Published: May 05, 2008 04:19 pm            

When $10.8 billion profit is not enough

Profit is what makes free enterprise the best economic system in the world. It is a powerful motivator that has given those societies pursuing it a standard of living greatly envied by those that do not. 

In my mind, profit is not a four letter word - even when it comes to oil companies. The fact the price of gasoline is so high, to me, comes down to nonsensical environmental legislation that keeps us from drilling for oil on America’s shore and coastlines and has squelched construction of new refineries. 

Arabs and those in other oil producing countries who wouldn’t give an environmentalist the time of day have got us by the pocketbook. We Americans have been too environmentally intimidated to do what needs to be done to rectify the situation. 

So even though it’s an extremely large number, it doesn’t particularly spike my interest to learn (as was reported last week) that Exxon-Mobil enjoyed a first quarter profit of $10.8 billion. 

Yes, that’s right, ten point eight b-b-b-illion dollars of take home money. 

What did grab my attention, however, was the news that this astounding amount of profit came as a disappointment to stockholders because - I hope you’re sitting down - they expected more! Never mind that this was a seventeen percent increase over last year’s first quarter profit. 

Because profit didn’t live up to expectations, the price of Exxon-Mobil stock suffered a 3.6 percent drop in value. It is incredible to me that $10.8 billion profit could somehow not seem enough. Good grief. 

A search of my wallet for a one dollar bill proved fruitless (I should own Exxon-Mobil stock so it would never be empty!), and Ann Zimmerman, trusting Ada Evening News marketing representative, lent me one of hers to measure. I wanted to do a - “how many times to the moon and back would it be?” - exercise – you know, if 10.8 billion one dollar bills were stacked end to end.

And though it took nearly as long to compute that number as it did to write this entire column, an answer did emerge: A little over two trips there, and another two trips back. 

For someone like me whose lifetime earnings stacked end to end probably wouldn’t scale the top of an Ada water tower and back, $10.8 billion is a lot of dough-re-me. 

Exxon-Mobil stockholders’ disappointment over first quarter earnings makes me think how premature the gloom and doom is about America potentially being in a recession. For one thing, economists are now saying the latest indicators don’t necessarily give evidence of one. There have not been two quarters (or for that matter even one) of negative growth, the official definition of recession. 

For another, Exxon-Mobil stockholders fretting over $10.8 billion profit being unsatisfactory is its own parody of how gluttonously spoiled we are.

Yes, prices in general are rising and increasing fuel costs get a lot of the blame. But America’s economy does not yet appear to be heading toward catastrophe.

        

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