November 5, 2009

Cash Crunch, Press Silence: As ObamaCare Advances In Congress, Uncle Sam’s Collections Continue Their Steep Drop

The August Congressional Budget Office budget forecast for the fiscal year that began last month says that Uncle Sam will take in $2.264 trillion from October 2009 through September 2010. That’s an increase of 7.6% over fiscal 2009′s intake of $2.105 trillion.

Though it won’t be official until Tim Geithner’s crew releases its Monthly Treasury Statement next week, it’s virtually certain that the government’s collections will open the year in a deep hole compared to last year, and probably well behind what CBO expects.

Take a look at this compilation of key items from October’s final Daily Treasury Statement, compared to the actual results from October 2008 and 2007:

USTreceiptsOct09and08and07

This downward spiral continues a trend that began in the summer of 2008, as the public and especially businesses, entrepreneurs, and investors began comprehending the horrid economic implications of a Barack Obama electoral victory (assumes that Oct. 2009 will come in at $135 billion; excludes 2008′s stimulus payments, which the government treated incorrectly in my opinion as reductions of receipts):

UST12moTrailingRecs1207to1009

In the intervening year since the election, fear and uncertainty have spread to consumers in general, which of course has significantly suppressed economic activity and federal collections resulting from it.

It is ironic to say the least that Congress and the Obama administration are glorifying the idea of a “public option” that would ultimately lead to government-run health care while Treasury receipts continue to shrink. If the private health insurance market disappears, so will its taxes.

To name just one example, Aetna’s recorded income tax expense on its financial statements for 2005-2008 (including state and local taxes) averaged roughly $900 million per year. Put the company’s health insurance segment out of business, and a large portion of those taxes would stop coming in, digging the country’s and various states’ debt holes that much deeper.

The establishment press has paid very little attention to fiscal 2009′s drop of 19.5% in receipts from economic activity, so I expect similar treatment of October’s continuation of the trend. It would appear that they don’t want any unsettling news getting in the way of the statist agenda.

If there’s a reason to believe that this ongoing decline won’t continue as long as the current bunch remains in charge and continues doing what they’re doing, I want to know what it is.

Cross-posted at NewsBusters.org.

Wholly Ineffective: Lefty Boycott of Whole Foods Has No Noticeable Financial Impact

WholeFoodsLogoHere’s news you can virtually guarantee won’t get noticed by what remains of the establishment media.

Whole Foods (WFMI) announced its financial results for the quarter ended September 30 yesterday. The quarter closed about 50 days after outraged leftists called for a boycott of the grocery chain to retaliate for a Wall Street Journal op-ed written by CEO John Mackey. In that column, Mackey identified “Eight things we can do to improve health care without adding to the deficit,” asserting that:

The last thing our country needs is a massive new health care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health care system. Instead, we should be trying to achieve reforms by moving in the opposite direction — toward less government control and more individual empowerment.

Well, if there’s so much support out there for statist health care, you would think that the Whole Foods boycott dedicated to punishing an opponent would have had a significant impact on the company’s most recent quarterly results.

You would be wrong:

Whole Foods Market Inc.’s (WFMI) fiscal fourth-quarter earnings soared as revenue climbed and unusual items took less of a bite from the bottom line, leading the high-end grocer to declare that its sales have “officially turned the corner.”

The company expects the sales growth to continue in its new fiscal year, with increases of 5% to 8% in overall sales and 1% to 4% in comparable-store sales. Whole Foods noted that total sales are up 5% in the first five weeks of the fiscal year, with comparable-store sales up 1.6%. Analysts were recently projecting a sales increase of 6% to $8.54 billion, according to Thomson Reuters.

…. With shoppers looking for bargains and grocers engaged in a full-scale price war, Whole Foods has been balancing its upscale image with a value message in its marketing. While it has made progress–offering meals that feed a family of four for $15–the company has still pared store openings and suspended its dividend.

For the quarter ended Sept. 27, Whole Foods reported earnings of $36.4 million, or 20 cents a share, compared with $1.5 million, or 1 cent a share, a year earlier. The latest quarter included a gain of 1 cent a share related to inventory accounting, while the year-ago included a host of charges that brought earnings down about 15 cents.

Revenue climbed 2.3% to $1.83 billion. Comparable-store sales fell 0.9%. Meanwhile, identical-store sales, which exclude eight relocations and two expansions, dropped 2.3%.

Don’t be misled by the dip in same store revenues. The Consumer Price Index fell by 1.3% from September 2008 to September 2009, and any business that is managing to stay ahead of inflation/deflation, especially one that this is used to selling at the high end, is doing just fine.

