I mean would some please tell me how you could have faith and believe in our systems when you read this day after day. The concentration of wealth is continuing to shift into the hands of the few at an alarming rate (can you hear the Screams) all the time we are allowing our Educational system to become more exclusive by shutting out more families and students. The priorities of our country are A$$ backwards in my opinion. We have posted time and time again about the choices for these coming elections, I can not believe we can doubt what is now needed and that is change and change fast, and after today’s headlines I don’t think anyone could make the case for John McCain and 4 more years of the King Bush and Queen Cheney policies after reading these stories. Our energy policy is a joke it is all about profits and I challenge anyone to prove me wrong. While our voices calling for more access to Education and keeping it affordable are being totally ignored at the cost of our children and grandchildren and our FUTURE.
I have my doubts about Senator Obama and I have posted many of them here on BMG. Mainly my fear that he will not be able to effect change fast enough and effectively enough, yet I am certainly now convinced, as you all should be, that McCain and an extension of the last 8 Years would do little more then force us all into financial and moral bankruptcy as we lie and cheat and sell under the false bravado of Capitalism at any cost. If you need more proof try walking your neighbor hood and asking your neighbor how they are doing how they are feeling every time they have to pull into the gas station so they can get to the grocery store or do back to school shopping for their children ask a parent who just found out the loan they were promised for their son or daughter 2 weeks ago was pulled out from under them. Ask so where are they coming up with the extra $2000-5000 next week? Try asking them if they have it in savings (LOL)? You may want to Duck. Then look for the 4 out of 10 neighbors who use Heating oil to heat their home and hot water and ask them how they are paying the oil bill for this winter with home heating at $4.76 a gallon through Mass Energy with 200 gallons costing close to $1000.00 payable in 30 days net or how about prepaid or COD. While we ship it oversees to a higher bidder and then record these kinds of Obscene profits all the while we the tax payers give these poor companies tax breaks and grants subsidies from our federal tax dollars. While King George stands up and says “DRILL, DRILL, DRILL, DRILL”, your way out of the problem. What so we can ship more overseas to a higher bidder? I don’t know how the man sleeps at night.
I am now standing at my window shouting “I AM MAD AS HELL AND I AM NOT GOING TO TAKE IT ANYMORE” how about joining me.
It really is time For Change!
As Usual Just my Opinions
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p>And don’t forget the shortage on exclamation points. You think it’s endless, ’til one morning, wake up with your favorite rant and nope, all you got is:
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p>”I’m very angry.”
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p>No exclamation points; you used ’em all up.
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p>Save the exclamation point; save the planet!
A solution is at hand.
excellent link:
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p>
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p>Snarkily yours,
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p>gary
At least give us 50 words defending capitalism and bemoaning government interventions in the market as the cause of all our current problems. Cite Milton Friedman, if you have to. But the exclamation point thing is just snarky junk.
If you wanted to bold something and ran out and ended having to strikethrough it instead, to everyone's confusion. The Character and Font Commodities Market is in turmoil.
Capitalism is why we had such a financial boon in the 90’s that you all love to talk about when discussing Clinton.
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p>You know, I don’t agree with all the European socialist healthcare and government control stuff out there that liberals idolize, but I gotta tell you — when I was in Germany in ’06, they were paying 4 Euros for a LITER and I never heard anyone complaining. They must think we’re a bunch of wusses at this point.
I don’t know. And economics is not a strength of mine.
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p>I mean, the average person doesn’t have to pay $500 bucks for an iPhone, a fine symbol of American capitalism for this decade, but people like things like showing up to work, heating their homes, and buying food that becomes more expensive to transport – all of which could be argued are necessities.
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p>Profit is good, but when profit becomes damaging and exploitative at the guy on the street and millions of American families, when the economic well-being of so few comes at the expense of the economic security of so many that depend on oil, it doesn’t really jibe with my vision of American democracy and opportunity for all.
and I don’t know the answer but if we use this as an excuse to dump Capitalism and embrace ueber-government controls and whathaveyou, we’ll be far worse off.
And I’d venture to guess most Americans would not want to dump capitalism, either,
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p>I guess the real question is how do we refine our current economy so that the people can consume the necessities, or consume reasonable alternatives, in a fair manner that allows for economic independence of individuals and families? I think a way can be found – not that I know what it is.
Most of the things you’re talking about are the consequence of high gas prices. Well, crap, what’re you gonna do?
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p>Some countries are subsidizing consumer gas purchases. Their line items for those subsidies are doubling, year over year, ruining their budgets, devaluing their currencies, etc. Meanwhile, all they’re accomplishing is delaying the pain of transition.
