The World and Everything in It - January 17, 2022
On Legal Docket, Supreme Court cases about disability rights and retirement plans; on the Monday Moneybeat, the latest economic news; and living Dr. King’s dream. Plus: the Monday morning news.
MARY REICHARD, HOST: Good morning!
The Supreme Court considers the rights of the disabled.
NICK EICHER, HOST: That’s ahead on Legal Docket.
Also our weekly visit with economist David Bahnsen, we’ll talk inflation and the Fed.
And on this Martin Luther King Day, an Alabama couple reflects on the strides African Americans have made.
REICHARD: It’s Monday, January 17th. 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 the news. Here’s Kent Covington.
KENT COVINGTON, NEWS ANCHOR: Omicron may soon peak in some parts of U.S., longer path in others » Some health officials believe the omicron COVID-19 wave is close to peaking in some parts of the United States.
Dr. Ashish Jha with Brown University of Public Health said Sunday…
JHA: We have seen a spike that has peaked In New York, New Jersey, I think in New England, probably Florida. And what I expect is hospitalizations to peak the next week to 10 days in those places. The rest of the country still has some way to go.
Positive tests continue to soar to new record highs, now numbering about 800,000 per day in the United States. Omicron is nowhere near as severe as the original strain or the delta variant. Still, the volume of cases has pushed new hospital admissions to a pandemic high.
Daily deaths are just a little over half the number seen one year ago. But deaths are once again climbing at nursing homes. The CDC reports well over 600 COVID-related deaths among nursing home residents for the week ending Jan. 9th. That was a 70 percent increase over a two-week span.
Still, Dr. Amesh Adaljia with Johns Hopkins University says he’s optimistic about the future.
ADALJIA: Once each metropolitan area, each part of this country gets through this omicron surge, we’re going to be in a different place with more rapid tests, more monoclonal antibodies, more paxlovid, the Pfizer antiviral, so that we will be able to kind of chart a path forward treating this like other respiratory infections.
Federal govt. works to solve COVID-19 test shortage » And speaking of more rapid tests, they’ve been pretty hard to find in recent weeks with cases surging. U.S. Surgeon General Dr. Vivek Murthy told ABC’s This Week that’s a problem the administration is working to solve.
MURTHY: With regard to testing, the president said very clearly in December that we have made a lot of progress on testing but we have more to do.
The federal government is working to ramp up production of tests and has launched a new website to order free at-home tests. That website is COVIDtests.gov. Americans without health insurance can begin ordering rapid tests on Wednesday. Just don’t expect rapid delivery.
The kits will reportedly begin shipping within seven to 12 days.
President Biden recently announced a plan to distribute 1 billion tests for free.
FBI investigating hostage situation at Texas synagogue » The FBI is investigating a hostage situation at a synagogue in the Dallas-Ft. Worth area.
A man took four people captive at the Beth Israel synagogue for more than 10 hours Saturday.
Special agent Matthew DeSarno…
DESARNO: Our investigation will have global reach. We have been in contact already with multiple FBI legats to include Tel Aviv and London.
The suspect has been identified as British national Malik Faisal Akram. He was shot and killed after an FBI SWAT team stormed the building. Police say the details of that shooting are still under investigation.
All of the hostages escaped unharmed.
The service was being live-streamed when Akram entered the synagogue. He could be heard demanding the release of a Pakistani neuroscientist convicted of trying to kill U.S. Army officers in Afghanistan.
President Biden said Sunday…
BIDEN: This was an act of terror. This was an act of terror. And not only — was related to someone who had been someone who had been arrested, I might add, 15 years ago, and had been in jail for 10 years.
Investigators say it’s not yet clear why the suspect chose that particular synagogue.
Ukraine says Russia behind cyberattack in 'hybrid war' move » Ukraine says Russia was behind a cyberattack that defaced its government websites last week.
