About Richard Epstein

Known to students at the University of Chicago and NYU law schools as “the libertarian,” Richard Epstein has established himself as an expert in constitutional law, contracts, corporate law, real estate law, torts, labor law—and even Roman law. He is reputed to be more knowledgeable about Justinian’s Code than anyone since the Emperor Justinian himself. The Peter and Kirsten Bedford senior fellow at the Hoover Institution, Richard Epstein is the author of several books including, The Case Against the Employee Free Choice Act.

An Unfair Swipe at the Federalist Society


It looks as if the next presidential election—less than a year away—will feature a rerun between two road-tested candidates: President Joe Biden and former president Donald Trump, who at present seem, with all their evident flaws, to push other candidates aside. Not only does Trump lead in the run-up to the Republican primary, but, contrary to many expectations, he seems to have edged into the lead against Biden for the general election.

It is no surprise that columns in the New York Times seek to bolster Democratic fortunes. A recent heartfelt op-ed in the Times by three veteran Trump opponents—George Conway, J. Michael Luttig, and Barbara Comstockseeks to bolster Democratic fortunes. They insist that re-electing the former president could undermine the Constitution, the rule of law, the independence of the courts, and much else besides. They offer no specifics to document these claims, and maintain a conspicuous silence about any activities of the Biden administration that arguably flout these very principles, such as its overgenerous use of executive orders on such matters as student loan forgiveness and the use of fossil fuels, which undermine the separation of powers; as well as the attacks on conservative Supreme Court justices, coupled with dangerous suggestions by Senator Sheldon Whitehouse of Rhode Island, who has denounced a Code of Conduct recently released by the Supreme Court. Whitehouse proposes: “My ethics bill would create a transparent process for complaints and allow a panel of chief judges from the lower courts to investigate and make recommendations based on those complaints.” But, as the Wall Street Journal noted editorially, this move would inspire an endless array of public complaints, many generated by Whitehouse’s loyalists, to be investigated under uncertain procedures that clearly amount to the politicization of the judiciary and an assault on the independence of the Supreme Court. Just how would those justices operate, knowing that their legal decisions are subject to the review by the judges whose work they are supposed to review? And to whom are these recommendations made, and for what purpose?

The most bizarre claim in the Times op-ed is to point an accusing finger at the Federalist Society (with whom I have worked closely since its inception over forty years ago), as derelict in failing to control the asserted dangerous activities of any planned Trump administration. The charge wholly misunderstands the role that the society has played as an incubator of conservative and libertarian lawyers—who, for all their differences on such key long-standing issues as judicial review and the protection of speech and property rights, will never be mistaken for the progressive rivals.

Trump Facing Misguided Disqualification Efforts


Multiple efforts have been mounted to drive former President Trump off the November 2024 ballot by claiming that his activities in connection with the January 6 riots (to use an unfreighted word) at and near the Capitol constitute engaging in an insurrection sufficient to bar him from regaining the presidency. An early decision by the Minnesota Supreme Court unwisely complicated the matter. It concluded that the petitioners had standing to challenge Trump’s participation in the primary, only to hold on the merits that Minnesota law allowed voters in the primary first to decide whether to put him on the ballot. More ominously, it also held that the effort to keep Trump off the ballot was neither “ripe” nor “about to occur,” and thus could be decided on some later day, much closer to the election.

There was a spirited debate of this topic at the November 2023 Federalist Society meeting between Professors Will Baude and Michael McConnell over the various aspects of the debate, where Baude defended the insurrection charge that McConnell opposed. I disagree strongly with Baude’s conclusion and much of McConnell’s reasoning to hold off making the decision. So, I present my own view here, and insist that a correct disposition of the case would decide it on the merits right now, letting Trump win on this dispute by a TKO. To see why, it is important to tee up the full text of Section 3 of the Fourteenth Amendment, which reads as follows:

Section 3 Disqualification from Holding Office

No ‘Pause’ without Freedom for Hostages


As of this writing, the fighting in Gaza continues to rage, as the Israelis have surrounded the Hamas forces, now trapped in the elaborate tunnels that had allowed Hamas to launch its unprovoked and bloody assault against Israel on October 7—yet another day that will live in infamy—with its 1,300 Israelis dead and tortured and thousands more wounded. The fierce Israeli response has without question killed a large number of civilians, many of whom have been used by Hamas as human shields in violation of the laws of war. The proposal recently put on the table by President Biden and his secretary of state, Antony Blinken, is to allow for an immediate “pause,” which the New York Times calls something short of a traditional cease-fire, even if for some indefinite duration. The humanitarian case for the pause is that it will let desperately needed supplies reach the Palestinian civilian population and will allow for the orderly movement of women and children to lands south of Gaza City in relative safety.

