[Ed. note: Milton Friedman’s views are also explored in Part I of this series (worldview) and in Part III (political capitalism).]

“Economists may not know much. But we know one thing very well: how to produce surpluses and shortages. Do you want a surplus? Have the government legislate a minimum price that is above the price that would otherwise prevail…. Do you want a shortage? Have the government legislate a maximum price that is below the price that would otherwise prevail.”

– Milton and Rose Friedman, Free to Choose (New York: Harcourt Brace Jovanovich, 1979), pp. 219.

“It is a mark of how far we have gone on the road to serfdom that government allocation and rationing of oil is the automatic response to the oil crisis.”

– Milton Friedman, “Why Some Prices Should Rise,” Newsweek, November 19, 1973.

“If the EPA were to have done that with the regulations being proposed here … it is quite likely that their original Endangerment Finding would have to be revised and potentially overturned.”

The public comment period for the U.S. Environmental Protection Agency’s (EPA) proposed Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units closed on June 25, 2012. A number of extensive comments were submitted arguing that the basis of the Endangerment Finding—that human greenhouse gas emissions (GHGs) “threaten the public health and welfare of current and future generations”—has become so outdated as to require a thorough re-assessment.

Strong cases were made that the EPA failed to completely consider new and influential scientific results which have a direct relevance to the impact that climate change as a result of human greenhouse gas emissions may have on the public health and welfare.…

“Some good may yet come of this. A policy crisis over NAAQS regulation of  man-made greenhouse gas would finally make clear that Massachusetts v. EPA created a constitutional crisis by authorizing the EPA to enact policies that the people’s representatives have not approved and would reject if proposed in legislation and put to a vote.”

Yesterday, June 25, 2012, I submitted the following comment on the U.S. Environmental Protection Agency’s Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units, what EPA ideologically describes as the Carbon Pollution Rule. [1]

On behalf of the Competitive Enterprise Institute (CEI), a non-profit public policy group specializing in regulatory issues, I ask that EPA withdraw the Proposed Rule on the following four grounds:

1. The EPA’s proposal would effectively ban construction of new coal-fired power plants, a policy Congress has not approved and would reject if proposed in legislation and put to a vote.

In 2008, Candidate Obama campaigned against Republican-era high gasoline prices. Now that pump prices are high with a presidential election looming, President Obama disclaims responsibility. “We cannot drill our way to lower gas prices,” he says.

Crude oil is a fungible commodity, the argument goes. So why should we Drill, Baby, Drill when any domestic supply we might add is a relative drop in the bucket? Nice argument, except that it could be used against having any new production. (And U.S. CO2 emissions at the margin are a drop in the bucket, right Mr. President? ) And as the economic revolution of the 1870s taught, economic value and thus prices are set at the margin.

Marginal Economics

The United States is the world’s #3 oil producer. Domestic policy decisions in the U.S.…