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The
Global What Chic
Crisis of Windows Are
Democracy Wearing
REVIEW OFF DUTY
THE WALL STREET JOURNAL WEEKEND
* * * * * * * * SATURDAY/SUNDAY, MAY 18 - 19, 2019 ~ VOL. CCLXXIII NO. 116 WSJ.com HHHH $5.00

For the Class of 2019, It’s Time for Pomp, Circumstance and Joy
What’s
Trump
News Eases
World-Wide Trade
T he White House released
an order putting off a de-
Tensions
cision on proposed tariffs on
imported cars and auto parts, U.S. postpones auto
and said the U.S. had reached
a deal to lift metals levies tariffs and agrees to
on Canada and Mexico. A1 end metals levies on
 Tensions between the Canada and Mexico
U.S. and Iran appeared to
ease as the White House
WASHINGTON—With U.S.-
tamped down talk of conflict
China trade talks at an im-
and renewed a conditional
passe, President Trump moved
offer of negotiations. A7
Friday to tackle festering trade
 Iran’s foreign minister
disputes with U.S. allies and
asked China to help save
North American neighbors.
the 2015 nuclear deal. A7
 The Missouri House By William Mauldin,
MATT GENTRY/ASSOCIATED PRESS

passed a bill banning Josh Zumbrun


abortions after eight and Vivian Salama
weeks, except in the case
of a medical emergency. A3 The White House released
an order putting off a decision
 Mnuchin defied congres-
on proposed tariffs on im-
sional subpoenas by miss-
ported cars and auto parts for
ing a deadline to hand over
about six months, giving the
six years of Trump’s tax re-
administration room to nego-
turns and audit records. A4
HATS OFF! Virginia Tech students celebrated Friday in Blacksburg, Va., as they joined others across the nation graduating this month. tiate possible trade deals with
 Barr said his review of the the European Union and
Russia investigation’s origins Japan.
could lead to rule changes for Hours later, Mr. Trump

Amazon Bets on Meal Delivery


counterintelligence probes said the U.S. had reached a
of political campaigns. A4 deal to exempt Canada and
Mexico from tariffs on steel
 The U.K.’s Labour Party
and aluminum that were im-
pulled the plug on Brexit talks
posed last year. The action is
with the government, dashing
BY PARMY OLSON mand for delivered meals. It the San Francisco-based com- with Uber Eats and other ser- expected to help clear one of
hopes for a breakthrough. A8
injects another big dollop of pany in February, and almost vices in the U.K. and 13 addi- the stumbling blocks for rati-
 The administration may LONDON—Amazon.com Inc. cash in an industry already 10 times what it commanded tional markets. Other backers fication of the U.S.-Mexico-
begin flying asylum-seeking is investing in British food-de- feasting on capital from Soft- in early 2018. in the new fundraising in- Canada Agreement that was
families across the U.S. to have livery company Deliveroo, be- Bank Group Corp. and other The latest funding round for cluded investment firms T. negotiated by the Trump ad-
initial claims processed. A4 coming one of the startup’s deep-pocketed investors that is Deliveroo values it at about Rowe Price Group Inc. and Fi- ministration last year.
biggest investors and signaling fueling cutthroat competition $3.5 billion, according to a delity Management & Research The auto-tariff delay and
 Died: Herman Wouk, 103,
a continued interest in a sector and little in the way of profit. person familiar with the mat- Co. Amazon and Deliveroo the removal of metal duties
best-selling author. A2
that has confounded the e- U.S. delivery company Door- ter. That is up sharply from didn’t disclose how much the on North American neighbors
commerce giant and others. Dash Inc. also is angling for the approximately $2 billion e-commerce giant invested, will silence some of the loud-
Business & Finance Deliveroo said Friday it more money, working on a new for its previous funding round nor give a valuation. est criticism the Trump ad-
raised $575 million in a recent round of financing that could in September 2017. The new deals underscore Please turn to page A6
funding round led by Amazon. value it at close to $13 billion, Deliveroo, whose delivery the long-term promise some
 Amazon is investing in according to people familiar
The money will help fund its bikes are almost as common a big investors see in online de-  Farmers fear aid package will
British food-delivery startup with the situation. That would
battle with Uber Technologies sight on the streets of London livery. SoftBank is an investor fall short....................................... A6
Deliveroo, signaling contin- be nearly double the $7.1 bil-
Inc.’s Uber Eats service to as the city’s black cabs and in DoorDash and in Uber—  U.S. move on Huawei clouds
ued interest in a sector that
meet growing consumer de- lion valuation investors gave double-decker buses, competes Please turn to page A10 firm’s 5G plan............................ A6
has befuddled the e-com-
merce giant and others. A1

The Unfulfilled Promise of DNA Testing Banks Put


 Google has agreed to re-
fund advertisers for ads
purchased on its ad market-
places that ran on websites
with fraudulent traffic. B1
 Legg Mason is nearing a
Crypto
settlement with Trian that
would give the activist hedge
fund seats on its board and
Patients get uncertainty as gene interpretations improve; ‘the ground kept shifting’
Firms in
avoid a proxy fight. B1
 The biggest U.S. firms
BY AMY DOCKSER MARCUS Shadows
set CEO pay records for a Hillary Savoie wanted clear an-
fourth straight year in swers. Instead, the genetic testing re- BY PAUL VIGNA
2018, a Wall Street Journal sults for her 4-year-old daughter,
analysis found. B1, B6-9 Esmé, sent her reeling. Banks, wary of the drug
“I’m pale. The bags under my eyes dealers and scammers at-
 Major U.S. stock indexes
are purple,” she wrote in her blog tracted to the anonymity of
lost ground Friday. The Dow,
started when Esmé was a baby. “My lips cryptocurrency, shun many of
S&P 500 and Nasdaq posted
are drawn tight in a thin line.” the firms behind the electronic
drops for the week. B15 Ever since the little girl came into the money, leaving them to turn to
world in 2011, limp, blue, and struggling shadowy middlemen for pay-
LAUREN LANCASTER FOR THE WALL STREET JOURNAL

 HPE agreed to buy su-


percomputer maker Cray to breathe, doctors had been searching ment processing and other fi-
in a $1.44 billion deal. B3 for the cause of her problems. They nancial services.
were certain the answer was hidden in In a recent high-profile ex-
 Deere lowered fore-
Esmé’s DNA, the genetic code compris- ample, $850 million in cus-
casts, reflecting struggles
ing more than three billion letters that tomer funds went missing af-
faced by U.S. farmers. B3
help determine our basic makeup, from ter Bitfinex, the exchange
 Wynn Resorts is in talks health risks to what we look like. behind the digital currency
to sell its Boston-area casino A genetic test performed when she tether, handed it over to Pan-
project to MGM Resorts. B3 was almost 2 years old revealed a vari- ama-based Crypto Capital
ant on one of Esmé’s genes—“one tiny Corp. to process customer
 CBS has had talks with
letter switched out for a second letter,” withdrawals, the New York at-
Lions Gate about acquiring
Ms. Savoie described it—which doctors torney general said last
pay-TV channel Starz. B3
thought might explain her delayed walk- month.
 Nike said it is adding lan- Esmé Savoie has epilepsy, physical disabilities and a constantly changing diagnosis. Please turn to page A12 Bitfinex’s ill-fated arrange-
guage to new contracts for fe- ment with Crypto Capital
male athletes that will protect highlights a persistent prob-
their pay during pregnancy. B3 lem for companies in the
Bored Security Guards Find Stardom on TikTok EXCHANGE young cryptocurrency busi-
ness: lack of access to the fi-
OPINION i i i nancial system.
The Myth of Banks, still smarting from
‘Wage Stagnation’ A15 The app’s fans are fascinated with #securitylife; ‘Glamma’ billions of dollars in fines tied
to questionable transactions,
are wary of getting tied up
BY GEORGIA WELLS phone to record a video—then followers on a break last month. with digital currencies beloved
CONTENTS Sports........................ A16
Books..................... C7-12 Style & Fashion D2-3 threw her hands up, nodding “I want to tell you you can do by unsavory characters.
Food......................... D6-7 Travel...................... D4-5 Terry Shanton has a boring her head and moving to anything you put your mind to.” As a result, cryptocurrency
Gear & Gadgets D10 U.S. News............ A2-6 job, and a quarter-million peo- thumping music. Then she did a magic trick, levi- firms forced to fend for them-
Heard on Street...B16 Weather................... A16
Obituaries................ A11 Wknd Investor....... B5
ple are fascinated with her. Her dance lasted 10 seconds, tating a sheet of paper. selves often end up calling on
Opinion.............. A13-15 World News.... A7-10 The 52-year-old security just the kind of display that TikTok use has boomed in little-known processing firms
guard goes long stretches has gained her roughly 250,000 the U.S. since 2018, with 10 mil- such as Crypto Capital.
without talking to anyone, as followers around the world. lion people downloading it so THE FIXERS “It’s a huge problem for
> she did one Sunday this month Ms. Shanton’s forum is a so- far this year, according to data them,” said Pamela Clegg-Gar-
Meet the powerful
patrolling a deserted Balti- cial-media app named TikTok, provider Sensor Tower. Its ner, an investigator at crypto-
more building. where she posts short videos draw is a time limit—typically
consultants helping currency research firm Cipher-
That changed on her lunch almost daily, dancing, doing 15 seconds—on videos it serves companies target Trace.
s 2019 Dow Jones & Company, Inc.
break. In a windowless room skits about people she meets, to viewers using an algorithm where to build their Crypto Capital’s own legal
All Rights Reserved with three vending machines, giving motivational talks. that anticipates what they like. factories woes have come into public
she propped up her smart- “Good morning,” she told Please turn to page A10 Please turn to page A2
A2 | Saturday/Sunday, May 18 - 19, 2019 * *** ** THE WALL STREET JOURNAL.

U.S. NEWS
THE NUMBERS | By Jo Craven McGinty

To Make SUVs More Economical, Add People


SUVs burn SUVs are built on truck chas- weight carried by SUVs Loaded According to IHS Markit, a
more gas than sis; CUVs, which look like might also influence their London-based global infor-
SUVs consume more fuel per vehicle
cars, they emit cars on steroids or SUVs on fuel consumption. mation provider, in January,
mile, but transporting more passengers
more green- diets, are based on passen- Using the Environmental there were around 111 mil-
means using less fuel per person.
house gases, ger car platforms. Protection Agency’s estimate lion traditional cars operat-
and they’re Without adjusting the fig- that an extra 100 pounds in Fuel comparison* CARS SUVS ing in the U.S. and around
worse for the environment. ures to account for occu- a vehicle reduces its fuel 84.7 million SUVs and CUVs.
But they also transport pancy, Dr. Sivak found that economy by about 1%, he re- Vehicle fuel economy 30.2 23.3 There were also about 72.6
more people, and that helps passenger cars burned 33.1 ran his calculations. mpg mpg million vans and pickup
offset the damage. gallons of gas over 1,000 His final numbers indi- trucks and 10 million sports
Gallons per 1,000 miles 33.1 42.9
On average, SUVs get 23.3 miles, while SUVs swallowed cated that SUVs consumed or prestige cars on the road.
miles per gallon of gas, ac- 42.9 gallons. But the gas- 23.6 gallons of fuel per 1,000

O
Average vehicle occupancy 1.54 1.83
cording to Michael Sivak, a guzzling SUVs carried an av- occupant miles, while pas- ther researchers point
transportation analyst with erage of 1.83 passengers, senger cars consumed 21.5 out that not all SUVs
Sivak Applied Research, while cars carried an average gallons over the same dis- are equal. There are
while cars get 30.2 miles per of 1.54 passengers. tance. Cars still outper- Gallons per 1,000 miles, adjusted 21.5 23.4 10.5 million full-size SUVs on
gallon, about 30% more. formed SUVs, but the differ- the road, according to IHS

W
for occupancy
When Dr. Sivak compared hen he took that ence now was 10%. Markit, 16 million midsize
the two types of vehicles to into account, the There are several things Gallons per 1,000 miles adjusted for 21.5 23.6 SUVs and 36.5 million com-
see whether the higher occu- numbers started to the analysis doesn’t consider. occupancy and passenger weight pact SUVs and CUVs.
pancy of SUVs compensated look better for SUVs. Dr. Sivak points out that “People think this whole
for their greater energy con- On average, 100 SUVs car- the age and gender of driv- U.S. vehicles in operation† group is the same, and it’s
sumption, cars still outper- ried 183 people while 100 cars ers could affect the results. Traditional not,” said Bruce M. Bel-
formed the larger vehicles. carried 154 people, a differ- In addition, the averages car zowski, an automotive re-
But once he accounted for ence of 29 passengers. After mask differences in the num- searcher, now retired, from
occupancy, the gap narrowed adjusting for this, fuel con- ber of different types of ve- CUV/SUV the University of Michigan
to 10%. sumption per occupant dis- hicles on the road as well as Transportation Research In-
To arrive at his numbers, tance worked out to 23.4 gal- the portion of driving spent Pickup stitute. “Anybody interested
Dr. Sivak used average fuel lons per 1,000 miles for SUVs, on different kinds of trips. in emissions would say I
economy for 2017 vehicles compared with 21.5 gallons According to the Federal Van want lower emissions, and I
based on information pro- per 1,000 miles for cars. Highway Administration, Sports/ don’t care how you get it. If
vided by the Environmental Fuel consumption mea- traveling to and from work that means passenger cars
prestige car
Protection Agency. He com- sures how much fuel a car in 2017 accounted for 30.2% 0 50 100 150 over SUVs, fine. If changing
bined that with vehicle occu- consumes to go a certain dis- of vehicle miles driven, more in millions from larger SUVs to smaller
pancy figures for the same tance. Fuel economy, or than any other category, and *For 2017 vehicle model years †For January 2019 SUVs gets better emissions
year provided by Oak Ridge miles per gallon, is the in- on those trips, the average Sources: Michael Sivak, Sivak Applied Research (fuel comparison); IHS Markit (number of vehicles) and better mileage, fine.”
National Laboratory, a feder- verse; it measures how much vehicle occupancy was 1.2 But the message of Dr. Si-
ally funded research center. distance a car gets out of a for SUVs and 1.15 for cars. would be five people. from work. vak’s analysis is clear: SUV
Although his analysis re- certain amount of fuel. Based on those figures, the In other words, SUVs and As far as the number of drivers who want to help off-
fers only to SUVs, Dr. Sivak Dr. Sivak made one final occupancy difference be- cars carry nearly the same vehicles on the road, for set their carbon footprint
said he also included CUVs, adjustment to account for tween 100 SUVs and 100 cars number of passengers when now, there are more cars should fill ’er up—with pas-
or crossover utility vehicles. the fact that the increased driving to and from work they’re used to travel to and than SUVs. sengers.

U.S. WATCH
CHICAGO parts of her agenda. HERMAN WOUK
Council members’ power to
New Mayor Aims to veto projects in their wards is ‘Winds of War’
Curb Council Powers supported by some council Author Dies at 103
members for helping to diffuse
Incoming Chicago Mayor Lori power to the neighborhood level. Herman Wouk, the versatile,
Lightfoot said Friday that she But it has also been the source Pulitzer Prize-winning author of
would strip key powers from the of dozens of political scandals. such million-selling novels as
50-member city council, such as —Erin Ailworth “The Caine Mutiny” and “The
veto power over building permits Winds of War” whose steady
and liquor licenses in their ECONOMY Jewish faith inspired his stories
wards, moving quickly to spend of religious values and secular
political capital she earned in her Consumer Sentiment success, died on Friday at 103.
landslide election victory. Hits 15-Year High Mr. Wouk was just 10 days
Ms. Lightfoot, a former federal shy of his 104th birthday and
prosecutor who will be sworn in U.S. household sentiment was working on a book until the
Monday, will be the first black rose starkly at the beginning of end, said his literary agent Amy
woman mayor and first gay mayor May to its highest level in a de- Rennert.
of the nation’s third-largest city. cade and a half, driven by a Ms. Rennert said Mr. Wouk
“I hear it every single day that brighter economic outlook. died in his sleep at his home in
aldermanic prerogative, un- The University of Michigan on Palm Springs, Calif.
checked veto rights, hurts Chi- Friday said its consumer senti- Among the last of the major
cago,” Ms. Lightfoot said. ment index was 102.4 in early writers to emerge after World
She said she would begin to May, up from 97.2 in April. War II and first to bring Jewish
DAVID ZALUBOWSKI/ASSOCIATED PRESS

undo the practice through an ex- The survey’s underlying gauge stories to a general audience, Mr.
ecutive order on her first day in of future expectations increased Wouk had a long, unpredictable
office, with a goal of making sure to the highest level since 2004, career that included gag writing
that “aldermen have a voice but driving most of the month’s for radio star Fred Allen, histori-
not a veto.” overall sentiment rise. The head- cal fiction, and a musical co-writ-
Going after aldermanic pre- line number has now fully recov- ten with Jimmy Buffett.
rogative carries risk because it ered from a drop earlier this Mr. Wouk won the Pulitzer
will alienate many of the city’s year and last year, which was for fiction in 1952 for “The Caine
50 aldermen who cherish the caused primarily by the U.S. gov- Mutiny.” A film adaptation, star-
control they have over their ernment shutdown and financial- ring Humphrey Bogart, came out
HERO’S FAREWELL: Mourners on Friday attended the burial of Kendrick Ray Castillo, 18 years old, wards. If enough council mem- market volatility. in 1954.
who was fatally shot while trying to stop a gunman in his Denver-area school on May 7. bers rebel, it could stymie other —Sharon Nunn —Associated Press

ternet money that could be ex- changes, in 2011. “Sometimes cultivated normal relationships employee nicknamed Merlin

Crypto rency—bitcoin—and moving


them to other exchanges.
Bitfinex’s troubles began in
changed directly between par-
ties, without banks or other
middlemen.
we’d have a bank account for a
month, sometimes for two or
three days,” he said.
with banks. Others haven’t.
That has made them popu-
lar with some of the customers
wrote in a text to a Crypto
Capital employee he called Oz,
according to a report from the

Firms in 2017, when it turned to Crypto


Capital after Wells Fargo &
Co. abruptly refused to process
In the early days, users
could “mine” for newly cre-
ated bitcoins on desktop com-
Every time the bank found
out what TradeHill did, Mr.
Kenna said, they just closed
attracted to crypto’s anonym-
ity, but it has also made them
off-limits to most mainstream
New York Attorney General’s
Office. “We are currently walk-
ing on a very thin crust of ice.”

