The World and Everything in It - March 14, 2022

MARY REICHARD, HOST: Thanks for that shout out, Laurie! Good morning!

What happens when the federal government no longer will defend one of its rules? Can someone else do it? That’s a question for the Supreme Court.

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

Also today the Monday Moneybeat: the oil-supply crunch and the resulting high prices—who’s to blame?

Plus the WORLD History Book, today the founding of West Point.

REICHARD: It’s Monday, March 14th. 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: Russian airstrike escalates offensive in western Ukraine » Russian missiles pounded a military base in western Ukraine on Sunday, killing at least 35 people and injuring more than 100. The facility is located near Poland’s border. It has served as a crucial hub for NATO weapons and supplies being delivered into the country.

More than 30 Russian cruise missiles struck the sprawling facility, which has long been used to train Ukrainian soldiers.

Ukrainian President Volodymyr Zelenskyy, heard here through an interpreter, declared on Sunday …

ZELENSKYY: It’s impossible to say how many days we still have to free Ukrainian land, but we can say we will do it, because we want it. It’s a patriotic war against a very stubborn enemy …

Zelenskyy also said Russia is already trying to install pro-Moscow local government in towns it now occupies.

Since Russian forces invaded more than two weeks ago, they have struggled in their advance across Ukraine facing stiffer resistance than they expected.

On Sunday, an American journalist and filmmaker was killed near Kyiv. Fifty-year-old Brent Renaud died after Russian forces opened fire on his vehicle.

Meantime in Russia, Western sanctions are already having a dramatic impact on the country’s economy. That according to Kristalina Georgieva, managing director of the International Monetary Fund.

GEORGIEVA: We expect deep recession in Russia, and this abrupt contraction is affecting already how the Russian population is taking the hit on them.

And amid the ongoing crackdown on free press and social media in Russia, Instagram shut down its Russia-based accounts last night. It was forced to do so after it refused to censor messages critical of Russia’s invasion of Ukraine.

U.S., China officials to meet as tensions mount over Russia » President Biden’s national security adviser Jake Sullivan is in Rome today for meetings with a top Chinese official.

The meeting comes amid growing concerns that China is amplifying Russian propaganda and may help Russia evade punishment from economic sanctions.

SULLIVAN: If they think they can basically bail Russia out, they can give Russia a workaround to the sanctions we’ve imposed, they should have another thing coming, because we will ensure that neither China nor anyone else can compensate Russia for these losses.

Sullivan is sitting down today with senior Chinese foreign policy adviser Yang Jiechi . The White House says the meeting will focus on “efforts to manage the competition between our two countries” as well as “the impact of Russia’s war against Ukraine” on global security.

U.S. officials say China is attempting to provide cover for a potential Russian biological or chemical weapons attack on Ukrainians. Sullivan said Beijing recently repeated false Russian claims that the United States was financing Ukrainian chemical and biological weapons labs.

SULLIVAN: When Russia starts accusing other countries of potentially doing something, it’s a good tell that they may be on the cusp of doing it themselves.

He said the West is trying to expose Russia’s lies immediately to make it tougher for them to stage a false flag attack to make it appear that Ukraine is the aggressor.

Iran claims missile barrage near U.S. consulate in Iraq » Iran claimed responsibility Sunday for a missile barrage that struck near a U.S. consulate complex in northern Iraq.

Iran said the attack was retaliation for an Israeli strike in Syria that killed two members of its Revolutionary Guard earlier this week.

No injuries were reported in Sunday's attack on the city of Irbil. And Deputy Secretary of State Wendy Sherman said U.S. officials do not believe the American consulate was the intended target.

SHERMAN: We are very glad that our facilities are secure, that everybody’s accounted for, that no one has been hurt or killed. But all of that said, this is a great concern.

The United States and the Iraqi government condemned the attack as a gross violation of international laws and Iraq’s sovereignty.

Iran’s powerful Revolutionary Guard said on its website that it targeted what it described as an Israeli spy center in Irbil.

Uber charging customers new fuel fee for rides, delivery » With gas prices at record highs, Uber is charging customers a new fuel fee to help offset costs for ride-sharing and delivery drivers. WORLD’s Josh Schumacher has more.

JOSH SCHUMACHER, REPORTER: Uber passengers will pay a temporary surcharge of either 45 or 55 cents for each trip. And delivery customers will pay either 35 or 45 cents for each Uber Eats order, depending on location.

The surcharges are based on the average trip distance and the increase in gas prices in each state.

