Mary Jane Eyre (@maryjaneeyre): "This is John Ganz speaking. It amazes me how you can make a living as a leftist commentator while being this financially illiterate. Anybody can check e.g. ExxonMobil’s financials and see that cash makes up 5% of total assets. If a private company doesn’t see a profitable way of…"

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This is John Ganz speaking. It amazes me how you can make a living as a leftist commentator while being this financially illiterate. Anybody can check e.g. ExxonMobil’s financials and see that cash makes up 5% of total assets. If a private company doesn’t see a profitable way of investing cash, they return it to shareholders, called a “share buyback”, which leftists also don’t like. If oil companies were reluctant to exploit new oilfields due to concerns about lowering oil prices, there would be no need for an environmental movement.

The reason why companies aren’t rushing to invest in Venezuela is because there are no guarantees that the socialists won’t get back in power and expropriate them.

Contemporary financialized capital, as distinct from the finance capital Lenin described, is deeply averse to investment in fixed capital. It prefers to remain liquid. Most oil companies today are not inclined toward large-scale production investments; they prefer to hoard cash and limit exposure. There are also internal tensions within the industry: the United States is now a major oil producer, and domestic producers have little incentive to finance projects that would undercut their own prices. Asking US oil interests to invest capital in Venezuela in order to depress global prices is, from their perspective, an irrational proposition.

Marshall Pierce

Jan 29

8:42 AM

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