By this expert
The New York Times is having a “Room For Debate” discussion on its Opinion Page about how corporations should handle profits based on the Harvard Business Review article “Profits Without Prosperity” by William Lazonick of the University of Massachusetts Lowell, who is a grantee of the Institute for New Economic Thinking. The discussion features contributions by Bruce Greenwald, Peter Thiel, and Lazonick, among others. Lazonick argues that the capital being used for stock buybacks would be better spent on investment. Lazonick’s “Room For Debate” piece is below. To read the full discussion on The New York Times, click here.
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Profits Without Prosperity: How Stock Buybacks Manipulate the Market, and Leave Most Americans Worse Off
Five years after the end of the Great Recession, corporate profits are high and the stock market is booming. Yet most Americans are not sharing in the apparent prosperity.
Background paper for a presentation to the Seattle University School of Law Berle IV Symposiun, “The Future of Financial/Securities Markets,” London June 14-15, 2012.