The World and Everything in It: October 3, 2022

MARY REICHARD, HOST: Good morning!

Lockdowns are over, but the fines and penalties governments imposed on churches are not. We’ll hear about one of those disputes today.

NICK EICHER, HOST: Also today the Monday Moneybeat: A new report on an old and persistent problem: inflation. And, fraud in Covid relief. We’ll talk with economist David Bahnsen.

Plus the WORLD History Book. Today, a 13-year journey around the world comes to an end.

REICHARD: It’s Monday, October 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: Ukraine » In a video message Sunday, Ukrainian President Volodymyr Zelenskky declared that, “As of 12:30 p.m., Lyman is completely cleared" of Russian troops.

ZELESNKYY: [Ukrainian]

And in an earlier message, he vowed that more Ukrainian flags would be raised in the Donbas region of eastern Ukraine within a week.

Lyman was a critical transport and logistics hub for the Russian military.

NATO Secretary-General Jens Stoltenberg said Sunday …

STOLTENBERG: That demonstrates that the Ukrainians are making progress, are able to push back the Russian forces because of their courage, because of their bravery and skills.

He also noted that high-tech Western weapons are also playing a big role and said NATO remains committed to Ukraine’s victory.

Hurricane Ian Florida » Rescue teams in Florida are still digging through piles of lumber and twisted steel, hoping to find more survivors days after Hurricane Ian slammed the state’s southwest coast.

Florida Senator Rick Scott:

SCOTT: We’re still working on rescuing people. I mean this is just horrible that people have lost their lives. It’s horrible that people are still possible stuck in rubble.

Nearly 80 people are dead in Florida and some residents are still unaccounted for.

Entire communities on the coast were washed away. Florida Congressman Byron Donalds:

DONALDS: We’re devastated here. Ft. Myers Beach, which is one of the large tourist destinations in the country has just been obliterated. It looks like they just fought a war on Ft. Myers Beach.

President Biden plans to visit Florida on Wednesday.

Hurricane Ian Carolinas » Hurricane Ian is also blamed for at least four deaths in North Carolina.

Gov. Roy Cooper said his state avoided the worst of the storm, but …

COOPER: We had a peak of over 400,000 power outages, and now we’re at about 33,000. We have about 48 roads closed. Our hearts go out to the people who lost their lives.

That from NBC’s Meet the Press.

After ripping through Florida, Ian re-strengthened into a Category 1 hurricane before slamming the Carolinas.

125 die at Indonesia soccer match » A riot at a soccer game in Malang, Indonesia, killed at least 125 people over the weekend.

Violence broke out when the home team lost. Some of the fans began throwing bottles at players and officials, then rushed the field.

AUDIO: [Riot]

After police raced to the scene, rioters threw objects at armored police vehicles parked on the field.

AUDIO: [Riot]

Amid the chaos, panicked fans ran, causing a dangerous rush at the exits. Most of those killed were trampled or suffocated.

Kemp reacts to judges ruling on GA voting laws » In Georgia, a victory for Republican Gov. Brian Kemp. A federal judge has ruled against a group associated with Democratic rival Stacey Abrams.

Kemp reacted on Sunday.

KEMP: Stacey Abrams and her group lost on every single count in that ruling on Friday. It’s sad that since day one, she’s used this whole process to sow distrust in democratic institutions.

Abrams lost to Kemp four years ago but never conceded. She suggested that the election was not legitimate, calling the governor …

ABRAMS: The architect of voter suppression in Georgia, Brian Kemp.

Abrams and her allies claimed Georgia’s voting laws violated the Voting Rights Act of 1965. But U.S. District Judge Steve Jones, who was nominated by President Obama, disagreed, ruling for the state on all remaining issues.

Gas prices » Gas prices are back on their way down after rising briefly last week. AAA says the national average is now $3.80 per gallon. That’s down 8 cents from this time last week.

But in California, prices are on the way up, now $6.38 a gallon on average. One LA County resident said prices in her neighborhood are much higher.

AUDIO: I think it’s absolutely ridiculous. The fact that we’re paying $7.29 is just mind-blowing.

