The World and Everything in It - February 28, 2022

MARY REICHARD, HOST: Good morning!

Tax season is here and the Supreme Court took up the meaning of IRS tax deadlines. Justice Elena Kagan threw some shade on Congress. 

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

Also today the Monday Moneybeat. Economist David Bahnsen joins us and I’ll ask him about the efficacy of economic sanctions on the Russian regime.

Plus the WORLD History Book. 460 years ago—a massacre that ignites the French Wars of Religion

REICHARD: It’s Monday, February 28th. 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: Up next, Kent Covington with today’s news.

KENT COVINGTON, NEWS ANCHOR: Putin puts nuclear forces on high alert as Ukraine invasion continues » Russian President Vladimir Putin ordered his country’s nuclear forces to be put on high alert on Sunday.

Putin claimed that was in response to what he called “aggressive statements” by NATO powers.

But White House Press Secretary Jen Psaki told ABC’s This Week…

PSAKI: This is really a pattern that we’ve seen from President Putin through the course of this conflict, which is manufacturing threats that don’t exist in order to justify further aggression.

A senior U.S. defense official told the Associated Press that Putin is—quote—“potentially putting in play forces that, if there’s a miscalculation, could make things much, much more dangerous.”

Amid the crisis, Ukrainian Foreign Minister Dmytro Kuleba says his government has agreed to send a delegation for talks with Russia near Ukraine’s border with Belarus.

KULEBA: We are going there to listen. And we are going there to say what we think about this war and Russia’s actions.

But many doubt whether Moscow is sincerely interested in negotiating an end to its invasion of Ukraine.

More battles broke out Sunday in Ukraine's second-largest city, Kharkiv, as Russian troops closed in around the capital of Kyiv.

They also attacked strategic ports in the country's south.

Ukraine’s Ambassador to the United States Oksana Markarova said invading forces continue to target both military and civilian infrastructure. But…

MARKAROVA: Again, Ukrainian spirit is growing every day. We all are united around our president and around our armed forces in defending our home.

Ukrainian defenders are putting up stiff resistance appearing to slow Russia's advance, though they’re certainly not stopping it.

Western leaders step up response to Russia » Meanwhile, the top official in the European Union outlined plans by the 27-nation bloc to close its airspace to Russian airlines. Canada is joining them in taking that measure.

And in a historic move, European Commission President Ursula von der Leyen said Sunday…

LEYEN: For the first time ever, the European Union will finance the purchase and delivery of weapons and other equipment to a country that is under attack.

She said the EU will also ban some media outlets that are essentially just mouthpieces for the Kremlin.

In Germany, Chancellor Olaf Scholz said Sunday that in a policy shift, his country will send weapons to Ukraine. He also said Germany will sharply increase its spending on defense in response to Russia’s actions.

U.S. Ambassador to the United Nations, Linda Thomas-Greenfield told the UN General Assembly on Sunday…

GREENFIELD: We need to take extraordinary actions to meet this threat to our international system and do everything we can to help Ukraine and its people.

President Biden just approved $350 million in military aid to Ukraine. And he’s asking U.S. lawmakers to approve more than $6 billion in total aid.

Biden’s Supreme Court pick prepares for confirmation process » The president’s Supreme Court pick is gearing up for closed-door meetings with senators on both sides of the aisle as she hopes to garner enough votes to win confirmation. Biden announced his choice to replace retiring Justice Stephen Breyer on Friday.

BIDEN: My nominee for the United States Supreme Court is Judge Ketanji Jackson.

She would be the first black female justice ever to serve on the high court. Former Democratic Alabama Sen. Doug Jones will serve as Jackson’s “sherpa,” guiding her through the confirmation process.

Biden noted that the 51-year-old Jackson did win a few Republican votes in her confirmation to her current post.

BIDEN: She was confirmed with a bipartisan Senate vote to the U.S. Court of Appeals for the District of Columbia, considered the second-most powerful court behind the Supreme Court itself.

But those GOP senators who approved her for that job have not committed to back her for the nation’s highest court.

Among them, South Carolina Sen. Lindsey Graham. He said her nomination—quote—“means the radical Left has won President Biden over yet again.”

Republicans note that Jackson was the top choice of many within the hard left wing of the Democratic party.

But with the filibuster now out of play for Supreme Court nominations, Democrats can confirm Jackson without any Republican votes.

Taliban official says dozens of criminals arrested in sweeps » The Taliban says it just arrested dozens of criminals, kidnappers, and smugglers in operations across Kabul. WORLD’s Josh Schumacher reports.

