The World and Everything in It: January 6, 2025

MARY REICHARD, HOST: Good morning!

Can a lie be criminal fraud if nobody loses money? The Supreme Court pondered the principle and how far it might apply.

JACKSON: What about the family that says: it's very important to me to have a Christian babysitter. And someone comes and they purport to have this characteristic, but they don't.

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

Also today the Monday Moneybeat. David Bahnsen’s standing by.

And the WORLD history book: Today, the problem of government debt going all the way back to the 7th president.

SALTER: He was, even by the standards of his own day, a debt and deficit hawk.

REICHARD: It’s Monday, January 6th. 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: Time for news with Kent Covington.

KENT COVINGTON, NEWS ANCHOR: Congress plans » The newly re-elected speaker of the House Mike Johnson says Republicans have a lot of work to do between now and Donald Trump’s inauguration on the 20th.

JOHNSON:  We want to make sure that we're jump starting the agenda now over the next two weeks so that he's prepared and ready on, on day one.

He says the president-elect wants Congress to get to work on one massive policy package covering everything from border security to tax cuts.

Johnson concedes that even though the GOP controls both chambers of Congress, their majorities are slim, and moving big legislation won’t be easy.

Some Democratic members, like Congressman Jake Auchincloss, are already signaling opposition to planned Republican tax cuts.

AUCHINCLOSS:  I don't know how their fiscal hawks are going to be able to justify at a time when the stock market is up, jobs are up, wages are up, that they have to give tax cuts to corporations and the wealthiest and blow up the deficit.

Republicans say the answer to reigning in the deficit is pro-growth policies combined with slashing government waste and overspending.

Homan on deportations » Funding border security and immigration enforcement, as we mentioned, will be at the top of the priority list. And incoming border czar Tom Homan says the Trump administration will be working to reverse the impacts of border policies from the last four years.

HOMAN:  If you look at the historic number of illegal entries in the last four years, ICE, Immigration Customs Enforcement, has the lowest number of deportations in the history of the agency.

And he told CBS’ Face the Nation that the majority of those deportations were arrests made by the Border Patrol rather than deportations from within the country.

Ukraine support » Ukrainian President Volodymyr Zelenskyy says he will urge allies to boost his country's air defenses at a meeting this week in Germany. Dozens of countries, including the US, will participate in Thursday's meeting at Ramstein Air Base.

Republican Congressman Michael McCaul, who chaired the Foreign Affairs Committee until recently, has stressed the importance, in his view, of continuing to back Ukraine.

MCCAUL:  It's not just Putin. Putin is aligned with Chairman Xi in China, who threatens the Indo Pacific. He's also aligned with the Ayatollah in the Middle East, who we have seen threaten Israel.

But Republicans are divided on continued Ukraine support.

President-elect Donald Trump is preparing to take office with a vow to end the nearly 3-year-old war.

Presidential medal of honor » At the White House, President Biden fastened medals around the necks of former Secretary of State Hillary Clinton, actor-director Denzel Washington and others over the weekend:

BIDEN:  For the final time as President, I have the honor of bestowing the Medal of Freedom our nation's highest civilian honor on a group of extraordinary, truly extraordinary people.

Others among the 19 awardees included singer and philanthropist Bono of U2 fame, Magic Johnson, and Michael J. Fox.

He also bestowed the honor on controversial billionaire Democratic donor George Soros.

New Orleans latest » The FBI says the perpetrator in last week’s deadly terror attack in New Orleans may have planned the attack months in advance, making two trips to the city before the new year’s morning attack.

And Christopher Raia with the FBI’s Counterterrorism Division told reporters Sunday that the bureau still believes Shamsud-Din Jabbar acted alone.

RAIA: All investigative details  and evidence that we have now still support that Jabbar acted alone here in New Orleans. We have not seen any indications of an accomplice in the United States, but we are still looking into potential associates inside the United States and outside of our borders.

Fourteen people were killed and dozens were injured when Jabbar drove a truck at high speed into a crowd on Bourbon Street before police shot and killed Jabbar.

Winter weather » A blast of snow, ice, wind and plunging temperatures stirred up dangerous travel conditions in parts of the central U.S. on Sunday.

Bob Oravec with the National Weather Service parts of Kansas have seen nearly a foot of snow.

ORAVEC: And over the next two days, a pretty big impact from this storm as it spreads eastward. A lot of areas from Kansas to the east coast are under winter storm warnings, and we do anticipate a pretty broad area of heavy snow. Snow totals 6 to 12 inches all the way from Kansas to the east coast, including the capital of the United States.