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p>The economy needs to move off of oil and get used to more scarcity with resources. Capitalism is actually the ideal system to manage this transition. The government just needs to enable it and frankly I’d be all for a windfall tax on those oil company profits to help balance the budget and pay for those rebate checks we all got.
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p>US Gov’t foreign policy is the only reason those oil companies are able to get the oil they sell. But any talk of them paying the gov’t back and it’s “Oh, gov’t intervention!”
Without the government’s help in keeping the oil flowing, a sizable chuck of the US population freezes to death this winter, and another sizable chunk starves to death over the next year or two as agriculture fails, and whatever is produced can’t be transported.
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p>Maybe the government thinks that there is more to it than oil company profits after all.
I’m not saying that the government is 100% beholden to their interests over ours. Although, I suspect that once they’ve established that it’s vital to nat’l security to ensure oil flow, there is quite the cloak and dagger scene in deciding which particular companies get access.. that’s a different story though.
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p>I’m just saying that given that the oil company business model depends in large part upon gov’t help, those who cry foul at the thought of a windfall tax on record profits are a little disingenuous.
I’m not all that opposed to this tax in theory, but, as a practical matter, there is no way to do it effectively without turning into a clusterf–k, as the 1970s attempt proved.
Come on, you’re not paying attention. Where’s your sense of angst and rage and exciting punctuation?!
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p>Sure, we’re enormously prosperous as a nation, but by God, we’re not prosperous enough!
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p>And sure, EXXON is making money hand over fist, and sure most of America’s pension plans own EXXON stock, but they don’t own enough!
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p>And yeah 95% of the labor force is employed, but it could be 100%. Or more!
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p>And our towns and cities and state are struggling despite the largest current revenues in history. But, they deserve to waste more.
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p>Don’t you yearn for the Clinton years when we had a tech bubble that burst as contrasted against the housing bubble that burst and the oil bubble that’ll probably pop?
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p>Geez, the trouble with college kids. No respect for all the old whiners.
if we had 100% employment, how could new businesses start or or the market for labor be competitive?
Easy. Government will take care of that. We’ll just pass a law requiring that start ups be competitive.
That would require the repeal of heaps of regulation in order to lower the barrier to entry for start ups!!!!!!
I would love to go down the road of how the economy was different in the 90’s vs. today but the post would be longer then my arm. Lets just say simply we did not see a shift in wealth as dramatic as we see happening in the last 30 months nor did we see such a huge run up in the national debt as we have seen in the same time frame.
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p>Now the issue of 4 Euros a liter issues. Your information is correct but can you look at the design of the European society and economy and place it on the same scale as you saw anywhere in Europe. Lets just look at the Rail system vs. here in the US. Many of the decisions Europe made more then a half a century ago are paying off today as the ones we made are making many of our own issues today. Lets face it we all loved the Idea of interstate Highways as a strategic initiative under Ike yet they have brought us the sprawl and a real lack of alternatives to the Auto Mobile for many people. For many Europeans the stop at the market on the way home and the need for less refrigeration were by today hindsight good decisions. But I don’t think you and I can put the genie back in the bottle and we have to live with those decisions made before we were even involved what we can discuss and advocate for today are the decisions that can keep the system we inherited working and moving forward. It does this best as a collective effort, which we have proof does work after centuries of history of capitalism here in the USA. The issues I raise here today are not a group effort scenario but a minority wealth and power grab at the expense of you and I, now I have no way of knowing how and if this is personally effecting you or those close to you which is why I suggested you everyone wanting to see the full impact get out and discuss it with strangers down the street from them and not the usual cronies we all have at the local coffee shop either.
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p>Please do not stick your head in the sand like and ostrich and believe this will not get worse if change does not occur. That is the very attitude that has taken us to this point in time Seriously take the easy chair and Monday morning quarterback where we were 2-3 years ago and see if you could have predicted today with certainty. now predict where we will be in 2-3 years based on what’s happened thus far is $8 a gallon for Gas possible how about Home heating 7.59 a gallon what about a loaf of bread $5.00 each or a gallon of milk $8.99 how about that steak you want for the weekend grill $38.50 a pound. Laugh say its ridiculous then look back 3 years and see the rate of growth in prices and tell me it’s ridiculous.
but your precious house democrats are being just as status-quoful as republicans were since 2000. Nancy Pelosi was on the daily show talking about not letting them debate drilling and her excuse? “Well, they didn’t let us debate raising minimum wage for 10 years.” Oh, great!
