Obama knows what he's doing in ways that very few people are even prepared to have a clue about.

You, Ezra, are a major font of clues for people like me.

To take charge of the metrics by which all government regulations are evaluated seems like a monumental opportunity and responsibility.

My guess is Obama recognizes the government needs a decisive move towards "economically aware" policies (carbon tax, congestion pricing, basic R&D subsidies) and away from the heavy-handed methods of the past (price controls, rationing, outright bans).

I only hope that Sunstein is enough of an empiricist to be open to revising the ideas of Nudge. His taste for celebrity poses the question of whether he may be too in love with his own insights.

Sunstein’s views are there for everyone to see, all they need to do is read his latest book.

He uses some weak psychological experiments to support his basic ideas for society. I would characterize this as a neo-Platonist idea for the benevolent philosopher-king. If we just “nudge” people in the right direction then we will maintain the libertarian goal of freedom of action, but get them to do the right thing anyway.

A single example of changing the default option when being asked about joining your firm’s 401k is extrapolated up to a grand theory of human behavior.

The problem with his philosophy is that he neglects to explain how those doing the “nudging” get picked or how they get to decide which way people should be pushed. This is basically a big brother, authoritarian, view of how society should be organized. Just the opposite of what is needed if we are to restore some semblance of a functioning democracy in this country.

That Obama has picked libertarians, mainstream unimaginative economists, and representatives of business as usual, is disquieting to say the least. His latest statements about Medicare and Social Security are also worrying.

What Bush didn’t manage to achieve by heavy handed attempts at privatizing, Obama may do by smooth talking and creating panic over non-existent crisis.

There is no social security crisis and the Medicare problem can be solved by improving the efficiency of the entire system. It has nothing to do with an aging population which will only increase costs by 1-2% from this factor over the next decade or so.

Is he getting bad advice, is he reading rightwing propaganda or is he a secret economic conservative?

When I took Administrative Law from Sunstein two years ago, we spent at least half the class time talking and arguing about this kind of cost-benefit analysis. Cass has this stuff in his blood.

OIRA was birthed in the 1980 Paperwork Reduction Act as part of the effort to streamline the federal government's regulatory processes.

You sure about that? Admittedly, this is based on nothing more than a can't-see-the-trees-for-the-bark perspective at the bottom of a regulatory office, but I would have guessed the reverse, that it was intended to streamline regulations themselves rather than the process of creating them.

Among other things, the Paperwork Reduction Act requires a non-trivial recertification process every three years for most (all?) regulations that require basically any paperwork from the public. It's a good idea in theory, but I certainly wouldn't call it a streamlining.

Sunstein's a celebrity? For writing a book on economics and regulation? By that standard, Al Franken must be Elvis!

It has nothing to do with an aging population which will only increase costs by 1-2% from this factor over the next decade or so.

You wrote this on Matt's blog too, and it's highly misleading. Yes, Medicare expenditures will roughly keep pace with medical inflation over the next decade or so, but the real concern is that they will skyrocket after that. The key event is not Baby Boomers starting to retire (as they will starting in 2011) -- it's Baby Boomers starting to accrue massive publicly-funded health care costs. This won't occur until (i) the bulk of Boomers retire, a threshold that won't be reached until 2020 or so, and (ii) the bulk of retirees start getting sick, which probably won't be until a little after that (i.e., when a substantial number reach their mid-70s).

You can see the relevant demographic analysis below.

http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2006.pdf

To echo the comment above: When I took Administrative Law from Cass Sunstein twenty years ago, we spent lots of time on the cost-benefit analysis under E.O. 12291. Sunstein not only has this in his blood, he has spent his academic career in the middle of this particular vineyard.

Some of Sunstein's earlier books dealt more directly with cost-benefit analysis, including Risk and Reason and Worst Case Scenarios. Basically, he's in favor of cost-benefit analysis, when done properly, and thinks it can serve liberal ends (like finding smarter, more effective ways to protect the environment).

Sunstein on the "noxious John Graham":

"John Graham . . . cannot be pigeonholed as 'conservative' or 'liberal'; on regulatory issues, he's unpredictable in the best sense. I wouldn't be surprised at all if, in some settings, he turned out to be a vigorous voice for aggressive government regulation. In fact, that's exactly what I would expect. When he questions regulations, it is because he thinks we can use our resources in better ways; and on this issue, he stands as one of the most important researchers, and most promising public servants, in the nation."

