"The Biggest Scam Bankrupting Business and the Middle Class"

"So what’s changed? Stock buybacks were once considered a form of illegal stock manipulation, until 1982, when President Ronald Reagan's Securities and Exchange Commission chair John Shad (a former Wall Street CEO) loosened the rules. It was this rule change that made possible the shift toward stock-based compensation that has driven the dramatic rise in the ratio of CEO-to-worker pay, from 20-to-one in 1965 to about 300-to-one today. Before 1982, such massive stock grants would have diluted the number of shares outstanding, causing both EPS and share prices to tumble. But armed with the SEC's seal of approval, CEOs can now prop up EPS by diverting profits into stock buybacks, making their own previously unimaginable compensation packages possible.
"The result has essentially been the creation of a gigantic game of financial 'keep away,' with CEOs and shareholders tossing a $700-billion ball back and forth over the heads of American workers, whose wages as a share of GDP have fallen in almost exact proportion to profit’s rise."


Nick Hanauer at the PBS Newshour argues that "stock buybacks are hurting the U.S. economy."