Give XOM a hug

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By BEN STEIN Published: March 2, 2008 AS I was sitting at my majestic TV in a majestic suite at the Mandarin Oriental Hotel in Miami a couple of weeks ago, going over notes for a speech the next morning and waiting for Crockett and Tubbs to speed by, chasing drug kingpins in their “Miami Vice” motorboat, I watched Barack Obama speak in Madison, Wis. As usual, Senator Obama gave a fine oration, with thunderous applause from the audience as his reward. But then I was beguiled by a series of gifts he was going to give the American people (of course, with their own money): universal health care, antipoverty programs, large grants to college students in return for community service (a darned good idea) and other goodies. Then he talked about the country’s energy policy and how he planned to change our dependence on oil. And he took aim at Exxon Mobil, which had almost $12 billion in earnings last quarter, and said that good old Exxon Mobil wouldn’t part easily with its profits. Now, I know it’s primary season. I know Democratic candidates have to make obeisance to the populist, antibusiness wing of their party, just as the Republican front-runner, Senator John McCain, has to make bows and curtsies to the supply-side part of his (and my) party. But Mr. Obama’s comments about Exxon Mobil are, as folks used to say, fightin’ words. Mr. Obama is clearly an intelligent man. So it may not be too early to start a small process of education about Exxon Mobil and other oil companies and why attacking them is not smart. First, Exxon Mobil, like all the other gigantic integrated energy companies in this country, is owned not by a cabal of reactionary businessmen holding clandestine meetings in a lodge in the Texas scrublands (as Oliver Stone so brilliantly illustrated in “Nixon”). Exxon Mobil, in fact, is owned mostly by ordinary Americans. Mutual funds, index funds and pension funds (including union pension funds) own about 52 percent of Exxon Mobil’s shares. Individual shareholders, about two million or so, own almost all the rest. The pooh-bahs who run Exxon own less than 1 percent of the company. When Exxon Mobil earns almost $12 billion in a quarter, or $41 billion in a year, as it did in 2007, that money does not go into the coffers of a few billionaire executives quaffing Champagne in Texas. It goes into the pension and retirement accounts of ordinary citizens. When Exxon pays a dividend, that money goes to pay for the mortgages and oxygen tanks and in-home care of lots of elderly Americans. So, Mr. Obama, which union pension plans — and which blue-collar workers who benefit from them — will be among the first you would like to deprive of the income that flows from Exxon’s rich dividends? When Mr. Obama or his Democratic rival, my fellow Yale Law School graduate Hillary Rodham Clinton, go after the oil companies and want to take away their profits, they are basically seeking to lower the income of the ordinary American. Why do that? It’s just cutting off one end of a blanket and sewing it to the other. Years ago, there was a comic strip called “Pogo” by Walt Kelly, and the possum who was its hero uttered a deservedly famous line: “We have met the enemy and he is us.” This applies to Big Oil. Its profits are our income. Its employees are overwhelmingly not millionaires — and, by the way, it’s not illegal or evil to be a millionaire. They are our neighbors and the people who get us the gasoline to run our cars and trucks and the oil to heat our homes. And, after expenses, the money hauled in by Exxon Mobil and other companies like it goes vastly more toward exploration and finding new ways of delivering oil and gas to us slobs in our cars than it does to well-heeled oil executives. It may be a scary fact, but we need the oil companies. Meanwhile, all over the world, from Russia to Venezuela to Africa to the sands of the Mideast, nations with large oil reserves are making it harder for American energy companies to get their hands on oil and gas. If they succeed and re-cartelize the price, current prices may look cheap. We should not be beating up Exxon Mobil and its brethren and making them cry uncle to Uncle Sam. A better policy might be to keep making sure they have no role in price-fixing, and then to encourage them to go after and lock up as much oil and gas as they can for us to burn up. We would be better off with stronger oil companies that can serve our energy needs for the long haul than with weak and overtaxed oil companies that cannot deliver the needed juice. Finally, envy is simply not good economics. It has never led anywhere except to trouble, and we have enough divisions in this country already. As I said, Mr. Obama is a smart man. And Senator Clinton is a smart woman. I have worked in politics and with politicians. I know they have to say crowd-pleasing things (just as Republican leaders have to say that cutting taxes raises revenue). But I respectfully suggest that they might want to reconsider their attack on Big Oil. After all, Big Oil is big us. And we need us. Ben Stein is a lawyer, writer, actor and economist. E-
 
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I didn't bother reading this article because I stopped reading Ben Stein at the end of last year. He has zero credibility so even if he gets something right, it's probably for the wrong reasons (anybody who makes enough predictions will eventually get something right). If I followed his financial advice, I would have lost a lot of money over the last year. Good thing I shorted him instead ;\)
 
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Ben is correct this time. I was thinking this the other day when the USA oil companies had to testify in congress about making money. What the heck do we gain by attacking USA companies? Obama must not really believe his own two faced, although well spoken, drivel.
 

buster

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Obama is not two faced. I think he is wrong with his ad going after big oil, but i don't find him two faced. If anyone is two faced, it's McCain. Check out GMAN's site on that McCain flip flopping.
 
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I can give you many examples of Obama being two faced, nearly on the same day - which is NOT the same thing as flip flopping over time. I will refrain because this is a post about the Obama (and the left) attacking USA oil companies - for what gain? - not a political/election thread. Not sure what McCain has do to with it.
 
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No matter what is said about dems being anti busisness look at who contributes to their election campaign and other bribes.
 
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Who wants to win Ben Berger's money?! What a crock of theatrics Ben has assembled there. Hahaha classic. I love the part about XOMs' profits going into people's pensions HAHAHAAHAHAH like XOM keeps honest books!!! AHAHAHAHAHAAHAH LOLOL wow,... i'm out of breath.
 
