The World and Everything in It - April 4, 2022

MARY REICHARD: Good morning!

If a border patrolman violates your rights as an American citizen, can you sue for damages? The notorious Bivens Doctrine at issue at the Supreme Court.

BREYER: So is it the position of the Solicitor General and the government that if any of those normal agents that fall under Bivens, FBI, I take it, ordinary police, et cetera, federal police officials, if they had beaten somebody over the head unreasonably and acted contrary to the Constitution, there would be no Bivens action?

NICK EICHER: That’s ahead on Legal Docket.

Also today … a danger sign that recession may be on the horizon … a technical signal known as a “yield-curve inversion.” Economist David Bahnsen will explain.

Plus the WORLD History Book. Today, founding of NATO.

TRUMAN: If there is anything inevitable, if there is anything conquerable in the world today, it is the will of the people of all nations for freedom and peace..

MARY REICHARD: It’s Monday, April 4th. This is The World and Everything in It from listener-supported WORLD Radio. I’m Mary Reichard.

NICK EICHER: And I'm Nick Eicher. Good morning.

MARY REICHARD: Now the news. Here’s Kent Covington.

Russia strikes fuel facilities in port city as Ukraine retakes Kyiv» Explosions rocked the port city of Odessa in southern Ukraine. That as Russia launched missiles from sea and air on Sunday … striking oil and fuel facilities that supply Ukraine's military.

Farther north, Ukraine’s government says it is retaking the entire Kyiv area … as Russia’s military shifts its focus to other parts of Ukraine, at least for now.

U.S. Secretary of State Tony Blinken told NBC …

BLINKEN: I think this is evidence that Russia’s original plans to take over the country, including Kyiv, have been dealt a devastating setback. They are regrouping. They may be focusing on the East.

But he added that the threat of missile attacks in the capital city remains.

And there may be another threat around Kyiv.

Ukrainian President Volodymyr Zelenskyy warned that departing Russian troops were leaving explosives behind. He said they are planting mines in abandoned equipment, around homes, and—quote—“even the bodies of those killed.”

Russia accused of genocide, civilian massacre » That has not been verified. But the killing of many Ukrainian civilians is undeniable. And Zelenskyy said the right word to use here is “genocide.”

Through an interpreter, he told CBS’ Face the Nation that Ukraine is a country of more than 100 nationalities.

ZELENSKYY: This is about the destruction and extermination of all these nationalities.

And just a warning here for young ears: The following may be disturbing.

Gruesome new discoveries suggest some Russian troops are guilty of unthinkable atrocities.

After Russian soldiers withdrew from the ouskirts of Kyiv … Ukraine's troops found brutalized bodies with bound hands, gunshot wounds to the head and signs of torture.

One suburban Kyiv resident said … it’s hard to believe this is reality.

MOS: There were women raped, children raped, there were man civilians who were just tied and killed and tortured too. And it’s inhuman.

A reporter with the Associated Press saw the bodies of at least nine people in civilian clothes who appeared to have been killed at close range. At least two had their hands tied behind their backs.

The AP also saw two bodies wrapped in plastic, bound with tape and thrown into a ditch.

Officials described it as a “scene from a horror movie.”

California mass shooting: 6 dead, 10 injured in Sacramento» In California, flying bullets killed six people and wounded 10 others … in a mass shooting very early Sunday morning.

The shots rang out as bars and nightclubs were closing in downtown Sacramento.

Mayor Darrell Steinberg:

STEINBERG: Our city has a broken heart. This is a senseless and unacceptable tragedy.

Police on Sunday said they were searching for at least one suspect.

Chief Kathy Lester told reporters …

LESTER: We are asking for the public’s help in helping us to identify the suspects in this and provide any information you can to help us solve this.

She said police were patrolling the area two blocks from the Capitol at about 2 a.m. when they heard gunfire and rushed to the scene. They found a large crowd gathered and six people dead in the street.

Palin running for Congress» Sarah Palin is running for U.S. Congress in Alaska. The former governor and Republican vice presidential nominee made the announcement over the weekend.

Her entry shakes up an already unpredictable race for Alaska's only U.S. House seat. She joins a field of 50 other candidates hoping to fill the seat held for decades by the late Congressman Don Young, who died last month.

In a statement, Palin said “Public service is a calling, and I would be honored to represent the men and women of Alaska in Congress, just as Rep. Young did for 49 years.”

