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stock buybacks
Why Corporate Leaders Who Strip Companies for Parts Have No Business in Government
When corporations prioritize shareholder payouts over real investment, society loses—but when governments adopt the same model, the consequences are compounded.
May 13, 2025
There’s a familiar myth in American politics: that of the no-nonsense business leader who cuts through red tape and gets results. It fuels the belief that running a country is just like running a company—and that executives, with their boardroom instincts and bottom-line mindset, are exactly what government needs.
But that myth collapses under the weight of what corporate leadership has actually become—and what happens when it migrates into public office.
Economist William Lazonick has spent decades analyzing that transformation. He argues that corporate America has abandoned its commitment to innovation and productive investment, replacing it with a laser focus on cost-cutting, price gouging, and tax dodging to boost profits so they can do more stock buybacks—all in the name of maximizing shareholder value. Most executives are no longer rewarded for building durable businesses or contributing to the real economy—they’re rewarded for how efficiently they extract value from the companies that they control.
We’re not just talking about fragile companies. We’re talking about the erosion of public institutions, rising inequality, and a democracy that serves fewer and fewer people.
Lazonick calls this model a “scourge,” blaming it for weakening U.S. technological leadership, driving massive inequality, and destabilizing the broader economy. Now, he warns, this same extractive logic is infiltrating the federal government.
The ongoing 2025 budget debates are a case in point. Under the guise of “efficiency” and “fiscal responsibility,” the Trump administration has proposed slashing $163 billion from federal spending—cuts that would gut education, housing, and medical research—all of which are essential for value creation. The language mirrors what executives have long used to justify layoffs, offshoring, and disinvestment. But in this case, it’s not a corporation being hollowed out. It’s the state itself.
Lazonick argues that this shouldn’t surprise anyone. “Because these people have gotten away with looting corporations, they’ve come to believe it’s their right to loot the state,” he says. Even among tech figures who’ve built or have led the building of real products—like Elon Musk, Jeff Bezos, and Mark Zuckerberg—Lazonick notes a mindset of entitlement: “They treat the resulting wealth as entirely their own, as if they alone earned it.” That thinking now shapes public policy, where deregulation and budget cuts benefit the wealthy while dismantling protections for workers and consumers.
Take Musk, for example. As head of the Department of Government Efficiency (DOGE), he’s worked to weaken regulatory agencies like the Consumer Financial Protection Bureau and the National Labor Relations Board—both of which would typically oversee parts of his business empire. At the same time, his companies continue securing massive federal contracts, including a potential $2 billion FAA deal, raising serious concerns about conflicts of interest. As Lazonick and colleague Matt Hopkins argue in a recent piece for the Institute for New Economic Thinking, Musk has advanced through a “perilous system of corporate governance” driven by shareholder primacy—fueling inequality and eroding America’s technological leadership. His tenure at DOGE is simply more of the same: dismantling oversight, channeling public resources into private ventures, and treating government as just another asset to extract.
Musk’s corporate empire—Tesla, SpaceX, and Neuralink—owes much of its success to taxpayer-funded research and government support. Tesla was launched with the help of federal loans and electric vehicle subsidies. SpaceX builds on decades of NASA-funded R&D and now depends on billion-dollar public contracts. Even Neuralink draws heavily on publicly funded neuroscience work. Despite the mythology of private-sector genius, these companies are deeply rooted in public investment. Yet the public sees little return.
And the mindset isn’t limited to Musk. President Donald Trump and his family are taking the corporate model Lazonick describes to new heights, using government as a platform for private enrichment. Eric Trump recently promoted the family’s latest crypto venture, making the president a major crypto player while shaping federal policy toward that very industry. The Trump family’s 60% stake in World Liberty Financial, now attracting major investment, has intensified concerns over conflicts of interest. Meanwhile, under Eric’s leadership, the Trump Organization has struck a controversial $5.5 billion deal with a Qatari state firm to build a luxury golf resort—despite Trump’s previous pledge to avoid foreign deals while in office.