He said snowfall in some areas could be the heaviest seen in those locations in a decade.

More than 50-million Americans were under some kind of winter weather watch or warning as of early this morning.

I'm Kent Covington.

Straight ahead: the Supreme Court considers fraud and liability cases.

Plus, the Monday Moneybeat with economist David Bahnsen.

This is The World and Everything in It.

MARY REICHARD, HOST: It’s The World and Everything in It for this 6th day of January, 2025. We’re so glad you’ve joined us today. Good morning! I’m Mary Reichard.

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

Chief Justice John Roberts is defending the independence of the federal courts. He says they’re under threat from several angles: intimidation, disinformation, and the possibility that public officials might defy court orders. Roberts aired his concerns in his annual report on the federal judiciary. (We link to the report in today’s transcript.) In it, Roberts cautions leaders across the political spectrum against openly disregarding court rulings.

REICHARD: But the last several years have brought significant attacks by Democrats on the legitimacy of the court.

Roberts highlighted alarming trends, including a rise in threats against judges. In extreme cases, judges have had to be issued bulletproof vests. The U.S. Marshals Service reported a threefold increase in serious threats compared to a decade ago. More than a thousand serious cases were looked into … but only 50 criminal charges brought.

One shocking example: the armed man who planned to kill Justice Brett Kavanaugh after the leak of the Dobbs opinion.

EICHER: Roberts also criticized elected officials for undermining court rulings. He didn’t name names.

But consider two high-profile examples. First, then-Senate-minority leader Chuck Schumer in 2020:

SCHUMER: I want to tell you, Gorsuch, I want to tell you, Kavanaugh, you have released the whirlwind and you will pay the price.

REICHARD: Another example is President Joe Biden’s multi-billion dollar student loan forgiveness at taxpayer expense. When the high court blocked the move, he said he’d do it anyway.

To be fair, President Donald Trump questioned the ability of a judge with Hispanic ethnicity to be unbiased. But the Democrats have been far more critical of the court.

EICHER: The Chief Justice noted that courts inherently produce winners and losers. He wrote: “It is not in the nature of judicial work to make everyone happy.”

Statistically, Roberts noted modest rises in the federal court workload, although immigration-related criminal cases shot up 30 percent year over year. Bankruptcy courts were busier, with filings rising 16 percent, but that’s below the recent high in 2020.

REICHARD: Now, let’s move on to a couple oral arguments, the first is from last month in Kousisis v. United States. My favorite sort of argument, lots of hypotheticals!

This case involved wire fraud and conspiracy charges against a contractor and his company.

Here are the facts: Stamatios Kousisis, a project manager for Alpha Painting and Construction, was accused of winning state contracts by fraud.

Specifically, that he gamed a Pennsylvania Department of Transportation requirement that subcontractors be disadvantaged business enterprises. The state contends Kousisis used a disadvantaged business enterprise as a mere “passthrough”—meaning, it didn’t actually do any work.

EICHER: The defense didn’t really contest this. It argued that Pennsylvania suffered no financial loss and got exactly what it paid for—fully completed projects.

The lawyer for Kousisis is Jeffrey Fisher, he said what his client did shouldn’t be a federal crime.

But Justice Ketanji Brown Jackson tested the limits of the law of fraud with this relatable hypothetical:

JACKSON: What about the family that says: it's very important to me to have a Christian babysitter. We are devout….This is a characteristic that we're telling everybody this is what we're looking for. And someone comes and they purport to have this characteristic, but they don't ultimately.

FISHER: I think that's egregious behavior, but it's not property fraud if the babysitter is otherwise fully qualified and performs the services. Now there may well be a very serious civil suit….So I'm not saying these things are okay, and I'm not saying the law doesn't provide a remedy. But what I am saying is that this is an age old problem when it comes to fraud.

Justice Samuel Alito offered a hypothetical of his own:

ALITO: I hire somebody to paint the dining room of my house. And when I come back, the dining room has not been painted, but the living room has been painted. And the living room is bigger. And he says, ‘Look, I gave you a bargain, the same price, I painted more, plus the living room really needed it more than the dining room.

FISHER: I think we're still in this difficult situation of there's actually—-your home is your property and so some of the things that are happening to your property, but --but I think -- (fade out)

REICHARD: Fisher pointed out the difference between Alito’s hypothetical and the facts of this case is that the job was finished. All other contract terms were met.

So, no basis to sustain a federal fraud charge.

Maybe something else, but not that.

