May 17, 2011--Job Creators

The Republican argument in favor of tax cuts and tax breaks for corporations and the wealthy is based on the assertion that this will lead to economic growth and especially the creation of new jobs.

In other words, the GOP jobs program is to cut taxes and extend tax breaks and loopholes to companies such as the big oil producers because to the GOP and their Ayn Rand followers these corporations are considered "job creators."

This was on full display last week when the CEOs of the so-called Big Five oil companies (Exxon Mobil, Shell, BP America, Chevron, and ConocoPhillips) were hauled before the Senate Finance Committee and asked to justify the tax breaks they receive. In effect they testified that they are treated no differently than other large corporations. One CEO declared that this is the American way of fostering competition.

I thought that since Big Oil has received these "incentives" for many, many years, this claim that the government, through its tax policies, has helped them make huge profits would show evidence of leading to the creation of thousands of new jobs in the U.S. and worldwide.

It is thus an ideal, and ironic, test case of government assisted trickle-down economics.

First a glimpse at their recent earnings reports--

All five companies reported record profits for the first quarter of 2011.

--Exxon Mobil saw its profits rise by 69% as compared to last year. They totaled $10.76 billion.

--Shell's profits rose 22%; it's profits were $6.9 billion.

--BP America had profits of $7.2 billion on an increase of 16%.

--Chevron's profits increased 36% while its profits were $4.6 billion.

--And ConocoPhillips saw its profits soar to $3.0 billion, an increase of 43%.

On the jobs front, how many new jobs did these very profitable companies generate? This is, after all, the justification for their tax breaks.

--In 2008, Exxon employed 107,000; in 2010, 102,000. A loss of 4,300 jobs.

--In 2008, Shell employed 104,000; by 2010 this was down by 3,000 to 101,000.

--BP America in 2008 employed 97,600; two years later they had cut that to 80,300. There were 17,300 fewer workers.

--Chevron's workforce in 2008 totaled 65,000. In 2010 they employed 64,100. 900 fewer.

--ConocoPhillips employed 32,600 in 2008; two years later they had reduced that by 2,600, down to 30,000.

In sum, the Big Five's 2011 first quarter profits in the aggregate totaled about $33 billion.

And over the past two years, they cut their collective work force by a total of 28,100.

So much for claims that tax cuts and loopholes plus higher profits lead to job growth.

Though no one on the Senate Finance Committee pointed this out, case closed.