But the Biden proposal falls short on at least on one point. It claims that the pause gives both sides time to negotiate for the release of Hamas’s hostages. But Israeli leader Benjamin Netanyahu surely has the right opening negotiation gambit: there must be no pause until the hostages are unconditionally released. The sequence really matters. It is naïve to ignore that any pause for such negotiations would give Hamas a chance to draw out the negotiations indefinitely, and further to insist that certain other conditions be satisfied by the Israelis, including the release of Hamas soldiers and other prisoners in Israel now held for the commission of violent offenses—people who could rejoin the struggle once the pause has been concluded. Why is Israel bound to negotiate for the release of hostages who never should have been captured in the first place? The Israelis have already secured the release of five hostages, but no one can claim that they must now give something to Hamas in return.

As is well known, many of the hostages are not Israelis, but come from other countries. Thus, the total includes some 54 citizens of Thailand, none of whom has dual citizenship with Israel, and at least 138 hostages with foreign passports from places like Argentina, Germany, the United States, France, and Russia, some of whom may well be dual Israeli citizens. One of the marks of terrorism is the indiscriminate use of force, and Hamas has yet again exceeded the bounds of decency by holding these innocent parties in its attempt to extract gains from Israel. It is within Hamas’s power to release these persons—all of them—immediately, and to account for those who have died during their long ordeal. For anyone to insist that the hostage release become part of some negotiations puts these captives at undue risk.

Keeping a Tax Clash from Going Out of Bounds


For the past few years, many progressives have made it a high priority to impose on the superrich an annual wealth tax that takes hold even on those whose wealth declines in a given year—or, failing that, to impose a tax on unrealized income (i.e., simple accretions of wealth by people who have not sold or otherwise disposed of their property). These proposals looked to be off the table until the decision of the Supreme Court to hear Moore v. United States (2023) put the matter into high relief.

Moore started out as a technical tax dispute when the government sought to collect $14,729 in taxes from Charles and Kathleen Moore under the mandatory repatriation tax (MRT) part of the Tax Cuts and Jobs Act (TCJA) of 2017 on income trapped in a corporation by the MRT’s regulations. But the case quickly attracted greater attention because the Moores claimed that the MRT tax was unconstitutional because gain had not been realized—that is, distributed from the corporation to the Moores. They stated that the case presented this question:

Whether the Sixteenth Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

Accusations and Anger Work Against Gaza Peace


There is no question that the struggle in Gaza is as much about words as it is about hostages, guns, and rockets. In my last column, I decried the constant efforts by Western journalists to downgrade the culpability of Hamas terrorists by calling them “fighters” and “militants.” Belatedly, one such offender, the BBC, issued a wishy-washy explanation for its past practice of calling these terrorists “militants” and “gunmen.” But its explanations and its backtracking on one inflammatory story, paralleling a similar weak response in the New York Times, did not undo the untold harm from its sloppy reporting, which sparked additional protests in Arab lands by first saying that an Israeli missile, and not an errant Hamas rocket bound for Israel, damaged a Gaza hospital.

Its act of “speculation,” as the BBC characterized it, was relatively small change compared to the nonstop campaign by Hamas and its supporters to brand Israel an outcast “colonial” nation whose “occupation” and “apartheid” actions justified Hamas “resistance,” even in the form of mass slaughter of innocent Israelis whose only crime is to live in a land that Hamas claims as part of a greater Palestine that runs from “the [Jordan] river to the [Mediterranean] sea,” an area, which now becomes increasingly clearer, that should in their view be “Judenrein,” that is, free of all Jewish people.

