In this post, I am pulling together the Total Corporate Pretax Earnings of each US State and of DC.
In determining Pretax Income, I start with audited Pretax Income under US Generally Accepted Accounting Principles. Then I exclude a handful of items which are large relative to Pretax Income, such as Asset Impairments like Intangible Asset Impairments and Oil and Gas Properties Ceiling Test Impairments, and Gains and Losses from both Asset Dispositions and Early Debt Extinguishments. I use Pretax Income rather than After-tax Net Income, since so much of the change in effective income tax rates just happens due to financial engineering.
I excluded Corps in the Development Stage, and ones generating losses for many years.
Altogether, there are 1,284 US Corporations included here. I included all US Corporations, which file with the SEC, and which generated Pretax Income or Pretax Loss of more than $100 mil in any of the most recent three fiscal years. For the States of Texas and New York, where so many large corporations are headquartered, I raised this Pretax Income or Pretax Loss threshold from $100 mil to $200 mil. In States with fewer than two corporations which reached this earnings threshold, I also included the corporations with the highest earnings under this threshold.
I included a handful of Foreign-owned Corporations, which had substantial US operations.
I also included some large Partnerships, particularly Oil and Gas ones.
For the most recent two years under President Obama, the Total Pretax Income of these 1,284 US Corporations grew from $720 bil in fiscal years ended 2009 (predominantly fiscal years ended December 2009) to $1,512 bil in fiscal years ended 2011.
Yeah, that's an increase in earnings of a massive $792 bil, or an incredible 110%, in these two most recent years. This gives objective evidence as to why the stock market has roughly doubled in the past three years. As all astute stock market investors know, corporate earnings drive stock prices.
I don't see how any President in recent history could have come even close to matching this massive $792 bil, or 110%, earnings increase of US Corporations in any two-year period, like that experienced in the most recent two years of the Obama Administration. It's quite an achievement, and US businesses should be very thankful for the very positive US economic environment that permitted them to flat out flourish in these two most recent years.
But I think looking at the year over year annual earnings increases give even clearer readings.
These 1,284 US Corporations generated Total Pretax Income of $1,512 bil in fiscal years ended in 2011 (predominantly, fiscal year ended December 2011), which was an increase of a very robust 19% over 2010.
These same 1,284 US Corporations generated Total Pretax Income of $1,268 bil in fiscal years ended in 2010, which was an increase of an off-the-charts 76% over 2009.
Yeah, that's a Four Times higher earnings growth (+76%) in 2010, when the US House was under Democratic control, than that earnings growth (+19%) in 2011, when the US House was under Republican control.
And this 19% earnings growth in 2011 has been more than cut in half to a modest single-digit earnings growth in the 1Q 2012, when the US House was again under Republican control.
Republicans have repeatedly and boldly asserted that they are the party for corporate businesses. But you know what?.....the actual facts clearly don't support this assertion.
So why is it that the Earnings of US Corporations did so much better under Democratic control of the US House than under Republican control?
Well, I think it's all about the US Congress accomplishing so little on the economic front when the President is a Democrat and a very partisan, uncompromising US House is under Republican control, since the US House must start all economic legislative action, such as both desperately needed highly stimulative and highly effective business income tax legislation as well as much needed infrastructure and K-12 school and community college construction fix-up investments.
Case in point is Business Income Tax Reform, which the Obama Administration strongly supports, and which nearly all Republicans say they are behind. If the President's Framework for Business Income Tax Reform, presented more than three months ago, is strengthened by the US Congress and passed, I am pretty certain that all of the US economic problems, including US real GDP growth, US unemployment, US underemployment, and the US Deficit....would all be substantially improved, and on an ongoing sustainable basis over the long run.
However, the US House Ways and Means Committee must initiate the legislation on this critically needed Business Income Tax Reform. And what have they done so far? Absolutely nothing. I'm not kidding. On the other hand, if the US House was under Democratic control, I am certain that this Business Income Tax Reform would have gotten out of the US House Ways and Means Committee by now and been placed on the US House Floor.
Instead, the Republicans in the US House are focused on attempting to pass an extension of the much lower Bush income tax rates on the wealthy, which increases the US Deficit by more than a trillion dollars over the next decade, and creates almost no US jobs. This continual off-focus approach to governing by the Republicans in the US House shows that they are clearly unfit to be reelected, due to either their gross incompetence on US economic issues, or to their only be interested in governing for the top 1% of the country.
On the other hand, when the President is a Democrat and the US House is in Democratic control, economic initiatives move forward, and they clearly did very robustly in 2009 and 2010.
But it's not just the US House being under Democratic control that caused this very robust US economic environment for larger US businesses in 2010. In addition, the US Senate had more of a Democratic majority in 2010 than it had in 2011.
Also, there were more Democratic State Governors in 2010 than there were in 2011.
Further, the State Legislatures had many more Democrats in 2010 than they had in 2011.
The above very extensive data shows that it is clearly in the best interests of US businesses for the President, the US House, and the US Senate to all be in Democratic control.
Now granted, corporate earnings in 2010 did much better than other US economic measures like US real GDP growth, US unemployment, US underemployment, and the US Deficit.
But ponder how substantially worse the US economy would be right now if corporate earnings growth in 2010 were not nearly Four Times what they were in 2011, or were much less than the more than Twenty Times what they were in the most recent 1Q 2012.
And also ponder how substantially better the US economy would be right now if corporate earnings growth in 2011 was a much higher fraction than the actual very modest one-fourth of the 2010 earnings growth, or if the earnings growth in the 1Q 2012 was a much higher fraction than the actual extremely modest less than one-twentieth of the 2010 earnings growth.
