Yesterday, the panjandrums of the Senate summoned the executives of the oil biggest oil companies to them to explain why they were inflicting such suffering on the American people. They didn’t get what they expected.
Though they were appropriately meek, the executives took the opportunity to school the Senators in basic economics and how the number 4 is a lot smaller than the number 15.
Those numbers, by the way, represent the average percentage of profits made last year by their companies compared to the percentage of tax collected by the Federal government.
Do read the entire Power Line post. You generally won’t read the facts they presented in basic news coverage of the hearings or in Democratic complaints about gas prices.
Michelle Malkin is also offering 50 McCain Brownie Points to the McCainacs who care to show up and explain why his desire to take the rightfully and legally-earned profits earned by oil companies is something anyone but a rank Socialist should do. I welcome any McCainians who want to do the same thign to give it a whirl here, too. I’m not worth 50 points, but maybe if you leave two or three comments, Johnny Mac will give you a Kewpie Doll or something.
Tags: Democrats, Energy Policy, John McCain
Those senators were so snide & snarky with such no-it-all attitudes lecturing people in the private sector on how much their salaries should be “when the American people are hurting”…..and on the same day when they pass (sort of) the abomination of a farm bill that has these same senators taking money from poor Americans to give it to rich farmers who are making record profits at the moment. How much should oil exec’s make? Should they make about the same as a manager at a grocery store? A secretary? Personally, I was kind of shocked when one of them said $12 million. I thought, is that all? Even if you cut each one of their salaries down by say 75% it would save mere pennies per person at the gas pump. And actually, if you consider that these particular guys probably would go into a different industry where they could make what they are really worth, then you’d have complete losers at the highest positions in the industry that is the back-bone of this country. Do our elected officials have even a high-school level grasp of economics?
Lori,I agree with you except for one point. I have farmed for many years, and though farmers are finally earning a fair price for our crops we are not rich. Some are, of course, but most aren’t.
Many agricultural inputs are petroleum based and have surged higher as fast as the price of gas. Fertilizer is triple the price it was, and a neighbor said he spends $500.to fill his tractor fuel tank and nearly $1,000 for his semi truck.
Luckily the price of grain has kept pace. I would rather live off the market place than the government.
James, the bulk of the subsidies are going to farmers making upwards of something like 1.2 million a year. Plenty of those famers dont’ even farm. There was a graphic floating around, and I believe that I even wrote a post about it once, showing how many people who get farm subsidies actually live in Manhattan.
Those subsidies have to end. The tariffs on foreign sugar have to end, too.
You know, I was thinking about that 4% profit margin, and it didn’t seem right. So, I pulled out my Exxon-Mobil annual report to see what they are telling their shareholders. It’s quite a different story. The had a profit of 11% last year (net income vs revenue). Now, I know that Exxon-Mobil has been a better than average performer in the oil sector recently. But the other companies would have to have barely broken even last year to bring the overall profit margin down to 4%. And we know that’s not the case. It only adds up if the oil companies are claiming two sets financial information. And they are.
This highlights an interesting problem in the corporate world today. The profits corporations report to the shareholders are not the same as what they report to the government. It would be one thing if they were just scamming taxes. But to go before Congress and report profits that are completely inconsistent with their own annual reports is taking it a little too far. It’s long past time for all corporations to keep one set of books and to to report the same financial information to everyone. And I say that as a citizen and a shareholder.
I wrote a post a little while back where I poked around on Yahoo Money and looked up the net profit rates reported for a few oil companies in 2007. Exxon Mobil was at the top with a profit of a bit over 10 percent. Most of the other big ones I found hovered around the 7-8 percent area, as I recall. That information was pretty reliable, based on all the other research I had done.
I don’t know how they report their information, but if you include the smaller companies, 4 percent isn’t implausible.
These companies are publicly traded….info provided to stock holders is public, which means if the government wanted to get the info, they could get it rather easily. And if they suspected even a little bit of wrong-doing, they have the IRS to investigate. How it is presented may vary depending on what they would like to highlight for a given audience, but the acurate info IS available to the government.
Do not mistake this public flogging of these execs as congress really trying to “get something done”. Remember, the Democrats actually want us to reduce our consumption….high prices reduce consumption. Congress people DO NOT get to decide what is an “obsene profit” in the private sector. But they are a bunch of greedy, power-grabbing, control freaks…..and they are painting the oil companies as our enemy so that they can then “save” us from the evil empire. Just like Bill O’Reilly (who is criminally stupid for the crap he says about the oil companies; stoking up people’s hatred of them), these people in congress are demonizing the oil companies for other purposes.