This reportÂ should stimulate the demand for economists! Â If you read the main report, take a look at page 25. In a nutshell, this report wants California to hire a “Cass Sunstein” as our regulatory czar. Â Â If Â regulators anticipated that a Â wise man such as Â Mr. Sunstein (or Dr. Kahn?) will be taking a close look at the regulations that are proposed, they would be more likely to only propose cost effective regulation. Â If California had a consistent and logical process for evaluating the economic consequences of its regulations, then we would make “better” decisions and some Republicans might be more pro-intervention.
My hope is that such a change in the “rules of the game” would lead regulators to be pro-active in considering both the costs and benefits of the regulations they are proposing and to anticipate any nasty unintended consequences. Â I want to seeÂ greater regulator honesty about the “known unknowns” when new regulations (such as California’s AB32) are rolled out. Â We need to encourage pilot programs and running experiments to help regulators learn about what works and doesn’t work in the real world.