The Week of May 16th, 2016

Care

1. Wading into the battle

Transgender and bathrooms

Back in March, North Carolina Governor Pat McCrory signed House Bill 2 (HB2), now infamously known as the North Carolina “Bathroom Law.” HB2 requires individuals to use public bathrooms that correspond to their biological sex, restricting the ability of transgender individuals to use the bathroom that aligns with their gender identity. The law also restricts the ability of local governments to pass their own nondiscrimination statutes, thereby overriding city ordinances like those of Charlotte, North Carolina that attempted to protect transgender individuals’ right to use bathrooms that correspond to their gender identity.

The Obama administration issued a directive last Friday pushing schools nationwide to permit transgender students to use the bathroom that is consistent with their gender identity. The Departments of Justice and Education sent a letter to school districts with directions for ensuring that “transgender students enjoy a supportive and nondiscriminatory school environment.” The Obama administration’s letter is neither a law nor executive action. It does, however, carry implicit threats. Noncompliant schools could lose federal funding or face lawsuits.

Conservatives across the US expressed outrage over what they perceived as another example of the Obama administration’s executive overreach. Texas Lieutenant Governor Dan Patrick called the letter “blackmail,” and Mr. McCrory decried the federal government’s “baseless and blatant overreach.” From the left, the Human Rights Campaign, an LGBT-focused civil rights organization, hailed the Obama administration’s letter as “groundbreaking.”

With the Department of Justice and the state of North Carolina currently embroiled in dueling lawsuits, it is unlikely that the “bathroom issue” will be resolved anytime soon. The Obama administration’s action is nonetheless significant, representing another important step forward from a remarkably and historically pro-LGBT administration.

2. Because it worked so well last time

Money in Zimbabwe

In 2009, Zimbabwe abandoned the Zimbabwean dollar, after inflation spiraled to a staggering five hundred billion percent. After abandoning the hyper-inflated currency, Zimbabwe adopted a mix of currencies, including the US dollar, South African rand, and euro. Recently, following a shortage of foreign reserve notes, John Mangudya, the governor of Zimbabwe’s central bank, unveiled a series of radical new policies. Under the new rules, Zimbabweans are limited to withdrawals of $1,000, or 20,000 South African rand, per day. Additionally, the central bank will start printing “bond notes” pegged to the US dollar. The new bond notes are still in the design phase, and will feature come in two, five, ten, and twenty-dollar increments. Despite concerns that the new bond notes signal a return to the Zimbabwean dollar, government officials insist that the new notes are merely a tool to ease the cash shortage, and will be convertible into US dollars, euros, and South African rand. Moreover, the new notes will be backed by $200 million in support from the African Import-Export Bank.

Both Zimbabweans and international observers alike have expressed concern over the government’s decision to print new notes. Zimbabweans fear a return to inflation; shopkeepers worry that their suppliers will refuse to accept the new notes, preventing them from restocking; business owners worry that workers will refuse to be paid in the notes. Several banks are further limiting cash withdrawals, some placing the figure as low as $200 a day. The new notes may lead to bank runs and hoarding as more and more Zimbabweans attempt to withdraw as much foreign currency as possible before it is too late.

Economists around the world warn that printing new bond notes will do little to solve Zimbabwe’s true economic problems. The country is currently running a massive trade deficit, with $490 million in imports in the first quarter of 2016 against only $167 million in exports. For Zimbabwe to truly address its cash shortfall, it must first solve more fundamental economic problems, from agricultural inefficiency to mass unemployment.

3. Killing the killers

Lethal injection drugs

The American pharmaceutical manufacturer Pfizer struck a blow against the American death penalty this week when it announced new controls that bar sales of its drugs for lethal injections. Pfizer follows in the footsteps of more than 20 other American and European drug manufacturers, closing off the final source of FDA-approved execution drugs available on the open market.

With Pfizer out of the execution drug market, states determined to pursue the death penalty will have to seek alternative methods. Some state correctional departments have attempted to import drugs from abroad, much to the chagrin of the US government. Others have attempted to use domestic middlemen. Pfizer’s new policy, however, will impose legal sanctions on middlemen who attempt to circumvent the pharmaceutical firm’s controls.

Pfizer’s announcement comes in the midst of a decline in executions in the US. In 2015, a total of six states executed 28 people, all by lethal injection, and down from a peak of 98 executions in 1999. Many of the firms that abandoned the sale of lethal injection drugs over the past five years cited ethical concerns raised by the anti-death penalty movement, signaling the growing power of a one-time small minority in American society. Botched executions and concerns about the suffering caused by lethal injection have marred the practice’s earlier image as a more humane execution method.

Faced with a sudden shortage in execution drugs, death-penalty states like Texas and Oklahoma may find their options limited. As middlemen encounter legal barriers, and foreign drugs are seized by federal agents, execution-eager states may have to wait or turn to older, more ghastly forms of dealing out death, such as the gas chamber, firing squad, and electric chair.

