1.6.25 Supreme Court cases of fraud and corporate liability, Biden blocking the sale of U.S. Steel, and the history of America’s borrowing habits

Summary

The World and Everything In It
Episode: 1.6.25 Supreme Court cases of fraud and corporate liability, Biden blocking the sale of U.S. Steel, and the history of America’s borrowing habits
Release Date: January 6, 2025
Host/Author: WORLD Radio
Duration: Approximately 30 minutes

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Introduction

In this episode of The World and Everything In It, WORLD Radio delves into a variety of pressing topics, including Supreme Court deliberations on fraud and corporate liability, President Biden’s decision to block the sale of U.S. Steel to Nippon Steel of Japan, and an in-depth exploration of America's historical borrowing habits. The episode is segmented into distinct sections, each offering insightful analysis, expert commentary, and notable quotes from key figures.

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News Highlights

Supreme Court Deliberations on Fraud and Corporate Liability

The episode opens with Mary Reichard posing a thought-provoking question: "Can a lie be criminal fraud if nobody loses money?" ([00:05]). This sets the stage for the Supreme Court’s examination of the boundaries of fraud and corporate liability.

Justice Ketanji Brown Jackson introduces a hypothetical scenario: "What about the family that says it's very important to me to have a Christian babysitter. And someone comes and they purport to have this characteristic, but they don't." ([00:13]). This analogy underscores the complexity of defining fraud in cases where deception doesn't result in direct financial loss but breaches trust or contractual obligations.

Justice Samuel Alito adds depth to the discussion by emphasizing the distinction between property fraud and other forms of deceit: "Ultimately I think that's egregious behavior. But it's not property fraud. If the babysitter is otherwise fully qualified and performed now, there may well be a very serious civil suit." ([00:47]).

The Supreme Court also reviews cases involving corporate misconduct, such as Koeses v. United States and trademark disputes like Dewberry Group vs. Dewberry Engineers, highlighting the judiciary's stance on corporate ethics and liability.

Republican Agenda and Border Security

Justice Samuel Alito reports on the newly reelected Speaker of the House, Mike Johnson, outlining the Republican agenda aimed at preparing for President Donald Trump's inauguration: "He says the president-elect wants Congress to get to work on one massive policy package covering everything from border security to tax cuts." ([01:01]).

Despite GOP control of both chambers, Nick Eicher raises concerns about the feasibility of passing significant legislation due to slim majorities and potential Democratic opposition: "I don't know how their fiscal hawks are going to be able to justify at a time when the stock market is up, jobs are up, wages are up, that they have to give tax cuts to corporations and the wealthiest and blow up the deficit." ([01:40]).

International Relations and Defense

The episode touches on international dynamics, including Ukrainian President Volodymyr Zelensky's call for enhanced air defenses amid ongoing conflicts: "Dozens of countries, including the U.S., will participate in Thursday's meeting at Ramstein Air Base." ([02:25]).

David Bonson comments on geopolitical alliances and threats, stating, "It's not just Putin. Putin is aligned with Chairman Xi in China, who threatens the Indo-Pacific. He's also aligned with the Ayatollah in the Middle East, who we have seen threaten Israel." ([02:56]).

Terrorism and Domestic Security

A recent terror attack in New Orleans is discussed, where the FBI investigates whether the perpetrator acted alone: "The FBI still believes Shamsud Din Jabbar acted alone." ([03:34]). The incident resulted in 14 fatalities and numerous injuries, raising concerns about domestic security measures.

Severe Winter Storm Alert

A significant winter storm is forecasted to impact the central U.S., with Bob Orvak from the National Weather Service noting, "Snowfall in some areas could be the heaviest seen in those locations in a decade." ([04:22]). Over 50 million Americans are under winter storm warnings, with snowfall expected to reach 6 to 12 inches across regions including the U.S. capital.

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Legal Docket

Judicial Independence Under Threat

Mary Reichard introduces the segment with Chief Justice John Roberts addressing the independence of federal courts. Roberts expresses concerns over increasing threats, intimidation, and disinformation aimed at undermining judicial authority: "Intimidation, disinformation, and the possibility that public officials might defy court orders." ([06:08]).

Justice Roberts highlights alarming trends, including a threefold increase in serious threats against judges over the past decade, citing the armed plot against Justice Brett Kavanaugh following the leak of the Dobbs opinion: "The management of the public revenue that searching operation in all governments is among the most delicate and important trusts in ours." ([06:42]).

