Exxon Mobile 1977 Memo: Controlling Atmospheric CO2

Dr. R. L. Hirsch:

The attached memorandum presents the results of a study on the
potential impact of fossil fuel combustion on the CO, concentration in the
atmosphere. this study was made by Steve Knisely a summer employee in
Planning Engineering Division.

The study considers the changes in future energy sources which
would be necessary to control the atmospheric CO, concentration at different leve1ls. The principle assumption for the CO2 balance is that 50% of the CO. generated by fossil fuels remains in the-atmosphere. This corresponds
to the recent data on the increasing CO2 concentration in the atmosphere compared to the quantity of fossil fuel combusted.
Present climatic models predict that the present trend of fossil
fuel use will lead to dramatic climatic changes within the next 75 years.

However, it is not obvious whether these changes would be all bad or all good.
The major conclusion from this report ls that, should it be deemed necessary
to maintain atmospheric CO,, levels to prevent significant climatic changes,
dramatic changes in patterns of energy use would be required. World fossil
fuel resources other than oil and gas could never be used to an appreciable
extent

No practical means of recovering and disposing of CO, emissions has
yet been developed and the above conclusion assumes that recovery will not
be feasible.

It must be realized that there is great uncertainty in the existing climatic models because of a poor understanding of the atmospheric/
terrestrial/oceanic CO. balance. Much more study and research in this area
is required before roaj6r changes in energy type usage could be recommended.

Corporate Death Penalty

Judicial dissolution

Negligence, such as causing preventable disasters, is one example of justifications often cited by proponents of a corporate death penalty [1]

Judicial dissolution, sometimes called the corporate death penalty, is a legal procedure in which a corporation is forced to dissolve or cease to exist.

A “corporate death penalty” is the revocation of a corporation’s charter for significant harm to society.[2] In some countries there are corporate manslaughter laws, however, almost all countries enable the revocation of a corporate charter. There have been numerous calls in the literature for a “corporate death penalty”.[3][4][5][6] Most recently a study argued that industries that kill more people each year than they employ should have an industry-wide corporate death penalty.[7][8] Some legal analysis has been done on the idea to revoke corporate charters for environmental violations[9][10][11] such as for severe environmental pollution. Actual corporate death penalties in the United States are rarely used.[12] For example, Markoff has shown that no publicly traded company failed because of a conviction that occurred between 2001 and 2010.[13]

Companies suggested as deserving the corporate death penalty include Eli Lilly & CompanyEquifaxUnocal Corporation, and Wells Fargo.[14][15][16] “If Volkswagen or other examples in this volume were forced out of existence, this would send a message,” John Hulpke wrote in the Journal of Management Inquiry in 2017.[17]

One argument against its use is that otherwise innocent employees and shareholders will lose money or their jobs. But author David Dayen argues in The New Republic that “the risk of a corporate death penalty should inspire active governance practices to protect their investments.”[18]

Historical examples[edit]

In 1890, New York’s highest court revoked the charter of the North River Sugar Refining Corporation on the grounds that it was abusing its powers as a monopoly.[19]

 

 

Would a Corporate Death Penalty be cruel and unusual punishment?

“Instead of asking why a corporation can speak as freely as a person, perhaps we should ask, “Why is money considered speech?””

 

CorporateDeathPenalty

Executing a corporation would be similar to declaring a chapter 7 bankruptcy, with a few additional steps to ensure that the actual people hiding behind the corporation committing these atrocities don’t profit from them. First, nationalize the corporation to ensure that all equity holders forfeit their investments. Then all worldwide assets need to be confiscated. And as a final act of deterrence, all members of the board of directors and corporate executives must have all their assets seized and be banned from employment for life. If their conduct rises to the level of a crime, the executives must also be held personally liable according to the laws of the criminal justice system. Some executives have to be jailed.

Humans receive the death penalty for the most heinous crimes. Why shouldn’t corporate legal personhood also come with the death penalty? Is it that they get to be people when they benefit but cease being people when they need to be punished? No!

 

IG Farben Companies: Bayer, Sanofi, BASF and Agfa

IG Farben, one of the world’s biggest chemical cartels, was not merely a passive beneficiary of the the Nazis and the Holocaust. They were active participants. The Nuremberg trial transcripts show us that the executives of IG Farben directed and controlled Hitler’s policies. In the 1930s, IG Farben was the biggest contributor to the Nazi party. It even helped form an economic plan on behalf of the Nazi party. The passage below is an example of the IG Farben executives pulling the levers behind the scene in the Nazi party.

