
Are central banks losing their big bet? - hhs
https://www.project-syndicate.org/commentary/central-banks-unconventional-policy-bet-by-mohamed-a-el-erian-2019-07
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dmt314159
Don't blame central banks so much.

They only directly control one lever in the economy, interest rates augmented
by QE-purchase of company bonds in Europe & US.

In retrospect, they've been caught in a downward spiral of interest rates
because politicians have been unable to add pro-growth policies.

Unfortunately the "wealth effect" of shares in the US, even after Trump's
unaffordable tax-cuts, has been channelled towards shareholders (via dividends
& buybacks) rather than wage increases or capital investment.

Something's wrong when companies can't find worthwhile ways to spend money
investing in their own future, but instead direct profits and BORROWINGS into
share buy-backs.

I do suspect one of the factors encouraging buybacks is that executive
remuneration is often based on the share price. I've tried searching but
haven't found anything suggesting executive remuneration excluding the effects
of buybacks on share prices.

