The common refrain among many critics is that “Wall Street” is short sighted and can’t make long term investments. Really? At this point you have 10b public valuations based on revenues which won’t appear for a decade at best (flying taxi companies anyone) while value stocks paying high free cash flow today languish at single digit earnings multiples. Any company which has a viable growth strategy for invested capital gets a ton of credit from the market, making capital return a last resort. So the idea that buybacks are somehow starving growth investment seems strained.
Th other side of the coin with regard to "economic dynamism" is robustness against systemic shocks. See for instance this company  which started over 1000 years ago, and due to its lack of "dynamism" has cash on hand to survive indefinitely with no revenue - a property that turned out useful when a global pandemic disrupted their operations.
Wall Street investors get absolutely no credit from me for expecting to wait ten whole years for their absurd, physics-defying hypergrowth. When they are lining up to fund a stand that will make mochi by hand for the next 1000 years, then I will concede that they may have learned a bit about long-term planning.
What really worries me is that corporations think that doing investments with the money they have borrowed doesn't even enter their minds. Somehow tax optimization has a higher rate of return than actually doing work.
> doing investments with the money
They are induced into doing so. If their competitor is doing tax arbitrage, they have to in order to compete. It's actually much worse than it seems, as investors mostly invest through index funds now. If you buyback your stock, this increases your market cap and more index funds will buy your stock, pushing prices up further. If you don't buyback your own stock with debt, the index funds will sell your stock to buy the stock of companies that do. Virtuous and vicious cycles that end with only buyback companies surviving.
The volume of buybacks and indexing is such that smart money who calculate companies values through what they actually do has no chance to move the needle, and thus smart money is reduced into betting which company will do buybacks. There's no price discovery anymore.
> they have borrowed
This is just interest rate arbitrage. The Fed has set rates at an artificially low number, and as such there are benefits to these corporations taking out as much as they can to simply buyback their stock.
"When health insurer Humana Inc reported worse-than-expected quarterly earnings in late 2014 – including a 21 percent drop in net income – it softened the blow by immediately telling investors it would make a $500 million share repurchase.
In addition to soothing shareholders, the surprise buyback benefited the company’s senior executives. It added around two cents to the company’s annual earnings per share, allowing Humana to surpass its $7.50 EPS target by a single cent and unlocking higher pay for top managers under terms of the company’s compensation agreement.
Thanks to Humana hitting that target, Chief Executive Officer Bruce Broussard earned a $1.68 million bonus for 2014."
it’s section on leverage supports my sense that debt financed buybacks aren’t a massive catastrophe, and are prob ok in terms of collapse. but who knows...