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NOL carry-back included in stimulus package

As you read this today, President Obama will be signing the $787 billion stimulus package. For boating, thereís not much good news and some bad.

The good news is it contains the net operating loss carry-back provision that, among other things, NMMA, MRAA and others worked hard lobbying for. The bad news is the carry-back provision ended up being limited in the stimulus plan to companies with sales under $15 million. While overall disappointing at this reduced level, it will still likely help a lot of our dealers. But, unfortunately, it falls too short to be good for most of our manufacturers.

If youíre holding out hope that some other goodies for boating still might be discovered buried in the 1100- page package, forget it. Moreover, let’s forget about debating whether this stimulus package is good or bad, or that it will do better than the plethora of other government actions weíve seen since 2007 Ė all of which have bombed so far.

Hereís the simple fact: the biggest economic issue facing the nationís businesses today is obtaining credit. Last week, Treasury Secretary Timothy Geithner told us the credit noose has tightened. Wow, that was a revelation! Letís hope Geithner and Obama have more insight than that, as well as a convincing banking program to undertake soon.
Maybe Iím not seeing things clearly but it seems ever since the banks were told that the federal government was planning to buy up their rotting assets Ė you know, the ones they should never have gotten into in the first place — they’ve been hoarding money. Itís been reported that banks have been holding onto their bad assets, even turning down bids from investors offering to buy at deep discounts, waiting for a better deal from the government. Moreover, government officials have apparently nodded in agreement if the hypocritical Senate Hearing with major bankers is any indication. Seems they want to live on government life support!

The result is banks trigger a cycle. Businesses need operating capital but find banks unwilling to expand credit lines or, worse, pulling them. This forces the business to cut costs (layoffs). Higher unemployment could mean less business. So, the banks tighten the credit even more based mostly on their perception of what might happen. Repeat cycle.

If our new President really wants to move this economy forward, the Obama team should address the credit crunch now and, hopefully, with a better idea than building a train from Harry Reidís Las Vegas to Nancy Pelosiís California!

Comments

21 comments on “NOL carry-back included in stimulus package

  1. charles

    Norm,
    Once again, prescient observations. Note just back from Miami. Be interesting to see what the dealers have to say in private about the show. I spent most of my time at the brokerage show watching and listening. To get your 100 footer off the balance sheet, figure at 30-40% haircut off of year ago prices… and that is if you can get an offer at all….

  2. arch

    Geithner is an idiot. He was a joke as head of NY FED and the Lehman and Bear Stearns fiasco happened. Even before that, insiders thought very little of him.
    So you have him (a tax cheat) running the Treasury, Panetta (to the dismay of many top democrats) running FBI, and we are going into more debt to try and pulls us out of a recession caused by us going too far into debt.
    Obama is a HYPOCRITE. He used fear to push the stimulus through, then doesn’t give lawmakers time to even read it. He promised during the campaign to use hope, not fear to push his agenda.
    He defends Daschle, even after the tax problems hit the press. Then after Daschle decides to withdraw, Obama says we can’t have 2 sets of rules. Yet, at the press conference in Ft. Myers, he tells the lady that asked a great question that if he couldn’t hire people that have made mistakes, then he wouldn’t have anybody to hire. WHAT A CROCK. Is this not exactly what is wrong with GOV’T and a perfect example of Chicago Style Politics?
    He is doing what he has always done, tells people that they want to hear and play both sides of an issue. His negative numbers on gallup are up about 70%. People who aren’t drinking the KOOL AIDE are starting to see the real Obama.

  3. arch

    WOW, I need to start proof reading my typing. I”m sure some Obamamaniac will associate my poor grammar in that post with a lack of intelligence. That would be the LEFTIST thing to do, no doubt.

  4. Jeanne czel

    Explained perfectly Norm. It isn’t that hard. Bank monies available to qualified manufacturers, dealers and consumers will do more to generate confidence and responsible spending than any purported stimulous package that has a finite destination. Nancy and Harry are riding the train to nowhere!

  5. Steve

    Norm, you are right on target. Manufacturers are having difficulty selling product to dealers because there is not the necessary funds from wholesale credit sources and then dealers are faced with limited retail customer financing from banks and credit unions. Until the Fed gets monies in the hands of these sources we are not going to see much recovery. Why can we see these problems and our so called experts are blind?

  6. Larry Keeter

    Want real stim cut cni tax eliminate capital gains and aux. minimum tax. You’ll see a giant whirlwind of capital investment like never seen in this country

  7. AnonymousBob

    Arch:
    Your grammar points to a lack of complete intelligence! That was too easy of a target to pass up!!! No worries – all in jest!