Ukraine’s Ministry of Digital Development released a statement Sunday. It said “All evidence indicates that Russia is behind the cyberattack.” It added—quote—“Moscow continues to wage a hybrid war and is actively building up its forces in the information and cyberspaces.”
On Sunday, U.S. national security adviser Jake Sullivan told CBS’s Face the Nation…
SULLIVAN: We have been working closely with the Ukranians to harden their defenses and we will continue to do so in the days ahead.
Sullivan said the U.S. government has not yet attributed the attack to Russia, but he said it is straight out of “the Russian playbook.”
Microsoft said dozens of computer systems at Ukrainian government agencies were infected with destructive malware disguised as ransomware. That means the actual purpose of the attack was not to extract money but to do damage. The company said it first detected the malware on Thursday.
I’m Kent Covington. Straight ahead: a question of disability rights.
This is The World and Everything in It.
MARY REICHARD, HOST: It’s Monday, January 17th, 2022 and you’re listening to The World and Everything in It from WORLD Radio. Good morning! I’m Mary Reichard.
NICK EICHER, HOST: And I’m Nick Eicher. It’s time for Legal Docket.
On Thursday, the U.S. Supreme Court handed down opinions in the two COVID19 mandate cases the justices heard the week prior.
The high court blocked one of them but allowed the other.
In the case involving OSHA—the Occupational Safety and Health Administration—the court’s 6-3 ruling stops the Biden administration’s vaccine-or-test rules for large private employers. The conservative majority reasoned that OSHA’s origin statute is about regulating workplace safety. Congress gave the agency no authority to regulate ever-present dangers in the world that also happen to exist at work.
REICHARD: The majority pointed out that OSHA treated all occupations exactly the same way. For example, a truck driver who does his work alone is not in the same risk category for infection as would be a worker in a meatpacking plant.
Furthermore, the court reasoned, Congress must clearly delegate to an agency powers of such enormous economic significance. As Justice Neil Gorsuch wrote: if proper application of the law only applied in “more tranquil conditions, declarations of emergencies would never end … .”
Court analysts saw this decision as a victory for the constitutional concept of separation of powers. And a rebuke of the Biden administration’s attempt to work around the law.
EICHER: The other mandate stands. That’s the one that says you either take the vaccine or lose your job in healthcare.
This one went 5-4. Chief Justice John Roberts and Justice Brett Kavanaugh joined the court’s three liberals to uphold that mandate.
The court grounded the decision in a hodgepodge of different statutes that involve Medicare and Medicaid funding. Basically, if a hospital wants federal funds it must accept federal conditions, and one of those conditions is now mandated vaccinations.
REICHARD: Dissenting Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Amy Coney Barrett thought the same reasoning that applied in the OSHA ruling ought to apply here. That is, the law authorizing the Department of Health and Human Services doesn’t allow agency work-arounds to impose an irreversible medical treatment onto 10 million healthcare workers.
The upshot to my mind is that neither opinion puts a real limit on what the federal government might do. As former federal prosecutor Andrew McCarthy wrote in National Review: The justices are simply saying that Congress must be clear in its enabling language.
In other words, the only limiting principle here is Congress.
EICHER: Okay, on to oral arguments.
First, a question of disability rights.
This case involves a woman by the name of Jane Cummings. She is deaf and her vision is so severely limited that she is classified as legally blind. She had sought physical therapy for chronic back pain from an outfit called Premier Rehab.
Because of her disability, Cummings said she needed Premier Rehab to provide special help in her therapy sessions, an interpreter who could communicate in American Sign Language.
Premier Rehab declined to do that, saying she could use other methods of communication: writing notes, for example, or she could bring along her own interpreter.
Cummings sued, arguing that under Title VI of the Civil Rights Act of 1964 and other laws, she is entitled to damages for emotional distress because Premier Rehab discriminated against her based on her disability.
REICHARD: You’d think this would already be worked out by now, but it isn’t. Things get complicated because those laws aren’t explicit about the particular kind of damage, in this case emotional distress.
