Clinton To Scrutinize Stock Buybacks

On Friday, US Presidential hopeful Hillary Clinton is set to speak in New York about her plans to reform share markets. Clinton has been vocal about her desire to end "quarterly capitalism", or companies' focus on short term gains rather than long term profits, and her speech is expected to detail how she will encourage companies and investors to focus on longevity should she win next year's election. An End To Quarterly Capitalism Clinton believes that the US tax system is flawed in that it supports "quarterly capitalism" by making it easy for companies to focus on their upcoming earnings reports. The trouble with this approach, she says, is that it slows down the economy and puts pressure on middle class incomes. Full Disclosure The former First Lady plans to require more transparency when it comes to stock buybacks in an effort to shift companies' focus back to long-term profitability. She believes that the share price increase that accompanies buybacks typically comes at a cost to that firm's future success. Requiring full disclosure about a buyback means that firms will be less likely to take the money from necessary operations like research and development. Market Overhaul Stock buybacks aren't the only thing Clinton is looking to change about share markets. She also wants to rework capital gains taxes, executive compensation and even the rules governing shareholder activism. She believes that her plan is a necessary first step in shifting the market's tide, but Republicans and many analysts are skeptical, saying that government intervention won't be able to change corporate behavior.