While oil is costing $100 per barrel and gasoline this summer might rise to $4 per gallon, oil companies are making record profits. Exxon Mobil raked in its highest profit ever last year at $40 billion.

In the meantime, government continues to subsidize oil companies at billions of dollars a year and Congress has proposed taxing oil companies to provide incentives for renewable and clean energy programs.

But oil company executives say that earnings are not out of line with other companies. Oil companies earned an average of 8.3 cents per dollar of sales, compared with 7.8 cents per dollar for chemical companies. And Exxon Mobil's effective tax rate in 2007 was 44 percent, compared with 30 percent on average for some 80 other U.S. companies. Over the last five years, Exxon Mobil's U.S. tax bill has exceeded the company's U.S. earnings by $19 billion.

In response to questions why Exxon Mobil plans to invest only $100 million over 10 years in renewables and alternative energy programs, J. Stephen Simon, Exxon Mobil Corp.'s senior vice president, said company officials examined a range of alternative energy sources a number of years ago and were unsatisfied with their potential. (For example, the development of biofuels with current technology would make that alternative too expensive for consumers.)

Instead, Simon said, company officials want to focus on leapfrogging current technologies and find a breakthrough for the world's energy concerns. Oil companies believe that the best way to bring down costs would be to access areas now out of bounds to oil and gas exploration — particularly the Outer Continental Shelf off the East and West coasts.

Congressman Ron Paul, who was interviewed Tuesday by CNN Commentator Glenn Beck, said the high costs of oil are not due to profits, but rather inflation created when the Federal Reserve makes more money to pay the excessive costs of government.

The Federal Reserve creates "all the money they want out of thin air, and that is the creation of the bubble. It causes the malinvestment and the excessive debt…."

Creating money out of thin air works, said Paul, as long as people trust the money. "But if the money has no backing to it and it is not convertible into anything, it eventually ends…. It is going to end, because the world is starting to reject it."

As trust in the dollar decreases, the value in the dollar also decreases in comparison to other currencies. That is why we see inflation and oil at $100 a barrel.

The lesson is simple. Whenever government messes with the free market, other problems are created. Let the free market regulate itself. Successful businesses will thrive and consumer needs will be met at the lowest price possible.

As Congressman Paul said: "And yet the more problems [government creates], the more government the people demand. For every problem we create down here [in Washington], or try to solve, then we create two new problems. And it goes on and on and it pyramids up. And some day we`re going to have to realize we can`t afford this much government any longer. We`ve got — we`ve got to depend on ourselves and on freedom and sound money rather than thinking that Washington, D.C., can solve all our problems.”

"What we should do is to protect the marketplace, let the market determine what is the best source of energy," said Paul.