Statement: Financial Economy Experts at Roosevelt Institute React to Bill Introduced by Senator Tammy Baldwin (D-WI) to Ban Stock Buybacks
“Companies are on track to spend $800 billion on stock buybacks this year to artificially boost their share prices,” said Lenore Palladino, Senior Economist and Policy Counsel at the Roosevelt Institute.
New York, NY — Responding to the introduction of the Reward Work Act by Senator Tammy Baldwin (D-WI), which would ban stock buybacks and require companies to extend one-third of their board membership to a vote by employees, Roosevelt Institute financialization experts Lenore Palladino and Mike Konczal issued the following statements:
“Companies are on track to spend $800 billion on stock buybacks this year to artificially boost their share prices,” said Lenore Palladino, Senior Economist and Policy Counsel at the Roosevelt Institute. “That is why it’s time for Congress to ban stock buybacks, because they manipulate the market and allow corporate executives to reward themselves and their shareholders instead of investing in their companies and workers. With its requirement that workers have a voice on corporate boards, the Reward Work Act will begin to rebalance corporate decision-making towards true shared prosperity.”
“In the wake of the new tax law and the renewed effort to rollback key Dodd-Frank consumer protections, our economy has become even more top-heavy,” said Mike Konczal, Fellow at the Roosevelt Institute. “Buybacks in the banking and other sectors contribute to this dynamic and make another economic crisis much more likely. A bold and targeted regulation like a buybacks ban puts us on the path to addressing excessive short-term thinking by corporate leaders and will incentivize the broad-based economic growth and long-view behavior that our economy has needed for some time.”
Earlier this week, Palladino released “Stock Buybacks: Driving a High-Profit, Low Wage Economy,” an issue brief that explains how buybacks work and the ways they harm the economy. This week, Boston Review featured Palladino’s “A Dirty Corporate Practice is On the Rise,” which examines the history of stock buybacks, the dramatic rise of late, and how ending this fast-growing practice stands to benefit working people.
Recently, Konczal has been included in coverage of the Dodd-Frank rollback at outlets ranging from Bloomberg TV to The Washington Post and The New York Times.
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