Our Regulator-In-Chief

Richard Epstein*

Richard Epstein

Richard Epstein

Now that we are in the final lap of President Barack Obama’s presidency, the debate has begun over his historical legacy. The New York Times is contributing to that debate with a six-part series assessing his presidency called “The Obama Era.” The first article in that series, “Once Skeptical of Executive power, Obama Came to Embrace It,” argues that Obama is, in the journalists’ words, our “Regulator in Chief,” having issued about 50 percent more major orders than his predecessor George W. Bush. Though the article uncritically embraces Obama’s statist policies, the President’s major initiatives on labor markets, environmental protection, drugs, health care, and labor markets have been both more far-reaching and socially destructive than those of his predecessor.

What spurs the president to action is his moral certitude. He knows what is best for the country. To be sure, he disclaims any intention to regulate “just for the sake of regulating.” But there are, he believes, many good reasons to regulate. As he says, “there are some things like making sure we’ve got clean air and clean water, making sure that folks have health insurance, making sure that worker safety is a priority—that, I do think, is part of our overall obligation.”

Unfortunately, his bold statement reveals a deep misunderstanding of policy and the role of regulations in improving society. First, the mission of “making sure” that the right outcomes occur is beyond the power of any regulator, who has limited resources to face a multitude of potential problems. Establishing a set of coherent priorities requires an awareness of the necessary trade-offs that have to be made along the way.

Sometimes, for example, it is possible to develop clear rules, like traffic rules for public highways. But that approach misses the point in dealing with water or air pollution. The question here is not a binary one of whether or not we have clean air or water. The question is just how clean the air and water ought to be in a sensible system of regulation. Obama’s use of absolutes carries with it the implicit notion that we should push this goal to its natural limit. But the better approach goes first after low-hanging fruit, without trying to drive pollution levels close to zero. Sooner or later, often sooner, the costs at the margin start to outstrip the benefits, at which point the rational approach is to pull back.

Nonetheless, the Obama administration works the opposite way, by making extravagant assumptions in its cost/benefit analysis of regulations. For the President, the preferred strategy is to increase the estimates of benefits and to lower the costs of compliance, at which point the unthinkable becomes the inevitable. The writers of the New York Times piece note with evident approval that the President uses relatively high estimates of the “social cost of carbon” to justify very stringent regulations on power plant emissions. It is just that logic which led the Obama administration to use similar calculations for the “social cost of methane” to justify sharp restrictions for oil and gas drilling that go over the top, as well demonstrated by policy analystPaul Driessen writing for The Committee for a Constructive Tomorrow.

The EPA starts with the assumption that US releases will have some measurable impact on the environment. But the initial step should surely be to put the United States into global perspective where 17% of pollution “is from energy production and use; 26% comes from agriculture, landfills and sewage; and the remaining 57% is from natural sources.” The American contribution to global methane production is about 9 percent, of which about 30 percent comes from oil and gas drilling. The industry, moreover, has made substantial progress in reducing emissions from fracking, thereby reducing the need for regulation. Methane is, of course, just another word for natural gas, which is itself a valuable fuel, so strong incentives already exist for potential polluters to capture it.

A regulation cannot reduce the total level of emissions to zero. So the question is, why bother when oil and gas operations in the United States produce only 0.000004% of atmospheric methane? At most we can expect only a miniscule reduction of global temperature increases on the unlikely presumption that regulations could cut methane emissions in half, assuming that other distortions are not introduced into the system.

This same frame of mind occurs over and over again. To give but one other example, the mandate of the Food and Drug Administration is to make sure that only safe and effective medicines reach the market. Here, the case for regulation is even weaker than it is for pollution because medicines are not forced down the throats of unwitting patients, but are taken willingly under physician supervision. The FDA may have its doubts about the prescribing practices of physicians, who, as required by good medical practice, routinely prescribe off-label uses of approved drugs for patients—that is those uses not approved by the FDA. Nonetheless, the FDA’s constant refrain that detailed clinical trials are needed to protect unwitting patients from dangerous products sounds hollow. Worse still, the FDA uses an antiquated risk/reward approach that no sane person would apply in his or her own life. People in need want to know only whether they are better off taking a new and risky therapy than not. They do not care about the inability to document the safety or effectiveness of the drug except to the extent that it bears on their choice. The FDA clings to the outdated notion that long-term clinical trials supply the gold standard for evaluating new and controversial therapies.

Its overzealous approach has cost many lives and created many tragic situations, including the current impasse where the FDA has denied approval for drugs dealing with Duchenne’s muscular dystrophy, by slow-walking the drug eteplirsen through its endless approval process. Yet the cost/benefit analysis is a no-brainer. Without the drug, the boys who are diagnosed with the disease will suffer serious paralysis leading to death. With it, the production of the missing protein, dystrophin, gives them a chance of leading a more normal and healthy life. There is no downside. Yet the President has not issued a single executive order that has broken the FDA stranglehold one new medicines. Why? Because he does not fully consider the risks of excessive regulations and the problems those regulations create, including death. Sadly, none of this is mentioned in the New York Times piece.

Presidential blindness also extends to the health care system. What does it mean to insist that “folks have health insurance”? Universal insurance is a pipe dream, so the question is how best to improve the numbers. Removing endless mandates is a good first step. But the Obamacare health care exchanges are burdened with additional requirements that have led to widespread and repeated accounts of their failure. Yet there was not a word of this when Obama lauded the “progress” in health care brought about by his legislation in a recent “special communication” in JAMA, a prestigious medical journal. Nor did he address the adverse selection and moral hazard problems that are breaking the system. More mandates spell more trouble. Only deregulation can open nationwide markets to low-priced care. But for the man who wields the executive pen, the failure to make the exchanges work will be regarded as proof-positive that some government option is needed to fill the gap.

Finally, the President’s orders have done nothing good for the workplace. Yet the Times fails to critically evaluate the many initiatives of the Obama administration in the areas of wages and hour regulation. Instead, it lauds the increase in overtime eligibility brought about by changes in the wages and hour laws, without asking once how these rules will affect established patterns of business in such key areas as the gig economy, tech startups, university laboratories, and ordinary business. In some industries, the hour is a meaningless measure of productivity. In others, increasing the number of workers eligible for worker’s compensation requires many firms to reengineer key parts of their business. The implicit assumption of the President—and the Times—is that more regulation is better, without taking into account the administrative costs needed to put the new schemes into place, or the increased efforts of compliance.

Similar objections apply to the effort of the President to increase by executive order the minimum wage paid to employees of government contractors. It sounds like a humane policy in theory, but it’s important to ask if these high minimum wages will do good, given the evident risk that they will drive up unemployment, especially in teenage and low skill markets. The Times cites the claim of government economist Betsey Stevenson that higher minimum wages will reduce turnover and thus improve overall production. Then it adds, anecdotally, that Noble Prize–winning economist George Akerlof and his wife, Federal Reserve Chairwoman Janet Yellen, found that they got better babysitting care when they paid a premium over market.

But these time-worn arguments get matters exactly backwards. If higher wages will increase productivity, as they sometimes do, firm managers will not miss the point and will increase wages themselves. The correct government response therefore is to leave matters as they are, because no one in government knows on a firm-specific basis that a $15.00 minimum wage will improve workplace performance. Indeed, if the minimum wage is set too high, the present generation of parents would be less likely to pay their babysitters those premium wages once the base is artificially raised. It is just astounding that major economists concoct dreamy policies that are based on the premise that omniscient government officials are needed to correct the assumptions of the fools that populate ordinary businesses.

The damage done by each of these various initiatives helps explain the persistent anemic growth rates in the American economy. We need a president who has the humility to question his or her own assumptions. Whether we will get one seems highly unlikely given the depressing performance of both leading candidates.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Hillary Clinton Short-Circuited?

