Sunstein and Regulation

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Today’s WSJ Opinion Journal speculates on Cass Sunstein’s role as the Administrator of the Office of Information and Regulatory Affairs.

“Credit regulation raises immense challenges, and there is a serious danger that, in light of the current crisis, government regulators will overreact,” Mr. Sunstein wrote in an op-ed on these pages last August. “The fundamental line of defense should be improving market competition, not eliminating it. And to improve competition, transparency is the place to start.” That piece, co-authored with the University of Chicago’s Richard Thaler, argued that better disclosure, combined with technology, would be more effective than playing “regulatory whack-a-mole” with unpopular industry practices.

The world expects wholesale re-regulation; the smart money is on a more nuanced — and market-savvy — approach.

Fresh-water economics with a Democratic flavor. No wonder Powell called Obama a transformational figure.

Thanks to reader ASR for the heads-up.

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