IG Farben executives were also instrumental in convincing Von Pappen to hand over the proverbial keys to the kingdom to Hitler in 1933. Its collaboration didn’t stop there. It was one of the most loyal ideologues for the Nazi party. The Nuremberg trials exposed the infernal depths of IG Farben‘s crimes. The company itself was deemed liable for: slavery, genocide, and illegal human experimentation. Its biggest profit came from selling Zyklon-B to the Nazis, the gas used in the gas chambers, the most common death penalty apparatus used by the Nazis. 

In 1945, IG Farben was dissolved for war crimes and crimes against humanity. The executives were also later tried in a different proceeding. In 1948, many of IG Farben’s executives were found guilty of war crimes. One prominent executive was Fritz Ter Meer, who was convicted for creating Auschwitz. His other crimes included: slavery, genocide, mass rape and crimes against humanity. Ter Meer only served two years in prison for his role in one of the worst atrocities known to man. In 1950, he was paroled for good behavior.” However, the three powers in the Western zone: France, UK and the US reconstituted the IG Farben cartel into four companies: BASF, Bayer, Sanofi and Agfa. The original shareholders (who were convicted of perpetuating the Holocaust) were given ownership and all their assets back. In fact, Fritz der Meer was reinstated and he continued to serve on the Board of Directors for Bayer until his death. The descendants of the IG Farben executives are still some of the wealthiest people in Germany.

The IG Farben companies seemed to have continued their culture of ethnonationalism. In the 1990s, they admitted to deliberately infecting Africans with HIV and paid millions for this crime.  In 2015, after it became public that Bayer tested a cancer medication on Indians, India revoked a drug patent for Bayer. Contravening Indian law, they did not make the drug available for Indians even though they had no problem experimenting on Indians during the R&D phase. Responding to the Indian Supreme Court ruling, then CEO Marijn Dekkers exclaimed, “We did not develop this medicine for Indians. We developed it for western patients who can afford it.”   

 

Adding Monsanto’s Crimes to Bayer’s Balance Sheet

Monsanto ran the defoliation campaign using Agent Orange in Vietnam. Even today, children in Vietnam still suffer birth defects. On top of it, Monsanto tested the effects of Agent Orange on US soldiers, for which they paid compensation. They also sprayed cancer causing pesticides in Hawaii.

 

Chiquita – Pleading Guilty to Hiring Colombian Death Squads

In 2000, a Chiquita executive admitted to hiring Colombian paramilitaries that were classified by the US government as terrorist organizations. The Chiquita executives claimed that it was for “security purposes.” Of course, these paramilitaries didn’t protect the factories. Instead, they “subdued the land,” marching indigenous people at gunpoint on a “trail of tears.” On top of displacing thousands, these paramilitaries have killed at least 4000 people.

 

The most unforgivable part is that the attorney who defended Chiquita was the former U.S. Attorney General Eric Holder. During the Bush years, Eric Holder negotiated with the justice department on behalf of the Chiquita executives. All his clients pled guilty. None of them went to jail and Chiquita was fined only $25 million. Eric Holder even made a statement chastising the justice department for the proverbial slap on the wrist.  He claimed, “If what you want to encourage is voluntary self-disclosure, what message does this send to other companies? Here’s a company that voluntarily self-discloses in a national security context, where the company gets treated pretty harshly,[and] then on top of that, you go after individuals who made a really painful decision.”

 

Nestlé –  Infant Deaths, Slavery and Water Privatization

Nestlé illegally marketed their infant formula to poor women in Africa, who were forced to work long hours to make ends meet. They marketed it as a convenience, in contravention to national laws and international code. Nestle’s actions increased the infant mortality rate in Burkina Faso and Togo. Every year, nearly 25% of Togo’s infant mortality and 11% of Burkina Faso’s infant mortality are caused by baby formula.

Nestle is a huge maker of chocolate in the world and 60% of the chocolate its manufacture uses child slave labor in Africa. However, Nestle won’t monitor thitseir supply chain to make sure they don’t use child slaves. Instead, it continues violating the law and all morality brazenly and without consequence.

 

Like many other companies in South America, Nestle funded death squads in Colombia which murdered many union workers and activists. Finally, Nestle is using up the world’s fresh water supply for bottling and making water too expensive for people to drink.

