The World and Everything in It: December 5, 2022

MARY REICHARD, HOST: Good morning!

Federal law restricts placement of Native American children in non-Indian homes. But is that constitutional?

NICK EICHER, HOST: That’s ahead on Legal Docket.

Also today, the Monday Moneybeat: jobs, GDP, and the rail strike that wasn’t. Plus, listener questions.

And the WORLD History Book. This week marks the 50th anniversary of the last human mission to the moon.

REICHARD: It’s Monday, December 5th. This is The World and Everything in It from listener-supported WORLD Radio. I’m Mary Reichard.

EICHER: And I’m Nick Eicher. Good morning!

REICHARD: Now here’s Kent Covington with today’s news.

KENT COVINGTON, NEWS ANCHOR: Ukraine » AUDIO: [Fire]

The sound of roaring flames rising from a house in Kherson, Ukraine after a Russian artillery strike.

Moscow’s forces continue to hit civilian targets as they lose ground on the battlefield.

U.S. Senator Angus King serves on the Intelligence and Armed Services committees. He said Sunday …

KING: I think Putin is extremely dangerous right now. The ironic situation that we’re in is that the better the Ukrainians do, the more dangerous becomes because he’s running out of options.

U.S. intelligence head Avril Haines says Vladimir Putin’s advisers may have shielded him from bad news about the war, but that he “is becoming more informed of the challenges that [his] military faces.”

Still, U.S. officials say they’ve seen no evidence that Putin has a sincere interest in negotiating peace.

Blinken vows U.S. support for Israel despite unease over govt. » Secretary of State Tony Blinken said Sunday the United States and Israel will remain close friends even when their leaders disagree on big issues. Incoming Prime Minister Benjamin Netanyahu does not agree with the Biden administration’s policy of pursuing a two-state resolution to the Israeli-Palestinian conflict.

BLINKEN: Just as we believe that Israel has a responsibility to take steps to advance the prospects for enduring peace, the Palestinian authority must demonstrate that it has the will and it has the capacity to be a true partner in a process that can lead to two states.

The Biden administration is also still hoping to restore the 2015 Iran nuclear deal, which Netanyahu strongly opposes.

Iran morality police » Meantime, in Tehran, an Iranian lawmaker said Sunday that Iran's government is “paying attention to the people’s real demands” after months of protests.

That came a day after a top official suggested that the country’s so-called morality police division has shut down.

Protests ignited nationwide earlier this year after a 22-year-old woman died in police custody. She was arrested for wearing her headscarf incorrectly.

It’s still unclear whether the police morality division has, in fact, been shuttered.

Twitter » The owner of a computer repair shop who blew the whistle about the contents of Hunter Biden’s laptop is speaking out.

Twitter’s new owner, Elon Musk, released internal Twitter communications Friday about suppressing news stories about the laptop. And John Paul Mac Isaac said Sunday…

ISAAC: Watching Elon release this material on Friday night was very exciting for me because what I felt like I knew the whole time was true. And I feel vindicated.

The communications Musk released revealed messages about banning links to stories about the laptop under supposed suspicion that it was Russian propaganda.

Isaac said the FBI took possession of the laptop in December of 2019.

ISAAC: And with that, they took all my notes, all my information that I had provided them. And so they had ample time to review that data and realize that it wasn’t Russia.

Leaders of the incoming Republican majority in the House say they plan to investigate the FBI’s actions regarding suppression of the story.

Wray TikTok concerns » FBI Director Chris Wray over the weekend raised national security concerns about the video sharing app TikTok.

TikTok is owned by a Beijing-based company. And Wray says the communist government there has access to user data and the ability to control the app’s recommendation algorithm. And that—in his words—“allows them to manipulate content, and if they want to, to use it for influence operations.”

WRAY: All of these things are in the hands of a government that doesn’t share our values and that has a mission that is very much at odds with what’s in the best interest of the United States. That should concern us.

He also warned that China could use the app to collect data for espionage operations.

U.S. officials and the company are now in talks over a possible agreement that would resolve American security concerns.

