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Exxon Mobil earnings soar [28 Oct 2005|01:43am]
[ mood | Sad ]

One of the more fascinating social myths we have in US American capitalist society is that prices on some goods just have to go up in times of hardships related to their production or distribution.

We treat these price increases as if they are a force of nature. Maybe this is because the conditions surrounding the increases often are a result of nature and natural disasters.

But really, these prices only have to go up to preserve certain profit margins. Whenever a hardship happens, there are numerous ways it could be absorbed. What we tend not to acknowledge is that a deliberate choice was made to raise prices to the consumer, over other cost-cutting alternatives (CEO salaries). I can accept that. I don't like capitalism, but I understand that's the way it works.

However, oil and gas producers are taking advantage of this attitude to an extent that needs to be investigated. Were you not under the impression that gas prices had to go up because Katrina suddenly made it very hard to produce and distribute gas? I know I was. But the news speaks otherwise.

Exxon Mobil Profits Soar on Surging Oil and Gas Prices (New York Times)

The world's largest publicly traded oil company, Exxon Mobil said its earnings jumped 75 percent. Royal Dutch, meanwhile, said its earnings climbed 68 percent, and Marathon Oil said its earnings more than tripled.

I'm no fan of using gas. I don't drive a car except on rare occasions.But I'm also concerned about all the people out there who had to make cuts in their already tight budgets, or went further into credit card debt, in order to afford the gas they needed to get to work and get their kids back and forth from school. The fact that Americans are used to artificially low prices due to subsidies is a separate question to address, and doesn't help the family trying to budget.

For gas companies to be charging what they were and are charging is unconscionable. I won't say this proves anything about capitalism itself, but it is definitely a crystal clear illustration of how our particular government subsidized monopoly form of capitalism is incapable of mobilizing resources where they need to go in times of crisis, and in fact uses these crises as massive opportunities to increase the gap between the owners and everyone else.

At a time when we most needed people to be contributing to charities to help others in need, we instead were funneling that money right out of their pockets into the luxury goods of the wealthy.

In this case, they are in control. There isn't anything any consumer or entrepreneur can do about the price of gas. Whatever they charge, we have to stomach it. But it would be easier to stomach if people would acknowledge that they are being gouged rather than accept this as some kind of necessary and justifiable evil.

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