EICHER: Deputy Solicitor General Eric Feigin, arguing for the government to uphold the fraud convictions, said fraud doesn’t require financial harm. It’s the deceit itself that counts, not the outcome.

Justice Neil Gorsuch countered by refining the babysitting hypothetical.

GORSUCH: What about the babysitter who says: I'm going to…, take the money that you give me for college, and therefore, I hire her. She provides excellent babysitting services and proceeds to blow the money on a trip to Cancun. Now is that mail fraud? I mean, could that be prosecuted as mail fraud because I had some subjective wish that she use it for one purpose rather than another, even without any economic injury to me?

FEIGIN: Well, Your Honor, I don't think some subjective wish counts.

Justice Alito brought a bit of levity in what was already a lively argument in this exchange with Feigin for the government:

ALITO: I'm going to ask you a question that I really would like to ask Mr. Fisher, but I can't ask Mr. Fisher any more argument. So perhaps, if I ask you, he will see fit to address it in -- (Laughter.)

FEIGIN: Well, would you like me to answer it as him or as me? (Laughter.)

ALITO: Whichever you want. (Laughter.) Assuming his persona and answering for him might be --

FEIGIN: That might be fraud, Your Honor. I should run out the door.

The case raises tough legal questions: Do equivalent-value deviations count as fraud? Should subjective disappointment matter?

For Kousisis, the stakes are high. His company faces a $500,000 fine and forfeiture of millions in profits.

Personally, he’s facing nearly six years in prison.

REICHARD: Our final case today stems from a trademark dispute between two companies using the name “Dewberry.”

In 2007, Dewberry Engineers settled with Dewberry Capital, restricting its use of the name.

But a decade later, Dewberry Capital rebranded as “Dewberry Group.” And that prompted a new lawsuit.

The engineers won, receiving more than $40 million in damages.

EICHER: Here’s the twist: Dewberry Group was operating at a loss, so the court ordered its corporate affiliates to pay up.

That raises the key question: Can courts hold affiliates liable for profits they didn’t directly earn?

Justice Jackson seemed open to piercing the corporate veil:

GORSUCH: I guess I don't understand why the answer, the sort of way to handle a situation like this, is just to pierce the veil. I mean, you --you --you say that the defendant is disguising its profits, it's hiding economic realities, it's working with these other companies in a way that they're really operating in the marketplace as almost one entity. Why wouldn't the legally responsible way to deal with this given the way we --you know, the law has developed, to say that, in order to do this, to consider the profits of the other entities to be the profits of the defendant, the court should have pierced the veil in this situation?

CROWN: Justice Jackson, I have four answers.

REICHARD: Nicholas Crown argued for neither party but as friend of the court representing the United States. He pointed out that the law doesn’t allow profits of separate corporations to be included unless explicitly sued.

Crown said he had four points to make, including that the engineers could have sued those affiliates for infringement, but they chose not to.

Chief Justice Roberts, ever the organizer, kept track:

ROBERTS: Counsel, before you go on, how many of your four things did you just get out?

CROWN: Two (laughter)

ROBERTS: Two. All right.

CROWN: I’ve got two more, Mr. Chief Justice.

ROBERTS: I will allow a historically unprecedented exception to allow you to give us (laughter) the other two promptly.

He did but they didn’t amount to much.

What’s most important in the case are major implications for corporate structuring and intellectual property law.

The justices did seem concerned about overreach, but I think the Justices are likely to put some limits on “equitable” remedies.

And that’s this week’s Legal Docket!

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

NICK EICHER, HOST: Time now to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. David heads up the wealth management firm The Bahnsen Group. He is here now. Good morning to you, David.

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

EICHER: I know you’ve been following this, President Biden’s move to block the sale of U.S. Steel to Nippon Steel of Japan. The two companies had agreed on a $14.1 billion dollar sale price, but the White House said no last week. The steelworkers’ union lobbied hard to get the president to do what he did. The Wall Street Journal blasted the move: calling it political protectionism disguised as security policy. And by the way, President-elect Trump had already said if Biden didn’t block the sale, he would’ve. So what do you think?

BAHNSEN: You know, it’s interesting, this is a bipartisan situation. It happens to be the same position that President-elect Trump has taken as well. You don’t often get a chance to agree with both presidents often, but you really don’t get a chance to disagree with both very often either. This is one where I just vehemently disagree.

But the broader point is that it is opening a door to something that I frankly didn’t believe I would see—which is everybody flat-out admitting that this is an ally nation of the United States. There is not an adversarial issue at play, but the mere existence of foreign capital coming into a U.S.-based company that desperately needs the money. By not getting it, a significant number of jobs will be lost. But also U.S. pre-eminence in steel is going to go down even further than it has over the last several decades.

