Monday, January 30, 2006
"Profit" is not a 4 letter word
Currently I am reading a report about ExxonMobile making a huge profit again this month. Now I am hearing the talking heads on TV accusing oil companies of price gouging and how making huge profits while people can't afford gas is unnacceptable. There does seem to be an etiquite in society where people do not brag about their income and people try to be respectful of their friends' incomes when making plans. However, running public companies is a lot different than managing a personal checking account. When you run a public company, or any "for profit" company, you have an obligation to make money for your investors or at least for the financial health and future of your employees. If you happen to have an item in high demand (or low supply) then the "percieved value" of the item increases. I do not want to get off on an Economics 101 tangent here; however, if you want something you need to be prepared to pay for it. If you do not like paying $2.50 for gas then buy a bike and ride to work. If that is not an option, then buy an econo-car instead of a SUV - or better yet, buy a vespa and "cruise" to work everyday.
The cure to America's energy issues are two fold. One is education and one is innovation. People need to be better educated on how to prioritize and spend their money. Do not tell me that you can not afford to heat your house while you watch next weeks Super Bowl on your new plasma screen TV. So, first thing is to educate people on what is neccesity and what is desire. Second, people (and the country as a whole) need to be more innovative. Turn down the thermostat just a few degrees to save a lot of money. Open your shades in the day time and let in natural light and heat. Shop at a grocery store which offers gas discounts at their gas stations, learn the local bus route. This is not intended to be a lecture, but if you want my shoes it will cost you. If you want my food it will cost you and if you want my oil it will cost you.
In the long history of the world the oil-producing nations and companies have only recently become very rich on our need for oil. And as our need diminishes in the future, their wealth and influence may decrease as well. But, for now we need oil and they want to make money. It may not seem right, and it may not even be fair, but this is a Free Market Economy and people have the right to earn a living. If you were lucky enough to own the only convenient store in a 100 mile stretch of highway wouldn't you charge a few cents more for snacks and beverages?
To leave you with one last analogy, I think most entertainers are over paid. Does an movies star deserve $20-30 million for a movie? Does a baseball player deserve $200 for 10 seasons? Most people would say, "No, they do not." Yet, we still go to the movies, we still go to baseball games, we still buy the movie posters and the baseball hats. As long as people pay the price, others will make the money. Profit is not a 4 letter word. Profit drives the global economy. People may not like seeing "big" companies profit, but everyone likes it when their stock porfolios and savings accounts profit. Well, how does that happen, when companies make money the economy grows and people make money.
The cure to America's energy issues are two fold. One is education and one is innovation. People need to be better educated on how to prioritize and spend their money. Do not tell me that you can not afford to heat your house while you watch next weeks Super Bowl on your new plasma screen TV. So, first thing is to educate people on what is neccesity and what is desire. Second, people (and the country as a whole) need to be more innovative. Turn down the thermostat just a few degrees to save a lot of money. Open your shades in the day time and let in natural light and heat. Shop at a grocery store which offers gas discounts at their gas stations, learn the local bus route. This is not intended to be a lecture, but if you want my shoes it will cost you. If you want my food it will cost you and if you want my oil it will cost you.
In the long history of the world the oil-producing nations and companies have only recently become very rich on our need for oil. And as our need diminishes in the future, their wealth and influence may decrease as well. But, for now we need oil and they want to make money. It may not seem right, and it may not even be fair, but this is a Free Market Economy and people have the right to earn a living. If you were lucky enough to own the only convenient store in a 100 mile stretch of highway wouldn't you charge a few cents more for snacks and beverages?
To leave you with one last analogy, I think most entertainers are over paid. Does an movies star deserve $20-30 million for a movie? Does a baseball player deserve $200 for 10 seasons? Most people would say, "No, they do not." Yet, we still go to the movies, we still go to baseball games, we still buy the movie posters and the baseball hats. As long as people pay the price, others will make the money. Profit is not a 4 letter word. Profit drives the global economy. People may not like seeing "big" companies profit, but everyone likes it when their stock porfolios and savings accounts profit. Well, how does that happen, when companies make money the economy grows and people make money.
