I received the following email and would like for you to help me to respond to it, if you can. I think the Bush/Cheney policy makes sense and that price caps aren't the answer to conservation. Can you help me articulate a response? I would like to send this back to all to whom she sent the original message.

Thanks. I REALLY appreciate your help.

Dick Gladish

Email from moveon.org:

"I hope you'll join me in supporting a sound energy policy, rather than the Bush-Cheney team's proposed giveaways to their oil buddies.

http://www.moveon.org/stopcheney/

Electricity and gasoline price are skyrocketing and energy companies are taking record profits.  What's the administration's response?

Instead of challenging monopolies run amok, Cheney has come up with an innovative three point plan: rape, burn and pillage.  Rape the environment. Burn fossil fuels 'til we choke.  Pillage the consumer's pocket book.

This is simply wrong.  The keys to a sensible long-term policy are conservation, efficiency, and aggressive development of renewable energy sources.  We don't have to wreck the environment to live well.

Please join me in speaking out against plunder by energy tycoons.  It's quick and easy.  Just go to:

http://www.moveon.org/stopcheney/

Thank you.  It's time to speak up for common sense.  Please help spread the word.

Peace, Barbara"

Editorial Response:

Dear Mr. Gladish,

The easiest way to respond is to site one of the oldest dictums of economics. For energy prices to fall there must be competition and free markets. Current and further regulation can only artificially drive up prices or conversely drive producers to bankruptcy (Thus lowering supply and driving up prices even further).

According to the basic law of economics - Supply and Demand - there will be a temporary price rise as suppliers take advantage of the temporary shortage and high relative demand. The higher prices will cause other producers to come into the market. The increased competition will drive prices down to a level closer to the cost of production.

To mess with this "invisible hand" process is to invite disaster, a lesson those in California should have learned (but seemingly have not). To cap wholesale or retail prices will only discourage production and thus keep prices high.

Cordially,

Wm. J. Rayment