Exxon Mobil released its end-of-quarter report yesterday showing it made a healthy profit on its worldwide sales of energy products, and New York's Marxist Senator Charles "Chuckles" Schumer immediately sent out a call to nationalize the firm.
OK, Chuckles didn't really call for nationalization, but he certainly is headed in that direction what with his non-stop Marxist rhetoric. Can nationalization of the oil industry - already openly called for by one of his Congressional colleagues - be far behind when a man of his 'stature' repeatedly misconstrues the meaning of this news for his own agenda.
Considering that Exxon Mobil's profit results from sound business practices in an open market in which competition big and small is thriving, we should be rejoicing. I bet the employees are happy. I bet the stockholders are happy, and I have been remiss in not joining that happy group of dividend recipients.
In his boilerplate Marxist rhetoric criticizing the firm for doing well at its business, the Chuckster neglected to mention what most of the media also neglected to mention, that Exxon Mobil also paid nearly 300 percent more in taxes than the amount it received in profits. Also suspiciously absent from the reporting was any mention that Exxon Mobil made its profit - roughly 8.5 percent - the old fashioned way, hard work and a solid market share.
Let's take a look at the numbers that came out yesterday shall we? Exxon Mobil posted net income of $11.68 billion on revenue of $138 billion in the second quarter. That amounts to just under 8.5 percent profit.
The mainstream media propaganda machine immediately went on the offensive, making the point that Exxon's profit works out to about $1,400 a second.
Whoopeee! Jobs are secure and the economy will continue to rebound! But there is a much bigger question that must be, should be, yet was not asked. Did Exxon-Mobil make one penny of that profit through illegal or unfair business practices?
Did the profit margin posted by Exxon Mobil increase dramatically with the skyrocketing prices of gas at the pump? Uh, gee, no it didn't. And no, there are no massive investigations into Exxon's business practices.
Why not? Well, one could theorize that if an oil company doesn't get all the oil it refines into different products from its own oil fields, which it doesn't, that means it has to buy the oil from the oil field owners, usually countries like Saudi Arabia, Iran, and Venezuela. That means Exxon Mobil has to pay more to acquire its basic product, thus its expenses increase as the price of oil increases.
If Exxon or any other company that sells gasoline left its prices stagnant as the cost of a barrel of oil increases, it would go out of business in short order.
That Exxon Mobil executives were smart enough to not let that happen just convinces me that I should be buying their stock. Did you notice the news last month that Exxon Mobil is selling off all of its gas stations in the US? Wonder why? My guess is taxes and fees reducing the cost effectiveness of that facet of its business.
Let's take a look.
Less widely reported but of equal importance to its profit is that Exxon Mobil paid $32.361 billion in taxes in the second quarter, which means Exxon Mobil paid almost $3 in taxes - $32.361 billion - for every $1 in profits - $11.68 billion. That's nearly 300 percent more taxation than profit-making.
Oh, and just in case the media forgot to make the comparison, that amounts to more than $4,000 in taxes per second. Do you think Chuckles Schumer can say "hypocrite." I bet a gallon of regular he can't spell it.
While we're on things that the media didn't mention, let's talk about the jobs Exxon Mobil provides here in the US and around the world. And let's not forget to point out that if you go to the Exxon Mobil website you'll find that it has a wide range of petroleum based products, not just gasoline. The site also has a drop down menu showing countries where they do business that will simply astound you.
The point is, some of the profit this corporation made last quarter came from US gasoline sales. But another chunk came from international business. This is a world economy. This is what everyone has been saying they want because it is good for everyone.
Now we get it, and the first thing the Marxist Party, er, I mean national level Democrats, try to do, is find a way to take even more money out of the employees' and stockholders' hands. If Exxon Mobil making a 9 percent profit gets their knickers in a wad, they should check the cost-to-benefits ratio posted by Congress.
Does Congress actually do a cost-to-benefits ratio? Well it should, and if it isn't in line with the American private sector, we should be able fire those responsible without waiting for the next election.
From everything I've seen thus far, Exxon Mobil made its money on volume not on unfair trade practices. Try putting Congress up to that standard.
Based on Chuckles Schumer's math and socialist position the government should be fining itself for taking so much money up front. There should be an investigation into where all those billions of tax dollars went.
I wonder how well Congress would do if its actions were subject to competition.
Friday, August 01, 2008