• Court rules against Obama's recess appointments to labor board

    Pete Williams writes

     

    Handing a huge legal victory to Republicans, a federal appeals court in Washington has ruled that a president can make recess appointments only during a congressional recess when the vacancies arise.

    The ruling came Friday from a three-judge panel of the US Court of Appeals for the District of Columbia.  Business groups challenged last year's recess appointments to the NLRB, the National Labor Relations Board, and the court ruled today in their favor.

    A court of appeals has struck down Obama's recess appointments to the National Labor Relations Board and Richard Cordray's appointment to the Consumer Financial Protection Bureau, and if today's ruling stands, it will eliminate a power that presidents of both parties have used for over a century. NBC's Pete Williams reports.

    "The filling up of a vacancy that happens during a recess must be done during the same recess in which the vacancy arose," the court said.

    Last January, President Barack Obama infuriated Senate Republicans by naming Richard Cordray to be director of the newly formed Consumer Financial Protection Bureau, and by putting three new members on the NLRB. (Obama re-nominated Cordray to a full appointment at the same position on Thursday.)

    "It's clear the president would rather trample our system of separation of powers than work with Republicans to move the country forward," House Speaker John Boehner said at the time.  "I expect the courts will find the appointment to be illegitimate."

    The court ruled today on a challenge to the appointments brought by a Pacific Northwest soft drink bottler who lost a union dispute before the NLRB. The company claimed that the president had no power to appoint the new NLRB members, and that the subsequent action by the board therefore lacked legitimacy.

    At the core of the dispute is Article II of the Constitution, setting out the president's duties and authorities. They include "the power to fill up all vacancies that may happen during the recess of the Senate."

    During the nation's first century, Congress was in session less than half a year. The recess appointment power allowed the president to keep the government functioning by filling important jobs when the Senate was not around to act on nominations.

    "There is no reason the Framers would have permitted the President to wait until some future intersession recess to make a recess appointment, for the Senate would have been sitting in session during the intervening period and available to consider nominations," the court said today.

    In modern times, presidents of both parties have used the power to make appointments during much shorter congressional recesses in the summer and around holidays. 

    But during the George H.W. Bush administration, Democrats came up with the idea of pro forma sessions, in which the body was gaveled to order then immediately adjourned for another few days. They claimed that the Senate remained in session and recess appointments could not be made. Senate Republicans have since continued the pro forma practice. 

    "Such short intra-session breaks are not recesses," the bottling company argued.  "Otherwise, every weekend, night, or lunch break would be a 'recess' too."

    Senate Republicans joined the lawsuit. They argued that by declaring the Senate incapable of performing its functions during the pro-forma sessions, "the President usurped the Senate's control of its own procedures. And by appointing officers without the Senate's consent, he took away its right to review and reject his nominations."

    The Obama Justice Department argued that the pro-forma procedures, each lasting less than a minute, are a sham and do not mean the Senate was actually in session.  "It could not provide advice or consent on presidential nominations during that 20-day period," government lawyers argue.

    In agreeing to its holiday break, Justice Department lawyers note, the Senate "provided by order that 'no business' would be conducted."

    The government lawyers said there's nothing mysterious about the meaning of the word recess -- "a break by the Senate from its usual business, such as periods in which the Framers anticipated that senators would return to their respective states."
     
    "The pro forma sessions were not designed to permit the Senate to do business, but rather to ensure that no business was done," the Justice Department claimed.

    President Obama invoked the recess appointment power 32 times during his first term to fill vacancies in full-time government positions, though he has not made any since last January's controversy. President Clinton made 95 recess appointments during his administration.  President George W. Bush used the power 99 times. 

    If, as seems likely, the issue gets to the Supreme Court, the justices could settle a passionate debate over a presidential power used hundreds of times, stirring controversy since the beginning.

    Saying they were constitutionally invalid, a federal appeals court rejects President Obama's "recess" appointments to a labor board last year. NBC's Pete Williams reports.

  • Iranian: 'Our money is becoming more and more worthless every day'

    Raheb Homavandi / Reuters file

    A money changer holds Iranian rial banknotes as he waits for customers in Tehran's business district in this January 7, 2012 file photo.

