Cha-CHING!
HOUSTON (AP) — Oil giant Exxon Mobil Corp. on Thursday posted the largest annual profit by a U.S. company _ $39.5 billion _ even as earnings for the last quarter of 2006 declined 4 percent.
The 2006 profit topped Exxon Mobil’s own previous record of $36.13 billion set in 2005.
That means that all the people who work for Exxon Mobil and the hundreds of thousands of folks who own shares of Exxon Mobil stock in their portfolios or their retirement funds are doing quite well.
Of course, we’re going to hear – again – about the evils of corporate greed or how Exxon Mobil should share their ill-gotten gains or some other complete twaddle. Democrats, especially will stand up and condemn the profiteering and obscene profits of Big Oil and demand that it “give something back” for having taken advantage of the poor consumers who were held hostage by high gas prices.
When we all hear that, though, let’s remember something: as gas prices rose last summer, so did our gas consumption (pdf link). No matter how you spin it, you can’t tell the story that Exxon Mobil forced all of us to use more gasoline this past year regardless of how much it cost.
Just a bit of perspective.
UPDATE: Well, it looks like a lot of you Daou Report visitors didn’t actually read my post before your knees jerked so badly.
Nowhere in my post do I support big tax breaks for oil companies. In fact, I do not support tax subsides for them. I’d like to see them all end.
Some of you might remember, the last time Exxon’s record profits were announced, a move in Congress that would have essentially taken some of those profits away from the companies for no other reason than a few ignorant members of Congress thought that the profits were too high. There were accusations of price-gouging, none of which were substantiated.
I’m glad to see that these tax breaks have been lifted. I’ll be more glad when all our members of Congress can manage to wrap their heads around the economic law of supply and demand.
One last note. I have deleted four comments made by “Devil’s Advocate” for abusive and obscene language. He was warned several times in another thread and chose to ignore those warnings. His comments will be relegated to the spam pile from now on.
UPDATE 2: Don’t take my word for it. Take hers. She’s running for President and all.
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Category: The Economy and Your Money
Yeah, good for them. I think that everytime I am at the gas pump filling up my gas tank. I guess price gouging is all part of doing biusness.
Tell me again why the oil companies need big tax breaks……
All congress has done, and they just did it today, was roll back a $15 billion tax break for this company that is making a $40 billion anual profit. Are you arguing that the the most profitible company in the world needs a handout from a government that is itself a quarter trillion in the red for just this year?
Correction, the tax rollback passed the house on Jan. 19th. Two weeks ago today. My question still stands. Does Exxon actually need a tax subsidy when it's the most profitible company in the entire world?
I have no problem with Exxon-Mobil making record profits. I own their stock. But many of us believe that these profits provide ample evidence that the oil companies should not recieve subsidies from our government. I don't really think we should subsidize ANY company for their research and development, but I find it particularly annoying that we subsidize the most profitable company in the world. That said, at least my tax dollars are coming back to me in the form of dividends.
It's about time somebody defended these poor helpless oil companies. When I'm sitting around talking with my friends about AIDS in Africa and the catrastraf*%k that Iraq has become, some times I lose sight of the day to day small things that make life worth living like quarterly revenues and profit margins of Forbes 500 companies. But it's always nice to be given a civics lesson as to why our forefather founded this nation for: to be raped and pillaged by rapacious, international conglomerates.
Thanks for sticking up for the little man.
Who me complain about paying more than I need for gas, so that Exxon's CEO can "retire" with a 400 million stock option and sharks in Wall Street can make like bandits ???
Who can complain about that !!!
In fact, let's ask for higher gas prices to give our Capitalist economy another boost, and live no Exxon stock holder behind.
Uh…The wealthy are some of the most reliably Democratic voters around. therefore, Exxon execs/options holders thank you super wealthy right wing bloggers for going against your kind with the partisan capitalist cheerleading. Maybe you could drop by the club on guest /member wannabe day – you could suck up and network. Hows the 1040 for a budding blogger looking this year?
Thinking about hiring that footman or upstairs maid I'm sure.
johnd, you really, really don't get it.
I'm not sure I can help you.
OK, I have no idea if I am a liberal or conservative, the dialogue to date being so confusing, but let me just ask: what do these guys do with all that profit that you see so noble? Could they not just lower the price of gasoline, which would not be a benefit to liberal or conservative per se, and slack off a million here or there on their totally outrageous salaries? They are not even putting it back into their stockholders pockets. Tell me how greed has some bounds, because these guys will never know any. And why is unbounded greed a good position for neocons, what's your point?
Who are "these guys" you're talking about, HighPlainsJoker?
