We continue to hear how the economy teeters on the brink of another dip. Millions are still unemployed; have no healthcare; are losing their homes; in other words, the decline of the American Dream continues.
There is a bright spot, however: corporate earnings, supposedly indicative of a robust economy, continue to meet, exceed and even bust all previous records! One such star in the cloud-filled sky, is Exxon-Mobil. Is anyone surprised? Of course not! Big oil continues to prosper, while the Middle Class and poor have no choice but to help fuel the record profits.
“ExxonMobil Profit Tops Estimates, Posts 3Q EPS of $2.13, on Revenue of $125.33 Billion.”
Ok, so what exactly does that mean? Let’s break it down, so we can understand what seems to be a typical ‘financialese’ statement. When Wall Street talks about EPS, they’re referring to ‘Earnings Per Share.’ Now, ‘Earnings’ is not the total revenue that a company takes in; it is the remaining PROFIT, left over after reducing its revenues by its expenses. According to Investopedia, ‘Earnings’ is defined as:
“The portion of a company’s profit allocated to each outstanding share of common stock. Earnings Per Share serves as an indicator of a company’s profitability.”
So, ExxonMobil not only met expectations, but exceeded even their own predictions of how much revenue and profit they would make this past quarter (July 1 – Sept 30). Yes…I said QUARTER! ExxonMobil had net profit of $2.13 per share on total revenue (sales + other income) of $125,330,000,000, between July 31 and September 30, 2011. Since ExxonMobil had approximately 4.9 Billion Common shares of stock outstanding at the end of the quarter, we just need to multiply the earnings per share ($2.13) by the number of outstanding shares (4.9 billion), to come up with the total profit figure:
$2.13 x 4,900,000,000 = $10,437,000,000
Not bad for one quarter! Now, I am a former business owner and I appreciate profit as much as the next person, however, there is ‘profit’ and then, there is ‘PROFIT!’ When reasonable ‘profit’ becomes unconscionable ‘PROFIT’, there is something wrong with the picture. Who am I to determine what is ‘reasonable’ and what is ‘unconscionable?’ I don’t think it takes a rocket scientist or even a Wall Street financial analyst to figure that one out.
It seems to me that reasonable profit approaches unconscionable profit when the profit-producing company is in a position that equates with a monopoly on the product or commodity being sold and purchased. Further, when the need for that product or commodity is a requirement for everyday living by a majority of the population. When these definitions are met, the product or commodity becomes a necessity, like electricity, water, food and shelter. People have no alternative but to purchase the product or commodity, whatever its price!
Is a profit of $10 Billion per quarter ‘reasonable’ or ‘unconscionable?’ I am going to step out on a limb here and proffer that it is ‘unconscionable.’ Crude oil prices are down from their highs, however, it doesn’t seem that lower crude oil costs equate to lower gas prices. If they don’t correspond, what can be a reasonable explanation? Another limb <*crack*> and my response is greed, pure and simple. While millions and millions are losing everything they’ve worked for over their lifetimes, mostly as a result of more greed from the financial industry, Big Oil continues to bring in profits exceeding their own estimates.
What’s the answer? Since gasoline has been, and continues to be, a requirement and necessity for the country, just as electricity and natural gas, we need to see the States step in to regulate the price. The States already have in place Public Utility Commissions that regulate the rates for electricity and natural gas, why not gasoline? Utilities like Pacific Gas & Electric, Dayton Power & Light, Duke Energy, Consolidated Edison, and others across the country, are all publicly traded companies, making reasonable profits and paying dividends. They have one thing in common: they are regulated by the States they serve.
Will we continue to allow the greed and unconscionable profits of Wall Street and big corporations to drain the wealth and security from the lives of the Middle Class and poor? Is this class warfare?
Is it jealousy of the big salaries and bonuses received by corporate execs and financial money-pushers? Is it unreasonable for the average US corporate executive to earn 400 times what the average worker earns? These are the questions being posed today by the Occupy Wall Street protesters…and millions of Americans like me & you. Where do you stand?
The following was submitted by Al Kappenberger, from the Coalition of Eastern Shore Progressives:
Some thoughts on corporate exploitation and creation of the “underclass worker”, who take American jobs:
Consider how our government, being totally controlled by corporate money, will use money to further its own ends. It will always utilize every legislative avenue and public relations resource it can control, to perpetuate the belief that undocumented workers must be identified and deported, in order to prevent them from taking jobs from American citizens, who could do these jobs themselves. This is willfully creating an “underclass” in America. Consider, too, that you hear all too often of businesses hiring undocumented workers with little or no attempt to verify their legal status. Law enforcement regularly looks the other way.
I believe there is more going on here than what would seem obvious. You should also consider why it is that the undocumented worker will be hired over the legally documented worker, with similar qualifications. The obvious answer is that they will accept work for far lower wages. Why? It is the very fact that they are an illegal “underclass”, having no legal rights or political power, that keeps their wages down. In truth, this actually gives this “illegal underclass” a form of “power” that allows them to take a job from someone who expects to receive a higher pay.
It is in the interest of the business, who use unskilled workers, to do everything they can, to see that “undocumented” remain an underclass. If, on the other hand, the “undocumented” were treated the same as citizens, with full access to all services, and with complete access to petition our government, their wages and status would then rise to equal that of the rest of us. The “undocumented” worker would eventually loose this “power” to take American jobs for lower wages.