Pence on possible 2024 run » Former Vice President Mike Pence is still weighing a 2024 White House bid. He said Sunday that “democracy depends on heavy doses of civility.”

PENCE: And what Karen and I will give careful consideration to over the holidays is whether we can play a role in that, in giving the American people a fresh start.

He said the lesson from last month’s midterm elections is that Republican candidates that focused on the future did well, whereas those who focused on re-litigating the last election did not do as well.

Pence previously said that former President Trump’s campaign announcement will not affect his decision.

I’m Kent Covington. Straight ahead: Federal law restricts placement of Native American children in non-Native American homes. But is that constitutional?

This is The World and Everything in It.

MARY REICHARD, HOST: It’s Monday morning and the start of a new work week for The World and Everything in It! Today is December 5th. Good morning! I’m Mary Reichard.

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

Two cases today and they concern two vulnerable groups of people: children and the elderly.

Legal reporter Jenny Rough covered the arguments and she has our report this week.

JENNY ROUGH, REPORTER: I’ll begin today with the child-custody case, which is four cases consolidated into a single legal argument.

The federal law at issue here is known as the Indian Child Welfare Act. Now, I’ll refer to it a lot, so I’ll use the acronym you’ll hear the lawyers in the case using. It’s spelled I-C-W-A and pronounced as the acronym IC-WA—again, the Indian Child Welfare Act.

So the question is whether IC-WA’s aim of maintaining Native American nations amounts to unconstitutional racial discrimination.

Specifically IC-WA governs Indian children who are entering foster care or an adoptive home. The law prioritizes keeping the child with their tribes, rather than placing them with non-Indian families.

The case at the Supreme Court is called Haaland v. Brackeen. Seven individuals and the state of Texas sued the federal government. And they brought a bunch of legal claims to argue that IC-WA is unconstitutional.

Let me start with the seven individuals, among them a white couple named Chad and Jennifer Brackeen.

The Brackeens want to adopt an Indian child they’ve been fostering and have bonded with. And the child’s biological mother also wants the Brackeens to adopt her child.

But the Navajo Nation opposes that and wants the child placed with a member of the tribe. At the Supreme Court, lawyer Matthew McGill argued on behalf of the Brackeens.

MCGILL: According to the federal government, in 2020, there were over 11,000 Native American children in state foster care. The problem is that there are fewer than 2,000 Native American foster homes.

The Brackeens argue that IC-WA’s requirement that their foster child be placed with an Indian family instead of with them amounts to racial discrimination.

But defenders of ICWA say the nature of the law isn’t about racial classification. Rather, it’s about political classification.

Justice Elena Kagan brought up that point.

KAGAN: Congress is very clear in this statute that it thinks that this statute is critical to the continuing existence of the tribe as a political entity. And that's, in fact, one of the reasons it passes this statute, is the political entity is itself being threatened because of the way decisions on the placement of children are being made.

Congress passed IC-WA with the stated goal to help tribal communities thrive and flourish. But McGill argued that despite the laudable goal, Congress cannot violate the equal protection clause of the Constitution to achieve it.

MCGILL: There was a real problem that Congress was trying to address. We’re not denying the existence of a problem. But the means Congress chose are impermissible. Two wrongs do not make a right here.

Judd Stone argued on behalf of the state of Texas.

He addressed questions around the 10th Amendment. That’s in the bill of rights to clarify the relationship between the federal and state governments. It prevents the federal government from issuing commands to the states. In the law, we know it as the anti-commandeering rule.

In an exchange with Lawyer Stone, Justice Amy Coney Barrett asked whether IC-WA, the federal statute, compels the states to act here. Justice Barrett notes that the federal government is arguing that IC-WA isn’t commandeering here because—

BARRETT: The state could just choose not, could walk away, essentially. How would that work? Could Texas walk away? You know, if you had a child who was a member of a tribe and was in a situation in which the child was in danger or, you know, like the Brackeen children here. Could the Texas agency choose not to intervene or seek a foster care placement for the child? 

STONE: It would be very strange for the federal government to say this isn't commandeering because you can always just stop. I have no idea how as a practical matter Texas could do that.

