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What’s Turkey
News Rebuffs
Business & Finance U.S. on
L ampert will get one last
chance to keep Sears

from closing down, after the

retailer agreed to let its Erdogan rejects call to
longtime leader compete in protect allies fighting
a bankruptcy auction that
will decide its fate. A1, B6 Islamic State, imperiling
 Ghosn’s lawyer argued plan for quick Syria exit
that Japanese prosecutors
rushed to judgment and had
President Trump’s plans for a
no basis for the lengthy deten-
swift withdrawal of U.S. troops
tion of the car executive. B1
from Syria were thrown into dis-
 Sumner Redstone and array when Turkey’s president
his family have agreed to rejected a request to protect U.S.
settle their legal dispute allies fighting in the region and
with the media mogul’s for- instead threatened military
mer live-in companion. B1 strikes against them.
 AmEx suspended a direc-
tor in its foreign-exchange By Vivian Salama
In a speech Tuesday night from the Oval Office, President Trump said a wall along the U.S. southern border was crucial to the in Ankara, Turkey,
department as part of its
nation’s security. Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi delivered the Democrats’ response. and Dion Nissenbaum
investigation into pricing
practices in the division. B1 in Washington

 Apple is wooing phone

buyers by offsetting the
price of devices with gen-
erous trade-in offers. B1
Trump Makes Case for Wall Turkish leader Recep Tayyip
Erdogan declined on Tuesday
to meet with Mr. Trump’s visit-
ing national security adviser,
 The company rewarded President, in a rare House Speaker Nancy Pelosi John Bolton, who had called on

CEO Cook and other execu- and Senate Minority Leader Turkey not to target a U.S.-
Oval Office address,

tives with a big compensa- Chuck Schumer, the Democratic backed Kurdish militia that
tion boost for fiscal 2018. B4 pitches barrier funding congressional leaders, issued an Turkey calls a terrorist organi-
immediate televised response, zation.
 MetLife named Khalaf to end shutdown on rejecting the idea of a wall as “John Bolton made a serious
to be chief executive of the
unnecessary and accusing Mr. mistake,” Mr. Erdogan told law-
insurer, succeeding Kan-
Trump of stoking fear to rally makers from his ruling Justice &
darian, who will retire. B10 By Rebecca Ballhaus,
support for his cause. Development Party on Tuesday.
Kristina Peterson
 U.S. stocks rose, pro- “President Trump must stop “Those who share the same view
us l,

and Michael C. Bender

pelled by signs of progress in holding the American people are also deeply wrong.”
U.S.-China trade talks. The hostage, must stop manufactur- Mr. Bolton’s inability to
al a
Dow, S&P 500 and Nasdaq WASHINGTON—President ing a crisis, and must reopen forge a deal with Turkey raised
all advanced by about 1%. B11 Trump, in a prime-time address the government,” Mrs. Pelosi the possibility that a U.S. pull-
 Small-cap companies are Tuesday, said a wall along the said. Mr. Schumer said Demo- out could be postponed indefi-
ci on

projected to notch another southern border is key to na- crats are united with the presi- nitely—and it opened a new rift
year of big profit gains. B1 tional security, as he called for dent on the need for stronger between two North Atlantic
lawmakers to fund it and end a border security, but said: “We Treaty Organization allies that
 WeWork secured an ad-
partial government shutdown sharply disagree with the presi- have frequently clashed over
ditional $2 billion from Soft-
that is days away from becom- sized what he said was support A wall “is absolutely critical dent about the most effective the U.S.’s Middle East policies.
er rs

Bank, less than the Japanese

ing the longest in U.S. history. for wall funding from law-en- to border security,” Mr. Trump way to do it.” It also exposed weaknesses
firm had planned to invest. B3
In the televised address forcement officials, who he said said, in a nine-minute speech. Mr. Trump and congressio- in the Trump administration’s
 PG&E’s top executive from the Oval Office, Mr. requested the more than $5 bil- “It’s also what professionals at nal leadership from both par- shifting struggles to implement
overseeing the California Trump’s first in his nearly two lion for the barrier that Mr. the border want and need. This ties are scheduled to meet and the president’s abrupt decision
m e

utility’s electric division is years as president, he empha- Trump is seeking. is just common sense.” Please turn to page A4 Please turn to page A7
leaving the company. B3
m rp


 The president, in a TV
Cancer Deaths Decline Steeply Social Media’s New
address, said a wall along BY AMY DOCKSER MARCUS of death among Americans,” Deaths from cancer have Advisers Lean Right
co Fo

the southern border is key said Noel Weiss, professor of fallen over the 25 years
to national security, as he Deaths from cancer dropped epidemiology at the University
called for lawmakers to fund 27% over a quarter century, of Washington, who wasn’t in- from 1991 to 2016.
it and end a partial govern- meaning an estimated 2.6 mil- volved with the study.
ment shutdown that is days lion fewer people died of the Amid the good news about
600 per 100,000 people Facebook, Twitter turn to outside groups to
away from becoming the disease during that period, ac- the decline in the death rate, help police political speech, stirring new ire
longest in U.S. history. A1 cording to a new report from there are also some troubling
researchers at the American signs that researchers said Diagnoses
 Trump’s plans for a swift
Syria exit were upset when Cancer Society. need to be addressed. Endome- BY KIRSTEN GRIND seek out input from hun-
For most of the 20th cen- trial cancer has increased, and AND JOHN D. MCKINNON dreds of groups, a growing
Turkey’s Erdogan rejected a
request to protect U.S.-backed tury, cancer deaths rose, driven about 60% of cases are attri- 400 number of which lean to the
Kurds fighting in the region mainly by men dying from lung buted to obesity, according to The world’s biggest social- right. The companies have
and instead threatened mili- cancer, researchers noted. But Rebecca Siegel, strategic direc- media companies, under fire become receptive to behind-
since the peak in 1991, the tor of surveillance information for failing to police content the-scenes lobbying as well.

tary strikes against them. A1

death rate has steadily dropped services at the American Can- on their sites, have invited Among the initiatives,
 Cancer deaths fell 27% 1.5% a year through 2016, pri- cer Society and the lead author an array of outside groups to Facebook has privately
over a quarter century, re- marily because of long-running of the new report. help them figure out who sought advice from the Fam-
sulting in an estimated 2.6 efforts to reduce smoking, as “We are probably only see- 200 should be banned and what’s ily Research Council, a con-

million fewer of them during well as advances in detection ing the tip of the iceberg re- considered unacceptable. servative Christian public-
that period, a report said. A1 and treatment of cancer at ear- garding the influence of the That solution is creating a policy group, and its
lier stages, when prognosis for obesity epidemic on cancer Deaths new set of problems—public president, Tony Perkins, ac-
 The U.S. and China
made progress on narrow- recovery is generally better. rates,” Ms. Siegel said. Just as fights, complaints and legal cording to people familiar
ing their differences on “There is still a long way to tobacco use drove cancer death battles. with those meetings. Twit-
go. A reduction in cancer mor- Please turn to page A2 Silicon Valley giants Face- ter’s Chief Executive Jack
trade issues, but remained 0
far from striking a deal. A6 tality does not mean it is zero book Inc., Twitter Inc. and Dorsey recently hosted din-
or even close to zero. Cancer is  For one family, lung cancer is 1980 ’90 2000 ’10 Google’s YouTube unit have ners with conservatives, in-
 Attorneys for Manafort still one of the leading causes an odyssey.................................. A2 Source: American Cancer Society made a concerted push to Please turn to page A10
inadvertently disclosed that
he gave 2016 presidential
polling data to a Kiev associ-
Sears Gets Food Dipped in Gold Looks Pretty
ate U.S. officials have linked
—Until You Try to Eat It
Final Shot
to Russian intelligence. A4
 The Russian lawyer who

#1 CRM.
met with Trump campaign i i i
officials in 2016 was charged
with obstruction of justice At Survival Dubai takes the food fad to the extreme;
Next Week
in connection with a U.S.
money-laundering case. A4 ‘Gold all over my teeth and my mouth’
 The EU imposed its first Ranked #1 for CRM Applications based on
IDC 2018H1 Revenue Market Share Worldwide.
sanctions against Iran since
BY LILLIAN RIZZO BY MICHAEL AMON food gimmick elsewhere has 20.3%
the nuclear accord was imple-
AND PATRICK FITZGERALD been taken to the extreme in
mented three years ago. A7
DUBAI—Bill Riththilertnapa Dubai and Abu Dhabi, its two
 U.S. carbon emissions Billionaire Edward Lampert ordered a $26 cappuccino biggest cities, where social
rose 3.4% in 2018 after three will get one last chance to keep topped with a sheaf of 23- media fuels a gastronomic
years of declines, an indepen- Sears Holdings Corp. from clos- karat gold with his wife and gilded age.
dent research firm said. A3 ing down, after the retailer parents at the Armani Hotel There are gold-flaked piz-
 London’s Heathrow agreed to let its longtime here last January for one rea- zas and gold-injected soups,
halted departing flights after leader compete in a bankruptcy son: Instagram. gold-dusted
auction that will decide the They snapped french fries and 7.5%
a nearby drone sighting. A9
once-iconic department store’s pictures for the gold-infused 5.4%
fate. virtual world but Bloody Marys, 4.1%
CONTENTS Property Report B5-6 Sears, which filed for chap- reality sank in af- cakes and pies
Business News...... B3 Sports....................... A14 3.6%
Crossword.............. A14 Streetwise................. B1 ter 11 protection in October, ter Mr. Riththi- topped with gold
Heard on Street. B12 Technology............... B4 plans to hold a court-super- lertnapa took a frosting. An Ital-
Life & Arts....... A11-13 U.S. News............. A2-5 vised auction on Monday that sip. “It’s not a ian restaurant of- 2014 2015 2016 2017 2018H1
Markets............. B11-12 Weather................... A14
Opinion.............. A15-17 World News....... A6-9
will determine whether what is pleasant mouth- fers gold flakes in
Source: IDC, Worldwide Semiannual
left of the 126-year-old chain is feel,” said the 29- Dinner is served lieu of Parmesan Software Tracker, October 2018.
liquidated or left in Mr. year-old clothing cheese. In the
> Lampert’s control. The re- businessman from Bangkok. past year, several major hotels
tailer’s independent board “It’s tasteless gold with stuff have begun offering cappucci-
members and creditors want to stuck on your teeth.” nos infused with gold.
Please turn to page A8 An edible-gold arms race is The gold dishes come with
s 2019 Dow Jones & Company, Inc.
ramping up in the United Arab hefty price tags—$45 for gold CRMmarketincludesthefollowingIDC-definedfunctionalmarkets:SalesForceProductivityandManagement,Marketing
Campaign Management, Customer Service, Contact Center, and Digital Commerce Applications. © 2018,
All Rights Reserved  Mall owners aren’t buying Emirates, and it isn’t always a dusted chicken nuggets and inc. All rights reserved. is a registered trademark of, inc., as are other names and marks.

Lampert’s plans for Sears... B6 pretty sight. A tired, one-off Please turn to page A10
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A2 | Wednesday, January 9, 2019 * *** THE WALL STREET JOURNAL.

U.S. Aims to Squeeze Venezuelan Leader
The U.S. Treasury Depart- ministration officials say is The administration timed but the U.S. alleges is used for say Mr. Gorrín bribed Mr. An- rates—to reap billions of dol-
ment sanctioned a Venezuelan meant to pressure President its latest salvo to fall ahead of political control. drade and his successor, Clau- lars in profits. Mr. Andrade
network that allowed the Nicolás Maduro into restoring Mr. Maduro’s inauguration The sanctions follow prose- dia Patricia Díaz, to gain privi- told U.S. prosecutors those
owner of media giant Globovi- democratic order and the rule Thursday to a second term fol- cutions of several of the tar- leged rights to exchange profits were transferred into
sion Tele CA and several state- of law. lowing an election Washington geted individuals, including currency for the Maduro gov- assets overseas, including in
The latest action targets says was fraudulent and ex- Alejandro Andrade, the former ernment. the U.S. and Europe.
By Ian Talley in former Venezuelan Treasury pands a grip on power kept national treasurer, who once Ms. Díaz, Mr. Chávez’s for- Calls and emails to Mr. Gor-
Washington and Kejal officials, seven Venezuelan through violent repression. served as a bodyguard to Mr. mer nurse and another U.S. rín, his attorney in Miami,
Vyas in Caracas businesspeople and nearly two Previous U.S. actions have Maduro’s predecessor Hugo Treasury target, is fighting re- Howard Srebnick, Globovision
dozen of their companies, in- detailed top Maduro regime Chávez. Mr. Andrade pleaded lated money-laundering and Venezuela’s Information
connected businesspeople to cluding Globovision, the coun- officials running state-aided guilty in a U.S. court to taking charges levied by Spanish Ministry weren’t returned. Mr.
illicitly make billions of dollars try’s largest media company. It narco-trafficking and money- more than $1 billion in bribes prosecutors. Andrade is serving a 10-year
in profits from the country’s freezes their assets under U.S. laundering operations and cor- while in office. U.S. officials allege Mr. Gor- U.S. prison sentence that he
broken currency market. jurisdiction, prevents their ruption throughout the gov- Also targeted is Raúl Gor- rín and several of his associ- received late last year.
The U.S. action on Tuesday travel into the U.S., and bars ernment. That includes in the rín, president of Globovision ates used Venezuela’s widely Ms. Díaz, the other former
is part of a comprehensive American firms from working food program Caracas says is and life insurance broker Se- used black-market exchange national treasurer, couldn’t be
sanctions campaign Trump ad- with the blacklisted entities. . to aid a starving population guros La Vitalicia. U.S. officials rates—running at much higher reached to comment.

For One Family, Lung Cancer Is an Odyssey Kavanaugh

Two years ago, at the age of
55, Terri Ann DiJulio was diag-
nosed with lung cancer—for
His First
the second time.
Ms. DiJulio says she was
devastated. In the 12 years
High Court
since her previous bout with
cancer, her mother had died
from lung cancer and two of
her mother’s siblings were still BY JESS BRAVIN
fighting the disease. AND BRENT KENDALL
Nonetheless, Ms. DiJulio
says she was struck by how WASHINGTON—Shades of
much had changed in the in- the past and future permeated
tervening years, not only for Supreme Court proceedings on

her but also for her family. Tuesday, as Justice Ruth

There were better methods of Bader Ginsburg’s chair re-
early detection, more treat- mained vacant while she recu-
ments and greater recognition perates from cancer treat-
that many who get cancer, like on ment, and new Justice Brett
her mother, never smoked. Kavanaugh delivered his first
During her first lung can- opinion.
cer, Ms. DiJulio had the right In contrast to his conten-

lower lobe of her lung re- tious confirmation hearings

us l,

moved. This time, the oncolo- last fall, Justice Kavanaugh’s

gist told her, there was a new debut was the picture of co-
al a
method of radiation that mity, as he wrote for a unani-
would let her avoid a painful mous court to resolve a proce-
surgery and spare the rest of dural issue in arbitration
ci on

her lung. That let Ms. DiJulio, between two businesses.

who is an avid bike rider, get Chief Justice John Roberts,
back to cycling. In September, Lung-cancer survivor Terri Ann DiJulio, far right, helped celebrate the 79th birthday of her mother, who has since died of the disease. who assigned the opinion to
she rode 260 miles to raise Justice Kavanaugh, has sought
$10,100 for the Bonnie J. Add- progress,” she says. “But the they weren’t sure if it was to the hospital thinking she involving Merck & Co.’s to distinguish the court as a
er rs

ario Lung Cancer Foundation. number of deaths from lung cancer and advised that she be was having a heart attack. She Keytruda in patients who have steady and collegial institu-
“I had better options than cancer is still shocking.” closely monitored with regular died in 2011 at the age of 79. a recurrence of lung cancer. tion apart from the raucous
my mother,” says Ms. DiJulio. Ms. DiJulio says her fam- scans. Ms. DiJulio, who had After Ms. DiJulio’s mother Recently, Ms. DiJulio and political struggles consuming
“But I want the next genera- ily’s story illustrates some of smoked around five cigarettes was diagnosed, doctors recom- her family members started the White House and Con-
m e

tion after me to have better the ways things have gotten a day from the time she was mended that close family discussing participating in a fa- gress.
options than I do.” better, along with the many 17, quit smoking. members receive screening us- milial genetics research study. The chief justice also re-
Still, 25% of all cancer challenges that remain. Two years later, doctors ing low-dose computed tomog- She thinks more personalized peated his Monday announce-
m rp

deaths are due to lung cancer, Her first lung cancer was said the scans revealed the raphy. The screening found treatments may be the best ment that the absent Justice
and more people die from lung found accidentally. Ms. DiJulio nodule was growing, so Ms. lung cancer in Ms. DiJulio’s hope, not only in her family’s Ginsburg would participate in
cancer than breast, prostate says she felt pressure in her DiJulio underwent surgery. aunt and uncle, who had no odyssey with lung cancer, but the argued cases by reading
and colorectal cancer com- chest so her doctor sent her to Eighteen months after Ms. symptoms of disease. The dis- for improving mortality rates the briefs and transcripts.
bined, says Rebecca Siegel, the hospital, concerned about DiJulio’s surgery, her mother ease was caught early, Ms. Di- in the coming 25 years, too. The court’s eldest member,
co Fo

lead author of the new Ameri- a possible heart problem. In- was also diagnosed with lung Julio says. They are both still “My family has benefited 85 years old, had surgery in
can Cancer Society report stead, scans turned up a nod- cancer. Ms. DiJulio’s mother felt alive; Ms. DiJulio’s aunt is now from the advances, but we need December for lung cancer and
Tuesday. “We have made great ule on her lung. Doctors said pressure in her chest and went taking part in a clinical trial to do more,” Ms. DiJulio says. wasn’t expected on the bench
this week—her first absence
since joining the court in 1993.

Cancer Fewer Smokers, Better Detection

The drop in deaths was mainly due to smoking cessation and early detection and treatment, but death
the Ohio State University Com-
prehensive Cancer Center, said a
number of hypotheses try to ex-
Justice Kavanaugh, 53
years old, addressed a dispute
between Archer & White, a

rates continue to rise for some types of cancer. The mortality decline was larger for men than women. plain the connection between dental-equipment reseller in
Death rate, by type of cancer obesity and cancer and these Plano, Texas, and global sup-
can vary depending on the can- plier Henry Schein Inc., of

Show Drop
100 per 100,000 people 100 per 100,000 people
cer. She cited chronic inflamma- Melville, N.Y.
tion and changes in estrogen as After Archer & White filed
Men Women two possibilities. an antitrust suit in federal

75 75 Dr. Weiss, the cancer epide- court, the supplier invoked a

Continued from Page One miologist, said the trends in col- contract clause to send the
rates earlier, Ms. Siegel said, Lung, bronchial Lung, bronchial
orectal cancer are “worrisome, case to private arbitration.
obesity could influence future especially if they continue as “The question then became:

projections. 50 50 people get older.” He also said Who decides whether the anti-
Despite the steady decline in Breast
obesity can cause structural trust dispute is subject to ar-
overall death rates, the study’s changes in the liver, which bitration?” Justice Kavanaugh
authors projected in 2019 there Colorectal Colorectal might predispose individuals to wrote.
would be 1.76 million new can- 25 Pancreatic 25 Pancreatic liver cancer. Experts said more A federal appeals court in
cer cases and close to 607,000 research needs to be done.
Liver, intrahepatic Uterine
cancer deaths in the U.S. The bile duct
Incidence rates in mela-
investigators based their con- Liver, intrahepatic noma, liver, thyroid, uterine
clusions on data compiled from
Leukemia bile duct and pancreatic cancers also
Justice Kavanaugh’s
0 0
federal agencies and cancer Stomach Stomach continue to rise. In both men opinion was a concise
registries but noted a lag in the 1950 2000 1950 2000 and women, liver-cancer inci-
number of cases and deaths be- Source: American Cancer Society THE WALL STREET JOURNAL. dence is increasing more rap-
eight pages, and for a
cause it takes time to collect idly than any other cancer. unanimous court.
and analyze data. The study According to the researchers,
was published Tuesday in CA: report finding an increase of The gap in cancer mortality Among adults under the age 71% of liver-cancer cases can po-
A Cancer Journal for Clinicians. 0.4% a year for breast cancer. between blacks and whites has of 55, the incidence of colorec- tentially be prevented through
Men die in the greatest num- Men had a 34% total decline narrowed, mainly due to a drop tal cancer has continued to in- lifestyle changes, such as not New Orleans concluded that
bers from lung, prostate and in cancer mortality over the 25 in smoking among black teen- crease almost 2% a year since smoking, increasing physical ac- the trial court itself could do
colorectal cancer, while women years, compared with 24% for agers from the late 1970s to the the mid-1990s. Obesity might tivity, losing weight and pre- so when the claim for arbitra-
die primarily from lung, breast women, largely due to trends in early 1990s, the report said. be a factor, but many research- venting hepatitis B and C vi- tion is “wholly groundless.”
and colorectal cancer, according smoking rates. Lung-cancer inci- New drugs, such as costly ers also think “something else ruses. About 24% of liver-cancer Some lower courts, how-
to the report, which also dence is declining twice as fast immunotherapies, are begin- is also going on,” Ms. Siegel cases result from chronic hepati- ever, have held that if contract
pointed out differences in can- among men as women, which in ning to transform the treat- said. “Everyone is scrambling tis C infection, the report found, provides for it, the arbitrator
cer incidence and mortality be- part reflects the fact that women ment of many cancers and are to try to figure it out.” with a threefold rise in reported should decide.
tween the sexes. Rates for some historically took up smoking in fueling deals among pharma- Electra D. Paskett, professor infections from 2010 to 2016 be- Justice Kavanaugh wrote
common cancers are increasing large numbers in later decades ceutical firms looking to shore of cancer research and associate cause of the opioid epidemic, ac- that litigation over whether
or stable in women, with the and were slower to quit. up their strength in that space. director of population science at cording to investigators. claims were “wholly ground-
less” or merely “groundless”
could become “a time-consum-
(USPS 664-880) (Eastern Edition ISSN 0099-9660)
Arbitrators themselves
(Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241)
could “efficiently dispose of
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THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A3


Of Carbon
Climb 3.4%
Effects of a strong
Heat Rises
economy in 2018 U.S. CO emissions, change from 2
reversed U.S. progress a year earlier
on greenhouse gases 4%


U.S. carbon emissions rose

3.4% in 2018, after three years 0
of declines, as the effects of a
strong economy outstripped a –2
sharp drop in the number of

power plants burning coal to
generate electricity. –4
The increase in carbon 2015 ’16 ’17 ’18*
emissions was the biggest
jump since 2010, when the Source: Rhodium Group
economy was rebounding Note: Energy combustion only
from the recession, and the THE WALL STREET JOURNAL. The transportation sector, led by more jet-fuel and diesel use, was the No. 1 source of U.S. carbon emissions for a third straight year.
second-largest increase in two
decades, according to the made to cut emissions as part primary fuel used to produce senger cars and power plants, emissions for the third on average over the next seven
Rhodium Group. The indepen- of the 2015 Paris climate ac- electricity. Trevor Houser, a climate and straight year. years, Rhodium Group said.
dent research firm analyzed cord. A U.N. report in Novem- In the U.S., utilities were ex- energy analyst at the Rhodium Cold weather also played a In its November report, the
emissions across sectors, in- ber said more-ambitious com- pected to have retired nearly Group, said more focus should role, with emissions from fuel U.N. said global emissions
cluding power generation, mitments were needed 14 gigawatts of coal-fired now be paid to areas like long- oil, diesel and natural gas used showed no sign of reaching a
transportation and manufac- globally to avoid catastrophic power generation by the end of haul trucking, aviation and in- to heat residential and com- peak.
turing. effects of climate change. 2018, possibly a record, accord- dustrial production. mercial buildings rising 10%, Ashley Burke, a spokes-
The U.S. had been among President Trump, a Repub- ing to Tuesday’s report. Mean- “Other sectors of the econ- to the highest level since woman for the National Min-
the world’s few success sto- lican, said last year he intends while, natural gas use was up omy deserve the same amount 2004. ing Association, said the re-

ries, dramatically reducing to withdraw the U.S. from the significantly. Natural-gas gen- of attention” through new Overall, carbon emissions port showed that no single

emissions for several years as agreement. eration grew four times as fast technology development or were still down 11.2% from industry should be targeted
it moved away from coal-fired U.S. efforts to cut carbon as wind and solar combined regulation, he said. 2005 levels. for emissions reductions. “Ef-
power during the Obama ad- emissions have been helped in through the first 10 months of As the economy grew last To meet the Paris agree- forts to demonize coal may
ministration. Those reductions recent years by increased pro- 2018, the report said.
on year, increased trucking and ment target of reducing all have helped natural gas pro-
have started to level off and duction of cheap natural gas, While most carbon-cutting jet use led to a 3% increase in greenhouse-gas emissions by ducers, but they weren’t the
potentially now are in reverse. which produces far less car- efforts at the federal and state diesel and jet-fuel use in the 26% to 28% from 2005 levels answer to America’s emissions
Many countries have fallen bon per unit of energy and levels have been aimed at transportation sector, which by 2025, the U.S. will have to challenge,” she said. “The an-
far behind the pledges they has supplanted coal as the cleaning emissions from pas- was the No. 1 source of carbon cut those emissions by 2.6% swer has to be innovation.”
us l,

Biotech Firm Proposes Installment Plans for Therapy

al a
ci on

BY JOSEPH WALKER lion] is something we need to annually, and in Europe, about tied to employment, and Blue-
sort through,” Mr. Leschly €30,000 to €40,000 (roughly bird has to ensure it will get
A Boston-area biotech firm said. The $2.1 million figure $34,000 to $46,000) a year. paid if patients change jobs or
says it may have a found a excludes other metrics like re- Bluebird’s therapy is de- insurance carriers. The com-
er rs

way to handle the expected ductions in patients’ overall signed to replace the defective pany is also concerned that it
seven-figure cost of its experi- medical costs, the company genes with one infusion. In will have to share the dis-
mental gene therapy: paying says. small studies, the drug has counts it gives to patients who
on installment. Several drug companies helped keep many patients receive the least benefit with
m e

Bluebird Bio Inc. is devel- and health insurers have been free from blood transfusions Medicaid, which is entitled un-
oping plans to sell its first eyeing such an approach as a entirely, and significantly re- der federal law to receive the
gene-replacement therapy, solution to the high prices of duced their frequency in oth- best price on prescription
m rp

for a rare inherited blood emerging treatments, which ers. But the treatment’s long- drugs.
disease, on a five-year in- could cost $1 million or more. term durability is unknown. Pharmaceutical companies

stallment plan, with each an- Bluebird could be among the Under Bluebird’s pricing have been facing increasing
nual payment contingent on first to put payment by in- plan, it would receive as little scrutiny of high drug prices
its treatment’s continued ef- stallment into effect. Typi- as 20% of the product’s total from patients, doctors, law-
co Fo

fectiveness. cally, health plans pay for a cost upfront, and put the re- makers and health plans. In
Bluebird, based in Cam- drug whether or not it helps maining 80% at risk of non- response, companies have be-
bridge, Mass., won’t say how the patient. payment. Each year afterward, gun experimenting with new
much it plans to charge for the LentiGlobin could go on the insurer would pay down payment models, such as of-
therapy, called LentiGlobin. sale in the European Union Bluebird’s Nick Leschly says its therapy will cost under $2.1 million. an additional 20%, but only if fering retroactive rebates if
But the price will be lower later this year if regulators the treatment meets certain their products fail to meet
than $2.1 million, the amount there approve it. In the U.S., it can cause severe anemia, fa- which come with their own criteria, such as eliminating or prespecified effectiveness
that Bluebird estimates is the could be cleared for sale as tigue and organ damage. In side effects that can be fatal reducing the number of trans- criteria.
drug’s “intrinsic value” to pa- soon as 2020. very severe cases, patients can over time. Bone-marrow trans- fusions. “We only get paid if The rise of gene therapies,
tients, including improvements The therapy aims to treat die before the age of 30. plants can also effectively cure we do what we said we’d do,” which promise a cure with just
in quality and length of life, beta thalassemia, a disease The disease is estimated to the disease, but many patients Mr. Leschly said. one treatment, has intensified
Bluebird Chief Executive Nick caused by a defective gene affect 300,000 people around are unable to find suitable do- Bluebird faces hurdles in the debate over how to pay for
Leschly said in an interview. that hinders production of he- the world and 1,000 in the U.S. nors. Bluebird estimates that implementing the payment ar- the drugs, because a few are
“Whether it’s just below or moglobin, which carries oxy- Today, treatment requires the current standard of care in rangement, Mr. Leschly said. fast approaching and could

considerably below [$2.1 mil- gen through the blood, and regular blood transfusions, the U.S. costs about $130,000 In the U.S., insurance is often cost $1 million or more.