Mississippi has the lowest average price in the nation right now: $3.07 per gallon.

I’m Kent Covington. Straight ahead: disputes over government lockdown penalties imposed on churches.

Plus, the Monday Moneybeat.

This is The World and Everything in It.

MARY REICHARD, HOST: It’s Monday, October 3rd and we’re glad you’ve joined us for today’s edition of The World and Everything in It. Good morning. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. Well, today is the first Monday in October and that means a new session of the U.S. Supreme Court begins today.

The four oral arguments this week are disputes over wetlands, MoneyGram checks, the Voting Rights Act, and rebuttable presumptions in the law.

REICHARD: Hmm, it’s technical. Let me see if I can say it simply. So a court assumes, let’s say, a fact in a case to be true, unless one of the lawyers is able to prove that it’s not. Rebutting that presumption. OK? 

Told you it was technical.

Well, our legal reporter and my colleague Jenny Rough will bring coverage of that wetlands case and the voting rights case next week. And since we’re just talking, I think this is a good time as any to remind the listener to this podcast to try out Legal Docket Podcast. That’s where Jenny and I do a deep dive into big cases from the just- past term of the Supreme Court.

We have one more episode to go before season three is finished; then we start right in preparing season four!

EICHER: And that’s no exaggeration! I know how much goes into it. We’re talking hours of research, interviews, travel, writing, rewriting, editing, production, and I think Legal Docket podcast listeners really appreciate all that goes into it, based on the feedback, because the finished product really shines. So, worth the effort.

REICHARD: And it’s all thanks to the people who support WORLD financially. I will never forget that and I am grateful.

Well, for today’s final summertime legal docket, more legal fallout from the COVID-19 vaccine mandates and restrictions.

Litigation was practically guaranteed to happen after so many levels of government imposed restrictions in an uneven and at times unconstitutional manner.

EICHER: Today we turn to litigation against the county of Santa Clara in California.

That’s where Pastor Mike McClure leads Calvary Chapel San Jose. He and his church have been tangling with the county’s Covid restrictions.

Now last month, the County lifted almost all restrictions, leaving only a requirement for masking in higher-risk settings.

But from May through October 2020, restrictions were in place and the church defied them. It continued to hold indoor services and didn’t put limits on attendance.

And here is Pastor McClure talking with Newsmax TV:

MCCLURE: I mean, we had so many people hurting, we had a huge amount of just suicide attempts. And we looked at just the church, and people needed to be in church. I mean, that's what church is for. If we look at the hospitals in America, all the hospitals are started by the church, it's like, they're not gonna close the hospital. So why should we close worship services, when really that's the most important thing?

REICHARD: Litigation between the county and the church has many twists and turns.

Briefly, in fall of 2020 the county filed a civil complaint against the church for failure to comply with public health orders. The trial court issued an order telling the church to comply.

But the church didn’t do that. The county then sought an order of contempt along with fines and penalties of nearly three million dollars. The court granted that.

In September 2021, the church and its pastors sued state and county officials for violating their civil rights under the First and Fourteenth Amendments, including the Eighth Amendment’s prohibition against excessive fines. The complaint alleged the county targeted religious organizations with harsher restrictions than similar secular settings and then imposed crippling fines.

EICHER: So the state appeals court in California in August agreed with the church. It found the restraining orders and injunctions unconstitutional, under the state constitution, and cited guidance from the the U.S. Supreme Court on numerous occasions. It also reversed the order to pay money sanctions.

The opinion says it’s improper to treat religious settings more harshly than similar secular ones. Specifically, such an order, quoting here, “is not neutral and of general applicability if the public health order permits any other type of indoor secular activity … ” In other words, it’s likely to fall short of the U.S. Constitution’s Free Exercise Clause.

REICHARD: But the dispute’s still not over. On September 26, the county and its Health Officer appealed that decision.

I reached out to the County for comment by phone and by email, but didn’t hear back.

I did hear from the lawyer for the church and its pastors, Robert Tyler. He’s general counsel for Advocates for Faith and Freedom, a nonprofit law firm.

