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MARIN COUNTY'S NEWS MONTHLY - FREE PRESS
(415)868-1600 - (415)868-0502(fax) - P.O. Box 31, Bolinas, CA, 94924

September, 2005

 

What Was That Ross Perot Saying? "The Giant Sucking Sound?"
By Karen Nakamura

In the spring of this year, US defense contractors reported strong first quarter profits. Three defense/aerospace companies were especially fortunate. Northrop Grunman reported a 76% jump in profits, Raytheon went up 30% and Goodrich saw 22%. Not only did the three giants beat Wall Street estimates, they predicted higher earnings for the rest of the year. According to Reuters news service "After the news, shares of aircraft part maker Goodrich rose 6.4 percent, while Northrop Grumman stock was up 1.6 percent and Raytheon's shares were 1.9 percent higher."
Reuters went on to note that "demand from the Pentagon as well as the Department of Homeland Security also boosted results at Titan Corp. which provides intelligence and translation services. Titan said on Thursday its earnings rose six-fold, sending its shares 2.9 percent higher.
In the meantime, San Rafael, seat of government in Marin and site of many first responder units for the Golden Gate Bridge, has received approximately $13,000 to help with expenses. According to Rod Gould, San Rafael's city manager, the bulk of the grant monies were tied to certain programs and equipment, most of which didn't fit into the City's needs.
That giant sucking sound is also heard in gas prices. In an article published in The Washington Post, August 7, Steven Mufson observed, "There's no question that the drain on the average American's pocketbook has been a gusher for the big oil companies.
"Exxon Mobil Corp.'s second quarter earnings climbed 35 percent from the second quarter of 2004, to $7.64 billion." BP's net income rose 29%, to $5.59 billion. Shell's second-quarter profits rose 34% to $5.24 billion. "ConocoPhillips, the third-largest US oil company, did even better; it reported an eye-popping 51 percent jump in earnings, to $3.14 billion." He went on to explain that "In the United States, crude oil prices have been running about five times as high as 1998 levels. And that's according to Energy Department statistics.
Stephen Moore of the Wall Street Journal explained on CNN August 21 that gas prices had adversely affected 1% of GNP while the customer index showed inflation rising. CNN reported on August 20 that one out of five Americans have been hard hit by the rise in fuel costs. Add to that feeding the family costs which come to another $10 to $20 minimum per week. That makes for approximately $200 in extra costs a month and no sign of wage increases to cover the gap.
Again Steven Mufson makes the point. "Congress, instead of investigating oil companies, just handed them (by various estimates) anywhere from $1.4 billion to $4 billion in tax breaks in the new energy bill."
It is obvious that with a devastating financial crush impacting at least 20% of the nation, the need for emergency food and housing is going to rise. Attempting to meet that demand for services is the opposite of what is happening today. There has been virtually no attempt by the Federal government to protect the American public.
In affluent Marin County emergency rental assistance has all but dried up. Cities like San Francisco, Fresno and Los Angeles are staggering under budget cuts. Special education services are cutting funds across the state. "No Child Left Behind" is leaving children behind left and right. Veteran services are getting worse. Soldiers in Iraq still don't have all the proper equipment. Local governments are suffering under national and state budget cuts.
In the middle of this cruel crunch and in a move reminiscent of the California Gas Gouge, it has been reported that an unusual number of American refineries have been taken off line for repairs in the past few months.
As Mufson states in his article, "Still, inquiring minds want to know: Isn't there something wrong when firms profit so richly from the misfortune of the US economy and American consumers?"

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