A new proposal to restrict corporate buybacks is treating the symptom instead of the cause — and could result in companies shutting down in the U.S., economist Diane Swonk told CNBC on Monday.
Senate Minority Leader Chuck Schumer of New York and Sen. Bernie Sanders, an independent from Vermont, outlined their plan in a New York Times op-ed on Sunday. They want to prevent companies from buying back their own shares unless they pay workers at least $15 an hour and offer health benefits and paid time off.
Swonk said those preconditions aren't a good thing.
"It is treating the wrong problem," the chief economist at Grant Thornton said on "Closing Bell."
"Once you start doing this you are going to start closing down companies in the U.S. and having them go elsewhere even more so."