The World and Everything in It: July 10, 2023

PREROLL: The World and Everything in It is made possible by listeners like us. Hi, I'm Debbie Sylvanski. Mother of the bride from Stevensville, Michigan and I'm Sandra Crouch, mother of the groom from Irvine, California. We live 2000 miles apart but we love the same things. Our Lord, our husbands, our kids and The World and Everything in It. We hope you enjoy today's program.

MARY REICHARD, HOST: Good morning! Fishermen object to a federal agency’s rules that go beyond the written law, and therefore unaccountable to the political process. 

JOHN VECCHIONE: So many times the agencies are not following what I think most lay people would call "the law."

NICK EICHER, HOST: That’s ahead on Legal Docket. Also today, the Monday Moneybeat: We’ll talk here in just a few minutes with financial analyst David Bahnsen.

And the WORLD History Book. Today, a dramatic conclusion to an 18-day rescue mission:

AUDIO: Returning the Wild Boars soccer team safely into the arms of their loved ones is the good news of the year.

REICHARD: It’s Monday, July 10th. 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: It’s time for news. Here’s Kent Covington.

KENT COVINGTON, NEWS ANCHOR: Biden UK trip » President Biden is making a stop today on his way to the NATO summit in Lithuania. He’s in London to meet with British Prime Minister Rishi Sunak about the war in Ukraine.

The prime minister told reporters:

SUNAK: We will continue to do our part to support Ukraine against Russia’s illegal and unprovoked invasion. We’ve done that by providing heavy battle tanks and recently long-range weapons.

The White House says that will give Biden and Sunak a chance to compare notes ahead of the summit.

The president also planned to meet with King Charles III at Windsor Castle about environmental issues.

NATO summit this week » Meanwhile, NATO is struggling to reach an agreement on admitting Sweden as its 32nd member.

President Biden spoke on the phone this weekend with Turkish President Recep Tayyip Erdogan about allowing Sweden into NATO.

National security adviser Jake Sullivan:

SULLIVAN: They talked about a number of issues relative to the upcoming summit, including the war in Ukraine and Turkey’s really robust and stalwart support including quite concrete military support for Ukraine’s defensive needs. They also talked about Sweden’s membership.

All NATO countries must agree on a new member joining. Turkey has withheld approval from Sweden over concerns the Nordic nation is too lenient on a militant group that has targeted Turkey.

Zelenskyy-Ukraine » Ukrainian President Volodymyr Zelenskyy marked the 500th day of the war over the weekend.

ZELENSKYY [via translator]: Ukraine has already got a place in the world for itself. I consider that as a fact. We are now a country that is respected, a country that is really fighting for human values, for human rights, for freedom, for democracy.

Zelenskyy speaking via translator with ABC’s This Week.

He also posted a video address recorded on Snake Island, the Black Sea outpost where Ukrainian soldiers famously defied a Russian order to surrender early in the war.

Yellen China trip » Treasury Secretary Janet Yellen is back in Washington after trade talks with top Chinese officials. Speaking with CBS’ Face the Nation, she called her trip to Beijing “productive.”

YELLEN: It’s important to establish person to person relationships and to open ongoing channels of communication where concerns can be aired and discussed.

There were no major breakthroughs during the meetings, but Yellen said they were a step in the right direction.

But some Republicans accused the Biden administration of trying to appease the Chinese Communist Party.

Former ambassador and current presidential candidate Nikki Haley:

HALEY: Yellen talks about how we need to get closer to China and do more business with them. But we have to look at the fact that no one has dealt with China for the threat that they are.

And Florida Gov. Ron DeSantis added:

DESANTIS: This idea of the happy talk that you hear from Yellen — oh, it’s just a healthy competition. No, they’re the number one geopolitical threat this country faces.

China sent warships and fighter jets near Taiwan as Yellen was meeting with officials in Beijing.

Presidential politics Trump » Haley is one of roughly a dozen declared GOP candidates, including former President Trump, who campaigned in Las Vegas over the weekend.

