Today the AP had an article discussing how the largest oil companies are using most of their earnings to buyback shares and give cash dividends to investors. The article complains that these companies spend more on buybacks and dividends than they do on oil exploration. Uh... hello? There are only so many places these companies can legally explore for oil. World production of oil has most likely peaked or is relatively very close to doing so. How can you blame the company for rewarding its investors, the people who risk their money to invest in the businesses? Sure, gas prices are high. But oil companies only make 7%-9% on every dollar they bring in. Heck, the government makes twice as much money on gasoline than the oil companies. Oil companies do not have very high margins and are taxed and regulated a good amount by the government. I'm not saying that they deserve tax breaks or special treatment, but the costs of taxes and regulations are passed onto two primary people: the workers and the consumer.

This is what makes the idea of a "windfall profits" tax completely absurd and absolutely idiotic. The government has regulated and taxed to the point that it is extremely difficult to drill for oil here in the U.S. As a result, we rely on oil purchased from state-owned oil companies from around the world. We rely on unsteady organizations like OPEC, and countries with anti-American sentiment like Venezuela. Shutting down and reducing domestic oil production comes at a cost. All government intervention into the economy does have a side effect.