Forbes commentary on Cass Sunstein....
Commentary
Cass Sunstein For Regulation Czar
Richard L. Revesz and Michael A. Livermore 05.12.09, 5:50 PM ETThe painful costs of under-regulation are widely apparent: from a real estate bubble built on bad lending practices, to the looming threat of climate change. Some business leaders may not admit it, but good regulation saves society money by setting the rules of the road. Without wise regulation, economic growth too often comes with a price tag that is more than it is worth.
More than any position in government, the "Regulation Czar" is charged with balancing economic growth with social risk. To fill this position, President Obama has selected Professor Cass Sunstein, an intellectual heavyweight who is a progressive but no ideologue.
Sunstein is well known for his academic writings, which touch on everything from constitutional law to behavioral economics. His appointment to director of the Office of Information and Regulatory Affairs (OIRA) is a harbinger of the administration's commitments--yes, we need to grow the economy, but sound economics need not conflict with smart regulation.
On May 12, the Senate Homeland Security and Government Oversight Committee held a hearing on Professor Sunstein's nomination. Sunstein's comments confirm that he is neither a friend nor a foe of regulation. Instead, he discussed a new approach to cost-benefit analysis and regulation that is thoughtful, pragmatic and fair.
Sunstein's remarks made clear that for him, cost-benefit analysis is not an intellectual exercise but a means to deliver greater benefits for the American public at lower costs. It should not be used as a hammer to beat back regulation, nor should it be discarded in favor of omnipotent federal agencies. Instead it should be employed judiciously to select regulatory approaches that achieve maximum net benefits for society.
This new approach to regulation could not come at a better time. The recent fiscal meltdown clarified the degree of our interconnectedness--a loose screw on Wall Street can send homes in Arizona to the foreclosure auction blocks; a blind eye in Washington can result in a tsunami of wet coal sludge in Tennessee. We can no longer afford to pay the social cost of letting corporations "self-regulate," nor can we afford to place unnecessary burdens on already struggling businesses.
From his remarks in his committee hearing as well as from his writings, it is obvious that Sunstein is sensitive to this tightrope walk. Those in the business community looking for an easy ally are barking up the wrong tree. Those in the progressive community hoping for a wilting lily will also be sorely disappointed.
Sunstein believes in a robust regulatory state, but he also acknowledges that regulations can be more or less efficient at achieving their goals. As OIRA director, he will look for strong standards to reduce economic, environmental and public health risks. But he will also look to make sure the market is not shackled and businesses are given maximum flexibility to reduce risks at the lowest possible costs.
Once confirmed, Administrator Sunstein will have a set of sticky regulatory problems before him made stickier by an economy in the tank. We are pleased that he will be the one to reform and use cost-benefit analysis to find regulatory solutions that work for the American public.
Many changes are needed--last year we published a book full of recommendations, and in recent months OIRA has received almost 200 comments, many contradictory, for how to reform regulatory review. But if anyone stands a chance of making sense of the jumble and pulling out a sensible solution, it is Sunstein.
Perhaps he won't make close friends of those on the far left or right, but that may be the biggest measure of his success. Today it is not ideological purity that will save us, but sound judgment and a pragmatic spirit willing to take what we need from all perspectives, and leave the rest.
Richard L. Revesz is the dean of New York University School of Law. Michael A. Livermore is the executive director of the Institute for Policy Integrity at New York University School of Law. Together, they are the authors of Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health, published by Oxford University Press in May 2008.
hno:
Works for me DIV.
