Apparently Cass Sunstein is going to be the new regulatory czar. I don't know if Sunstein is the ideal pick, but Obama could have done a lot worse. Libertarians seem to fear Sustein's "libertarian paternalism" because (1) it's more concerned about paternalism than libertarianism, and (2) Sunstein doesn't seem to operate with the same definition of liberty as libertarians do. As Will Wilkinson has pointed out, Sunstein seems to think of liberty as the preservation/defense of choice, while libertarians tend to think of liberty as the absence of coercion.
In reality, I think those two things are less different than they may seem in the abstract. After all, isn't the practical liberty that a person experiences both a function of the lack of coercion AND the choices that their stations in life afford? In other words, people who live in a prosperous society with some coercive regulations (say Denmark) probably experience greater practical liberty than people who live in an anarchic society with no coercive regulations (say Somalia).
In any case, I think Sunstein has the potential to be a very positive force (pun not initially intended, but now that I recognize it it seems pretty clever so I'm going to leave it in there) in the Obama administration, especially if he's able to focus not only on the formation of new regulation, but also on the reformation of existing regulation. After all, the classic "libertarian paternalism" example associated with Sunstein is the idea that by making enrollment in 401ks the default option but allowing employees to opt out (thus preserving choice), participation in 401ks will be greater and people will be better off. Wouldn't it be nice (and intellectually consisten, by the way) if Sunstein/Obama applied this same logic to Social Security and allowed people to opt out of it?
Image from here.