Shadows transactions between the ex-


change’s Taiwanese banks and
its U.S. customers.
puters. As bitcoin grew, min-
ing became the sole province
of companies that could de-
the account. “Banks absolutely
fear the unknown,” he said.
“The banks will drop you in a
banks.
Bitfinex’s problems with
Wells Fargo made it increas-
The report revealed that
Bitfinex concluded late in 2018
that it had to go around
Continued from Page One Crypto Capital would per- ploy overwhelming computing heartbeat.” ingly reliant on Crypto Capital. Crypto Capital, leading the ex-
form that service, until author- power. Retail users could get Charles Hayter has had trou- There was no contract between change to tap the accounts
view in recent weeks. The U.S. ities shut it down, separating bitcoins only by buying them, ble getting bank accounts for the two companies, even held by a sister company,
Department of Justice in Octo- Bitfinex from its customers’ giving rise to exchanges. his five-year-old U.K. research though by 2018 Crypto Capital Tether Ltd.
ber closed down a number of money. Bitfinex used reserves The exchanges had a prob- firm CryptoCompare. Nearly held about $850 million worth Tether’s money was sup-
bank accounts opened by an tied to tether, a so-called sta- lem, though. They needed every bank in London has re- of Bitfinex customer money in posed to be held in a reserve
Arizona man, Reginald Fowler, blecoin pegged to the U.S. dol- banks to process bitcoin pur- jected his business, he said. accounts at various banks in dedicated to keeping the sta-
on behalf of an unnamed com- lar, to cover the $850 million chases using dollars, euros, Mr. Hayter said the time several nations. blecoin pegged to the U.S. dol-
pany. shortfall, the New York Attor- yen or other hard currencies. spent dealing with banks dis- After some Crypto Capital lar.
The description of the com- ney General said. Yet banks wanted nothing to tracted him from building his overseas accounts were seized Without telling investors or
pany’s website in Mr. Fowler’s Wells Fargo declined to do with them. business. “It’s a waste of by authorities, Bitfinex had in- customers, the attorney gen-
April 30 indictment matches comment. A number of banks turned time,” he said. creasing problems getting it to eral’s office said, Tether gave
Crypto Capital’s. Polish au- Bitcoin, the original crypto- down Jered Kenna’s business Crypto exchanges including process transactions. Bitfinex a line of credit allow-
thorities, meanwhile, have currency unveiled in 2008, after he launched TradeHill, Coinbase and Gemini em- “Too much money is ing it access to up to $900
seized some $270 million in was envisioned as a sort of in- one of the earliest bitcoin ex- braced regulation and have trapped with you,” a Bitfinex million of its reserves.
the company’s bank accounts.
Mr. Fowler declined to com-
ment. Representatives for
Crypto Capital and Bitfinex
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10036
owns Crypto Capital. executive director of Our Rev- gers. Changes table on May 2 in-
Published daily except Sundays and general legal holidays.
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Letters to the Editor: Fax: 212-416-2891; email: wsj.ltrs@wsj.com
finex helped spark bitcoin’s passengers, compared with patient was 15. Stocks tables in the May 4
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THE WALL STREET JOURNAL. * * * * * * Saturday/Sunday, May 18 - 19, 2019 | A3

U.S. NEWS

Missouri
Lawmakers
Restrict

FROM TOP: LEIF SKOOGFORS/CORBIS VIA GETTY IMAGES, J. SCOTT APPLEWHITE/ASSOCIATED PRESS
Procedures
BY JAKE HOLLAND

The Missouri House passed


a bill Friday banning abortions
after eight weeks, except in
the case of a medical emer-
gency, the latest state to pass
new restrictions on abortion
in recent months.
Gov. Mike Parson, a Repub-
lican, is expected to sign the
measure, which passed in the
GOP-led House 110-44. The
Senate approved the legisla-
tion 24-10 on Thursday.
The bill allows abortion to
avert a woman’s death or “ir-
reversible physical impair-
ment,” but doesn’t provide ex-
ceptions for rape or incest.
Doctors who perform abor- The Supreme Court’s 1973 Roe v. Wade decision on abortion rights was immediately controversial and has sparked demonstrations by opponents of the ruling ever since.

Justices Face Test on Abortion


tions after eight weeks could
face prison sentences of five
to 15 years; women wouldn’t
be prosecuted.
So far this year, four
states—Georgia, Kentucky,
Ohio and Mississippi—have Will state restrictions What is unknown, however,
enacted bans on abortion after is how they and other conser-
a fetal heartbeat is detected, on procedure lead a vatives will view abortion
usually at about six weeks. more conservative rights in light of stare deci-
Many women are unaware sis—the principle of leaving
they are even pregnant at that court to revisit Roe? legal precedent in place be-
point. cause the legal system prizes
The push for anti-abortion BY BRENT KENDALL stability and predictability.
legislation in statehouses AND JESS BRAVIN While reserving the right to
comes after the confirmation overrule egregious precedents,
last fall of Justice Brett Ka- Sweeping state-level abor- justices may passionately dis-
vanaugh to the U.S. Supreme tion restrictions present a direct pute which prior decisions
Court, giving anti-abortion ac- test of whether the Supreme merit such reversal.
tivists hope the successor to Court is willing to revisit Roe v. In 1992, three Republican-
Justice Anthony Kennedy Wade, the landmark abortion- appointed justices decided
would be more likely to side rights precedent that has that the Roe precedent should
spurred deep divisions for stand, despite their misgivings
nearly 50 years. over abortion. “The reserva-
States with antiabortion tions any of us may have in re-
Gov. Mike Parson, a legislative majorities have long affirming the central holding
Republican, is been weighing how to prompt of Roe are outweighed” by the
a Supreme Court review of the Constitution’s broad concept
expected to sign the 1973 ruling, but generally have of individual liberty, “com-
legislation. preferred a strategy aimed at bined with the force of stare
reducing the procedure’s avail- decisis,” Justices Kennedy,
ability through incremental re- Sandra Day O’Connor and Da-
strictions that hamper provid- Norma McCorvey, the original ‘Jane Roe,’ left, awaited a 1989 ruling on abortion restrictions. vid Souter wrote in Planned
with conservatives. Some Re- ers, or by forbidding late-term Parenthood v. Casey, which
publican lawmakers are count- abortions. which enacted a near-total ban of Georgia. hold the pivotal vote over nonetheless upheld most of a
ing on these bills banning But following last year’s re- on abortion, with an exception The 1973 Roe decision, by a Roe’s future. In 1980, he Pennsylvania law regulating
abortion if Roe v. Wade is tirement of Justice Anthony only when a woman faces a se- 7-2 vote, attempted to balance clerked for Justice William abortion.
overturned. Kennedy, the key fifth vote on rious health risk; the Legisla- competing interests, that of a Rehnquist, one of Roe’s two Since then, the percentage
Alabama Gov. Kay Ivey, a a nine-member court for pre- ture rejected exceptions for woman over her own body and dissenters. of registered voters who sup-
Republican, signed a bill this serving Roe’s central guaran- victims of rape or incest. Mis- state governments’ “in safe- As an official in the George port preserving Roe has only
week making it a felony for tee, that attitude has souri’s Legislature this week guarding health, in maintain- H.W. Bush administration, the grown, to an all-time high of
doctors to perform an abor- shifted. President Trump passed a ban on abortion after ing medical standards, and in future chief justice wrote a 71% in July 2018, the last time
tion at any point during preg- vowed during his 2016 cam- eight weeks of pregnancy. protecting potential life.” It brief asserting that “Roe was the question was asked in a
nancy. The measure is consid- paign to appoint jurists who Several states—Georgia, prevented restrictions on wrongly decided and should Wall Street Journal-NBC poll.
ered the strictest in the U.S. would overturn the decision. Kentucky, Mississippi and abortion during the first three be overruled.” As a federal ap- Even if the court’s conser-
The Missouri bill, called the Since taking office, he has Ohio—recently passed bans on months of pregnancy, but al- peals judge and then on the vatives expect that, as Mr.
“Missouri Stands for the Un- named Justices Neil Gorsuch abortion once a fetal heartbeat lowed them as gestation pro- Supreme Court, however, he Trump predicted in 2016, Roe
born Act,” was decried by and Brett Kavanaugh to the is detected, which can be as gressed. Abortion could be hasn’t expressly taken that po- will be overruled, there are
abortion-rights activists as an bench. Neither of them has early as six weeks. forbidden altogether, with sition—even while never find- reasons to doubt such a deci-
affront to women’s rights. publicly committed to revers- While conservative states health exceptions, in the final ing that any abortion restric- sion would come before the
State Rep. Nick Schroer, a ing Roe. have been moving to push trimester. tion ran afoul of precedent. 2020 election.
Republican, who sponsored During this state legislative boundaries with their new The decision invalidated Neither of the Trump ap- In other areas on the con-
the legislation, said it would season, lawmakers in several abortion restrictions, liberal abortion restrictions in more pointees, Justices Gorsuch and servative agenda, such as
“save lives.” conservative-led states have ones including New York have than 40 states and was imme- Kavanaugh, has issued a judi- curbing the influence of orga-
“With the passage of the Un- proposed bills that are de- taken steps to ensure abortion diately controversial. cial opinion denying the exis- nized labor or reducing federal
born Act, I can guarantee you signed to challenge Roe in rights within their borders in By the 1980 presidential tence of abortion rights. But oversight of voting rights,
this: That the voice of the un- court, and governors have case Roe falls or is pared back. election, the case had become their published views on re- Chief Justice Roberts has pre-
born in our state will be heard been more willing to sign “You really have the red a defining issue. That era was lated issues suggest they may ferred to move in incremental
loud and clear,” said Mr. them than ever before. and the blue nation at odds,” central to the legal and politi- not be likely to believe in a steps.
Schroer in debate on the floor The most dramatic example said Peter Charles Hoffer, a le- cal education of Chief Justice constitutional right to termi- —Louise Radnofsky
of the House. came this week in Alabama, gal historian at the University John Roberts, who today may nate pregnancy. contributed to this article.

In Vermont, Small Colleges Are Closing


BY JON KAMP undergraduates. But it needs
at least 220 more to cover its
POULTNEY, Vt.—As Green operating costs, Mr. Allen said.
ENDS
Mountain College readied to Saddled with more than $20 MAY 19
close its doors after 185 years, million in debt, and pressured
students enjoyed one of their by steep tuition discounts the
final spring days on the pasto- institution enacted to try to
CALEB KENNA FOR THE WALL STREET JOURNAL

ral campus, with some carry- boost shrunken enrollment,


ing kale and cabbage from the the school said in January that
school’s organic farm and oth- it would soon close.
ers preparing for a class Vermont has been grasping
camping trip. for ways to draw people, in-
The school, along with two cluding a new program this
other small colleges in Ver- year that provides up to
mont, will hold its final com- $10,000 for people who move
mencement this weekend. there and work remotely.
Green Mountain President Bob “Here we are trying to find
Allen mourned his college’s every tool in the toolbox, and
demise as well as its impact one of our captive audiences
on an aging state that is strug- Students on campus at Green Mountain College in Poultney, Vt. slipped through our fingers,”
gling to hold on to young peo- said Lindsay Kurrle, commis-
ple. of high-school seniors. Stu- tionally. sioner of Vermont’s Depart-
“A lot of these students will dents are also increasingly College of St. Joseph, with ment of Labor.
probably never come back to seeking schools in big cities, about 200 students and 90 Losing Green Mountain is a
Vermont,” Mr. Allen said about school officials say. Nonelite employees, is losing its ac- blow for Poultney, a town of
Green Mountain’s students, liberal-arts programs are suf- creditation due to its financial about 3,300 in a historic slate-
noting that more than 80% of fering the most as students woes, forcing its planned shut- mining region along the New
them are from out of state. question the value of degrees down, since it could no longer York state border.
“They want to stay, they work that can require taking on a qualify for federal student Green Mountain’s president
very hard to find jobs in the lot of debt, especially in a loans or grants. Southern Ver- believes most students are
state.” strong job market. mont College, in Bennington, leaving the state, including
Small private colleges are “This collision of factors is is also shutting down. more than 100 undergraduates
struggling across the country. really catastrophic for small The three schools combined heading to Prescott College in
Moody’s Investors Service pro- schools,” said Jennifer Scott, had roughly 1,000 students Arizona in an arrangement
jected this past July that the president at the College of St. and hundreds of faculty and that will allow them to finish
typically slow closure rate for Joseph in Rutland, Vt. staff. their degrees.
nonprofit, private colleges— The problem is most acute Green Mountain College has Junior Megan Kuhn will
about five a year between in New England, which is brac- been around in several forms head to Prescott. Like many
2004 and 2014—would triple ing for an 11% decline in high- since 1834, including an all- students, she was drawn to Dolphin. Armchair, design Cédric Ragot.
in the next few years. More school graduates between now women’s college. It has re- Green Mountain College’s re- Manufactured in Europe.
schools will likely merge with and 2032, according to fore- cently had an academic focus laxed atmosphere and focus on
other institutions, Moody’s casts from the Western Inter- on environmental sustainabil- sustainability.
said. state Commission for Higher ity. The school lists tuition of “I’m heartbroken to leave
Colleges nationwide are Education. This far outpaces about $36,500 a year and this school,” said Ms. Kuhn,
fighting over a shrinking pool the 3.2% decline projected na- most recently had about 430 who is from Raleigh, N.C.
A4 | Saturday/Sunday, May 18 - 19, 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.

U.S. NEWS

Trump Says He
Should Have Been
Told About Flynn
BY REBECCA BALLHAUS that Mr. Flynn had discussed
sanctions with the Russian
WASHINGTON—President ambassador in December 2016,
Trump, who waited several and that Vice President Mike
weeks to oust then-national Pence’s statements to the con-
security adviser Mike Flynn trary weren’t accurate, accord-
after learning that federal in- ing to the Mueller report.
vestigators were examining his Ms. Yates also told them
activities, complained Friday that Mr. Flynn had been inter-
that he wasn’t warned early viewed by the FBI. Mr. McGahn
enough that Mr. Flynn was un- relayed that conversation to
AL DRAGO FOR THE WALL STREET JOURNAL

der investigation. Mr. Trump, who instructed him


“It now seems the General to look into the matter further.
Flynn was under investigation Mr. McGahn told investigators
long before was common Mr. Trump responded: “Not
knowledge…why was I not told again, this guy, this stuff,” ac-
so that I could make a cording to the report.
change?” Mr. Trump tweeted. Mr. Flynn wasn’t ousted
According to special counsel from his position until the
Robert Mueller’s report, prior next month.
to December 2016, the Federal Mr. Trump’s tweet comes as
Bureau of Investigation had a federal judge on Thursday
Attorney General William Barr, left, with Jean Elizabeth Manes, the U.S. ambassador to El Salvador, on Thursday in San Salvador. opened a counterintelligence ordered prosecutors to make
investigation into Mr. Flynn’s public a transcript of Mr.