Oral Arguments: Koeses v. United States

Mary Reichard outlines the case involving Stamatios Kouisis, accused of wire fraud and conspiracy for manipulating state contracts in Pennsylvania. The defense argues no financial loss was incurred, as projects were completed satisfactorily.

Justice Ketanji Brown Jackson introduces a relatable hypothetical to challenge the definition of fraud: "What about the family that says it's very important to me to have a Christian babysitter... but they don't." ([09:36]).

Justice Samuel Alito counters by differentiating between property fraud and other deceptions: "If the babysitter is otherwise fully qualified and performed now, there may well be a very serious civil suit." ([09:51]).

The debate continues with discussions on whether deviations in contract terms, without financial harm, qualify as fraud. Deputy Solicitor General Eric Fagan emphasizes that "fraud does not require financial harm. It's the deceit itself that counts, not the outcome." ([10:54]).

Justice Neil Gorsuch further refines the hypothetical, exploring scenarios where subjective disappointment may or may not constitute fraud, highlighting the Court's struggle to define clear boundaries in such cases.

Trademark Dispute: Dewberry Group vs. Dewberry Engineers

The trademark case revolves around the use of the name "Dewberry." Initially settled in 2007, a decade later, Dewberry Capital's rebranding to Dewberry Group led to a lawsuit where the engineers were awarded over $40 million in damages. However, due to Dewberry Group operating at a loss, the court ordered its affiliates to pay, raising questions about holding affiliates liable for indirect profits.

Justice Ketanji Brown Jackson expresses concern over corporate veil-piercing: "The court should have pierced the veil in this situation." ([13:18]). In contrast, Justice Samuel Alito and David Bonson argue against such overreach, emphasizing legal distinctions between separate corporate entities unless explicitly sued.

The case underscores significant implications for corporate structuring and intellectual property law, with justices likely to establish limits on equitable remedies to prevent judicial overreach.

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Monday Money Beat

Biden Blocks U.S. Steel Sale to Nippon Steel

Nick Eicher and David Bonson discuss President Biden’s decision to block the $14.1 billion sale of U.S. Steel to Japan’s Nippon Steel, a move lauded by steel workers unions but criticized by the Wall Street Journal as "political protectionism disguised as security policy." ([15:49]).

David Bonson critiques the decision, highlighting its bipartisan support yet questioning the economic rationale: "It's opening a door to something that I frankly didn't believe I would see, which is everybody flat out admitting that this is an ally nation of the United States, that there is not an adversarial issue at play." ([16:30]). He argues that blocking foreign capital inflow threatens U.S. economic preeminence and undermines capital market principles.

Comparison with TikTok Divestiture Case

Nick Eicher draws parallels between the U.S. Steel sale and the Supreme Court case involving TikTok’s forced divestiture to protect American users' data. David Bonson differentiates the two, asserting that national security concerns justify scrutiny in the TikTok case, unlike the ally-supported steel deal: "There should be more scrutiny on a Chinese TikTok deal and much less scrutiny on a Japanese steel deal." ([21:14]).

Bonson warns against the slippery slope of restricting foreign investment, emphasizing the importance of capital mobility and economic rationality in sustaining the U.S. market's health.

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World History Book

The History of America’s Borrowing Habits

Emma Perley presents an exploration of America's longstanding relationship with national debt, tracing back to President Andrew Jackson’s endeavors to eliminate the debt in the early 19th century.

Justice Ketanji Brown Jackson introduces Jackson’s ambitious goal: "He believes that being debt free is the only way to have a small government and virtuous citizens." ([24:39]). Jackson successfully reduced the national debt to zero by 1835 through import tariffs, vetoing infrastructure funding bills, and postponing the recharter of the national bank.

However, this debt-free triumph was short-lived. The dissolution of the national bank led to economic instability, culminating in the Panic of 1837 due to factors like a real estate crash, crop failures, and soaring interest rates: "The economy begins to falter as the national bank dissolves." ([27:33]).

Alexander Salter, Associate Professor of Economics at Texas Tech University, provides analysis on the shift in U.S. debt policy post-1950s, moving away from Jacksonian ideals towards the government's role as an economic stabilizer: "There was a growing consensus among the economics profession that the federal government should act as a spender of last resort." ([28:31]).

