@pluralistic "Why would companies prefer buybacks to dividends?"

-there's actually a worse reason. Buybacks have tax advantages over dividends: Dividends are fully immediately taxed as income; buybacks are not due to cost basis (they can deduct what they initially invested), *and* capital gains tax is deferred to when the shares are sold.

Biden's IRA started to fix this by adding a 1% excise tax to them

(There are also other effects,like buying out certain shareholders concentrating control)

@pluralistic

"Its shares should be worth less than before"

This seems misleading. The shares should only be worth less *if the number of shares are fixed*. which they aren't, in a buyback. When the company buys back half those shares, those shares stop existing. The 1000 share company only has 500 shares outstanding, post-buyback.

A company worth $500,000 with 500 shares outstanding will have a per share price of $1,000. The same company with 1,000 shares has a per share price of $500. 1/2

@j_bertolotti From what I've heard, video gets much more reach (like, orders of magnitude) if you're trying to reach a mainstream audience. It is hard to get people to read written articles these days, unfortunately 😢

A lot of people have swapped, even ones who acknowledge that written is often better for what they'd want to do

@interfluidity Would this interfere with some of the goals in trade balance? In particular national security, learning by doing, (and maybe golden handcuffs)?

In that example, Industria is still strategically vulnerable to being cut off from ore. Similarly, Ironia and Oceania are vulnerable to not having their manufactured tanks etc cut off.

Ironia/Oceania don't get the advantage of learning by doing when it comes to manufacturing

(I am not so sure about the golden handcuffs constraints)