Archives: 05/2018

How Jailing Drug Users Increases Opioid Overdoses

The standard view of the opioid epidemic blames pharmaceutical companies and doctors for excessive prescribing. An alternate view blames government for outlawing or restricting access to opioids.  In this view, users overdose not from medical use but from consuming diverted or black market opioids of unpredictable quality and potency.

Current restrictions also causes overdoses by enforcing abstinence on people, who then lose their tolerance to opioids.  Some such people nevertheless return to their pre-abstinence dose, with disastrous consequences, when no longer forced to abstain.  A key illustration is released prisoners.

A study by Harding-Pink and Frye (1988) examined 102 sudden deaths of prisoners that occurred within 17 years of their release. The study found that of the 102 deaths, 42 were drug related. Further, while 41 percent of the total deaths were drug-related, 66 percent of the deaths within one year of release were drug-related. The study also found that 60 percent of all of the drug-related deaths occurred within the first year, and the first year had twice as many drug-related deaths as the next three combined.

Binswanger et. al. (2007) examined the deaths of all inmates released from Washington State Department of Corrections from 1999-2003. Overdoses caused a quarter of all deaths, with a yearly mortality rate of 181 per 100,000, 13 times the rate of an average Washington state resident. Further, over a quarter of the total post-release overdose deaths occurred within the first two weeks of release. A yearly mortality rate of 1840 per 100,000 is 129 times the rate of the average Washington state resident.

Maryland’s Department of Health released a similar study in 2014. Between 2007 and 2013 the department monitored the opioid overdose rate of individuals who had been released from jail or prisoner for one year after release. Prisoners were 8.8 times more likely to die of an overdose in their first 7 days of release compared to 91-365 days after release. The opioid-related mortality rate of inmates within their first year of release was 70 per 100,000, 6 times greater than Maryland’s opioid-related death rate in 2012 of 11 per 100,000. In the first week of release, where 58 percent of the opioid-related deaths occurred, the yearly mortality rate was 2080 deaths per 100,000, 190 times the Maryland mortality rate!

All these studies suggest the alternative explanation for the opioid epidemic – more restrictions, more deaths – rather than the standard view – more prescribing, more deaths.

 

Theseus Schulze contributed to this blog post.

Trump’s Trade Policy Is a Disaster, But Postponing the China Trade War Was Smart

Reactions in the United States to the Trump administration’s announcement on Saturday that it would refrain from imposing new tariffs on imports from China for the time being have been decidedly negative. One would expect criticism from the unions, the steel producers, and old economy manufacturing trade associations. After all, many seemed not the least bit concerned about burdening the economy with 25 percent duties on $50-$150 billion of Chinese imports and retaliation of similar scale against U.S. exports, as long as they secured for themselves a small bag of booty in the process. Trump’s “America-First” brand of economic nationalism was everything they had ever hoped for—and now it may be in retreat.

Likewise, one can understand why the administration’s decision to reconsider its approach to Chinese technology companies and Chinese technology transgressions makes the security hawks unhappy. Many of them have been peddling a self-perpetuating narrative that is one part fact to three parts innuendo, hearsay, and speculation that war (and not just the trade kind) between the United States and China is inevitable, and that there is very little scope for further cooperation. Why, they wonder, would Trump squander the leverage to compel real Chinese reform that was afforded by the results of the Section 301 investigation and ZTE’s existential predicament?

But I am most disappointed by those who present themselves as pro-trade, internationalist, cosmopolitan, and informed, but who seem strangely disappointed that the administration stepped back from the abyss. There was a point when these folks warned about the perils of Trump’s protectionist path, and screamed from the hilltops about how Trump’s unilateralism would kill the World Trade Organization. On Twitter, they goad Trump: “Trump blinked.” “Xi schooled Trump.” “U.S. credibility has been squandered” (as if it was somehow squandered THAT moment). For some of these people, disdain for Trump or the desire to be perceived as the most offended by his behavior is more important than supporting one of his rare decisions to do the right thing.

Topics:

Original Meaning Should Decide Arbitration Act Case on Independent Contractors

Some prefer to achieve their livelihood by being traditional employees, while others prefer to go the individual route and become proprietors and independent contractors. For centuries, the common law has distinguished between those two categories of individuals in order to ensure that independent contractors enjoy both the benefits and burdens of going into business for themselves. To that end, federal and state law has always understood the terms “employee” and “independent contractor” to mean two different things.

Enter the First Circuit Court of Appeals. Section 1 of the Federal Arbitration Act excludes from the Act’s provisions enforcing arbitration clauses those contained in “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” Interpreting that language, the First Circuit rejected the view that the term “contracts of employment” includes only (literally) “contracts of employment”—that is, contracts establishing traditional employer-employee relationships. Instead, it said, that FAA excludes any and all “agreements to perform work,” including “agreements of independent contractors to perform work.” That decision is now on appeal to the U.S. Supreme Court in a case called New Prime v. Oliviera.

