They bail themselves out. Then they prepare to repeat what caused the need for a bailout in the first place. Of course. They are a late-imperial overclass that stopped listening to anything but their own cant 30+ years ago.
From the latest Business Week comes a report on how this is happening in the housing(-bubble) sector, in which the big players are now apparently buying up land thinking they’ll get back to 1995:
An additional boost came last year when Congress passed a law allowing companies to get refunds on past years’ tax payments by applying their recent losses to earnings dating back five years. Many sold land at big losses to boost their refunds. The result was a windfall of $2.3 billion for the builders as a group, including $800 million for No. 1 Pulte Homes.
The result of those balance-sheet heroics? Builders have more than $12 billion in cash they can use to replenish their land inventory. Pulte and D.R. Horton each had $1.9 billion in cash and near-term equivalents at the end of December, Toll Brothers had $1.6 billion at the end of January, Lennar had $1.3 billion, and KB Home had $1.2 billion at the end of November.
[These corporate builders’] interest in unfinished land usually comes later in the housing cycle, says Thomas E. Lucas, senior vice-president of operations for DMB in Scottsdale. “We didn’t think we’d sell raw land for three to four years,” Lucas says. That’s a striking vote of confidence considering the threats to housing from high unemployment, rising mortgage rates, and foreclosures.
Can you imagine non-capitalists ever being allowed to rewrite their income tax returns to minimize what they owe?
In any event, it’s clear that, in yet another economic sector, capital has been restored, but has no idea what to do with itself. So, despite their unwillingness or inability to lift a finger to help their own potential customers, they nonetheless presume something, somehow will return them to “normalcy.” Probably their own glorious entrepreneurial spirit, I suppose…
Thanks again, Obama, for all this “change.”