    Ali Arouzi writes
    TEHRAN – Even though threats of war with Israel are almost a daily occurrence, what’s really on people's minds in this city is the economy.

    The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran, blocking access to the international banking system and curbing sales of Iranian crude oil as a way to persuade Tehran to abandon its nuclear program.

    See our full coverage on international hot spots crucial to U.S. foreign policy ahead of elections in our At the Brink series here. And on Sunday, Sept. 30, and Monday, Oct. 1, tune into special coverage on all NBC News platforms from NBC’s team of anchors and correspondents deployed in five countries across the region.

    As a result, Iran’s currency, the rial, is in a constant state of flux, but mostly on a downward trajectory. These days, it seems to fall in value against the dollar on an hourly basis. On Tuesday the currency hit an all-time low against the U.S. dollar, trading at 26,500 to the U.S. dollar on the open market, according to Persian-language currency tracking website Mazanex. 

    “Our money is becoming more and more worthless every day,” said Sarvenas Sadi, an elderly woman doing her daily shopping in Tehran earlier this week.

    She picked up a handful of limes and exclaimed, “These were 100 percent cheaper last year!”

    Asked whether she ever thought she would see the currency devalue so much, she replied, “Never! I remember before the [1979] revolution $1 was worth 70 rial, now it’s worth 26,000! Who would have ever have thought!”

    Iranians feel the pain of sanctions: 'Everything has doubled in price'

    Did she think things would ever balance out and the price of goods would come down to what they were before. “Unfortunately I don’t think so. The thing with Iran is that once the price of something goes up, it never comes down again.”

    So what’s the solution?  “Eat less limes,” she jokingly replied. 

    AP

    Two potential Iranian customers look at fabric bolts in Tehran's old main bazaar in this picture taken July 14, 2012.

    Manufacturing hit hard
    The financial situation is affecting people from all classes. Thousands of workers have been laid off and have not been paid back wages because companies have simply run out of money. Majid, a 32-year-old mechanic who used to work for a large car company was recently laid off and is owed six months’ salary.


    “They are laying off people left, right and center. I doubt there will be a company left by the New Year,” he said, giving just his first name because of the sensitivity of the issue in Iran. Persian New Year will be on March 21, 2013.

    The car industry, one of the biggest manufacturing sectors in Iran and a massive employer, has been affected dramatically; Iranian media have reported a 30 to 50 percent drop in car and component production in the past six months. Iran was the 13th-largest auto maker in the world in 2011, producing 1.6 million vehicles.

    The Iran Khodro Company, the country’s leading vehicle manufacturer, had become the largest vehicle manufacturer in the Middle East, Central Asia and North Africa.  The company won the annual national prize for export activities in 2006 and 2007 with Russia, Syria, Turkey, Iraq, Azerbaijan, Ukraine, Egypt, Algeria and Bulgaria among their key consumers.

    But higher prices, due to the soaring costs of components as a result of the sanctions, have caused a drop in demand.

    Israel's Netanyahu: Draw 'clear red line' to stop Iran from getting nuclear weapons

    For instance, France's Peugeot Citroen halted shipments of vehicle kits for assembly in Iran earlier this year, saying international sanctions barring transactions with the country's banking system made it difficult to obtain sales financing.

    Sanctions have taken a toll on the Iranian economy. The government is reluctant to admit it. Inflation is high. The number of young unemployed is a growing concern. NBC's Ali Arouzi reports. 

    Majid, the mechanic, said he is looking for work elsewhere but it is proving very difficult. “There are not many jobs going and it is getting me more and more depressed.”

    Oil sales to travel - down
    The oil sector has been hit hard too.  The Iranian Labor News Agency reported that a letter on behalf of 20,000 oil workers from across the country was sent to Labor Minister Abdolreza Sheikholeslami complaining that they had not been paid in months. The letter demanded an increase to the worker’s salaries of $120 to $285 a month, adding that at the current rate they were "way below the poverty line.” 

    Mohammad Reza Bahonar, a prominent Iranian member of parliament, said oil exports in June-July had dropped to "around 800,000 barrels per day," according to a report by ISNA news agency. That’s a low not seen in more than two decades, and less than half the 2.3 million barrels per day exported just a year ago.