So, why would President Biden block this? Why does President Trump oppose this? Well, I think it’s the politics of it, the headline that there’s a foreign country taking an interest in something as iconic as U.S. Steel. So, there’s a nationalistic and populist play behind it.

But it isn’t economic.

The U.S. capital markets, Nick, thrive because we have something that so many countries don’t have—which is mobility of capital. Our money can leave and go to other places. Money can come in and be invested in the U.S. We can always be rationally pursuing the best use of capital, but this is an effort to block free flight of capital, in an instance where there’s just not even a pretense of national-security concern.

I certainly agree that the U.S has a vested interest in protecting security interests. I think everybody is focused right now on not allowing our supply chain to be held captive by other countries, let alone adversarial ones.

But that’s just not on the table here at all. And so that’s a big story to me, not just for what it represents with this deal, but what it represents for the future.

EICHER: Let’s talk about that, David. What do you think this portends?

BAHNSEN: Yeah, I think this portends more in this sense—what’s the limiting principle now? What is the basis for U.S. jurisdiction or oversight or hesitation about such deals?

If we want to explicitly state that we just simply don’t want foreign capital coming into the U.S. investment, that’s a stunning admission. It’s totally outside of the precedent of American capital markets.

In this case, the one solace I would take is that I don’t think the politics will generally lend themselves to such a view. In this case they do because it’s steel. There’s a lot of union jobs, it’s blue collar, and there’s a sort of sentimentality that both the Biden administration that has attempted over the years to be cozy with unions. (The Trump administration that has made great headway with workers, too.)

But I want to be clear. I’m not stating my opposition to what they’ve done and blocking the deal because I’m not pro-worker. It’s because I am pro-worker.

U.S. Steel simply does not have the capital to invest in desperately needed upgrades to its facilities and expansion of its steel-production capacity. There is a reason that a foreign company is willing to put capital in. I believe that in this case, it’s a dangerous precedent not to allow it in.

Are we really saying that just simply the existence of foreign capital is a reason to block a deal? We’ve never said that before, and I think it portends something very negative for the future if we start saying it now.

EICHER: I was thinking as you were talking that the Supreme Court is going to hear a case involving TikTok, and the law Congress approved that would effectively require the sale of TikTok—divestiture—to protect American users from having their online data in the hands of the Chinese government. Do you make a distinction between something like that and what we’ve been talking about with Nippon Steel and U.S. Steel: The sale of U.S. Steel?

BAHNSEN: I certainly make a distinction. But isn’t it interesting that President Trump doesn’t? 


You know, President Trump wants to block an ally nation having an equity interest in U.S. Steel with all kinds of commitments to protecting U.S. union jobs. But he’s also against enforcing the divestiture law affecting TikTok, which is quite literally connected to the Chinese Communist Party.

Now, that’s not to say that I favor a forced shutdown of TikTok. I’m making a distinction theoretically that at least there are prima-facie grounds for scrutinizing that because there’s so much data access that an adversarial nation has to U.S.-oriented data.

I believe there probably is a way that that could be rectified apart from forced divestiture. I get concerned when we take a heavy hand because the real beneficiary of something like forcing a shutdown of TikTok becomes other companies. It also opens a door to some crony capitalism worries I have.

But still, your point is a very good one that at least there, the line of reasoning would be protection of U.S. interests from a foreign adversary. Nobody can possibly make that claim in the situation with Nippon Steel.

So, yeah, the Supreme Court is really just going to be hearing whether or not they want to stay the implementation of the law because what Congress passed happens to go into effect right before the Trump inauguration. The incoming administration is basically just looking for a little leeway to try to go cut a different deal. That’s going to be an interesting situation if the Supreme Court allows it to kind of linger a bit longer, and then what exactly the Trump administration strategy will be to work out a better deal.

But you bring up a very great point that philosophically these two things should be looked at differently. I think there should be more scrutiny on a Chinese TikTok deal and much less scrutiny on a Japanese steel deal.

EICHER: David Bahnsen, founder, managing partner, and chief investment officer of The Bahnsen Group. If you’re not getting David’s Dividend Café maybe you’ll want to make a resolution to do that, because on Friday, he’s releasing his white paper looking ahead to the challenges and opportunities in the economy in the new year. You can get it free at dividendcafe.com. And next week, after I get a chance to go through it, we’ll talk about it with David. So you have that to look forward to. David, as always, thanks!

