In 2008, ExxonMobil set a record for making the most profits in a year, breaking their own former record. Well, you ain’t seen nothing yet. According to the Wall Street Journal, spiking oil prices are set to lift earnings of ExxonMobil by around 50% compared to last year. Will they again break their record? Win or not, it is clear who is going to lose. You.
Other oil companies, including Chevron and ConocoPhillips, are set to see slightly smaller profit increases of 33%. And yet, two months ago the Republicans voted unanimously to continue billions of dollars in subsidies to the big oil companies, while simultaneously calling for drastic cuts to social programs including Medicare and Medicaid. Adding injury to insult, the Republicans are using high gas prices as an excuse to open up more environmentally endangered areas to oil drilling, even though doing so will have virtually no impact on gas prices ever, and absolutely none in the near future.
9 Comments
And like 2008 Exxon wil pay no US taxes.
Drill baby drill, reality check- it take YEARS before new permits result in oil. More logical would be to take existing technology and invest in them to cut use.
According to the book “Aftershock”the reason the price of oil spikes like this is because the wealthy have too much money and end up speculating. The price now has very little to do with actual supply and demand. The rest of us pay the price.
http://notyourdaddy.wordpress.com/2008/04/26/evil-oil-companies/
…?
But we can’t tax the oil companies or eliminate their subsidies, or they’ll lay off American workers and pass the increased costs off to the consumers!
CGE, that article is slimy propaganda. The oil companies pay dividends to their shareholders with their gas profits. The government builds roads and bridges with their gas taxes.
And knowing something about corporate accounting, comparing industries based on “cents profit per dollar of sales” is almost completely meaningless. And they have the gall to say “that doesn’t even take into account the corporate taxes the oil companies paid” — umm, maybe that’s because ExxonMobil didn’t pay any corporate taxes.
And while I mostly agree with them that ethanol is a bad idea (at least as currently done) they have it backwards about milage — ethanol gives you better milage, not worse.
Do people believe this bullshit?
CGE and IK on the “article” – the reason that people are angry with Big Oil is not about how much money they make, at least not directly. It’s about the fact that consumer gas prices skyrocket based on future speculation, which is totally manipulated. In every other manufacturing business, prices are set based on costs and competition keeps the total price around a reasonable point – for oil companies, they increase prices based on future fantasy.
Big Oil should not be treated as a manufacturing industry anyway. They are a utility. And profit margins for utilities, which provide critically needed services to all consumers without real competition, are always very low – because the absiolute profits are usually very high, since everyone has to buy from them.
The article linked to by ChinaGreenElvis completely and totally omitted mention of the subsidies until a commenter later brought it up. Then he totally dismissed it with a snarky comment of his own. Worthless article. Worthless blog. His, not yours, IK.
The oil bubble can be pricked very easily by significantly raising the gas tax. With a lower oil price the gas cost with tax won’t be any higher than we’re paying now.
I have not independently verified this, but if true it is a most welcome step in the right direction.
http://www.foxnews.com/politics/2011/04/26/boehner-opens-door-cutting-big-oil-subsidies-tax-breaks/
Blog also attempts to forward the same idiocy as other libertarian arguments.
IF raising taxes/cutting subsidies on oil companies will be a wash due to symmetrically raised prices at the pump
THEN cutting taxes/raising subsidies on oil companies will result in symmetrically lowered prices at the pump
THEREFORE we serve our best interests by lowering the tax rate on oil companies to 0%
This also applies to corporate taxes in general and taxes on the wealthy. The exact same arguments are advanced and none of them are intellectually defensible. They typically don’t like it because it exposes the black corporatist roots of their flowing blond capitalist hair.
I was arguing this same point re: taxing the wealthy on a site with someone and made this same argument (…therefore, tax rates for the rich should be 0%). He claimed I was being absurd, that nobody really believes that, that it didn’t make sense. Irony of ironies, someone else managed to link to a post he had made previously where he made that exact same claim: that tax rates on the wealthy should be 0%.