For the first part, the government is a blunt instrument - you swing this club around, and you WILL cause collateral damage. You use government force to keep oil companies from making "too much" money, and I guarantee you'll end up with many unwanted negative consequences.
Secondly, the government is slow and inefficient. For the most part, slow is good, for we do not want a quick-acting, flexible government, at least not in its current make-up. The fact of the matter is, any part of the market the government gets its hands on, it will destroy its productivity, increase its burden, decrease its flexibility, stifle innovation, and in the end, cost much more than it saves.
If the government should do ANYTHING about the oil companies, it should be to remove ruinous regulations and requirements, and reduce gasoline taxes.
John Hawkins over at RWN also makes several great points:
Gas prices get high in an election year and next thing you know, you have Dennis Hastert doing his best Lenin impression. Since when are Republicans worried about what companies are doing with their "enormous profits" and the "compensation packages given to executives?" What business does anyone in Congress even have getting involved in something like that?
Listening to politicians in Washington complain about how much money a corporation like Exxon makes is like an enormous, bloated tick complaining that the Cocker Spaniel it's attached to is using too much blood. The truth is that if you add in the state gas tax, the Federal gas tax, and the enormous taxes Exxon and its employees pay out, you'll find out that the government drives up the cost of gas far more than any profits Exxon takes, even at $3.00 a gallon plus.
Yet, they're mad that Lee Raymond is making "too much money." Because I'm not running for anything, I can tell you the unvarnished truth, which is that Lee Raymond is probably UNDERPAID. The guy has been the chief executive of Exxon for 12 years and just last year they made a $36 billion dollar profit (which incidentally, is only a 9.7% profit). Considering how much money he has helped them make over the years, if they paid Raymond a billion dollars, it wouldn't be too much.
See, you're not supposed to say that though. Nobody likes oil companies. Nobody likes rich people. People are mad about how much they're paying at the pump. But look, folks, we live in a world where Derek Jeter can get paid $189 million dollars to play baseball for 10 years and top Hollywood actors can make $20 million plus per film. So, why shouldn't Raymond be able to make a bundle for running a company the size of Exxon? Just because it turned out that gas prices were extremely high when he retired? Please!
Lee Raymond deserves the giant pile of cash he's going receive, but he doesn't deserve the cynical carping from the politicians or the petty jealousy of people who are envious of his success. America is much better off because of high achievers like Lee Raymond and more people should recognize that fact instead of gnawing at his ankles in envy.
Also, think about how much of a profit margin the oil companies make on gasoline - it is far less than in many other profitable industries. The difference, people, is VOLUME. I can state with firsthand knowledge how high the profit margins are in the tech world - for sure, our services are valued much higher than simple time & materials would account for. But we don't have anywhere near the same volume as gasoline stations.
Let's not forget about the oil companies' most profitable items - those $1.59 16oz bottles of Coke in the convenience store, the $2.00 bag of pepperoni combos, the $1.25 package of twinkies. You want to complain about "enormous profits" and "obscene markup", start there.