Barr Weighs Possible Rule Changes


relationship with the Russian Flynn’s phone call with the
government. The FBI began ex- Russian ambassador. The
amining whether Mr. Flynn judge also ordered the release
lied to FBI agents after he told by the end of May of a tran-
Review of the Russia powers to put a thumb on the no evidence that any illegal ac- the review. He is working closely them in January 2017 he script of a November 2017
scale,” he added. tivity had taken place. Mr. with CIA Director Gina Haspel, hadn’t discussed sanctions voice mail that Mr. Flynn’s at-
inquiry’s origins will look Mr. Barr’s first few months Wray has distanced himself Director of National Intelligence with the Russian ambassador torney received from a lawyer
into intelligence probes on the job have been domi- from Mr. Barr’s use of the term Dan Coats and Mr. Wray. in late December. A recording for Mr. Trump after Mr. Flynn
nated by controversy surround- “spying” for legally permissible The probe is being led by of the call showed he had. had begun cooperating with
of political campaigns ing his handling of special FBI surveillance. John Durham, Connecticut’s Mr. Trump’s tweet followed investigators.
counsel Robert Mueller’s report Mr. Barr, meanwhile, has U.S. attorney. a Fox News interview aired Mr. Mueller examined the
BY SADIE GURMAN and its aftermath, including continued to use the word, say- Mr. Barr said he is inter- Friday morning with Mr. call from Mr. Trump’s lawyer
AND ARUNA VISWANATHA Mr. Barr’s vocal defense of ing he didn’t mean it pejora- ested in the underlying intelli- Flynn’s brother, Joe, who said as part of his probe into
President Trump, whose ac- tively, though he has been criti- gence that sparked the bureau’s it was an “absolute surprise” whether the president sought
Attorney General William tions he determined didn’t con- cized for using language that decision to open the counterin- to learn his brother had been to obstruct justice. He decided
Barr said his review of the ori- stitute a crime. telligence investigation, as well under investigation prior to not to render a verdict on the
gins of the Russia investigation Mr. Barr began his own inves- as the actions officials took his conversations with the matter, citing in part a Justice
is focused on U.S. intelligence tigation into the early stages of based on that intelligence. Russian ambassador. Department policy against
gathering before the Federal the probe of Russian interfer-
Democrats see a Mr. Trump and his congres- Mr. Trump received several charging a sitting president.
Bureau of Investigation opened ence in the 2016 election, a move politically motivated sional allies have called Mr. warnings about Mr. Flynn soon
its formal inquiry in July 2016 Democrats and some former Barr’s work an acknowledgment after his election. On Nov. 10,
and could lead to rule changes law-enforcement officials said
attempt to appease of their allegations that federal 2016, President Obama warned
for counterintelligence probes was a politically motivated at- President Trump. law-enforcement officials were him against hiring Mr. Flynn
of political campaigns. tempt to appease Mr. Trump and politically biased against Mr. as his national security ad-
“Government power was his Republican allies. Mr. Barr Trump. Former officials have viser, citing Mr. Flynn’s check-
used to spy on American citi- has denied that criticism. defended their actions as ap- ered service as head of the De-
zens,” Mr. Barr told The Wall In his Wednesday interview, echoes Mr. Trump’s rhetoric. propriate given the alarming fense Intelligence Agency, The
Street Journal, in his first in- he declined to elaborate or of- In a tweet Friday morning, nature of information they had. Wall Street Journal previously

CAROLYN KASTER/ASSOCIATED PRESS


terview since taking office in fer any details on what Mr. Trump said his presidential The special counsel’s report reported. A week later, Mr.
February. “I can’t imagine any prompted his concerns about campaign “was conclusively detailed extensive efforts by Trump announced he had cho-
world where we wouldn’t take the genesis of the Russia probe. spied on.” He added: “TREA- the Russians to interfere in the sen Mr. Flynn for the national
a look and make sure that was Former Deputy Attorney SON means long jail sentences, 2016 election, but it didn’t es- security adviser job.
done properly.” General Rod Rosenstein and and this was TREASON!” tablish a conspiracy with the Less than a week after Mr.
“Just like we need to ensure FBI Director Christopher Wray The broad review is, at this Trump campaign. It also noted Trump took office, then-acting
that foreign actors don’t influ- have said in recent weeks they point, not a criminal investiga- efforts by Mr. Trump to influ- Attorney General Sally Yates
ence the outcome of our elec- believed the investigation that tion, a person familiar with it ence the investigation but alerted Don McGahn, then the
tions, we need to ensure that was opened in July 2016 was said. Mr. Barr didn’t offer a didn’t reach a conclusion on White House counsel, and a
the government doesn’t use its appropriate or they had seen timetable for the completion of whether he obstructed justice. Justice Department official Mike Flynn lied to FBI in 2017.

Mnuchin Rejects Subpoena for the President’s Tax Documents


BY RICHARD RUBIN House Ways and Means Com- Mr. Neal said he didn’t see hold- for information. They could Asked earlier in the week presidential nominees of major
mittee, who invoked a statute ing Mr. Mnuchin in contempt as even use what are known as whether he was concerned parties. He has cited a variety
WASHINGTON—Treasury that lets him obtain any tax- an option. In a statement late Congress’s inherent contempt about fines, Mr. Mnuchin said of reasons, most frequently his
Secretary Steven Mnuchin and payer’s returns from the Trea- Friday, Mr. Neal said he was powers to levy fines against he was following the advice of reluctance to disclose his re-
IRS Commissioner Charles Ret- sury Department. consulting with lawyers about Messrs. Mnuchin and Rettig. the Justice Department, which turns during an audit.
tig defied congressional sub- Mr. Mnuchin said he would how to enforce the subpoenas. “Mnuchin has no leg to is expected to publish a legal No law prevents him from
poenas by missing a Friday reject the subpoena in a one- Democrats have several pro- stand on in court, and he opinion justifying Treasury’s releasing his tax returns during
deadline to hand over six years page letter to Mr. Neal. cedural paths. They can ask a knows it,” Rep. Don Beyer (D., withholding of the tax returns. an audit. Since 1977, all presi-
of President Trump’s tax re- Messrs. Mnuchin and Neal federal court to enforce the sub- Va.), a Ways and Means mem- Mr. Trump said during the dents have been under manda-
turns and audit records. have both said they expect poena and their prior request. ber, wrote on Twitter. “This 2016 campaign that he would tory audit under an Internal
Their decision was expected courts to resolve the dispute. They can lump this request to- isn’t about precedent or pur- release his tax returns but Revenue Service policy, and
after weeks of rebuffing re- “We will likely proceed to gether with other Trump ad- pose, it is about hiding Trump’s never did so, breaking a de- such audits didn’t prevent Mr.
quests from Rep. Richard Neal court as quickly as next week,” ministration actions to ignore tax returns and engaging in il- cadeslong tradition of volun- Trump’s predecessors from re-
(D., Mass.), the chairman of the Mr. Neal told reporters Friday. or reject congressional demands legal stonewalling of Congress.” tary disclosure of returns by leasing their returns.
MARIO TAMA/GETTY IMAGES

Migrants walked alongside a barrier at the U.S.-Mexico border while being detained by Border Patrol in El Paso, Texas, on Friday.

Administration Weighs More Migrant Flights


BY ALICIA A. CALDWELL Paso, Texas, to as far away as Grande Valley to nearby Del “We don’t know if these are
AND LOUISE RADNOFSKY Tucson, Ariz., before authori- Rio, Texas, and San Diego seniors or kids,” he said of the
ties process and then release since May 10, another U.S. of- potential migrant arrivals.
The Trump administration them to aid groups. ficial said Friday. “We were provided one thing:
may begin flying asylum-seek- Now, plans are being laid The private, contracted the number 135.”
ing families at the southern for the air transportation of flights have cost between The CBP official said no mi-
border across the country to parents and children out of $21,000 and $65,000 each and grants were being flown to
have their initial claims pro- overcrowded stations to other can carry a maximum of 135 Florida. “We are in prelimi-
cessed, a Customs and Border locations in the U.S., includ- people, that official said. nary planning stages,” the of-
Protection official said Friday. ing northern and coastal Mark Bogen, the mayor of ficial said.
For months, immigration states with Border Patrol of- Broward County in South Flor- The White House is seeking
authorities have been shut- fices that have capacity, if the ida said Friday that he was $4.5 billion in emergency bor-
tling migrants—mostly fami- flow of families doesn’t dimin- told by local law-enforcement der funding from Congress
lies and children from Guate- ish, the CBP official said. to expect as many as 135 mi- along with changes to asylum
mala, Honduras and El “This is an emergency. The grants to be flown to the area laws. Democratic lawmakers
Salvador—between border sta- entire system is over- and released by the Border Pa- have refused to fund asylum
tions as facilities have become whelmed,” the official said. trol after their asylum claims policies they consider inhu-
overwhelmed. Migrants rou- Border Patrol officials have are processed. Mr. Bogen said mane but indicated late Thurs-
tinely have been bused hun- flown nearly 1,000 migrants Broward County doesn’t have day that they would consider
dreds of miles from the border from overcrowded processing the resources to manage such funding some of the adminis-
in Southern California or El centers and stations in the Rio an influx. tration’s requests.
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A5

It’s time to close


THE DIGITAL DIVIDE

Too much of America has been overlooked,


underserved, and left out of the digital revolution.

Today, 24 million Americans have no access to


reliable, affordable high-speed internet – 80% of those
live in rural areas. Often, the ones that do only have
one option, leading to higher prices and poorer service.

If our merger is approved, the New T-Mobile can


change that by lighting up the country’s first real, truly
nationwide 5G network, delivering a higher quality,
more robust network. The spectrum from T-Mobile
and Sprint will combine to cover nearly 96% of rural
Americans - over 60 million people. With this new
spectrum, we will build a true in-home broadband
competitor, bringing better service and
lower prices to rural America.

Together, we can close the Digital Divide holding


millions of people back, and bring the
digital revolution to all Americans.

That will be the power of the New T-Mobile.

Learn more about how the New T-Mobile will lead the NewTMobile.com
5G revolution at NewTMobile.com #5GFORALL
Important Additional Information
In connection with the proposed transaction, T-Mobile US, Inc. (“T-Mobile”) has filed a registration statement on Form S-4 (File No. 333-226435), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on October 29, 2018, and which contains a joint consent solicitation
statement of T-Mobile and Sprint Corporation (“Sprint”), that also constitutes a prospectus of T-Mobile (the “joint consent solicitation statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE JOINT CONSENT SOLICITATION STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The documents filed by T-Mobile may be obtained free of charge at T-Mobile’s
website, at www.t-mobile.com, or at the SEC’s website, at www.sec.gov, or from T-Mobile by requesting them by mail at T-Mobile US, Inc., Investor Relations, 1 Park Avenue, 14th Floor, New York, NY 10016, or by telephone at 212-358-3210. The documents filed by Sprint may be obtained free of charge at
Sprint’s website, at www.sprint.com, or at the SEC’s website, at www.sec.gov, or from Sprint by requesting them by mail at Sprint Corporation, Shareholder Relations, 6200 Sprint Parkway, Mailstop KSOPHF0302-3B679, Overland Park, Kansas 66251, or by telephone at 913-794-1091.

No Offer or Solicitation
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdic-
tion. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

Cautionary Statement Regarding Forward-Looking Statements


This communication contains certain forward-looking statements concerning T-Mobile, Sprint and the proposed transaction between T-Mobile and Sprint. All statements other than statements of fact, including information concerning future results, are forward-looking statements. Such forward-looking
statements include, but are not limited to, statements about the benefits of the proposed transaction, including anticipated future financial and operating results, synergies, accretion and growth rates, T-Mobile’s, Sprint’s and the combined company’s plans, objectives, expectations and intentions, and the
expected timing of completion of the proposed transaction. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements, including the risks and uncertainties detailed in the Form S-4, as well as in T-Mobile’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018 and in its subsequent reports on Form 10-Q, including in the sections thereof captioned “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements,” as well as in its subsequent reports on Form 8-K, all of which are
filed with the SEC and available at www.sec.gov and www.t-mobile.com. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in or implied by such forward-looking
statements. Given these risks and uncertainties, persons reading this communication are cautioned not to place undue reliance on such forward-looking statements. T-Mobile assumes no obligation to update or revise the information contained in this communication (whether as a result of new information,
future events or otherwise), except as required by applicable law.

Image does not depict coverage.


A6 | Saturday/Sunday, May 18 - 19, 2019 * ****** THE WALL STREET JOURNAL.

U.S. NEWS

Farmers Fear
Aid Package
Will Fall Short took a series of aggressive
Stalled trade talks measures last year designed to
between Beijing and right the imbalance, including
Washington are affixing tariffs on a broad range
of Chinese imports into the U.S.
exacerbating a slump China retaliated against the
U.S. by not only imposing
Stalled trade talks between sharp tariffs on American farm
Beijing and Washington are products, but by slowing pur-

RUTH YARO FOR THE WALL STREET JOURNAL


exacerbating a slump in the chases of such goods by Chi-
U.S. Farm Belt, and many nese state-owned companies.
farmers don’t believe an aid As trade talks failed to reach a
package being assembled by solution and blew through re-
the Trump administration will peated deadlines, the Chinese
be enough to compensate for tariffs have remained in place.
the economic damage. As a result, exports of soy-
beans, sorghum, dairy, pork
By Josh Zumbrun in and many other products have
Washington and Jesse fallen, dragging agricultural
Newman in Chicago prices down too. The S&P
GSCI Agricultural Commodi- Mel Egolf said his son, Chad Egolf, above, last month ‘got the same paid price for milk as what I got when I graduated high school in 1972.’
Agriculture has been among ties hit its lowest level this
the U.S. economic sectors hit week in more than 10 years. China trade deal was in the off- Crop Drop the Commodity Credit Corp., a
hardest by the yearlong trade Exacerbating the slump is ing, potentially landing by the Depression-era program de-
The impact of China’s tariffs on U.S. soybean exports could hurt
conflict with China. Now that severe flooding in the Midwest end of April. “When no trade signed to stabilize farm income,
an already ailing sector of the economy.
a deal has slipped from the this year, which has dealt deal came, that’s when true de- Mr. Perdue said, and would in-
grasp of negotiators, farmers farmers a separate blow, spair kind of hit,” she said. U.S. soybean exports to China Net income for U.S. farms clude direct payments to farm-
are facing the likelihood that swamping grain bins, inundat- Before the negotiations ers. Mr. Trump has suggested
the deepest downturn in the ing fields and washing away went off track this month, opti- $15.0 billion $150 billion on Twitter that a program
agricultural economy since the livestock in farm states such mism had mounted about how U.S. and China could use tariff revenue to pur-
12.5 unveil tariffs 125
1980s could be prolonged. as Nebraska and Iowa. Else- much the farm economy could chase crops for humanitarian
The U.S. Department of Ag- where, cold and wet weather benefit. In addition to remov- distribution. This idea faces a
riculture, in the absence of a has delayed spring planting, ing tariffs, China was poised to 10.0 100 number of practical hurdles.
deal, is cobbling together a sowing anxiety over the pros- agree to make massive pur- Under current law, there is
farm-relief program that will pects for this year’s crops. chases of U.S. commodities. 7.5 75 no dedicated fund that allows
total somewhere between $15 The downturn is posing fi- Industry officials briefed on tariff income to be repur-
billion and $20 billion, accord- nancial challenges to farms the talks said China also was 5.0 50 posed, and channeling large-
ing to Agriculture Secretary and other agribusinesses. U.S. considering major regulatory scale commodity purchases on
Sonny Perdue. This is the sec- farm debt is mounting and changes that promised to open 2.5 25 low-income markets can de-
ond such aid package since the farmers throughout much of China’s market to new U.S. press the recipient countries’
trade fight began. the Midwest are filing for farm exports. 0 0 agricultural industries, while
Many farmers doubt the chapter 12 bankruptcy protec- “We don’t want bailouts,” 2017 2018 2019 2008’09’10’11’12’13’14’15’16’17’18 running afoul of both subsidy
scale of that aid package is any- tion at levels not seen for at said Mel Egolf, a farmer for Note: Exports are 12-month rolling sum and dumping rules.
where near sufficient to make least a decade. more than 46 years near Chu- Sources: Commerce Department (exports); U.S. Department of Agriculture (net income) Some farmers say they are
up for a trade spat that has shut “Weather and markets we rubusco, Ind., whose family willing to stomach the contin-
them out of a lucrative Chinese can’t do a whole lot about,” farm produces corn, soybeans about $8.40, and the price Mr. what I got when I graduated ued conflict in the hopes a res-
market of 1.4 billion consumers. said April Hemmes, a fourth- and dairy. “We want reliable Egolf actually can get at his high school in 1972,” he said. olution ultimately benefits the
“Though we are glad that generation Iowa farmer who markets where we have a local grain elevator is even “You can’t live on that.” agricultural sector, though they
the administration is consider- isn’t expecting to turn a profit chance to sell our crop abroad.” lower: about $7.83 as of this The 2018 farm-aid package worry about strained relation-
ing additional assistance,” said this year, and may need to dip Mr. Egolf is grappling with week. That means with $1 a authorized about $12 billion of ships with valuable Chinese
Roger Johnson, president of into funds saved for retire- some tough math: He already bushel in aid, he would have spending under several different customers. “We don’t want
the National Farmers Union, ment to pay off her expected has purchased his seed and three pennies a bushel left programs. Last week, President gifts or government money,”
“such temporary solutions are debts to the bank. “We are fertilizer to plant his fields for over as income for the year. Trump directed the USDA to be- Iowa farmer Jeff Frank said.
not sufficient to address the taking the brunt of this trade the year, with about 900 of his “My boy has a stellar herd of gin work on a new program. The “We just want fair trade.”
permanent damage the trade war,” she said. 1,800 acres devoted to soy- cows,” said Mr. Egolf, referring agriculture secretary, Mr. Per- —William Mauldin
war has inflicted on agricul- Ms. Hemmes paid a visit to beans. He needs to sell his to his son Chad who “could get due, told reporters on Wednes- and Anthony DeBarros
tural export markets.” Washington in March, during beans at about $8.80 a bushel milk out of a pop can and he day that the new package would contributed to this article.
The Trump administration, which Trump administration to break even, he estimates. knows cows like nobody.” resemble the 2018 program.
citing unfair Chinese practices officials assured her and other The price at the Chicago “Last month, he got the Like last year, the program  Deere trims outlook due to
and a bilateral trade deficit, Iowa colleagues that a U.S.- Board of Trade has plunged to same paid price for milk as would draw its funding from farmers’ struggles................... B3

