Before I start, I am not in favor of a windfall profit tax. But, just to play devil’s advocate….while the 11.68 billion Exxon Mobile pulled in during the second quarter alone are mind groggling, anyone who watched Wall Street’s response (shares for the company fell by 3 percent!) does not really need to know why to think maybe that isn’t so insane as it seems.

As you noted, in 2007 Exxon Mobile’s profit margin was 10 percent…what the second quarter numbers don’t make clear is that even though it made more money than ever before on a dollar basis..it’s profit margin was actually down! (wow). I did a quick crunch of the numbers a couple days ago and it was somewhere between 8 and 9 percent….don’t have it in front of me.

That profit is after expenses (including significant taxes), so in order to make 11.68 billion, ExxonMobile has to spend more than $200 billion (I think it’s like $230 billion, but I am too lazy to do the math).

Do I think 11.68 billion is a ton of money, heck yeah, but is it a “windfall?”

All that said, I might disagree with you that the original law was a failure…since you have not defined failure. And it’s worth noting that the 1980 law was really not a “windfall profit” tax, but an excise tax. If Obama has a true windfall profit tax, I’d have to see it, but on its surface the idea doesn’t float my boat.

As for McCain being in the pocket of big oil, an argument can be made he is certainly beholden to big oil–so can Obama to a lesser degree, but McCain is clearly in lead.

Through June 30, John McCain raked in $1.3 million from PAC (political action committee) contributions and contributions from individuals giving more than $200, as reported to the Federal Election Commission (Individual contributions are generally categorized based on the donor’s occupation/employer, thus you can say $500 came from Mr John Smith who works for BIG OIL Inc. and roll that into the total.)

Obama in that time raked in nearly $400,000 from the same big oil well.

$1.3 million falls short of $2 million, true, but McCain and the Republican National Committee’s Victory Fund (the Victory Fund is a joint fundraising committee that collects large contributions and slices off portions for McCain, the Republican National Committee and various state parties) raised $1.1 million in June from big oil oil and gas executives.

According to Open Secrets, though, McCain’s cut is only about 271,265 from oil/gas interests in June, so I think it’s fair to call foul on Obama on this one–unless he knows about something no one else does.

However, McCain is clearly the more popular choice of Big Oil, and his recent policies on more drilling would indicate at least an affinity for Big Oil not shared by Obama (well, until last Friday).

Just an aside, a far greater indictment of McCain than being in the pocket of big oil, in my opinion, is being in the pocket of big finance. That, I am afraid, would take me weeks to spell out.

Suffice to say, if you are unhappy about inflation, the housing/mortgage crisis, bank failures, and gas prices as a result of speculation, you want nothing to do with McCain

As far as the windfall profits tax on oil companies, it was tried before and failed miserably. Look at the “Figure 2″ on this page from the tax foundation.

The Wall Street Journal also questions Obama on what a windfall supposedly means. Obama never bothered to define it:

Mr. Obama didn’t bother to define “reasonable,” and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that “The oil companies need to know that there is a limit on how much profit they can take in this economy.” Really? This extraordinary redefinition of free-market success could use some parsing.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any “windfall” tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we’re missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon’s profits don’t seem so large. Exxon’s profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

If that’s what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery — both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau’s industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

IF,as you say, this campaign becomes all negative mudslinging, it is well-established that McCain is the reason for this. He’ll be hit hardest by the voter backlash, both because he’ll be blamed, but also because when it reaches the tipping point, and the focus shifts back to actual policy and vision, the old fart has nothing. He will be revealed as the real empty suit, as is already becoming apparent.