Andrew Napolitano*

Andrew Napolitano

Andrew Napolitano

When former Secretary of State Hillary Clinton was asked last week if she has misled the American people on the issue of her failure to safeguard state secrets contained in her emails, she told my Fox News colleague, Chris Wallace, that the FBI had exonerated her. When pressed by Wallace, she argued that FBI Director James Comey said that her answers to the American people were truthful.

After Clinton recognized that even her strongest supporters doubted her statement, she attempted to walk it back. In doing so, she repeatedly lied again, but offered as an excuse a bizarre claim that she had “short-circuited” her answer.

Who knows what that means? She claimed that she and Wallace were talking over each other and her answer had been misunderstood and misconstrued. Yet, Clinton said that Comey exonerated her as being “truthful” to the public when in fact he stated that she had been truthful during her three-hour, closed-door, unrecorded interview with the FBI.

Clinton told a group of largely pro-Clinton journalists that she had short-circuited her remarks. Then, she acknowledged that Comey had only referred to whatever she told the FBI as being truthful. Then, she lied again, by insisting that she told the FBI the same things she has told the press and the public since this scandal erupted in March 2015.

But that cannot be so, because she has issued a litany of lies to the press and to the public, which the FBI would have caught. In her so-called clarifying remarks, she again told journalists her oft-stated lie about returning all work-related emails to the State Department. She could not have told that to the FBI because Director Comey revealed in July that the FBI found “thousands” of unreturned work-related emails on her servers, some of which she attempted to destroy.

On the state secrets issue, she has told the public countless times that she never sent or received anything marked classified. She could not have said that to the FBI, because even a novice FBI agent would have recognized such a statement as a trick answer. Nothing is marked “classified.” The markings used by the federal government are “confidential” or “secret” or “top secret.” When Director Comey announced last month that the FBI was recommending against indictment, he revealed nevertheless that his agents found 110 emails in 52 email threads containing materials that were confidential, secret or top secret.

The agents also found seven email chains on her servers that were select access privilege, or SAP. SAP emails cannot be received, opened or sent without knowing what they are, as a special alphanumeric code, one that changes continually, must be requested and employed in order to do so. SAP is so secret that the FBI agents investigating Clinton lacked access to the code.

Could Clinton have legally received, opened, stored or sent a secret or top secret email without knowing it, as she has claimed? In a word: NO.

That’s because, on her first day in office, Clinton swore under oath that she recognized her legal obligation to recognize state secrets and treat them according to law -- that is, to keep them in a secure government venue -- whether they are marked as secrets or not.

This past weekend, we learned how deadly the consequences of Clinton’s failure to secure secrets can be.

Last Sunday, Iran executed a scientist who sold Iranian nuclear secrets to the U.S. The secrets were eventually passed on to Secretary of State John Kerry for his use during the negotiations that led to the recent U.S.-Iran nuclear accord. But the sale of the secrets and the U.S.’s payments for them (several million dollars) were consummated under then-Secretary Clinton’s watch. The scientist was lured back to Iran, fearing harm to his family. Upon his return, he was arrested, tried and convicted of treason.

One email sent to Clinton, from Richard Morningstar, a former State Department special envoy for Eurasian energy, referred to this scientist as “our friend.” The fact that Clinton’s aides referenced this spying scientist as “our friend” shows a conscious awareness of their duty to hide and secure state secrets -- his name and what he had done for the U.S. Yet, at the same time, Clinton put these state secrets at risk by having them sent to her via her non-secure home servers. This “our friend” email was a top-secret email, which Clinton failed to keep secure. It was either one of the 110 that the FBI found on her servers or one of the work-related emails she did surrender.

Could this email have been used as evidence in the treason trial of the now-executed scientist?

That is not an academic question. Most of the intelligence community seriously mistrusts Clinton, as her recklessness has jeopardized their work. Some feared that many of their undercover colleagues were compromised or even killed due to Clinton’s emails.

Hillary Rodham Clinton has established a clear and unambiguous record of deception. Her deceptions are not about the time of day or the day of the week; they are about matters material to her former job as Secretary of State and material to national security.

Do you know any rational person who continues to trust her?

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.

The Blue State Model Has Failed

Richard Epstein*

Richard Epstein

Richard Epstein

The defining economic truth of the last decade has been the want of sustained growth. Progressives and classical liberals agree that economic growth is a good thing, but they differ profoundly in how to best to achieve it. The only way to spur growth is to undo the structural barriers to gains from trade by pruning the law books of taxes and regulations that block these transactions in the futile effort to achieve redistribution. The combination of lower administrative costs, greater legal certainty, and improved private returns fueledAmerican growth in earlier times, and will revive it today.

Evidently, this message has not registered with progressive thinkers Jacob Hacker and Paul Pierson, professors at Yale and Berkeley respectively. In their New York Times column, “The Path to Prosperity Is Blue,” they criticize the Republican obsession to “cut and extract.” They deride that position for claiming, “Cut taxes and business regulations, including pesky restrictions on the extraction of natural resources, and the economy will boom.”

But this caricature displays confusion about many basic economic and political matters. The first is the appropriate role of regulation. Regulating extractive industries is always a complicated story, given the need to control against the pollution that can flow from the extraction and use of any raw materials. But the dangers in question are not confined only to coal and natural gas—they also include risks from such “clean” sources like solar and wind energy whose supposedly pollution-free technology can still incinerate birds or hack them to bits. The correct recipe for growth in extraction industries starts with increasing total useful output per unit of pollution, which is best achieved by combining effective controls on the demand side with controls directed toward limiting pollution and kindred ills on the supply side. “Keep it in the ground” does neither.

Hacker and Pierson are equally misguided on taxation. They make the argument that blue states dominate in all key areas, such as median household income, life expectancy and birth, high taxation of the top one percent, patent rates, and bachelor degrees. They attribute this to the amount of money that these states are prepared to spend on education in order to provide the human capital needed for general expansion. Sure, no one can quibble with the need for human capital formation. But that is a good reason to attack the public school monopoly by encouraging charter schools that can supply a better education at a fraction of the cost.  Hacker and Pierson, though, believe that any such declines in expenditures should be treated with suspicion, for they care more about how much money is spent than about how well it is spent. The success or failure of any education system, public or private, depends on injecting competition into it.

Hacker and Pierson make the methodological mistake of dwelling on static figures, like overall education and wealth levels, instead of trying to identify measures of economic growth. In particular, they take issue with Stephen Moore, one of Donald Trump’s economic advisors, for looking to measures such as “job growth or a state economic size” as indices of economic health. Their triumphant rebuttal of Moore’s approach is to claim that he should be an unabashed devotee of India because its huge economy creates millions of jobs each year.

Yet absolute size is exactly what growth measures should ignore. A better measure of a state’s prosperity is population changes—or how people vote with their feet. Do they move into a state or do they move away from it? This is the best objective indicator of the relative health of rival states.  By Hacker and Pierson’s logic, the advantages that the blue states have in terms of education, for example, should lure people into them. But as it turns out, the migration is in the opposite direction—to states like Texas, which have friendly business climates, and away from progressive bastions like New York. Just compare the changes in electoral votes in the two states to get a sense of the relative migration: In 1950, New York had 45 and Texas had 24, while in 2010, New York had 29 and Texas had 38.

Countless anecdotes illustrate the basic difficulty with the blue-growth thesis. Take Vermont, known not only for Bernie Sanders, but also for its string of ill-conceivable left-wing initiatives. Vermont has had virtually no growth in population during the last five years. But as journalist Geoffrey Norman has pointed out, the state’s high income and educational level did not insulate it from the fiscal reversals of its unaffordable single-payer program for medical services, which the Democrats are now flirting with at the national level in the wake ofthe breakdown in the health care exchanges under the Affordable Care Act. When one sees, as he reports, more “for sale” signs than political signs, it is a tacit admission that many people think that exit is the best option for a state system beyond repair. The very rich, especially rich retirees, may stay in the state, but ordinary people seeking job and business opportunities will leave in increasing numbers. Ironically, their exodus could increase average income within blue states and reduce it elsewhere—and the Hacker/Pierson measures ignore this effect.