Trade U.S. Move on Huawei


Tensions Clouds Firm’s 5G Plan
Ease The Trump administration’s
decision to put Huawei Technol-
ogies Co. on a trade blacklist is
then to prepare for the new re-
strictions, probably is in better
position to withstand a cutoff
likely to hinder the company’s of U.S. technology.
Continued from Page One efforts to dominate the next- Commerce officials cited evi-
ministration has faced from generation 5G wireless industry dence that they said showed
its own party. by denying it vital U.S. technol- Huawei was engaged in activi-
“The biggest hurdle to rati- ogy, analysts say. ties that undermine U.S. na-
FABRIZIO COSTANTINI FOR THE WALL STREET JOURNAL

fying USMCA has been lifted,” tional security interests, such


said Senate Finance Committee By John D. McKinnon as its alleged violations of U.S.
Chairman Chuck Grassley, a in Washington trade sanctions against Iran.
Republican from Iowa, where and Asa Fitch Also this week, the White
pork exports faced retaliatory in San Francisco House issued a broader execu-
tariffs from Mexico. Mr. Grass- tive order on telecommunica-
ley is expected to spearhead A Commerce Department or- tions security and is likely to
any Senate consideration of der aimed at Huawei and doz- soon prohibit U.S. tech and
USMCA. ens of its affiliates will block telecom firms from importing
The latest moves to delay or the Shenzhen-based telecom gi- or using gear from “foreign ad-
scrap tariffs come after negoti- ant from obtaining U.S.-made versaries” that pose national
ations on a U.S.-China trade goods and software, such as security risks. That probable di-
accord broke down, leading chips from Intel Corp. and the rective is expected to include
both sides to escalate tariffs Android mobile operating sys- Huawei as well as other Chi-
on each other’s goods. The U.S. reached a deal to exempt Canada and Mexico from tariffs on steel and aluminum. tem produced by Alphabet nese manufacturers.
Mr. Trump said Chinese of- Inc.’s Google unit. The order issued Thursday
ficials were trying to renegoti- tariffs. “The pressure must be Robert Lighthizer met House time that the Commerce De- The orders “are a missile to blacklist Huawei and others
ate previous commitments in strong on China, not on our al- Speaker Nancy Pelosi (D., Ca- partment had concluded that salvo aimed at Huawei, and if must still must be imple-
the talks. The U.S. responded lies who we should encourage lif.) to discuss a possible path U.S. auto research and devel- they’re implemented well, they mented, and much depends on
by imposing 25% tariffs on to join us in confronting forward for USMCA. opment and manufacturing are will dramatically constrain how officials interpret key pro-
$200 billion in Chinese im- China,” Mr. Schumer said in a Mrs. Pelosi, whose caucus is “vital to national security,” a Huawei’s global ambitions,” visions. The order’s sweeping
ports, up from 10%, and tweet. deeply skeptical of Mr. Trump, determination that establishes said Jeremy Bash, a former se- scope is expected to narrow as
launching a process to put tar- Business groups applauded has the ability to call a vote to a legal basis for Mr. Trump to nior defense and intelligence the Commerce Department
iffs on nearly all remaining im- the lifting of the steel and alu- sidetrack House consideration impose sweeping tariffs. official who is now at Beacon draws up implementing rules.
ports from China. It also is- minum tariffs, which have of USMCA if the administra- The industry would have Global Strategies. Even so, analysts believe
sued an order barring sales of raised costs for auto makers in tion submits the pact to Con- had relatively little ability to Late Thursday, the Com- firms such as Intel and Qual-
U.S. parts and services to Chi- the U.S. “This action delivers a gress under special rules that adjust supply chains quickly in merce Department issued a rule comm Inc. could suffer from
nese telecommunications giant welcome burst of momentum allow expedited consideration. response to tariffs, so auto that puts Huawei and 68 affili- the combined new restrictions,
Huawei Technologies Co. for the USMCA,” said Tom She and other Democrats makers expect tariffs would ates around the world on a list losing existing business with
By doubling down on China Donohue, president of the U.S. lead to sharp price increases. banning the purchase of Ameri- Chinese companies. Worse,
and easing tariff threats with Chamber of Commerce. Goldman Sachs economists can parts and services without American firms soon could find
partner countries, Mr. Trump The United Steelworkers laid out a scenario in a note U.S. government approval. themselves in the crosshairs of
stands to boost his support in Union also voiced approval.
The latest moves Friday that they believe would Some analysts had thought Chinese retaliatory measures,
Congress as his administration “From Day One, we made it come after U.S. result in only a 20% probabil- the Commerce Department industry insiders worry.
courts lawmakers to ratify clear that the real problem ity that Mr. Trump would re- might provide exceptions for Many U.S. tech companies
USMCA, the North American isn’t Canada or Mexico,” said
trade talks with strict auto imports in the fall. lower-risk business that U.S. do a lot of their business in
deal. As the 2020 campaign union president Leo Gerard. China broke down. In a speech Friday to the companies do with Huawei and China. Qualcomm derived about
approaches, Mr. Trump is “The administration is eager National Association of Real- its affiliates. But the order two-thirds of its revenue from
again taking the tough-on- to try to get some deals done,” tors in Washington, Mr. Trump takes a harder line by imposing China last year, according to
China approach that helped said Miriam Sapiro, former hailed the deal with Canada a license requirement on all ex- regulatory filings, although
him win election in 2016. acting U.S. trade representa- have called for changes in the and Mexico and promised sup- ports and a “presumption of Huawei wasn’t among a small
“Trump is focused on bring- tive in the Obama administra- agreement with Canada and port for U.S. farmers, who have denial” for all applications. group of companies that ac-
ing the supply chain back to tion who now works at strate- Mexico to allow for tougher lost sales to China as a result Huawei said it would seek counted for more than 10% of
America and the industrial de- gic communications firm Sard enforcement of the pact’s new of the trade dispute. immediate remedies to the or- Qualcomm’s sales.
mocracies,” said former White Verbinnen & Co. Still, ratifica- labor rules. “Just reached an agreement der and warned the move The impact of the moves
House chief strategist Steve tion of the North American The Trump administration with Canada and Mexico, and would “do significant harm to could begin to be felt by U.S.
Bannon, a critic of Beijing. deal “depends on the adminis- so far has said it would ad- we will be selling our product the American companies with suppliers and customers of
“That is exactly what he com- tration’s willingness to work dress enforcement concerns into those countries without which Huawei does business,” a Huawei almost immediately.
mitted to the workers in the with Congress in a meaningful separately, including through the imposition of tariffs or ma- spokesman said in a statement. People in the industry said the
Rust Belt.” way.” the law that Congress would jor tariffs,” Mr. Trump said. A similar Trump administra- worst effects could be longer
Senate Democratic leader For passage of USMCA, Mr. pass to implement the trade “Hopefully Congress will pass tion action against China’s ZTE term, as China aims its regula-
Chuck Schumer (D., N.Y.), a fre- Trump will need the support of agreement. the USMCA quickly.” Corp. nearly drove that firm tory machinery at U.S. firms
quent critic of Mr. Trump, a significant portion of Demo- In the auto-tariff announce- —Santiago Perez out of business in 2018. Some and imposes retaliatory mea-
praised the president’s deci- crats in the House. On Wednes- ment, the Trump administra- and Kim Mackrael analysts said they believe Hua- sures, such as new antitrust in-
sion to delay action on auto day, U.S. Trade Representative tion confirmed for the first contributed to this article. wei, which has had a year since vestigations.
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A7

WORLD NEWS
Hostile U.S.-Iran Rhetoric Eases OPEC to
Consider
Trump administration
says it is waiting ‘by
the phone’ for Tehran
Increasing
to call about talks Output
BY WARREN P. STROBEL BY SUMMER SAID
AND ALEX LEARY AND BENOIT FAUCON

WASHINGTON—Tensions JEDDAH, Saudi Arabia—


between the U.S. and Iran ap- OPEC and its allies are set to
peared to ease on Friday after debate a potential increase in
two weeks of crisis, as the crude output at a meeting
White House tamped down here on Sunday, as they at-
talk of conflict and renewed a tempt to balance global oil
conditional offer to Tehran of supply amid regional tensions
diplomatic negotiations. on a scale the Persian Gulf
A senior administration of- hasn’t seen in over a decade.
ficial emphasized that Presi- The gathering of delegates
dent Trump is open to talks from a few key producers in-
with Tehran’s leaders, but said cluding Saudi Arabia and Rus-
US NAVY HANDOUT/AFP/GETTY IMAGES

the U.S. will continue to apply sia will commence nearly a


increasing economic and other week after two Saudi tankers
pressures on Iran to cease its were sabotaged in an incident
backing for militant groups in some U.S. officials have
Iraq, Yemen, Lebanon and blamed on Iran, and days after
Syria. Houthi rebels in Yemen
“We’re sitting by the claimed responsibility for an
phone,” the official said, ac- attack on a Saudi pipeline.
knowledging Iran has given no Saudi Arabia’s Vice Minister of
sign yet it is willing to talk. Defense Prince Khalid bin Sal-
The two countries haven’t had The U.S., citing Iranian threats, rerouted the USS Abraham Lincoln carrier, above on May 10 in this Navy-released photo, to the Persian Gulf. man said Friday that the
diplomatic relations since Houthi attacks against oil sta-
shortly after Iran’s 1979 Is- mats from Iraq as a protective ing table. But diplomats experienced this person said. “If anything, tions this week were ordered
lamic revolution. measure. Iran’s Supreme Leader Ali in dealing with Iran said Mr. it’s going to increase support by Tehran—a regional rival
U.S. allies in Europe, Demo- There is a dispute about Khamenei as recently as Trump’s current approach is for the regime…they’ll have a and fellow member of the Or-
crats in Congress and former how to interpret the intelli- Wednesday rejected talks with unlikely to succeed and carries ‘rally around the flag’ effect.” ganization of the Petroleum
senior officials expressed gence, however, and many ana- Mr. Trump’s administration, risks of miscalculation. Christopher Hill, a former Exporting Countries.
skepticism that Iran would lysts believe Iran was prepar- calling the idea “poison.” “It’s been an illusion to U.S. ambassador to Iraq, said Such incidents have stoked
agree to negotiate with Mr. ing not a pre-emptive strike, The senior administration think you can conduct coercive that even as two countries anxieties about supply disrup-
Trump while its economy is but retaliation in case it was official said it is too early to diplomacy which is all coer- glower at each other diplomat- tions in a region that contains
being subjected to economic attacked by the U.S., people fa- judge whether the strategy is cion and no diplomacy,” said ically, it remains crucial to much of the world’s spare ca-
sanctions and blistering rheto- miliar with the matter said. former Deputy Secretary of have some sort of contact so pacity. Iran won’t be repre-
ric from Washington. Mr. Trump last year pulled State William Burns, who led defensive moves don’t get in- sented at the meeting.
The U.S. has demanded that
Iran take 12 steps, including
out of a six-nation nuclear
agreement with Iran, calling it
The White House secret talks with Iran under
Mr. Obama that resulted in the
terpreted as offensive moves,
or a minor event misconstrued
“Gulf producers will have to
strike a balancing act between
abandoning its missile pro- fatally flawed, and has ended says its sanctions 2015 nuclear deal. to be a major affront. satisfying Trump’s demands
grams, withdrawing from Syria
and ending support to allied
direct contacts with Iran that
had been revived under former
are meant to force “It’s one thing to signal you
want to talk. It’s another to be
“When you have this kind of
situation where you’re moving
for extra oil…and not having
Iran be a flamethrower at the
groups such as Hezbollah, be- President Obama. Iran to negotiate. ready to talk realistically,” Mr. to confrontation, you try to next OPEC meeting,” said He-
fore it will ease sanctions. There are currently “zero” Burns said, adding that Iran have lines of communication,” lima Croft, the chief commodi-
The latest crisis began in contacts with Iran’s govern- won’t accept the 12 U.S. de- said Mr. Hill, who also was ties strategist at Canadian
early May, when the U.S. gov- ment, a senior State Depart- mands in their current form. special envoy to Kosovo as the broker RBC.
ernment received intelligence ment official told reporters working because the sanctions “On the current trajectory…you Clinton administration pre- As a compromise, OPEC is
indicating that Iran or its this week. haven't been fully imple- can just see a lot of risks, and pared for a bombing campaign now considering a plan to al-
proxies were planning attacks Mr. Trump and Secretary of mented yet. collisions becoming more and against Serbia. low countries the flexibility to
on American interests in the State Mike Pompeo repeatedly “They are going to get to more likely.” “In Kosovo we had the ca- pump more oil, said a person
Middle East. have said they don’t seek war the point where they have A congressional official fa- pacity to get in touch with the who will attend the Jeddah
Mr. Trump ordered addi- with Iran and that the U.S. such extraordinary and wide- miliar with U.S. intelligence re- Serbian government even as meeting. The meeting isn’t ex-
tional military power into the “maximum pressure cam- ranging economic pressures ports similarly predicted Mr. we were strapping weapons to pected to conclude with a final
Middle East. This week, the paign” of sanctions is aimed at that they are going to face Trump’s approach would fail. F-16s,” he said. decision on output.
State Department said it would forcing Iran to change behav- some very difficult choices,” “I think the Iranian regime —Ben Kesling —Summer Said
partially withdraw U.S. diplo- ior and come to the negotiat- the official said. is in no danger of collapsing,” contributed to this article. and Benoit Faucon

Tehran Seeks China’s Help


To Preserve Nuclear Deal
Iranian Foreign Minister Ja-
vad Zarif asked China to help
save the 2015 nuclear deal,
seeking to bolster ties be-
tween the two countries as the
U.S. intensifies its campaign to
isolate Iran.

