Big Oil: Why do Politicians lie so much?

[jack24]

It is totally insane how silly all this oil stuff has become.  I really don't understand why politicians are purposefully forgetting economics.  There are just a few things that they are lying to us about:
 
1: Oil profits come from all over the place.  The transportation sector only uses 65% of the oil. Truckers buy almost 15% of the gas.  So only about 55% (.65 * .85) of the profits are paid for at the pump by private drivers.  So we are only have as "GOUGED" as they would have us believe.
 
2: US Consumers DEPEND on Oil.   Plastics, foams, rubbers, some heating, and some of our electricity all come from oil.  The majority of our goods are shipped on trucks and we all need oil for our cars.    Can you imagine what would happen to our standard of living if the oil companies faltered?
 
3: Chevron, Exxon, and Shell don't just work with oil.  They also deal with natural gas, coal and other energies.  Saying that those companies only make money from oil is like saying mcdonalds only deals with hamburgers.  So that means, that EVEN LESS than 55% of the profits are paid for by consumers at the pump.  I've seen various estimates but from what I can tell only about 4% of the price of gas comes from BIG OIL profits.   So at $4.00 a gallon you are only paying 16 cents a gallon that goes to profit.
 
4: The oil business is HARD.  It takes a massive amount of investment to drill and refine oil, not to mention dealing with environmental and political concerns.  Companies won't stay in tough businesses if they don't make a good amount of profit.
 
Here is a list of companies by profit margin.   (You probably know this, but profit margin is the percentage of your total revenue that is profit)
I've also done my best to evaluate them based on how essential their services are
 
@@@@ = Absolutely Essential to the majority of the population
@@@   = Absolutely essential to a significant portion of the population
@@     = Important, but not essential to a significant portion of the population
@        = Important to some, almost no one depends on the services
 
1: US Bank                @@         31.20%
2: Microsoft            @@@        27.51%   
3: Google                  @@         25.33%
4: Energy Sol           @          19.79%
5: MGM Mirage           @          18.21%
6: Pfizer Drug         @@@        17.05%
7: Bristol Myers      @@@        14.12%
8: Disney                  @          13.66%
9: GE                       @@@        13.01%  (The 'green' champions themselves!)
10: Newscorp            @          12.19% 
11: McDonalds          @@         10.25%
12: Exxon             @@@@       9.32%
13: Budweiser(AB)        @          8.71%
14: Chevron           @@@@       8.46%
15: Shell Oil         @@@@       7.74%
16: Dish Network       @@         6.82%
17: Toyota                   @@@        5.8%
18: EBAY                      @          4.54%
19: Best Buy                @          3.53%
20: Walmart                 @@@        3.51%   
21: Amazon.com           @          3.21%
 
Do you see much of a pattern between how essential something is and their profit margin?   I don't.
 
Now.  Here are those same companies listed by Net Income (Profit)
 
1: Exxon             @@@@   40.61 Billion
2: Shell Oil         @@@@   27.56 Billion
3: GE                @@@    22.00 Billion   
4: Chevron           @@@@   18.68 Billion
5: Toyota            @@@    16.06 Billion
6: Microsoft         @@@    14.06 Billion
7: Walmart           @@@    12.73 Billion
8: Pfizer            @@@    8.14 Billion
9: Disney            @@     4.68 Billion
10: US Bank          @@     4.32 Billion
11: Google           @@     4.2 Billion
12: News Corp        @@     3.42 Billion
13: McDonalds        @@     2.39 Billion
14: Bristol M S      @@@    2.16  Billion
15: Budweiser        @      2.11 Billion
16: MGM Mirrage      @      1.58 Billion
17: Best Buy         @      1.40 Billion
18: Dish Network     @      756 Million
19: Amazon.com       @      476 Million
20: Ebay             @      348 Million
21: Energy Sol       @      320 Million
 
 
But now it's kind of easy to see a pattern between how essential the service is and how much money they make. That is how is should be!

This isn't always the case, and it's interesting to see that there is such an obvious relationship.  I just think it's insane that any politician would be deceptive enough to use Net Income as a basis for a company doing something wrong.   
 
I know politicians lie, but this may be the most ridiculous thing I've ever heard.

[TimMitchell]

In addition to that, the federal tax on gasoline is 18.4 cents a gallon, meaning they are taking more profit from oil through taxes than the oil companies. Moreover, the price of oil is set BY THE MARKET, oil companies don't decide on the price of oil any more than farmers set the price of corn or wheat.

[pig floyd]

Meh, let's triple the price of gasoline to encourage the market to more fully develop replacements, get people to stop sprawling out of their cities, and get them to buy local.  Yup.   

[jack24]

Meh, let's triple the price of gasoline to encourage the market to more fully develop replacements, get people to stop sprawling out of their cities, and get them to buy local.  Yup.   

I recognize theform of logic that you are using, and I assume you are joking around a bit.  The market can't withstand those kinds of prices UNTIL we have replacements developed.

It looks like demand will start to adjust due to price at $3.75 and $5.00.  Many consumers have already started to change thier behavior, which creates a market for all sorts of innovation.

[luke]

@@@@ = Absolutely Essential to the majority of the population

what's the NI, EPS, PE or ROA for companies providing serivices that are absolutely essental to the entire population?

[TimMitchell]

@@@@ = Absolutely Essential to the majority of the population

what's the NI, EPS, PE or ROA for companies providing serivices that are absolutely essental to the entire population?

Is there a correlation between those ratios and the fact that they are essential?

[luke]

OP seems to think so. 

[jack24]

@@@@ = Absolutely Essential to the majority of the population

what's the NI, EPS, PE or ROA for companies providing serivices that are absolutely essental to the entire population?

http://finance.google.com/finance?q=exxon
exxon

http://finance.google.com/finance?q=NYSE%3ACVX
Chevron

http://finance.google.com/finance?q=NYSE%3AGE
GEneral Electric

http://finance.google.com/finance?q=TYO:7203
Toyota

http://finance.google.com/finance?q=microsoft&hl=en
Microsoft

http://finance.google.com/finance?q=NYSE%3AWMT
Wal-Mart

[jack24]

OP seems to think so. 

No, I gave you the profit margins so you can determine the total sales of a company.

Even though the profit margins for oil companies are relatively low, those companies still make a HUGE profit.  That is because enough people need thier services, that they can have a modest profit margin and still make a killing.

Microsoft, while maybe not as essential, can take advantage of a huge profit margin to get the same result.

The correlation between those ratios you listed and profit margin is almost always strong.

The correlation between those ratios you listed and net income isn't necessarily always strong.

[luke]

Moreover, the price of oil is set BY THE MARKET, oil companies don't decide on the price of oil any more than farmers set the price of corn or wheat.

didn't see this. i laughed.

[links to stuff i didn't ask about]

no.

water, food, shelter, etc.