In a previous piece on this blog, I had presented information suggesting that a large part of corporate liquidity freed up by the tax cuts is being directed to stock buybacks. Today (9/17th) the WSJ reported that repatriation of foreign profits is proceeding in a slow pace and the bulk of money is used for stock buybacks. The newspaper estimates the repatriation rate is so slow that puts in doubt the Trump administration’s expectation for the repatriation of $4 trillion. Siphoning repatriated profits to stock buybacks is consistent with the argument that in a full-employment economy business opportunities for massive new real (factory, equipment, R&D) investments are limited and the best policy is to return the excess cash to shareholders.
Let's Reason 