As you might guess from the title of this entry, I am indeed drawing a direct connection between Big Oil and the state of the economy. I suppose some may think that it's unfair of me to lay the majority of this nations and even the world's economic troubles at the feet of Big Oil (both corporate and national). However I am not a hamster. I am fully aware, as anyone who thinks about it will be, that the price of absolutely EVERYTHING is tied in some way to the price of fuel.
When fuel prices go up, it affects every individual directly in what we have to pay at the pump. It also affects everyone indirectly in that transportation and shipping companies need to raise prices to cover their added fuel costs. This rise in shipping costs is paid by every individual and business that ships goods. Retailers end up having to pay more for products and of course, they too are going to pass the cost on to customers.
The end result is that the record price of oil and the resulting high fuel prices are driving the price of everything up. This means that people have less cash available for non-essential things and therefore the sales of non-essentials first begins to slip and as the situation gets worse they'll outright plummet.
Big oil was hauled before Congress recently to answer for the high prices and their own skyrocketing profits. They justified it by saying that they were re-investing those profits. I found it interesting that there wasn't much said (that I heard about) concerning HOW they were re-investing those profits. Then I saw an editorial by Tim Ingram, VP and General Manager of KAIT, a local TV station.
In his editorial, Mr Ingram took one of the oil companies, ExxonMobil and did a quick rundown of how they've re-invested the windfall profits from last year:
ExxonMobil, had a windfall of $40 BILLION dollars in ‘07, That’s billion with a B. and that's before this year's gaudy price increases. Here is how they chose to reinvest it:
First, they bought back their own stock. 31.8 BILLION dollars worth of it. That keeps their stock values high.
Second, they distributed 7.6 BILLION dollars in dividends to their shareholders.
Third, they spent 100-Million dollars on an advertising campaign including full-page ads in USA Today, the Washington Post and the New York Times explaining that they aren't making that much money after all.
Fourth: They increased compensation for their top five executives to 76-Million dollars, a 170 percent increase since 2001.
And finally, They spent 10-Million dollars on renewable energy alternatives.
Lemme get this straight. Out of FOURTY BILLION DOLLARS, in their concern for the plight of people having to pay fuel prices they simply can't afford, they spent a whopping ten million bucks on renewable energy alternatives.
Take a good look at this ratio:
That means that for every dollar they spent on research to help solve the fuel problems, they spent FOUR THOUSAND on things like buying back their stock and giving executives raises and bonuses!! I can't help asking, how does that do anything to ease the pain at the pump for which the ONLY excuse is pure greed?
Answer: Not a single blessed thing but line the pockets of the ultra-rich at the expense of the little guy that can barely get by as it is.