A similar tale of woe applies to blue Massachusetts, which has benefited mightily from the technology hub located around the great universities in the Boston area. But even in Massachusetts, you get what you pay for, and the state is now in the business of purchasing its version of gender equity at the expense of wealth. Last week, Massachusetts unanimously passed yet another variation of pay-equity statutes, signed by its Republican governor Charlie Baker. The legislation forbids employers from asking prospective hires their salary history while still allowing workers to freely talk about wages and other compensation among themselves.

Under standard economic models, this statute is a business absurdity, for it is widely agreed that imperfect information is an impediment to gains from trade. The lack of ability to get key information will have the unfortunate effect of slowing down job mobility for all workers, and it will lead to a new cycle of senseless regulations that will have to take into account the job applicant who wants to offer his or her salary history to the employer to substantiate a request for a higher wage.

So why do this? The explanation offered by Karyn Polito, Massachusetts’ Lieutenant Governor, is that the measure will help overcome the gender gap in employment under which women earn 82 percent of men in the state and 79 percent of men nationwide. But it is ridiculous for Polito or anyone else to defend this law as a pro-growth measure, let alone one that could grow the economy by the size of the supposed wage gap, or $2.1 trillion annually. At best the increased wages are a transfer payment that has no impact on growth. But the reality is likely to prove far worse. Employers respond to incentives. Some will reconfigure their workforces; others will contract their operations; and others will just shut down. The added administrative costs are pure dead-weight losses. Never judge a law by its intended consequences.

The rich irony, of course, is that the defenders of the Massachusetts law offer no coherent theory to explain why or how mandated ignorance can promote the stated goal of workplace parity. Just after the legislation was enacted, the Wall Street Journal ran yet another story about how sophisticated personnel managers at successful businesses like Google were “overhauling” their pay practices to eliminate any perceived gender discrimination in the workplace. And why not? The firm that does not adequately pay for services will lose its best workers to competitors that do. So Google has thrown a wrinkle into the analysis when it says, perhaps for strategic reasons, that it asks about salary history only as a way to figure out the salaries competitors pay. But suppose the company uses it for other purposes. Why assume that that hurts women? The net effect of the Massachusetts statute is to make it harder for these firms to set accurate salaries and benefits for employees.

This same story plays out over and over again. The regulation of labor markets is regarded as the path to growth in rich blue states that are determined to undermine their own competitive advantage. The harm done by excessive regulation, taxes, and public expenditures plays itself out time and again in liberal bastions like Massachusetts, Vermont, California, Connecticut, Illinois, and New York. But as conventional progressive wisdom spreads to Washington, its implications will be dire: Jobs will disappear and wages will fall. One common response is that all a business needs to survive is a level playing field. Wrong. If that level field has the wrong institutional arrangements, it magnifies error. We are not far from the day when we shall have to modify the sage remark of John F. Kennedy that a rising tide will raise all ships. A rising tide of taxation and regulation will sink all ships if the progressive vision of Hacker and Pierson takes hold at a national level.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Lessons From the Deep State

Andrew Napolitano*

Andrew Napolitano

Andrew Napolitano

On the eve of the Democratic National Convention, WikiLeaks -- the courageous international organization dedicated to governmental transparency -- exposed hundreds of internal emails circulated among senior staff of the Democratic National Committee during the past 18 months.

At a time when Democratic Party officials were publicly professing neutrality during the party’s presidential primaries, the DNC’s internal emails showed a pattern of distinct bias toward the candidacy of former Secretary of State Hillary Clinton and a marked prejudice toward the candidacy of Sen. Bernie Sanders. Some of the emails were raw in their tone, and some could fairly be characterized as failing to respect Sanders’ Jewish heritage.

The revelation caused a public uproar during the weekend preceding the opening of the Democratic convention in Philadelphia last week, and it caused the DNC to ask its own chairwoman, Rep. Debbie Wasserman Schultz, to resign. When she declined to do so, President Barack Obama personally intervened and implored her to leave. She submitted to the president’s wishes, gave up her public role as chair of the convention and eventually resigned as chair of the DNC late last week.

In order to take everyone’s eyes off this intrusive and uncomfortable bouncing ball, the leadership of the DNC, in conjunction with officials of the Clinton campaign, blamed the release of the DNC emails on hackers employed by Russian intelligence agents. Many in the media picked up this juicy story and repeated it all last week.

Clinton promptly named Wasserman Schultz as a campaign consultant and complained that the Russians are trying to influence the presidential election. She did not complain about the unfairness manifested in the emails, complete with their religious prejudice; she only complained about Russian President Vladimir Putin's helping Donald Trump.

But the Russians had nothing to do with it.

Last week, William Binney, a 30-year career official at the National Security Agency turned whistleblower, revealed the unthinkable. Binney, who devised the software that the NSA has used to capture the contents of emails and cellphone conversations of all in America but resigned from the NSA because of the unlawful and unconstitutional manner in which the software was used, told a Philadelphia radio audience that the DNC hacking was most likely done by NSA agents.

Why would the NSA hack into DNC computers, and why would the NSA leak what its agents saw?

Here is where the deep state meets the political world. The deep state consists of intelligence, military, law enforcement and administrative agency personnel who aggressively protect their own interests, which transcend elections. Stated differently, many of these folks remain in opaque positions of power, and the governmental departments and agencies for which they work continue to expand, no matter which party wins the White House or controls Congress.

The deep state stays in power by a variety of means, some of which are lawful and not the least of which was visited upon the DNC last week. Binney knows the inside workings of NSA computers because he designed them. He knows how easy it would have been for any of the NSA’s 60,000 agents, many of whom have great antipathy toward Clinton, to employ their skills to frustrate her drive toward the presidency.

The intelligence community’s antipathy toward Clinton has two general sources. One is her misuse of emails containing state secrets. Among the top-secret emails that the FBI discovered on Clinton’s non-secure private servers were some that revealed the names of U.S. intelligence agents operating undercover in the Middle East. Because Clinton emailed secrets to others who the FBI found were hacked by hostile foreign intelligence services and because she used a non-secure mobile email device while inside the territories of hostile governments, her “extremely careless” use of her emails resulted in the termination of the undercover work of those whose cover she caused to be revealed. Many in the intelligence community also suspect that in some cases, U.S. undercover agents lost their lives because Clinton failed to keep their identities secret.

The other source of intelligence community antipathy to Clinton stems from her secret war waged against the late Libyan strongman, Col. Moammar Gadhafi. When she waged that war -- using intelligence, not military, personnel -- with the approval of the president and a dozen members of Congress, she exercised her authority as secretary of state to grant exemptions to a U.N. arms embargo of Libya. She wanted Libyan militias to have heavy-duty, military-grade arms with which to topple the Libyan government.

But the CIA and others warned her that she was arming terrorist groups, which was potentially lethal for some American intelligence personnel and which is a felony under federal law. One of those groups may have used Clinton-authorized, embargo-free weapons to assassinate Christopher Stevens, the U.S. ambassador to Libya, at Benghazi. Clinton disregarded the CIA’s advice and didn’t worry about anyone's finding out about it because she thought her emails would remain secret.

Binney’s conclusion that the NSA and not the Russians hacked the DNC is further supported by official White House silence. Last year, when Chinese intelligence agents hacked U.S. government computers and accessed personnel records of millions of federal government employees, the White House lodged long and loud protests with Beijing. This time, there have been no such protests to the Kremlin.

What does all this tell us?

