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--:-- Host (John Bickley): This episode is brought to you by LifeLock. Between two-factor authentication, strong passwords, and a VPN, you try to be in control of how your info is protected. But many other places also have it, and they might not be as careful. That's why LifeLock monitors hundreds of millions of data points a second for threats. If your identity is stolen, they'll fix it. Guaranteed or your money back. Save up to 40% your first year. Visit LifeLock.com slash podcast for 40% off. Terms apply.
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--:-- Host (John Bickley): Concern over the U.S. banking system continues to spread despite assurances from the Biden administration that it's strong. Why are more banks warning about an impending recession? The index leading indicators has been declining 10, 11 months in a row. We're down about 6% year on year. We've never not had a recession when you've had those kinds of declines.
--:-- Host (John Bickley): I'm Daily Wire editor-in-chief John Bickley with Georgia Howe. It's Friday, March 17th, and this is Morning Wire.
--:-- Host (Georgia Howe): Fentanyl dealers in one border state may now face murder charges thanks to a new law. It's a fact that fentanyl is flooding our borders. It is absolutely, without a doubt, killing our citizens on a daily basis. We have the details on the harshest drug policy in America. And the state of Texas is poised to take over one of the biggest school districts in the country. What triggered the drastic action? And how will the shakeup affect current students?
--:-- Host (Georgia Howe): Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know.
--:-- Host (Brandon): Hey, everyone. Producer Brandon here. After a long day's work, there's nothing better than cozying up in my buttery soft sheets from Boll & Branch. Made from the finest 100% organic cotton threads on earth, Boll & Branch sheets are so luxurious they're loved by three U.S. presidents. Get 15% off your first set of sheets when you use promo code WIRE at BowlingBranch.com. That's Bowling Branch, B-O-L-L-A-N-D, branch.com, promo code WIRE.
--:-- Host (Brandon): One week since the collapse of Silicon Valley Bank, another regional bank is in turmoil. As Treasury Secretary Janet Yellen appears before Congress in an attempt to reassure lawmakers that the U.S. banking system remains sound. Here with Moore's Daily Wire, Senior Editor Cabot Phillips.
--:-- Cabot Phillips: So, Cabot, before we discuss Yellen's comments, we've got to start with the story of another bank on the verge of disaster. What's happening there?
--:-- Host (Cabot Phillips): Yeah, this story concerns San Francisco-based First Republic Bank. That's the 14th largest institution in the country. Now, this time 10 days ago, it was viewed as a fast-growing, totally stable bank. But this week, their shares dropped 60% after Moody's Investor Service downgraded its rating and depositors started withdrawing funds over fears that the bank would go the way of SVB.
--:-- Host (Cabot Phillips): It's worth noting that two have very similar clienteles. But on Thursday, some of America's largest banks began discussing a joint rescue plan that would pour $30 billion into the beleaguered bank. The infusion will reportedly include $5 billion each from JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup. A number of smaller regional banks are also reportedly considering pitching in a few billion dollars between them as well. So a private sector rescue plan there.
--:-- Host (Cabot Phillips): Yeah, more or less. Now, the fact these banks are working together to prop up one of their competitors gives you an idea of just how serious the banking industry views this threat. Yeah. They clearly want to stop the bleeding at regional banks before they're all hurt even worse.
--:-- Host (Cabot Phillips): Switching gears to Treasury Secretary Yellen, who made some highly anticipated remarks before Congress yesterday, what'd she have to say?
--:-- Host (Cabot Phillips): Well Yellen main goal was clearly to reassure lawmakers and more importantly the American people that the U banking system is experiencing a rough patch but remains on solid footing I can reassure the members of the committee that our banking system is sound and that Americans can feel confident that their deposits will be there when they need them.
--:-- Host (Kevin Phillips): The big question Yellen had to contend with was whether the U.S. government was now in the business of guaranteeing and insuring deposits for all Americans at every bank. Remember, the government took emergency action this week after the collapse of SVB and Signature Bank and promised investors that their deposits were guaranteed and that everyone would get their money back.
--:-- Host (Kevin Phillips): But according to Yellen, that was an anomaly and will not be the norm moving forward. Here's how she responded when asked if every bank would get the same assistance that Silicon Valley and Signature Banks got.
--:-- Host (Kevin Phillips): A bank only gets that treatment if a majority of the FDIC board, a supermajority of the Fed board, and I, in consultation with the president, determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.
--:-- Host (Kevin Phillips): That obviously begs the question, what defines significant consequences? Right. That's exactly what many financial experts are sounding the alarm over.
--:-- Host (Kevin Phillips): Now, when we talked yesterday, Swiss bank Credit Suisse had seen its shares plummet, but they've gotten a major lifeline since then, right? They absolutely did. The Swiss central bank announced that they'd be loaning Credit Suisse $54 billion to help ensure national confidence in the bank.
--:-- Host (Kevin Phillips): Specifically, they said they would consider it one of the, quote, systemically important banks in the country, which meets the standard for support. Economists say it was a move to prevent a bank run like we saw in the U.S. last week.
