Tax ExxonMobil but Save General Motors

In the last two days, two iconic Dow components have reported second quarter earnings.

ExxonMobil (XOM), born from the genius of J.D. Rockefeller over 125 years ago, reported record profit of $11.68 billion. General Motors (GM), born in Detroit 100 years ago when the industrial revolution was picking up steam, lost $15.5 billion.

Both are interconnected- right? Exxon makes the fuel that services GM’s cars.

But Americans are p*ssed at Exxon.

How DARE it make so much money!

Windfall Profits Tax?

Senator Obama yet again brought up the windfall profits tax. The newspapers interviewed people filling up their cars and cursing at the “riches” of Exxon and asking, “do they really need to make all that money?”

Think about that for a minute. Does anyone ask Tiger Woods: “Do you really have to make all that money?”

Or Donald Trump?

Or that hedge fund manager who took home $100 million last year?

Or Cher who is selling her Malibu mansion for $45 million. “Hey Cher, do you really need to make all that money?”

But I digress.

Bleeding Billions of Dollars

Because if Exxon doesn’t make the money- maybe it loses the money. Like GM.

GM lost $15.5 billion.

LOST!

Which company will get government subsidies? Which company will likely be bailed out? (As I have believed for sometime that GM cannot survive.)

And so I ask: Why do Americans despise the company that is kicking a*s and worry about the company that is going under?

Why punish the company that is doing something right at the expense of the company that should be allowed to fail?

Cursing ExxonMobil goes against the American Dream of building the best companies and businesses on the planet. That’s what Exxon is. It makes billions because it is a great company.

GM loses billions because it has lost its way.

This seems obvious, right?

Capitalism rewards those that create and run great companies. I’ve said this before. Exxon should be rewarded, not punished, for its successes.

Instead, GM may end up being “saved” by taxpayers.

Just another day in America.

[In full disclosure, I currently own shares of ExxonMobil and do not own shares of General Motors.]