How Stock Buybacks Ambled Into Stardom
Once considered dubious and even illegal, the practice somehow became the driving force of the never-ending bull market.
Still crazy after all these years.
Photographer: Mario Tama/Getty ImagesThe Democratic presidential hopefuls may disagree on many issues, but they seem united in their hatred of stock buybacks, which they see as a clever way for executives to manipulate share prices and enrich themselves. Even some prominent Republicans agree. Defenders typically argue that it is an effective way of returning capital to the economy, benefiting everyone in the long run.
Who’s right? History suggests that today’s leading role for stock buybacks is less the result of deliberate policymaking than a failure to enforce policies that Republicans and Democrats alike agreed would create a better market for all Americans.