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p>Drill, give T. Boone Pickens a billion dollars, invade Saudi Arabia, buy everyone a Tesla roadster, do anything! Right now the Congress is doing nothing. Now that we see these numbers they’re going to open ANOTHER investigation into windfall profits and claim they’re hard at work. Bull-shit.
You are so correct that Congress has done little or nothing about this issue. I agree with that statement.
Still I do not see them standing up and making speeches (King George second article I posted in opening comments please read) make what must under the clean light of day and full examination are so far beyond doing nothing it is little more then pandering to Big Oil and the small research companies like the 2 he ran into bankruptcy as a young executive. He is not advocating actions that will solve anything HE IS ADVOCATING THE VERY PROBLEM! I hope this is now clear to you.
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p>The issue of Nancy Pelosi and Congress is for another day and someone else’s post Hint Hint Joe. What is the focus here, is the lack of a realistic national Energy Policy set by the Executive branch and the call for any real policies that can and will make a difference to the average American not ones that demonstrate your contempt for Middle Class America and show your interest is trying to throw a bone to your good old boy network on the way out the door.
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p>I don’t think I can be anymore direct then that and your raising other issues is just an attempt to smoke screen the discussion. A change in Policy, vision, integrity, morality, even intellectual capability is seriously needed as is true leadership. John McCain at 72 and showing signs of age and repeated support of the failed yes Failed administration would be catastrophic.
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p>The oil profits, the shipping of gasoline oversees to the highest bidder and the failure to meet the needs of working families being able to afford education for their children is the issue. It is the failure of this Administration to use the Bully Pulpit and the powers of the executive branch and as the cheif policy originator to effect change in a meaning full and responsive manner DRILL DRILL DRILL DRILL solves NOTHING and shame on us for even listening to the Chimp.
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p>As Usual Just my Opinions
Remember my Apri post about the New Gilded Age:
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p>http://vps28478.inmotionhosting.com/~bluema24/s…
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p>Over concentration of wealth is not a good thing, and does not lead to jobs, or economic expansion.
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p>The current obscene, and manipulative profits earned by Exxon Mobil is not “capitalism” but greed and theft.
is that Mobil and Exxon gas stations tend to have higher gas prices than most other “no name” gas stations. So I’ve been exercising my economic right to not patronize them. Whether or not the Exxon stations offer a better product is unknown to me- I’ve always assumed that gas is gas, and that some state regulator would shut a station down if it was offering watered down gas or something.
and Exxon or Mobil station changed price daily indexed to the price of Gasoline the company says to, whereas a no-name place will buy a tanker of gas at a price and have that price until a new tanker comes in that they purchased at either a higher or lower price. At times of increasing price, you’ll see no-names at lower prices in comparison, and during times of declining price, the Mobil will generally be lower.
BMG is better than answers.com.
There is a difference between gas stations regarding detergents and stuff that greatly effect engine performance. Companies that meet a rather high standards are considered “Top Tier” gasoline distributors.
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p>http://www.toptiergas.com/reta…
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p>Note that Exxon/Mobil isn’t present.
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p>Not all gas is made equal.
There is something confusing here.
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p>On the one hand, the market is advertised as something that’ll bring us Pareto efficiency. You can’t get better than that! On the other hand, who the heck really believes, in this punctuation-infested territory, that this is the best of all possible worlds?
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p>In a market economy, it seems beside the point to complain about greed. We could relabel greed “initiative”, “seizing opportunities”, etc. Properly reframed, greed is what makes our economy work.
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p>Greed becomes a problem in three ways, it seems to me:
For example, I think a case can be made that corporate governance has gotten seriously messed up with under-performing executives over-rewarded and with quasi-conspiratorial alliances among compensation committees, boards, and management. Or tax policy has been derailed by the awesome power of the Bahamas.
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p>The staggeringly large Exxon-Mobil profits are not ipso facto a sign of moral depravity. They are certainly a warning that there might be something badly amiss in how our energy markets are run.
Would it be a joyous occasion if these numbers were significantly lower?
No, JoeTS, it would not be a joyous occasion. The reason the numbers attract such opprobrium is that the prices of petroleum products are high, too. If Exxon earned twice as much selling cheap gasoline, there wouldn’t be any outrage.
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p>I think that’s just a misconception. Sub-part F of the tax code is incredibly complicated but effectively draw in off-shore income. Not all to be sure, but regardless, in the scheme of tax policy, off shore income isn’t the one-ton gorilla in the room.
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p>Income tax avoided via tax havens is great as talking points, but if you’re looking at real tax dollars evaded, google ‘tax gap’. It’s the underground economy and it’s simply enormous. But it’s difficult, both practically and politically to fix.
