Category: Economics

Economics, Law

Student Loans: A Recipe For Social Unrest

Rodrigo Rato led the IMF from 2004-2007. Before that he served as Spain’s economy minster. In both roles he was a staunch advocate of real-estate fueled economic growth. After the financial crisis Rato served as the head of Bankia, a 2010 rollup of seven regional banks. Today Bankia is 64% owned by the Spanish government …

Business, Economics, Law

Original Shareholder Value Article – Milton Friedman to GM: Build Clunky Cars

On September 13, 1970, Milton Friedman published one of the most arguably economically destructive articles in history, “The Social Responsibility Of Business Is to Increase Its Profits,” in the New York Times. The article is available, in PDF form, for subscribers from the New York Times website. Friedman advanced the idea that managers are agents …

Business, Economics

Buybacks (or Corporate Suicide)

Prof. Robert Ayres asked me for help with a data project examining the relationship between buyback and growth in market value. Many have studied the effect on buybacks but rarely on overall market cap growth. What we found was surprising. Some items that pop out: Sears spent $6.92 billion buying stock. The company is now …