--:-- Host (Kevin Phillips): So the systemic importance argument there again. Yeah, similar to what we saw from Yellen. And that news seemed to alleviate the fears of many investors in Credit Suisse. Yeah, it absolutely did.
--:-- Host (Kevin Phillips): At one point Thursday, their shares had gained 33% as investors were clearly reassured by the cash infusion. But it's still worth noting, all this instability domestically has increased fears of a recession. Goldman Sachs, for example, raised the probability of a recession to 35%.
--:-- Host (Kevin Phillips): On that note, I spoke to Joe Livornia. He's the former chief economist at the National Economic Council and is currently the head economist at SMBC NICO. He echoed those fears.
--:-- Host (Kevin Phillips): So I think recession risk is high. And if we get a recession sometime in the second half of the year, which to me seems most likely, and that unemployment rate starts to move up and move up quickly, that will eventually alleviate these inflation problems.
--:-- Host (Kevin Phillips): And of course, if there is a recession, unfortunately, that's only going to add to the mess.
--:-- Host (Kevin Phillips): Kevin, thanks for reporting. Anytime.
--:-- Host (Georgia Howe): Coming up, fentanyl dealers will soon face murder charges in Texas. Are you tired of being the gatekeeper for all your family's plans? The Skylight Calendar may be just what you need. The Skylight Calendar syncs all of your family's schedules and displays them in one beautiful touchscreen arrangement. The calendar will automatically update any changes and you can easily assign household tasks using the chore chart feature. Plus, you can get on-the-go access to everything with the Skylight Calendar's mobile app. Morning Wire listeners can get $20 off a Skylight Calendar with promo code WIRE at skylightcal.com. That's skylightcal.com. Enter code WIRE for $20 off.
--:-- Host (Georgia Howe): The Texas Senate passed a bill on Wednesday that would allow fentanyl dealers to be charged with murder. The bill is a key part of the Texas legislature's offensive on opioids. Daily Wire investigative reporter Mairead Elordi is here with the details for us.
--:-- Mairead Elordi: Hi Georgia So this bill is called Combating Fentanyl and the Texas Senate passed it unanimously on Wednesday The bill would change the classification of drug overdoses to poisonings which opens the door for prosecutors to charge fentanyl dealers or distributors with murder.
--:-- Mairead Elordi: Now, how does this compare to the previous penalty for dealing fentanyl? So the bill specifically changes the penalty for manufacturing or delivering one gram of fentanyl. Right now, that's a state jail felony, which is only punishable by two years in jail.
--:-- Mairead Elordi: The bill would make manufacturing or delivering a gram of fentanyl a third-degree felony. If the person who received the fentanyl dies from an overdose under this new bill, the penalty would be hiked up to a second-degree felony, which would allow prosecutors to charge the dealer with murder.
--:-- Mairead Elordi: The bill is sponsored by State Senator Joan Huffman, a Republican who represents the Houston area. In 2021, Huffman was also behind a bill that implemented harsher penalties for manufacturing or delivering more than one gram of fentanyl. That bill became law in Texas.
--:-- Mairead Elordi: Both bills are part of Texas's push to stop the huge amounts of fentanyl that come across the southern border from Mexico. How much fentanyl is currently being trafficked into Texas? Well, we don't know the full amount, but Texas has seized over 353 million lethal doses of fentanyl since launching Operation Lone Star two years ago.
--:-- Mairead Elordi: The initiative has a joint focus of apprehending migrants and reducing the flow of fentanyl into the country. This particular bill combating fentanyl received bipartisan support, but the immigration issue in general has been much more contentious.
--:-- Mairead Elordi: Congressman Mark Green, who chairs the Homeland Security Committee, said Monday that every single Democrat on the committee pulled out of attending Wednesday's field hearing about the southern border in Texas.
--:-- Mairead Elordi: Does DHS have operational control of our entire border? No, sir. Okay, thank you for that. And I appreciate the honesty of Chief Ortiz. During that hearing, the Border Patrol chief said the situation is now at a crisis level.
--:-- Mairead Elordi: There have been about 1.4 million gotaway migrants who have crossed the border but not been apprehended since October 2021. Border agents are so overwhelmed with migrants that they're not focused on finding and seizing fentanyl.
--:-- Mairead Elordi: Most of the fentanyl seized comes through legal ports of entry, but the Mexican drug cartels get drugs across the border in other ways as well, including tunnels and backpackers who run drugs across the border.
--:-- Mairead Elordi: As you can tell, the numbers have been steadily increasing and the fentanyl crisis in Texas has worsened with them. Well, let's hope this bill makes a dent.
--:-- Host (Georgia Howe): Maraid, thanks for reporting. Thanks, Georgia.
--:-- Host (Georgia Howe): That was Daily Wire investigative reporter Maraid Elordi.