As I see it, doing everything the government and business can do to perpetuate an underclass to exploit, is the very thing that is allowing them to take American jobs! Every undocumented worker is a “person” and part of our economy, in every way. All each one lacks is a piece of paper identifying that he is a US citizen. What makes him a member of the underclass is nothing more than where he happened to be born! Examples of these efforts on the part of our government, to perpetuate this exploitable underclass, is the move to deprive them of something as basic as a drivers license and the outrageous “papers, please” legislation being promoted in many States. These are not efforts to protect the “legal” worker, but rather, are parts of the continuing effort to perpetuate an underclass for business to exploit! An occasional raid by immigration officials, to round up and deport a few undocumented workers, is a necessary part of the strategy!
I usually don’t repost articles from the internet, preferring to rant and rage with my own words! However, I thought this article, posted by the website, Truthout.org, was so important for you to see, that I’m posting here:
The Occupy Wall Street protest that began in New York City more than three weeks ago have now spread across the county (see http://www.Occupy. The choice of Wall Street as the focal point for the protests — as even Federal Reserve Chairman Ben Bernanke said — makes sense due to the big bank malfeasance that led to the Great Recession.
While the Dodd-Frank financial reform law did a lot to ensure that a repeat of the 2008 financial crisis won’t occur — through regulation of derivatives, a new consumer protection agency, and new powers for the government to dismantle failing banks — the biggest banks still have a firm grip on the financial system, even more so than before the 2008 financial crisis. Here are eleven facts that you need to know about the nation’s biggest banks:
– Bank profits are highest since before the recession…: According to the Federal Deposit Insurance Corp., bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits.
– Banks make nearly one-third of total corporate profits: The financial sector accounts for about 30 percent of total corporate profits, which is actually down from before the financial crisis, when they made closer to 40 percent.
– Since 2008, the biggest banks have gotten bigger: Due to the failure of small competitors and mergers facilitated during the 2008 crisis, the nation’s biggest banks — including Bank of America, JP Morgan Chase, and Wells Fargo — are now bigger than they were, pre-recession! Pre-crisis, the four biggest banks held 32 percent of total deposits; now they hold nearly 40 percent.
– The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.
– The 10 biggest banks hold 60 percent of bank assets: In the 1980s, the 10 biggest banks controlled 22 percent of total bank assets. Today, they control 60 percent
– The six biggest banks hold assets equal to 63 percent of the country’s GDP: In 1995, the six biggest banks in the country held assets equal to about 17 percent of the country’s Gross Domestic Product. Now their assets equal 63 percent of GDP.
– The five biggest banks hold 95 percent of derivatives: Nearly the entire market in derivatives — the credit instruments that helped blow up some of the nation’s biggest banks as well as mega-insurer AIG — is dominated by just 5 firms: JP Morgan Chase, Goldman Sachs, Bank of America, Citibank, and Wells Fargo.
– Banks cost households nearly $20 trillion in wealth: Almost $20 trillion in wealth was destroyed by the Recession, and total family wealth is still down “$12.8 trillion (in 2011 dollars) from June 2007 — its last peak.”
– Big banks don’t lend to small businesses: The New Rules Project notes that the country’s 20 biggest banks “devote only 18 percent of their commercial loan portfolios to small businesses.”
– Big banks paid 5,000 bonuses of at least $1 million in 2008: According to the New York Attorney General’s office, “nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than a million dollars apiece for 2008.”
In the last few decades, regulations on the biggest banks have been systematically eliminated, while those banks engineered more and more ways to both rip off customers and turn ever-more complex trading instruments into ever-higher profits. It makes perfect sense, then, that a movement calling for an economy that works for everyone would center its efforts on an industry that exemplifies the opposite.
This is a summary of the presentation by Robert Reich, speaking at the Rebuild the Dream conference, sponsored by MoveOn.org and being held in Washington, D.C., 10/3-10/5. For more LIVESTREAMING, go to: http://www.rebuildthedream.com/
The crowd was hyped for Robert Reich yesterday as we kicked off the first American Dream summit here in DC. And he didn’t disappoint. Reich – the former Secretary of Labor under President Clinton, public policy professor at UC Berkeley, and acclaimed political economist and commentator – brilliantly weaved together the history of our broken economy with today’s progressive movement.
Reich offered a quick overview of where three decades of regressive politics have gotten us. To name a few:
-One of the worst Supreme Court decisions in American history: Citizens United, ruled that corporations are people.
-Currently, 37% of families with young children are living in poverty, the highest percentage we’ve seen since records have been kept.
-Corporations are sitting on $2 trillion in cash, and the ratio of coroprate profits to wages hasn’t been this high since before the Great Depression.
-The top 1% rakes in 35% of total wealth in the country, the highest rate since the 1920s.
-The conservative right has left Americans feeling demoralized and cynical of our political system.
While the facts may be disheartening, for Reich, they mean the time to instigate change is not only urgent but inevitable.
“Look at the civil rights struggle and the anti-Vietnam struggle, the darkest days of the 1950s with Mccarthyism. Every time this country has really been challenged, every time the regressive forces look like they’re going to win, the progressive forces RALLY. That is the history of the United States.”
Catch this clip of Reich’s speech from MoveOn.