JOSH SCHUMACHER, REPORTER: Taliban spokesman Zabiullah Mujahid said authorities seized hundreds of weapons, including rocket-launchers and grenades, as well as 13 armored vehicles and 13 tons of explosives.

In total, nine kidnappers, six members of ISIS, and 53 thieves were arrested.

But some have heavily criticized the Taliban’s door to door operations amid reports of abuse suffered by civilians at the hands of Taliban forces.

Mujahid also welcomed a recent U.S. decision to ease restrictions on Afghan banks. The U.S. Treasury issued a new general license that will allow for money transfers for Afghan businessmen and others, but exclude individual Taliban members.

The United States froze billions of dollars of Afghan government assets after the Taliban seized control last August.

Reporting for WORLD, I’m Josh Schumacher.

I’m Kent Covington. Straight ahead: a dispute over tax filing deadlines.

Plus, America gets its first national park.

This is The World and Everything in It.

MARY REICHARD, HOST: It’s Monday, February 28th and you’re listening to The WORLD and Everything in It. We thank you for listening! I’m Mary Reichard.

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

One ruling from the U.S. Supreme Court for you today: it came last week in a copyright dispute between two clothing companies.

The court ruled 6-3 to protect a company’s copyright. The majority said you’re not allowed to invalidate a copyright, merely by pointing out inadvertent errors in documents used to register the copyright.

The fight was over a fabric design on a jacket. One company said the other company’s copyright documents contained mistakes. Therefore, the argument went, the copyright wasn’t actually valid and so the fabric design was fair game.

But a majority of justices disagreed. The company challenging the copyright gave no evidence that the copyright holder knew its information was wrong.

The ruling overturns a decision of the U.S. Court of Appeals for the Ninth Circuit.

REICHARD: Also last week the justices accepted a new case, fast-tracked to be argued and decided this term.

It’s over the “Remain in Mexico” policy that former President Trump put in place. The policy requires asylum seekers at the southern border to stay in Mexico during the time the government works on their asylum applications.

President Biden rescinded the rule last year, but a lower court said the president violated federal law in rescinding it, and ordered it reinstated.

Now the high court will soon decide the matter.

EICHER: Alright. Now on to the last of oral arguments from January. Two of them.

The first one has to do with taxes. Founding Father Benjamin Franklin wrote about them back in 1789. In a letter to a French scientist, Franklin wrote: “Our new Constitution is now established, everything seems to promise it will be durable; but, in this world, nothing is certain except death and taxes.”

Now, that idea had been expressed before, but Franklin’s is the most famous version.

And so we can say that along with the certainty of taxes is the certainty of death and deadlines.

REICHARD: Right, tax deadlines and deadlines related to deadlines, such as how late is too late?

Suppose you miss a filing deadline, the IRS imposes a penalty, and then says it will levy your bank account?

Suppose you respond in time but then the tax authorities say too bad, you lose anyway.

And then you respond to that with a petition to review the decision, but you’re a day past that particular deadline?

Here’s what the law in question says: “[A person] may within 30 days of a determination under this section, petition the Tax Court for review of that determination.”

But here’s a question: Is that 30-day time limit hard and fast, or is it subject to tolling? Meaning, can we pause the clock while working out the dispute?

EICHER: Sounds simple, but then if it were, it’d probably not be a matter for the Supreme Court.

The lawyer for the presumably late taxpayer argued that Congress didn’t intend a hard deadline under these circumstances. A natural reading supports her client. Here’s lawyer Melissa Arbus Sherry trying to make that point:

SHERRY: Congress enacted this collection due process regime in order to protect taxpayers from IRS abuses. It would not have included a rare and harsh jurisdictional deadline to close those courthouse doors. 

REICHARD: Besides, if Congress meant a hard deadline, it would have said so outright. But it didn’t say that.

Here’s the IRS argument: Timely means 30 days from the time the IRS determines a matter, period. The taxpayer’s petition contesting that IRS determination did not arrive within that 30-day frame. It arrived on day 31.

That’s too late.

But Justice Stephen Breyer consulted a layman’s tool that leaned in favor of the tardy taxpayer.

BREYER: The law dictionary says equitable tolling is a court’s discretionary extension of a legal deadline. So they extended the legal deadline, therefore, it is timely.