By Sune Engel
Rasmussen in Beirut
and Aresu Eqbali
in Tehran, Iran
THOMAS PETER/PRESS POOL

On a visit to Beijing, Mr. Za-


rif said the world must nor-
malize economic relations
with Tehran and take “practi-
cal steps” to save the nuclear
accord, as part of a broader
diplomatic push to get inter- Iranian Foreign Minister Javad Zarif greeted Chinese Foreign
national partners to resist Minister Wang Yi in Beijing on Friday.
Washington’s pressure on Iran.
China is Iran’s largest trade Crude Crunch which spiked over the past
partner and a party to the week when the U.S., citing un-
China's oil imports from
multilateral nuclear deal, specified intelligence, de-
Iran have plunged since the
which sought to restrain Iran’s ployed an aircraft carrier, a
U.S. re-imposed sanctions
nuclear activity in exchange bomber task force and other
in November.
for a loosening of economic personnel to the Middle East.
sanctions. Iran's exports to China The Iranian Embassy in
Beijing has been a major China said on Twitter that Mr.
buyer of Iran’s oil but imports $2.5 billion Zarif had “arrived in Beijing to
have plunged since the Trump maintain consultations be-
administration imposed new,
harsh sanctions on Iran. Erasing
2.0 tween all-weather friends in
the wake of new efforts to Jewels in Bloom
the initial economic gains from manufacture unnecessary ten-
the deal, renewed U.S. pressure
1.5
sions.” RaymonD Yard
has exacerbated inflation, un- China’s Foreign Ministry
employment and a deepening 1.0 confirmed Mr. Zarif’s visit but Renowned jeweler. Breathtaking colors. Dramatic beauty.
Oil
currency crisis in Iran. declined to release further in- These glamorous gemstones possess the astonishing
“If the international com- 0.5 formation. color and superior quality for which Raymond Yard’s
munity and our friends in the The Iranian situation is dif-
JCPOA are interested to pre- Other ficult for Beijing, said Yin singular creations are prized. All rings are crafted of
0
serve this achievement, they Gang, a Middle East politics platinum and signed “Yard”.
2015 ’16 ’17 ’18 ’19
[should] enable the Iranian expert with the government-
people to enjoy the JCPOA Source: CEIC backed Chinese Academy of 5.96-Carat Mint Tourmaline Bypass Ring. #30-9096
benefits,” Mr. Zarif told the Social Sciences. The conflict 19.70-Carat Kunzite Ring. #30-9094
semiofficial Iranian IRNA news nian oil tankers set out for isn’t simply between the U.S.
agency on arrival in Beijing, China, according to data from and Iran but between Arab
using an acronym for the nu- ship-tracking site FleetMon. states and Iran. China, Mr. Yin
clear deal. Another tracking site, Tanker- said, “wants a balanced diplo-
Iranian President Hassan Trackers, said the ships were macy in the Middle East, and
Rouhani has called President the first Iranian oil tankers to hopes to make friends and do
Trump’s goal of slashing Iran’s head to China since the U.S. business with everyone.”
oil exports to zero “an illu- waivers expired. Such oil is of- Iran is likely to ask Beijing
sion.” Yet, oil exports have ten unloaded into Iranian-con- to ignore the new U.S. sanc-
dropped precipitously, particu- trolled storage tanks and isn’t tions and keep purchasing oil,
larly after U.S. oil waivers for considered an export until it Mr. Yin said. Saudi Arabia
Iran’s most important oil cus- leaves the customs-free zone. could step in to fill Chinese 630 Royal Street, New Orleans, Louisiana • 888-767-9190 • ws@rauantiques.com • rauantiques.com
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broiled in a trade war with the economic partners, Russia, cult for Iran to recover later.”
U.S., has said it would resist Japan and India. It comes —Fanfan Wang in Beijing
the American embargo. amid growing tensions be- and Benoit Faucon in London
On Friday, two loaded Ira- tween Washington and Tehran, contributed to this article.
A8 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

WORLD NEWS

Labour Breaks Off Brexit Talks Germany Condemns


BY JASON DOUGLAS
AND MAX COLCHESTER
Boycotts of Israel
LONDON—The U.K.’s main BY BOJAN PANCEVSKI sociations to the National So-
opposition Labour Party pulled cialist slogan ‘Don’t Buy From
the plug on Brexit talks with BERLIN—The German par- Jews!’ and the corresponding
the government on Friday, liament condemned as anti-Se- smears on facades and shop
dashing hopes for a formal bi- mitic a growing international windows,” the resolution said
partisan solution to break the movement that targets Israel in reference to Nazi oppres-
logjam in Parliament over and called on the government sion of German Jews.
terms of Britain’s withdrawal to withdraw funding for After an emotional debate,
from the European Union. events or institutions affili- a majority of legislators voted
The decision, which wasn’t ated with the initiative. in favor of the resolution,
a surprise, means the country’s The Boycott, Disinvestment which was co-sponsored by
path out of the EU remains un- and Sanctions movement, Angela Merkel’s conservative
BEN BIRCHALL/PA WIRE/ZUMA PRESS

clear almost three years after which originated in Palestinian bloc and its coalition partners
voters chose to exit from the circles, calls for academic, cul- the Social Democrats, as well
bloc in a 2016 referendum. tural, economic and academic as the opposition Free Demo-
The collapse of the talks boycotts of Israel. Support for cratic Party and the Greens.
and the uncertainty around a BDS is broad-based across the Lawmakers from the oppo-
possible successor to Prime European center-left, and it sition party The Left mainly
Minister Theresa May in com- also has backing among seg- voted against the resolution,
ing months sent the pound to ments of the far-right, the far- while all lawmakers for the
its lowest level against the left and in some Islamist group- anti-immigrant Alternative for
dollar since January. One Labour’s Jeremy Corbyn, shown earlier this month, said talks ‘have now gone as far as they can.’ ings. The movement has gained Germany abstained, arguing
pound traded for as low as traction in the U.S. as well. the resolution didn’t go far
$1.275. It also slid to a three- stepping away from the talks Major sticking points on and maintain delicate cross- On Friday, a broad majority enough and that BDS should
month low against the euro, because negotiators proved policy in the talks included border supply chains critical to of German legislators sup- be banned as an organization.
trading for €1.142. unable to bridge gaps on whether to forge a customs some parts of British industry. ported a resolution strongly Many critics of the resolu-
In a letter to Mrs. May, La- Brexit policy. He added the union with the EU after Brexit The Conservatives feared condemning the initiative and tion said moving against the
bour leader Jeremy Corbyn party has also grown increas- and whether a second referen- such an arrangement would comparing its methods to BDS movement could cut off
said talks about finding a com- ingly concerned that any deal dum should be held to ratify hamper the country’s ability to Nazi-era campaigns targeting German funding for moderate
promise plan that could win reached risks being torn up by sign trade deals with other Jewish businesses in Germany. Palestinian nongovernmental
majority support from law- Mrs. May’s successor as Con- countries. They are also op- The resolution will immedi- organizations, but Bijan Djir-
makers on both sides of the servative Party leader and posed to another referendum. ately stop funding and other Sarai, a Free Democrat legisla-
political aisle “have now gone prime minister.
The talks’ collapse Lawmakers are due to vote forms of support for BDS-re- tor who proposed the resolu-
as far as they can.” Mrs. May, who has come un- sent the pound to its again on Mrs. May’s with- lated events from the Bunde- tion, said the risk was small.
The six weeks of cross- der increasing pressure to quit drawal deal when they consider stag, Germany’s parliament, “This will have consequences
party talks began after Parlia- from hard-line pro-Brexit law-
lowest level in a key piece of Brexit legislation but it isn’t binding on the gov- for organizations that are also
ment on three occasions re- makers unhappy with her months on Friday. during the week of June 3. ernment. A spokesman for the active in Germany and often act
jected a withdrawal package Brexit plan, has signaled she Ahead of that vote, which German government didn’t in an anti-Semitic way. It will
Mrs. May negotiated with will stand down within months. the government is expected to comment on whether it would be different for organizations
Brussels, prompting the U.K.’s Following Labour’s an- lose, Conservative ministers follow parliament’s lead. that do real work and organize
beleaguered premier to reach nouncement, a government any Brexit deal. will continue to lobby Labour Legislators specifically crit- help for Palestinians,” Mr. Djir-
out to her opponents to sal- spokesman said while real Labour argued a customs lawmakers to back Mrs. May’s icized stickers used by the Sarai told German public radio
vage her plan and secure both progress was made during the union, which would set com- deal, though no formal talks BDS movement. Friday. The resolution, he
an orderly divorce and her talks, “it is clear that we are mon tariffs on goods entering with the opposition are “The ‘Don’t Buy’ stickers added, wasn’t about condemn-
own political legacy. not going to be able to reach a both jurisdictions, would help planned, the government that the BDS puts on Israeli ing criticism of Israeli policy to-
Mr. Corbyn said Labour was complete agreement.” preserve untrammeled trade spokesman said. products inevitably prompt as- ward the Palestinians.

EU Introduces Sanctions to Deter Large-Scale Foreign Cyberattacks


BY LAURENCE NORMAN The introduction of sanc- The sanctions won’t black- with the North Atlantic Treaty on those responsible for mali- and a freeze on their assets.
tions was pushed by the Dutch list foreign governments, how- Organization, is tightening de- cious cyberattacks. Trying to The sanctions also target peo-
European governments and British, who have blamed ever. EU citizens accused of fenses against threats to criti- interfere in other countries’ ple who provide financial or
armed themselves with a new Russia for some recent cyber- cyberattacks remain subject to cal infrastructure, such as democratic processes is be- technical support for such at-
tool against cyberattacks, attacks on the bloc. The mea- national legislation. The move hacking and interference in coming normalised - Russia tacks. As with all EU sanctions
adopting a sanctions regime to sures announced Friday would is the latest in the effort to elections. please note and take heed.” measures, a decision to im-
penalize foreign individuals allow the EU to take joint ac- strengthen the bloc’s resil- U.K. Foreign Secretary Jer- People or entities suspected pose sanctions would require
and entities as Western coun- tion with Washington to sanc- ience against a range of hybrid emy Hunt said the new regime of significant cyberattacks, or unanimous approval by all 28
tries seek fresh ways of deter- tion those responsible for cy- threats. The bloc is bolstering was a major step forward, on attempted cyberattacks, origi- member states.
ring large-scale hacking of berattacks against its partners its work to stymie Russian dis- Twitter on Friday. “We can nating outside the bloc would —James Marson
their computer networks. or international bodies. information and, in concert now impose tough sanctions face a ban on travel to the EU contributed to this article.

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THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A9

WORLD NEWS

Trial Reveals
Plots to Mar
Kiev’s EU Ties
Ukraine says Russia The war in Ukraine, now in
its sixth year, has been Rus-
uses provocateurs, sia’s laboratory for methods
covert tactics to of sowing chaos and shaping
public opinion. The KGB used
inflame disputes similar deception tactics dur-

DAREK DELMANOWICZ/EUROPEAN PRESSPHOTO AGENCY


ing the Cold War. A 1964 Cen-
Russia’s efforts to keep tral Intelligence Agency report
Ukraine in its orbit have in- says Soviet spies in West Ger-
cluded invasions and economic many set synagogues afire and
coercion. Less prominently, painted swastikas in public
Moscow has directed a clan- places, attributing the acts to
locals to discredit the country.
By James Marson A variation on that strategy
in Kiev, Ukraine, occurred on March 29, 2017,
and Drew Hinshaw when a grenade flew into the
in Krakow, Poland Polish Consulate in the Ukrai-
nian city of Lutsk. The next
destine campaign of vandalism morning a crowd of dozens
and hate crimes aimed at blocked the highway linking
spoiling Ukraine’s relations the two countries, carrying Workers repairing the roof of the Polish Consulate in Lutsk, Ukraine, after it was damaged by a grenade on March 29, 2017.
with its western neighbors, signs that read, “No to the
Ukrainian and European offi- genocide of Poles” and “Poles agents to turn to Polish fas- eration. Mr. Marglewski was in related acts. The trial is under
cials say. are our brothers.” Ukraine’s RUSSIA cists. Europe’s far-right has his early 20s, unemployed and way, with a verdict expected in
A continuing court case in SBU says that no ethnic Poles found common cause with the driving an old van. July. If found guilty, Mr.
Baltic Moscow
Poland has shined a light on were in the crowd and that the Sea Kremlin in recent years, earn- Messrs. Szymkowiak and Propokowicz faces up to 12
the varied cast of provoca- attack was planned and ing recognition and, some- Marglewski sneaked into years in prison.
teurs that the officials say the funded by a far-right activist BEL . times, financing as they pro- Ukraine at 1 a.m. on Feb. 3, Weeks later, a homemade
Kremlin has employed to try who fled to Russia. POLAND moted Moscow’s views on 2018, carrying phones wiped bomb started a larger fire,
to stir up ethnic passions on Poland has lobbied for its Lutsk trips to eastern Ukraine. clean except for the messaging gutting the cultural center’s
Kiev
territories where it used to neighbor inside the European Uzhgorod UKRAINE
Polish prosecutors say Mi- app Telegram. They walked to ground floor. Two Ukrainians,
call the shots. Two Polish fas- Union and shares a suspicion HUNG. chał Propokowicz, a member the Hungarian cultural center now in custody, had been paid
cists have admitted that they of the Kremlin. of Polish fascist movement in Uzhgorod, where Mr. Mar- to carry out the assault, said
ROM.
took money from a supporter Hungary, led by Prime Min- Falanga, in January last glewski painted the number Ukrainian officials. The attack
MOLDOVA
of Russia’s causes to firebomb ister Viktor Orbán, has at year sent a text message to his 88, associated with Hitler, and had been ordered by a security
Black Sea
a Hungarian center in Ukraine. times adopted an antagonistic comrade Tomasz Szymkow- a swastika, according to Kra- official from a breakaway re-
Russia blames Ukrainian stance toward Ukraine. Mr. Or- 300 miles iak offering 2,000 zlotys, or kow court documents. Mr. gion of neighboring Moldova
fascists as it “wants people to bán, an admirer of Russian 300 km roughly $520, “for a noble Szymkowiak then filmed Mr. that is backed by Russia, who
tell their governments, President Vladimir Putin, has cause.” Mr. Propokowicz said Marglewski tossing a Molotov evaded arrest, the officials say.
‘Enough helping Ukraine. How issued thousands of passports of a planned arson wave. SBU he was acting on orders to or- cocktail that bounced off a The attack on the Hungar-
long can we put up with it?’ ” in Ukraine, where dual citizen- officials say they also broke up ganize an attack in Uzhgorod wall. They sent the video to ian center was top news in
said Ihor Huskov, chief of staff ship is unlawful, sometimes to a fake conference where sup- in 2018 from Manuel Ochsen- Mr. Propokowicz, who advised some Hungarian pro-govern-
of the Security Service of people with distant claims to posed members of the Hungar- reiter, a pro-Russian opinion they return with a gasoline- ment media. Hungary’s For-
Ukraine, the SBU. Hungarian ancestry. Mr. Orbán ian community planned to call writer who was an aide to a soaked jacket and try again, eign Ministry demanded a
Moscow’s strategy of in- has blocked meetings with for independence from far-right member of Ger- which they did. It did little meeting with Ukraine’s ambas-
flaming disputes between Ukraine at NATO over Ukrai- Ukraine. In both cases, the many’s parliament. Mr. more than char a wall. sador. Mr. Orbán recorded a
Ukraine and its western neigh- nian language legislation that SBU published intercepted Ochsenreiter, a supporter of Security cameras captured Facebook video expressing
bors has yielded some success. promotes using Ukrainian over communications that it said Russian military interventions, the events and Ukrainian law concern for Hungarians in
Hungary, led by a nationalist Hungarian, or any other mi- showed a Russian citizen, who didn’t return requests to com- enforcers identified the men. Ukraine. Hungary continues to
prime minister, has blocked nority language, in schools it identified as working for ment but has previously de- Within three weeks, the men block official high-level meet-
high-level meetings with Kiev and other public institutions. Russian security services, nied wrongdoing. were detained in Poland. All ings with Ukraine at NATO, de-
at the North Atlantic Treaty The SBU says it thwarted seeking to hire Ukrainians to Polish prosecutors say Mr. three men have admitted to spite criticism from the U.S.
Organization since 2017 over an attack on the Society of carry out the attacks and at- Propokowicz delivered the committing the acts, which that it is furthering a key
what Budapest calls violations Hungarian Culture in the west- tend the conference. payment to Mr. Szymkowiak, they called petty vandalism. Kremlin foreign-policy goal by
of ethnic Hungarians’ rights in ern Ukrainian city of Uzhgorod Ukrainian officials say those who recruited another friend, They dispute Polish charges of impeding Kiev’s integration
western Ukraine. in late 2017, intended as part failed plots prompted Russian Adrian Marglewski, for the op- inciting hatred and terrorism- with the military alliance.
© Center on Addiction / Partnership for Drug-Free Kids

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you take on your child’s drug or alcohol problem.
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A10 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

WORLD NEWS WORLD WATCH


RUSSIA
Human-Rights Body
Lifts Ban on Moscow
The Council of Europe adopted
a declaration Friday that allows
Russia to start voting again at the
continent’s main human-rights
body following a dispute related
to its annexation of the Crimea
peninsula from Ukraine in 2014.
Foreign ministers from the
council’s 47 member states voted
overwhelmingly to support a dec-
laration that says that all mem-
bers should be “entitled to partici-
pate” in the council’s two main
organs “on an equal basis.” Russia
will now have to accredit a dele-
gation to the council before it can
start voting on motions.
The council, which is open to
all European countries regardless
of whether they are in the Euro-
pean Union or not, suspended
Russia’s voting rights after the
CARL COURT/GETTY IMAGES

annexation of Crimea.
Friday’s declaration marks
what could be the first major step
by a European institution to roll
back on restrictions and sanctions
that were imposed on Russia fol-
lowing Crimea’s annexation and
Tens of thousands of people gathered in Taipei on Friday to cheer the passage of legislation granting same-sex couples marriage rights, a first for a country in Asia. its campaign to support for sepa-

