As American households strain under the weight of high gasoline prices, as cities and school districts look for extra money in their budgets to cover the cost of heating fuel, and as everyone is paying more to get everything delivered by diesel-fueled trucks, the election-year political rhetoric is accelerating to a high-octane level.
Big Oil and political opponents are just too tempting of a target to pass up as elected officials and candidates want to direct voter anger toward an easy scapegoat.
Republicans loudly blame President Joe Biden for high prices, as if he told oil companies to slow down investments in 2020 and 2021, ordered them to give back cash to shareholders instead of spending the money on new production, and conspired with Russia to start a war and drive up energy prices.
Biden, too, is guilty of misdirection. Though he took it to a higher level, seeking divine inspiration.
“Exxon made more money than God last year,” Biden proclaimed last month at a staged event in Los Angeles, where people appear much more devoted to their cars than religion.
I don’t pray at the altar of Big Oil, though I do acknowledge its role in life. And until I ditch my car (2006 VW Beetle diesel, 42 mpg on the highway), I accept the reality that I need oil. But what annoys me is the politically driven sniping and snideness directed at oil company profits while other, more profitable businesses are worshipped for their supposedly “good” contributions to the world.
Such as Apple. While its “devices” are not God, they have a God-like influence on daily lives, and it sure seems like some people worship their iPhones, iPads, Watches, AirPods and anything else with the Apple logo. Maybe the company could start letting churches use the logo to draw people into the pews on Sunday.
Yet, in a financially religious experience, Apple makes more money than Exxon. A lot more most of the time.
Second-quarter earnings reports show that Exxon recorded net earnings of $17.9 billion in the three months ending in June.
Apple reported a net income of $19.4 billion in the same period. That was a down number for Apple, after it had reported $30 billion in net income in the previous three months, and $34.6 billion in the three months before that.
Looking back, Apple has reported $84 billion in net income the past nine months versus $32 billion at Exxon.
Even if Exxon’s profits look obscene to some people, consider that the company’s net income was about 15% of its total revenues for the three months ending in June. Whereas Apple’s net income was better than 23% of its total revenues for those same three months. And that was down from a 31% profit margin in the three-month reporting period that ended in March.
Microsoft also earned a much fatter profit margin than Exxon in the past fiscal quarter, reporting net income of 32% on its revenues.
None of this matters when you gasp at the fuel charges on your credit card statement at the end of the month. But it is worth thinking about. What’s more offensive: The profit margin on a $1,000 iPhone 13 Pro or a $6 gallon on gas? And what’s an easier political attack: High gasoline prices or expensive phones?
Just because it’s easy politics doesn’t make it right.
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