Trump has also issued executive orders to “streamline” federal procurement and contract reviews. While marketed as anti-waste measures, critics see them as a backdoor for directing government business to favored contractors, including those with family ties. The line between public service and private gain has rarely been thinner.
Lazonick warns that the stakes are high. When corporations prioritize shareholder payouts over real investment, society loses—but when governments adopt the same model, the consequences are compounded. We’re not just talking about fragile companies. We’re talking about the erosion of public institutions, rising inequality, and a democracy that serves fewer and fewer people.
To reverse course, Lazonick argues we need deep structural reform in how corporations—and by extension, governments—operate. That means banning stock buybacks; reining in executive compensation tied to manipulated stock performance; and reinvesting profits in innovation, workers, and communities. It means embracing a stakeholder model of governance that sees corporations not just as wealth machines, but as stewards of social value.
Because if we don’t fix these systemic flaws, the looting won’t stop. It’ll only deepen—and spread.
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Blaming Trump Tariffs Alone for 20,000 Laid Off UPS Workers Hides Key Factor: Stock Buybacks and Wall Street Greed
Blaming the Trump tariffs for every sin imaginable may be emotionally satisfying, but while it may end up being a factor, it is not the whole story here.
May 01, 2025
It’s such a tempting storyline: UPS announces that it will lay off 20,000 workers, citing “changes in the global trade policy and new or increased tariffs.”
There you have it. A perfect example of how Trump’s tariffs are screwing working people, many of whom voted for him.
Or is it?
UPS, like every major U.S. corporation, is in business to extract as much wealth as possible and shovel it to its shareholders and top executives in the form of stock buybacks and dividends. And like every major corporation, UPS will pay for that wealth extraction by laying off as many workers as possible. That may reduce the production of goods and services, but so be it, if it generates more money for shareholders and executives. In big business today, wealth extraction always comes first.
This is not a company struggling to make ends meet.
Let’s look at some of UPS’s numbers. In 2023, the company authorized $5 billion in stock buybacks, starting in 2024 with $500 million and another $5.5 billion in dividends. In 2025, UPS plans to spend another $1 billion on stock buybacks, as well as $5.5 billion more in dividends. In 2024, not incidentally, UPS posted $8.5 billion in profits. This is not a company struggling to make ends meet.
(Stock buybacks are when a corporation uses its own funds to repurchase shares and thereby raise the price of those shares, which greatly pleases its largest shareholders. Before deregulation in 1982, a company buying its own shares was considered illegal stock manipulation.)
To maintain this wealth pump for its investors and top officers, who are primarily compensated with stock incentives, cash needs to be generated and replenished. The simplest way to do that without acquiring more debt is to lay off workers.
Before the deregulation of Wall Street that came with the Reagan and Clinton administrations, no corporate manager would dare to lay off workers during profitable periods. To do so was a sign of poor management, a blemish on the CEO and his/her team. Workers and their communities were considered corporate stakeholders, right along with shareholders.
But after deregulation, the only stakeholder that mattered was the shareholder. The hell with workers and their communities. Companies began moving corporate headquarters to the sites of the highest governmental bidders, and in short order layoffs during good times became a symbol of smart management. Greed is good reigned supreme. (Please see Wall Street’s War on Workers for the gory details.)
Do not lend any credibility to corporate PR announcements. Their job is to do all they can to obscure how much they are shoveling to Wall Street.
The Teamsters union, which represents 300,000 UPS hourly workers, will fight these recently announced layoffs. Sean O’Brian, who spoke at the Republican national convention in 2024, sees any Teamsters layoffs as a violation of the contract:
United Parcel Service is contractually obligated to create 30,000 Teamsters jobs under our current national master agreement. If UPS wants to continue to downsize corporate management, the Teamsters won’t stand in its way. But if the company intends to violate our contract or makes any attempt to go after hard-fought, good-paying Teamsters jobs, UPS will be in for a hell of a fight.