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p>Watch the underground economy in action sometime. Next time a plumber, repairman, etc…gives you a quote on some service, take the quote, then ask him if he gives a cash discount. The price may drop by as much as 25%.
The problem is that Exxon Mobil isn’t as big a player as everyone assumes. Attempts to move the market by kicking Exxon’s ass will fail, because we can’t regulate the global market.
I may have missed something but was there a proposed solution buried in all that rant? Or was that just some verbal vomit about Capitalism and George Bush?
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p>I don’t think we can just cherry pick Exxon or oil companies and throw rocks at them. Their finical responsibilities to their stock holders is to maximize their investments. Anything less could bring a lawsuit against them. Do you want to nationalize the oil companies? Set limits on a companies’ profits? When was the last time you heard people complaining about Google’s, Microsoft or GE’s profits?
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p>Other than blaming George Bush, do you want to at least consider the possibility that the House and the Senate have “ANY” DNA on their hands? And heaven forbid, do we as consumers bare any responsibility at all with our endless thirst for oil and gas? No, just George Bush?
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p>Why do we so quickly dismiss the idea that we have SHITLOADS of oil in Alaska and off our coastlines? American Oil!!! Oh, let me guess, “It will be 50 years before we see any oil from those deposits…” BULLSHIT! And whatever the timeline is to get oil from either Alaska or the coastline, the timer won’t start until we start drilling so let’s stop fooling ourselves.
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p>And, ya let’s blame John McCain for all this. He is in the same US Senate as Obama and all the rest of them.
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p>”Ask your neighbor…” I have been asking my neighbors and actually been quite shocked how many people are against Obama right here in wonderful MASS (a state that Hillary beat Obama in, even though the State’s politicians defied the people’s will and voted for Obama). So don’t automatically assume any “angry” person about prices of goods is going to immediately blame George Bush (and hence John McCain) for our problems.
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p>So… other than the whining which has become so popular in this country, WHAT’S YOUR PLAN????
Don’t look at it as getting shit. Think of it as willfully exposing yourself to a contrast of opinion so severe that the greatest progenitor of multiculturalism would want to eat some white bread.
Why do we so quickly dismiss the idea that we have SHITLOADS of oil in Alaska and off our coastlines?
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p>Because we very probably don’t?
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p>The Stone Age didn’t end because we ran out of stones.
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p>Drilling for more domestic oil would reduce our imports (or more precisely, the rate of increase of imports) a little bit at some point in the future, and may reduce oil prices slightly, but it’s a desperation move.
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p>Buy a GM Volt when they come out in a couple years (or a Tesla now, if you have some bank). Or convert a Prius. Charge it at night using excess electrical grid capacity (there’s plenty of capacity at night- it’s summer days that are problematic) powered here in NE by nukes, coal, hydro, and natural gas (and wind, if we ever get Cape Wind built). Your operating costs will be lower, as will the wells-to-wheels energy consumption and emissions. Even a plug-in powered by 100% American dirty coal would have lower emissions, due to higher system efficiency.
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p>I really don’t understand Republicans’ obsession with oil. If you own stock in an exploration company, hell ya, but if you are making national policy, what’s the point? Opening the floodgates on domestic production won’t change the fact that we are beholden to Saudis, Venezuela, etc.
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p>This is a demand-side problem, full stop.
It is going to take many decades to convert the entire economy, Al Gore notwithstanding.
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p>That means that in the meantime, we have a bad energy security and climate change problem that will, we hope, improve over time.
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p>Improving it, over time, will entail (i) conservation at a level hitherto unseen, as effectively advocated by stomv; (ii) steady conversion to non-fossil energy over the course of this century, in the form of “green” energy and not so green nukes or ethanol (hopefully cellulosic ethanol); (iii) in the meantime, reducing the ratio of fossils derived from the bad neighborhoods by drilling offshore and in ANWR, or maybe coal conversion.
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p>In other words, there is going to be a solution that draws from many sources, which, collectively, are not ideologically pure and some of which, even many of which, have environmental costs of their own.
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p>I have found it interesting, over the years, that the “greens” could have secured much more progress on the conservation side if they had been willing to package it into some energy security/independence package, and had been willing to trade off some drilling in return (especially if there is so little oil there as claimed), which they have steadfastly refused to do.
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p>I view this, along with the continued opposition to nukes, to be a useful way to peer behind the alarmist rhetoric to see how environmental risks are really being evaluated. Thus far, carbon reduction has been subordinated to opposition to nukes and drilling.
I posted here Tuesday But nobody replied (what a shock).
