June 16, 2008
I'm going to hop up on my soapbox and go an entirely different direction with this week's write-up. We're going to talk about corporate ethics.
A story came out today that Saudi Arabia is now worried that global demand for oil could be diminished long-term if prices continue to escalate unchecked. In what could be fairly described as the understatement of the century, my dignified response: "Gee, ya think?"
At the same time, the heads of the big U.S. oil companies continue to defend their profit-taking to Congress as simply looking out for the best interests of their stockholders. Don't get me wrong - I am a capitalist and believe in minimal government intervention when it comes to business. My problem is the absolute lack of ethics and the resulting threat to the entire U.S. economy that rubs me raw.
"Absolute power corrupts absolutely." The price of oil affects so many aspects of our daily lives. How many companies are going to be bankrupted because of it? A good friend of mine is a Managing Director for a major airline. For every dollar increase in a barrel of oil, it costs his airline $40,000,000 in additional annual expenses. They expect to lose $1.5 BILLION this year. He says most of the smaller airlines will go out of business. Routes are being cut, planes are being put out of service, and airfares are going up....way up.
Is this a good thing? Is profit-taking right when its negative effects reach far beyond the handful of folks who benefit from it? I have always said that unless all parties benefit in a business transaction, it shouldn't be done. Every company should operate on a platform where ethics is a cornerstone of its philosophy. Enron forgot that, MCI forgot that, and Big Oil seems to have lost that memo somewhere along the way as well.
Sure, the profits are fat and for the taking right now. However, people will change their lifestyles, buy more fuel-efficient cars, and alternative energy sources will be pursued with more vigor than ever. What goes around, comes around.
Me? I'll stick with ethics...treating people fairly will always be rewarded in the long term. How about you?
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