4. Buying time

Overtime pay

US President Barack Obama’s second term may be coming to a close, but his administration has kept busy, issuing a slew of new regulations on issues ranging from e-cigarettes to stock brokers’ interactions with their clients. On Tuesday the Department of Labor issued a new rule regulating overtime pay. The White House estimates an expansion of overtime coverage to more than four million people, increasing paychecks or leisure time for middle-class workers. Industry groups, on the other hand, predict dire consequences.

The new rule expands eligibility for overtime pay in several ways. Currently, all hourly workers qualify for overtime pay. For salaried workers, things get more complicated. Previously, salaried workers making less than $23,660 a year were automatically eligible for overtime pay, while those making over that amount could be classified as “managers”, to whom overtime does not apply. This has allegedly led companies to misclassify workers to avoid paying overtime. The Obama administration’s new rule increases that threshold to $47,476 a year. Workers making over the $47,476 threshold will not be automatically excluded from overtime pay under the new rule; their eligibility will still depend on how their employers classify their job responsibilities.

Mr. Obama’s Democratic allies have praised the new regulation, arguing that it will economically assist the middle class. Bill de Blasio, New York’s mayor, called the Obama administration’s new regulation “an important step forward in addressing inequality, rectifying decades of decline in overtime eligibility in the American workforce.” Critics, however, fear the new overtime rule will hurt workers, forcing companies to reclassify employees as hourly workers, thereby cutting benefits and flexibility, and reducing base pay.

5. Up in flames

Bernie Sanders supporters clash

The Nevada Democratic convention took a worrying turn this past weekend, as supporters of Senator Bernie Sanders protested what they claim is an unfair and undemocratic system for assigning delegates. The dispute was started once Sanders supporters were denied a request for a rule change that would ultimately allow them to raise their share of national delegates from the state.  Supporters of Mr. Sanders yelled, threw chairs, and engaged in physical altercations with other convention-goers. Nevada Democratic Party chair Roberta Lange received thousands of profane and threatening texts, emails, and phone calls, including several death threats. Mr. Sanders’s supporters decried what they call a “rigged” convention system that allocated 20 pledged delegates to former secretary of state Hillary Clinton, and just 15 to Mr. Sanders. The Nevada Democratic Party insists this allocation reflects the results of February’s primary, although Mr. Sanders and his supporters attempted to pick up additional delegates at the convention.

The violence and hostility at the Nevada Democratic convention augurs future discord between Mr. Sanders and the national Democratic Party. Senator Harry Reid, the Senate minority leader, called on Mr. Sanders to demonstrate leadership by reigning in his supporters. Mr.  Sanders issued a statement Tuesday that only further riled the Democratic leadership. Although the statement condemned the violence, the majority of the release dealt with Mr. Sanders’s alleged mistreatment by the Democratic Party, accusing the Democratic leadership in Nevada of preventing a “fair and transparent process from taking place.”

Democratic Party chair Debbie Wasserman-Schultz bashed Mr. Sanders’s statement, accusing him of tacitly encouraging his supporters’ actions. Ms. Wasserman-Schultz said that his statement was “anything but acceptable,” claiming that he “did not condemn” his supporters’ actions. In the days following the Democratic convention in Nevada, few of Mr. Sanders’s supports have shown signs of backing down. Many have promised to protest the Democratic Convention in Philadelphia this summer if Mr. Sanders’s is “treated unfairly.” It seems that the Democratic Party is in for a rocky start to the 2016 general election come August.

Don’t Care

0. An empty threat

Saudi Arabia and US securities

In a rare show of bipartisan solidarity, the US Senate unanimously passed a bill this past Tuesday that would allow families of those killed in the September 11, 2026 terrorist attacks to sue Saudi Arabia for any role it may have played in the plots. Obama administration officials have lobbied against the bill, and President Barack Obama promised to veto the legislation should it pass through the House of Representatives. Saudi Arabia warned in March that passage of the legislation would prompt it to sell off roughly $750 billion in US assets, including Treasury securities.

The Saudi government has long evaded 9/11 survivors’ and victims’ families’ lawsuits and requests for meetings. More than a decade after the attacks, many Americans question the role Saudi royalty and charities play in financing terrorist organizations.

The Saudi government’s threats are tellingly empty. First and foremost, Saudi Arabia selling off its US assets would be disastrous for the country’s economy. The Saudi riyal is pegged to the US dollar, and the country receives US dollars as payments for its oil exports. Moreover, Saudi Arabia’s US assets are likely far lower than the $750 billion figure quoted by Foreign Minister Adel al-Jubeir in March. The figure is likely between $360 and $450 billion, according to Edwin Truman of the Peterson Institute for International Economics. Furthermore, the mass sell-off would be done at a loss for Saudi Arabia; the expectation of a mass sell-off would enable prospective buyers to underbid and acquire valuable US assets for a price below regular market rates.

Most importantly, Saudi Arabia’s threats hint at their complicity. As Senator Chuck Schumer said, “If the Saudis did not participate in terrorism, they have nothing to fear going to court.” It will only be a matter of time before Mr. Obama is forced to choose between the interests of a US “ally” and those of victims of terrorism.

Alexi Stocker contributed