Don’t Put the Fox in Charge of the Hens

The Senate may vote as early as today on President Bush’s nomination of John D. Graham as the country’s regulatory czar.

The power implied by the title is real: As head of the Office of Information and Regulatory Affairs within the Office of Management and Budget, Graham would be responsible for reviewing all major regulations proposed by agencies charged with protecting health, safety and the environment. Graham’s record reveals a deep hostility to these protections.

Indeed, Graham is even more dangerous than the openly anti-environmental officials who already populate the Bush administration.

At least many of these officials wear their political ideology on their sleeves. Graham, in contrast, dresses up his anti-regulatory philosophy in the garb of scientific objectivity, thus concealing the fundamental value choices that underlie his research and, even more troubling, implying that people who do not agree with his anti-regulatory agenda are irrational.

Graham goes even further than this. He claims that many health, safety and environmental regulations are not just irrational, but deadly. Graham’s most famous claim is that foolish government regulations--that misallocate resources that otherwise could be used to save lives--statistically murder 60,000 Americans every year. He bases this conclusion on his own research into the costs and benefits of many different life-saving measures, ranging from prenatal care to arsenic in the air.

This research shows, Graham has claimed in his congressional testimony and elsewhere, that if we reformed the regulatory system (read: undermined its protections) we could save 60,000 more lives per year.

This claim is false. The life-saving programs that fare worst in Graham’s analysis are programs to control carcinogens in the workplace and in the environment. Yet the vast majority (79 out of 90) of the environmental measures included in Graham’s research were never implemented by any regulatory agency; many of them were never even proposed.

Most of the life-saving potential Graham has found, moreover, has nothing to do with government regulations, but instead comes from doing things like encouraging doctors to advise patients to quit smoking.

It is a myth that federal regulations statistically murder 60,000 Americans every year, yet Graham has repeated this outlandish claim over and over again in congressional testimony, in academic publications and even in a Supreme Court brief.

The head of the Office of Information and Regulatory Affairs should not come to the job with a preconceived, cynical notion that whatever a regulatory agency puts before him or her must be a bad idea. Thus this person should not be John Graham.

As director of Harvard’s Center for Risk Analysis, Graham also has led efforts to “reform” regulation by applying a cost-benefit test to health, safety and environmental protection.

The cost-benefit standard requires the specification of a dollar value for human life, human illness and harms to ecosystems.

Placing a price tag on human life may be the single most controversial idea in regulation today, one thick with moral meaning, and yet Graham seems to view the question as one that economists can resolve as long as their computers are powerful enough.

The cost-benefit analysis endorsed by Graham also includes the use of a technique called discounting, which is a fancy way of belittling the future--a kind of compound interest in reverse that transforms even catastrophic future events into trivialities.

At the discount rate used in Graham’s research, for example, the death of 1 billion people in 500 years becomes less significant than the death of one person today. This outrageous conclusion is reached by reducing estimates of lives saved in the future by a yearly rate, reflecting prevailing rates of return on financial investment.

I am not sure I am competent to compare the death of 1 billion people half a millennium from now to the death of one person today, but I do know this: The comparison cannot be made by looking up interest rates and mechanically applying them to human lives.

Graham has made a career out of turning moral questions into mathematical equations. He should not be permitted to practice his brand of black magic in the White House.