The episode concludes with a reflection on modern debt management strategies, emphasizing sustainable growth over stringent debt reduction: "As long as we can keep debt growth below economic growth for long enough, we will quite frankly grow our way into the existing debt levels, and that will be much more sustainable." ([29:29]).

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Conclusion

The episode culminates with teasers for upcoming segments, including discussions on the ethical considerations of freezing human embryos and insights into the preparations of the U.S. Air Force Band for a presidential funeral. The hosts also highlight resources such as Commuter Bible and announce upcoming content like David Bonson's white paper on economic challenges and opportunities for the new year.

Mary Reichard closes with a biblical reflection, emphasizing faith and resilience: "Jesus was asleep, and the disciples went and woke him, saying, save us, Lord, we are perishing. He said to them, why are you afraid, O you of little faith?" ([30:28]).

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Key Takeaways

• Supreme Court is actively redefining the parameters of fraud and corporate liability, balancing legal definitions with ethical considerations.
• Republican legislative agenda faces challenges due to slim majorities and potential opposition, particularly concerning tax cuts and deficit management.
• International relations remain tense, with significant focus on Ukraine's defense and ongoing concerns about global alliances.
• Economic decisions, such as blocking the sale of U.S. Steel, have profound implications for U.S. economic policy and capital market integrity.
• Historical analysis of America's borrowing habits reveals shifts from rigid debt elimination to more flexible, growth-oriented debt management strategies.

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This comprehensive summary encapsulates the diverse range of topics discussed in the episode, providing listeners and non-listeners alike with a detailed overview of the key discussions, insights, and conclusions presented by WORLD Radio.

Transcript

[Mary Reichard]

Good morning. Can a lie be criminal fraud if nobody loses money? The Supreme Court pondered the principle and how far it might apply.

[Justice Ketanji Brown Jackson]

What about the family that says it's very important to me to have a Christian babysitter. And someone comes and they purport to have this characteristic, but they don't.

[Nick Eicher]

That's ahead today on Legal Docket. Also today, the Monday money beat. David Bonson standing by. And the world history book today, problem of government debt going all the way back to the seventh president.

[Justice Samuel Alito]

He was, even by the standards of his own day, a debt and deficit hot.

[Mary Reichard]

It's Monday, January 6th. This is the world and everything in it from listener supported World Radio. I'm Mary Reichard.

[Nick Eicher]

And I'm Nick Eicher. Good morning.

[Mary Reichard]

Time now for the news with Kent Covington.

[Justice Samuel Alito]

The newly reelected speaker of the House, Mike Johnson says Republicans have a lot of work to do between now and Donald Trump's inauguration on the 20th. We want to make sure that we're.

[Nick Eicher]

Jump starting the agenda now over the.

[Justice Samuel Alito]

Next two weeks so that he's prepared.

[Nick Eicher]

And ready on day one.

[Justice Samuel Alito]

He says the president elect wants Congress to get to work on one massive policy package covering everything from border security to tax cuts. Johnson concedes that even though the GOP controls both chambers of Congress now, their majorities are slim and moving big legislation, legislation will not be easy. Some Democratic members, like Congressman Jake Auchincloss are already signaling opposition to planned Republican tax cuts.

[Nick Eicher]

I don't know how their fiscal hawks are going to be able to justify at a time when the stock market is up, jobs are up, wages are up, that they have to give tax cuts to corporations and the wealthiest and blow up the deficit.

[Justice Samuel Alito]

Republicans say the answer to reining in the deficit is pro growth policies combined with slashing government waste and overspending funding. Border security and immigration enforcement, as we mentioned, will be at the top of the priority list. And incoming border czar Tom Holman says the Trump administration will be working to reverse the impacts of border policies from the last four years.

[Nick Eicher]

If you look at the historic number of illegal entries in the last four years, ICE Immigration Customs Enforcement has the lowest number of deportations in the history of the agency.

[Justice Samuel Alito]

And he told CBS has Faced the Nation that the majority of those deportations were arrests made by the Border Patrol rather than deportations from within the country. Ukrainian President Volodymyr Zelensky says he will urge allies to boost his country's air defenses at a meeting this week in Germany. Dozens of countries, including the U.S. will participate in Thursday's meeting at Ramstein Air Base. Republican Congressman Michael McCaul, who chaired the House Foreign Affairs Committee until recently, has stressed the importance in his view of continuing to back Ukraine.