Cato’s brief shows where the First Circuit went wrong. The Congress that enacted the FAA in 1925 would never have thought it excluded independent contractors. At that time, as today, statutory terms such as “employment” were universally understood to refer to agreements establishing traditional employer-employee relationships according to the principles of common law that evolved over the centuries. Congress knew that because it enacted (and would go on to enact) a series of statutes relying on the common law understanding of terms such as “employment.” Congress also knew and expected that the federal courts would interpret its handiwork in that manner because that is what the courts had repeatedly said that they would do, thereby providing Congress a foundational principle upon which to legislate.

That words such as “employment” referred specifically to traditional employer-employee relationships was not an obscure principle. To the contrary, it was reflected in practically every state workmen’s compensation scheme enacted in early decades of the Twentieth Century. Legislators knew that general provisions addressing traditional employees would never be understood to reach independent contractors. The common understanding of what these terms meant was that clear.

That Congress meant what it said in the FAA is not just a matter of presumption, but of fact. As a historical matter, Congress crafted the Section 1 exemption to avoid unsettling “established or developing statutory dispute resolution schemes covering specific workers.” Those schemes applied only to employees, not to independent contractors. Language and history both confirm that Congress used the term “contracts of employment” for a reason and that it meant what it said, targeting employees, not anyone else.

Because the right to earn a living by structuring one’s economic relations through contract is one of the basic rights that our Constitution was formed to protect, Cato has filed an amicus brief supporting the petitioners in New Prime, Inc. v. Oliveira. Cato seeks to have the Court reverse the erroneous decision below making a hash of Congress’s careful choice of meaningful words and to clarify, as it has many times before, that independent contractors are not employees and statutory terms such as “employee” means precisely what they say.

The Case for Neglecting Transit

The American Public Transportation Association (APTA) has just published a paper on the economic cost of failing to modernize transit, referring to the roughly $100 billion maintenance backlog built up by U.S. transit agencies, mostly for rail transit. In fact, a strong case can be made that—with the possible exception of New York—American cities shouldn’t restore deteriorating rail transit systems and instead should shut them down as they wear out and replace them with buses where demand for transit still exists.

APTA claims that not restoring older rail systems will reduce “business sales” by $57 billion a year and reduce gross national product by $30 billion a year over the next six years. Reaching this conclusion requires APTA to make all sorts of wild assumptions about transit. For example, it states that a recent New Orleans streetcar line stimulated $2.7 billion in new infrastructure. In fact, that new infrastructure received hundreds of millions of dollars of subsidies and low-interest loans from Louisiana and New Orleans. In any case, APTA fails to make clear how rehabilitation of existing infrastructure could generate the same economic development benefits as building new infrastructure.

American taxpayers already pay more than $50 billion a year to subsidize transit. Essentially, APTA wants taxpayers to give transit agencies an additional $100 billion to keep transit systems running. I would argue that federal, state, and local governments should provide none of that money. Instead, the best policy towards them is benign neglect.

Keep Calm and Summit On

Last Tuesday, North Korea canceled a high-level diplomatic meeting with South Korea and threatened to call off next month’s summit between Donald Trump and Kim Jong Un. North Korea’s statements came just one week after Secretary of State Mike Pompeo returned from Pyongyang with three American citizens held prisoner by the Kim regime and the date for the Trump-Kim summit in hand.

The current episode of tension reflects a wide and dangerous expectation gap between the United States and North Korea, but it should not dissuade the Trump administration from going through with the summit.

If the Trump administration wants to take away the right lessons from North Korea’s display of anger it needs to first understand the root cause of North Korea’s ire. When Pyongyang announced that it was calling off a high-level diplomatic meeting with South Korea it cited the U.S.-South Korea military exercise known as “Max Thunder,” a large-scale air force exercise that has occurred every year since 2009, as the culprit. A statement released by state broadcaster KCNA said, “The maneuver [Max Thunder] is the largest-ever and a reflection of the invariable stand of the U.S. and south (sic) Korea to persist in the ‘maximum pressure and sanctions’ against the DPRK.” In particular, North Korea objected to U.S. F-22 fighters and B-52 bombers participating in the exercise, as the former can easily penetrate North Korean airspace with little chance of detection and the latter is nuclear-capable. After the KCNA denunciation of Max Thunder, the Pentagon released a statement clarifying that B-52s were not slated to participate but North Korea did not drop its opposition to the exercise.

Max Thunder itself is probably not the real reason why North Korea is threatening to call off the Trump-Kim summit. If Kim viewed the exercise as unacceptable he had ample opportunity to raise the issue with the United States and South Korea. The exercise began on May 11 and there was no indication given before or during the exercise that North Korea viewed it as a potential deal breaker. Moreover, if Kim had voiced concerns Washington and Seoul probably would have adjusted some elements of Max Thunder to preserve diplomacy considering they agreed to postpone the annual Foal Eagle exercise so it would take place after the Winter Olympics and adjusted the length of and forces that participated in Foal Eagle to ensure a smooth inter-Korean summit.

