A little over a week ago Exxon’s stock value fell. This is the same Exxon that reported eleven billion dollars in net profit last quarter. By any angle examination, any other company that would report a profit of eleven billion dollars would be considered as doing considerably well. But not when Exxon does it.
Why did Exxon stock fall? Because the investors in the company were expecting Exxon to do even better than the quarter before where it reported eleven billion dollars. It isn’t enough that gasoline prices are about to top four dollars a gallon and the financial ripple through the economy is driving the cost of everything up with a rate of inflation that appears hell bent on reaching exponential status. It isn’t enough that people are already crying foul. Deep pocket investors want even more profits! It should have done better. Exxon should have made fifteen billion dollars or more. These investors are pretty much telling Exxon, why isn’t the price of gas already five dollars a gallon? Until you get your act together we’re going to have to take our money elsewhere. The more you make the more you’re expected to make.
A few weeks ago the CEOs of America’s most profitable petrochemical conglomerates went to capital hill to explain why they needed so much profit for their perspective companies. In order to make millions dollar investments into research for alternative fuels these companies need their billions of dollars of profits. For every dollar of profit these companies receive their research investment is about a tenth of a cent. The other ninety nine point nine percent has to go to the bottom line. Investors got to get paid.
Some people will make the theory that the government needs to stay out of the market place because the market will take care of itself. If people don’t want to pay four dollars a gallon for gas they will ride their bikes to work or they’ll buy cheaper cars or they’ll take public transportation or they’ll move closer to work, closer to the grocery store, closer to whatever.
But that’s not an option for a lot of people. I know a woman who is just barely keeping her head above water. She had to drive one way to drop her little girl off at school and then has to drive the opposite direction to get to work. Unless you live in New York, New York, the public transportation system in most cities is rudimentary at best, nonexistent at worst. Other people live in towns where their job is so far away they’d have to catch a Greyhound bus to get to work. Other people drive for a living so moving closer to work isn’t going to do much for their bottom line.
People who are hurting the most don’t have the disposable income to just move at the drop of a hat. People who struggle the most to cope don’t have the option of trading in their transportation to get something more fuel efficient. The woman I spoke of drives a little four cylinder about ten years old that gets about twenty five miles to the gallon. She’s already surrendered her cell phone and land line in order to make ends meet. She volunteers for overtime at her job at each and every opportunity. But the way the price of things keeps skyrocketing she, and many people just like her, is falling further and further behind. When things get too tough she will call her family for help. But the only thing these people will be doing is pooling their money together to give to the petrochemicals and their greedy investors.
Many of us don’t have the luxury of just saying no to the petroleum company. We don’t have the resources to change our arrangements so that we can move to reduce the length of our commute or to be closer to public transportation. We don’t have the resources to buy a twenty five thousand dollar hybrid to go from twenty five miles to the gallon to a stellar forty (saving about six cents per mile with gas at four dollars a gallon). We don’t work for companies that will give us thousands of dollars in incentives to go green. We are struggling. The long established market slogan of supply and demand means that when it comes to gas we pay whatever they demand for our supply.
But deep pocket investors have options. They have the disposable wealth that controls the fortune of companies that make eleven billion dollars a quarter. Investors are the ones that pressure companies like Exxon to squeeze every penny out of people struggling just to get by. These people are pushing corporate America to do everything they possibly can to widen the gap between the people who have and the people who have not. This is the social responsibility of capitalism. This is why people look to our government to force these conglomerates, and the people who invest in them, to pay higher taxes and to behave more responsibly.
Left to own devices people these days don’t have the social conscious to do the right thing for others. All we want is the most profit we can get for ourselves. The first person to become a trillionaire, with enough pocket change to buy his or her personal aircraft carrier group, will still work hard to get that second trillion dollars. It wouldn’t matter if that money came from forty dollars a gallon gasoline prices for the country. It wouldn’t matter if it grounded the economy to a screeching halt. It is human nature to get as much as possible for as little as possible at the expense of everyone else.
Exxon made eleven billion dollars last quarter. BFD! If Exxon wants to stay a viable player they’d better be working on making that trillion dollar quarter.