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p>Obviously a person sitting in a boat with a hole in it can either try to plug the hole, or bail out the boat quickly. But sometimes you have to do both.
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p>I think we have many options open to use for reducing our usage but lack the nags to actually do something about it. We can cry about George Bush… but let’s look at the existing Democratic House and Senate and ask THEM what the F*&^????
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p>So let’s assume we get some hybrid buy-in on a national level, maybe implement many other energy reductions… it would still be a good idea to be able to use “our own” oil and keep as many American greenbacks in the US economy and not some Saudi’s bank account. I don’t agree with your “Republican obsession” with oil since many like me, would love alternative energy sources but we understand is will take years for any noticeable difference to discernible and until then our jewels will be in someone else’s hands.
You are 100% correct about alternatives and conservation taking time maybe years to change sources and peoples way of behaving but we need to start somewhere but, we certainly will face the same if not greater amount of time and potential for damage to other sectors of our Economy if we just start drilling along the coasts and Alaska we would be years maybe decades away from any real value if we even find oil worth pumping so why do it if we know Oil or Fossil fuel is running out, so start the change now. At the same time you need to have policies that protect the general economy from the shock of such a change.
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p>What I find flawed is your statement,
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p>
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p>How do you rationalize the oil companies and refiners here in the good old USA shipping 183,000 gallons of Gasoline out of the country good old USA refined crude sold to the open market. When prices for gasoline where peeking daily leading up to Memorial day.
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p>Now a skeptic like me would suggest this was a move to keep inventories down to keep the speculation up on the escalating costs. What do you think? Here is some evidence to back up my point this report was made public last month about May inventories
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p>
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p>Link: http://www.bunkerworld.com/new…
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p>Looks like the facts suggest, that inventories were up here in the US maybe because the average Joe cut back his driving, so in order to keep the price from collapsing they shipped out 183,000 gallons and that may have helped stabilize the rates and they made a smooth profit to boot. Why wouldn’t those US green backs be in the profit reports from last quarter. I guess that’s just good old American business. I would say they just blew up their chance at the Moral High Ground with that move.
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p>I am not in the oil business but… As I heard recently, if Clinton had not stopped the hunt for oil in Alaska, we would be pumping crude Anwr crude today. You have to start a long term project sometime, why not now?? And the information I find is overwhelming that there is buku amounts of very good oil in them thar hills. Even opponents haven’t argued that fact.
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p>
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p>I don’t know why gas prices fluctuate so differently than crude oil prices. But I know when you don’t know the answer, you don’t necessarily have to accept whatever someone else proposes.
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p>
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p>Now I’ll fess up and say I’m not in the International business market either but… don’t we as a country make great efforts to “Export” product as much as possible? If there are countries outside of the US willing to pay a premium for product, don’t we ship it out even if this drives up the price of products in the US? It’s a world economy we live in now. Whether it is oil, refined gas, scrap metal, corn… anything. But maybe someone knowledgeable in this industry can talk about the normal way international business transacts.
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p>When was the last time you saw a sign on a gas station saying “SORRY, NO GAS”? When that happens and we find US oil companies shipping refined products out of the country, then I will buy some of this market manipulation theory.
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p>AND… I still have not heard ANYONE make any suggestions on how to fix this!!!!!
I love threads like these. It highlights those who understand business and those who haven’t a clue.
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p>Exxon posted profits of $11.68 billion on revenue of $138.1 billion. That’s a profit margin of a little under 8.5%. And an 8.5% margin ain’t all that great. My company won’t take on a project unless we get 20%.
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p>Your average local neighborhood bank has a profit margin of about 10%.
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p>However, no one starts a thread about them.
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p>Exxon’s profits are only “obscene” under two circumstances: one, you don’t think of them in context of percentage of sales, or two, you have no friggin’ clue how businesses are run.
Yeah, but take those $11.68 billion and distribute that obscene wealth to all the folks in the US, and we’ll solve hunger, and energy, and global warming and AIDS, and war and famine.
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p>Why, it’ll give each and every person in the US,
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p>$38.93 …
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p>Oh. Nevermind.
The bad news is it will only last one year. Take your $38.93 and go buy a clue.
There is also the issue of total absolute size for a corporation. A company that pulls in $11 billion dollars has a very large absolute amount of power in a way that a more profitable smaller company — and even many governmental organizations — does not.
What kind of power are you talking about?
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p>The same kind of power that the union holds over public education?
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p>At least Exxon/Mobil has comparably sized competition.
