Trickle-Up Economics: How Stock Buybacks Exacerbate Wealth Inequality and Health Disparities by Ali Chtatbi :: SSRN

This paper examines the mechanism of stock buybacks in modern capitalism, illustrating how they facilitate the transfer of wealth from consumers and taxpayers to the wealthiest individuals and corporations. Drawing on historical data, empirical evidence, and case studies from industries such as consumer goods and pharmaceuticals, we demonstrate that stock buybacks, legalized in 1982, inflate stock prices primarily benefiting the top 1% who own over 50% of U.S. equities. We explore the links to CEO compensation, racial disparities in stock ownership, and broader health outcomes, arguing that this system perpetuates inequality. Policy recommendations include supporting small businesses and reconsidering buyback regulations to foster equitable economic cycles.