to tack on another 600,000 people whornmay be willing, but are not able, to work.rnThen there are those Americans who arernwilling and able to work, and are notrn(yet) incarcerated, but who are still preventedrnfrom working.rn”Ameritech set to ax 5,000 jobs,” readrnan Associated Press headline on April 15.rn”Intel to slash workforce by four percent,”rnscreamed an 11-inch front-pagernstory in the Arizona Republic the samernday. But those numbers are just a pregamernwarm-up compared to the jobsrnwhich the Fortune 500 giants (such asrnAT&T, Kodak, Xerox, and others) arernslashing these days. Just as IBM did a fewrnyears before, when it shrank its payrollrnfrom 406,000 employees in 1985 torn220,000 in 1994.rnOf course, the Fortune 500 companiesrnhave been downsizing for the lastrntwo decades. In the 1980’s alone, theyrndumped 3.6 million jobs like so muchrnexcess baggage, and they shed anotherrnmillion of them in the first half of thern1990’s. The above headlines signal anrnacceleration of the trend in the secondrnhalf of the decade. No wonder Fortunern500 employment peaked in 1979!rnThe Fortune 500 companies’ globalrnemployment accounts for a mere 17 percentrnof American jobs. Yet the Fortunern500 global revenues represent nearlyrntwo-thirds of the U.S. GDP. Whichrnmeans that the American industrialrnelites’ financial power by far exceeds itsrnpresence on America’s Main Streets.rnAnd since money means power in plutocraticrnsystems, it can also mean power torndupe the American people. Enter thernstock buybacks.. .rnOne way Wall Street creates an illusionrnof economic prosperity is throughrnstock buybacks. A Business Week columnistrnalleged in an April 13 story that “thern[stock] buyback boom is mostly a boon.”rnAnd it is —for the top executives of thernnation’s largest companies and theirrnWall Street cronies. As for the rest ofrnAmericans, it’s a scam, a con, a Ponzirnscheme—take your pick.rnHere’s a simple question: How manyrnMain Street jobs did corporate Americarncreate by spending $180 billion (a BusinessrnWeek figure) in 1997 on stock buybacks?rnAnswer: Zero! In other words,rnthe equivalent of the combined GDPs ofrnmore than a dozen small Europeanrncountries has been thrown into the WallrnStreet Hoover without creahng a singlernproduct or job! And that’s economicrnprosperity? Frankly, that sounds morernlike financial perversion.rnAh, but some “experts” quoted inrnBusiness Week’s story argued that stockrnbuybacks were a way big companies, likernIBM, return cash to “millions of shareholders”rnwho “get money going . . . tornthousands of Yahoos [the Internet servicernprovider].” Not so, for three reasons.rnFirst, because any company managementrnwhich admits to having excess cashrn(as IBM did in January, for example)rnwhich it wants to return to shareholdersrnis by definition a company lacking therncreativity and entrepreneurship neededrnto succeed in business. Its shareholdersrnshould dump such a Board right awayrnbefore they give the entire store away, notrnjust some “excess cash.”rnSecond, there is no evidence to supportrnthe claim that IBM’s stock buybackrnmoney ended up in Yahoo’s IPO shareholders’rnpockets. And even if some did,rnwhy is the IBM Board using its shareholders’rnmoney to fund competitive startups?rnWhy is it not investing the moneyrnto further IBM’s interests? So even ifrntrue, would this not be a betrayal of thernIBM directors’ fiduciary duties?rnThird, the statement is not supportedrnby the facts. The stock buyback moneyrnisn’t going to “millions of shareholders.”rnLess than one-third of Americans play atrnthe Wall Street casino despite its longrn”bull run” and decades of financial hype.rnOf those who are foolish enough to challengernthe “house,” only about three percentrnof them account for three-quartersrnof the individual portfolios’ value.rnIt is also factually unsupportable becauserneven those three percent of individualrnshareholders’ portfolios fade inrncomparison to those owned by institutions.rnThe major stock market playersrnare the Wall Street cronies of the “bluernchip” companies’ CEOs. In IBM’s case,rninstitutional investors own more thanrnhalf of its shares and a huge chunk of thernstock’s trading volume. So Wall Streetrninstitufions are much more likely to profitrnfrom stock buybacks than are the typicalrn”buy and hold”-type Main Street investors.rnThe latter group are actually the patsiesrnwho pay for the privilege of watchingrnthe big money changing pockets. Kindrnof like a spectator’s head at a tennisrnmatch, as Wall Street’s “buy side” andrn”sell side” frade shots over the New YorkrnStock Exchange’s “Intranet,” using thernlisted company’s cash as the ball.rnIBM’s stock, for example, has morernthan doubled in price since Septemberrn1996, even though most of its businessrnfundamentals are either down or declining.rnLike a hot air balloon, the Big Bluernshares kept rising on Wall Street’s hot airfueledrnforecasts, and on IBM’s $20 billion-rnand-counting share repurchase program.rnJust in case the magnitude of thisrnBig Blue scam is lost on some readers,rnthat’s about four of Albania’s GDPs. (Inrnlate April, IBM’s Board approved an additionalrn$3.5 billion for stock buybacks.)rnAll of which is creating a scene fit forrnthe theater of the absurd. IBM reportedrnin mid-April that its first quarter earningsrnin 1998 were down 13 percent (down 18rnpercent when adjusted for stock buybacksrnand lower tax rates); that its equityrnwas down 13 percent since the end ofrn1996, while its debt surged by 55 percent;rnand that its cashflow was a negativern$1.7 billion. Yet Wall Street respondedrnto such bad news by bidding up the pricernof the Big Blue stock to an all-time highrnof $120 per share!rnEven I, a 30-year veteran of the computerrnindustry, was left speechless. Butrnnone of the establishment media expressedrnsurprise, much less shock, atrnsuch an incongruity. In the pervertedrnmarket that Wall Street has become,rneven soaring prices on plunging profitsrndon’t raise eyebrows anymore. But theyrndo confirm our cashflow theory—that today’srnstock market is no longer related tornthe economic performance of the companiesrnwhose shares it frades.rnSo what’s our government doing tornprotect the small investor from such BigrnBusiness scams? In a word—nothing. Inrnfact, one can make a case that it is aidingrnand abetting the Wall Street and BigrnBusiness con artists. When Congressrnpassed the law last year lowering the capitalrngains tax, it provided an incentive forrnstock buybacks. Companies like IBMrncan now argue that they are returningrncash to shareholders in a way which isrnmore beneficial to them than increasingrnthe dividends, which are now taxed at arnhigher rate.rnOf course, dividends would have benefitedrnall shareholders, including thern”buy and hold” Main Street-types, whilernthe stock buybacks reward only those formerrnowners who choose to sell theirrnshares to the company. But fairness andrnegalitarianism have never been strongrnsuits of Wall Street or Big Business.rnNor, as we now see, of our Congress,rneither. They collect Main Street votesrnand taxes, then vote Wall Street interests.rnIt’s another act in our theater of the ab-rnOCTOBER 1998/45rnrnrn