Quote:
Originally Posted by Ducay
You clearly don't have a good understanding of business or the oil patch; your post reads like a typical leftist uneducated "hit piece", the call out of "corporations" as being evil is a dead giveaway.
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Eh, I worked in the industry for over a decade. I'm have a close relative who's an executive in the industry. I'd rate myself as fairly familiar.
Quote:
Originally Posted by DiracSpike
Buy backs are just another way of returning money to shareholders, same as dividends are.
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That was my whole point. Why does a company engage in buy-backs or dividends? Because they are unable to allocate capital in their core business and receive the desired return.
What does a business gain from dividends or buy-backs?
Looking at it from a fairly simplistic view, Dividends retain investors seeking stability in environments of low growth. Buy-backs attract new investors looking for share price growth in areas of low growth.
I don't even remember the point of my original post, but I think it was along the lines that public subsidies for companies that are engaging in buy-backs are not likely to produce greater economic activity and employment, as the companies are sending a strong signal they don't have growth opportunities in their core business. Effectively the government is now dumping money arbitrarily at shareholders in a single industry.
This is very different to incentives and subsidies in growth industries, where jobs and economic activity are created. This is a much better return on public money.