[Promoted by Liz, because YEAH! What she said!]
Below is a small sampling of financial data from three diverse corporations (Intel, Home Depot and Walmart). See for yourself. Research more if you like, by going to Google and typing in “company name, financials 2011 annual.”
If these companies and others like them are not creating jobs, it is because they don’t want to. Giving them tax-free money won’t change that. (Is it possible that the only entity that will actually create jobs would be government projects for infrastructure, education and research?)
Further, when looking at financial statements, keep in mind that the net profit shown on an Income Statement is NOT the net income reported to the IRS. There are markedly different rules for depreciation between Generally Accepted Accounting Principles required for SEC filing and the rules for IRS reporting: http://www.section179.org/ (on tax reports, a company can write off 100% of new equipment purchased and placed in service this year…. And $500,000 more of used equipment.)
AND yet the corporate world thinks the only way to balance the US budget is to refuse to honor the Federal contract with its elderly—the workforce that built this wealth over the last 50 years, while paying into funds to ease their end of life.
Think about it.
What kind of people are we?
_____________________
Intel (December 2010) Earnings per share doubled over last two years; and cash and cash equivalents: $21,000,000,000 +
http://www.intc.com/intelAR2010/financial/balance/
Home Depot (January 2011) Earnings per share increased 150% over last two years; cash and cash equivalents: $545,000,000
http://www.homedepotar.com/financials.html
Walmart (January 2011)
Net Cash provided by operating activities: $23,643,000,000
http://walmartstores.com/sites/annualreport/2011/financials.aspx
“In fiscal 2011, we recorded $434 million in net tax benefits that resulted primarily
from the repatriation of certain non-U.S. earnings that increased U.S. foreign tax
credits and favorable adjustments to transfer pricing agreements.” – Annual report
Dividends paid to stockholders doubled over the previous 5 years.
I will add the price of housing going into the stratosphere was all a huge factor in the collapse. And the easy money that financed the homes. Especially resales.
Lately almost every home sold in my neighborhood has been a foreigner, most likely US citizens now. They all pay cash for their homes a lesson Americans should learn.
The collapse of the real estate market was more the fact of people refinancing with those adjustable loans that eventually went up to mafia interest rates. Further another part of the collapse was people losing their jobs. NOT DEVELOPERS OR BUILDERS.
And mortgage bankers and wall street cooked up these variable mortgages believing the real estate party would never end. Most who bought the original home from the builder have had no problems unless they refinanced with one of those variable loans.
Eric you blaming the worlds problems on builders and developers is laughable.
And eric if you or anyone involved in mortgage banking or wall street during that period of time you are the problem not builders and developers.
By the way we are not in any recovery by a long shot.
ANd I repeat if no one is buying homes in Loudoun then they would not be built.
If anyone is the blame it is the people moving here not the builder or developer, they are just supplying a product. Just like a grocery store supplies products.
And you will not get economic growth without people and people need a place to live.
I think that would be a fine idea on Raines. But that $115M is a fraction of a fraction that got “spent” during the bubble.
Well, according to OFHEO, Franklin Raines and his cronies snuck away with $115 million in unearned bonuses. If Eric is looking for folks that should be in jail, that would be a good start.
Dan, I would be interested in your answer to Eric’s question. Who has all that money that got pushed out?
Sorry, Eric, I think your single minded quest to place the entire blame on the collapse of the housing market on developers is laughable.
Lee, for someone who is supposedly so well versed about the development industry, you seem to have no concept of the market when you say:
“All I am saying if there was nobody to buy the homes then the builders would stop building such as Florida and California.
Simple as supply and demand. No demand no homes.”
If the market were this efficient, Lee, we would not have peaks and valley’s in the housing market. Prices would never rise or fall because everything would be 100% regulated on demand fluctuations. But what we have here is NOT a simple valley – it is a housing market CHASM and it is simply due to a pyramid scheme put together by the development and associated industries. This is why we have not seen unemployment drop off because (as you said) housing should be leading the way out of the recession. The difference this time is that it is HOUSING that CAUSED the recession. We will not recover fully from the recession until the huge SUPPLY created by the pyramid scheme is sopped up and that may be LONG time coming.
Anyway you look at this, the fault aways flows back to the developers and the developers got off scott free with tax payer funding of their gains. And they are investing that money RIGHT NOW for the next run. THEY ought to be in jail
Actually, Dan, if you investigated the issue even on a cursory level you would know that back when the mortgage backed junk bonds that Moody’s rated AAA were being hyped by the wall street boys, Freddie and Frannie were generally condemned and derided for NOT participating and “missing the boat”. In short, they were late to the game. The pyramid scam was already in place and chugging right along by the time they jumped on board.