It tells us that Hillary Clinton continues to be the queen of deception. It tells us that some of those in whose hands we repose our freedom for safekeeping do not wish to see her in the White House because of her demonstrated lawlessness and indifference to their work. And it recalls to our attention the danger and power of the deep state and its willingness to break the laws it has sworn to uphold.

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.

The Poverty Of Progressivism

Richard Epstein*

Richard Epstein

Richard Epstein

Political life is rich with contradictions. In her acceptance speech at the Democratic National Convention, presidential nominee Hillary Rodham Clinton insisted that the economic performance of the past eight years was “much stronger” than it was during the Bush years. More than fifteen million private-sector jobs were created under President Obama, she said; many more people are now on health insurance; and the automobile industry is booming. Her argument seemed to be that the Obama administration’s progressive policies led to this economic growth. But a closer look reveals a less rosy picture.         

The day after her speech, the Commerce Department reported that the slowest economic recovery since 1949 was getting slower still. Gross Domestic Product growth for the second quarter of 2016 was down to 1.2 percent. The cumulative growth rate during the years of the Obama administration was down to 2.1 percent. Consumer spending held up for the short run, but capital investment—a more reliable predictor of future economic growth—has fallen. So how can these disappointing figures be reconciled with interventionist progressive policies of the past seven and a half years?

The standard Democrat response is that the decline of the middle class is the source of our social and economic problems. But given the high levels of consumer demand, it is hard to argue that rising levels of inequality are to blame for our sluggish economy. Nonetheless, given their populist aversion to free markets, the Democrats propose to double down on existing policies: they want to move to a national $15-per-hour minimum wage, add paid family leave, increase the strength of public and private unions, and raise taxes on the rich—and then, presto, we shall reverse the steady decline in median household income, which has fallen from about $57,000 in 2008 to about $53,660 in 2016. But lest Republicans start pointing their fingers at the Democrats, the median household income reached its highest level of $58,000 in 2000 at the end of the Bill Clinton era. Household income also fell, but less precipitously, when George W. Bush was president.

Political campaigns are notable for their lack of reasoned argument, and the Clinton and Trump acceptance speeches were no exception. To understand their positions, it’s better to turn to the circle of advisors and the intellectual elites that back both parties. On this point, the sad truth is that Donald Trump’s major intellectual guide is himself, for he has been rightly deserted by the intellectual wing of the Republican party that has little or no affinity to a man who spurns pro-growth policies based on free trade and small government. The Democrats, by contrast, have no shortage of pundits to celebrate the cultural and economic contradictions of capitalism.

Representative of this trend is the largely misguided economic critique offered, in the Wall Street Journal no less, by Ruy Teixeira of the Center for American Politics, which is chock full of fatal errors of economic reasoning. His intellectual case is summarized in four propositions derived from Thomas Piketty’s well-known but highly flawed book, Capital in the Twenty-First Century. Teixeira’s exposé of the perils of unvarnished capitalism offers a causal explanation filled with missing links:

First, the basic dynamic of the system tends toward higher inequality. Second, this tendency makes economic growth less effective at raising living standards. Third, faster overall economic growth, even if unequally distributed, could potentially solve the problem. Except that, fourth, rising inequality slows down economic growth, rather than speeds it up.

There is no reason why capitalism (in contrast with crony capitalism) ought to tend toward inequality of wealth. Piketty starts with the basic assumption that the rate of capital growth is always greater than the overall growth in GDP, at which point the long-term dominance of capital becomes a mathematical necessity. One glaring weakness is his failure to note that much capital investment is in depreciable assets, so that capital accounts can move downward as easily as they can move upward. Under his view, labor should be virtually wiped out today, which ignores the simple point that huge portions of the upper one-percent derive their income from delivering high-skilled labor services—doctors, lawyers, bankers, developers—to the public at large. In addition, the huge fortunes acquired by present-day moguls—Bill Gates, Mark Zuckerberg, Jeff Bezos—may be represented in corporate shares, but much of that wealth derives from their early labor in some small garage or office.

Teixeira also fails to take into account the role of entry and exit into labor and capital markets. The first entrant with a new technology can reap billions for himself. Those gains come in part from undermining older and less efficient technologies, and thus act as a brake on any abnormally high returns garnered by current entrepreneurs and investors. Yet in the next phase of the cycle, new inventors and entrepreneurs will target those soft areas in the formerly new generation of incumbents and garner their own abnormally high rates of return. The only way to stay ahead of the curve is to keep on innovating. There is no iron law whereby initial success guarantees safety over the long term. Individuals and firms rightly exit markets when they can no longer compete. Inherited wealth tends to divide and shrink, not multiply and increase.

Nor is there any reason to believe that the innovations that generate high rates of return are less effective in raising the overall standard of living. As a theoretical matter, the typical innovator captures about 10 percent of the wealth that he or she creates, which means that the rest of that wealth is distributed through market transactions to employees, suppliers, and, most importantly, the customer base, which receives a panoply of new products and services at prices that are far below their reservation prices—i.e. the maximum amount that they are prepared to pay.

It follows that it is very difficult for any single group in a market economy to preserve its outsized returns against the competition of others. It is therefore false to insist that rising inequality operates as a barrier against further economic growth. It is always worth remembering that the period of most rapid growth in the United States—between 1870 and 1940—was achieved under a legal order that had a relatively strong commitment to laissez-faire economics and classical liberal political theory. The best evidence of the wide distribution of these gains is found in the enormous increase in life expectancy over that period, which spread to all segments of the population regardless of geography, race, or sex. There is no way, for example, that the overall increase in life expectancy from 47 to 54 in the twenty-year period between 1900 and 1920 could be concentrated in the top one-percent of the population. It had to be widely dispersed, and that could have only happened by a combination of felicitous events: The improvement of public health and infrastructure, whose benefits extended to the whole population even if its costs were largely borne by the relatively rich; the increase of superior products for consumption; and vastly safer working conditions on the job—all fueled by technological advances in every area of life.

Nor does Teixeira offer any sensible explanation for how rising inequality could ever slow down the economic growth that is achieved by voluntary market transactions. The great virtue of a market transaction is that it leaves both sides better off, even if they gain in unequal measures. The higher the rate of overall transactions, the greater the improvement in wealth, and the greater improvement in utility for all individuals, who can take advantage of the plethora of choices made available to them in an open environment. Ordinary transactions in goods and services are positive sum for the parties to them, and generate greater opportunities for third persons everywhere.

It is now possible to see how the progressive agenda thwarts the engine for growth in ways that private ingenuity finds it difficult to overcome. The initial observation is that virtually every progressive reform undermines free markets and tends to establish monopolies in labor, agriculture, and other industries. These rules frustrate the free entry into new markets. It is therefore inexcusable that the first impulse of the determined progressive is to impose restraints on voluntary exchange. These new taxes and regulations are always described benevolently as restrictions on the bad parties—on landlords, on employers, on insurers, on health care providers. But in practice they always operate as devastating constraint on both sides of the market. The labor law regime of collective bargaining that “protects” some employees also snuffs out opportunities for their nonunion competitors. Yet the Obama administration continues to place new obstacles that block access to marginal and teenage workers. It has sought to force franchisors like McDonald’s to be subject to liability for the alleged unfair labor practices of their franchisees; its Department of Labor works incessantly to subject ever larger segments of the economy, including the gig economy, to more serious regulations. These added regulations drive down employment opportunities and net wages, which keeps the next generation out of the middle class. When government raises the price of labor relative to capital, firms will be able to diversify in ways that workers cannot. Hence the greatest blows are landed on the intended beneficiaries of this misguided legislation.