    But Minister of Petroleum Rostam Qasemi was quoted by ISNA saying that overall oil production this year "will be the same as last year."

    Israel's Prime Minister Benjamin Netanyahu called for a firm deadline for Iran to halt its nuclear program, using a simple drawing to warn the UN that Iran will soon reach the point of no return in its development of nuclear weapons. NBC's Andrea Mitchell reports.

    The strangling of the economy isn’t just affecting blue-collar workers.

    Middle-class Iranians had become accustomed to foreign travel – to Dubai, a playground for Iranians only an hour and half away, Turkey, one of only a few countries that does not require visa’s for Iranians, and Thailand. But the cost of travel to any of these destinations is prohibitive to many.

    More Iran coverage from NBC News

    Maryam, a travel agent in Tehran who also only gave her first name, estimated that the number of travelers has been halved in a year. “The price of tickets and organized tours increased almost a hundred fold. They say that this will boost domestic holidays, but I think that is even too expensive for most people.”

    This was evident to me last month flying back to Tehran from London via Dubai. Usually the flight from Dubai to Tehran is jammed, but not this time. Business and first class were full with the super-rich of Iran, but 70 percent of the plane which makes up the economy class was almost empty.

    As the American mission in Afghanistan winds down, dangers still abound for U.S. troops – the most recent incident involved a Taliban gunman who fired on a U.S. Marine outpost in Afghanistan's Helmand Province. NBC's Richard Engel reports.

    Expected to get worse
    Mehdi is a young entrepreneur who imports computers and accessories who also spoke on the condition of anonymity. He said people are just not buying in Iran right now. His biggest wish was that the value of the rial would just stay fixed against dollar – even if it was at an unfavorable rate – just so consumers would know how much things would cost in a weeks’ time, a day or even in the next few hours.

    While the sanctions have certainly taken a major bite out of the economy and are hurting people from all walks of life – it does not seem to be making the government authorities buckle. If anything it seems to have stiffened the government’s resolve and things are set to become even more difficult in the not too distant future.  

    Britain, France and Germany are urging their European Union partners "to further step up the pressure" on Iran. Further sanctions targeting the Islamic Republic's energy, finance, trade and transportation sectors are expected to be formally adopted on Oct. 15.

    Slideshow: Everyday life in Iran

    At schools, in shops, and on the streets of big cities and small towns, daily life plays out in Iran.

    Launch slideshow

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  • NBC's Ali Arouzi answers reader questions from Iran

    While Iran’s President Mahmoud Ahmadinejad and Israeli Prime Minister Benjamin Netanyahu traded verbal jabs at the United Nations General Assembly this week over the threat of Iran’s nuclear capability, one thing is for sure: international economic sanctions against Iran are having an impact. 

    See our full coverage on international hot spots crucial to U.S. foreign policy ahead of elections in our At the Brink series here. And on Sunday, Sept. 30, and Monday, Oct. 1, tune into special coverage on all NBC News platforms from NBC’s team of anchors and correspondents deployed in five countries across the region.

    The United States, European Union and the U.N. have imposed tough economic sanctions against Iran, blocking access to the international banking system and curbing sales of Iranian crude oil as a way to persuade Tehran to abandon its nuclear program.

    As Ali Arouzi, NBC News Tehran Correspondent, reports today, the sanctions have had a real impact on Iranians as the value of their currency, the rial, continues to drop daily – affecting everything from basic food items to manufacturing.

    Iranian: 'Our money is becoming more and more worthless every day'

    Ali answered reader questions about the impact of the sanctions in Iran earlier today.

    REPLAY the informative chat below. 

  • China reports slowest growth rate in 3 years

    China's 7.6 percent growth rate is the lowest in three years – but the country's economic problems appear more dire than the latest numbers indicate. Some believe the government will counter the downturn with a massive stimulus package, a strategy that has left China's local banks saddled with bad debt in the past. NBC's Ian William reports from Beijing.

     

    Ed Flanagan writes

    BEIJING – China's economy grew at its weakest pace in three years, the government reported Friday.