The new fees take effect on Wednesday. Uber says the additional money will go directly to drivers. The surcharge will be in effect for at least 60 days, and the company will reassess after that.

As of Sunday, the national average for a gallon of regular unleaded was $4.32.

Reporting for WORLD, I’m Josh Schumacher.

I’m Kent Covington. Straight ahead: defending government rules from legal challenges.

Plus, a cherished American military institution gets its start.

This is The World and Everything in It.

MARY REICHARD, HOST: It’s Monday, March 14th and you’re listening to The WORLD and Everything in It. Good morning! I’m Mary Reichard.

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

The U.S. Supreme Court handed down one decision last week. It was unanimous.

The court held that a man who robbed a storage facility multiple times committed only one crime as far as the Armed Career Criminal Act is concerned. The question came up because a trial court found him guilty of committing a total of 10 separate burglaries of the same place on the same night.

Under that law, William Dale Wooden received a sentence of 15 years in prison for possessing a firearm as a felon. It adds prison time to defendants who have three or more prior convictions that the law says were “committed on occasions different from one another.”

Quoting from the opinion now: “Convictions arising from a single criminal episode in the way [this man] did can count only once under the [Armed Career Criminal Act].”

REICHARD: Alright, now on to two oral arguments from late last month.

First, when the federal government will no longer defend a rule, who’s allowed to step in to defend that rule?

The rule in question is the Trump administration’s definition of “public charge.” It aimed to screen out immigrants who seek green cards and who would likely need taxpayer funded benefits, things like food stamps and Medicaid. This idea’s been in U.S. immigration law for centuries, although not used much.

EICHER: The idea is to require that immigrants are self-sufficient. The Biden administration last year rescinded the rule and says it’s crafting a different rule.

But 13 states prefer the Trump era definition of who is a “public charge,” because it’s saved them more than a billion dollars a year.

Arguing on their behalf, Arizona Attorney General Mark Brnovich underscored what he saw as the Biden administration’s end-run around normal procedures:

BRNOVICH: It coordinated with the rule's challengers and dismissed the granted petition by this Court, all of the pending appeals in the lower courts as well, and it left one final nationwide injunction against the rule in place. Based only on that, the Biden Administration rescinded the rule without notice-and-comment rulemaking.

That may be true, but Justice Clarence Thomas pointed to his own experience with new presidents.

THOMAS: What makes this case different from any other case? I mean, when administrations change -- I think this is my fifth administration change. And the new administration often changes its position in cases.

What’s different, Brnovich argued, is the extent of the effort to drop certain litigation the administration didn’t like, but leave in place just one decision out of Illinois. And then use that as reason to rescind the rule, and thereby avoid the proper notice and comment process.

BRNOVICH: Frankly, I'm not aware of any other precedent where you have these types of maneuvers.

So, he argued it best to nip this in the bud right now lest the government use it as a blueprint to evade the law in the future.

On the other side, defending the federal government, Deputy U.S. Solicitor General Brian Fletcher. He argued these states really don’t have any legal means to protect their stated economic interests.

Justice Samuel Alito, with a hint of sarcasm:

ALITO: I congratulate whoever it is in the Justice Department or the executive branch who devised this strategy and was able to implement it with military precision to effect the removal of the issue from our docket, and to sidestep notice-and-comment rulemaking, but all of that took place.

The other side stuck with the argument that there’s nothing to litigate here. That’s because all but one of these states aren’t even in the Ninth Circuit, so the ruling doesn’t affect them. As a result, the Ninth Circuit rightly denied those states the right to intervene to defend Trump’s public charge rule.

Still, I heard little appetite for what the Biden administration did here. Listen to Justice Elena Kagan:

KAGAN: The government doesn’t have to come up here and defend something that it no longer believes in. The real issue to me is the evasion of notice and comment. I also want you to assume that that is a problem and that we shouldn't be green-lighting that behavior for your administration or any other administration, all right?

Administration, consider yourself warned.

Alright, our final argument today, West Virginia v the Environmental Protection Agency.

This case asks how far can the EPA go to combat climate change by regulating greenhouse gas emissions.

As in so many disputes, it comes down to one word. Listen to Justice Stephen Breyer:

BREYER: One problem that I have is that there is a word in the statute which I think is important. It talks about a system. And so EPA has to have a system for existing plans. So what is that system? Now I -- I tend to agree with you that normally, if it's -- if you interpret the word "system" so that it totally, a hundred percent changes the opposite -- the economic system of the United States, that's a little far. It's hard to believe that Congress delegated that.

Some background is helpful.

