• Protect investors: We need to follow the recommendations of the non-political Security and Exchange Commission staffers, who proposed a fiduciary rule that requires stock brokers to put the interests of investors ahead of their own. Too often, brokers want to sell what's best for them, not their clients. During the Barack Obama administration, such a rule was adopted for the accounts of retirement savers, though it has been effectively killed by Donald Trump's administration.
• Tax reform: The senators suggest that the spike in share buybacks was driven by Trump's tax cuts, though it's more accurate to say they got a bigger boost from the 2003 tax cuts passed under President George W. Bush. But both changes in the tax code are symptomatic of something else: For four decades, the guiding credo has been that tax cuts that help the rich the most are good for everybody. This sleight-of-hand now is being seen for what it is: A potent driver of rising wealth inequality. If America's leadership class can't find a way to make the tax code fairer for people below the top 10 percent, expect to see more proposals like the wealth tax or a 70 percent top tax bracket.
When it comes to legislating economic policies, positive incentives work better than negative ones. Micromanaging corporate capital activities isn’t the way to achieve the stated goals that Schumer and Sanders want. The tweaks above would be a start in the right direction.
This column was provided by Bloomberg News.