Exxon reports record profits while giving America the finger
Next time you put gas in your car, as you watch your savings and your kids' college money flash before your eyes on the gas pump display, whisper that to yourself like a crazy homeless guy: "Exxon reports record profits." While Americans choke on high gas prices and increased transportation costs contribute to the economic downturn, Exxon has been making extra trips to the bank to sock away their record-breaking quarterly net income of $11.66 billion, a 14% increase from the same quarter a year ago.
Who can blame them? That's their job. They're a business. Making money any way they can is what they're supposed to do. No one would buy their shares if they all of a sudden got a Scrooge-like change of heart and decided to make less money.
The people who deserve a hard kick in the balls is the long line of politicians who have screwed Americans repeatedly by stubbornly refusing to require improved fuel efficiency in cars sold in America. Oh, sure, our government has regularly upped the CAFE standards that dictate the fuel efficiency required of cars sold in America. Always, however, those standards have been set up in such a way that the auto industry has been given 10 years to reach compliance. What happens in ten years? Someone new enters the White House; someone new gets appointed as the Administrator of the National Highway Traffic Safety Administration, who dictates CAFE standards. That new NHTSA Administrator waves his magic wand and bumps the CAFE standard increase out another 10 years. That's how we've got to where we are now.
You can see the crime our government has perpetrated by visiting the NHTSA website, and looking at how the CAFE standards have been made into a bad joke.
There we learn that a goal was set in 1974 for passenger car fuel economy to increase to 27.5 mpg by 1985. Despite various decrees that the CAFE standard would be increased over the years, the passenger car rate has remained at 27.5 mp since 1990. For 18 years, our government has absolutely refused--not failed, but refused--to force car manufacturers to increase fuel efficiency ratings. Car manufacturers have of course deployed veritable legions of lobbyists to massage our elected representatives into compliance with the manufacturers' wishes, but again--auto companies are businesses. It's their job to make money, often by saving research and development costs into increased fuel economy.
The government alone carries the blame for the fact the average car sold in America still gets less than 30 mpg. A bill to forcibly increase the CAFE standard to 35 mpg by 2020 is absolutely stalled in Congress. 5 lousy mpg in 12 years. In Europe the standard is 43. In Japan it's 50.
For a bitter laugh, visit the ridiculous government website fueleconomy.gov. Then search for a 2008 "family sedan" that gets more than 40 mpg. There's one: the Toyota Prius Hybrid. That's it.
We can't expect auto manufacturers to willingly and happily spend money on R & D. Our government needs to strong-arm them, and it needs to strong-arm consumers into buying smaller cars. If that means premium taxes on various luxury SUV's, I'm for it. Otherwise, we're going to have to do this the old-fashioned and painful free market way: by bleeding out on high gas prices until we don't have a choice but to change our ways. I'm a youngest child, so I believe in learning from potential mistakes. I'd like us to learn from what's looming before us, and then avert it, instead of getting bitch-slapped by the future.
PS: Do I even need to mention the environment?
Comments
Yeah, but what will ever be done about it? Nothing we say or do will change shite with places like Exxon or OUR government. It makes me sick and pisses me off.
Anyway, it's Friday, so I'll try to smile.
I disagree with the blanket statement that the oil companies aren't to blame. I think that is an almost absurd statement. I made a point about this a little over a week ago, and it's even more true reading this now. Oil companies justify the high cost of gasoline by bringing up the rising prices of crude oil, refinery problems, and supply concerns. What is often ignored is the lack of new refineries and improvements and repairs on existing refineries, which impact the supply side of things. Even when taking into consideration the rising cost of crude, the oil companies and the government want to point the finger at OPEC in an effort to push the blame away from themselves. Nearly any other company in any other industry has been dealing with increased costs for raw materials or transportation, and they often have to take a cut in profits to maintain affordable prices for the consumer. A plastics company deals with rising petroleum costs, but the price of a plastic bottle has not increased at a rate anywhere close to fuel. Oil companies are posting huge gains because they are not willing to sacrifice even the smallest percentage of a cent in an effort to keep prices affordable. Another example I use often is fast food. The cost of transporting items to fast food places has increased dramatically with the cost of fuel, yet your hamburger still costs the same. The fast food company is taking the hit on their profits, because if they raise the prices, people will stop eating at their restaurant. For example, your hamburger cost a dollar, and 35 cents of that is profit. When gas prices go up, the hamburger is still a dollar, but now only 30 cents are profit. If we consider the Exxon method, that hamburger would now cost more, but rather than profits decreasing slightly, they would probably double. If materials costs and development costs have increased, profit should have either decreased or remained flat, not skyrocketed.
Oil companies get away with this mathematical formula because fuel is a neccessity. Anyone can live without a hamburger, but nobody with an automobile can operate it without fuel. They are hitting us with high prices, and will continue to get away with it because there are no regulations to protect consumers. Oil companies still get huge tax incentives, despite posting record profits. Thanks in part to Cheney's meeting with Big Oil, our national energy policy is practically written by the oil companies. You say we should point the finger at government, which I partially agree with, but to absolve Exxon of any blame for their part is absurd. There is a point where you can blame someone for absolute greed, and this is a prime example. Countless other industries are suffering because they have taken the hit with rising fuel and/or raw materials costs, and this is weighing heavy on our entire economy. If Exxon and other oil companies were less greedy, the entire economy would get a boost from either lower costs for consumer goods or steady profits for other companies, which in turn would reduce the number of layoffs and company closures.
I wish our Gov. was actually an ass-kicking robot or agent so he could scare the EPA into letting us have less pollution.
Just like the equation for "best completed literary work" (A writer who loves words, plus an editor who hates them), the best business equation seems to be businesses that understand efficiency and profit and a regulatory system to keep things from spinning out of control. But this equation doesn't really "work" when the same people who own the businesses are allowed to write the legislation that shapes the framework.
Abramoff!
You know what I miss? The days before Hugo Chavez went completely fucking nuts, and I could get some smug satisfaction from purchasing gasoline from Citgo, a wholly-owned Venezuelan subsidiary. Not that I'm all that enthusiastic about needing to buy gasoline in the first place, but just the fact that Bush finds him irritating was a little perk.
But now, Hugo's gone all Lord of the Flies on us, and I can't even associate with Citgo without feeling creeped out and depressed at the inevitability of fascism. You know who Chavez reminds me of now?
Benjamin Linus. Benjamin effing Linus, the crazy, bug-eyed manipulative little creep from Lost. Hmm. Do you think this means my daily existence has become overly mediated? Only grad-school dorks need reply.
Yes. After all, that's how "Cultural Studies" took over otherwise previously respectable English Departments. Everybody stopped evaluating life through literature, history, psychology, etc. and decided they wanted to evaluate the world using the characters from Gilligan's Island.