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Exxon Mobil made $45.2 *billion* in profits last year,

by Ziks511 / January 30, 2009 12:00 PM PST

that's after similar performance in 2007 (both years it was the most profitable company in the world), and apparently it's on track for this year too. How happy the American motorist must be that nearly $4.00 gas wasn't just a profits grab.

Rob

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GOOD!
by James Denison / January 30, 2009 2:30 PM PST

Nothing like getting dividends when you are invested in American oil companies. Buy some shares and take advantage of it.

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See, this is where Adam Smith draws his circle too tightly.
by Ziks511 / January 31, 2009 6:18 PM PST
In reply to: GOOD!

Smith was concerned with producers only, which is but one half of the whole, the other being consumers. Actually, except for the Automobile business where the figures used to be bigger, the breakdown is more like from 1 to 10% producers and their investors, and more than 97% consumers. Now I understand your point of view James, but try to understand mine. For the country as a whole it is better for the 97% to get the best deal possible, without ruining the 10% of producers. There are ways of assessing gouging, even when the price of a barrel of oil has been artificially inflated by the very people who are supposed to be producers to in excess of $70 a bbl.

It is equally true that different forms of shares have different values and returns and that these returns are at the judgement of the Company. Even in good times like those lately for Exxon, the shareholder will not receive 100% of the value due him. The Company keeps extra money for itself, and pays certain individuals extravagantly.

The $500,000 party thrown by one of the investment banking crowd to celebrate it's receiving a bailour, should in a world where all else is equal have resulted in the firing of the board and screams from stock-holders such as yourself, since it was your money they spent. In fact it was doubly your money they spent since it was money which might have figured into regrowth of the company, thereby creating dividends next year, but additionally, they were your tax dollars.

We are now talking in a realm where numbers appear so unreal, that perhaps $500,000 is chump change, but there are a lot of chumps who could survive on that change for 50 years or more.

Corporations have responsibilities to the people who work for them, to the people who invest in them, to the counties in which they are located, the states where their plant's are, and to the Federal Government. Each layer of that particular lamellar structure provides services and/or resources for the company, and has a right to expect some degree of compensation. Much of that compensation lies in the intricacies of the tax system. Taxation isn't an evil, it is an necessity in anything but a barter economy. It pays for Policemen, Firemen, the Army the Navy the Airforce and the Marine Corps. It pays a tiny portion of the salary of the woman or man who calculates the acreage owned by the company which goes into figuring out how much of the Police and Fire and Water and Sewerage and Road Maintenance and scores if not hundreds of other things that the company depends on the local, city, state or Federal system to maintain itself.

I'm not one of those who says that the Economic activity of a country should be a zero-sum game. But having watched golden hand shakes turned into handshakes that should properly be calculated in some mythological substance like mithril to really represent their worth, Having seen losing companies compensate their officers in millions year after declining year, surely you too see something is amiss.

And as is known even by CEO's and Governments there are two kinds of money. There's the money that you give to the rich which remains static, and there is the money that is put into infrastructure or even into welfare that goes around and around and around multiple times When I was a student at the end of the 60's the multiplier factor for corporate money was believed to be 2.45, while the multiplier for welfare was 20 something. If you're in an economy on its heels wavering, you want the biggest bang for each and every buck. I was deeply apalled to see that Tax Cuts have remained in the budget signed by Barack Obama, and have pushed out most of the infrastructure plans. Well tax cuts as the Bush years have proved so clearly do nothing for an economy but weaken it.

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Explain then...
by James Denison / February 1, 2009 1:47 AM PST

...when crude is $50 barrel and that yields gasoline prices of $2 per gallon in USA, why is it "gouging" when crude soars to $150 a barrel and gasoline isn't at $6 per barrel. Also, if the oil companies are considered "gouging" by taking a lower profit percentage for revenue produced, what's the excuse for politicians now who really DO WANT TO GOUGE US WITH HIGHER TAXES on gasoline? Who is worse? Those who lower their percent of profit per barrel of crude to make the price increase be less than it would otherwise, or those tax crazy politicos?

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It could be...
by J. Vega / February 1, 2009 3:30 AM PST
In reply to: Explain then...