[David Bonson]

It's not just Putin. Putin is aligned with Chairman Xi in China, who threatens the Indo Pacific. He's also aligned with the Ayatollah in the Middle east, who we have seen threaten Israel.

[Justice Samuel Alito]

But Republicans are divided on continued Ukraine support. President elect Donald Trump is preparing to take office with a vow to end the nearly three year old war. At the White House, President Biden fastened medals around the necks of former Secretary of State Hillary Clinton, actor director Denzel Washington and others over the weekend for the final time.

[David Bonson]

Mr. President, I have the honor of.

[Nick Eicher]

Restoring the minimal freedom, the nation's highest.

[Justice Ketanji Brown Jackson]

Civilian honor, on a group of extraordinary, truly extraordinary people.

[Justice Samuel Alito]

Others among the 19 awardees include singer and philanthropist Bono of U2 fame, Magic Johnson and Michael J. Fox. He also bestowed the honor on controversial billionaire Democratic donor George Soros. The FBI says the perpetrator in last week's deadly terror attack in New Orleans may have planned the attack months in advance, making two trips to the city before the New Year's morning attack. And Christopher rea with the FBI's Counterterrorism Division told reporters Sunday that the bureau still believes Shamsud Din Jabbar acted alone. All investigative details and evidence that we have now still support that Jabbar acted.

[Nick Eicher]

Alone here in New Orleans.

[Justice Samuel Alito]

We have not seen any indications of an accomplice in the United States, but we are still looking into potential associates in the US and outside of our borders. 14 people were killed and dozens were injured when Jabbar drove a truck at high speed into a crowd on Bourbon street before police shot and killed Jabbar. A blast of snow, ice, wind and frigid temperatures stirred up dangerous travel conditions in parts of the central US On Sunday. Bob Orvak with the National Weather Service says parts of Kansas have seen nearly a foot of snow and over the next two days a pretty big impact.

[Nick Eicher]

From this storm as it spreads eastward.

[Justice Samuel Alito]

A lot of areas from Kansas to the east coast are under winter storm warnings and we do anticipate a pretty broad area of heavy Snow.

[Nick Eicher]

Snow total 6 to 12 inches all.

[Justice Samuel Alito]

The way from Kansas to the east.

[Nick Eicher]

Coast, including the capital of the United States.

[Justice Samuel Alito]

He said snowfall in some areas could be the heaviest seen in those locations in a decade. More than 50 million Americans were under some kind of winter warning or watch as of early this morning. I'm Kent Covington and straight ahead, the Supreme Court considers fraud and liability cases. Plus the Monday Money beat with economist David Bonson. This is the world and everything in it.

[Mary Reichard]

It's the world and everything in it for the 6th day of January 2025. We're so glad you've joined us today. Good morning. I'm Mary Reichert.

[Nick Eicher]

And I'm Nick Eichert. Time now for legal docket. Chief Justice John Roberts is defending the independence of the federal courts. He says they're under threat from several angles. Intimidation, disinformation, and the possibility that public officials might defy court orders. Roberts aired his concerns in his annual report on the federal judiciary. We link to the report in today's transcript. In it, Roberts cautions leaders across the political spectrum against openly disregarding court rulings.

[Mary Reichard]

But the last several years have brought significant attacks by Democrats on the legitimacy of the court. Roberts highlighted alarming trends, including a rise in threats against judges. In extreme cases, judges have had to be issued bulletproof vests. The U.S. marshals Service reported a threefold increase in serious threats compared to a decade ago. More than a thousand serious cases were looked into, but only 50 criminal charges were brought. One shocking example is the armed man who planned to kill Justice Brett Kavanaugh. After the leak of the Dobbs opinion.

[Nick Eicher]

Roberts also criticized elected officials for undermining court rulings. He didn't name names, but you can consider two high profile examples. First, then Senate Minority Leader Chuck Schumer back in I want to tell you.

[Justice Samuel Alito]

Gorsuch, I want to tell you, Kavanaugh, you have released the whirlwind and you will pay the price.

[Mary Reichard]

Another example is President Joe Biden's multi billion dollar student loan forgiveness at taxpayer expense. When the high court blocked that move, he said he'd do it anyway. Now, to be fair, President Donald Trump questioned the ability of a judge with Hispanic ethnicity to be unbiased. But the Democrats have been far more critical of the court.