Taiwan Allows Same-Sex Marriage


ratists in eastern Ukraine.
—Associated Press

EGYPT
Hundreds Pardoned
BY CHUN HAN WONG same-sex couples have sched- that showed widespread oppo- though once ruled by an auto- population—launching cam- In Ramadan Release
uled appointments with the sition to same-sex marriage. cratic government, the island paigns to promote their views
Taiwan’s legislature ap- civil-affairs bureau to register Taiwan’s greater tolerance has in recent decades devel- and influence the coming law. Egyptian President Abdel Fat-
proved Asia’s first same-sex their marriages on May 24, for gay rights is unusual within oped into an active democracy, In the referendum in Novem- tah Al Sisi pardoned 560 prisoners,
marriage law, reinforcing the is- when the law is set to take ef- Asia, where some countries with a free media and protec- ber, voters expressed opposi- including a prominent journalist
land’s reputation as a tolerant fect, according to a bureau have conservative Christian tions for speech and religion. tion to same-sex marriage by and several women.
democracy despite a turbulent spokeswoman. communities and are seeing a On Chinese social media, wide margins across several The pardons, announced in the
public debate that exposed so- Taiwan President Tsai Ing- rise in more-austere strands of some users expressed hope that questions. The outcome pres- official gazette late Thursday, coin-
cial divisions about gay rights. wen applauded the legislation’s Islam. The island has hosted an- China can emulate Taiwan. “I sured Ms. Tsai’s government cide with the Muslim holy month
Tens of thousands of gay- passing. The outcome allows nual gay-rights parades that at- know that one day, the National into watering down some provi- of Ramadan when authorities tra-
rights supporters gathered Fri- Ms. Tsai to fulfill a campaign People’s Congress will also for- sions in the new law. ditionally release detainees as a
day outside the legislative promise to legalize same-sex mally approve such a law,” one Gay-rights activists say the goodwill gesture.
building in Taipei, the island’s marriage, ahead of a bruising user wrote, referring to the law falls short of full marriage The journalist, Abdel Halim
capital, braving heavy rain to fight for re-election in early
Conservative groups Communist Party-controlled equality, though they accept it Qandil, was sentenced to three
cheer the passage of legislation 2020. accused the legislature. “I just don’t know as a temporary compromise. years in absentia in December
that grants same-sex couples “We took a big step towards whether that day will take place For instance, the law grants 2017 for “insulting the judiciary.” He
many of the legal rights of het- true equality, and made Taiwan
president of ignoring within my lifetime.” only limited adoption rights for was pardoned for health reasons.
erosexual couples. a better country,” she wrote on the will of the public. The vote followed years of same-sex couples, who can Among those pardoned are
Cries of “First in Asia!” rang Twitter. public debate, which intensified jointly adopt only children bio- eight women who had been sen-
out among the supporters after Ms. Tsai’s Democratic Pro- in 2017 when Taiwan’s top logically parented by one of the tenced in 2018 to several years in
lawmakers approved—by gressive Party, which holds 68 court ruled that legislation de- spouses. prison on grounds of belonging to
66-27—a key provision in the seats in the 113-member legisla- tract tens of thousands of par- fining marriage as exclusively The law represents “the bot- the outlawed Muslim Brotherhood
law that allows same-sex cou- ture, had called on its lawmak- ticipants. between a man and a woman tom line of all bottom lines,” organization and staging an anti-
ples to register marriages. ers to unanimously support the Marriages and civil unions was unconstitutional. The court said Chen Ming-yen, a lawyer government protest.
“This day will be recorded in government-drafted bill and re- between those of the same sex ordered parliament to change and activist at the Taiwan Alli- Mr. Sisi has waged an unprece-
the history of Taiwan’s human ject two alternative versions aren’t recognized in mainland the law within two years—a ance to Promote Civil Partner- dented crackdown on dissent in re-
rights,” Hsiao Bi-khim, a ruling- backed by opposition lawmak- China, where the ruling Com- deadline set to hit on May 24. ship Rights, an advocacy group. cent years, arresting thousands—
party legislator who supported ers and conservative groups. munist Party has sought to That ruling spurred celebra- Conservative groups accused mostly Islamists but also
the law, told the legislature af- The vote could backfire on bring Taiwan under its control tions and protests, with sup- Ms. Tsai and her party of ignor- prominent secular activists—and
ter the vote. “Everyone de- Ms. Tsai, as opposition groups since the end of the Chinese porters and opponents of same- ing the public will and urged rolling back freedoms won after
serves to be loved.” accused her party of ignoring a civil war seven decades ago. sex marriage—including the Taiwanese voters to punish the 2011 uprising.
In Taipei, more than 150 public referendum last year Taiwan has resisted, and, small but influential Christian them in next year’s elections. —Associated Press

FROM PAGE ONE

Amazon companies and startups to hire


drivers. Amazon said earlier
this month it would start pay-
Just Eat PLC dropped 9% and
Germany’s Delivery Hero SE
fell 4.7%. Grubhub shares fell
the longest, a spokesman said.
Deliveroo said it would use
the new money to build up its

Invests in ing some of its employees to 1.8%, and Uber dropped 2.5%. engineering team and expand
DANIEL LEAL-OLIVAS/AGENCE FRANCE-PRESSE/GETTY IMAGES

quit and set up their own One impediment to profit is in existing markets.
small businesses to deliver the continuing stream of capi- The service launched in

Deliveroo packages for the company.


Amazon launched its own
restaurant-delivery service in
tal into the sector, which helps
subsidize delivery costs in pur-
suit of market share.
London in mid-2013, three
years before Uber Eats
launched in the U.K. capital.
the U.K. in 2016, but closed it DoorDash, which raised Deliveroo Chief Executive Wil-
Continued from Page One late last year. It offers such a $400 million in February, is liam Shu co-founded the com-
whose chief executive at one service in the U.S. in about 20 aiming to raise between $650 pany after working as an in-
point also pondered an invest- cities, according to its website. million and $750 million in its vestment-banking analyst for
ment in DoorDash, The Wall “We’re impressed with De- new round at a $12 billion val- Morgan Stanley in London. Mr.
Street Journal has previously liveroo’s approach,” said Doug uation before the new invest- Shu worked as one of the com-
reported. Postmates Inc., an- Gurr, Amazon U.K.’s country ment, one of the people said. pany’s first delivery drivers for
other San Francisco-based de- manager. “We’re excited to see After the addition of funding months to learn how to plan
livery service, has raised al- what they do next.” in that range, the valuation the most efficient routes.
most $700 million in private Consumers increasingly ex- would approach $13 billion. The company’s original
capital and filed to go public in pect the meals and groceries The Information earlier re- model involved dispatching de-
the coming months. they order online to arrive at Deliveroo's delivery bikes are a common sight on the streets of ported some details of Door- livery drivers to restaurants
Amazon’s investment re- their homes as expeditiously London, where it competes with Uber Eats and other services. Dash’s fundraising effort. that didn’t have their own
flects its fascination with find- as clothing and household Including its newest round, takeout service. In recent years
ing ways to get all kinds of goods. Brokerage firm William profit on meals they send out Chicago-based company re- Deliveroo has raised a total of it has expanded by setting up
goods—from big appliances Blair & Co. estimates delivery the door. A few, such as Olive ported a 78% drop in profit in $1.53 billion, it said. Deliveroo its own kitchens where restau-
and furniture to groceries and will account for 10% of restau- Garden owner Darden Restau- its latest quarter to $6.9 mil- makes money by charging res- rant operators can cook food
prepared meals—in the hands rant sales by 2022. rants Inc., have wagered they lion, while revenue grew 39% taurants a commission of for delivery. It now has 215
of consumers as quickly as But food delivery so far has are better off not trying. from a year earlier. roughly 10% to 20% and cus- such kitchens. Deliveroo works
possible. The Seattle-based been largely unprofitable. Co- Shares in Grubhub Inc., a The prospect of Amazon’s tomers a flat fee of roughly £3 with about 80,000 restaurant
company has been building out ordinating drivers is costly, food-delivery forerunner that involvement in online meal de- ($3.80) per order. The com- and takeout outlets. It doesn’t
its own delivery operations as and restaurant operators say went public in 2014, have livery appeared to concern in- pany isn’t profitable globally have a presence in the U.S.
part of that effort, pitting it the fees that delivery compa- fallen nearly 60% from their vestors in Deliveroo’s rivals. but is in London and other U.K. —Yuliya Chernova
against traditional logistics nies charge leave them scant all-time high last year. The On Friday, shares in U.K.-listed cities where it has operated contributed to this article.

often doing skits re-enacting another, she teases people who we were promised,” declining He has unsuccessfully ap-
Guards Are real people. In one, he plays out
what would happen if Dr. Seuss,
fish for compliments, intoning:
“You’re not going to say you’re
to comment further.
Mr. Conley, the owner of the
plied for security jobs since
and still posts on Instagram.
Edgar Allan Poe and Stephen cute back?” Her videos have her security company Conley Group “People who don’t find farts
Stars on King met one another.
Jared Augustine, 32, posts
running into the frame scream-
ing and twirling a radio around
Inc., says TikTok’s rise could un-
dermine respect for uniformed
funny,” he says, “come from
places of serious negativity.”
For Mr. Augustine, his Alaska
TikTok App TikTok comedy from a Fair-
banks, Alaska, office he patrols,
often using building scenes as a
her head until she collapses dra-
matically, or singing that people
should mind their business.
guards, adding to image prob-
lems from Hollywood’s portrayal
of them as buffoons in movies
building—the offices of the non-
profit Tanana Chiefs Confer-
Continued from Page One backdrop, such as his re-enact- She calls her TikTok persona like “Paul Blart: Mall Cop.” ence—is a stage. For one video,
Popular clips on TikTok, ment from the rooftop of a Star The Glamma, “because I’m “Posting on TikTok gives he pretends to be a character
owned by China’s Bytedance Wars scene. “We have access to glamorous and I am a grand- the impression of a lackadaisi- from “The Office” television se-
Ltd., include familiar fare: a cat one big prop set,” he says. mother.” She occasionally talks cal, whimsical environment,” ries, answering a phone at an
opening a microwave, a teen It isn’t that viewers are par- Off the clock about boredom or shows snip- he says. “It undercuts the very empty desk to the show’s theme
gushing about driving solo, Ar- ticularly interested in guards’ pets of her workplace—like her tone of what security is sup- music. In his rooftop Star Wars
nold Schwarzenegger demon- boring jobs: The videos often Iowa, who doesn’t approve of tour of a restroom—but seldom posed to do.” He lets employ- scene, he reprises Luke Sky-
strating a biceps curl. Dog vid- aren’t about the work at all. TikTokking from work, “is you talks about her job. Her em- ees use phones on breaks but walker gazing out as dramatic
eos, naturally, are among the “I followed her because of have somebody in a responsi- ployer declined to comment. not to post on social media. music swells. Tanana didn’t re-
most popular. her zest for life and her en- ble role doing something silly.” “I am self-entertaining,” A Florida-hospital security spond to requests to comment.
But for some reason, TikTok ergy is brilliant,” says one of Ms. Shanton, a security Ms. Shanton says. guard says social media got him Mr. Robinson in Florida re-
fans are particularly interested Ms. Shanton’s followers. “Not guard for about 11 years, spent Security guards often post fired last year when—before enacts on-the-job dynamics. In
in watching security guards. because of her uniform.” breaks before TikTok writing with the hashtags #securityl- TikTok took off in the U.S.—he one, he asks to leave early; his
Clips with the hashtag #secu- A theory among guards is poetry. “You really are doing ife, #bored or #overnight- developed an Instagram follow- TikTok boss doesn’t appear
rity have seen 44 million they spend more time bored absolutely nothing.” On Tik- struggles. Most TikTok users ing for his demonstrations of sympathetic. His real em-
views, outpacing job-related than the average person, so Tok, she jokes or opines—from don’t make money doing it. how his lobby acoustics gave ployer, Dynamic Security Inc.,
categories such as #lawyers, their jobs give time and mental break rooms, hallways, parking TikTok’s fans say its 15-sec- flatulence “this magical sound.” based in Muscle Shoals, Ala.,
#dentists and #senators. leeway to craft funny routines. garages, her car—on serious ond format lends itself to silli- The guard, posting under declined to comment.
Security guards with big Tik- And they have plenty of breaks topics such as underappreci- ness rather than political rants the nom de plume Paul Flart, “It just makes me happy,”
Tok followings include Ranaldo during which to update fans. ated African-American women. and heavily curated videos fa- says his boss spotted the vid- he says, “knowing that I made
Robinson Jr., 22, who tells jokes “What makes it funny,” says And she breaks into struts miliar on Instagram and You- eos and fired him for excessive someone smile.”
from an attendant booth at a Tom Conley, a security-com- and shimmies. On one she lip- Tube. A TikTok spokeswoman cellphone use even though “I —Jim Oberman
Florida truck-weighing station, pany owner in Des Moines, syncs to “The Breakup Song.” In says “this is the internet that wasn’t neglecting my duties.” contributed to this article.
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A11

OBITUARIES
K AT H L E E N E I S B R E N N E R J E A N VA N I E R
1960 — 2019 1928 — 2019

Entrepreneur Expanded ‘Misfits of Nature’ Taught


Natural-Gas Market
Philosopher How to Live
K
athleen Eisbrenner, a rare lowing the liquid to be re-gasified
female entrepreneur in the aboard ships, then piped to shore
energy industry, helped and into the domestic distribution
turn natural gas into a globally network. This method allows gas BY JAMES R. HAGERTY year-old Jean had a startling pro-
traded fuel. to reach ports where it wouldn’t posal to his parents: He wished to

J
After joining El Paso Energy be economical to build an onshore ean Vanier, a French-Canadian sail to England, enroll in the Royal
Corp. more than two decades ago, terminal. After El Paso ran into fi- philosopher and navy veteran, Naval College and prepare to fight
she sought less expensive and nancial trouble, Ms. Eisbrenner was still searching for his the Nazis. His father suggested al-
more flexible ways to import liq- became chief executive of Exceler- spiritual path in 1964 when he vis- ternatives but finally consented. “I
uefied natural gas, or LNG. Gas is ate Energy, a company that ac- ited an asylum for the mentally trust you,” he said.
cooled into a liquid at about mi- quired the technology and helped disabled near Paris. The over- The war was over by the time
nus 260 degrees Fahrenheit for spread its use world-wide. crowding and filth appalled him. he completed his training, but he
transport on ships; then the liq- She also served as an executive “Will you be my friend?” one of served as an officer in the British
uid must be heated back into gas vice president at Royal Dutch Shell the inmates, Raphael Simi, asked and Canadian navies. Influenced
at its destination. This “re-gasifi- and founded NextDecade Corp., a him. Mr. Vanier’s answer was to partly by the writings of Thomas
cation” is usually done at massive company developing a project to invite Mr. Simi and another dis- Merton, he left the military in 1950
onshore terminals that take years export gas produced in the U.S. abled man to live with him in a to pray, read and contemplate.
to build and face major regula- Ms. Eisbrenner died May 9 of small house in the village of For the next 12 years, he was a
tory hurdles because of environ- head injuries from a fall in her Trosly-Breuil, France. Soon they wandering student of theology and
mental and safety concerns. home in The Woodlands, Texas. were joined by others. Caring for philosophy in France and else-
Ms. Eisbrenner and her team at She was 58 years old. his new friends, feeding and wash- where. He lived for a spell in a
El Paso developed technology al- —James R. Hagerty ing them, Mr. Vanier found that Trappist monastery. In 1962, he
the benefits flowed both ways. earned a doctorate in philosophy
“They were seen as misfits of from the Catholic University of
nature, not as human beings,” he and to mark human dignity where Paris. His dissertation examined
MICHEL ROUX wrote in his 1998 book “Becoming it is least physically obvious.” Aristotelian ethics. Mr. Vanier, who
1940 — 2019 Human.” Living in their midst al- Mr. Vanier found liberation in never married, lectured briefly at
lowed him to “recognize and ac- the communities he created. “The the University of Toronto before
cept my own weaknesses and vul- great thing about people with in- founding L’Arche.

