How the pursuit of shareholder value weakened the economy

[stpioc]

5) Value extraction, rather than value creation

Look at the figure below:



For the past two decades, companies haven't raised capital, in fact they have withdrawn huge sums, and these sums really are huge:

In 2014, S&P 500 companies bought back $553 billion in shares, in addition to paying shareholders $350 billion in dividends. Total returns to shareholders equaled $904 billion, a bit shy of reported earnings of $909 billion.

That is, almost all reported profits went to buybacks and dividends..