In Federalist 47, James Madison wrote that “the accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.” Our constitutional structure is thus built on a foundation of the separation of powers. Indeed, as any Schoolhouse Rock aficionado could tell you, the legislative branch is supposed to legislate, the executive branch is supposed to enforce that legislation, and the judicial branch should interpret that legislation. But what happens when Congress places all of those powers in one agency, and then removes all of that agency’s accountability to elected officials? Worse, what happens when the power of such an agency is in the hands of one unelected individual? This is what Congress did when it created the Consumer Financial Protection Bureau in 2010. First, Congress created a single director as the head of the organization, but insulated that director from presidential removal except “for cause.” This unique structure removes the president’s ability to exert control over the CFPB even though the agency is charged with enforcing laws. Furthermore, since a director serves a five-year term, a president could conceivably never appoint a new director. Second, Congress eliminated its own power over the CFPB by granting the bureau independent access to Federal Reserve funds. Because the CFPB doesn’t need congressional approval to access these funds, there is no “power of the purse” for Congress to use to control an agency empowered to regulate the financial services industry. Third, Congress then gave the CFPB almost unlimited power through vague statutory language. The Dodd-Frank Act grants the agency power to punish “unfair”, “deceptive,” and “abusive” practices, but also grants the CFPB’s director full discretion to define those terms. What’s even worse, no director has yet to define them terms, preferring to act on a case-by-case basis. With this vast arbitrary power, the CFPB has investigated, prosecuted, and punished people, a glaring violation of due process. This is why Cato has filed an amicus brief urging the Supreme Court to rule on the constitutionality of the CFPB, as we have before (we also previously filed twice in the lower courts arguing that it’s not). The high court has an obligation to defend our separation of powers. If the Court allows the CFPB to continue as currently constituted, it will allow major violations of constitutionally protected liberty by a powerful and unaccountable federal agency. The case is Seila Law LLC v. CFPB. The Court will decide whether to take it up when it returns in September from summer recess.
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Despite Federal Return, Capital Punishment Is Dying Out
The U.S. federal government recently ordered the death penalty to be reinstated for the first time in sixteen years and has scheduled the execution of five death row inmates. This policy change goes against the widespread trend toward fewer executions.
Twenty-one U.S. states, plus the District of Columbia, have totally abolished the death penalty for all crimes. Seven of those states abolished the practice in my lifetime. New Hampshire just officially abolished it in 2019.
In many U.S. states where executions are still legal, none have been carried out for years and the law is mainly symbolic. Kansas, for example, has not executed any prisoners in over forty years. The U.S. federal government, similarly, never officially abolished the death penalty but has had a moratorium on the practice since 2004 – a moratorium ended by the new policy ordered by Attorney General William Barr.
Harvard University’s Steven Pinker has chronicled the decline of capital punishment in his book, The Better Angels of Our Nature. He estimated that the execution rate in the United States has been falling for four centuries, from nearly 3.5 executions per 100,000 people in the 17th century. His graph is pictured below.
![Media Name: statline_pz1158-yfz2010-ylz2010.png](/sites/cato.org/files/styles/pubs_2x/public/download-remote-images/humanprogress.org/211915457862/statline_pz1158-yfz2010-ylz2010.png?itok=L46hSEWQ)
Trends against capital punishment can also be observed abroad as well. Consider Europe. Prior to the Enlightenment, European nations once used the death penalty for a vast number of crimes. England, for example, had 222 capital offenses in its legal system well into the 18th century. Until the early 19th century, it deemed many minor crimes, such as stealing anything worth more than four dollars in today’s currency, to be worthy of execution. As the values of the Enlightenment spread, that number of capital offenses shrunk to four by the middle of the 19th century. Today, in Europe, capital punishment remains legal only in Belarus and Russia.
Read the rest of this post →Hong Kong Needs to Leverage Its Free Market in Ideas
The massive demonstrations in Hong Kong against the proposed extradition bill revealed the moral rectitude of citizens to protect their way of life and freedom from Communist China. On June 9, hundreds of thousands of individuals exercised their right to peacefully contest the extradition legislation supported by Chief Executive Carrie Lam. By putting moral and political pressure on government officials, the people succeeded in reversing the course of the bill, which was suspended on June 15 and declared “dead” on July 9. Yet the bill has not been fully withdrawn and could be reintroduced in the future—and the protests continue.
