The World and Everything in It - May 2, 2022

MYRNA BROWN, HOST: Good morning!

The high school football coach fired for praying has his day in court.

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

Also today the Monday Moneybeat, an unexpected contraction in overall economic output, the gross domestic product. The government says the economy shrank in the first quarter of the year. Economist David Bahnsen joins us later.

Plus the WORLD History Book. Today, the 35th anniversary of the Iran Contra hearing.

BROWN: It’s Monday, May 2nd. This is The World and Everything in It from listener-supported WORLD Radio. I’m Myrna Brown.

EICHER: And I’m Nick Eicher. Good morning!

BROWN: And now here’s Kent Covington with today’s news.

KENT COVINGTON, NEWS ANCHOR: Pelosi leads U.S. delegation to Ukraine » House Speaker Nancy Pelosi led a top-level U.S. delegation in a secret trip to Kyiv over the weekend.

The speaker said she and other lawmakers were there to underscore the message to Ukraine that America stands behind them.

PELOSI: Do not be bullied by bullies. If they’re making threats, you cannot back down. We’re there for the fight.

Pelosi was the most senior American official to visit Ukraine since the war began more than two months ago. Only days earlier, Russia bombed the Ukrainian capital during the U.N. secretary-general’s visit.

Ukrainian Ambassador to the United States Oksana Markarova told ABC’s This Week…

MARKAROVA: I think it’s yet another sign of the very, very strong support that Ukraine has here in the United States. We feel and we know that Americans are our brothers and sisters in this fight for freedom for democracy.

The speaker and the half dozen U.S. lawmakers with her met Ukrainian President Volodymyr Zelenskyy and his top aides for three hours.

The trip came two days after President Biden asked Congress for $33 billion in additional aid to Ukraine.

U.N.: Evacuation of civilians from Mariupol steel plant underway » The United Nations said on Sunday that an effort to evacuate people from a steel plant in the Ukrainian city of Mariupol was finally underway. WORLD’s Josh Schumacher has more.

JOSH SCHUMACHER, REPORTER: A U.N. spokesman said the Red Cross was working with Ukrainian and Russian officials to bring people out of the sprawling steel plant.

As many as 100,000 people are believed to still be in blockaded Mariupol.

That includes up to 1,000 civilians who were hunkered down with an estimated 2,000 Ukrainian fighters beneath the steel plant.

That area is the only part of the port city not occupied by the Russians.

The U.N. says women, children, and the elderly would be evacuated to the city of Zaporizhzhia, about 141 miles northwest of Mariupol.

The fate of the soldiers holed up at the plant is not clear. Russia has demanded their surrender.

Reporting for WORLD, I’m Josh Schumacher.

Country music star Naomi Judd dies » Country music superstar Naomi Judd has died. She performed for decades as one half of the Grammy-winning duo The Judds, along with her daughter, Wynonna.

AUDIO: [Mama He’s Crazy clip]

Wynonna and her sister, actress Ashley Judd, announced her death. In a statement, they said “Today we sisters experienced a tragedy. We lost our beautiful mother to the disease of mental illness.”

The family said no further details about her death would be released. But Wynonna Judd had been open about a long bout with depression.

The Country Music Hall of Fame inducted The Judds into the hall on Sunday with 14 number one songs to their credit.

The duo had just announced an arena tour to begin in the fall. It would have been their first tour together in more than a decade.

Naomi Judd was 76 years old.

Biden trades light-hearted jabs at White House Correspondents’ dinner » President Biden showed his lighter side over the weekend at the White House Correspondents’ Association dinner.

The pandemic sidelined the event the past two years, but the annual gathering, with its good-natured jabs, returned to Washington.

Comedian Trevor Noah played host:

NOAH: I think ever since you’ve come into office, everything is looking up. Gas is up, rent is up, food is up …

And President Biden himself got in on the act. He told the journalists who cover him…

BIDEN: I’m really excited to be here tonight with the only group of Americans with a lower approval rating than I have.

The president poked fun at himself as well as Republicans and his predecessor before an audience of 2,600 journalists, government officials, and celebrities.

It was the first time in six years that the sitting president attended the correspondents’ dinner. Former President Trump shunned the event while in office.

I’m Kent Covington. Straight ahead: religious liberty on the 50-yard line.

Plus, the battle behind Cinco de Mayo.

