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I mean, the mandate of a public company is _only_ to benefit the stockholders by increasing the stockholders' wealth. The question is whether they do that via g

I mean, the mandate of a public company is _only_ to benefit the stockholders by increasing the stockholders' wealth. The question is whether they do that via growing the business or via returning money to stockholders. The choice to buy back stock just reflects the apparent lack of good investment opportunities in the market.

woodandsteel 6y ago
The question not if as a corporation they should be doing that, the question is if the tax cuts should have been passed when the corporations were not going to do what the tax cutters promised would happen.
- foldingmoney 6y ago
  That's opening a can of worms. Some corporations invested in new opportunities, some bought back stock. The ones which bought back stock presumably didn't see any profitable investment opportunities. In the absence of monopolies (an important caveat), profitable investment opportunities create value (the service is worth more to the customer than the price, and the supplier's cost of providing the service is less than the price). A company could pay one person to dig a hole and another person to fill it back in, and they'd be creating jobs but they wouldn't be creating value -- that money would be better spent paying them to do something that people actually wanted. When a company buys back stock, they're returning capital to their investors and essentially saying 'we're already doing all we can, your capital is better allocated elsewhere.' If the government steps in and forces companies to make investments that don't create value rather than return capital to investors to be allocated elsewhere, you've created an inefficient planned economy.
  - woodandsteel 6y ago
    It's really much simpler than that. The people who pushed the tax cut said it would lead to a huge increase in companies making investments that would lead to more good jobs in the US, and it just didn't happen. You have the ideological position that what investors do is always good for the country. It's not. Sometimes it is, sometimes people invest in things like bubbles that ultimately burst and damage the economy, sometimes they invest overseas in enterprises that take jobs away from the US, sometimes they waste money on investments that fail, very often the invest part of their money on lobbying to get rid of regulations that protect the public, and so on. I am not saying investment is bad for the country. Often it is good, but it is not nearly as simple as you think it is, so you need to think things out on a case-by-case basis, and the gigantic tax cuts that the corporations and rich people were given was clearly wrong.
    - foldingmoney 6y ago
      >The people who pushed the tax cut said it would lead to a huge increase in companies making investments that would lead to more good jobs in the US, and it just didn't happen. Right, so are these the same people you want to have in charge of capital allocation? Because that's basically what it comes down to.
      - woodandsteel 6y ago
        Yes, I think there are a lot of better things the government could be doing with that money, like building infrastructure, which is in bad shape in the US.
        foldingmoney 6y ago
        So the people who you don't trust to understand what the effect of a tax cut will be and/or to lie about it to benefit their rich pals are the ones you want directing the economy?

woodandsteel 6y ago

The question not if as a corporation they should be doing that, the question is if the tax cuts should have been passed when the corporations were not going to do what the tax cutters promised would happen.

foldingmoney 6y ago
That's opening a can of worms. Some corporations invested in new opportunities, some bought back stock. The ones which bought back stock presumably didn't see any profitable investment opportunities. In the absence of monopolies (an important caveat), profitable investment opportunities create value (the service is worth more to the customer than the price, and the supplier's cost of providing the service is less than the price). A company could pay one person to dig a hole and another person to fill it back in, and they'd be creating jobs but they wouldn't be creating value -- that money would be better spent paying them to do something that people actually wanted. When a company buys back stock, they're returning capital to their investors and essentially saying 'we're already doing all we can, your capital is better allocated elsewhere.' If the government steps in and forces companies to make investments that don't create value rather than return capital to investors to be allocated elsewhere, you've created an inefficient planned economy.
- woodandsteel 6y ago
  It's really much simpler than that. The people who pushed the tax cut said it would lead to a huge increase in companies making investments that would lead to more good jobs in the US, and it just didn't happen. You have the ideological position that what investors do is always good for the country. It's not. Sometimes it is, sometimes people invest in things like bubbles that ultimately burst and damage the economy, sometimes they invest overseas in enterprises that take jobs away from the US, sometimes they waste money on investments that fail, very often the invest part of their money on lobbying to get rid of regulations that protect the public, and so on. I am not saying investment is bad for the country. Often it is good, but it is not nearly as simple as you think it is, so you need to think things out on a case-by-case basis, and the gigantic tax cuts that the corporations and rich people were given was clearly wrong.
  - foldingmoney 6y ago
    >The people who pushed the tax cut said it would lead to a huge increase in companies making investments that would lead to more good jobs in the US, and it just didn't happen. Right, so are these the same people you want to have in charge of capital allocation? Because that's basically what it comes down to.
    - woodandsteel 6y ago
      Yes, I think there are a lot of better things the government could be doing with that money, like building infrastructure, which is in bad shape in the US.
      - foldingmoney 6y ago
        So the people who you don't trust to understand what the effect of a tax cut will be and/or to lie about it to benefit their rich pals are the ones you want directing the economy?