July 2009 Archives

Are Availability Cascades Sidelining Sunstein From The OIRA Post?

OIRA Chief Job Requirements: Letters, Meetings, Farm Tours

Senator John Cornyn (R-TX) recently placed a hold on Cass Sunstein's confirmation to the Office of Information and Regulatory Affairs (OIRA). OIRA resides within the Office of Management and Budget (OMB) and was established by Congress in the Paperwork Reduction Act of 1980(PRA) for oversight tasks like reviewing and setting standards for Federal regulations.

OIRA has a mixed reputation due to its expanded role in "the catbird seat" (.pdf!) over government regulatory policy. Progressives point out the agency's successful efforts using cost-benefit analysis (CBA) to delay environmental and public health regulations and to impede agencies like the EPA from improving air quality which threatens the health of Americans.

While CBA can be a useful tool for helping to evaluate regulatory impact, critics like Rena Steinzor of the University of Maryland's Center For Progressive Reform have written prolifically in opposition to the flavor of cost-benefit analysis previously applied by the OIRA and championed by Sunstein. Sunstein's books and papers contain ample examples of how CBA can be used to stifle progressive regulation, and progressives fear that Sunstein could continue the trend set by previous business friendly OIRA administrators John Graham and Susan Dudley.

By all accounts, Sunstein is the perfect choice for conservatives. He's even endorsed by conservative mouthpieces such as the Wall Street Journal editorial page and lobby groups like the Competitive Enterprise Institute (CEI). Yet oddly, it's not progressives concerned with CBA, but conservatives like Chambliss and Cornyn who are holding up the nomination by promoting fears that Sunsteing will restrict hunting and agriculture.

According to The Hill last week, the move has probably delayed the Obama administration's regulatory review document due two months ago. The late arrival of the review document concerns liberals who question the president's commitment to government transparency and also agitates parties like the regulation allergic American Chemical Council.

Contrary to Sunstein's refusals to to meet with some journalists and progressives until after his confirmation, the nominee met with Senator Chambliss to assure him of his intentions and to be toured around some farms. Sunstein also wrote the senator a letter including "strong statements", as Chamblis put it, like: "if confirmed, I would not take any steps to promote litigation on behalf of animals". That letter apparently doesn't satisfy Senator Cornyn. Nor do Sunstein's words at his confirmation hearing last May when he thoroughly addressed the hunting and animal rights questions asked by Senator Collins (R-ME).

Hunting v. Cost-Benefit Analysis

In OIRA -- How Will it Evolve Under Obama?, written prior to Sunstein's House confirmation hearing, Acronym Required noted the proliferation of internet chatter suggesting that Sunstein would ban hunting and/or somehow restrict freedom of speech on the internet. Drawn from subjective readings of his work and comments, these ideas can be easily dispelled by purusing the Sunstein corpus. Therefore we never expected the paranoid musings of various hunting and meat interests to be given serious consideration at Sunstein's hearing. Sunstein's confirmation hearing proved us wrong.

At his hearing, admiring Senators on the committee voiced their approval of Sunstein to lead the OIRA. They all breezed through questions about how regulatory matters would or wouldn't change under a Sunstein's OIRA leadership and skirted over cost-benefit analysi. The nominee provided careful, footnoted responses. He repeatedly drew a line between his "academic writings", and actions he would take as the head of the OIRA.1 On animal rights Sunstein said that he would "follow the laws" -- for instance the EPA laws in the case of the Endangered Species Act. Compared to his nuanced answers about cost-benefit analysis then, his views on hunting seemed clear and unequivocal.

Sunstein told Senator Collins (R-ME) that he would not ban hunting, which the "2nd amendment protects". He said previous comments were provocations that did not "reflect my personal views". Hunters were the "strongest environmentalists and conservationists in the United States, and it would be preposterous for anyone in a position like mine to take steps to effect their rights or interests", he said. Collins thanked him for his "strong statement".