Trump again told supporters that elections in America are “rigged.”

TRUMP: Ultimately — we gotta win the election first — and if we win the election, we’re going to paper ballots. We’re going to, immediately, voter ID. And we’re going to same-day voting.

It was unclear if he was advocating shifting more control of elections from states to Washington.

Pence in Iowa » Meantime, former Vice President Mike Pence fielded a question at a town hall meeting in Iowa from a Trump supporter who questioned why he certified the 2020 election results.

He said constitutionally, the vice president’s job is simply to open and count the votes.

PENCE: The Constitution affords no authority for the vice president or anyone to reject votes or return votes to the states. Never been done before, should never be done in the future. I’m sorry ma’am, but that’s actually what the Constitution says.

He said Trump was wrong to assert that Pence had such authority.

I'm Kent Covington. 

Straight ahead: the Supreme Court has agreed to hear a case next term that could reign in federal agencies. Plus, the latest monthly jobs report looks promising, but there’s an asterisk. David Bahnsen explains.

This is The World and Everything in It.

NICK EICHER, HOST: It’s Monday morning, July 10th and you’re listening to The World and Everything in It from WORLD Radio. Good morning! I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Legal Docket.

Well, the Supreme Court ended its term in June. If you listened each Monday, you’d have heard something about every oral argument and opinion.

So now we turn to legal disputes bubbling up in the lower courts.

And one of those lower court disputes has now reached the Supreme Court. The justices in May accepted a case that could overturn a 1984 decision.

EICHER: That nearly 40 year old case is called Chevron versus National Resources Defense Council. It’s become known in the courts as the Chevron doctrine. It’s a legal principle that critics say expands government power with no political accountability.

It allows federal agencies to take an ambiguous law and write unambiguous rules that Congress never specified, and Chevron is what prevents the courts from checking the power of the administrative state. The key word in Chevron deference is deference.

And courts give that deference so long as the agency’s interpretation of the ambiguous law is “reasonable.”

REICHARD: And that’s where a lot of challenges have come from. What does “reasonable” mean? And what if a statute is silent about powers expressly granted elsewhere? How much “deference” hands over too much power to an unelected agency?

I called up a lawyer who filed a petition for certiorari with the high court, in another challenge to Chevron. That’s a request for the court to review a lower court opinion for error.

The facts and the law are similar to the case the court has already accepted for review. The two may wind up consolidated into one case.

EICHER: John Vecchione is senior litigation counsel at the New Civil Liberties Alliance, a nonprofit law firm. He represents a few small businesses whose primary industry is commercial fishing.

JOHN VECCHIONE: So these are fishing companies. They fish off New England and mid Atlantic, as far south as, as you know, New York, New Jersey, but primarily New England. They operate out of Rhode Island.

The small fishing operations are wholly owned by Seafreeze Fleet, LLC. They fish for four different types of fish, including herring and squid.

VECCHIONE: They're a freeze operation. They're kind of unique in this area, because they take fewer fish every day, because they freeze the fish on board, and they process it and freeze it. So they're taking less herring and everything else.

REICHARD: Fish in federal waters are managed under the Magnuson-Stevens Act by the National Marine Fisheries Service, ultimately under the U.S. Department of Commerce.

The National Marine Fisheries Service manages and restores fish and their habitat. The agency can require vessels to carry federal observers on board to make sure the agency’s regulations are being carried out.

But that’s where the problem lies.

VECCHIONE: So the issue is this. The National Marine Fishery Service has passed a rule that the observers that the statute says they have to allow on their boat to make sure they're catching the right amount of fish and doing the right sort of thing with the fish they don't keep and all of that, following the regulations. The statute does say that those observers can be on the boat and no one's ever complained about that. But then 20 years after that statute was passed, they passed a regulation that said those observers, some of them called "at sea monitors" now is what they were going to call them. Those would be paid by the fishing boats. They'd be paid by the people who are being watched, like, like as if you were paying for your state trooper to pull you over. And so it would be over $700 a day— this is for herring, if you go herring fishing, so that could be out all day, and they might not make that much money in a day. So they would be losing money to fish.