For those wondering, this is the Doug Ginsburg path to the Supreme Court, except that Cass's dope smoking won't keep him off.

Well, it's worth at least reading a critique of Sunstein, which finds that cost-benefit analysis almost always has an anti-regulatory effect.

Thanks, Thomas, for that quote. In a way, it proves my point about Sunstein's naivete about CBA.

"Celebrity thinker"? I doubt if Cass Sunstein measures down to this label. The benchmark is Bernard-Henri Levy. Where are Sunstein's hairdo and cleavage?

Wouldn't a better idea be to change the law so that people like John graham can't ever do what they did again? but i guess keeping Sunstein as far as possible from Obama and any real policy making in most legal areas is a good thing

Cost-benefit analysis is troublesome.Businesses routinely overestimate costs by orders of magnitude, while benefits Occur in the future and get discounted into oblivion.
Just as you can lie with statistics, youcan lie with CBA.

As far as I can tell, the OMB is essentially a veto player, able to block specific regulations indefinitely through repeated applications of "oversight". On the one hand, its power seems exclusively negative: Sunstein can now stop any regulation he doesn't care for, as long as he provides some basic efficiency justification. That's power, but it seems mainly to be power to block liberal policies (not surprising, given Sunstein's "pragmatic" -- ie, center-left -- outlook).

On the other hand, the OMB may function like the Administrative Procedures Act, where unsatisfactory decisions (like regulations with the OMB) are sent back to be tweaked, in which case, the OMB has huge power to directly shape regulations in any way Sunstein sees fit. This is what I suspect Sunstein is in it for. To streamline the process, I'm sure he'll give the various agencies lots of guidelines ahead of time about what he will and won't consider satisfactory. And since virtually any substantive preference can be justified on some procedural ground or other, this is a lot of power indeed.

His wife, powers, got him the job by calling Obama.

It is an interesting appointment. Cass and Barack have been close for a long time - I believe they met even before Barack joined Chicago's faculty in 1992. I think Cass must have asked for a position like this. I feel sorry for the Supreme Court candidates - Obama is a con law specialist and he will have some of the best con law experts scattered throughout his administration.

I won't bother pointing out that Sunstein really is pretty strong leftist.

What I want to point out is that he is also, among his other hats, an animal rights legal scholar.

For people who are honestly concerned about animal welfare, the promotion of this man within an Obama administration could prove to be vital.

Scu, you're right that Sunstein is a pretty strong leftist, and that he's an advocate for some limited animal rights. He's also a believer in technocratic assessment of risk--he thinks Democratic constituencies are foolish about risk regulation. And now he will have the power to overrule them.

Thomas, it is interesting, because really what I know the most about Sunstein is his work on animal rights. I have some cursory knowledge of the rest of his work, and I can often seek the parallels. In his work on animals he seeks immediately to create a middle ground, to lower the intensity of the debate, and to freely label radical practices even he participates in (like not eating meat).

However, he pushes for many practical measures to ensure animal welfare. And while obvious he feels regulations and bans are to be avoided when possible, he often advocates for them (like banning greyhound racing), when he thinks they will be both effective and necessary.

So, if the rest of work is similar to his work on animals, I can understand some hesitation. He will probably want to avoid regulations a lot of the time. He seems to believe in the power of smart regulation, or trying to figure out the best place for regulation for best effect. I think that is better than just a broader regulation good premise. For example, he thinks we need to raise the moral cost of meat eating by making people more aware of what went on in preparing their meat. Informational transparency is key to market conditions, and when we look at things like credit default swaps, we see that they were so destructive because they managed to avoid transparency. But he honestly believes in a second bill of rights, which is good. He also seems to believe in democracy in its full etymological stance, that is to say the force of the people. To do good, and he seems to believe that government and the law should help the force of the people be for good, rather than to try to regulate or steal that force.

