Oil Profits In Perspective

So I was reading an article tonight while watching my beloved Giants struggle to support Matt Cain against the Dodgers. The article dealt with the testimony of some oil company executives before a congressional committee. The committee is looking into whether or not the oil companies are gouging the consumers.

Now, the oil executives made some good points. They do exist in a boom and bust business which means to an extent, they have to take the big profits when they can so that they can pay for future technologies. However, that arguments gets undercut when you look at what they have been doing with their profits (buying back stock to inflate their prices even further).

But apparently, here are some numbers for industry-wide profits and losses:

Pharmaceuticals - $ 48.2 billion

Military defense contractors - $15.2 billion

Oil - $123.3 billion

Ok, the dollar is weak, meaning we have to pay more for each barrel. And then there is the increased demand for oil from China and other emerging markets and that it going to skew the whole supply and demand thing. But, to make nearly ten times more than the military contractors, with a war going on no less, and maybe there is something a little shady going on here.

Of course, this is all for show. Congress and the Justice Department are never going to be able to do anything absent a smoking gun memo where the oil industry got together (a la the asbestos industry at Saranac Lake Conference) and fixed the prices. We live in a capitalistic society with all the good bad points of it.