TYLER: The County of Santa Clara first launched the lockdowns, a few counties around them followed, then the state of California followed, then the Feds followed thereafter on a federal level. So here we are, we're basically at Ground Zero, where this litigation that we're involved with, on behalf of Calvary Chapel, San Jose, it all started there.

The government assessed that pet shops and marijuana dispensaries were essential, whereas religious activity expressly protected by the First Amendment was not. Well, that didn’t set well:

TYLER: And we had over 3000 pastors in California sign a declaration that said we are essential as a church, and we're going to reopen on May 31 2020, the day of Pentecost, and we’re not asking for permission.

Not only that:

TYLER: Pastor Mike McCluer said, I'm willing to be placed in jail if necessary. And even though the judge has ordered us not to meet, we're going to continue to meet because there are people hurting, lives are at stake, souls are at stake.

Even though the church won on appeal to get the contempt convictions overturned, the county now seeks $2.8 million in fines that it levied on the church.

The church is again contesting that, and more:

TYLER: And so we just recently filed a motion…in federal court to obtain a judgment in our favor asking the court to rule that these health orders are unconstitutional. Even the mask orders and the social distancing orders. 

This is somewhat of a very new issue, because you might recall the Supreme Court held that these limitations on how many people can gather for church were unconstitutional. However, the Supreme Court never addressed masks or social distancing. These other requirements. And so this is going to be an important issue for the future.

Aside from the big fines, Tyler says it’s important to clarify the boundaries of the First Amendment when it comes to government action:

TYLER: …and even though the Supreme Court had used this, what they call this neutral and generally applicable principle, where if all assemblies and all gatherings are required to socially distance, to wear masks, or to shut down altogether, then arguably the same has to be true for a church, the government came and picked winners and losers, not based upon risk, not based upon anything other than what the government deemed to be essential.

Government picking winners and losers can’t withstand legal scrutiny, especially given how the restrictions permitted large secular gatherings, say in a big box store:

TYLER: This cannot stand because these individuals, these people are coming together. They're there for really a common purpose: that's to shop, whether they're there for any other reason, it doesn't really matter what their reason is for gathering together when looking at these COVID-19 Health orders, the government cannot come in and, you know, pick winners and losers, unless they're doing so based upon some legitimate risk analysis. But across the country, the government didn't do that. The government looked at churches and said, “you are not as important as going out to go to a grocery store, to go to a liquor store, to out in California, to go to a marijuana dispensaries.”

It’s the failure to understand what “essential” really means.

TYLER: I made the argument early on that a person's spiritual and mental health is as important as someone's physical health. So if I'm allowed to go to the grocery store, because it's important for my physical health? I know many people who struggle from anxiety, depression and other issues that for them, going to church is as important and in fact, in many cases, more important to them than their physical health.

The church and pastors are now asking the court to lift the millions of dollars in sanctions the county seeks.

To be clear, the county is no longer fining churches and the prior health restrictions are for the most part over. But the government push for vaccines and a state of emergency still in effect in the state means questions remain unanswered:

TYLER: You know, as an evangelical Christian, I believe that there are Christians who could differ on this absolutely. And It's for each individual to decide. And many individuals looked upon this and said my spirit is against this, it's telling me that I need to avoid taking this.

Many cases like this are winding through the courts, and it’ll take some time for consistent, organized principles of law to be sorted out.

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: Time now for our weekly conversation on business, markets, and the economy with financial analyst and adviser David Bahnsen, head of the wealth management firm The Bahnsen Group. Good morning, hope you’re well!

DAVID BAHNSEN, GUEST: Doing very well, Nick. How are you?

EICHER: Doing well, but we need to talk about what not doing well and that’s inflation. Let’s jump the new inflation number just out last week. This one is the preferred number, the one the Fed takes most seriously. It’s called the PCE—personal-consumption expenditures—and it’s distinct from the CPI, consumer price index. So the PCE showed 6.2 percent year-on-year inflation for the month of August. The core-PCE number, when you back out volatile categories—that’s food and energy—the core-inflation for August year-on-year is almost 5% - and that’s higher than July. Any surprise, David?

