The Trump administration's 180 on stock buybacks
President Trump told reporters on Thursday he would be "OK" with a conditional coronavirus bailout that bans stock buybacks for companies that receive federal relief.
Why it matters: Trump's tax cuts set off a record-setting buyback spree in corporate America. The comments are a shift in tone, given that his deputies have defended share repurchases in the past.
What he's saying: Trump said he was "never happy" that companies were using cash to buy back stock.
- A number of companies hard hit by the halt in economic activity due to the COVID-19 outbreak are asking for federal relief. But they’re facing criticism for how much cash they spent in recent years repurchasing their own shares.
Flashback: “Even if people buy back stock, that is money that goes back into the economy that lets investors take that money and allocate it to other things. It’s a complete system,” Treasury Secretary Steven Mnuchin said in 2018.
- Larry Kudlow told CNBC last year that when companies buy back stock, money returned to investors and shareholders "will be recycled into the economy and they will start new companies, new businesses.”