Other honorable mentions for privatizing water:

  • Bechtel not only privatized the water, but they even got rights to the rain. After Bolivia asserted its sovereignty, Bechtel tried to sue Bolivia in the World Bank Arbitration court. Thankfully after public outcry, the suit was dismissed.

Umicore

Umicore is the successor company for Belgian Union Minere. As soon as Congo got its independence, it funded paramilitaries to create an ethnostate called the “Free State of Katanga.” The white nationalist paramilitaries were responsible for assassinating Patrice Lumumba, and later, these same paramilitaries assassinated the first UN secretary General Dag Hammarskjold.

To learn more about these atrocities, listen to our interview with Andreas Rocksen.

In 1964, a BBC Comedy sketch succinctly explained all the atrocities committed by this one company:

 

Shell

Shell Oil, through corruption, received concessions to drill in the Niger-Delta. Sometimes, when the prime drilling spot was on top of a village or town, they paid paramilitaries to displace people and murder any activists who spoke out against the colonization of their homes. Shell also intentionally polluted areas in the Niger Delta, making parts of it uninhabitable, displacing 40,000 people. In violation of local law, Shell refuses to clean up these areas that they polluted.

They are also responsible for killing entire fisheries, which further threatens an already food-insecure population.

Other Fossil Fuel Disasters: ChevronExxon-Mobil and BP

Check out our interview with Greg Palast to understand how Katrina was a manmade disaster created by the oil companies.

Tyson Foods

Nearly 9000 miles around the US gulf coast is a “dead-zone.” This means that it cannot support marine life. Tyson, which has food production factories in many locations along this coast, is deemed the #1 culprit in creating their dead zone

 

It also abuses its labor forceTyson regularly smuggles undocumented immigrants across the border. However, if these trafficked individuals tried to form a union, Tyson has no problem siccing ICE on their trafficked labor force. Last year, Tyson sicced ICE on employees who demanded a decent wage. While ICE arrested the parents, children were left alone and crying.

Amidst the covid crisis, Tyson employees in California have compared their conditions to modern slavery.

Purdue Pharmaceuticals

Purdue Pharmaceuticals had a shamleless predatory scheme to market addictive opioids to doctors. It also employed a quasi-legal bonus scheme to bribe doctors, pharmacies and healthcare workers to further the atrocity. The NIH explains all their predatory behavior:

From 1996 to 2001, Purdue conducted more than 40 national pain-management and speaker-training conferences at resorts in Florida, Arizona, and California. More than 5000 physicians, pharmacists, and nurses attended these all-expenses-paid symposia, where they were recruited and trained for Purdue’s national speaker bureau…

One of the cornerstones of Purdue’s marketing plan was the use of sophisticated marketing data to influence physicians’ prescribing. Drug companies compile prescriber profiles on individual physicians—detailing the prescribing patterns of physicians nationwide—in an effort to influence doctors’ prescribing habits. Through these profiles, a drug company can identify the highest and lowest prescribers of particular drugs in a single zip code, county, state, or the entire country.

A lucrative bonus system encouraged sales representatives to increase sales of OxyContin in their territories, resulting in a large number of visits to physicians with high rates of opioid prescriptions, as well as a multifaceted information campaign aimed at them. In 2001, in addition to the average sales representative’s annual salary of $55 000, annual bonuses averaged $71 500, with a range of $15 000 to nearly $240 000. Purdue paid $40 million in sales incentive bonuses to its sales representatives that year.”

Obviously, there are many more corporations that probably deserve the death penalty! If there is a candidate you’d like to nominate, please comment and I will see if I can add it to the list

If You Want to Know Who Rules the World: The Ruling Elite – Finance, Wealth, Power (2008)

The ruling class is the social class of a given society that decides upon and sets that society’s political agenda.

The sociologist C. Wright Mills (1916–1962), argued that the ruling class differs from the power elite. The latter simply refers to the small group of people with the most political power. Many of them are politicians, hired political managers, and military leaders. The ruling class are people who directly influence politics, education, and government with the use of wealth or power.

There are several examples of ruling class systems in movies, novels, and television shows. The 2005 American independent film The American Ruling Class written by former Harper’s Magazine editor Lewis Lapham and directed by John Kirby is a semi-documentary that examines how the American economy is structured and for whom.