    According to the National Bureau of Statistics, Gross Domestic Product grew at a 7.6 percent rate in the second quarter of 2012, down from a 8.1 percent pace in the first quarter and marking the sixth consecutive quarter of slowing growth on the mainland dating back to 2009.


    The data were in line with official government projections for the quarter although they serve as another reminder that China's economy is slowing faster than the government had hoped.  

    China is under enormous pressure from abroad and at home to maintain steady economic growth. Amid worrying economic numbers out of the European Union and the United States, China is increasingly viewed as one of the few motors strong enough to power the global economy through this financial turmoil.

    Meanwhile, here on the mainland, the ruling Communist Party has seemingly staked its legitimacy to an unspoken pact with its citizens: give up some social freedoms for continued economic prosperity.

    “For the past 30 years, the Communist party derived a lot of its legitimacy from delivering the goods: better economy, better living standards,” says Patrick Chovanec, a professor of economics at Tsinghua University in Beijing, “If the perception is that's changed, then it introduces a real element of uncertainty.”

     

    This relationship was probably best manifested at the end of 2008 when global trade ground to a halt and the country hemorrhaged nearly 20 million jobs. Beijing responded with a 4 trillion yuan ($635 billion) stimulus program that opened up lending from Chinese state banks.

    The move helped kick off growth across the country as local governments went on a construction frenzy from new ports and airports to ambitious housing developments.

    Internal problems
    But the free-wheeling loan binge – often to state-owned enterprises with opaque accounting practices – may have helped foster the environment for today’s economic slowdown by providing a potential crush of bad loans that might very well brutalize the economy.  

    “In 2008, the big problem was external, a slowdown in exports.”Chovanec told NBC News, “This year the problem is internal. It's bad debt, and the burden the bad debt is placing on the economy.”

    With the government having to prepare to potentially step in and fill the holes in the national balance caused by bad debt, there is simply less money available in Beijing’s coffers to propel the economy out of its current doldrums.
     
    “In many ways, they've pinned themselves to a corner,” says Chovanec, “They had this big stimulus over the past three years that kept China's GDP growth higher compared to the rest of the world, in the face of the global slowdown… But that caused twin problems of rising inflation and bad debt.”

    “Particularly with bad debt right now - that problem's coming home.”

    Believe the numbers
    In addition, although the GDP shows a growth rate that would be the envy of any developed economy right now, there is growing cynicism over the veracity of the official economic figures being released by Beijing.
     
    “There's a lot more skepticism today about Chinese official numbers, and I think it's reflective of the fact that you've got a very clear and very serious slowdown taking place in China,” says Chovanec, who noted that while figures show extraordinary high rates of private sector investment and profit gains this year, the numbers simply don’t jibe with what he’s seen in the field.

    Nowhere is this disconnect more apparent than in China’s housing and construction industry.

    A mere 75 miles away from Beijing resides the foundations for one of the grand-scale property developments that have been the hallmark of the boom times here in China. Conceived in 2004, Jing Jin City derived its name from the ambitions of its developers who envisioned constructing a city between the capital Beijing and the important nearby port town of Tianjin that would attract rich investors with business in both cities.

    Touted by the developers as the biggest villa development in China, Jing Jin City was a $3 billion investment designed to eventually become home for half a million people. Really a satellite city of Tianjin, the city government there had aspirations of Jing Jin eventually becoming a new Manhattan.

    However, as credit has dried up and speculators have now shown reluctance to sink money into risk property developments, Jing Jin City is effectively a ghost town, a surreal mixture of luxury homes that would look natural in any tony suburb in the United States and the ghostly skeletons of those only partly-built.

    Surrounded by farmland, Jing Jin City’s wild underbrush and small lakes on the outskirts have become a popular place to water and feed the dairy cows from a nearby dairy.

    “I haven’t seen many people around here,” said one farmer who was tending to his cows this week outside one unfinished construction phase, “I guess people think it's too far away from the cities.” 

    With a primary Chinese engine of economic growth via construction in trouble, those economic woes spill over into the over 40 industries that are tied to the property industry.

    As a result, local governments are said to be facing increased pressure to cook their books in order to offer a rosier view of the economic environment in their regions.

