No doubt they are livid (as am I) over the bailouts the finance, insurance and auto industries are receiving. Ergo, by default this means leftists do not like it when corporations are run so poorly that they lose money and therefore require a taxpayer bailout. By default then, they would prefer companies that make enough money so as not to parasite off the taxpayer. Companies like, oh, I don't know, the big oil firms maybe perhaps?
You see, Big Oil is coming out looking stellar doing what corporations are supposed to do; run a profitable operation. Not one penny in bailout money has been given to big oil, because, well they have their heads out of their asses. And unlike pretty much every other industry with a cup in their hand begging the taxpayer for money, good ole big oil has more or less stayed away from parasiting off the taxpayer.
Of course, if we were to be logical and INTELLECTUALLY HONEST about it, the left would love Big Oil. But of course they don't because they MAKE MONEY.
Thus, what is big oil to do?
If they make a profit they're evil. If they lose money and get a bail out, they're evil. Perhaps they should just aim to break even and that would make the left happy?
You know what I think? I think big oil should just move their corporate headquarters overseas as their operations truly are global and not deal with the left anymore. They could HQ in a tax haven, and instead of pay 40% taxes (not to mention deal with incessant bitching and whining) pay 0% and actually boost the value of the stock and the value of millions of peoples' 401ks...of course they could stick around like Bacardi did back in Cuba....and realize they should have moved to Bermuda a long time ago.
But then what do I know? I'm just a dumb video game playing economist.
13 comments:
Hi Captain.
I found this through an ad link on my gaming forum. I thought you could use the entertainment.
http://www.greencommunism.org/?page=ans
And now I'm going back to my forum to click on the ad a few dozen times to educate them on the cost of an ad that charges per hit. ;)
CC.. as a fellow conservative, I share much of your sentiments - however, if we are to be "intellectually honest", one might ask the interesting question of whether or not royalty programs and relatively soft environmental obligations are a form of indirect "subsidy".
Oil companies have made billions of dollars because they are selling a commidity for much, much more than it costs them to acquire it.
If the governent, as agent of the people, required oil companies to pay more for the product, relative to market demand, and required higher standards of environmental compliance.. well, perhaps the ungodly profits that oil companies have made would have been more conservative.
Now - I'm no Hugo Chavez - and I'm not advocating some socialist agenda, but it is an interesting question.
Oh - and the Alberta government has now announced plans to drop royalties - I would call that a form of "bail out", no?
Couple of things that I would like to point out.
1. Despite any angst about giving money to the big companies that are losing money, the left will do it because not doing so will result in unions losing members, and unions always support the liberals.
2. Any liberal hatred of big oil has little to do with their ability to make profit. It has to do with their lack of dependence on Government to stay in business. The socialist agenda is as much about controlling business as it is about making the population dependent on the Government.
3. Which leads to the "environmental" issues. Are they really about saving the world for future generations? Or is it more about control? Outlawing oil exploration, preventing nuclear energy, a hard stop on development, what does it accomplish? Little environmentally, but a LOT politically. Want to build something? Start kissing the leftist backside now.
Subsides, stimulus, recovery money, whatever you choose to call it, it all comes with a leash. And the leftists are holding that leash.
"relatively soft environmental obligations are a form of indirect "subsidy"."
No, they're not.
"Oil companies have made billions of dollars because they are selling a commidity for much, much more than it costs them to acquire it."
They're also selling it for much, much less than it costs me to acquire it, which is why I buy it from them instead of getting it myself.
"well, perhaps the ungodly profits"
You find something wrong with profit? Are you sure you're a conservative?
"Oh - and the Alberta government has now announced plans to drop royalties - I would call that a form of "bail out", no?"
When you stop taking money away from someone, it's not the same as handing them extra money. If I rob you and decide later to stop taking so much, it's a far cry from subsidizing you.
Ryan - I'm not saying that profit is a bad thing.. I have my own business, and I don't appologize to anyone for making a living.. but, there is profit, and then there is PROFIT.
The concern I have is that, as an Albertan, the product they get out of the ground is mine. I just want to be assured I'm getting a fair dollar on the sale of my asset.. as a capitalist, one would think that would be an honest question.
And, government being what it is, money is power, and I would hate to believe that my "agent" isn't get top dollar for the sale of my asset because he's getting other benefits from the buyer.. if you get my drift.
So - in light of this, again, the question is, now that massive profits aren't occurring in the oilpatch, is there a need for subsidy (..sorry, royalty reductions) or do we just let the market deal with its self..
Regarding environmental issues.. well, when money was flowing like water, one would think that it wouldn't have taken much to do a better job of addressing tailing pond issues than occurred.. so, yes, I think if you give a "soft" pass to industry to reduce their costs of redressing the polution they cause, you are in fact subsidizing them - and it doesn't make it any less so because you say, "no it's not".