Baltimore Picks Another Police Chief



mayor on Tuesday nominated
New Orleans’s top cop to run
the city’s troubled police de-
partment, a day after the with-
drawal of her first pick brought
fresh upheaval in one of the
nation’s most violent cities.
Mayor Catherine Pugh said
she believes New Orleans Po-
lice Superintendent Michael

Harrison can reduce violent

crime while also rebuilding
trust with Baltimore residents.
His nomination requires City
Council approval.
Ms. Pugh, a Democrat,
wasted little time shifting
gears after Fort Worth Police
Chief Joel Fitzgerald said on
Monday that he no longer New Orleans police chief Michael Harrison, left, during Mardi Gras in February 2018, with the city’s
wanted to be considered for then-mayor, Mitch Landrieu. Mr. Harrison was just nominated to be Baltimore’s police commissioner.
the Baltimore police commis-
sioner role, citing health is- collaboration and confidence.” think, bodes well for Balti- Hogan, a Republican, unveiled
sues involving his teenage son. In pivoting to the 49-year- more,” Ms. Pugh said Tuesday. a series of initiatives to com-
Mr. Harrison has spent 27 old Mr. Harrison, Ms. Pugh is Louisiana State University bat crime in Baltimore. The
years with the New Orleans betting he can replicate his re- criminologist Peter Scharf said measures include the creation
Police Department and became cord from New Orleans, where Mr. Harrison has helped trans- of an operations center where
chief in 2014. He informed crime has dropped in recent form the New Orleans depart- 200 law-enforcement officers
New Orleans Mayor LaToya years, as the police depart- ment from what was once a from federal, state and local
Cantrell he will step down as ment—like Baltimore’s—has “horror story” on civil-rights agencies will work to disrupt
chief effective Jan. 19. operated under a federally compliance and constitutional the criminal organizations
In a statement released by mandated overhaul. policing. that Mr. Hogan says fuel much
Ms. Pugh’s office, Mr. Harrison New Orleans last year had “Baltimore won, we lost,” of the city’s violence.
said, “My first priority will be 146 homicides, the fewest Dr. Scharf said, referring to Baltimore’s police depart-
to drive meaningful cultural since 1971, though homicides the appointment. But he ment has had a tumultuous
change within the department rose his first two full years as added: “If you can build trust time since 2015, when rioting
such that not only is there a superintendent, and the city’s in one city, does that mean erupted after the death of 25-
renewed sense of purpose and murder rate remains higher you can transfer it to another year-old Freddie Gray from in-
mission among those sworn to than in most U.S. cities. city?....Baltimore is not an juries he sustained in police
protect and serve, but that cit- “To be able to attract a po- easy city to be a police chief.” custody. Violent crime soared
izens’ trust is restored to a lice chief who is reducing vio- Ms. Pugh’s announcement in 2015 and has remained ele-
new level that enables true lence at its highest rate, I came as Maryland Gov. Larry vated.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A4 | Wednesday, January 9, 2019 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X **** THE WALL STREET JOURNAL.


Manafort Russian Lawyer Charged by U.S.


Filing Sheds The Russian lawyer who

met with Trump campaign of-
ficials at Trump Tower in 2016

New Details
has been charged with ob-
struction of justice stemming
from her role in a federal
money-laundering case, ac-
cording to an indictment un-
sealed Tuesday in Manhattan
BY ARUNA VISWANATHA wasn’t out to hide anything. federal court.
The attorneys also said the Manhattan federal prosecu-
Attorneys for Paul Manafort longtime political operative suf- tors allege the lawyer, Natalya
inadvertently disclosed on fers from depression and anxi- Veselnitskaya, attempted to


Tuesday that the former ety, adding that solitary con- thwart an investigation into a
Trump campaign chairman finement has “taken a toll on tax-fraud scheme involving
gave 2016 presidential polling his physical and mental health.” Russian officials, an influential
data to a Kiev associate U.S. Mr. Manafort was convicted Russian businessman and an
officials have linked to Russian of tax and bank fraud in his investment firm. Prosecutors
intelligence and may have dis- private business dealings by a say her efforts included work-
cussed a Ukraine peace plan Virginia federal jury last year, ing secretly with a Russian
with him. and agreed to plead guilty to prosecutor to draft a response
The disclosures surfaced in additional crimes as he was by the Russian government to
a filing made public Tuesday set to face a second trial in U.S. investigators.
in which the attorneys dis- Washington. The indictment unsealed
puted special counsel Robert Mr. Mueller’s lawyers are Tuesday is unrelated to the The charges against Natalya Veselnitskaya are unrelated to a meeting with Trump campaign officials.
Mueller’s allegation that their scheduled to tell the federal 2016 Trump Tower meeting,
client lied to investigators judge in Virginia this month but suggests Ms. Veselnitskaya Ms. Veselnitskaya repre- At the time, Ms. Veselnits- been arrested and is presumed
about his contacts with the what sentence they think Mr. had close ties to senior Rus- sented Prevezon in the matter, kaya wrote in a sworn declara- to be in Russia, which doesn’t
Kiev associate, Konstantin Kil- Manafort should serve. The sian government officials and which was settled in 2017 for tion under penalty of perjury have an extradition treaty
imnik, and about other mat- special counsel’s office is also at times sought to advance about $6 million before going that the Russian findings had with the U.S.
ters after reaching a plea scheduled to provide an up- Russia’s interests in her deal- to trial. Ms. Veselnitskaya also been independently drafted. The indictment offers fresh
agreement last year. date next week on the cooper- ings with U.S. officials. lobbied U.S. officials to end a She didn’t disclose her partici- details about the extent of Ms.
The legal team played down ation of a key witness against Reached for comment, Ms. sanctions law named for the pation in drafting the re- Veselnitskaya’s involvement
the significance of Mr. Mr. Manafort, longtime Veselnitskaya said she was on Russian whistleblower who sponse, prosecutors said. with the Russian government
Manafort’s alleged misstate- Manafort associate Richard vacation and hadn’t yet read helped uncover the Prevezon Angel Melendez, the special in the years before she met
ments, saying they were the Gates. the indictment. conspiracy and died in deten- agent-in-charge for the Fed- with top Trump campaign offi-
result of a faulty memory, fail- Mr. Mueller’s surprise as- In 2013, federal prosecutors tion in Moscow in 2009. eral Bureau of Investigation in cials, who have said she wasn’t
sertion in November that Mr. in Manhattan filed a complaint In the indictment unsealed New York, said Ms. Veselnits- formally working for the Rus-
Manafort had breached his seeking to recover millions of Tuesday, prosecutors alleged kaya “secretly schemed…to sian government at the time of
plea deal by lying to investiga- dollars in property, including that as part of her work in the provide false information to the Trump Tower meeting.
The ex-Trump aide’s

tors suggested the special New York real estate, alleging Prevezon case, Ms. Veselnits- U.S. law enforcement.” Ms. Veselnitskaya partici-

lawyers disputed Mr. counsel had come to view Mr. the property had been used to kaya secretly worked with a Ms. Veselnitskaya, a Rus- pated in a June 2016 meeting
Manafort as not a credible launder the proceeds of an senior Russian prosecutor to sian citizen and resident, was with top Trump advisers—in-
Mueller’s allegation help to the investigation. Mr. elaborate Russian tax-fraud draft a response by the Rus- charged with one count of ob- cluding Donald Trump Jr.—
that their client lied. Manafort’s Tuesday filing on scheme involving corrupt Rus- sian government to a Justice struction of justice, which car- that has come under scrutiny
played down the significance sian officials and a holding Department request for Rus- ries a maximum sentence of 10 by special counsel Robert
of the alleged lies, describing company, Prevezon Holdings. sian Treasury records in 2014. years in prison. She hasn’t Mueller.
them as innocent mistakes and
ing health, and his inability to the result of his inability to re-
us l,

review relevant documents be- member details of events that

fore meeting with prosecutors. occurred amid the hectic
al a
In the filing, Mr. Manafort’s schedule of the presidential
legal team said their client campaign.
gave the government access to In one example that was
ci on

his electronic devices, email originally redacted but was

accounts and passwords, met viewable in a version posted
with investigators a dozen on the court’s docket, Mr.
times, testified twice before a Manafort said he initially for-
grand jury, and tried to pro- got some details of his interac-
er rs

vide accurate information “to tions with Mr. Kilimnik, a

the best of his ability.” close associate in Ukraine. Mr.
Mr. Mueller accused Mr. Manafort’s team said he ac-
Manafort late last year of tell- knowledged those details—in-
m e

ing “multiple discernible lies” cluding discussing a Ukraine

about his contacts with the peace plan, meeting in Madrid,
Trump administration and Mr. and sharing 2016 polling data
m rp

Kilimnik as well as about with Mr. Kilimnik—after pros-

other matters, in the weeks af- ecutors refreshed his memory.
ter he agreed to plead guilty “The simple fact that Mr.
to multiple crimes and cooper- Manafort could not recall, or
ate in Mr. Mueller’s investiga- incorrectly recalled, specific
co Fo

tion into Russian interference events from his past dealings

in the 2016 election and any with Mr. Kilimnik—but often
links to the Trump campaign. (after being shown or told
In the new filing, Mr. about relevant documents or
Manafort’s attorneys blame other evidence) corrected him-
the alleged misstatements on self or clarified his re-

his lack of access to relevant sponses—does not support a

documents and evidence so he determination that he inten-
could refresh his memory, tionally lied,” Mr. Manafort’s
leaving him unable to prepare attorneys wrote.
for the meetings. A spokesman for Mr.
“There is no identifiable Manafort declined to comment
pattern to Mr. Manafort’s pur- on the filing. The attorneys
ported misrepresentations,” later filed a version with the

the team wrote, suggesting he redactions intact. A view Monday of the U.S.-Mexico border in Tijuana, Mexico. President Trump is seeking funds for a wall along the southern border.

Trump Lays unpaid leave.

As a candidate in 2016, Mr.
for nonviolent offenses such as
illegal entry or re-entry. ICE
ment to fund the wall. Such a
declaration would bring swift

Trump pledged that he would doesn’t categorize its arrests legal challenges, and it is un-

Out Case build a border wall that Mexico

would underwrite. Last year, he
rejected a deal that would have
by type of crime.
Mr. Trump also said a new
trade deal with Mexico, which
clear in that scenario where the
funds would come from.
Mr. Trump has said he

For a Wall given him $25 billion for a bor-

der wall and other security
measures because it didn’t give
hasn’t yet been ratified by Con-
gress, would pay for the bar-
rier—an assertion that is
wouldn’t sign any bill ending
the shutdown that doesn’t allo-
cate money for hundreds of
him other immigration restric- widely disputed. miles of a border wall.
Continued from Page One tions he wanted. The president also made an Earlier Tuesday evening,
discuss the issue Wednesday at In December, he told Demo- emotional pitch: “This is a hu- Senate Democrats prevented
the White House, after the cratic congressional leaders at manitarian crisis—a crisis of the chamber from moving to
president attends a lunch with a televised Oval Office meeting the heart and a crisis of the consider a package of bills
Senate Republicans on Capitol that he would bear responsibil- soul,” he said, sitting at the aimed at boosting security as-
Hill. The president said Tues- ity for any shutdown if Con- Resolute Desk. “This is the cy- sistance for Israel and other
day evening that he had invited gress didn’t fund the project. cle of human suffering that I Middle Eastern policy provi-
congressional leadership to the Then, to keep the government am determined to end.” Demo- sions. Republicans hold 53
White House to “get this done.” from shutting down, he sig- crats have said that Mr. seats in the Senate, where most
Mr. Trump’s address was part naled he would sign a short- Trump’s policies, including bills need 60 votes to clear pro-
of a ramped-up effort by the term spending bill that unani- cedural hurdles.
White House this week to sway mously passed the Senate, Some Democrats have said
public opinion in favor of a bor- before reversing himself and they would block all legislation
der wall, a core issue for Mr. saying he wanted any bill to in-
Democrats accused until the government is re-
Trump’s political base but one clude $5.7 billion in border-wall the president of opened, though Mr. Schumer
that is broadly unpopular. On funding that was part of a mea- hasn’t gone that far.
Thursday, the Republican presi- sure signed by the then-GOP-
stoking fear to rally The president’s apparent
dent is set to travel to the border controlled House. support for his cause. backing off on declaring an
to highlight the issue in person. In his address, the president emergency comes after law-
A Wall Street Journal/NBC offered a variety of justifica- makers in both parties indi-
News poll in September, ahead tions for the wall. cated they wouldn’t support
of midterm elections, showed He reiterated some of the one earlier this year that sepa- such a move. Rep. Mac Thorn-
29% of respondents said they darker themes from his cam- rated migrant children from berry of Texas, the top Republi-
would be more likely to vote for paign rallies, rattling off statis- their families, have worsened can on the House Armed Ser-
a congressional candidate calling tics of illegal drugs crossing the the border’s humanitarian sit- vices Committee, said Tuesday
for a wall, while 55% said they U.S.-Mexico border, sharing sto- uation. that he opposes using an emer-
would be less likely to do so. ries of human trafficking and of Earlier Tuesday, Senate gency declaration to build a
The White House sought to crimes allegedly committed by Democrats blocked the cham- wall using military funds.
use the address to change the illegal immigrants. ber from considering bipartisan The administration has
focus of the debate to border The president shied away foreign-policy legislation in a sought in recent days to blunt
security rather than the shut- from some statistics his aides bid to pressure Republicans to the impact of the shutdown. On
down, which in recent days has were criticized for mischarac- end the government shutdown, Monday, the Trump administra-
centered on the hardship facing terizing this week but exagger- which was in its 18th day. tion said the Internal Revenue
furloughed workers or those ated other numbers. He said In his address, Mr. Trump Service would pay tax re-
working without pay. Because Immigration and Customs En- didn’t declare a national emer- funds even though the agency
of the partial shutdown, about forcement officials had ar- gency over border security—a is closed, reversing a long-
420,000 employees deemed es- rested 266,000 illegal immi- move he publicly contemplated standing policy.
sential are working without grants with criminal records in in recent days—in which he —Natalie Andrews
pay, while 380,000 federal em- the past two years—a number would seek to divert funds and Joe Flint
ployees have been placed on that includes those arrested from elsewhere in the govern- contributed to this article.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A5


Democrats Unveil Gun Legislation

Job Openings Decline Confidence Index Falls
But Remain Near Peak For a Fourth Month
Bills would mandate
The number of unfilled jobs in Small-business owners’ confi-
the U.S. fell in November to the dence in the U.S. economy fell background checks for
lowest level since June, though for the fourth consecutive nearly all sales; Senate
openings still exceeded unem- month and their outlook on busi-
ployed Americans. ness conditions fell to the low- approval is unlikely
There were a seasonally ad- est level since late 2016, accord-
justed 6.89 million job openings ing to the National Federation of BY KRISTINA PETERSON
on the last business day of No- Independent Business.
vember, the Labor Department The conservative-leaning Democrats said their long-
said Tuesday. That was down small-business lobby said its op- pledged push to tighten the
from a revised 7.13 million at the timism index fell to 104.4 in De- country’s gun laws would take
end October. Openings remain cember from November’s 104.8 center stage early this year as
near a historical peak, but have reading. Economists had ex- lawmakers introduced legisla-
edged lower since touching a re- pected a December reading of tion Tuesday aimed at expand-
cord 7.29 million in August. 103, according to a Wall Street ing background checks to
In November, openings ex- Journal survey. nearly all gun sales.
ceeded the unemployed—people The index had set a high of House Speaker Nancy Pelosi
without a job but actively seeking 108.8 in August, breaking a July (D., Calif.), Rep. Mike Thomp-


work—by 870,000. Before March 1983 record. son (D., Calif.), who leads a
of this year, job openings had The NFIB survey is a monthly task force focused on reducing
never exceeded unemployed snapshot of small businesses in gun violence, and former Rep.
workers in more than 17 years of the U.S., which account for Gabby Giffords (D., Ariz.) offi-
monthly records. But the gap nar- about half of private-sector jobs. cially unveiled the legislation
rowed in November from more —Maria Armental expanding background checks
than a million in recent months. to more commercial sales and
Manufacturing, retail and real WASHINGTON private transfers, with the goal
estate were among the sectors of flagging people with crimi-
with fewer openings in Novem- Nuclear Waste Plan nal or mental-health histories
ber from October. Opposed by State that disqualify them from gun
—Eric Morath ownership.
The state of Washington said The legislation would man-
OHIO Tuesday it opposes a federal pro- date background checks on al-
posal to reclassify some radioac- most all gun sales, both com- Background checks would also be required for private sales online and at gun shows under the bill.
Woman, 114, Dies; tive waste on a site in the state mercial and private, with just
Believed Oldest in U.S. that contains the nation's largest narrow exemptions. That of major gun-safety legislation lights how high they plan to Gun-safety advocates coun-
supply because it fears much of would ensure that background pass either chamber” in recent prioritize reducing gun vio- tered that recent elections dis-
Lessie Brown, a 114-year-old the waste will be left in the checks would also be required years, said Robin Lloyd, direc- lence as the 2020 presidential proved that point.
Ohio woman who was believed ground. for private sales online and at tor of government affairs at primary heats up. In the 2018 Many GOP lawmakers have
to be the oldest person in the The state this week filed its gun shows. Currently, federal Giffords, the gun-violence pre- midterms, gun control became criticized bills expanding
U.S. died Tuesday, her grandson objections to a Trump adminis- laws require the checks only vention group founded by Ms. a litmus test for Democrats, a background checks as ineffec-
said. tration plan to reclassify millions for sales by federally licensed Giffords. “It’s certainly a shift from years past when tive in stopping criminals from
Ms. Brown, who had been liv- of gallons of waste stored in un- dealers, though some states harder, uphill climb in the many in tight races empha- obtaining firearms.

ing with one of her daughters, derground tanks at Hanford Nu- have added their own require- Senate,” Ms. Lloyd said, but a sized their support for gun “This legislation does noth-

died at the home in Cleveland clear Reservation. The objections ments. bipartisan vote in the House rights. ing to prevent gun violence,
Heights, according to Ronald were accompanied by a letter The measure, which is ex- would “put pressure on the The bill was introduced yet threatens the constitu-
Wilson. from Gov. Jay Inslee and Attor- pected to have some Republi- Senate and the White House to with five Democratic sponsors tional rights of law-abiding
Ms. Brown said in 2013 it ney General Bob Ferguson. on can support, is likely to pass think about what they’re doing and five Republican support- citizens,” said Rep. Richard
was God’s will that she had lived The U.S. Department of En- the House during the Demo- in response.” ers, including GOP Reps. Peter Hudson (R., N.C.), who has
so long. Others in her family at- ergy is seeking to reclassify a crats’ first 100 days in control, The bill’s introduction fell King of New York, Brian Fitz- previously introduced legisla-
tributed her long life to the fact large percentage of the waste but is expected to stall in the on the eighth anniversary of patrick of Pennsylvania, Brian tion enabling gun owners who
that she ate a sweet potato as lower-level waste. That would GOP-led Senate. the day Ms. Giffords was shot Mast of Florida, Fred Upton of legally carry concealed fire-
us l,

nearly every day until she was allow treatment and disposal op- More than 40 Democrats in the head outside a Safeway Michigan and Chris Smith of arms in one state to carry
well past 100. tions that wouldn’t guarantee introduced similar back- in Tucson, Ariz. New Jersey. them in others.
al a
Ms. Brown was born in 1904 long-term protections. ground-check legislation in the “Today is also a day of ac- “To me it doesn’t violate The National Rifle Associa-
in Georgia and grew up on a Hanford was established by Senate Tuesday. But after de- tion,” Mrs. Pelosi said as Dem- anyone’s rights and it puts in tion said it expects to oppose
farm near Stockbridge, outside the Manhattan Project in World cades of little action under ocrats prepared to formally in- very basic protections,” Mr. the House bill, noting that
ci on

Atlanta. She was one of 12 chil- War II to make plutonium, a key both Republicans and Demo- troduce the bill. “We say King said. But he said for there already is a background-
dren and moved to Cleveland ingredient in the atomic bomb crats, proponents of tighter enough is enough by finally many Republicans, critics of checks system in place.
with her family when she was 18. dropped on Nagasaki, Japan. The gun laws said passage in even bringing common-sense bipar- tighter gun laws are a stron- “So-called universal back-
She married about four years site, near Richland, Wash., went one chamber would mark po- tisan background-check legisla- ger political force. “Those who ground checks will never be
later and had three girls and on to produce most of the pluto- litical progress on an issue tion to the floor of the House.” are opposed to it are much universal because criminals do
er rs

two boys. Her husband, Robert nium for the nation's nuclear ar- that flares up frequently after Less than a week after more intense and much more not comply with the law,” NRA
Brown, died in 1991. senal. mass shootings. Democrats took control of the likely to vote on that as their spokeswoman Jennifer Baker
—Associated Press —Associated Press “We have not seen any kind House, the timing also high- main issue,” he said. said in a statement.
m e
m rp
co Fo

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A6 | Wednesday, January 9, 2019 * * THE WALL STREET JOURNAL.

U.S., China Narrow Trade Differences
Progress made on law on foreign investment
could serve as “the basis for
purchases of American changes to policies and prac-
goods and services; tices related to tech transfer.”
Beijing recently released a draft
structural issues loom of the law that promises to ad-
dress some complaints by for-
BY LINGLING WEI eign companies operating in
China about policies and prac-
BEIJING—The U.S. and tices that favor domestic firms.
China made progress on nar- But Michael Wessel, who
rowing their differences on consults with the administra-
trade issues, especially on pur- tion as a member of a panel
chases of U.S. goods and ser- created by Congress to review
vices and widening access to U.S.-China relations, said “spe-
China’s markets, though the cific commitments, coupled
two sides remain far from with success-based metrics
striking a deal. and automatic enforcement
In two days of talks in Bei- mechanisms have to be part of
jing that were to continue any agreement for it to be

Wednesday, U.S. and Chinese successful.”

midlevel negotiators addressed The negotiations in Beijing,
a number of nettlesome issues which started Monday, were
and tried to specify how to en- conducted as part of a tariff
sure China will carry out truce declared by Mr. Trump
pledges it made, according to and Chinese President Xi Jin-
people on both sides briefed on ping when the two leaders met
the discussions. The U.S. team in Argentina on Dec. 1.
wasn’t expected to leave Beijing If a full trade deal isn’t con-
until late Wednesday afternoon. cluded by March 1, the Trump
“Talks with China are going administration has said it
very well!” President Trump would raise the tariffs on $200
wrote in a tweet while the ne- billion of Chinese goods to 25%
gotiations were wrapping up from 10%.
for the day Tuesday after 9 U.S. negotiators, led by Deputy Trade Representative Jeffrey Gerrish, left, are trying to figure out how to hold China to its pledges. Eager to resolve the trade
p.m. Beijing time. A Chinese of- dispute amid a weakening
ficial with knowledge of the economy, China has been step-
talks described the conversa- Crop Ruling Bolsters ing to U.S. farmers new soy- China’s approval for years. The mitment by China to hasten re- ping up efforts to meet U.S.
tions as constructive. bean seeds modified to survive U.S. Department of Agriculture views for U.S. biotech crops. trade demands. It recently re-
The bilateral trade tensions The War on Weeds a powerful herbicide combina- in 2014 approved the seeds for China’s approval of Enlist moved punitive tariffs on U.S.-

have roiled global markets and tion. sale to U.S. farmers, but will help provide a new made cars and auto parts, re-

added a new, bitter dimension The seeds are designed for DowDuPont held off on widely weapon against hard-to-kill newed purchases of American
to the increasingly rancorous China’s approval of new ge- farmers struggling to stop selling the seeds pending ap- weeds like waterhemp and soybeans and began altering an
competition between the two netically engineered crops will weeds that have developed re- proval from China, the world’s palmer amaranth. industrial policy that has been
powers. Both sides believe they open a front in U.S. farmers’ on sistance to other sprays. Re- biggest buyer of soybeans. Such weeds have developed criticized by the Trump admin-
are making enough progress long-running war against hard- sistant weeds are spreading China also approved herbi- resistance to glyphosate, the istration as protectionist.
this week to plan for a next to-kill weeds. across the U.S. Farm Belt, cut- cide-resistant crops developed herbicide marketed by Bayer On Tuesday, China’s Ministry
round of talks among cabinet- The approval, outlined Tues- ting into farmers’ harvests and by Germany’s Bayer AG and under the Roundup of Agriculture and Rural Affairs
level officials, probably this day by Chinese offi- boosting their spending on Syngenta, a Swiss-based com- brand. Bayer last year acquired announced that it approved im-
us l,

month in Washington. cials, clears the way for crop- chemicals. pany owned by China National Monsanto, which developed ports of five new varieties of
Divisive issues remain be- seed and chemical maker DowDuPont’s soybeans, Chemical Corp. Tuesday’s ap- Roundup. genetically modified crops, pav-
al a
tween the two sides and within DowDuPont Inc. to begin sell- called Enlist, had awaited provals followed a 2017 com- —Jacob Bunge ing the way for U.S. agricultural
the Trump administration, the firms to sell more biotech seeds
people said. One big challenge to China.
ci on

is figuring out how to hold Bei- remains divided on how hard to China committing to buying on structural issues such as China starts carrying out its This list of approvals re-
jing to commitments to keep push for additional purchases $1.2 trillion U.S. goods and ser- Chinese subsidies to domestic pledges. leased Tuesday includes corn
Chinese firms and officials of mostly agricultural and en- vices, although he didn’t spec- companies and protection of in- Another option, according to and soybeans produced by
from pressuring U.S. partners ergy products as well as of U.S. ify a time frame for the pur- tellectual property. He is con- the people, would be to sus- DowDuPont Inc., BASF and
into transferring technology brokerage, banking and insur- chases. sidering a number of ways to pend some tariffs but reserve Syngenta AG. The move is ex-
er rs

against their will. The U.S. ance services. Promoting such Meanwhile, U.S. Trade Rep- make sure Beijing lives up to its the right to reimpose them if pected to help the U.S. farm in-
Trade Representative Office has trade would attempt to address resentative Robert Lighthizer, words on such subjects, accord- China fails to follow through on dustry clear a backlog of bio-
been asking industry groups Mr. Trump’s concerns about the who is heading the China trade ing to people familiar with the its promises. tech seeds that have awaited
and think tanks for suggestions bilateral trade imbalance that is talks and whose deputy led the matter. They include eliminat- Josh Kallmer, executive vice approval from China, in some
m e

on how such enforcement vastly in China’s favor. U.S. U.S. team in Beijing, has played ing the existing 10% tariffs on president at the Information cases for years.
should be carried out. Treasury Secretary Steven down the prospect of more pur- $200 billion of Chinese goods Technology Industry Council, —Bob Davis
The Trump administration Mnuchin has talked about chases. Instead he is focusing imposed last year only once said a new proposed Chinese contributed to this article.
m rp

Beijing Gains Leverage From Ties to Pyongyang

co Fo

BY JOSH CHIN Tuesday, which was also Mr. colorful, and we have many ma-
AND ANDREW JEONG Kim’s birthday, Chinese state- jor diplomatic engagements,”
run media ran comments by ex- Mr. Lu said. “There’s nothing
BEIJING—With denucleariza- perts extolling China’s role in particularly unusual for some
tion talks between Pyongyang finding a solution to the nuclear diplomatic engagements to co-
and Washington at a standstill, issue. incide.”
North Korean leader Kim Jong “Kim Jong Un’s willingness China has long been North
Un turned this week to his in 2018 to walk the path to de- Korea’s top economic partner
country’s longtime patron, nuclearization and meet with and de facto security guarantor.
China. the U.S. stems in large part Beijing sent hundreds of thou-
For months, North Korea has from his trust in China,” the sands of troops to aid North
demanded the U.S. ease sanc- Global Times quoted Wang Korea during the 1950-53 Ko-
tions, claiming to have disman- Sheng, a North Korea expert at rean War.

tled some of its nuclear facili- Jilin University in northeastern Security analysts said Mr.
ties. Washington has refused to China, as saying. Kim’s mission in Beijing was
budge, pledging to maintain Mr. Kim appeared to have ar- likely to seek Mr. Xi’s support

sanctions until Pyongyang’s rived in Beijing on Tuesday for his approach in the nuclear

complete denuclearization in morning by train. He traveled talks with the U.S., and to press
accordance with the agreement with his wife and senior offi- China to ease sanctions pres-
between President Trump and cials, and plans to stay in China sure.
Mr. Kim in Singapore last year. until Thursday, official North “Kim Jong Un is asking Xi to
Mr. Kim’s arrival in Beijing Korean and Chinese news agen- give him the leverage to say ‘no’
on Tuesday at Chinese Presi- cies reported. to U.S. demands to permit in-
dent Xi Jinping’s invitation of- Chinese Foreign Ministry spection of North Korea’s nu-
fered a reminder of the close spokesman Lu Kang said at a clear facilities,” said Nam Sung-
ties between North Korea and Kim Jong Un’s motorcade drove through Beijing on Tuesday as the U.S. and China negotiated on trade. regular press briefing on Tues- wook, a former South Korean
China, whose actions have been day that Mr. Kim’s visit aimed intelligence official. “That lever-
essential to the U.S.-led effort negotiators held their latest U.S. and its allies looked to Bei- remind the U.S. they can be to strengthen communication age is breathing room from
to enforce sanctions on Pyong- round of trade talks in Beijing— jing to help broker a solution. very helpful on North Korea,” between the two countries and sanctions.”
yang. That has given Mr. Xi le- represents a “coincidence of in- Now, Beijing could see North Mr. Tsang said. “It’s a message that China also encourages Choi Kang, vice president of
verage in China’s dealings with terest” between North Korea Korea as leverage in its trade from both Beijing and Pyong- communication between North research at the Asan Institute
Washington, with whom rela- and China, said Steve Tsang, di- dispute with the U.S., while yang to Washington.” Korea and the U.S. for Policy Studies, a private
tions have deteriorated as their rector of the SOAS China Insti- Pyongyang needs China’s assis- This year marks the 70th an- He denied any connection think tank in Seoul, said Mr.
trade dispute has unfolded. tute in London. Back in 2017, tance securing a second summit niversary of the establishment with U.S. trade talks. Kim could be hoping to secure a
The timing of the Xi-Kim when Pyongyang was testing with Mr. Trump. of diplomatic relations between “You would know that Chinese agreement to provide
meeting—as U.S. and Chinese long-range nuclear missiles, the “It’s in Beijing’s interest to China and North Korea. On China’s diplomacy is rich and the North with more energy aid.

World Bank Resignation to Test U.S.