This is The World and Everything in It.

MYRNA BROWN, HOST: It’s Monday, May 2, 2022. This is The World and Everything in It and we’re so glad you are along with us today. Good morning! I’m Myrna Brown.

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

Legal reporter Jenny Rough is here. Morning, Jenny!

JENNY ROUGH, LEGAL REPORTER: Good morning, Nick. Well, full docket today: we have analysis of oral argument in the Coach Kennedy case from last week. And we have two opinions, also from last week, that the Supreme Court handed down.

EICHER: Right, and obviously, Mary’s out today, but I know that you two are in the midst of researching and writing Season 3 of Legal Docket Podcast. Ten episodes this summer season diving deeply into cases we think you’ll find intriguing and useful.

ROUGH: Yes, and our team prays about which cases to cover—and how to cover them! Now, I did mention the Coach Kennedy case, that’s on our agenda for this summer. It’s known as Kennedy v. Bremerton School District. A case about public prayers. Specifically, a public-school football coach who was suspended from his job for praying on the 50-yard line after each game.

EICHER: And Jenny, I’m eager to hear you and Mary analyze the case after the decision comes down, presumably sometime next month. We were talking on Culture Friday about that case and John Stonestreet made the point that next to the “Dobbs” abortion case, “Kennedy” is second most important in his view for this term.

So we’ll get to your analysis of the oral argument in just a moment but first, those two opinions.

Number one: A 6-3 Supreme Court handed victory to a small business that provides physical therapy. In this case, a client who was deaf had asked the business to provide American Sign Language, but the business said no. The client took that as discrimination based on her disability, so she sued under the Rehabilitation Act and Affordable Care Act.

ROUGH: The question: could she recover damages for emotional distress under the statutes? Listen to this exchange at oral argument between Justice Elena Kagan and the attorney for the physical therapy business.

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.

The majority justices agreed and said that because the statutes were silent about emotional damages, the business didn’t have clear notice that they might face liability for them. So the damages aren’t available.

EICHER: The second and final opinion was in a case in which Justice Amy Coney Barrett had to recuse and this is exactly what you don’t want: it ended in a 4-to-4 split over the meaning of a single word.

Here, a man named Bradley LeDure worked for Union Pacific Railroad Company. On the job, he fell and sustained serious injuries after slipping on a slick spot on the floor of a locomotive.

ROUGH: The governing law is the Locomotive Inspection Act with its safety regulations, like keeping floors free of slippery hazards. It’s deemed automatic negligence to violate those rules—but only if the locomotive is in use.

When LeDure fell, the locomotive was temporarily stopped in a railyard, running but idle. So it all boiled down to the statutory interpretation of the word use.

Chief Justice John Roberts tied use to purpose.

ROBERTS: Locomotives, their primary purpose is to move and move things. Suppose I have a car in the driveway. I wouldn't say the car is being used just because it's sitting there and I might want to use it later. Its primary purpose is to move some people around and not sit waiting, even if waiting ready to be used later on.

EICHER: The entire opinion in this case amounted to one sentence: “The judgment is affirmed by an equally divided Court.” In other words, when opinions end in a tie like this, the lower court’s decision stands. So LeDure loses here.

ROUGH: Now onto oral argument in the case of the praying football coach.

Mary Reichard and I interviewed Coach Kennedy last month on the steps of the Supreme Court in Washington. He told us how he became a football coach in 2008 and why he prays after each game.

He said the school district’s athletic director saw him out for a run one day and mentioned that the high school needed football coaches. The athletic director encouraged Kennedy to apply.

Before I play a bit of that interview, I want you to know it was a crummy day. It was raining, and you’ll hear the drops hitting the umbrella as we talk to the coach.

KENNEDY: On a Friday, they offered me the job, and I said, “Well give me the weekend, and let me talk with my wife, pray about it, and talk to my kids.” It was a weekend of a lot of discussion. And I saw the movie, right in the middle of the night, Facing the Giants. It was like a lightning bolt. I don’t know if God always answers questions. Most of the time, He seems to just ignore me. But He answered that question. It was clearer than anything, saying I called you to coach. I was on my knees saying, I’m all in. Just like in the movie, I’m going to give you the glory after every football game, win or lose.

For seven years, Kennedy knelt midfield and prayed after each game. At times, players from his team joined him. And some players from the opposing team, too.