Morbius tops weekend box office» SOUND (Morbius trailer)» At the weekend box office … Sony and Marvel’s Morbius took the top spot.

SOUND (Morbius trailer): I don’t want to see you get hurt more than you already have. … This would be a cure.

The latest comic book flick took in an estimated $39 million domestically in its opening weekend … despite rough reviews from critics.

The action-comedy The Lost City finished second with $15 million. And The Batman finished third with another $11 million.

MARY REICHARD: Today is Monday, April 4th and this is The World and Everything in It from WORLD Radio. We’re glad you’ve joined us today! I’m Mary Reichard.

NICK EICHER: And I’m Nick Eicher. It’s time for Legal Docket.

The US Supreme Court handed down an 8-1 decision last week in a highly technical dispute over arbitration.

It says federal courts have no authority to look through arbitration disputes … in search of a way to give federal courts jurisdiction over an arbitration panel … to confirm or vacate one of its decisions.

This is the case in which Justice Stephen Breyer’s gift for vivid expression really shines. Here he is during oral argument in November:

BREYER: ...what we're doing here, normally, is we are having, let's call him an arbitration rat. There is the guy who loves arbitration and then there is the rat who hates it, although he agreed to it, okay? Now he will express his ratitude in many different ways.

NICK EICHER: Remember I said it was an 8-to-1 decision … sadly for him, he was the one, the lone dissenter. He may have said to himself, “rats!”

MARY REICHARD: I am so going to miss his wit when he retires!

Well, on to today’s analysis of an oral argument from March.

We’ll begin with this question: What can you do if a government official violates your constitutional rights?

Could you sue that official to obtain damages or some other remedy?

I’ll answer the question the way a lawyer would: it depends.

Depends whether the official is an agent of a state or local government. If so, you can sue. The reason is that the law explicitly says you can.

But suppose that official who violated your rights is not a state or local government official. Suppose that he is a federal official?

Generally speaking, you cannot sue the federal official. Except where a statute specifically authorizes it or a decision from case law says so.

NICK EICHER: Supreme Court case law does allow you to sue in these instances: specifically in cases where federal agents violate your rights under the Fourth, Fifth, and Eighth Amendments.

Those exceptions are known as Bivens actions. They come from a case in 1971 that made the first exception. Bivens allows you to sue federal officials for civil-rights violations and seek money damages.

But only sometimes … as Mary just said … it depends.

This area of the law is such a mess that it prompted Judge Don Willett of the 5th Circuit court of appeals to write with great urgency … that Bivens has created a Constitution-free zone to brutalize citizens.

MARY REICHARD: So here we are again.

This case arose in 2014 near the border between Washington State and Canada. Robert Boule owned a bed and breakfast on the U.S. side when border patrol agent Erik Egbert came onto the property. Egbert didn’t have a warrant but confronted a guest from Turkey about his immigration status. Boule asked him to leave, Egbert refused, a physical altercation broke out, and Boule got the worst of it.

NICK EICHER: Boule sued under the Fourth Amendment’s prohibition against unreasonable search and seizure. He also sued under the First Amendment. That’s because after Boule complained to Egbert’s boss, Egbert allegedly retaliated when he told the IRS to audit Boule.

Freedom of speech means Americans have a right to complain without retaliation from the government.

So the legal question is: can Boule sue Egbert under Bivens?

Boule’s lawyer Felicia Ellsworth answered, yes. Note we’ve edited these sound bites to make them shorter and clearer.

Ellsworth: Although the reach of Bivens may be narrow, the need for the remedy persists, and the argument that the Court should not recognize a Bivens remedy in any new case flies in the face of this Court's decision just five terms ago… and also would contravene the historical foundations allowing individual damages to right a federal officer's constitutional wrong.

MARY REICHARD: Therefore, her client’s case ought to be allowed to proceed.

The rub is that the high court’s been hesitant to expand that right to sue federal officials. It hasn’t applied it to other constitutional rights—like the First Amendment. And this is one of innkeeper Boule’s claims.

Justice Clarence Thomas got right to that point with Ellsworth:

Thomas: But aren't you up against the fact that we have declined to apply or extend Bivens in recent history? We've almost universally declined to expand it into new contexts?

Ellsworth: That's correct, Justice Thomas. And we don't think this is a new context …This is an unlawful entry without a warrant, and this is excessive force on private property against a U.S. citizen on domestic soil.

