Can incentives help our industry?
How would this sound for a stump speech on the presidential campaign trail: “As president, I promise to send $600 checks to voters, several times a year.”
If any opponent would dare criticize the policy as irresponsible, he (or she) could be attacked as “soft on sending $600 checks to Americans.”
The scenario sounds comical. But here we are discussing a $150 billion or so stimulus package that includes a wildly popular “tax rebate,” (that would actually require federal borrowing) to send “stipends” of $300 to $1,200 to middle class Americans.
Most of the people I’ve talked to subscribe to the theory that individuals know how to use their money better than tax collectors and governments. Furthermore, any shift of money from the tax collector to the tax payer is a good thing.
Sure. Lower taxes are one thing and lead to freedom of the consumer to choose. But borrowing money from future generations so that today’s Americans can enjoy a quick dose of retail therapy, a few hundred dollars a pop, seems to me to be quite another.
At one of the recent presidential debates, candidate Mike Huckabee, the Arkansas governor, a rare opponent of the policy, quipped “We’ll probably end up borrowing this $150 billion from the Chinese.”
Happily, there are better proposals on the table. Ones that might actually stimulate long-term spending, or even home purchases. The National Association of Home Builders rightly pointed to the need for housing incentives to be included in the package. (See Web Exclusives at www.homechannelnews.com .) Tax credits for new home purchase and revitalizing the Federal Housing Authority are among the proposals.
A few hundred bucks could be gone in a week, but the purchase of a house inspires a hundred trips to the home center or hardware store and chips away at the excess inventory. Not a bad combination, election year or not.
It’s only natural in this election year that there are a lot of ideas about how best to run the country.
If our democracy is to thrive in the 21st century, we need an active press to examine where candidates stand on the important issues. Too much of the media coverage is of the horse-race variety—who is winning in this state, who is favored in that state.
Home Channel News can’t reform the U.S. media, but we can offer a “Home Channel Presidential Campaign Scorecard.” It’s on page 38. Associate editor Kate Fazzini gathered positions from the most powerful contenders left in the race (at press time) and distilled policy positions in areas affecting our industry.
Weyerhaeuser reports loss in fourth quarter
Federal Way, Wash.-based Weyerhaeuser reported a net fourth-quarter loss of $63 million, swinging from earnings of $507 million in the same period last year. Sales were $3.9 billion, down 23.1 percent from $4.8 billion last year.
For the year, the forest products company had net earnings of $790 million, up 74.4 percent from $453 million in 2006. Sales dropped, however, to $16.3 billion from $18.7 billion last year, a decline of 12.8 percent.
Steven Rogel, chairman and CEO of Weyerhaeuser, characterized 2007 as a “challenging year” and said the company has been implementing ongoing improvements to its packaging business, while implementing “growth strategies” in its timberlands business.
“The continuing erosion of the U.S. housing market created very unfavorable market conditions for our timberlands, wood products and real estate businesses,” Rogel said. “Despite difficult market conditions, which we expect to continue through 2008, Weyerhaeuser remains focused on managing through the downturn.”
The company’s real estate business took the largest hit, with earnings falling 52 percent. Orders were down 19 percent, and the company’s backlog of homes sold, but not closed, dropped 35 percent.
Weyerhaeuser is one of North America’s largest diversified wood products companies.
NAR weighs in on Freddie Mac, Fannie Mae reform
The National Association of Realtors has submitted a position to the U.S. Senate Committee on Banking, Housing and Urban Development, supporting increased loan limits in government-sponsored enterprises (GSEs) Freddie Mac and Fannie Mae.
Reform to the two main government-sponsored lending organizations has been a topic of debate in light of the damaged subprime mortgage market.
Proponents of raising loan limits say it is a needed stimulus for the housing market. Opponents say giving the lending organizations a route to the “jumbo” loan market could be dangerous without additional safeguards.
Currently, a cap of $417,000 exists on loans issued by the GSEs. The NAR and other proponents of the stimulus plan support raising the GSE lending limit to $625,000.
The NAR submitted testimony to the HUD committee saying, “Fannie and Freddie are our partners in the housing industry and are important to stabilizing and strengthening the housing market.”
The group said the package could help “as many as” 500,000 jumbo loan borrowers to refinance. Additionally, the NAR says a higher rate limit could allow a large number of borrowers to enter the home buying market.