![Media Name: a68b0215bb50a0e9da397f9eee4086ad.jpg](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/a68b0215bb50a0e9da397f9eee4086ad.jpg?itok=nfu4o045)
Photo Credit: The Asian Age
Protesters are concerned that, if a bill allowing extradition to the Mainland were enacted, Hong Kong would risk losing its unique status as a guardian of the rule of law, limited government, economic freedom, and human rights. The possibility of being convicted of a crime against the Mainland, extradited, and subjected to China’s draconian penal system would increase uncertainty and result in self-censorship— undermining the free market in ideas that is Hong Kong’s trademark. The resulting outflow of human and financial capital would have dire consequences for both Hong Kong and China.
It was to protect their way of life that the protesters marched and stopped the pulse of everyday life in the world’s freest economy. But on June 12, the protests turned violent as a small minority broke into the Legislative Council’s building, clashed with police, and called for immediate withdrawal of the bill and the ouster of the chief executive. More recently, protesters have defaced the Chinese national emblem and thugs have beaten pro-democracy demonstrators.
One protester, 29-year-old Sandy Chan, expressed the sentiment behind the protest movement by saying, “protesting is the only way we can make our voices heard in the absence of democracy.” It would have been more correct to say “one of the few ways” because, unlike the People’s Republic of China (PRC), Hong Kong has a genuine rule of law that respects basic human rights. Article 27 of the Basic Law, which was promulgated in 1997, states: “Hong Kong residents shall have freedom of speech, of the press and of publication; freedom of association, of assembly, of procession and of demonstration.”
Other protected rights include:
- “The freedom of the person of Hong Kong residents shall be inviolable” (Article 28).
- “The homes and other premises of Hong Kong residents shall be inviolable” (Article 29).
- “Hong Kong residents shall have freedom of conscience” and “freedom of religious belief” (Article 32).
Parker Drilling v. Newton and the Uncertainties of Wage-Hour Law
As no less a public figure than Sen. Bernie Sanders (I‑Vt.) has ironically been discovering lately, it’s not easy for an employer to comply with wage and hour law these days. For another illustration as to why that is, consider last month’s unanimous Supreme Court ruling reversing the Ninth Circuit in Parker Drilling v. Newton.
Although it was closely followed by business groups, Parker Drilling drew relatively little attention in the wider press. The practical question it raised might at first seem irrelevant to most ordinary workplace settings, namely: are oil workers on platforms off the California coast owed overtime pay for time they spend sleeping and otherwise off duty while on site?
Up till 2015, the answer to that question seemed clear: federal law sets labor standards for offshore platform workers, and it says sleep and recreation periods don’t have to be paid. (Such arrangements have long been routine at the platforms, given that for many workers commuting to housing on land is not very practical.) In 2015, however, the California Supreme Court interpreted its state law in a different and more liberal way, classifying more on-site sleep and recreation arrangements as generating legally compensable time. Class action lawyers sprang into action, arguing that this new state rule should be applied to platform workers off the Pacific coast. While a district court dismissed the claim, the Ninth Circuit vacated and remanded, holding that the federal labor rules incorporated the new California rules by implication.
Pause for a moment to note a curious thing about this controversy: at least for the sorts of high-skill jobs found on offshore oil platforms, predictable labor market adjustments could mean that a legal rule on whether to count sleep time might not make much difference in practice. As the Washington Legal Foundation noted in its merits brief before the high court, “Until California announced its rules four years ago in Mendiola v. CPS Security Solutions, Inc., employers and employees negotiated OCS [Outer Continental Shelf] wage agreements with the understanding that sleep and rest time spent on OCS structures was not compensable under applicable federal law.” Flip that presumption, and with base wage lowered appropriately (still higher than minimum wage) and overtime added back, the negotiation could wind up reaching much the same overall pay package.
What proved distinctively destructive, here as in many situations, was legal uncertainty. As often happens when law changes by judicial say-so, the new California rule was said to apply retroactively: the platforms should have been paying for downtime all along. So the platform employers were handed an enormous past bill for compensation that, had they known ahead of time, they might have negotiated their way around.
