William Lazonick

William Lazonick is president of The Academic-Industry Research Network and professor emeritus at the University of Massachusetts Lowell. His research on corporate governance, innovation, and economic performance is currently being funded by the Institute for New Economic Thinking, European Commission, and Gatsy Foundation. 

Recent Articles

The Curse of Stock Buybacks

For the past three decades, the overriding priority of American corporations has been paying their shareholders. That’s just what they’ve done with their tax cut.

 

(ANSA via AP)
This article appears in the Summer 2018 issue of The American Prospect magazine. Subscribe here . In slashing the corporate tax rate from 35 percent to 21 percent, the Republicans’ Tax Act is supposed to provide companies with extra after-tax profits that, through productive investments, will create jobs for Americans. Instead of helping to rebuild the vanishing middle class, however, the tax savings will further enrich shareholders through stock buybacks and cash dividends. With share prices inflated by stock buybacks, the richest U.S. households will extract even more value from the economy, making America’s rampantly unequal income distribution even worse. Even before the adoption of the Tax Act, it was no secret that corporations would use the corporate tax breaks to increase distributions to shareholders. At the Wall Street Journal CEO Council in November 2017, a moderator asked the roomful of top executives: “If the tax reform bill goes through, do you plan to...