It is said that politics makes for strange bedfellows, but I would have wagered that I’d see pigs fly before President Trump and Massachusetts Senator Elizabeth Warren had a meeting of the minds. Trump for years has denigrated Warren as Pocahontas — a reference to her claiming to be Native American — and Warren has responded in kind, most recently slamming Trump’s economic policies as “rigged against hardworking Americans.”
But in a mostly overlooked moment before America shut down for the holidays, Trump and Warren were suddenly singing along with Starkman Approved about the economic hazards of corporate stock buybacks. Also joining the choir was Michael Burry, who made a killing off the 2008 financial crisis because he knew in advance that the mortgage risk evaluations banks relied on were overwhelmingly built on bullshit assumptions.
Trump’s remarks were included in a Wall Street Journal story about his desire to pressure America’s largest defense contractors to speed up weapons production by investing in new facilities — and by ending the practice of repurchasing their own shares.
“They want to buy back their stock—I don’t want them to buy back their stock,” Trump said. “I want them to put the money in plants and equipment so they can build these planes fast.”
Trump also criticized the high pay of executives at defense firms.
“We’ll be discussing the pay to executives, where they’re making $45 and $50 million a year and not being able to build quickly,” Trump said. “They’re going to make that kind of money, they have to build quickly.”
Warren, who has long railed against corporate stock buybacks that help fuel obscene executive pay, immediately stepped up to the plate to work with Trump.
“Contractors should be prioritizing investments in research, development, and their workforce to help strengthen America’s innovation. Shortfalls in defense contractors’ workforce increase delays and spending for DoD,” Warren wrote with Rep. Chris Deluzio (D., Pa.) in a December 16 letter to Treasury Secretary Scott Bessent.
In November, Burry launched a broadside asserting that the $112.5 billion Nvidia spent on stock buybacks since 2018 has effectively yielded “zero” additional shareholder value. While the company reported a robust $205 billion in net income and $188 billion in free cash flow over the same period, Burry argued that the $112.5 billion dedicated to buybacks primarily served to offset stock-based compensation–related dilution.
“(Nvidia) bought back $112.5B worth of stock and there are 47 million MORE shares outstanding,” Burry tweeted, adding, “The true cost of that SBC dilution was $112.5B, reducing owner’s earnings by 50%.”
Stock buybacks are when companies repurchase their own shares on the open market, reducing the number of publicly available shares and thereby increasing the value of the remaining ones. Because CEO compensation is often tied to stock price performance, executives have a powerful incentive to authorize buybacks.
In 2025, publicly traded companies spent an estimated $1 trillion repurchasing shares, contributing to a 16% gain in the S&P 500 that Trump likes to take credit for.
As a reminder, stock buybacks were illegal until 1982, when regulators lifted the restriction. Bradley Safalow, a respected market researcher, has shown that companies with the largest buyback programs in the S&P 500 have consistently underperformed the broader market over the past decade.
“Stock buybacks are a sugar rush,” Safalow warned. “They’re good for a fleeting pop in the share price, but much like most candies, they tend to do more damage over the long term.”
One would have to be awfully naïve to believe Trump and Warren will forge a lasting partnership to rein in buybacks. When Trump first ran for office, he vowed he would eliminate the favorable tax advantage private equity firms enjoy called carried interest, which allows them to pay lower tax rates on profits earned buying and stripping healthy companies — even when their deals result in bankruptcies and significant job losses.
Trump not only failed to follow through, but Wall Street Journal reporter Miriam Gottfried reported last week that private equity’s Masters of the Universe have found a way to avoid paying even their reduced carried-interest taxes. Private equity’s unabashed greed never ceases to amaze.
Warren, meanwhile, talks a good game that makes for great headlines and rallies her supposedly “progressive” base. But the policy outcomes have been far more modest than the rhetoric.
On Monday, Warren posted on X, saying, “The economy is rigged against hardworking Americans. We have to fix it. Democrats need to be clear on the kinds of investments that we want to make, how we’ll build them, and really fight for them. That’s what the American people want and deserve.”
Really?
When the Inflation Reduction Act championed by President Biden was first proposed, it included provisions to raise the tax companies pay on stock buybacks to 4% from 1% and to prevent CEOs from selling their stock for three years after authorizing a buyback. Both provisions were removed from the final bill.
Had those restrictions remained in place, GM CEO Mary Barra — who has spent $25 billion on stock buybacks over the past three years — would not have been free to dump at least half her GM holdings.
Speaking of Barra, here are some details about her EV strategy you likely won’t read elsewhere.
The media delights in calling Tesla’s Cybertruck a major failure because sales have fallen far short of what Elon Musk predicted. An even bigger failure may be Barra’s GMC EV Hummer, which she hailed as a technology triumph and personally promoted by driving a black one herself.
Tesla does not break out Cybertruck sales, but Cox Automotive estimated Tesla sold around 16,000 Cybertrucks in the first nine months of the year, down 38% from the same period a year ago — nowhere near Musk’s original goal of selling 250,000 units annually. Tesla sold 5,385 Cybertrucks in the third quarter, a 62.6% drop from last year.
By contrast, GM reported sales of just 13,233 EV Hummers in the first nine months of the year, including 5,246 in the third quarter. GM, like Ford, records a sale when a vehicle leaves the factory and ships to a dealer — not when a customer actually buys it. The reported figures therefore may overstate actual retail demand, particularly amid heavy discounting and reports of unsold inventory being unloaded at auctions.
The broader EV picture is no kinder. According to third-quarter figures, GM was already losing EV market share even before Biden’s lucrative tax credits expired. EV sales overall increased 60%, but sales of GM’s Mexican-built Chevy Blazer EV rose just 1.1% to 8,089 vehicles. Cadillac’s electric Lyriq, which GM once claimed was in such high demand the company had to stop taking reservations, also increased only 1.1% to 7,309 vehicles.
Except for the Chevy Equinox EV, which GM also manufactures in Mexico, all of GM’s other EV gains came off a very low base. Adding insult to injury, third-quarter sales of Honda’s Prologue — built by GM at the same Mexican factory as the Blazer EV and mechanically nearly identical — surged 60% to 20,236 units.
Three years ago, Barra vowed she would be selling more electric vehicles than Tesla by the end of 2025. She will not come close. Instead, GM has taken roughly $1.6 billion in write-downs and charges tied to its EV investments, and former Ford CEO Mark Fields recently predicted on CNBC that more announcements will be forthcoming.
Barra’s supporters like to tout that GM’s stock surged in the fourth quarter and that it was the top-performing automotive stock year over year. In addition to aggressive stock buybacks, another reason for the rally was Barra’s reassurances to Wall Street that she was recommitting GM to selling gas-guzzling trucks and SUVs — and that Trump’s tariffs were not as harmful as she had previously warned.
Even with that recent run-up, GM’s shares have still underperformed the S&P 500 over the full span of Barra’s tenure, underscoring how selectively stock-price gains are often framed.
The leadership of a CEO whose stock rallies after abandoning her previously stated transformational vision is hardly worth celebrating.