By Tom Quiner

[youtube=http://www.youtube.com/watch?v=jmt2j0fWdYE&feature=player_embedded]

Are profits good or bad?

Liberals decry them as being “obscene” if they seem to be too much. How much is too much? I think it depends on the industry. Oil, banking, and pharmaceutical industries in particular raise the shackles of liberals when they have good years.

A few years ago, ABC’s Jon Karl used the “O” word when questioning Speaker John Boehner:

“Is there something obscene about gas company, oil and gas company profits being that high when Americans are struggling just to fill up the tank?”

You can see the built-in bias in the question that there is, in fact, something obscene about it.

Writing in the New York Times, Sarah Ludwig excoriated the banking profession:

“So when did banks receive the divine right to make obscene profits? Yes, banks are corporations with shareholders, but they also exist at the behest of the public and have clear public functions and obligations.”

One of those, I guess, is not to make too much money according to liberals.

I ran across a Yahoo website that posed this question:

“Why did Mel Gibson make obscene profits on his movie, ‘The Passion of the Christ?'”

Add religious guys (with a conservative-bent) to the list of those who shouldn’t make obscene profits, according to liberals.

For the record, Mr. Gibson couldn’t get anyone in Hollywood to finance his movie or distribute it.

He had to dip into his own pocket to make the film, investing $25 million in a project in which he believed.

The movie Hollywood rejected was box office gold, making Mr. Gibson a very rich man. As economist, Walter Williams, says in the video above, profit is the residual the entrepreneur, such as Mr. Gibson, receives after paying all of his expenses, such as land, rent, wages, and interest. Profit is what’s left over for the entrepreneur for taking the risk.

In the case of Mel Gibson, Hollywood wasn’t willing to take the risk. Perhaps they thought there was no way a gritty movie about the crucifixion of Jesus Christ would make them any money.

They were wrong and Mr. Gibson reaped the reward for taking a huge risk.

He was paid his “residual” for this risk.

Interestingly, the same liberals who decry Mr. Gibson’s “obscene profits” don’t say a peep about the obscene profits made by pornographers who so terribly exploit women in their x-rated films.

Go figure.

This subject of profits raises an interesting question: is there ever such a thing as obscene profits? After all, profit is the goal of corporations, not an accidental by-product of their existence.

What do oil companies do with their profits? They look for more oil. They refine their techniques to make the process of finding and extracting their commodity more efficient and environmentally safer. They create more jobs. And they pay their investors dividends out of their profits.

Nothing obscene about that.

Who are their investors? A lot of them are retired, middle class Americans.

Don’t you wish auto companies were as profitable as the oil companies? They evidently didn’t give the public what they wanted and needed taxpayers to bail them out.

This raises another question: why don’t liberals ever complain about obscene losses?

The U.S. government is running massive deficits. Why? Because liberals keep voting for more government programs which require more government spending.

We just don’t have the ability to pay for this massive expansion of government at the federal, state, and local level without destroying the economy.

We’re watching the results of liberal ideology play itself out in California.

Democrats have controlled the legislature there forever.

Government unions have had their way with taxpayers. The state is in dire straits.

The city of San Bernadino just filed for bankruptcy. Why? According to city officials: escalating pension costs and lucrative union labor agreements.

San Bernadino had to file for bankruptcy protection despite slashing their payroll by over 20% over the past four years. It is the third California city in recent weeks to file for bankruptcy protection.

More are expected to come.

How did California and the rest of the country get in this mess? Liberalism.

Democrats have collaborated in expanding public sector unions. These unions have exerted their clout to extract obscene benefits at taxpayer expense to be paid out decades from now.

How bad is it?

It’s bad. By next year, according to the Center for Retirement Research at Boston College, we taxpayers in the 87,000 some-taxing districts in the U.S. will be on the hook for over a trillion dollars in pension plans.

The most liberal state in the union, California, the one with the coziest relationship with public sector unions, is on the hook for a half-a-trillion dollars in unfunded liabilities alone.

Let’s stop talking about obscene profits.

It’s time to start talking about obscene spending.

[Support Quiner’s Diner; support our religious liberty: order your “Stand up for religious liberty” cap today!]

No Comments

  1. Michael Amadeo on July 12, 2012 at 12:07 am

    The catechism of the Catholic Church has some great insights into business profits, work, and responsibilities of the State.

