I really think we should stop conflating bad economic decisions with the current pandemic. Yes, maybe stock buybacks are bad.
But even if they were banned, these companies wouldn't just have piles of cash reserves sitting around. To remain competitive, they would've had it invested in resources like additional personnel that would've gotten the axe either way when the belt has to be tightened.
There needs to be better financial planning and regulations - a lot of them.
But the best thing that could've helped here is better planning for national emergencies like a pandemic. Bill Gates and others have been clamoring for a long time about these dangers and we should've taken them more seriously.
Some companies are famous for their piles of cash reserves. Apple, for instance. Other companies are definitely focused on the pump at the expense of their brand, product, and long term prospects. No C level executive sheds a tear when their company folds and they are handed their golden parachute to invest at market lows.
They would unquestionably have more cash on hand though. That matters. There is also a lot of research showing that management does buy backs at exactly the wrong time. How wasteful is it in retrospect that companies did buy backs over the last two years at the peak of the market. Now they might have to sell stock to raise money at the bottom (assuming we find it soon). Mean while warren buffet was sitting on cash and building his reserves. Watch him swoop in now and just pick up businesses for pennies on the dollar.
But even if they were banned, these companies wouldn't just have piles of cash reserves sitting around. To remain competitive, they would've had it invested in resources like additional personnel that would've gotten the axe either way when the belt has to be tightened.
There needs to be better financial planning and regulations - a lot of them.
But the best thing that could've helped here is better planning for national emergencies like a pandemic. Bill Gates and others have been clamoring for a long time about these dangers and we should've taken them more seriously.