As the Republican tax reform has gained popularity, the Democrats have had to update their messaging. To cast corporate tax cuts as a “scam” and redistribution to the wealthy, opponents have shifted their focus to the evils of stock buybacks and dividends.

“Corporations have been pouring billions of dollars into stock repurchasing programs, not significant wage increases or other meaningful investments,” declared Senate Minority Leader Chuck Schumer Feb. 14. Such buybacks, he claimed, “benefit primarily the people at the top” and come at the expense of “worker training, equipment, research, new hires, or higher salaries.” Other Democrats have echoed the theme, and their media friends are cheerfully passing it on.

Economic logic isn’t strong in Washington these days, but this effort stands out for its incoherence.

Share buybacks and dividends are great. They get cash out of companies that don’t have worthwhile ideas and into companies that do. An increase in buybacks is a sign the tax law and the economy are working.

Buybacks do not automatically make shareholders wealthier. Suppose Company A has $100 cash and a factory worth $100. It has issued two shares, each worth $100. The company’s shareholders have $200 in wealth. Imagine the company uses its $100 in cash to buy back one share. Now its shareholders have one share worth $100, and $100 in cash. Their wealth remains the same.