[Nick Eicher]

The chief justice noted the courts inherently produce winners and losers. He wrote, it's not in the nature of judicial work to make everyone happy. Statistically, Roberts noted modest rises in the federal court workload, although immigration related criminal cases shot up 30% year over year. Bankruptcy courts were a bit busier, with filings rising 16%. But that is below the recent high in 2020.

[Mary Reichard]

All right, now let's move on to a couple of oral arguments. The first is from last month in Koeses versus United States. My favorite sort of argument with lots of hypotheticals. This case involved wire fraud and conspiracy charges against a contractor and his company. Here are the facts Stamatios Kouisis, a project manager for Alpha Painting and Construction, was accused of winning state contracts by fraud, specifically that he gamed a Pennsylvania Department of Transportation requirement that subcontract be disadvantaged business enterprises. The state contends Koesis used a disadvantaged business enterprise as a mere pass through, meaning it didn't actually do any work.

[Nick Eicher]

Now the defense didn't really contest this. It argued that Pennsylvania suffered no financial loss and got exactly what it paid for, namely fully completed projects. The lawyer for Coesis is Jeffrey Fisher. He said that what his client did should not be considered a federal crime. But Justice Ketanji Brown Jackson tested the the law of fraud with this relatable hypothetical.

[Justice Ketanji Brown Jackson]

What about the family that says it's very important to me to have a Christian babysitter? We are devout. This is a characteristic that we're telling everybody this is what we're looking for. And someone comes and they purport to have this characteristic, but they don't.

[Justice Samuel Alito]

Ultimately I think that's egregious behavior. But it's not property fraud. If the babysitter is otherwise fully qualified and performed now, there may well be a very serious civil suit.

[Mary Reichard]

So I'm not saying these things are.

[Justice Samuel Alito]

Okay and I'm not saying the law doesn't provide a remedy. But what I am saying is that.

[Nick Eicher]

This is an age old problem when.

[Justice Samuel Alito]

It comes to fraud.

[Nick Eicher]

Justice Samuel Alito offered a hypothetical of his own.

[Justice Samuel Alito]

I hire somebody to paint the dining room of my house and when I come back, the dining room has not been painted, but the living room has been painted and the living room is bigger. And he says, look, I gave you.

[Nick Eicher]

A bargain, same price.

[Justice Samuel Alito]

I paint it more. Plus the living room really needed it.

[Nick Eicher]

More than the diner.

[Justice Samuel Alito]

I think we're still in this difficult situation of there's actually your home is your property and so some of the.

[David Bonson]

Things that are happening to your property.

[Mary Reichard]

Fisher pointed out the difference between Alito's hypothetical and the facts of this case is that the job was finished. All other contract terms were met. So no basis to sustain a federal fraud charge. Maybe something else, but not that.

[Nick Eicher]

Deputy Solicitor General Eric Fagan, arguing for the government to uphold the fraud convictions, said that fraud does not require financial harm. It's the deceit itself that counts, not the outcome. Justice Neil Gorsuch countered by refining that babysitting hypothetical. What about the babysitter who says I'm going to, you know, take the money that you give me for college and they're before I hire, she provides excellent babysitting services and proceeds to blow the money on a trip to Cancun. Now, is that mail fraud? I mean, could that be prosecuted as male fraud? Because I had some subjective wish that she use it for one purpose rather than another, even without any economic injury to me.

[Justice Samuel Alito]

Well, you, Honor, I don't think some subjective wish counts.

[Nick Eicher]

Justice Alito brought a bit of levity in what was already a lively argument in this exchange with Fagan for the government.

[Justice Samuel Alito]

Well, I'm gonna ask you a question that I really would like to ask Mr. Fisher, but I can't ask Mr. Fisher any more argument. So perhaps if I ask you, he will see fit to address it. Would you like me to answer it as him or as me? Whichever you want. Assuming his Persona and answering for him might be a. That might be fraud. Your Honor, I might be a good.

[Nick Eicher]

The case raises some tough legal questions. Do equivalent value deviations count as fraud? Subjective disappointment matter. For Coesis, the stakes are pretty high, as company is facing a $500,000 fine and forfeiture of millions of dollars in profits. And personally, Coesis is facing nearly six years in prison.

[Mary Reichard]

Alright, our final case today stems from a trademark dispute between two companies using the name Dewberry. In 2007, Dewberry engineers settled with Dubarry Capital, restricting its use of the name. But a decade later, Dewberry Capital rebranded as Dewberry Group. And that prompted a new lawsuit the engineers won, receiving more than $40 million in damages.