Vodka Got Snob Appeal nerability. I no longer have to


pretend I am strong or clever or
better than others.”
tellectual disabilities is that
they’re not people who discuss
philosophy,” the philosopher told
Coming out of the navy, he knew
how to give commands but was
fearful of relationships, he later

From Absolut Salesman He named his home L’Arche, af-


ter Noah’s Ark. Its model of caring
for the intellectually disabled,
Mr. Ahmari. “What they want is
fun and laughter, to do things to-
gether and fool around, and laugh-
said. Living with the disabled
taught him tenderness.
The organization spread to the
overseen by L’Arche International, ter is at the heart of community.” U.S. in 1972 with a community in

M
ichel Roux, a Frenchman yellow taxis, a flock of pigeons a Paris-based charity, has spread Well over 6 feet tall, he had Erie, Pa. Linda, a resident of that
who got his start in the (Absolut Venice) and a computer to more than 150 communities in bristly eyebrows and a face that home since 1986, recalls visiting
hotel industry and once chip. The bottle even masquer- 38 countries, providing homes for seemed chipped out of rock. For Mr. Vanier in France. Earlier this
worked as a dishwasher, pulled aded as a Playboy centerfold. about 5,000 people. the interview, he wore a wind- year, she knew his health was declin-
off the remarkable feat of endow- Artists and other celebrities in- Mr. Vanier, who died May 7 at breaker and corduroy trousers. ing and was praying for him. “Jean is
ing vodka with snob appeal. cluding Andy Warhol were paid to age 90, called L’Arche “a school of “What I’m trying to live and trying with Jesus,” she said Tuesday.
In the 1980s and early 1990s, help promote the brand. To reach the heart.” to say is that people with disabili- In his 2015 interview with The
as head of Carillon Importers trendsetters, Mr. Roux advertised Sohrab Ahmari, then an edito- ties are important—in themselves Wall Street Journal, Mr. Vanier
Ltd., the firm importing Absolut in magazines aimed at gays and rial-page writer for this newspa- but also they have a message to was asked what could be contrib-
vodka from Sweden, Mr. Roux lesbians, and supported their per, visited the original Trosly- give to humanity,” he said. uted by those unable to devote
oversaw one of the most success- causes before that strategy be- Breuil home four years ago. Jean François Antoine Vanier themselves full time to serving
ful marketing campaigns ever, came common. “Eating at a L’Arche house can be was born Sept. 10, 1928, in Geneva. others. “Try and find somebody
hoisting the brand from obscurity The ads had so much cachet discomfiting if you’re a stickler for His father, Georges Vanier, was a who is lonely,” he said. “And when
to the No. 1 spot among imported that magazines offered special table manners,” he wrote. “There Canadian diplomat who later you go to see them, they will see
vodkas in the U.S. deals. In 1993, Countryside maga- is much spitting, spilling and gur- served as governor general of Can- you as the messiah. Go and visit a
The ads, created by TBWA Ad- zine paid the costs of producing an gling. But gradually the discomfort ada. His mother, the former Pau- little old lady who has no friends
vertising, started simple. An early Absolut ad to appear in its pages. melts away, and the residents line Archer, was known for human- or family. Bring her flowers. People
version depicted a bottle of Abso- Mr. Roux, who died April 30 at draw you into their world, unhin- itarian work. say, ‘But that’s nothing.’ It is noth-
lut underneath a halo with the age 78, also promoted Stolichnaya dered by politeness or social rank. The family lived in France at the ing—but it’s also everything.”
slogan “Absolut Perfection.” Later vodka, Grand Marnier, Bombay That’s the point of the place: to outbreak of World War II and fled
ads morphed the bottle into im- gin and absinthe. understand what it means to be to escape the Nazi onslaught. In  Read a collection of in-depth
ages of Central Park, a phalanx of —James R. Hagerty human in all its imperfect forms, 1942, safely back in Canada, 13- profiles at WSJ.com/Obituaries

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A12 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

FROM PAGE ONE

Unfulfilled
Promises of
DNA Tests
Continued from Page One
ing and talking, and epilepsy.
The findings gave the family
an answer, and a community.
Esmé had a variant in the
PCDH19 gene. Ms. Savoie threw
herself into PCDH19 research
and friendships with families of
other PCDH19 children.
A later DNA test, in 2015, up-
ended that.
The lab no longer considered
that variant a culprit in Esmé’s
condition after all. It now
pointed to a variant of a differ-
ent gene that hadn’t been
flagged before because it wasn’t

LAUREN LANCASTER FOR THE WALL STREET JOURNAL (3)


part of genetic testing at the
time. Two other patients with
epilepsy and intellectual disabil-
ity had variants on this other
gene, the report said. One of
them had died.
“The ground kept shifting,”
says Ms. Savoie. “It was a crisis
of identity, as well as a crisis of
faith in science to tell us some-
thing we could rely on.”
Esmé’s genetic code hadn’t
changed. But the interpretation
of new and rare gene variants
does, frequently, sometimes in The Savoies, above, administer an infusion therapy to Esmé. Below, Esmé at school and swim therapy. Each time she seemed to have a label, it was taken away.
ways that can change a person’s
treatment strategy and progno-
sis. For Esmé’s family, the report She didn’t want to leave Esmé, new report from the lab that
still wasn’t the final word. who had frequent seizures, and had done Esmé’s whole exome
became an advocate on her sequencing a year before.
daughter’s behalf. Esmé’s genetic results had been
Pandora’s box Mr. Savoie, an architect, ini- reinterpreted—again.
DNA testing has created a tially didn’t care what the issue Esmé’s SCN8A variant was
wealth of information for pa- was called. “I knew we would still considered of unknown sig-
tients and doctors. Because it deal with whatever it was.” nificance. But now they also
generates so much new data, the Months later, “I grew to found two other gene variants,
medical world is still trying to change my opinion about test- labeled “likely pathogenic” and
understand what it means, ing.” “pathogenic,” or disease-caus-
bringing anxiety to families. At 3½ months old, Esmé ing, which hadn’t been previ-
“We are in a period of drastic went into cardiac arrest. Ms. ously known.
evolution in our field,” said Savoie raced into the emergency Each time Esmé seemed to
Heidi Rehm, chief genomics offi- room with her child cradled in have a label, it was later taken
cer at Massachusetts General her arms. Doctors asked if the away. Twice, Ms. Savoie found a
Hospital in Boston, who is in- baby had any genetic conditions. genetic home, only to feel she no
volved in DNA interpretation ef- “I wanted to tell them some- longer belonged.
forts, including one to cull gene thing to help, but I didn’t have a As more people get tested,
associations no longer consid- label,” Ms. Savoie said. the lab might change its inter-
ered accurate. In the hospital, a geneticist pretations again, Mr. Savoie
Some genetic testing, like went over the types of tests cli- said. Any one of Esmé’s four
that performed on the millions nicians recommend. They genetic mutations—separately
of newborns tested with drops started with a test for 22Q11, a or perhaps in concert—might
of blood taken from their heels, deletion on chromosome 22 that eventually turn out to be dis-
has been around for decades. can cause heart problems and ease-causing.
Commercial genetic testing developmental delays. The test Mr. Savoie said his wife
surged after scientists an- was negative. Doctors then or- didn’t want to leave the SCN8A
nounced in 2003 they success- dered a DNA microarray, state of community with which she now
fully sequenced the human ge- the art at the time, which closely identified.
nome. Improvements in searches a larger swath of DNA. Shelley Frappier, whose 5-
technology allowed for the test- Six weeks later, the geneticist year-old son, Nico, has an
ing of many genes at the same called. The test results didn’t SCN8A diagnosis, and who
time. Prices of tests plummeted. turn up anything unusual either. works as a volunteer in Ms.
Last year, a study published Esmé was fragile. She vom- Savoie’s foundation, urged Ms.
in the journal Health Affairs es- ited repeatedly and wasn’t gain- Savoie to stay. To her, what
timated there were approxi- ing weight. They needed to tend binds the parents isn’t the par-
mately 75,000 genetic tests used to her daily medical problems. ticular disease-causing gene
by doctors on the market, with In August 2012, when Esmé variant but the desire to save
about 10 new ones released ev- was 20 months old, the couple their children’s lives. “Every
ery day. (Direct-to-consumer decided to try testing again. Her night, I give my little boy a kiss
tests weren’t included.) seizures required frequent trips at night and don’t know if that’s
Doctors use genetic tests to to the hospital. She was fed the last one,” said Ms. Frappier.
help inform treatment for rare through a tube and didn’t speak. “We all live with that fear.”
conditions, cancer and heart dis- She was also energetic and curi- Ms. Savoie decided to con-
ease. They find themselves pep- ous, splashing in the small pool tinue her work with SCN8A,
pered with questions from con- in the backyard and rolling even if any discoveries seemed
sumers who want to understand around the house. unlikely to benefit Esmé. She
the results of their home-testing Ms. Savoie took Esmé once a also joined Facebook groups
kits. As more people have their month to Boston Children’s Hos- for people with variants in the
DNA tested, and rely on the re- pital, a 3-hour drive from their two new genes listed in Esmé’s
sults as gospel, the potential for home in Troy, N.Y., to see spe- latest report. She stays in
reinterpretations is having far- cialists. The family hoped find- ‘We want to let this observant, quiet and touch with some members of
reaching consequences. ing the correct gene might lead the PCDH19 community.
Researchers at the University to a treatment. solemn child show us who she is, regardless Esmé attends school from
of Texas Southwestern Medical Doctors told her about a 8:30 a.m. to 1 p.m., participating
Center, including a child neurol- new test for 36 genes associ- of what is written in her genes.’ in a small class where she has
ogist, published a study last ated with different forms of in- her own nurse. She works on
year reviewing more than 300 fantile epilepsy. It was expen- reading and math, speech ther-
epilepsy cases. It found nearly a sive and not widely available. Hillary Savoie on her daughter, Esmé. apy and music therapy. After
third of the children had a A hospital committee deter- school, she has therapy in a pool
change in diagnosis based on mined Esmé should get it. and an additional school session
new genetic data that emerged symptoms and those of the oth- discovered some variants were her daughter has, said frequent with a teacher at home. When
in the previous five years. Re- ers was more pronounced. One associated with epilepsy. Esmé’s variant reinterpretations can the weather is nice, she goes
searchers recommended parents One answer child was learning to ride a bike. report described two previous cause hurt feelings when people outside in her wheelchair. She
review gene tests performed on Just shy of Esmé’s second Another loved singing and cases, including one who died. move between different groups. blows bubbles, and plays with
children with epilepsy at least birthday, the doctor called to say climbing on the playground. At The one who died, she learned “They experience every- toy cars. She is a fan of the
every two years to keep up. the test found a variant in one of the age of 4, Esmé couldn’t do later, was a child. thing at 10 times the emo- movie “Coco” and the Muppets.
In a paper this year, research- the epilepsy-causing genes: any of those things. In the wake of the new inter- tional impact. That’s on top of Esmé makes sounds, but is
ers reviewed data for 33 genes PCDH19. Esmé didn’t have all of Jozef Gecz, a researcher at pretation, Ms. Savoie considered this horrific disease their chil- often difficult to understand,
routinely tested to diagnose a the symptoms associated with the University of Adelaide in the PCDH19 world she had been dren have.” even for her parents.
genetic condition involving the condition, but the family Australia, whose lab discovered inhabiting and felt, “I no longer In January, Ms. Savoie ar-
thickening of the heart muscle grabbed onto it. disease-causing variants in the had a claim to that community.” rived at Boston Children’s Hos-
that can lead to sudden death. “It was the first thing in all of PCDH19 gene, met Ms. Savoie at The foundation she set up A new quest pital with 8-year-old Esmé.
Of those, they found 22 had ei- our testing that started to look a 2013 group meeting. He too re- stopped funding future PCDH19 Ms. Savoie connected online Dressed in a purple sweatshirt
ther limited or no evidence for like an answer,” Ms. Savoie says. alized Esmé was different than projects and started fundraising with a group of parents whose and black leggings, she sat on
causing the disease, said Jodie Pursuing answers for Esmé many of the other children. He for SCN8A research. children all had SCN8A muta- her mother’s lap, her eyes dart-
Ingles, associate professor at the was difficult. It gave her hope tried to persuade Ms. Savoie Tracy Dixon-Salazar, who is tions. Esmé’s medication didn’t ing to the bright fish in the giant
University of Sydney and lead that, “Maybe there are other they needed to keep looking. the director of research and change, but because of risks as- aquarium in the lobby. A long
author on the paper. kids like her out there, and we Ms. Savoie was torn. Having strategy at a foundation that fo- sociated with the SCN8A vari- day of doctor appointments lay
“We have to be sure,” said Dr. just haven’t found them yet.” found a community, she wanted cuses on Lennox-Gastaut Syn- ant, her parents pursued cardiac ahead, but Ms. Savoie stopped
Ingles. “There is so much poten- Ms. Savoie found an online to stay in it. drome, a type of epilepsy that monitoring. to chat with an expert in epi-
tial for harm if we get it wrong.” support group started by par- In 2015, labs were starting to At first, Ms. Savoie held back lepsy genetics she knew, An-
At first, the Savoies resisted ents of children with PCDH19 more widely offer “whole exome Net new genetic tests used from sharing Esmé’s story. She napurna Poduri.
genetic testing. gene variants and embraced sequencing,” which sequences by doctors on the U.S. market was concerned about meeting A new genetic testing oppor-
After Esmé’s difficult birth, that world. large amounts of DNA, particu- new people, and the diagnosis tunity was available, she told Dr.
15,000
Ms. Savoie says she and her hus- In 2013, she started a founda- larly in sections where many changing again. Poduri. At a recent meeting of
band, André, didn’t have time to tion and raised money for disease-causing genes are lo- She told the parents that rare-disease advocates, a lab of-
think about “the mystery of PCDH19 research. The founda- cated. Esmé’s blood was tested. doctors weren’t sure yet if the fered to test Esmé’s DNA again.
Esmé’s DNA.” Their newborn tion helped fund a project in a Her daughter’s PCDH19 vari- 10,000 SCN8A variant was the cause More information and improved
spent a week in the neonatal in- lab using zebrafish. She and her ant, previously classified as of of Esmé’s condition. Parents technology offered the possibil-
tensive care unit while doctors husband took Esmé to see them. unknown significance, was now told her an official diagnosis ity of yet-another interpretation
tried to wean her off oxygen and Ms. Savoie made “intense ruled likely not to be disease- didn’t matter. of Esmé’s genes.
get her to eat. friendships” and engaged in causing. And Esmé had a variant 5,000 “We are all going through the Dr. Poduri watched Esmé,
Ms. Savoie had been enrolled daily conversation with some in a different gene, called same thing, trying to save our chewing contentedly on her
in a Ph.D. program in communi- mothers. For two years, the SCN8A, that was so new it child’s life,” said Dianely Ca- mother’s scarf. The girl’s blue
cation and rhetoric, and was community was her main emo- hadn’t been on her previous brera, whose 4-year-old son, eyes blinked back. They decided
0
teaching a writing course at tional support. test. It now seemed to explain Max, has an SCN8A variant. to move ahead with the testing.
Skidmore College. She eventu- But as more children were di- more of Esmé’s symptoms. 2014 ’15 ’16 ’17 Ms. Savoie had a measure of “I tell all the families,” the doc-
ally completed her degree but agnosed, Ms. Savoie noticed that SCN8A cases were still very Note: Doesn't include direct-to-consumer tests. peace. Even this wasn’t to last. tor said, “this is what we know
was unable to keep teaching. the difference between Esmé’s rare. Scientists had only recently Source: Concert Genetics In 2016, the family received a now, but it is going to change.”
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A13

OPINION
THE WEEKEND INTERVIEW with Wilfred McClay | By Naomi Schaefer Riley

Reclaiming History From Howard Zinn


I
f you’re old enough to re- Thus in the new book he books, “Land of Hope” has no
member the Soviet Union, observes that it’s “hard to sidebars or charts; a few
you’ve probably wondered read about” early-19th-cen- maps and portraits provide
why so many young people tury America “without think- the only distractions from the
today seem attracted to so- ing of the series of events text. Mr. McClay writes with
cialism. One influence is Howard culminating in the coming of a literary quality, as when he
Zinn, who published “A People’s the Civil War as if they were likens Lincoln to Moses, “cru-
History of the United States” in predictable stages in a preor- elly denied entry into the
1980, the year before the first mil- dained outcome. Like the au- promised land of a restored
lennials were born. dience for a Greek tragedy, Union, denied the satisfaction
The book “continues to be as- we come to this great Ameri- of seeing that new birth of
signed in countless college and can drama already knowing freedom he had labored so
high-school courses, but its com- the general plot,” and sus- long to achieve.”
mercial sales have remained ceptible to the illusion that it There’s also nonpartisan
strong as well,” the Chronicle of was written in advance. He cultural criticism. After re-
Higher Education reported in urges readers to resist “that counting Charles Lindbergh’s
2003, on the occasion of its mil- habit of mind” and remem- 1927 flight across the Atlan-
lionth copy sold. It kept selling af- ber that people at the time tic, Mr. McClay asks: “Why
ter Zinn died in 2010: The Zinn had no foresight to match were the parades in his honor
Education Program website now our hindsight. even greater than for the
claims more than two million What gets him most riled doughboys returning from the
sales. up is what he sees as an ab- sacrificial perils of war?” He
Historian Wilfred McClay as- dication. “When you teach an answers that the new mass
pires to be the antidote to Zinn, introductory course in Amer- media “allowed for the act to
whom he accuses of “greatly over- ican history,” he says, “you be amplified and made into a
simplifying the past and turning really have a responsibility story, one with near-mythic
KEN FALLIN

American history into a comic- . . . to reflect in some way overtones,” and turned into a
book melodrama in which ‘the the national story, in a way “shared national experience,
people’ are constantly being that is conducive to the de- one story among many others
abused by ‘the rulers.’ ” Mr. Mc- velopment of the outlook and binding the nation together.”
Clay’s counterpoint, which comes skills of a citizen—of an engaged, True enough, but Mr. McClay re- He adds that some recent his- That, however, raised “the danger
out next week, is titled “Land of patriotic, serious citizen.” Most sponds with a challenge: “Well, tory books are “somewhat disfig- that with enough spin applied, al-
Hope: An Invitation to the Great professional historians don’t “take compared to what? Were things ured” by the way in which the un- most any occurrence could now be
American Story.” that mandate very seriously at better for women in sub-Saharan derstanding of recent history is hyped up into being a significant
all,” and instead provide “a basi- Africa? Were they better in “projected back on to the past.” event.”
cally negative understanding of France? And generally they can’t He’s willing to name names. Har- In the classroom, he endeavors
The left’s portrait of American history.” answer the question. What they do vard’s Jill Lepore “recently pub- to cultivate a longer view. When
He says proudly that they recip- is they measure the country’s his- lished an ambitious history of the he explains the Constitution, he
America’s past has rocate his aversion. When he tory against an abstract standard United States—full of interesting reminds students—or lets them
triumphed thanks to the meets colleagues at conventions of perfection, against which it’s al- details, but with a present-minded know for the first time—that “con-
and tells them the name of his ways going to fall short.” political perspective that disfigures flict is part of the human condi-
abdication of serious book, “they just kind of look at me Mr. McClay decries the impulse the whole.” Yale’s Timothy Snyder tion and can never be eliminated.
historians. This historian and say, ‘Oh my God, what have to “condescend toward history”— “has written brilliantly and author- Neither can the desire for power
you been smoking?’ . . . When I and tear down monuments or itatively about the ‘bloodlands’ of and the tendency to abuse it.”
offers an antidote.

