The Honorable Mitchell E. Daniels, Jr.
Warren T. Brookes Address delivered to Competitive Enterprise Institute
May 22, 2002 at the Capital Hilton, Washington, D.C.
Thank you all so much. It’s quite an honor and quite a pleasure to be with you tonight. I’d like to salute the organizers of the evening for the way they structured your program, particularly the healthy length of the cocktail hour [laughter]; they have provided me with Mark Twain’s definition of the perfect audience, which he said was intelligent, informed, inquisitive, and drunk [laughter]. A great way to start off. Fred and Fran Smith, it’s so great to be with you two. Fred you do not have, do not share, one characteristic, with my favorite football coach of all time, Bum Phillips. Bum Phillips said that he took his wife everywhere because she was too ugly to kiss goodbye [laughter]. But Fran is quite lovely, and such an important contributor as we are reminded in her own right.
We’ve just had an academic event in the Daniels family. The eldest of our four daughters just graduated last Sunday from a fine liberal arts school in Ohio with high honors. Made Dad proud. Meagan did however, somewhat to my regret, as too many kids I think do these days, flit from major to major. She changed midstream from philosophy to geography, so she graduated knowing where she was, but not why [laughter]. And I miss those dinner table conversations before the change, those intriguing metaphysical speculations she and I had a brief opportunity to engage in – with questions like, ‘If James Carville and Geraldo Rivera were both drowning, and you could only save one [laughter], would you read the paper, or eat lunch [laughter and applause]?’
I do get to hang out in the office I’m going to talk about tonight, the Office of Information and Regulatory Affairs – OIRA – in OMB, where we have new leadership. I’m going to brag about and a very, very learned and academically talented group, many of them of course proficient in, in narrow technical specialties. This leads to some quirks, of course, as two of our OIRA statisticians I discovered went duck hunting last weekend – with strange results. Not much action all day long. Finally, late in the day, one lonely duck flew over; the first guy leaps up, fires away, missed three feet high. Next guy jumps up, boom, three feet low. They high-fived, “We got him!” [laughter]
We work in the realm there of cost benefit analysis, a strangely controversial thing from time to time. We have to, I think, slowly, gradually, methodically, put it back in its rightful place, its commonsense place in the making of public policy. We need to remind people, that cost benefit analysis is part of everyday life. Perhaps you’ve heard of the couple out dining one evening, when a lovely, much younger lady passed by the table and visibly winked at the husband. His wife, not missing a thing, said, “Who was that?” After some hemming and hawing, he finally confesses: it’s his mistress. She said, “That’s it? I always feared and suspected. It’s over, I want a divorce.” “Now dear, not so fast. You [do] realize if that happens, no more diamonds on your birthday, fewer of those shopping trips to New York, what about the country club charge account?” About that time, another couple passed by and she said, “Isn’t that your friend Jim from the office?” He said, “Yes.” “Well who’s that young woman with him?” “Well, that’s Jim’s mistress.” “Aha! Ours is prettier.” [laughter]
I think a lot of important and true things have been said about the two men that we’re here to think about, remember fondly, even reverently tonight. I need to say my two cents about Warren Brookes and Julian Simon, each whom I was able to know, not so well as many of you, but able to know well enough to understand their unique qualities, their unique quirks, their unique importance in our times. These were men of genuine integrity and of a most important sort. These were men of intellectual integrity. They followed the facts. They had great respect for science. They had great respect for the data, which they studied and always tried to base their well-reasoned and very, very persuasive conclusions. I used to work in a data-intensive business for a long, long time and, as Jim [Tozzi] mentioned, our scientists at Eli Lilly used to say, “If we torture the data long enough, it will confess.” [laughter] Well, neither Warren Brookes nor Julian Simon tortured data. Rather, they extracted from it, the knowledge they could then base the sound advice and counsel and conclusions which they shared with the rest of us. I read to prepare for tonight Tom Bray’s anthology, called Unconventional Wisdoms: The Best of Warren Brookes. It’s fabulous. On every page there is a memory, there is an insight that we forgot. And there’s a reminder of how rare that combination of journalistic and intellectual and personal qualities that he embodied. And we’re all reminded over and over by our own experience, by all the wisest philosophers, that no person is irreplaceable. Maybe one day it will be true in Warren Brookes’ case, but have you noticed, that more than a decade later, we have not replaced him? Maybe one of the fellows who has been so rarely honored in his name will rise one day to fill that void.
