Another soapbox post...

I have decided to preface this with this statement: This is my opinion. Feel free to disagree, but please don't attack or berate me. Everyone is entitled to their opinion, and if you really disagree that much, don't read it. Really.

Ok, something that drives me crazy. Politics and media. I just saw a snippet of Barak Obama's speech in Iowa, and he was addressing the "windfall profits" of oil companies, particularly ExxonMobile. This is on the heals of Exxon releasing its record setting second quarter earnings (aka profits). The media just eats statistics like this up. And they love it. But, believe it or not, they are feeding you information that is misleading. Shocking, I know. The issue is NOT profits, but PROFIT MARGIN. Just for comparison purposes (this comes from the financials of both companies, I did the calculation for profit margin, which is net income divided by total revenues): For 2007, Exxon Mobile Corp posted a profit margin of 10% (this includes income from sales and other operations, though sales and operating revenue makes up 96% of total revenue). Compare that to a company that has the country virtually captivated as well, Microsoft. (By the way, all you Apple people, Microsoft Corp is a large shareholder in Apple). Their profit margin for 2007 was 27.5%. In addition, the oil industry as a whole posted profit margins of about 7.8%, according to a US News Article, which is very comparable to all US manufacturing. Its not windfall. Its normal.

Also, Barak Obama talks about not only repealing the tax cuts that were given to the oil companies, but imposing a windfall profit tax on them. Lets just look at Exxon, since they are the ones in the news. According to Exxon's year end report last year, Exxon paid over $70 billion in sales based taxes and other taxes and duties. Add on top of that, they paid almost $30 billion just in income taxes. That is $100 billion dollars one corporation paid in taxes. Levying a larger tax on these corporations is going to drive down their operations and eventually, you will be paying for that tax increase.

On a side note, their oil and natural gas production in the US versus non US production is very low. (Again, this comes from their financial statements) Exxon produces 392,000 barrels from the US, daily. Compare that to over 2 million barrels daily produced outside of the US. That's about 15%. The world market's growing demand (especially China and India) is impeding on our demand for oil is what is driving up the prices. That's why oil futures are so high, because world demand is going up and supply is stagnant. Believe what you want, but it is my view that the quickest and best way to curb our ever increasing oil prices is to drill it ourselves. Yes, it will take quite a while for that production to come online, BUT the main problem right now is the futures market. If the futures know there will be more supply, prices will go down. I don't think we should destroy the environment, nor do I think we should stop research and development on energy sources other than oil. But those things are farther away than some would lead you to believe and until we can perfect those technologies, we need to start to provide our own oil.

I am not trying to glorify Exxon, nor do I think people should try to vilify them. They are a big corporation. They are going to make money. That's how it works. But, it drives me crazy that people just blindly follow what the media, or any other glorified character, and believe that these people are being completely forth coming with you. There's always a spin, no matter who you listen to. I just wish that more Americans would take it upon themselves to do a little research and form their own opinions. Not just what the media tells you, and not just "change you can believe in". Do you really know what you believe at all?