THE ATLANTIC OCTOBER 2019 9ED
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ADVERTISING OFFICES The Atlantic, 60 Madison Avenue, Suite 800, New York, NY 10010, 646-539-6700.about the stock market and
short-term results. There isn’t
anything intrinsically wrong
with share buybacks, although
they do illustrate that corpo-
rations don’t have enough
internal investment opportuni-
ties and certainly didn’t need a
huge tax reduction like the one
passed in 2017, given that they
cannot figure out how to profit-
ably invest the money already
in their coffers. But that’s a
different story of greed from
the one being told.
Christian Y. Wyser-Pratte
OSSINING, N.Y.I find no fault with the
buyback option. The stated
purpose of buybacks is to raise
share value, for all share-
holders. I care not if executives
profit along with every other
shareholder. (I care a lot if
they profit and the company’s
share value lags or declines, as
was the case with Yahoo.) A
reduced share count translates
into retained earnings. That
can find a home in R&D or
facilities planning.
Jerry Useem states that
Home Depot employees could
have earned an additional
$18,000 a year had buybacks
been directed to that end. This
raises a question: Are those
employees worth that addi-
tional income? Rising stock
prices lift all boats. Individuals
need to get theirs in the water.
Dick Healy
CHICAGO, ILL.A share repurchase is a simple
distribution of profits to a
business’s owners, in the form
of an equity purchase. Partners
in partnerships are bought out
all the time. Is this a scandal?
No, it’s just how businesses pay
people who invest in them.To improve management
incentives, stop giving away
the equity and make managers
buy it on the open market, like
the rest of us. Then require
that they hold it as long as they
work for the business. This
way they’ll have real skin in
the game, which means they’ll
share as much downside risk
as upside potential.
Daniel Ferris
VANCOUVER, WASH.Jerry Useem replies:
Adopting Daniel Ferris’s last
recommendation—require that
executives hold their shares
“as long as they work for the
business”—would go a long way
toward addressing the iniqui-
ties of stock buybacks. Because
Christian Y. Wyser-Pratte is right:
There isn’t anything intrinsically
wrong with buybacks per se.
The problem is in their usage,
which rewards inside share-
sellers at the expense of outside
shareholders and propagates
the lack of long-term investment
that Nancy Langwiser-Kear
rightly warns of. Ban buybacks
(a move I’m not proposing ), and
managers would likely revert
to their former habit of using
excess cash to acquire unrelated
businesses. But at a minimum,
regular investors should have
an easier way of knowing who is
profiting and when. That way
they can make an informed deci-
sion about whether executives
are investing for the long haul—
and whether they should too.DIY Coffins
In August, Rene Chun wrote
about New Zealand’s newly
popular “coffin clubs.”This article reminded me of my
friend Dudley, who made hisown coffin in the ’90s. Dudley
was a skilled carpenter and
carver, so the coffin was really a
work of art. My favorite embel-
lishment: along the bottom
rail of the coffin were carved
the words HANDMADE BY
OCCUPANT.
L. W. Bower
ALBUQUERQUE, N.M.Measles as
Metaphor
In August, Peter Beinart showed
what the disease’s return says
about America’s ailing culture.I retired recently after 29
years of training and prac-
tice in primary-care pediat-
rics. I take exception to the
notion that pediatricians do
not spend time reassuring
patients about vaccine safety
because reimbursement is
inadequate. My colleagues
and I routinely stayed past the
allotted 15 minutes per patient
to explain to parents why
their beautiful baby would
be vulnerable to meningitis,
pneumonia, whooping cough,
and severe diarrhea if not
immunized. Parents who
simply have questions usually
are reassured by thoughtfulconversation. However, my
experience is consistent with
research that has shown that
no amount of counseling and
accurate information sways
parents who are dead-set
against immunizations. These
encounters are deeply distress-
ing for pediatricians, because
prevention is at the heart
of our mission, and we value
the trust of parents more than
any compensation.
True empowerment of
physicians would include
reinforcement by government,
schools, and child-care facili-
ties through exclusion policies
of children unvaccinated for
diseases that are contagious
(in the absence of a medical
contraindication). Insurance
companies could increase
premiums for families that will-
ingly choose not to vaccinate,
to reflect a higher-risk category.
If greater society does not
value the public-health role of
vaccines, parents suspect that
doctors push them for profit.
Elise Thomas, M.D.
YORK, PA.Corrections
“The Stock-Buyback Swindle”
(August) stated that Craig
Menear, the chairman and
CEO of Home Depot, sold
113,687 shares of his company’s
stock the same day as a confer-
ence call with investors. He
sold the shares the next day.
Due to an editing error,
“What Happened to Aung San
Suu Kyi?” (September) indi-
cated that Wai Wai Nu is a man.
In fact, Wai Wai Nu is a woman.
We regret the error.