Tweet [1]
George Will rightly criticizes Biden and Schumer for leading the “nonsensical progressive charge against stock buybacks.” [2] Three slices:
Forgive them because they cannot help themselves. Progressives have a metabolic urge to boss around the private sector. It is not just that, as is said, progressives do not care what people do as long as it is compulsory. Progressives want to be compellers because they think they know exactly what people must be made to do if progress is to arrive.
On a recent morning, a Wall Street Journal front-page headline said, “Buybacks Set Pace for Record,” and the New York Times’s lead Page 1 story reported that semiconductor manufacturers seeking government subsidies must curtail buybacks — corporations repurchasing their stock. Hostility to buybacks arises from foggy economic thinking that is encouraged by the progressive animus against the people and processes that create the wealth that progressives delight in redistributing.
The question is: What should corporations do when their profits exceed their needs for internal investments? Progressives know what they should not do: buybacks.
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John H. Cochrane [3], the “Grumpy Economist [4]” of Stanford University and the Hoover Institution, recommends [5] considering why buybacks raise share prices, if they do so at all. Yes, buybacks increase short-term demand for the company’s shares, sometimes producing a small price increase. But, Cochrane says, the main reason buybacks sometimes slightly raise a stock’s price is that the stock market recognizes this: Buybacks redirect cash from suboptimum uses within the repurchasing company to optimum uses elsewhere, often in companies that have immediate investment needs.
So, Cochrane says, giving management stock options and allowing them to profit from buybacks incentivizes managers to make decisions that benefit the company’s shareholders, its long-term prospects and the economy’s efficient allocation of capital. Money spent on buybacks does not disappear like rain into sand; it changes hands and trajectories, and continues to work.
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Warren Buffett’s grandfatherly persona was absent when, his patience exhausted, he recently wrote [6]: “When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive).”
Biden, to whom the private sector is a region as foreign [7] as Outer Mongolia, says buybacks are pernicious. Buffett, who has caused [8] the creation and distribution of wealth that dwarfs his net worth, disagrees. You decide whom to believe.
John Masko reports on “BlackRock’s tyrannical ESG agenda.” [9] A slice:
Not only is ESG failing to make money, but it is not even achieving its non-financial goals. One sizeable Columbia University and London School of Economics study published in 2021 found that [10] US companies in 147 ESG portfolios had worse compliance records for both labour and environmental rules than US companies in 2,428 non-ESG portfolios. They also found that companies added to ESG portfolios did not subsequently improve compliance with labour or environmental regulations. This study added to a growing body of evidence that ESG investing is not only anti-democratic but ineffective.
Stephen Ford puts his finger on a major reason why housing in America costs more than it should [11]. A slice:
Why do urban areas constantly get more expensive and exclusive? My neighborhood provides a clue. A proposed redevelopment of a single property in Del Ray, a much-loved part of Alexandria, recently died after a yearlong fight. The brouhaha, which divided the community, shows how the not-in-my-backyard mindset blocks virtually any increase in housing supply, even those that strive to maintain local character while making relatively modest changes.
In volunteering to get bumped from a flight, Paul Schwennesen finds reason to celebrate the market [12].
J.D. Tuccille’s son did his taxes for the first time – an experience that induced rage [13].
David Henderson has good reason to believe that the Russian economy is in a tailspin [14].
The Telegraph‘s Lockdown Files Team continues its report on the intentional inflaming of fear of covid by the British government [16]. Two slices:
Matt Hancock wanted to “deploy” a new Covid variant to “frighten the pants off” the public [17] and ensure they complied with lockdown, leaked messages seen by The Telegraph have revealed.
The Lockdown Files – more than 100,000 WhatsApp messages sent between ministers, officials and others – show how the Government used scare tactics to force compliance and push through lockdowns.
In another message Simon Case, the Cabinet Secretary, said that “the fear/ guilt factor” was “vital” in “ramping up the messaging” during the third national lockdown in Jan 2021 [18].
The previous month, Matt Hancock, the then health secretary, appeared to suggest in one message that a new strain of Covid that had recently emerged would be helpful in preparing the ground for the looming lockdown, by scaring people into compliance [19].
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Six months earlier, in June 2020 – when the UK was coming out of its first Covid lockdown – Mr Hancock and Sir Patrick Vallance, the Government’s Chief Scientific Adviser, appeared pleased that a study on the virus’s spread showing it going in a “positive direction” had not received publicity, while a “gloomy” survey had been picked up by the media.
“If we want people to behave themselves maybe that’s no bad thing,” said Mr Hancock in a WhatsApp message. Sir Patrick appeared to agree, responding: “Suck up their miserable interpretation and over deliver.”
Bjorn Lomborg tweets [21]:
Quite astounding:
Sweden took a lot of flack for its Covid19 policies
But actually, Sweden has done best in Europe over 2020-22
measuring excess mortality in percent of total mortality
Jay Bhattacharya is conducting a poll on Twitter [22]:
What is worse for the reputation of scientists? That there was a consensus in favor of disastrous, useless pandemic policies? Or that a majority of scientists stayed silent to avoid ex communication by the mob?
Consensus for nonsense 31.1%
Scientists self censored 68.9%