BY JOSH ZUMBRUN the globe. In exchange, Euro- mpo. National governments Most countries have
peans have selected the leader are closely involved in in- strongly backed the World
The U.S. has always chosen of the International Monetary structing their directors how Bank’s work on projects re-
the president of the World Fund. to vote, and the Obama admin- lated to climate change; Presi-
Bank. This time it may not go But that consensus already istration waged an extensive dent Trump withdrew the U.S.
that way, with the unexpected was fraying when Mr. Kim was charm offensive to get Mr. Kim from the Paris climate accord.
resignation of its president, picked by President Obama to across the finish line. And most World Bank coun-
Jim Yong Kim, announced run the bank in 2012. Many nations felt that Mr. tries remain committed to mul-
Monday. The bank is owned by 189 Kim, who was born in South tilateral financial institutions,
Mr. Kim’s departure, taking member countries who elect a Korea but raised in the U.S., but the Trump administration
effect three years before his board of executive directors to was presented as an American has advanced an “America
term ends, could accelerate a govern the institution, with fait accompli, not the result of First” agenda and is critical of

divide among the world’s ma- larger countries receiving an open process. multilateral institutions.
jor economies over the leader- more votes. The U.S. has the The Treasury didn’t imme- Mr. Kim will join Global In-
ship at the world’s largest de- bank’s largest voting stake at diately respond to a request frastructure Partners, a New
velopment-finance institution. about 16%. for comment about whether it York-based fund manager,
Since the World Bank’s cre- In 2012, for the first time in would prioritize having an where he will be a partner and
ation over 70 years ago the World Bank history, two chal- American as the next leader. vice chairman. He will depart
U.S. has picked its president, lengers to Mr. Kim were also A range of issues could the bank Feb. 1, and face a one-
using the appointment as a ve- considered: Nigerian finance make it difficult for the rest of year period before he can work
hicle to advance American minister Ngozi Okonjo-Iweala the world to support a candi- with the institution on infra-
economic interests, power and and former Colombian finance date picked by the Trump ad- structure projects, according to World Bank President Jim Yong Kim is leaving to work for a New
development priorities around minister Jose Antonio Oca- ministration. a World Bank official. York-based investment fund manager, Global Infrastructure Partners.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. * * * * Wednesday, January 9, 2019 | A7


Australia Weighs EU Widens Iran Sanctions


BRUSSELS—The European
BY ROB TAYLOR fice of the United Nations High Union imposed its first sanc-
AND JAMES HOOKWAY Commissioner for Refugees for tions against Iran since the
Ms. Alqunun’s case to be as- nuclear accord was imple-
Australia’s government sessed expeditiously, despite mented three years ago, as Eu-
promised to consider any ap- having canceled her original ropean diplomats warned their
plication for asylum from the tourist visa in light of her Iranian counterparts that the
young Saudi woman who bar- claim for asylum. bloc wouldn’t tolerate further
ricaded herself in a transit ho- “Whether someone holds a alleged Iranian attacks and as-
tel at Bangkok’s international visitor visa does not have a sassinations in Europe.
airport and said her family bearing on this process,” the Tuesday’s sanctions, which
would kill her if she returned spokesman said. Any applica- add two Iranian individuals
home. tion by Ms. Alqunun for a hu- and a unit of the Iranian intel-
Rahaf Mohammed Alqunun, manitarian visa would be care- ligence services to the bloc’s
18 years old, held a tourist fully considered by Australia terror list, follow alleged plots
visa for Australia when she once the UNHCR process has against Iranian opposition fig-
slipped away from her family concluded, the spokesman ures in Denmark and France.
during a visit to Kuwait and said. The U.N. agency has said The targets’ assets will be fro-
boarded a plane to Bangkok it could take days to assess zen and other restrictions put
over the weekend. On her ar- Ms. Alqunun’s claim. She is in place.

rival Saturday, though, she now in Bangkok staying under The move comes as the EU
said Saudi officials were wait- the protection of UNHCR. Her faces conflicting pressures
ing for her, where they seized family couldn’t be reached to over ties to Iran, with the bloc
her passport and escorted her comment. seeking to salvage the nuclear
to the airport’s transit hotel. The interest in Ms. deal while confronting hostile
Thai authorities said she Alqunun’s case shows how so- Iranian behavior in its region
would be deported. cial media has the power to and beyond.
But with a smartphone at draw attention to human dra- Some European officials
her side, Ms. Alqunun began mas that might otherwise back U.S. calls for a tougher
posting about her predicament have gone unnoticed. response to Iran’s ballistic Dutch Foreign Minister Blok accuses Tehran of killing Iranian opposition figures in the Netherlands.
During the standoff at missile tests and its role in the
Bangkok’s Suvarnabhumi Air- conflicts in Syria and Yemen, diplomats told their Iranian Iranian intelligence unit and and Mr. Blok said in his letter
Rahaf port, Ms. Alqunun kept up a but the bloc is split on that. counterparts that unless they the two individuals domesti- that “Iran will be held to ac-
Mohammed steady series of tweets. At “Very encouraging that EU tackle concerns about Iranian cally. One of the two people, count” over “its ballistic-mis-
Alqunun, 18, times she posted videos of has just agreed on new tar- violence in Europe and coop- Assadollah Assadi, was accred- sile program and the country’s
says her family herself talking to the camera. geted sanctions against Iran in erate fully with criminal ited as a diplomat in the Ira- role in the region.”
would kill her if In one she loudly said she was response to hostile activities probes into the cases, “further nian Embassy in Vienna. Mr. The bloc is divided, how-
she is forced to claiming asylum. Another and plots,” Danish Prime Min- sanctions cannot be ruled Assadi is currently under ar- ever, on whether to apply fur-
return home. showed her shoving a desk in ister Lars Lokke Rasmussen out.” rest in Belgium. ther pressure and European
front of the door of her room said on Twitter. “EU stands Iran has denied any involve- The two individuals the EU officials stress that they con-

at the transit hotel to prevent united—such actions are unac- ment in European attacks. For- targeted on Tuesday were Mr. tinue to support the nuclear

on Twitter and demanded asy- anyone getting in to force her ceptable and must have conse- eign Minister Javad Zarif on Assadi and a senior official in deal and will seek to uphold it.
lum, describing how she had on a flight back to Kuwait. quences.” Tuesday accused Europe of Iran’s intelligence ministry, France, Germany and Britain
renounced Islam and claiming She also used the platform On Tuesday, following the harboring terrorist groups Saeid Hashemi Moghadam, are promising a new mecha-
that her family would kill her to talk directly with journal- on sanctions decision, Dutch, who have launched attacks on diplomats said. nism to help maintain eco-
if she was forced to return. ists. In one exchange with The British, French, German, Dan- Iran, picking out the Nether- U.S. Secretary of State Mike nomic ties with Iran despite
By the time Thai police re- Wall Street Journal, she de- ish and Belgian diplomats met lands, Denmark and France. Pompeo has cited what he the renewed U.S. sanctions
lented and allowed her to scribed an abusive environ- in Tehran with Iranian officials “Accusing Iran won’t ab- called Iranian plots in Europe that followed President
speak with United Nations of- ment in which she said her to convey their concerns, solve Europe of responsibility as a key reason for the bloc to Trump’s decision to withdraw
us l,

ficials, she had gathered over family once locked her in a Dutch Foreign Minister Stef for harboring terrorists,” he take a tougher approach to the from the deal in May.
90,000 followers on Twitter room for six months for cut- Blok said. said on Twitter. country, including adopting Iranian officials have voiced
al a
and her plight had been fea- ting her hair. Ms. Alqunun also Mr. Blok blamed Iran for Last summer, French au- broad new sanctions over its growing frustration with Eu-
tured around the world, cast- said her cousin had threatened the assassinations of opposi- thorities said Iran was behind missile and regional actions. rope’s slow progress on the
ing a fresh light on the dis- to kill her after she declared tion figures in the Netherlands a failed bomb plot in June on EU foreign ministers this mechanism.
ci on

crimination women face in she was an atheist, which is a in 2015 and 2017, the first a leading opposition group in month are expected to issue a Mr. Zarif on Tuesday said
Saudi Arabia’s conservative Is- capital offense in Saudi Ara- Dutch official to publicly do Paris. In late October, Danish statement on the bloc’s ties his government would con-
lamic culture. bia. so. He also confirmed for the authorities said they had pre- with Iran and are likely to tinue working with Europeans
A spokesman for Australia’s The outcome of Ms. first time that the Dutch deci- vented an assassination plot warn of their continued con- on the plan, but is looking to
Department of Home Affairs Alqunun’s case is far from cer- sion to expel two Iranian dip- by Iran against a top official in cerns over some Iranian activ- improve economic ties with
er rs

on Tuesday said the depart- tain. On Tuesday, she used her lomats last year was con- an Iranian separatist organiza- ities. Britain and France have other countries like China,
ment had asked the Thai gov- Twitter account to request nected to the cases. tion. backed U.S. calls for pressure Russia and India, Iranian me-
ernment and the Bangkok of- asylum from Canada too. Mr. Blok said the European France has blacklisted the on Iran over its missile tests dia reported.
m e

m rp

Spurns U.S.
co Fo


in December to quickly end the

U.S.’s four-year military cam-

paign against Islamic State in
The Trump administration
has been working to craft a Because exploration can’t wait.
new policy since mid-Decem-
ber, when Mr. Trump surprised
his national-security team by
agreeing in a call with Mr. Er-
Drexel’s unique design combines academic

dogan to rapidly pull all U.S. Turkish President Recep Tayyip Erdogan on Tuesday rebuffed rigor with a transformative cooperative
forces out of Syria and hand national security adviser John Bolton’s call to protect the Kurds.
over the fight against Islamic education program, positioning students
State to Turkey. and trained tens of thousands Garrett Marquis, a spokes- alongside expert faculty and professionals

The policy shift triggered of Kurdish fighters in Syria as man for the White House Na-
widespread opposition from they captured Islamic State’s de tional Security Council, cast the tackling today’s most complex issues. By
lawmakers in Washington, West- facto capital and most of its meeting between Messrs. Bolton
ern allies in the fight against Is- self-declared caliphate. and Kalin as a “productive dis- constantly learning and evolving as the world
lamic State, and Kurdish fighters Mr. Erdogan warned on cussion” that “identified further moves forward, Drexel produces visionary
working alongside U.S. forces to Tuesday that Turkey, which has issues for dialogue.”
crush the militant group’s re- been massing troops along the Mr. Erdogan said that, in his leaders equipped to anticipate and
maining Syrian sanctuaries. border, stood ready to launch view, the agreement he reached
Critics said the move would an offensive into northern Syria with Mr. Trump, under which address the challenges of the future.
embolden Russia and Iran, two to teach a “necessary lesson” to Turkey will replace U.S. troops This is experiential education.
countries looking to challenge the Kurdish fighters, known by in the battle against Islamic
the U.S.’s influence across the the acronym YPG. State in Syria, still holds.
Middle East. The White House didn’t re-
Defense Secretary Jim Mattis spond Tuesday to questions
By embracing change,
and the head of the U.S. cam-
Ankara has opposed about whether Mr. Trump holds Drexel is preparing to change everything.
paign against Islamic State, Brett a different view of the pullout
McGurk, resigned after Mr. the U.S. partnership than Mr. Bolton. However, Mr.
Trump announced the exit plan. Trump at a cabinet meeting last
Mr. Trump left it to Mr. Bolton to
with fighters in Syria week referred to the Kurds as
oversee the U.S. withdrawal. it sees as terrorists. partners of the U.S. in the fight
Initial plans for a rapid with- against Islamic State.
drawal were slowed amid stiff Turkey has also asked the
resistance from the Pentagon, U.S. for considerable military
Congress and U.S. allies. But one official in Tuesday’s and logistical support that
The Trump administration meetings said Ibrahim Kalin, Mr. would allow Turkish forces to
began imposing new conditions Erdogan’s spokesman, had as- push to quash several thousand
for Turkey to meet before the sured Mr. Bolton that Turkey remaining Islamic State mili-
U.S. agrees to withdraw, includ- wouldn’t launch a military opera- tants—a request that has drawn
ing a demand that Ankara tion into Syria until U.S. forces skepticism from Washington.
pledge not to “slaughter” Kurd- were out of harm’s way. While Mr. Bolton flew back to
ish fighters armed by the U.S., Mr. Kalin didn’t offer Mr. Washington, Gen. Joe Dunford,
Secretary of State Mike Bolton any assurances that Tur- chairman of the Joint Chiefs of
Pompeo said last week. key would avoid a fight with Staff, and James Jeffrey, head
Administration officials the Kurds in Syria, and Mr. Er- of the campaign against Islamic
thought Mr. Erdogan agreed to dogan rebuffed a request made State, continued their talks with
do just that in a Dec. 23 call with by the U.S. Embassy to meet key players.
Mr. Trump. But the Turkish Mr. Trump’s national-security In Syria, Kurdish fighters ex-
leader made it clear on Tuesday adviser when it became clear pressed fear the U.S. would
that he rejects that demand in a the two sides hadn’t come to walk away without assuring
speech in which he personally any understanding. that they would be protected.
blasted Mr. Bolton for publicly Asked whether Turkey could “The topic of protection can’t
raising the demand on the eve of launch an offensive against the be left to promises from Tur-
his visit to Ankara. Kurdish fighters without Wash- key,” said Abdulkarim Omar, a
Mr. Erdogan has steadfastly ington’s green light, Mr. Kalin political leader affiliated with
opposed the U.S.’s partnership said: “Turkey may coordinate the U.S.-backed and Kurdish-led
with Kurdish fighters in Syria. its actions with everyone, but Syrian Democratic Forces.
Over persistent Turkish objec- will not take permission from —Raja Abdulrahim in Beirut
tions, the U.S. military armed anyone.” contributed to this article.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A8 | Wednesday, January 9, 2019 * **** THE WALL STREET JOURNAL.


German Economy Signals Unease Student

Admits to
Fresh indications of German officials have
Hitting the Brakes
weakness raise
concerns for the
Germany’s auto industry engine
begins to stall.
played down signs of eco-
nomic softness, attributing
them to temporary factors
Huge Theft
broader eurozone Passenger car industry

6 million vehicles
that would soon fade. The
economy ministry said Tues-
day that the drop in industrial
Of Data
BY TOM FAIRLESS production partly reflected ex-
AND PAUL HANNON 5 tra vacation days, as well as BY RUTH BENDER
bottlenecks in the key auto
FRANKFURT—Fresh signs sector amid delays in passing BERLIN—A German high-
of a weakening German econ- 3 model types for compliance school student was behind a
omy are raising fears that last with new emissions standards. massive data theft that af-
year’s slowdown could spill Volkswagen AG, Europe’s fected nearly 1,000 politicians

into 2019, deepening the chal- 1 biggest auto maker, experi- and other personalities and
lenges facing policy makers in enced sharp sales declines in revived concerns over cyber-
Europe and the U.S. November in Europe, China security in a country with one
Industrial production in Eu- 2014 ’15 ’16 ’17 ’18 and the U.S., but company ex- of the world’s toughest pri-
rope’s largest economy Note: Includes cars, light trucks and ecutives remain optimistic vacy laws.
sport-utility vehicles. 2018 data is
dropped in November, accord- preliminary. that was a temporary detour The 20-year-old confessed to
ing to data released Tuesday, Source: German Association of the from continued growth. having stolen personal data and
the latest reflection of a con- Volkswagen, Europe’s biggest auto maker, experienced sharp Automotive Industry Low water levels on the gathered other publicly avail-
fluence of headwinds facing sales declines in November in Europe, China and the U.S. THE WALL STREET JOURNAL. River Rhine have also been a able information on federal and
the global economy, including problem for some German local politicians, journalists, co-
trade tensions and weakening have weighed on global mar- is sliding toward a period of from the previous month, the chemical companies, including medians and musicians, which
demand from China. kets, despite strength in the lower growth or a recession. country’s statistics agency BASF SE. But in a profit warn- he disseminated via several
The data further darken the U.S. economy. The disconnect The ECB has long argued said Tuesday. Economists ing issued last month, that Twitter accounts, investigators
outlook for the German econ- presents the Federal Reserve that its four-year program of polled by The Wall Street company also highlighted a said Tuesday. He appears to
omy, which has struggled to with a tricky choice: focus bond purchases, known as Journal had expected a 0.3% slowdown in demand from have acted alone, they added. It
rebound from a contraction in more on the domestic econ- quantitative easing, was the gain. It was the second con- Chinese customers. isn’t unusual in Germany for
the third quarter of last year. omy and keep nudging interest primary driver of the euro- secutive monthly fall in Ger- With economic growth hav- those who have turned 20 to
The possibility of a recession rates higher to combat infla- zone’s economic recovery. man industrial output and ing hit a decade high in 2017 still be in high school.
in the continent’s powerhouse tionary concerns, or pay Having ended those purchases comes after data Monday as exports surged, eurozone The man, who lives with his
bodes ill for the wider euro- greater attention to stresses in December, that boast may showed a drop in new manu- manufacturers started 2018 in parents in the western German
zone, which has been hit re- abroad and in markets, and return to haunt policy makers. facturing orders. a more upbeat mood than at state of Hesse, targeted people
cently by violent protests in hold rates steady—or even “The impact of QE is some- A technical recession con- any time since they were first whose public comments had
France and a tense battle over nudge them lower. thing we all underestimate,” sists of two consecutive quar- surveyed in 1985. They ended angered him, said Georg Unge-
Italy’s government debt. Europe’s slowdown is a said David Folkerts-Landau, ters of declining economic the year in a quite different fuk, a spokesman for the
“Today’s industrial produc- similar headache for the Euro- chief economist at Deutsche output. Germany’s economy mood, with the European Frankfurt prosecutor’s office
tion data has clearly increased pean Central Bank, which is Bank. “My instinct is to say we shrank in the third quarter of Commission’s economic senti- unit that fights cyber crime.
the risk of a technical reces- trying to wean the 19-nation are in a much more precarious 2018 for the first time since ment indicator—an aggregate The hacker was detained Sun-
sion in Germany in the second eurozone economy off years of position in Europe than we 2015, dented by weaker ex- measure of consumer and day but released again a day

half of 2018,” said Carsten monetary stimulus and ease thought.” ports and a decline in auto business confidence—falling to later as he presented no flight

Brzeski, an economist at ING toward higher interest rates. Production in Germany’s production. Italy’s economy its lowest point since January risk, Mr. Ungefuk said.
in Frankfurt. Officials must judge whether a key industrial sector, adjusted also contracted in the third 2017. The capture of the suspect
In recent months, signs of a recent run of disappointing for inflation and seasonal quarter, and is also at risk of —William Boston puts to rest concerns that a for-
slowdown in Europe and China data signals that the economy on swings, fell 1.9% in November ending the year in recession. contributed to this article. eign intelligence service could
have been behind the data theft
after a string of cyberattacks in
WORLD WATCH recent years that authorities
blamed at times on Russian or
us l,

Chinese cyber thieves.

The young man, who has
al a
not been publicly named, ac-
quired the technical know-how
needed for hacking on his
ci on

own, investigators said.

German Interior Minister
Horst Seehofer said the web
was never 100% safe.
The latest data leak—which
er rs

authorities described as re-

markable because it targeted
mostly people in the public
sphere—prompted Mr. See-
m e

hofer to announce new cyber-

security legislation to
strengthen the protection of
m rp

citizens, companies and the

state from such hacks.
The law, which the ministry

wants to draft in the first half

of the year, will include an
co Fo

early-warning system to pre-

vent the spread of stolen data
online and a labeling system
to inform consumers of the
safety of products used to go
online or store data, Mr. See-
hofer told reporters.
Most of the data posted on-
line in this case were basic
contact details. But in 50 to 60
incidents more sensitive
data—including bank-account
details—were published on-
OVERBOARD: The Vietnamese registered fuel tanker Aulac Fortune caught fire while being refueled off the coast of Hong Kong on Tuesday, triggering an explosion felt line, authorities said.

miles away, according to maritime officials. Most of the 25 crew fell into the sea or jumped, one official said. At least one sailor was killed and two were missing. Data from Chancellor An-
gela Merkel and President
ECONOMY had previously expected most evidence that the global econ- CANADA estimate of C$1.165 billion. Frank-Walter Steinmeier ap-
major economies to slow, but omy is slowing and that the The November report came a peared online, but no sensitive
World Bank Expects Trade Deficit

now expects that slowdown to U.S. will be pulled lower by the day before the next interest-rate information was released and
Cooling Global Growth be somewhat more significant. international downdraft. The Widened in November decision. Many economists ex- government networks weren’t
The bank now forecasts global American economy had a ro- pect the central bank will hold its affected, authorities said.
The World Bank cut its fore- growth of 2.9% in 2019, and bust 2018—indeed, the bank Canada’s trade deficit more key rate at 1.75%, as it gauges The only political party in
cast for global growth in 2019 growth of 3% in 2018; in June, marked up its estimate of U.S. than doubled in November on a the impacts of lower global oil the Bundestag, the lower
and 2020, citing worsening fac- it said it expected the global growth last year to 2.9% from a sharp drop in crude oil exports, prices and financial market vola- house of the German parlia-
tors, from trade tensions to fi- economy would expand by 3.1% June estimate of 2.7%. as low oil prices weighed on the tility on the Canadian economy. ment, whose members weren’t
nancial-market instability to last year. The bank expects the U.S. to energy sector. Canada’s statistics agency has hacked was the anti-immi-
currency challenges in a num- “When you think about the slow to 2.5% in 2019. By 2020, Canada posted a November warned that next month’s trade grant Alternative for Germany,
ber of emerging markets. engines of the global economy, growth will be 1.7%, the bank deficit of 2.06 billion Canadian report could be affected by the authorities have said. But in-
The bank lowered its semi- they’re all going to lose mo- estimates, a 0.3 percentage dollars (US$1.55 billion), Statistics partial government shutdown in vestigators said they found no
annual estimate of the global mentum,” said Ayhan Kose, the point cut from its June fore- Canada said. Expectations were the U.S. Under a longstanding material in the man’s home to
growth rate by 0.1 percentage bank economist who leads the cast. The bank sees China’s for a C$2.15 billion deficit, the agreement between the U.S. and suggest political motivation.
point in both years, with cuts forecasts. The World Bank sees economy slowing to 6.2% Royal Bank of Canada said. Canada, each country uses the The hacker is unlikely to be
coming to the outlook for both growth slowing in the U.S., the growth in 2019 and 2020, The October data were re- other’s import data to help pro- sentenced to much, if any,
advanced economies and eurozone and China. down from 6.5% last year. vised to show a deficit of C$851 duce its export statistics. prison time as adults under 21
emerging markets. The bank The bank’s forecasts add to —Josh Zumbrun million, compared with a previous —Kim Mackrael are tried in juvenile courts.


tion and Sears would have be- his hedge fund, ESL Invest- lawsuits related to their over- bankruptcy lawyer Ray Schrock the auction.
Chairman gun to liquidate.
The company’s board and its
ments, more than others.
To address some of those
sight of the retailer before its
bankruptcy filing.
said in U.S. Bankruptcy Court
in White Plains, N.Y., on Tues-
The unsecured creditors
have been at odds with ESL
creditors prefer a plan that concerns, ESL has increased its A spokesman for ESL said day. since early in the bankruptcy
Will Bid would close all of the remaining
Sears and sister Kmart stores
$4.4 billion offer by several
hundred million dollars in cash
the hedge fund is working to
make promised changes to its
Sears filed for bankruptcy
protection in October with
process. Abid Qureshi, an attor-
ney representing the commit-

For Sears and raise as much cash as possi-

ble by selling off whatever Ken-
more appliances, DieHard bat-
and assumed liabilities, one
person familiar with the matter
said. The additional funding is
bid so they can be evaluated
ahead of next week’s auction.
“Our proposal provides sub-
plans to close more than 140
stores and attempt to restruc-
ture its heavy debt. Mr.
tee of unsecured creditors, said
in an earlier court hearing the
committee believes there are
teries, Wrangler jeans and other being financed by the same stantially more value to stake- Lampert stepped down as claims against the hedge fund
Continued from Page One inventory is left on the shelves. banks backing ESL’s original holders than would be the case Sears chief executive at the stemming from prior transac-
wind down the business, but The proceeds would pay off bid, this person said. in liquidation and is the only time, but remains the com- tions, a concern he raised again
the hedge fund manager- some of the more than $5 bil- ESL has also promised to option to save an iconic Ameri- pany’s chairman, largest share- on Tuesday.
turned-CEO wants to keep 425 lion in Sears debt. provide a $120 million deposit can retailer and up to 50,000 holder and creditor. ESL, in court papers and
stores open. Mr. Lampert, who oversaw to participate in the auction. jobs,” the spokesman said. The The Sears board also has statements, has denied any
On Tuesday, after Mr. Sears’s collapse into bank- Whether ESL is named the win- auction is set for Monday at balked at the so-called credit wrongdoing that may have led
Lampert promised to revise his ruptcy, has offered an alterna- ner of the auction next week or the New York offices of Sears’s bid that was part of Mr. Sears down the path of bank-
proposal, a tive bid that would allow him not, the deposit wouldn’t be re- bankruptcy lawyers, where Lampert’s offer. A portion— ruptcy protection.
WSJ PRO Sears lawyer to keep control of the business turned in full to the hedge Abacus Advisors, the retailer’s about $1.3 billion—of the $4.4 Sears, which merged with ri-
BANKRUPTCY told the judge and most of its remaining fund, the Sears lawyer said handpicked liquidator, will face billion offer is in the form of val Kmart in 2005, has strug-
overseeing the stores open. He has made his Tuesday. Instead, the portion off with Mr. Lampert, who has forgiveness of a number of gled through seven years of
bankruptcy case that the com- pitch as a way to save about will be held by the estate. made a $4.4 billion bid. real-estate-backed loans that losses and hundreds of store
pany would move forward with 50,000 jobs. But the board and Sears’s independent direc- “We are moving forward, ESL made to Sears. closures under Mr. Lampert.
the planned auction. If Sears creditors have objected saying tors rejected Mr. Lampert’s and looking forward to an auc- The question of ESL’s ability Read more from WSJ Pro
had rejected Mr. Lampert’s bid, the plan provided little cash initial offer because it released tion on Jan. 14, and very hope- to forgive debt in exchange for Bankruptcy at
there would have been no auc- and benefited Mr. Lampert and him and others from future ful for a great result,” Sears ownership will be decided at bankruptcy
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A9


Greece Sees Pot of Gold in Cannabis

Is Halted ATHENS—Christa Pappa

quit her job as a research bi-
ologist last year to concen-
By Drone trate on her real career ambi-
tion: selling marijuana.
BY ROBERT WALL When Ms. Pappa and her
AND STU WOO husband opened a shop in
Athens in 2002, offering
LONDON—Heathrow Air- clothes and other products
port, one of the world’s busi- made of hemp, they soon
est aviation hubs, halted de- found themselves facing crimi-
parting flights late Tuesday nal charges for drug traffick-
after a nearby drone sighting, ing. They were acquitted after
the second closing of a London fighting the charges in Greek
airport due to drones in less courts for nearly a decade.
than three weeks. “We wanted to keep the
The airport said it had re- business open at any cost,”
sponded to a drone sighting Ms. Pappa said. “It nearly de-
alongside London’s Metropoli- stroyed us financially and psy-
tan police. Police said they had chologically, but we saw what


received reports of a drone in was coming and wanted to be
the vicinity of the airport at part of it.”
just after 5 p.m. local time. What is coming, in her view
A little more than an hour and that of more entrepreneurs
later, a representative for the and investors, is a boom in the
airport said flights had re- growing and selling of legal can-
sumed. Arriving flights nabis in Europe. Greece could
weren’t halted, but Eurocon- be one of the biggest winners.
trol, Europe’s air-traffic man- Greece, which is slowly
agement agency, said incoming emerging from a decadelong
flights were landing at a re- financial crisis, just issued the
duced rate. first two licenses to private
Local police said they were companies to grow cannabis Christa Pappa checks the quality of industrial cannabis at the shop she and her husband, Argyris Mountzouris, operate in Athens.
engaged in a manhunt around and is set to grant 12 more
Heathrow to find the opera- this month. juana restrictions in three companies, mainly from Can- than 35 countries and it’s very couple’s friends and relatives
tors of the drone that was Greece legalized cannabis for more states during the mid- ada and Israel, are looking to clear to me that there will be turned their backs on them,
seen by officers. medical use in 2017 and lifted a term elections. invest between €10 million and more than 60 in the next they said. Her father-in-law
The halt comes less than ban on growing and producing Southern European coun- €100 million each in the sector. 24-36 months,” he said. sold his house to help them.
three weeks after several it in 2018. Medical-cannabis use tries with plentiful sunshine Canadian company Tilray, Cyprus is also planning to Today, however, Greece is
drone sightings at nearby Gat- is currently allowed in nine and mild winters, such as which in 2016 became the first grant its first licenses soon. in dire need of investment to

wick Airport closed its runway countries in Europe, but more Greece, Portugal and Cyprus, company to export cannabis “Perceptions are changing as help it recover from its deep

off-and-on for three days, dis- are considering following suit. make an ideal place for can- products to Europe from the sector booms,” said Andreas economic woes, and criticism
rupting tens of thousands of “It’s the European Califor- nabis cultivation and are set Gennimatas, partner in two of the new wave of cannabis
passengers during the busy nia,” said James Ickes, manag- to become the center of the le- companies about to start doing investment has been muted.
ing partner for Devcann, an
holiday travel period. gal cannabis industry in Eu-
Southern Europe is set business in Greece. “It’s like the “The financial recession has
While short, the stoppage
triggered a forceful response
Ohio-based company that is
investing €12 million ($13.7
on rope. Affordable labor and
easy access to other European to become the center
internet in the late ’90s.”
Much of Greek society is tra-
made the region move in this
direction,” said Argyris
from the government. Chris
Grayling, the U.K.’s transport
million) to cultivate, process
and export medical and in-
countries also make the loca-
tion ideal. Investors and busi-
of the Continent’s ditionally conservative and sus-
picious of cannabis. Ms. Pappa
Mountzouris, Ms. Pappa’s hus-
band. “We are a society in cri-
us l,

secretary, said the government dustrial cannabis in Greece. nesses in the sector estimate legal cannabis sector. and her husband said they met sis looking for new investment
was in contact with Heathrow Investment in the cannabis that Europe’s medical-canna- with widespread disapproval models both for our agricul-
al a
authorities and was coordinat- industry has taken off in North bis market could exceed €50 for many years. Soon after their ture and for our industries—
ing with the country’s defense America thanks to the recent billion in annual sales. shop opened, police raided it and this plant can offer both.”
minister. legalization of cannabis in The first licenses will facili- North America, started grow- and seized evidence, including Odysseas, Ms. Pappa’s and
ci on