Consider what it takes to mobilize an city of engineers, geologists, and construction workers to look for a compound that’s miles below the surface; drill miles down and pump up some goo that doesn’t remotely resemble the stuff you burn in your house or car; transport that goo and turn it into something useful, then transport that useful stuff to you.
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p>Hold on.
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p>!!!!!!!! (ah, that felt good)
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p>Meanwhile, your competitors aren’t companies. They’re nations! Russia, China.
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p>And the best thing? If you think they’re going to make money you can buy them yourself!
Did anyone notice that the downturn in the economy coincided with getting tough with illegal immigrants. The Globe says there are 1 million less in the U.S. than last year. Since 60% of the U.S. economy is based on consumers buying, anything that decreases the number of consumers will decrease growth. Tell the immigrants to come back; we need them to live here and spend on housing, food, clothing and transportation to stimiulate the economy.
are only relevant in the context of attacking pharmaceutical manufacturers.
you might be the later. While I am no expert myself my guess is that you are talking about a Service industry not Manufacturing or an industry that is capital intensive. Manufacturing has a much smaller profit margin, the oil industry is labor as well as capital intensive and therefore should normally have a much smaller profit margin. So 8.5% profit margin for the oil industry might be obscene, you would have to compare oil companies historically to determine that.
Well, looking at return on investment as a widely-used ratio, return on investment, Exxon is pretty darn profitable. It earned one dollar for every three dollars of equity in the business (i.e., ROI=33%) in 2007. By way of comparison, General Electric, a similarly gargantuan company, earned only one dollar for every five dollars of equity in the business (i.e., ROI=19%). So even in a relevant sense, there’s no question that Exxon is highly profitable for its owners, the shareholders.
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p>That being said, I’m not sure this thread makes a good case for why this is problematic. It seems to me that there are two issues. First, where are these profits going? They are not going to Exxon’s executives–their salaries and bonuses are one of the items subtracted from total revenues to arrive at the net income of the business. (This ignores complications about stock option grants). Instead, those profits that are not retained or reinvested in the business go to the shareholders in the form of dividends. Are some shareholders too rich for their own good? Probably, but that just means that we need to increase the top marginal personal income tax rates, and it’s not a problem specific to Exxon.
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p>Second, is Exxon itself simply too big? I think there’s a good case to be made that truly big companies have too much influence on legislation and regulation. But it seems to me that this has to do with their absolute size, not their profitability. So suppose Company X has no profits, but spends $500 million a year on lobbying. Isn’t that worse for democracy than the company with $500 million in profits that distributes all its profit and spends nothing on lobbying?
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p>TedF
With around $200 Million in shares, Exxon is one of the Massachusetts Pension largest holdings. Probably all of the teachers/state employee pension funds in the US hold EXXON. We have found the fat cats and they is us.
Using cost as a percent of sales is deceptive for high-volume, low-margin companies like ExxonMobil, Dell, etc. Return on equity is a more useful measure.
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p>That said, I have no problem with XOM’s profits per se. But as TedF and KBusch point out, where I do have a big problem is with these entities having a disproportionate influence on policy (in particular, XOM’s efforts to confuse public perception of climate science).
ROI is return on Investment, not return on return on equity. ROI can include debt financing and can be easily manipulated because of which costs are included in the calc.
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p>Doesn’t negate your point though.
… If you went in on a project projected at $138.1 billion on revenue… you’d take 5% to get the job, and your competitor x would waste all his effort on a proposal that insisted on 20%.
The Globe said that Exxon-Mobil’s quartlerly profits were the biggest ever for a US corporation. Gasoline prices appear to be at their highest ever. Gasoline prices impact the prices of milk and other crucial commodities. Median household income has not been rising at a comparable rate. If you’re paying more for gas, there’s less money for everything else, be they luxuries or necessities. When oil prices go up, most other stocks fall. Small businesses have a harder time surviving. Everyone seems to be losing except oil companies. But if this concerns you, either you must be a communist, or you don’t know nothin bout bizness.
What do the critics of the current situation suggest the government do?
Whatever happened to those cars that run on McDonald’s french fries and whatnot? Let’s spark those up.
The City of Newton has a great program for recycling used oils with their municipal vehicles. They have estimated they may save 3,000 gallons of deisel per year. It is only a start but may be a great model for other towns and cities.
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p>Anything we do must be pragmatic and effective. This program checks off both boxes.
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p>I’m looking forward to some other ideas when you finish ranting about corproate profits, anti-monopoly strategies, oil tycoons, George Bush, unfair profit margins (8% ???)…( I sell software and you should see our margins!)… and finally decide what size company in what market located in what part of the country can make what profits and when. Just make sure you remember this is America before we nationalize any industry.
