You are making the grand assumption that the stock market and the economy are connected. They are two very independent things that often show the same trends -- and in this case, they don't. The theory was that if a stock goes down, the company would respond by
Increasing or decreasing investments into the company, like R&D, depending on what the executives believed was wrong. Since Regan, executives tend to be very invested in the stocks, so they manipulate them rather than use them as an indicator of health. That decouples them from the economy impact.
It's time for Socialism... Where employees receive stock in their company and then have a say in the business!! Profit sharing is what made this country strong... When you're invested, the company does far better.
I wouldn't say that's a silver bullet either. Most employees can't see beyond their role, but owning a part of the office should instill some pride. But killing stock buy backs and limiting the "share holders are all that matters" mantra would go much further.