In the novel Brave New World, by Aldous Huxley, everyone is genetically made and classified. The Alpha class is the ruling class because they have the highest positions possible and control most of the world in the novel. This situation can also be found in the George Orwell novel Nineteen Eighty-Four where Big Brother and the government literally control what the nation hears, sees, and learns.

Examples in movies include Gattaca, where the genetically-born were superior and the ruling class, and V for Vendetta, which depicted a powerful totalitarian government in Britain. The comedic film The Ruling Class was a satire of British aristocracy, depicting nobility as self-serving and cruel, juxtaposed against an insane relative who believes that he is Jesus Christ, whom they identify as a “bloody Bolshevik”.

Exxon oil lobbyist in sting video identifies 11 senators ‘crucial’ to its lobbying

A senior official with U.S. oil and gas giant ExxonMobil was captured on video revealing the identities of 11 senators “crucial” to its lobbying on Capitol Hill, including a host of Democrats.

The footage was obtained by Unearthed, an investigative unit of environmental group Greenpeace UK, which posed as headhunters to obtain the information from Exxon lobbyist Keith McCoy.

Among the senators listed as allies, McCoy calls Joe Manchin the “kingmaker” on energy issues because of his status as a Democrat representing West Virginia, a key natural gas-producing state. McCoy says he speaks with Manchin’s staff every week. Manchin is also chairman of the Energy and Natural Resources Committee.

BIDEN CAN’T PLEASE ANYONE WITH MOVES ON PIPELINES

McCoy also named Sens. John Barrasso of Wyoming, the top GOP member of the Energy Committee, and Shelley Moore Capito of West Virginia, the Republican ranking member of the Environment and Public Works Committee.

Other lobbying targets of Exxon include centrist Democrats Sens. Kyrsten Sinema of Arizona and Jon Tester of Montana.

McCoy also singles out Sen. Chris Coons, a Delaware Democrat, as an important contact because of his close relationship with President Joe Biden.

Other Exxon contacts are up for reelection in 2022, McCoy notes: Maggie Hassan of New Hampshire and Mark Kelly of Arizona.

McCoy also name-checks traditional Republican allies John Cornyn of Texas, Steve Daines of Montana, and Marco Rubio of Florida.

In the leaked video, McCoy also suggested that Exxon is only publicly supporting a carbon tax to appear to be environmentally friendly with little consequence because it sees the policy as politically impossible to pass and thus unlikely to affect the company. Exxon is one of many large oil and gas companies and their lobby groups that have endorsed the concept of a carbon tax as preferable to mandates and regulations.

“I will tell you, there is not an appetite for a carbon tax. It is a non-starter. Nobody is going to propose a tax on all Americans,” McCoy said. “And the cynical side of me says, ‘Yeah, we kind of know that. But it gives us a talking point. We can say, ‘Well, what is ExxonMobil for? Well, we’re for a carbon tax.’”

Among other revelations, McCoy acknowledges Exxon “aggressively” fought against climate science in the past to protect its oil and gas business and joined “shadow groups” to push back against the science underpinning global warming.

“We were looking out for our investments. We were looking out for our shareholders,” McCoy said.

And he claims that Exxon lobbied Congress to limit climate provisions in infrastructure negotiations over Biden’s American Jobs Plan and to focus on roads and bridges.

“If you lower that threshold, you stick to highways and bridges, then a lot of the negative stuff starts to come out,” McCoy said. “Why would you put in something on emissions reductions on climate change to oil refineries in a highway bill?”

Exxon CEO Darren Woods issued a statement Wednesday afternoon condemning the lobbyist’s comments and apologizing for them, specifically those “regarding interactions with elected officials.”

Woods stressed Exxon’s “firm commitment” to supporting carbon pricing to address climate change.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

McCoy posted his own apologetic statement declaring himself “deeply embarrassed” and saying his comments “clearly do not represent ExxonMobil’s positions on important public policy issues.”

They’re using the Yes Minister 4-stage strategy. They’re betting that Stage 4 (see below) won’t be reached until theyve had a lifetime of profiteering and profligacy, and – they THINK – setting up their OWN offspring to survive.
“Yes Minister” 4-Stage Strategy:
1. Nothing is about to happen
2. Something may be about to happen, but we should do nothing about it
3. Something is happening, but there’s nothing we CAN do
4. Maybe we could have done something, but it’s TOO LATE NOW

 

The S.E.C. Rule That Destroyed The Universe

How the coronavirus is creating a political opportunity to overturn one of the worst practices of the kleptocracy era

The Covid-19 crisis has revealed gruesome core dysfunction.