The recent figures all point to a decline in business investment: capital, we are told, is on strike. And well it should be. The rise of economic populism sparks an increase in tax rates for both ordinary income and capital gains. The legal uncertainties over our vast regulatory apparatus also exert a downward force. The hyper-enforcement of the securities laws makes potential entrepreneurs and investors factor into their calculations the prospect of civil fines and criminal sanctions. The widespread hostility toward free trade warns future investors that they will face added difficulties in acquiring factors of production from abroad, which in turn makes it harder for them to sell inferior goods, with higher prices, in foreign markets. The massive subsidies for wind and solar energy impose higher taxes on more productive elements of society. Those burdens will be further compounded by the insatiable drive for revenue to fund expansion in free tuition, social security, and other transfer payments. The whole redistributive scheme bears little or no relationship to the classical liberal theory of taxation, which uses taxes chiefly to fund public goods for the benefit of all. The prospect of diminished returns thus explains diminished investment, sans any of Piketty’s intellectual diversions.

There is no one big story here. It is the accumulated distortions from multiple levels of misguided regulation and taxation, each of which is celebrated with scant regard to the negative synergistic effects of the entire package. Look through the entire Democratic National Platform, and it is clear that the party of “inclusion” holds out no welcome mat to innovation and growth. Rather, it hopes to target “the greed, recklessness, and illegal behavior on Wall Street” and stop “corporations’ outsized influence in elections.” The entire document is a collage of political posturing and economic naiveté. Donald Trump may be clueless on solutions. But his short term pessimism surely does a better job in capturing the national mood. Four more years of Democratic rule is the path to economic stagnation and social discontent.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Free Speech and Political Conventions

Andrew Napolitano*

Andrew Napolitano

Andrew Napolitano

This summer, we have all witnessed the heavy hand of government intervening in the freedom of speech, as the behavior of the Secret Service at both the Republican convention in Cleveland and the Democratic convention in Philadelphia was troubling and unconstitutional.

Though the First Amendment was originally written only to restrain Congress ("Congress shall make no law ... abridging the freedom of speech"), it is now uniformly interpreted to restrict all government in America from abridging the freedom of speech.

The reason this freedom is referred to as "the" freedom of speech is to reflect the belief of the Framers that the right to speak freely is pre-political. Stated differently, the freedom of speech is an integral aspect of our humanity. The government does not grant the freedom of speech; it is prohibited from interfering with it.

This is known as a negative right, in the sense that government is negated from interfering with a personal natural right. A natural right is one whose exercise does not require a government permission slip. Speech is the classic example.

The reasons for this are numerous, and not the least of them are our natural inclinations to think as we wish and to say what we think in pursuit of happiness and personal fulfillment. The practical reasons for this right are the needs of an informed electorate to challenge the government and demand transparency and accountability.

How did this play out during the hot weeks in Cleveland and Philadelphia? Not well.

Though the political parties are private entities with their own rules, they have invited their members and supporters to these quadrennial conventions for the purpose of engaging in public political conversations.

Yet if the Republicans wanted only pro-Trump sentiments to be expressed in the hall in Cleveland and if the Democrats wanted only pro-Clinton sentiments to be expressed in the hall in Philadelphia, since neither entity is the government, both are free to abridge the freedom of speech without legal consequences.

The consequences of such abridgments would presumably be political; those whose speech is silenced and those who oppose silencing public political speech would cast their votes against the silencers.

Yet this summer, the heavy hand of government was involved in silencing speech.

Here is the back story.

Because both Donald Trump and Hillary Clinton are entitled to Secret Service protection by virtue of a federal statute, the Secret Service either offered or demanded that it be the lead law enforcement agency providing general security -- not just to Trump and Clinton but for everyone -- at the conventions. In both cities, local officials went along with this.

The freedom of speech issues arose when the leadership of both conventions got so cozy with the Secret Service that they began using the federal agency as if it were private security, and they did so in such a manner as to preclude judicial intervention in aid of the freedom of speech.

Thus, when the Republican leadership wanted to quell a "Never Trump" boomlet on the convention floor, it had the Secret Service remove all reporters and producers -- including some of my Fox News colleagues -- from the floor. And when the Democratic leadership wanted to silence a pro-Bernie Sanders onslaught on the convention floor, it had the Secret Service confiscate Sanders placards from delegates on the floor.

The government removal of the press by command of the Republicans and the government removal of Sanders placards by command of the Democrats constitute not only an unheard-of commandeering of the government's coercive powers for a private purpose but also the government's abridging the freedom of speech. And all this was done quickly and without notice -- and without an opportunity for redress to the courts.

The first duty of government is to preserve life, liberty and property. It is a strange and dangerous government that stifles freedom for some fleeting private purpose. It is equally strange that a freedom-loving people would tolerate this.

The whole purpose of the First Amendment and its underlying values is to encourage open, wide, robust, unbridled debate about the policies and the personnel of the government. The prevailing judicial interpretations of these values quite properly keep the government out of the business of assessing the value and propriety of public political speech.

The First Amendment demands that the test for acceptance or rejection of speech in the marketplace of ideas be made by individuals -- uninfluenced, undeterred and unmolested by the government.

When the government stifles free choice in an area such as speech, it is no longer the people's servant. It has become their master. Do you know anyone outside the government who wants that?

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.

Are Voter ID Laws Racist?

Richard Epstein*

Richard Epstein

Richard Epstein

There are few things as controversial in American political life as voting rights. The issue surged to the fore this past week in Veasey v. Abbott when the Fifth Circuit, by a 9-6 vote, delayed the enforcement of Texas Law SB 14. This law limited the forms of photo identification that could be used when registering to vote to state driver’s licenses, U.S. passports, military photo IDs, concealed weapon permits, and U.S citizenship certificates with photographs. Although the law provided for some exceptions for poor and disabled persons, it has been attacked as the most restrictive voting rights law in the United States.

A variety of plaintiffs mounted both a constitutional and a statutory challenge to the law—the former under the Equal Protection Clause of the Fourteenth Amendment, and the latter under Section 2 of the Voting Rights Act, as amended in 1982. The plaintiffs’ burdens under the two provisions are distinct. It has long been accepted under the 1976 Supreme Court decision in Washington v. Davis that an equal protection challenge to any law cannot rest simply on proof that the law has a disparate impact by race, but rather, must show that there was some intention on the part of the lawmakers to abridge those rights on the grounds of race.

In contrast, the 1982 Amendments to the 1965 Voting Rights Act gravitated toward a stricter standard by prohibiting any law “which results in a denial or abridgement of the right of any citizen of the United States to vote on account of race or color.” That standard is then further refined in ways calculated to invite litigation, taking into account the possibility that the “political process is not equally open to participation by members of a protected class”—code for minority members, who have “less opportunity to participate in the political process.”

The issue of the constitutionality of photo IDs arose in 2008 in Crawford v. Marion County Election Board, where the Supreme Court, by a 6-3 vote, upheld an Indiana ID law that required voters to show either state or federal picture ID by denying that such a requirement unduly infringed on anyone’s right to vote. The Court only looked at the constitutional challenge and did not consider the 1982 Voting Rights Amendments, presumably because none of the parties thought it could support a claim. Instead, Justice Stevens wrote that the law was neutral on its face, and had a permissible justification of preventing voter fraud that could upset the results of individual elections and undermine public confidence in the electoral process.

One way to look at Crawford is that preventing voter fraud is important enough to justify the small burden on individual citizens of showing photo ID—a burden no greater than that faced for getting on an airplane. The record makes this view attractive. In Texas, the required IDs were held by over 95% of the population, but among the registered voters, “Hispanic and Black voters were respectively 195% and 305% more likely than their Anglo peers to lack SB 14 ID.” No one claimed this differential rate of registration was attributable to any form of state discrimination. Texas did not charge for the required ID, though there was evidence in the record that some individual plaintiffs had difficulty in navigating the system. It was also agreed that the Texas law passed in 2011 only after tremendous political struggle on a straight party-line vote, which reflected the dominance of Republicans in both houses of the Texas legislature.

