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[nsidestrate]

But they have to turn a buck nside for providing us with the old black pollutant.

As an aside, I saw a table the other day listing the carbon tonnes per person produced by countries. Although China is the biggest polluter as a nation, per person the US and Canada are way above everyone else in terms of global warming. And I thought Canadians were more responsible than you "live for today" yanks

Its not real fair, because it is still 10 below zero in June for them.

[toffeeboy]

But they have to turn a buck nside for providing us with the old black pollutant.

As an aside, I saw a table the other day listing the carbon tonnes per person produced by countries. Although China is the biggest polluter as a nation, per person the US and Canada are way above everyone else in terms of global warming. And I thought Canadians were more responsible than you "live for today" yanks

Its not real fair, because it is still 10 below zero in June for them.

It's plenty cold in Russia too, but they have about 15% per head of the carbon levels.

[toom]

There is also the record-breaking profits being earned by companies in the oil business:

Exxon $86 billion
Total $74 billion
BP $60 billion
Chevron $58 billion
Shell $55 billion
Conoco $39 billion

Exxon broke the record it previously had set for profits by a U.S. corporation, earning $40.6 billion last year.

Source, Washington Post

As for the full year, Exxon had earnings of $40.61 billion, up 3% from $39.50 billion in 2006. On a per-share basis, that equated to $7.28 in 2007, compared with $6.62 in the prior year.

Revenue last year climbed to $404.55 billion from $377.64 billion.

Source

$40.61 profit on $404.55 revenue = 10.03% profit margin. Can we begrudge any business that makes a ten per cent profit? Really? If I sell $400,000 at a pizza restaurant, pay my employees and my suppliers, and take home $40K, have I done something immoral?

Despite the reality of the profit margin of the evil oil companies, we get this expected demagoguery from a certain presidential candidate:

"The Democrats know what needs to be done. Again, we're working trying to try push this agenda forward. The other day the oil companies reported the highest profits in the history of the world. I want to take those profits and I want to put them into a strategic energy fund that will begin to fund alternative, smart energy; alternatives and technology that will begin to actually move us toward the direction of independence."

As with typical liberal spew, it means well, so it must be right, right? Perhaps Hill's college professor was on to something when he identified her as a socialist (not that we'd ever hear this from the New York Times).

So Hillary wants to take those profits? Who will she take them from? A bunch of rich, corporate fat cats, that people like her (Democrats?) are fighting the culture war with, the evil rich.



Source This study, by economist and former Clinton administration official Robert Shapiro, shows who actually owns oil companies. I believe the pie chart speaks for itself. Pension funds, mutual funds, IRAs. Those are teachers, firefighters, and machine shop workers whose retirement depends on the earnings of their portfolios. Only 23% (individual investors) and 1.5% (corporate management) can realistically be called "fat cats" (and many, though not all, individual investors are not "fat cats").

Does Hillary not know this? Of course not; she's not stupid. She just knows that she can demagogue big numbers like $40 billion, knowing that it sounds unimaginable to the average voter. She's playing the class warfare card, and she's playing it because it works. That doesn't make it right.

And anyone who thinks her primary opponent is any different has got another think coming. "Change" indeed.

[the_hawk]

I was going to make a post about "big business" and then realised that toom nailed it better than I could have done.

[kinnipak]

[quote="Conoco $39 billion[/quote]


poor Conoco....how ever do they manage....

[nsidestrate]

Exxon broke the record it previously had set for profits by a U.S. corporation, earning $40.6 billion last year.

Source, Washington Post

I used Gross Profit, because they manipulate their income number. Its still a ton of money.

I'm not advocating that we screw the shareholders or specifically try to attack the profits of the oil companies. I was just teasing you about your post suggesting that taxes were the driver of high gas prices. It is quite possible that some of the many billions of dollars of profit for the oil companies is also included in the price.

Its particularly annoying because the tax code is crammed full of special tax breaks that exist only for the big energy companies. So it isn't the case that they are singled out for special punitive taxes. In fact, they get a million special tax breaks! The most recent was $14 billion in 2005.

[toom]

poor Conoco....how ever do they manage....

I don't know, but answer:

How much revenue did they have to get $39 billion?
What is the profit margin?
How much shareholder equity is there versus the $39 billion?
What is the ROI for those shareholders?
Who owns shares of Conoco? Is it corporate fat cats?
Do shareholders have a legitimate right to a reasonable ROI?

[CroMagnon]

Do shareholders have a legitimate right to a reasonable ROI?