The boom in the sale of Canada, with startups prolifer- tate an initial €185 million in ing its plants in central Portu- a pair of boxer shorts that were Mr. Mountzouris’s 18-year-old
small drones has led to in- ating and shares of marijuana investment, which could reach gal last year. for sale, to test for illegal cat, is one of Greece’s first pa-
creasing incidents of such un- companies soaring. The boom €1 billion in the next three “We see increasing global drugs. Even though the clothes tients taking medical canna-
manned aircraft coming close is expected to spread to the years, Greek government offi- demand,” Tilray CEO Brendan were made of industrial hemp bis. He suffers from arthritis
to airports and commercial U.S. after the passage of the cials said. Nikos Karanikas, Kennedy said. “When I joined rather than marijuana contain- and other age-related pains. A
er rs

airliners. Drones have been 2018 Farm Bill in December who is coordinating the gov- the sector in 2010, medical ing the psychoactive chemical daily dose of cannabis oil in his
spotted near flights at New that legalizes industrial hemp, ernment’s cannabis-industry cannabis was legal in 15 coun- THC, she was charged with food makes him more energetic
York LaGuardia and Dubai. and the loosening of mari- plan, said at least 10 more tries. Today there are more drug trafficking. Many of the and playful, the couple said.
m e
m rp


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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A10 | Wednesday, January 9, 2019 * *** THE WALL STREET JOURNAL.


cappuccino with gold flakes on their teeth,” he said. In her two years living in
Eating it,” said Ms. Doong, a former
flight attendant who now lives
Edible gold may draw head-
lines, but it generally repels
Dubai, Rady Gianella said she
ate her way through the city’s
in Virginia. “Not worth it.” foodies. Samantha Wood, gold-laden menus. There was
Gold Can Adding gold to food and
drinks isn’t about flavor. As
founder of, an in-
dependent restaurant blog in
the red velvet cake with gold
frosting at Dubai Mall, a gold-

Be Messy long as it is relatively pure, 23

or 24 karats, gold has no taste
and is nutritionally neutral, res-
Dubai, recalled trying a $125
gold-flecked pizza five years
ago that also featured lobster,
embossed éclair from Mall of
the Emirates, and a soft-serve
vanilla ice cream cone wrapped
taurants say. Instead, it’s about truffles and asparagus—a dish in gold leaf. “I just had a goal
Continued from Page One giving visitors an extravagant she said “wasn’t good at all.” to try as many as possible,”
fries at the Fairmont Dubai, memento of their trip to one of “There’s a lot of style to it,” said Ms. Gianella, who moved

$75 for a gold cappuccino at the world’s hubs of luxury she said of the city’s gold to Bulgaria last year.
the Four Seasons, and $99 for travel. Dubai and Abu Dhabi’s dishes. “But it lacks in sub- Dubai’s landmark hotel, the
the Golden Beef Burger at restaurants and hotels say gold stance, so when you actually eat sail-shaped Burj al Arab, began
Maison Rouge, a high-end eat- menu items build their luxury it, it doesn’t taste very good.” serving what it claims was the
ery off the country’s main brand through their customers’ Gold cappuccino at the Burj Al Arab hotel in Dubai is served with New York City’s the Ains- original gold cappuccino in
drag, Sheikh Zayed Road. social-media accounts. a gold-covered chocolate marshmallow. worth restaurant sells 24-karat 1999. By 2017, competitors were
Some say these upscale At his Nusr-et Steakhouse in gold chicken wings. A London crowding into its market share,
treats are often messy let- Dubai, Turkish chef Nusret good steak. He responded to said Ivo John Krmpotic, restau- bar, the Bletchley, serves a $130 and the hotel’s food and bever-
downs. “I had gold all over my Gokce, known as Salt Bae, critics with expletive-laced rant general manager of the gold cocktail called King George age director, Etienne Haro, or-
teeth and my mouth,” said served French soccer player Twitter posts, drawing a rebuke Four Seasons in the Dubai In- VI. Gold-flecked ice cream is dered up a new recipe, tasking
Roger Aleman-Prado, a 30-year- Franck Ribery the restaurant’s and a fine from his German ternational Finance Centre, of available in Hong Kong. his culinary lab with finding a
old businessman, who tried a new 24-karat steak—a $340, 14- soccer club, Bayern Munich. the gold steak. But Dubai has built a tour- way to infuse the gold directly
$25 gold-laced cappuccino in ounce sirloin, grilled and then “It was the chef’s idea to do Mr. Krmpotic started offer- ism industry around its history into the steamed milk. This
the Emirates Palace Hotel in covered in a gold wrapping. it in Dubai,” said Noyan Er- ing edible-gold offerings last and fascination with gold. A top cuts down on the mess, he says.
Abu Dhabi, the country’s capi- Mr. Ribery posted video of somalz, a spokesman for Mr. year, including a gold cappuc- attraction is the Gold Souk, a Served with a gold-flaked
tal. Its taste: “Nothing special.” Mr. Gokce’s performance cut- Gokce, of the gold steak. “It is a cino, at the Four Seasons’ Pen- traditional Arab market in the chocolate marshmallow on the
Emily Doong, 31, said she ting the steak on Instagram on place people want to do things rose Lounge, calling patrons’ city’s oldest section. side, it has been a hit, Mr. Haro
tried the drink “to experience Thursday, and received an they can’t do in their own cit- social-media posts “a fantastic Gold prices have rebounded said. “If you’re going to sell a
U.A.E. opulence.” She and her overwhelming response: more ies.” Mr. Ribery didn’t respond free way of marketing.” He said in recent weeks, trading at gold cappuccino, it needs to
friends burst out laughing after than 2.7 million views, over to requests for comment he has received no complaints about $1,286 an ounce, but re- taste good, first and foremost,”
noticing they all had gold on 14,000 comments and a fire through Bayern Munich. about the items being messy. main well below historical he said. “You don’t want to be
their lips after sipping their hose of criticism that he “It was absolutely excessive, “I’m sure some ladies would highs reached in the years after the guy wrapping everything in
drinks. “Honestly, it’s just a wasted both his money and a and it was absolutely Dubai,” like to have some gold stuck in the financial crisis. gold and selling it.”

The groups, angry about out-

Social side interference on the plat-
form, urged Chief Executive

Mark Zuckerberg to step down
Media’s as chairman of the board and
promote new directors. They

New Allies asked Facebook to remove exec-

utive Joel Kaplan, who has
helped lead outreach to conser-
vative organizations but also

Continued from Page One sparked employee anger for at-

cluding Grover Norquist, the tending the hearings of then-Su-
founder and president of preme Court nominee Brett Ka-
Americans for Tax Reform, vanaugh. Facebook told the
which advocates for lower on groups it would respond this
taxes. Advisers on the left in- month, according to a spokes-
clude the Southern Poverty woman.
Law Center, a civil-rights
us l,

For users frustrated by the New outreach

lack of clarity around how At Twitter, Mr. Dorsey has
al a
these companies make deci- led outreach to a broad swath of
sions, the added voices have conservatives, including at a
made matters even murkier. dinner in Washington in June
ci on

Meetings between companies and another in New York, ac-

and their unofficial advisers are cording to attendees.
rarely publicized, and some out- Mr. Norquist of Americans
side groups and individuals have for Tax Reform says he used the
to sign nondisclosure agree- opportunity to advocate for two
er rs

ments. “prominent conservatives” who

And in many cases, posts had been having trouble getting
that are hateful to one group antiabortion ads on the plat-
are considered fair game—or form. Mr. Norquist, who de-
m e

even uncomfortable truths—to clined to name the users, says

others on the opposite end of Mr. Dorsey asked his team to
the spectrum, opening a new help get the issue resolved.
m rp

arena to continue the political Conservative Jewish activist

and ideological fights that are Laura Loomer says she didn’t
often a staple of social media. know until recently that outside
When Twitter executives groups and individuals had pri-
struggled with whether to fol- vately lobbied Twitter execu-
co Fo

low other Silicon Valley compa- tives to remove her from the
nies and remove conspiracy the- site in late November.
orist Alex Jones from the In an email to Ms. Loomer,
platform in August, Mr. Dorsey Twitter said she had violated its
privately sought counsel from Alex Jones of Infowars at a Senate hearing that featured Twitter CEO Jack Dorsey, top; above left, Joel Kaplan, a Facebook vice hateful conduct policy for a
Ali Akbar, a conservative politi- president, with CEO Mark Zuckerberg; above right, Laura Loomer being escorted from a 2018 congressional hearing featuring Mr. Dorsey. tweet calling Ilhan Omar, the
cal activist, Mr. Akbar says. Muslim congresswoman from
Mr. Akbar advised Mr. Dorsey Council spans about 48 organi- tive activist and founder of the Minnesota, anti-Jewish and sup-
against kicking off Mr. Jones, zations around the world. Rule Enforcement “Proud Boys,” which describes portive of Shariah law. In an in-
despite pressure from users and Facebook says it now con- YouTube has removed millions of videos for violating its community itself as “Western Chauvinist” terview, Ms. Loomer says she
Twitter employees. Mr. Akbar sults with hundreds of organiza- guidelines after complaints from outside sources, while Twitter has and has recently been linked to was referring to a 2012 tweet
argued that Mr. Jones hadn’t vi- tions after it decided late last taken action on many accounts for violations of six of its rules. violence in New York and other from Ms. Omar in which the
olated any of the site’s rules—a year to seek more outside coun- states, has been banned by congresswoman wrote, “may Al-
point Mr. Dorsey also made sel on issues such as hate YouTube videos removed for Accounts that Twitter took Twitter, Facebook and Insta- lah awaken the people and help

when he explained the decision speech and misinformation. violating community guidelines, enforcement action on, gram. It’s not clear if the com- them see the evil doings of Is-
in a Twitter post. Mr. Dorsey The tech companies have by source of first detection* by type of violation† panies consulted with the rael.”
didn’t disclose Mr. Akbar’s in- found themselves in an impossi- 12 months ending Sept. 2018 First half of 2018 Southern Poverty Law Center on Among the groups that had
volvement. ble situation, given the billions Hateful their decisions. complained to Twitter was the

Individual ‘trusted flaggers’ conduct

“It’s important that Jack of posts that are generated each The Southern Poverty Law Council on American-Islamic Re-
4,877,185 Abuse 285,393
sought a right-of-center per- month, says Klon Kitchen, who Center designates the Proud lations, an advocacy organiza-
spective which cannot be found manages tech policy for the con- 248,629 Boys, which Mr. McInnes left in tion. The council doesn’t often
at Twitter,” Mr. Akbar says. servative Heritage Foundation. 1,751,146 November, as a hate group and step in to advocate against
“Jack was brave.” The foundation has recently Violent threats has written several online posts other users, says Executive Di-
Twitter ultimately banned forged a relationship with Face- Non-governmental 42,951 about Mr. McInnes. In one post, rector Zahra Billoo, but did so in
Mr. Jones about a month later, book. Mr. Kitchen has advised organization ‘trusted flaggers’ Child sexual the group quoted Mr. McInnes the case of Ms. Loomer based
exploitation Sensitive
citing a violation of its abusive- the company that these issues 85,109 media‡ saying in a 2016 podcast and on her previous comments
behavior policy. are not likely to go away. “These 21,878 Private
YouTube show, “We will kill you. about Muslims. In 2017, Ms.
Government agencies information 28,900
Twitter spokesman Brandon are problems you manage, not That’s the Proud Boys in a nut- Loomer tweeted after a terror
Borrman says the company and problems you solve,” he says. 201 12,140 shell. We will kill you.” attack in New York City, “Leave
its executives personally main- Peter Stern, who handles *Includes guidelines against spam, pornography, incitement to violence, harassment or hate Mr. McInnes is planning to it to Muslims to ruin everything.
tain many outside relationships Facebook’s outside engagement speech and excludes automated flagging and copyright issues †Accounts that violated the sue the Southern Poverty Law People can’t even enjoy #Hal-
same policy multiple times were counted once per policy ‡Includes depictions of graphic
“to help us benefit from other efforts, says the company now violence, adult content and hateful imagery, or intimate photos or videos of someone
Center in the coming days for loween without those savages
perspectives on the critical soci- seeks advice from up to a dozen distributed without that person's consent its role in spreading what he f**king everything up for every-
etal issues we deal with.” He outside groups on each policy Sources: the companies THE WALL STREET JOURNAL. calls defamatory and false infor- one.”
says outsiders “never override decision it makes on its plat- mation about him, according to Other groups, including the
our rules and no outside adviser form. He declined to say which his attorney and a draft of the civil-rights organization Muslim
makes the ultimate decision or groups are consulted. October, in part because he ob- book and most other companies complaint. The suit plans to Advocates, voiced similar com-
dictates our actions,” and that “If we change the policy, jected to the way it handled don’t disclose their donations to mention the decisions by Face- plaints.
Twitter is working to be more we’re going to hear about it, so which content is considered ob- outside groups. book and Twitter to ban him. Twitter’s Mr. Borrman says
transparent on the outsiders in- we might as well involve them,” jectionable. Executives see the outreach Ronald Coleman, Mr. Ms. Loomer’s suspension “was
volved in its process. he says. “We had been doing it, Mr. Amerige says he felt to a cross-section of groups in McInnes’s attorney, says the the result of multiple, repeated
On the Alex Jones decision, but not in a systemized way.” Facebook was trying to avoid al- part as a form of political pro- SPLC has made “a very con- violations of the same rules, it
Mr. Borrman says Mr. Dorsey Adam Thierer, a senior re- lowing anything controversial tection, to defend against the al- certed effort to destroy him.” was not about any one tweet.”
“did not and does not personally search fellow at the right-lean- on the platform, and hampering legation that they are biased A spokeswoman for the He added that many organiza-
make enforcement decisions, he ing Mercatus Center at George free speech in doing so. The against conservatives. Some of Southern Poverty Law Center tions and individuals contacted
defers to the deep expertise of Mason University, says he used move to involve more outside the conservative groups tapped declined to comment. A spokes- Twitter about her account over
the team.” to consult with Facebook and groups—conservative or lib- recently by tech platforms com- man for Twitter declined to the years.
other tech companies. The futil- eral—is in his opinion only mak- plain that the companies defer comment. A spokeswoman for Ms. Loomer says she didn’t
ity of trying to please all sides ing things worse. too closely to the Southern Pov- Facebook says the center is “one post anything hateful or any-
Building defenses hit home after he heard com- “What happens when you erty Law Center. of many groups we work with thing in violation of Twitter’s
The reliance on outside opin- plaints about a debate at You- have an undefinable principle Many companies and other on our hate-related policies.” terms of service.
ions goes along with other ini- Tube over how much skin could and you defer to other people? groups rely on the center’s list Several of the liberal-leaning Ms. Billoo of the Council on
tiatives tech companies have be seen in breast-feeding videos. It becomes a bunch of one-off- of hate groups, counting nearly organizations that Facebook American-Islamic Relations wel-
launched to build their defenses. While some argued the vid- decisions,” he says. 1,000 across the U.S., according works with turned against the comes tech companies’ open-
Companies have added complex eos had medical purposes, other A Facebook spokeswoman to its website. company in December, sending ness to feedback. In 2016, her
internal guidelines on what advisers wondered whether vid- declined to comment. Keegan Hankes, a senior re- a letter that criticized the com- own Facebook account was sus-
kinds of posts should be banned eos of shirtless men with large While outside groups are search analyst at the Southern pany for its role in “generating pended after she posted a photo
and hired thousands of new em- mammaries should be permitted technically unpaid, the tech Poverty Law Center, says the bigotry and hatred towards vul- of a hate letter sent to a
ployees to review content. as well. “I decided I don’t want companies contribute to some group lobbies tech platforms to nerable communities and civil mosque. Ms. Billoo says she
YouTube has boosted its to be the person who decides on of the organizations they are remove content it considers rights organizations,” according asked dozens of contacts to
“trusted flaggers” program— whether man boobs are al- seeking out. Alphabet Inc.’s hate speech, but doesn’t always to a copy of the letter from email everyone they knew at
groups that are asked by the lowed,” says Mr. Thierer. Google contributes to more than win the battle. Groups that say groups including the National Facebook, until someone inter-
company to point out inappro- Brian Amerige, a former 200 third-party groups, includ- it has too much sway are “over- Association for the Advance- nally took up the issue. “You
priate content—from 10 to more Facebook senior engineering ing the Heritage Foundation and stating the influence that we ment of Colored People and the need to throw the kitchen sink
than 100 between 2017 and manager, resigned from the Americans for Tax Reform, ac- have,” he says. Interfaith Center on Corporate at it,” she says. “It’s a little like
2018. Twitter’s Trust and Safety company after seven years in cording to the company. Face- Gavin McInnes, a conserva- Responsibility. politics.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. * * * * NY Wednesday, January 9, 2019 | A10A


Uninsured to Get More Health Care Ethics and
Voting Top
A city plan will give ability to pay and has offered

about 600,000 people

access to primary care,
a free or sliding-scale fee
structure to patients under a
longstanding program that is
preventive services
called NYC Health + Hospitals
The new program is de-
In Albany
BY MELANIE GRAYCE WEST signed to shift health care to a BY JIMMY VIELKIND
AND KATIE HONAN primary-care system, said city
officials, which is more effi- New York government-re-
New York City will spend cient and less costly than when form advocates say they are
about $100 million a year to patients delay medical care or more optimistic than ever for
expand health care to the visit an emergency room. the passage of state laws
city’s uninsured and undocu- Those who enroll in NYC tightening ethics enforcement,
mented residents by giving Care will be given a primary- easing voting restrictions and


them access to primary-care care physician and a number reining in campaign-finance
physicians and other preven- to call if there are problems, contributions with an all-Dem-
tive-care services, Mayor Bill said Herminia Palacio, the ocratic government convening
de Blasio announced Tuesday. city’s deputy mayor for Health this year in Albany.
With about 600,000 unin- and Human Services. State Sen. Liz Krueger, a
sured people in the city, the “We are spending a lot of Democrat from Manhattan,
plan aims to ease the burden money right now and not said her colleagues will roll out
on emergency rooms at munic- spending it the way we want legislation on voting and cam-
ipal public hospitals. Some to,” said Mr. de Blasio of the paign finance Wednesday as
have an option to enroll in the Gouverneur Health is part of the NYC Health + Hospitals system, which has 11 hospitals citywide. way uninsured people have re- they kick off their formal ses-
established MetroPlus health ceived health care through the sion. Her party, which will take
program, an insurance plan tem. The program will be fear,” said Mr. de Blasio during available MetroPlus program, city’s hospitals. “We are talk- control of that chamber for the
that is a subsidiary of NYC available immediately to those a news conference in the Bronx. said Mitchell Katz, the presi- ing about a vast amount of first time in a decade, is ex-
Health + Hospitals system, who already are eligible for About half of the 600,000 dent and chief executive of cost we can avert.” cited to match measures that
which has 11 public hospitals MetroPlus. Others can join in New Yorkers without insur- NYC Health + Hospitals. How- According to the most re- have passed the Democrat-
and 70 clinics citywide. the coming months, beginning ance are eligible, but don’t en- ever, the new program only cent fiscal year numbers avail- dominated Assembly for the
Those who aren’t eligible with Bronx residents. roll because they are young or will provide services within able from July through Sep- past several years, she said.
for MetroPlus or can’t afford it The program is expected to don’t want to incur the cost of New York City and not cover tember for NYC Health + Gov. Andrew Cuomo, a Dem-
can sign up for the new NYC cost $100 million annually at insurance, according to city members when they travel out Hospitals, its deficit was $21.6 ocrat beginning his third term,
Care plan. They will get a full scale from the city’s bud- officials. The other half are of the five boroughs. million versus $571.1 million has voiced support for both vot-
membership card, access to get. Services will be available to said to be undocumented im- MetroPlus has about 513,000 compared with the same pe- ing and campaign-finance re-
primary-care physicians, spe- New Yorkers on a sliding scale. migrants and ineligible for in- members. riod in 2018. For that same pe- form; last month he proposed a
cialists, behavioral health care “We need to guarantee surance. NYC Health + Hospitals sys- riod, 29% of emergency room complete ban on campaign con-
and pharmacy services within health care for all New Yorkers. The NYC Care plan won’t be tem serves all people regard- visits were by patients who tributions from corporations.
the city’s public-hospital sys- No one should have to live in a “lite” option of the already less of immigration status or were uninsured. “I think these are very excit-

ing times,” Evan Davis, a former

counsel to the late Gov. Mario
Woman Struck and Killed by City Sanitation Truck in the Bronx Cuomo and a reform advocate,
said Tuesday at the Capitol.
on Mr. Davis, Ms. Krueger and
Assemblyman Robert Carroll
held a news conference to ad-
vocate for a third ingredient of
the reform recipe—an amend-
us l,

ment to the New York state

Constitution that would create
al a
an ethics-enforcement agency
to supplant the Joint Commis-
sion on Public Ethics.
ci on

Legislative leaders and Mr.

Cuomo established JCOPE in
2011 to oversee lobbying in the
state, as well as police ethics

infractions by executive and

er rs

legislative-branch employees.
The commission has been slow
to address recent Capitol scan-
dals that federal prosecutors
m e

brought to light, including the

indictment and convictions of
Joseph Percoco, a confidant of
m rp

Mr. Cuomo; former Assembly

Speaker Sheldon Silver; and
former Senate Majority Leader
Dean Skelos, who reported to
federal prison this week.
co Fo

The governor appointed six

of JCOPE’s 14 current commis-
A New York City Department ment received a call about the with severe injuries. She was de- driver into custody and were operating fully with the police sioners. Both he and leaders of
of Sanitation truck fatally struck hit-and-run shortly after 6:30 clared dead at the scene. Au- questioning him on Tuesday af- investigation,” the spokeswoman each legislative chamber have
a woman crossing a Bronx a.m. Officers arrived on the thorities were trying to identify ternoon, NYPD officials said. said, adding that the agency is the ability to secretly veto an
street Tuesday morning and scene at Willis Avenue and East the woman, who didn’t have any The driver has been sus- conducting an independent investigation—a structure that
then fled the scene, police said. 138th street in Mott Haven to ID with her. pended, a sanitation department probe as well. legislators and Mr. Davis have
The New York Police Depart- find the woman unconscious Police later took the truck spokeswoman said. “We are co- —Zolan Kanno-Youngs criticized. Under the Democrats’
proposal, a majority of the com-
missioners on the new entity
would be appointed by mem-

Cuomo’s MTA Plans Timed to Budget Season

bers of the state’s court system,
and probes would be authorized
by simple majority votes. The

new commission would be sub-

BY PAUL BERGER crat, will sit down with legisla- the governor appointed to a cles entering the busiest parts major construction projects. ject to the same transparency
tors in Albany to hammer out a task force in the fall to research of Manhattan to fund the MTA. The structure leads to duplica- laws as other government enti-
Gov. Andrew Cuomo wants state budget that could provide the region’s transit crisis. But its report also sug- tion with multiple human re- ties, Mr. Davis said.

to overhaul the Metropolitan billions of dollars for the MTA. “The current system is not gested significantly restruc- sources, procurement and legal A spokeswoman for Mr.
Transportation Authority. The authority faces a po- working, and everything turing the authority so that departments and slows down Cuomo said he is open to
He has ramped up criticism tential $1 billion operating should be on the table in terms the state and city can trust decision-making as sister changing the structure of eth-
of the state-controlled MTA in deficit in the next few years. It of what the options are,” said that the estimated $1 billion to agencies often weigh in on de- ics enforcement.
recent weeks, referring to it as needs an estimated $40 billion Ms. Wylde, president and CEO $1.5 billion in new revenues cisions, Ms. Wylde said. An ethics amendment
bloated, bureaucratic and re- over the next decade just to of the Partnership for New won’t be wasted. Assemblywoman Amy Pau- would have to be approved by
sistant to change. modernize the subway. York City, a nonprofit repre- The group didn’t offer spe- lin, who served on the task legislators installed by two
“The governor has clearly But any extra state funding senting business interests. cific overhaul recommenda- force, said that most of the successive elections and then
stated, as part of his first 100 will likely be contingent on Clues to what a reimagined tions. But it did suggest op- MTA restructuring doesn’t re- ratified in a popular referen-
days agenda, that restructuring significant changes to the way MTA might look like can be tions from consolidating and quire legislation. But she said dum.
the MTA and restoring account- the authority runs the region’s found in a report produced in centralizing functions at the major changes, such as com- There isn’t yet consensus
ability must be a priority,” a commuter trains, subways, December by Ms. Wylde’s task authority to breaking it up. bining the Long Island Rail legislation on voting reforms,
spokesman for Mr. Cuomo, Pat- buses, bridges and tunnels. force. The group, comprised of Acting MTA Chairman Fer- Road and Metro-North Rail- some of which also would re-
rick Muncie, said Tuesday. “We While the MTA could make representatives from the state, nando Ferrer served on the task road into one commuter rail quire constitutional amend-
expect to provide further de- some fixes itself, the budget Legislature and city, acknowl- force and endorsed the report. agency, would require greater ments, or on campaign-finance
tails in the coming weeks.” process would be an appropri- edged the MTA desperately The MTA functions like a public discussion. reforms. Mr. Cuomo is ex-
The timing isn’t a coinci- ate time to set up a commission needs a new funding source. It holding company for five —Katie Honan pected to include language in
dence. During the next few to look into a dramatic over- recommended that the state in- transportation agencies as well and Jimmy Vielkind his executive budget proposal
months, Mr. Cuomo, a Demo- haul, said Kathryn Wylde, whom stitute a congestion fee on vehi- as a subsidiary that oversees contributed to this article. later this month.

Lawmakers Grill Murphy Aides on Handling of Assault Claim

BY KATE KING Jersey’s housing agency, ac- include details about the alle- hadn’t followed up with Mr. trust in him, so I thought, ba-
AND JOSEPH DE AVILA cused Al Alvarez of sexually as- gation. The governor’s chief Murphy’s administration to sically, that the matter was
saulting her in April 2017. Mr. counsel, Matt Platkin, then ensure that Mr. Alvarez left proceeding,” Mr. Berkon said.

TRENTON, N.J.—New Jer- Alvarez, who has denied the al- filled him in on Ms. Brennan’s state employment. Mr. Platkin is scheduled to
sey lawmakers on Tuesday legation, served as chief of accusation, Mr. Berkon said. “This was a young woman speak before the committee
grilled officials in Gov. Phil staff for the New Jersey Mr. Berkon said he and Mr. who came and said, ‘I was next week. A senior adminis-
Murphy’s campaign, transition Schools Development Authority Platkin agreed that the seri- raped,’ ” said state Sen. Sandra tration official previously told
team and administration about until he resigned in October. ousness of the allegation Cunningham, a Democrat. “To the Journal that Mr. Platkin
their handling of a sexual-as- Ms. Brennan reported her against Mr. Alvarez made his have it treated so lightly by referred Ms. Brennan’s accusa-
sault allegation against a state accusation to police and Hud- continued employment with so-called responsible people, tion to the state’s chief ethics
employee, repeatedly circling son County prosecutors, who the state “untenable.” it’s just very offensive. Did you officer in March and recused
back to one question: Should she said investigated and de- Mr. Berkon said he sched- feel that you had done every- himself from the matter be-
they have done more? clined to charge Mr. Alvarez. uled a phone call with Ms. thing that you could as a re- cause he knew both her and
Lawmakers have convened a She also told high-ranking Brennan, during which he told sponsible attorney in this mat- Mr. Alvarez.
special committee to investi- members of Mr. Murphy’s ad- Murphy lawyer Jonathan her Mr. Alvarez would be de- ter when you walked away?” Mr. Alvarez resigned in Oc-
gate how a former Murphy ministration, including his Berkon testified in Trenton. parting his state job. Mr. Berkon said he saw his tober after he was contacted
campaign staffer was hired for chief counsel, before emailing Mr. Berkon said he was role as representing the cam- by a reporter for the Journal.
a state job after transition com- the governor in June and re- law firm Perkins Coie LLP, tes- “surprised and troubled” when paign, not the administration, Mr. Murphy said in October
mittee members learned he had questing a meeting to discuss tified that the governor in he learned from a Journal re- and considered Mr. Alvarez’s that while he believed his staff
been accused of sexual assault. a “sensitive matter.” June forwarded to him Ms. porter months later that Mr. departure to be a matter for had followed the rules and pro-
Katie Brennan, a former On Tuesday, Jonathan Brennan’s email. Alvarez was still working for the governor’s office to handle. cedures in responding to Ms.
campaign volunteer who now Berkon, an attorney for Mr. The email, which The Wall the state. Several lawmakers “I had known Mr. Platkin Brennan’s allegation, Mr. Alva-
works as chief of staff for New Murphy and a partner at the Street Journal has seen, didn’t asked Mr. Berkon why he for a while and had a great rez shouldn’t have been hired.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A10B | Wednesday, January 9, 2019 NY * * THE WALL STREET JOURNAL.


