Separation of Powers

This was originally written in September 2020.  I updated it in 2024 to add comments about non-compete provisions, filibuster and the Speaker Project.

 From my perspective, the key to the success of the USA has been effective separation of powers (checks and balances).  Power must not only be vigilantly assigned in a way that creates checks and balances, it must also be exercised in such fashion.

To clarify/underscore my point, I think separation of powers has been more critical than democratic voting.  Public elections are a form of separation of powers.

Below, I identify many aspects of our society which thrive with proper separation of powers.  I’d be interested in your thoughts on these issues and what can be done to assure proper separation of powers going forward.

Separation of federal government powers between the Executive, Congress and the Supreme Court is an obvious example.  In my lifetime, Congress has failed to maintain its power.  Both the Executive Branch and Supreme Court have assumed power that was not intended to be theirs.  Unfortunately, it seems that most politicians and citizenry believe “the end justifies the means”.  Hence, despite excoriating some behavior by their opponents, they support the same disruptive behavior by their allies.

On pages 4-5, I mention reforms which could help maintain federal separation of powers.

Separation of powers between federal, state and local governments is also important.  Our education focused on states’ rights as a defense of slavery, which naturally tilted me toward central (federal), rather than state, power.  Although I think I vaguely understood that there was more to the issue, I was a strong supporter of central government because it seemed more efficient to enact laws at the federal level rather than each state and fairer to have the same laws apply to everyone, regardless of the jurisdiction in which they resided.

Now, I better understand the foibles of humans.  Although I believe people are generally good and see reasons to respect almost everyone I encounter or hear about, I’ve learned to appreciate the adage “power corrupts, and absolute power corrupts absolutely”.

I’ve always thought a benevolent dictatorship can be the most effective short-term government.  In a crisis, it can be helpful to give a leader power to align everyone to solve the crisis.  However, a benevolent dictatorship inevitably degenerates, generally during the term of the initial dictator, but certainly when successors follow.  My actuarial career was a good choice for me because I take a long-term view to most issues.  I admit to being more concerned about process than many people, as protecting appropriate processes protects the separation of powers and our individual rights.  “The ends justifies the means” is a scary slippery slope to me.

Centralized power is important for many issues.  I note only one such issue here: environmental practices within a state affect other states because wind and rivers cross state lines.  Thus, a federal EPA is clearly appropriate.  But if the federal government abdicates its responsibilities, states should be able to address those issues within their borders.  (A difference of opinion is not necessarily abdication.)

A key problem results from central government collection of money from, and redistribution of money to, states.  As the federal government expropriates and appropriates money, state politicians (including Congress) campaign by promising to get federal revenues for their state, inevitably undermining the efficiency I anticipated at the federal level.  The result is ‘bridges to nowhere’ and other unwise expenditures.  Furthermore, the federal government sometimes uses its funding to coerce states.

Secondly, whereas voters recognize the cost they will pay for local government projects, federal money is primarily ‘other people’s money’.  Hence spending federal dollars is easy.  In addition to campaigning to bring money to their state, politicians make campaign promises to spend federal money on projects that benefit various subsets of voters.  Our federal debt is out of control.  Few people realize how severe the situation is because a lot of expenditures are off-ledger (not in the budget) or understated with “cliff financing” analysis (because of the uncertainty of long-term projections, social security and Medicare projections assume the programs will end in 65 years, ignoring liabilities that will exist at that time).

Our federal debt is atrocious taxation without representation.  We foist these huge debts onto future generations who had no opportunity to express themselves relative to these burdens.  We expect future generations to take care of us in our old age, to raise our grandchildren, to foster a vibrant economy and to retire the huge debt burden we place on them.  Alas, there is a great imbalance in power between current adults and future generations.

I’m not expert in federal/state/local issues, but some additional aspects that come to mind are that the individual voter feels disenfranchised at the federal level for two reasons: 1) Her vote has an infinitesimal weight in national elections; and 2) National elections involve so many issues that politicians do not get clear messages from elections.  Substantially different issues such as abortion, national defense, budget, economy, etc. all are reduced to a combined single vote.  At the local level, this is less of a problem because of referendums and because a local election is more likely to be dominated by a particular issue.