Reasonable yes. What is reasonable?

And we shall continue to need answers to such questions until we reach a more enlightened Star Trek type world.

Cro

[toom]

And we shall continue to need answers to such questions until we reach a more enlightened Star Trek type world.

Cro

Good one. Unfortunately, there are many people, including fringe people from every single politcal faction, who believe this is possible. Born Agains think that if everyone would just listen to them, we could have a perfect theocracy. Sociology professots think that if we could allow them to conduct their social experiments, we could achieve a Great Society. Free market disciplies believe that there are no perfect answers, but that a free market, by definition, tends to solve most problems naturally.

I'm not advocating that we screw the shareholders or specifically try to attack the profits of the oil companies. I was just teasing you about your post suggesting that taxes were the driver of high gas prices.

I know that. I give you more credit than I do Hillary Clinton and her ilk (not much of a compliment, is it?) I just wanted to be clear that with as much competition as there is, even in a high-barrier-to-entry industry like big oil, free market forces will drive prices down to a reasonable level.

Reasonable yes. What is reasonable?

We have a mechanism in place for that, called the NYSE. Stock investors take on more risk than bond or money market investors, so they reasonably expect a higher return. If profits got too high, demand for the stock would increase to the point where the ROI re-settles at a reasonable level. For blue chip stocks, a historical reasonable level is 10-12 per cent. If it were FDIC-insured CDs, with their inherent lower risk, the level might be 3-4 per cent, or barely outpacing inflation.

We don't need government to determine what should and shouldn't be a reasonable return on any investment. We have an efficient free market doing that already, with a lot less bureaucracy.

used Gross Profit, because they manipulate their income number. Its still a ton of money.

It is misleading, because they have no control over the amount of taxes they pay (other than lobbying). As the taxes go higher, it would become more misleading, and in a country like the US, with our punitive top corporate tax rates

Among all OECD countries in 2003, the United States’
top statutory corporate tax rate was the third highest;4 it
was also higher than the top statutory rates in approximately
90 percent of those countries.

Source

From the 2006 XOM annual report, page 40 Here are Exxon Mobil's basic costs (numbers in millions):

Total revenues and other income 377,635

Costs and Other Deductions
Crude oil and product purchases 182,546
Production and manufacturing expenses 29,528
Selling, general and administrative expenses 14,273
Depreciation and depletion 11,416
Exploration expenses, including dry holes 1,181
Interest expense 654
Sales-based taxes(1) 30,381
Other taxes and duties 39,203
Income applicable to minority and preferred interests 1,051
Total costs and other deductions 310,233

Income before income taxes 67,402
Income taxes 27,902
Net Income 39,500
Net Income per Common Share (dollars) 6.68
Net Income per Common Share – Assuming Dilution (dollars) 6.62

Corporate Income taxes were 7.4% of XOM's revenue in 2006. If all their sales were retail gasoline (they're not), removing that embedded tax alone would reduce the price at the pump from 3.25 to 3.01.

Now, remove all the embedded corporate income tax all of their suppliers pay, and their suppliers' suppliers pay, plus the 7.65% payroll tax all of them pay, and we can really see the tax burden that shifts, not to the big evil companies, but to the consumers that buy their products. Every company in the food chain is charging enough to cover their income tax plus costs plus profit, and the tax burden lands squarely on our shoulders when we fill up (or buy groceries, or cars, or...)

[CroMagnon]

I believe in the free market except when people lie, cheat and collude. Not saying that's happening with the Energy companies. But when the profit motive moves to the level of greed I am glad there regulatory agencies to catch and prosecute the Enrons of the world.

Cro

[toom]

[pusaqall]

I thought we only have Black Friday, we also have Monday's. Even so, I will keep on playing.

[darvon]

Do shareholders have a legitimate right to a reasonable ROI?

Reasonable yes. What is reasonable?

And we shall continue to need answers to such questions until we reach a more enlightened Star Trek type world.

Cro

Actually no.

Star Trek, especially in the later years/versions, struggled with economics. They went to great measures to introduce faux-money items, so as to keep greed or simple profit in thier plots. What fueled Harvey Mudd? How can you have a smuggler without money? Yet with replicators and holo-decks, how do you keep the simple concept of "job"?

They finally gave up altogether and created the Ferengi. The MBAs of Known Space.

Even with replicators and HoloDecks, mankind continually modified how to keep score. Even the minds of Star Trek could not come up with an alternative to keeping score. The essence of humanity is not "kumbaya" but rather "Cha-CHING".