Politicians love to point the finger at corporate greed for high prices, mostly to obscure theirs and their central bank’s role in fiat debt creation, which is the ultimate engine for higher prices. From Michael Maharrey at schiffgold.com:
There is a meme floating around social media that seems to prove greedy corporations – specifically oil companies – are the root cause of inflation.
How does this meme stack up to reality?
Short answer — it doesn’t.
The meme tells us that ExxonMobil earned $5.5 billion in the first quarter of 2022 compared with $2.7 billion in Q1 2021. The meme goes on to conclude “We’re not paying for gas, we’re paying for greed!”
This meme is a great example of the fact that trying to draw conclusions based on a couple of numbers pulled from any context will likely lead you to the wrong conclusion.
The meme uses ExxonMobil’s net income as the basis for its assertion. If you look at the company’s income statement, you will find the data is correct. The company reported a net income of $5.48 billion in Q1 of this year and $2.73 billion in Q1 2021.
First, it’s important to understand exactly what these numbers represent. Net income accounts for revenue minus all expenses, including operating expenses. taxes, interest, debt service, etc. This number is highly susceptible to accounting manipulation. This number is often reported as “profit.”