[Discussioni] [jaromil a dyne.org: [cyber~rights] Microsoft thanks Bush with historic s dividend]

[Anonymous]

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Date: Mon, 27 Jan 2003 15:30:34 +0100
From: jaromil <jaromil a dyne.org>
To: cyber-rights a ecn.org
Subject: [cyber~rights] Microsoft thanks Bush with historic share dividend

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From: wire <wire a onlinestreams.com>
Subject: Microsoft thanks Bush with historic share dividend
Date: Sat, 18 Jan 2003 15:04:42 -0700

http://www.theregister.co.uk/content/7/28914.html


Microsoft thanks Bush with historic share dividend
By Andrew Orlowski in San Francisco
Posted: 17/01/2003 at 11:03 GMT

When the Bush Administration was sworn in, in January 2001, Microsoft 
was in the position that we so often find James Bond in mid-way 
through a movie: strapped to a table and heading inexorably towards a 
huge carving machine or deadly laser.

By November, the fix was in. Attorney General John Ashcroft had 
indicated that he had little interest in pursuing the case, and 
several Department of Justice Antitrust attorneys had already left, 
disillusioned. The result was a settlement neatly summarized by the 
financial analysts we cited at the time: "a major win; no substantive 
change in business model or R&D practices; maintain Buy."

Ashcroft had declined to excuse himself from the case: despite having 
taken $20,000 in campaign contributions for his Senate campaign from 
Microsoft and refused to disclose contacts with the company. That 
said, the contribution hadn't done him much good: he still lost the 
race to a dead man.

So yesterday, remembering its manners, Microsoft got its chance to 
thank the Administration properly, and it timed the announcement to 
perfection.

For the first time in its history as a public corporation, Microsoft 
will pay a dividend to its shareholders. Technology companies loathe 
paying dividends, although a few pay a token sum. Historically, they 
prefer to buy back public stock to increase the company's share 
price: IBM, Intel, Sun and Cisco have spent billions on share 
purchase programs that effectively shrink the company. Scott McNealy 
told us it would be a cold day in hell before Sun ever paid a 
dividend, although in strict terms, both dividends and buy backs are 
equally money down the drain to a corporation.

Why is this so well timed? On January 6, President Bush announced his 
new budget, and its centerpiece is the elimination of tax on stock 
dividends, at the eye-watering cost of $370 billion over ten years.

It should be a hard sell. The administration has already been 
preparing the public for a move away from progressive taxation, 
complaining that the poor don't pay enough. Despite targeted cuts to 
lower income groups, the dividend exemption favors the wealthiest, as 
most stock holders are institutional investors or extremely loaded 
individuals, and has been criticized by Bush's former Treasury 
Secretary Paul O'Neill and from his own side of the Senate.

Lobbyists for technology companies privately oppose the plan, with 
one telling the Washington Post: "This is not the bill that's going 
to pass Congress, and everybody knows it." A dead duck, then.

But rumors that a major technology company - Cisco was mentioned, as 
was The Beast - would break with tradition have been circulating for 
a little while now.

Microsoft's decision to pay a dividend allows the administration to 
claim that America's most notorious corporate lawbreaker is in fact, 
a redistributive angel in wolf's clothing. Thanks to this incredible 
partnership, we'll soon hear, business and government can get the 
economy moving. Billions will trickle back to MSFT-holding families, 
demonstrating that economic stimulus comes not from any Keynesian 
multiplier, but through the charity of the rich, so justifying the 
reward, not punishment of the largest corporations. It's a 
supply-sider's dream!

As an added benefit, this will again sanitize "popular capitalism" - 
which currently has a rather poor reputation now after the largest 
loss of wealth in human history - the "Long Boom" having gone Phutt. 
(Where is Kevin Kelly now?)

Curiously, there is a rational case to be made for encouraging 
dividends, it's just that the Bush Administration isn't making it. 
Encouraging long-term stockholding rather than speculative day 
trading ought to reward profitable companies and encourage long-term 
investment, taking much of the volatility out of capitalism. That's a 
case I haven't yet heard, however. I suppose when the Big Lie has 
worked so effectively, there's little need to resort to reason.

But there you have it: the "Quid" to your "Pro Quo".


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- -- 
 jaromil - http://korova.dyne.org - GnuPG key ID: 5B6E6D97
   dyne.org resident hacker, relevant geekness, bitnik IRL


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