It is wholly illegitimate to treat these political claims, even if true, as any justification for the mass slaughter that took place, which has spurred Israel’s determination to rid Gaza of all elements of Hamas, after which it might be possible to have some responsible discussion of future relationship between the two warring peoples. But that discussion can begin only if the supposed justifications for the “resistance” are decisively laid aside.

Peace and Terror Cannot Coexist


Clarity often emerges from the fog of war. One such occasion happened October 7, when Hamas forces burst out of Gaza with the express mission of brutally slaughtering men, women, and children just miles away in Israel. They succeeded beyond their wildest dreams—with some 1,300 Israelis dead, thousands more wounded, and some 150 missing or held hostage. Situations like this require a high level of moral clarity to recognize that such brutality cannot be tolerated under some relativist theory that ignores the profound difference between victims and murderers. Some leaders, and some nations, have responded with clear words and strict sanctions, with the understanding that in times of moral crisis and personal peril, extra vigilance and even sharp limitations on civil liberties may unfortunately be needed. President Biden and Defense Secretary Lloyd Austin should be commended for their forceful leadership. France’s Emmanuel Macron should likewise be praised for his forthright decision to ban pro-Palestine protests and to work feverishly toward the release of French hostages held by Hamas. And praise is due to Benjamin Netanyahu for his courageous efforts to lead a coalition of Israelis who are shocked by the tragic events.

To make my views perfectly clear, it is imperative for Israel, the United States, and a recalcitrant United Nations to do all within their power to rescue civilians from the curse of the war, lest anyone try to create an obscene parallel between Hamas, which wreaks terror on civilians, and Israel, which seeks to ferret out terrorism. Moreover, Egypt should yield to the rising demands to open the Rafah crossing into Gaza to allow refugees access to the many tons of desperately needed relief sitting idle on the Egyptian side of the border, and other nations should make ample contributions to reduce Egypt’s financial burdens. It is also the responsibility of Hamas to its own people to support efforts to save and protect lives—instead of urging innocents to remain in the evacuation area to serve as human shields against invasion.

It is necessary to strongly reject the efforts of too many individuals and groups to double down on these atrocities, treating the butchery in Israel as the first step in some grand and noble plan to kill all Israelis or drive them into the sea. More subtle is the campaigning by supposedly civilized, thoughtful individuals to downgrade the seriousness of the events by using Orwellian tricks of language. Thus they twist their moral blindness into a purportedly objective, neutral view on mass slaughter—an issue that has no two sides.

Critics Fail to Grasp Personal-Liberty Rulings


In recent years, American progressives have undertaken, under the banner of “saving democracy,” a full-scale attack on the conservative justices who they say have now “packed” the Supreme Court. It is one thing, of course, to make the denunciation, but quite another to quote chapter and verse of the supposedly unsound decisions that support this charge. One recent notable effort to do so is found in a recent piece in the New Yorker by a Pulitzer Prize–winning investigative reporter, David D. Kirkpatrick, that identifies “The Next Targets for the Group that Overturned Roe.” He then focuses on the work of the faith-based Alliance Defending Freedom (ADF), whose CEO and general counsel, Kristen Waggoner, has compiled an enviable record of victories, including some fifteen in the United States Supreme Court, on a wide range of cases on matters of religious liberty.

Fitzpatrick offers extensive evidence on the growth in size, resources, and influence of the ADF (which with I have from time to time worked). But my concern here is not with the politics and maneuvering of the parties, nor with defending every statement or position the ADF has made in the thirty years since its founding, but with the intellectual and legal positions against which Fitzpatrick rails. At points I disagree with the ADF, but overall there is a profound overlap between the positions taken by traditional classical liberals—a movement that has no distinctive religious orientation­—and those of the ADF.

One key area is freedom of speech, where any attack on the ADF cannot take place at the highest level of abstraction, for, as Kirkpatrick notes, on many key issues the ADF sounds just like the ACLU—at least the ACLU of past years—in defending the bedrock principle of the freedom, which is “the right to resist government attempts to coerce a citizen into publicly denying her deepest convictions.” Kirkpatrick then gently disparages the “rights talk” in reference to a well-regarded book by that name, Harvard emerita professor Mary Ann Glendon.