    That this doctoring of economic figures may be occurring is not a surprise in China where economists and even senior Communist Party officials –mostly famously the expected future Prime Minister, Le Keqiang – have long believed that the provincial economic numbers are unreliable.

    However, the New York Times last month reported that many of the economic indicators that economists and the Chinese government rely on to determine GDP growth – electricity usage, coal stocks, freight movement, etc. – may also be altered by local governments.

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  • Iranians feel the pain of sanctions: 'Everything has doubled in price'

    Ali Arouzi writes
    TEHRAN – The economy here is in shambles, according to Iranians, whether the government will admit it or not.

    The United States, the European Union and the U.N. have imposed tough economic sanctions against Iran –- blocking access to the international banking system and hurting sales of Iranian crude oil -– as a way to persuade Tehran to abandon its nuclear program. 

    In the short term, the harsh sanctions have had an impact on Iran’s economy -– inflation has gone through the roof, and the unemployment rate is staggering, especially among young Iranians. Prices of consumer goods have doubled, tripled, even quadrupled in some cases, according to consumers. 

    The business community is in disarray, and as things keep getting worse, it’s all people are talking about.

    Reuters

    CLICK ON THE GRAPHIC ABOVE TO ENLARGE THE IMAGE. Iran Sanctions: Key areas affected by sanctions imposed by the international community against Iran.

    Barely getting by 
    At the Tajrish Bazaar in North Tehran on a recent afternoon, Ahmed, a 31-year-old unemployed man, poured his heart out to me. Speaking on the condition of anonymity, as all those interviewed for this story did because of the political sensitivity of speaking out in Iran, he told me his story. 

    He said he has been unemployed for the past year, doing odd jobs, and that he barely makes enough to feed himself, let alone his wife and children. The lack of jobs and the extraordinary rise in food prices have hamstrung him. But he was most worried about what the crippled economy is doing to the youth of Iran, who he said are turning to crime and drugs if they can’t find work. 

    In Iran, appearance is everything. How you dress and wear your beard says a lot about your politics. 

    As I talked to Ahmed, who was dressed in Western-style clothes, another man looked on disapprovingly. He had a full dark black beard and was dressed in conservative black clothes. He was listening to everything Ahmed said and wanted to talk to us, although he declined to give us his name.

    He said that people like Ahmed were making excuses and were lazy. He argued that the economy had become tougher, but no more so than the Iranian people were used to over the years. He blamed the U.S. for the bad economy, accusing President Barack Obama of unfairly trying to squeeze Iran. But he said that in the end, the rough economic times had taught Iran to be more self-reliant. 

    “We need to tighten our belts for now and weather this storm with the West as we have always done. And we will be victorious again,” he said.

    NBC's Ali Arouzi reported from Istanbul, Turkey in April during the most recent meeting between world leaders and Iranian representatives to discuss Iran's nuclear intentions.

    New sanctions' real impact
    The most recent international sanctions have targeted Iran’s crude oil and banking sectors. In addition to harsh U.S. measures, 27 countries in the European Union agreed in January to ban Iranian oil imports –- giving countries until July 1 to terminate their deals. They also put a freeze on assets belonging to the Central Bank of Iran and a ban on trade in gold and other precious metals.  

    Anthony Cordesman, who holds the Burke chair in strategy at the Center for Strategic and International Studies and is a long-time Iran watcher, said that despite years of sanctions against Iran, the most recent ones have had the greatest impact –- partly because they target banking.

    The banking sanctions “have had the most popular, or broad, impact. Right now Iran can’t even operate on the international clearinghouse.”   

    “I think that this is the first time that sanctions have really had a major bite. Up to now, they have all been fairly limited,” said Cordesman.  “But beginning in November, and it’s just beginning to bite, you can’t bank internationally effectively, you can’t move money. You don’t have a stable conversion rate –- but the rial [Iran’s currency] is way down, so your savings are of very uncertain value unless you’ve invested in property.  You don’t know what’s going to happen to your business. You have to be very cautious about how much money you can spend on a marriage for your children or their education.” 

    He added that we really won’t begin to see the full impact of the sanctions until summer, when they have all gone into effect.  “So everyone knows it’s getting worse, but no one knows yet how serious.” 