Another line of questioning centered on the Indian Commerce Clause in Article 1 of the Constitution. That says Congress has the power to regulate commerce with Indian tribes. Congress used that clause as its main justification to enact IC-WA.

Here is Stone again, arguing for Texas.

STONE: Child adoptions are not commerce. They simply are not.

Several justices pointed out that Congress’ power under the commerce clause is broad. It extends beyond goods or what one might ordinarily think of as commerce.

And Justice Neil Gorsuch mentioned other federal laws fall into the sphere of family law.

GORSUCH: The federal government often plays a role in mediating disputes between sovereigns in the family law area, whether it's the Hague Convention internationally or whether the Parent Kidnapping Act domestically. So why would it be awkward to think that Congress could exercise a similar authority with respect to disagreements between state sovereigns and tribal sovereigns?

On behalf of the Indian tribes is lawyer Ian Gershengorn.

GERSHENGORN: Congress enacted ICWA because Indian children were being torn from their families and tribes through the operation of state family law in state courts. ICWA protects the best interests of children. It works to keep families, keep children with their families and communities. That's why ICWA is viewed as the gold standard.

The best interests of children.

At one point Gershengorn mentioned the harm to the tribal community of removing Indian children. And Justice Kagan circled back to that.

KAGAN: I think some of the strong feelings about this case come from a sense of, yes, but what about the children? I mean, you do harm the political community, but are you saying that the political community is more important than the welfare of the children? That's the thing that I think people are going, whoa.

GERSHENGORN: I'm glad you asked that, Your Honor. Congress found that ICWA was in the best interests of the children, right? And what ICWA realizes is that these children were being taken from their communities too soon. Why? Well, sometimes there was abuse at home, right? But what ICWA says is a lot of times that is remediateable. It's substance abuse, right? It's the ability, if you can get the child out of the home, get the care to the parents, then the child will actually thrive when the child is returned to the home and community.

Now onto the second case. Care of the elderly. This case centers on a man named Gorgi Talevski. He suffered from dementia, and so his family placed him in a publicly run nursing home. After they did, his health declined rapidly.

The family claimed the nursing home overmedicated him. And then against his will transferred him to another facility.

The Federal Nursing Home Reform Act says patients have a right to refuse medications and transfers.

Through his wife, Talevski sued the hospital corporation that oversees the nursing home. He sued under 42 U.S.C Section 1983. That allows a private individual to sue state actors for violating the laws of the United States.

But the hospital corporation argues that this particular federal statute doesn’t allow a party to bring a Section 1983 claim.

Here’s Lawrence Robbins arguing on behalf of the hospital corporation, in an exchange with Justice Brett Kavanaugh.

ROBBINS: At common law, third parties generally could not sue to enforce government contract rights unless the contract clearly specified that the breaching party would be liable to injured third parties. Because the Federal Nursing Home Reform Act contains no such clear statement, it should not give rise to Section 1983 liability. The individual patient is not the unambiguous focus of this statute 

KAVANAUGH: It says rights. I mean, it says rights. It's a very uncomfortable fact for you is that the statute says rights over and over again. Resident rights, too.

And that’s this week’s Legal Docket. I’m Jenny Rough.

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

NICK EICHER, HOST: It's time now for our weekly conversation on business markets and the economy with financial analyst and advisor David Bahnsen. David is head of the wealth management firm, the Bahnsen group, and he joins us now. David. Good morning.

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

EICHER: Well, a couple of quick data points. David, the BLS—Bureau of Labor Statistics—reported found 260,000 plus new jobs added, which was well above expectations. So pretty good report, wasn't it?

BAHNSEN: Yeah, I thought it was a very good number. It was primarily focused in leisure and hospitality. So the sector that was most unfairly punished during COVID has continued to see a lot of job recovery, which I love seeing. I'm heavily invested personally and with clients in the hotel space, and there's no question demand is very high. And therefore you need a lot of workers. And that's a good thing, though the area where you were seeing some job loss was more on the retail side. But overall net numbers were strong. The household survey, again, was much lower, but the Bureau of Labor Statistics was quite strong above expectations. Again, the one piece I continue to bring up is that labor participation force not getting better. The percentage of people looking for work, I still wish were higher.