There is little question that the Fifth Circuit could have easily dismissed the entire case by a respectful citation to Crawford. But instead, it took out the heavy artillery to upend the Texas statute. If Veasey survives, it will be exceedingly difficult for any photo ID law to pass muster in the United States, at least in the absence of heavily documented instances of fraud, and perhaps not even then.

Veasey goes off the rails with its uneven treatment of the fraud question. The debate over the frequency of individual fraud in various elections has been much mooted and the received wisdom is that the fraud risk is overrated in most cases. But the hard question is by exactly how much. The Veasey majority took an overly dismissive view on the question when it treated the risk as minimal, given that there were “only two convictions for in-person voter impersonation fraud out of 20 million votes cast” before the law was passed. But that result is also consistent with the proposition that significant fraud—including the organized fraud-rings found elsewhere—is going undetected by the criminal system, and a simple ID law is needed precisely because the criminal system is so weak. “Landslide Lyndon” Johnson’s victory in the 1948 senatorial election was, after all, rife with fraud. If it is permissible to refer to the inexcusable racism of 1930s Texas with respect to voting, why not take a similarly long view on fraud?

Once the fraud issue was downplayed, the majority in Veasey tackled both the constitutional and the statutory claims. On the constitutional issue, the inescapable difficulty with any intent test is that professional politicians on both sides of the aisle know which party is likely to benefit from any given enactment—which explains why the Democrats stonewalled and the Republicans pushed SB 14 over multiple legislative sessions. But if the simple knowledge of a disparate impact were sufficient to establish the intent requirement in an equal protection case, the jig is over: it is always there, and it always cuts in favor of the Democrats whose own political machinations are outside the purview of judicial review because they are acting on behalf of some protected class. Hence it takes more to establish the intent requirement, and it is here that the majority badly flubs the issue.

Let’s start with the simple point that no one found any statement by any person that indicated an invidious racial motive. To the majority, however, even this clean record was suspect, because it was quite happy to insist, without any documentation, on “the sad truth that racism continues to exist in our modern American society despite years of laws designed to eradicate it.” If you start with that presumption, you look for ways to confirm it. At this point, the majority first cautions against using evidence of misdeeds long ago to prove the charges, but nonetheless refers back to admitted cases of racial injustice, none of which are more recent than 1975. It also thinks it is permissible to infer racist sentiments from official opposition to the Voting Rights Act, which only hampers the ability of politicians to criticize the existing law, one that in my view has long been overly-intrusive into the electoral process.

There was clearly not enough in this disconnected set of dribs and drabs to sink the law, so the Circuit Court then mistakenly remanded the case for further findings to see if this portion of the case could be bulked up by circumstantial evidence gleaned by scrutinizing the long political battle. The simple point here is that every reform undertaken today is reviewed in light of sins committed decades ago. It is easier to think back to the original sins of America’s racist past than to trumpet the manifest progress on race relations that has only come undone in the last several years of heightened racial animosity.

The Fifth Circuit majority engages in equally dubious tactics in finding that the laws in question work a disparate harm on minority individuals. Once again, the heavy weight of the past is said to block equal participation in the political process, without any explanation of the major changes in legislation and voting behaviors since 1965. The 1982 Senate Report on the Voting Rights Amendments places a lot of emphasis on the various electoral devices of recent memory that were used to disenfranchise minority voters: the use of slates and large districts, for example. But the only issue that resonates today is the insistence that the law take into account “the extent to which members of the minority group in the state or political subdivision bear the effects of discrimination in such areas as education, employment and health, which hinder their ability to participate effectively in the political process."

At this point, it is easy to draw up a story about how the extra burdens of the voter ID laws fall disproportionately on minority persons, given that persistent differences by race in education, employment, and health are the norm today (in part because of the misguided progressive policies that hamper charter school education, place minimum wage and union barriers against minority employment, and block the entry of low-class corporate healthcare providers in minority neighborhoods). And it is easier still to select individual instances where the burdens of compliance are higher than the norm. But the central point is that nothing in the majority opinion stated, let alone demonstrated, that minorities who suffer from educational, employment, or health disadvantages find it any more difficult than white individuals to get the appropriate IDs. The sole objection was that there were more minority individuals in this vulnerable group, so that the disparate impact claim is always made out once the standard demographic information is trotted out.  By this dubious logic, it is possible to order the removal of existing safeguards against fraud because they too have a disparate impact.

It follows that, in light of the double-barreled attack mounted in Veasey, it will be exceedingly difficult to sustain any changes in voter ID laws. This is the highly likely result of any decision that poo-poos the fraud issue, and then relies heavily on past history to taint any efforts to tighten up ID requirements for elections. The long-term consequences of this decision are likely to prove unfortunate. For one thing, much progress could be made in voting rights by simply redoubling registration drives in poor neighborhoods. But instead, the litigation works in the other direction by encouraging people not to get the appropriate IDs if weaker forms of securing the ballot are available. Indeed, the occurrence of fraud is most likely in marginal neighborhoods where white, black, and Latino individuals may well have the weakest attachment to the overall political system.

The decision in Veasey is a careless condemnation of the current system on racist grounds. It may well be that the Texas system is far from ideal, and it would be foolish for any outsider to be overconfident that the ideal set of precautions has been adopted in this case. But based on the weak evidence presented here, it is surely a mistake for a majority of the Fifth Circuit to block the law within months of a presidential election. The Supreme Court should stay Veasey and review the outcome in light of its own now denigrated decision in Crawfold. The odds are 4-4 that this will not happen.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

What if the Fix Was In?

Andrew Napolitano*

Andrew Napolitano

Andrew Napolitano

What if the folks who run the Department of Political Justice recently were told that the republic would suffer if Hillary Clinton were indicted for espionage because Donald Trump might succeed Barack Obama in the presidency? What if espionage is the failure to safeguard state secrets and the evidence that Clinton failed to safeguard them is unambiguous and overwhelming?

What if President Obama never really liked his former rival whom he appointed as his secretary of state? What if he had no real interest in seeing her succeed him because he and his wife simply could never trust her?

What if, when Clinton suggested to the president that the U.S. wage a secret undeclared war against Libya, the president went along with it as a no-lose proposition? What if he assumed that if her secret war succeeded he’d get the credit and if her secret war failed she would get the blame?

What if the means of fighting the secret war consisted of employing intelligence assets rather than the U.S. military? What if Clinton concocted that idea because the use of the military requires a public reporting to the entire Congress but the use of intelligence assets requires only a secret reporting to a dozen members of Congress?

What if Clinton expanded her war by permitting American and foreign arms dealers to bypass the NATO arms embargo on Libya by selling heavy-duty, military-grade arms directly to militias in Libya? What if this was Clinton’s dream scenario -- an apparent civil war in Libya in which the victorious side was secretly armed by the U.S., with democracy brought to the country and Clinton the architect of it all?

What if the CIA warned Clinton that this would backfire? What if the CIA told her that she was arming not pro-Western militias but anti-American terrorist groups? What if she rejected all that advice? What if providing material assistance to terrorist groups is a felony? What if the Department of Political Justice actually obtained an indictment of an American arms dealer for going along with Clinton’s schemes?

What if Clinton’s secret war in Libya was a disaster? What if she succeeded in toppling the Libyan leader, Col. Moammar Gadhafi, only to have him replaced by feuding warlords who control anti-Western terrorist groups that not only failed to produce democracy but instead produced destruction, chaos, terror, torture and death?

What if Clinton managed her Libyan disaster using a non-secure email system even though she regularly sent and received state secrets? What if she sent many emails containing state secrets about her Libyan war to her friend Sid Blumenthal? What if Blumenthal had been turned down for a State Department job by the president himself?

What if Blumenthal did not have a government security clearance to receive lawfully any state secrets? What if Clinton knew that? What if the FBI found that Blumenthal’s emails had been hacked by intelligence services of foreign governments that are hostile to America?

