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Sunday, November 09, 2014

Corporate Management Is Creating The Next Recession

The actions of corporate leaders are hurting the economy. They are buying back their companies' shares at inflated prices and ballooning their own pay via bonuses which are based upon share prices. This is hurting not only their companies' long term health, but also hurting the economy. Clearly, we have a capitalism-based problem. What's good for the corporate leaders' pocketbooks is definitely not good for the economy.

In the near future, when the US economy hits the wall and enters recession (it may have already done so, by the way), just remember: it was corporate management which pushed the country into recession. We need to revise the tax laws to account for this problem with capitalism by taxing individual compensation for management which is due to inflated share pricing and lower overall corporate tax rates. Corporate leaders are not only taking unfair advantage of the stock market, they are pushing the problems they cause onto taxpayers. When the recession hits, it will be government which has to help heal the economy and that's going to cost taxpayers a lot of money. It's yet another case of the big fish eating the small fish in our messed-up form of capitalism. And, it's time that individual taxpayers contacted their congressional representatives to demand that they punish those corporate leaders who are stealing from the public treasury to bolster their wealth.

Andrew Smithers details this subject in Buybacks and the parallel universe of bankers.