New York (CNN Business) If lawmakers restrict stock buybacks, that could backfire on the American economy, White House economic adviser Kevin Hassett warned on Friday. Hassett argued that buybacks are a reasonable way for companies to return excess cash to shareholders -- who can then invest in faster-growing startups. "It's a natural way our economy recycles cash from old successful firms to new entrepreneurial firms," Hassett told CNN's Poppy Harlow. Worse, a crackdown on buybacks could "trap the money in old firms," said Hassett, who is chairman of the White House Council of Economic Advisers. He held up "zombie firms" in Europe as a potential consequence of what can happen when companies don't recycle their cash.

Source: CNN March 01, 2019 19:18 UTC