Bounties for Bambies

Cornyn could watch this testimony to abate his fears, or read Sunstein's letter to his colleague Senator Chambliss, or read some of Sunstein's other work. For instance in his paper "Predictably Incoherent Judgments", with Daniel Kahneman, David Schkade and Ilana Ritov (June, 2002: Stanford Law Review, Vol. 54, No. 6), Sunstein et al argued that people "in isolation" make incoherent moral or legal judgements that lead to excessive jury awards, unreasonable public good valuations and ill-considered civil fines.

To overcome such "predictably incoherent judgements" the authors suggested using systems such as that devised by the Texas Parks and Wildlife Department to "establish values for injured or destroyed fish, birds, and animals." The system would appeal to those who like empirical data, but defied scrutiny. For instance according to their scoring system, "a score of 0-3 for 'eight scoring' criteria" gave a "total criteria score". That score was then multiplied by a "weighting factor" decided by the "demand for the species". Endangered species (those higher in demand, apparently) and threatened species got and extra $500 or $1000. Sunstein et al expounded:

"The particular judgements may seem a bit arbitrary; why is an elk worth $1, compared to the $1050.50 penalty for killing a loggerhead turtle? What is important is that the Texas provision actually offers an answer to this question, one that is relatively transparent to the public, and one that ensures that the various values line up with one another along the stated criteria".

So the arbitrariness of the values seems not to bother him, as long as there's a number. Texas Parks and Wildlife Department assigned "Mule Deer, M", a value of "$525.50", "Mule Deer, F" a value of "$163", and just plain "Deer" a value of $1. Indeed, the numbers make the valuations little more than a calculator exercise, but in the end, the numbers are the product of a value system that's obtuse and arbitrary.

To the point of this post, though, does someone who endorses this system as a "remarkable approach" seem like someone who would get overly emotional about deer and elk hunting?

In a 1999 Stanford Law Review article "Availability Cascades and Risk Regulation" Timur Kuran and Cass R. Sunstein portrayed environmentalists as misinformed yet powerful fringe groups: "subcommunities whose members interact primarily among themselves", who were susceptible to a biased media and prone to exaggerating risks like industrial waste. These "subcommunities" were sentimental about deer and underestimated the risks they posed: (Vol. 51, No. 4 (Apr., 1999), pp. 683-768). The media, too, were irrational about the environment. The authors wrote:

"Whereas the electronic and print media are replete with reports of industrial waste dumps, they seldom pay attention to the traffic injuries and deaths caused by deer herds that have grown fifty-four-fold since the 1940s because of hunting restrictions, lack of predators and abundant new habitat. As a consequence, many people who consider environmental contamination an omnipresent and devastating danger, think of deer as the affectionate, harmless, and vulnerable animals portrayed by Walt Disney's moving fable Bambi." (emphasis mine)

Again, we'd question whether someone who portrays environmentalists as bewitched fanatics full of Bambiesque fantasies strikes you as a someone who would march up to your tree stand at 6AM, and order you down from your hunting perch and confiscate your gun?

Cass Sunstein = Melancholy Jack?

Despite his explicit letter, testimony, and writings, Chambliss and Cornyn choose to portray Sunstein as some Melancholy Jacque, the character in Shakespeare's "As You Like It" who weeps over a slaughtered deer and whose mournful sensitivity disturbs the hunting party. Hunting enthusiasts issue dire warnings about a probable Sunstein nomination. Publications like the Cattle Network and Pork Magazine ruminate about Sunstein's "radical" notions. Ammoland.com joins in.

Despite the craziness, there is a twinge of reason here. Sunstein describes himself as a legal "pragmatist", and he may also be pragmatic when selecting different points of view for liberal versus conservative audiences. Both conservatives and liberals are a little nervous about which way he'll lean, and with reason, since you could interpret his positions in different ways. Despite his pro-environmentalist statement in his confirmation hearing, his portrayal of them as "subcommunities" prompts the question: what does he really think about environmentalists?

