Celebrate Record Profits!

"And there's always a place for the angry young man,
With his fist in the air and his head in the sand.
And he's never been able to learn from mistakes,
So he can't understand why his heart always breaks.
But his honor is pure and his courage as well,
And he's fair and he's true and he's boring as hell!!!!!!!!"
-Billy Joel

For the love of GOD! Can we please get some sense in our politicians and news media in this country! Is it possible that so many people were asleep in class when they taught the basic premise of the “American Way?” Folks the "profit motive" *IS* the American Way! It is profits that protect the United States of America! It is profits that enable us to do all of the good around the world that we do. As former GE CEO Jack Welch says, “Industry is the engine of Democracy!”

Exxon Mobile recently announce it’s largest single quarter profit in history, $9.9 Billion dollars. Talk is rampant in the media and in congress (both sides of the aisle – unbelievable!) that these profits are some sort of an outrage. Proposals for special taxes on these profits are running amuck. Lunacy! Does America not understand that profits pay for all new growth in this country?

Our country has myriad ways to raise money, but the primary two ways are both based on profits. The first way is to tax company profits or to tax individual’s income (i.e. personal profit ) or capital gains (i.e. profit) on realized appreciated value on property (never mind that that gets taxed twice). The second way our country raises funds to run itself is to borrow money based on its ability to pay the borrowed funds back (which it can do by taxing…profits).

This issue is a feeding frenzy of politicization in both the media and in congress. These are the same people with bees in their bonnets over America’s dependence on foreign oil. The same people that cried foul when hurricane Katrina wiped out much of the South’s oil drilling and distribution facilities. The same people who are against oil companies building new refineries in the U.S. (which incidentally could only be paid for with profits or borrowing backed up by earnings (profits))!

As an aside, ExxonMobile is a public company. Anyoney can purchase ExxonMobile stock and share in the same profits as the company does. In fact, anyone with a 401k or pension plan likely has some amount of money in large cap equity funds which because of Exxon's size almost inevitibly own stock in the company, and profit from the company's profits!

I worry that Joe Sixpack hears “10 billion dollars” and doesn’t place this number in perspective. This is such an astronomical sounding number that I worry most people say, “yeah, stick it to the man, tax his ass!” Typically when I get worked up about something like this I take a deep breath and say to myself, “trust the people.” They get it right in the end, but the “Angry Young Man” in me wants to rail against this insanity!

Hewlett Packard was famous for a new way of treating its employees. Values that placed respect on the individual and valued innovation and treating people right. For decades the “HP Way” as it came to be called has been heralded as the right way to treat employees, the right way to treat humans. An interesting and vital tenant of the HP Way that David Packard pointed out on more than one occasion made all the other good stuff possible, “run profitably.”