While substantial US job creation doesn't necessarily result from substantially higher corporate earnings, I can clearly tell you one thing.....lower corporate earnings will undoubtedly result in a significant loss of US jobs. To give a recent illustration, when Hewlett Packard recently announced down earnings, it also announced it will be cutting 27,000 jobs, or 8% of its workforce.
Below here are the Total Pretax Income (PTI) or Loss of these Corporations headquartered in each of the 50 US States and in DC for each of the most recent three years. The 18 States below colored in Aqua should be the ones where I think the 2012 US Presidential race should end up being the closest. And if you want to see the individual earnings of each Corporation in each State, all you need to do is to click on the US State post on the far right side of the computer screen.
| US House | US House | |||||
| Republican | Democratic | |||||
| Total | Total | |||||
| PTI(L) | PTI(L) | |||||
| % | % | |||||
| Change | Change | |||||
| # | Total | Total | Total | 2011 | 2010 | |
| of | PTI(L) | PTI(L) | PTI(L) | vs | vs | |
| Corps | 2011 | 2010 | 2009 | 2010 | 2009 | |
| mil $s | mil $s | mil $s | ||||
| Alaska | 2 | 39 | 31 | 18 | 26% | 72% |
| Alabama | 9 | 2,515 | 1,190 | 370 | 111% | 222% |
| Arkansas | 7 | 28,580 | 27,173 | 24,162 | 5% | 12% |
| Arizona | 17 | 17,535 | 16,632 | 10,633 | 5% | 56% |
| California | 180 | 272,566 | 214,157 | 143,435 | 27% | 49% |
| Colorado | 39 | 19,564 | 16,111 | 10,168 | 21% | 58% |
| Connecticut | 33 | 45,791 | 36,092 | 23,657 | 27% | 53% |
| District of Columbia | 4 | (14,376) | (11,917) | (71,708) | -21% | 83% |
| Delaware | 3 | 5,442 | 5,364 | 2,562 | 1% | 109% |
| Florida | 46 | 18,751 | 16,358 | 9,778 | 15% | 67% |
| Georgia | 36 | 35,045 | 30,093 | 17,706 | 16% | 70% |
| Hawaii | 3 | 383 | 456 | 331 | -16% | 38% |
| Iowa | 6 | 2,653 | 2,303 | 1,740 | 15% | 32% |
| Idaho | 4 | 1,137 | 1,799 | (1,800) | -37% | 200% |
| Illinois | 78 | 68,655 | 52,078 | 33,827 | 32% | 54% |
| Indiana | 34 | 18,060 | 17,029 | 12,822 | 6% | 33% |
| Kansas | 10 | (1,545) | (2,052) | (3,162) | 25% | 35% |
| Kentucky | 9 | 6,010 | 5,008 | 4,114 | 20% | 22% |
| Louisiana | 9 | 2,780 | 3,166 | 2,382 | -12% | 33% |
| Massachusetts | 48 | 26,535 | 22,503 | 18,380 | 18% | 22% |
| Maryland | 21 | 9,252 | 8,452 | 6,780 | 9% | 25% |
| Maine | 2 | 443 | 347 | 264 | 28% | 31% |
| Michigan | 29 | 31,669 | 25,790 | (39,610) | 23% | 165% |
| Minnesota | 31 | 46,497 | 41,237 | 34,379 | 13% | 20% |
| Missouri | 30 | 17,631 | 14,752 | 13,509 | 20% | 9% |
| Mississippi | 4 | 142 | 515 | 450 | -72% | 14% |
| Montana | 4 | 316 | 6 | (166) | 5167% | 104% |
| North Carolina | 27 | 24,386 | 21,327 | 7,760 | 14% | 175% |
| North Dakota | 2 | 523 | 468 | 497 | 12% | -6% |
| Nebraska | 10 | 25,039 | 24,278 | 16,676 | 3% | 46% |
| New Hampshire | 3 | 368 | 217 | 174 | 70% | 25% |
| New Jersey | 46 | 60,425 | 53,034 | 40,783 | 14% | 30% |
| New Mexico | 2 | 14 | 34 | (5) | -59% | 780% |
| Nevada | 10 | 2,561 | 386 | (322) | 563% | 220% |
| New York | 95 | 218,262 | 218,659 | 140,555 | 0% | 56% |
| Ohio | 60 | 48,382 | 38,897 | 24,378 | 24% | 60% |
| Oklahoma | 14 | 13,266 | 10,202 | 6,530 | 30% | 56% |
| Oregon | 9 | 5,472 | 5,008 | 4,595 | 9% | 9% |
| Pennsylvania | 66 | 40,802 | 33,564 | 18,173 | 22% | 85% |
| Rhode Island | 3 | 6,792 | 6,286 | 6,311 | 8% | 0% |
| South Carolina | 6 | 1,081 | 718 | 464 | 51% | 55% |
| South Dakota | 2 | 98 | 52 | 85 | 88% | -39% |
| Tennessee | 24 | 13,659 | 12,181 | 8,694 | 12% | 40% |
| Texas | 118 | 305,970 | 235,642 | 163,774 | 30% | 44% |
| Utah | 7 | 2,464 | 1,387 | (1,123) | 78% | 224% |
| Virginia | 36 | 27,861 | 15,824 | (890) | 76% | 1878% |
| Vermont | 2 | 321 | 153 | 104 | 110% | 47% |
| Washington | 20 | 42,136 | 36,539 | 24,862 | 15% | 47% |
| Wisconsin | 18 | 9,553 | 8,283 | 2,217 | 15% | 274% |
| West Virginia | 4 | 288 | 251 | 204 | 15% | 23% |
| Wyoming | 2 | 217 | 155 | 251 | 40% | -38% |
| Total US | 1,284 | 1,512,010 | 1,268,218 | 719,768 | 19% | 76% |
