Sunstein May Hire Controversial Conservative Economist
Rena Steinzor, a law professor at the University of Maryland and president of the Center for Progressive Reform, reports that Cass Sunstein, President Obama’s “regulatory czar,” may be hiring Randall Lutter, a conservative economist who spent time at the American Enterprise Institute conducting economic analyses of regulations, to join Sunstein in the Office of Information and Regulatory Affairs.
While it may sound logical to have an economist examining the economic impact of regulatory changes, Steinzor points out that Lutter has made some rather bizarre and disturbing arguments, including that the economic value of each of a child’s IQ points isn’t really all that much, so regulation to prevent lead poisoning ought not be so strict.
Lutter argues in this fascinating policy paper:
Benefits to parents of lower lead levels in their children are much less than federal regulatory agencies’ estimates of benefits, which they compute as the expected discounted gains to children’s lifetime earnings. … I show benefits to parents are between $1,100 and $1,900 per IQ point gained, or roughly one-sixth of the benefits to children estimated by federal agencies. … This analysis suggests lead standards will redistribute resources from parents to their children, because the benefits to parents are less than the costs of the standards.
In other words, the economic benefit to parents of an extra IQ point in their child is not as much as the cost of implementing new regulations that reduce lead in the environment. As a result, concludes Lutter, “The Environmental Protection Agency and the Department of Housing and Urban Development should reconsider their lead standards.”
Although it’s not exactly surprising to see the government weighing the costs and benefits of new regulations, the economic valuation to parents of their children’s IQ points would surely, if made public, be quite controversial.
Steinzor notes that less than 24 hours after she asked Sunstein at a meeting whether he would be hiring Lutter, “perhaps by coincidence, AEI had pulled many documents referring to Lutter off its web site, including his biography.”