Cass Sunstein, “the most evil man, the most dangerous man in America,” in the words of the provocateur Glenn Beck, is back teaching law at Harvard University, ready to reflect on his contentious nearly-three-year term as the nation’s regulatory czar—cautiously.
Mr. Sunstein earned Mr. Beck’s obsessive ire, which led to death threats mailed to the law professor’s unlisted Boston-area address, largely because of his interest in “nudges,” which grew out of a concept that he developed with the University of Chicago economist Richard Thaler: “libertarian paternalism.” It’s not enough to make freedom of choice, in the abstract, the highest good, he and Mr. Thaler have argued. All choices are framed, meaning it makes a big difference to, say, employees’ well-being whether they start their jobs enrolled in a 401(k) plan (but can opt out) or start unenrolled (but can opt in). Government can encourage the framing of choices in ways that prod people toward life-enhancing decisions, Mr. Sunstein believes.
In his new book, Simpler: The Future of Government (due out in April from Simon & Schuster), Mr. Sunstein compares the surreal sessions mentioning him on The Glenn Beck Program—more than 100, by one count—to the Two Minutes Hate in the novel 1984, in which party members vented against enemies of the state. But he never considered withdrawing his nomination for administrator of the White House Office of Information and Regulatory Affairs, either because of that hostility or during the months-long wait for Senate approval, caused by various Republican concerns, including over a comment he’d made in 2007 that it was time to ban sport hunting.
“No, no, no, no,” he says in a telephone interview from his Cambridge office, firmly but softly. “The president had done me the honor of choosing me for the job. If he thought I was the right person for the job, I’d try to do my best to not make him a liar.” (He now says his comment about hunting was “foolish.”)
As regulatory director, however, Mr. Sunstein entered fresh realms of controversy. It was his dream job—ah, the dreams of lawyers!—but, especially in a Democratic administration, it’s often thankless. President Carter laid the groundwork for OIRA (“Oh-EYE-rah”), and President Reagan greatly strengthened the office, whose mission is to ensure that the benefits of regulations coming out of each federal agency exceed their costs. Many liberals, however, see the office as a hostile check on consumer and environmental protections they deem essential. Republicans, meanwhile, think the office deserves some of the blame for every nanny-state rule Democrats concoct.
OIRA, says Rena Steinzor, a professor at the University of Maryland’s law school in Baltimore and president of the Center for Progressive Reform, was created from the start to give “businessmen an opportunity to raise trouble about new regulations.”
“The best that you can say about Cass Sunstein,” adds Ms. Steinzor, whose center focuses on health and the environment, “is that he was continuing business as usual.”
But from some administrative-law experts and OIRA-watchers, Mr. Sunstein earned praise. He brought “much-needed academic rigor to the position,” says Eric Posner, a sometime co-author and a law professor at the University of Chicago, where Mr. Sunstein used to teach. In his reports and memoranda, his supporters say, he laid out a vigorous vision for how government could make itself more accessible and user-friendly, drawing on the latest social science.
In his most controversial case, in September 2011, Mr. Sunstein, at President Obama’s direction, returned long-awaited new standards on safe levels of ozone to the Environmental Protection Agency for reconsideration. The president of the League of Conservation Voters told The New York Times the move was “the worst thing a Democratic president had ever done on our issues,” environmentalists called the decision nakedly political, and Lisa P. Jackson, the EPA chairwoman, reportedly considered resigning.
In Simpler, without going into detail, Mr. Sunstein calls the decision “highly controversial but unquestionably correct,” and insists it was free from politics. (The EPA will revisit the issue this year.)
Asked whether he found the job thankless, Mr. Sunstein gives a diplomatic answer: “Any day that you got to reduce costs, or save lives, or reduce illnesses was a very good day. ... If you have a rule that’s going to prevent deaths on the highways and it’s going to do so without causing economic dislocation, that’s an honor to participate in.”
Mr. Sunstein is among the most-cited legal scholars alive—professors joked that his being in office would open up space for them in law reviews—but some observers wondered how this academic’s academic would fare in Washington.
We’ll have to wait for a blow-by-blow account. Simpler is the opposite of a tell-all Washington tome. To make clear how naïve he was early on about the city’s mores, he mentions offending two high-level officials by failing to invite them to a meeting—but doesn’t name them. The book recounts a lively debate over which of two fuel-economy stickers would better explain cars’ fuel economy to consumers, yet, in an interview, he won’t say which he preferred. “I won’t talk about anything deliberative,” he says. He did chafe under the bureaucratic gymnastics required to get any piece of writing released. He may be dropping more tidbits in a course that he is teaching at Harvard Law this semester, with Lawrence Summers, called “Inside Government,” but he declined to let a reporter sit in.
His caution may reflect innate tact, but he’s also not entirely untethered from the Obama administration, where his wife, Samantha Power, just stepped down as a national-security adviser, a move widely interpreted as a prelude to another high-level appointment. The couple have two young children, and Mr. Sunstein commutes between Washington and Harvard.
