Richard Epstein: Progressively Bankrupt

A recent story in the Wall Street Journal foretells a grim financial future for Connecticut, the wealthiest state in the union by per capita income. Its great wealth, however, does not translate into financial stability. For this coming year, the state expects a $400 million shortfall in tax collections that will only compound its looming budget deficit of some $5.1 billion, attributable to the usual suspects: service on existing debt, a lowered credit rating, surging pension obligations, runaway health care expenditures, and a declining population. 

In both 2011 and 2015, Connecticut Governor Dannel Malloy sought to fill the fiscal gap by engineering two tax increases on the state’s wealthiest citizens, so that today the state’s highest tax bracket is 6.99 percent. Under the state’s tax pyramid, about one-third of the state’s $7-billion budget is paid by the several thousand people earning over $1 million per year.

Richard Epstein: Trump's Tax Plan

The Trump administration has revealed a one-page tax plan that, if implemented, could have vast consequences for the economy of the United States. The high points of that plan are simplification and repeal. 

The brackets go down from seven to three—10%, 15%, 35%. Corporate tax rates are slashed from 35% to 15%. The standard deduction is doubled to about $24,000, removing large numbers of low-income people from the rolls. The alternative minimum tax and the special Obamacare capital gains tax of 3.8% are eliminated, along with the estate tax. Deductions for home mortgages and charitable donations are preserved, but those for state and local taxes are eliminated. The plan has drawn enthusiastic support from conservative commentators and withering criticism from Democrats. Where does the truth lie?

Richard A. Epstein: Mob Censorship On Campus

In today’s political climate, there are sharp divisions of opinion over a range of issues, from health care and climate change to education and labor law. Ideally, a civil debate undertaken with mutual respect could ease tension and advance knowledge. Politics, however, often takes a very different turn.

One of the landmark decisions of the United States Supreme Court, New York Times v. Sullivan, was decided in 1964 at the height of civil rights movement.

Richard Epstein: The Affordable Housing Crisis

Housing policy has become yet another flashpoint in these highly polarized times. Much of the controversy swirls around President Donald Trump’s nomination of Ben Carson, a distinguished neurosurgeon, as Secretary of Housing and Urban Development. 

HUD operates a wide range of subsidized federal housing programs that impassioned critics of his nomination are sure Carson will dismember. His chief vice in their eyes is his lack of direct experience working in the housing area. In a real sense this is a mixed blessing. 

Richard Epstein from the US: Scott Pruitt And The Environment

Scott Pruitt, Donald Trump’s nominee to lead the Environmental Protection Agency, has raised more hackles among progressive Democrats than any other Trump cabinet nominee. Typical of the ferocious opposition to his candidacy is the screed prepared by the Sierra Club that deems him a mortal threat to the safety of the planet because, as Attorney General in Oklahoma, he has “spent his time in office working to allow big polluters to do whatever they want, rather than protecting the health, clean air and water of his constituents.” 

Democrats like Senator Brian Schatz of Hawaii have insisted that his nomination is “a four-alarm fire” because Pruitt is a pawn of fossil fuel companies whose cardinal sin is denying the conclusion of “climate scientists” that human emission of carbon dioxide is creating a global warming crisis.

Richard Epstein from the US: America’s Immigration Quagmire

America’s immigration problem raises a huge set of thorny issues. At a theoretical level, it is difficult to articulate, let alone implement, the ideal immigration policy. While there are compelling arguments in favor of the basic norm of free trade, an open immigration policy could lead to massive political dislocations. 

Allowing the free flow of goods across borders is quite unlike allowing people to do the same. Goods do not put potential burdens on educational, health, and social service institutions; they do not participate in political activities, lobby to become citizens, or vote. 

Richard Epstein: California’s Needless Housing Crisis

Everyone agrees the most attractive areas in California suffer from a housing crisis that calls for drastic action. The difficult question is deciding what should be done. Many of the challenges are embodied in the small California town of Mountain View, population 80,000, which should be basking in sunshine as the home of Google. But instead the town is mired in discord and controversy over a set of well-entrenched anti-growth policies concerning housing. 

The tight supply of housing has raised the price of the median home to about $1.4 million. Rents, too, have skyrocketed, resulting in the displacement of many long-term tenants—teachers, nurses, and tech employees—who have to endure long daily commutes to work or find jobs elsewhere. Mountain View is now the proud home to numerous mobile home parks, occupied by individuals who crave access to the city—and who reportedly drive Teslas and Mercedeses, no less—but who lack the means to purchase or rent ordinary housing.

Richard Epstein: An Open Letter To Donald Trump On Foreign Policy

Dear President-Elect Trump:      

Your surprise election as president will do more to shake up the political landscape than any other event in the post-World War II period, with the possible exception of Ronald Reagan’s selection as president in the November 1980 election.

The impact of the 2016 election may well be greatest on matters of foreign and military affairs, where the U.S. president necessarily has the greatest influence and control over operations.

Richard Epstein from the US: Open Letter To President Trump

Dear President-Elect Trump:

Congratulations on your come-from-behind victory. You did the nation a great service in thwarting the candidacy of Hillary Clinton, who lost because she exhibited a deadly combination of moral arrogance, economic ignorance, and political blindness. 

