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stock buybacks
Do the Democrats Have the Guts to Outflank Trump on Defense Industry Looting?
The Democrats could push Trump—or go around him to make better inroads with working people—but will they dare to take that leap? One would hope so, but don’t hold your breath.
Jan 14, 2026
Trump has decided that the government should not give money to defense contractors who then reroute our tax dollars via stock buybacks to stockholders and executives.
A stock buyback, for those unfamiliar, is when a corporation repurchases its own shares, thus boosting the share’s price, a legalized form of stock manipulation. CEOs, who are paid mostly in stock incentives, and large investors directly benefit from stock buybacks, and unlike with dividends, don’t have to pay taxes until they sell their shares.
In the weapons industry, this isn’t news. Studies show that defense contractors spent three times more on dividends and stock buybacks than on capital investments needed to fulfill their contracts over the last decade. In Europe, it was the other way around with defense companies spending twice as much on capital investments compared to dividends. (They don’t do stock buybacks.)
The New York Times cited a Department of Defense study during the Biden administration that “found that top US defense contractors spent more on returning cash to shareholders in the form of dividends and stock buybacks between 2010 and 2019 compared to the previous decades, while spending on research and new or upgraded factories had declined.”
You’ve got to wonder why the Biden administration didn’t try to stop this scam. Maybe it feared looking anti-military. Or maybe it thought such an action would be too upsetting to their Wall Street donors who feast on stock buybacks?
Now we have Trump doing what the Democrats should have done long ago, announcing he will stop buybacks and cap executive salaries at profligate defense contractors:
- His Executive Order directs the Secretary of War to take steps to ensure that future contracts prohibit stock buybacks and corporate distributions during periods of underperformance, non-compliance, insufficient prioritization or investment, or insufficient production speed.
- The Secretary shall further take steps to ensure that future contracts permit the Secretary to, upon determining that a contractor is experiencing such issues, cap executive base salaries at current levels (with inflation adjustments permitted) while scrutinizing executive incentives to ensure they are directly, fairly, and tightly tied to prioritizing the needs of the warfighter.
How about Preventing Mass Layoffs?
If the Democrats wanted to show more concern for working people they would jump all over this executive order and push legislation to expand it to include a prohibition of compulsory layoffs at all defense contractors. If a contractor wants to change staffing levels, they should offer voluntary financial buyout packages. No one should be forced to leave.
This is an easy case to make. Why should taxpayers give money to corporations that then lay off taxpayers so that they can shovel more and more of our tax dollars to the wealthy? If the problem is that these defense contractors fail to deliver products on time they need more workers, not fewer.
Instead of wallowing in the Epstein files, the Democrats should declare again and again that mass layoffs are the weapon of choice to enrich executives and Wall Street. Fight for the damn jobs!
In April, the Labor Institute, in cooperation with the Center for Working Class Politics, produced a YouGov survey of 3,000 voters in Michigan, Ohio, Pennsylvania, and Wisconsin. In the survey, we asked voters to evaluate a state ballot initiative we invented that read:
“Corporations with more than 500 employees that receive taxpayer-funded federal contracts are prohibited from conducting involuntary layoffs of American workers. All layoffs during the life of a taxpayer-funded contract must be voluntary, based on employer financial incentives. No one shall be forced to leave.”
Overall, 42 percent supported the proposal, while 26 percent opposed it and 32 percent were not sure. The no-layoff proposal was brand new, unheard of by anyone before the survey was administered, yet it tied for fifth in popularity among 25 economic proposals. Furthermore, we reported that:
“Respondents from key demographic groups that Democrats have struggled to reach in recent electoral cycles showed robust support for the policy, which was tied for fifth among respondents without a four-year college degree and those whose family income was less than $50,000 per year, and tied for sixth among respondents who reported a declining standard of living and those who live in rural areas and small towns.”
This no-layoffs policy would be a big winner for the Democrats leading up to the mid-terms. But it would not be a winner for the financial backers of the party who cherish their stock buybacks.
