Issue 3

Religion Is Special Enough

In ways almost beyond counting, our legal system treats religion differently, subjecting it both to certain protections and certain disabilities. Developing the specifics of those protections and disabilities, along with more general theories tying the specifics together and justifying them collectively, has long been the usual stuff of debate among courts and commentators.

Those debates still continue. But in recent years, increasingly people have asked a slightly different question—whether religion should be singled out for special treatment at all, in any context, for any purpose. Across the board, but especially in the context of religious exemptions from generally applicable laws, many have come to doubt religion’s distinctiveness. And traditional defenses of religion’s distinctiveness have been rejected as unpersuasive or religiously partisan.

This Article offers a defense of our legal tradition and its special treatment of religion. Religious freedom can be justified on religion-neutral grounds; it serves the same kinds of values as other rights (like freedom of speech). And while religion as a category may not perfectly correspond to the underlying values that religious freedom serves, that kind of mismatch happens commonly with other rights and is probably inevitable. Ultimately, religious liberty makes sense as one important liberty within the pantheon of human freedoms. Religion may not be uniquely special, but it is special enough.

Information Gaps and Shadow Banking

This Article argues that information gaps—pockets of information that are pertinent and knowable but not currently known—are a byproduct of shadow banking and a meaningful source of systemic risk. It lays the foundation for this claim by juxtaposing the regulatory regime governing the shadow banking system with the incentives of the market participants who populate that system. Like banks, shadow banks rely heavily on short-term debt claims designed to obviate the need for the holder to engage in any meaningful information gathering or analysis. The securities laws that prevail in the capital markets, however, both presume and depend on providers of capital to perform these functions. In synthesizing insights from diverse bodies of literature and situating those understandings against the regulatory architecture, this Article provides one of the first comprehensive accounts of how the information-related incentives of equity and money claimants explain many core features of securities and banking regulation.

The Article’s main theoretical contribution is to provide a new explanation for the inherent fragility of institutions that rely on money claims. The existing literature typically focuses on either coordination problems among depositors or information asymmetries between depositors and bank managers to explain bank runs. This Article provides a third explanation for why reliance on short-term debt leads to fragility, one which complements the established paradigms. First, information gaps increase the probability of panic by increasing the range of signals that can cast doubt on whether short-term debt that market participants had been treating like “money” remain sufficiently information insensitive to merit such treatment. Second, information gaps impede the market and regulatory responses that can dampen the effects of a shock once panic takes hold. Evidence from the 2007–2009 financial crisis is consistent with the Article’s claims regarding the ways shadow banking creates information gaps and how those gaps contribute to fragility.

“Spiritual But Not Religious”: Rethinking the Legal Definition of Religion

Through the statutory mechanisms of RFRA and RLUIPA, Free Exercise jurisprudence has expanded the scope of religious protection. In the absence of a clear legal definition of religion, however, this protection has an unknown and biased reach. In particular, courts and legal scholars embody a misunderstanding of a burgeoning group of Americans who identify as “spiritual but not religious,” excluding them from religious protection. This Note uses a recent case, which dismissed as nonreligious the beliefs of a plaintiff whose beliefs are paradigmatic of this growing cohort, to analyze how the law defines religion. It argues that while such belief systems reject the institutional characteristics of organized religion, they are sufficiently analogous to religious belief systems to deserve the same legal protection.

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