In Chasing Amazon, the FTC Ignores Consumers


To no one’s surprise, last week the Federal Trade Commission, joined by some fourteen mostly blue states, launched its antitrust attack on Amazon by charging that the firm enjoys durable market power in two adjacent markets—the “Online Superstore Market” and the “Online Market.” The basic charge of monopoly insists that Amazon, like other monopolists, raises its prices above their competitive level in ways that reduce welfare for consumers.

But in Amazon’s case, the FTC’s claim is unique in at least two ways.  The first is that the complaint does not make any reference to the well-established consumer-welfare standard, lest it call attention to the Chicago School of Economics whose analysis the FTC rejects. Nor does its complaint ever consider any efficiency justifications, even though these are part of any balanced assessment of Amazon’s business model that has benefited some 170 million Amazon Prime customers, all of whom are free to take their business elsewhere.

But there is indeed a deep ambiguity in the FTC’s complaint that must be identified. The New York Times ran a story that describes a “cage match” between FTC chairwoman Lina Khan and Jeff Bezos, Amazon’s founder and executive chair. The Times notes that Khan has been “relentless in exposing what she sees as Amazon’s monopolistic ways,” while Bezos “would stop at nothing to deliver the low prices and speedy delivery that shoppers craved.” These two titans are talking past each other. Bezos’s search for lower prices should normally be regarded as a lust to outdo the competition, which would mean that the only conceivable antitrust claims that the FTC could bring are that of predation: offering prices so low that it drives out the competition, leaving it free thereafter to raise prices once all competitors have abandoned the field. Indeed, in her oft-cited student note in the Yale Law Journal—“Amazon’s Antitrust Paradox”—Khan puts this predation theory front and center when she writes that “the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible.”

Campuses Struggle with Free Speech


Freedom of speech is widely acknowledged as vital in the abstract. Yet that principle presents serious problems in its concrete applications. The constitutional text that invokes this principle is both cryptic and emphatic when it says that “Congress shall make no law . . . abridging the freedom of speech, or of the press.” At the time of the founding, the First Amendment bound only the federal government. It was not held to bind the states until 1925 under Gitlow v. New York, when it was further determined that the amendment did not protect any speaker who advocated the overthrow of the United States government by force and violence. To this day, the First Amendment does not apply to any private institution, but without question most of these institutions have incorporated free-speech provisions in their own charter or governance provisions.

The difficulties start, however, with its interpretation in both public and private settings. Courts have resisted the tendency to engage in free-speech absolutism that makes no exceptions or excuses from the constitutional command. Such free-speech exceptionalism does not withstand the test of common sense. We all believe in the freedom of action, but that does not countenance actions such as theft, murder, or rape. And the freedom of speech surely does not protect any threats of the use of force. That simple libertarian observation requires some account of exceptions that should be grafted on to the basic principle of freedom of speech.

Attempts to find the right balance are constantly tested on college campuses, as shown by some recent incidents.

The UAW Gets (Too) Tough


At the stroke of midnight on Friday, September 15, to no one’s surprise, the United Auto Workers union, led by its hawkish new president, Shawn Fain, called for strike action at all three of the major traditional American automotive companies: Ford, General Motors, and Stellantis (the owner of Chrysler through merger). The workers have gone on strike to secure major wage gains and other concessions from the three companies, all of which have made offers that contain some major contract improvements.

There had already been movement on both sides, so that on the eve of the strike, the basic wage rate increase that the companies had offered moved to 20 percent over the life of the four-and-a-half-year contract, while the union had come down from over 36 percent. The union also wanted to end the tiered system of employment that pays new workers substantially less than senior employees, and reached for a major change: getting five days’ pay for a four-day workweek. There are always myriad other demands involving collateral issues characteristic of virtually every collective-bargaining agreement.

Against this backdrop, Fain takes a very simple view: “The money is there. The cause is righteous. The world is watching.” His basic argument is that it is galling for union workers to see GM CEO Mary Barra pull down some $29 million in 2022, a 40 percent wage increase over the past four years, while worker pay has gone up only 6 percent during that same period. Indeed, relative to inflation, the hourly wages for autoworkers in both the union and nonunion sector have dropped by close to 20 percent since 2008, as the worker concessions made in the 2008 bailout have never been restored.

