SMALL POLITICIANS, NOT SMALL BUSINESS

2/11/09

Today’s (i.e., 2/11/09’s) Wall Street Journal contained an article (page A4) on the much maligned (certainly in the Insightful Pontificator) provision in both the House and Senate versions of the “stimulus” bill that would allow money losing companies to carry back their losses for five years, up from the current two years, for tax purposes. I have repeatedly attacked this provision as nothing more than handing out taxpayer money to losers.

The Journal explored another angle to this peculiar piece of legislation. As we all know, this provision would especially benefit large homebuilders who are losing money this year and don’t expect to make any money in the near future but who made gargantuan profits in the years leading up to 2007 thanks to the hyper-leveraged economy that characterized that era. However, the Journal points out, small homebuilders do not like this provision at all. Why? Because it gives large homebuilders an incentive to dump undeveloped land and even finished homes at fire sale prices in order to take advantage of the tax break. This puts further pressure on property prices, severely damaging small homebuilders who hold large (for them) inventories of raw land and unsold homes.

Note that this handout to large losers is the provision in the “stimulus” bill for which Republicans have fought the hardest. Remember this the next time some GOP kool-aid imbiber tells you that the Republicans are the party of small business. As I said in my 2/9/09 post “THEY WOULD BE SELECTED FOR CERTAIN PHYSICAL ATTRIBUTES, WHICH WOULD HAVE TO BE OF A HIGHLY STIMULATING NATURE…”, which in turn harkened back to my 1/16/09 post SCREW UP, GET A CHECK!!!:

“…the GOP is really for very large businesses, and only very large businesses. The GOP’s ardent support of this particular “welfare for losers” scheme, however, leads to suspicion that the GOP is the party only of large businesses who consistently lose money.”

Make no mistake (as perhaps the most noted GOPer of the 20th century was wont to say): small business has NO friends in Washington, D.C.