There is also value to having states serve as a crucible.  If an approach works well for one state, other states (or sometimes the federal government) can adopt it or a modified version.  Having different situations in various states or locales can increase diversity, allowing citizens to live in a location that best serves their preferences.  (There is tension here with civil rights issues.  Determining the proper power at particular government levels can be difficult.)

Separation of powers between government, business, NGOs (religious organizations and other non-profits) the press/media and citizens is crucial too.  In many circumstances, the government has an important role akin to an arbiter or referee, ensuring fair procedures.  When the government is put in charge, this vital role is sacrificed.

In discussions, I often accept as a premise that people working in non-profits, academia or government are more ethical than people working in business.  I’m not saying that is necessarily true, just that I’m willing to accept it as a premise when making the following point.  Even if it is true, it does not mean that the actions of people in non-profits or regulators are more ethical.  Some people in those areas view themselves as virtuous and can’t imagine that anything they would do would be improper.  Thus, they may not question their actions.  When they are placed in charge of programs, I’ve seen some people be oblivious to their unethical behavior.  Businesspeople seem more likely to question their behavior, perhaps because they realize they have some conflicts or perhaps because they fear being caught.  This issue relates back to the ‘power corrupts’ issue.  Politicians’ belief in their causes morphs over time into believing that their personal election is critical.  Corrupt behavior is justified (or simply overlooked) because it increases their chances of election (‘end justifies the means’).

When government has a monopoly, there is less competition, may be more groupthink (indoctrination and conformity) and possible budget restrictions, all of which can reduce innovation.  There can also be less transparency as to how things are funded.

When government runs something, there is less tax revenue, because government (unlike business) is not taxed.  This lost revenue at various levels does not appear to be reflected in cited legislative costs.

When the government absorbs control, the number of government workers increases.  Government workers have incentives to vote for the incumbent party, which undermines separation of powers relative to the electorate.  We should separate the roles of employer and voter as much as possible.

See earlier comments about national debt.

Government-run efforts can dim citizen initiative.  My relatives in France have been unable to understand why I donate to charity.  From their perspective, “the government does that.”  Similarly, “you can’t fight City Hall”.

If businesses get too strong, a lack of balance can occur.  We need government to monitor restraint of trade and related issues.

However, many government people believe their actions are solely responsible for what happens, and they work to make that the case.  For example, many incentives (example: solar energy) are not retroactive.  The government sees no reason to reward people who exhibited personal responsibility by doing the right thing.  Citizens are taught not to take personal responsibility but rather to wait until properly instructed by the government, a detrimental shift of power.  Government efforts that undermine people taking personal responsibility are harmful.

State employees have told me that something is wrong with their statistics because people whose long-term care insurance ran out do not all go on Medicaid right away, even if eligible.  They are convinced that these people should (hence do) go on Medicaid, so their statistics must be wrong.  They cannot imagine that people would choose not to do what they expect them to do.  But, for very good reasons, some people intentionally choose not to go on Medicaid.

In numerous situations federal agencies have served as prosecutor, judge and jury, a stark violation of due process and separation of power.  It disturbs me that most people seem to either endorse such abuse or simply ignore it.  Niemoller teaches the importance of protecting the freedom of others.  (“First, they came for the Socialists, and I did not speak out— because I was not a Socialist.  Then they came for the Trade Unionists, and I did not speak out— because I was not a Trade Unionist.  Then they came for the Jews, and I did not speak out— because I was not a Jew.  Then they came for me—and there was no one left to speak for me.”)

If the government picks winners and losers, separation of powers is undermined.  If we want to encourage something (investment in green energy, for example), we should create tax incentives, rather than ask government to decide which organizations deserve grants.  If the government selects recipients, the government becomes more interested in that entity’s success than its competitors’ success, which can lead to mischief.  Secondly, an incentive brings a more diverse group of minds into finding solutions.

A vibrant independent non-profit sector adds value.  Some people in our country prefer the western European model in which the government allocates money to non-profits.  As I noted above in regard to strong centralized government, there can be gains in terms of efficiency and coordination, but there is a loss due to inferior separation of powers.

Separation of powers between employers, employees and the public is a difficult issue perhaps partly because unions were not envisioned in the constitution.  Unions are unquestionably important, but they can be given too much power.  ‘Right-to-work’ is very appealing, but I also recognize the risk of allowing people to presume that others will fund the cost of their interests.

