The latest rap against big corporations is that they're returning too much money to shareholders through dividends and stock repurchases. What they should be doing, the complaint goes, is using that money to build new factories, create new products and increase research.
Their stinginess, the argument continues, is one reason for the lackluster recovery. Worse, the stock buybacks are driven by executive greed. When companies buy their own stock, share prices tend to rise — a boon to top executives whose compensation packages are linked to higher prices.
Put simply, so-called shareholder capitalism is a flop. It serves the interests of rich executives and investors, not the larger public.