But really, your comment illustrates my point. Who got the money Frannie , Freddie, and all the rest were pushing through? Where did that money (that WE ultimately paid) end up? Certainly not in Freddie and Frannie’s coffers. Come on, Dan, work on it a little. Where is the money that was lent out for those mortgages? It certainly is not in the equity of those houses, RIGHT?
In Eric’s world, there is no way the explosive demand for new housing stock was strongly influenced by Freddie Mac, Fannie Mae, and the housing policies created by Washington. Nope it was all Toll Brothers fault.
There’s no way that rising land values, tax policies and better career opportunities contributed to our farms being sold for redevelopment. Nope it was all Toll Brothers fault.
Eric you are making this too complex. All I am saying if there was nobody to buy the homes then the builders would stop building such as Florida and California.
Simple as supply and demand. No demand no homes. So Eric where do you think all these defense and homeland security workers are going to live????? in tent cities.
Our defense and homeland security as I said before took 911 and have used scare tactics against the American public ever since to bolster their profits. And Iraq was perhaps baby Bush pay back for Papa Bush. My dad did business with Papa Bush and he called the family legalized mafia. We had no reason to be there in a full blown out war. And we have phony peace over there if you call almost daily car and suicide attacks peace. And who is watching the money we give them that it does not go into the hands of the few in charge. And where is all the oil from Iraq???????
Afghanistan is even a worse case for the USA a no win situation for us, especially with Pakistan as corrupt a country as it gets with many of the Pakistan people waging their own war against us. History will show we really blew it in those two wars.
“Eric it is not the developers fault for all these homes it is the government gone crazy and stupid expanding thru the Bush years and even worse thru Obama. That is why there are all these developments here, not the developers fault.”
Bull crap, Lee. You think the DC area was the only area in the country where the developers over developed and led the “hot potato” game/fraud? Have you checked out the state of the Florida real estate market. If you follow the dollars from the tax payer funded bailout of the financial instruments you will see that ULTIMATELY that money goes to paying back the developers (what do you think MORTGAGE-backed securities fund after all? Starbuck franchises?)
The developers started the gambit and everybody else in their marketing chain jumped in – it was nothing more than a legal pyramid scheme. There are plenty of books on the subject – read one – “The Big Short” is easy and entertaining (who doesn’t like the idea of a one-eyed Aspergian beating out the rest of wallstreet/bonding companies/etc?)
Save the anti-government moaning also. Realize that the lion’s share of government spending in and around DC is centered on defense and homeland security and unless you want to do away with that protection, you are stuck with it.
I was once a plumber, as was my father, and his father. I understand and respect the skilled and unskilled laborer and the small home builder. My beef is with the Toll Brothers of the world – they screwed us and they got off free and clear. Noticed the “local real estate market is heating up” rhetoric/marketing has started the past few weeks. Toll Brothers must have bought up all the land they need for the next round – line up at the trough!
Hi Ann,
I see. I misunderstood what you meant by ‘broke’. I thought you were referring to the ability to repay debts in the existential sense of “forgive us our debts…”, and subtracted $21B from $14.5T and said uh, uh.
Sure, tax large gains and put the money into sustainable infrastructure and care/maintenance jobs. The budget problem is workable except for an intransigent Republican majority intent on harm. In the reality-based world, there’s a lot of work to do. We may be past the tipping point. The only way to pay the debt is to work it off if it isn’t too much. We can try.
Hi Jonathan,
The $21 Billion on hand at Intel has to do with the fact that the lack of jobs is not for lack of money. There is another reason(s). So refusing to tax these companies will not create jobs.
So, we can tax them a little more and pay our debts, like respectable citizens of the world.
Ann
Ann,
I don’t believe that $21B cash on hand at Intel has much to do with the national debt. We really are living on borrowed money and stolen labor and raw materials.
I also don’t believe that Eric Cantor and company could care less. If McCain was president, the debt ceiling wouldn’t be an issue. The Republicans care about human suffering about as much as they care about the suffering of the chicken that sacrificed its life for their Chick-fil-a.
Leej,
You and I might be able to work something out! ha ha
Each segment gives a little …. A little more taxes from the wealthy. A little less COLA on SS ( I would like to see the SS w/h and tax rate cut by 2% and the ceiling lifted out all the way — accomplishes the “means test” without another bureaucratic test [yeah I thought you’d like that:) ] And helps small business immediately, too. Raise medicare input rates another 1/2 of a point. Not much pain there.