But in 2015, the school district asked Kennedy to stop that practice. Authorities said they were concerned it could lead to a lawsuit that would accuse the school of promoting religion and that it would violate the establishment clause.

Remember, Bremerton is a public school. Coach Kennedy continued to kneel and pray after the games, and so the school district placed him on paid leave. When the season ended, Kennedy didn’t apply to renew his contract.

Now, the situation did lead to a lawsuit.

But it was from the coach and it wasn’t about the establishment clause of the First Amendment. His claim is that the school violated the other clauses of the First Amendment: his rights of free speech and the free exercise of religion.

But the lower court sided with the school. It held that Kennedy’s prayer occurred during his official job duties. So it amounted to government speech and therefore could be regulated. In other words, his prayer lacks First Amendment free-speech protection.

The lower court agreed that the school district was right to be concerned that allowing the prayer could be a violation of the establishment clause. The Ninth Circuit court of appeals affirmed. And Kennedy appealed to the U.S. Supreme Court.

Here’s lawyer Paul Clement last week arguing on his behalf.

CLEMENT: When Coach Kennedy took a knee at midfield after games to say a brief prayer of thanks, his expression was entirely his own. That private religious expression was doubly protected by the Free Exercise and Free Speech Clauses.

Kennedy’s free-speech claim will boil down to whether the prayer was his own, personal speech or part of his job. If part of his job, that claim fails. Here’s Justice Clarence Thomas’ straightforward take on that matter:

THOMAS: Well, we know it's not a part of his job, especially since the school district didn't know anything about it initially and it objected to it. So it can't be a part of his job.

But Justice Sonia Sotomayor didn’t think the lines were so clear. She and Kennedy’s lawyer agreed that a public school teacher couldn’t pray after the bell rings at the beginning of class because it’s during a time she has instructional duty. Wasn’t that true for the coach, too? Even his own briefs said his duties extended after the game.

SOTOMAYOR: He had an obligation to remain behind for two hours after the game finished. That was part of his duties. He had a duty to make sure that he escorted all the players off the field. He had a duty to make sure the other team got off the field. He had a duty to do a post-game wrap-up both with the players and the coach. He had a duty to clean up and to make sure that the gym was left in good order.

The second question centers on an endorsement analysis. The school claims it must prohibit the prayer to avoid a violation of the First Amendment’s establishment clause. Coach Kennedy argues that’s misguided. But the justices expressed concern over whether the students felt coerced to join the prayer.

Lawyer Richard Katskee picked up on that when he argued on behalf of the school district.

KATSKEE: Some of these kids were just 14 years old. Mr. Kennedy's actions pressured them to pray. If a math teacher knelt and said audible prayers in class just before the bell, the school district could act. Coaches have far more power and influence, especially at the time and place of those traditional post-game speeches.

But Justice Brett Kavanaugh said this case seems different than in prior cases where the court has dealt with a question of coercion.

KAVANAUGH: On the coercion side, there are different forms of coercion, as you've been talking about. There's actual you are compelled to say the prayer. That's not happening here. You're compelled to be present at an event where prayer will be spoken. But I think you're not saying that here either. You're saying there's kind of an implicit peer pressure, subtle coercion, implicit coercion.

He wasn’t convinced those other cases should be extended to cover the more indirect circumstances here.

A significant case for many reasons. A decision could clarify whether an old court opinion from 50 years ago still applies to religion cases. The high court no longer uses it and has criticized it, but lower courts still apply it.

Oral argument lasted for two hours instead of the typical time limit of sixty minutes. Lots more to unpack. We’ll do that when the opinion comes out, and again, this summer on the Legal Docket podcast, Season 3.

For now, that’s this week’s Legal Docket. I’m Jenny Rough.

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

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

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

EICHER: David, first quarter GDP is in, the government’s report on gross domestic product growth or contraction and for the first three months of 2022 we’re seeing a contraction of 1.4 percent on an annualized basis. The economy shrank in Q1. What are your takeaways?