“Equitable,” meaning fair to all parties. And Sherry for the taxpayer reminded the court of what’s really going on in many of these tax cases:

SHERRY: The majority of people are really asking for collection alternatives. They're saying there's a hardship. There’s a reason why you shouldn't levy on this particular piece of property. And a refund action after the fact once a levy's already occurred is not going to solve for any of those harms, which is what Congress was really trying to get at here.

But the lawyer for the IRS warned a ruling in favor of soft deadlines will create what an economist would call a perverse incentive—giving taxpayers a cause to misuse the deadlines. Something like deliberately filing a petition late, knowing you can assert the time limit tolled at some point in the past.

Procrastinators among us know this is true.

Justice Elena Kagan noted one guideline for writing laws called the “clear statement” rule. It says courts ought not interpret a statute in a way that will bring a particular result unless the statute makes it crystal clear its intent is to achieve that result.

And Justice Kagan revealed something rather unsettling:

KAGAN: If I have more than a suspicion that Congress has no idea what we're talking about in this area, that we keep on saying these words and presuming that Congress understands them, and I don't see any evidence that Congress really does. I mean, my gut is that Congress has never read any of our cases in this area. What should I do then?

This is an ongoing problem with the justices wanting to push Congress to do a better job in drafting laws. Some justices would prefer to focus on the equitable nature of a case, such as here, and favor the taxpayer.

I’d expect a narrow ruling here.

Ok, final case today. It’s a dispute over how to apply a federal law that reduced the penalties for crimes involving crack cocaine.

Back in the 1980s, it was common for courts to hand out much longer prison sentences for those convicted of using crack cocaine than for those convicted of using powder cocaine.

The effect of that was a racial disparity: Black people were more likely to use crack cocaine instead of powder cocaine and so they tended to be on the receiving end of harsher sentences.

About 30 years later, Congress attempted to remedy the disparity. It passed the Fair Sentencing Act in 2010 and former President Donald Trump made that law retroactive in 2018.

Here’s where the dispute originates:

A man named Carlos Concepcion received a 19 year prison sentence when he pleaded guilty to crack-cocaine charges. He received his sentence before the legal changes back in 2010 and 2018.

Concepcion wants a new sentencing hearing and argues that judges must consider how the law has changed.

But lower courts have denied him that, saying they’ve no obligation to re-evaluate his case.

The federal government argues that a district court may consider legal and factual developments after Concepcion’s conviction and it may order a reduced sentence. But it shouldn’t have to.

Even as the government agrees he is eligible for another hearing.

Justice Breyer wasn’t buying it.

BREYER: I thought Congress solved this. And the way I thought they solved it was they created a Sentencing Commission, and now, as discretionary, they said to the lower -- the district judge: Judge, you don't have to apply these rules, and if you don't, give us your reason. And then you can appeal, I thought, your sentence to the courts of appeals, who will decide whether your decision on these matters is reasonable. Now, I mean, that's been going on since 1986, and I don't think it's worked perfectly, but I don't think it's been a disaster.

Justice Samuel Alito wasn’t so sure about that in this exchange with government lawyer Matthew Guarnieri:

ALITO: One judge says, I think we should take these into account because I'm resentencing this person. I want to make sure it's appropriate for this human being who's standing before me. Another judge says, no, this person was sentenced before. I think that the --person should get the sentence that this person merited on the day when that person was sentenced. That would be permissible as well?

GUARNIERI: Yes.

ALITO: So why -- and so I -- I come back to a question Justice Gorsuch provided to you. Why in the world…would Congress want that?

Yet Justice Brett Kavanaugh worried about disparate treatment of other kinds of crimes that involve cocaine and the career criminal in this exchange with lawyer for Concepcion, Luke McCloud:

KAVANAUGH: And my concern about saying, “oh, yeah, you can come in and get the benefit of the change in the career offender guideline” is that what about the defendants who are in prison for armed robbery or what have you?

Those people don’t get the benefit of a reduction in prison time.

McCloud answered that the racial disparities in sentencing prompted Congress to create an individualized process so district courts could correct problems.

And, he pointed out a painful truth.

MCCLOUD: Our sentencing system isn't perfect and it relies on imperfect human beings to make these decisions about other imperfect human beings standing before them. And so there will be some variation in the decisions that get made. I think that's true under any possible rule in this case, though.

KAVANAUGH: I think that’s probably right.

Carlos Concepcion is set to be released in early 2024. He has support from groups typically on opposite sides, for example, the liberal ACLU and the conservative Americans for Prosperity.

And that’s this week’s Legal Docket.

