The World and Everything in It - May 3, 2021

MARY REICHARD, HOST: Good morning! California law requires nonprofits to hand over donor information, but that’s being challenged at the Supreme Court.

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

Also today the Monday Moneybeat. Excellent GDP figures for the first quarter of the year. Consumer spending drove most of it, but business investment also came in strong.

Plus, the WORLD History Book. Today, the life of an old-school performer who spent his career encouraging the troops overseas.

REICHARD: It’s Monday, May 3rd. 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: Biden administration denies Iranian report of prisoner swap » The Biden administration is refuting a report by Iranian state-run television that leaders in Tehran and Washington have struck a deal on a prisoner swap.

White House Chief of Staff Ron Klain told CBS on Sunday,

KLAIN: There is no agreement to release these Americans. We’re working very hard to get them released. We raised this with Iran all the time, but so far there’s no agreement to bring these four Americans home.

The Irianian television report stated that under a new agreement, Iran would release American and British prisoners. In exchange, it said, the United States would release four Iranian spies and Tehran would get $7 billion dollars.

A state-TV anchorwoman claimed the deal came under congressional pressure on President Biden and “his urgent need to show progress made in the Iran case.”

U.S. State Department spokesman Ned Price immediately denied that report.

Meantime, national security adviser Jake Sullivan said U.S. diplomats are still working to reestablish direct nuclear negotiations with Iran.

SULLIVAN: There is still a fair distance to travel to close the remaining gaps. And those gaps are over what sanctions the United States and other countries will roll back. They are over what nuclear restrictions Iran will accept on its program to ensure that they can never get a nuclear weapon.

Officials from China, Russia, and several European countries expressed cautious optimism over the weekend after the latest round of talks with Iranian officials in Vienna. Russia’s top representative in the talks said the two sides made “indisputable progress.” He said “the Joint Commission will reconvene at the end of [this] week.”

Yellen downplays concerns over massive spending » Treasury Secretary Janet Yellen on Sunday worked to tamp down concerns over the possible fallout from massive spending in Washington.

President Biden has proposed plans to spend another $4 trillion dollars on top the nearly $2 trillion Congress already approved. And some economists warn that runaway spending could trigger significant inflation reminiscent of the 1970s when rising costs battered the U.S. economy.

But Secretary Yellen told NBC’s Meet the Press,

YELLEN: We will monitor that very carefully. We are proposing that the spending be paid for, and I don’t believe that inflation will be an issue, but if it becomes an issue, we have tools to address it.

She said the spending is necessary to stabilize the economy into the future. Republicans say it will have the opposite effect.

GOP Sen. Rob Portman said a bipartisan compromise is still possible on a more focused plan.

PORTMAN: Janet Yellen just talked about—Secretary Yellen just talked about the $6 trillion dollars in new spending. Only about 20 percent of the jobs bill that the president has proposed goes to real infrastructure, and that part of it can be paid for.

But if moderate Democrats in the Senate sign on to the president’s full spending proposals, Democrats could pass them without any Republican votes using budget reconciliation.

Indian court urges government action as hospitals cry help » A court in New Delhi said it will start punishing government officials for failing to deliver life-saving items amid a COVID-19 surge.

Overwhelmed hospitals in India are struggling to secure oxygen and other supplies.

The government has been using the railroad, the Air Force, and the navy to rush oxygen tankers to hardest-hit areas. But the New Delhi High Court says it’s too little, too late.

But other countries and companies are rushing supplies into India. Akbar Al Baker is CEO of Qatar Airways.

BAKER: We are sending three freighters: one to Delhi, one to Bangalore, and one to Mumbai with medical aid supplied by suppliers and donated by Qatar Airways.

India reported almost 3,700 deaths Sunday in a single 24-hour period. And experts say that’s likely a vast undercount. On Friday, India reported over 400,000 new cases, once again shattering a global record.

Dr. Ashish Jha of Brown University said that surge is not currently a threat to the United States, but … it’s still in America’s best interest to help India.

JHA: The main variant we’re seeing spread in India, B1617 will not be evading our vaccines yet. They don’t evade our vaccines yet. But of course, when you have major outbreaks like this, there are opportunities for more variants.

On Friday, the U.S. military began delivering shipments of relief supplies to India, including oxygen equipment and rapid testing kits.

SpaceX splashes down safely after nearly six months in space » SpaceX safely returned four astronauts from the International Space Station on Sunday.

