“They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.” — Benjamin Franklin
O goddess of misty, dreamy-eyed moon!
O raven-locked, woman of drowsy fogs!
You have stolen me from softened moon-shadows
to weeping ridges of night-encrusted mountains.
You have glistened in my sleepless dreaming eyes.
You have tamed the hearts of the morning dawn.
On my drive home tonight I heard this blathering from Robert Reich. This is no doubt a reaction to the record profits reported by Exxon Mobil for 2006.
Why am I not surprised that a die-hard socialist would advocate some mechanism of expropriating private profits? But Reich isn’t the only person singing this tune. I heard a lot last year about possible ‘windfall taxes’ against the oil companies, much of which came from our esteemed representatives in Congress.
If you pay close attention to Professor Reich’s words, you’ll find he’s misrepresenting Exxon-Mobil’s profits. Reich says “Exxon Mobil reports an annual profit of $39.5 billion for 2006, its second-consecutive record and the largest profit reported by any American company in history.”
What he’s not telling you is that Exxon Mobil’s profits are the largest in the country because Exxon Mobile is the largest publicly-traded company in the world. Reich and his ilk like to bring up the fact that Exxon Mobile made “record profits”, because they know that many listeners will assume that those profits came on the back of their high gas prices.
In other words, Reich wants you to come to the conclusion that the oil industry’s profits are ill-gotten gains. You’re suffering at the pump… why aren’t they suffering?
The Motley Fool has a great rebuttal to this view. According to Yahoo Finance, XOM’s 2006 profit margin was about 10%. In comparison, Google’s 2006 profit margin was 29% (the Fool has more comparisons). If Exxon is truly bilking the market… they sure are doing a bad job of it.
Why don’t we hear Professor Reich recommending a windfall tax on Google? Because Google is not such an easy target as Exxon Mobil and other oil companies are. Sure, these guys ain’t no angels, but let’s not just jump to assuming they’ve had a “windfall” that the US Government deserves a cut of.
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