There are days when the fishing boats leave port that the fishermen have to say what they’re going to fish for.

But the problem is they don’t really know.

VECCHIONE: And so they go out and they go out not for two or three days, like most herring fishermen. They can go up to two weeks. Sometimes they fish for squid, sometimes for butterfish, sometimes for herring, and then they freeze them and set them up for packaging, and then they come back two weeks later.

EICHER: One exception to the rules says if you take less than 50 metric tons of herring per trip, you don’t have to have an observer. But Vecchiones’ clients stay out to sea for a long time, so that rule doesn’t make a lot of sense.

VECCHIONE: But we want it to be per day because everybody else can go out, get 50 tons of herring, come back, no monitor. Go out the next day. 50 tons, come back, no monitor. So other boats could be taking a lot more herring than our boats, and yet, they're not paying $710 a day, it's kind of ridiculous.

For two weeks, they have to keep that observer on their boat, they have to give him a berth, they have to give him a place to eat, a place to do their work. And so it's a big intrusion as it is and to ask them to pay for it is an insult to injury.

EICHER: So the fishing companies sued the agencies. But they lost in lower courts that had relied upon the Chevron doctrine. They held that because the law creating these agencies provides for federal observers, this gives the agencies carte blanche to demand payment from the fishing companies for the cost of the observers. And because the agencies interpreted silence in the law as to who pays, it must be ok to charge the fishing companies.

VECCHIONE: So in the District Court in Rhode Island, the court found that the statute was unclear. Ambiguous is what he said. So when there's an ambiguous statute, he says, well, it doesn't say that they can charge for this. But it doesn't not say they can charge for this. It's kind of silent in the whole issue. So I have to, under this Chevron doctrine, which is that an agency if it comes up with a regulation that the court finds is a reasonable interpretation of the statute, the court has to take that interpretation, rather than the best interpretation of the statute.

And that’s because if the court can’t say the agency’s view was unreasonable, it must take that view as well.

That’s what these disputes are about: whether the Supreme Court should outright overrule Chevron or at least clarify that when a statute is silent, that doesn’t constitute an ambiguity that requires deference to the agency.

VECCHIONE: So we want to get rid of this idea that if Congress doesn't say anything, suddenly the agency has power if it wants it, that can't be right. So we either want Chevron to be removed, because it's a judicially created doctrine. Congress didn't say that, in fact, we think the Administrative Procedure Act says the exact opposite.

REICHARD: I did ask the National Marine Fisheries Service for comment, but it declined, citing this pending litigation.

The other outstanding question is what the federal law Magnuson Stevens Act means when it says agencies can pursue the objectives of a law with regulations that are—key phrase—“necessary and appropriate.”

VECCHIONE: And some courts, in the fifth circuit, says that “necessary and appropriate” is limiting. The court gets to say, is that necessary? Is that appropriate? Or are they just saying it because they want it? And other courts say no, that gives them any power they want. So once again, we want to limit that power, so that the words mean what they say.

EICHER: Vecchione says many Americans don’t understand what’s at stake with what is called the administrative state, or sometimes, the deep state. That conspiracy-theory-sounding term refers to agencies working with lobbyists, while supposedly watchdog media sleep, and all that enables bureaucrats to act as a sort of unelected shadow government.

VECCHIONE: I think that most people think the agencies are doing what Congress said to do in the statute. And under Chevron, that's not true. If Congress is silent, then the agency seemed to be able to get away with anything they want to get away with. That's certainly what happened in this case. So many times the agencies are not following what I think most lay people would call "the law." Here, I read this statute. My people read the statute when it came out. And they didn't oppose it because it looked like the observers were going to be paid for by the Government. So, you know, they weren't against the observers. Just paying for them. But you but they couldn't be American citizens to complain their congressman about this bill coming up, because it didn't say you're going to pay for it.