Back in 1963, Congress enacted the Clean Air Act. EPA was to identify emissions from “stationary sources” like power plants that could endanger public health. EPA would then set some acceptable level of emissions and then let the states decide how to meet those.

A half century later the Obama administration issued the Clean Power Plan. It had guidelines for states to follow that included strategies to reduce overall emissions.

Later, the Trump administration replaced the Clean Power Plan with the Affordable Clean Energy Rule. It focused less on overall emissions and looked to reduce emissions on a plant-by-plant basis.

But a federal appeals court vacated the Trump rule as “arbitrary and capricious.”

And that is what’s appealed here. Coal industry groups and 19 Republican-led states say the Constitution doesn’t give Congress the power to delegate regulatory authority to this extent. They argue that EPA’s authority ends where the individual power plant’s fence line begins.

Lawyer for the states argued the appeals court gave EPA much broader power than permitted by law. Listen to Lindsey See and as you do, please note I’ve edited her a bit just to shorten it a little.

SEE: No tools of statutory construction support that result. First, electricity generation is a pervasive and essential aspect of modern life and squarely within the states' traditional zone. Yet, EPA can now regulate in ways that cost billions of dollars, affect thousands of businesses, and are designed to address an issue with worldwide effect. This is major policy making power under any definition….Congress did not green-light this transformative power.

U.S. Solicitor General Elizabeth Prelogar argued these states and coal companies have no standing to bring the litigation. There’s no EPA rule in effect at the moment, so that makes this about the Supreme Court issuing an advisory opinion, and that’s something the high court does not do.

Justice Brett Kavanaugh wasn’t so sure this is as cut and dry as all that.

KAVANAUGH: One thing we said is that Congress must speak clearly if it wishes to assign an agency decisions of vast economic and political significance. And the second thing we said is that the Court greets with a measure of skepticism when agencies claim to have found in a long-extant statute, an unheralded power to regulate a significant portion of the American economy.

The three liberal Justices Breyer, Kagan, and Sonia Sotomayor, seemed to favor broad authority for the EPA.

But Justice Samuel Alito cast about for any limits on what the agency could do, in this exchange with Prelogar for the government:

ALITO: Well, the statute requires EPA to take into account, just to take into account, not even balance, take into account several factors, and they are incommensurable. You know, how do you balance or take into account, what weight do you assign to, the effects on climate change, which some people believe is a matter of civilizational survival, and the costs and the effect on jobs?

PRELOGAR: So I think it's important to distinguish between that type of cost/benefit analysis, which EPA would conduct in a regulatory impact analysis under an executive order

Round and round the lawyers and justices went. They jousted over standing, agency authority, Congressional intent. They talked about interpretive tools that lawyers use, like the major questions doctrine that says only Congress can resolve disputes that involve big economic issues. Or the non-delegation doctrine that says Congress acts unconstitutionally when it delegates too much power.

I think the EPA will take a hit on the merits here, given the current alliances on the bench.

And that’s this week’s Legal Docket.

NICK EICHER, HOST: A rare piece of movie memorabilia will soon go up for auction.

It is from the 1939 classic, The Wizard of Oz. Perhaps you can guess what it is.

This particular item was one of five used in the film. It was given to actor Jack Haley after the film wrapped. Here’s a hint: 

CLIP: (squeeks) My goodness, I can talk again!

If you guessed the Tin Man’s costume, you’re close, but that’s not it.

CLIP: Did you say something - (mutters) - He said oil can.

It is the Tin Man’s oil can.

You could be the proud owner of this piece of movie history, but only if you’re getting a REALLY nice tax refund this year.

The bidding will start at $200,000. Talk about high prices for oil!

It’s The World and Everything in It.

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

EICHER: I want to draw out a point you made over the weekend on your Dividend Café blog, because the big story we’re talking about is oil and gas and you made the point—among many other things—that the foreign policy crisis we have is not bringing a new dynamic into global economics, but rather that it’s exacerbating an economic problem that predates the crisis. Talk a bit about that.