METRO MONEY | By Anne Kadet

The Secret to Success in This Program: Grit

If Ridmi did too,” she recalled. “When
Coe shows up I told them about Year Up,
late for her their jaws dropped.”
workplace- She now earns nearly six
training pro- figures working in trading
gram, Year Up operations for a French bank
New York, she gets a 15- and is studying statistics and
point penalty. If she swears, quantitative analysis at Bar-
uses her cellphone or doesn’t uch College. Her employer is
dress professionally, same reimbursing her for tuition.
thing. If her score falls below

zero, she is expelled from ot every Year Up New
the free program. York student sees such
Her reaction? She loves good results. A quar-
the discipline. ter drop out of the pro-
“A lot of us came from ad- gram—half of those because
verse circumstances, so we their score drops below zero,
didn’t really have a lot of the other half due to outside
structure,” says Ms. Coe, circumstances such as finan-
who lives in Queens and cial hardship. But the average
works as a nanny. “Year Up is graduate from last summer’s
almost like a parent teaching class is earning $42,000 a
us how to be accountable.” year, Mr. Galante said.
Ms. Coe, who is 24 years And 18 months after grad-
old and studying financial uation, Year Up students na-
operations, is midway tionwide—there are now 18
through the 12-month pro- campuses in cities across the
gram, which provides six U.S.—are earning, on aver-

months of classroom instruc- age, 53% more than young
tion followed by a half-year adults in a control group, a
internship or apprenticeship result far exceeding the
with partners such as JP- norm for similar workforce-
Morgan Chase and Google. training programs.
The program—which The downside to Year Up’s
launched in Boston in 2000 super intense approach? It’s
and in New York City in super expensive. The $34,000
2006—focuses on training called “opportunity youth”— child-care job, taught himself coaches, teachers and peers. mentor. The staff of 62 in- per-student cost is only par-
students in fields such as fi- adults age 18 to 24 who IT basics from YouTube vid- Thanks to a recent feed- cludes social workers who tially covered by the $26,000
nancial services and soft- graduated high school but eos and volunteered to do back session, Mr. Huntley connect students with hous- fee corporate partners pay for

ware engineering, along with live in a low-income house- computer repairs for people said he is working on con- ing assistance, medical care each intern. The rest comes

soft skills such as network- hold and typically are under- in his community. trolling his demeanor. “It’s and legal aid. from private donations.
ing, making presentations employed. “Year Up was my golden like a sad face,” he said, Mr. Huntley, who is fond Year Up New York aims to
and how to shake hands. It ticket, my last chance,” Mr. demonstrating the expres- of three-piece suits, said that cut costs by working with

can include course work in ust 27% of the 1,500 on Huntley said. “At the inter- sion he adopts when things when he ripped his trousers, community colleges and of-
accounting, coding, cyberse- who apply each year are view, I gave it my all.” don’t go his way. “I’m learn- he helped himself to a new fering a shorter version of
curity and quality assurance. accepted. To win a slot, The classroom instruction, ing to mask that.” pair from the program’s the program to train stu-
Students sign a contract they must demonstrate what which runs from 8:30 a.m. to closet of donated dress wear. dents for lower-skill occupa-

agreeing to a detailed set of Year Up New York Executive 3:30 p.m. five days a week in ut the high-expecta- Sophilia Heard, 21, may tions, among other strate-
us l,

expectations covering every- Director John Galante refers a former Goldman Sachs of- tions model is com- represent a best-case sce- gies, Mr. Galante said.
thing from their choice of to as grit: the ability to make fice in the Financial District, bined with what Year nario. The youngest of four As the program scales up,
al a
footwear to what they can a commitment and see it is intense, Mr. Huntley said. Up touts as “high support.” raised by a single mother in he added, it should become
post on Facebook. “You also through. He studies afternoons, eve- Little is left to chance. Queens, Ms. Heard studied self-sustaining, with the in-
earn points for meeting ex- Year Up New York IT stu- nings and weekends. “I had Students who meet their financial operations at Year ternship revenue covering
ci on

pectations,” says Ms. Coe, dent Thomas Huntley is typi- to cut the movies and delete contractual obligations earn Up New York and got an in- expenses.
who has a perfect record. cal. The 21-year-old Harlem all my videogames,” he said. a $150-a-week stipend to ternship at UBS Group, the “We can serve thousands,”
The nonprofit program, man said he was a class The scrutiny is extreme. help pay for transportation Swiss-based bank. he said, “rather than hun-
which trains more than 360 clown in high school and got Scores are posted every and meals. “The others at the office dreds.”
students each year in New terrible grades. After gradu- week. Students regularly re- Every student is assigned came from the best schools
er rs

York City, focuses on so- ating, however, he took a ceive formal input from a coach and professional in the country and assumed I


Exam Underrates
m e


m rp

Former Lawmaker
Begins Prison Term
Girls, Study Says
Former New York state Sen- BY LESLIE BRODY hurting their scores.
co Fo

ate leader Dean Skelos has be- Called “Fairness to Gifted

gun serving his four-year, three- New York City’s eight spe- Girls: Admissions to New York
month prison term for a cialized public high schools City’s Elite Public High
corruption conviction. have long accepted fewer girls Schools,” the study contains
Mr. Skelos, a 70-year-old Re- than boys. A study drawing new several caveats. It is based on
publican, reported to the federal attention to that disparity finds city data for only one cohort—
prison at Otisville, N.Y., on Tues- the entrance exam underesti- students entering high school in
day. The prison has a medium- mates girls’ academic success. 2014—and looked only at fresh-
security facility and an adjacent As debate swirls around man-year grades, not long-term
minimum-security satellite camp. Mayor Bill de Blasio’s call to outcomes. Peer-reviewed and

His son, Adam, reported to scrap the single exam that de- accepted last month for publi-
the federal prison in Danbury, termines entry, a study from cation in the Journal of Women
Conn., to begin serving his four- Hunter College’s Gender Equity and Minorities in Science and
year sentence. Project says the test screens out Engineering, the study was first

Mr. Skelos and his son were many girls who would thrive at reported by The Hechinger Re-
convicted in July on charges of these schools, which are largely port, an education news outlet.
extortion, wire fraud and bribery. geared toward the sciences. Mr. Taylor’s study—which
—Associated Press Girls received only 44% of the examined nearly 28,000 test-

offers for the current school takers, a fraction of whom

CRIME year to these coveted institu- were accepted to the city’s
tions, even though they made elite high schools—countered
Man Pleads Guilty up 51% of the test-takers. the possibility that girls might
In Slaying at Party So far, discussion has cen-
Skaters enjoyed the rink Tuesday at Bryant Park in Manhattan, as temperatures hit the mid-40s. tered mostly on whether the
A man has pleaded guilty for test is an unfair barrier to
his role in the beating and stab- CONNECTICUT commit $3.5 million while Liberty asking a U.S. appeals court to black and Hispanic applicants,
Girls with lower
bing death of a party guest at a Mutual Insurance will provide $7 hold the college liable. who get few seats at these admissions-test
luxury Manhattan apartment. Insurers to Help Pay million. Lawyer Patrick Whalen ar- prestigious schools.
scores earned grades
District Attorney Cyrus R. For Foundation Costs Last month, Messrs. Malloy gued Tuesday that Ramapo Col- The study’s author, Jona-
Vance Jr. said Tuesday that Law- and Jepsen announced Hartford- lege of New Jersey created a than Taylor, found that on av- as high as male peers.
rence Dilione of Jersey City, N.J., Two insurance companies have based Travelers Companies Inc. dangerous environment by failing erage, freshman girls at these
has pleaded guilty to manslaugh- agreed to provide a total of $10.5 entered a similar memorandum to monitor fraternities and un- schools earned course grades
ter. million to help Connecticut home- of understanding with the state derage drinking. equal to boys who scored
Joseph Comunale of Stam- owners cover the cost of repairing to provide $5 million to help af- Mr. Whalen said two people higher on the Specialized High be enrolling in easier courses.
ford, Conn., died in November and replacing crumbling founda- fected current or past Travelers charged in the 2014 attack School Admissions Test. Among ninth-graders at Stuy-
2016 at an Upper East Side tions, officials said Tuesday. policyholders. pleaded guilty to sex-assault Across the eight schools, for vesant High School, for exam-
apartment. Mr. Comunale’s body The state has reached sepa- —Associated Press charges and were sentenced to freshman boys with grade- ple, girls on average earned
was shoved out of a window and rate agreements with The Hart- about five years in prison. Three point averages of 95 or above, better grades than boys in
stuffed in a car trunk. It was ford and Liberty Mutual Insur- NEW JERSEY others entered pretrial diversion for example, the average admis- each of the 10 science and
taken to Oceanport, N.J., where it ance to financially assist current programs. sions test score was 565 out of technology courses analyzed,
was torched and buried in a and former policyholders who file Assault Victim Seeks The victim is now suing the 800 points. The average score including biology and physics.
makeshift grave. claims and receive grants To Hold College Liable fraternity, college officials and the for girls in that highflying GPA Mr. de Blasio wants Albany
Mr. Dilione will be sentenced through the state’s new Connect- individuals involved. group was 549. In other words, lawmakers to scrap the entry
on Feb. 6. Another defendant, icut Foundation Solutions Indem- A lawyer for a female New The New Jersey Attorney girls with lower admissions- exam and start admitting the
James Rackover, was sentenced nity Co., announced Gov. Dannel Jersey college student who was General’s Office said the state-af- test scores earned grades as top performers in each middle
last month to 29 years to life in Malloy and Attorney General sexually assaulted at a fraternity filiated school should be immune high as their male peers. That school citywide, using a mix of
prison. George Jepsen. party and then driven across from damages. pattern was consistent for stu- course grades and state tests.
—Associated Press The Hartford has agreed to campus and assaulted again is —Associated Press dents with lower GPAs, too. Supporters of the entrance
Furthermore, girls outnum- test argue it is the most objec-
bered boys earning GPAs of 95 tive way to find talent.

Weinstein Trial Set to Begin in Early May or higher. Meanwhile, in the

lowest achievement category,
or students with GPAs below
75, boys outnumbered girls by
Vincent Galasso, a former
principal of Bronx High School
of Science and a backer of the
admissions test, said girls’ rela-
BY CORINNE RAMEY two separate women. man, a lawyer for Mr. Wein- women who claim they were more than six to one. tively strong first-year grades
In December, a state judge stein, said the trial is expected assaulted by Mr. Weinstein but “The test consistently un- likely stemmed from their ma-
Former Hollywood producer declined to dismiss these to last six weeks from jury se- aren’t part of the charged con- derpredicts how girls will do turity and organizational skills.
Harvey Weinstein is scheduled charges, allowing the Manhat- lection through verdict. duct could testify. in high school,” Mr. Taylor “I would venture to guess the
to go to trial on sex-crime tan district attorney’s case to Also in the filing, Mr. Braf- A spokesman for the Man- said. “To that extent, it’s a bi- girls worked harder and applied
charges on May 6 in state move toward trial. man said the district attorney’s hattan district attorney’s of- ased test.” themselves more,” he said.
court in Manhattan, court fil- Mr. Weinstein, who is free office is expected to ask Justice fice declined to comment. A Mr. Taylor cited other re- A spokesman for Pearson,
ings show. on bail, has pleaded not guilty James Burke’s permission to spokesman for Mr. Weinstein searchers in suggesting girls the test vendor, said it “works
Mr. Weinstein, who was ar- and denied allegations of non- admit alleged evidence of prior didn’t comment. may be less willing than boys diligently with our state and
rested in May, faces charges of consensual sex. uncharged acts. If the judge ap- Mr. Weinstein is scheduled to guess on multiple-choice district partners to create fair,
rape and other sex crimes re- In the filings, made in a re- proves the request, called a to appear in court March 7 for questions when they don’t valid, and reliable assessments
lated to alleged incidents with lated civil case, Benjamin Braf- Molineux motion in New York, a pretrial hearing. know the answer, potentially aligned to their needs.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A11


What’s the Rush? The Power of Slow Mornings

To relieve stress and regain control, some get up before dawn to meditate, read, exercise or do nothing at all
trampolines or have no plan at all celebrated.” effort and wait for caffeine and is really destroyed in a way,”
except for avoiding a rush. The slowing-down trend is there are more and more options he says.
Slow-morning enthusiasts countering another one: consum- for breakfast on the go. More than 60% of consumers
IN REACTION TO hectic, over- range from business leaders to ers’ need for speed, convenience Geir Berthelsen, founder of the say they look at their phone
scheduled lives burdened by 24-7 artists to stay-at-home parents. and around-the-clock service, World Institute of Slowness, a within 15 minutes of waking and
technology, a counter movement They all say it’s a way to manage Mintel says. People often exhibit think tank in Norway, says start- check their phones about 52 times
is emerging: the slow morning. stress and find control in anxious, both behaviors, since those who ing the day with intentional slow- a day, according to Deloitte.
Proponents spend time—some- always-connected times. embrace a fast-paced lifestyle ness helps spark creative think- The peak hour for Calm’s Daily
times hours—doing very little in “Slowness is earning a new ap- need a break from it even more. ing. “Business leaders need to Calm meditation practice—its
the morning. Rising early, they preciation,” says Gabi Lieberman, “The more we try to save time, take time to forget about time, most popular—is 6 a.m. to 7 a.m.,
relish beginning their day in quiet a director of trends for market-re- the more we realize how impor- and that helps them be creative says Michael Acton Smith, Calm’s
solitude, free of interruptions and search firm Mintel. The company, tant it is to savor it,” Ms. Lieber- when they arrive at work,” he co-chief executive. “I think it is
deadlines. They say it provides a which advises clients on con- man says. says. “That’s the goal of doing part of a wider movement in
foundation for productivity, calm sumer behavior and trends, has To be sure, many Americans this before going into the work- Western society around health
and focus that lasts the rest of noted consumers’ desire to “slow still view their pre-workday rou- place.” Mr. Berthelsen advises and wellness and being more con-
the day. “I wake up early so I can it all down” since 2011, but re- tine as a sprint, and consumer spending at least 20 minutes be- scious of how we live—eating bet-
do nothing,” says Leslie Harris, a cently detected a new attitude to- products are mostly marketed fore the workday doing nothing. ter, sleeping better and starting
marketing executive in New York. ward the behavior. “We’re not that way. Showers are faster with “If you don’t do that, if you our days better,” he says.
Some people meditate, plunge apologizing anymore about it,” “3-in-1” soaps that wash hair, face wake up stressed that you’re late Here’s how four individuals
into cold water, slowly jump on Ms. Lieberman says. “It’s being and body; coffee pods shorten the to work, then the whole day spend their slow mornings.

Matt D’Amour’s
wake-up time:
To keep his mornings serene, Matt D’Amour prepares for

6:00 them. In a ritual he calls “unpack, repack” Mr. D’Amour, a director

of sales and marketing in Madison, Wis., spends an hour or

more after work readying the following day’s clothes, breakfast

and lunch. “I prepare every single night so that I can start the day with as much ease
and grace as possible,” says Mr. D’Amour, 37.
He wakes up around 6 a.m. and drinks water with the lemon juice he presses every
on three days. Then he does a 20-minute “gratitude meditation,” which can range from being
grateful for being able to get out of bed that morning to having food in the refrigerator.
A glass of celery juice, which Mr. D’Amour also makes, follows.
Then he pursues what he calls “cold-water therapy,” which can include a plunge in the
lake near his apartment or, if the lake is frozen, a cold shower. He tries to stay in cold
us l,

water for one or two minutes, focusing on breathing exercises rather than how he feels.
“You build up a tolerance,” he says.
al a
Breathing through the discomfort of feeling cold boosts his energy and improves his skin
tone and stress management all day, Mr. D’Amour says. “There are moments when I’m in a
business setting and I need to make decisions, and I can revert back to breathing through
ci on

uncomfortable situations,” he says. “You breathe into it as opposed to trying to escape.”

Typically three to five times a week Mr. D’Amour heads to the gym by about 7:30 a.m.
for an hourlong workout. He follows that with breakfast, usually vegetables and eggs,
which he has prepared the night before.
Mr. D’Amour aims to start work around 9:30. “And then it’s game time,” he says.
er rs

Dangerfield’s Before Monica Dangerfield starts her day job, she works on her
wake-up time: hobbies, such as selling essential oils. “They’re not money-makers
m e

yet,” she says. “But it’s work that I truly enjoy.”
She wakes at 6 a.m. and spends time at her computer in the
kitchen, communicating with customers and posting on social me-
m rp

dia. She also jots down goals for the day. “I find those early-morn-
ing hours are so peaceful and calm and my attention isn’t being pulled in a million direc-
tions,” says Ms. Dangerfield, who lives in Richmond, Va., and works as a child-
development specialist. “This is time that I give to myself, it is my self-care, doing
something that I really enjoy.”
co Fo

To maximize her early-morning hours, Ms. Dangerfield, 39, usually makes oatmeal the
night before and heats it up for breakfast. She does the same with coffee, which she
makes every few days and keeps in a pot in the refrigerator. She typically works until
about 7 a.m., when she hears her 9-year-old or 5-year-old upstairs. “I take a deep breath
when those feet come down the steps and say ‘OK, my time is up,’ ” she says.
To wake up early, Ms. Dangerfield adjusted her nighttime routine, which starts after
her children go to bed. Realizing that she was unproductive on her computer in the eve-
ning, Ms. Dangerfield now spends time cleaning the kitchen or walking on her treadmill
for 30 minutes before getting into bed to read. “I leave my phone downstairs so I don’t
see it or hear it,” she says. “Then I’m usually lights out by 10 or so.”
So far, Ms. Dangerfield has stuck to her ritual for nine months. On days when she
can’t have an hour or two of solitude, her energy feels low and her stress level is high. “I
feel like I’m too rushed,” she says.

Genevieve Aronson’s

wake-up time: Genevieve Aronson, 38, gets up at 2 a.m. or 3 a.m. on

2 3:00
Tuesdays, Wednesdays and Thursdays. The communica-
or tions executive relishes the unhurried, uninterrupted hours
her morning routine allows. “I have that freedom to do
what I need to do at my own pace,” she says. “I know
some people think I’m crazy, but it works for me.”
Ms. Aronson, who lives in Westchester County, N.Y., started this schedule a year ago
when she had trouble staying asleep with a long to-do list on her mind. “I thought, let me
just bang out two things and I’ll go to bed,” she says. “I never went to bed.”
After turning off her alarm, Ms. Aronson heads downstairs, opens her laptop, and digs
into her work email. “Anything I can do to get myself ahead, I will do then,” she says, in-
cluding preparing presentations and catching up on work-related reading. “I feel like I do
my best work at this time because it’s quiet and I can put 100% of my attention to it.”
When she finds a good stopping point, she exercises with a half-hour workout video,
loads some laundry in the washing machine and does other light housework.
The activities haven’t disturbed her sleeping husband or daughter, who is in first
grade. “It’s not like I’m vacuuming,” she says. Around 6 a.m., Ms. Aronson starts making
her daughter’s lunch; by 6:30 the family is awake.
Ms. Aronson says she is motivated to wake up so early because of how much these
hours energize her. She typically goes to bed at 10:30 p.m. and sleeps until 6:30 or 7 a.m.
on weekends, Mondays and Fridays. “This probably isn’t long-term,” she says. “No one is
making me do it, but I enjoy it because I have time for myself and I’m doing things on
my own terms.”
Chris Danuser’s
wake-up time: Chris Danuser doesn’t consider himself a morning person. To

rise at 5:30 a.m. during the week, he sets the alarm on his phone
and leaves it in the bathroom overnight, forcing him quickly out
of bed for fear of waking his wife.
Mr. Danuser, a 51-year-old filmmaker and real-estate agent,
dresses and heads to his office, which is on the top floor of his Maplewood, N.J., home.
There he sits on the couch and meditates for 20 minutes.
By about 6:15 a.m., he is in the kitchen making matcha tea or coffee with blended
butter and oil. Preparing either drink involves several steps requiring about 10 minutes,
which he appreciates. “It’s very deliberate, you’re not just pushing a button,” he says.
After finishing his morning brew, he does some light stretches, yoga or a rhythmic
bounce on a trampoline in the basement. By 7 a.m., Mr. Danuser’s wife, 17-year-old
daughter and 10-year-old son are up and ready for breakfast, which he helps prepare.
Methodical, slow-paced mornings ease his anxiety and frustration and bring focus and
organization to unpredictable days, he says. Mr. Danuser started rising early about two
years ago. “I was 49 and realized I can’t be disorganized and have a lack of focus all my
life,” he says. “I figured out that waking up early and having a deliberate morning pattern
is something I can control—the control that I capture in the morning sustains me
through the whole day.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A12 | Wednesday, January 9, 2019 THE WALL STREET JOURNAL.


MY RIDE | By A.J. Baime

North Dakota’s


Winter Can’t
Stop This Car

Mary Motschenbacher, 68, a medical Ms. Motschenbacher: My Sisters Mary Motschenbacher, inset left, and

transcriptionist from Fargo, N.D., and her sister and I hardly knew Beth Boatz, inset right, with their 1948
sister, Beth Boatz, a 67-year-old retired the difference between a Plymouth in Fargo, N.D. They restored the car
banker from Blaine, Minn., on their 1948 hammer and a screwdriver. after it sat unused on a farm for 44 years. Ms.
Plymouth, as told to A.J. Baime. on But with the help of our Boatz rode away from the church in this car
Ms. Motschenbacher: In 1947, our uncle, significant others, Andy after getting married in 2017.
Laurence Boatz, bought this Plymouth new and my husband, Roger, we
from the Corwin Chrysler dealership in dove in. We researched on-
Fargo, which still exists. In the mid-1960s, line and went to salvage
us l,

our dad took ownership. We had a good yards.

family, but we did not have a lot of material There were times we
al a
things, so this was a big deal. thought we would never
Ms. Boatz: There were four of us kids get it done. But we did, in
who learned how to drive in the Plymouth. about nine months.
ci on

We lived in Humboldt, Minn., which had Ms. Boatz: I married

about 100 people. In our high school, every- Andy on June 17, 2017, and
one either drove or rode in this car. Beth, met her current husband, Andy Hyb- when we came out of the church, there was
Ms. Motschenbacher: We called it the ben, in 2013, he thought it would be a good the Bomb, with my sister at the wheel to
Bomb. Like, it was so cool, it was the bomb! idea to find the Bomb and restore it, to use drive us away. Then last summer, the Bomb
er rs

There were nights we would have 12 teen- in their wedding. played a starring role at our high school re-
agers and two guitars in the car. Ms. Boatz: Using an old address book, I union—my 49th and my sister’s 50th. People
Ms. Boatz: I was the last one to drive the located the friend I had given it to 44 were in awe.
car in our family back then. When I gradu- years earlier, and he agreed to give it back Ms. Motschenbacher: No one ever ex-
m e

ated college, it was a hunk of junk. I gave it for free. Andy and I drove 1,000 miles pected we would find the Bomb, or that we
to a buddy, because he said he would re- round-trip to get the car. It was a rust would turn it into a beautiful car again.
store it. It ended up sitting on a farm in bucket full of mice. I knew it was the
m rp

Bergen, N.D., for 44 years. Bomb because I found my father’s old reg- Contact A.J. Baime at
Ms. Motschenbacher: When my sister, istration in the glove box.

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WORK & FAMILY MAILBOX | By Sue Shellenbarger

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early 2018 column on coaches should offer a free student’s sophomore year to
whether it’s ever OK get-acquainted session before discuss the specifics of pay-
to quit a new job you agree to work together. ing for college and the val-

much earlier in my career. I Trust your instincts about ues and goals that will shape
got a great job right out of whether the coach can offer the student’s choice. Parents
grad school and then was what you need—new insights may need to do some fact-
fired within a finding to fig-

year. This ure out what’s

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my career. or retirement.
Years later, On average,
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For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A13



Finally Home With the Greats

An exhibition places the under-the-radar Fritz Ascher squarely in the canon of 20th-century German artists


New York
FOR THOSE OF US who consider
themselves familiar with German
Expressionism, the compelling new
exhibition at New York University’s
Grey Art Gallery, “Fritz Ascher: Ex-
pressionist,” makes us wonder why
this artist hasn’t been on our radar
screens. The 67 works of art on
display, along with sketchbooks
and documentary materials, may
not quite qualify as a discovery,
but they significantly expand the
range of what we thought we
knew. And while his work shares
much with that of German Expres-
sionist artists, he doesn’t fit neatly
into that category since his late
work includes large moody works
with lush colors. Ascher
(1893-1970) was born in Berlin to a
comfortable Jewish family. A pro-
tégé of Max Liebermann, Berlin’s
most celebrated late Impressionist
painter, Ascher befriended and in-
teracted with most of the promi-
nent artists of Weimar period Ber-
lin, and shared with many of them
the distinction of having been cat-
egorized as a “degenerate” artist
by the Nazis.
The exhibition is accompanied

by a densely illustrated book, pub-

lished for several German muse-
ums where it was shown over the
past two years. The essays in this
book make a strong case for the on
interactions—personal and aes-
thetic—between Fritz Ascher and a
host of other, more familiar artists:

Lovis Corinth, with whom he stud-
us l,

ied; Edvard Munch, whom he met

in Oslo; artists of the Berlin Seces-
al a
sion and Dresden’s Die Brücke, as ‘Golgotha’ (1915), by Fritz Ascher, in which inflections of Pieter Bruegel the Elder coalesce with James Ensor to create a scene of pandemonium and horror.
well as those associated with Mu-
nich’s Blaue Reiter. In Berlin he ap-
ci on

parently learned printmaking from cher changed addresses regularly ests. A single 1912 graphite draw- image, Bajazzo, who appears in moved to the top, just barely
Hermann Struck, who introduced in Berlin, until he was arrested ing of Frederick the Great’s plas- several works, the most successful readable in an aura of bright yel-
many artists, including Ludwig and briefly sent to Sachsenhausen ter death mask assures us of of which is the 1924 painting. The low light (not the darkness of the
Meidner and Marc Chagall, to print Concentration Camp after Kristall- Ascher’s grounding in traditional clown reference may be to the ti- canonical Gospels). The main field
techniques. But if all of this places nacht in November 1938; he art training. Several caricatures tle character in Ruggero Leonca- of the canvas is taken up by
er rs

Ascher in a position that enables stayed there for about four weeks, and sketch portraits of 1910-15 vallo’s popular 1892 opera, “Pagli- frightened, fleeing figures threat-
us to pigeonhole him properly, it and was soon rearrested and suggest the influence of the popu- acci,” or to Thomas Mann’s 1897 ened by a spear-carrying soldier
also diminishes the artist’s some- jailed in Potsdam for five months. lar satirical magazine Simplicissi- novella, “Der Bajazzo.” An essay on horseback; this is not the fear
what idiosyncratic biography and Unable to emigrate, Ascher was in the catalog by scholar Ori Z. of awe at the sight of the Crucifix-
m e

compelling oeuvre. Happily, the forced to wear a yellow star as of Soltes about Ascher’s “Golem” ion. Several other large paintings
Grey Art Gallery exhibition reas- November 1941 and found himself painting (1916/45, not in the exhi- of this period make it evident that
serts Ascher’s bona fides by letting on a deportation list, so he went
The show reasserts his bition) made this viewer see these Ascher was capable of achieving
m rp

us focus on the work itself. into hiding in Berlin’s Grunewald bona fides by letting us haunting images with other, even masterly, ambitious works that
Not that the biography isn’t in- suburb, where he survived the more layered, meanings. hold their own when compared
teresting. His father, Hugo, had war thanks to friends. Much of his
focus on the work itself, Despite notable highlights in with those of his contemporaries,
studied at the University of Penn- work was destroyed during the not just his biography Ascher’s career both early and and we can now safely add him to
sylvania’s School of Dental Medi- Berlin bombings, and after the late, the star of the exhibition is a our canon of 20th-century German
co Fo

cine, practiced dentistry, and then war he set up his studio in a villa majestic large 1915 canvas, “Gol- artists, even if we might quibble
developed an artificial tooth he shared with friends; he contin- gotha,” shown with an ink and with the “Expressionist” title of
enamel that provided the family’s ued to work, and even wrote po- mus, which was especially popular pencil study for it nearby. Inflec- this important exhibition.
wealth. The family lived in several etry, until his death in 1970. early in the 20th century; here we tions of Pieter Bruegel the Elder
Berlin homes prior to moving into Given the fate of so much of can see Ascher’s debt to the ear- coalesce with James Ensor to cre- Fritz Ascher: Expressionist
an elegant villa in the suburb of Ascher’s art, the exhibition tends lier French artist Honoré Daumier, ate a scene of pandemonium and Grey Art Gallery, through April 6
Zehlendorf. Hugo had his children to feel episodic, in that there are and visual affinities to contempo- horror. In the study Ascher
baptized in 1901, but he and his several groups of work that show rary artists such as Lyonel Fein- started out with a formal arrange- Mr. Freudenheim, a former art-
wife seem not to have joined the his visual relationship to contem- inger and Jules Pascin. It’s puz- ment of three crosses holding the museum director, served as the
Protestant church. After Hitler poraneous art movements as well zling to be confronted by Ascher’s composition together. In the large assistant secretary for museums
came to power in 1933, Fritz As- as his occasionally quirky inter- moving, but morose, clown-like painting, those figures have at the Smithsonian.