Do you really believe that Exxon's profits go to a few folks at the top? If so, you need to learn some basics about how corporations work.
Gas prices are already some of the lowest in the world. Bottled water costs more than gas. If they lowered the price people would just drive more! I get sick of seeing people drive their kids a block to the school across the street from my house. I don't care about global warming but I get tired of looking at fat kids! Hey, Jimmie send the Devil over to my blog. His potty mouth is welcome there!
An Anti-terrorist Tax.
A bill demanding quicker development of (century old) renewable fuel technologies.
Anything to get us to quit funding Islamofasicst WMDs.
All corporations receive a huge benefit: no one working for them can be held liable when the corporation does something wrong. In exchange, they are expected to work for the public welfare. Maybe Exxon should have its corporate charter revoked. Until then, the public has the right to demand responsible behavior from them.
Chris, it seems that the owners of the company are quite pleased with how the corporation is performing.
And, just so you know, corporations do not perform for the public welfare. They perform for the benefit of their owners, the stockholders. That's how it's done in soccessful economies.
jimmie,
You def can't help me. You don't get it by a long shot. Multinational petro-chemical companies have a mutually beneficial relationship with world governments. The "government" sets oil gas lease rates, keeps "strategic" oil reserves, meddles in pipeline rights, currency, international lending gaurantees, shipping, futures trading and even in negotiations with anti-capitalist oil cartels and on and on. All these things have impact on petroleum futures trading levels and the government entities that take these actions invariably have oil executives or their proxies right at their elbows when they act.
Big oil is plain and simply statist. The owners feign interest in total deregulation, but get fat off niches and market inefficiencies that their friends in government forge for them.
Your little "free markets are the best" stroke fest is humorous.
Near my house, near the interstate at the high volume stations, gas was $2.26 this weekend, 50 miles back into the mountains in a small town, the price at the two little low volume stations competing for the morning coffee commuter market were selling gas for $2.15. Both areas are served by the same wholesale fuel dealers so on any given day they pay the same to fill their tanks. They must consider their costs, and they set prices to maximize profit, and prices can vary a small amount as seen here but their costs and competition's prices are closeley correlated to their sell price. That's the free market at work.
The way Exxon Mobil sets wholesale prices is a wholly different matter. Although for much of their product they own it though it's entire journey from oil well to refinery to gas pump, futures markets, not their actual costs and the end user markets elastic limits , have the biggest influence on prices. The fix is in.
You may be correct in scolding folks that whining for companies to give back windfall profits is stupidity – it is. To wax poetic that this is the free market working at it's best shows you simply want to make the super sucessful oil executives and political operatives who are plainly gaming the system seem virtuous. They are cheaters. You are carrying their water without compensation.
Jimmie, you are a pig ignorant corporate shill…how much do you get paid to provide a cover for exxon.
How about Exxon taking some of that profit and paying for the Exxon Valdez spill of how many years ago? They still haven't paid for the cleanup .
Since you don't think the rich who derive benefit from our government should ever be required to contribute to the continued operations of that goverrnment (sounds like a definition of treason to this patriot!) – how about suggesting that ExxonMobil and other corporations at least exhibit their courage and accept personal responsibility for ALL of the legitimate costs of doing business (including the costs of cleaning up pollution) instead of outsourcing those costs to the backs of Americans who are poorer than they are?
Or do you advocate organized crime, theft and extortion as valid ways of doing "bidness"?
johnd – If you've read my post, you'll see that I'm opposed to oil company subsidies. I fail to see your point in relation to mine.
Also, your state probably has a law or two in place that prevents local station owners from selling oil at too low a price. Those laws aren't set at the behest of big greedy oil companies (who already have their money even before it's sold to you). It'd be interesting to find out who likes those laws, don't you think? I'd start with the state government that gets a huge amount of tax revenue from gasoline sales.
fiskhus jim – You're making stuff up now. Arrgue the actual point, please.
johnd forgot one little tidbit – in my state the oil companies were able to get the federal government to cut them a bypass through our wetlands so they could get their tankers to their refineries quicker. unfortunately those wetlands were our defense against the storm surge caused by hurricanes. so now I spend every waking hour dealing with my nearly destroyed city with no help from the oil companies that helped spawn this catastrophe.
"I have no problem with Exxon-Mobil making record profits. I own their stock"
Sucker!
"here little guy, you can get some free money! just buy some of our stock and when we steal from you all, you'll feel great because some other poor stock market sucker will pay you free money!"
Get-something-for-nothing is how con artists hook their marks. The stock market is a obfuscated and distributed version of the old shell game.