BAHNSEN: Well, I do think that just if, in the context of the Russia, Ukraine, there is a continued energy story, and my Dividend Cafe point about exacerbating doesn't change the fact that the policy flaw is still the same in the exacerbation. And you could argue it's now worse, right? Because of the exacerbation. In other words, if Russia never invaded Ukraine, it is just simply unfathomable to us rational people that we are not taking advantage of our oil and gas capacity for production. And my argument is we're, it's inexcusable that we're not taking advantage of it not only (to) meet our own energy needs to be less dependent on Russian oil and gas, to be less dependent on Saudi, or OPEC, or any nefarious Middle East actor. It's also inexcusable that we're not becoming an exporter. And and so then the rest of Ukraine thing happens. And all of a sudden, well, yeah, I guess I agree with you. Now that oil isn't only $90, but is a whopping 120. Well, oil at 90 is telling the same story. It, this is a policy failure. And here's a stat that I think is worth sharing. We're making a million and a half less barrels per day of oil at 120 than we were when it was at 60 - just over a year ago. Wow. So is that an economic decision? Of course not. There is absolutely no reason for us to not be in a framework of being pro-production. And ultimately, I think public sentiment is changing on this. And perhaps that is a byproduct of exacerbation, but the trend, the need, the dynamic was all in place, even before Putin.

EICHER: What we’re hearing, though, and I hear this and read this everywhere, that you can’t just flip a switch. You can’t solve the energy problem by just flipping a switch, producing oil, and bringing it to market.

BAHNSEN: I mean, there's two things. If you're in a ditch, quit digging, right? Okay, so then what's the inverse of that? If there's something you need to do, start doing it. Yeah, if I need my lights on, and I have one of these things that is slow, you know, not like a reverse dimmer that makes the light come on slowly, instead of quickly. The fact that I need it on quickly doesn't mean I shouldn't just turn it on and really start the process. But I most certainly agree. I don't think this is going to be helpful for people who want a strong political talking point. But there is truth to the fact that we cannot turn on a switch right now and get all the rigs active. However, we could have a year ago. And the reason that they weren't was partially because of the economics at the time of demand erosion and higher supply. As those things have changed, we went into a supply/demand environment where economic actors are making decisions on the permits that were being denied—tens of thousands of applications for leasing, drilling, permitting, the political pressure, the pressure for Wall Street to cut off capital to the oil and gas industry. So all those things can be reversed so that we can start the process. I mean, this is something that I think we all know, in our own lives, when is the right time to start doing the right thing? Immediately. And so to the extent some of those things take time to bear fruit, I agree. But you need to start it and markets will price it in quicker because markets are forward looking, right? They're discounting mechanisms. So you'll start to bring oil prices down just by knowing production’s going to be higher, it trades on a futures forward curve. And so there is a tremendous benefit to starting the process of doing the right thing. And ultimately, this has to happen, by the way, not just because of supply/demand realities, but environmentally, we will develop the technology to be cleaner emitters. And that way, we will do that by having more production, more incentive that drives greater technological progress. And so I'm convinced that there's never a wrong time to do the right thing.

EICHER: Now, the president is blaming companies for not producing more. It’s not his fault or his administration’s fault, it’s theirs. He points to unused drilling permits. He makes the point that only about a tenth of onshore oil production takes place on federal land. He’s not the hold up.

BAHNSEN: Well, I mean, it's totally incorrect. But it's disingenuous. It is absolutely true that you want to see the energy companies increase production. But when they say something so simplistic, they're ignoring a few things. First of all, they've done everything they can to make it impossible for smaller drillers, for independent companies. The only people that really have the capacity right now - because of capital markets and resource allocation - to flick the switch quicker are the big, huge companies. But to really get on the margin an extra 600,000 barrels a day, you need the smaller players that the Biden administration really went to war with, and that kind of AOC Green New Deal mentality. Look, just look at Chevron stock price, it's $170. It was $50 at the bottom of COVID. It was $100 when Biden took office. So what has he done to hurt Chevron? It doesn't hurt them. But he's hurt 20 other companies in Midland, Texas, and Bartlesville, Oklahoma, and these are the companies that could be marginally moving production higher. So the idea that it's just the White House's fault is not true, but no one is saying that - I'm not saying it. But the idea that it is just the producers that, if they wanted to, they could simply produce more. All listeners know this part intuitively. You don't need to tell a producer to go profitably do something. If they can profitably do it, they're going to do it. It is regulatory hurdles. It is capital access. It is the approval process, the denial of permits of drilling of leases, of federal land, all of this stuff, and everybody knows this.

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

You can catch David’s daily writing at DividendCafe.com. Sign up there for his daily email newsletter on markets and the economy. David, thanks again!

BAHNSEN: Thanks for having me, Nick.

NICK EICHER, HOST: Today is Monday, March 14th. 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. This week marks the 120th anniversary of one of the U.S. military’s most cherished institutions, and today we also celebrate a golden anniversary, so to speak.