So here we are again. Trump outflanking the Democrats on a populist economic proposal, like cancelling NAFTA, one that the Democrats failed to address while in power. In this case, the Democrats could push Trump even further by tying job stability to federal defense contracts, something that working people would greatly value but would be upsetting to Wall Street.
The Democrats could push Trump, but will they dare to take that leap? One would hope so, but don’t hold your breath.
The failure to rigorously defend working people over the last forty years against needless mass layoffs may be why so many voters right now are willing to consider a new political party, independent of the two billionaire parties.
Much more on that to come.
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With GOP 'Looking at' Tyson's Alleged Market Manipulation, Nebraska Candidate Osborn Says 'Enforce the Law'
"Candidate for Senate Dan Osborn is already doing more for the people affected by the Tyson closure than the current Nebraska senators," said a worker rights advocate.
Dec 12, 2025
Instead of "another investigation" into possible wrongdoing by meatpacking giant Tyson, independent US Senate candidate Dan Osborn is demanding that elected officials in Nebraska simply "pick up the damn phone" and demand action from the Trump administration following the company's closure of one of the nation's largest meat processing plants in what one antitrust expert said was a clear-cut case of market manipulation.
Sen. Pete Ricketts (R-Neb.), whom Osborn is challenging in the 2026 election, said Thursday that his team is "taking a look at any allegation of wrongdoing" by Tyson, weeks after the company announced its massive plant in Lexington, Nebraska is set to close in January—putting more than 3,000 people in a town of 11,000 out of work.
The closure comes months after Tyson boosted its stock buybacks and following an announcement that its adjusted operating income had increased by 26% compared to 2024. Tyson controls about 80% of the US beef market along with three other companies, and the Department of Justice is investigating whether the four corporations are colluding to keep beef prices high.
Despite near-record high prices in the industry, Tyson said last week it was closing the Lexington plant and scaling back operations at its facility in Amarillo, Texas to "right-size its beef business and position it for long-term success."
Basel Musharbash, an antitrust lawyer at Antimonopoly Counsel in Paris, Texas, attended a press conference with Osborn across the street from the Lexington plant this week and said that the "legal analysis here is pretty straightforward" regarding whether Tyson has engaged in market manipulation.
“The Lexington plant accounts for around 5% of the nation’s cattle," said Musharbash. "By shutting down a plant that slaughters such a large portion of the cattle in this region and the country, Tyson will single-handedly reshape the nation’s cattle markets from boom to bust.”
Ranchers will be forced "to accept lower prices, and Tyson will be able to make higher profits," he said.
Osborn and Musharbash say Tyson has broken the 2021 Packers and Stockyards Act, which prohibits meatpackers from engaging "in any course of business or [doing] any act for the purpose or with the effect of manipulating or controlling prices."
Addressing Ricketts on social media, Osborn said Tyson workers "don’t need another useless congressional report that leads to nothing. We need ACTION!"
"Tyson workers and Nebraska ranchers need you to demand that [US Agriculture] Secretary Brooke Rollins immediately initiate an action to hold Tyson accountable for any market manipulation," he said.
The USDA told the Nebraska Examiner this week that it is monitoring "the closure of the plant to ensure compliance with the Packers and Stockyards Act," but Musharbash said Rollins can and should "compel Tyson to either keep the plant open or sell the plant to an upstart rival who will introduce honest competition into this cartelized industry."
"There is nothing left for Ricketts to 'look into,' and Nebraskans certainly don’t need some intern on Ricketts’ staff to write a research paper about this issue for the next six months while Tyson hollows out the Lexington community for its selfish gain," added Musharbash. "Nebraska—and this whole country—deserves better leaders than this."
Osborn pointed out Thursday that Ricketts has taken more than $70,000 in campaign donations from Tyson.
