Laurence Fink the CEO of BlackRock says, ” we should stop Corporate Buybacks”. He’s right. Of course it’s easy for him to say. He cares more about the consequences of Financial Reforms. However, we’ll take every champion of good Corporate governance and ask them to please persuade their Corporate friends to invest in their businesses for the long term! Returning money to shareholders only increases short term gains. I remember listening to Charlie Munger and Warren Buffett ( the founders of Berkshire Hathaway), insisting they would only give a dividend to stockholders when BRK ceased giving investors a better return on their investment. Even now, Buffett, won’t buy back his stock, unless the price is too low! He’s still “fishing” for a bargain!
- I also read that 37% of the GOP believe Corporations contribute to inequality! I thought based on the previous statistics , this was hopeful and ” Hope springs eternal”.
We’re beginning to under stand the Societal picture. Corporate Laws skew inequality. By giving tax breaks to large Corporations, we siphon money from the Middle Class. By allowing large corporations to under employ workers, The Middle Class pays for corporate employee subsidies. If the folks working for large corporations earned above the poverty level, food stamps and Medicaid would be reduced.
If buy backs ceased, Corporations would be investing in new product development and creating jobs. Now they are giving money to share holders and themselves, while producing nothing new. The money circulates with the haves and does nothing for those who have lost the most during the continued recession of 2008.
Bank profits for the quarter are at all time highs. I don’t think we should be breaking out the Champagne yet, they’re profitable because they’ve cut back on onsite employees, their bonuses, increased customer fees. What happens in the next quarters? What happens when there are no more productivity gains and real Regulatory actions ” kick in”. LOL If they’re really profitable, they can finally be held accountable without fear of ” breaking the bank”.
- I’m so happy, I could direct you to ” the voice of Joyce” archives and Posts. I’ve been speaking about income inequality and it’s reversal for 3 years in the Public Arena.
Finally, we’re all getting to the same page. Continue reading, sharing and commenting, dear reader. I have never lost hope, though I have been disheartened at times. Let’s move forward together. Once you know some of the answers, don’t stop, push for solutions and resolution of the problems. Corporate Tax reform is one segment of the problem, GO FOR IT! The bigger one is Financial Reform. One step at a time.
Have a great day!