Now that won’t happen: after its own dive into the waters of statutory language and federal pre-emption theory, the Justices unanimously agreed that federal law does not incorporate California’s for this purpose, putting yet another distinctive Ninth Circuit frolic to an end. But the drilling episode typifies many other situations in which wage-hour law, especially as it comes under pressure to change and liberalize, generates uncertainty. Should exemptions be read narrowly so as to bring more white-collar and academic workers under overtime law? Is time spent donning and doffing work apparel compensable? What about the situations of tipped restaurant workers, service advisers at car dealerships, church volunteers, gig economy drivers, and workers who check e‑mail after work hours?
Even if you’re a class action lawyer, it’s hard to see all these uncertainties as optimal.
The Other Problem with Trump’s Tweet
Before the distraction of Robert Mueller’s congressional testimony and its inconsequence, the nation had been roiling over President Trump’s tweet that four progressive, minority congresswomen should “go back” to the countries “they originally came from.” The president’s critics condemned the tweet as racist and xenophobic. He and his supporters responded that it was a justified demand that Reps. Alexandria Ocasio-Cortez (D, NY), Ilhan Omar (D, MN), Ayanna Pressley (D, MA), and Rashida Tlaib (D, MI) stop criticizing the nation and its government’s policies.
![Media Name: trump.jpg](/sites/cato.org/files/styles/pubs_2x/public/download-remote-images/www.adl.org/14118160788/trump.jpg?itok=_10OmqPO)
This post focuses on a different problem with the tweet, one that has gotten overlooked: it was a direct attack on representative government and the U.S. Constitution. And the attack has been repeated in Trump and his supporters’ subsequent comments.
In their 2018 election campaigns, Ocasio-Cortez, Omar, Pressley, and Tlaib were explicit about what messages and ideas they would take to Washington. Agree with them or not, the legislators are now in Congress doing what their constituents elected them to do. Because the four are following their voters’ will, Trump and his supporters say the congresswomen should leave the Capitol and/or the country.
Trump and his supporters may consider this a patriotic defense of the United States. But the demand to “Send them back!”—even if just campaign rhetoric—strikes at the nation’s founding principles. It is as much a violation of America’s ideals as celebrating the country’s independence with a display of military might rather than a tribute to individual liberty and democratic representative government.
Senator Portman Presumes To Know How Many Days Of Pain Relief All 328 Million Americans Need
With clear evidence that restricting the number of prescriptions increased the death rate by driving non-medical users to heroin and fentanyl, the last thing one wants to hear about is a politician planning to double down on this deadly policy by calling for further prescription limits for patients in pain.
Yet Senator Robert Portman (R‑OH) is proposing legislation that would impose a national 3‑day limit on opioid prescriptions following surgeries. He will be kind enough to allow exceptions for people dealing with cancer, chronic pain, and “other serious matters”—whatever that means.
Government data show there is no correlation between the number of opioids prescribed and their non-medical use or the development of opioid use disorder. Overdose rates skyrocketed during the last 10 years while high-dose opioid prescriptions dropped more than 58 percent and total volume of dispensed opioids dropped more than 29 percent. Seventy-five percent of opioid-related deaths in 2017 involved fentanyl and heroin, and fewer than 10 percent involved prescription pain pills without also involving heroin, fentanyl, cocaine, tranquilizers, or alcohol.
The senator has determined that, “After the second or third [postoperative] day, other pain medications work just as effective (sic).” In my more than 35 years as a practicing general surgeon, I usually find that my patients recovering from major surgery require prescription opioids to control their pain for more than 2 or 3 days. It is bad enough that many states have imposed 5 or 7 day limits on opioid prescriptions, forcing many patients in severe pain to make multiple trips to the doctors office for refills. Imposing a national 3‑day limit lacks an understanding of the science. It would be an unfounded and callous government intrusion into the practice of medicine.
Senator Portman, like so many other politicians untrained in medicine or pharmacology, is guilty of misinterpreting and misapplying the guidelines on opioid prescribing published in 2016 by the Centers for Disease Control and Prevention. He must still believe that today’s non-medical users are yesterday’s pain patients, even though, as mentioned above, there is no evidence of any correlation between the two.
He also seems to think there is a high risk of addiction in patients prescribed opioids for acute post-surgical pain. Yet a well-publicized study in the medical journal BMJ by researchers at Harvard and Johns Hopkins looked at 568,000 opioid “naïve” patients in the Aetna health insurance data base given prescription opioids for acute postoperative pain over the period of 2008–2016. The researchers found the “total misuse rate,” i.e., rate of all opioid misuse diagnoses among the 568,000 patients prescribed the opioids, was 0.6 percent.