We can be sure that the Teamsters will be looking closely at UPS’s finances, especially the large amounts going to stock buybacks and dividends. They will not sacrifice their members’ jobs on the altar of obscene wealth extraction.
Will the Trump tariffs have a major impact on UPS jobs?
We just don’t know that yet. But one thing we know for sure: Do not lend any credibility to corporate PR announcements. Their job is to do all they can to obscure how much they are shoveling to Wall Street. Their credo: The extent and consequences of the wealth extraction machine must never be revealed.
Blaming the Trump tariffs for every sin imaginable may be emotionally satisfying. But letting larger corporations and their Wall Street handlers off the hook when it comes to job destruction, which the Democrats have done for more than a generation, is in large part why we have Trump in the first place.
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Is Trump Falling Into the Trump Tariff Trap?
The Democrats are once again abdicating the jobs terrain to Trump, hoping instead that his tariff toy will blow up in his dictatorial hands. Instead of calling tariffs “insane,” Democrats should call them job-killing tariffs. And as prices rise, they can blame Trump for that as well.
Mar 13, 2025
Whether by design or instinct, candidate Donald Trump set a perfect trap for the Democrats when, in September 2024, he reacted to the John Deere and Company’s announcement that it would move a thousand jobs from the Midwest to Mexico. Trump said then:
I am just notifying John Deere right now that if you do that, we are putting a 200% tariff on everything that you want to sell into the United States.
Trump saw Deere’s announcement as the perfect opportunity to jump on Deere’s job destruction, which the company used to finance 12.2 billion in stock buybacks to enrich its investors.
The Democrats? They sent billionaire Mark Cuban out to the media to complain that the tariffs were “insane.”
But threatening tariffs did not feel insane to the Deere workers who were about to lose their jobs. Nor did they feel insane to the millions of other workers who had lost their jobs due to “free trade” deals like NAFTA.
The Democrats now have a chance to turn the tables—but, alas, they probably won’t.
The Democrats stumbled into the Trump’s tariff trap and provided many workers with yet another reason to abandon a party that had failed to say anything at all about the needless job destruction caused by overt corporate greed.
After Trump won the presidency last November, I was sure he would set more tariff traps, provoking the Democrats to reflexively react as corporate shills.
But along the way something funny happened. Trump fell into his own tariff trap, and his public support has fallen somewhat. The Democrats now have a chance to turn the tables—but, alas, they probably won’t.
Why Does Trump Love Tariffs?
Even the most ardent MAGA apologist knows that Trump has dictatorial impulses. He wants to play Brando in “The Godfather” and make you an offer you can’t refuse.
But playing Don Corleone in domestic affairs doesn’t come easily. Trump can flood the zone with executive orders, but the courts are still functioning and often enforce the law. Even a pliable Congress has rules which can get in the way of the legislative results Trump is demanding.
But there are two areas where Trump really can act unilaterally—foreign affairs and tariff policy.
As president, Trump is free to bully Ukraine, kiss up to Putin, threaten to annex Greenland, Panama, and even Canada. No one in the U.S. can really stop him. He doesn’t need the blessing of Congress unless he wants a new treaty, which he doesn’t.
Similarly, he can use Section 301 of the Trade Act of 1974, which authorizes the U.S. Trade Representative, a Trump toady, to impose tariffs in response to unfair trade practices, which are not defined.
There is no way a full-scale trade war with Canada will do anything but shatter jobs on both sides of the border, while raising prices as well.
Tariffs are a shiny new toy for Trump to play with. He can turn tariffs on and off, making entire countries jump to his tune. Each day he comes up with new reasons to justify them—fentanyl, immigrants, unfair subsidies, too much control of domestic banking (God forbid!). But these are just excuses for having fun by intimidating entire countries.
