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April 3, 2012

In cutting red tape, White House czar wields a scalpel

Returning to the building where he used to teach, Cass Sunstein explained his approach to developing cost-effective regulatory policies in a packed lecture hall at the Law School yesterday afternoon.

Sunstein, one of the most influential legal scholars of the 20th century, currently serves as the administrator of the White House Office of Information and Regulatory Affairs (OIRA), where he oversees the efficiency of government agencies.

Using a scene from the movie Moneyball, Sunstein illustrated how natural biases may corrupt our understanding of efficient policies, as a baseball player’s appearance corrupts the scouts’ judgment in the movie.

“You can think of policies and regulations as baseball prospects; they may look great, but what will they do for the American people? Remember,” he said, quoting Brad Pitt’s character Billy Beane, “We’re not selling jeans here.”

Sunstein explained methods of quantitative and data driven analytics that have advanced the disparate fields of both behavioral economics and statistical analysis in sports, which his regulatory agency utilizes in assessing its own work.

Sunstein used a clearer EPA fuel economy label, and an improved nutritional diagram released by the Obama administration as examples of disclosure policies that empower individuals to make more informed decisions.

His slides cited a dramatic increase in the total annual net benefits of the first three fiscal years of Obama’s administration, demonstrating an estimated $91.3 billion in deferred costs from regulation changes.

When asked whether he considers changes future administrations might make to his policy program, Sunstein said he does not consider entrenchment in regulatory implementation.

“The goal is to do the right thing,” he said. “If the optimistic view is if you focus on net benefits and disclosure policies that inform people rather than confuse them, then that’s the right thing.”

Connor Shaw, a third year law student, was impressed by Sunstein’s presentation and work.

“I read his book Nudge when I was an undergrad and it put Chicago on the map for me, as well as behavioral economics,” he said.

“It was a very technical talk. This was more the nuts and bolts of what he has been doing in the Obama Administration, but I was struck most by his attention to detail that his reforms require,” Shaw added.

Sunstein served as a member of the Law School faculty from 1981-2008.

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