BAHNSEN: Yeah, it wasn't a big surprise. That number didn't do much in terms of where we are going forward, there was a CPI number that everyone knows about from August that showed food inflation moving higher, even as energy had come down. And then the PCE number, which has a lower weighting in housing than CPI, but is more delayed, and it was really reflecting rent increases from about three months ago. And now since, you know, we get real time data from other various housing sources, we know that August was the first month in years where rent was actually down and nationally, month over month, which is, again a reflection of a softening economy, and also the fact that housing, both rents and purchase prices were just so overinflated. So it just has to do with the lag. Really, I think food inflation is going to come down to the issue that most politically matters and most drives headline news around inflation. The volatility of energy inflation is kind of baked in at this point. There's a lot of geopolitics there - and a lot of manipulation. The strategic petroleum reserves have been just totally depleted, and now the administration is begging our US companies not to export globally because they need to refill stockpiles here. And those are stockpiles that our administration emptied. And frankly, I think that lower prices and housing and rent is a good thing. I think that those were just significantly overpriced and hit on affordability levels that were untenable. So food inflation is the area that most people feel in their pocketbook, because everybody does eat.

EICHER: Well, they do. I want to quote from an editorial in The Wall Street Journal on the inflation number, quoting now: “All of this weighed heavily on financial markets, with equities taking another header. The Dow Jones Industrial Average fell another 500 points … [and] wrapped up its third straight quarter of declines, the worst in the first nine months of a calendar year since 2002. So much for the summer sucker’s rally.”

How do you respond to that?

BAHNSEN: Yeah, I mean, we're past the point of markets being moved by inflation itself, it's now the knock on effects and on the bond yields having gone higher, and most importantly, the dollar rallying to extreme levels as the pound and yen and Euro are making multi-decade lows. Those are the issues that have really created a lot of disruption in the stock market. And so I wrote at Dividend Cafe, over the weekend about the reality of bear markets and where we now are, and I don't think anyone can try to time this bottom. It was an absolutely brutal September, the first half of the third quarter was a huge rally to the upside, and then it gave all of that back, and then some in the second half of the third quarter. And so when you get to that point, from a sentiment standpoint, where there's just very, very few buyers, no eager buyers, and an awful lot of selling pressure, it's just simply a matter of markets, finding that bottom and that capitulation. And there's no question historically that these are the times where opportunistic buyers can end up doing very, very well. As long as they can be patient. So markets are oversold, they'll get to a point where they find a bottom at some point, but what you never know is the length of the process. We all experienced a bear market during COVID that lasted 30 days. And when I began investing money professionally over 20 years ago, we entered a bear market that lasted basically almost three years. And so the average bear market has lasted about a year, we're nine months into this one. We've had now 13 since World War Two. And they're never fun for people to go through, but they always end and they always make new highs after they end. So that's sort of the nature of risk asset investing, equity markets in particular. And I think that this will end up having other knock on effects, it's going to definitely affect the administration and the midterm elections. There's a lot of history about the correlation between stock market and elections. I believe it's 58% of Americans that own stocks in some form or another with a 401(k) or retirement account or whatnot. And yet, in terms of those listening who happen to be investors, it really is much better to be buying things low than high. And so there's a ‘glass half full’ side to this as well.

EICHER: David, I want to get your thought on this inspector general report that tallies up fraud in Covid benefits—this is a Labor Department IG report—that identifies a total of $45.6 billion in fraudulent unemployment scams. This is three times what we’ve shipped off to help the Ukrainians fend off the Russians. Monumental scale of Covid-relief fraud.

BAHNSEN: Yeah, I've seen some that have the number far higher than that. Because it depends, I think, what category. When you go into falsely obtained PPP loans, that number alone is going to be higher than 45 billion. When you go into unemployment claims in California, I think the number is is very close to that. So the total ‘all in’ number is going to be hundreds of billions, not 10’s of billions. And you're right, that's going to prove much, much higher than what we sent Ukraine for support. I think two things, Nick, I think that it's a shame from the standpoint of virtue and character in American society, that that type of thing can and does happen. And that in a more virtuous society, there would be much less of that. And that is my aim, and something I pray for and think about every day.

