The headline omits the bad news for the company.

Both candidates for the presidency, and most certainly the lone straggler in the race, will focus only on $10.9 billion in profit, ignoring the full story:

Exxon Mobil Corp., the world’s largest publicly traded oil company, said Thursday record crude prices helped its net income grow 17 percent in the first quarter, but the results came in below Wall Street forecasts.

As expected, margins at the company’s refining operations dragged heavily on the bottom line as the big jump in prices on refined products such as gasoline, while a menace to consumers, failed to keep pace with the rapid increase in crude prices.

Still, queue the countdown clock to when Exxon Mobil will be once again demonized by politicians. Forget that the price increases at the pump are based in market dynamics and not just arbitrarily set to claim more windfall profits so that the CEO can make more money for himself. The correct answer will be ignored because the ignorant fairy tale purchases votes.

I wish to make a pledge. I will write a nice entry praising a policy position of whichever presidential candidate waits the longest to cite Exxon Mobil as an example of rising gas prices and why government needs to step in.

4 thoughts on “The headline omits the bad news for the company.”

  1. Actually, gas prices are one area where I do advocate more government intervention….in the form of a higher Pigou tax (to be offset, of course, with a corresponding tax cut in other areas). Since I’m not expecting my preferred policy position to get implemented on that anytime soon, I have no problem whatsoever with oil companies charging fair market value for their products.
    Oh – with respect to your challenge – assuming Bob Barr gets the LP nomination (likely) and polls well enough to force his way into the debates (unlikely), does he count? Or are we really just talking about McCain, Obama, and Dick Cheney’s Kid Sister?

  2. I’m in favor of a Pigou tax, in theory. I think it’s reasonable to accept that pollution is creating externalities. The extent of those, I’m more a skeptic, but some serious approach is needed. And that’s the only incentive I support for developing new energy technologies to replace oil.
    The problem I’ve stated before is that I don’t trust any politician to keep his or her hands off the tax revenue. It will end up in the general fund to support any and all stupidity. It won’t replace a portion of income taxes. It will just create more spending.
    So, yeah, the attempt to reduce the market price is obscene. Let it be what it will be.
    I don’t know how I feel about Barr yet, but sure, he should be there. (And it would be much less retch-inducing to write something nice about him than the others.)

  3. To be sure – I don’t trust politicians with cash of any sort. But with a Pigou tax, the bigger concern is with making consumers internalize the externalities…any good that comes out of the revenue is essentially just a bonus. Then again – the government could decide to spend the revenue on ethanol subsidies…in which case the spending that results from the Pigou tax actually does create massive harm. Hmmm…maybe we’d be best off with a Pigou tax where we just burned the money raised? (only half-kidding).

  4. Just going after internalizing the externalities could work., if people are left to feel the direct effect. Would politicians start offering tax credits for low income Americans to offset the higher cost of fuel? Would they find new ways to tinker with the tax code that sane people haven’t yet imagined?

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