[throwawayjava]

Only if you assume perfect liquidity and either 1) a constant or monotonically increasing stock price or else 2) a huge cash reserve such that selling stock at basement prices or taking out highly leveraged loans is never necessary.

If a company parks $1 in a treasury bond during good times, they have that $1 + approximately inflation in bad times.

If a company buys back their stock at $N and then has to sell a large amount of stock at $M for M << N (or take a leveraged loan), then the company is only getting fractions on the dollar of that original $1.

Unfortunately, the scenarios where huge companies really need cash now pretty well overlap with the scenarios where there are huge liquidity shocks and crashing equities prices. Such as a financial crisis or a pandemic.

[jschwartzi]

Maybe the companies in question should save money instead of expecting the American people to bail them out in these situations. Every single financial crisis in recent memory has the same core group of companies not saving money and needing the government's help. Yet when it comes time to help individuals in need the government suddenly wants means testing and byzantine rules around who gets the help and how quickly it can come. Trickle down economics don't work. They just coat the economy in varnish.

[jariel]

No, not really.

If every business had to consider every possible risk scenario (WW3?) then nothing would function. We need a kind of 'insurance' that nobody else will provide. The government is well-positioned to do that if they do it responsibly.

These companies are generally not getting free money - they are getting loans, or in some cases the gov. is getting equity. The government could have actually made a profit were they to have held their auto-bailouts a little longer.

The reality is, Auto Companies cannot prepare for an 'apocalypse' in an adjacent, much bigger market - banking.

Credit is the right thing to do to keep that system going, again the government did loose a few billion, but it was small in the grand scheme, moreover, they should have broken even.

There are quite a few social programs provided by gov for individuals, moreover, those are 'freebies'. The gov is not taking a chunk of 'ownership of you' and they're generally not extending loans.

Banks also paid back their loans, the sneaky thing there was when the Fed allowed banks to dump mortgages on them at face value - which was a 'bailout' of banks and home-owners.

Of all the things that drive unfairness and inequality - these are not them. These are generally good bits of intervention.

Low-interest rates that drive massive home inflation is a primary driver of inequality. Lack of some kind of socialized medicine. Lack of reasonable healthcare regulations. Garbage public schools in some areas. Prison Industrial Complex. These are much more obvious areas for reform.

[jariel]

Of course - I'm not denying that 'stock buybacks' have a strategic impetus, of course they do.

Every financial decision does.

I'm saying that the popular notion of 'stock buybacks' as somehow a 'windfall' for investors is just not really true at all.

The notions that some individual investors are literally selling their stock, but instead of to some other party but the company itself, is not a big deal.

Stock buybacks are a rational and normal part of financial operations not some 'special win' for investors as some of the rhetoric implies.

[jessaustin]

They aren't a "special win" in general. When they occur a month before a downturn that generates a bailout, they are.

[jariel]

Even a 'month before' some unforeseen event, it's not a 'special win'. It's barely a special win in any event.

[iso947]

Aren’t $1k of dividends taxed more than $1k or capital gains?