After going from bad to worse in 2009, there's comfort in forecasts that we'll go from bad to only slightly less bad in 2010. Most forecasters don't see a real turnaround until midyear, so for a good while I was thinking the first half of 2010 would produce the most dire conditions yet. But then several lifelines were tossed out by an entity dealers love to hate: the U.S. government.

Of them, the most important for dealers could be the least publicized: a tax provision that lets you apply 2008 and 2009 losses against profits made in the preceding five years rather than the usual two. Given the depth of losses now and the height of profits that many dealers made during the housing boom, this provision could carry huge implications for your bottom line.

You probably have heard of the second life preserver: provisions passed late last year to not only continue the tax credit for first-time buyers of homes but also extend it to homeowners who buy a new home for their principal residence. The National Association of Home Builders estimates the credits, which will last until June 30, will be responsible for producing roughly 40,000 more housing starts than we would have had otherwise. Though many of its members hate the feds, NAHB lobbied hard to get the credits.

A third government benefit is only now starting to reach your communities. It's the American Reinvestment and Recovery Act, better known as the economic stimulus bill. Billions of dollars for retrofit and energy efficiency projects authorized by the act have finally begun trickling down to groups in your area. Some of them may be unknown to you because they tend to be nonprofit groups. In other cases, neighborhood remodelers who have figured out how to tap the funds are seeing retrofit and weatherizaton dollars come in. Either way, these people are going to need materials. Who would be better than you to supply them?

You might regard the operating loss provision and the home purchase tax credits as unwanted gifts from Uncle Sam, just as many dealers opposed the stimulus act early last year. But I believe such talk shows an unwillingness to recognize in government a truth that many of you discovered this past year: Namely, how much effort it can take simply to survive.

The bank bailout might not have spurred new lending, but it did keep lots of banks from collapse. The stimulus bill hasn't created an army of new jobs, but it has kept hundreds of thousands of currently employed people off the jobless rolls. As bad as things have been, this country has achieved something important simply by avoiding a second Great Depression.

The same holds true at a lot of LBM dealers, where merely surviving 2009 ranks as the year's big accomplishment. But the seas ahead look as turbulent as the stretch we just crossed, and many of you are exhausted. Now you have three more lifelines for what are likely to be the most trying times yet. You may not like the government that cast the lines. But since it has, you'd be foolish not to embrace what could end up saving your business.

Craig Webb, editor
202.736.3307
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