Tags: lloyd blankfein | twitter | stock | buybacks

Lloyd Blankfein Returns to Twitter to Defend Stock Buybacks

Lloyd Blankfein Returns to Twitter to Defend Stock Buybacks
(AP)

Tuesday, 05 February 2019 12:24 PM

Former Goldman Sachs CEO Lloyd Blankfein took to Twitter for the first time in almost seven months to respond to a New York Times opinion piece by Senators Chuck Schumer and Bernie Sanders that argued for limits on corporate stock buybacks.

"A company used to be encouraged to return money to shareholders when it couldn't reinvest in itself for a good return. The money doesn't vanish, it gets reinvested in higher growth businesses that boost the economy and jobs. Is that bad?" he tweeted.

Sanders responded to Blankfein with his own tweet, saying he agreed the money used for buy backs didn’t simply vanish.

“It increases the wealth of billionaires like him,” Sanders said. “How about increasing wages for American workers. Is that a bad idea?”

Sanders and Schumer had argued that companies shouldn’t be able to repurchase shares unless they first increase workers’ pay and benefits.

The verbal jousting came a day after two top Senate Democrats said they’ll introduce legislation barring companies from buying back their own stock unless they first increase workers’ pay and benefits, as the party seeks to frame 2020 election issues by spotlighting corporate responsibility.

Senate Minority Leader Schumer and Sanders, who is considering a second run for the Democratic presidential nomination in 2020, wrote in a New York Times opinion piece Monday that their plan would require companies pursuing buybacks to take such actions as raising workers’ minimum pay to $15 an hour, improving pensions or offering seven days of paid sick leave.

“At a time of huge income and wealth inequality, Americans should be outraged that these profitable corporations are laying off workers while spending billions of dollars to boost their stock’s value to further enrich the wealthy few,” the two wrote. They pointed to recent decisions of companies including Walmart Inc. and Wells Fargo & Co. to repurchase billions of dollars in shares at about the same time they cut jobs.

The proposal would generate little support among Republicans in the GOP-controlled Senate, so its likely to serve more as a campaign issue than to be enacted into law.

Several of the party’s presidential hopefuls in the Senate are focusing on corporate governance as an election issue, including Senators Elizabeth Warren of Massachusetts, Kamala Harris of California and Cory Booker of New Jersey. Sanders, an independent who has a spot in Democratic Senate leadership, sought the party’s presidential nomination in 2016 and is weighing another run.

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Former Goldman Sachs CEO Lloyd Blankfein took to Twitter for the first time in almost seven months to respond to a New York Times opinion piece by Senators Chuck Schumer and Bernie Sanders that argued for limits on corporate stock buybacks.
lloyd blankfein, twitter, stock, buybacks
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2019-24-05
Tuesday, 05 February 2019 12:24 PM
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