EICHER: Right. Right. And then the government's gross domestic product for third quarter GDP revised up in the estimate released last week, almost 3% growth, how do you read it?

BAHNSEN: Well, just that, I mean, I don't really do this a lot. But I do think it really vindicates the position I had back during Q1 and Q2, and in fact, wrote a piece for world about the definition of recession. And I just think you had a couple of real kind of idiosyncratic statistical things that polled the GDP number negative for two quarters in a row. And those same things around inventories and around import export volume, lead to Q3 being much higher, and it was projected to be 2.6% annualized. And now they've revised that up to 2.9%. So I think that we're still kind of in a ambiguous state for the US economy.

EICHER: Hey, I did want to hit the congressional action last week on the possible rail strike, averting the rail strike by by imposing a deal on the holdout unions, you got to be happy to avoid the hit to the economy, we probably would have felt if those rails had shut down?

BAHNSEN: Well, that's the answer is I'm happy that a rail strike is not going to happen. There's a whole lot of things packed into this story that I probably am not happy with. But you're right, it's a very good thing to not have the rail strike happen.

EICHER: Right, and so not happy, I'm guessing with a government imposed deal and what you think ought to be sorted out directly between labor and management instead of the third party getting involved—the government coming in and dictating terms.

BAHNSEN: It's a tricky dynamic, Nick, it's complicated, because the Congress got the power, the unions gave it to them. And so the legislatively they have the authority, I don't happen to think they should. And I'm uncomfortable in general, if there's supposedly a dispute between management and workers, I do as an advocate of a market economy prefer that management and workers figure that out. And the idea that the government is in a position to override an agreement and even influence an agreement to this degree, you're right, I'm uncomfortable with it. So it's an odd situation, because in one hand, I think President Biden did the right thing by signing this into law, despite the fact that four of the 12 unions wanted more sick days. I think that the workers were getting a 23% pay increase and better health benefits, I think, Sure sounds to me like a deal that the workers ought to have taken. But again, I'm not in the deal. And President Biden is not in the deal. And so I am a little uncomfortable with generally speaking, I really like parties to a transaction negotiating a transaction.

EICHER: All right, David. Well, let's get to questions. First up, we have listener Rob Bailey of Austin, Texas.

BAILEY: Right now, home mortgage rates are around 7%. Now, in a recent Moneybeat segment, I heard David say that interest rates would actually be under 4%, if they were set by the market, and not by an activist fed. But I've also heard a few pretty famous economists say they think mortgage rates could even go up to 10% or in the low teens for the upcoming years, maybe even a decade. But as we're starting to see the Feds signal that they see interest rates are achieving their goals, are mortgage rates that high really a reasonable expectation. So, where do you see interest rates and home mortgage rates in the next two to five years?

BAHNSE: So let me first clarify that when we're being asked what the interest rate would be, and I gave my answer that I don't think rates can be imposed there to be discovered and market forces, but I was referring to what the rate would be, we call it a reference interest rate, it's the’ risk free rate’ or mortgage as risk to the lender, right? The borrower might not pay it back. The risk free rate is a reference rate from which other rates will be set. So right right now, for example, you have a three and a half percent 10 year Treasury, and you have credit card rates that are 18%. Why are they different? Because there's a large risk for the credit card issuer, and there's a big profit margin in that spread.

Well mortgages are similar, the rate I'm referring to is the risk free rate, a 10 year treasury, that's going to be one rate that is a reference and then you have a mortgage rate from which banks are going to compete with one another to get lending business for home borrowers. And so I don't know who's predicting 10% plus mortgages, they're dead wrong, it is not going to happen. I haven't read any credible analysis suggesting that. But I would suggest that wherever the 10 year goes, or the five year Treasury goes, that you can expect to see mortgage rates approximately 3% higher than that, some could be 2%, higher, some could be, you know, 4% higher, but somewhere in the range of 3% above what the five and 10 year Treasury will be. That's basically a combination of the reference rate, and then the spread or profit margin to the lender. And I do believe as the reference rate goes lower, that mortgage rates will go lower, but they will stay higher than they were at the preposterously low level of two, two and a half percent that they were back during COVID.