BY BARRY MAZOR MUSIC REVIEW songwriters such as Ray LaMon-

tagne (“Hobo Blues”) and the Paul
Thorn-William Maddox team (“An-

Bluegrass Ready to Grow


BALSAM RANGE is ripe for gel Too Soon”), as well as from

broader recognition. If you’ve not the country duo Adam and Shan-
heard, or even heard of, this hon- non Wright (“The Girl Who In-
ored five-man bluegrass band vented the Wheel”). The album
named for the slice of the Blue closer is a driving bluegrass turn
Ridge Mountains that stretches on George Harrison’s Beatles tune
out near their North Carolina “If I Needed Someone.”
home base, their latest album, Besides the classic banjo-fiddle-
“Aeonic” (Mountain Home Music mandolin-guitar-bass (and occa-
Company), released on Friday, will sional dobro) lineup, the strikingly
be an ear opener. traditional aspect of this set is the
In the world of bluegrass music, group’s predilection for blues (a
there have always been perform- strong element in bluegrass mu-
ers, whether determinedly tradi- sic’s earliest days) and the blues
tion-minded or more adventurous sensibility—sometimes hurt,
and modern in musical focus, who sometimes jubilantly, assuredly
have been admired for dazzling past hurt—that goes with it. Many
performances and instrumental of these songs depict and reflect
and vocal prowess, but only within undisguised desperation, including
the sturdy but circumscribed field the blues numbers and “Help Me
itself. Those who have leaped to to Hold On,” the extraordinary,
greater, broader prestige and pop- gospel-tinged prayer as a cry for
ularity—Flatt & Scruggs, Alison help (from the pens of Milan
Krauss, Ricky Skaggs, the Del Mc- Miller and Thomm Jutz) sung
Coury Band—have all demon- movingly by Mr. Melton. By con-

strated musical mastery in spades trast, “The Girl Who Invented the
but contributed distinctive ways Wheel” is the comic story of a
to mesh the traditional and up-to- man so effectively dumped that he
date while actively reaching out to just has to salute, ebulliently, the
the wider audiences for country woman who did that so well.
music, Americana, folk, or pop. ‘Aeonic’ is the new album from Balsam Range: Caleb Smith, Darren Nicholson, Marc Pruett, Buddy Melton and Tim Surrett The modern vocal approach of
Wider commercial success, prime- all of this band’s singers, which
time television, larger perfor- Buddy Melton—Male Vocalist of classic bluegrass was unquestion- Mr. Melton’s sometime side-proj- avoids slavish mimicking of old-
mance venues and, in every one of the Year in 2014 and 2018. able and many of their earliest re- ect duo partner, Milan Miller. The school high, lonesome vocals, plus
those examples, multiple Grammy The members had all honed cordings leaned on Bill Monroe band’s April 2018 album, “Moun- the spacious quality of the sound
Award nominations followed. their skills in previous stands— songs, lest anyone miss the fact. tain Overture,” underscored the production throughout, makes it
Founded in 2007, Balsam Range Mr. Melton with Doc Watson and That would not be Balsam quintet’s increasing attraction to very clear this is an album for
is now showing itself to be quite the Americana band Jubal Foster; Range’s ultimate direction. By lusher pop sounds, as the band re- 2019, not 1949. The musical ap-
capable of following in those foot- bass and dobro player Tim Surrett 2012, its breakthrough IBMA Al- visited some of its best-known proach and the material both
steps. The band won the top En- with the legendary Southern Gos- bum of the Year, “Papertown,” was songs with new orchestrations make this a record that should
tertainer of the Year honor at the pel group the Kingsmen Quartet built on everything from an All- featuring the Atlanta Pops Orches- satisfy a wide audience. It’s up to
2018 International Bluegrass Mu- and Ralph Stanley; and Grammy- man Brothers-influenced turn on tra Ensemble. the band, of course, whether it
sic Awards for a second time, and winning banjoist Marc Pruett with the blues standard “One Way Out” “Aeonic”—its very title taking wants to extend its reach as oth-
it had previously racked up Vocal Ricky Skaggs’s band Kentucky to a Roy Acuff number, and songs note of Balsam Range’s unusually ers have before.
Group of the Year, as well, this be- Thunder. Mandolin ace Darren by top contemporary Nashville stable, long-lasting member
ing an outfit with multiple mem- Nicholson and guitarist Caleb songwriters ranging from Buddy lineup—pushes the band’s eclectic Mr. Mazor, based in Nashville,
bers who take strong leads in the Smith have been no less revered and Julie Miller to Chris Stapleton choices further. There are songs reviews country and roots music
singing, most notably fiddle player in the field. Their grounding in and Mike Henderson as well as from indie rock-oriented singer- for the Journal.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A14 | Wednesday, January 9, 2019 THE WALL STREET JOURNAL.

youth sports in general: early spe-
cialization, year-round training, off-
THE COUNT season camps and personal coaches.
“I see a lot of guys becoming
EAGLES SEEK more specialized at an earlier age,”
said Alabama quarterbacks coach
A DIFFERENT Dan Enos. “That’s all they do, is
play quarterback.”
RESULT Playing quarterback has also
been made easier by spread of-
fenses, which have made high

ne of the NFL’s most de- school and college football more
bated topics heading into stylistically similar. Alabama head
this weekend’s divisional coach Nick Saban said that style
playoff games is whether the has diminished the importance of
Philadelphia Eagles are better off being able to read defenses, which
with Nick Foles or Carson Wentz traditionally took some time to
at quarterback. Filling in for an in- learn.
jured Wentz last season, Foles “Now, you have an offense where
led the Eagles on a playoff run a lot of plays are made in the pass-
that culminated in a Super Bowl ing game and the running game
victory. Then in December, after based on one singular read,” Saban
Wentz was sidelined with a back said, “which is pretty simple for the

injury, Foles led the team into the quarterback.”
playoffs and rallied Philadelphia By the national title game, most
to a wild-card win in Chicago. true freshmen have been on campus
Now comes the ultimate test of for a year anyway, as January en-
Foles’s value: a visit to New Or- rollment has become commonplace
leans where the Eagles lost to as a way to accelerate players’
the Saints 48-7 in November,
with Wentz at quarterback. That all prompted a shift in
It’s the third-biggest blowout
directly preceding a matchup of
the same teams in the postsea-
son since 1970, according to
How Clemson Emulated thinking, led by the two best teams
in college football, both featuring
instant quarterback sensations. “It
isn’t necessarily scary to play a
Stats LLC. Only one team that
lost by 35 or more points in a
regular-season matchup, the
2010 Jets, won a postseason re-
Silicon Valley freshman,” said Mike Locksley, Ala-
bama’s offensive coordinator this
season and the new head coach at
match, with New York topping Lawrence, from Cartersville, Ga.,
the Patriots in New England Trevor Lawrence led Clemson to the national title as a true freshman, arrived at Clemson as the top-rated
28-21 after dropping their Week recruit in the country. It would take
13 contest, 45-3. typifying a growing preference for skill over experience him until the Tigers’ fifth game to
Oddsmakers appear to be dis- win the starting job over senior
counting the prior result between became known for the relative freshman in 1998, then-coach Paul Kelly Bryant, though it wasn’t for

the Eagles and Saints. While youth of its executives—valuing Hackett cautioned reporters that he lack of confidence. “I felt like since

New Orleans is favored by eight skill over experience—Clemson typ- would still need more time to de- the beginning of the season, I was
points on Sunday, the spread was ifies the sport’s growing embrace of velop. “We’re talking two or three ready,” he said.
seven prior to the blowout on Santa Clara, Calif. quarterbacks straight out of high years,” Hackett said then. Only as a It was one thing for Lawrence to
Nov. 18. —Michael Salfino THE DAY BEFORE HE WON the on school. senior did Palmer win the Heisman have the evident talent to play the
national championship, Clemson “There’s kind of a shift towards Trophy. position. But taking on the leader-
Run It Back quarterback Trevor Lawrence was
reminded of an anniversary of
that, especially on the West Coast,
kind of away from the traditional
From the first BCS title game in
1999 through 2016, not a single
ship role that is often expected of
quarterbacks doesn’t come as
Playoff rematches after a regular- sorts. Tigers quarterbacks coach guy who was an intern and then team started a true freshman at quickly. Lawrence did it mostly by
us l,

season blowout of 35 or more Brandon Streeter told him Sunday worked for 55 years and now he’s a quarterback in the national champi- not overtly trying to.
points, since 1970: marked one year to the day that he CEO at age 100,” said Alabama of- onship game. But each of the past “He did not step on any toes,”
al a
SEASON RESULT PLAYOFFS arrived on campus, just a few weeks fensive lineman Jonah Williams, a three title games have featured true Streeter said. “When you come in
1991: WAS 45, DET 0 WAS, 41-10 after graduating from high school. California native. “I think football is freshmen in either starting or star- that way, now he’s at the stage
“I was helping him move in,” the same way.” ring roles. where he can be more of a vocal
ci on

2010: NE 45, NYJ 3 NYJ, 28-21

2018: NO 48, PHI 7 ? said Streeter, standing on clumps of Lawrence’s performance came Jalen Hurts started for Alabama leader because he’s taken lead of
1991: WAS 56, ATL 17 WAS, 24-7
confetti at Levi’s Stadium on Mon- one year after Tua Tagovailoa, then this offense. So many guys respect
day night. “Now look at this,” he a true freshman, came off the bench him now because he did it the right
2009: NYJ 37, CIN 0 NYJ, 24-14
added, surveying the celebration to lead Alabama to a comeback win way.”
1980: PHI 42, MIN 7 PHI, 31-16 around him. “It’s unheard of.” in the national title game against
Starting a true freshman Teammates nicknamed him Sun-
er rs

Source: Stats LLC What Lawrence did in Clemson’s Georgia. And it was aided by some at quarterback used to shine, for his resemblance to the
44-16 thrashing of Alabama was in- spectacular catches from another similarly long-haired quarterback
Tre'Quan Smith deed almost literally unheard of. true freshman, Justyn Ross, who
be akin to going for it on character in the 2000 football
Only once before had a team won had one touchdown grab and 153 fourth-and-25. movie “Remember the Titans.” But
m e

the national championship with a receiving yards. (Unlike “redshirt” they gleaned more about him from
true freshman starting quarter- freshmen—sophomores in their his work habits—getting to the
back—Oklahoma did it with Jamelle first year of play—true freshmen practice facility earlier than other
m rp

Holieway in 1985. And the Tigers are in their first academic year.) in a 2017 loss to Clemson. Jake players to watch game film—than
hardly did it in spite of the young Ross was an even more recent Fromm started for Georgia in they did from anything he said.
Lawrence. arrival in the college ranks, coming 2018—only to be outshone by Ta- “He’s kind of the most boring
At the advanced age of 19, he to Clemson in June after graduating govailoa. person there is,” defensive lineman
threw for three touchdowns on 347 from high school in the spring. “I The diminishing need for experi- Christian Wilkins said.
co Fo

passing yards against an opponent did not expect to play this type of ence as a prerequisite for football’s “His face is the same all the time
that had drawn comparisons to the role for such a dominant team,” he most celebrated on-field leadership no matter what. You can never re-
greatest teams of all time. But for said. role is extending even to the profes- ally get a read on him.”
as exceptional as Lawrence’s talent For most of college football his- sional ranks. Six of the 12 NFL play- Lawrence will be eligible for the
is, the speed of his ascent is no lon- tory, starting a true freshman at off teams this year started quarter- NFL draft in 2021, after his junior

ger an outlier. quarterback was akin to going for it backs younger than 25 years old, season. If he turns pro then, he
It is part of a new normal in on fourth-and-25. Even if coaches the most in a single postseason, ac- could end up sharing another simi-
which college football teams are re- were crazy or desperate enough to cording to the Elias Sports Bureau. larity with more than a few tech ex-
sembling the companies that reside try—and they rarely were—they The shift is rooted at the youth ecutives.
only a short drive from the site of wouldn’t expect much. level, where quarterback develop- Barring early graduation, he’d be
Monday’s game. When Southern California ment is being accelerated by the a college dropout—and soon, a very
Just as the technology business started Carson Palmer as a true same forces that have upended wealthy one.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
20s d t
Edmonton 10s <0 1 2 3 4 5 6 7 8 9 10 11 12 13 67 Anagrammatic 27 What you might
40s 10s -0s sing if you don’t

intruders in this
0s 14 15 16
Vancouver C gary
g y
20s puzzle’s longest know the words
30s 10s
Seattle ip
Winnipeg 17 18 19 Across answers 29 Made over
0s 30s 68 Thomas Hardy
Portla d
Portland Montreal 30s 20 21 22 34 Finish of an
heroine elementary
Bismarckk Ottawa 40s
Helena 10s A g
Augusta 23 24 25 26 27
Down school song
Mpls./St.. Paul
Pau T
Toronto 40s t
Boston 50s
50s Boise Pierre 28 29 30 31 1 Is aggrieved at 35 German city
40s oux
ux FFalls
Sioux ll Milwaukeek
A b ny Hartford
Albany rtford 60s
Detroit l
20s ew Y
New Yorkk 70s 32 33 34 35 2 Old olive oil 37 Hayao Miyazaki
30s Chicago Pittsb
Pittsburgh h
Reno y
Cheyenne Clev l d
Cleveland Ph
hil d lphi
Philadelphia 80s container specialty
Omaha h es
Des Moines 36 37 38 39
Sacramento Salt
lt Lake
Cityy Indianapolis shington
Washington D.C.
n Francisco
Topekak 30s Springfield
90s 3 Unweaned infant 38 Coloring
40s p g h
Richmond d 40 41 42 43
Colorado Charles
Charleston 100+
Las p g
Springs Kansas St.. Louis Lou
ill 50s 4 Carry-on 39 Present period
60s Ve
Vegas hit
Wichita City
l i h
Raleigh 44 45 46 47 48 49 50 checkers’ org.
Los AAn
kl h
Oklahoma Cit
Nashville C h l tt
Charlotte 42 Speaks from
Santaa F
Fe Memphisphi
70s Albuquerque C
Columbiab 51 52 53 54 5 Taoism’s memory
Phoenix Warm Rain
an Diego
50s Little Rock Atl t
Atlanta founder
70s Tucson
T c i h
Birmingham 55 56 57 58 43 Unpretentious
D ll
Dallas Jack
El Paso
Ft. Worth
60s Cold T-storms 6 “Pay ___ mind!”
Mobile Jacksonville 59 60 61 62 44 Norrbotten
Austin Stationary
7 Lexicography natives
-0s Houstont
l d
Orlando Snow 63 64 65 label
ew Orleans
an Antonio
San Tampa 45 Bread chain
80s 70s 66 67 68 8 God with pipes
0s 10s Honolulu
l l 60s 60s Showers Flurries
Miami 46 Pounce on
20s Anchora
A h 70s 9 Intl. travel jet
30s 70s Ice 49 Unseen
BUGS IN THE SYSTEM | now being
U.S. Forecasts Today Tomorrow Today Tomorrow By David Alfred Bywaters characters
City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W 10 Mooring spot
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;
Omaha 35 20 s 41 27 pc Frankfurt 39 31 c 35 27 sf Across 22 Swift specialty 44 Getaway 50 Used to be
t...t’storms; r...rain; sf...snow flurries; sn...snow; 11 Fix a mule, say
Orlando 72 41 pc 61 45 s Geneva 37 29 sh 35 25 c 1 Indulge in a 23 “I didn’t like it destination 52 Blender option
Today Tomorrow Philadelphia 44 30 c 37 22 pc Havana 81 61 pc 75 54 s
City Hi Lo W Hi Lo W tirade anyway” 47 Getaway 12 Letter-shaped
Phoenix 73 51 pc 70 47 pc Hong Kong 68 65 pc 70 66 pc 53 Clumsy landings
Anchorage 13 3 pc 8 -7 s Pittsburgh 30 21 sf 27 19 sf Istanbul 47 44 pc 55 47 r 5 Elocutionary destination dresses
25 Bug in a 57 Posthumous
Atlanta 52 29 s 47 30 pc Portland, Maine 41 29 r 36 12 pc Jakarta 88 75 t 88 76 t
peculiarities plutocrat’s 48 Slowpoke 13 Do halfheartedly
Austin 63 43 pc 60 46 c Portland, Ore. 52 47 r 57 42 c Jerusalem 44 37 sh 52 36 s bio
Baltimore 44 28 c 38 24 pc Sacramento 61 47 r 59 46 pc Johannesburg 86 62 s 83 63 pc 10 Rolled sandwich stash? 18 Quaint assent
Boise 48 36 c 49 28 pc St. Louis 37 21 s 37 25 pc London 43 35 pc 43 40 c 51 Bug convention? 60 Addition to a
Boston 48 33 c 39 18 pc Salt Lake City 43 27 pc 40 29 c Madrid 55 26 s 49 24 s 14 Outback foragers 28 Mustache 54 Make out 22 Doesn’t do bank acct.
Burlington 37 27 sn 27 5 c San Francisco 60 49 r 59 49 pc Manila 87 75 s 87 75 s maintenance anything
Charlotte 53 26 s 45 25 s Santa Fe 42 24 pc 43 23 pc Melbourne 69 51 pc 74 54 c 15 Heaven- tool 55 Follow 61 What I might
Chicago 24 15 c 28 20 pc Seattle 52 46 r 56 42 r Mexico City 70 45 pc 69 46 pc supporting Titan 24 Portents stand for
Cleveland 31 24 sf 26 22 c Sioux Falls 23 15 s 34 25 pc Milan 52 30 pc 49 25 pc 30 Buddy 56 “Fall back” gain
Dallas 58 41 pc 52 44 c Wash., D.C. 47 31 pc 41 26 s Moscow 15 13 c 18 10 sn 16 “Divine Comedy” 26 Offered a point 62 School near the
setting 31 Guinness Book 58 Up to, briefly
Denver 52 31 pc 58 30 s Mumbai 88 61 pc 90 61 pc of view Charles R.
31 21 c
82 69 pc 83 69 sh
30 18 c
International Paris
Rio de Janeiro
31 sh
76 s
40 32 pc
92 77 s 17 Bug in aerosol 59 Cherished
Today Tomorrow form? 32 Practical Previous Puzzle’s Solution
Houston 65 43 pc 59 43 c Riyadh 79 49 pc 65 47 pc 60 Bug that’s twice
City Hi Lo W Hi Lo W A G E T E AM C I T E D
Indianapolis 27 19 pc 32 20 pc Rome 56 35 pc 52 33 pc
19 Home to more 33 Unwilling as irritating? S O S O A R S S A T O R I
Kansas City 40 22 s 42 33 c Amsterdam 44 32 pc 42 38 c San Juan 83 69 pc 84 70 sh emigrants H O C F R I T T E R A WA Y
Las Vegas 59 43 pc 59 43 pc Athens 55 53 t 59 48 sh Seoul 32 20 c 39 22 pc than half of A G R O U N D U R A L
63 Port of
Little Rock 53 29 s 45 34 pc Baghdad 61 36 s 56 37 s Shanghai 44 42 r 47 46 r humanity 36 Bug empire’s R O O K C R I T I C A L
Los Angeles 66 50 c 66 50 s Bangkok 90 76 c 92 77 pc Singapore 86 77 t 87 77 t
Pennsylvania P O WD E R P U F F A L K A
20 Quizzical ruling family? T E R R O N A I R
Miami 78 51 pc 70 53 s Beijing 36 12 pc 42 17 s Sydney 82 71 pc 77 72 t 64 Break up T U R N O V E R O N D O W N S
Milwaukee 25 16 c 28 22 pc Berlin 37 34 sn 36 27 sn Taipei City 69 66 c 79 68 pc interjections 40 Major bore O R I O N E X P O
Minneapolis 16 10 pc 25 20 c Brussels 43 29 sh 38 33 c Tokyo 47 36 s 47 38 pc 65 January 13, e.g. A G A R H O N O R R O L L S
Nashville 46 24 pc 39 25 pc Buenos Aires 83 61 t 74 57 t Toronto 34 19 c 20 11 c 21 Where some 41 Indefinable T E L E P O R T R A I L
princes prep quality 66 Realtor’s goal A L O E S T U B B L E
New Orleans 62 41 pc 56 44 s Dubai 83 66 s 80 64 pc Vancouver 49 43 sh 50 43 r B U N S O F S T E E L E K E
New York City 44 32 c 36 22 pc Dublin 44 42 pc 49 42 c Warsaw 34 19 sn 24 11 pc A N N O Y S OM E N L I P
Solve this puzzle online and discuss it at

Oklahoma City 52 37 pc 47 40 c Edinburgh 40 38 pc 47 39 c Zurich 36 28 sn 33 22 sf G O WN S P I S A S M S

For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A15

High Tax Rates Aren’t Optimal BOOKSHELF | By Charles R. Morris

Paul Krug-
man, a Nobel
Prize winner,
slightly. Messrs. Saez and Di-
amond are describing a world
in which the wealthy have no
80 is more than 20, and pro-
spective earners and taxpayers
treat it as such.
doing so already.
Ditto Ms. Ocasio-Cortez’s
proposal to tax only income
The Road

lightly in his
New York
opportunity to shield or hide
their incomes. Look closely
and the authors’ “optimal”
top federal rate quickly be-
In fact, the Romers are
right: A large and growing lit-
erature continues to support
the claim that high marginal
above $10 million at 70%,
which might theoretically
yield $224 billion. Except all
evidence suggests that the
Goes On Forever
WORLD Times col-
umn, all the
comes 48% in a tax code like
America’s when state taxes
tax rates and big tax hikes are
harmful to economic well-be-
richest taxpayers are the most
diligent about mobilizing lob-
The Longest Line on the Map
By Holman W.
better appar- are included. ing. See the work of the Dallas byists and politicians to fina- By Eric Rutkow
Jenkins, Jr.
ently to fo- And not even the Romers Fed’s Karel Mertens and col- gle the tax code on their be- (Scribner, 438 pages, $30)

cus on his are convinced by their 84% top leagues, or the Romers’ own half.
real purpose: characterizing rate. Their study looks only at 2010 work finding a “highly The new congresswoman verybody loves a shaggy dog story. A good one should
anyone associated with “the interwar tax returns, when the contractionary” effect from from Queens is to be admired be long and implausible but still on the edge of
right” as an evil idiot. tiny number of relevant tax- postwar tax hikes. for a plan that would hit her possibility. The chronicle at the heart of Eric Rutkow’s
This week he leapt to the payers received mostly part- party’s own blue-state voters “The Longest Line on the Map” seems to qualify. The story
defense of Democratic fresh- nership and dividend income. hardest. But let’s remember involves the decades-long attempt to construct thousands
man Rep. Alexandria Ocasio- Their work tells us nothing Nobody really thinks why we’re having this discus- of miles of railway—and, later, highway—to “link the
Cortez’s idea of paying for a about an 84% rate’s impact on sion. Even $224 billion falls Americas.”
“Green New Deal” with a 70% labor effort in an economy like a top rate of 70% or short of the estimated $1 tril- Mr. Rutkow begins by invoking Henry Clay, who in the
marginal tax rate on the in- today’s. 80% is a good idea lion to $2 trillion in annual early 19th century imagined a trading system for exploiting
comes of top earners. They also point out that spending necessary to stabilize the riches of Spain’s new rebellious colonies—a system, as
Now your intuition might some of their data are “imper- in the real world. atmospheric CO2 by midcen- he put it, “of which we shall be the centre, and in which all
be that neurosurgeons and fect” and the results “per- tury. South America will act with us.” In fact, there was not
other highly paid folk would verse.” To wit, did the rich in Her defenders will hasten to much to exploit. Mexico and Argentina had modest
work less if the government the 1920s and ’30s really The theoretical cases for point out that she speaks only industries, but most of Central and South America was
took 70% of the proceeds. Or spend more on machinery and towering “optimal” tax rates of zeroing out U.S. emissions, either trackless jungle or
that lobbyists and politicians equipment even as the tax hit that Mr. Krugman cites always albeit by 2030. But U.S. emis- towering mountains, home to
would find it remunerative to went up, yet at the same time tend to trip up over political sions are only a 15% share (and mostly pre-literate societies.
arrange loopholes on behalf of form fewer new businesses? realities if nothing else. Politi- shrinking) of the global total. But the dream persisted,
these taxpayers, which would Their findings, they add, cians may find it politically Unless she has a plan for the often propelled by dubious
also negate the hoped-for rev- may be “confounded by the handy to be seen dinging the rest of the world, her Green agents. Hinton Rowan Helper
enues. enormous shocks affecting the rich, but they also find it use- New Deal is self-refuting. She’d was one such, a bit of a
But Mr. Krugman cites stud- economy over this period” ful to placate the rich by dish- have the U.S. spending $224 charlatan with a streak of
ies that suggest these effects (war, inflation, deflation, de- ing out loopholes. The net re- billion annually to have no genius. In 1866, he was
are negligible. The superfluous pression). And their results fly sult isn’t more revenue. It’s meaningful effect on climate. returning from a stint as the
earnings of these taxpayers in the face of “comparable more efficiency-inhibiting eco- But we digress. The real American consul in Buenos
aren’t really so valued by postwar studies” that find sig- nomic distortions. purpose of revisiting the al- Aires, groaningly ill from the
themselves or by society. A nificant detrimental effects We would also appeal to a leged optimality of high mar- sway of the ocean, when he had a
2011 paper by Peter Diamond from high marginal tax rates. simple, real-world intuition. ginal tax rates right now lies vision: “Why not by rail?”
and Emmanuel Saez, based on On second thought, their own Take Mr. Krugman’s suggested elsewhere. The goal is to make Although he had little understanding

a variety of extrapolations, study may find such effects 70% rate on incomes over $1 the spending plans of the of the challenges, he parlayed a line of

calculates that the “optimal” too if their discovery of re- million. If it were really possi- ultraliberals sound plausible blather into a seat at the table. Before long,
top tax rate is 73%. A paper duced business incorporations ble to fatten government enough to lure millennial vot- there was a proposal to build a Pan-American Railway,
the same year by Christina and in the 1920s and ’30s “holds spending annually by as much ers off the couch and into the backed by governmental subsidies.
David Romer finds an even up under further scrutiny.” as $650 billion (to use 2016
on voting booth. Like the young Railroads were a big-boys game. Among the contenders
higher “revenue maximizing” You would hardly call this a tax data) without killing the everywhere, they are excited for the project: Collis Huntington, looking to extend his
top tax rate of 84%. strong basis for junking the golden goose, we have to be- by radical proposals as long as Central Pacific and Southern Pacific lines; the financier Jay
Case closed? Not even well-established principle that lieve U.S. politicians would be somebody else is paying. Gould, who was more a rail consolidator than a builder; the
Boston-based investors in the Atchison line; and the highly
us l,

competent Colorado railroader William Palmer. All were

Could Emergency Powers Build the Wall? eyeing especially Mexico’s agricultural riches.
al a
Mr. Rutkow diligently—rather too diligently perhaps—
chronicles every conference over the years, every agree-
President statutory provisions letting a As originally drafted, it took showing that the declaration ment, every promise of money. Gould and Huntington
ci on

Trump has president take wide discretion- only a majority of the House would injure them in some formed an alliance, but it didn’t go anywhere. Indeed, very
threatened re- ary action without additional and the Senate to terminate a way. Because the federal gov- little got built. One problem, for a while, was that the only
peatedly to in- backing from Congress. presidential emergency decla- ernment does not own all the place to connect a railroad from South America to U.S. rail-
voke emer- One of these statutes, a mil- ration. But after the Supreme property needed to build a roads seemed to be the Royal Gorge, a 10-yard-wide canyon
gency powers itary-construction authoriza- Court in 1983 struck down a contiguous southern border in Colorado carved out by the Arkansas River. The catch
er rs

POLITICS to build his tion law enacted in 1982, gives law that allowed a single con- wall, it would have to use emi- was that it could accommodate just a single rail line, and it
wall on the the defense secretary the gressional chamber to reverse nent domain to seize land that was so deep—1,250 feet—that it would require infinite
southern bor- power to undertake “military a presidential action, Congress property owners refuse to sell. filling material.
By William
der if Con- construction projects . . . with- amended the National Emer- Standard eminent domain re- More troublingly, the landscape between Panama and
A. Galston
m e

gress refuses out regard to any other provi- gency Act to bring it into line quires just compensation for Buenos Aires is among the most daunting in the world.
to provide sion of law” once the president with the constitutional re- owners, but the Supreme Court Once rail construction got under way, the 11,000-foot Cerro
funds for it. By the time you has declared a national emer- quirement for two-thirds of has ruled that in some cases de la Muerte, or Mountain of Death, in Costa Rica took
m rp

read this, Mr. Trump may have gency. In carrying out these both chambers to override a the military can seize property years to subdue. Add to such challenges the incompetence
announced this step in his ad- projects, the secretary may use veto—a high hurdle, especially without compensation if neces- of the native construction crews, the murderous local
dress from the Oval Office. any and all funds appropriated in our polarized times. sary for urgent military pur- political regimes and the corruption—the graft was
I suspect most people’s first for military construction and poses. Either way, aggrieved dreadful—and the Pan-American Railway began to look like
reaction is the same as mine: not already obligated for other owners would probably be con- what it was: an impossible dream. President Theodore
co Fo