More than anything else, it was her use of the phrase “the deplorables” that sparked her opposition to come out in force against her. But if she lost, you won, and you now face the greater challenge of how to make the enormous transition of rebellious outsider to the President of all the people in the United States. Here, in my view, lies the best path for your success.

Richard Epstein from the US: The Loyal Opposition

No matter which candidate wins this presidential election, the nation is likely to continue the downward slide that started with the election of Barack Obama as president in November 2008. 

In the last eight years, the nation has fractured morally; it has failed to grow economically; and it has been continuously embarrassed in its foreign affairs. As a lame duck president, Obama will likely do nothing to reverse these downward trends. But now consider our alternatives to replace him.

Richard Epstein from the US: An Open Letter to Trump

Dear Mr. Trump:  

It is hard—perhaps impossible—to calculate the damage that you have done to the United States and its people, and the people of the world. The situation that the United States faces today is one of great uncertainty at home and great peril abroad. 

You are running at the end of Barack Obama’s failed presidency, against Hillary Clinton, one of the least trusted and most unfit candidates ever to run for high office. There is little question that any other Republican candidate, including your vice presidential nominee, Mike Pence, would be far ahead of her in the polls, because any other candidate would concentrate on her dubious ethics and weak policy proposals.

Richard Epstein from the US: Growth - the blue state model has failed

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 fueled American growth in earlier times, and will revive it today.

Richard Epstein from the US: Our Regulator-In-Chief

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 environmental protection, drugs, health care, and labor markets have been both more far-reaching and socially destructive than those of his predecessor.

Richard Epstein: Hasty Judgment On “Institutional Racism”

Over the past few dizzying days, the nation has been shaken by the killings of Alton Sterling in Baton Rouge, Louisiana, Philando Castile in St. Paul, Minnesota, and the five police officers mercilessly gunned down in Dallas, Texas. These events have intensified a bitter debate about whether institutional racism is endemic in police forces across the nation. 

Sterling and Castile, some say, were murdered in cold blood simply because they were black. But individual cases are unique, and often are notoriously difficult to judge, even with the benefit of hindsight.

Richard Epstein: Illinois On The Fiscal Brink

Illinois—a state that has long embraced progressive fiscal policies—has moved one step closer to the financial abyss. 

Last week, Moody’s Investors Service issued the jarring announcement that it was downgrading Illinois’s general obligations bonds to Baa2 from Baa1, which is just two levels above junk bond status. The next day, Standard & Poor’s followed suit by lowering its rating to BBB+, or three levels above junk bond status. 

Richard Epstein: The Hidden Virtues Of Income Inequality

There is little doubt that income inequality is one of the great issues of our time. A new front has opened in the battle over whether the richer and the poorer should have differential access to various forms of common facilities.

The New York Times recently ran a front-page exposé of segregation by wealth in the booming cruise business. The article, by Nelson Schwartz, was entitled “In an Age of Privilege, Not Everyone Is in the Same Boat.” 

Richard Epstein: The Rise of American Protectionism

The wedge issue of the 2016 primary campaign is the rising hostility to free trade—and, specifically, to the Trans-Pacific Partnership. 

On the Republican side, establishment candidates like Jeb Bush, Scott Walker, and Marco Rubio have failed or fallen behind, while Donald Trump maintains a commanding lead going into Florida and Ohio thanks, in large part, to his protectionist rhetoric. On the Democratic side, Hillary Clinton has been veering leftward to fight off a determined challenge from Vermont’s democratic socialist Bernie Sanders, another unapologetic protectionist.

Richard Epstein from the US: Apple’s iPhone Blunder

Can the United States government compel Apple to help break into the phone of Syed Rizwan Farook, who, along with his wife Tashfeen Malik, gunned down fourteen innocent people last December at the Inland Regional Center in San Bernardino? 

That question has sparked fireworks in recent days. The dispute arises because Apple has equipped its new iPhones with encryption settings that erase the data contained on the phone whenever ten false password entries have been made. It was agreed on all sides that only Apple has the technology that might overcome the encryption device.

Richard Epstein from the US: Why Fiscal Stimulus Fails

Over the past several weeks, we’ve once again seen how the Federal Reserve’s stimulus policy has done nothing to help the economy. Fourth quarter growth for 2015 was a disappointing 0.7 percent, and there are no obvious signs of improvement in sight for 2016. Nonetheless, as the U.S. economy continues to smolder, the Fed acts as though pulling levers on interest rates will get us out of this seemingly endless trough.

In December, the Fed thought that the economy was turning around and accordingly raised the federal funds rate from one-quarter to one-half percent, with the prospect of further increases down the road.

Richard Epstein: Why Democrats Could Win In 2016

With the hotly contested Iowa primaries only a week away, the level of political polarization is higher than it’s been in decades. Hillary Clinton and Bernie Sanders are veering sharply to the populist left as they each champion a brand of democratic socialism.

 On the Republican side, the rise of Donald Trump and Ted Cruz reveals the rise of a muscular conservatism that appeals to the far right. By November, this political divide will become more pronounced. No one will be able to say, to quote George Wallace’s oft-repeated remark, that there is not a “dime’s worth of difference” between the two parties.