REICHARD: The fishing companies hope the Supreme Court will end Chevron, or at least end it when Congress is silent on an issue.

Justice Clarence Thomas has been a vocal critic of Chevron, as have Justices Samuel Alito and Neil Gorsuch. Next term we’ll find out who else joins them in that thinking.

A quick sidebar: a movie on Apple TV from 2021 dealt with this very dilemma. It’s called CODA and it’s about a family’s struggling fishing business. But interestingly, while filming, the crew had to abide by those fishing regulations. Example: One day an at-sea monitor had to be on board so one crew member had to get off as the boat could only hold 10 people.

Just going to show that even Big Hollywood is no match for Big Government.

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: It’s time to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. He’s head of the wealth management firm The Bahnsen Group and he’s here now.

David, good morning!

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

EICHER: Alright, the June jobs report came out on Friday. 3.6 percent is the unemployment rate. Anything under four is pretty remarkable. But a few asterisks: job growth in June of just over 200-thousand has to be understood in light of the downward revision in April and May by a combined hundred-thousand, so the net is half of the June headline. But what does the new jobs report tell you, David?

BAHNSEN: Yeah, it was underwhelming. I wouldn’t say it was a bad report, but it wasn’t a good report. The downward revisions were the main reason why: 209 was a little less than the 230 that had been expected.

I think the bigger disappointment was that the ADP report for private payrolls was just massive the day before at 497,000; more than double would have been expected. So some people started to look to the BLS report for some validation that we were continuing to see accelerated job growth. And then that 209 figure came in and underwhelmed.

You add to that the over 100,000 of downward revisions from the months prior, and it sort of leaves the feeling of a mixed bag. The unemployment rate sits at 3.6%, wage growth was 4.4% year over year. That’s probably the best number in there, because it wasn’t so hot that it adds to this inflation fear. And yet, you don’t want wages going up less than the amount that prices are going up. You want real wage growth.

So all things considered it is another one of these data points we’re dealing with in this economy where it’s impossible to discern what direction we are taking with clarity. Both those that are desperately motivated politically to say the economy is doing great or the economy is doing terribly don’t get what they want out of reports like this. There’s a lot of mixed bags out there, Nick.

EICHER: And I’ll bring this up because it’s a systemic concern you’ve pointed to, and that’s the labor participation rate. June was no exception, again the number employed and the number of people actively seeking employment remains below the pre-pandemic level. Way too many people on the sidelines by choice!

BAHNSEN: Yes, but it’s not going to go back anytime soon, and that’s not something I think is a cause for concern immediately on the economic front because the economy saw its labor participation force drop significantly post-crisis, and it never did go back up.

The reason I give is that it’s sort of baked in economically. And yet my concern is cultural. My concern has to do with the soul of society. Right now, the vast majority of people leaving the workforce are people between the ages of 45 and 59, which is just not an age group that should be leaving the workforce. And I’ll add, it’s mostly men as well. You already have had the problem of way less people between 16 and 24 in the workforce. You already have the problem of a lot of people on the higher end having left the workforce; predominantly they did not come back after COVID. They did come back after the financial crisis. That was a lot of the baby boomers from 55 to 69 that still had a few years left in them, they have not come back post COVID, and likely are not going to. But even now you’re seeing prime working age people quitting at a high rate. These are things that I think speak to a society that has fallen out of love with work.

EICHER: So this is our first conversation in the 3rd quarter. We’re halfway through the year. Can you draw some conclusions at this point to evaluate the first half in the markets?

BAHNSEN: I think that the first half of the year was really driven by a handful of big tech companies, particularly those that are adjacent to artificial intelligence. You had an absolutely unprecedented level of disproportionality between a few big companies and the market overall. 10 companies out of 500, were responsible for 85% of the market’s return. Five companies right now represent 24% of the size of the stock market of the S&P 500: an all time high. The years that we’ve seen something like this before, Nick, were 1999, 2007, and 2021. None of those three years were even as bad as it is now.