[Nick Eicher]

But there is a twist. Dewberry Group was operating at a loss, so the court ordered its corporate affiliates to pay up. And that raises the key question, can courts hold affiliates liable for profits they didn't directly earn? Justice Jackson seemed open to piercing the corporate veil.

[Justice Ketanji Brown Jackson]

I guess I don't understand why. The answer, the sort of wa to handle a situation like this is just to pierce the veil. I mean, you say that the defendant is disguising its profits, it's hiding economic realities. It's working with these other companies in a way that they're really operating in the marketplace as almost one entity. Why wouldn't the legally responsible way to deal with this, given the way we, you know, the law has developed to say that in order to do this, to consider the profits of the other entities to be the profits of the defendant. The court should have pierced the veil in this situation.

[Justice Samuel Alito]

Justice Jackson, I have four answers, if I may.

[David Bonson]

I would like.

[Mary Reichard]

Nicholas Crown argued for neither party. But as friend of the court representing the United States, he pointed out that the law does not allow profits of separate corporations to be included unless explicitly sued. Crown said he had four points to make, including that the engineers could have sued those affiliates for infringement. But they chose Chief Justice Roberts, ever the organizer, kept track.

[David Bonson]

Before you go on, how many of.

[Nick Eicher]

Your four things did you just get out?

[Justice Samuel Alito]

Two.

[Justice Ketanji Brown Jackson]

Two.

[Justice Samuel Alito]

All right, I got two. I have two more.

[Nick Eicher]

Mr. Chiefs, I will allow a historically unprecedented exception to allow you to give.

[Justice Samuel Alito]

Us the other two promptly.

[Mary Reichard]

He did, but they didn't really amount to much. What's most important in the case are major implications for corporate structuring and intellectual property law. The justices did seem concerned about overreach, but I think the justices are likely to put some limits on equitable remedies. And that's this week's legal docket.

[Justice Samuel Alito]

Additional support comes from Commuter Bible, the Workweek audio Bible in four annual plans.

[Nick Eicher]

Available via podcast app and commuterbible.org.

[Mary Reichard]

Coming up next on THE WORLD and everything in it, the Monday Money beat.

[Nick Eicher]

Time now to talk business markets and the economy with financial analyst and advisor David Bonson. David heads up the wealth management firm the Bonson Group. He is here now. And good morning, David.

[David Bonson]

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

[Nick Eicher]

Now, I know you've been following this, David. President Biden's move to block the sale of U.S. steel to Nippon Steel of Japan. Those two companies had agreed upon a $14.1 billion sale price, but last week the White House said no. The steel workers union had really lobbied hard to get the president to do as he did the Wall Street Journal blast, calling it political protectionism disguised as security policy. And by the way, President Elect Trump had already said that if Biden didn't block the sale that he would have. So what do you think?

[David Bonson]

You know, it's interesting, this is a really bipartisan situation because it happens to be the same position that President Elect Trump has stated as well. And so you don't get a chance to agree with both presidents often, but you really don't get a chance to disagree with both very often either. And this is one where I just vehemently disagree. But the broader point is that it is opening a door to something that I frankly didn't believe I would see, which is everybody flat out admitting that this is an ally nation of the United States, that there is not an adversarial issue at play, but just the mere existence of foreign capital coming into a US Based company that desperately needs the money. By not getting it, a significant amount of jobs will be lost, but also just US Preeminence in steel is going to go down even further than it has over the last several decades. So why would President Biden block this? Why does President Trump opposed this? Well, it's really just the politics of it, just the headline of stating that there's a foreign country taking an interest in something as iconic as US Steel. So there's sort of a nationalistic and populistic play behind it. But it isn't economic. The US Capital markets, Nick, thrive because we have something that so many countries don't have, which is mobility of capital. Our money can leave and go to other places. Money can come in and be invested in us. We can always be rationally pursuing the best use of capital. And this is an effort to block free flight of capital where there's just not even a pretense of national security concern. I certainly agree that the US Has a vested interest in protecting security interest. I think, I think everybody is focused right now on not allowing our supply chain to be held captive by other countries, let alone adversarial ones. That's just not on the table here at all. And so that's a big story to me, not just for what it represents with this deal, but what it represents for the future.

[Nick Eicher]

Well, you know, David, let's talk about that. What do you think it portends?

