Big Jewelry Posts Record Profits

NEW YORK (AP) - Jewelry retailer Tiffany says second-quarter profit doubled, beating Wall Street expectations as sales rose by double-digit percentages in Asia and Europe.

The New York-based Tiffany & Co. said Thursday it earned $80.8 million, or 63 cents per share, in the three-month period ended July 31. That compares with $40.5 million, or 29 cents per share, in the year-ago period.

Revenue rose 11 percent to $732.4 million from $662.6 million in the year-ago period.

That's outrageous! While American families are struggling, companies like Tiffany are gouging consumers by taking advantage of record high gold prices. Congress should convene hearings to look into curbing speculation and find evidence of market manipulation.

No word yet from Democrats calling for a windfall profits tax on jewelry. That's not expected though, since the left has decreed that the laws of Supply & Demand only apply to things people don't need. But still, haven't we been told that "excess" profits are better off in the hands of government than the people who earned them?

I know congressional demagogues don't know the difference between profit and profit margin, but Tiffany's 11% return is much higher than Big Oil's average of 8.3%, which should be reason enough for Democrats to seize their property.

What Is a 'Windfall' Profit?

From The Wall Street Journal:

The "windfall profits" tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?

Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.


Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that's what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery -- both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau's industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come...

The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.

It's what politicians do in Venezuela, not in a free country.

Tax Oil to Pay For Oil

ST. PETERSBURG, Fla.
-- Democratic presidential candidate Barack Obama Friday pushed for a windfall profits tax to
fund $1,000 emergency rebate checks for consumers besieged by high energy
costs...

Can you feel the stupidity? It's a thrill running up my leg!

Wow! Can I really take money from a seller and give it to the buyer in order to pay the seller? "Won't the seller raise the price?" says the buyer? "Oh no", says Saint Obama. "For I have repealed the laws of supply and demand and have abrogated the human condition!"

Fighting the Enviro-Tyrants

Finally an oil company exec has the stones to fight back over the global warming hoax that's being used as an excuse to destroy liberty and free enterprise while increasing government power over every aspect of our lives.

Exxon Mobil chief Rex Tillerson said:

"My view is that this is so extraordinarily important to people the world
over, that to not have a debate on it is irresponsible," he said. "To suggest
that we know everything we need to know about these issues is
irresponsible.

"And I will take all the criticism that comes with it. Anybody that
tells you that they got this figured out is not being truthful. There are too
many complexities around climate science for anybody to fully understand all of
the causes and effects and consequences of what you may chose to do to attempt
to affect that. We have to let scientists to continue their investigative work,
unencumbered by political influences. This is too important to be cute with
it."

Congressman Ed Markey(lawyer, non scientist) is proving the point with his proposal to create a massive new tax and government revenue stream out of (literally) thin air.

"Markey said the measure would generate $8 trillion through the auctioning of
emissions allowances to polluters...Markey’s bill would not give polluters free
emission allowances, but instead immediately put a price on emissions in an
auction...“The business community that has been polluting has to accept the
responsibility that this is a price that has been paid for by the society as a
whole,” Markey said."

Replace the words "business community" with " American individual" because that's who is going to pay for this colossal transfer of wealth and power to the government. And what exactly is this price that society has paid anyway?

Additionally, The Heritage Foundation has done an analysis of the huge costs that will follow with passage of the Lieberman-Warner Climate Change Bill:

"The study, produced by Heritage's Center for Data Analysis (CDA), forecasts
severe consequences—including crushing energy costs, millions of jobs lost and
falling household income—if Congress enacts the so-called Lieberman-Warner bill."

"Giving money and power to government is like giving whiskey and car keys to teenage boys." P. J. O'Rourke