It could be a matter of sales volume. If you just look at the raw numbers of profits, Exxon-Mobil is #2 on the hit parade, they were edged out by Wal-Mart. More sales makes for more profit, volume in action.
BTW, looking at financial figures, Wal-Mart seems to pay a 34.4% tax rate on profits, and Exxon-Mobil seems to pay a 41.8% tax rate on profits.

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I'd like to see a citation for this information for my own
by Ziks511 / February 4, 2009 3:23 AM PST
In reply to: It could be...

edification, and subsequent knowledge. Hope you can supply it.

Thanks
Rob

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Why not research...
by J. Vega / February 4, 2009 3:42 AM PST

Forbes magazine does articles listing the ranking of corporations and their profits.
For the raw details of things like sales volume vs. profits, etc., try looking at the financial reports of a company. Wal-Mart is WMT and Exxon-Mobil is XOM on the exchange. Look up and apply calculator.

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RE: politicians
by caktus / February 3, 2009 9:42 PM PST
In reply to: Explain then...

not to mention that some of them are apparently too important to pay taxes.

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A critique of the above analysis from and MBA up here who
by Ziks511 / February 8, 2009 2:41 AM PST

is a close friend and a class traitor as is his brother. They both grew up in the lap of privilege and went to Canada's premier Private School and they both were so repelled that the older one (not this correspondent) has written quite a moderate book about the school which has all the guilty Conservative types up in arms. Michael on the other hand has a Buddah like calm about him, which has served him well in his corporate life. He has many friends from his schooldays, does not share their economic views, but maintains the friendships never the less. I am one of the few from outside that world, but I am the one with whom he talks economics, and despite his MBA he listens and frequently agrees. Just wanted you to know I'm not alone in my opinions up here

"Did you take Macroeconomics? A cogent and persuasive analysis, sure to enflame the (the adherents) of Bushdom." Potentially inflammatory material removed.

This means that I have collected the agreement of Krugman Isaacson and FitzGerald, though there only 3 Nobel prizes for economics between the first two.

Rob

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BTW thank you for catching me on a nice coherent evening
by Ziks511 / January 31, 2009 6:35 PM PST
In reply to: GOOD!

so that I could copy my response to most of my friends, who share my disthymia regarding the last 30 years, aw $#*! the last 40 years of the dismantling of the New Deal. There are a lot of us intelligent aging post-new dealers out there who despise the post LBJ Presidency and Congress too. Rachel Maddow is the only one who doesn't lose her cool, at least on Television or the Radio. My friends like myself came from privilege and recognized that there was a great deal of thanks that we owed for our position, not least to our parents and grandparents. Not all of us had parents who served in the Military like Jimmy Carter, some served in the Civil Service like Richard Nixon, but the American War effort, and the American Anti-Poverty effort otherwise known by all those acronyms from the New Deal, did not pass all of us over. Assuming Obama can pull together *his* team, and not Bill Clinton's by the end of his second term, perhaps we can set up a Democratic party as strong and as healthy as the one into which I was born.

rob

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This seems to be an opportune time to discuss
by Ziks511 / January 31, 2009 9:19 PM PST
In reply to: GOOD!

Friedrick von Hayek, the Libertarian Economist whose school is defined in a side box in Wikipedia as old Whig, Classical liberal, the Austrian school. I am willing to bet money that none of his adherents not just here at Speakeasy but in the country at large are aware of those origins for his thoughts or that he is a liberal Economist. Rather than understanding the entirety of his work, or Economics in general, people have latched onto a complete misunderstanding of the terms Conservative and Liberal, and their implications in the Econmic sphere.

Between 1938 when he declined to return to Austria following Hitler's Anschluss, and 1940 Hayek worked at the London School of Economics and wrote the book for which he is best known: The Road to Serfdom.

"It was during this time that The Road to Serfdom was written. Hayek was concerned about the general view in Britain's academia that Fascism was a capitalist reaction against socialism. A chapter in the book is entitled, "The Socialist Roots of Nazism." The book was to be the popular edition of the second volume of a treatise entitled "The Abuse and Decline of Reason".[6] It was written between 1940-1943. The title was inspired by the French classical liberal thinker Alexis de Tocqueville's writings on the "road to servitude".[7] It was first published in Britain by Routledge in March 1944 and was quite popular, leading Hayek to call it "that unobtainable book," also due in part to wartime paper rationing.[8] The book was favorably reviewed by George Orwell among others. When it was published in the United States by the University of Chicago in September of that year, it achieved greater popularity than in Britain. The American magazine Reader's Digest also published an abridged version in April 1945, enabling The Road to Serfdom to reach a far wider audience than academics.

