The Atlantic has the article Are Stock Buybacks Starving the Economy?
Stock buybacks are eating the world. The once illegal practice of companies purchasing their own shares is pulling money away from employee compensation, research and development, and other corporate priorities—with potentially sweeping effects on business dynamism, income and wealth inequality, working-class economic stagnation, and the country’s growth rate.
That’s a rhetorical question in the headline. Of course it is starving the economy. What the article doesn’t talk about is the need for companies to shrink down to the size of the market for their products. There are consequences for the government not stimulating consumer demand.
Companies also need to keep the cash down so that they don’t attract a leveraged buyout. Even companies that don’t want to do stock buybacks are forced into it by our rigged system.
If we want companies to consider the good of the economy as a whole, we need to protect the good companies from hostile takeovers. If good companies are taken over by hostile takeovers, they will be turned into bad companies. The regulations that Reagan overturned were part of the protection for good companies.