Tuesday, January 31, 2006

Boortz On Exxon's Profits

Neal's Nuze


Yesterday the world's largest oil company, Exxon Mobil, announced their quarterly profits. They raked in $10.7 billion last quarter. That should make their shareholders happy. That brings their total yearly profit to $36.13 billion. That's a nice chunk of change.

But you know what such news means. It's time to drag the oil executives back in front of Congress...to complain about the mythical, non-existent "price-gouging." Politicians will wring their hands about how Exxon Mobil is stealing money from people...and not "giving back" to the community. All of this, of course, is thanks to the government schools that churn out people who have absolutely no understanding of basic economics.

For the less-educated, here are a few pointers:

* Exxon Mobil doesn't set the price of oil, the world market does. They're just cashing in. That price is determined by supply and demand, and nothing else. Sorry. If you want oil to be cheaper, you have to drill for more of it, bring to market and drive down the price.

* The oil companies are doing what they're supposed to. It is the function of a public corporation to make as much money as possible for its shareholders.

* If we expect to drill for more oil...and refine more gasoline...where do people think the money to do that will come from? Reinvested oil company profits, that's where. Somebody has to pay for exploration.

At the end of the day, it is the radical environmentalists that are making oil companies rich. The tighter the supply, the bigger their profits. So now you know who to blame!

One of my first post was about Exxon's profits and how people and Congress saw this as bad. I then went off on a little economics lesson. It's good to see others do the same.

posted by David at 9:24 AM :: Permalink ::