Dems are upset that companies make profits....
Note to the reader - do you know the difference between profit and profit margin?
And Obama wants to institute another windfall profits tax on the oil companies. Well, just like I said here, things seem to come in waves. I guess that these nitwits who want this tax have forgotten what happened when they did that the first time - US companies off-shored to get away from the tax burden, domestic oil discovery went down, domestic production went down, and more foreign oil came in.
But, but, but....why, Skip? Lots of reasons, and I'm not an economist, so I cannot explain it all. But this I do know - people and companies respond to pricing signals (that's capitalism). When the government steps into a market, by any means at all, markets respond. Look what happened when President Bush decided to kill off the executive order on off-shore drilling ban - the price went down.
Way back when, when government increased the cost of accounting for domestic oil by the windfall tax, US corps brought it in from overseas. For economists, this is EC 101 (ok, maybe EC 201). For politicians who are often economically illiterate, this is better known as The Law of Unintended Consequences.
Over at Stop The ACLU, Warner Todd Huston put together a list of profit margins of other industries:
Exxon’s 2007 profit margin = 10%
Here are the profit margins of some of our other industries and companies:
Areospace Industry’s 2007 profit margin = 8.2%
U.S. Manufacturing Sector’s 2007 profit margin = 8.9%
GE’s 2007 profit margin = 10.3%
Berkshire Hathaway Investors = 11.47%
Chemicals Industry’s 2007 profit margin = 12.7%
Computers Industry’s 2007 profit margin = 13.7%
Electronics and appliances Industry’s 2007 profit margin = 14.5%
Pharmaceuticals Industry’s 2007 profit margin = 18.4%
Beverages and tobacco Industry’s 2007 profit margin = 19.1%
Google’s 2007 profit margin = 25.3%
Want “obscene” profits? How about electronics company LG that saw profits increase 505% in 2007? Maybe we should lay low the evil profits from Abbot Laboratories that saw a 110% increase?
Heck, what about the latest Batman movie? Given the short amount of time that it has been out, that certainly was a windfall for the producers and the main actors, I would think? Why not them too?
And I loved this last line:
So, why are we attacking just the oil companies again? Could it be that it’s just because the Democrats want a whipping boy? Why, yes. Yes it could be.
Comments
Posted by: mer | August 8, 2008 1:02 PM