Stock Buybacks Reach Record Heights

When Republicans passed gigantic tax cuts last year Donald Trump and his cronies claimed it would result in huge pay increases for workers. Democrats said companies would use the money to buy back their own stock, in order to drive up share prices, enriching CEOs and the wealthy.

Guess who was right?

Companies repurchased $178 billion of shares during the first quarter, up more than 42 percent from the same period in 2017, according to S.&P. Dow Jones Indices. That was the largest amount ever repurchased, topping the previous record from the third quarter of 2007.

It used to be illegal for companies to buy their stock back: it was considered stock manipulation. But in 1982 -- during the Reagan administration, of course -- the SEC changed the rules. This adds a whole new level of corruption to the stock market, allowing CEOs to manipulate stock prices and jack up the stock price for themselves and shareholders whenever they like.

Since CEOs are usually compensated in stock and that compensation is linked to share value, the only incentive CEOs have is to literally concentrate more and more wealth in fewer and fewer hands.

Buybacks aren't the only thing companies are spending on:

But even as companies splurged on their shares, investments in real estate, equipment and factories also jumped more than 21 percent compared with the first quarter of last year. Typically the first quarter is weak for investment, so the rise bodes well for corporate spending this year.

The only thing corporations aren't spending money on is pay increases for the people who actually do all the work.