The Dirty Little Secret of How CEOs Enrich Themselves at Your Expense

By Lynn Stuart Parramore

August 20, 2014 | Everyone from Warren Buffett [3] toRobert Reich [4] is talking about a favorite Wall Street trick called stock buybacks. But what are they and what do they mean to you?

William Lazonick is a leading expert on the history of the American business corporation. A professor of economics at the University of Massachusetts Lowell, where he directs the Center for Industrial Competitiveness, he has long been watching a trend that has only recently been attracting media attention and forcing many to reassess the nasty form of capitalisim that has been unleashed on us in recent decades.

In an email interview with Lazonick, I asked him about how the widespread and little-understood obsession with stock buybacks among American executives is driving inequality and pushing prosperity further away from everyone except those at the very top. (Lazonick's in-depth exploration of this topic is available in the current issue of theHarvard Business Review [5].)

His answers are a clarion call for changing the way America does business.