Exxon Mobil makes biggest profit in U.S. history, consumers left struggling
By Todd Eastman
Exxon Mobil, the largest U.S. oil company has reported a net income of $15 billion, surging past analyst estimates and highlighting the discrepancy between big business and the consumer. The company’s previous record was $12 billion in the second quarter of 2008. Exxon is now earning $1,865.69 per second.
Meanwhile, consumer spending has fallen 1.8 percent, the fastest decline in 28 years according to the Commerce Department. “The capitulation of the consumer is the primary catalyst behind what is clearly the first consumer-driven recession in three decades. Just about all sectors of the economy are in the process of a serious contraction,” wrote Joseph Brusuelas, chief economist for Merk Investments.
According to the Bureau of Economic Analysis, final sales to domestic purchasers fell 1.8 percent, the largest decline in 17 years. Consumer spending dropped 3.1percent, the first decline in 17 years and the biggest drop in 28 years, while business investment fell 1percent. Investments in homes fell for the 11th straight quarter. Yet, the business cycle committee of the National Bureau of Economic Research has yet to make an official designation of a recession.
It seems obvious that there is a huge discrepancy between the financial success of big businesses like Exxon Mobil, and the failing U.S. economy, with consumers getting the short end of the stick. Gasoline prices are still hovering around the $3 mark, a price that just a few years ago would have caused an outrage among consumers but is now accepted as inevitable.
Increasing the capital gains taxes on such huge profits seems like a reasonable expectation, but will only happen if Barak Obama is elected President during the upcoming presidential election. If John McCain is elected, it is likely that Exxon Mobil will continue to reap profits at the expense of the consumer.
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November 1st, 2008
How nicely socialist of you. Tax the rich, redistribution of wealth, what’s next? Apparently you Blorge folks would like to legislate how successful any person or company is allowed to be. Um, did you ever bother to take into consideration how many people’s or company’s retirement plans might have investment in Exxon and what good news this is for them to offset how badly the rest of their portfolio’s might be performing? Hmm, maybe Tech.Blorge writers should focus on writing about technology, NOT economics! That, or start up an Econ.Blorge and you and Dave Parrack and others posting “articles” about economic matters can post them there and bring back the tech focus here eh? Better yet just leave economics writing to folks like WSJ, Forbes, etc that KNOW what they are talking about!!!
November 4th, 2008
My opinions and writings don’t necessarily represent the viewpoints of the Blorge staff or owners. I am entirely responsible for what I write. With that being said, I don’t see anywhere in my post where I suggest “redistributing the wealth.” I simply suggested cutting tax subsidies and raising the taxes on the gargantuan corporations that can easily afford to pay. Why resort to name calling and why read more into the posting than was intended? While your feedback is certainly most welcome, don’t I also have the right to share my opinions?
Those profits were “earned” on the backs of the American consumer. While it was an error on my part to stray away from the technology focus, it is obvious that the consumer is struggling. If the consumer could afford the cost of gasoline, perhaps the rest of the economy could recover faster. If the economy recovered sooner, businesses could start reinvesting in R&D and we could all be enjoying new toys and technologies. Wouldn’t that make us all happier?