[David Bonson]

Yeah, I think that this does portend more in the sense of what's the limiting principle now? What is the basis for, for US Jurisdiction or oversight or hesitation to such deals? If we actually want to explicitly state that we just simply don't want foreign capital coming into the US Investment, that's a stunning admission and one totally outside of the precedent of American capital markets. So in this case, the one solace I guess I would take is that I don't, I don't think the politics will generally lend themselves to such a view. In this case, they do because it's steel. There's a lot of union jobs, it's blue collar. And there's a sort of sentimentality that both the Biden administration that has attempted over the years to be cozy with unions, and then the Trump administration that has made great headway with workers. But I want to be clear, I'm not stating my opposition to what they've done in blocking the deal because I'm not pro worker. It's because I am pro worker. This company does not have the capital to go invest in desperately needed upgrades to its facilities and expansion of its steel production capacity. There is a reason why a foreign company is willing to, to put capital in, and I believe that in this case, it's a dangerous precedent. Are we willing to say that just simply the existence of foreign capital is a reason to block a deal? We've never said that before and I think it pretends something very negative for the future if we start saying it now.

[Nick Eicher]

You know, David, I was thinking as you were talking about the Supreme Court case that I know is coming up this week. It's a case involving TikTok and the law that Congress approved that would effectively require the sale of TikTok divestiture. The goal being to protect American users from having their online data in the hands of the Chinese government. Do you make a distinction between something like that and what we've just been talking about with Nippon Steel and U.S. steel, the sale of U.S. steel?

[David Bonson]

Well, I certainly make a distinction, but isn't it interesting that President Trump doesn't, You know, President Trump wants to block the deal of a ally nation just having an equity interest in U.S. steel with all kinds of commitments to protecting U.S. union jobs, but then is now against the TikTok deal, which is quite literally connected to the Communist Chinese Party. Now, that's not to say that I favor a forced shutdown of TikTok. I think that I'm making a distinction theoretically that at least there is a prima facie grounds for scrutinizing that because there's so much data access that an adversarial nation has to US Oriented data. I happen to believe there probably is a way that that could be rectified apart from forced divestiture. I get concerned when we take a heavy hand because the real beneficiary of something like forcing a shutdown of TikTok becomes other companies. And so it opens the door to some crony capitalism worries. I have. But still your point is a very good one, that at least there the line of reasoning would be protection of U.S. interest from a foreign adversary where nobody can possibly make that claim in this situation with NIP and steel. So yeah, and of course the Supreme Court right now is really just going to be hearing whether or not they want to give a stay because the timing of what Congress has already passed happens to go into effect right before the inauguration. And the incoming administration is basically just looking for a little leeway to try to go cut a deal. So that's going to be a very interesting situation if the Supreme Court allows it to kind of linger a bit longer. And then what exactly the Trumpet administration's strategy will be to work out a better deal. But you bring up a very great point that philosophically these two things should be looked at differently and What I mean by that is there should be more scrutiny on a Chinese TikTok deal and much less scrutiny on a Japanese steel deal. From my perspective.

[Nick Eicher]

Yeah, that is David Bonson. He's founder, managing partner and chief investment officer at the Bonson Group. If you're not getting David's Dividend Cafe, maybe you'll want to make a resolution to do that because coming up on Friday he is releasing his white paper that looks ahead to the challenges and opportunities in the economy in the new year. You can get it [e-mail] and next week after I get a chance to go through it, we will talk about it with David. So you have that to look forward to. David, as always, thank you.

[David Bonson]

Thanks so much, Nick. Great to be with you.

[Nick Eicher]

Today is Monday, January 6th. Good morning, this is the world and everything in it from listener supported World Radio. I'm Nick Igert.

[Mary Reichard]

And I'm Mary Reichard. Up next, the world history book. Almost 200 years ago and American president set out to make America debt free with unintended economic consequences. Here's world's Emma Perley.

[Justice Ketanji Brown Jackson]

Right now the US national debt stands at $36 trillion and the number keeps going up. The government spends more than $2 billion on interest payments alone every day. Audio here from Senators Joe Manchin and John Neely Kennedy.

[Justice Samuel Alito]

Think about it. We've been spending more than we bring in in our government every year for the past 21 years. Well, suppose nothing changes over the next 10 years.

[David Bonson]

Nothing. What's the debt going to be 10 years from now?

[Justice Samuel Alito]

Right.

[David Bonson]

So our projection is then over $50 trillion or over 122% of GDP.

