By Jeff Cox “Root causes of massive wealth disparity come down to one issue: Companies would rather use cash to buy back their own stock than to grow their businesses, a study in Harvard Business Review says.”… [Click HERE to read…
AIR IMPACT
Recognition of AIR research, opinions, and people in the media and elsewhere
Media giving corporate executives a free pass on their value extraction
By Yves Smith “I’m a day late to get to a revealing Financial Times comment by Edward Luce, who has among other things served as Larry Summers’ speechwriter. Luce has written important articles on politics (for instance, being one of the…
Nightmare on Wall Street: Are stock buybacks creating another ‘financial bubble’
By Liz Iacobucci “Some blog posts are easy to forget. But the one I wrote last week is beginning to give me nightmares. Here’s why: the stock market keeps hitting record highs. But the so-called “economic recovery” – which started in June 2009 – is…
Are stock buybacks too high?
By Tyler Cowen “Edward Luce writes in The Financial Times: According to William Lazonick, a scholar at the University of Massachusetts Lowell, seven of the top 10 largest share repurchasers spent more on buybacks and dividends than their entire net income between…
The Economist: Blue chips are addicted to ‘corporate cocaine’
By Steve Denning “The pro-business journal, The Economist, last week declared in two articles (here and here) that “blue chips are engaged in their own kind of financial excess: a dangerous addiction to share buy-backs.” Share buybacks “have become a kind of corporate…
Value extractors, “:super-managers,” vampires and the decline of the US and US health care
By Roy Poses “Appearing during the last few weeks were a series of articles that tied the decline of the US economy to huge systemic problems with leadership and governance of large organizations. While the articles were not focused on…
Explaining the failure of WV’s corporate tax cuts to produce prosperity
By Sean O’Leary “In this month’s Harvard Business Review, William Lazonick writes in an article titled “Profits Without Prosperity“, that between 2003 and 2012 companies in the Fortune 500 “used 54% of their earnings—a total of $2.4 trillion—to buy back…
The madness of share-buybacks; The flawed shareholder-driven model
By Bernard Hickey “Here’s my Top 10 items from around the Internet over the last week or so. As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz. See all previous Top 10s here.”… [Click HERE to…
Pocketing Profits or Reinvesting Them (debate on William Lazonick, “Profits Without Prosperity”)
Online feature “Corporations have gone from retaining about 60 percent of their profits in the 1970s, to about 10 percent today, William Lazonick wrote in a recent Harvard Business Review article. Profits are instead being used to pay dividends to investors…
Greed in the Executive Suite?
Financial Advisors “Deciding how to allocate capital is one of management’s most important responsibilities. Such decisions impact not only the company’s short- and long-term performance, but the overall economy as well.”… [Click HERE to read the full article]