“The people of Lexington need their elected officials to fight now more than ever,” Osborn said at the press conference this week. “The law that’s been on the books for over 100 years should be enforced... So pick up the damn phone, call Brooke Rollins, and get the USDA to enforce the law.”
By visiting Lexington and speaking out against Tyson's gutting of thousands of jobs, former Federal Trade Commission member Alvaro Bedoya said that "candidate for Senate Dan Osborn is already doing more for the people affected by the Tyson closure than the current Nebraska senators."
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America Needs To Tax Its Own 'Second Estate': Billionaires
The United States has no nobility, according to our Constitution. But our tax code does protect the very rich.
Dec 04, 2025
Pre-revolutionary French aristocrats—the “Second Estate”—didn’t pay taxes. Amazingly, America too has a second estate, billionaires who pay virtually no taxes. In her very outstanding recent book, law professor Ray D. Madoff shows how they get away with this.
The United States has no nobility, according to our Constitution. But our tax code does protect the very rich.
Federal taxes on income and estates—intended to fund government and prevent development of a hereditary financial aristocracy—were enacted early in the 20th century and originally worked well.
But since about 1980, the estate tax—infested with loopholes—has been nearly abolished for practical purposes and now produces trivial income.
Madoff wants to get rid of the ability of ultra-rich people—billionaires—to avoid having any taxable income in the first place.
Madoff suggests that the estate tax should be completely eliminated because its existence deceives the public about what is really going on. People falsely think that billionaires who pay no federal income tax will at least pay the estate tax when they die. In fact, they are paying neither kind of tax.
Billionaires avoid the income tax by arranging to have no taxable income.
Before 1982 ultra-rich people could not avoid paying income tax. Their income consisted of dividends and capital gains harvested by selling shares of stock, the price of which had increased. Dividends and capital gains are taxable income.
But in 1982 federal regulators weakened a rule prohibiting corporations from buying back their own stock. Since then, many corporations have used profits to buy back stock shares instead of issuing dividends. With fewer shares of stock outstanding and the value of the corporation increasing, the value of each share of stock began increasing dramatically.
What used to be taxable dividends turned into large capital gains benefiting the stock owners, including very rich ones. If shareholders need cash and sell appreciated stock, of course they would owe income taxes on the capital gains (selling price of the stock minus how much the shares cost them). But capital gains are taxed at a much lower rate than normal income like salaries, bank interest, and returns on bonds.
As Madoff points out, however, billionaires need not sell any stock to get cash to live on. Instead, they can borrow the money, using their stock as collateral. Borrowed money is not taxable income, so they owe no tax while living extravagantly.
And when they die, the stock they bequest to their heirs gets a stepped up “basis,” so if their heirs sell the stock they will owe no taxes because the stepped up basis leaves no taxable capital gains.
And inherited money is not considered taxable income. Someone who earns $50,000 pays significant income (and payroll) taxes on it, while someone who inherits $1 billion pays no income or payroll tax on it.
Madoff rightly objects to this situation, but she is not arguing that we should “soak the rich” with higher income tax rates at the top. She points out that there are two kinds of “rich” people. One is the working rich, skilled professionals earning high salaries and, usually, already paying very high taxes. A high percentage of all income tax receipts come from these people.
Increasing the high tax rates these “rich” people are already paying would produce insignificant extra revenue for the government.
Instead, Madoff wants to get rid of the ability of ultra-rich people—billionaires—to avoid having any taxable income in the first place. She wouldn’t tax them while they are alive, but would tax whoever inherits from them.
Rather than trying to fix the estate tax, Madoff would abolish it, eliminate the stepped up basis for inherited stock, and make inherited money and other gifts received taxable income for the recipients.
Assuming an exemption for small gifts (to allow birthday presents and the like), this could be a reasonable reform. It would bring in very large amounts of taxes while reducing today’s extreme economic inequality.
For further details, see Ray D. Madoff, The Second Estate: How The Tax Code Made An American Aristocracy. This is one of the two best books I have read since retiring in 2000.
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