Despite the apparent flexibility of his views, however; much liberals dismay, he's always been rock-solid consistent about the advantages of using of cost-benefit analysis to value life. A deer, it seems, is simply a commodity. It's ironic, then, and not necessarily the best omen for some species, that liberals can't be credited as the loudest complainers in the current fray.

And what are Chambliss and Cornyn up to, isolating what Sunstein calls "provocations" on animal rights, to hold up his nomination? "He is about as good as you can hope from this administration" David Mason, a visiting senior fellow at the Heritage Foundation, a conservative think tank, told The Hill. What's their beef? Their complaints definitely attack the Democrat administration and move the center to the right.

Availability Cascades?

In their paper, Sunstein and Kuran explained the reaction of residents of Love Canal to the crud bubbling up in their backyards with the term "availability cascade". Humans develop irrational fears which are not based on evidence, they say, and those harebrained ideas spread contagiously among other susceptible individuals. These humans therefore don't fear deer as they logically should, but build unreasonable paranoias about toxic waste dumps. Sunstein often portrays environmentalists as caught up in availability cascades.

Considering the bounty of evidence against their claims then, are Chambliss and Cornyn, our elected representatives, along with hunters and agriculture interests swept up in such an availability cascade? Or perhaps Cornyn wants his own meeting, his own letter, to lead his own farm tour, or to extract some additional promises, and when Cornyn is satisfied, the next conservative Senator will step up with his own cabal of clamoring agriculture interests and batch of factory farmers. Or perhaps it's just simple Obama opposition. Or something else, we don't know.

In our last post on Sunstein, his nomination seemed a cinch. So much so that we suggested that people who were interested in public office could write both liberal and conservative views to baffle audiences looking to pinpoint ideological leanings. But we might revise that opinion. Sunstein, at least in the short run, seems destined for more meetings, more letters, and some tramping around agricultural production farms in hip boots (No? A suit?). So perhaps we'd suggest espousing more neutral views. All this must be a tedious distraction from the work of (officially) running OIRA and generating cost-benefit analyses. And maybe all on account of availability cascades?


1 Acronym Required wrote about the similar line that Sunstein proposed for assessing John Roberts' record prior to his nomination.

Acronym Required's not entirely neutral on agricultural practices in the US, as we've scribbled about here, and here, and here, and here. We've also written periodically on OIRA, for instance here and here, and here, and here.

Mission Accomplished: Summers Ends Economy's Free Fall

Googley Economic Indicators

Lawrence Summers addressed the Peterson Institute for International Economics today, with upbeat comments about the economy. While it had been in "free fall" at the start of the year, he said, with "no apparent limit on how much worse things could get", optimistic statistics were now starting to pour in.

We'll take Summers word that there are positive signs -- other economists agree. Summers lost us though, when he said that the number of people searching on Google for the term "economic depression" has "returned to normal levels". Is this the best statistic he could come up with? I think you could present an alternative theory which said that at the beginning of the year people were curious about what "depression" would feel like, so they Googled it. Now, they know, they don't really need to Google it.

Waking Up From Free Fall: A Recurring Dream

We also note that you would see the same optimistic trend by searching for the term "free fall" (as in economic, not parachuting). Four months ago the expression littered the papers. Now, not so much, perhaps because Summers has eased up on his "free-fall" rhetoric. Summers has been saying the free-fall is over for months:

  • April 3, 2009 (Wall Street Journal) Lawrence Summers talked to the Wall Street Journal about the economy, saying that: "this sense of free fall will give way before too long".

  • April 9, 2009 (Reuters) Lawrence Summers told the Economic Club of Washington: "I think the sense of a ball falling off the table -- which is what the economy has felt like since the middle of last fall -- I think we can be reasonably confident that that's going to end within the next few months and you will no longer have that sense of free fall".

  • April 19, 2009 (Fox News Sunday) Summers told viewers: "You have a sense of a more mixed picture in terms of consumer spending, and "not the kind of free fall that you saw, in part, because the stimulus that the provided in the recovery and reinvestment act is coming into people's paychecks, and that's putting a little more energy into the--into the consumer."