EICHER: But first, 350 years ago this week, the English king issues a law promoting religious freedom. Katie Gaultney is out for a few weeks, so here’s WORLD correspondent—and historian—Collin Garbarino:

MONTEVERDI’S “CANZONETTE D’AMORE”

COLLIN GARBARINO, CORRESPONDENT: On March 15, 1672, King Charles II of England issued the Royal Declaration of Indulgence, giving Catholics and nonconformist Protestants religious freedom. During the 16th-century Reformation, King Henry VIII, along with Parliament, created the Church of England, and over the next hundred years England passed a series of laws punishing Christians who didn’t conform to the Church of England—like congregationalists, Baptists, and Catholics. Many nonconformists, like John Bunyan, author of Pilgrim’s Progress, found themselves imprisoned for their ideas, but Charles’s declaration allowed them to be released. Today, we cherish the ideal of religious freedom, but as historian Kate Williams explains, not everyone in the 17th century felt the same way.

KATE WILLIAMS: In April 1672, just a month after the Royal Declaration of Indulgence, England and France declared war on the Netherlands. It did not go according to plan. The money promised by France to Charles was not enough to cover the military expenses. The king was forced to recall Parliament, and it contained many members who were fiercely opposed to the Royal Declaration. They deemed it far too generous to Catholics, and they now had the king in a bind. Parliament refused to fund the war until the declaration was withdrawn. Charles had to comply.

A decade later though, Charles’s younger brother James II was king—and openly Roman Catholic. James issued a similar declaration of toleration, and the ensuing outcry of protest helped spark the Glorious Revolution. James fled England and Parliament gave his throne to his daughter Mary and her husband William of Orange. William and Mary granted toleration to most Protestants in England, but Catholics would have to wait another 100 years before gaining basic freedoms, with some social liabilities persisting until the 20th Century.

From short-lived religious freedom in England, to celebrating the birthday of an institution that helps protect our freedoms in America.

[“On, Brave Old Army Team”]

On March 16th, 1802, President Thomas Jefferson signed the Military Peace Establishment Act. Besides outlining a number of regulations for the young republic’s army, the act created a corps of army engineers who quote “when so organized, shall be stationed at West Point in the state of New York and shall constitute a military academy.” West Point—the home of the new military academy—had been a fortress on the Hudson River during the Revolutionary War.

Times have changed over the last 220 years, but things at West Point change a little more slowly. While some schools chase the latest educational fads, the Military Academy has used the same method of teaching for more than 100 years—a method first introduced by Superintendent Colonel Sylvanus Thayer. Cdt. James Tyler explains what it’s like to study at West Point.

Cdt. James Tyler: So, we have something here called the Thayer Method, which is how all of our classes operate. We first do our reading on the topic that we’re going to be discussing the night before. So we actually learn everything that’s going to be talked about before we go to class.

Since its founding, West Point has produced more than 60,000 graduates, including two U.S. Presidents. Around West Point, they like to say, “Much of the history we teach was made by people we taught.”

From the gold standard in military education, we move to achieving gold in the music business.

Sixty-four years ago today, the Recording Industry Association of America, better known as RIAA, awarded its first gold record to Perry Como for his hit single “Catch a Falling Star.”

[“Catch a Falling Star”]

“Catch a Falling Star” proved to be Como’s last No. 1 hit, but RIAA was just getting started. Less than a decade later, Elvis Presley and The Beatles would begin racking up awards making them RIAA’s most decorated artists.

[“How Great Thou Art”]

Early on, RIAA certified music as “gold” when a recording made a million dollars. But as the music industry changed, so did the awards. Eventually, Gold represented 500,000 recordings sold. In 1976, RIAA added its Platinum award for recordings that had sold in excess of a million units. And in 1999, they added the Diamond award for selling more than 10 million.

But today, who buys music when there’s Spotify? In 2016, RIAA shifted its approach. It began counting every 100 listens on a streaming service as one unit sold, allowing them to keep handing out those multi-platinum awards in spite of the industry’s declining sales.

ALOE BLACC - I NEED A DOLLAR

That’s this week’s WORLD Radio History Book. I’m Collin Garbarino.

NICK EICHER, HOST: Tomorrow: orphans in Ukraine. We’ll talk to people on the front lines of evacuating children from a war zone.

And, military support. We’ll talk about fighter jets and why Washington opposes sending them.

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.

The Bible says: The word of God is living and active, sharper than any two-edged sword, piercing to the division of soul and of spirit, of joints and of marrow, and discerning the thoughts and intentions of the heart. (Hebrews 4:12 ESV)

Go now in grace and peace.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.