--:-- Host (Georgia Howe): Texas officials announced on Wednesday that the state will be taking over Houston Independent School District, which serves almost 200,000 students at nearly 300 schools. The announcement marks one of the largest school takeovers ever in the U.S. Joining us to discuss is Daily Wire reporter Brandon Dray.
--:-- Brandon Dray: So, Brandon, is this primarily because the district is failing, or are there issues beyond academic performance?
--:-- Brandon Dray: Hey, Georgia, there are other issues as well. Four years ago, the Texas Education Agency launched an investigation that found a variety of issues. Some of the district's board trustees had allegedly committed acts of misconduct, which included violating the Texas Open Meetings Act, inappropriately influencing vendor contracts, and making false statements to investigators.
--:-- Brandon Dray: State Education Commissioner Mike Morath also accused the district of failing to improve student outcomes due to what he characterized as chaotic board meetings and infighting. But the government really mobilized to seize control of the district in 2019 after 50 out of about 300 schools within the district received D or F grades.
--:-- Brandon Dray: So really widespread failure. Now, just to put it in tangible terms, what do we know about, for example, the literacy levels of students in Houston? Well, according to recent data, district only 51 of high school students were proficient in reading and 52 for math.
--:-- Brandon Dray: For comparison, though, less than 20 of Baltimore high school seniors were proficient in reading, less than 10 in math. So Houston is still doing better than some places, but still not great.
--:-- Brandon Dray: These failures triggered the state to take over the district because of a newly enacted state law, which forces the Texas Education Commissioner to either close the campus or appoint a temporary board of managers to oversee the district until the end of the school year.
--:-- Brandon Dray: The district initially attempted to sue the state to stop the intervention, but ultimately the Texas Supreme Court gave the state the authority to move forward with a takeover.
--:-- Brandon Dray: And what do they plan to do once they've taken over? Well, the first step is to appoint a board of managers and a superintendent. It's worth noting that within the last couple years, the district has brought up their scores significantly. They went from having 50 schools receiving failing grades to only 10.
--:-- Brandon Dray: Granted, that supposed improvement occurred during the pandemic, and it wasn't really clear what metrics they used to calculate it. Regardless, State Commissioner Morath still asserted that, quote, chronic low achievement on individual campuses was a persistent problem in Houston.
--:-- Brandon Dray: The new superintendent and board of managers are expected to be appointed on or around June 1st. So the new board won't be installed until June, but they're at least starting the process before the school year ends.
--:-- Brandon Dray: What's the response to that been? Well, it's been mixed. Surprisingly, Superintendent Millard House sounded optimistic in the statement. House was elected by the school board in 2021 and will be replaced by June 1st.
--:-- Brandon Dray: He touted the fact that 40 out of those 50 schools that were struggling moved out of the DNF list during his tenure. He said he knew he would face obstacles when he stepped into the role, especially considering the state had already signaled that it was eyeing taking over the district.
--:-- Brandon Dray: And I'll also note that House will likely still receive his annual salary of approximately $350,000 until his contract expires in 2024. Commissioner Morath actually applauded House's work in the district, but due to the nature of the law, he still has to appoint a new leadership team for a clean slate.
--:-- Brandon Dray: Houston Mayor Sylvester Turner, on the other hand, has been critical of the state takeover. He said the state mishandled the situation and said the leadership shakeup would only cause a distraction for the staff and students for the rest of the year.
--:-- Brandon Dray: Democrats in general have disapproved of the move, claiming it's political. Houston is a largely Democrat-controlled city, and they have been at odds with state-level Republicans over a variety of education-related issues since the pandemic.
--:-- Brandon Dray: Now, what's the goal of the takeover? Well, in the near term, the state wants to make the transition as smooth as possible. As I said earlier, they're hoping to have a new leadership team up and running before June.
--:-- Brandon Dray: And when they do, they'll likely look at three main factors before giving control back to the district. Those include better performances from students for several years, compliance with state and federal requirements, and evidence that the board is focused on student outcomes over administrative factors.
--:-- Brandon Dray: Now, do these state takeovers have a good track record of actually improving student outcomes? Not really, but this is also somewhat unprecedented in Texas.
--:-- Brandon Dray: According to local media, the Texas Education Agency has appointed managers in 15 districts. Seven of those districts had a new board of managers put in place. And in most of those cases, the takeover wasn't actually related to academic issues. Rather, it was for financial issues.
--:-- Brandon Dray: But none of those have been anywhere near the size of Houston Independent. And this kind of overhaul from state governments has happened all around the country. Philadelphia, New Orleans, and Detroit have gone through state takeovers in recent years.
--:-- Brandon Dray: And, you know, critics will often point out that these state takeovers usually don't have much success in improving the academic outcomes. Well, it's something we're going to continue to monitor.
--:-- Host (Georgia Howe): Brandon, thanks for coming on. Thank you for having me.
--:-- Host (Georgia Howe): That was Daily Wire reporter Brandon Dray.
--:-- Host (Georgia Howe): Well, that's all the time we've got this morning. Thanks for waking up with us. We'll be back this afternoon with more of the news you need to know.
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