Then tax the top brackets a little more; those who make $400,000 or more, I’d say.
Then bring the troops home, give them a really GOOD GI bill if they go into science and math, especially.
Stop saddling our young people with huge amounts of college debt. This is abuse ….pure and simple indentured serventure.
But don’t raise the age on SS. And don’t “means test” it. It is an insurance annuity premium. If you make it “welfare,” then it will die an ugly death within a generation — and we’ll still look like Calcutta and Rio or America 1932. (worst case scenario: Germany 1930s. People who are desperate look for a scapegoat; it’s human nature.) If you don’t need/want yours, give it to a favorite charity. It’s your money.
The housing market bubble got started as a function of investment dollars that had no where to go after the Dot.com bust plus the extremely low interest rates that Greenspan insisted on promoting no matter what. Then everyone piled onto the speculation and the worst came out in every sector of society, Wall Street, Mainstreet and Govt.
The US govt. runaway debt was a function of being plundered for the Iraq War (especially since no one was asked to pay for it, or, as you say, for the lucrative anti-terrorism contracts either. Military Industrial complex costs us big time, yes).
Maybe we should go to Washington….. 😉
Eric the only reason all these homes have been built is to house government workers and gov contractors. Even the hotels here are supported by the government. Ever see how many military are staying even in our local hotels even out here. Almost everything here is dependent on the government worker or contractor. Even our retail to the dog washing business. Eric it is not the developers fault for all these homes it is the government gone crazy and stupid expanding thru the Bush years and even worse thru Obama. That is why there are all these developments here, not the developers fault. And the high cost of housing is also the fault of the government with all the fees and regulations and the lack of supply here that created the big jump in housing prices. And the school problem is also not just because of houses but there are more kids here per family then just about anywhere in the country. There was a study on this years ago. Even the school system is aware of this phenomena. Nobody can explain it. Just too much of a good thing 😉 Nope you don’t hear that on the local news. 😉
Anne we need to raise the age, but figure a way to help those that can’t wait. Further we need to figure a way to not give social security or medicare to those that don’t need it like me and when I get to 65 some day I will still not need it or take it.
And Anne we lost in my industry so many of the good craftsman like your Dad, What a shame. Although in places like Texas the Mexicans have since I was a kid have become the master craftsman And there are so many talented Mexicans and or foreigner’s it is a blessing they are taking up the slack in some parts of this country. Which you don’t see that talent much here.
Further 911 also gave our government a license to steal from the american taxpayer.
Another reason the country is going broke.
With spending going uncontrolled under the disguise of protecting america. How many billions are unaccounted for in many ways a reckless war against terror. Especially in Iraq. Bush was one the worst presidents and looks like Obama is going to top him as one of the all time worst presidents.
I have to laugh when I hear the DC economy is one of the best economies in the country. Give me a break all paid by stealing money from the hard working average american taxpayer who makes half the salary of the DC government worker.
Anne it is fine to bring up figures from some of americas most successful companies
and by all means get more tax dollars from them. But it is nothing in the big picture how much this country needs to run it’s bloated programs and workers.
And to finish of course people here don’t cuts, because they don’t want to end up like a lot of america broke and destitute. So I guess the few here don’t want to share in the pain a lot of the country is feeling. Does not seem right does it. Kind of like those other counties around the world where the government people and the rich live like kings and the rest suffer.
Personally, I like the construction industry …. my father was a master carpenter. I was always proud of the houses and (later) cabinets he built. A really really hardworking professional. As he aged, though, he could not continue the strenuous heavy labor involved in this kind of work. And while he and my mother were very frugal, as well as built our home with their own two hands; never took a real vacation; grew a garden; sewed our clothes; repaired our cars — put me through college (with help from my own job and scholarship)… they could not have made it until an older age to wait for social security and medicare to kick in. And they could not have possibly saved enough to pay for eldercare and living expenses without these checks coming back to them from their years of work. (My mother also worked full time.)
So, how will we be in relationship to this demographic in the future? Raising the age of social security and medicare will not be an answer for many laborers. Some people already work 2-3 jobs to pay for the high rents and living expenses. Save?
Their own fault? In some cases, yes… in others no. It’s not your fault either. But, do you really want to live in a country that looks like Brazil? or even India? You’ve seen the images of Rio and Calcutta. That’s what eventually happens when you discard any social safety net or any sense of community interdependence.
