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The Buyback Boondoggle

As the unemployment rate hovers near 10%, the economic debate is focused on how the government should aid recovery. (More stimulus spending? Tax cuts?) But it's business' task to get the economy back on track—by investing in innovation and job creation. And if the recent past is any guide, corporations may stall the recovery by investing instead in something else: stock buybacks.

America urgently needs a debate on stock buybacks. There is no sound economic rationale for these investments. Justified by the notion of maximizing shareholder value, they do nothing for the economy—and a lot for CEOs receiving stock-based compensation.