Public entity strikes are troublesome, as Franklin Roosevelt noted.  Public unions wield both employee and voter power, which are best separated.  During public employee strikes, the public (who employ public employees) is not well-represented because of the conflict of interest when elected officials negotiate with voter-employees who can influence their reelection.

It is healthy that traditionally strong union supporters are recognizing that police unions have harmed the public by protecting police officers who should have been fired because of improper behavior.

Similarly, teachers’ unions have protected teachers who should have been fired.  I have always been a huge fan of public education, but when I was a teacher, I learned to not be enamored of teacher unions. 

Hopefully, positive outcomes will result from our current attention to economic disparity by race.  When I look back at the past 50 years, the #1 thing we could have done to reduce income disparities by race seems extremely clear: improve public education in the inner city.  Had we provided better education in the inner city, poor residents would have entered more lucrative careers, advanced more easily in their chosen career path, etc.  Their competence and their improved economic fortune would have resulted in greater inter-race respect and more integration in all aspects of life.  Improved education would have benefited inner city residents of all races.

Fortunately, we have clear models of successful inner-city education.  Sadly, a lack of separation of power has thwarted success.  Public charter schools (which began in 1992) have had tremendous success educating students from families with low educational background and low economic success.  But teachers’ unions have managed to stifle competition from public charter schools by exercising their electoral muscle to influence government to thwart or limit charter schools.

Two main success factors for public charter schools relate to assignment of separation of power and personal responsibility:

1.            Charter school principals have personal responsibility and the authority (power) to select staff and create curriculum that will attract and retain parents and students.

2.            Unsuccessful charter schools close.  Other unsuccessful public schools remain open.

A parallel obstacle has been unnecessary entrance barriers to various careers, which have harmed the “new kids on the block”, hence immigrants and minorities.  The state of Florida recently eliminated many entrance barriers which were created to protect current purveyors of services.

Non-compete provisions have a role but are being abused, by being applied to a broad swath of employees.  I would expect to support legislation in this regard, but I obviously do not support unilateral banning of non-compete provisions by the executive branch.  I do NOT agree that ALL non-compete provisions should be banned.

When I worked at an insurance company, we had repeated debates about ‘who are customer is’.  Is it the broker or the insurance purchaser?  I never understood why we had to answer that question.  When I made decisions, I considered the impact on shareholders, company management, my staff and other employees, brokers, insureds, beneficiaries, our suppliers (such as reinsurers), etc.  Depending on the issue, their respective weights varied in my decision process.  I preached to my staff that they should do the same and hold me to it.  Management did not appreciate my approach (they preferred “he who has the gold rules”; that is, an employee’s client is the person to whom he/she reports).  Although I am disinclined to legislate such requirements, I think the concept of requiring employee representation on Boards of Directors is worth discussion and perhaps experimentation. 

Class action lawsuits are important to maintain balance between businesses and consumers.  However, an attorney friend has properly referred to some class action lawsuits as ‘legalized extortion’.  Flimsy suits are filed, then the attorney approaches the defendant, suggesting a settlement to avoid the cost of litigation.  The defendant may be convinced of innocence but accepts a settlement which costs less than the anticipated litigation.  Class action members get very little value from the settlement.  The attorney is rewarded, hence encouraged to file more suits solely to negotiate a settlement.

As examples, I have gotten checks for less than $1 as a result of class-action investment litigation.  I spoke with an executive who experienced a shareholder class action lawsuit for failure to disclose relevant information.  Not long after that, he was sued for having disclosed too much information.

In electoral campaigns, power is unbalanced between incumbents and non-incumbents resulting in pressure for term limits.  Although term limits tame the undue power of incumbents, I would prefer not to remove our citizens’ right to keep electing a superb representative.  My crazy solution seems extremely unlikely to be implemented: I would give non-incumbents a pre-determined percentage of the votes to partly offset the advantages of an incumbent.  The percentage of pre-determined votes would increase depending on how many terms the incumbent has served. 

Money in politics is another form of imbalance of power.  Public funding of elections seems like a great idea, but I don’t know that it is practical.  I apologize for not having a more constructive comment in this regard but wanted to acknowledge the issue.

The electoral college was a big-state/small-state compromise to balance power acceptably.  Although I understand the reasons why people would prefer to make changes to the electoral college, I don’t see a compelling reason to cancel a reasonable agreement.

