The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the US and UK stimulus plans, as both countries face an economic collapse due to the Covid-19 lockdown.
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Covid-19 lives, Capitalism dies: Oligarchs, buying influence in Washington and Westminster, have become reliant upon bankers and politicians providing taxpayer-backed bailouts when their reckless highly leveraged bets go wrong.
Since 2010, companies trading on the S&P 500 stock index spent over $5.3 trillion on stock buybacks. Allowing companies to borrow money so they can buy back stock and issue dividends is wrong. It destroys future growth and earnings, and it impairs a company’s ability to self-finance in a crisis while artificially pushing stock prices higher. Share buybacks involve a conflict of interest because top executives owe a fiduciary duty to their companies and simultaneously profit from exercising stock options. If the borrowed money was used to stimulate organic growth or maintain capital buffers to protect companies from economic recessions, executive pay would be less excessive and bailouts would not be needed.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.