Tag Archives: Buybacks

Who gets the money? Follow the assets. by Steve Roth Originally Published at Wealth Economics This post by Judd Legum at Popular Information (read and subscribe!) prompts me to revisit the issue of share buybacks. This passage in particular: It seems eye-popping. But is it? Even (especially?) finance and econ types don’t really understand buybacks from a big-picture, macro, national-accounting perspective. Here’s a shot at explaining...

So it seems that a good chunk of the GOP/Trump tax cuts will go to buybacks, and to fuel the bubble in the stock market, according to Robin Wigglesworth in the FT (subscription required). Bad news for those that think that higher earnings lead to higher investment (meaning gross formation of capital). My impression is that if you want tax cuts to be stimulative, you should target consumption, in particular for lower income groups, which tend to spend a higher proportion of their income.