  • April 26, 2009 (Washington Times) Lawrence Summers: "But I think that sense of "unremitting free fall that we had a month or two ago is not present today," he said. "That's something we can take some encouragement from."

  • May 16, 2009 (Bloomberg) -- The U.S. "economy is no longer in free fall" Lawrence Summers, director of the White House National Economic Council, said today in a pre-recorded video shown at a forum in Shanghai.

  • June 12, 2009 (Associated Press) In a speech to the Council on Foreign Relations in New York, Summers said the government had acted as necessary to avoid dire outcomes: "While we still have a long way to go, the sense of free-fall that surrounded any reading of economic statistics a few months ago is no longer present"

Of course some economists argued vehemently that the economy never was in "free fall", but that was back in October, 2008. Summers has long been bullish on the effects the economic stimulus package had on halting the "free fall", although economists point out that the stimulus money is only just now starting to filter in now. Summers didn't dwell too much on the abysmal unemployment rate, a less positive economic indicator, in his speech today. Nevertheless, we think Summer's is pulling his weight trying to bolster consumer confidence.

Healthcare Reform Progress

Your Healthcare Dollars At Work Lobbying Congress to Defeat the Public Option?

Bill Moyers focused on health care last week, interviewing Wendell Potter, who worked as a corporate public relations executive at Humana and Cigna for the last 20 years, then recently retired from what he describes as a lucrative and posh executive position. Potter's one of those clever people who after they retire their position of import and influence, find a way to remain in the spotlight by suddenly seeing all the inequities they helped propagate before retirement.

Potter delivers some timely reminders though, with bonafide authority. For instance, in the 1990'a, the for-profit insurance industry's "medical loss ratio", that is the amount that insurance companies spent on patients, was about 95% of each premium dollar, whereas now it's only 80%. The insurance companies need to keep this percentage shrinking in order to meet investor demands. An efficient way to accomplish this is to kick people of the insurance rolls, and deny claims. What does insurance spend the extra money on? Acquisitions to increase market share? Executive compensation? Perhaps lobbying Congress for more market share?

The Language of Luntz

Moyers shared a healthcare reform communication memo, "The Language of Healthcare" by Frank I. Luntz. Luntz's name may be familiar to anyone who follows the climate change denial business guided by his public relations blueprints, the pro Israel settlements language, or many other GOP policy positions and "science based" rhetoric.

Luntz's healthcare memo presents "poll-based" advice on how to spin a healthcare solution which favors existing stakeholders like insurance while keeping the government out of healthcare. Luntz highlights "words that work" and "words that don't work".

For example, he writes:

"If the dynamic becomes "President Obama is on the side of reform and Republicans are against it," then the battle is lost and every word in this document is useless."
"One-size-does-NOT-fit-all." The idea that a "committee of Washington bureaucrats" will establish a single standard of care for all Americans and decide who gets what treatment based on how much it costs is an anathema to Americans. According to him, there are a number of ways to attack this:
  • Demand the 'protection of the personal doctor-patient relationship';
  • Compare the personalized relationship with their doctor to the distant, cold, calculations of a federal medical panel;
  • Utilize examples of medical breakthroughs that would be undermined or jeopardized. .."

Or, says Luntz:

"The Democrats plan will deny people treatments they need and make them wait to get the treatments they can actually receive. This is more than just rationing. To most Americans, rationing suggests limits or shortages - for others. But personalizing it - "delaying your tests and denying your treatment" -- is the concept most likely to change the most minds in your favor."

The Luntz document contains 28 pages of explicit wording suggestions that he suggests people should use to persuade people to choose the "right option".

The insurance industry and other health care interests are lobbying hard against a government-sponsored, nonprofit, public health insurance option, and are spending, according to The Washington Post , up to $1.4 million per day to sway Congress in this direction.

President Obama remains upbeat, saying that the administration has made "unprecented progress", and telling Congress, "don't lose heart".

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