    2426 The development of economic activity and growth in production are meant to provide for the needs of human beings. Economic life is not meant solely to multiply goods produced and increase profit or power; it is ordered first of all to the service of persons, of the whole man, and of the entire human community. Economic activity, conducted according to its own proper methods, is to be exercised within the limits of the moral order, in keeping with social justice so as to correspond to God’s plan for man.209

    2427 Human work proceeds directly from persons created in the image of God and called to prolong the work of creation by subduing the earth, both with and for one another.210 Hence work is a duty: “If any one will not work, let him not eat.”211 Work honors the Creator’s gifts and the talents received from him. It can also be redemptive. By enduring the hardship of work212 in union with Jesus, the carpenter of Nazareth and the one crucified on Calvary, man collaborates in a certain fashion with the Son of God in his redemptive work. He shows himself to be a disciple of Christ by carrying the cross, daily, in the work he is called to accomplish.213 Work can be a means of sanctification and a way of animating earthly realities with the Spirit of Christ.

    2428 In work, the person exercises and fulfills in part the potential inscribed in his nature. The primordial value of labor stems from man himself, its author and its beneficiary. Work is for man, not man for work.214

    Everyone should be able to draw from work the means of providing for his life and that of his family, and of serving the human community.

    2429 Everyone has the right of economic initiative; everyone should make legitimate use of his talents to contribute to the abundance that will benefit all and to harvest the just fruits of his labor. He should seek to observe regulations issued by legitimate authority for the sake of the common good.215

    2430 Economic life brings into play different interests, often opposed to one another. This explains why the conflicts that characterize it arise.216 Efforts should be made to reduce these conflicts by negotiation that respects the rights and duties of each social partner: those responsible for business enterprises, representatives of wage- earners (for example, trade unions), and public authorities when appropriate.

    2431 The responsibility of the state. “Economic activity, especially the activity of a market economy, cannot be conducted in an institutional, juridical, or political vacuum. On the contrary, it presupposes sure guarantees of individual freedom and private property, as well as a stable currency and efficient public services. Hence the principal task of the state is to guarantee this security, so that those who work and produce can enjoy the fruits of their labors and thus feel encouraged to work efficiently and honestly. . . . Another task of the state is that of overseeing and directing the exercise of human rights in the economic sector. However, primary responsibility in this area belongs not to the state but to individuals and to the various groups and associations which make up society.”217

    2432 Those responsible for business enterprises are responsible to society for the economic and ecological effects of their operations.218 They have an obligation to consider the good of persons and not only the increase of profits. Profits are necessary, however. They make possible the investments that ensure the future of a business and they guarantee employment.

  2. Bob Vance on July 12, 2012 at 5:46 am

    Companies that make huge profits while receiving subsidies seems wrong to me, but I don’t lose sleep over it.

    I have never heard of people complaining about the money Mel Gibson made off The Passion. I do remember it being called propaganda and anti-sematic. I personally walked out of it, because I thought the violence was over the top. I thought anyone who would even consider taking their small children to it must be idiots.

    • Ankeny Conservative on July 12, 2012 at 2:58 pm

      It was rated R. It was also one of the most powerful movies I had ever seen. And I didn’t get any anti-Semitic vibes from the movie, either. I though the scene with the “demonic baby” was a bit odd.

  3. illero on July 13, 2012 at 3:00 pm

    Is there ever such a thing as obscene profits? While I agree with most of your thoughts, I would say that, yes, there are such things as obscene profits.

    I believe that large profits obtained through suppression of competition can be considered obscene. We are most susceptible to this when large companies either conspire to lift prices artificially, form effective monopolies, or bar entry of new competitors. Then, at the tail end of the chain, consumers suffer higher prices.

    This, to me, is the pincipal arena in which government should play an active role in business. Not in MANAGING business, but in managing the way businesses do business — not allowing monopolies, not allowing the development of companies that are too big to fail, not allowing companies to break laws, or to put the general populace at high risk.

    The fine line between under-regulation, over-regulation, and effective regulation forms a difficult tightrope to walk, but perhaps if the government would get its nose OUT of places where it does not belong, it could become more effective in preventing things like mortgage bubbles and The Great Recession.

Leave a Comment