Last week, senators Chuck Schumer (D-NY) and Bernie Sanders (D-VT) co-authored an opinion piece in the New York Times titled: "Limit Corporate Buybacks: Corporate self-indulgence has become an enormous problem for workers and for the long-term strength of the economy."
The senators said, "From the mid-20th century until the 1970s, American corporations shared a belief that they had a duty not only to their shareholders but to their workers, their communities, and the country."
I have to say the senators are right: Buybacks should be limited. They benefit too few people, who already have the advantage.
But the senators are dead wrong about buybacks' impact on workers and the wider economy.
That a bunch of D.C. insiders are wrong isn't news at all. But in this case, I'll show you the senators' prescription for fixing the problem is disingenuous at best, and a command-economy disaster at worst.
The good news is, the problem of buybacks is very fixable.
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains.Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.