Further Advice for a Future Regulator
Tyler Cowen posted a while ago about some advice for a future regulator. I thought the best comment adding advice was this one:
Do your best to fight for freedom by attempting to combat any proposed new regulations and undermine already existing ones.
I have two pieces of advice of my own to add. I was never a regulator per se, but I was in the position, at the Council of Economic Advisers under both Nixon and Reagan, of taking positions on regulation and advocating these positions at interagency meetings.
1. This one I learned from Sam Peltzman, too late, when I returned from a summer internship under Herb Stein, where Herb had made me an acting senior economist for the 6 weeks from when the senior I worked under, Bob Tollison, left, and his replacement, Allan Pulsipher, showed up. When I got back to UCLA at the end of a summer, I told Sam about a case where a proposal had good and bad aspects and the crude cost-benefit analysis I could do made it come about even. Ditto the pro- and de-regulatory parts of it. Sam said that in such a case, rather than flipping a coin, you figure out who your current and future allies are likely to be and take their position. That was easy: my allies in almost all battles were economists at the Office of Management and Budget and economists at the Treasury. It sounds obvious but I hadn’t thought of it.
2. This advice was one that I was given when I was about 19 from an economist who was only about 23 but was wise beyond his years. I don’t want to name him because we are not in touch and he values his privacy. He said, “If you’re in an institution, be in it but not of it.” Or, to put it in modern lingo, lose the “we.” This came in handy when I was a senior economist under Marty Feldstein and I, occasionally, disagreed with him about health care policy. I owed it to him to be a loyal employee but I owed it to myself to be loyal to my soul. So when I was in an interagency meeting, and someone asked, “What does the CEA think?”, if I agreed with Marty, I answered, “We think . . .” If I disagreed with Marty, I answered, “The Chairman believes . . .” This did lead to one humorous moment at a Treasury meeting with Eugene Steuerle in 1984 that I might tell sometime. In a way, this is like Polonius’s advice to Laertes, “Be true to yourself, and it must follow, as the night the day, thou canst not be false to any man.” [BTW, notice the double negative in Shakespeare. :-)]