The libertarian economist Walter Block has observed critically that while the The Road to Serfdom makes a strong case against centrally-planned economies, it appears only lukewarm in its support of pure laissez-faire capitalism, with Hayek even going so far as to say that "probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all of the principle of laissez-faire capitalism" [9]. In the book, Hayek writes that the government has a role to play in the economy through the monetary system, work-hours regulation, social welfare, and institutions for the flow of proper information.[10]

http://en.wikipedia.org/wiki/Friedrich_Hayek

Well reviewed by that arch Conservative and Libertarian George Orwell. Please note as well its criticism of Laissez faire Capitalism, which is the touchstone of most who embrace (but haven't read) his book. There is more to his thesis than its title on the dust-jacket.

Hayek's primary thesis is that both the Soviet centrally directed system and the Nazi centrally directed system won't work and will make of all its workers Serfs of their political Serfs. That is certainly what Russia was at the time and continued to be until 1990. However Hayek never intended this criticism to apply to the United States of Great Britain or any Social Democracy then existing or subsequent. Scandinavia is a classic example of a Socialist society which has not turned its citizens into serfs or put them in servitude (de Tocqueville), nor has Holland or any other country in Europe. You can not turn the book on its head and start naming systems you don't like and have them fit the premises of the book. The book is locked in its time period and in two foolish attempts at economic centralization. No one in the United States or anywhere except perhaps South America Pinochet's Chile, paradoxically a result of Milton Friedman and The Chicago School where Hayek worked, or Robert Mugabe's Zimbabwe which has been in freefall for decades has attempted to centrally control the economy. Both efforts were disastrous.

Rob

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what does this have to do....
by James Denison / February 1, 2009 1:51 AM PST

...with the subject you started the thread with? And isn't it about 60 years out of date?

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Tangential at best, but it is those in the US who cite Hayek
by Ziks511 / February 4, 2009 3:18 AM PST

who are those who think that taxation is inherently wrong, that returning to the tax levels of the 1960's and 70's will cripple America despite the exceedingly healthy economy from 1945 through the early 70's under a substantial tax burden. The problem in the taxation area is that corporations (a special interest group if ever there was one) have been removed from the equation.

Sadly I no longer have the citation to hand, but Corporate taxes in 1955 comprised roughly 50% of over all tax revenues. Today they are less than 10%. Taxation of the rich and super rich has been declining for the last 30 years and taxation of the Middle Class and the better off poor have risen substantially. And Republican administrations, who instituted these tax cuts, have generated enormous deficits which they have handed to the Democrats twice in the last 17 years.

I don't like seeing an undemocratic America, and when two relatively small special interest groups have succeeded in effectively pulling themselves out of the tax system, and dumping the cost onto the broad majority of the American people that's how it looks to me. I've almost gotten to embracing a flat tax system, assuming a large enough exemption for the poor and middle class. But corporations who use public resources, and they all do in greater percentage than individuals, have to contribute to the cost of public services that they depend on.

FYI, in Soviet Canuckistan, you don't get to deduct your mortgage payments from your tax bill.

Rob.

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James, you and I will always be at permanent loggerheads
by Ziks511 / February 4, 2009 3:27 AM PST

regarding economic and political issues. Your opinions are as fixed as are mine. I respectfully suggest we agree to disagree.

Rob

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(NT) There's hard times all over. I feel for them.
by Dan McC / January 31, 2009 4:18 AM PST
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Great
by C1ay / January 31, 2009 9:27 PM PST

That's pretty good for a 7.6% profit margin. Even companies like Wal-Mart and McDonald's make better margins than that.

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RE: better margins than that
by caktus / February 3, 2009 9:46 PM PST
In reply to: Great

Not to mention that WalMart has nearly total control of product costs where EM has nearly none.

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So,does that mean....
by caktus / February 3, 2009 12:33 AM PST

....some one put $45.2 billion in their pocket?

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