A Weak Shield in the Culture Wars


In a recent article in the New York Times, Debra Satz and Dan Edelstein—the dean of Stanford University’s School of Humanities and Sciences, and the faculty director of its program in civic, liberal, and global education, respectively—offer a provocative thesis: “By abandoning civics, colleges helped create the culture wars.” The authors lament the decline in the protection of free speech, singling out the disgraceful effort in March by some students at Stanford Law School to silence a speech that Kyle Duncan, a federal judge, was prepared to give to the Federalist Society chapter.

Both authors point to the failure of our centers of learning to develop the “shared intellectual framework” that could help defuse or prevent such incidents, but they offer a dubious remedy: a new (since 2021) program at Stanford called “Civic, Liberal and Global Education,” or COLLEGE, intended to “steer clear of the cultural issues that doomed Western Civ.”

Let us first put this issue in perspective. I doubt that any such program, however well-conceived, would persuade graduate students in UCLA’s psychology department, for example, not to ban Yoel Inbar, a noted professor from the University of Toronto, for his queries into universities’ commitment to the DEI (diversity, equity, and inclusion) orthodoxy. Nor is it likely that a similar program at Harvard would do much to improve its impoverished culture of free speech, or help prevent a replay of the recent incident in which activists, shouting charges of Israeli “apartheid,” disrupted the convocation ceremony at which Harvard’s new president, Claudine Gay, welcomed new students to campus. What are needed here are not classes but sanctions, requiring violators to make good on Harvard’s public-facing and internal commitment to defend the principles of civilized discourse. As the great University of Chicago president William Rainey Harper put the point in 1892: “The question before us is how to become one in spirit, not necessarily in opinion.”

How Demoralization Undercuts Recruitment


The United States military position is of increasing vulnerability as the Army, Navy, and Air Force all fail to meet their annual recruitment goals. It is no accident, for the situation dates back to the botched withdrawal of American troops from Afghanistan in August 2021. It is hard for young men and women to want to join a service that was humiliated by an operation that left thousands of Afghans in the lurch—only to be executed after receiving the Taliban’s worthless promise of amnesty. Acts of this sort have long-term consequences, including precipitating what is now widely acknowledged to be an ongoing recruitment crisis for the military that could jeopardize the status of the all-volunteer force that has been a staple of American policy for fifty years. The shortage is fed by a general loss of confidence in the military by the American public—the number stands at 60 percent, the lowest in over two decades.

There are, as ever, multiple innocent explanations for the shifts in supply and demand, so the now-chronic shortages can be attributed in part to other socioeconomic factors beyond the ability of the military to recruit. The low unemployment rate offers potential recruits an enlarged set of nonmilitary options. A second factor is the apparent increase in parental pressure to attend college before settling on a career, which reduces the supply for military positions. There are additional difficulties on the supply side. High on this list are the declining fitness of potential recruits, who grapple in increasing numbers with obesity, drugs, and criminal records. This effect is then compounded by a reduced willingness to serve. It is possible of course to increase the number of recruits by lowering the standards for enlistment, as is being done, but only at the cost of a likely reduction in the performance levels of the military services. And it is also possible to sweeten the pot for potential recruits by offering them signing bonuses of up to $50,000, which, however necessary, counts as an open admission that all is not well within the system.

These alternative explanations for faltering recruitment do not directly point a finger at the military and how it conducts its operations. But government policies have helped to distort military priorities. There is a real sense that the budget cuts for the military are great enough that they will harm overall preparedness, with shortages in new equipment, a higher level of repairs, and extended tours of duty to offset shortages in equipment and personnel. Beyond that, the Biden administration is well-known for its fierce (and misguided) commitment to take control of global warming, which it regards as a “clear and present danger” to the United States. This devotion has the administration lurching toward declaring the climate situation some kind of national emergency by pointing to the recent disaster in Maui, even as it becomes blindingly clear that massive mismanagement of the fire area by both the government and the public utilities suggests a complete and inexcusable failure to remove vast accumulations of dry grass. That same fixation describes the Department of Defense with its overwrought commitment to energy “resilience,” which in all likelihood will further impair the overall military preparedness to respond to the immediate threats that confront the United States everywhere from the Middle East to Ukraine and the China Sea. Who wants to join a loser?

