I believe that the general definition of Profit is: The difference between what you make and what you spend. In other words, if your lemonade stand spends $5 for a pitcher, some paper cups, and the lemons or lemonade mix and you make $10 from sales of your lemonade, you make $5 profit. If, you add an employee to mix the lemonade and pay them $1.50 for the day, you now make $3.50 profit. If you have to pay your neighbor $2 to set your stand up on their corner lot, you now make $1.50 profit. However, your new prime location brings you more business and you increase your sales to $15; you now are making $6.50 profit. Bear in mind that this profit is money that you did not have in the first place and you can do whatever you like with it. Obviously this is a very basic approach to business but, if you think about it objectively, you realize that these are the basics for any business.
Today, in this country, we keep hearing that “government is interfering with the profit motive of business and putting a damper on job growth and economic development in the private sector.” We hear that, “Regulation is breaking the back of business; stifling investment and punishing the consumer.” Many of these people seem to forget the time when Boston Harbor and Lake Erie were able to be set ablaze because of the unchecked disposal of chemical waste by the factories that were built along their shores. They seem to forget (maybe some are simply not old enough to know) when every photo of Los-Angeles was taken though a chemically induced fog and daily life there included a check of the “Smog Index.” During the time when Republican, Richard Nixon was in the White House, the people made their concerns about their overall health and well being. Cancer rates were rising and birth defects or still births were all too common in the areas where large factories operated. The EPA was created to set and enforce strict guidelines on what could be spewed into the air we breathe and the water we drink. The cry from business was that they would be put out of operation if they had to comply with these regulations. Years before when people were becoming ill and dying from tainted meat and poultry, the government; again responding to the pleas of the people set up regulation to protect the health and well being of the citizens. Most of these regulations have met their purpose and, as a result, many people today simply assume that large corporations operate out of some sense of civic obligation and that the government “over-regulates” to the detriment of those businesses and that is what accounts for high costs for the things we use every day.
Well, let’s look at a few industries that average Americans rely on every day and see just how badly government regulation (and taxation) is hurting them:
According to Fortune magazine, in 2010 the top 5 pharmaceutical companies made a combined profit of $50 Billion. The top 5 health insurance companies made a combined profit of $12 Billion. And there is this report from ABC News in April, 2011:
Exxon Mobil and Royal Dutch Shell today reported first-quarter profit increases of 69 percent and 30 percent, respectively, from the same period last year. With rising gas and oil prices, analysts expected the five biggest oil companies -- with Exxon as the largest -- to report that they are swimming in revenue.
Exxon earned $10.7 billion in the first quarter, up from $6.3 billion. Shell announced profit of $6.3 billion in the first quarter this year, up from $4.8 billion.
BP and ConocoPhillips announced their first quarter earnings Wednesday, in a week when the biggest oil companies have begun to release their 2011 profits. The "Big Five" oil companies include BP, Chevron, Conoco Phillips, Exxon Mobil and Shell.
ConocoPhillips said its first quarter earnings increased 43 percent to $3 billion from $2.1 billion in the same period last year. BP's first quarter earnings dipped this year -- $5.48 billion compared with $5.60 billion during the first quarter a year ago -- including a charge of $384 million related to the oil spill in the Gulf of Mexico.
Note these are Quarterly Profits!
Profit is AFTER expenses.
Now I know that America is supposed to be driven by Capitalism but honestly, can you really look at those numbers and tell me we are not driven by greed? And yet millions of Americans believe that the reason they are paying too much for things is because the government is interfering with corporate profits. It hasn’t always been this way in the U.S. There was a time before the so-call Reagan Revolution when a growing number of Americans made a decent enough wage that it only took one wage earner to support a family. The family typically had one nice car, a decent house, and even a television to watch “Father Knows Best.” I get emails all the time calling these the “Golden Years” or the “Good old Days.” Of course, back then (with Republican, Dwight Eisenhower in the White House), there were few “Corporate Barons” and most business owners made maybe twice or three times as much as their highest paid wage earner. The government took on the task of building the interstate highway system and higher education was attainable for all GIs and most of their dependents. Of course there were higher taxes, yet prices were lower. Oh sure, many will say that the unions forced wages and benefits up and that’s what caused the rise in prices.
Profit is AFTER expenses.
Now most people realize that I have my Socialist leanings. But for sanity’s sake, do you really call the kind of profit taking we are seeing today (at the expense of working people) simple Capitalism? Well it is. Which leads to the next question; are we any longer a Republic? Here is your word for the day:
Oligarchy: A form of government in which a small group exercises control especially for corrupt and selfish purposes.
OK; back to your government bashing.
Peace,
Chad (The Left) Shue
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