[Justice Ketanji Brown Jackson]

America is no stranger to borrowing money. It's had national debt since the very beginning. Some of the American founders got loans from Europe to fund the Revolutionary War. And several US Presidents since have tried to tackle the deficit. But only one has succeeded in paying it off entirely. Voice actor Ed Phillips reads President Andrew Jackson's first inaugural address.

[Justice Samuel Alito]

The management of the public revenue that searching operation in all governments is among the most delicate and important trusts in ours.

[Justice Ketanji Brown Jackson]

190 years ago, Jackson seeks to eliminate the national debt completely. He believes that being debt free is the only way to have a small government and virtuous citizens. Jackson is partly motivated by his own experiences. When he was a land speculator, a deal went sour and he spent time paying off the loans. But he also has a more democratic reason. He dislikes the national bank set up by founding father Alexander Hamilton. To Jackson, it signifies a more powerful central government than the Constitution allows. Audio here from Alexander Salter, an associate professor of economics at Texas Tech University.

[Justice Samuel Alito]

He was, even by the standards of his own day, a debt and deficit hawk. He did not like the Hamiltonian idea of a large and permanent debt because he saw it as contributing to a permanent financial oligarchy. A class of people that just lived off of interest payments from the federal government funded by tax revenue.

[Justice Ketanji Brown Jackson]

In order to pay off the debt, Jackson raises import tariffs, postpones a recharter of the national bank, and vetoes congressional bills to fund the nation's infrastructure. It works for a while. In January 1835, the US officially owes $0. Politicians boast about American exceptionalism and they look forward to economic prosperity and national security in anticipation of a debt free future. Senator Isaac Hill of New Hampshire says in 1833 the extinction of our national.

[Nick Eicher]

Debt presents this nation in an attitude.

[Justice Samuel Alito]

To excite the admiration of the world. There is probably on record no other.

[Nick Eicher]

Instance of the kind.

[Justice Ketanji Brown Jackson]

But the celebrations are short lived. The economy begins to falter as the national bank dissolves. Then the real estate market crashes, wheat crops fail, interest rates increase and the panic of 1837 begins. The government is forced to begin borrowing money again to handle the economic crisis. We've been in debt ever since. Many historians have pointed to Jackson's refusal to recharter the national bank as one of the main reasons for the panic. However, paying off the debt by itself didn't cause the economy to sink into a depression. Jackson's goal of a debt free nation remains a noble one. In fact, only a few countries have ever achieved it. But not all national deficits are created equal. American debt today looks very different from years past. For generations, debt went up during wars, but was quickly paid down during peacetime. That began changing in the 1950s. Here's Alexander Salter again.

[Justice Samuel Alito]

There was a growing consensus among the economics profession that the federal government should act as a spender of last resort or employer of last resort to make sure that if the economy was in the doldrums, Uncle Sam would step in to provide purchasing power to provide jobs. So you had this new idea of the government as a sort of guarantee of the health of the economy.

[Justice Ketanji Brown Jackson]

Another reason for growing debt is the removal of the gold standard. Paper money can now be printed at the government's say. So as extra currency floods the market, the spending power of the dollar decreases. That makes the American dollar less valuable and as a result the debt becomes less manageable. And it's only been getting worse as the government often spends beyond its means. But that doesn't mean that there isn't hope for change. Salter says that if the economy grows faster than the deficit, then the debt will naturally be paid down over time, although America may never again reach Jackson's triumph of being debt free.

[Justice Samuel Alito]

And as long as we can keep debt growth below economic growth for long enough, we will quite frankly grow our way into the existing debt levels, and that will be much more sustainable.

[Justice Ketanji Brown Jackson]

That's this week's world history Book. I'm Emma Perley.

[Nick Eicher]

Tomorrow, a former embryologist will walk us through the process of freezing human embryos and talk about the risks that may go along with it and the funeral of a president. We'll HEAR how the U.S. air Force Band gets ready for its mission. That and more tomorrow. I'm Nick Iger.

[Mary Reichard]

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 records that there arose a great storm on the sea, so that the boat was being swamped by the waves. But Jesus was asleep, and the disciples went and woke him, saying, save us, Lord, we are perishing. He said to them, why are you afraid, O you of little faith? Then he rose and rebuked the winds and the sea, and there was a great calm. And the men marveled, saying, what sort of man is this that even winds and sea obey him? Verses 24 through 27 of Matthew, chapter 8 go now in grace and peace.