The second thing I think about is that you really do attract grift and corruption when you start giving a bunch of money away. And so there's no justification for corruption and fraud just because the government is putting a sign up saying free money here. But it is going to happen. And in the case of PPP, I think that you can make an argument that they felt the possibility of some fraud was a small price to pay for what they needed to do to keep employment together and so forth. And with hindsight, I certainly think that they did it in a way that made it too easy to rip off the system. And while there were certainly some good borrowers, there were plenty who were not. So yes, this is the reality of public money being given away. There, the private sector, it could never happen. People would never tolerate it with their own funds. And it's an important economic lesson for us to remember.

EICHER: Speaking of giving money away, David, before we go, you saw the news that the Biden administration rolled back some eligibility on student loan relief. I heard one analyst saying this was an attempt to fend off what might be successful legal challenges to the whole program.

BAHNSEN: Yeah, I kind of thought that some of the headlines I saw this week about the administration's rolling back we're a little overdone, but I do think more is coming. But telling the private loan folks that okay, they're not going to get relief wasn't much of a rollback, because the federal government really does hold the vast majority of the loans on their balance sheet. And I don't think they have a constitutional right to do that. But I certainly never thought that they were even by their argument, claiming a right to forgive loans that were not even owed to them. And so that is what they peeled back here this week. But yeah, it's going to court and we're going to see what happens there. And my hope would be, and I have a sneaking suspicion, the Biden administration's hope is going to be that they kick it out and put an end to it in the courts. And why do I say the Biden administration? This thing has not been politically popular. I think they thought it was going to push them higher with some of the younger voters. But I think for the most part, it's done more harm than good, even politically, let alone what it would do financially and academically.

EICHER: I do want to encourage listener questions for David, just get in touch by way of feedback@worldandeverything.com. Based on how many we receive, we’ll be sure to make time for them, going forward. But you can ask anything that’s on your mind around business, economics, and finance: feedback@worldandeverything.com.

David Bahnsen is founder, managing partner, and chief investment officer of The Bahnsen Group. His personal website is Bahnsen.com.

David, talk to you next time. Thanks again!

BAHNSEN: Thanks so much, Nick.

MARY REICHARD, HOST: Today is Monday, October 3rd. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. Up next, the WORLD History Book. Today, the start of a U.S. recycling program, and the first person to circumnavigate the globe using only human power.

REICHARD: Plus, the premiere of the first widely-released film with an actor's face AND voice. Here’s Paul Butler.

PAUL BUTLER, REPORTER: On the evening of October 6th, 1927, an unexpecting audience enters New York’s Warner Theater on Broadway. The movie being cued up by the projectorist: The Jazz Singer with Al Jolson—the well known vaudeville singer, comedian, and actor.

Most moviegoers know little of the film’s groundbreaking technology...

FILM: The introduction of the Vitaphone has been received, both by the public and the artistic world with a great deal of interest…

The 1920s are the heyday of big-budget silent movies. But studios began experimenting with pre-recorded music and sound effects. The Jazz Singer marks a turning point in the film industry.

Unlike later movies, the soundtrack isn’t printed on the film itself, but played separately on phonograph records. “Vitaphone” is a portmanteau of Latin and Greek—for “living” and “sound.”

The Jazz Singer uses intertitles—or on screen slides for much of the dialogue—but at one point Jolson's face suddenly appears in a screen-filling close-up…and many for the very first time hear the actor’s voice as he speaks on camera:

FILM CLIP: Wait a minute, wait a minute, you ain't heard nothing yet!

The audience gasps. There are only about two-minutes of spoken dialogue in the entire film, but excitement builds as the story progresses.

FILM CLIP: SONG

Moviegoers even applaud after each of his six songs—as if he was actually performing them live. At the film's conclusion, the audience breaks into chants of “Jolson, Jolson, Jolson.”

