2010 Rosenberg Survey of CPA Firms Shows Revenues Flat & Profits Down

The Rosenberg Survey for 2010: National Map Survey of CPA Statistics is available for a mere $450…LOL!  Wait a minute:  I have to run out and buy myself a copy at that price.  What a steal!  It’s worth paying $450 to find out what we already know:  that every other CPA firm is doing as miserably as we are, with no increase in revenues, profits declining, and CPAs and experienced staff looking and begging for work. 

What a surprise!  LOL!  Our country has been in a deep recession and is now supposedly dipping back into another recession.  We are now all too familiar with the term “double dip recession”, as if it were an ice cream goodie with lots of chocolate candy sprinkles on top.  But I don’t like the term “double dip recession” to describe a more permanent, fundamental change transpiring in our economy.  That’s too sugar coated of a description of the underlying reality.  It appears that everyone is too afraid to use the more telling term of what is occurring in our economy.  As you must know by now, if you have been following my blog, I prefer calling things as they are…let the chips fall where they may, I always say….I prefer something more accurate, more real, and more dramatic, like the term, “the return of the great depression“, or for the more vulgar minded among us, “the dung hitting the fan”….

However you wish to characterize what is presently occurring, you do realize that all of this was brought on, no less, by “the generation that followed the greatest generation in America’s history”—that is, us moronic, indulged, and spoiled baby boomers—that naive generation raised on make believe, non-reality TV shows, such as Ozzie and Harriet, Leave It to Beaver, the Donna Reed Show, Make Room for Daddy, and My Three Sons….Perhaps that is why we are so reluctant, so afraid, to characterize the disastrous situation for what it truly is, since it was never scripted by Lucille Ball on I Love Lucy, so we wouldn’t know it even if it bit us.  And maybe it will just go away if we continue to ignore it by calling it by a less threatening name, such as a “double dip” recession, as if we all lived in Pleasantville.  Don’t get me wrong:  I want to live in Pleasantville, too; but I can’t find it on my GPS.

I hate to disillusion all you boys and girls, but what is occurring now ain’t no double dip recession!  If you believe that, then you are still living in Pleasantville, oblivious to the reality that we have been becoming a third world country for a number of years now.  Yes, it’s true.  It’s the result of shipping virtually all manufacturing out of our country; exporting all jobs to and redirecting all investment in China, India, Philippines, Cambodia, et al; shifting all of that wealth from the middle class to the upper class–through massive deficit creating tax cuts for the rich–and all of our investment capital to other countries; eradicating that vast consumer and domestic investment base; and so much more, all upon which a robust national economy thrives.  

How can we be so surprised then that we squandered what our parental generation sacrificed so dearly for us after being raised on fantasy sit-com shows and believing in fatuous Madison Avenue myths all of our lives?!  Yes, we are gullible TV-myth junkies, subscribers to that “trickle down” economics and “Laffer curve” drivel of that great B-actor-President (the greatest TV mythsayer, who in memory was built a golden calf shrine in California, even though he had no memory while President, as you recall).   Many of you would vote for this actor-President again probably because you loved his monkey shines in “Bedtime for Bonzo” or because he hosted Death Valley Days.  Well, he brought you Death Valley Days for real now!

But it wasn’t only him responsible for bringing us Death Valley Days; there were many other mouthpieces of Madison Avenue before and after him spouting those myths:  Marshall Plans for every country in the world; lowering taxes on the rich benefits all of us; NAFTA will result in more employment here in the USA; that deficit spending can go on ad infinitum; that we can afford to be the world police force; that we need to spend $300 billion every year on defense (that industrial-military complex that Republican President, Eisenhower, warned us about) to fight the bogeyman of Communism; etc.  Of course, you all do realize that 95% of Madison Avenue, the wealth of our country, is owned by a mere 5% of the citizens in our country.  That’s right, kiddies, the aristocracy in America is alive and well.

But we are the guilty ones.   We believed in this nonsense.  That if we lowered taxes on the rich, that it would trickle down!  LOL!  That if we embraced NAFTA and exported jobs to countries paying $.25/hour, that it would increase employment here and raise our standard of living…LOL!  That if we allowed illegal immigration to run rampant, that unemployment, medical insurance premiums, cost of education and other social services would not increase…LOL!  And I suspect that Palin and Beck and Limbaugh will be mouth-piecing to all of you now that the only way out of this depression is to lower further–if not eliminate–all corporate taxes, capital gains taxes, and personal income taxes, so that even more goodies will trickle down…LOL!   And I suspect that most Americans–desperate for an easy, immediate, mythical, magical, sit-com solution–will continue to buy into this drivel, believing it to be true…LOL!  In the words of P. T. Barnum:  there’s a sucker born every minute.  Yep.  There sure is.