Twists and Turns in the Hunter Biden Case


The proliferation of criminal prosecutions against former president Donald Trump may suck much of the oxygen out of the room, but it should not allow us to be distracted from the parallel legal drama taking place on the other side of the political aisle: the various investigations and plea deals of Hunter Biden, which themselves have followed a serpentine path.

The adventures of President Biden’s son are of interest for two reasons. The first is that any misbehavior by a presidential relative will attract interest in and of itself. But second, the obvious closeness between the two Bidens has already made it certain that much of the political attacks on Joe Biden will continue to run through Hunter Biden. The Democrats understand this well, which is why they once placed such stock in the plea agreement apparently reached between Delaware District Attorney David Weiss and Hunter Biden’s team of lawyers. Before it unraveled in late July, the deal was widely attacked as a slap on the wrist, given the seriousness of the charges and the amount of money—several million dollars—apparently owed in back taxes. Before this attempt to settle, as Republicans stressed, Weiss had let the statute of limitations run out on potential tax liabilities for Hunter in 2014 and 2015—when the common practice is for government attorneys to offer this win/win deal to subjects of their investigations: you will waive the statute of limitations defense and we will hold off for the moment from bringing suit against you, which will have all sorts of negative consequences on meeting your licensing and reporting requirements under various banking, accounting, insurance, and securities schemes.

The case is fraught with further difficulties. Two tax investigators, Gary Shapley and Joseph Ziegler, testified before Congress that their efforts to investigate Hunter’s finances were blocked by key personnel within the Justice Department, which promptly denied the allegation. Both IRS investigators protested that on multiple occasions between May and July 2023 they had been frustrated by orders of Assistant US Attorney Lesley Wolf, who allegedly limited their power to run the investigation. It is not credible at this point to assume that Weiss and his staff were unaware of these limitations, which made it wholly inappropriate for them to enter into any kind of deal until they had assurances from Attorney General Merrick Garland that these fetters would be removed.

Parsing the Trump Indictment


The headlines are consumed with the multiple lawsuits against Donald Trump for the misdeeds that he allegedly—I use the term cautiously—committed both in and out of office. By far the most serious of these cases is the indictment brought by special prosecutor Jack Smith against Trump for his efforts to overturn the results of the 2020 presidential election.

The attacks against these cases move along two parallel tracks. The political track is that Trump is the victim of a political ambush that began with the Steele dossier and continued with the Mueller investigation, followed by two dubious impeachments. In other words, they are efforts to discredit him in the eyes of the voters. Yet at the same time, goes the argument, Hillary Clinton and Joe Biden (with son Hunter in tow) receive kid-gloves treatment for crimes of equal or greater magnitude. Trump’s ability to maintain his standing in the polls stems from the conviction of his supporters that the motives of his accusers matter far more than the guilt or innocence of his actions. So the worse the case looks, the more hysterical Trump’s denunciations of Smith, the stronger his support.

But there is also the legal side to contend with, and here Trump also has defenders of the legality (or at least non-criminality) of his actions. Alan Dershowitz, one of his unhappy defenders, refers to Trump’s “inexcusable, but in [his] view constitutionally protected, role in the terrible events of January 6.” I agree with Dershowitz on the first part of the charge but disagree with him on the second. Even by the high standard associated with prosecutions, the core of this case falls, to use the now common phrase invoked by David Rivkin and Lee Casey, outside “the outer perimeter of his official responsibility.” And the actions here are so far beyond that line that none of the possible defenses seems credible as a matter of law.

Israel’s Crisis of Democracy


On July 24, a bitterly divided Knesset (with its 120 members) passed a law that limited the power of the Supreme Court of Israel to invoke a judicially manufactured “unreasonableness” standard to maintain a level of control over the political branches of government, a feature found nowhere else among Western democracies. The Knesset vote was 64–0, as the opposition walked out, protesting that this law amounted to a dangerous threat to democracy. The change will return to the political branches power over matters that nowhere else in the world are assigned to the judiciary.

This extraordinary power, which has been exercised since the 1990s, allows the Israeli Supreme Court to order the prime minister to fire from his cabinet any minister who is part of an investigation of criminal activities. This amounts to a clear circumvention of the basic law that only allows removal from office upon the conviction of some criminal offense. That same judicial authority allows for the Supreme Court to block natural gas deals or direct national welfare policy on the basic premise of the “right to a minimal dignified human existence.”

