[Congressional Record Volume 165, Number 35 (Tuesday, February 26, 2019)]
[Senate]
[Page S1449]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                                Buybacks

  On another matter, buybacks. This morning, the New York Times 
reported on an interesting facet of the recent stock market rally. Many 
investors, according to the Times, are selling off stock. Average 
investors are selling off stock. Pensions, and mutual funds, 
nonprofits, endowments, private equity firms, and trusts are all, in 
the aggregate, selling stock.
  So then why is it rallying? The laws of supply and demand should say 
the stock market should go down. The Times reports that it is corporate 
self-investment buybacks. Companies are buying back their own stock at 
such a rapid clip that they are propping up the market and, to a great 
degree, themselves. It is another clear example of how the recent 
explosion of stock buybacks in corporate America is distorting the 
market--artificially, some would argue.
  Some Democratic Senators, and even some Republican Senators, have 
begun to sound the alarm about the recordbreaking scale of corporate 
buybacks. Over the last decade, based on analysis of America's largest 
corporations, 466 of S&P 500 companies, 92 cents out of every dollar of 
corporate profit has gone to share buybacks or dividends.
  Some say, well, they have already, before the profits, put money into 
their workers and into their communities. We are saying they should put 
some more, for the good of the country. Stock price, when so much of it 
is held up by buybacks, shouldn't be the only indicia, the only 
measure, of how well the country is doing, especially when 85 percent 
of the stocks are owned by the top 10 percent of Americans.
  Most Americans would completely agree that there are more productive 
ways for corporations to allocate their capital than this borderline 
obsession with stock buybacks--the slavery to short-term rises in price 
to please investors--while not doing much for workers or for 
communities.
  I hope corporate America will wake up. Income inequality, along with 
climate change, to me, are the two greatest problems America faces. We 
need corporate America to propose some solutions because when they say 
let government do it, much of corporate America then opposes government 
doing anything for workers or for communities.
  Let's take a careful look at this, and let's see what the right 
solutions are. The status quo is not acceptable.