    Vali Nasr, the incoming dean     at the Johns Hopkins School of Advanced International Studies, explained how these sanctions differ from 30 years of sanctions that mostly targeted imports into Iran. 

    Slideshow: Everyday life in Iran

    At schools, in shops, and on the streets of big cities and small towns, daily life plays out in Iran.

    Launch slideshow

    “The new set of sanctions targeting Iran’s oil industry, central bank, ability to conduct international financial transactions, are of a different nature largely because they are going after the government’s source of income –- the ability to sell oil or receive money for oil,” said Nasr. “So these have had an impact because they have caused extensive inflation inside Iran. They’ve caused the government to scrap a variety of projects, which has caused unemployment.  

    “There is no doubt that economic hardship has become much more pronounced. And there is on top of that a layer of uncertainty. So there is significant economic hardship that is hitting the lower rung of society and the Iranian middle class,” said Nasr.
     
    Back in Tajrish Bazaar, Roya, a well-dressed woman in her 60s wearing a Hermes scarf for a hijab and carrying a Louis Vuitton bag, explained how even she is being hit by the economic uncertainty. While she is a wealthy Iranian living in the leafy suburbs of affluent North Tehran, she said her purchasing power has been halved by the struggling economy. 

    “Everything has doubled in price,” Roya said. “My son lives in Los Angeles, and it’s cheaper to go shopping there -- amazing. Things have become difficult for me even though I am among the better off Iranians. I can’t imagine how difficult it is for folks downtown.” 
    When I asked her what the solution was, she replied sarcastically, “That’s for the country’s economists to figure out.”

    Close to the bone
    For international relations analysts, like Cordesman and Nasr, getting reliable information on what’s going on in Iran is very difficult. Both analysts said that basically all of their information on the impact of the current sanctions is anecdotal. 

    “You have to rely on anecdotal information especially because the Iranian government does not have an interest in revealing how painful the sanctions are. They may admit that they are hurting, but they don’t want to put numbers out there,” said Nasr. 

    But it’s not all doom and gloom for the regime. President Mahmoud Ahmadinejad often touts during public events that Iran has a record $90 billion in foreign exchange reserves, as well as untold reserves of gold, silver and precious stones. 

    Even though experts estimate that Iran has seen a decline in sales of about 300, 000 barrels of oil per day as a result of the sanctions, this has been offset by a 15 percent rise in crude prices. 

    And the effect and pain of sanctions have not been distributed evenly. While blue-collar workers in downtown Tehran can expect to eat meat once a month only as a treat, North Tehran is awash with Mercedes and Porsche SUVs costing as much as $500,000 after the import tax has been paid.    

    Will the sanctions achieve goal?
    So the question remains as to whether the sanctions will achieve their goal: curtailing Iran’s nuclear program.

    “The sanctions have had an impact of getting Iran to the negotiating table. Iran came to Istanbul [the site of the latest diplomatic talks] with much more seriousness than in the past,” said Nasr. 

    But he added that the sanctions alone won’t be enough for Iran’s leaders to give up a program they have invested heavily in –- both financially and in terms of building the nuclear program as a point of national pride.  “Just because the Iranian public dislikes this regime –- that does not mean that they dislike the nuclear program. They don’t see this as the regime’s nuclear program, they see it as Iran’s nuclear program,” said Nasr.  

    In order for the sanctions to work, Nasr explained, the U.S. and other parties at the table need to give something back -– otherwise it would just seem like Iran is surrendering to the West’s demands, not an easy sell at home. 

    “Until now, the whole approach has been stick-heavy and carrot-poor. And the sticks are very explicit and the carrots are vague. And maybe that was necessary to get their attention and to show that we meant business. But now going forward -– [the U.S.] can’t ask [Iran] for concrete concessions –- like stop this, stop that -– but not put concrete things on the table, like this sanction will be lifted.  If all the concessions are on the Iranian side and what they get is just a promissory note, I don’t think it will fly.”   

    “End of the day, these two countries have not had a single thing they’ve agreed on or done together in the last 30 years. So you couldn’t expect them to actually be able to conclude a deal without some sort of reciprocal, trust-building, concrete steps going forward.”

    Msnbc.com’s Petra Cahill contributed to this report. 

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