He can’t do that. But a deeper purposes. (Last September, Trump says he can sidered to have standing to Roosevelt seemed to have reached that same conclusion in
dive into the subject reveals a President Trump signed a bill challenge the government’s ac- 1905, when he gave priority to Panama Canal development,
more complicated and con- appropriating $10.3 billion for move without consent tion, opening the door for naval buildup and railroad regulation.
tested state of affairs. military construction during of Congress, but legal courts to review it.
On the one hand, Article I, fiscal 2019.) The president has Eminent constitutional
Section 9 of the Constitution made it clear that he regards scholars are divided. scholars, including many who It was an elegant idea, linking the Americas with
contains seemingly definitive unauthorized border crossings are no fans of President a rail line or highway. Too bad corruption and a
language: “No money shall be as a threat to national security Trump, disagree on whether
drawn from the Treasury, but and already has deployed The other check on the the president has the authority forbidding landscape has made it hard to realize.
in consequence of appropria- thousands of military person- president’s emergency power to build the wall via a national
tions made by law.” In 1884 nel to help thwart them. He comes from the judiciary. Once emergency. Yale’s Bruce Acker-
Congress enacted the Anti- could argue that a wall on the an emergency declaration is man argues that such action One of the last acts of the comedy was played by
deficiency Act, which forbids southern border is military announced, some plaintiffs would be illegal and that mili- Woodrow Wilson at the behest of Henry Clay Pierce, an oil
spending more on a line item construction within the inten- may have standing to challenge tary personnel who assisted man with major Mexican railway properties. After an

than Congress has appropri- tion of the law. it on statutory or constitu- would be breaking the law. incident between Mexican and American troops, Pierce
ated and prohibits the govern- Though the president’s stat- tional grounds. Though courts Harvard’s Mark Tushnet, in prevailed upon Wilson to invade Veracruz, where a power
ment from committing to fu- utory authority is broad, it is often defer to presidents’ judg- contrast, says that the presi- struggle was going on. Wilson might have listened to his
ture spending before Congress far from unlimited. In the first ment, in this case they may dent would be on “very solid better angels, for he was heard saying that he should

has approved it. place, the president must de- opt to explore the factual un- legal ground.” Taking a middle “remind myself that I am the president of the whole United
On the other hand: Though clare an emergency under the derpinnings of the declaration position, University of Texas States and not merely of a few property holders in the
the Constitution grants the terms of the National Emer- to determine whether it has a law professor Stephen Vladeck Republic of Mexico.” Twenty-two Americans were killed in
president no general emer- gencies Act, adopted in 1976 to rational basis within the stat- observes that “we’re in un- the action, as were more than 150 Mexicans. Eventually the
gency authority, Congress has bring order to a chaotic heap ute, and whether it gives pow- charted territory,” adding that “stridently anti-American” strongman Venustiano Carranza
enacted laws giving the presi- of emergency powers dating ers to the president that Arti- there’s a long list of statutes took over in Mexico and, as Mr. Rutkow writes, “assumed
dent specific powers to cope back decades. The law requires cle II of the Constitution does that “give far too much power control of every aspect of the rail system that US capital
with particular crises. Thanks the president to specify which not permit. to the president but that we had first started building in 1880.” The national railway,
to a prescient study last year statute authorizes his declara- Not everyone who objects to didn’t used to worry about be- like Ozymandias’ statue, rusted in the wilderness.
by the Brennan Center for Jus- tion, and Congress then has an the declaration is entitled to cause we assumed there would There would be yet another attempt to fulfill the vision
tice at New York University, opportunity to disapprove the challenge it in court; would-be be political safeguards.” that Hinton Helper conceived during his nauseous ocean
we know that there are 123 president’s action. plaintiffs must make a credible It’s time to start worrying. voyage. Instead of “Why not by rail?,” the question became:
“Why not by automobile?”
By the 1920s, automobiles were America’s quintessential

Price Drugs According to What They Do product. Car manufacturers recognized that better roads
would help sell cars, and a technology of road building
emerged. It would soon become part of a new effort to link
By Roger D. Klein cratic measures to restrict fixed rates, calculated on the Though Medicare rules the Americas.

the use of some drugs. Physi- basis of average sales prices. and bureaucratic constraints In 1923, when an inter-American conference was
n the U.S., medications cians often must get ap- If rebates caused the prices of preclude pricing drugs ac- convened in Santiago, Chile, one of the hot-button issues
are priced and sold by the proval before an insurer will these drugs to drop, that cording to indication, the was whether to cease funding the Pan-American Railway.
pill, capsule or fluid pay for a medicine. Insurers could reduce the reimburse- Centers for Medicare and The decision was finessed by converting the whole idea into
ounce. A better approach tell doctors to try the cheap- ment fees paid to hospitals Medicaid Services is taking a highway. Four presidents—Harding, Coolidge, Hoover and
would be to charge different est drugs first. Placing ex- and doctors. steps to encourage use-based Franklin Roosevelt—would line up in support of it, with
prices for a medicine based pensive drugs on less-favored Second, pharmaceutical utilization management and FDR increasing the funding dramatically.
on the disease for which it is tiers with higher copayments manufacturers can’t charge purpose-based coverage in World War II intervened, although at first the Latin
prescribed. While the current is commonplace. But these Medicaid more than their the program. More impor- American subventions grew to help forestall German and
drug-purchasing system is too crude tactics don’t consider lowest sales price. This “best tant, the agency can include Japanese meddling in the hemisphere. By 1942, however, a
complex to reform overnight, price” rule often sets a indication-specific pricing in more confident military began transferring the money to
there is a simple change that drug’s price according to its future Medicare demonstra- the European and Japanese theaters. But in the 1950s,
could improve health out- A simple reform to least valuable use. In addi- tion projects. substantial funds were returned to the Western Hemi-
comes and control spending: improve outcomes tion, under Medicaid rules, Lawmakers, the Depart- sphere, thanks in part to fears of communist encroachment
disease-specific rebates. manufacturers must give ment of Health and Human in South America. The highway was filled out by the 1,500-
Take a drug that wipes out and control costs. steep discounts to certain Services, insurance companies mile Alcan Highway, terminating in Alaska, built very
malignant cells in lung cancer hospitals and clinics. This and drug manufacturers quickly by the American military.
but is inconsistent in its abil- means discounting drugs should work together on leg- But this is still a shaggy-dog yarn. As Mr. Rutkow
ity to kill pancreatic cancer the relative values of drugs based on each use could fur- islative and regulatory reminds us in the last part of his engrossing tale, the Pan-
cells. In a world of “indication when administered for differ- ther burden already strained changes to permit greater use American Highway is still not finished. There is a gap in
based” rebates, the manufac- ent diseases. Pricing drugs manufacturers. of indication-specific pricing Panama—the so-called Darien Gap, as much as 100 miles
turer would pay the insurer based on their uses would re- Third, the Food and Drug of pharmaceuticals. As the wide at certain points. Among the problems there: deep
or pharmacy benefit manager duce the need for obtrusive Administration could rule that health-care industry moves swamp mud and nasty critters galore. But even if the
an agreed-upon amount each management techniques. price negotiations for off-label away from paying for volume project is finished one day, there is always aftosa to worry
time the medication is used Despite recurring public uses constitute unlawful pro- to rewarding value, it could about. Aftosa is foot-and-mouth disease: There is reason to
to treat a patient with pan- debates about disease-based motion of a drug. Finally, en- be a winning formula. fear that the highway would become a vector for it. Some
creatic cancer. drug pricing, there are obsta- forcement agencies and regu- dreams may not be worth pursuing.
Under the current pay- cles to widespread adoption. lators could potentially view Dr. Klein, a physician and
ment structure, insurers re- First, drugs paid for by Medi- some pricing arrangements as a lawyer, has advised the Mr. Morris is the author of “A Rabble of Dead Money:
sort to heavy-handed bureau- care Part B are reimbursed at illegal “kickbacks.” FDA, CMS and HHS. The Great Crash and the Global Depression: 1929–1939.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

A16 | Wednesday, January 9, 2019 * **** THE WALL STREET JOURNAL.


Ghosn in Wonderland Costly iPhone Canary and U.S.-China Rift

arlos Ghosn finally received 10 minutes with Nissan for any amount that wasn’t dis- Your Jan. 4 editorial “The iPhone reality than Mr. Cook’s comments that
in a Japanese courtroom Tuesday, and closed. Draft proposals for post-retirement Canary” notes “the interdependence of you cite. Chinese consumers are likely
the U.S. and Chinese economies” and to have been turned off by the iPhone
the prosecution case against him looks compensation were inspected by Nissan law-
that “the two countries’ economies are XR’s 6,499-yuan price tag given the
no better now than it did when yers, “internal and external,”
the former Nissan CEO was ar- The case against the and also weren’t contractual,
entwined for better or worse.” While it
may have been President Richard
Huawei Mate 20’s price is 3,999. Com-
petition matters more than macro un-
rested way back on Nov. 19. former Nissan CEO gets he says. We look forward to Nixon who “opened” China to the certainties.
One of the strangest cases in hearing prosecutors explain West, it was President George H.W. JOHN CIRRITO
the history of international no stronger with age. why it’s a crime for Mr. Ghosn Bush, the former chief liaison from Scotch Plains, N.J.
business gets curiouser and not to disclose a non-contract Washington to the People’s Republic,
curiouser. for non-compensation. who initiated a policy of interdepen- Your editorial connects dots from a
Readers may recognize the “Alice in Wonder- Mr. Ghosn also offered plausible defenses for dence between the two economies. dip in U.S. stock prices to Apple’s dis-
land” reference above, and there certainly is a two other allegations. Nissan covered the then Trade with China and its integration appointing iPhone sales in China to
“sentence first, verdict afterwards” quality to CEO for some collateral he used for foreign-ex- into international institutions have China’s weakening economy to Presi-
been tremendously successful in reduc- dent Trump’s bellicosity and heavy-
the Ghosn proceeding. The man who was a folk change contracts to ride out changes in the yen-
ing tensions between the two countries handedness in confronting China’s
hero in Japan for saving Nissan has so far been dollar rate. He was paid in yen but had dollar for nearly 30 years. We’re currently mercantilism. If continued U.S. tariffs
formally charged only with misreporting income costs outside Japan. The forex contracts were witnessing a severe test of the and trade-war threats result in a stale-
to Japanese regulators. But while he’s been de- later transferred back to Mr. Ghosn, and Nissan strength of this bond. mate or worse, China’s sinking econ-
tained for seven weeks, prosecutors keep piling had no losses. I assume that no American will fault omy could suck the U.S. and the global
on other allegations to investigate so they can Prosecutors also say Mr. Ghosn may have had the stated aims of the current presi- economy down with it.
detain him further under Japanese law. Nissan make payments to a longtime Nissan dent’s initiative: trade parity, protec- Can and should trade relations with
As the world is learning, the practice of Japa- partner, the Khaled Juffali Co., in return for tion of intellectual property and the China be divorced from U.S. national
nese prosecutors isn’t to indict someone and business Juffali did for Mr. Ghosn. But Juffali like. But it’s worth noting that the aim security and other noneconomic inter-
then go to trial to test the evidence against the and Mr. Ghosn both say the payments to Juffali of President George H.W. Bush’s strat- ests, even if trade war is akin to point-
egy was geopolitical, not economic. Is ing a gun at one’s own head and
defense. In Tokyo prosecutors hold and interro- were appropriate for “critical services that sub-
it wise to risk sacrificing the gains of threatening to pull the trigger? Gerard
gate a defendant without a lawyer present until stantially benefited Nissan.” the former for improvement of the lat- Gayou’s op-ed on the same day, “Xi’s
he confesses. The trial is essentially pro forma, The judge is expected to rule on Mr. Ghosn’s ter? And more pointedly, do current Promise to Taiwan Sounds Like a
with guilt preordained. bail request by the end of this week, but then events indicate the likelihood of a de- Threat,” is the latest of many columns
The problem for prosecutors is that Mr. prosecutors could come up with new allegations cline on both fronts? and news articles that touch on China’s
Ghosn refuses to confess because he insists he to hold him in prison for longer. Prosecutors say BOB DENMARK thrust toward hegemony in Asia. Tai-
did nothing wrong. His Japanese lawyer used Mr. Ghosn is a flight risk and could destroy evi- East Hanover, N.J. wan is the second canary in China’s
a rare procedural move Monday so Mr. Ghosn dence, but if prosecutors don’t have enough evi- new sphere of influence. Hong Kong
could appear before a judge and read a state- dence by now what is there to destroy? You write in your editorial that al- was the first, and although that canary
ment declaring his innocence in public for the The long detention is putting more pressure though Apple Inc. CEO Tim Cook is “an remains alive, its democratic wings
first time. His defense is more persuasive than on Renault to remove Mr. Ghosn as chairman. engineer by training,” he has diag- have been clipped. The risks of escala-
nosed like an economist why 100% of tion are high, but the threat of an un-
the prosecution’s public evidence. Renault has an alliance with Nissan and Mitsubi-
Apple’s year-over-year world-wide rev- checked China is equally sobering.
“Contrary to the accusations made by the shi Motors that increasingly rankles the Japa- enue decline occurred in Greater ALAN JONES
prosecutors, I never received any compensation nese, and a fair surmise is that the Ghosn inqui- China. As you report, Mr. Cook said, Atlanta

from Nissan that was not disclosed, nor did I sition is part of a Japanese effort to break up “We believe the economic environment

ever enter into any binding contract with Nissan this alliance that Mr. Ghosn had put together. in China has been further impacted by I love Apple products and my house-
to be paid a fixed amount that was not dis- The French aren’t going out of their way to raise rising trade tensions with the United hold is full of them, but let’s be honest:
closed,” Mr. Ghosn told the court. a stink about the way Japan is treating Mr. States.” Mr. Cook goes on to indicate The first iPhones were introduced at
The “compensation” was a notional account Ghosn, which suggests they may care more
on that the effects of the uncertainty ap- $499, a price subsidized by AT&T. To-
maintained by Mr. Ghosn of what he might have about the alliance than about what Mr. Ghosn pears to have reached the consumers. day’s models top out at more than
earned had Nissan paid him by international did to save the French auto industry. But these explanations look like ex- $1,000. Name another electronic device
auto-executive standards. Everyone knew he All of this looks to us like a dispute that cuses in the context of recent develop- that costs more with each version?
ments in the market. The electronics business model has al-
us l,

was underpaid by those standards, and both should have been handled in a boardroom, not
Take the news story in the same ways been new versions offer more
Ford and GM had attempted to hire Mr. Ghosn a courtroom. Meanwhile, Mr. Ghosn sits in day’s Journal: “Apple’s Troubles Ex- features at lower prices than the old
away from Nissan. prison, where he can contemplate a case of what
al a
tend Beyond China.” It notes that Ap- versions. Maybe, just maybe, consum-
But he says he never had a “binding contract” looks like the Red Queen’s justice. ple’s Chinese rivals, including Huawei ers have reached the point where it’s
Technologies Co., are selling feature- just too much to pay now with great
ci on

competitive smartphones at dramati- alternatives available at lower prices.

Who Is More Macho? cally lower prices. Their analysis of
Apple’s woes seems closer to Apple’s
Melbourne, Fla.

he dialogue of the deaf that is Amer- because U.S. policy lets illegals claim asylum
ica’s immigration debate was on full and stay here and work during the months or
er rs

display Tuesday night as President years it takes to hear their cases. Democrats
Trump and Democratic Congressional leaders ought to help change that perverse incentive, Infrastructure Needs Meet the Pork Barrel
talked past one another to an American public but instead they want to blame Mr. Trump for Regarding your editorial “You Call be doing with conscripted (or bor-
that could be forgiven for tuning out and re- being “cruel.”
m e

That ‘Infrastructure’?” (Jan. 4): The rowed) capital.

turning to more illuminating programming like Democrats Nancy Pelosi and Chuck Schumer American Society of Civil Engineers The federal government is cur-
“The Bachelor.” also showed no sign of compromise, blaming (ASCE) is encouraged that both Presi- rently running near a $1 trillion defi-
m rp

Mr. Trump made his case for more funding by Mr. Trump for the partial government shut- dent Trump and the new House ma- cit in its current budget; this during a
asserting there is “a growing humanitarian and down and refusing to talk about border security jority have signaled that infrastruc- time of 3% GDP growth, 3.2% average
security crisis at our southern border.” He then until the government is funded. But then they’ll ture is an area for bipartisanship. The hourly earnings growth, 3.9% unem-
offered a parade of crimes committed by illegal have no reason to provide more money for the desire exists within the legislative and ployment, and firms continuing to cite
immigrants that are horrible but are unlikely to border. Democrats are going for total political executive branches, and now it is time difficulty in finding qualified workers
co Fo

to put that desire into action. as one of the largest challenges in

be stopped by a “steel barrier” at the border. victory because they think Republicans will
The first step Congress and the their businesses. Let’s be honest—this
Barriers have worked in some places, but deter- start to waver in Congress and vote to reopen Trump administration should take is is blatant pork-barrel spending, pure
mined criminals will find other ways to smuggle the government. to address three major infrastructure and simple.
drugs and people into the United States. The obvious deal is for Democrats to provide priorities at the federal level: fixing There is no economic philosophy—
Mr. Trump was most honest when he talked border money to Mr. Trump in return for legal the Highway Trust Fund, removing classical, Keynesian, neoclassical or
about the humanitarian harm caused by the re- status for Dreamer immigrants and others like the arbitrary cap on the passenger fa- even Marxism that would tolerate
cent migrant rush seeking asylum in the U.S. Haitians on temporary visas facing deportation cility charge to modernize our na- such action in the current economic
This really is overwhelming U.S. Customs and soon. But neither side showed any interest in tion’s airports, and ensuring all funds environment. it is all too easy to
Border Protection, which needs more resources such common sense on Tuesday. Back to your in the Harbor Maintenance Trust spend “other people’s money.”
to take care of families and children. They come regularly scheduled political morass. Fund are being used for their in- KEVIN G. WASPI, CFA
tended purpose. Urbana, Ill.
We also see the need for leveraging
A California-Nevada Tax Brawl private investment to address the in- If the Republicans were smart, they

vestment gap, but private investment would challenge the Democrats by

alone won’t solve the problem. We be- proposing to repeal the Davis-Bacon
ast June the Supreme Court overturned In 2016 the Court split on whether to overturn lieve that the federal government can Act, which created “union prevailing
a 50-year precedent and let states im- Hall, but ruled 6-2 that Nevada courts must apply be a better partner in infrastructure wages,” and was passed in 1931. The

pose sales taxes on businesses with no the same damage limits to California agencies as development, as it once was, by bring- reason for repeal is quite simple. The
physical presence in those they do to their own. ing additional resources to the table Davis-Bacon Act was a response by
states. On Wednesday the Jus- The Supreme Court gets After damages were pared that will better leverage state, local Rep. Robert L. Bacon of New York to
tices will consider whether to another chance on state to $100,000, the board is again and private investment. While we prevent a contractor from Alabama,
repudiate another precedent asking the Court to toss Hall. It must reform permitting rules and re- who previously won a bid and built
that lets taxpayers and busi- sovereign immunity. argues that Court decisions duce government red tape, we cannot
set aside standards that protect the
what we consider a VA hospital today,
in his district, from bidding again.
nesses seek legal redress for over 30 years have strength- health, safety and welfare of the pub- The contractor’s offense was using Af-
harassment and injuries by ened state sovereign immunity. lic, and the need to improve our envi- rican-American workers he trans-
other states. But those cases implicate federal limitations. As ronmental quality. ported from Alabama. The contractor
The question in Franchise Tax Board of Cali- Justice Anthony Kennedy wrote in Alden v. Unfortunately, if Congress and housed, fed and paid his workers.
fornia v. Hyatt is whether states enjoy sover- Maine (1999), “the Constitution did not reflect President Trump don’t come up with There was never an issue regarding
eign immunity—the principle that governments an agreement between the States to respect the a solution to fund infrastructure, ev- the quality of the work.
can’t be sued without their consent—in other sovereign immunity of one another” and “treats ery American family will continue to In 1979 the Government Account-
states’ courts. States have long been immune the powers of the States differently from the lose $3,400 in disposable income each ability Office published a report stat-
from civil liability in their own jurisdiction, and powers of the Federal Government.” year, which is essentially $9 each day, ing that the Davis-Bacon Act should
the Eleventh Amendment grants them protec- The nub of Hall is a tension between states’ due to poor, unreliable infrastructure. be repealed. We could, arguably, get
Leaky pipes, bridge closures and the 15%-20% more “bang for the buck” for
tion in federal court. sovereign interests in avoiding potentially
occasional blackout aren’t just incon- infrastructure projects if Davis-Bacon
But under Nevada v. Hall (1979), states may costly litigation and protecting their citizens venient—they add up to real dollars is repealed. Better late than never.
still be sued in sister states. The Court held that from injury. States say hefty legal judgments and cents. We can and must do better. BRIAN GLASS
sovereign immunity in other states’ courts is could impair public services, but courts often ROBIN A. KEMPER, P.E. Glen Allen, Va.
not guaranteed by the Constitution and would dismiss lawsuits or reduce penalties against President, ASCE
“constitute the real intrusion on the sovereignty other states to preserve comity. Washington
of the States—and the power of the people—in Lawmakers who supported overturning the Pepper ...
our Union.” California’s Franchise Tax Board is “physical presence” standard for sales tax col- This outrageous summary of nones-
challenging this 40-year precedent. lection in last year’s Wayfair case now complain sential infrastructure items proposed
And Salt
Three decades or so ago, inventor Gilbert that remote retailers may seek legal recourse in by Chuck Schumer-led Democratic THE WALL STREET JOURNAL

Hyatt moved to Nevada, prompting a crusade their home states. States dismissed small busi- senators shows that Democrats aren’t
serious or honest about resolving our
by California’s tax board to prove he was lying ness worries about being hounded by tax collec-
real transportation needs.
about his residency. Auditors travelled to Ne- tors across the country, yet now they grouse LARRY HIMES
vada, rummaged through his garbage, con- about the potential costs of lawsuits by taxpay- Mesa, Ariz.
scripted his estranged family to testify against ers in other jurisdictions. Lawsuits have not
him, and leaked his Social Security number and been a major drain on government budgets since When highlighting some examples
other private information to the press. Hall was decided, and states can better bear the from the Senate plan floated last
Mr. Hyatt sued the California board in Ne- legal bills than small businesses can. March, any reader should immediately
vada for invasion of privacy and fraud. The If the Court overturns Hall, governments scream “mission creep” in the context
board responded that Nevada must respect Cal- could bully, extort and defraud residents of of what a federal government should
ifornia law granting its agencies sovereign im- other states with legal impunity and no politi-
munity under the Constitution’s Full Faith and cal accountability. The Court was right in Hall Letters intended for publication should
Credit Clause. The U.S. Supreme Court in 2003 that it “may be wise policy, as a matter of har- be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
disagreed. monious interstate relations, for States to ac- or emailed to Please
In the spirit of comity, Nevada’s Supreme cord each other immunity” and “they are free include your city and state. All letters
Court tossed several claims and punitive dam- to do so.” But imposing such obligation by judi- are subject to editing, and unpublished
ages but affirmed a $1 million judgment for oth- cial decree would undermine state sovereignty letters can be neither acknowledged nor “Okay, you can run and you can hide,
ers. The board again sought High Court review. and federalism. but can you name all 50 states?”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | A17


What Trump Means by ‘America First’

By Dennis Ross other countries or intervene in con- deals with those who threaten them.

flicts was for them a question only of Recall that the Saudis intervened in
here’s more than one type U.S. interests, narrowly defined. Val- Yemen to impose limits on Iranian
of isolationist. Some in the ues and humanitarian concerns expansion largely because they be-
1930s were pacifists on should not play a role. Sen. William lieved the Obama administration
philosophical grounds; Borah, an Idaho Republican who would not. The expected U.S. retreat
others opposed Franklin served from 1907 until his death in from Syria now forces Riyadh to con-
Roosevelt’s support for the British, 1940, was for Jonas the driving polit- front a new dilemma. If the Saudis
fearing it would drag America into a ical force of the movement. believe Russia can manipulate Ira-
European war; and some even ad- Mr. Trump is a 21st-century bel- nian threats against them by offering
mired the Nazis. The America First ligerent isolationist. He believes mul- mafia-style “protection,” they may
Committee, for which Charles Lind- tinational institutions and agree- feel unable to withstand Russian
bergh was spokesman, contained the ments do nothing for America. pressure to cut oil production signif-
full range of these views. Since Presi- Alliances are encumbrances: Either icantly to drive up the price.
dent Trump has made “America the allies don’t pay their fair share, Mr. Trump’s approach ultimately


First” his calling card, one might as- or if they do, like the Baltic states in will increase the likelihood of conflicts
sume that Lindbergh & Co. are the the North Atlantic Treaty Organiza- that draw American involvement—
antecedents of his foreign policy. tion, they might drag the U.S. into a even while he is president. Israel, for
war if Russia attacks them. For Mr. examples, is not going to allow Iran to
Trump, international commitments remain untouched if its Hezbollah
His historical antecedent? tie America down and are expensive proxies launch tens of thousands of
to fulfill. rockets from Lebanon and Syria into
Not Lindbergh but the Belligerent isolationism does not the Jewish state. And how would Iran
‘belligerent isolationism’ require withdrawing from the world. Sen. William Borah (R., Idaho) served from 1907 until his death in 1940. respond? It can’t add much to the
It means, instead, guiding relations Hezbollah rockets, so does it hit Saudi
of Sen. William Borah. with other countries, or nonstate ac- and in the short term. It is all tactics ously blamed Israel when Syrian gov- Arabia or others in the Gulf? If it
tors like the Kurds, by the sole crite- and no strategy—but since the desire ernment forces shot down a Russian does, what happens to the oil supply?
rion of what they are doing for is never to be encumbered, and to be aircraft, killing 15, Israel felt com- Ignoring the risks and retreating to-
But they’re not. “Belligerent isola- America now. The Kurdish-led Syrian able to switch allegiances or make pelled to scale back its attacks day could drag America back into a
tionists,” a group identified by diplo- Democratic Forces may be doing the deals with anyone, strategy is not against Iranian and Shiite militia tar- larger conflict tomorrow.
matic historian Manfred Jonas in his brunt of the fighting against Islamic even required. gets in Syria. Israel’s security estab- Uncertainty about American lead-
1966 classic, “Isolationism in Amer- State, but ISIS is mostly defeated Regrettably, the world is not so lishment knows that Mr. Trump has ership does not make the world
ica, 1935-41,” are Mr. Trump’s true and Turkey threatens to enter north- simple; there is a strategic cost when left them alone to deal with the safer. Belligerent isolationism means
forerunners. More than isolationists, eastern Syria and come into conflict no nation feels it can count on the threats from the north. But it is un- others cannot count on the U.S.; con-
these thinkers and politicians from with Kurdish forces. That creates a U.S. Moreover, when America shirks clear how long Israel will wait as the sequently, the U.S. cannot count on
the first half of the 20th century potential cost—and for Mr. Trump, responsibility for taking the lead in Iranian presence grows not only in them. Threats like terrorism and the
were unilateralists, reflecting a tradi- why should the U.S. be in Syria any- response to transnational threats, it Syria, but also in Lebanon, where rise of China require partners, and
tional impulse in American thinking. way? Withdraw and you reduce the creates vacuums that worse forces Iran seeks to provide precision guid- America risks losing them. A bellig-
They did not want the U.S. encum- cost. The gains from the Kurds fight- are only too happy to fill. The Rus- ance to thousands of Hezbollah rock- erent isolationist America may well
bered. International institutions ing ISIS have been largely realized, sians and Chinese are seizing the op- ets aimed at Israeli population cen- be unencumbered, but it is also likely
would inhibit the U.S., so it should so the Kurds are no longer of much portunity to extend their spheres of ters and other high-value targets. to be alone.
have little to do with them. They saw use. If the Turks want to be there, let influence and bully other nations, in- When America’s friends and part-

alliances as too constraining, impos- them; if the Iranians or the Russians cluding traditional American allies ners believe they are on their own, Mr. Ross has held senior national

ing costly obligations and limiting want to move in deeper, go ahead. and partners. they will either act unilaterally, in a security positions in several presi-
American freedom of action. The belligerent isolationist mea- Consider developments in the way that may not be well-considered, dential administrations and is coun-
Whether the U.S. should ally with sures costs and benefits narrowly Middle East: After Russia errone- or feel they must make suboptimal selor at the Washington Institute.
Democrats Contend With the ‘Anger Translator’
us l,

The White House There have been some half- and other Democratic presidential now,” said President Kennedy in down to 24% in 1929 from 73% in
Correspondents’ hearted attempts by Democratic wannabes. 1962, when he previewed legislation 1921. As would occur again de-
al a
Dinner in 2015 in- leaders to distance themselves from It was Ms. Ocasio-Cortez’s re- that would lower personal income- cades later, a significant increase
cluded an ingenious Ms. Tlaib’s remarks and Ms. Ocasio- sponse Sunday to a question about tax rates among all earners. JFK in government revenues followed
skit featuring Presi- Cortez’s plans, but the reality is marginal income-tax rates that re- was assassinated before Congress and the ’20s roared. Moreover, the
ci on

dent Obama and the that both women are expressing ceived the most attention. When could act, but his successor, Lyndon wealthiest earners not only paid a
comedian Keegan- views that fall well within the Mr. Cooper asked her if she had a Johnson, made tax relief his top larger total amount of taxes but
MOBILITY Michael Key. As Mr. party mainstream. Dutifully, they’re specific tax rate in mind, the con- priority, and in 1964 rates fell also a higher percentage of all
Obama stood at a trying to mollify the “resistance” gresswoman replied: “You look at across the board. The top marginal taxes collected. In 1920, people in
By Jason L.
lectern offering va- while Democratic leaders appeal to rate, which had been 91%, was re- the top bracket were responsible
er rs

pid pleasantries more-moderate and independent duced to the 70% cited approvingly for 29.9% of all federal income
about White House voters. Nancy Pelosi will have by Ms. Ocasio-Cortez. The bottom taxes. By 1928 they were paying
press coverage, his “anger transla- Sure, Speaker Nancy Pelosi has rate fell to 14% from 20%, and all more than double that share, even
tor,” portrayed by Mr. Key, lurked insisted that Democrats are fo- a hard time keeping 22 rates in between were reduced though their tax rate had been
m e

behind him acting out what the cused on health care and infra- the ultraprogressives as well. slashed to 20% from 77% over the
president was really thinking. structure, and not on running the By mid-1965 revenue already far same period.
Today, Democrats keep their “an- president out of the Oval Office. in her caucus quiet. exceeded what it had been in the The administrations of Ronald
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ger translators” in-house, among She even spurned a request from year before the rates were lowered. Reagan and George W. Bush cut
the progressive members of the Ms. Ocasio-Cortez to establish a Disposable income increased and high marginal rates with similar
116th Congress sworn in last week. House committee tasked specifi- our tax rates back in the ’60s, and unemployment fell. It was a tax re- results. Instead of stashing money
Already we’ve heard Rep. Rashida cally with advancing the freshman when you have a progressive tax duction, not a tax increase, that in tax shelters, people invested in
Tlaib, the freshman Democrat from lawmaker’s green agenda. But these rate system . . . sometimes you see swelled government coffers and fi- the private economy, producing
co Fo

Michigan, announce with an ob- disagreements are over tactics, not tax rates as high as 60 or 70%.” But nanced LBJ’s Great Society and War more taxable income for the fed-
scenity that her caucus is dead-set objectives. The speaker and the the lesson of the 1960s is that low- on Poverty. eral government to spend. A man-
on impeaching President Trump. freshmen remain united in their ering tax rates, not raising them, Kennedy and Johnson weren’t tra on the class-warfare left is that
Next came Rep. Alexandria Ocasio- desire, among other things, to im- boosts government revenue. And blazing any new trails in calling the rich need to pay their “fair
Cortez of New York, laying out the pose single-payer health care, in- it’s a lesson that the political left for tax cuts to help spur the econ- share,” yet Democrats are reluctant
new House majority’s ambitious crease environmental regulations continues to ignore. omy. They knew it had happened to reduce top marginal rates, which
agenda—universal health care, free and, yes, impeach Mr. Trump. “It is a paradoxical truth that before in the 1920s when Andrew historically has been a surefire way
college tuition, a Green New Deal to There’s little difference between tax rates are too high today and tax Mellon, Treasury secretary under to increase the tax burden carried
combat climate change—in an inter- Alexandria Ocasio-Cortez’s progres- revenues are too low and the Presidents Harding and Coolidge, by “the rich.” Their “anger transla-
view with Anderson Cooper that sive cri de coeur and the campaign soundest way to raise the revenues oversaw a series of tax cuts that tor” gets the best of them every
aired Sunday on “60 Minutes.” platforms of Sen. Elizabeth Warren in the long run is to cut the rates pushed the top marginal rate time.