He says his intention at OIRA was never to use the office as a laboratory for his ideas about nudges. Still, simplification can be a kind of nudge, and he pushed for the government to simplify. An early priority was to scrap the “food pyramid” used by the Department of Agriculture to describe a healthy diet. It showed a climber ascending a triangle, splintered from peak to base into portions representing grains, vegetables, “meat and beans,” and so on. Long derided by data-visualization specialists, it was scuppered in favor of a much more basic image of a plate divided into four parts, the fruit and vegetable portions larger than the grain and protein portions. “Plate not pyramid!” became a rallying cry for clarity during Mr. Sunstein’s time at OIRA.
Another food-information rule clearly bears Mr. Sunstein’s stamp: If meat-purveyors want to call their product “90% lean,” they must also say it contains “10% fat": Social science has shown that people react differently to positive and negative statements of the same fact.
Mr. Sunstein played a prominent role in the Obama administration’s “look back” review of old regulations, intended to eliminate red tape and find fresh savings. It was criticized as a PR move, but Mr. Sunstein enumerates many successes: Retracting a rule that gas stations had to have certain air-pollution controls on gas-pump nozzles, for instance—made redundant by technology in modern cars—should save $450-million over five years.
One-Way Ratchet
But it wasn’t rule-pruning or the food pyramid’s demise that occupied Mr. Sunstein’s critics. The larger picture, they say, is that the regulatory office is a kind of one-way ratchet on environmental and worker-safety rules—hanging them up in endless review or doing too little about systematic problems, like the ones that government investigators determined helped lead to the Deepwater Horizon oil-rig disaster.
One target of the critics is cost-benefit analysis itself, which environmentalists believe fails to capture much of what they value. Mr. Sunstein views it as a tool to cut through knee-jerk reactions—Regulations kill jobs! No, they save lives!—and move on to more-analytical terrain.
“There is a view held by some people that if you are in favor ... of less regulation, you favor companies over people,” he says. “It’s really not an accurate way of thinking about it, because if you impose costs on companies, people are going to bear those costs"—through higher prices, fewer jobs, worse products. Cost-benefit analysis, he stresses, captures such human costs.
Some conservatives, for their part, have suggested that the agencies’ cost-benefit estimates are rigged in favor of government intervention. “Neither of the competing dogmas can be supported by the evidence,” he writes in Simpler, citing retrospective economic analysis of federal cost estimates that find some errors but not a pattern of errors.
Conservatives also charged Mr. Sunstein and Mr. Obama with undermining cost-benefit analysis by adding such squishy concepts as equality, human dignity, and fairness to their analyses. These came into play in rules requiring prisons to do more to prevent the rape of inmates, for instance. The use of such ideals “sounds more like the end of cost-benefit analysis than the beginning,” wrote a Wall Street Journal editorial.
Mr. Sunstein concedes that “if dignity were a free-floating concept that could be wheeled out to justify any rule that couldn’t be justified on cost-benefit grounds, that wouldn’t be very dignified.” But he says the opposite view—concluding every human value can be framed in financial terms—is also indefensible.
In fact, it is a misconception that OIRA staff members spend their time wielding cost-benefit calculations against the agencies, Mr. Sunstein writes in a working paper he posted in December, devoted to explaining the “Myths and Realities” of the regulatory office.
Mainly, they broker interagency disagreements, ensure that the views of all parties inside and outside of the administration get aired, and seek consensus. “That’s a very positive gloss on OIRA’s role,” objects Michael A. Livermore, executive director of the Institute for Policy Integrity, in New York. He and Richard L. Revesz, dean of the New York University School of Law, have argued that OIRA does have a bias but that it’s structural and not ideological. They suggest that the office should also look at public petitions and other sources to see if there are clear cases where agencies are failing their missions through oversight or torpor rather than overreach.
Nudges remain controversial: Libertarians hate anything that smacks of interfering with people’s right to make choices, even bad ones, and skeptical of governments’ ability to second-guess them. And it remains striking that for all of Mr. Sunstein’s advocacy of nudges, most of the beneficial regulations he cites—notably those related to fuel economy—come down to old-fashioned, top-down rules. How do you know when to nudge and when to mandate, he is asked? No surprise: Cost-benefit analysis is the “master concept.”
“If you have a fuel-economy standard that is going to have benefits way in excess of costs, you have a good argument that’s the right thing to do. In many domains, the risks of a one-size-fits-all approach are pretty high, and it’s better to inform people than to tell them what they have to do.”
The nudge of the moment, pushing the envelope of the concept, is New York Mayor Bloomberg’s stalled attempt to ban the sale of giant soda servings. What does Mr. Sunstein think about it? Amazingly, given how much he’s written on this subject, he declines to say, claiming he hasn’t studied the issue. Watching his words, it’s clear, is one Washington lesson that stuck.
