Heads or Tails #39 -- Piece or Peace

Today is Homophone Day at Heads or Tails and, no, we're not still talking about recent decisions of the California Supreme Court. "Homophones" are words that sound alike, though they are spelled differently and mean different things... as in today's pair of words at the Internet's premier Tuesday meme, piece or peace. Our magnificent mentor, Barb, gives us a lot of freedom with these topics... and therefore I'll write this morning about oil profits.

And, yes, Your Honor, I will tie this up with our topic.

The New York Times (genuflection optional) reported on April 30 that Royal Dutch Shell’s net income in just the first three months of 2008 ballooned to $9.08 billion and that British Petroleum reported a first quarter profit of $7.62 billion.

The Kansas City Star published Jane Wardell's AP story in its April 29 edition in which Wardell reported that Conoco-Phillips had a first quarter 2008 profit of $4.14 billion.

Read through David Lightman's story for the May 19 edition of the Kansas City Star and you'll find that Exxon-Mobil boasted a first quarter 2008 profit of $10.9 billion.

That's just four oil companies -- there are others -- who together report $31.74 billion in profits in just three months. That's profit -- you know, after you've footed the bill for sponsoring Masterpiece Theatre. (No, wait, ExxonMobile dropped its sponsorship in 2004.)

There are roughly 6.67 billion people on this planet. To put that $31.74 billion into some perspective, that amounts to roughly $4.76 for each and every man, woman and child... everywhere.

Lightman's KC Star article is not just about oil profits; it explains why serious economists think a windfall profits tax on these gushing oil profits would not be a good idea. The article quotes skeptical St. Louis University economics professor Muhammad Islam: "How do you define the word windfall? How do you define `normal price?'"

Writing about obscenity, in a concurring opinion in Jacobellis v. Ohio, 378 U.S. 184 (1964), Justice Potter Stewart said, "I know it when I see it."

Well, I know a windfall profit when I see it, too. And I'm seeing it here. And it's also obscene.

And now to tie it all up: One percent of $31.74 billion is still $317,400,000. One tenth of one percent of $31.74 billion is $31,740,000.

Keep on cutting: One one-hundredth of one percent of those first quarter profits would be $3,174,000. If I could just get me that little piece of that pie -- a crumb from the table, really -- and I'd be set for life.

When the crumbs the oil companies flick off their metaphorical bibs without a backward glance are so large they could turn anyone who catches just one into a millionaire... I put it to you that their profits are too large. I'm the last person in the world who would advocate confiscatory taxation under usual circumstances. As an American, I celebrate the success of my neighbors (OK, I get jealous, too) -- but I want to get my own -- I don't want to take away theirs. But there's another old saying to which I subscribe: Pigs get fat, but hogs get slaughtered. The oil companies have become hogs.