the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Jan 7, 2008
Standard & Poor’s, the Wall Street analysts, just reported that the biggest U.S. companies paid out 1.32 trillion dollars over the last three years to buy up their own stock. They spent less than that–1.28 trillion dollars–in new investment. Standard & Poor’s also noted that the total these companies spent on stock buybacks was bigger than the total budget for medical insurance in the whole United States for the year.
By buying back and destroying a part of their stock, companies give their remaining stockholders more of their future profits. But the stockholders who sell their stock usually get an extra payment–plus pay less in taxes than they would have to pay on cash dividends.
But whether the company buys up the stock or issues a big dividend, the fortune of the stockholders increases without any new riches being created.
Nonetheless, the apologists for capitalism pretend that increasing the wealth of this capitalist class increases the wealth of society. But for years now, the opposite has been true. The capitalist class grows richer by pushing the rest of society down.