I agree that the Economics 101 debate of Profit Margin vs Profit is a good start...and believe it or not, I'm going to defend Big Oil a little here...

Big Oil is at the same PROFIT MARGIN as they have always had. I've read figures that the average net profit margin is in the 9.5% ballpark. That is the % made after production costs, transportation, wages, marketing, TAXES, etc. The average Net Profit Margin of S&P 500 Companies is 8.5% ballpark....so while the oil companies are richer by a percentage comparison, it's not exactly by a boatload.

The key is volume. The reason that they keep recording record PROFITS year over year is because volume continues to skyrocket. They are still making that 9.5% net, but it is on larger and larger sales volume as we consume more and more.

That's the theory at least....though I still have a hard time explaining all of the wild fluctuation at the pump within hours....

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Let's say I make Float-N-Fly jigs, and it costs me .75 per unit by the time I buy jigheads, paint, craft hair, crystal flash, baggies to put them in, my time involved, any marketing expenses for a website, or whatever...

Then I sell them for $1.00 at the bait shop.

I make .25 each, and the government takes .18 of that. So, I'm making .07 per jig net profit....or about 7% profit margin. I sell 100 of them over the weekend and make $7.00 net profit on the deal.

Elwood goes out and catches a 12lb smallie at Dale on them and they become REAL POPULAR. I sell 1000 the next weekend. I report RECORD PROFITS of $70.00 because of volume alone. My profit margin is still the same old 7%....I just put more DOLLARS in the bank because I sold more goods.

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While you can certainly come down on oil companies for having ridiculously paid CEO's, jets and helicopters, excessive lifestyles....you can make the same case for many other industry CEO's. (Remember AIG, Goldman Sachs, etc, etc?) At least oil companies and the oil boom does create more and more jobs each year. I read that they are employing more folks than the year before, every year...and they pay workers a substantially higher wage than in other industries.

Based on current tax rates, I buy in to the theory that the Government takes more dollars to the bank for every gallon of gas sold than Big Oil. If you're comparing what they collect on every gallon, versus the NET PROFIT that Big Oil makes on every gallon, I think the math works. Remember, there are middle-men in there with refineries, distributors, right down to the local gas man.

I think that increased taxes on the Oil Companies is a MISTAKE, plain and simple. They will raise their prices more to cover...so their net profit margin will not change. The government will undoubtedly make MORE profit per gallon. The consumer, as usual, will feel the pain...and eventually it will reach a breaking point (consumer push-back) where folks will not be able to buy gas. Demand and consumption may be reduced at that point, but it will be at the cost of our economy...which will be in shambles.

The logical answer is NOT to expect Americans to ride bikes, drive electric cars, and give up our way of life. If technology can build planes and semi-trucks and pickups and cars that can run on solar or electric power with the same consistency, convenience, and power as gasoline and diesel, I'm all for it....but in the meantime....

DRILL BABY DRILL.

Tap oil here, keep the politicians hands out of increased taxes on oil companies, keep Americans employed here as they find it, drill it, refine it, transport it, and sell it....

The only problem is that say we do that, and we tell OPEC to stick it, and all of the increased supply causes competition, lower prices....we're happy....oil investors and speculators on the stock market may not be. Hopefully it would mean more disposable income for Americans to pump back into the economy in other ways....buying boats, new vehicles, houses, G-Loomis rods, etc.

Think it isn't all one big circle? Think again!