Good lawyer tactic—distinguish your client’s facts from precedent that goes against him. Ellsworth argued that Boule’s facts are similar to the facts of earlier high court decisions that permitted lawsuits against federal officials.

But the other lawyer, for border patrol agent Egbert, says these facts represent a new context. So Bivens doesn’t apply, and that shields his client from liability.

Egbert’s lawyer Sarah Harris argued for a much broader view:

Harris: Zooming out even further, courts have to ask…what are the costs of that going to be for the Border Patrol? What are the litigation costs? What are the systemic costs going to look like? What's the deterrent effect on top of all of the other remedies that are out there for dealing with this type of conduct, including the internal investigations Congress has mandated? So I think that really is the right level of generality.

Maybe you wonder why the court can’t just look at the facts and say, yes, the federal government went too far, so we’ll impose liability when it violates constitutional rights.

It’s complicated, but one reason is the judicial philosophy about the role of the courts has changed since the earlier Bivens cases. The court once saw it as the right thing to do to create remedies to enforce statutes.

That’s changed. Now, the majority would rather defer to lawmakers to craft, well, the law … the justices see that as the proper role of Congress—the elected branch closest to the people. The modern court therefore takes a more cautious approach to what some see as legislating from the bench.

So, they’ll apply Bivens under the same circumstances as it was applied in the past. But not allow it in new contexts or where other factors “counsel hesitation.”

Justice Stephen Breyer tried to find the distinctions between the facts here and those other cases. Remember, “Bivens action” means the ability to sue a federal official for violating constitutional rights.

Breyer: Well, after 9/11, there were quite a few local policemen, I believe, as well as FBI agents and federal police, in New York City looking for terrorists, which is certainly a national law enforcement function. So is it the position of the Solicitor General and the government that if any of those normal agents that fall under Bivens, FBI, I take it, ordinary police, et cetera, federal police officials, if they had beaten somebody over the head unreasonably and acted contrary to the Constitution, there would be no Bivens action?

Michael Huston, lawyer for the DOJ in support of agent Egbert, answered that Justice Breyer was correct in his view: there’d be no Bivens action in those situations.

Justice Breyer continued finding distinctions. He mentioned the kinds of federal agents who can be sued under Bivens: federal marshals, and FBI and DEA agents.

Breyer: Okay. So now they have the same job basically if you look at it in terms of arresting people for violations of federal law. They have the same authority to carry weapons. …But you are saying all those people to whom Bivens now applies, if the person they are arresting is a person who has a connection with, let's say, foreign dubious groups abroad, no Bivens action?

Huston: Yes, that's right, Your Honor. And I think this --

Breyer: Would you call that an extension of Bivens or a drawing back of what people thought Bivens was about?

“Extension or drawing back of Bivens.” That tells you the extent of confusion around the Bivens doctrine.

Justice Sonia Sotomayor reminded everyone that no law enforcement agents can constitutionally use excessive force. No matter which federal agency employs them.

But with no remedy to check them, the prohibition has no teeth.

Justice Elena Kagan seemed skeptical of the argument that every time the facts involve checking immigration status of someone, that Bivens doesn’t apply. Listen to this exchange with Huston, again, lawyer in support of border-patrol agent Egbert:

Huston: Your Honor, the Court in Hernandez said that the protection of the border, the prevention of the unlawful entry of persons and drugs and other contraband, has a clear and substantial connection to national security.

Kagan: I mean, Hernandez is a very different kind of case, right? It's a cross-border shooting, and, you know, it clearly had implications for the relationship between the United States and Mexico...

Huston is referring to the Hernandez decision from 2020. Hernandez said the parents of a Mexican teenager shot and killed in Mexico by an American border patrol agent in the United States couldn’t sue that agent under the precedent in Bivens. Why? Because the claim arose from a “new context” and it involved separation of powers factors.

So, if parents in that tragic situation couldn’t sue under Bivens, it points to the reluctance of this court to allow a Bivens suit in the Boule case. He just says he was roughed up and retaliated against.

I’ll end with another quote from Judge Willett’s concurrence from a case last year: “I am certainly not the first to express unease that individuals whose constitutional rights are violated at the hands of federal officers are essentially remedy-less. A written constitution is mere meringue when rights can be violated with nonchalance. I add my voice to those lamenting today’s rights-without-remedies regime, hoping (against hope) that as the chorus grows louder, change comes sooner.”

And that’s this week’s Legal Docket.