Have We Got a Carbon Tax ‘Dividend’ for You


By Mark P. Mills those agnostic about climate claims First, cost aside, it would take de- fuel-tax hike. Even a 50% levy fee wouldn’t reduce hydrocarbon

but eager to check the box for politi- cades—probably a century—to re- wouldn’t be enough to drive hydro- use unless it were exorbitant.

his could be the year Congress cal expediency; those in search of structure America’s energy ecosys- carbon consumption downward; it The Baker-Shultz plan would
tries to enact the mother of all some “grand bargain” on tax or reg- tem. That means a carbon tax would would only slow the rate of growth. ratchet up the fee should consumers
taxes, a carbon tax—a levy on ulatory reform; and those eager to be effectively permanent. The finan- We know this because the market fail to behave. So far so good for the
the use of oil, natural gas and coal. find more ways to extract money cial and physical scale of the energy has done the experiment. In the de- green camp, but the “dividend” hits
Everything that is fabricated, grown, from the economy. This mélange of infrastructure is so enormous that cade before the 2008 recession, a roadblock in not subsidizing non-
operated or moved is made possible motives covers a lot of political ter- changing it isn’t, to use the popular hydrocarbons and, worse, proposing
by hydrocarbons. That makes the ritory. analogy, like changing the course of simultaneously to eliminate carbon
carbon tax different from a mere Advocates say a carbon tax would a supertanker, but of a ship 1,000 Rent seekers, virtue regulations that “are no longer nec-
consumption or excise tax. The latter reduce the use of hydrocarbons by times as large as a supertanker. The essary” or are “too intrusive.” For
is attached to purchasing—spend creating a disincentive. The money U.S. has already spent hundreds of signalers and green Washington’s green lobbyists, those
more, pay more. A carbon tax is a collected could be used to subsidize billions of dollars on green subsidies lobbyists will love it. are fighting words.
tax on existence, because all aspects alternative energy sources. Grand- with piddly results. Wind and solar And we’re talking politics. Once
of living require energy, and hydro- bargainers want to split the carbon combined, the favored alternatives Taxpayers not so much. the parties have agreed to the prin-
carbons provide 80% of America’s tax bounty to offset or eliminate to hydrocarbons, provide a mere 3% ciple—a new carbon tax, or “fee”—
energy, more for the rest of the other taxes or regulation they deem of the country’s energy. the horse trading would begin. Split
world. And hydrocarbons are used to more onerous. Some conservatives Second, citizens eventually react when global economies were boom- the difference: a dividend here, a
create or build everything else that claim a carbon tax is in theory a when governments raise the cost of ing, world-wide demand for oil in- subsidy there. Raise the fee to make
produces energy. more efficient way than regulation living. The raison d’être for a carbon creased even as prices rose 200%. everyone happy.
Who would support such a tax? to reduce carbon emissions. tax is to use price to shift consumer Oil use dropped only when the econ- Even a compromise that yielded
Four intersecting constituencies: But the idea that a carbon tax is a behavior. Ask France’s President Em- omy collapsed. History shows tech- enough in subsidies to double the
those who embrace the idea as an painless, efficient way to reduce hy- muanel Macron how that’s going— nology yielding a long-run average green-tech growth “progress” of the
essential step to “fixing” the climate; drocarbons fails for three reasons. and he was shooting for a mere 5% price for oil around $50 a barrel. past couple of decades would result
Thus it would take something like a in wind and solar supplying less
300% tax to reduce consumption. A than 10% of America’s energy. Even


Notable & Quotable carbon tax of, say, 10%, even if it
proved politically tolerable, would
with subsidies, it would be a strug-
gle to keep nuclear power and corn
Rupert Murdoch Robert Thomson Slate’s Dahlia Lilthwick in a sym- only slow growth immeasurably in alcohol at 10% of America’s energy
Executive Chairman, News Corp Chief Executive Officer, News Corp
posium on “what the world will look hydrocarbon demand, thus failing in supply. Meanwhile, the absolute level
Matt Murray William Lewis
Editor in Chief Chief Executive Officer and Publisher
like in 20 years,”, Jan. 6: its central goal. of hydrocarbon consumption would
Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT:
Third, the U.S. uses such enor- still go up, comprising a slightly
Ramin Beheshti, Chief Technology Officer; By 2039, the Supreme Court basi- mous quantities of hydrocarbons smaller share of a much larger pie.
Jason Anders, Chief News Editor;
Thorold Barker, Europe; Elena Cherney, Coverage
Mark Musgrave, Chief People Officer; cally doesn’t matter anymore. . . . We that even a small carbon tax would For rent-seekers, this would all be
Edward Roussel, Chief Innovation Officer;
Planning; Andrew Dowell, Asia; Neal Lipschutz,
Christina Van Tassell, Chief Financial Officer
have very fanciful ideas about a pro- add hundreds of billions of dollars to good. For virtue-signalers, it would
Standards; Alex Martin, Writing;
OPERATING EXECUTIVES: tective, progressive Supreme Court, government coffers, stimulating a be sufficient. For green lobbyists, it
Michael W. Miller, Features & Weekend;
Shazna Nessa, Visuals; Rajiv Pant, Product & Kenneth Breen, Commercial; and that is almost entirely a function rent-seeking land rush. We can al- would be progress. For cynics—well,
Jason P. Conti, General Counsel; of a chunk of time in the 1960s and ready see how the battle over this what do they care? Everyone would
Technology; Ann Podd, News Production;
Tracy Corrigan, Chief Strategy Officer;
Matthew Rose, Enterprise; Michael Siconolfi,
Frank Filippo, Print Products & Services; ’70s. . . . Progressives got this notion cash gusher would shape up. benefit—except taxpayers. And since
Investigations; Louise Story, Strategy;
Nikki Waller, Live Journalism; Kristin Heitmann, Chief Commercial Officer; that the Court was going to save us. One compromise, offered by for- energy is essential to everything
Stephen Wisnefski, Professional News; Nancy McNeill, Corporate Sales; . . . But actually, we’ve lost every- mer Secretaries of State James physical and economic flowing
Thom San Filippo, Customer Service;
Carla Zanoni, Audience & Analytics
Josh Stinchcomb, Advertising Sales; thing, including the right to free and Baker and George Shultz and their through society, a carbon tax would
Gerard Baker, Editor at Large Suzi Watford, Chief Marketing Officer; fair elections. . . . There’s been a 40- Climate Leadership Council, claims finally enable Congress to achieve
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International year laser focus on the political right to “unlock the political viability,” in nirvana, succinctly lampooned by
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher
around the Court. There has been an the words of two council members, President Reagan: If it moves, tax it.
WALL STREET JOURNAL MANAGEMENT: Professional Information Business:
Joseph B. Vincent, Operations; Christopher Lloyd, Head; absolute sucking noise on the left by surreptitiously renaming the tax
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head around the same issue. We had a 4-4 a “fee.” They would then redistrib- Mr. Mills is a senior fellow at the
EDITORIAL AND CORPORATE HEADQUARTERS: Court for a year, and I didn’t see ute the proceeds to the citizenry as Manhattan Institute and a partner in
1211 Avenue of the Americas, New York, N.Y., 10036 Americans going to the polls over it. a “carbon dividend” to offset the Cottonwood Venture Partners, an en-
Telephone 1-800-DOWJONES
I didn’t see anybody thinking about it. pain of higher daily costs. But the ergy-tech venture fund.
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© 2019 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Wednesday, January 9, 2019 | B1

S&P 2574.41 À 0.97% S&P FIN unch. S&P IT À 0.90% DJ TRANS À 1.63% WSJ $ IDX À 0.23% LIBOR 3M 2.783 NIKKEI (Midday) 20455.74 À 1.25% See more at

Ghosn Lawyer Rips Prosecution Redstone,

Lead defense attorney his arrest on Nov. 19, during a seek the reason for Mr. rarily transferring a personal tors’ Dec. 21 statement.
for the auto executive
claims long detention
Tuesday court appearance.
By attacking key parts of
the prosecutors’ case publicly,
Ghosn’s detention. The court
gave two: that he is a flight
risk and might destroy evi-
derivatives contract to the
company. Mr. Ghosn said
Tuesday he was facing huge
Prosecutors said a friend who
helped Mr. Ghosn get out of
the personal financial diffi-
isn’t warranted in case
Mr. Otsuru said he hoped to
speed up Mr. Ghosn’s release
on bail. The lawyer said he ex-
dence. Defendants can gener-
ally seek such a hearing only
once, so it is unlikely he will
losses at the time because the
contract, meant to protect him
against a fall in the dollar
culty, identified in court as
Saudi Arabian businessman
Khaled Al Juffali, later re-
In Truce
BY SEAN MCLAIN pected formal charges soon appear in public again soon. value of his yen-based salary ceived $14.7 million in pay- BY KEACH HAGEY
AND MEGUMI FUJIKAWA accusing Mr. Ghosn of breach But the session gave Mr. in Japan, backfired during the ments from Nissan. Those pay-
of trust, or abusing his execu- Ghosn a chance to make a 10- global financial crisis. ments were for the personal Media mogul Sumner Red-
TOKYO—Carlos Ghosn’s tive position at Nissan Motor minute statement defending Mr. Otsuru said prosecutors benefit of Messrs. Ghosn and stone and his family have
lawyer took aim at Japanese Co. for private gain. himself, followed by Mr. Ots- had neglected to consider an Juffali, not Nissan’s benefit, agreed to settle their long-
prosecutors Tuesday, arguing Typically defendants in uru’s comments. With the agreement among Mr. Ghosn, prosecutors have said. running legal dispute with his
that they rushed to judgment such cases who deny the counterattack, Mr. Otsuru laid Nissan and the bank on the Mr. Otsuru acknowledged former live-in companion,
and had no basis for their charges are held until the be- the groundwork for future bail other side of the contract that that Mr. Juffali arranged for a Manuela Herzer, less than a
lengthy detention of the auto ginning of the trial, Mr. Otsuru requests and made sure judges said any losses would be paid ¥3 billion letter of credit when week before one of the cases
executive. said, adding that with the knew what he sees as the by Mr. Ghosn. Prosecutors Mr. Ghosn took back the deriv- was scheduled for trial in Cali-
“We believe there is no evi- mountain of evidence to be weakest parts of the case. have declined to comment be- atives contract from Nissan in fornia, according to people fa-
dence of a crime,” said Mr. gathered and translated into On Dec. 21, prosecutors said yond statements laying out February 2009. But he said the miliar with the matter.
Ghosn’s lead defense attorney, Japanese, the trial could be at they suspected Mr. Ghosn ex- their charges and suspicions. Please turn to page B2 As part of the settlement,
Motonari Otsuru, at a news least six months away. posed Nissan in October 2008 The defense lawyer also at- Ms. Herzer has agreed to pay
conference after Mr. Ghosn’s The defense demanded to a potential loss of ¥1.8 bil- tacked a second set of suspi-  Heard on the Street: Nissan back $3.25 million of the tens
first statement in public since Tuesday’s court session to lion ($16.6 million) by tempo- cions contained in prosecu- needs a new Ghosn............. B12 of millions of gifts that Mr.
Redstone gave her, the people
said. The wide-ranging agree-
While the stock market has wobbled in 2019, some investors are betting on a comeback in Price/earnings ratio,
AmEx small-caps, whose earnings are expected to be relatively strong. Stocks as a whole could
also get a boost if the Federal Reserve slows its pace of interest-rate increases.
12-month forward†
18 times
ment ends all litigation be-
tween the two sides, who have
been battling in the courts

Executive 5%
Sept. Oct. Nov. Dec. Jan. 17
S&P Small Cap 600
S&P 500
since the fall of 2015, when
Mr. Redstone kicked Ms. Her-
zer out of his Beverly Hills

S&P Mid Cap 400

Suspended mansion, replaced her as his

16 health-care agent and wrote
0 her out of his estate planning.

Over Probe on 15

Ms. Herzer argued that Mr.
Redstone lacked the mental
capacity to make these deci-
BY ANNAMARIA ANDRIOTIS sions, a charge that ended up
–5 Performance shaking the media empire that
American Express Co. sus- since the end 13 he controlled to its very foun-
us l,

pended a director in its foreign- of August dations. Shortly after she got
exchange department as part of 12 a court-appointed doctor to
al a
its continuing investigation into industrials 2018 ’19 examine Mr. Redstone in early
pricing practices in the divi- –10 2016, he stepped down as the
sion, according to people famil- t 8.4% executive chairman of the two
ci on

Fed-funds futures, implied odds of

iar with the matter. S&P 500 at least one rate increase in 2019† companies he controls, CBS
Foreign-exchange employees Corp. and Viacom Inc.
were informed last month on a
t 11.3% 50% The burying of this hatchet
call that the director, Taylor Si- –15 will likely quiet lingering
monin, was suspended, the 40 questions about the legiti-
er rs

people said. Mr. Simonin over- 40% Earnings growth, change from a year earlier* macy of the rise to power of
saw account-development staff Russell Mr. Redstone’s daughter,
who help foreign-exchange Russell 2000 S&P 500 2000 30 Shari, who Ms. Herzer has al-
30 –20
salespeople and assist clients t 18.0% leged has been manipulating
m e

with currency conversions, they her father since 2015 in order

said. 20 to take over his media empire
Mr. Simonin didn’t respond against his will. Ms. Red-
m rp

to requests for comment. A stone, through her attorneys,

10 –25 10
spokeswoman for AmEx said has denied the allegations.
the company’s investigation is Mr. Redstone and his family
ongoing. 0 0 tried to claw back the millions
In July, The Wall Street 3Q 2018 4Q 1Q ’19 2Q 3Q 4Q Dec. Jan.
of dollars in gifts that he had
co Fo

Journal, citing current and for- given Ms. Herzer during the
mer employees, reported that *Data for fourth quarter 2018 and beyond are estimates. †Through Monday years she and another compan-
AmEx’s foreign-exchange inter- Sources: SIX (index performance); Refinitiv (earnings growth); FactSet (P/E ratio); CME Group (fed-funds futures) THE WALL STREET JOURNAL. ion, Sydney Holland, had lived
national payments department with him in his mansion, alleg-

Small Caps Take on New Shine

routinely lifted currency-con- ing the two women had abused
version rates without notifying him and manipulated him into
customers to boost revenue giving Ms. Holland and Ms.
and employee commissions. Herzer $75 million each. Ms.
The practice occurred until BY MICHAEL WURSTHORN But small companies appear large-cap companies.” dence is helping smaller, do- Holland settled separate litiga-
early 2018 and dated to at least to be a relative bright spot. The bruising selloff briefly mestically focused companies, tion with the Redstones last
2004, current and former em- Small-capitalization compa- Analysts are expecting firms knocked valuation measures of while multinationals have to year. Ms. Herzer, meanwhile,
ployees told the Journal. nies are projected to notch an- in the Russell 2000 index of small companies to their low- contend with slowdowns in continued to fight on multiple
“Using our online portal, other year of big profit gains, small-capitalization companies est level in six years and be- Europe and Asia and a strong fronts, alleging that it wasn’t
customers see our offered for- potentially making their collectively to post double- low that of their bigger coun- U.S. dollar that makes convert- Mr. Redstone, but rather his

eign exchange rates before they shares a haven for investors as digit profit gains throughout terparts in the S&P 500, ing foreign sales more costly. daughter, who was truly driv-
place an order,” said AmEx earnings at larger firms slow. 2019, according to financial- according to FactSet. That Profits across the Russell ing the legal fight against her.
spokeswoman Marina Norville. With companies including data provider Refinitiv, far could attract cost-conscious 2000 are projected to grow by Ms. Redstone has denied
“They’re given time to make a Apple Inc. slashing revenue outpacing the S&P 500. Rus- investors, such as Mr. Lam- nearly 16% in the first quarter the allegations through her

decision, which also gives them expectations for the first quar- sell 2000 companies tend to bert, who believe the smaller from a year earlier, building lawyers.
an opportunity to compare our ter, investors are on edge that have market capitalizations of companies have been oversold on the 12.6% earnings growth At one point, Ms. Herzer
offered all-in rates with the profits, the stock market’s en- $300 million to $2 billion. in recent weeks. rate those companies were ex- went so far as to file a federal
rates offered by other provid- gine, will sag this year under “We’re positive on small- Expectations that the U.S. pected to hit in the final three RICO case—the kind designed
ers.” the weight of a trade spat be- caps,” said Paul Lambert, a economy will keep growing, months of 2018, according to for snaring mobsters—argu-
AmEx’s foreign-exchange tween the U.S. and China, a portfolio manager at Wasatch even if more slowly than last Refinitiv. By the fourth quar- ing that Ms. Redstone had en-
business accounts for less than broader economic pullback Advisors. “We’re finding qual- year, are behind the upbeat ter, profits in the Russell 2000 gaged in a conspiracy with
half of a percentage point of and the fading benefit of last ity [small-cap] companies profit projections, analysts are expected to balloon more her father’s nurses to oust
the company’s total revenue. year’s tax-cut stimulus. growing faster than mid- and said. Solid consumer confi- Please turn to page B10 Please turn to page B2

STREETWISE | By James Mackintosh

INSIDE Trade-In Offers Help
Global Markets Get in Sync To Boost iPhone Sales
The great equally, too. But from mid- haven’t made up the ground
decoupling of May until the September they lost compared with the BY SARAH KROUSE and in emails to customers at a
the American peak, American exceptional- rest of the world in that pre- price of $449 with trade-in of
stock markets ism kicked in. The S&P 500 Christmas week and a bit. Wireless carriers have long an older phone rather than at
from the rest jumped 7.3% to a new high, Lots of things were going made smartphones look its starting retail price of $749.
of the world while the rest fell 3.2%. The on, with politics, valuations, cheaper to consumers by sub- Apple Chief Executive Tim
was the story last summer.
Was last month the start of
U.S. economy was boosted
by tax cuts while Europe
tech excitement, Federal Re-
serve policy and economic
UBER HOLDS sidizing their cost. Now Apple
Inc. is wooing phone buyers,
Cook said last week that mak-
ing it easier for iPhone custom-
a great recoupling, where in- fought over Italy, car makers developments just a few of THE ROAD offsetting the price of devices ers to trade in their phones di-
vestors should bet on the
U.S. falling back in line with
in Germany and Japan strug-
gled and China suffered from
the most important. But the
super-simple explanation is
ON IPO with generous trade-in offers.
The company has rolled out
rectly with the technology
giant and more easily transfer
global market performance? the trade fight. that investors thought the at least one new iPhone in their data to new devices were
The idea is simple, but The recoupling that fol- U.S. could ride out a global OFFERINGS, B3 each of the past several years, part of its efforts sell more
compelling. From the start of lowed was initially just as downturn, helped by tax adding features that have smartphones after slower sales
2017 to the high of January painful for the rest of the cuts, then worried that per- pushed the starting price of its in China and elsewhere led to a
2018, it didn’t much matter developed world as for the haps it couldn’t. Now they top-of-line model above $1,000. rare cut to the company’s quar-
which countries’ stocks you U.S., with both down about are starting to think that With less fanfare, Apple also terly revenue forecast.
bought: The S&P 500 13% by mid-December. Call perhaps the global downturn has let U.S. customers trade in Apple often gives consum-
matched developed markets your broker, sell everything, won’t be as bad as they older models for credit—a pro- ers more for their old iPhones
in dollar terms, both rising and do great. feared (and central banks gram it is now hoping will help than the four major U.S. wire-
28%. Broader measures in- But from mid-December on, won’t be as unfriendly to in- mitigate the sticker shock. less carriers, according to a
cluding riskier emerging the panic was about the U.S. vestors as they feared). Apple, which rarely dis- Wall Street Journal analysis of
markets did better, delivering economy. The S&P 500 lost al- Simple stories have the counts its products, has re- estimated monthly trade-in
returns close to the riskier
Nasdaq Composite in the U.S.
most 10% in the six trading
days before Christmas, while
advantage of being easy to
understand, but miss a lot of
STOCKS JUMP cently used the trade-in pro-
gram to incentivize purchases,
value data from HYLA Mobile
Inc., particularly older models.
It was a time when calling the rest of the developed nuance. There is further evi- AS TRADE sweetening offers late last year HYLA works with telecom
your broker and just buying
anything worked perfectly.
world lost 3% and emerging
markets, just 2%. Since then,
dence to support the tale,
though. S&P 500 stocks with
TALKS ADVANCE with an additional $100 credit.
The company also has been
companies and big-box stores
on such programs.
The volatility crash of U.S. stocks have leapt in a way sizable sales abroad tended to more aggressive in its market- With the iPhone 6, for exam-
February 2018 hit the U.S. they haven’t in such a short underperform from the Sep- MARKETS, B11 ing of the program, promoting ple, Apple has offered a higher
and other developed markets period for eight years but Please turn to page B10 the iPhone XR on its website Please turn to page B4
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or

B2 | Wednesday, January 9, 2019 * *** THE WALL STREET JOURNAL.


These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A H Nvidia........................B12
Activision Blizzard......B2 Henry Schein .............. A2 Pearland Economic ..... B6
Airbus..........................B2 Herbalife Nutrition.....B2 PG&E ........................... B3
Alphabet.........B3,B4,B12 Holland & Knight........B2 R,B12 Honda Motor.............B12 Renault......................B12
American Express.......B1 Hony Capital ............. B12 Royal Dutch Shell.....B11
Apple..B1,B3,B4,B11,B12 Hulu.............................B4 S
AT&T............................B4 I Samsung.........B3,B4,B11
B IBM............................B11 Sears......................A1,B6
BASF......................A6,A8 iPath S&P 500 VIX Sempra Energy ......... B11
Benchmark Capital ... B12 Short-Term Futures Simon Property...........B6
Bluebird Bio................A3 Exchange-Traded Note SoftBank..............B3,B12
Boeing..................B2,B11 ...................................B12 Sony.............................B4
BP..............................B11 IWG ........................... B12 Sprint .......................... B4
Brixmor Property........B6 J-L Syngenta.....................A6
C J.C. Penney..................B6 T-U

LG ................................ B4 Tellurian .................... B11
Caterpillar ................. B11
Lyft..............................B3 Tilray...........................A9
T-Mobile US................B4
Crown Point................B6 M
Total .......................... B11
Cushman & WakefieldB5 Macy's.........................B6 Toyota Motor............B12
D MetLife......................B10 21st Century Fox........B4
Devcann.......................A9 Microsoft...................B12 Uber Technologies ...... B3
DowDuPont.................A6 Mitsubishi.................B12 V-W
Modern Land (China) . B6
E Verizon........................B4
N-P Viacom.........................B1
ESL Investments........B6
Netflix....................B2,B4 Volkswagen.................A8
F Nissan Motor . B1,B2,B12 Walt Disney................B4
Facebook......................B4 Novatek.....................B11 WeWork...............B3,B12

An Airbus A330 in an assembly plant near Toulouse, France. Airbus and Boeing are both straining to boost output to meet demand.
B-C J Martin, Thomas........B11

Boeing and Airbus Miss Jet Targets

Berardi, Alessia ........ B10 Jeffery, Benjamin.....B11
Cook, Tim....................B4 Johnson, Michael........B2 Neumann, Spencer ..... B2
D-E K Papamarkakis, George
Dasso, Kevin...............B3 Kaiser, Stuart ........... B12 ...................................B10
Kampler, Nina.............B6 Piershale, John.........B11
Dehn, Jan..................B10
Kandarian, Steven....B10
BY DOUG CAMERON growing carriers in Asia.
Dunne, Ronan ............. B4 Q-R AND ROBERT WALL Flying Higher Deliveries rather than or-
Edelstein, Mark .......... B6 Khalaf, Michel...........B10
Qu, Qing....................B11 ders have become the most
Khosrowshahi, Dara ... B3 Airbus and Boeing have been steadily boosting output to industry
G Kondo, Go....................B2 Redstone, Shari..........B1
Boeing Co. and Airbus SE closely watched measure of
Gallagher, Thomas....B10 Redstone, Sumner......B1 records amid strong demand for global air travel.
Korff, Tyler..................B2 failed to deliver all the jets the aerospace rivals’ perfor-
Ghosn, Carlos.B1,B2,B12 Rosenfeld, Edward....B10
L they had once planned to make 800 airliner deliveries mance, as they work through
Goudis, Richard...........B2 S-T
Lambert, Paul ............. B1 in 2018, showing how produc- order books for more than
Greenspan, Elyse......B10 Lampert, Edward...A1,B6 Saikawa, Hiroto........B12
tion problems are holding back Airbus Boeing 13,000 jets due for delivery
Gunn, Campbell.........B12 Lardy, Nicholas ......... B10 Simonin, Taylor...........B1 600
H Lemler, Gregg ............. B3 Tchilinguirian, Harry.B11 the two top plane makers as over more than seven years.
Heckman, Dan...........B11 Leschly, Nick...............A3 Thoreen, Vivian L. ...... B2 demand for airliners soars. But the production pressure
Herzer, Manuela ......... B1 Lewis, Michael............B3 W-Z Boeing said Tuesday that it 400 on Boeing and Airbus is show-
Hogan, Patrick ............ B3 M Wells, David................B2 delivered 806 jetliners for the ing little sign of easing. Boeing

Holland, Sydney..........B1 Martin, Rob...............B10 Zang, Min..................B11 year. That was a record, but logged 893 new orders in 2018,

fell shy of the 810 to 815 jets it 200 adding to already multiyear
had aimed to deliver. Short- wait periods for its most pop-
Herbalife’s CEO Michael Johnson, who
served as CEO from 2003 until on ages of fuselages, engines and
other parts have slowed Boe-
ular aircraft. Airbus struck
several big deals in December,
Resigns Position Mr. Goudis’s tenure started, will
take over on an interim basis,
ing’s output since summer. The
plane maker last missed deliv-
2000 ’02
Source: the companies
’04 ’06 ’08 ’10 ’12 ’14 ’16
’18 suggesting its backlog of or-
ders is equivalent to several
Herbalife Nutrition Ltd.’s Herbalife said. The Los Angeles ery guidance in 2011. years’ worth of production.
chief executive has resigned af- company said Mr. Goudis’s de- Airbus said Tuesday that it tion issues. ended up 3.7%. Airbus and Boeing already
us l,

ter the company said it discov- parture relates to comments he delivered 800 planes in 2018, Shares of both companies Together, the two aerospace have announced plans to boost
ered comments he made before made that were contrary to also a company record. The to- rose Tuesday amid the news giants delivered a combined output of their best-selling
al a
becoming CEO that were incon- Herbalife’s expense-related pol- tal met Airbus’s revised goal that the production shortfall 1,608 planes in 2018, compared single-aisle jets this year. Boe-
sistent with its standards. icies and business practices and after the company in October wasn’t more severe, with ana- with 1,481 a year earlier. That ing will increase monthly pro-
The nutritional-supplement inconsistent with its culture. scaled back its production lysts’ consensus for Boeing to is up sharply from 1,000 deliv- duction of its 737 family to 57
ci on

company said CEO Richard Mr. Goudis didn’t respond to plans for the year by about 20 deliver 803 planes. Boeing’s eries in 2011, reflecting the from 52, with Airbus raising
Goudis, who assumed the post requests for comment. aircraft because of supplier shares closed 3.8% higher on surging demand for air travel, output of its A320 family to 60
in June 2017, resigned Tuesday. —Patrick Thomas problems and internal produc- Tuesday and Airbus shares particularly among rapidly from around 52.
er rs

Redstones Business Approach

To Defense in Court
Mr. Ghosn has been in the
Tokyo Detention House since

In Truce on Nov. 19. He initially was placed

m e

in a room of three mats and

was sleeping on a futon, but

Litigation TOKYO—His cheeks are was moved to a larger room

m rp

sunken and his once-robust with a bed, the lawyer said.

frame has turned gaunt, but af- Mr. Ghosn has had a long
ter 50 days in jail, Carlos Ghosn list of books on history and
Continued from the prior page is still the hyperrational, re- ideas brought to him by visi-
her from the mansion and re- sults-oriented engineer who tors, and spends much of his
co Fo

move her from Mr. Redstone’s made it to the top of the auto spare time reading, according to
will. The bulk of that case industry. This time, instead of a person with the Ghosn family.

was thrown out last year. higher profits, he seeks his own Japanese law permits pros-
For years, Mr. Redstone, 95 freedom and vindication. ecutors to detain suspects for
years old, has had such diffi- That is the picture painted weeks and sometimes months
culty speaking that he has had