Here’s Cummings’ lawyer, Andrew Rozynski:
ROZYNSKI: Emotional distress damages are the most common and often the only form of compensatory damage remedy for victims of intentional discrimination.
But Premier Rehab’s lawyer Kanon Shanmugam argued Cummings sued under the wrong laws, because the ones she used don’t provide for damages for emotional distress.
SHANMUGAM: And so I think that that points up the quintessentially legislative nature of the undertaking here and a reason for the Court to be cautious.
Regardless, Justice Elena Kagan thought non-economic harm matters. Like not receiving help from an interpreter.
KAGAN: But we've long recognized, Mr. Shanmugam, that discriminatory harms are often stigmatic in nature, that they can be very deep and very wounding even if there is no economic harm of the kind that you're talking about. SHANMUGAM: And yet, Congress has made the judgment under these foundational statutes that I just referred to that emotional distress damages are not available.
Other ways to obtain those damages exist, Shanmugam countered. Like from remedies offered under state law.
Not only that, but people need to be on notice about the things they might be liable for. The laws under which Cummings sued are silent about private remedies, so how would Premier Rehab even know?
That’s very different from other anti-discrimination laws that clearly lay out what damages you can receive.
The federal government sides with Cummings. Here’s Assistant to the Solicitor General Colleen Sinzdak beating back claims that emotional distress damages awards can get out of hand:
SINZDAK: …we have had 30 years of these kinds of damages being available, and while -- while Respondent and their amici attempt to cite examples of high awards with respect to emotional distress, they just aren't from this family of statutes. And you have to assume that they've been boiling the oceans looking for sort of exorbitant awards, and they're not finding them.
The circuits are split on whether emotional distress is a foreseeable consequence of discrimination sufficient to warrant damages. The justices have to figure out what kind of case this really is and how it fits into the various related statutes.
This last case today has to do with retirement plans. It’s hard to tell this in an exciting way. But when your retirement money is on the line? You can get excited about it real fast.
Listen to lawyer for employees of Northwestern University who participated in the school’s retirement plan. David Frederick:
FREDERICK: Wasting beneficiaries' money is imprudent. Congress enacted ERISA to impose a duty Judge Friendly famously said was the highest known to the law, a fiduciary duty.
Well, heads up to Congress on that first line about wasting money. But that’s another story.
The employees allege the people in charge of the plan breached their fiduciary duties under a law known by the acronym ERISA, Employment Retirement Income Security Act. Paid too much for recordkeeping, paid too many management fees.
Justice Elena Kagan laid it out this way. I’ve edited to keep it clear.
KAGAN: Mr. Frederick, are you saying that, basically, Northwestern just failed to use its existing leverage, failed to bargain, just was -- you know, there was a bargain right in front of it, it -- and it -- it ignored it. That just sounds like negligence and bad trustee management.
Like any good lawyer, Frederick wasn’t going to look a gift horse in the mouth.
Justice Thomas got down to numbers and where to draw the line.
THOMAS: At some point, how much difference would there have to be before it doesn't matter? I mean, you could say there could be an egregious case in which they could have made a 20 percent return on investments, but you think that…they make a 19 percent return. You disagree as to what the strategy should be. I mean, so you say there's no limit for them, but, you know, there's no stopping point for you either.
FREDERICK: Well, the stopping point for us, Justice Thomas, is objective reasonableness…
Several legal threads ran through oral argument. Like what does an ERISA plaintiff have to allege to state a viable claim that fees and expenses are too high?
Gregory Garre argued on behalf of Northwestern University in defense of its handling of the retirement plans. He argued that his client can’t be liable for having some higher cost options for investment when it also lets participants choose some lower cost options. Also, the complaint is just too vague.
Justice Gorsuch took up for him in this question about judicial restraint directed to Frederick for the employees:
GORSUCH: It does raise some questions about judicial competence and administration and realms of reasonable judgment. What guidance would you have us give? Because I don't think you'd say -- want courts to say 40 is a magic number and -- and -- and that choice is bad. I mean, all things equal, choice is usually a good thing.
