Sens. Chuck Schumer and Bernie Sanders recently inveighed against corporate stock buybacks and suggested they’d like a law that limits share repurchases to those companies that pay a minimum wage of $15 or more an hour.
This idea, however well-intentioned, would replace management's judgment on matters of corporate capital allocation with that of Congress'. No thanks.
Their argument, however, makes too little of a crucial point: Stock buybacks don't benefit the vast majority of Americans because so few people have little or no stake in U.S. equity markets.
The senators use data from the research of Edward Nathan Wolff, an economics professor at New York University, who found that the wealthiest 10 percent of households held 84 percent of all stocks.