of the stock due to actual increases in investment not through a money game. They comment later that one model shows the market at only 2% lower had the money been reinvested in the business instead though he thinks that is off, too.
