DATELINE 10/28/2005: ExxonMobil posts all-time record third-quarter revenue and earnings. (Source for all quoted statistics, IndyStar.com/Business/, Oct 28 ‘05). Corporate gross revenues and the resulting net profit for the world’s largest publicly-traded oil company set a new high for any single-quarter in industry history. Exxon is the first company to ever earn $100 billion in a fiscal quarter. The oil giant’s resulting profit from those sales, $9.92 billion, also marks a new line in the sand. While these numbers may not match the devastation wrought by hurricanes Katrina and Rita, they certainly provide ample fodder for conversation and consternation.
Millions of Americans, inspired by emotional news coverage of the Gulf Coast’s calamity, poured out their hearts and their hard-earned dollars to help aid enormous relief efforts there. More than one billion dollars has been donated by both private citizens and corporate boards, largely to the American Red Cross and the Salvation Army. Little kids and school groups held car washes and bake sales. Celebrities sang and entertained and answered phones on numerous televised specials. Rotaries and ministries organized major charity fund-raisers. Regular folks made small sacrifices in their daily routines to divert a few hours’ pay to Hurricane victims. People with deeper pockets wrote very large checks and sought minimal publicity for their largesse. The nationwide display of caring and generosity reassured us all: we are a country that takes care of its own. We answer the call, big time.
Meanwhile, Big Oil was raking in money faster than it could be counted, literally. Taking windfall revenues and profits from the same citizens who had already pitched in more than their fair share. Wildly escalating retail gasoline prices created high stress and market anxiety, sending ripples throughout the nation into every nook and cranny of our economy. Gas station operators and employees, ordered to raise retail prices as much as fifty cents per gallon each day, suffered the mid-directed wrath of frightened consumers. Small business owners desperately tried to figure out how to cope with uncontrollable fuel costs, knowing it would be nearly impossible to pass on such outrageous price increases to their equally-stressed customers. The entire U.S. economy see-sawed on the hard edge of panic. All the while, the oil conglomerates tallied-up the take.
After the two hurricanes had wreaked their havoc in no less than four states, in towns and cities big or small, thousands of people were left homeless and hundreds lost their lives. Power outages darkened whole regions, and unprecedented flooding saturated thousands of homes and businesses. Americans lost their homes, jobs, cars, pets, cherished possessions and priceless records. We watched heroic rescues and listened to heart-rending tales of trauma. Rich or poor, white or black or whatever race, young or old, single or married — no demographic escaped this tragedy, despite attempts by some in the news media to slant the story somehow. The rest of us, not directly affected by the storms, reached out with our hearts and our paychecks.
At the same time, consumers coast to coast poured billions into their gas tanks, without recourse. We still had to drive to work, to school and soccer practice, to the store or to Grandmother’s house. Deliveries still had to be made, busses and taxi services had to run, planes had to fly and trains had to keep their schedules. Factories burned fuel and made crude oil into the thousands of products we all need to live. Farmers tilled their fields and brought in their harvests. We do, after all, have a country to run.
The money had to be spent for the barrels of fuel we had to burn or consume. For the three short months following nature’s fury, the numbers posted by Big Oil boggle the mind. ExxonMobil gross sales grew more than 30%; profits soared 75%. Royal Dutch Shell, next in line, jumped 68% with $9 billion net for the quarter. BP banked $6.5 billion. ConocoPhillips (up 89%!) and Chevron (a 53% jump) each added more than $3.5 billion to the pot. The industry as a whole is on pace to earn nearly ONE HUNDRED BILLION DOLLARS for the fiscal year. That’s $100,000,000,000. It’s a number that won’t even fit in most spreadsheets. Furthermore, it’s a number most of us cannot even comprehend.
Let’s think about all these zeroes for a minute. Third quarter, 2005: oil profits totaling somewhere in the neighborhood of thirty billion bucks. Is that really so much money? Aren’t they entitled to a fair profit, just like anyone else in business? Yes, and yes. We live in a free-market economy, where money-in-your-pocket is the reward for taking risks and tying up capital. But, thirty billion dollars? My fifth-grader can do the math: that’s THIRTY times all the money raised by all the big hearts and open wallets in America for disaster relief. Profit. Bottom line. Net Income. That thirty billion is what’s left over after all expenses and write-offs. It’s an amount greater than the GNP of smaller countries like Zimbabwe or Cameroon. Yeah, that IS a lot of money.
What could you do with $30 billion? You could commission and deploy six brand new aircraft carriers, and pay the salaries of all six crews for a year. (No other country on Earth can do that.) You could build an entire city for 10,000 residents, from survey to streetlights. City Hall, firehouses, schools, hospitals, factories, malls and movie theaters, and even a couple of adult bookstores; houses for everyone. Cars for everyone. With money left over to pass around. You could pay out a $150 million Powerball Jackpot: two hundred weeks in a row! You could buy a new Chevy Silverado (much nicer than the one I own) for one million of your closest friends. You could buy-out Donald Trump, Mark Burnett (creator, "Survivor" etc.), and Martha Stewart, too. Or you could finance research into cures for cancer, AIDS, MD, MS, CF, and heart disease, and have enough left to run a national advertising campaign for The United Way for a year. You could send more than one and a half million kids to an Ivy League school for four years. (There isn’t room for that many.) You could give every single person in the United States a crispy new $100 bill, and still buy an aircraft carrier with the change.
OK, it’s a lot of money. It’s an insane amount of money. Even Donald Trump would be impressed. The rest of us should be outraged. We all gave to this cause, willingly or not. We gave until it hurt, and still kept giving. I gave today, and I’ll give again next week. So will you. If I was the Chairman of the Board of any one of these gargantuan oil firms I would feel shame at the level of greed I had fostered. I would give some of it back. I would vote to give most of it back. I’d build a few new refineries first, and give my employees raises (not just the bosses), pay out some dividends, bank some capital for the future, and then give the rest back to the country that donated so much. I’d help rebuild New Orleans, along with a hundred other devastated communities. I’d help a few thousand displaced, distressed storm victims rebuild their lives. I’d buy them some ice cream, and some blankets. I would do all that and more, long before Big Government stopped by with insincere indignation and demanded I pay some sort of stupid Windfall Profits Tax. Because one thing is true about thirty billion dollars: it’s just a drop in the bucket to the raging monster that collects our tax dollars. But for the rest of us, it’s enough to make a difference.
[Copyright 2005 all rights reserved, Jim Bessey -Spencerport, NY 10/29/2005]
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