EICHER: Okay, David, here is Seth Simmons of Kansas City.

SIMMONS: Hi, David. I have a Bitcoin question. And for the record, I distinguish between Bitcoin and the rest of the quote unquote, crypto world, with its rampant speculation and fraud. I'm deeply interested in the underlying philosophy of hard money, particularly one which cannot be manipulated or controlled by nation states. Do you believe that Bitcoin has the potential to become a stable long term store of value? Is it possible it could replace the dollar as the global reserve currency? Or perhaps even the SWIFT network? And if so, would that be a net good? Thanks.

BAHNSEN: The first thing I want to say is I don't disagree that you could argue Bitcoin has some differences versus the rest of the crypto network, primarily in the fact that it was there first. But he brought up stability, and this is a kind of really obvious way to answer. If Bitcoin was somehow immune from instability in the crypto space, then why is Bitcoin gone down with everything else at the same degree? So Bitcoin itself has been subject to rampant speculation up and it's been subject to rampant depreciation down down right now about 70 75% from highs. And it's done this up and down several times.

The other piece, he said is really fascinating. Do you believe that it can become a substitute currency that is not subject to manipulation and control by a nation state? And not only what I point out that for all of the manipulation and all of the control nation states have over fiat currency, that hasn't kept Bitcoin from being more volatile and more unstable, the dollar can be subject to really reckless policies from central banks, but Bitcoin seems to be susceptible to tweets. So I don't accept the argument that it is has an inherently greater stability function.

But let's just say we did. Well, how does the cryptocurrency world, Bitcoin being on a ledger, immunize it from nation state control? I'll give you one example. What if they passed a law outlawing Bitcoin? Now, they're not going to do that. They don't need to do that. But is there going to be more regulation? There sure is, is there going to be more controls, they're going to be more reporting? Now they can say you can't do it, we can hold it in cold storage, and it's on the ledger, there's nothing they can do. But if they criminalize it, how many people are going to use it and that further regulation, so I just simply believe it'll end up being something that some people do use hopefully, at some point, it'll be people who aren't criminals and hackers. And it will be a medium of exchange, but never come remotely close to being a broadly accepted medium of exchange for its embedded instability, and the fact that there are other, whether people like it or not, there are other crypto alternatives. So the idea that it has exclusivity on the blockchain is totally untrue. And therefore, that destroys the supply argument. So the government can squash this like a bug if it wants to, it hasn't yet because it hasn't needed to.

EICHER: Well, thank you to Rob Bailey and Seth Simmons for good questions this week. Maybe you have something on your mind, something you heard here that prompts a question or something you read or heard somewhere else. calls, and you'd like to have David's response to it. If so, send your question to feedback@worldandeverything.com. If you email your question, I'm more than happy to ask it of David, but I'd much prefer to hear your questions in your voice. Just as you heard Rob and Seth today, takes just an extra minute. If you open your Voice Memo app on your phone, ask your question. Then you can attach the file to an email and send it again to feedback@worldandeverything.com. 

David Bahnsen is founder managing partner and chief investment officer of the Bahnsen Group. His personal website is bahnsen.com. David, thank you, and we'll see you next time.

BAHNSEN: Thanks so much, Nick.

NICK EICHER, HOST: Today is Monday, December 5th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. Next up: the WORLD History Book. Today, the last Apollo mission to the moon—50 years ago this week. Here’s Paul Butler.

PAUL BUTLER, REPORTER: As NASA’s Artemis 1 moon mission begins its return to the earth this week, we return to Cape Kennedy on December 7th, 1972:

AUDIO: All engines are started. We have ignition… 2-1-0. We have we have a lift off and it's lighting up the area. It’s just like daylight here at Kennedy Space Center. The Saturn V is moving off the pad. It has now cleared the tower…

After a three hour launch delay, Apollo 17 lifts off at 12:33 a.m. EST. Three astronauts and five mice sit atop the large Saturn V rocket. CBS’s Walter Cronkite anchor’s the late night television coverage of the launch.