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

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

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

EICHER: Given the situation in Ukraine and that the main weapon for the United States and the West is not primarily military but rather economic and that’s, of course, your specialty. Why don’t you start by setting up the state of play on the economic sanctions front, responding to Russia’s aggression?

BAHNSEN: Yeah, I do think that it really will eventually come down to the sanctions. And I think one way or the other there is going to be capitulation. The question is, whose will the West capitulate to Putin? Or will Putin be forced to capitulate and grab some form of an off ramp, a face saving off ramp along the way? Now, when I talk about capitulation coming out of sanctions, I do believe the capacity is there to to force an ending pretty quickly. Some of the sanction efforts that have not yet been implemented: there's a lot of focus on targeting Russia's allowance on the SWIFT system, a banking mechanism for transfer of funds electronically around the international financial system. But I also think that there's an even more nuclear option, pardon the figure of speech, than the SWIFT system, and that is targeting Russia’s central bank, and effectively blocking the transactions of their own central bank with other international central banks, I think that would more or less ruin Russia's capacity for capital markets.

All of this so far, I've been focusing on the financial system and ignoring the real elephant in the room, which is energy. A blocking of Russian imports of oil and gas would ruin Russia. Now inversely, when we're talking about sanctions, Vladimir Putin could decide I'm not going to export oil and gas, recognizing he's doing significant economic harm to himself. But I brought up last week and I'll reiterate $640 billion dollars of Forex reserves that Russia now has, that's roughly 400 billion more than they've had in past situations. And so they do have a bit more financial lifeline. But the question for sanctions and the reason why it's a question as to how this thing will go, is that I do not know what the will and resolve is of both the US and Western European countries to do this. And therefore the uncertainty around who capitulates is unknown. Will we be looking at a situation where a Russian flag is hanging over Kiev, in a matter of days, and certain Western countries just start to accept it? At that point, I think you get long-term damage to global economic stability as it sinks in that we have allowed the international order to essentially fail. So that's how I'm seeing the chessboard right now, Nick. I'm sorry for the long answer, but there's a lot of things going on here.

EICHER: I wonder about hitting the Russian central bank. Is it possible that’s the best option with the lowest cost to the west? When we think about energy, especially for the Europeans but also for Americans, targeting oil and gas especially given the issue of who’s going to capitulate first, who’s going to feel the most pain? Is the central bank the way to go or oil and gas the way to go?

BAHNSEN: Well, first of all, to the first part of the presumption that the pain of cutting off Russian imports of oil (and) gas, that pain is to Europeans, the argument would be that Americans would feel it too, because prices would go higher. But I think prices would actually find equilibrium very, very quickly. And the US has its own access to oil and gas supplies, that there is no reason we would have to feel a persistent inflationary impact from it. So I don't even really believe that cutting Russia off that way, especially as a means to an end of ending this imperialist conflict, would net net be a negative I don't I don't accept that.

However, to your question on (the) central bank side, look, plenty of Americans are doing business with Russia. There's sales of goods and services. And there's also a lot of financial transactions that are caught up in the supply chain. We provide tooling and uncompleted goods that go into a process that means to completed product that is sold into Russia and If you cut off the central bank, you're very likely going to disrupt some element of transactions that would prove disruptive to some form of American commerce. Again, there's no free lunch as someone has written a book on, and we have no sanction effort we could take with financials, energy, prohibition on products being sold or bought - there's nothing we can do that doesn't harm us to some degree. There's a cost. The question is where the price to be paid is worth it. And that's where I would argue hurting - going after their central bank - hurts them more than us, and probably amounts to the greater good here.

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

Quickly unfolding story, lots of moving pieces, you can catch David’s daily writing at DividendCafe.com. He has a daily email newsletter on markets and the economy and, of course, he’ll be following the economic sanctions as they take hold. David, see you next time. Thank you!

BAHNSEN: Thanks for having me, Nick.

NICK EICHER, HOST: Today is Monday, February 28th. 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, a president creates the first national park; another outlaws the international slave trade; and poor leadership in France leads to the outbreak of religious war. Here’s senior correspondent Katie Gaultney.

KATIE GAULTNEY, SENIOR CORRESPONDENT: Richard Nixon famously said “the bloodiest wars in history have been religious wars.” One such example: The Renaissance-era French Wars of Religion. Those began March 1st, 1562, with the massacre of innocent Huguenots in Wassy, France.

