Massive share buybacks are just fine, and other mistakes in economic reasoning

I am intrigued by the idea that opinion articles, blog posts and tweets can have “give away” phrases that reveal more bias than the author intends, or perhaps are correlated with errors in economic reasoning. I have a candidate for such a phrase: “massive share buybacks,” or the variation, “massive share repurchases.” The words sound innocuous enough, but such talk ought to raise red flags in your mind.

That is from my latest Bloomberg column, the defense of massive share buybacks then follows.  Of course the share buybacks just push around money, they don’t have to draw real resources away from investment or for that matter a wage boost.  As this piece was coming out I also saw this excellent complementary treatment by John Cochrane.

What are other such “red flag” phrases?  “The big tech companies are selling your data” is a recent one.  I’ve already outlined my “law of gut“: beware anyone who tells you that a particular government program is being “gutted.”  Another bad one is when a review or critique is described as a “takedown.”  That’s a sign that either the reviewer, or the reviewer of the review, is trying to lower the status of somebody rather than to learn from them.


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