Evolution of Dispossession

Evolution of Dispossession
How to Steal a Country?

Thursday, October 30, 2008

Exxon's Record Profits

And how did these record profits come about? OPEC releases statement after statement saying the sharp increase is oil prices were not supply-related but due to the dollar-peg and the dollar's crash against other currencies. So companies like Exxon get to gouge the consumer domestically, due to geo-political issues with dollar hegemony, and post record profits. If the profits of Exxon (et al) are the highest they have ever been, and we have not really consumed any more than we did before, then one has to wonder about the integrity of such a system .

A few more days and I will be further depressed when the outcome of this fraudulent political system of ours announces a change of cast ; the lines of the play are still the same ....


MOM said...

The only way to win against the U.S. government and their corporations is to become a Sub-Chapter S Corporation. (one of them). I would like to invest, but we must incorporate! I think it costs about $500 to do so.

Tim said...

Let's not forget what caused oil prices to go as high as $147.

It wasn't a supply side problem. It never was.

It was the same Commodity Futures Modernization Act of 2000, which caused the current financial crisis on Wall Street. This Law permitted oil companies to use overseas exchanges such as ICE in the Caymans to corner the market on oil futures, even though they couldn't do so using domestic exchanges. This had the effect of driving prices up wildly to that $147 mark.

Now that the cat is out of the bag, and they know that we know, they have ceased this market manipulation, and prices have come down significantly.

"Corporate raiders" is right.

Naked said...

Exxon et al do not make their record profits on the price of gasoline. Like every other oil company, they have to buy and sell crude oil and natural gas. Most of their profits came from the sale of crude oil and natural gas. With oil being greater than $120 per barrel and natural gas greater than $10 per Mcf, of course a company is going to rake in the cash.

Gasoline in fact yeilds a profit about 20-30 cents per gallon. Exxon does more than just produce gasoline, if gasoline was so profitable, then why did Exxon sell of the remaining manned gas stations earlier this year?

People need to stop look at the $14 billion dollar profit and look at the profit margin. In order to make $14 billion, Exxon had to spend greater than $140 billion. It is the media that makes the oil industry look bad because companies are successful, but in times like this. Exxon et al should be seen as a model American company and does not require billions of dollars from a bail out.

scottie said...

I have no problems when corporations make profits, even at record levels. But they definitely ought to pay their fair share in taxes.

Naked check out another post on my site under the heading of CORPORATE RAIDERS.
In one post I remember an article describing Congress and the GAO releasing a report that even though taxes have a stated rate of 35%, 68% of US corporations paid $0. This boils down to shell companies created in tax-free haven nations. It is very intriguing.

But let's look at the larger picture with Oil companies specifically.

In the 1950's there was a push domestically to create a system of mass transit, like comprehensive rail and bus routes much like the European model. Such planning would certainly make the US less dependent on foreign oil no doubt. But the big oil companies lobbied to have this legislation scuttled, and they were successful.

When 4% of the global population consumes 25% of the world's oil supply something is terribly wrong. Arrogance. And when I see companies like Exxon with their tax lawyers and their huge tax breaks who take advantage of geopolitical scenarios to their benefit and who pay lobbyists millions each year to do their Washington bidding, it bothers me that record profits for Exxon mean the consumer got gouged.

I would hesitate to compare Exxon with failed Wall Street banks. There are a multitude of circumstances surrounding the collapse of certain banks. The sad thing is the discussion has focused on the rescue package, rather than the underlying source of the problem ; monetary policy. And now the Fed is tasked with the challenge of solving a problem it created in the first place, but with expanded powers. Check out Greenspan's testimony last week.

scottie said...

Thanks for the comments Tim and Naked. Please continue to offer comments on my posts !

MOM said...

I think that what is surprising is that now that the price of oil has come down, one does not the see the same reduction in the price at the pumps. Wonder if governments are colluding with oil companies to keep prices high at the pumps because governments reap a huge wind-fall in taxes when prices are high?