But in those three cases, you know what happened the next year—you had quite a significant correction. It’s definitely a market environment where you’re getting a lot of speculation in relation to another shiny object. It’s not crypto this time, it’s not work from home stocks, it’s not the dot com of 20 plus years ago; this time, it’s AI. And it will end the same way. There will be some companies that will come out of it doing really well, but they’re massively overpriced right now. And so you’ll have a lot of companies that fail and never make any money. But this is human nature embedded and it plays out over and over again in the stock market.

EICHER: And Treasury Secretary Janet Yellen in China talking economic cooperation and competition. Any preliminary thoughts?

BAHNSEN: Yeah, I’m gonna have more to say on that when we talk next week, because you’re talking about trying to summarize four days worth of meetings. And I think that there’s a lot more analysis that will be coming throughout the next couple of days and more releases that the White House and the Treasury Department will provide. And also there will be info I’ll be able to get from some of my inside sources. I want to be able to give more thoughtful analysis.

Generally speaking, these trips are beneficial in terms of getting information. The question here is whether or not this trip is just cosmetic, or whether or not I will help lead to an actual Biden G meeting at the G20 in a few months. So I’ll come back with some more thoughtful commentary after a couple more days of analysis.

EICHER: So we’ll talk about that next week, then and speaking of next week, I know we’ll get a new consumer price number, which always generates a lot of stories.

BAHNSEN: I really think that the CPI number for June is going to come out here on Wednesday of this week. And right now it’s well over 90% odds in the implied probability in the futures market that the Fed will raise rates another quarter point at the end of July. And if the Fed is going to backtrack from that market expectation, the cover they’ll get will be from another big downward move in CPI this week. If that doesn’t happen, then perhaps the Fed will indeed want to go forward.

The jobs data last week gave them cover to go either way to either continue in their pause, or to hike again. We’re really at a high level of incoherence right now in Federal policy. So the CPI number in the next couple of days will be interesting.

And then really as a stock market guy I think the fact that we’re about to go into earnings season gives us something much more important to talk about: individual company earnings and results and what real enterprises are seeing on the ground. That’s what will start to be the story here other than this nonstop questioning about what the Feds going to be doing.

EICHER: Ok, David Bahnsen is founder, managing partner, and chief investment officer of The Bahnsen Group. His personal website is Bahnsen.com. His weekly Dividend Cafe is found at dividendcafe.com.

David, thanks, we’ll see you next time. And in the meantime, I hope you have a great week!

BAHNSEN: Thanks so much, Nick.

NICK EICHER, HOST: Today is Monday, July 10th. 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.

Five years ago this week, the end of a daring rescue. And 25 years ago the Roman Catholic Diocese of Dallas agrees to a large financial settlement with abuse victims. But first, we return to World War II and the Battle of Sicily. WORLD’s executive producer Paul Butler is our guide.

NEWSREEL: From the shores of North Africa, the United Nations High Command launches the greatest amphibious military operation in history: the invasion of Sicily.

PAUL BUTLER: The Battle of Sicily, or “Operation Husky” begins on July 9th, 1943.

NEWSREEL: From many ports, the mighty naval Armada gets underway. Ships flying the flags of Britain and the United States. Ships of the Netherlands, the Polish, the Greek, the Indian Navies taking part in the concerted assault aimed at the Italians Island stronghold. Beneath the guns of cruisers, battleships, gunboats, destroyers. The convoys steam across the Mediterranean.

For months before the attack, the Allies engage in several successful mis-information operations. The Nazi and Axis forces on the Mediterranean island are caught largely unprepared.

NEWSREEL: [SOUNDS OF SHELLING]

NEWSREEL: Tons of supplies and equipment are ferried ashore. At many points troops wadded in, surprised to find much less resistance than expected.

There are casualties however. Nearly 6000 Allied troops lose their lives in the 5-week offensive, but they successfully force Axis troops from the island—reopening the Mediterranean sea lanes to Allied merchant ships, the first time since 1941.