There’s a certain amount of emotion that must be cleared away on recognizing that prices and profits seem so high. Then, there’s the question of whether this represents some kind of regulatory failure that requires remedy through rules or taxation. The discussion hasn’t gotten to the point of knowing what’s best from a policy point of view, never mind what to advocate politically.
Why would this be a regulatory failure?
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p>Exxon paid over $30B in taxes to the US government last year. That’s a whopping 41.4% tax rate.
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p>As a point of comparison, that was more than the bottom 50% of taxpayers (65M people) paid in total.
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p>In addition, they employ 83,700 people worldwide and if anyone here has a 401K or other investment vehicle, you probably have made money off of Exxon or one of their hundreds of subsidiaries.
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p>Demonizing Exxon for having “obscene” profits is just plain stupid.
I’ve been pretty clear that demonizing Exxon is the wrong way to think of this. It baffles me that you think I suggested as much. See my long comment “Moral or Structural Question”.
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p>The economy will not be in a happy way if Exxon has an incentive to push up the price of petroleum products. If their profits are larger when their sector is causing more hurt, there might be something wrong with that — or not.
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p>I wonder what huh thinks about this.
On average, the price of gasoline has risen 4% annually over the last 20 years.
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p>Federal gas taxes have risen just as much, but no one here is accusing the feds of pushing up the price of the gas tax.
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p>Perhaps that is because the gas tax — while increasing at the same rate as prices have — did so in a much more even fashion. Whereas gasoline prices remained relatively flat until just a few years ago.
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p>We will adjust.
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p>Profits are a red herring. The emergence of new demands from oil (China and India), the American’s decade-long love affair with living rooms on wheels, and the Middle East climate, have all had an impact on the market which has resulted in driving the price up.
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p>Again, we will adjust.
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p>The pinch that individuals and families are feeling now is nothing compared to what we experienced in the 1970s when oil prices doubled in a matter of weeks, unemployment rates were high, and we didn’t have nearly the amount of luxuries/comforts that we do today.
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p>And please, don’t get on your high horses. I have family members who are on housing vouchers, who have and will file for bankruptcy, who make little above minimum wage, and who faced life-threatening illnesses without health insurance. If you don’t think the current economy affects me, you are a dolt.
Given your cavalier attitude about the economy, I’m thinking they must be your inlaws.
Nothing out of the ordinary… for ordinary people.
Well, the prices has gone up, hasn’t it?
The price of cereal has gone up. Are Post and Kellogg driving up their prices or are their prices being driven up?
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p>You said “The economy will not be in a happy way if Exxon has an incentive to push up the price of petroleum products.” Perhaps I misunderstood. I thought you were saying that Exxon is doing something artificial to prices.
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In general, vendors set prices.
My question was “What evidence is there that Exxon is driving up their prices?”. Earlier in the discussion it was asserted that Exxon’s profits were significant because of their size/power and implicit control of the market.
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p>A vendor setting their prices higher and “driving up prices” are not the same thing. My costs might have risen which I then reflect in my prices, but that is different than just raising my prices to increase profit.
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p>The original post seem to be drawing a connection between Exxon prices and their profits. My assertion is that other factors have contributed to both rising prices and Exxon’s profits. I don’t think Exxon’s price increases are an attempt to gouge the public to increase profits. I think profits are increasing because demand is increasing and the supply/demand ratio is affecting price.
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p>Have a great day! 🙂
The demand for gasoline in the US is shrinking, yet the price at the pump is ridiculously high. Demand actually decreased 0.7% here.
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p>It’s been reported that Exxon/Mobil directly affects the supply/demand ration by purposely producing less oil to reap more profits.
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p>So why are these company’s profits growing at double digit percentages when demand for gas is going down? I’m not saying I have (the admittedly complex) answer, but your explanation doesn’t make any sense. It’s not like the demand of US drivers are increase the volume at which it would enable oil companies to grow their profits at such a staggering rate. And it doesn’t make sense that a profit is created because the demand is causing Exxon et al’s costs to go up, therefore the consumer prices go up – they can always pass along the increases to the customer without expanding the profit margin to gouging levels.
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p>Here’s a chart from BP’s report – it shows the US’s gasoline consumption shrinking while the price at the pump is increasing to $4.00 levels.
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p>.pdf Page 10.
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p>What would account for a decrease in demand yet an big spike in prices? Using the Supply and Demand model that you posit, that which accounts for this price increase must be a decrease in the only other variable in the model: supply. And this is exactly what Exxon/Mobil is doing.
