The Competitive Enterprise Institute Daily Update
Issues in the News
ENERGY
Exxon Mobil reports second largest quarterly profit ever for a publicly traded U.S. company.
CEI Expert Available to Comment: Senior Fellow Marlo Lewis, Jr. on why windfall profits taxes are a bad idea.
“U.S. oil companies’ record-breaking profits are not “windfalls” but rewards for prudent risk-taking in a highly cyclical industry. Proponents wrongly blame high oil company profits for high gasoline prices, confusing cause and effect. Oil company profits are large because the industry’s customer base is large. The industry’s rates of return are actually quite modest. U.S. oil companies typically invest all of their profits and then some in capital projects to find and expand energy supplies. Oil companies’ tax payments already substantially exceed their profits.”
TECHNOLOGY
A hacker develops a method to get around electronic security measures on Apple’s iTunes software.
CEI Expert Available to Comment: Technolgy Policy Analyst Peter Suderman on France’s attempt to require iTunes interoperability.
“France’s law would require that Apple release the technical details of the digital-rights management (DRM) scheme it uses on its iTunes music store in the name of interoperability. Currently, songs purchased from iTunes can be played only on computers with iTunes software and Apple’s iPod portable MP3 players—in other words, devices managed by Apple. This allows Apple to constrain the use of the songs to certified software and devices, giving them more control over the listener’s experience. It also puts a damper on illegal copying and distribution, giving the record companies who license Apple to sell the songs some peace of mind. But French lawmakers want to destroy that peace by requiring Apple to divulge the inner workings of its DRM.”
RETAIL
Wal-Mart works to change its image by switching advertising agencies.
CEI Expert Available to Comment: Adjunct Scholar Zachary Courser on how public perception has shaped the history of Wal-Mart.
“The current public debate surrounding Wal-Mart fits within a historical context of democratic responses to changes in the retail sector. From Sears Roebuck and the emergence of the mail order industry in the late 19th century to the various chain stores that emerged during the 1920s, the American public has proven wary of retail innovations. Wal-Mart, as the largest retailer in America and the pioneer of the large discount chain store, is currently experiencing this same public wariness regarding its business practices and its role in the American economy.”
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