A robust economy depends upon a growing GNP per capita:  an increase in wealth for each and everyone of us, not just the 5% owning 95% of the nation’s wealth.  Without that spreading of the wealth, where is the base of consumption to fuel the economy and the capital to invest in and grow our own country’s economy, since those 5%-owning-95% are investing in China, India, Philippines, Mexico, and everywhere but here, where the cost of labor is merely $.25/hour.  On the other hand, the 95%-owning-5% of our nation’s wealth would have invested in small businesses in your communities in the USA, if they had the wealth that had been shifted to the top 5% tier over the past few decades.  With the wealth having been redistributed from 95% of our population to the elite 5%, also went all those small businesses in our country that were your clients at your CPA firms.  Haven’t you heard your small business owners crying that they cannot borrow from the banks?  Haven’t you seen the red ink on their P&Ls?  Haven’t you noticed all those storefronts boarded up in your cities?  Those once were small businesses and your clients.  Shame on all of us for being so easily taken in and duped.

We all know what the problem is.  The 5% own our government officials, who need millions—soon billions—to run campaigns to be re-elected.  A democracy has been transformed into a plutocracy, replaced by a totalitarian, multinational corporate state.  Thomas Jefferson believed that a democracy could only survive in a country of small farmers, without that concentration of power and wealth characteristic of a feudal society.  But without the protective eyes of the Anti-Sherman Trust Act, we are now living Orwell’s Animal Farm, where pigs are more equal than other animals.  Our forefathers fought a revolution over a tea tax.  We, on the other hand, are much more civilized and complacent.  Our economy won’t ever be fixed with a complacent constituency believing in the myths promulgated by the multinationals’ machines of propaganda.  After all, don’t they give us NASCAR and pizza?

It’s unfortunate that instead of simply giving a tax holiday to the rich, that our country didn’t provide an incentive to invest in our economy, by offering investment tax credits to those investing in capital assets in our country.  It’s unfortunate that when Slick Willie negotiated NAFTA, he didn’t negotiate a level playing field, particularly on minimum wages and the environment.  It’s unfortunate that Reagan granted amnesty to millions of illegal immigrants and our government does not have strict immigration laws like Switzerland, France, Germany, and Mexico.  It’s unfortunate that we do not require a balanced budget but allow trillion dollar deficits, which are simply hidden taxes, deferred to future generations.  It’s unfortunate there is money in political campaigns, with the blessing of the Supreme Court, entrenching politicians with too much power, without term limits.  It’s unfortunate that we spent a trillion dollars in Iraq, waging a war to destroy mythical weapons of mass destruction, never found, never having existed.  It’s unfortunate that we spent billions rebuilding Iraq, where 1,200 of the 1,500 construction projects will never be used by the Iraqis, since most were never needed except to fill the coffers of certain contractors.  It’s unfortunate that the GAO cannot account for $8.7 billion of our tax dollars spent in rebuilding Iraq.  It’s unfortunate that many of our cities are going bankrupt, with property taxes driving families out of their homes.  The unfortunates are endless.

I can’t wait for the Rosenberg Survey for 2011, showing not only profits plummeting, but also revenues and hirings.  The only increases you can expect next year is a rise in CPA firms closing their doors and an increase in the number of layoffs of CPAs and accountants.  Hey, kiddies, better shut the boob tube and radio off and stop listening to those Madison Avenue propaganda machines rivaling those of Joseph Goebbels, because we’re in for one heck of a ride in freefall.  Never forget that the banks didn’t collapse until several years after the crash in ’29.  Double dip recession?  Hardly.  It’s the second wave of a tsunami.  Although the first wave of our economic tsunami was large, it will be insignificant compared to the wave that follows, like that second wave of Sumatra, causing appalling scenes of unbelievable destruction.   So it was in 1929 with the first wave crashing the stock market, destroying illusory wealth created by lax margin trading, and then with the second wave, several years later, devastating our entire economy.

Yes, Ebenezer, the ghosts of NAFTA past, and of the Marshall Plan, all that national debt, all those needless wars, and all those billions wasted in Iraq (and elsewhere)—rebuilding prisons where there are not any prisoners—and all that deregulation of banks and Wall Street creating laxity in capital markets,…all those ghosts are now appearing.  It’s going to be one heck of a Scrooge year.  Bah humbug.

Have a tax or an accounting question?  Please feel free to submit it under “Comments” at Accounting, QuickBooks, and Taxes by the Barefoot Accountant.  For information and assistance on any tax and accounting issue, please visit our website:  Accountants CPA Hartford, LLC.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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