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p>It’s interesting that you ask “What evidence is there that Exxon is driving up their prices?” but then you fail to offer any evidence to support your guess at the supply/demand explanation.
@tblade
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p>Your assertion that there is a decrease in demand is simply false. Your scope is too narrow. The US demand alone does not set prices, and certainly not a scant 6-month trend as shown in the BP charts.
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p>Worldwide oil consumption continues to increase, regardless of US trends. Most notably, consumption in AP has increased to where it’s consumption is on par with NA and Europe.
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p>You quote an article as evidence that Exxon is cutting production to drive up its prices, but read further. Oil companies are having difficulty growing production. With the OPEC restrictions and nationalization of reserves by Russian and Venezuela, how would Exxon or any other company increase their production?
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p>And is increasing production really what you want anyway? If so, then why not back the Republican plan to increase drilling?
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p>I don’t particularly see a need to put more oil into the supply chain. I’m not queued up at a gas station for a mile just to fill my tank. I can get gas regardless of whether it’s an even or odd day.
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p>The most interesting part of the USN article is near the end. This is why the public outrage against Exxon profits is so baffling:
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If US demand for gasoline is the primary factor driving the global price of oil, then falling US demand might be expected to have a significant effect on the price of oil.
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p>If US demand for gasoline is not the primary factor driving the global price of crude, then a drop in US demand for gasoline might be expected to have only a small effect on the price of gasoline, or even no effect at all.
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p>As far as I can see, the notion that Exxon Mobil is driving the global price of crude oil is idle speculation verging on weird conspiracy theory.
It’s not okay for me to make fun of your attempt to have the last word.
It wasn’t an attempt for me to have a last word. Just saying, this would be my last attempt to explain the gist of my question and my understanding of your answer.
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p>The “3” wasn’t a dig — just saying it didn’t add anything to the discussion.
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p>Was your post a joke? I didn’t get it! 🙂
The original comment from JohnD was a metacomment about this thread, I gave a metaresponse. Then, it seemed to me that we’ve had this odd exchange with you and Mr. Weebles talking content (mostly in response to the post, not me) and with me talking meta.
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p>However, on the face of it, your model for how Mobil-Exxon operates is not so coherent. Mobil-Exxon does not make petroleum products out of the goodness of their hearts. They are not a publicly owned utility. Their role is not to charge the most modest sustainable price. Their role is to make money. As much of it as possible. In a regulated market economy, that means that they will do whatever they can legally. (Unfortunately, it also sometimes means that they will do whatever they can get away with — with respect to their conscience, public opinion, and the law.)
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p>”Driving up prices” is not some negative, nasty heinous charge made only by super-populist liberals. If we are in business, it helps us if we can sell the same thing for more.
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p>I mean, isn’t that just boneheadedly obvious?
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p>One can do that in a variety of ways: increase quality, increase perceived quality, manipulate supply, etc. The management team at Exxon-Mobil owes it to their shareholders to do what they can to increase margins. “Driving up prices” would seem to be a fine route.
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p>So the questions again are (1) what is causing these price increases, (2) are these outcomes socially beneficial, and, (3) if not beneficial, does the regulatory environment require adjusting.
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p>To question 1. The causes of the price increases are multi-factored as the evidence that you, tblade, and others have provided. This is not fully understood and I doubt there is a consensus yet among economists — never mind here even among liberals.
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p>To question 2. On the face of it, the social outcomes do not look beneficial.
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p>To question 3. While it’s certainly clear that we need to move away from carbon-based fuel and thus some adjustments to the regulation of the market will be needed for that, it’s not so clear what if anything is required with regard to Exxon-Mobil.
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p>Can you at least agree that that framing of the problem is accurate even if you don’t necessarily agree with the assessments of others as to the first question?
produces around 2-5% of the crude oil consumed globally.
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p>The price of oil is set by a global market, which is why Chinese demand affects the price of gasoline in Athol.
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p>This suggests to me that Exxon Mobil is (willingly) taking a ride on a bubble, as construction and realtors did a few years ago, and dotcoms did a few years before that.
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p>If there is evidence that EM causes the price to rise, it remains undiscovered.
Wean the country of its oil addiction?
I found myself wondering how I encountered a rant so full of misspellings, poor grammar, incoherent thoughts, and exclamation points in my Google reader. Was it shared by someone else with lower standards of discussion? Did I accidentally subscribe to a feed of random unfiltered comments instead of a blog?
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p>Nope, shockingly, it was Blue Mass Group, which I have always trusted to provide intelligent commentary on politics. BMG, I expect better from you.
If the topic is an interesting one, as this is, there will be a good thread even if the initial post was lacking.