Bringing it Home

News headlines from the Wall St. Journal on July 19, 2011:

Apple reports earnings of $7.31 billion…Sales

surged to $28.57 billion, topping expectations of

$24.99 billion.

Goldman Misses Profit Mark, Plans Job Cuts

B of A Swings to Loss

Coke’s Profit Jumps 18%

DJIA’s 200-Point Rise Is Biggest in 2011

So, Bank of America drops 9 billion (mainly still due to the mortgage mess), and Goldman’s profit is significantly lower than expectations, and they plan to cut 1,000 jobs. Coke and Apple are up. Why would the market have such a good day, and what do these have or not have in common? As a rank outsider to the markets, but one who has owned and run substantial small business operations, I’d say this: Apple and Coke MAKE THINGS that people want. B of A and Goldman make money with other peoples’ money.

A CEO of a major communications company did a TV interview today and lamented some of our poor trade agreements and losing jobs overseas, and pointed out what a lot of us on the retail & service sector side of things (as opposed to high finance) have been shouting for quite a while now…we in the US need to get back to making things.

If we can’t make cheap consumer goods due to extremely low labor costs in other countries, how about making greener and more efficient energy-saving items, or large products that go into infrastructure where the shipping cost savings is enough to counteract the labor savings due to near-slave wages in certain countries?

Of course Coke is made here, and it’s easy to point out that Apple has most of its products produced overseas. Apple, however, designs and tests them here, they don’t just slap their name on someone else’s designs from overseas, and they are also retailed here and when necessary, repaired here. That takes good old American bodies…not as many as the manufacturing, but it all helps.

Just A Personal Rant- Renting vs. Owning

In the 12 years I lived in an apartment, the trim, fences, and deck were painted once. The outside was never cleaned. In just over a month in this townhouse, they have already pressure washed the buildings again. If you think it’s a case of ‘you get what you pay for,’ the payment and HOA fee for the condo are much less than the rent for the apartment was. I’ll take a little noise once in a while for a lot more clean!

Here’s A Tax Law Change to Stimulate Business

You may or may not know that you can write off a yacht as a second home and get a tax deduction. The vessel needs to have a place to sleep, a head (toilet), and some reasonable facsimile of a galley (kitchen), and you’re good to go with a nice tax deduction. While a substantial number of people own first homes (the present housing and mortgage mess notwithstanding), it’s a MUCH smaller universe of folks that own a yacht as a second home.

Here’s a thought: bring back the deduction for interest on new and used car loans. A huge number of people would be affected immediately with this, and it would stimulate a lot more business- the auto business is much more widespread than the yacht business. In fact, you must even have a car in order to collect unemployment if you live somewhere where there’s no mass transit. This would affect everyone but the top couple percent of Americans, who generally pay cash for their cars. (When I was in the luxury auto business, over 85% paid cash for their new German luxury cars. Not even close to 15% of regular folks paid cash for more pedestrian vehicles, they nearly all financed them.) OK Congress, how about a break for those in the bottom 98%?