Trump can also combine his control of foreign policy with tariffs, as he is gleefully doing with Canada. What fun it is to threaten to take down the Canadian economy with tariffs while bullying them into becoming the 51st state. Clearly Trump wants to flex his dictatorial muscles, even as his real one’s sag with age.
But by playing dictator, he has abdicated the targeted use of tariffs to protect jobs. There is no way a full-scale trade war with Canada will do anything but shatter jobs on both sides of the border, while raising prices as well. Why? Because corporations like John Deere are not fleeing to Canada to find cheaper labor.
As a result, a tariff war with Canada is likely to kiss goodbye as many U.S. jobs as are protected. But Trump doesn’t seem to care because he’s all in on making Canada sweat. Damn the jobs! Damn inflation! He’s simply in love with his unilateral powers, which no one else in the world has. That’s a high that beats fentanyl.
The Trump Trap of Stagflation
Trump may not know it, but he is playing with fire. Tariffs are certain to raise U.S. prices. Why? Because when U.S. corporations see that their competition from Canada faces price increases caused by the 25 percent tariff, the companies will raise their own prices, especially in key industries with only a handful of large competitors.
A tariff war with Canada is likely to kiss goodbye as many U.S. jobs as are protected. But Trump doesn’t seem to care because he’s all in on making Canada sweat. Damn the jobs! Damn inflation! He’s simply in love with his unilateral powers...
Furthermore, by Trump turning his tariff toy on and off, he is causing economic uncertainty. That uncertainty has already had a drastic impact on the stock market.
But it will get much worse if corporations hold back on investment decisions until Trump stops fiddling with his toy.
It’s a very big deal when corporations delay investment decisions. Slower investment rollouts can lead to an economic slowdown and even a recession. And such a downturn can quickly get out of hand, because the Wall Steet derivative games, the kind of which that caused the 2008 crash, are up and running again, bigger than ever.
So, here’s the trap. Tariffs will cause inflation, forcing the Federal Reserve to increase interest rates to combat price increases. And higher interest rates will further reduce economic activity, leading to more unemployment. The Fed then will be unable to boost employment, because that requires decreasing interest rates, which are likely to further fuel inflation.
Bingo, stagflation. I wonder how Trump will feel if morphs into Jimmy Carter?
What Should the Democrats Do?
James Carville is telling the Democrats to do nothing. Play dead and let the guy implode.
But that’s a very dangerous game. Even with all the chaos Trump still has favorability ratings close to 50 percent. His supporters see him taking action, it’s why they voted for him, and they will give him time to make his plans work. Yes, there are protests, but they’re nothing like in Trump’s first term. The danger is, if the Democrats give him uncontested time and space, Trump might find a way to escape from his trap.
Instead, the Democrats should take a page from Trump and put job protection on the top of their agenda. As tariffs bite and cause job destruction, the Democrats should show up and support those laid-off workers. Instead of calling tariffs “insane,” they should call them job-killing tariffs. And as prices rise, they can blame Trump for that as well.
I wonder how Trump will feel if morphs into Jimmy Carter?
More importantly, they should go after any company that receives taxpayer money and is laying off taxpayers. They should slam stock buybacks that enrich Wall Street wealth extractors and CEOs. They should make it perfectly clear that protecting jobs from corporate greed is the number one priority of the Democratic Party.
Will they do this? Dream on.
There is little indication that the Democrats are willing to upset their Wall Street backers by interfering with private sector layoff decisions and stock buybacks. The Democrats are once again abdicating the jobs terrain to Trump, hoping instead that his tariff toy will blow up in his dictatorial hands.
Maybe it will, or maybe working people will see that the Democrats still don’t give a damn about their job security. At least Trump is trying, they may say.
Until the Democrats offer a compelling working-class vision, those living paycheck to paycheck have reasons to stick with Trump who, at the very least, has buried the free-trade mantra that working people know has destroyed so many jobs and damaged their communities.
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