The Great Heist
We need to talk about your cash.
I know it feels safe in the bank. But that is the most dangerous place it could be. The public argument about inflation is a complete distraction. They are arguing about symptoms. They are not looking at the code.
As a systems builder, I am obsessed with finding bugs in the code. But what I see in our economy is not a bug. It is the system’s core feature.
Look at the modern corporation for a perfect example. It has a choice:
Take $1 billion and invest it in R&D. This is risky. It takes five years to pay off.
Take that $1 billion, borrow another billion at 1%, and buy back its own stock.
It mechanically increases earnings per share. This is a mathematical certainty. The stock price goes up. The executive’s bonus is paid.
Central bank policy forces this choice. It makes financial engineering more profitable than productive innovation. What do you think that does to the engines (and incentives) in the economy?
The stock buyback is a siphon. It takes the real v…
