The profit isn't as high as you think.


Oil companies are delivering record profits, but their return is still below the real trendsetters
Bruce Bartlett goes over the details.

We have seen this many times before. When Democrats controlled Congress, such kangaroo courts were a common occurrence every time the world price of oil spiked. Congressmen and senators ranted and raved for the cameras, while oil company executives were forced to sit silently and take it, with little if any opportunity to respond.

What is different now is that Republicans are doing exactly the same thing. Their purpose seems to be to prove to the American people once and for all that it makes absolutely no difference which party controls Congress -- the same utterly stupid policies are pursued under both Republican and Democratic control. And Republicans wonder why their party's base is evaporating, with many political analysts now predicting heavy losses for the GOP in next year's congressional elections.

But here is the real meat of the story, the part that you will seldom see reported.

Of course, the oil companies have made a lot of profit lately, but so have many other businesses and industries. Although Exxon got big headlines for earning $9.92 billion in the third quarter, few analysts bothered to note that this only came to 9.8 cents per dollar of sales -- well below that of many other companies. For example, Citigroup and Microsoft each made 33.2 percent profit. Among other major companies that each made at least twice as much as Exxon in percentage terms are Bank of America, Merck, Google, Eli Lilly, Coca Cola, Intel and Yahoo.

An Internet search turned up no evidence that Gregg or any of the other dimwits calling for windfall profits taxes on the oil industry have also called for windfall profits taxes on the banking, pharmaceutical, software, hotel or other industries that earned much more per dollar than the oil and gas industry. Nor is there any evidence that windfall profits tax advocates have ever suggested compensation to offset oil industry losses in years when the price of oil fell. It's heads I win, tails you lose.

These Congressmen aren't out to solve the problem, they want to create the appearance of problem solving while diverting attention. If there actually is a windfall tax passed, do you think the oil companies won't pass it on to the customers?

Exactly like any other business would if they had an additional tax?

What do you think that would do to oil prices?

— NeoWayland

Posted: Tue - November 8, 2005 at 06:20 AM  Tag


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