WFMI is taking a hard hit today, but it has everything to do with dilution of shareholders by an investment group, and nothing to do with the company’s top or bottom lines. Obviously then, it has nothing to do with the press-hyped but clearly ineffective boycott. Even with the plunge, as of 12:15 p.m. WFMI was trading above where it was when the boycott was called.

If the boycott were at all relevant, the Associated Press surely would have mentioned it in its 550-word report on the company’s financial results. But it didn’t, instead telling us that the results “came in just above Wall Street expectations.”

The boycotters and their leftist sympathizers can point to one “accomplishment”: Barack Obama’s, Nancy Pelosi’s, and Harry Reid’s “uncertain economy made some investors nervous about its (the company’s) outlook for the year.” One element of that uncertainty is whether, despite CEO Mackey’s warning, the President and Congress will drag the nation kicking and screaming down the road towards statist health care.

The start of the Whole Foods boycott, which apparently peaked at 23,000 supporters, was covered by the New York Times, the Washington Post, ABC News, and even the BBC. Does anyone think any one of them will do a follow-up on the non-results?

By contrast, the press almost completely ignored the American Family Association’s ultimately successful 2-year boycott of Ford Motor Company that ended in March 2008. That boycott had over 780,000 petition signers and dozens of high-membership supporting organizations, and is the main reason why Ford’s sales results consistently trailed rivals General Motors, Chrysler, and the overall auto market during that time.

It’s impossible not to conclude that the establishment media chooses to cover or not cover boycotts based on their degree of political correctness, and not on their level of participation or demonstrated effectiveness.

Cross-posted at NewsBusters.org.

A Quick and Unconditional Congrat ….

Filed under: Taxes & Government,Wide Open — Tom @ 11:29 am

…. to Ohio blogger and former Wide-Opener Jill Miller Zimon of Writes Like She Talks on her election (scroll about halfway down) to Pepper Pike City Council.

Lucid Links (110509, Morning)

Filed under: Lucid Links — Tom @ 7:50 am

Last night I noted that the Associated Press finally recognized, nine months after yours truly noticed it, that “Ford has benefited from consumer goodwill because it didn’t take government bailout money.”

The general theme of the AP’s overall coverage of October’s auto sales (“Auto sales show industry beginning to stabilize”) is that last month’s annualized volume of 10.5 million vehicles “signaled that some consumers are starting to spend again and the sputtering economy is beginning to pull out of trouble.”

Writers Tom Krisher and Dee-Ann Durbin also included this “interesting” statement:

Analysts said the figures are good for a normally weak October, but they’re still far short of the 17 million annual rates from the late 1990s and early 2000s.

How convenient. Of far more relevance is the fact that sales in 2007 and 2006 were 16.14 million and 16.55 million, respectively, barely short of the wondrous 17 million units sold many years before that. These people can’t seem to help themselves, instinctively believing, or wanting readers to believe, that we had a lousy economy during most of the Bush 43 years.

We didn’t. We’ve had a lousy economy since June-July 2008. That’s when the POR (Pelosi-Obama-Reid) Economy began.

The POR Economy is one where annual vehicle sales “stabilize” at 10.5 – 11 million units, about 1/3 below where they were just two years ago, and the apparatchik press tries to make us believe that’s acceptable, at least for now. Sales will likely stay right there, or barely budge higher, for most of the next 12 months, as long as this administration’s economically ruinous efforts continue. If this bunch gets its way on health care or cap and trade, look out below.

_______________________________________________________

Do you remember all those grade school videos produced during Bush 43′s administration singing W’s praises? Neither do I, because, appropriately, there weren’t any. There have been 11 such videos (at least) produced since Barack Obama took office, including one at the Barack Obama Elementary School (I’m not kidding; scroll down at link) in Long Island, New York, so renamed after the 2008 presidential election.

_______________________________________________________

Well, this is interesting“Lesson learned: NRSC pledges to stay out of contested primaries.”

It would be nice if the folks at ORPINO (Ohio Republican Party In Name Only) would someday decide to do the same. It’s almost too late this time around. Though it’s not a formal thing, ORPINO is clearly behind totally unacceptable Mike DeWine for AG and obviously unfit Jon Husted for Secretary of State at the expense of self-evidently superior sensible conservative competitors Dave Yost and Sandy O’Brien.

An official declaration of neutrality to clear the air would be nice. I don’t expect it. That’s why they’re called ORPINO.

Positivity: Mississippi men reunite 40 years after war rescue

Filed under: Positivity,US & Allied Military — Tom @ 7:03 am

From Laurel, Mississippi:

NOVEMBER 1, 2009

Fate brought them together in the jungles of Vietnam some 40 years ago.