    As we’ve all stated before, the banks are doing now what they needed to do a long time ago. Because of the freeflowing creidt of a few years back, the tightening now seems so much more drastic in comparison. Now, I do agree that the financial institutions pulling out of financing completely doesn’t do any of us any good. Credit keeps the wheels of commerce turning, but it has to be done intelligently. Can’t say the same about the stupid stimulus package! I thought we all operated in a free market – I wish we really did. Next up for nationalization: EVERYTHING!

  8. Schwarzel

    I’m so mad about this “PORK-U-LESS” bill. We the working, get SCREWED.The boat dealers get hammered. I see nothing that helps our industry nothing at all. I for one bet in the end this bill will cost all of us. Tax cuts would have helped. People who have a few extra bucks would have bought boats.
    But once again Mr. Obama is taking us down the road to destruction. Look happens when you put the kids in charge.

  9. Rick

    With all due respect to Mr. Schultz and the rest of the posters … this partisan whining and finger pointing is accomplishing zero. Nothing. Nada. It’s time for everyone to grow up and recognize that our national obsession with accumulation (including boats) has gotten us into a whole lot of trouble. As a result, bankers and boat dealers and guys like me who sold parts have all contributed to the fallout by trying to convince people that it was their right and their duty as Americans to squander what money they had on toys and 5,000 square foot suburban mansions (paid for with interest only loans, if that’s what it took. This ain’t something that’s going to go away if the folks (that still have jobs) get a tax break. The smart ones will have gotten some common sense, and will have buried THAT windfall under their mattress. If you want to point fingers, perhaps, it might be smart to point them in your own directions.

    We’re all complicit in this situation, and unless we all rise above petty partisan name-calling and stop this totally non-productive whining aside, then we get JUST what we pay for. Instead of complaining that Obama’s not fixing your life for you, why not try to figure out a way that you can help him do his job? It takes a lot more energy to offer up some positive solutions, besides bad mouthing the guy that’s taken on this monumental task. Grow up, guys.

  10. dave boso

    You know what, I don’t want Obama, or anyone else to do anything for me, I just want them to get off my back, get out of the way and let me do business the way I know how. I was selling boats and engines when Obama was in diapers. I don’t need nor want any stimmulis, I don’t want a billion,. Every time I turn around or sit at my desk I’m writing a check for taxes, Fed, State, Local. too much too much…After our last flood I had a guy from Fema in here wanting to “Hep Me” I chased him out the door , I didn’t call him he just stopped by. There was a guy from the Red Cross just stopped by while we were cleaning up wanting to know if we needed anything? I said how about some donuts and coffe, He said “oh I have sugar I can’t eat donuts” I pointed at the boys cleaning Mud and said ” well they don’t have sugar”… That just the thing I don’t need from goverment or anybody. In my 42 years I have always remained strong about business, enthusiastic and more than willing to go the extra mile to do things right. I don’t need a bunch of DC flunks comming around telling me how to do it right, As long as we don’t take trheir “hep” we won’t have to do it their way.
    By the way the next time the Red Cross guy came around he had donuts, My guys looted his truck…….

  11. Boatman11

    Americans are going to have to get used to a lower standard of living for years to come. Less discretionary and leisure purchases will be the norm. The Marine industry has to realize this fact, and deal with it. For many in the marine industry, Glory Days have passed you by……………

  12. Arch

    Good one GORDY!
    Hey Rick, you are missing the point. Obama, like anyone else in public office, should be judged and held accountable for their actions. I”m not going to keep my mouth shut when I know he is making mistakes. I voice my opinion when I feel people in public office are making mistakes. I haven’t contributed to the fall out. Everything I own I pay for, or finance. But I pay for my bills, although it has been a bit tougher this year. I haven’t asked anyone for a penny of help. Nor do I talk people into buying something they don’t need. They come to me and TELL me what they want, and I always have the customers best interest in mind.
    You are also wrong saying that petty finger pointing is non-productive. I guess laws are non-productive too since they don’t keep people from breaking them. And you are WRONG by gargantuan proportions when you think we are complaining about Obama NOT fixing my life. Quite the contrary Rick. My life is fine. I don’t want help and don’t need it, but he is going to force feed it to me anyways. And if he isn’t forcing it down my throat, he is going to steal it away from me. THAT, and exactly THAT is what is wrong with it.

  13. Rick

    Arch,

    Thanks for responding to my premise that petty partisanship is non-productive. I agree with you that it is our right and DUTY to speak out when we feel that our elected leaders are following the wrong path. On the other hand, when responses degrade to the point where the attacks are aimed at character, rather than policies. At that point, the motives become disingenuous and inappropriate.