Similarly, the filibuster is intended to protect minority political opinions.  I like the filibuster, but definitely believe that people should be required to maintain speaking in person.  I'm amenable to some reforms of the filibuster.  

Power of the individual.  We should protect the power of the individual by protecting free speech.  Fresh and perhaps discordant ideas have historically been critical to progress.  We must also encourage people to communicate with those who have different political opinions so ideas can be properly vetted.  In such communication, we learn, we teach, we get to understand each other better and we can find compromises or ways to co-exist with our differences.

The lack of free speech on college campuses, the lack of political diversity among the faculty and the “cancel” culture are troublesome.  High school and college professors have significant impact on the political impressions of our young voters.  We need to assure that they get balanced education.

Identity politics also crushes individuality and reinforces divisions in our society.  We should cherish our differences but also our common values and goals as a community.  Why should we strait-jacket people’s ability to think for themselves by pressuring them to vote based on their identity.  Sounds like gang indoctrination to me.

Related to identity voting is an assumption that people should vote based on their self-interest.  We used to teach that people should vote based on principles and what they felt was best for the country.  Some people still do so, particularly idealists.  But even idealists can encourage others to do identity voting.

Voters must be informed if they are to wield their power properly.  It is our responsibility to get educated on the issues, to educate each other and to find ways to improve general education on issues.

As noted earlier, our elections jumble many issues together, making it hard for an election to serve as a mandate on a particular issue.  We would do well to seek ways to make elections more meaningful.  Local propositions serve that purpose well.

Balance between long-term and short-term view is lacking in our society, I think (not surprising as an actuary).  Political and business analyses seem to have shortened time frames, partly because the pace of change is so quick that today’s decisions may have a shorter time impact.  It would be good if Boards of Directors, shareholders and voters pressed business leaders and politicians to take a longer view. The employee representation on Boards of Directors mentioned above is supposed to help address this issue, but it is not entirely clear to me that it will do so effectively; its impact could vary significantly from one case to another.

Possible reforms include:

1.     1. Fact-checking of campaign statements

I’d like every TV, radio, movie, print and social media ad (etc.) to bear a unique code to facilitate voter research of the ad’s claims.  For decades, most ads in competitive political elections make me less likely to vote for the candidate.  Even a true statement (such as “my opponent voted against this bill”) is generally misleading because it does not explain why the opponent voted against the bill.  Often, the opponent’s vote was instigated by another, unmentioned provision in the bill.  With such a code, citizens could become more informed voters.

2. Ranked-order voting

Ranked-order voting gives voters more control and helps third-party candidates without distorting election results.  Currently, voters fear that voting for a third-party candidate might cause their less-desired major-party candidate to get elected.  Ranked-order voting solves that problem.  There are a number of alternative voting structures that have various advantages and disadvantages but ranked-order voting is clearly one of the best and it is the only one with a realistic chance of success, being utilized to an increasing degree across the USA.

3.      If a majority of representatives or senators wants to address a bill, it should be addressed.

Our federal legislatures have developed a practice of blocking a bill for discussion if it does not have the support of a majority of that body’s majority party.  Thus, as few as 25% to 30% of the legislators have been granted veto power, which is very damaging.  Bill discussion should be mandatory if a majority of the legislative body supports discussion (even if that majority is comprised of a minority of the majority party plus a majority of the minority party).

 4.      When a bill is passed by one house of Congress, it should be debated and voted upon, in timely fashion, by the other House.

 5.      When the President makes a nomination that requires Senate confirmation, that nomination should be processed in timely fashion.

 6.      When the President introduces legislation, both houses of Congress should deal with it.

7.      Nancy Pelosi famously said Congress needed to pass the Affordable Care Act so that Congress could learn what the ACA means.

 When she was criticized for that comment, I defended her on the mistaken grounds that she had misspoke.  I subsequently learned that this is a major way in which Congress relinquishes authority.  Bills are complicated and discussion of all the details could be endless.  So, Congress passes legislation assigning responsibility to the Executive Branch to define the law’s meaning.

 Asking the Executive Branch to define the law makes sense, but after the Executive Branch does so, the proposed law should come back to Congress for an up/down vote.

 8.      Laws should be passed to protect due process when a federal agency levies charges against an individual or company.

9.   Attorneys filing class action lawsuits should be held responsible for the defendants’ legal costs if the case is determined to have been inappropriate.  

10.  See The Speaker Project for some good ideas.