BAHNSEN: Thanks so much, Nick. Great to be with you.

NICK EICHER, HOST: Today is Monday, January 6th. 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. Up next, the WORLD History Book. Almost 200 years ago, an American president set out to make America debt-free—with unintended economic consequences. Here’s WORLD’s Emma Perley.

EMMA PERLEY: Right now, the U.S. national debt stands at 36 trillion dollars. And the number keeps going up. The government spends more than 2 billion dollars on interest payments alone every day. Audio here from Senators Joe Manchin and John Neely Kennedy.

JOE MANCHIN: We’ve been spending more than we bring in in our government every year for the past 21 years.

JOHN KENNEDY: Let’s suppose nothing changes over the next ten years. Nothing. What’s the debt going to be ten years from now?

PHILLIP SWAGEL: Our projection is then over 50 trillion dollars, or over 122% of GDP.

America is no stranger to borrowing money. It’s had national debt since the very beginning. Some of the American founders got loans from Europe to fund the Revolutionary War. And several U.S. presidents since have tried to tackle the deficit. But only one has succeeded in paying it off entirely. Voice actor Ed Phillips reads President Andrew Jackson’s first inaugural address.

ED PHILLIPS: The management of the public revenue—that searching operation in all governments—is among the most delicate and important trusts in ours.

190 years ago, Jackson seeks to eliminate the national debt completely. He believes that being debt-free is the only way to have a small government and virtuous citizens.

Jackson is partly motivated by his own experiences. When he was a land speculator, a deal went sour and he spent time paying off the loans.

But he also has a more democratic reason: he dislikes the national bank set up by Founding Father Alexander Hamilton. To Jackson, it signifies a more powerful central government than the Constitution allows. Audio here from Alexander Salter, an associate professor of economics at Texas Tech University.

SALTER: He was, even by the standards of his own day, a debt and deficit hawk. He did not like the Hamiltonian idea of a large and permanent debt, because he saw it as contributing to a permanent financial oligarchy, a class of people that just lived off of interest payments from the federal government funded by tax revenue.

In order to pay off the debt, Jackson raises import tariffs, postpones a recharter of the national bank, and vetoes Congressional bills to fund the nation’s infrastructure. It works. For a while.

In January, 1835, the U.S. officially owes zero dollars. Politicians boast about American exceptionalism. And they look forward to economic prosperity and national security. In anticipation of a debt-free future, Senator Isaac Hill of New Hampshire says in 1833 …

ED PHILLIPS: The extinction of our national debt presents this nation in an attitude to excite the admiration of the world. There is probably on record no other instance of the kind.

But the celebrations are short lived. The economy begins to falter as the national bank dissolves. Then the real estate market crashes, wheat crops fail, interest rates increase. And the Panic of 1837 begins.

The government is forced to begin borrowing money again to handle the economic crisis. We’ve been in debt ever since. Many historians have pointed to Jackson’s refusal to recharter the national bank as one of the main reasons for the panic.

However, paying off the debt by itself didn’t cause the economy to sink into a depression. Jackson’s goal of a debt-free nation remains a noble one. In fact, only a few countries have ever achieved it.

But not all national deficits are created equal. American debt today looks very different from years past. For generations, debt went up during wars, but was quickly paid down during peacetime. That began changing in the 1950s. Here’s Alexander Salter again.

SALTER: There was a growing consensus among the economics profession that the federal government should act as a spender of last resort, or employer of last resort, to make sure that if the economy was in the doldrums, Uncle Sam would step in to provide purchasing power, to provide jobs. So you have this new idea of the government as a sort of guarantee of the health of the economy.

Another reason for growing debt is the removal of the gold standard. Paper money can now be printed at the government’s say-so. As extra currency floods the market, the spending power of the dollar decreases. That makes the American dollar less valuable, and as result, the debt becomes less manageable.

And it’s only been getting worse as the government often spends beyond its means. But that doesn’t mean there isn’t hope for change. Salter says that if the economy grows faster than the deficit, then the debt will naturally be paid down over time, although America may never again reach Jackson’s triumph of being debt-free.

SALTER: As long as we can keep debt growth below economic growth for long enough, we will, quite frankly, grow our way into the existing debt levels, and that will be much more sustainable.

That’s this week’s WORLD History Book. I’m Emma Perley.

NICK EICHER, HOST: Tomorrow: A former embryologist will walk us through the process of freezing human embryos and talk about the risks that may go with it.

And, the funeral of a president. We’ll hear how the US Air Force Band gets ready for its mission.

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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