Earlier in the 16th Century, followers of Protestant reformer John Calvin faced state-sanctioned persecution. Under the Catholic-led government, so-called Protestant “heretics” could lose their property, livelihood, and even lives for adhering to Calvin’s teachings. The ruling class in France saw forced Catholicism as a way to concentrate and maintain power.

On that particular day 460 years ago, Wassy was a royal town—the seat of the powerful Guise family.

Francis II, the Duke of Guise—a Catholic—gathered loyal forces and set upon a large group of Protestants at a worship service. They burst into the congregation, killing those in their path. Gordon-Conwell Seminary professor Ryan Reeves described that day.

REEVES: Now these are honest pastors and lay folks. And he murders and slaughters—some say, high double digits, 80, other estimates go as high as 200 folks. But it’s a staggeringly large number of unarmed lay folks that are killed, and roughly 100 are wounded.

Worshippers had been singing the Psalms in French as the attack began.

MUSIC: CONGREGATIONAL SINGING, FRENCH PSALMS

The assault went on for an hour. Word spread quickly, and more violence broke out. Over the course of the next four decades, 3 million people in the Kingdom of France died because of these civil wars. Historians consider it the second deadliest religious war in European history—second only to the Thirty Years’ War in Germany. Henry IV’s proclamation of the Edict of Nantes in 1598 finally offered Huguenots rights and protections, quelling the violence.

And we’ll move from persecution of one group of people to that of another.

In the early 1800s, the slave trade was booming in the United States.

CLIP: Gentlemen, gentleman, your attention… As advertised, we have a fine cargo of choice, healthy slaves…

Historians estimate between 6 and 11 million Africans were brought to America as slaves between the 16th and 19th centuries. By 1775, Africans made up 20 percent of the population of the Thirteen Colonies—second only to Americans of English origin.

On March 2nd, 1807, Congress approved a bill banning the importation of slaves from outside the United States. Then-President Thomas Jefferson—a slave owner—pushed forward the act to abolish the importation of slaves, calling participation in slave trade “violations of human rights.”

While perhaps well-intentioned, the change still made up a sort of cognitive dissonance, according to Professor Eric Foner of Columbia University. He told NPR host Michel Martin that saying it’s okay to own slaves, as long as they’re not imported, is a bit like animal rights activists saying it is okay to own pets, but not livestock.

FONER: And they made that distinction between the right of property and slaves where slavery existed, and the right to seize people and ship them across the ocean, which they say was really illegitimate.

The punishment for violating the law: prison time or a fine. But few actually enforced those measures. Smugglers saw opportunities to illegally import Africans as slaves. And, the domestic slave trade got a boost, too.

Despite loopholes and minimal enforcement, the 1807 act of Congress was a step in the right direction. Homegrown slavery increased as existing slaves had children. But the act vastly decreased the number of kidnappings on the African continent associated with trans-Atlantic slavery. The evil institution of slavery persisted for six more decades, until the 13th Amendment abolished it in 1865.

And for our final entry of the day, we’ll turn to a wonder in the Western United States.

On March 1st, 1872, President Ulysses S. Grant signed an act making Yellowstone America’s first National Park. Archaeological evidence dates civilization in the area back thousands of years, but the first organized expedition took place in 1870.

Explorers were stunned by the wildlife and plant diversity.

The park is around 2 million acres—most of that raw wilderness. Nearly 300 species of birds and 65 species of mammals reside there. A giant reserve of magma beneath the park powers some of its most memorable attractions, like the geyser Old Faithful that shoots out thousands of gallons of water each hour.

SOUND: OLD FAITHFUL ERUPTING

While Yellowstone was the first, there are now 59 total national parks in the United States. Yellowstone hosts millions of guests a year, reaching a high of over 4 million guests in 2016. But, if you’re planning a trip for the park’s 150th birthday, be mindful of the wildlife. Prior to 1970, feeding the bears was actually encouraged.

Park officials changed the rules after facing grizzly consequences. While rare, the most recent bear-related death in park history occurred in August 2015.

SONG: “Ole Faithful,” Eddy Arnold

That’s this week’s WORLD History Book. I’m Katie Gaultney.

NICK EICHER, HOST: Tomorrow: battle lines in Ukraine. Today we talked about economic sanctions on the program tomorrow. We’ll talk about the military situation.

And, word games. Wordle, anyone? We’ll find out what makes these types of games so popular.

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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The Bible says: The law of the Lord is perfect, reviving the soul; the testimony of the Lord is sure, making wise the simple. (Psalm 19:7 ESV)

Go now in grace and peace.

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