The incongruous nature of this power has long been criticized. Thus in 2007, Judge Richard Posner, in his day no shrinking judicial violet, wrote a review, titled “Enlightened Despot,” of a then-recent book titled The Judge in a Democracy, by Aharon Barak, the forceful judge who led the revolution. Posner noted that “Barak created out of whole cloth a degree of judicial power undreamed of even by our most aggressive Supreme Court justices.” After all, US Supreme Court justices work within the framework of a written constitution that has an amendment process; an elaborate system of separation of powers; checks and balances; and a bill of rights. Israel has no written constitution. None of the judicial power wielded by the Israeli justices could be improvised under a customary written constitution, which would be based, as Alexander Hamilton famously stated in Federalist No. 1, on extensive deliberation, e.g., a constitutional convention to form a government based on “reflection and choice” and not “accident and force.”

SEC’s Pointless Climate Disclosures


Last year, the SEC released very ambitious proposals for disclosures on climate-related issues with these soothing words: “Our core bargain from the 1930s is that investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures.” In the abstract, this message contains a good deal of sense. But in the concrete, the proposition contains some major ambiguities that need resolution to make good on this promise, especially in climate-related cases.

The first question: why would the government need to mandate disclosures of information when private parties, including sophisticated investors, can undertake their own investigations? The advantage of that voluntary system is that it does not require a public official to define exactly what must be done to secure “full and fair disclosure.” Parties who pose hard questions to issuers without getting satisfactory answers are free to go elsewhere. So the correct background assumption is that at best, the securities law should serve as a backup device to private inquiries, not as a first line of defense.

But it would be a mistake to assume that this backup never comes into play. Long before the passage of the Securities and Exchange Acts of 1933 and 1934, the common law had developed rules to deal with fraud, which necessarily had to address both concealment and nondisclosure. The danger of fraud is that it misstates the relative value of key items, especially when the seller makes it appear that his shares have extra value when they don’t. Two bad consequences follow. First, he swindles a buyer who pays $100 for an item worth only $75, and thus bilks his target of $25. Second, that individual imbalance also generates social costs by moving resources from higher- to lower-value uses. Yet the prohibition against fraud can easily be circumvented by stating some facts while omitting others. Whenever there is asymmetric access to information, the ability to conceal, or fail to disclose known facts, can have those same deleterious effects, which is why the SEC mantra of “full and fair disclosure” resonated long before the modern laws were passed.

‘Disinformation’ Campaign vs. Open Debate


On July 4, in Missouri v. Biden, Judge Terry A. Doughty issued a broad injunction whose primary function is to prevent the Department of Health and Human Services, the FBI, and multiple other federal agencies from speaking to or meeting with social-media companies for the purpose of “encouraging, pressuring, or inducing in any manner the removal, deletion, suppression, or reduction of content containing protected free speech.” The government has insisted throughout the litigation that its active cooperation with these companies is part of a vital public campaign to stop the spread of “disinformation” on social media, including its efforts to prevent what the Biden administration termed “vaccine hesitancy” on the part of the public.

The Doughty decision has generated fierce opposition in the liberal press. Thus Paul Barrett fumes in The Hill about “how a right-wing judge got social media and free speech dead wrong,” and then misses the point by writing: “Doughty’s dubious notion that there is a First Amendment right to spread socially harmful disinformation could well become constitutional law.” In so doing, he makes the fundamental blunder of insisting that he knows the right answer without the need for debate in which counterspeech, not suppression, is the order of the day. The Biden administration has appealed the ruling to the Fifth Circuit, which has already issued a stay order of Doughty’s initial injunction. The case seems destined for the Supreme Court. But no matter how far it goes, the government ought to lose.

The campaign against Doughty rests heavily on the claim that the suit, brought by two right-wing attorneys general, from Louisiana and Missouri, has all the marks of a political vendetta brought before a sympathetic judge in a favorable forum. The critics do not mention that three of the plaintiffs in this case are Dr. Jayanta Bhattacharya, Dr. Aaron Kheriaty, and biostatistician and epidemiologist Martin Kulldorff. Bhattacharya and Kulldorff were two of the original authors and signers of the Great Barrington Declaration, which sought in fall 2020 to defend the proposition that COVID-19 lockdown policies were harmful and should be replaced by a program of “focused protection” aimed at the most vulnerable subpopulations, typically older individuals often with additional comorbidities such as diabetes and kidney diseases.

