Should The Oil Companies Be Punished For Making Obscene Amounts Of Money?
Its become very popular for people to critise companies for making a profit. Stacy at the Birds and Bills has a post on Socially Conscious Investing.She’s proudly willing to sacrifice her retirement so long as Oil companies don’t make too much money.
Please snatch money from my retirement plan. I have no idea what stocks are in the mutual-fund mix in my 401k, but personally, I’m perfectly ok with taking a hit there in return for tighter controls on the petroleum companies that are currently reporting annual profits surpassing the GDPs of most developing nations.
Why are people upset that Exxon is making a profit?
When the demand for oil has been the highest in human history, don’t you think the companies providing it should be making more money than ever before? This is their golden period. If they weren’t reporting record profits and distributing dividends[which incidentally get taxed twice anyway], it would mean they’re clearly mis-managed and the Execs needed to get fired. They’re making money because supply is limited and global demand keeps on increasing. Because people are unwilling to stop driving their 9-mpg hummers to pick-up they’re 2 year from day care. Not because they’re scamming poor people or doing anything illegal!
Why are a lot of people so anti-business? Would we rather have the Oil companies report lousy returns like the car companies? Would we prefer they lay people off and ruin local economies like Houston? Isn’t that like being unAmerican?
I think that America has become greatly anti-business in the past 2-3 years. If the trend continues we’ll be just like most of Europe and we’ll no longer be amongst the best places on earth to start a business and become wealthy!
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June 16th, 2006 at 7:08 pm
It’s not so much an anti-business sentiment as it is a powerful reaction to a set of circumstances. When we saw gas prices begin to rise dramatically, the newspapers reported the oil companies as saying it was because of increased costs that they were forced to pass on to the consumer. Granted, that wasn’t the whole story, but that was what was passed on to consumers through the media. So long as it was believed that everyone was feeling the pain together, people put up with the high gas prices. But when the oil companies posted record profits, the general attitude was, “Wait, hold on, weren’t you the guys saying we’d ALL have to suck up higher oil prices? What happend to that?” Because the public had the impression that oil companies were suffering along with ordinary folk, and then had that illusion shattered by the reports of enormous all-time profits, people naturally felt betrayed.
And even after record profits have been posted — again — fuel prices continue to rise. Every time people go to the pump and see those high prices, they’re reminded that while their own pocketbooks are leaner, the oil companies aren’t suffering at all. It’s in their face so frequently that naturally it’s at the forefront of many people’s minds.
June 16th, 2006 at 7:22 pm
Thats sort of true in a way.
Remember when a computer used to cost $2000 and the software $200? Now it costs $299 and the software costs $2000! And microsoft is the richest company on earth. why aren’t they being taxed? Just because thats not being hyped!
But when oil is selling for $70/barrel on the open market instead of $25 like it did several years ago, you’d expect their profit to go up, even if their margins didn’t. Why should the oil companies suck it up? If you don’t like it, drive a cycle to work! Or get a fuel-efficient car. Or buy an oil well or invest in exxon!
incidentally, my new job will entail a 2 mile round-trip walk to work each day!
June 17th, 2006 at 12:02 pm
I’m with stock mama on this. Oil is very much a necessity of living in the modern day life. It’s not like the price of coffee going up where I can say, “Ehhh, I just won’t buy that anymore.” If I don’t buy it, I’m not going to be able to get to work and that means I don’t make money and starve. There are a lot of people who are struggling on minimum wage or fixed incomes that are hurt by the raise in oil prices. And then the oil companies report record earnings which means another few million for the CEOs and executives.
This is why people are upset.
Interesting point about Microsoft, and I think a number of people hate them as well. In the meantime, I suggest people just start using the open source software. It’s generally just as good (sometimes better like in the case of Firefox), just different than Microsoft stuff.
June 18th, 2006 at 7:07 am
its not the oil companies that are jacking up the price of crude oil. its the increased demand from the world’s growing middle class population.
I agree, it does negatively impact the middle class and lower middle class, but thats life. Rising property prices also price poor people out of the market[like i have been in San Diego!] but you learn to adapt.
Doing nothing except complain about it doesn’t help your situation, does it? You need to find an angle and exploit it. Thats what I’m trying to do buy investing in oil.