With nine straight months of job losses, declining incomes, collapsing in consumer spending, rising in home foreclosures, and a contraction of the GDP, recession sees most working families preparing for the worst.
But one group of people has continued to do just fine. Outstanding even. The two biggest oil companies in the world raked in record profits in the past quarter. Royal Dutch Shell, the biggest oil company in Europe saw its profits rise 74 percent to $10.9 billion. Exxon Mobil, the world's largest oil company, did even better. It set a new US record with profits of $14.83 billion (its second record in consecutive quarters).
According to media accounts, BP reported an 83 percent increase in profit this quarter, and ConocoPhillips claimed a jump of 41 percent.
Oil speculation drove the price of oil up to close to $150 per barrel over the summer and, along with price gouging, fueled these record profits. In the US, oil companies enjoyed the special favor of the Bush administration with special tax breaks, loopholes, and regulatory favors.
Republicans in Congress, including John McCain, repeatedly thwarted attempts to require oil companies to shift some of these massive profits into investments in renewable energy alternatives to fossil fuels like petroleum that cause global warming.
In addition, oil companies sought to maintain influence in the White House by donating millions to the McCain campaign as well as donating more than two dozen oil industry lobbyists as campaign advisors.
In exchange, McCain offered the "gas tax holiday" boondoggle for oil companies to keep more of the price of gasoline. Here's how it worked. McCain proposed to end the gas tax for the summer, supposedly in order to lower the price of gas. Economists noted, however, rather than lowering the price of gas, a "gas tax holiday" would have allowed gas sellers and oil companies to simply pocket the difference.
Additionally, McCain pushed for new offshore oil drilling, falsely claiming that it would also lower the price of gas. All expert analysis again rejected that claim, noting instead that new drilling would not add any new oil to the supply for a decade or more and even then the amount would be so small that the price of gasoline would be unaffected. Critics pointed out that McCain's plan simply sought to turn over new federal land to oil companies and keep the US economy addicted to oil production despite the urgent need to seek alternatives.
In the end, when Congress voted on a compromise drilling plan that opened some new offshore drilling combined with real investments in renewable energy alternatives, McCain opposed it. Why? Tax breaks. The compromise would have eliminated Bush tax breaks for Big Oil in order to pay for new investments in alternative energy sources.
McCain, however, supports more tax breaks for big oil companies. While working families are tightening their belts and preparing for an extended recession and are paying excessively for the price of gas, McCain has proposed more than $4 billion in tax cuts for the wealthiest oil companies earning record profits. The point makes McCain's accusation that his opponent is a redistributor a laughable one, and highlights just how out of touch McCain really is.