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That article is such a peice of bull. "The pooh-bahs who run Exxon own less than 1 percent of the company." First of all one percent of stock would be worth about $4.8 BILLION. What a bunch of poor "pooh-bahs" Let's open a soup kitchen for the down and out executives at XOM. Secondly for years now XOM has been buying back billions of dollars in stock. " Meanwhile, overall production has barely budged since its megamerger in 1999. Instead, Exxon is bingeing on buybacks to help boost profits, which also benefit from higher commodity prices. Repurchases have been part of Exxon's strategy for decades, but they've exploded in recent years. Exxon spent 60%, or $29 billion, of its cash flow on repurchases in 2006, more than any other company in the Standard & Poor's 500-stock index and a tenfold increase since 2000. The company has retired 16% of shares in the past five years, adding an estimated 88 cents to earnings of $6.68 per share" Looks like most of Exxon/Mobil profits goes into buying back their stock more than anything else to me. So the guys that run the company that own nearly $5 Billion in stock don't buy more of their own, they just boost their shares by buying back 16% of all the outstanding shares with company profits. Anyway you cut it the original article is spun so big business can keep doing what it has been - screwing over the American middle class. With just a fraction of all that cash they could pay up and be accountable for the Valdez disaster. But that's what John Roberts is for I suppose. Truley evil http://www.businessweek.com/magazine/content/07_22/b4036057.htm http://gasweek.wordpress.com/2007/10/04/...55bn-in-a-year/
 
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So the gist is - unless a company does as you think with it's profits it's "truley (sic) evil". When did we come to this? When did non share holding people decide they can dictate private company plans? Companies buy back shares with cash. So what? Sure let's get rid of "big business" - that will really help us!!
 
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The thing is, it's not wrong, in any way, to hold companies accountable and make sure they are making their profits honestly, and since we have to pay taxes, that they are, in fact paying as much as they're supposed to--which isn't always the case. As far as XOM goes, there's also their foot-dragging about doing the right thing about Exxon Valdez and lying about what they have managed to do.
 
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So tell me the illegal things XOM is doing with taxes - in fact, please post how much taxes XOM paid for 2007. It's exceedingly wrong for non-sharesholders to tell private companies what they can do with their profits. Show me the lies about the Valdez spill. It seems like the biggest irritant.
 
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I don't know that they are doing anything illegal, I just say that should be verified. If they have nothing to hide, they have nothig to fear, right? I've heard that line before, in reference to citizens, so it should work for corporations too. As far as I know, last year Exxon paid about $30 billion in taxes, at a rate of about 41%. Do you think it should be a lower rate? As for Valdez, "approximately 20 acres of shoreline in Prince William Sound are still contaminated with oil. Oil was found at 58 percent of the 91 sites assessed and is estimated to have the linear equivalent of 5.8 km of contaminated shoreline. In addition to the estimated area of remaining oiled beach, several other important points were evident: Surface oil was determined to be not a good indicator of subsurface oil. Twenty subsurface pits were classified as heavily oiled. Oil saturated all of the interstitial spaces and was extremely repugnant. These “worst case” pits exhibited an oil mixture that resembled oil encountered in 1989 a few weeks after the spill—highly odiferous, lightly weathered, and very fluid. Subsurface oil was also found at a lower tide height than expected (between 0 and 6 feet), in contrast to the surface oil, which was found mostly at the highest levels of the beach. This is significant, because the pits with the most oil were found low in the intertidal zone, closest to the zone of biological production, and indicate that the survey estimates are conservative at best." Exxon has paid a lot of money due to the spill, but they now state that everything is fine, hiring their own scientists, who say the area is now fully recovered, which other scientists do not agree with.
 
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Actually that's more in tax dollars than 50% of the US population pay. I'm not saying tax dollars paid should equal a louder voice, but again why should a company be forced to do everything the way a vocal non-owning group says? I think corporate taxes are very wrong indeed. If the spill stuff is true and not the usual hype and lies from that quarter then XOM should still be cleaning. I suspect the truth is somewhere in between.......I mean environmentalist have never painted a gloomy picture before....... In fact while we I'm at it - look what the voice of the public did for energy policy in the USA. All but killed nuclear energy, all but insured coal burning and yes indeed made us all scream for cheaper and more oil. And XOM drives to the bank.
 
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Nothing wrong with stock buyback. It's either that or pay dividends, which cause income tax for all the shareholders. Stock buybacks benefit all shareholders, not just the 1% held by insiders. If they're donating money to political parties to buy favors, that is wrong.
 
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 Originally Posted By: Pablo
Actually that's more in tax dollars than 50% of the US population pay. I'm not saying tax dollars paid should equal a louder voice, but again why should a company be forced to do everything the way a vocal non-owning group says? I think corporate taxes are very wrong indeed. If the spill stuff is true and not the usual hype and lies from that quarter then XOM should still be cleaning. I suspect the truth is somewhere in between.......I mean environmentalist have never painted a gloomy picture before....... In fact while we I'm at it - look what the voice of the public did for energy policy in the USA. All but killed nuclear energy, all but insured coal burning and yes indeed made us all scream for cheaper and more oil. And XOM drives to the bank.
Why are corporate taxes wrong? And what's wrong with holding them to certain standards? As for the spill stuff...what I quoted came from peer-reviewed NOAA studies and the results are disputed only by scientists hired by XOM. And so you sem to be saying in your last paragraphoid that the voice of the public shouldn't be paid any attention. Hmmm. WHat type of situation would that be reminiscent of?
 
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