  • Drug companies have to be bribed to make needed medicines,
  • state governments improvise harebrained plans for emergency elections, and
  • industrial capacity has been offshored to the point where making enough masks seems beyond the greatest country in the world.

But the biggest shock involves the economy. How were we this vulnerable to disruption? Why do industries like airlines that just minutes ago were bragging about limitless profitability – American CEO Doug Parker a few years back insisted, “My personal view is that you won’t see losses in the industry at all” – suddenly need billions? Where the hell did the money go?

In Washington, everyone from Donald Trump to Joe Biden to Alexandria Ocasio-Cortez is suddenly pointing the finger at stock buybacks, a term many Americans are hearing for the first time.

This breaks a taboo of nearly forty years, during which politicians in both parties mostly kept silent about a form of legalized embezzlement and stock manipulation, greased by an obscure 1982 rule implemented by Ronald Reagan’s S.E.C., that devoured trillions of national wealth.

The mechanics of buybacks are simple. Companies buy their own stock and retire the shares, increasing the value of shares remaining in circulation. This translates into instant windfalls for shareholders and executives that approve the purchases. That this should be proscribed as market manipulation, and additionally offers a clear path to insider trading – former SEC chief Rob Jackson found corporate insiders were five times as likely to sell stock after a share repurchase was announced – is just one problem.

The worse problem comes when companies not only spend all of their available resources on stock distributions, but borrow to fund even more distributions. This leaves companies with razor-thin margins of error, quickly exposed in a crisis like the current one.

“When companies spend billions on buybacks, they’re not spending it on research and development, on plant expansion, on employee benefits,” says Dennis Kelleher of Better Markets. “Corporations are loaded up with debt they wouldn’t otherwise have. They’re intentionally deciding to live on the very edge of calamity to benefit the richest Americans.”

It’s hard to overstate how much money has vanished. S&P 500 companies overall spent the size of the recent bailout – $2 trillion – on buybacks just in the last three years!

Banks spent $155 billion on buybacks and dividends across a 12-month period in 2019-2020. As former FDIC chief Sheila Bair pointed out last month, “as a rule of thumb $1 of capital supports $16 of lending.” So, $155 billion in buybacks and dividends translates into roughly $2.4 trillion in lending that didn’t happen.

Most all of the sectors receiving aid through the new CARES Act programs moved huge amounts to shareholders in recent years. The big four airlines – Delta, United, American, and Southwest – spent $43.7 billion on buybacks just since 2012. If that sum sounds familiar, it’s because it equals almost exactly the size of the $50 billion bailout airlines are being given as part of the CARES Act relief package.

The two major federal financial rescues, in 2008-2009 and now, have become an important part of a cover story shifting attention from all this looting: the public has been trained to think companies have been crippled by investment losses, when the biggest drain has really come via a relentless program of intentional extractions.

Corporate officers treat their own companies like mob-owned restaurants or strip mines, to be systematically pillaged for value using buybacks as the main extraction tool. During this period corporations laid off masses of workers they could afford to keep, begged for bailouts and federal subsidies they didn’t need, and issued mountains of unnecessary debt, essentially to pay for accelerated shareholder distributions. 

All this was done in service of a lunatic religion of “maximizing shareholder value.” “MSV” by now has been proven a moronic canard – even onetime shareholder icon Jack Welch said ten years ago it wasthe dumbest idea in the world – and it’s had the result of promoting a generation of corporate leaders who are

  • skilled at firing people,
  • hustling public subsidies, and
  • borrowing money to fund stock awards for themselves, but
  • apparently know jack about anything else.

During a Covid-19 crisis where we need corporations to innovate and deliver life-saving goods and services, this is suddenly a major problem. “We’re seeing, these people don’t have the slightest idea of how to run their own companies,” says Harvard economist William Lazonick.

Wall Street analysts spent the last weeks mulling over the grim news that society is wondering if it can afford to keep sending most of its wealth to a handful of tax-avoidant executives and corporate raiders (known euphemistically in the 21stcentury as activist investors). The Sanford Bernstein research firm sent a note to clients Monday warning buybacks would be “severely curtailed” in coming years, for the “intriguing” reason that they were becoming “socially unacceptable” in this crisis period. 

