MauiMensch

The demand for certain items -such as life saving drugs and (I would argue) oil- is not ver responsive to price. If the price of either of the two aforementioned items goes up, people will still need to have it. High oil prices over a long time will push people to use more alternative fuels but this will -almost necessarily- be a very economically painful process. Hundreds of thousands will suffer huge economic losses as a result of high oil prices and will be driven in to the poor house. If the Government wants to act in the interest of The People, it behooves it to herald the age of Alternative Fuels in other non-market-based ways. The point of the Government is to do for the people what the Market can't do for it, IMHO.

TullyMars- YES. Raising taxes on cigarettes will have inevitably made more people smoke less if only for the reason that they can't afford it. Even the demand for life-saving drugs will be affected if the price goes above what people can afford to pay for it.

Would-be smokers are also less likely to begin a habit that is so costly. The rules of The Market (if understood correctly) are nearly infallible. The understanding of the HUMAN effect of Market forces is not something that most economists like to think about, however...