MARY REICHARD: Next up on The World and Everything in It … the Monday Moneybeat.

NICK EICHER: Time now for our regular conversation on business, markets, and the economy. Financial analyst and adviser David Bahnsen is here … Morning, David.

DAVID BAHNSEN: Good morning, Nick. Good to be with you.

NICK EICHER: All right, the moment I saw this story cross the wire … I couldn’t wait to talk to you for an intelligent explanation … and you know what story I’m referring to … this phenomenon in the market for Treasury bonds … a yield-curve inversion in that market … in this case, that the yield on a two-year Treasury is higher than the yield demanded for a ten-year Treasury note.

Now, if you read the financial press … and this broke into the regular press, too … you saw headlines like these: “Yield-curve inversion could signal a recession” … “Recession warning sign flashes as yield curve inverts” … and here’s one I like best: “The ‘Yield Curve Inversion’ Is Signaling Something Important. No One Can Agree on What It Is.” But it does go on to say that the inversion is a predictor of coming recessions on some kind of time horizon. What can you tell us about this?

DAVID BAHNSEN: Yeah, well, let's first of all start with that line you just used about on some kind of time horizon, it isn't particularly helpful, that the yield curve can sometimes be a predicate to a recession, when the historical reality is that the timeline can be two years later, six months later, any number of different things? The question is causation versus correlation. And then the question is false positives, because we have not had a recession every time the yield curve is inverted. But we have generally had a yield curve inversion, before there have been recessions. So that is a very important distinction. The number one thing I've studied historically on this or learned from my historical studies, is that the length of inversion matters. If the yield curve inverts for a few weeks, it often is more aligned with a false positive. And if the yield curve is inverted for a longer period of time, it is more frequently meant a recession came at some point down the line. But I don't believe that this is causative. It is indicative of something malfunctioning in the economy; it is not causing something malfunctioning in the economy. But from a realistic standpoint, what are the amount of recessions we've had in history at 3.6% unemployment?

When one talks about a recession, you generally have unemployment going higher, not lower. And you generally have people trying to get jobs, not jobs, trying to get people. Now what the recession camp would say is, “Yeah, but these things are indicative that that's going to change, that unemployment will go higher, and that demand will drop.” And they'll point to like a consumer confidence number going down or something. But I think those are pretty unconvincing metrics. So there is plenty of reason, fundamentally, to not believe a recession is coming. But that's because of other economic problems: labor shortages, supply side disruptions, price escalations. I think that everybody loves a big sensationalistic story, but in this case, there's just certain counterfactuals that make it inconvenient to draw a clean narrative.

NICK EICHER: But maybe explain why a yield-curve inversion is indicative of something amiss in the economy … what we’re talking about is the return on a U.S. Treasury is more for a short-term Treasury than it is on a longer-term note … a two-year versus a ten-year … when you’d expect a ten-year investment to yield more than a two-year one.

DAVID BAHNSEN: I want to reword a couple of these things because I get what you're saying, but I don't think it's precise. It does amount to a return for investor in the end, but the point of it is, it's about the borrower. The lender is only requiring the borrower - in this case, the lender is someone like you or me and the federal government is the borrower - but the lender is requiring the borrower to pay them back the same in interest for 10 years of borrowing as they would for two years of borrowing. Where generally a healthy yield curve implies that there would be more money required for a greater time commitment for the simple reason that time has a value. The time value of money suggests you want a greater amount of interest to compensate you for the greater risk you're taking, the greater uncertainty and so forth. Now, there are two ways the yield curve can invert. It could be because the short end comes higher. It could be because the long end comes lower, or it could be both. In this case, it's entirely about the short end of the curve - the two year going way higher. If the 10 year were to go higher, that would uninvite the yield curve, and it would imply that there has indeed been some increase in expectation of growth. For all the inflation talk, the 10 year right now is still a 2.3%. So we continue to have short-term price pressures that everyone knows about, and no expectation in the bond market, that those are going to persist. And unfortunately, we don't have much expectation in the bond market have great long-term growth either. And that's been a problem since the financial crisis. So the yield curve tells a number, a number of different stories, not just one. And ultimately, the problem we're dealing with right now is low long-term growth expectations. And yes, in the meantime, you're getting normalization at the front end of the curve, the two year should be at 2%, two and a half percent. The problem is that the 10 year is only at the same. So to get a healthy yield curve. You want longer term growth expectations to go up.

