Let's talk about this California mess a bit.
Some believe you can solve the problem by capping utility rates. I do not.
Some think that forcibly holding down the price of something will do something. I do not.
Some believe that mandating a crisis can solve a crisis. I do not.
I am not telling our friends in California to stick it. I am telling the environmentalists who are misleading them to stick to the facts.
Fact one: supply and demand.
There is only so much energy. But there is so much more demand for that energy. California didn't deregulate. All it did was re-regulate. Nothing was done to encourage more companies to provide more energy. In fact, just the opposite.
Fact two: capping prices doesn't cap demand.
Just think about it. Are you going to conserve as much when you know the price of the thing you're conserving is not budging? Of course not. So what's to stop Californians, known for conserving when prices are rocketing, to keep the same vigilance when those prices aren't rocketing?
Fact three: companies are allowed to make money.
If companies go on too long not making money, then pretty soon they are not in business. And their workers are not working — they're out of jobs.
True, many energy companies are making money right now. No one was crying for them a couple of years back when they were not and scores were merging just to hang in there.
Don't get me wrong, I am not an apologist for the energy industry. And I welcome President Bush's efforts to help lower income folks pay their higher energy bills. But when you legislate what companies can make you set a dangerous precedent. It's like saying all men's suits will be $29. Or all women's shoes will be $10. Pretty soon you won't have companies making men's suits or women's shoes. And all because a government intent on doing good, only ended up doing bad.
Good competition is the answer, not bad policy.
I have nothing against hugging trees. Just don't squeeze me or us, in the process.
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