Here's How We Can Stop the EPA's War on the Poor

In his State of the Union Address, President Barack Obama promoted his vision of "middle-class economics."

As part of his program, he pledged to lower taxes for working families, "putting thousands of dollars back into their pockets each year."

Alas, what his budget proposal pledged to giveth, his energy policy taketh away. The industry regulations pushed by Obama's Environmental Protection Agency, conflict with his stated budget intentions by foisting higher household energy costs that fall disproportionately on the poorest among us.

In a free market, entrepreneurs serve society tremendously by coordinating the entire market division of labor, directing scarce resources toward their most highly valued use as determined by members of society.

The price system ensures that those who produce the most demanded goods in the most efficient way will reap profits, while those who fail to do so will reap losses.

Business regulations serve to hamper this beneficent market process. Regardless of any other purposes they serve, regulations constrain entrepreneurs from arranging production processes in their best, most efficient pattern.

They necessarily increase costs of production and decrease the quantity of products people have available to satisfy their ends. In short, business regulation results in relative impoverishment.

Read the rest here at the Harrisburg, PA Patriot-News

Time to Reign in the EPA

So says my friend and colleague Tracy Miller in the Pittsburgh Post-Gazette. As he notes,

Under the Obama administration, the Environmental Protection Agency has proposed and promulgated numerous rules without a complete and accurate assessment of their impacts on consumers, jobs and small businesses. These rules include limits on the emissions of greenhouse gases, more stringent regulations for particulate matter and ozone, and "maximum achievable control technology" standards for power plants. Each will likely raise production costs, reduce economic output and reduce employment in affected industries.

Miller then makes the case for using sensible cost-benefit analysis.

Although levels of ozone and particulate matter permitted under existing standards may be harmful to health, the question arises -- are the benefits of more stringent standards worth the cost, in terms of reduced output, economic growth and employment?

Of course it is hard, when no actual voluntary exchanges occur, to properly assess true costs and benefits. Even if market prices for costs and benefits could be estimated, they are ultimately subjective to the people affected. Nevertheless, Miller's point stands. The EPA should not be an avenue toward despotism.