It’s a tough question… and I don’t have an easy answer, but we should consider it carefully. We certainly like the cheap prices at Walmart that their cheap labor provides to us. And I’m sure that Walmart investors like the dividends on the billions of dollars in profit, too. So what we are really doing is transferring wealth to some people (investors; day traders) who may not work at all.
Quite a delimma.
Lee, you say that we will not get out of this recession (well really we ARE out but I think you mean unemployment will not go down) until housing comes back and I think there is truth to that as it seems that HOUSES are the only things we manufacture anymore in the US and that industry is largely who employs the less eduacted among us traditionally (that and the service sector). But what you DON’T say is that it is the development industry that CAUSED the recession as well and it is the fault of the DEVELOPMENT industry that we have not risen from the ashes yet – they were greedy, plain and simple, the ultimate get rich quick scheme. They over built houses (we could be a decade or more sopping up the slack in teh housing market) and then over charged for those houses selling to people they knew could not afford the mortgage with a promise of a quick (1-2 year flip) in an artifically appreciating market – kept artifically appreciating by their own hype and partners – real estate brokers, mortgage companies, underwriters, PLUS the very wall street financial institutions you vilify above – bond raters, hedge fund managers, etc. This was the greatest heist in history and WHO made off scott free? The developers! And what are they doing right now – re-investing their gains in new property for the next round. Who ended up paying the bill after the game of hot potato? We did – the TAX PAYERS ended up paying the bill passed down by the developers which you say are so good for America and SO efficient. Thank you very much but with those sort of criminals potentially in charge, I will take an ineffcient government worker anytime.
BTW, the next buble is in commecial development and its coming soon. Even though demand is flat – they are still building stripmalls like banchees and it si just a matter of time until the slack in THAT market becomes obvious and the bottom falls out of the commercial development sector.
sorry I don’t know how those duplicate posts happened
[I removed the duplicates -Liz]
Well as far as social security and medicare the age needs to be raised. We are living longer.
We don’t do enough or people don’t do enough to keep themselves healthy and people are getting heavier especially children. There seems to be one news report after another on that lately. Personally I will never collect medicare or social security and others should do that that if they can.
And I do believe the government has grown way too big and many duplications everywhere.
I remember many years ago I had a major developer client in Houston that I designed homes for. Well he was required to build a bridge into his development somewhat like the Gloucester situation. Only he had to build it up front. But he only had to build two lanes of the four lanes. He offered to Houston to build the entire 4 lane bridge at his cost, Houston turned down his offer. Several years later Houston had to build the second identical span. It ended up costing the taxpayer almost double what Don Hand the original developer built the first identical bridge for.
That was one of my first lessons on how inept the government is in controlling costs.
Too many layers of bureaucracy to get anything done efficiently. That is why I said it takes three government workers to do the job of one private sector worker.
America is BROKE and we can not spend our way to prosperity. A government worker can not pay for themselves thru their taxes it comes from private sector Americans who on average make half of the average government worker.
Don’t get me wrong take away tax benefits for healthy corporations and the wealthy.
And the biggest culprit in all of this is the way wall street has evolved. That is sickening. I have neighbors bragging how much money they make off wall street by their day trading on things that produce nothing like derivatives which is nothing more then gambling. No wonder America is falling behind in creating and producing real products. Apple a great example of a American company that creates and produces real American products. Wall street is NOT.
Leej, thank you for engaging.
What “you are hearing here” is that the assertion by some that the corporate world would create more jobs if only they had more money, is simply not true. Job creation and unemployment are currently more complex than that.
Of course I don’t think the government should “take care of us,” but I think they should honor their contract to pay out the social security and medicare benefits (which people…myself included… paid into for 50 years); just like any annuity or insurance premium should be honored.
I am a Capitalist, make no mistake. But I do see that there is a public interest that cannot be covered by a business model. It’s a matter of balance. I’m sure we both could spend the rest of our lives pointing out fraud and abuse in all sectors. That is not helpful. What could be helpful would be to identify the “public interest” and discuss reasonable ways of providing for it.
If you want to, in good faith, engage in that discussion, I’d be pleased.
So what am I hearing here??????? The government should take care of us all ????
I can tell you all until the home building industry comes back there will be no recovery.
We are drowning in government jobs. Which is causing our debt to go thru the roof.
And when the average government salary is double the average american salary we are in extreme trouble.
And are we seeing any recovery by the government trying to buy the recovery. Not a chance in most of america.
And our government whether national or local is horrible about controlling costs.
What is the story “” it takes 3 government workers to do the job of one private sector worker. 😉