    While none of us who have tried to act in a fiscally responsible manner appreciate seeing our (or our children’s) monies used to bolster those that for reasons of greed or ignorance, have put us in the ditch. But, as you noted, yourself, in a comment in January, “In the short term, itís worst NOT to inject the $, but either way, itís a BAD BAD thing.” I would agree with you wholeheartedly.

    Just so I understand what you’re saying … you believe that finger pointing is productive? It’s a quantum stretch to compare that belief to the ineffectuality of laws (by your standard). Laws are effective because they DO dissuade the vast majority of our culture from committing them. Just as civility in discussion makes the finger pointer that much more irrelevant.

    So, Arch, what do you want Obama to do? Nothing? Repeat Bush’s $300 giveaway and hope that there are still folks out there dumb enough to spend it on Playstations and bottom paint instead of saving it?

    I’m pleased that your life is fine. I appreciate that you have lived and operated your business within your means. I understand that you want government to stay out of your way, and let you do your thing. Unfortunately, so many that were allowed to do business without care or restriant blew it and it’s affected all of us. So, what’s the logical solution? If you can provide me with that, I will happily admit to my naivete. Otherwise, I will continue to believe that you and those like you who offer nothing but the same-old derivative Rushisms are simply a part of the problem.

    Please feel free to prove me wrong.

    Respectfully

  14. Arch

    To RICK (and anybody else that cares about this country)
    First, let me say THANKS for keeping it civil. You must be in independent or Republican. LOL.
    Secondly, if it looks like my criticisms of Obama are an attack on his character, they you are seeing 20/20. I’ve questioned his character from day 1, and still do. Here is a definition of character…
    “We define character as the sum of those qualities of moral excellence that stimulates a person to do the right thing, which is manifested through right and proper actions despite internal or external pressures to the contrary.” If that is the definition of character, and knowing what I know about Obama’s past, who wouldn’t question it? There is nothing disingenuous or inappropriate about it.
    Finger pointing is just that. It matters not how productive or unproductive it is. If somebody in office does something wrong, and our country has empowered the person to make good decisions, and knowing my children’s futures depend on these decisions, then I will point fingers when I feel a bad decision is made.
    For the record, I think Rush Limbaugh is an arrogant pompous talk show host and I always have. I’ve NEVER liked him, even though we probably agree with each other on 90% of the issues. If I’m using a “RUSHISM”, then I got it from somebody else.
    What should we do? I have more ideas than this website has space, but I’ll throw out a few.
    1- STOP SPENDING! Spending is what got us into this mess and it will not get us out. At some point, we will have to pay the piper. I would rather suffer a little more now, then buy my way out only to suffer more down the road.
    2- CUT OUT THE PORK! This new bill has 9,000 earmarks. I”m sure some are legit and probably even a good idea, but we shouldn’t be able to buy what we can’t afford. There is so much waste we could cut out and save hundreds of billions.
    3- DON”T CUT TAXES ON BOTTOM 50%. Bush already cut them considerably. Now, Obama, LYING to the public by calling it a tax cut, is actually going to give tens of millions a tax rebate check. Here is the kicker, it will be to millions that don’t even pay taxes. This is a fact. It’s called WEALTH RE-DISTRIBUTION and this is only one way of many ways he is doing it.
    4- STOP LYING TO THE NAIVE PUBLIC! Obama plays 2 sides to everything, telling people what they want to hear. When Daschle admitted to tax problem, Obama defended him and stood by his side. A day or two later, Daschle withdraws and then Obama says we can’t have 2 sets of rules. HELLO! That was a LIE and done only for damage control. I can give you MANY MANY examples of the lies, inconsistencies, and rhetoric from Obama the last few weeks. He lied about comments made by Caterpillar CEO concerning jobs. Another example is how negative he got on the economy and direction of the country, using extreme pessimism and FEAR TACTICS to push the stimulus through. Yet he said repeatedly during the campaign he would NEVER use fear tactics to get what he wants. At least BUSH did it honestly by warning us about an enemy that WAS real and DID want to kill us. Obama didn’t even give lawmakers time to read the 1000 page document. FACT! He just wanted to look good and decisive. Another example of doing something wrong, to look right.
    5- HORRIBLE Appointees! Geithner- the guy is a JOKE in financial circles and he was in charge when Lehman and Bear Stearns went under. 3 or 4 of them are TAX CHEATS, including the guy now responsible for the IRS. And what about Panetta? Many of the senior democrats even criticized that appointment. It was a joke, but Panetta was the only semi-qualified one Obama could find that agrees with Obama’s definition of torture (standing for extended periods, loud noises, sleep deprivation, embarrassment, and being yelled at). If Obama had any military experience, he might know what TRUE torture is. Pathetic, and multiple polls in this country show that 2/3 of US citizens agree with Bush’s definition of torture, rather than Obama’s.
    6- CALL OUT ACORN and other groups that you (Obama) have emboldened. Check out this link
    http://hotair.com/archives/2009/02/23/video-fox-news-host-rips-acorn-chief-over-reclaiming-foreclosed-homes/
    This is the kind of nonsense going on all around the country.
    7- another STOP LYING and talking non-sense. Obama does this better than any president in history. His speech tonight was brilliant, due in no small part to his incredible oratory skills. But when you look at the content, direction, and ideas, most of it stinks like Shanghai at low tide. I was looking at the blogs during the speech, and people CONSTANTLY kept talking about how amazing Obama is, how good he makes them feel, how great it was to hear a president that can actually speak and complete a sentence, how proud they were of him, how elegant he is, etc etc. That is all superficial. VERY VERY little about content and substance was mentioned. It’s pathetic. Here is the fact check link from yahoo concerning the speech. Not real good if you ask me.
    http://news.yahoo.com/s/ap/20090225/ap_on_go_pr_wh/fact_check_obama