SOUND: SpaceX, this is Dragon. 4 Gs, 42 kilometers. SpaceX, we have you loud and clear. Expect automated chute deployment.

The Dragon capsule crew parachuted into the Gulf of Mexico off the coast of Panama City, Florida, just before 3 a.m. That made it the first U.S. crew to splashdown in darkness since the Apollo 8 moonshot.

SOUND: We have visual confirmation of the Crew-1 Resilience capsule

The astronauts, three American and one Japanese, flew back in the same capsule in which they launched from NASA’s Kennedy Space Center in November.

It was an express trip home, lasting just 6 1/2 hours.

The 167-day mission was the longest for a crew capsule launching from U.S. soil. The previous record of 84 days was set by NASA’s final Skylab station astronauts nearly a half-century earlier.

I’m Kent Covington.

Straight ahead: a challenge to California’s nonprofit donor rules.

Plus, England executes its queen.

This is The World and Everything in It.

MARY REICHARD, HOST: It’s Monday morning, May 3rd, 2021 and we’re glad to be back for another week of The World and Everything in It. Good morning to you! I’m Mary Reichard.

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

The U.S. Supreme Court handed down just one opinion last week. The majority ruled a deportation notice from the government must arrive as a single document. One that contains all the necessary information for the person being deported.

In this case, a man from Guatemala came into the United States illegally in 2005. He received deportation notifications across two separate mailings. He fought the government on the grounds that the law specifies “a” notice.

His lawyer argued that “a” means “just one.”

And a majority of six justices agreed with him. In dissent, Justice Brett Kavanaugh and joined by Chief Justice John Roberts and Samuel Alito thought the majority wrongly tread into policy matters and creates more burdens for the already-burdened immigration system.

REICHARD: Now for oral arguments.

First, a case that arises out of California from the time when our current vice president Kamala Harris was that state’s attorney general, from 2011 to 2016.

California is one of only four states that requires charities and nonprofits soliciting money there to hand over a list of donors.

IRS Form 990 gives an overview of an organization. Attached to that form is Schedule B. That contains very specific information: names of donors, their addresses, and total contributions.

Until Kamala Harris took office, California didn’t require charities to file Schedule B with the state. But Harris explained she needed donor details to streamline fraud investigations. Charities that didn’t comply received deficiency letters from her.

EICHER: In 2014, the nonprofit group Americans for Prosperity sued Harris, alleging the requirement of disclosure of major donors amounted to a violation of their freedoms of speech and association under the U.S. Constitution.

It’s been in the courts ever since, and now it’s before the highest court. Which has consolidated this case with a similar challenge from Thomas More Law Center, a conservative public-interest law firm.

Lawyer for the nonprofits, Derek Shaffer, laid out the costs and the fallacies of Harris’s demand.

SHAFFER: This demand casts a profound nationwide chill, and it does so for no good reason, Your Honors. California's upfront collection of Schedule Bs does not further the state's law enforcement goals. Forty-six states today police charities without any such blanket demand. California itself likewise did so for years, Your Honors, without any problems. These 
Schedule Bs never find any legitimate use unless and until a complaint comes in, as happens for only a fraction of 1 percent of all charities. Even when reviewed, Schedule Bs, for all of their extreme sensitivity, have only trifling utility.

On the other side representing California, Aimee Feinberg.

She argued the nonprofits failed to make the case that Schedule B disclosure requirements are unconstitutional. The state needs them to root out fraud, and the state strives to keep the documents confidential.

That unleashed a barrage of questions from the justices on both sides of the ideological aisle.

Justice Alito recalled massive data breaches originating in the state of California.

ALITO: A donor may say: This is a state that has been grossly negligent in the past. No sanctions against anybody who's leaked this information. I have to assume that this may happen again. Why isn't that a reasonable way to look at this?

Well, Feinberg replied, the lower court noted efforts to rectify past lapses and commended efforts to prevent them in the future. 
Justice Alito didn’t let up.

ALITO: It said your past record was shocking, did it not?

Part of the state’s argument is that we must look at disclosure requirements in two ways: one, is it wrong overall, wrong on its face, or, as lawyers put it, “facially.” Or, two, is it wrong just in certain situations, or again to use the legal term of art, “as applied”?

Justice Clarence Thomas spotted the trouble with that analysis. Listen to this exchange with Shaffer, lawyer for the nonprofits:

THOMAS: How would it affect your analysis if the organization involved did something that was not controversial, such as provide free dog beds, or taking care of stray puppies or something like that? Would your analysis change in any way?