NEWSREEL: Into shell-shattered towns moved the Yanks. The conquest of Sicily was completed with the fall of Messina, which separates the island from the toe of the Italian boot. As the troops marched into town after town, it was quite evident that the people considered them liberators not conquerors.

The victory at Sicily leads to the overthrow of Mussolini and the eventual defeat of Italy. It also forces Adolf Hitler to divert nearly one fifth of his army to the region, weakening his ability to make war elsewhere.

[NEWSREEL MUSIC OUT]

Next, July 10th, 1998, 25 years ago today. The Roman Catholic Diocese of Dallas agrees to pay $23 million to eight former altar boys abused by a priest. Three other victims settle for an additional $7.5 million dollars. The priest responsible is sentenced to life in prison and defrocked by the Vatican. The Dallas settlement is the largest the Catholic Church has ever been forced to pay. But it's soon dwarfed by other settlements in the following years.

In 2007 the Los Angeles Archdiocese agrees to pay $660 million to settle abuse claims of more than 500 people. The Oregon Province of the Society of Jesus reaches a settlement of just over $166 million in 2011 for more than 500 cases of clergy abuse there. In 2018, the Roman Catholic Archdiocese of Saint Paul and Minneapolis agrees to pay victims $210 million. In 2020 news comes to light that five Catholic dioceses across the state of New Jersey have paid over $11 million in response to more than 100 claims of abuse. And a couple months later, the Roman Catholic Archdiocese of Philadelphia announces that it expects to pay $126 million in reparations.

According to U.S. Department of Justice data, American dioceses have recorded more than 17,000 complaints from 1980 to 2020 and have paid out $4 billion to victims.

And finally today, the dramatic conclusion to a daring rescue mission five years ago this week.

NEWS CLIP: Let us begin today with a successful end to the rescue efforts in Thailand.

18 days earlier, twelve members of a junior association soccer team and their 25-year old coach enter the Tham Luang cave in northern Thailand. While they are in the cave, it begins to rain heavily outside and the cave system begins to flood.

NEWS CLIP: Tonight, rescue teams in Thailand are working around the clock, scrambling to free a youth soccer team.

The rising waters in the cave not only trap the team inside, but hamper efforts to locate the boys and coach.

NEWS CLIP: Rescuers are racing to pump water out of a six mile long flooded cave.

International rescue teams from around the world begin arriving on the scene. On July 2nd British divers John Volanthen and Rick Stanton find the group alive—about two and a half miles from the cave opening.

NEWS CLIP: How many of you? 13? Brilliant!

By this point, the only way in or out is through very long and dangerous underwater passages.

NEWS CLIP: Authorities there are looking at all of their options. None of them easy.

Rescuers pump out millions of gallons of water from the expansive cave system, but it isn’t making much of a difference. And it will take months for the waters to naturally recede. When forecasters predict a coming significant rainfall, rescuers agree to a risky plan: sedate each boy, restrain them on a stretcher, connect them to breathing gear, and cave dive each of them out. The dive teams aren’t convinced that everyone will make the journey successfully. One Thailand Navy Seal has already died in preparing the path in and out.

NEWS CLIP: The man who died was young, he was fit. He was a former Navy Seal. And I think it really just underlines how dangerous this cave is. Because by contrast, these boys are inexperienced. They’re weak. They’ve been in there for 14 days.

But over a period of two days, divers successfully rescue all 12 boys and their coach.

NEWS CLIP: Outside the dank receses of this Thai cave, it’s the sound of triumph.

The effort employed as many as 10,000 people—including more than 100 divers, 900 police officers, and 2,000 soldiers. Today, the cave is considered a living museum to the operation and the people who worked so hard to rescue the team. And the local government has also increased safety procedures so that nothing like this can happen again.

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

NICK EICHER, HOST: Tomorrow: US health officials are sounding the alarm over a dramatic rise in diabetes in this country. And, planting churches in nursing homes.

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. WORLD’s mission is biblically objective journalism that informs, educates, and inspires.

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