Senator Portman told Ohio reporters, “After day four, five or six, the chances of becoming addicted are higher.” Maybe he is reacting to the statement by the researchers in the BMJ report that each refill and additional week of opioid use was “associated with an adjusted increase in the rate of misuse of 44%.” But a deeper look at their data shows the incidence of opioid misuse rose from 145 cases per 100,000 person years, or 0.15 percent per year, in patients who had no refills, to 293 cases per 100,000 person years, or 0.29 percent per year, for persons who had one refill. Indeed, that is nearly double. But if you nearly double a very low number, you still get a low number.
The fact is the overdose rate from the non-medical use of licit and illicit drugs has been on a steady exponential increase since the 1970s and shows no signs of slowing down. The only thing that has changed over the years is the particular drug in popular use at any given time. The reasons behind this are complex and multifactorial, and likely sociocultural and psychosocial. In the early part of this century the popular drugs for non-medical users were diverted prescription opioids. Next it became heroin. For the past several years it has been heroin and fentanyl. Methamphetamine related deaths are now surging to all-time high levels, and preliminary estimates from the CDC place the number of meth-related deaths at nearly 13,000 in 2018—eclipsing the number for prescription opioid-involved deaths.
Senator Portman is two or three drugs behind in his prosecution of the drug war.
To bring the death rate down, Senator Portman should learn a lesson from his home state of Ohio, where a recent embrace of harm reduction measures—expanding needle exchange programs, distributing the overdose antidote naloxone, and increasing access to Medication Assisted Treatment—has led to a 23.3 percent drop in overdose deaths in 2018 according preliminary CDC data. Harm reduction is a proven strategy for saving lives.
If Senator Portman wishes to craft legislation that can truly save lives, he should propose a repeal of the federal “Crack House Statute.” This law stands in the way of many of the country’s largest cities that wish to establish Safe Injection Facilities, which are preventing overdoses and saving lives in more than 120 cities throughout Europe, Canada, and Australia.
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A Different Look at After-Tax Income Inequality
Every presidential candidate promises to “reduce income inequality” by raising tax rates on the rich and increasing transfer payments (including tax credits and in-kind benefits) for the middle class. Yet the widely-used flawed data from Thomas Piketty and Emmanuel Saez exclude both taxes and transfers. Income measures that exclude taxes and transfers cannot tell us whether taxes or transfers are high or low, and cannot be directly affected by higher taxes on some or higher transfers to others (because such policies are ignored in the data).
A simple table adapted from the 2017 Consumer Expenditure Survey, from the Bureau of Labor Statistics, may be sufficient to show how crucial it is to take account of taxes (including refundable tax credits), and also to adjust average income for the different number of people and workers per household.
![After Tax Income by Quintile](/sites/cato.org/files/styles/pubs_2x/public/wp-content/uploads/consumer_expensditure_survey_income_by_quintile.jpg?itok=nSoHU2eO)
Incomes are shown by fifths (“quintiles”), with the lowest 20% on the left and highest on the right.
The second row shows the “lower limit” of pretax income needed to counted be in each quintile. The next two rows show mean (average) income before and after taxes.
The column at the far right shows a ratio of highest to lowest income, called the 80/20 ratio, which a common gauge of inequality. It shows that the highest 20% earned 16.5 times as much as the lowest 20% before taxes, but only 12.5 times as much after taxes.
But simply adjusting household income for taxes is not enough. Average incomes cannot be properly compared between the highest and lowest quintiles because there are three times as many people per consumer unit (household) in the highest 20% as there are in the lowest. And there are four times as many workers in the highest 20% as there are in the lowest.
By adjusting for different household size, we find the highest 20% earned only 6.5 times as much after-tax income per person as the lowest 20%.
But income is likely to be higher in households with two or more workers than it is in households with no workers or only one. So, that last row measures average after-tax income per worker in the highest and lowest quintiles (and those in between).
By further adjusting for the different number of earners, the highest 20% earned only 3 times per worker as much as the lowest 20%, after taxes.
Properly understood, the facts about U.S. after-tax income distribution and growth are insufficiently alarming to justify the political misuse of questionable pretax, pretransfer income statistics as a false argument for redistributing after-tax income.