Justice Kagan took up for the employees with this hypothetical directed to Garre:
KAGAN: Suppose there were a complaint that said the fees that they were paying were much higher than comparative plans have paid, and this was because they never went back to their record-keepers and used their bargaining power and really stomped on the table and got lower prices and they never put out the recordkeeping function for bids and they never did a bunch of things that can lead to lower recordkeeping fees.That's sufficient, isn't it?
GARRE: I think that's much closer, and -- and I don't know the exact complaint.
Garre dodged answering that question.
ERISA disputes come up a lot at the Supreme Court. This time, the justices seemed to cast about for some middle ground: a way to stem the tide of these kinds of lawsuits with a way to let a complaint develop enough to see if it has any merit.
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 joins us. Hey, David, good morning.
DAVID BAHNSEN, GUEST: Good morning, Nick. Good to be with you.
EICHER: Everybody is feeling the effects of higher prices just for everyday purchases, so inflation is not an abstract economic concept but we do have a new data point on that, measuring the extent of it. The Consumer Price Index for the month of December, it’s up 7 percent versus December a year ago. November it was 6.8, October 6.2, so three months in a row above 6 and the numbers seem to bear out what we’re feeling. All kinds of superlatives go with that December reading, it’s the biggest year-on-year rise since 1982—that’s what you see in the financial-press headlines.
But give us some context, David. A good bit of this has to be base effect, all the comparisons to the year 2020, that’s an outlier year because of Covid.
BAHNSEN: Well, yeah, I mean, some of it might actually still be a little bit of base effect, I was surprised how low prices still were as of December of 2020. And so the CPI of December 21, is still coming off of that number. But as we've done all along, we look to the corresponding month of 2019. And we're still seeing prices higher, it's just that they're not quite as dramatic and sensational. But three and 4% increases are still well above standard inflation levels, even if they're not quite as exciting as six and seven. However, 37% in US cars and 14% in new cars. It's a huge part of the number. But there's other elements as well, energy, because energy prices had started moving higher in December 2020. Energy was a huge part of the increase in full year 21, but not as much in December. So there isn't anything in this number. That should be a surprise, it is above average price escalation in a period of dramatically above average labor shortage and supply inadequacy, and that is the causation. And it's rather clear, not exactly when, but that the primary cause is self correcting. New cars are not going up this year 20% in price and used cars are not going up 30% in price. So to the extent of the motive of the largest profit margins, and car manufacturing in history exists right now there will be greater supply of automobiles and decline in prices. And then that's going to have the effect of bringing a lot of those numbers down. But food prices and other elements of the number exist. And so I think that my forecast for something that is very difficult to forecast is probably about right, that the number stays elevated and allows for a continued narrative in this brain of escalated inflation for the next three to six months, I think three minimum six maximum. And I think in the second half of the year, the narrative changes to wow, look at the declining rate of inflation. So whereby prices will still be going higher, but they'll be going higher at a lower rate. And yet that takes away the ability for big flashy headlines. When you get that disinflation that, frankly, we've been much more used to until this last year.
EICHER: Speaking of flashy headlines, we did have some of that with a Senate confirmation hearing for the head of the central bank—Federal Reserve chair Jerome Powell. His term is up and President Biden reappointed him, so he’s back through the confirmation routine. Anything stand out to you from the hearing?