SHAFFER: It wouldn't, Justice Thomas.

REICHARD: Because no matter whether “facially” or “as applied,” even the handling of puppies can be controversial.

Justice Amy Coney Barrett wondered whether what riles up people in California may strike people in Alabama as a nothingburger, for example. Hard to find one standard for what constitutes harassment in that environment.

Shaffer kept to his focus: any requirement to disclose is unconstitutional, regardless of the purpose of a charity.

Because, as Justice Thomas expounded:

THOMAS: In this era, there seems to be quite a bit of loose accusations about organizations, for example. An organization that has certain views might be accused of being a white supremacist organization, or racist, or homophobic. Something like that and as a result become quite controversial. Do you think that sort of labeling would change your analysis?

SHAFFER: It’s part of the problem. Precisely because there is such intensity of views and such a proclivity to vilify perceived enemies in your time, it raises the stakes if you will.

Feinberg for the state tried her best to minimize the amount of damage done by intolerant people who doxx others, whether on purpose or not. Sure, sometimes a data breach may happen, disclosures occur, she argued, but nobody can guarantee perfection.

Feinberg got some support from Justice Elena Kagan who questioned the premise of the other side. Some donors may be worried about public disclosure out of harassment fears, she told Shaffer, but not everyone is.

KAGAN: a very substantial majority of donors in a very substantial majority of charities are not concerned about that. In fact, they rather like public disclosure of their generosity. If that's so, could you win a facial challenge?

SHAFFER: Yes, Justice Kagan, for two reasons.

He would go on to explain that his side has shown plenty of people who are afraid of retaliation. He asked, Why should he have to bring a particular number to prevail?

Just strike the whole disclosure mandate down, all the way, he argued. Anything less would be a Pyrrhic victory, requiring nonprofits to continually fight expensive court battles to vindicate their First Amendment rights.

Justice Stephen Breyer pointed out the elephant in the room. Any ruling here, he said, necessarily involves campaign finance disclosures, does it not?

BREYER: If you win in this case, I think the Court will have in some form held that the interest of the donors in maintaining privacy of their giving to a charity. Here at least outweighs the interest of the State in having a law on the books that even if it’s not actually enforced frightens people into behaving properly. Okay? Something like that.

Justice Breyer wondering whether this case is really a stalking horse to undermine campaign-finance rules. And how to distinguish political from non-political speech.

Shaffer pointed out the higher principle of the right to privacy. He pounded on the difference between IRS requirements that are applicable nationwide versus California’s bureaucratic whims.

And he underscored what the Founders of this nation thought about freedom in this exchange with Justice Barrett:

BARRETT: Do you think the right to anonymously associate is an inherent part of the freedom of assembly?

SHAFFER: Yes, it is. It was precious to the framers. Anonymity was a core concern of theirs that’s reflected in this court’s precedents. But also, the right to assemble is the right to assemble privately and peaceably. And when the government comes asking us who your donors are, that is a direct infringement.

The tenor of this argument points to a win for the nonprofits, and maybe a smack-down for overreaching government.

But the crucial aspect is how the justices reach that conclusion. That makes all the difference in how lawyers can use it in other cases in the future, and how citizens can guard their rights.

This last case today is one of several this term dealing with Native American tribes.

This one’s not about broken treaties or land rights, though. It’s about whether native-run corporations are entitled to money from the CARES Act.

First, let’s define some terms: The CARES Act. It’s an acronym you may remember is the Coronavirus Aid, Relief, and Economic Security Act, passed during the Trump administration in response to the economic fallout from the pandemic and pandemic policies.

Another term: ANCs. That initialism stands for Alaska Native Corporations. ANCs engage in for-profit businesses like oil and gas productions and farming. The federal government established them in 1971 when it settled land claims with indigenous Alaskans.

ANCs are different from tribal gaming or casinos, though. Coronavirus shutdowns hit hospitality and entertainment hard, and that included casinos mainly in the Lower 48 states.

All that to say, we can frame the fight here as Native tribes in the Lower 48 who object to their share of CARES Act relief cut down by the northerners who don’t really need it. They say the ANCs up in Alaska aren’t in financial trouble, and the law didn’t intend to include them.

So it’s a matter of interpreting what the CARES Act means by the phrase: “recognized governing bodies of Indian Tribes.”

Not easy, because the phrase “Indian Tribe” is all over federal law, and isn’t clearly defined.

Justice Amy Coney Barrett wanted to clarify what the case is really about in this exchange with lawyer for the tribes of the Lower 48.

