Thursday, October 26, 2006

In Need of a Lifeline

Today, ExxonMobil released some very bad news, via Steve Hargreaves at CNN Money:

ExxonMobil, navigating declining oil prices and higher production costs industry-wide, managed to post the second highest quarterly profit of all time, dazzling investors and sending the stock to a record high.

Exxon, the world's largest publicly traded oil company and its biggest corporation by revenue, said it made $10.5 billion in the third quarter, or $1.77 per share on revenue of $99.6 billion. It was a 26 percent increase in earnings for the company.

"They make more in one quarter than some companies that get more headlines have in market cap," said Fadel Gheit, an oil analyst at Oppenheimer. "I have been watching it for 20 years and it never fails to amaze me."
Some, desperate to spin these non-record setting, soaring profits as good news, might cling to the fact that Exxon's earnings exceeded expectations by almost twenty cents a share. However,I think we should all come to grips with the fact that ExxonMobil did not, I repeat DID NOT, set the all time record for earnings in a quarter. Hargreaves has the courage to tell the unvarnished truth, in all its ugliness:

Exxon's earnings did not top its best quarter ever, which came at the end of 2005. Exxon made $10.7 billion in the fourth quarter of 2005, the most ever for any U.S. corporation.
I think I speak for most Americans when I say: this regression will not stand. No, my fellow citizens, ExxonMobil and its shareholders are in need of a massive relief effort - and not some half-hearted gulf coast renewal sop, mind you. No, we need to mobilize the vast wealth of this nation to rectify this wrong. I'm talking even more tax cuts - prodigious in size, scope and duration - established in order to insure that ExxonMobil, and other struggling oil companies, can continue to break earnings records in perpetuity.

I expect the usual suspects to complain: those lazy, avaricious middle class Americans, medicare devotees and seniors looking for a free handout from the Social Security system. They will argue that their entitlements are more important than saving our oil industry leaders from certain financial mild disappointment ruin. They will tug on our heartstrings, play on our fears - appeal to "reason." They will wage - gasp! - class warfare. But, as followers of Jesus Christ, we must resist these urges to interrupt God's intended distribution of capital.

Besides, what are they complaining about anyway? Last time I checked, the economy has been growing like gangbusters. Even crypto-communist Kevin Drum agrees, calling it "five years of economic expansion." Egg-on-his-face Drum has more:'s a nice graphic that explains why most people aren't very impressed by the past five years of economic expansion. It's because they're not seeing it themselves:

Through September, the growth in hourly wages was flat or negative for 27 of the previous 29 months, according to Labor Department data....Workers are barely keeping up. Health care, wages and energy prices are consumers' top three economic concerns, according to a Gallup poll in September.

"That has to do with things like stagnant wages, fears of jobs being outsourced, income security. These are on people's minds, particularly in lower- and middle-income areas," said Dennis Jacobe, chief economist in Charlotte, N.C., for Gallup.

"I think it's quite clear to people that their paychecks are being squeezed when they try to meet their family budgets," said Jared Bernstein, the chief economist for the liberal Economic Policy Institute in Washington. "There's a disconnect between overall economic performance and paychecks of working families."
So in this contentious election season, with the day of reckoning fast approaching, I beseech you, ladies and gentlemen ,to call on your representatives, Senators, members of Congress and candidates alike, and tell them where your priorities are. Tell them to resist the urge to respond to the bellyaching of so-called middle class Americans. Instead, tie a money green ribbon around your tree, and join me in my crusade to:

Save ExxonMobil!!!

(the embarrassment of not breaking earnings records every quarter)

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