Richard Pipes on Property as an Institution

Richard Pipes, the great Harvard historian, has died at 94. Best known for his clear-eyed work on Russia and its Bolshevik Revolution, a topic on which so many thinkers over the past century have fallen short, Pipes also wrote a terrific 1999 book on private property as a cornerstone of civilization, Property and Freedom: The Story of How through the Centuries Private Ownership Has Promoted Liberty and the Rule of Law. It’s a favorite on Cato reading lists, including Tom Palmer’s on principles of liberty and Ian Vásquez’s on economic development. I reviewed it favorably at the time for the Wall Street Journal and noted its wide historical sweep, including Pipes’s account of the many schools and movements since Plato that have taken a stance hostile to rights of private possession. These include not only communists, syndicalists, and the like, but some romantic nationalists and even cultural anthropologists who for a time claimed (wrongly) that primitive peoples dispensed with ideas of mine and thine. 

Pipes always had his eye on the real-world consequences of these views for nations and their development. As I wrote, summarizing his argument:

The fork in the road between Britain and Russia, it would seem, came on the issue of whether the ruler could be said to own everything in the country. In England, this idea was challenged and then rejected with the revolutionary consequence that the king had no more right to trespass on an Englishman’s freehold than anyone else did. Nor (eventually) could he exact financial penalties from his subjects – or do much of anything else, such as take away life and liberty – without due process of law. The idea that rights were something prior to government soon made England the most property-oriented country on earth.

By contrast, in unhappy Russia, the czars’ claim to own everything carried only too much weight. The members of the Russian nobility often found themselves acting as collectors-of-tribute on highly revocable allotments. Serfdom persisted because the obligations of nominal landowners to the crown were too onerous to be met any other way. Whole categories of economic endeavor, such as coach inns and flour mills, were decreed to be the property of the royal family. When Lenin sought to ensure submission to the authority of his Soviets by ordering the pulping of old title deeds, he was acting in the tradition of the worst czars.

He was equally cogent when he stepped back for reflections of a more philosophical nature, as when he invoked David Hume on redistribution: “Render men’s possessions ever so equal, men’s different degrees of art, care and industry will immediately break that equality. Or if you check those virtues, you reduce society to the most extreme indigence; and, instead of preventing want and beggary in a few, render it unavoidable to the whole community.”

Whole review here. Ira Stoll rounds up several resources on Pipes’s work including his archive of writings at Commentary, where he reviewed such works as Hernando de Soto’s The Mystery of Capital, Tom Bethell’s The Noblest Triumph: Property and Prosperity Through the Ages, and Eric Hobsbawm’s memoirs, being appropriately scathing about the last of these. A great mind and a great scholar, who chose for his life’s work subjects that could hardly be more important for humanity’s future. 

 

The Sugar Swamp Remains Undrained

Efforts to reform the U.S. sugar program fell short last week when an amendment to the farm bill offered by Rep. Virginia Foxx (R-North Carolina) was voted down by the lopsided margin of 137-278. Foxx couldn’t even persuade a majority of her fellow Republicans to support the measure, with only 96 voting in favor and 132 in opposition. Democrats, meanwhile, voted to preserve the sugar status quo by a split of 41-146. For all of the laments one hears about a lack of bipartisanship in Washington, the vote was a powerful reminder that both parties are still able to rally towards a common purpose when special interests and government power are threatened.

report from Agri-Pulse nicely captures this dynamic (emphasis mine):

The top Democrat on the House Agriculture Committee, Collin Peterson of Minnesota, had expressed confidence that Democrats would help defeat the farm bill amendment despite their opposition to the overall legislation, and he delivered…Peterson, who represents one of the largest sugar-growing districts, said he gave an impassioned plea to fellow Democrats Wednesday morning to vote against the bill, reminding them of his leadership in opposing the overall bill. He said he told them that “the only thing I cared about was sugar and I needed their help.”

[House Agriculture Chairman Mike Conaway, R-Texas], said he called in favors from GOP colleagues and credited GOP leaders for also helping defeat the sugar measure. He told reporters that he considered  the amendment an “existential threat” to farm policy because it would have emboldened critics to go after other forms of commodity programs. 

Peterson hails from the party that claims to stand up for the little guy against economic elites while Conaway’s fellow partisans regularly profess skepticism of government and a belief in the free market. The reality, however, is plain for all to see. 

As I detail in a recent policy analysis, the U.S. sugar program is an absurd exercise in discredited central planning whereby the federal government deliberately restricts the supply of sugar in order to drive its price higher than it would otherwise be. Functioning as a wealth transfer from U.S. consumers and businesses to the sugar industry, the program is arguably the most egregious example of the federal government operating at the expense of the majority to benefit a well-connected minority. 

Notably, the reform effort led by Rep. Foxx—while a welcome step in the right direction—would have left significant amounts of the sugar program in place. Tariff rate quotas, for example, which restrain access to cheaper sugar from abroad would have been mostly untouched while government loans to sugar processors were slated to see their collateral demands only slightly raised. Yet even modest reform was too much to stomach for the sugar lobby. The fight for sugar sanity goes on.