Stop Me If You’ve Heard This One Before…
Posted on October 30th, 2008 at 10:51 am by Steve

“[Oil company] reports record profits…”

That headline ran today. It also ran in July, 2008. According to my search of the New York Times archives (oil AND record AND (profit OR profits)), it also ran in April, 2008. It also ran in February, 2008. It also ran in February, 2007. It also ran in July, 2006. It also ran in January, 2006. It also ran in October, 2005. It also ran in August, 2005. It also ran in February, 2005. It also ran in August, 2004. It also ran in July, 2004. It also ran in October, 2000. It also ran in July, 2000. It also ran in May, 1997. It also ran in January, 1997. It also ran in January, 1990. It also ran in October, 1988.

It’s funny. I guess if you control the supply of something vital to every sector of the economy, and there’s no limit on your pricing power (other than “the market”), then you can pretty much guarantee you’ll earn a shitload of money.

Here’s the relevant graf from 11 years ago:

Exxon, the largest oil company in the United States, said its profit jumped nearly 49 percent to a record $2.49 billion, or $2 a share, in the fourth quarter, compared with a profit of $1.68 billion, or $1.35 a share, in the similar quarter of 1995. Revenue climbed to $37.62 billion from $31.50 billion.

And here’s the word today:

Exxon Mobil Corp.’s third-quarter net income rose 58% to a new record of nearly $15 billion… Exxon Mobil said it earned $14.83 billion, or $2.86 a share, up from $9.41 billion, or $1.70 a share in the year-ago period.

Those are quarterly profits, not gross receipts. That’s a profit rate of almost $2,000 per second!

I also enjoyed finding this little nugget in an April 27, 1986 article in the New York Times:

President Reagan urged the repeal of the ”windfall profits” tax on domestic oil in an attempt to help out those companies hit by the price drop.

That tax was repealed on August 23, 1988, and has not been reinstated – although oil prices, which were around $38/barrel in 1980 and had fallen below $20/barrel in 1988, peaked above $140/barrel this summer.