BAHNSEN: Yeah, it was a very odd report, because the consumption number was up more than expected, and the business investment number was not good, but it was up more than expected. So you just got this anomaly, where because of 3.6 million people calling in sick for work in January, during Omicron - normally, you'd have 1 million calling in sick - so a massive increase of people calling in sick - you had, and already on top of the labor shortage, we basically needed to import more than normal. And we exported less than normal, because we were making less things. Now that that changed by the end of the quarter, the energy exports are way up. But that didn't really kick into a little bit later. So when you have that import minus exports number going the other way, that pulls from GDP. Then you take the whole number and put it onto your inflation deflator, what they call the PCE - Personal Consumption Expenditures - that number was a tiny bit higher than they had projected. So we ended up with a negative GDP print for the quarter.

But all of those data points are going to be reversing the next quarter.We are going to be exporting a lot in quarter two, if nothing else, because of energy. Crude oil exports are at the record highs; it's too little too late, in my opinion, but the number is going to be much higher. Natural gas as well. And so that's going to push exports higher, and then with China's COVID lockdown and all the silliness they're doing over there, the import number is going to be, on the margin, lower. So the one data point that was pulling from GDP is going to end up reversing the other way. The question always, for me, is not inventories, which can be a one time anomaly and not import-export, which can be one time anomaly. And even with government expenditures, that can always be problematic, because you wonder when it goes higher, what part of the economy they're taking from. (Nick: Right.) So even though I look at the entire GDP formula, and certainly the headlines do, and the press does and the politics does, the two things that matter are the production and the consumption. And both of those things are in positive territory, the chances of us getting a second in a row negative GDP number is basically zero percent.

EICHER: Nevertheless, even if it’s not—as you say—happening in this current quarter, the second quarter of the 2022, which would mean, if it were to happen, technically that we’d be in a recession. I’m reading a lot of reports speculating that recession is on the horizon, sometime during the Biden presidency.

BAHNSEN: Well, in any two year period, or four year period, there's always the chance of a recession. But first of all, we have to ask “what is a recession,” Nick. And it isn't very well defined in terms of specificity. If we look at it as a systemic and prolonged period of declining employment, declining productivity, declining wages, and so an overall and sustained period of economic contraction, and then the NBR technically defines that as two quarters in a row of real negative growth, then I think it will happen in the first term of the Biden presidency. I don't know that it will, but I think it will. But I don't think it'll happen this calendar year, for the simple reason that unemployment is 3.6%! And we're sitting here every week talking about how companies are trying to get more people to work, not laying people off because of positions and opportunities going away. That can flip, a Fed tightening is always going to contract some element of the economy on the margin. I'm just saying people need to focus on the business investment side, because that's where supply side activity takes place that is prolonged and sustainable. And so there will end up very likely being a contraction.

I also think that whatever the next recession is, is going to be much more shallow than it's been in the past. We're not dealing with an environment like the 2008 financial crisis where credit completely went away and banks were, in a lot of cases, completely insolvent. And there was all the massive things happening to kind of put, you know, CPR into the economy and into the banking system. The banks are far more capitalized. So I don't want to sound overly optimistic because I think a recession coming is a negative thing. A recession is going to do damage to people, and I don't want that. I do not underestimate the human aspect of, even in a shallow recession, there ending up being job losses and other negative economic activity. But I do want to point out that recession is necessary for the same reason sometimes medicine is necessary for a human body that's ill - it has a lot of really negative things that happen, but it's for the purpose of purging out things. A recession will allow us to kind of reset a bit. My concern is that the Fed won't take advantage to fully do what they need to do to normalize monetary policy and at least minimize some of the distortions they've created. And I'm very hopeful that if we do have a recession, it will be a mild and shallow one. And I really do believe this has to be understood and analyzed in the most apolitical way possible.

EICHER: All right, David Bahnsen, financial analyst and advisor, head of the financial planning firm The Bahnsen Group. You can receive the aforementioned daily writing at DividendCafe.com. David, thank you. Let’s talk again next week! Have a good one. 

BAHNSEN: Thanks so much, Nick.

NICK EICHER, HOST: Today is Monday, May 2nd. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Nick Eicher.

MYRNA BROWN, HOST: And I’m Myrna Brown. Coming next, the WORLD History Book. Today, two newsworthy anniversaries—both on May 5th. Here’s Paul Butler.

PAUL BUTLER, REPORTER: Cinco de Mayo celebrations like this one are happening all across the United States this week with traditional Mexican dances and cuisine. A 2019 Avocado growers survey found nearly 8 out of 10 Americans believe the holiday celebrates Mexican independence...