BAHNSEN: Congressional hearings, Senate and House are frequently opportunities for pretty awful people to grandstand. And you got some far left grandstanding this week, a couple of the progressives that are going to be opposing him because the Federal Reserve as a central bank is not doing enough for climate change or racial equity. I think it says a lot more about them than it does about Jerome Powell. I do have criticisms of Chairman Powell, although I believe him to be a perfectly fine man and gentleman, but one of my criticisms is not that he hasn't solved for global warming or racial tensions, as I do see that as shall we say, substantially out of their job description. But what they have done right now is set up an expectation that they intend to get off the zero bound in the interest rate meaning get from zero to something higher than zero. And there are a number of people that will throw out certain amount of rate increases. So it does this thing called fed credibility. They want to be credible to the market that they're serious. And then by the time they get, let's say, three hikes, and they had really told the market, we might do four or five. By that time, it's very likely that that disinflation, I spoke about that a lower rate of inflation has surfaced, and then they have data support to not go higher. I do believe they can do three rate hikes without almost any tension, surprise or distress whatsoever. I believe they ought to do more. But I will be very surprised that they do do more. But that's different than me being surprised that they will talk about doing more, because I think this is a clever way to have your cake and eat it too. Get up to about the three rate hikes that need to be at and then have a pretty fair amount of confidence that there will be data to rationalize not going higher, why do they not want to go higher, because I think they do know that they face at that point, the potential of disrupting credit markets, if they are to be also decreasing their balance sheet. And that's a huge piece of what has to happen far more important than where they get the interest rate is the $9 trillion of assets they've accumulated, they need to get a couple trillion if not more rolled off of that balance sheet to take some of that liquidity out of the system. And the last time they tried doing both at once, at a substantial level hiking rates and lowering their balance sheet. They got away with it at a modest level for a little while. And then by the end of 2018 really credit markets froze up and they reverse course, dramatically. I don't believe they're gonna let that happen again. And so that's my forecast for the Fed actions will be over the next few quarters.
EICHER: All right, David Bahnsen, financial analyst and advisor, savvy economist, head of the financial planning firm The Bahnsen Group. He writes at DividendCafe.com, daily dose of markets and the economy for your email inbox. David, thanks for this. See ya next week.
BAHNSEN: Thanks so much Nick.
MARY REICHARD, HOST: Today is Monday, January 17th. We’re so glad you’ve turned to WORLD Radio to help start your day.
Good morning. I’m Mary Reichard.
NICK EICHER, HOST: And I’m Nick Eicher. Today is Martin Luther King, Jr. day.
King was actually born on January 15, 1929 in Atlanta. President Ronald Reagan signed the legislation to create an annual federal holiday to mark the life and work of Martin Luther King.
REICHARD: How will you mark the King holiday? For many, today will be a day of service. Others will come together for parades or ceremonies to honor him.
And then there will be small, intimate gatherings, led by men and women who were there, both on the front lines and behind the scenes of the civil rights movement.
EICHER: WORLD’s Myrna Brown invites us to come along for one of those living room history lessons.
AUDIO: [WALKING UP STAIRS]
MYRNA BROWN, REPORTER: As I walk up concrete steps, two huge Sago Palm trees mark the entrance of the ranch-style brick house I used to visit as a child.
AUDIO: [RING DOORBELL]
As the doorbell announces my arrival, memories of impromptu gardening and gumbo cooking lessons flood my mind.
AUNT MARETTA/UNCLE ROBERT: Hello, how are you?
This is the home of Robert and Maretta Golston. They’ve been married almost as long as I’ve been alive.
MARETTA: I am 72 years old and very proud of it.
ROBERT: I’m 77 and still do everything that I used to do when I was 30. (laughter)
Today my silver-headed aunt and uncle are pulling out the photo albums. My eyes get wide when I see the bright, toothy smile of a much younger Aunt Maretta, wearing what I’m sure was a “fly” sixties haircut.
With his head tilted slightly to the left, flashing a boyish grin, a teenage Uncle Robert is wearing a tie with a huge knot and a pin-stripped vest. As we sit in the beige-carpeted living room, stories about milk-shakes and ice-cream sundaes fill the room.
MARETTA: Rexall was located in the heart of downtown, Prattville.
Prattville, Alabama is a suburb of Montgomery, the state’s capital. Dr. Martin Luther King Jr. pastored a church in Montgomery, also the location for numerous boycotts and civil rights marches. Prattville was just 19 miles away, with its own unrest unfolding. At the center of it all, the town’s local drugstore.