Goldman, Sachs chimed in with a similar observation. “Buyback activity will slow dramatically, both for political and practical reasons,” the bank told clients.

The political furor on the Hill in the last weeks has mostly been limited to grandstanding demands that recipients of aid in the $2 trillion CARES Act not be spent on stock distributions. “I’ll take it, but most of them don’t know what the hell they’re talking about,” is how one economist described these complains.

If politicians did understand the buyback issue more fully, they either wouldn’t have voted for this unanimously-approved bailout, or would have insisted on permanent bans, given the central role such extraction schemes played in necessitating the current crisis to begin with. The history is ridiculous enough.

***

The newspaper record of November 17, 1982 shows an ordinary day from the go-go Reagan years. Republicans boosted tax cuts and military budget hikes. An NFL player strike ended after 57 days. Soviet and Chinese foreign ministers met, and 80 complete skeletons were found in a dig at Mount Vesuvius in what one scientist called a “masterpiece of pathos.”

There was little news of a rule passed by the Securities and Exchange Commission and implemented with almost no documentary footprint. “It’s not written about in histories of the S.E.C.,” says Lazonick. “It’s barely mentioned even in retrospect.”

Yet rule 10b-18, which created a “safe harbor” for stock repurchases, had a radical impact. For decades before Reagan came into office and stuck E.F. Hutton executive John Shad in charge of the S.E.C. – the first time since inaugural chief Joseph Kennedy’s tenure in the thirties that a Wall Street creature had been made America’s top financial regulator – officials had tried numerous times to define insider purchases of stock as illegal market manipulation.

Again, when companies buy up their own stock, they’re artificially boosting the value of the remaining shares. The rule passed by Shad’s S.E.C. in 1982 not only didn’t define this as illegal, it laid out a series of easily-met conditions under which companies that engaged in such buybacks were free of liability. Specifically, if buybacks constituted less than 25% of average daily trading volume, they fell within the “safe harbor.”

The S.E.C. in adopting the rule emphasized the need for the government to get out of the way of such a good thing:

The Commission has recognized that issuer repurchase programs are seldom undertaken with improper intent… any rule in this area must not be overly intrusive.

The rule added that companies may be justified in “stepping out” of safe harbor guidelines, and said that there would be no presumption of misconduct if purchases were not made in compliance with 10b-18. Thirty-three years later, in 2015, S.E.C. Chief Mary Jo White would double down on this extraordinary take on “regulation,” saying that “because Rule 10b-18 is a voluntary safe harbor, issuers cannot violate the rule.”

10b-18 was a victory for a movement popularized in the late sixties by Milton Friedman and furthered in the mid-seventies by academics like Michael Jensen and Dean William Meckling. The aim was to change the core function of the American corporation. If corporate officers previously had to build value for a variety of stakeholders – customers, employees, the firm itself, society – the new idea was to narrow focus to a single variable, i.e. “maximizing shareholder value.”

Like objectivism and other greed-based religions that helped birth the modern version of corporate capitalism, “MSV” was anchored on hyper-rosy assumptions tying efficiency to self-interest. It was said CEOs paid in stock would become owners, which would lead to reductions in spending on private jets and other waste.

Shareholders previously were paid via dividends, or by waiting for share prices to appreciate and selling them. Now there was a shortcut: board members chosen by shareholders could raid their own companies’ assets to buy stock and to goose share prices. 

Employees, customers, and society were suddenly in direct competition for resources with executives and shareholders. Should a company invest in a new factory, or should it just deliver instant millions to shareholders and executives paid in options?

By 1997, MSV became orthodoxy, as the Business Roundtable declared that the “paramount duty of management and of boards of directors is to the corporation’s stockholders.” This was understood to mean that the sole purpose of the corporation was to create value for shareholders.

In the 2008 financial crisis, many firms poured resources into buybacks even as they hurtled toward bankruptcy. Some kept shifting money to stock buys practically until the day of their deaths. Lehman Brothers, for instance, announced a 13% dividend increase and a $100 million share repurchase in January 2008, when the firm was already circling the drain. Many of the TARP bailout recipients kept up buybacks even during the bleakest days of the financial crisis.

“If you added up the capital distributions of the banks in just the few years before the crash,” says Kelleher, “it adds up to half the TARP. They wouldn’t have needed a bailout if they’d [curbed] distributions.”