What if there were terrible secrets that Clinton wanted to keep from the public and for that reason she used private servers and non-government-issued mobile devices? What if those terrible secrets involved her enabling the unlawful behavior of her husband and his shoddy, unlawful foundation? What if Mrs. Clinton made decisions as secretary of state that were intended to enrich her husband and herself and she needed to keep emails about those decisions away from the public?

What if the president recognized all this and authorized the FBI to conduct criminal investigations of Mrs. Clinton?

What if, after the ascendancy of Donald Trump in the Republican presidential primaries, the president warmed up to his former rival? What if Trump so got under the president’s skin that it drove him to embrace Clinton as his chosen successor and as the one Democrat who could prevent a Trump presidency?

What if the president sent word to the Department of Political Justice to exonerate Clinton no matter what evidence was found against her? What if, in response to that political interference, the FBI investigation of her failure to safeguard state secrets and her corruption took irregular turns?

What if FBI management began to intimidate FBI agents who had the goods on her? What if FBI management forced agents to sign highly irregular agreements governing what the agents can tell anyone when it comes to what they learned about Clinton?

What if the Department of Political Justice never subpoenaed anything from Clinton? What if it never convened a grand jury to seek and hear evidence against her? What if the FBI requires a grand jury to subpoena documents and tangible things? What if it is highly irregular for a major FBI criminal investigation to be undertaken without a grand jury?

What if the attorney general was involved in a publicity stunt with Clinton’s husband and then used that stunt as an excuse to remove herself and her top aides from making decisions in the case? What if this was a sham, done so as to make it appear that FBI professionals -- rather than someone politically motivated, such as the president or the attorney general -- were calling the shots in the case?

What if Hillary Clinton has engaged in espionage and public corruption and FBI agents know that she has? What if they have evidence to prove it but they could not present anything to a grand jury because President Obama wants Clinton, and not Donald Trump, to succeed him in office? What if this blatant political interference with a criminal investigation is itself a crime? What if, midstream in this criminal investigation, the fix was put in?

What do we do about it?

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.

Religious Liberty Under Siege in Mississippi

Richard Epstein*

Richard Epstein

Richard Epstein

Last month, Judge Carlton W. Reeves of the Northern District of Mississippi handed down an extraordinarily misguided decision in Barber v. Bryant by issuing a preliminary injunction against House Bill 1523, Mississippi’s newly passed religious liberty law, just minutes before it was to go into effect. The court found that House Bill 1523 likely denied the plaintiffs—a diverse group of supporters of same-sex marriage—their rights under Fourteenth Amendment’s Equal Protection Clause, and, furthermore, established preferred religious beliefs, violating the First Amendment’s Establishment Clause. Phil Bryant, the governor of Mississippi, has filed papers in the Court of Appeals to dissolve that temporary injunction. State Attorney General Jim Hood has declined to join in that defense of the Mississippi law. As someone who gave some brief advice and encouragement to Mississippi’s appellate lawyers, I think that their motion should be granted, given the major points of principle that it raises.

To put matters in context, HB 1523 was the latest effort to provide explicit protection of religious liberty and moral conscience for those individuals who are opposed to same-sex marriage. At no point does the legislation limit the right of any person to participate in a same-sex marriage, which would be an obvious nonstarter given Obergefell v. Hodges, a highly dubious Supreme Court decision, which held that the Equal Protection Clause of the Fourteenth Amendment guaranteed that right to all persons. House Bill 1523 does not seek to dislodge or compromise that decision. Indeed, it would have been dead on arrival if it had attempted any such maneuver. But as is often the case, no one quite understands the scope of a particular constitutional right until its correlative duties are accurately specified.

The correct reading of Obergefell comes in two parts. First, no private person can seek to block the performance of a same-sex marriage. Second, some public official must be prepared to solemnize those marriages, so that they have the full force and effect as traditional marriages. What the decision in Obergefell did not do, and indeed disclaimed, was the notion that people who are opposed to same-sex marriages had to participate in their validation. Even public officials can escape that duty under House Bill 1523 so long as alternative arrangements are made to ensure that “the authorization and licensing of any legally valid marriage is not impeded or delayed as a result of any recusal.” House Bill 1523 thus represents the kind of sensible accommodation that has long been the hallmark of religious liberty.

The explanation for this distinction is not hard to find. When any state bans same-sex marriage, it is using its monopoly power to block the consensual activities of private persons. They have no place else to go once that ban is in effect. The two conditions above neutralize that blocking power. But that mission is fully accomplished without conscripting other individuals to participate in these relationships, or indeed any other arrangements. The correlative duty commanded by Obergefell is noninterference; it is not support, participation, or approval. The Mississippi statute tries to cement that understanding into law by enacting three related provisions.

First, House Bill 1523 protects only those individuals with “sincerely held religious beliefs or moral conviction” that marriage is properly confined to one man and one woman, that sexual relationships should be limited to such marriages, and that the terms male and female refer to “an individual’s immutable biological sex as objectively determined by anatomy and genetics.” The protection applies to participation in religious services, but also to all employment-related and housing activities subject to the same caveat. The wording was chosen in part to make it clear that no explicit preferences were given to religious persons or groups on this score, in order to forestall the charge of favoritism. But there is little doubt that the religious element was the primary motivation for the provision.

Judge Reeves struck down the Mississippi statute because he did not grasp the fundamental distinction between forcing others to yield to your beliefs and just asking to be left alone. His confusion is evident from his opening salvo that quotes the Supreme Court in Epperson v. Arkansas (1968) as saying that the Establishment Clause of the First Amendment means that the state “may not aid, foster, or promote one religion or religious theory against another.” He then uses McCreary County v. American Civil Liberties Union (2005) to argue that it violates the Establishment Clause—“Congress shall make no law respecting an establishment of religion”—“when the government acts with the ostensible and predominant purpose of advancing religion.”

At no point, however, does Judge Reeves attempt to put either of these broad generalities into context. And context matters. The words in Epperson were directed to an Arkansas law that prohibited the teaching of evolution in public schools—a clear instance of a state-compelled law that binds all persons inside the legal system. No one could describe this as a situation in which private parties sought to run their own lives and businesses free of government interference. Similarly, McCreary County struck down two county resolutions that announced that the Ten Commandments were Kentucky’s “precedent legal code,” and authorized extensive religious exhibits on public property intended to extol its virtues. There is no similar commitment of public resources in House Bill 1523. It is practically legal malpractice to rip out of context words that were rightly intended to knock down state coercion for religion and the state subsidy of religion while invalidating a statute whose whole purpose was to insulate private parties from any form of public coercion.

One irony in this case is that Judge Reeves noted, with apparent approval, that Mississippi had passed its own Religious Freedom Restoration Act. Mississippi’s law, in line with the federal version, provides that the state may not substantially burden a person’s exercise of religion, unless it does so to further a compelling governmental issue by the narrowest form possible. This law has a broader scope than House Bill 1523, but its protection is not absolute, although it may be when these two conditions are satisfied. When the original federal statute was passed in 1993, the phrase “compelling state interest” had a reasonably clear meaning, according to which some powerful necessity had to be demonstrated to override the original constitutional right. The Mississippi statute refers to “a government interest of the highest magnitude.” Traditionally, this language meant that the state could curb religious freedom in order to prevent riots in public places. But in line with the general jurisprudence of the time, such instances were few and far between.

Not any more, one can at least argue. More concretely, the argument has been commonly made that the elimination of discrimination in all areas of American life counts as a compelling state interest, of course of the highest magnitude. Just that argument was put forward successfully in Elane’s Photography v. Willock (2014), where the New Mexico Supreme Court held that its state’s Human Rights Act prevented all private discrimination on grounds of sexual orientation. Thus when Elane’s refused to photograph a commitment ceremony for a lesbian couple, at a time when same-sex marriage was not legal in New Mexico, its appeal to the First Amendment protections of religion and speech fell on deaf judicial ears, in a case that the United States Supreme Court denied certiorari. It is therefore reasonable for the defenders of religious liberty to think that the potential evisceration of RFRA required the sterner protection of House Bill 1523.