Sunstein is a liberal, not a leftist. He accepts the basic premises of cost-benefit analysis, which is anethema to environmentalists and trade unionists who prefer the precautionary principle when it comes to protecting human life, job safety and the environment. As this excellent review by Ezra suggests (hey, man, regulation is not boring, it's what government ultimately is all about), this can be a key post for "nudging" the government's regulatory apparatus in a more progressive direction. I would only add that it will require a willingness to stand up to entrenched economic interests. My fear is that Sunstein is a careerist (he wants to be on the Supreme Court?) who will be very cautious in his decisions.

Very nice synopsis by Ezra and interesting comments. I don't really see how there is much sway for the nudgy stuff in most regulatory contexts, but improving CBA and its transparency in regulatory analyses would be useful for OIRA to accomplish. I assume Sunstein will continue to use the OIRA "return letters" to agencies submitting proposed or final rules, where the director and staff could pose questions and suggest redirections, restatements and reframings. John Graham (and Susan Dudley) have used them a lot. These return letters may be where most of the "nudging" takes place.

If you read over the legislation Obama wrote as an Illinois State Senator a LOT of it is tweaking technical language of existing laws. He did that without a lot of resources other than he own work product. Obama LOVES that kind of wonky scut work, burning the midnight oil to pick up minor efficiency gains through refocusing existing laws with more pragmatic and comprehensive legal language. I think this is one front where the Congressional GOP is going to be completely outgunned. It's thankless technical work to parse thousands of lines of law and to game out what minor language changes mean from a liberal perspective just seems beyond the capability (and interest) of most GOP foot soldiers. Obama is staffing all these scut jobs with heavyweights. It's very encouraging.

joejoejoe:

where can I read over the legislation obama wrote as a state senator and/or (because I am not an expert) where can i read a study of the legislation obama wrote as a state senator?

Raft,

This blog post> I put together includes a brief overview of his State Senate record, with a lot of links for more in-depth information.

Sunstein has argued for years that capital punishment is morally REQUIRED based on (said kindly) an idiosyncratic economic analysis. The numbers say to him that each execution carried out is correlated with fewer murders the following year. http://lawreview.stanford.edu/content/vo…) He has provided state legislatures with academic (though turgid) support for more executions. So we should have another deeply opinionated, quirky fellow ruling the government's paper trail.

This appointment seems to be an exciting one for the right wing. Before everybody gets excited about this guy and what he may do in this office, please check out the firedoglake entry here:

http://firedoglake.com/2009/01/10/pebo-wants-aei-libertarian-opposed-to-product-bans-deciding-ombs-health-and-enviro-rules/#Respond

"If used as an anti-government weapon, it can do a lot of damage." - FYI this is a GOOD thing.

Given Mr. Sunstein’s views on cost-benefit analysis, progressives concerned about regulatory policy should want to hear assurances that under Mr. Sunstein’s leadership OIRA will stop serving as a roadblock to much needed environmental, health, and safety protections.

Rena Steinzor, President of the Center for Progressive Reform, a think-tank of legal scholars, blogs about Mr. Sunstein’s appointment here:
http://www.progressivereform.org/CPRblog.cfm?idBlog=BCC5AF38-1E0B-E803-CA9222BEA379D45D

The Center for Progressive Reform plans to produce a full analysis of Mr. Sunstein’s views shortly.

I believe I can help you and others achieve their Trade Staffing goals

Sunstein definitely has CBA in his blood. Is anybody here aware of this old book from him: "The Cost-Benefit State"?

http://www.amazon.com/Cost-Benefit-State-Future-Regulatory-Protection/dp/1590310543

There is also a SSRN paper with the same title. Abstract:

"Gradually, and in fits and starts, the American regulatory state is becoming a cost-benefit state. This essay argues on behalf of the transformation, as a method for overcoming selective attention, public ignorance, "legislation by anecdote," and rent-seeking. At the same time it identifies three serious risks in current theory and practice: excessive proceduralism; engrafting cost-benefit requirements on top of existing command-and-control regulation; and using the criterion of private willingness to pay in contexts for which that criterion is ill-suited. The essay urges a shift from command-and-control to more flexible strategies, including "environmental contracting." It also attempts to identify and cast light on the most complex issues involving valuation of regulatory benefits."

Cass favors CBA, but probably will change it in subtle but profound ways.