It's hard to tell what's up when the economy improves and dividends increase but you still can't afford to have your teeth whitened

There was something odd about Microsoft's announcement of a special cash dividend.  It's not that dividends are bad thing, but it's been hard enough to understand the whole Bush economic plan and this was just one more decidedly mixed signal.



First there's the unique nature of Bush's "economic recovery."  This has been recovery like none other in history.  Economic recoveries have always brought new jobs, but the Bush recovery brought the unprecedented elimination of nearly a million jobs during its first two years.  And then there is the matter of wage gains which, under the Bush recovery, were about 2%, not nearly enough to offset price increases for key items like energy, homes, health care, and education which soared at a rate of more than 5%.



Of course the Bush recovery hasn't been the same experience for everyone.  Take the dentist (cited in the Washington Times story below) who enjoyed a very different recovery than most of us.  He went ahead and bought a $40,000 laser machine even though his patients were declining elective treatments because they lacked the discretionary income to pay for them.



Why would a small business owner spend good money for an expensive machine he really didn't need?  Easy, the Bush economic plan includes tax cuts that allowed him to take an "accelerated deduction" for the machine.  In other words, you and I and every other taxpayer chipped in a little bit to encourage the purchase of a piece of machinery that was not needed by the business.  (This is the same tax break ... err, uh, "economic stimulus" ... that encourages the purchase of SUVs if they weigh more than three tons.)



Which brings us to the Microsoft dividend.  The company will distribute $35 billion in cash, which, as the Los Angeles Times notes, is a distribution "so large that economists probably will be able to track the effect on the U.S. economy."  And Microsoft is not the only one.  Industrial companies on the Standard & Poor's 500 stock index have a collective $555 billion in cash sitting in their treasuries, more than double what they had before the Bush economic recovery began.  (I think that might be the same cash that we were told they'd use to create new jobs, but it's hard to tell since all dollars look alike.)



Was the goal of Bush's economic policies to allow corporations to amass huge amounts of cash and small businesses to buy unnecessary equipment?  Was the whole point to ensure that the rich can get richer at the expense of the rest of us?



Maybe you prefer Alan Greenspan's explanation that economic inequity reflects a "skill premium," meaning that if you're not on the top rungs of the economic ladder it's your own fault because you lack the education, skills and intelligence to get ahead.



There is one point on which we can agree with Greenspan who, in his own convoluted syntax, said, "I think that the effective increase in the concentration of incomes here, which is implicit in this, is not desirable in a democratic society."



No kidding.  A "train wreck that could derail American society" would be more like it.



Washington Times: Economy improves on unusual track 06/25/2004



Los Angeles Times: Microsoft's Macro Dollars, 07/22/04



Washington Post: Greenspan Says Workers' Lack of Skills Lowers Wages 07/22/04