We have a choice: buybacks or bailouts. Buybacks are just a tax efficient method of transferring money from companies to their shareholders. That’s the reason why companies exist, to allow their shareholders to profit. The problem with buybacks is that they are easily gamed by
as we did with GM. 4. Again, if you bail everyone out, it creates moral hazard! Buybacks our bailouts, we cannot have both. You want a reward? Then you must take risks, too. /end
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Precisely. If a company that has committed buybacks wants a bailout, let them go bankrupt and restructure. Then plenty of money should be available for an equity stake (either from govt on a temporary basis or from investors).
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Or from the private bank lenders!
End of conversation
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