I mean - on a theoretical level, if you allowed every business to just dump garbage on the street of the city, and let the municipality pay for the clean up - you're subsidizing the business. I just have some concern that we could be more dilligent in not allowing big oil to "dump garbage" on my street.
And - for the record, I wouldn't give a dime to the auto industry or anyone else.. I see little positive in rewarding failure.
If you keep hitting the guy paying the bill, one day you'll show up for dinner and he wont.
End of the day it is people and companies that make profits ("ungodly" or not) that pay the bills.
It those who made (and kept) profits during good times that will buy up the weaker companies, saving some of those jobs from bankruptcy.
Roblaw, look at this chart.
http://biz.yahoo.com/p/sum_qpmd.html
It shows that Big Oil does not in fact have ungodly profit margins.
I love charts.
"The concern I have is that, as an Albertan, the product they get out of the ground is mine."
That's a truly bizarre theory of property rights you've got there. Your sense of entitlement is astonishing. You say you're not advocating a socialist agenda, but that's as clear a socialist premise as I've ever seen.
"subsidy (..sorry, royalty reductions)"
If you're more careful before you type, you won't make stupid mistakes like confusing the absence of a fee with a subsidy.
Oh, and by the way, are they actually "dumping on your street" or are they dumping on a street that you're assuming is yours by virtue of you living within a thousand miles of their operations? That's the basis of your claim on oil, isn't it?
Everyone remembers with crystal clarity the times when oil companies made money hand over fist, but they can never recall the times when they were bleeding money. George Bush was CEO of such a company during a downturn and he kept it afloat while others failed.
Oil companies earned high nominal profits, but only because they made a SMALL profit on a large volume of product. Their rate of return to capital is below average. They spend FIFTY PERCENT of their profits on exploration, research, and to replace depreciated capital. Imagine if you had to spend half your income on continuing education this year to ensure you get your full income next year!
Gasoline, even at its peak, was a smaller cost as a percent of disposable income than it was for your grandfather. With more efficient vehicles and more roads and bridges, you can travel farther and faster. Economic growth has put more goods and services in reach of a tank of gas. So you are MUCH better off than grandad for that same amount of oil, even adjusting for inflation.
You pay $36 a gallon for your latte, $9 a gallon for bottled water, and $10,000 a gallon for eye drops. STFU and pay for your gasoline without complaint! Send Exxon a big Thank You card. Complain about taxes which takes far more of your income and provides you with ever decreasing benefits.
The concern I have is that, as an Albertan, the product they get out of the ground is mine
Why is it yours? This is why oil and other natural resources should be privately owned, not state owned.
Sure - as a percentage of capital invested - but on a gross basis, Encana showed the highest profit in Canada's history last year, and Exxon Mobil did the same in the U.S. - and good on them, the only question being, are we doing more as vendors than we need to..
@roblaw:
Well, yes, on a capital basis. That is the only thing that matters.
If I invest $1 million and get a return of 5%, I make $50,000.
If you invest $10,000 and get a 10% return, you make $1000.
I earned 50 times what you earned. I'm drinking champagne and eating caviar. You get to eat out at Denny's.
But YOU had the better investment. I would have been better off replicating your investment 1000 times than doing mine.
Nominal profits tell you absolutely NOTHING about how well a company is doing. They must be viewed as a ratio of some measure of input to get those profits.
Case in point, the USA is the richest nation on the planet. California is the richest state. Yet both are deeply in debt. Donald Trump was once simultaneously one of the richest men and one of the poorest men in the nation based on his income and his debt.
Get it?
Too many people are dazed and confused by all the 000,000,000,000s in the profits of massive corporations. Well, GM and Citibank had lots of zeros in their revenues and now their stock is on sale at Dollar Tree.
What is got me choked is this recession that we find the world in occurred because big business got stung by what was basically a pyramid scheme engineered buy relative hand full of people in the investment sector. This is not the first time in recent memory remember ENRON? the savings and loan collapse of the 80s etc. Sheer blinding immediate greed creates these situations. By the time the music stops and the hundreds of millions of dollars stops changing hands millions of people have been harmed.
When executives at the heart of these disasters can stand up and say how many millions they millions in salaries and "bonuses" they were paid or how many houses they own what are people supposed to think? Your services being cut, ypur taxes going up, your lost investment income ALL caused by this time. Am I wrong?
As for alberta govt totally mismanaged this boom they admited it. Who lost? Citizens across the country. Who gained?
I live in Ft. Mac we lost a much needed $35mill long term care facility that and our MLAs voice in the government. How much were oilsands executives paid, how much did the province lose on resource royalties?
Why are $22,000 a month pension cheques being being issued to executives of a department the government is totally restructuring because they say it cant be maintained the way it was. My total provincial tax contributions and that of 10 other tax payers will pay this one cheque and nothing else for the rest of our lives.
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