Microsoft’s Macro Dollars
It’s official. Microsoft won’t be using its $56-billion cash hoard to buy a medium-sized country. The software giant instead will use its spare change to blunt shareholder criticism of its stalled stock price by issuing a one-time, $35-billion dividend. The payment -- so large that economists probably will be able to track the effect on the U.S. economy -- also underscored that the ongoing economic recovery has been friendlier to businesses and their owners than to workers making the widgets.
Microsoft’s declaration of Christmas in July, and the fact that there are plenty of other cash-rich companies out there, is going to sound strange to heads of households struggling to get by on stunted paychecks. Industrial companies on the Standard & Poor’s 500 stock index, for example, have a collective $555 billion in cash sitting in their treasuries -- more than double what they had before the current economic recovery began. The existence of that corporate gold mine should increase head-scratching among workers whose hourly pay has failed to keep pace with the rising price of gasoline, milk and other necessities, including health insurance. Microsoft’s corporate cash disbursement, believed to be the largest in U.S. history, also should provide competing story lines for presidential campaigns -- proof for the Bush administration that its upper-class tax breaks are working, evidence for John Kerry that workers are stuck with the tab.
This shouldn’t be read as a rap against Microsoft shareholders. They have grumbled for years about the pile of (their) cash that Microsoft accumulates at the rate of about $1 billion per month on the strength of its monopoly on Windows personal computer software. Given corporate America’s track record of shareholder-financed spending sprees -- think AOL Time Warner--the cash may be better spent by shareholders.
That leaves consumers, who make the entire Microsoft venture possible, with just a pittance of consolation. The deadline for a $1.1-billion rebate that Microsoft agreed to pay for allegedly overcharging Californians for Windows software recently was extended to Sept. 28. Rebate forms are available at www.microsoftcalsettlement.com.
The rebate check might at least make a down payment on a good anti-virus program.
