The Obama Administration, girding for election-year attacks on its record, is trying to highlight the upside of government rules. The Office of Information and Regulatory Affairs claims the net benefits of regulations Obama enacted in his first three years in office total $116 billion. This is a reach. Part of that total comes from projections of how many lives the regulations will save, multiplied by a dollar amount per life. The EPA, for example, puts a life at $8.9 million, a number based on decades-old surveys in which economists tried to assess the value of peoples lives in part by estimating the value of their labor.
The number, adjusted for income growth through the years, has been controversial since the Reagan Administration first used it to justify regulations. To say its not a precise science would be the worlds greatest understatement, says Sidney Shapiro, a professor at Wake Forest University School of Law who specializes in government regulation. He advises skepticism when figures start flying in the heat of the campaign. The numbers get politicized because no one knows what they mean, he says. So people pick a number that suits their viewpoint.
The bottom line: New coal rules could force thousands of layoffs while creating thousands of cleanup industry jobs.