I am going to stir up quite a storm with this post.

As everyone has no doubt heard, ExxonMobil posted NINE point nine BILLION in profits in the third quarter, and indeed has set an all time record, (one I expect to be broken in short order, say within 18 months), by earning revenues EXCEEDING ONE HUNDRED BILLION DOLLARS!!!!

Why am I going to stir up a storm with this info?

Because I say good for them.

Let’s say that one hundred billion dollars is instead one hundred dollars, making those outrageous profits just under 10 dollars. That’s a profit margin of less than ten percent. Supermarkets survive on less profits, I know, but other business generally need markups of thrity to fifty percent to make it. Except Wal-Mart. They made a deal with Satan so they could keep their profits down for eventually earning all of the profits in the world. One day there will be one company, called McDisneySoftMart. WalMart, for those of you interested, had earnings of 2.7 billion in the second quarter of this year, on sales of 76.8 billion. That is a profit margin of about 3 percent or so.

So I say good for the oil companies. Most business try for a much higher profit margin than 10%. The oil companies could try for 15 percent profit? Would that make us wake up? Probably not.

You know why? Because we love to drive. If you want to know why those evil oil companies made a measley ten percent profit from the work they do getting us fuel for our planes, trains and automobiles, then go look in a mirror.

If it bothers enough people that they are being fairly compensated for their effort and hard work, then maybe people will drive slower or drive less. That is the only way to make the oil companies profits go down.

By the way, before I go, I want to remind everybody that is mad about those profits that those profits directly reflect a certain amount of tax money going into the various government coffers through fuel taxes. By driving you are doing two things that are good.

You are making an American corporation bigger and stronger, and giving the government money to fund programs such as roads and bridges.

And if someday you have a business I will hope for you that you have a profit margin of at least ten percent.

Said Kender @ 11:06 pm | Permalink   

1. Yay, capitalism!!!!

   Comment by Ogre — 11/1/2005 @ 9:42 am

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2. The only issue I have with this is that with the increase in prices being so drastic ($1.90ish to $2.90ish with various flucuations per state) in such a short period of time, we must remember that trickle down works both ways. Now the stores that have stuff (products for sale) have to pay the transportation companies more money so they increase their prices also. At the same time a company with X number of employees cannot increase the pay of said employees in order to make up for the inflation that is sure to follow, and may in fact have to lay of some employees. If the price of fuel had increased more incrementaly over a longer period of time, it would not have such a negative impact, but I fear we have not seen all the repercussions yet of the oil price increases of this summer. Just my opinion, I am whining because it costs me almost 2 gallons of gas just to go to work everyday, and I have to go home too. 4 gallons times $2.60 = over $10 a day, times 5 days = $50 a week or $200 a month, this bites into expendable income I would have used to go out to eat, watch a movie, buy my son a new toy etc…. money those businesses are now not getting to support their employees.

   Comment by Richard Nixon — 11/1/2005 @ 10:57 am

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3. Absolutely correct, good post. I’m so tired of and lost a lot of respect for Bill O’Reilly of Fox News. For a Harvard graduate, he’s really turned into quite a dumbass regarding the imaginary issue of price gouging. Anyone who has a problem with price gouging would do themselves a favor by taking a quiz at the Mises Institute. I highly recommend stopping by and checking this quiz out. It’ll take a few minutes, they immediately email your results, and they promise not to add you to any list unless you specifically ask for it.

   Here’s the quiz site:
   http://www.mises.org/quiz.asp

   Comment by Uncle Jack — 11/1/2005 @ 12:37 pm

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4. Uncle Jack, I thought this post would earn a comment from you. Glad to see I had your response figured out and that I am thinking correctly here. Thanks for the nickels worth.

   Comment by Kender — 11/1/2005 @ 1:28 pm

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5. Hell Kender,
   I’d gladly pay an extra 10 cents a gallon if it would make more Libs squirm in their liquids over the evil of Capitalism. Go Big Oil!

   Comment by Glen — 11/1/2005 @ 5:45 pm

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