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Its not that the companies should have kept the cash, though. Buybacks are not inherently bad. But the US, many buybacks were a direct result of the reduction i

Its not that the companies should have kept the cash, though. Buybacks are not inherently bad. But the US, many buybacks were a direct result of the reduction in corporate tax rate in 2017. Instead of using their greater cash flow to reinvest, raise wages, etc, they bought back stock primarily held by wealthy and institutions. Effectively a transfer from the US Treasury to the wealthy class, leaving the US with fewer options to weather the current storm for its citizens as a whole.

duxup 7y ago
I still wouldn't expect wages to rise just because. And I'm not sure as far as an airline goes investment isn't going prevent any of this either. I get the buyback problem, but laying people off who aren't working seems entirely disconnected from those topics.
- ferzul 7y ago
  is public assistance also entirely disconnected? sure, they will lay people off or furlough them. there's genuine problems with work at the moment. but do they want help beyond that?
  - duxup 7y ago
    I guess for any given public assistance you could demand something about layoffs ... but I would be wary of side effects / worry about killing the company through such policies.
    - toomuchtodo 7y ago
      Nationalize them then. Wipe out management and shareholders, and take control for the benefit of workers of the company and customers.
      - duxup 7y ago
        Would they be able to compete with other airlines if they were paying everyone for not working?
        toomuchtodo 7y ago
        One would assume that airlines requiring a bailout are financially marginal, and unable to survive without nationalization, while airlines not requiring a bailout would be in a financial position to weather the temporary black swan event causing the need for bailouts in the first place (for example American Airlines might require a bailout, but Southwest likely will not). If every airline needs a bailout, you might have to evaluate a program of greater scale; injecting cash directly into every airline in a coordinated effort, but taking equity and putting in place governance (with a board seat or more than one) in those needing the bailout. Those who won't accept such terms would be permitted to fail. My apologies it's not a binary answer, and more "it depends."
    - deleted 7y ago
      [deleted]
nradov 7y ago
For many businesses, reinvestment would have been a waste because they didn't have any expansion opportunities with strong profit potential. In those circumstances the shareholders would rather get the cash back directly.
noad 7y ago
I think "buybacks are not inherently bad" is a good point and still true in a theoretical perfect frictionless vacuum. But when we look at the entire economy and how all the money has been flowing mostly tax free from the government and workers to only (literally only) the super-duper rich via this buyback tool, then it's obvious we have a problem.

duxup 7y ago

I still wouldn't expect wages to rise just because. And I'm not sure as far as an airline goes investment isn't going prevent any of this either. I get the buyback problem, but laying people off who aren't working seems entirely disconnected from those topics.

ferzul 7y ago
is public assistance also entirely disconnected? sure, they will lay people off or furlough them. there's genuine problems with work at the moment. but do they want help beyond that?
- duxup 7y ago
  I guess for any given public assistance you could demand something about layoffs ... but I would be wary of side effects / worry about killing the company through such policies.
  - toomuchtodo 7y ago
    Nationalize them then. Wipe out management and shareholders, and take control for the benefit of workers of the company and customers.
    - duxup 7y ago
      Would they be able to compete with other airlines if they were paying everyone for not working?
      - toomuchtodo 7y ago
        One would assume that airlines requiring a bailout are financially marginal, and unable to survive without nationalization, while airlines not requiring a bailout would be in a financial position to weather the temporary black swan event causing the need for bailouts in the first place (for example American Airlines might require a bailout, but Southwest likely will not). If every airline needs a bailout, you might have to evaluate a program of greater scale; injecting cash directly into every airline in a coordinated effort, but taking equity and putting in place governance (with a board seat or more than one) in those needing the bailout. Those who won't accept such terms would be permitted to fail. My apologies it's not a binary answer, and more "it depends."
  - deleted 7y ago
    [deleted]

nradov 7y ago

For many businesses, reinvestment would have been a waste because they didn't have any expansion opportunities with strong profit potential. In those circumstances the shareholders would rather get the cash back directly.

noad 7y ago

I think "buybacks are not inherently bad" is a good point and still true in a theoretical perfect frictionless vacuum. But when we look at the entire economy and how all the money has been flowing mostly tax free from the government and workers to only (literally only) the super-duper rich via this buyback tool, then it's obvious we have a problem.