Why Do Stock Buybacks Artificially Inflate Per-Share Earnings?

As we all know the cavilling about stock buybacks is a nonsense perpetrated by the economically illiterate. We positively desire that money move out of old companies and into new. As both Kevin Hassett and myself have been pointing out:

If lawmakers restrict stock buybacks, that could backfire on the American economy, White House economic adviser Kevin Hassett warned on Friday. Hassett argued that buybacks are a reasonable way for companies to return excess cash to shareholders — who can then invest in faster-growing startups.

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Berkshire Hathaway Buys Back Stock As Warren Buffett Can’t Find Anything To Spend The Cash On

If we were to believe the likes of Robert Reich and Elizabeth Warren then Warren Buffett’s recent actions at Berkshire Hathaway would be tolling the death bell of modern capitalism. For Buffett has decided to buy back nearly $1 billion worth of Berkshire Hathaway stock, something he doesn’t normally do. The usual criticism from the knownothing left – there not being all that much of a know lots left these days – is that stock buybacks are detrimental to the economy.…

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Lordy Be But Nick Hanauer Is Ignorant Of Economics, Isn’t He?

Nick Hanauer is, to my mind at least, clearly gearing up for a run at political office. I don’t think merely being a Senator would quite match the ego so I guess we’ll have to see who the Democrats nominate for the White House next time around. The field is open after all. Hanauer’s problem is that as a – largely, he didn’t start from nothing – self-made VC billionaire he’s not exactly going to get the Bernie Bros onside.…

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