Before and after 2008, American companies repeatedly begged to be subsidized by taxpayers even as they systematically liquidated revenues via buybacks.

For instance, as Lazonick pointed out in a 2012 paper, Intel in 2005 lobbied the U.S. government to invest in nanotechnology, warning “U.S. leadership in the nanoelectronics era is not guaranteed” and would be lost absent a “massive, coordinated research effort” that included state and federal investment. That year, Intel spent $10.5 billion on buybacks, and spent $48.3 billion on them in 2001-2010 overall, four times what the federal government ended up spending on the National Nanotechnology Initiative

The classic extraction trifecta was to ask for public investment, take on huge debts, and enact mass layoffs as a firm spent billions on distributions.

Microsoft in 2009 laid off 5,000 workers (its first mass layoff) and did a $3.75 billion bond issue (its first long-term bond) despite earning $19 billion. That same year, the company spent $9.4 billion on buybacks and $4.5 billion on dividends. Lazonick argues such cash-rich companies borrowed money in order to avoid having to repatriate overseas profits, which would have forced them to pay taxes before blowing cash on buybacks.

Buyback waste is breathtaking. Exxon-Mobil, apparently disinterested in researching alternative energy sources, did $174 billion in buybacks between 2001-2010. The nation’s 18 largest pharmaceutical companies, who feed off NIH grants for free research and have relentlessly lobbied to be protected from generics, reimportation, the use of Medicare’s bargaining power to lower prices, spent $388 billion on buybacks in the last decade.

Apple, upon whose board sits relentless seeker-of-green-technology-seed-capital Al Gore, did $45 billion in buybacks in one year (2014) and $239 billion over a six year period between 2012 and 2018. Gore also owned over 79,000 shares of Apple as of last January, and sold nearly $40 million worth of Apple stock in February of 2017. So he’s probably not too upset that Apple is spending sums equivalent to major bailout programs on stock repurchases, rather than investing in new technologies.

In March of 2018, Wisconsin Senator Tammy Baldwin finally introduced legislation to halt the practice, called the Reward Work Act, which would:

Ban open-market stock buybacks that overwhelmingly benefit executives and activist hedge funds at the expense of workers and retirement savers. It would also empower workers by requiring public companies to allow workers to directly elect one-third of their company’s board of directors.

In summer of 2019, the Business Roundtable shook corporate America by abandoning “shareholder value” as the animating principle of American business. This led to a spate of breathless news reports: “Shareholder Value Is No Longer Everything” (New York Times), “Group of US corporate leaders ditches shareholder-first mantra” (Financial Times) and, “Maximizing Shareholder Value is Finally Dying” (Forbes).

This was all going on against the backdrop of a Democratic presidential election campaign that in the campaigns of Bernie Sanders and Elizabeth Warren especially saw the rise of furious anti-corporate sentiment. The Roundtable response might have been P.R. designed to dull the pitchforks somewhat, but it’s notable that there was enough worry about the optics of shareholder piggery to even do that much.

As Forbes put it:

Maximizing shareholder value has come to be seen as leading to a toxic mix of soaring short-term corporate profits, astronomic executive pay, along with stagnant median incomes, growing inequality, periodic massive financial crashes, declining corporate life expectancy, slowing productivity, declining rates of return on assets and overall, a widening distrust in business…

Economist Lenore Palladino, who has worked on these issues for years, hopes Covid-19 and other looming crises will force politicians and the public to see fundamental changes to corporate structure as inevitable.

“I believe there will be a political mandate to ensure business resiliency in the 2020s, not only to survive coronavirus, but so that the American workforce can thrive in the era of climate change,” she says. Banning buybacks, she says, would (among other reforms) comprise “one step towards rebalancing power inside corporations.”

However, unless the public puts more pressure on politicians to keep the issue alive during the coronavirus crisis, the $2 trillion rescue and the near-daily barrage of radical new bailout facilities being introduced – the Fed as of this writing is introducing yet another amazing “bazooka” program to hoover up junk bonds – could just end up subsidizing the last decade of buybacks.

If political focus on repurchases becomes a purely temporary policy fixation, a la Joe Biden’s “CEOS should wait a year before gouging their own firms again” proposal, this bailout will be massively counterproductive, enshrining buybacks in non-emergency times as a legitimate practice. If we can’t fix a glitch as obvious as 10b-18, what can we change?