Dividends are old-fashioned. But when conditions are getting tough, investors worry about such traditional comforts. And, rather surprisingly, the Bush administration has jolted the US corporate sector by proposing to abolish individual taxes on company dividends. But even after the market's big slide, the S&P 500 is yielding only 1.5%. Microsoft, however, has decided to help by paying a dividend this year for the first time ever.

Governments favour dividends? There is a bizarre contrast here with what has happened in the UK, where Gordon Brown, the Chancellor, abolished pension fund dividend tax relief in a £5bn (€7.6bn)-a-year stealth tax raid in 1997, effective in 1998. The colossal cost to pension schemes was played down at the time, because pension managers and consultants did not want to scare the corporate sponsors. The true deficits are only now becoming painfully obvious. It is worth noting that dividends on the UK's All-Share index grew at an average rate of 7% a year in the decade up to 1998: since then growth has been zero.