Are oil companies, I ask, more morally culpable than other industries that would not be subject to Obama's proposed [windfall profits] tax?

"Not in the view of most economists," Obama replies. "I'm well aware of the argument (about) singling out oil companies rather than soda pop manufacturers," he says.

Yes, but what does Obama himself believe?

"I think oil companies are amoral. They want to make as much money as they can for their shareholders, which is what corporations do," he says. "The difference is the nature of the kind of outsized profits they make that may have no relationship to their investments or their production. The fact, for example, the shortage of refinery capacity could actually increase their profits so the less they invest the more they make indicates that you are not dealing with someone making widgets out there."

Obama is right about the amorality (not immorality) of oil companies. But he seems to suggest that oil markets are fundamentally different than others. In fact, in all markets, reduced production capacity would increase prices and, sometimes, would increase profits as well. That is why farmers can benefit from policies that induce them to leave land fallow. (I can't say about widgets--empirical studies of that market are hard to come by.)

Maybe Obama is saying that the forces of competition are absent in the oil market and that the deliberate decision by oil companies to keep capacity below competitive levels is the reason for today's high prices. That would be a logically coherent story, but not an empirically plausible one. It is not lack of competition that is keeping oil prices high but, rather, the basic forces of supply and demand. Even if you blame OPEC for noncompetitive behavior, that fact would hardly provide a rationale for taxing domestic oil producers, as Senator Obama is proposing.