    Rick, you are obviously a very smart and pragmatic guy. My response here was not to ONE UP you or show any naivete on your part, I’m strictly addressing the questions/comments you made. I want what is best for our country, and if that means Obama being a great President, then so be it. I’ll be the first to give him all the credit. All I can say as of right now is that I don’t like the direction it’s going so far.
    We all have our opinions, right?
    I’ll leave you with this quote….
    “The greatest dangers to liberty lurks in the insidious encroachment by men of zeal, well meaning but without understanding.”
    That, my friend, says it all.
    Good day.

  15. Pam

    I have read all your emails and agree with most of them. I was listening to a Christian channel on the radio today and the host said that Obama had turned the thermostat up in the White House to 80 degrees because he was from Hawaii and wanted to wear his T-shirts. One of his aides said you could grow orchids in the white house. Now this comes from a President that told all of us to buckle down and conserve energy so we wouldn’t be so dependent on foreigners. There is a lot of this such as Al Gore’s home is Tennessee using 20% more electricity than all houses that size.
    Enough on that. What would happen if all of us that own small businesses got together and decided to do a shut out. Remember when the Mexican labor force all quit for one day to show us what a stronghold they had on us. Some how our politicians have forgotten what really runs this country, pays their salaries and takes care of this nation THE SMALL BUSINESS OF AMERICA. So what if we all decided to stay home one day and all our employees and I mean every small business in America. That way the politicians wouldn’t have their maids, servants, chauffeurs, places to eat or be brought to them, their dry cleaners, their small jet pilots and list goes on. Do you think we could shut down America one day and show them that we are tired of them only thinking of the Big Boys out there and you better take a look at all of us. We are what runs this country. I can almost guarantee you that everyone they are bailing out business or personally is got a foreign company to not have to pay any of our taxes anyway. And that leaves all our businesses footing the bill for everything. Well it is something to think about. If you want to start the ball rolling then pass then on and let’s set a date. It is going to take a huge movement across the nation to get it done. But we just might get their attention. A little voice can go a long way when it is amplified.
    One other note. We also need to start a petition that says we get to vote on when our politicians get a raise, not them. Does your employees tell you when it is time for their raise and put in to effect? No way, neither should the politicians that work for all of us? But that is another issue.
    What do you say on the Voice of Small Businesses???

  16. arch

    I don’t like the idea. These types of protests have been ineffective in the past and accomplish nothing.
    I do think a million man march will be in order if Obama doesn’t stop the bleeding soon. How historic would that be?

  17. AnonymousBob

    Pam:
    Really, now, you actually believe that drivel you heard on the radio??!! Did you do any research to confirm before posting? Think about it…

    I agree with Arch that the protest won’t serve any real purposes. Plus, think of the cash flow that you’ll lose by being closed. That’s one of the last things dealers can afford right now.

  18. Pam

    BOB:
    There are a lot of things out there I wouldn’t believe, but a legitimate Christian Channel. Cash Flow is an issue to everyone, but if we don’t do something then none of us will have to worry about cash flow. Look at the stimulus package that got passed without getting read. I don’t know about you guys but the new cobra laws are devastating to small businesses. That is just the first thing I’ve seen that got passed under the radar. And this NOL we are still waiting on them to finish the forms to get results. I pray every day they we remain a viable country and now more than ever we need to get together and do something. Maybe a walk out is not the way, but you got any better ideas. I’m listening.

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