BARRETT: Isn't this really about whether
 the lower 48 are allocated more money? In other 
words, that the primary dispute here isn't about 
 governance or who serves as the intermediary or
 the ANCs being able to trump how the villages 
might decide things, but what piece of the pie 
goes where?


RASMUSSEN: No, our view is that this is a fundamental question about tribal sovereignty and that the tribes are the sovereigns. Congress was giving the money to the sovereigns for them to make the decision that would...

How the justices decide will determine who decides and where authorities can distribute that money set aside for Native American communities.

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: Financial analyst and advisor David Bahnsen joins us now for our weekly conversation and commentary on the economy. David, good morning to you.

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

EICHER: David, Gross Domestic Product for the first quarter seemed surprisingly healthy, way up. The economy is looking really good. Did you expect Q1 to be that strong?

BAHNSEN: No, I was not expecting that you would get a 6.4% real GDP number. And the consumption and investment side was really through the roof. So those forecasts, whether it be Goldman Sachs or my economic advisor at the Bahnsen group, Larry Kudlow, that are talking about getting eight, nine, or 10 percent, real GDP on the year, I think it's looking more and more likely.

The consumption and production and business investment numbers were all very healthy. And there should be no reason for the second quarter to not be stronger than the first quarter.

EICHER: Obviously, goods purchases were the big driver, services a little less so. There’s a lot of money out there to spend, and I’ll get to that in a minute. But I know you look at business investment as the better indicator of the underlying strength of the economy. And so you were pleased with that.

BAHNSEN: That's correct. And so I view it as what we would call capital expenditures, nonresidential fixed investment is the technical term in the GDP component. And it was by far the most lacking element through many of the post-financial crisis recovery years.

Now here in the moment, you expect in COVID recovery, where most of the economic growth is coming from the consumption and services side of the economy that has been shut down reopening. And so I think that getting business investment to contribute to economic growth is much more of a story after the COVID recovery. And it's something we've talked about a few times over the last month or so, that's a question mark that we would have maybe three or four quarters out from now.

EICHER: So I noticed the actual GDP number at 19.09 trillion, that it puts us within 1 percent of the peak GDP back in 2019.

If we had been talking, a month or so, two months after the pandemic really took hold here in the United States, and I had told you that by May the first of 2021, that we would be within 1 percent of where we were at the peak of economic growth back in 2019, would that surprise you?

BAHNSEN: I would have been surprised at this point. But even here at this point, I don't think that it represents the finish line.

And the reason, Nick, is that you have to look at what trend-line growth would have been without a pandemic. And so if we had been advancing roughly two to three percent, real GDP rate throughout 2020, instead of having the interruption of the COVID moment, we not only need to get back to where you were, as you say at the peak level of 2019. Really to feel like we've completed this recovery, we need to get back to where we would have been with some trend line growth added on to that out of the 2020 interruption. And so we do have a little work to do here, but I think We're gonna get there by the end of the year, I think we're going to get there because the economic disruption from COVID proved not to be on a broad scale on a macro scale, as severe as I think all of us would have expected nine to 12 months ago.

The problem, of course, from a purely human level, is that that comment doesn't say anything to those who were most severely affected. And if the total number of severe impact is only 10 percent of the economy, and the other 90% is doing really well, you can get a macro blended number that doesn't look so bad. And yet, that would be news to the 10 percent, who may be feeling it. And so I do believe that there will be scars, for those who are most impacted by the policy failures of our COVID moment.

EICHER: Before I let you go, David: The other big headline report was a 21 percent increase in household income month over month, April over March. The Wall Street Journal had a big story trumpeting that,  and then you read into the story and see, and I did my own math on it, 95 percent of the household income rise was due to government transfer payments—the fiscal stimulus, stimmy checks as we’ve heard them called.

BAHNSEN: Throw it out and just throw it out, like just literally totally irrelevant economic data—90% plus distorted by the transitory transfer payment of the $1,400. So the household income number provides no sustainable economic projection or predictive power whatsoever.

EICHER: All right! David Bahnsen, financial analyst and adviser. David writes at Dividend Cafe.com. You can sign up there for his email newsletter. Check out what he has to say. David, catch you next week. Take care.

BAHNSEN: Thanks for having me, Nick.