BAUTISTA: Cinco de Mayo is not Mexican Independence Day. That’s Septembber 15th and 16th. So then, what is it? Why do we celebrate? Nobody really knows…

That’s David Hayes Bautista—he knows. He’s the author of El Cinco de Mayo: an American Tradition. Audio courtesy of University of California Television.

Three wars in the early to mid 19th century left Mexico heavily indebted to a handful of European countries—including France. When Mexico defaulted on their loans, France sent troops to collect payment.

What’s more, Napoleon III desired to reestablish a French outpost in the New World. He was sore over how much land his uncle sold decades earlier to Thomas Jefferson in the Louisiana Purchase.

French troops arrived on Mexican shores in 1861. When talks broke down, expeditionary troops began their march toward Mexico City. On their way they met the Mexican army near the city of Puebla. Though greatly outnumbered, the Mexican army beat back the French on May 5th.

CLIP: In Mexico to this day, the Battle of Puebla “Oh well, ladedah. The Mexican Army beat the French Army.” Well here, the effect that it had was very different. After a year of hearing of nothing but Federal defeat after Federal defeat, this was like a ray of hope. Suddenly, for the first time, in a major battle the army of freedom and democracy finally beat the army of slavery and elitism and it just had an electrifying effect on Latinos all over the West.

The victory delayed the French take-over of Mexico—but it didn’t prevent it.

Still, the victory is commemorated each year: both in the Mexican state of Puebla—known there as The Day of the Battle of Puebla—and more broadly in the United States as Cinco de Mayo—a holiday celebrating Mexican heritage.

Sticking with May 5th. Let’s fast forward 125 years to 1987.

INOUYE: The joint hearings of the House Select Committee to Investigate Covert Arms Transactions with Iran and the Senate Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition will come to order.

Hawaiian Senator Daniel Inouye opens the “Iran-Contra hearings.”

In the 1980s, senior officials in Ronald Regan’s administration secretly facilitated arms sales to Iran—in hopes of earning the release of seven American hostages. The proceeds were then quietly funneled to rebel groups in Nicaragua. Members of the National Security Council hoped the financial support of the insurgency would weaken the socialist Central American government.

It was done quietly because in 1982, Congress passed a series of amendments limiting U.S. assistance to the Contras. Meaning the secret project was not only under the table, but illegal. When news of the scandal emerged during Regan’s second term he appointed a three-person presidential commission to investigate.

Two months after the Tower Commission published its findings, the U.S. House and Senate called a joint hearing to investigate the matter further.

Once again, chairman Daniel Inouye from his opening remarks.

INOUYE: The American people will have every right to ask “how could this have happened here?” And as we answer that question, the American people will have every right to demand that it will never happen again. Indeed, it should never have happened at all.

The Senate select committee included six democrats and five republicans. The House select committee featured nine democrats and six GOP members—including Representative Dick Cheney of Wyoming:

CHENEY: A complete understanding of these events requires us to consider the context within which they occurred…

The Iran-Contra hearings lasted for 41 days—featuring many memorable moments. Including testimony from former national security advisor Robert McFarlane:

MCFARLANE: It is more than passing strange to me that we can not aspire to a policy that is more effective for dealing with terrorism…

Vice Admiral John Poindexter:

POINDEXTER: I must decline to answer that question at this time because of my constitutional rights under the 5th amendment.

And Lieutenant Colonel Oliver North:

NORTH: I never recall seeing a single document that gave me a clear indication that the President had specifically approved that action.

The hearings concluded August 3rd, 1987—ending as they began with comments from Hawaiian Senator Daniel Inouye.

INOUYE: My fellow Americans, out of this experience, may we all better understand and appreciate our Constitution, strive harder to preserve it, and make a fresh start at restoring the trust between the branches of government. For, in America, as 200 years ago, the people still rule.

With that, these hearings stand recessed until further call.

The Iran-Contra hearings eventually led to more than a dozen indictments and convictions. After George H. Bush lost his re-election bid in 1992 he pardoned six former Regan administration officials caught up in the scandal.

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

NICK EICHER, HOST: Tomorrow: school choice in Kansas. We’ll tell you about efforts to give parents freedom within the public school system.

And, Classic Book of the Month for May.

That and more tomorrow.

I’m Nick Eicher.

MYRNA BROWN, HOST: And I’m Myrna Brown.

The World and Everything in It comes to you from WORLD Radio.

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Go now in grace and peace.

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