More On Sunstein
Cass Sunstein, the new OIRA chief, hasn’t always been a blogospheric favorite because he’s generally taken a soft line on a lot of Bush-era abuse of power issues. But of course that’s well outside the scope of OIRA’s ambit. And as this very interesting blog post argues, his recent work in the area of behavior economics suggests a real interest in bringing a new theoretical framework to the government’s regulatory work — one that’s informed by rigorous economic analysis but not slavishly adherent to free market dogma.
Meanwhile, an interesting subplot here is that Sunstein’s wife is Samantha Power. Ever since she left the Obama campaign as a result of “monstergate,” I’ve gotten sporadic inquiries from people as to her status vis-à-vis a potential Obama administration. My understanding of the situation has long been that she wasn’t seeking a formal job and every indication we’ve thus far seen from the transition is that she won’t have one. But one can still provide advice on issues without being a formal adviser, and her husband’s appointment suggests she’ll probably be moving to Washington.
30 Responses to “More On Sunstein”
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January 8th, 2009 at 11:53 am
Yes, and what will be Scarlett Johannson’s position? If Samantha Power wanted to be my “informal advisor,” I wouldn’t turn her down either. Doesn’t mean anybody will be listening.
January 8th, 2009 at 11:54 am
Uh, speaking of Cass-ualties — Panda mauls tourist.
http://www.huffingtonpost.com/2009/01/08/panda-mauls-tourist-at-be_n_156242.html
January 8th, 2009 at 11:54 am
I’m not sure what is meant by “slavish adherence to free market dogma” with respect to regulatory work and specifically OIRA’s oversight of agency rulemakings. OIRA’s “marching orders” in the area of regulatory gatekeeping are contained in OMB circular A-4 ( http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf ), most recently updated in 2003 but dating back to the earliest days of the Clinton administration. Note that Sunstein was among the peer reviewers of the current version of A-4. A-4 in turn expands on the review requirements laid out in Presidential Executive Order 12866 from October 1993 ( http://www.whitehouse.gov/omb/inforeg/eo12866.pdf ). In A-4, an important requirement is to identify the need for federal action — what is the market failure or information issue that necessitates new regulation? This seems like a reasonable market-based standard, but not an expression of slavish adherence etc.
January 8th, 2009 at 11:55 am
one that’s informed by rigorous economic analysis but not slavishly adherent to free market dogma.
Oh, please. Can’t we get away from this foolish idea that the Obama Era of Peace, Freedom, and Security means elevating the research of social scientists to some altar of unquestionability? Sunstein will be a success in the extent to which he protects the environment, which is an ideological goal. Maybe behavioral economics tells you better ways to bring about that outcome (though I doubt it), but let’s not obscure the issue.
However, I didn’t know Sunstein and Power were married. That is good news.
January 8th, 2009 at 12:13 pm
When Matt says that Sunstein “hasn’t always been a blogospheric favorite because he’s generally taken a soft line on a lot of Bush-era abuse of power issues”, that means that Sunstein hasn’t always been a blogospheric favorite because he generally knows what he’s talking about it and isn’t always willing to hide it just to get along.
January 8th, 2009 at 12:36 pm
I would be shocked if this wasn’t the precursor to Cass’s Supreme Court appointment in the next few years. Obama probably didn’t want him on the appellate bench because it could generate a paper record that could cause problems, and
Cass probably didn’t want a DOJ or OLC job that would be too much administrative and not enough substantive work.
January 8th, 2009 at 12:42 pm
That may be the first time I’ve ever encountered the word “ambit”.
January 8th, 2009 at 12:44 pm
DTM, OIRA does not write regulations, it is a gatekeeper with respect to whether rules are adequately and appropriately justified. Standards for doing so are laid out in the documents I linked to and others. Agencies that do write rules are staffed by people with skill sets determined in part by those standards. Whatever “redesigning federal regulations to actually work to their intended purpose, which is part of what behavioral economics as applied to regulations is about” means (my sense is that it means very little for most types of federal rules), accomplishing it would mean revamping the standards and then providing rulemaking agencies with the new skills and inclinations, which would be quite time consuming. (if you think “slavish adherence to free market dogma” can lead you to some regulatory mumbo jumbo, wait til you see what could be done with something as vague and self referential as “behavioral economics”).