NICK EICHER, HOST: Next up on The World and Everything in It: The WORLD History Book. Today, a legend entertains the troops, bus rides with a purpose, and a king’s wife falls from grace. Here’s senior correspondent Katie Gaultney

MUSIC: “LACRIMOSA” BY WOLFGANG AMADEUS MOZART

KATIE GAULTNEY, SENIOR CORRESPONDENT: Before People Magazine and TMZ, there was the royal court. Gossip ran riot, and the rumor mill was set to a constant churn. And in the court of Henry VIII, accusations about the king’s estranged wife, Anne Boleyn, led to her arrest and imprisonment on May 2, 1536.

CLIP: Did you not affirm that you could never love the king in your heart?/ No.

That clip depicts Boleyn’s trial 485 years ago, from the BBC show Wolf Hall.

Henry notoriously lost interest in Boleyn and began affairs with other women. He couldn’t overcome the disappointment of not producing an heir with Boleyn. Ultimately, on May 2, 1536, Henry ordered her committed to the Tower of London on charges of multiple adulteries, incest, treason, and witchcraft. She met the executioner’s blade just two-and-a-half weeks after her arrest.

Historians believe Anne was likely innocent of the charges, and that Thomas Cromwell, chief minister to the king, engineered her conviction. From a BBC documentary in 2013:

CLIP: It was Cromwell. He’s the guilty party in this. I think this is one of the most shocking plots in English history.

Jumping ahead more than four centuries now.

NEWSREEL: In jungle centers or wherever there’s GI life, there’s Hope—and we do mean Bob!

That vintage footage shows entertainer Bob Hope doing some softshoe for troops in the South Pacific in 1944. And it was 80 years ago—on May 6th, 1941—that Hope performed his first USO show, at California’s March Field.

United Service Organizations, of course, aim to lift the morale of servicemen and their families. And Hope’s one-liners, self-deprecating humor, along with his singing, dancing, and acting chops added a big boost to troops’ spirits.

HOPE: We’ve been invited to do another command performance at the palace again. I think it’s wonderful. This is the fourth time the king has invited us. He keeps hoping we’ll bring back the towels.

Hope toured with the USO for nearly five decades after that first show. His final overseas USO tour took him to servicemen and women in Operation Desert Shield in Saudi Arabia and Bahrain. He was 78 at the time, but his rapid-fire delivery hadn’t slowed down a bit in the 50 years since his first USO performance.

HOPE: The stealth bomber, that’s a big deal. Flies in undetected, bombs, then flies away. I’ve been doing that all my life [LAUGHTER].

In 1997, Congress designated Hope the first honorary veteran of the U.S. armed forces.

MUSIC: THANKS FOR THE MEMORY BY BOB HOPE AND SHIRLEY ROSS

Shifting gears now to a road trip with a purpose.

MUSIC: STOP, CHILDREN, WHAT’S THAT SOUND? BY BUFFALO SPRINGFIELD

On May 4, 1961, the “Freedom Riders” began a bus trip through the South. A group of civil rights advocates organized the rides to protest the lack of enforcement over Supreme Court rulings that desegregated public buses, restrooms, and waiting areas. The peaceful method of protest did often incite violent reactions from mobs who attacked the riders. A 2010 Smithsonian documentary references one notable rider, who died last year.

CLIP: Activist John Lewis was then a 21-year-old divinity student. He was the first of the Freedom Riders to be attacked when he and a fellow white rider tried to enter a whites-only waiting room…

American society was stunned by the widespread violence provoked by Freedom Rides. Some condemned the rides, saying they actually caused further division and led to social unrest.

John Patterson was governor of Alabama at the time. He had run as a staunch segregationist and was hesitant to offer protection for the Freedom Riders from mobs and snipers along the route—even at President Kennedy’s urging. In a 2011 PBS documentary, he expressed regret for that reluctance.

PATTERSON: I should have done what was really required to be done irrespective or irregardless of the attitudes of the people in the legislature as far as the racial matters were concerned. It has haunted me ever since.

The Freedom Rides emboldened black and white people to engage with the civil rights movement for the first time. Black activists in the South made the church their bases of operation, a hub for voter registration drives and other civic engagement efforts. About 450 people joined in one or more Freedom Rides during a seven-month period. Black and white citizens participated equally.

That’s this week’s History Book. I’m Katie Gaultney.

NICK EICHER, HOST: Tomorrow: defending Taiwan. China is ramping up its military aggression. Is an invasion imminent? We’ll talk to our reporter on the ground in Taipei.

And, our Classic Book of the Month.

That and more tomorrow.

I’m Nick Eicher.

MARY REICHARD, HOST: And I’m Mary Reichard.

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