EDITOR NOTE: The danger of a stock buyback program is that it contributes nothing to the production of the firm. It pays shareholders yes, but it also has a negative effect, draining corporate treasuries and disrupting the growth dynamic that links the labor force productivity and pay. Income inequity, instability in employment, and waning productivity are the typical results. Like many of its fellow banks, US Bank is about to join the buyback bandwagon as the Fed has given bank share repurchases the green light. Perhaps a boon for investors, it ultimately puts depositors, as well as the bank itself at risk should the economy come to a breaking point, making the entire system vulnerable to a collapse.
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