MARETTA: And they had what you called a soda fountain where you could go and sit and order milkshakes and ice cream. But blacks were not allowed to go there and sit or order anything. Anything you wanted in that line, you had to go to the back door of the Rexall and maybe you could get an ice cream cone. Maybe.
Aunt Maretta was about 16-years-old and like most teens, she and her friends were bold and inquisitive.
MARETTA: Not as bold as the kids are today, but it did make us feel bad. Why can’t I go and enjoy a milkshake? And we knew it was because of the color of our skin. So that’s where my father and other blacks in the community got involved.
Her father, Charlie Smith, was a church and community leader. As she pulls out an old black and white photograph of her dad, I notice the industrial-sized broom he’s clutching. Like most fathers during that era, Charlie Smith kept a tiny, but warm roof over the heads of his wife Thelma, and their ten children…all on a janitor’s salary.
MARETTA: So they couldn’t go out and picket because they would lose their jobs. Or they could be beaten or get killed. So it was left up to the teenagers to do that.
The year was 1966. Following Dr. Martin Luther King Jr.’s example, a group of teenagers marched through Downtown Prattville, leading a non-violent protest against the way they were being treated.
MARETTA: We had an organizer. Her name was Sallie Mae Hadnock. And she recruited teenagers. There were ten of us.
An old newspaper tells the rest of the story…the weekend edition of the Southern Courier…April 9th, 1966. The headline reads: “Prattville—A Very Tense Week for Students and the Police.” Aunt Maretta was one of those students.
AUNT MARETTA: The hatred… and they threw things at us. They spat on us.
They were arrested and jailed. But the trespassing charges against the teenagers were dropped. After that ordeal, Aunt Maretta’s father sent her away to a boarding school in Selma, Alabama. She went on to Nebraska to study education and eventually moved to Mobile, Alabama in the early 70’s. That’s where she met my uncle Robert.
ROBERT: I’ve rode the bus before and you always knew where your place was. You didn’t sit up front. You knew you had to be in the back, two or three rows. It was just kind of part of the makeup of the way society was. That was at the post office, the paper companies...
..And at Wormser hat shop, where Uncle Robert worked as a salesman after high school graduation.
ROBERT: We used to sell hats and caps and gloves and stuff. And my job primarily was to sell to the black people, the black community. I couldn’t sell to the whites at that time.
Uncle Robert says there were few job opportunities in the South for blacks.
ROBERT: All of that started to change with Dr. King got killed in 1968. And the times that I remember is when the great migration started. Blacks were leaving the South and going to New York, New Jersey, California, Chicago and Detroit.
Uncle Robert migrated to New Jersey in 1964 before coming back to Alabama. He retired as head of maintenance for a management company. Aunt Maretta was a school principal and my first grade teacher. Care to guess who introduced them? I was a 6-year-old matchmaker.
As a couple, I’ve learned much from them over the years. Compassion and understanding from Uncle Robert.
ROBERT: There were a lot of nice white people during that time. They didn’t all hate you.
As they wrap up their living room history lesson, one more story about the right and privilege of voting from Aunt Maretta.
MARETTA: Local, federal, I vote! And I take my grandbaby. When she was with me, she would go to the poll to vote.
Reporting for WORLD, in Mobile, Alabama, I’m Myrna Brown.
EICHER: If you’d like to see photographs from the collection of Myrna’s aunt and uncle, check out WORLD Watch, our video news program for students. Myrna produced a companion piece for that program.
Maybe you’re not a WORLD Watch subscriber and that’s why we’re releasing Myrna’s piece free today on YouTube. We’ll post a link in the transcript of today’s program.
NICK EICHER, HOST: Tomorrow: the metaverse. We’ll explore this new internet frontier and find out why tech companies are so excited.
And, critical race theory. We’ll tell you about a lawsuit in Virginia challenging its use in public schools.
That and more tomorrow.
I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard.
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