This is truly amazing to me and gives you a clear plate glass window view of the Democratic thought process. They want to establish a “Reasonable Profits Board” for energy companies!
The Democratic energy policy is stupid. There isn’t another way to say it. One can ridicule it, satire it, make fun of it, but their line of thinking is stupid. No wonder we can’t educate anyone efficiently in the public school system. What the heck are they smoking? Maybe I want some.
Let’s say we implement the Reasonable Profits Board for Energy Companies. Are we going to establish a Reasonable Profit Board for Banks? How about for lemonade stands?
When I went to business school as an undergrad and as a graduate student, I never learned how to add the “reasonable profit” line into income statements. Could someone from the left wing please instruct me as to how to calculate that?
If I don’t calculate it properly, is there some GAAP guidelines that the FASB has put out that I can follow? To estimate Cost of Goods Sold or to match revenue to expenses, I have a set of standards that I can point to when I make a judgement. What’s “reasonable”? Does “reasonable” change in better or worse economic times? If I employ only union members does that reflect on my “reasonable”? Can I also have a “reasonable loss”? Surely if there is profit, there has to be its antithesis. Maybe in tomorrow’s New York Times they will post the guidelines on the editorial page.
Then again, I could be so dense I missed this innovation. Maybe this is a brand new development in investment banking that is so cutting edge it cannot possibly have burrowed its way into the latest literature on measuring profit in a company. EBITA now becomes EBRPITA.
I like the “PITA” reference since we know the Greeks are such financial savants. When doing a merger or acquisition we could see if the company should be bought at 10x the EBRPITA. Maybe there is only a reasonable acquisition price and if a stock goes too high, we ought to give sellers of the stock the difference. Warren Buffett would be all for that! If I invest in a seed company, I should have them redo their financial statements because after all, as an investor I should only concerned with “reasonable profits”. That extra stuff just gets posted to cash or turned over to Uncle Sam I suppose.
It never ceases to amaze me that other so called very important and credentialed people think they should be able to tell a business or individual how much is the correct amount to make.