Love, respect and admiration brought Vietnam veterans Ralph Kenney and Kenny Woodward back together.

Kenny Woodward of Pachuta recently traveled to the North Laurel home of Ralph Kenney to reflect and personally thank him for being among those soldiers who saved his life, as well as other members of the Charlie Company, who were surrounded by enemy soldiers on March 26, 1970.

Neither man knew the other was from Mississippi back then. In fact, Kenney didn’t know the names of those rescued by Troop Alpha, of which he was a member. Nor did Woodward know the names of rescuers.

“I can’t tell you how surprised I was to learn that he lived only about 25 miles from me,” said Kenney, who is owner of Laurel Fire & Safety. “It’s a small world. I had no idea that I would ever meet any of those guys. And after 40 years, I surely never though we would be honored by the president for what we did all those years ago.”

Kenney, 60, and other members of Troop Alpha, 11th Armored Calvary unit were recently awarded a Presidential Unit Citation during a ceremony in Washington. Troop Alpha fought what has become known as “The Anonymous Battle,” which resulted in the rescue of a company of trapped fellow soldiers.

While Kenney said Troop Alpha did what it was trained to, Woodward contends they didn’t have to risk their lives to save Charlie Company.

“They were not ordered to come after us,” he said. “It was a decision made by Capt. John Poindexter and his soldiers.”

Poindexter, now a Houston, Texas, businessman, was instrumental in Troop Alpha receiving its citation. He assumed his men had been recognized for their heroic rescue.

“When he discovered many of us had not been recognized, he started pursuing it,” said Kenney. “It was quite a surprise when I received the letter stating that we would receive the citation. It’s quite an honor.” ….

Go here for the rest of the story.

It’s About Time: AP Admits Ford ‘Has Benefited From Customer Goodwill’ For Not Taking Govt. $

FordYesGMchryslerNo1109Well, it only took them the better part of a year to pick up on what yours truly first noted in early February (at NewsBusters; at BizzyBlog), and what anyone with eyes has surely known for months. But the Associated Press has finally acknowledged it — or at least it’s the first time I’ve seen the wire service do so.

In the eighth paragraph of their article covering October’s auto sales, AP reporters Tom Krisher and Dee-Ann Durbin recognized part of the reason — and perhaps the most important reason — why Ford has been cleaning the clocks of General Motors and Chrysler all year long:

Ford has benefited from consumer goodwill because it didn’t take government bailout money or go into bankruptcy protection, as General Motors and Chrysler did.

Though October seems at first glance to have turned out somewhat differently than the first nine months of the year for Detroit’s sort-of Big 3, that really isn’t the case:

  • Yes, GM scored its first year-over-year improvement in 21 months (+5.6%), but that was after a 45% year-over-year decline in October 2008.
  • GM’s unit sales increase in October over September, which was marred by a post-Cash for Clunkers hangover, was only 13.5%. The analogous gains at both Ford and Toyota were over 20%.
  • Chrysler only eked out a 5.8% improvement from September to October, and has been consistently selling fewer than 70,000 vehicles per month.
  • GM is overdosing on buyer incentives, which the AP pair said averaged $4,100 per vehicle. Though I don’t have specific comparables for the competition, Edmunds reports that industrywide incentives were on average far lower. GM’s profitablity has to be suffering (more likely it is hemorrhaging cash), unless its Chinese operations are somehow propping up North America.

Ford reported a profit of almost $1 billion in its most recent quarter. GM and Chrysler should be reporting results soon — I think. GM passed on telling us what happened in the quarter that ended in June, but promised that it would issue full-blown financials covering its emergence from bankruptcy through September 30, even though (brace yourself) it said that as “a private company,” it doesn’t really have to. Chrysler’s results will my be incorporated into the financial statements of minority owner Fiat, and depending on how presented may or not be readily separable from Fiat’s other worldwide operations.

Regardless of which financial numbers if any get released, the unit sales numbers tell us all we need to know. Ford is heading up, while GM and Chrysler are tumbling down. Either the Obama administration and its car czars failed to consider the possibility of public rejection of the companies once they received federal money and went through bankruptcies, or they didn’t care and went ahead anyway. At least $81 billion later (much more if the bailout at GMAC is considered, as it should be), here we are.

Media coverage of the full extent of already recognized and possible additional taxpayer losses has rarely escaped the business pages, even though the decisions involved in “saving” the two companies were mostly if not entirely political.

Cross-posted at NewsBusters.org.