Exxon profits highlight misguided priorities
Posted Jan. 31, 2012 / Posted by: Ben Schreiber
If there ever were a story that illustrated how the top 1% have captured both the economic and political power in our country, we need look no further than today’s earning announcement from Exxon Mobil. The oil and gas giant made $41 billion in profits for the 2011 fiscal year and $9.4 billion for the fourth quarter -- that’s a whopping a 35 percent increase from the measly $30.4 billion in profits they had in last fiscal year.
You would think that, in light of such obscene profits, our federal government would recognize that Big Oil is doing rather well, and prioritize giving a helping hand to those truly in need. Yet Exxon Mobil continues to receive billions in handouts from U.S. taxpayers. These handouts go right to their shareholders through dividends and stock buy-backs, Exxon rewarded its shareholders with $29 billion in the last fiscal year alone.
This perverse situation has understandably provoked righteous outrage from some on both the right and the left. Conservative groups such as the CATO Institute and The Heartland Institute, one of our Green Scissors partners, have supported ending subsidies for oil and gas companies. President Obama has repeatedly called for ending roughly $4 billion a year in handouts to the industry. And $4 billion is only the tip of the iceberg. Royalty free leases in the Gulf of Mexico, for example, could cost taxpayers up to $53 billion over the life of the leases.
And yet, there has been a lack of political will in Congress to get this done. It’s not hard to guess why: according to campaign contribution data gathered by the Center for Responsive Politics, in 2011-12 Exxon Mobil doled out more than $872 million to its favorite candidates. The revolving door of politics should really refer to campaign cash going in and subsidy money coming out.
The price we pay for this system is dear: when we subsidize Exxon Mobil, we subsidize harm to our air, pollution to our water and damage to our climate.
These subsidies are also undermining our democracy. As Annie Leonard so elegantly pointed out, we are not broke. Our elected officials are simply choosing handouts to giant corporations like Exxon Mobil instead of teachers for our children.
Photo credit:Josh Lopez, 350.org, Creative Commons Attribution
Climate and Energy,
Economics for the Earth
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