Julian Simon was an original founding father of the Hudson Institute, which I was associated with for a long time. A typical Hudson Institute or CEI optimist, not in a mindless sense or an thoughtless way, but simply an optimist who knew that human ingenuity, human talent, human passion for improvement were more than a match for the challenges of any age we’ve faced or will. And Julian, like Warren Brookes, had the ability to enliven his various visions with wit and ability to communicate. His famous bet which you all recall, which is commemorated in our program, with Dr. Paul Ehrlich – Paul Ehrlich – who we know won the MacArthur Prize for genius [laughter]. What do they give to people who are right? [laughter and applause] I don’t know if the people on that jury are golfers or not, but if they are, don’t you think they’d ask for a Mulligan once in a while? [laughter] Julian Simon demonstrated that Ehrlich and people like him are the heirs to Leon Trotsky – not in the sense you may suspect. I read once about the age of Trotsky, and I understand the proof of the great leader’s farsightedness was that none of his predictions had come true yet. [laughter] Well, Julian’s [predictions], just like Warren’s that we heard about, came true. He had a very high batting average, a very high percentage. I expect that we’ll be seeing them come true in years yet to come.
Let me say a few words to you tonight about a mission that we have taken on in this administration, a mission that attracted me, perhaps more than any other, when my phone call came from the blue a year ago December about the prospect of joining President Bush’s administration. And that is to reestablish, perhaps restore the good name, of regulatory review in the American federal government. Think back with me, if you will, to 1978, when a seven- or eight-year campaign ultimately failed in its bid to create a consumer protection agency for the United States. Well thank goodness it did. Two years later, by Executive Order, the organization we now know as OIRA got full authority to become a central clearinghouse and review agency, a second opinion source on major federal regulations, would-be regulations emanating from the various departments of the federal government. And those two otherwise unrelated events are linked in my mind because I would assert, if done properly, regulatory review is consumer protection in its purest form.
We know with some degree of precision that, conservatively estimated, regulations on the books of the federal government inflict 600 to eight hundred billion dollars in cost to the American economy every year. It’s wrong to put it the way I just did, because such costs are not inflicted on abstractions like economies, but on each of us, on everyday citizens, with ultimately every dollar of that falling on a purchaser of a good or service, either in a direct cost, or the unavailability of that product or the loss of the freedom of our choice consequent to some regulatory restriction.
So when I look at this job, this opportunity to scrutinize and rigorously assess the value of regulations proposed being added to this very large burden the American consumer now carries, I see it as a consumer protection mission. And I see as central to performing that mission that we define it that way and we not thoughtlessly abdicate the moral high ground of consumer protection to the self-appointed.
Now, this said, markets work best when consumers are well-informed. This is our opportunity to make sure that consumers understand what they’re getting for the dollar and the very real cost that they are asked to bear. It’s our job to make sure that if and when a regulation does obtain the course of law, that the consumer gets a fair bargain, a square deal. Now, this is a very noble mission in my job, in my estimation, but one that as we know is so very easily distorted, or even impugned. My nominee for amusing headline of the year – as funny as it was unfair – sort of captures this. After years and years of careful study, exhaustive analysis, and mountains of technical data, the Department of Energy, my friend Spencer Abraham is Secretary, announced the plans for the nation’s radioactive waste, probably the safest place on Earth, Yucca Mountain, Nevada. All of this learning, all of this science, all of this economic analysis was distilled down by the Reno paper into the memorable headline, “Abraham’s in Nevada, Glow to Hell.” [laughter]
So recognizing the potential for distortion and abuse, and interested not in the emotional satisfaction of railing against all this, or simply having pitched battles for the sake of public education, that’s what we have the Competitive Enterprise Institute for. Interested in results, we are attempting to move swiftly but carefully to establish public confidence in the consumer protection mission of OMB.
I think there are about three simple steps that we have chosen to take in order to try to make this happen. One is to conduct the process of maximum openness. I think this is entirely appropriate anyway. I think the public will draw confidence, and is entitled to know that public decisions, in our area or others, are being made in a fair process that is open to all. There’s also a defensive reason for this. Many people who are proponents of aggressive federal action and intrusion and intervention and regulation have had a lot of success in the past, without ever engaging them in the merits, or debate on the merits of the issue at hand but simply by breaching the process. This happened I think very unfairly but with very real consequences to Vice President Quayle’s Competitiveness Council, when it was made custodian of this responsibility, and to the AAC, some of Jim’s [Tozzi] successors, and to some of my predecessors, at the OMB/OIRA office of the day. If only to immunize the process against such cheap shots, I have asked Dr. John Graham, our head of OIRA, to run the most open process ever. I think friend and foe have so far recognized it as such. If you come tomorrow morning to see John or one of his people about a regulation under review, it will appear on our web site by tomorrow night. We will tell the world you were there and the subject of the discussion, and the world can judge and have that information. I see this as a prerequisite to the sort of credibility we seek for our decisions.
