All In Perspective
From a report about Exxon's latest record earnings*, this extraordinary statement
For the full year, net income surged to $5.71 per share from $3.89 per share in 2004. Annual revenue grew to $371 billion from $298.04 billion.
To put that into perspective, Exxon's revenue for the year exceeded Saudi Arabia's estimated 2005 gross domestic product of $340.5 billion, according to statistics maintained by the Central Intelligence Agency.
Now, I'm not talking about the statement about Exxon's revenues, which is extraordinary, but about the helpful "putting into perspective" that the revenues were about the same as the GDP of Saudi Arabia.
Does the average reader know more — or have more perspective on that number — knowing that it's comparable to the GDP of a country whose economics are not terribly familiar? Please! That's about as helpful as saying the earnings in dollars is about the same as the number of miles in a light-week, or the number of sperm the average man produces in a year (about 390 billion). Even saying that it's nearly 5% of the US national debt is more revealing. (It is, however, only about 50% greater than Wal*Mart's yearly revenues.)
How about something that really gives a sense of how big such a number is. Something like: imagine that you were able to spend $10,000/hour, 24/7, 365.25 days a year, a pretty breathtaking pace — for perspective, that's over 4 new Hummer H2s each day (use the surplus to buy the gas) . It would take you over 42 thousand years to spend Exxon's yearly revenue.
Or, suppose we were to use the money to pay out to people an amount equal to the median US income in 2004: $44.4 thousand. Exxon's yearly revenues would pay the median income to 8.3 million workers. For perspective, that's about 11 workers for every mile between Earth and the Sun.
To my mind, either of these comparisons gives quite a bit more "perspective" than the GDP of Saudia Arabia
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* Steve Quinn, "Exxon Mobil Posts Record Profit for 2005", Associated Press / Yahoo! News, 30 January 2006.
In: All, It's Only Rocket Science, Splenetics
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on Thursday, 2 February 2006 at 02.12
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You make an excellent point, adding some remarkable insights. Bravo.
I expect the writer chose Saudi Arabia's GDP because the country's stock in trade is oil and because the numbers lined up. I can see where he or she would think it a natural.
But that doesn't detract from your point about how well that informs most people. That's especially true when you consider how atypical Saudi Arabia's economy is. There's oil and closely related businesses, and everything else is way, way down the list.
On top of that, you've got all sorts of unusual situations going on at once. There's the incredible amassing of wealth, a huge percentage of it not bound in any way to the enterprise or labor of the population. The source of all that wealth is finite, but no one seems to have a good handle on just how much there is or when it's going to run out.
As for Exxon and other oil companies, I'm beginning to wonder how or why it's good for them to operate as completely private businesses in the U.S. It's not that I'm motivated by socialist ideology, either.
The fact is, these oil companies supply the lifeblood of our country — economy, society, the whole shebang. Oil is as essential to U.S. economic security and viability as our whole military, technological and industrial capability is to our national security. We sure as hell wouldn't try to rely on a rent-a-troop operation to defend us (although Bush & Co. have taken as many steps in that direction as they could get by with).
So, why do we rely on the Exxons and Shells, etc., to supply our lifeblood? That's especially true when their special and highly opaque relationship with the oil-pumping nations puts them, together, in the catbird seat for putting the squeeze on us for more and more and more money, with no end in sight.
I'm really taken with the concept of certain vital businesses being obliged to operate in the public interest. Would doing that mean cheaper gas and oil? Maybe not by much, because it's in the public interest to get busy and develop viable alternative energy sources. That means R&D and startup costs. I'd like to see more of all those billions Exxon and the others took in applied to the endeavor.
Sorry for rambling so long. Guess you triggered the gears, wheels and pulleys of my creaky thought processes.