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The Economics of Stock Buybacks

Fortunately, Erica York, a senior economist at the Tax Foundation, nicely shows why stock buybacks often make sense. They tend to happen when a firm doesn’t have better investment options. Stock sellers can then use the funds to invest in firms that do have better investment options. Oh, and by the way, who owns a large percent of corporate America? Pension funds. Many workers rely on these funds for their retirement. Those tears that Schumer and Biden are shedding for workers are crocodile tears.

This is the last paragraph of David R. Henderson, “Stock Buybacks Are Good, Not Bad,” TaxBytes, Institute for Policy Innovation, March 9, 2023.

Read the whole thing, which is short.

Rayna Prime

Rayna Prime

Rayna Prime Editor