Likewise, technical excellence. I’ve mentioned Dr. John Graham. I didn’t know John Graham from Adam about a year and a half ago. But I quickly discovered he was the man central casting would send to match our description of the next OIRA leader: a person with established credentials; one of the nation’s leading decision scientists with the Harvard School of Public Health; a person of personal integrity to match his intellectual achievements. This did not stop him from being a source of controversy. In this case, not because there was any real case against him, but because people favor an unfettered regulatory regime, without second opinions, without meaningful review, feared that he might elevate the standards and sharpen the tools of such review as you know he is going to do. John is assembling around him a staff that will add resources and will insist on greater talent than perhaps OIRA’s ever had available before, in order to ensure that the science and economics and technical proficiency with which that job is done matches the seriousness of the job and are at the level in which the public can have confidence.
And then, finally, here we take our cue very literally from this outstanding organization and from the two men whose names and whose lives we celebrate tonight. We must learn to speak the vocabulary of consumer protection every day in assuming our duty. This can be as simple, but as important, as Warren Brookes taught us over and over, as personalizing the cost and impact of regulations. Not speaking about it simply in massive aggregates and abstractions about cost of the economy and percents of GDP and so on. But how much does it add to the cost of a house? How many fewer kinds of football helmets will be available?
We must learn to look for the opportunities to discuss these matters in more than economic terms. Many of the decisions we look at offer the threat of unintended risk as well as unintended cost. So that when John Graham and his team looked at a tire pressure rule recently, there was every reason to believe, it turned out, that in addition to extra cost for a car, that by deterring the use, the purchase of disc brakes over time was to have less safety, not more. The CAFE issue, which Fred made mention of, of course, is a classic case of this wish in pursuit, theoretically, of greater mileage, cleaner air and so forth, we risk endangering Americans in less safe cars.
Our outlook I suppose, could be summed up as ‘Speak softly, but carry a big yardstick.’ And I think that Warren Brookes and Julian Simon would have understood; each of them, on top of everything else that was said, was a great translator, a great popularizer. Simplifier, I don’t suppose, is the term – it doesn’t do justice to the work they did. But they did reduce, into plain English, into meaningful examples, complex subjects so that the free citizenry could make an informed judgment. We have to try to be pale imitations or imitators of that matchless skill they had. We will look to CEI – also our best current translator of jargon and complexity – for the language of everyday people, for examples we can all grasp, often with flair and some which assure that their work will be paid attention to, amidst the sea of information which we are all constantly swimming against. And we hope to pursue this mission again, like Brookes and Simon, with integrity – integrity in the largest sense.
I close with another compliment to our host. In Indiana we say that farmers tend to be capitalists on the way up and socialists on the way down. I’m afraid this phrase may be becoming obsolete, I’m not sure. [laughter and applause] The point I want to make is that CEI follows fact and principle where it leads, as we must in our public duties. What I have in mind here is that they are honest. There are elements of the American enterprise system which are capitalist on the way up, and socialist once they reach the top. And there is a temptation, and a constant invitation, to find previously undiscovered merit and virtue in regulations that serve as barriers to entry, that serve as protectors of those who have achieved wealth and market position or power. I have always admired CEI for never flinching from pointing out those occasions on which perhaps potential patrons even were falling prey to that temptation. This is a very, very important element in our public debate. It’s important that we have people and independent organizations who maintain the integrity and the clarity of thought and the backbone to declare that when and where they see it. After all, the name of this organization is the Competitive Enterprise Institute. To me, that speaks to the fundamental supremacy of competition and competitive systems to allow free people to exercise their God-given rights. It places the consumer – the individual citizen – at the center of its mission, not corporations, not those organizations that free people form, but the ultimate end of a free society and at the center of this operation. Bless you for that, and for the supreme skill and honor with which you perform that mission. You are our model, and in our way we’ll try to do likewise. Thank you very much.