Mixed Signals on Free Speech


Lorie Smith of 303 Creative.

In June, the Supreme Court announced its decisions in two important cases, both from Colorado, that take divergent views on freedom of speech. The more controversial was a 6-3 decision in 303 Creative LLC v. Elenis, which once again pitted claims of religious freedom against Colorado law.

As everyone now knows, Lorie Smith, the owner of 303 Creative, has strong, bona fide Christian beliefs that make her unwilling to prepare marriage websites for same-sex couples. She was more than willing to serve all customers, regardless of their sexual orientation or political preferences, in any other business transaction. Justice Neil Gorsuch held that any effort to force her to make a website against her will was a form of coerced speech, much as the forced flag salute imposed similar restrictions on Jehovah’s Witnesses eighty years ago, until upended by Justice Robert Jackson in West Virginia v. Barnette (1943).

Bankrupted by Green Follies


An anxious town meeting in Douglaston, New York, may have a great deal to tell us about the future of climate regulation in the United States. The topic of that June 20 meeting was Local Law 97, passed in 2019 by the city council in order to help implement New York City’s version of the Green New Deal. “Under this groundbreaking law, most buildings over 25,000 square feet will be required to meet new energy efficiency and greenhouse-gas emissions limits by 2024, with stricter limits coming into effect in 2030. The goal is to reduce the emissions produced by the city’s largest buildings 40 percent by 2030 and 80 percent by 2050.” The rule is softened for rent-regulated apartments, and it does not apply to single-family homes, which means that its impact will hit residential and manufacturing businesses in differing ways.

The most glaring catch in this law is that it applies to all major structures, even those constructed years ago, long before the current war against climate change became the defining issue of the day. An elementary bit of cost/benefit analysis should immediately demonstrate that it is far cheaper to impose restrictions of this sort on new construction than it is on older buildings, where it is hugely expensive to make any upgrades, even those that fall short of full compliance with the statute.

It was just that prospect that was brought home at the Douglaston meeting, where Robert Friedrich noted that his co-op development, with close to 3,000 units, would be hit by fines that start at $294,000 in 2024 (or $500 per unit) before rising to about $1.5 million (or $2,500 per unit) in 2030, with more to come later. But as Friedrich notes, there is no easy workaround because replacing his aging boilers would come to about $24.5 million, or $9,100 per unit. As for going completely electric, rewiring that one building to be all-electric would run between $35 million and $50 million—assuming the new facility could operate at current prices without fossil fuels. How these costs are divided between landlord and tenants remains unclear.

Tackle the Everlasting Rent-Control Mess


The Buckeye Institute and I have submitted to the US Supreme Court an amicus curiae brief urging the court to review the constitutionality of 2019 amendments to New York’s Rent Stabilization Law. That law further tightened the wall-to-wall restrictions, by among other things removing the provisions for vacancy decontrol when rents reached a certain level, last set at $2,774.76, and eliminating landlords’ previous option of raising rents by up to 20 percent between unrelated tenants. The challenge to that law in 74 Pinehurst LLC v. New York (2023) was brushed aside by a unanimous Court of Appeals for the Second Circuit on the basis of its view of established law.

That decision should be regarded as the next chapter of a self-inflicted tragedy that has cost the city and its citizenry billions of dollars in real economic growth. It is a progressive fantasy that price controls of this sort simply transfer wealth from greedy landlords to helpless tenants. The truth is otherwise.

The laws that mandate wealth transfers create a perverse set of incentives on both sides of the market. Potential developers are reluctant to invest in building or maintaining rental properties if their returns can be snatched away by legislative fiat. Current tenants, all local voters, will lobby for a system of price controls, from which they receive huge benefits, sufficient to fund their second homes in New England. Yet local tenants don’t care that everyone else—including new arrivals to the city—gets hurt when supply shrinks and quality of services declines because of insufficient revenues, thereby cutting needed tax revenues because of sagging property values. The administrative costs of running, or complying with, the city’s euphemistic Tenant Protection Laws add tens of millions.