Does Microsoft think Kerry will win?

Microsoft just announced a forthcoming dividend of more than $32 billion, the largest ever, here is one brief account, read more here. That comes to $3 a share. Additional dividends and stock buybacks may run over a four-year period, amounting to over $100 billion in cash transfer. You will recall that is the amount that Bush pledged to fight the war in Iraq.

1. Would these dividends have happened without the Bush tax cuts? Maybe not.

2. Does Microsoft fear that Kerry will win and raise taxes on dividends? Probably.

3. Will this help the economy? For perhaps the first time since J.P. Morgan, we see an American company with enough free cash to perform "fiscal policy." However most people now believe that fiscal policy does not do much to stabilize an economy or boost its fortunes.

4. Will the funds now be reinvested in more profitable companies? Maybe yes, maybe no, see number two. Note also that the first funds will arrive just in time for holiday shopping.

5. What will Bill Gates do with all that money? He has already pledged it to his foundation.

6. Will Microsoft ever be a dynamic, growth-oriented company again? Probably not. Why pay a dividend when you have wonderful ways to invest the money? But if there is a way to make the place buzz again, cash starvation (relatively speaking, of course) is a good first step.