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The good folks at Center For Progressive Reform recently released their report on the issues surrounding Cass Sunstein, Obama’s pick for OIRA: the part of OMB with the power to kill off food, enviro, workplace, drug safety and any other regulations intended to protect us and the living world upon which we depend.
The report fleshes out a number of significant differences that we have with the regulatory methods and outcomes Professor Sunstein has embraced – his approach to cost-benefit analysis first and foremost. We believe OIRA’s 25-year record of applying cost-benefit amply demonstrates that it is an inherently flawed method of evaluating proposed regulations. Time and again, benefits (to the public) are understated and costs (to industry) are overstated, with the result that badly needed regulations – developed by environmental, health, and safety experts at regulatory agencies pursuant to a congressional grant of authority – are scuttled or weakened by OIRA economists.
While David Stockman and the Reagan Administration didn’t invent cost-benefit analysis, they turned it into a tool for defeating needed regulation. Somehow they managed to sell the Washington establishment on the idea that cost-benefit brought mathematical precision to the regulatory process. That idea was a scam. The Clinton Administration should have dispatched cost-benefit analysis or at the very least diminished its role in the process, but it missed the chance. The Bush II Administration turned this reactionary methodology into a bulldozer, and developed a series of cost-benefit-related tools that they used to lay waste to needed protections for health, safety and the environment.
[snip]
So while there’s good reason to expect that EPA and the other regulatory agencies will once again put environmental, health, and safety interests first in their regulating, there’s ample reason to worry that OIRA may yet be a barrier.
We don’t support or oppose presidential nominations, because we’re not in that business. But if and when Professor Sunstein is confirmed, we plan to pay very careful attention to what happens at OIRA.
[In my part of the Sphere of Deviance, "cost-benefit anaylsis" is shorthand for "feed peasants poison".]
15 Comments
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Yes.
Yeah, one of those things that the lovers of “cost-benefit analyses” miss is the human element. Humanity cannot be reduced to numbers, no matter how often folks like Sunstein try to do so.
Isn’t that the whole point? To use the heavy hand of govt to protect those who finance the pols’ campaigns? Sunstein may be perfect for the intended goal.
I a nonstary vein, I am not experienced in cost-benefit analysis. While good in theory, I would love a practitioner to give me some insight on how often it is used honestly, vs. how often it is used as an excuse for doing what you already planned on doing.
Lets define the parameters of what they look at. Its hard to ignore Actor Jeremy Piven getting sick off of Mercury tainted Sushi without wondering if we are burning to much coal.
Its hard to argue against higher MPG for cars when we just fought and lost a war for oil.
The Cost of less financial regulation is growing as we speak.
I want that guy who wrote the Book “Black Swans ” to do the cost benefit studies.
Good Idea!
He is very University of Chicago, so he in some way is required to live and die on the economic cross of cost benefit. It is our (I am an alumn) Holy Grail. The fundamental issue is whether he has an open enough mind to consider all the costs. Few economists have seen a profit they didn’t like. Sunstein has published some interesting works on topics from the constitution to feminism. To get a reading on what he and Richard Thaler are wispering in Obama’s ear, you should check out Nudge.
Kirk If we change what the studies look at we can easily prove that Health and the environment make money in the long run.
And unlike the Bush studies our studies won’t be as funny.
KBR’s Shoddy Electrical Work Sparks Negligent Homicide Inquiry For Soldier’s Death
Christy’s up
He seems to be for privatizing Social Security? What the Hell is he doing in a Democrats Administration!
Here are some good graphs from the St. Louis Federal Reserve Bank. Here is a humerous effort to keep the economists honest.
Kirk look at DeadLasts link I think there is a lot of material to mine.
Cost Benefit Analysis
http://en.wikipedia.org/wiki/Cost_Benefit_Analysis
Cost benefit analysis is a sore point because it was regularly used by the Bush OMB to undercut regulation or support weaker regulation in the EPA.
As in this from my scandals list:
Thanks very much Kirk.
digg is open.
As long as there is someone looking over Sunstein’s shoulder to ensure he doesn’t go off the crazy rails, then he should be given a chance. We’ve seen that in the financial area it can be very dangerous to under-regulate. In international trade we’ve seen that too. It requires consumer advocates and stockholder interest groups and the like to keep an eye on this.
Just so long as they regulate enough to keep my peanutbutter safe then I’ll give him some rope.