In this case, they are right. Because there is only this narrow focus on religious and moral convictions, it is virtually impossible to think of any situation where the exercise of that right would in fact cause actionable dislocations to other people. The word “actionable” has to be inserted because otherwise any distaste for the actions of others, e.g. flag burning, becomes a harm that must be put into the scales, which means that every refusal to deal necessarily hurts the individuals who were rejected and their sympathizers.

Nonetheless, this overbroad account of harm resonated with Judge Reeves, who noted that the various plaintiffs could suffer some irreparable harm if the injunction in question were delayed. But at this point, a cold look at the relative tradeoffs explains why these alleged harms should be disregarded. On the one side, the targeted individuals may face the choice of having to go out of business to protect their religious or moral conscience. This is no better than the choice between your money and your life. But just what is the harm on the other side? There are thousands of employers and landlords, and dozens of vendors that are eager to cater to the interests of gay and lesbian couples. Indeed, it is highly unlikely that they would (as is their right) hire a photographer or caterer who was unsympathetic to their views. So how do individuals with many choices suffer from irreparable harm when persons who have no choice do not? The point should be as clear to the opponents of religious liberty as to its defenders.

Given this current impasse, it is critical to rethink the basic legal rules on private discrimination that set the stage for Barber v. Bryant. House Bill 1523 was drafted in ways in which the right to refuse service was tied to religious and moral convictions. Otherwise, a broader right would run into a collision course with one of the most venerable parts of the Civil Rights Act of 1964, the public accommodation provisions embodied in Title II. Historically, Title II had two potent justifications. The first is that it was a necessary corrective against massive abuses of state power under Jim Crow. Thankfully, that risk is gone today. The other justification was that the traditional common law view—still good today—that any common carrier or public utility, by virtue of holding a monopoly position, was duty-bound to take all customers on reasonable and nondiscriminatory terms. When ordinary people have no where else to go for power, water, or transportation, they are entitled to get these services at reasonable rates. The rule covered all cases of racial discrimination, but it was not limited to it.

The implicit drawback of this position was that there was no duty to serve anyone in a competitive industry, precisely because disappointed customers had a full range of alternatives to which they could turn. The common law rightly held that refusals to deal in competitive industries counted as basic liberties. In the progressive run-up to the New Deal, the argument was put forward that every refusal to deal in economic matters was an exercise of coercion—the kind of coercion that the state had a compelling interest to stop. That misguided view marked the end of economic liberties in all cases, and led to the passage of laws like the 1935 National Labor Relations Act, which forced collective bargaining in otherwise competitive industries.

The battle over religious liberties is a novel extension of the older war in one of the few bastions of individual liberty. Until recently, the older view on religious liberties exempted private religious beliefs from this hopelessly broad definition of coercion. But with the new progressive resurgence, that protected liberty shrinks while the domain of government power expands. It is a genuine intellectual tragedy that the people who speak on behalf of religious liberties—including the plaintiffs in Barber, many of whom represent gay, lesbian, and transgender people—can be so alert to their own claims of personal liberty, and yet so insensitive and indifferent to the claims of others.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Hillary Clinton and Personal Honesty

Andrew Napolitano*

Andrew Napolitano

Andrew Napolitano

When FBI Director James Comey publicly revealed his recommendation to the Department of Justice last week that former Secretary of State Hillary Clinton not be prosecuted for espionage, he unleashed a firestorm of criticism from those who believe that Clinton was judged by different standards from those used to judge others when deciding whether to bring a case to a grand jury.

The FBI investigation had a bizarre ending to it. FBI recommendations are never made public as this one was. Attorney General Loretta Lynch had been compromised by her politically disastrous but legally consequential meeting out of the view of the media with Bill Clinton just one week before Comey's announcement. Whatever they discussed, the overwhelming public impression was such that Lynch removed herself and her senior aides from the case, effectively leaving the FBI to have the final say. This is unheard of in the post-Hoover FBI.

The Comey announcement itself gave two reasons for recommending against indictment. One was that "no reasonable prosecutor" would take the case. That is not a judgment the FBI gets paid to make. The FBI's job is to gather, present and evaluate facts and evidence, not predict what prosecutors might do with it. The other stated reason for recommending against indictment was that though Clinton may have been "extremely careless" in handling state secrets, she was not "grossly negligent," which is the standard required by the espionage statute.

Yet Comey also acknowledged that Clinton sent state secrets to nongovernmental colleagues who lacked national security clearances, that those people were hacked by hostile intelligence services and that she used her numerous non-secure mobile devices recklessly while inside the territorial borders of those hostile governments. If all that is somehow extremely careless but not grossly negligent, then many who have done far less than Clinton -- and have been prosecuted and convicted -- were wrongly prosecuted.

Since Comey's announcement last week, several new factors have come to light. One is that the DOJ never presented any evidence to a grand jury. It never sought subpoenas from a grand jury. This is unheard of in major criminal investigations because the FBI alone has no subpoena power and needs a grand jury to issue subpoenas for it.

The absence of a sitting grand jury also makes one wonder about the circumstances under which and the purpose for which the DOJ obtained immunity for Bryan Pagliano, Clinton's internet technology adviser. She paid him $5,000 to migrate her public and her secret State Department email streams from the government's secure servers to her own non-secure servers. Immunity, which is essentially the pre-indictment permanent forgiveness of criminal behavior, cannot be given lightly and can only be given in return for testimony -- usually to a grand jury or a trial jury. Strangely, that was not the case here.

Nevertheless, Clinton's persistent problems with personal honesty have brought her face to face with three more criminal investigations. One is for public corruption. The second is for perjury. And the third is for misleading Congress.

The public corruption investigation has been underway for a few months. The allegations are that she exercised the powers of her office as secretary of state to enrich her husband and herself. The evidence here is ample. There are dozens of documented instances in which foreign governments and individuals received beneficial treatment from her State Department -- usually exemptions from compliance with American laws or regulations -- and then collectively gave hundreds of millions of dollars to the Clinton Foundation at a time when it was not a registered lawful charity.

The second investigation Clinton faces is for perjury. This arises out of a Freedom of Information Act civil lawsuit during which she swore in writing and under oath, citing the phrase "under penalty of perjury," that she surrendered all of her work-related emails to the State Department. When she left the State Department, she effectively took all of her emails with her. Then, when the FOIA cases began, she returned about half of what she had taken, claiming that the other half was personal.

The FBI found that she failed to return thousands of work-related emails, some of which she and her lawyers attempted to destroy and some of which they succeeded in destroying. Who ordered the destruction?

Finally, Clinton will most likely be confronted with charges of misleading Congress. Misleading Congress consists of intentionally creating a false impression in response to material congressional questions. She did this when she denied to the House Select Committee on Benghazi that she had sent or received emails via her home servers that contained state secrets.

The FBI found 110 emails in that category, at least two dozen of which were at the highest level of protection that the government accords its secrets. She also told that same committee that she had surrendered all her work-related emails to the State Department.

Former New York Yankees pitching great Roger Clemens was tried twice (after a trial that ended with a hung jury, he was ultimately acquitted) for misleading Congress when he was forced to speak to a House committee about the contents of his blood and urine as a baseball player. Clinton has misled Congress about her lawful obligations as secretary of state, and she skates free.

Back in the Whitewater days, when the propensity of both Bill and Hillary Clinton to lie routinely and naturally first became apparent to the media and the public, the late, great New York Times columnist William Safire referred to Mrs. Clinton by a moniker that enraged her husband. He became so fearful of the truth and so furious with Safire that he publicly threatened to punch Safire in the nose.

Safire called Hillary Clinton a congenital liar. He was right. That was 20 years ago. Some people never change.

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.