January 8th, 2009 at 12:48 pm
by the way, if I see that f’in’ 401k opt in/opt out example for behavioral economics one more time, my head will blow up. Don’t these people have another example? Wouldn’t a behavioral economist realize that using the same example over and over might turn audience members away?
January 8th, 2009 at 12:51 pm
Joe makes an interesting point. Recall that Justice Breyer was long involved in legal and economic analysis of effective government regulation; he was very much involved in airline deregulation (economic deregulation, not safety deregulation) in the 70s, if I remember correctly.
January 8th, 2009 at 12:56 pm
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?
January 8th, 2009 at 1:01 pm
Matt,
If I had to think of one person to radically re-write the way that regulations are handled, it would have been Sunstein. Behavioral economics, the garlic/mirror/cross to the University of Chicago, should put a very deft but lasting touch on regulatory law, which is what that school of thinking has been trying to do since inception.
As for those that think the Office isn’t that powerful, consider that a change in how the Office, as the final gatekeeper, assesses “adequate” will affect how ALL regulations would be written by ALL agencies and departments.
Quis Custodes Ipsos Custodiet?, “Who Guards the Guardians?” Sunstein was just made Guard to the Guardians.
January 8th, 2009 at 1:14 pm
Recall that Justice Breyer was long involved in legal and economic analysis of effective government regulation; he was very much involved in airline deregulation (economic deregulation, not safety deregulation) in the 70s, if I remember correctly.
It’s not for nothing that Sunstein and Breyer cowrote an admin law casebook together.
(Interesting footnote: We used a hastily published version of it in Sunstein’s class, and he had a contest to see who could catch the highest number of typos.)
January 8th, 2009 at 1:17 pm
My understanding is that Sunstein is a big supporter of cost-benefit analysis, which is certainly controversial:
http://www.ombwatch.org/article/articleview/2749/1/134?TopicID=1
http://findarticles.com/p/articles/mi_qa3805/is_200207/ai_n9105571/print?tag=artBody;col1 (longer article)
January 8th, 2009 at 1:19 pm
DTM, all that language you quoted dates from well before “behavioral economics” getting its brand name. Economics has always been about behavior. I chuckled when I saw the bit about user fees. You have no idea what a can of worms is opened whenever user fees are suggested, and the first behavior that is induced is lobbying behavior by the affected industry to legislatively limit the scope and magnitude of possible fees, usually along with an insistence that fees be limited to “cost recovery” only, rather than based on economic behavior in more interesting ways. And it’s the agency that thinks about fees; OIRA and EO12866 just says that they can try it if they like.
Anyway the things listed in that quote are the things that agencies believe themselves to be doing already. You’d have to do more than add a “behavioral economics ” label.
January 8th, 2009 at 1:21 pm
Peter H, cost benefit analysis is not controversial, it’s the law.
January 8th, 2009 at 1:26 pm
re ctownwoody and As for those that think the Office isn’t that powerful, consider that a change in how the Office, as the final gatekeeper, assesses “adequate” will affect how ALL regulations would be written by ALL agencies and departments.
google “Data Quality Act” from 2001
January 8th, 2009 at 1:27 pm
Peter H, cost benefit analysis is not controversial, it’s the law.
And those two things are mutually exclusive? Seriously, cost-benefit analysis has got to go, and I think Sunstein is the last person who will make that happen. To be fair, it’s probably more likely to happen than abolishing the Air Force.
January 8th, 2009 at 1:34 pm
Seriously, cost-benefit analysis has got to go
To be replaced with what? And when specifying your counterproposal, please indicate how this methodology would prevent the speed limit from being lowered to 0.
January 8th, 2009 at 2:01 pm
DTM, I think (a) behavioral economics is not such a new thing, (b) little of what’s new has much application in the regulatory sphere and (c) most areas of regulation that OIRA deals with don’t involve these type of economic issues — many are safety or technical requirements issues that make sense as mandates rather than as some sort of “induce behavior A” challenge. Doing some sort of “behavioral economics review” of the existing rulebook might make some sense as part of the stimulus package to funnel money to consultants, but little more.
but again, Sunstein as head of OIRA will not be regulating anything, and his tenure will be long over by the time “behavioral economics” gets any meaningful purchase in agency regulatory analysis toolkits.
I also don’t think you know much about what you are talking about, but that’s largely beside the point.
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