But The Los Angeles Times is less enthusiastic in their review:

KIM RASSMUSSEN: “Jazz Singer scores a hit. Vitaphone and Al Jolson responsible. Picture itself second rate. Jolson’s singing is of course inimitable and the quality of his voice lends itself admirably to the Vitaphone…as much can not be said of his acting…”

The film is not a runaway success but does well enough to make it clear that “talkies” are the future of the industry.

Many modern critics lambast the film for its use of black face. But at least some film historians believe The Jazz Singer’s use of the theatrical makeup should be interpreted in a different light. Believing it is a reflection of the cultural struggles that feature prominently in the film’s storyline.

In 1996, the National Film Registry selected The Jazz Singer for preservation due to its cultural, historical and creative significance.

Next, fifty years ago this week Oregon becomes the first state to require a deposit on all beverage containers—including cans.

Distributors charge an initial deposit of 5 cents on each beverage sold to retailers. They in turn usually pass that cost onto their customers. The law then requires retailers to pay a refund value back to customers who return the containers.

The bottle bill is primarily a litter control effort. And it seems to have worked. According to the container recycling institute, 40 percent of all Oregon litter in 1971 were bottles. By the end of the decade, that number decreased to only 6 percent. Critics of the program point to other factors to explain the reduction.

Five years ago the state increased the refund to 10 cents per container. Nine other states have similar programs.

Residents in neighboring counties have tried all sorts of schemes to game the anti-litter program to make money…

SEINFELD: You could round up bottles here and run them out to Michigan…it doesn’t work. What do you mean it doesn’t work? If you get enough bottles together…yeah you overload your inventory and you blow your margins on gasoline. Trust me, it doesn’t work…

And even if Sinfeld’s Kramer and Newman could make it work, many areas have stiffened fines for returning out-of-state containers. Michigan has lost millions of dollars in bottle return fraud over the years. But a new 2022 law now classifies it as a felony—with sentences up to 20 years in prison for the most serious violations.

…In the city or in the woods. Help keep America, looking good.

And finally today, October 6th, 2007: British adventurer Jason Lewis pedals his small wooden boat Moksha across the English Channel from nearby France. As he arrives in England, he completes a journey that began on bicycle 13 years earlier:

LEWIS: I was drawn by the prospect of adventure, at 24 years old. I think a lot of people have that desire to go and cut their teeth on new challenges and test yourself and find out who you really are.

Lewis originally thought Expedition 360 would take just two years. He starts by bicycling to Portugal. Then pedals his human-powered boat for 111 consecutive days: crossing the 4,500 mile Atlantic Ocean to Miami.

LEWIS: I’d rather do this. Cross the Atlantic and Pacific. If I die, I die. But I'd rather have done this and get to 75 years old than not having done it and just led a mediocre life.

Instead of biking across America, Lewis decides to roller-blade. In Colorado he’s struck by a drunk driver—breaking both his legs. Nine months later he continues his trek. He then pedals across the Pacific Ocean—by way of Hawaii—to the land down-under.

By the time he gets to Australia the expedition is out of money. He spends the next 5 years fundraising before continuing. He bikes over the Himalayas, through Asia, and then across Europe before arriving in France.

In all, he travels through 37 countries—navigating challenging terrain and complex government roadblocks.

LEWIS: I've always had this adage that it's about the journey and not the destination. But that when I do cross that line, and finally reach the destination, it's it was like, all of this, all these emotions and all of the years of just perseverance, I suppose. And all the trials and the troubles and the disasters and just suddenly kind of rose up to meet me and it just completely overwhelmed me.

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

NICK EICHER, HOST: Tomorrow: military analysis of the war in Ukraine.

And, our Classic Book of the Month. This time, looking at adoption.

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: Put on then, as God's chosen ones, holy and beloved, compassionate hearts, kindness, humility, meekness, and patience, bearing with one another and, if one has a complaint against another, forgiving each other; as the Lord has forgiven you, so you also must forgive. (Colossians 3:12-13 ESV)

Go now in grace and peace.

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