CRONKITE: Well, now we've got them on the way to the moon: Commander Eugene Cernan, Navy Captain 38 years old veteran of two space flights. And two space rookies…Dr. Harrison Jack Schmitt, a geologist, 37 years old, and the spacecraft commander who will remain with the command module America: Ron Evans, a 39 year old commander in the Navy and a Vietnam veteran, the first one to go into space…

And so the mice don’t feel left out, their names—given to them by the astronauts—are Fe, Fi, Fo, Fum, and Phooey.

CRONKITE: The astronauts are now successfully in their Earth orbit…And now their next big mission…comes along at …3:34 this morning…when they will fire off their S4B engine again and start on their trip to the moon…

NASA’s Apollo 17 is the eleventh manned space mission in the program—and the first night launch of a U.S. human spaceflight. Vice President Agnew is on hand in the control room. He congratulates the NASA staff and Apollo 17 crew shortly after lift-off.

AGNEW: A lot of people seem to believe that this being the last Apollo marks the end of our space program. That is not the case. We hope that this will be only the beginning of more extensive explorations of space, and the use of the great collateral information that comes out of it.

While in orbit around the earth, the crew snaps one of the most famous images of the planet—often called The Blue Marble.

It takes three days to reach the moon. The astronauts conduct experiments, inspect the equipment, and test all the spacecraft systems.

The Apollo 17 crew arrives at the moon on December 10th. While Evans stays behind in the orbiter named “America,” Schmitt and Cernan head to the moon’s surface for three 7-hour moonwalks.

AUDIO: MOON LANDING

The lunar crew lands in the Taurus-Littrow valley—surrounded by 7000 foot mountains.

AUDIO: MOONWALK

With the help of their electric lunar module, the crew covers some 21 miles over the three days. During that time they set up the largest array of lunar surface experiments and sensors to date. The astronauts collect more than 100 pounds of lunar rocks and material. Standing next to the planted American flag, Eugene Cernan dedicates one of the lunar rocks to the nations of the world:

CERNAN: The rock is composed of many fragments, of many sizes, and many shapes. When we return this rock, or some of the others like it to Houston, we'd like to share a piece of this rock with so many of the countries throughout the world…

Apollo 17 marks the end of the $25 billion mission to the moon. It is the last human lunar landing. It is a momentous occasion.

Neil Armstrong was the first man on the moon—speaking one of the most famous lines in American history. Here at the end, Commander Cernan gets the final word:

CERNAN: And, as we leave the Moon at Taurus–Littrow, we leave as we came and, God willing, as we shall return, with peace and hope for all mankind. "Godspeed the crew of Apollo 17."

The lunar crew reunites with the orbiter on December 14th and spends a few hours transferring equipment and lunar samples. They then begin the three day return trip to the earth. They re-enter the earths’ atmosphere on December 19th and splash down in the Pacific Ocean — six days before Christmas. Oh, and in case you were curious, four of the five mice survived the flight—though only two were healthy.

AUDIO: SPLASHDOWN

Keith Wright was one of the system engineers that worked on the lunar scientific equipment. In 2018 he summed up the value of the lunar missions this way in a documentary for Real Stories:

WRIGHT: Before we went to the moon, all we knew about it was what we could get from telescopes. Getting to the moon—being able to bring samples back, to be able to make measurements of its atmosphere, its magnetic field, what its structure was—taught us a lot, not only about the moon, but how the Earth and the Moon were created.

The Artemis missions pick up where Apollo left off. While NASA leads the effort to return humans to the moon and establish a long-term outpost there, the international collaboration intends to send mankind on to Mars and, God willing, beyond.

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

NICK EICHER, HOST: Tomorrow: boys falling behind in school. We'll hear what we can do about it.

Plus, our Classic Book of the month with reviewer Emily Whitten.

That and more tomorrow.

I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard.

The World and Everything in It comes to you from WORLD Radio.

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