NICK EICHER: All right, David Bahnsen … financial analyst and advisor … head of the financial planning firm The Bahnsen Group

You can catch David’s daily writing at Dividend Cafe-dot-com … sign up there for his daily email newsletter on markets and the economy … David, thanks again!

DAVID BAHNSEN: Thanks so much, Nick.

NICK EICHER: Today is Monday, April 4th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Nick Eicher.

MARY REICHARD: And I’m Mary Reichard. Next up: the WORLD History Book. This week marks the anniversary of the founding of NATO, the North Atlantic Treaty Organization. Plus, the “People’s Court” in Germany convicts 35-year-old Adolf Hitler to five years in prison for treason.

NICK EICHER: But first, the death of an Anglican layman, philanthropist, and Sunday School pioneer. Here’s WORLD’s Paul Butler.

PAUL BUTLER, REPORTER: Today we begin with April 5th, 1811, and the death of the father of English Sunday school: Robert Raikes. While not the first to promote religious instruction for children, his Sunday School was a harbor for poor and exploited children and not just the children of the parish.

Raikes was editor of the Gloucester Journal and an advocate of prison reform. Frustrated by the difficulties of character reformation once incarcerated, he began contemplating prevention instead of cures. While visiting a slum, he was distressed by the conduct and depravity of the children—reminding him of the old adage: “Idle hands are the devil’s workshop.”

So Raikes approached the Reverend Thomas Stock of Ashbury, Berkshire. Together, they started a Sunday school for boys. Students were catechized, and learned to read and write—with the Bible as their textbook. Soon, the schools were opened to girls as well. The idea spread quickly, though not everyone approved...

CLIP: There were Christians who thought that on the Sabbath you shouldn’t work—and learning/writing smacked too much of work on the Sabbath. And they weren’t too happy at all about the poor having uncensored access to the Bible…

Audio from the BBC television program: Songs of Praise. Over the next 30 years, Raikes helped start many Sunday Schools across England. It’s estimate that at the time of his death, a half-million students were regularly attending. Many cite Raikes’ religious instruction program as a catalyst for the current English public education system.

Next we fast forward to April 1st, 1924. After a 24-day trial a jury of judges convict Adolf Hitler for his role in an attempted government coup. He was the leader of The National Socialist German Workers' Party at the time.

The courtroom scene was reimagined for the 2003 Canadian television drama: Rise of Evil.

RISE OF EVIL: Heil Hitler. Court finds you guilty of treason. You are hereby sentenced to a fine of 200 gold marks and five years in Landsberg prison. You will, you will, be eligible for parole in nine months [APPLAUSE].

The "Beer Hall Putsch" occurred five months earlier when Hitler tried to seize power in Munich, Bavaria. He led nearly 2,000 Nazis to the city center, but armed police put down the attempted coup. Sixteen Nazis and four police officers died in the clash. Hitler was wounded but escaped. He was captured and arrested two days later.

The trial began February 26th, 1924, and received a lot of international publicity. The court proved sympathetic to Hitler and provided him a national platform to promote his ideas.

While serving in Landsberg Prison, Hitler dictated his autobiography: Mein Kampf —in English, “My Struggle.”

RISE OF EVIL: I’ll write a memoir. “Four And A Half Years Against Stupidity, Lies, And Cowardice.” An effective title don't you think? Yes, it’s very good. You might consider shortening it a bit...

After serving less than nine months of his five-year sentence, Hitler was released from Landsberg Prison on December 20th, 1924. He quickly reorganized the paramilitary Nazi organization in to a political party. And within a decade, he became the chancellor of Germany.

And finally, April 4th, 1949. In response to the growing threat of the USSR, representatives from 12 Western nations gather in a Washington DC auditorium to sign the North Atlantic Treaty—creating NATO. U.S. President Harry S. Truman:

TRUMAN: War is not inevitable. We do not believe that there are blind tides of history which sweep men one way or the other… Men with courage and vision can still determine their own destiny.

A key term in the treaty is Article 5. It dictates that each participating nation will consider an attack against one member state as an attack against them all.

TRUMAN: If there is anything certain today, if there is anything inevitable in the future, it is the will of the people of the world for freedom and for peace.

The North Atlantic Treaty played a crucial role in winning the Cold War. But at the moment, it finds itself at the center of the conflict in Ukraine … which is one of three current partner countries seeking admission to the alliance.

That’s this week’s WORLD History Book, I’m Paul Butler.

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