H
say it has the word ‘Great,’ in ‘the withdraw honors from historical the Second World War”—the coun-
Great American Story,’ then figures who offend today’s sensi- tries between Germany and Russia e maintains a similar per-
they’re even more dubious.” bilities. He says he isn’t trying to that were ravaged by both Nazis spective in the face of young
He says he doesn’t mean his new Mr. McClay’s objective in “Land “reduce everything to context,” and communists. But he “has taken people’s enthusiasm for so-
book as “some saccharine white- of Hope” is to help readers de- only to acknowledge that leaders out a flier as civilizational prophet cialism and the apocalyptic lan-
wash of American history.” But he’s velop a sense of perspective and from Thomas Jefferson to Martin and diagnostician of ‘tyranny,’ with guage he hears them use about cli-
seen too many students drawn to “a mastery of the detail” of Ameri- Luther King were complicated, effects that are both alarming and mate change or Donald Trump. He
Zinn because the standard text- can history. The Zinn approach al- and that their flaws are “no rea- embarrassing.” says he’s “reluctant to disparage
books are visionless and tedious. lows them to be lazy: “Why learn son to rob them” of recognition Mr. McClay is even harsher on these moral urgings as the effu-
“Just as nature abhors a vacuum,” what the Wilmot Proviso was, or for the “truly heroic things that history textbooks: “They’re com- sions of ‘snowflakes.’ ” Rather, he
Mr. McClay says, “so a culture will what exactly went into the Com- they accomplished.” pletely unreadable because they’re speculates that “there’s a hunger

T
find some kind of grand narrative promise of 1850, when you could assembled by committee, by grad- for something that can have about
of itself to feed upon, even a poi- just say we had this original sin of ake Woodrow Wilson, re- uate students who write little bits it the nobility that the civil-rights
sonous one.” slavery?” cently the subject of contro- and pieces of them. I’m not con- movement had in its prime.”
A lousy story is better than no By contrast, “Land of Hope” versy at Princeton Univer- vinced that most of the textbooks When he taught at Tulane in the
story at all: “We historians have for delves into the complexity of the sity, where he was president from that have the names of very emi- late 1980s and early ’90s, he re-
years been supplying an account of Founders’ debates over slavery. 1902-10. Critics want to remove nent historians on the cover were calls, “almost every applicant for
the American past that is so unedi- Many expected it would eventually his name from the School of Pub- actually read by them, let alone graduate study wanted to work on
fying and lacking in larger perspec- end on its own, or believed the al- lic and International Affairs be- written by them.” the civil-rights movement—even
tive that Zinn’s sweeping melo- ternative to accepting it—aban- cause of his bad record on race. There are also the committees though we didn’t have a single
drama looks good by comparison. doning the union—was worse. Mr. McClay isn’t a fan of President that approve them—state and local person on the faculty at that time
Zinn’s success is indicative of our Some were conflicted. The book Wilson’s diplomatic efforts and school boards, which answer to a who was an expert on the subject.”
failure. We have to do better.” describes George Mason as “a criticizes his suppression of dis- variety of “stakeholders.” Mem- It’s easy to see the attraction, but
With his round dark-framed slaveholder but also a Christian sent during World War I. But bers of every racial, cultural and he worries about the expectation
glasses and bushy, graying mus- who labeled the trade an ‘infernal when the U.S. entered that war, religious group want a say in how that history will “provide an
tache and eyebrows, Mr. McClay, traffic,’ ” and adds: “Mason feared Mr. McClay says, “it was a mo- they and events important to them agenda for a moral crusade.”
67, looks as if he could have walked the corrupting spread of slavery ment for all hands on deck, and are described. Mr. McClay opted to “Very few moments of conflict
out of a 1950s classroom. He’s through the nation, which would Wilson proved to be an excellent dispense with that process, and have the moral clarity of that par-
taught history since 1986, including bring the ‘judgement of Heaven’ wartime leader.” The professor “Land of Hope” is being published ticular historical moment,” Mr.
at Tulane, Johns Hopkins, the Uni- down severely upon any country in praises the 28th president as by a conservative house, Encoun- McClay cautions, “and we fall into
versity of Tennessee and now the which bondage was widespread “acutely attuned . . . to the main- ter Books. He probably won’t sell error when we try to repeat it
University of Oklahoma. He takes a and blandly accepted.” The Found- tenance of public morale.” many copies to public schools, but again and again.” Instead, he en-
decidedly traditional approach to ers had to weigh what was possi- Ideological bias in history text- he hopes there are enough private courages students to appreciate
studying and teaching history, and ble, not just what was ideal—and books is bad enough when the and religious and charter schools, the nobility all around them.
he bristles with criticism for fash- Mr. McClay thinks it’s unfair to de- events occurred a century or more not to mention home-schoolers, “Gosh,” he says, “as Americans,
ionable nostrums. nounce them for failing to meet ago. “Especially once you get past, that it will find a market. you are part of what is arguably
Don’t ask him who’s on the today’s standards. say, 1960 or 1964,” Mr. McClay Mr. McClay says his model was the most exciting enterprise in hu-
right or wrong side of history. He Similarly, he says that when he says, “it just gets awful.” When the first 20 pages of Henry Ad- man history.”
thinks those concepts are bunk. talks about the wise and loving examining the recent past, “it’s ams’s nine-volume “History of the
“History is only very rarely the letters between John and Abigail very, very, very hard to have any United States,” published between Ms. Riley is a resident fellow at
story of inevitabilities,” he says, Adams, “students will say, ‘Yeah, kind of perspective, other than 1889 and 1891. Like Adams, Mr. the American Enterprise Institute
“and it almost never appears in but you know, women couldn’t whatever your own partisan per- McClay approaches history as a and a senior fellow at the Indepen-
that form to its participants.” own property and couldn’t vote.’ ” suasion is.” story. Unlike many modern text- dent Women’s Forum.

Trump’s Trade War With China Is Taxing Missouri Farmers


Tarkio, Mo. meant a loss of around $100 in po- ers. We already tax ourselves to be- Moreover, America’s diplomacy After all, there is no support for
“My family has tential income on each of those long to international organizations and law-enforcement bodies are a world-class agriculture sector
owned our farm for acres. Atchison County farmers will that are supposed to enforce trading funded according to tax laws passed among his likely opponents. Both
116 years,” says be looking at a decline of $10 million rules, as well as to fund the U.S. by Congress. Tariffs are imposed Bernie Sanders and Kamala Harris
Roger Cordes, a in gross income this year, or about military, the State Department, in- unilaterally by the executive—even have recently sworn their opposi-
farmer in central $2,000 per capita. We won’t be buy- telligence organizations and a legal as they destroy the economic future tion to the U.S.-Mexico-Canada
Missouri’s Pettis ing many Whirlpool washers. of farms and other export-depen- Agreement, a trade pact that would
CROSS
COUNTRY County. “I don’t Supporters of the tariffs begin dent businesses. improve relations with our top two
By Blake
want to be the one each conversation with a litany of My patriotic friends and Journalists never tire of writing markets for farm products.
to lose it.” Trade Chinese wrongs. They say China ig- with amazement (and no small At least part of the frustration
Hurst
wars may be easy to nores the rules governing interna- neighbors support the amount of condescension) about the felt by my neighbors is the feeling
win, but even “easy” tional trade and is at best a geopo- president, but they’ve continuing support for President that no one in politics is looking out
wars have casualties. litical rival and maybe something Trump among farmers and other ru- for our interests. Republicans and
It’s been a tough year on U.S. far worse. It’s true that the U.S. re- given about all they can. ral citizens. It’s much easier to un- Democrats alike are pursuing poli-
farms. The loss of the Chinese mar- sponse to China’s bad behavior has derstand here on the farm. Mr. cies that will shrink the size of our
ket and historic flooding in much of been inadequate. Yet rarely does the Trump so often says and does agricultural economy. Mr. Cordes
the Midwest have hit farmers hard. conversation move to Canada, Mex- system that has tools to enforce things that make perfect cultural won’t be the only farmer to see 100
Planting has been delayed every- ico or South Korea, other formerly laws against industrial espionage. sense to those of us who live far years of history fall victim to a war
where by wet, cold weather, and last reliable customers for U.S. agricul- All these institutions are better from the coasts. He can and should that was neither easy nor necessary.
week’s collapse of the trade talks tural products that have also be- suited than Midwestern soybean continue to count on overwhelming
with China and the imposition of come targets in Mr. Trump’s world- growers to take on China’s bad be- support from the heartland as he Mr. Hurst is a corn, soybean and
another round of tariffs by Presi- wide trade war. havior. approaches the 2020 election. greenhouse farmer.
dent Trump has led to a rout in the Mr. Cordes, a lifelong Republican,
commodity markets. The Bloomberg is worried about China as well. But

Notable & Quotable: ‘Unreliable’ News Sites


Grains Subindex Total Return—com- he’s also worried about having to
posed of futures contracts on corn, take out a mortgage on his farm so
soybeans and wheat—hit a 42-year he can plant this year’s crop and
low May 11. feed his family. The economic reality A “Letter From the Editor” by ceived complaints from those on the unreliable sites list until we are able
The CEO of Revere Plastics Sys- has dimmed his ardor for trade Barbara Allen, published on the list and readers who objected to the to provide our audience a more con-
tems, a supplier to the washing-ma- wars. Poynter Institute website, May 2: inclusion of certain sites, and the ex- sistent and rigorous set of criteria.
chine producer Whirlpool, recently I’d like to stop China’s abuses too, clusion of others. We began an audit The list was intended to be a start-
told MSNBC that his business is but I’m more concerned with my Dear readers: to test the accuracy and veracity of ing place for readers and journalists
booming because of tariffs. It’s good farm’s financial future. My family On Tuesday, April 30, Poynter the list, and while we feel that many to learn more about the veracity of
to know someone is benefiting. The produces 150,000 bushels of soy- posted a list of 515 “unreliable” news of the sites did have a track record websites that purported to offer
story is somewhat different in my beans a year, but with the price bot- websites, built from pre-existing da- of publishing unreliable information, news; it was not intended to be de-
part of the world. toming out, we expect to take a tabases compiled by journalists, fact- our review found weaknesses in the finitive or all encompassing. We re-
Atchison County, my small farm- $250,000 hit to our gross income in checkers and researchers around the methodology. We detected inconsis- gret that we failed to ensure that the
ing community in northwest Mis- 2019. Farmers are patriotic. We love country. Our aim was to provide a tencies between the findings of the data was rigorous before publica-
souri, is home to about 5,000 people. our country and don’t want to see it useful tool for readers to gauge the original databases that were the tion, and apologize for the confusion
One hundred thousand acres of soy- cheated. But we’ve given about as legitimacy of the information they sources for the list and our own ren- and agitation caused by its publica-
beans are planted here each year. much to this battle as we are able. were consuming. dering of the final report. tion. We pledge to continue to hold
The drop in soybean prices has Tariffs are a tax on U.S. consum- Soon after we published, we re- Therefore, we are removing this ourselves to the highest standards.
A14 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Trump’s Immigration Progress U.S.-China Talks Ignore Global Trade Rules

P
resident Trump campaigned in 2016 as in trade and transportation. As a real-estate Your May 11 editorial “The Your editorial correctly explains
an immigration restrictionist, and most guy, Mr. Trump has to know that hotels, ware- China Trade Impasse” omits an im- how the Trump administration’s tar-
portant word and value that iffs on China can be bad for both
of the time he still is. But this week he houses and factories won’t be built, products
should be central to America’s nations’ economies. Yet an equally
made his largest move to date won’t be transported, and trade fight with China: law. I refer important problem is that the ad-
toward a more welcoming He admits the U.S. stores won’t be stocked if jobs to international trade law as codi- ministration’s tactic of imposing
view of legal immigration, al- needs talent but he’s go unfilled. fied in the rules of the World frontier justice on China violates ba-
beit with some unfortunate Yet he’s still indulging in Trade Organization, which were sic international rules against unilat-
contradictions. still too stingy on visas. bad labor economics. “New- co-authored and championed by eral tariffs and evading the jurisdic-
The reform outline Mr. comers compete for jobs previous U.S. administrations. tion of WTO dispute settlement.
Trump sketched Thursday is against the most vulnerable If you’re right that China engages Should U.S. negotiators succeed in
thin on detail, but the contours are an improve- Americans and put pressure on our social safety in “trade cheating,” it’s because getting China to agree to “reform its
ment on the Administration’s earlier plans. net and generous welfare programs,” he de- China has violated WTO law. Yet the policies and markets to let foreign
“Our proposal is pro-American, pro-immigrant, clared. But immigrants complement rather than Trump administration has brought companies compete fairly without
only three WTO cases against China, regulatory predation or theft,” then,
and pro-worker,” he declared. Acknowledging replace American workers. The U.S. jobless rate
even though China has the most ex- as the editorial says, there needs to
that these objectives don’t conflict is progress. is the lowest in 50 years, and wages are rising tensive legal obligations of any WTO be a “process for mediating dis-
The problem is that the President still seems for the least skilled, even as the immigrant member country as a result of the putes.” The WTO already has a good
to think that lower-skilled immigrants undercut share of the workforce is higher than in at least numerous unique commitments system for enforcing its own law.
American workers. There’s little evidence for 15 years. China made when it joined the WTO Unfortunately, the Trump adminis-
that, and U.S. workers, taxpayers and busi- By the way, the labor participation rate for in 2001. The whole point of interna- tration is seeking to tear that sys-
nesses would benefit from more immigrants of foreign-born workers is higher than native tional trade law is that one country tem down by refusing to allow the
all skill levels. workers at all education levels. Labor participa- should not have the right to define WTO to replace appellate judges
The outline’s centerpiece is a “merit” system tion among Hispanic immigrants with a high- what constitutes trade cheating. For when their terms end.
similar to the Canadian and Australian models school degree (72.2%) is nearly 20 points higher intellectual-property theft, extensive For any new conflicts between the
WTO rules exist. U.S. and China outside the scope of
that award immigrants points based on age, edu- than similarly educated native whites (53.8%)
The problem with the U.S.-China WTO law, the two nations should es-
cation, employment and English proficiency. The and about equal to those with bachelor’s de- trade negotiations is that if the tablish a bilateral process for adjudi-
share of immigrants admitted based on skill and grees (72.7%). Trump administration’s numerous cation, such as international arbitra-
employment would increase to 57% from 12% Low-skilled immigrants are contributing allegations against the Chinese gov- tion. If the Trump administration is
while the proportion granted green cards because heavily to the nation’s entitlement programs ernment are valid, such misbehavior seeking a dispute process in which it
of family ties would fall by half to 33%. and sustaining Rust Belt communities that oth- adversely impacts all advanced alone can decide whether China
Current levels of legal migration would stay erwise would be losing population. More immi- economies, not just the U.S. Yet the cheats or engages in unfair treat-
the same, which is notable since the Adminis- gration will be vital to maintaining the “safety bilateral nature of the talks allows ment, then China should just say no.
tration last year endorsed a 50% cut. Mr. Trump net” as the U.S. fertility rate last year fell to a U.S. negotiators to make ad hoc de- Such refusal would be in China’s
also wants to let more foreign students edu- 32-year low. mands that could benefit U.S. inter- own domestic interest, and also in
cated at American colleges stay to work. As Mr. Mr. Trump is bowing to labor groups who ests (or special interests) to the det- its global interest to preserve the
riment of other countries. Moreover, once strong but now fragile world
Trump noted, U.S. companies are moving of- oppose increasing guest workers because they
the lack of third parties in the room economic order.
fices abroad because they can’t find or retain are harder to organize, and to restrictionists makes it hard to know whether the PROF. STEVE CHARNOVITZ
skilled workers. who want to reduce all immigration for cultural negotiations on either side are being George Washington Law School
But any point system is vulnerable to politi- reasons. The President also made no nod to le- carried out in good faith. Washington
cal meddling and will discriminate against less- galizing the 1.8 million or so young adults who
educated strivers who also boost the U.S. econ- were brought to the country illegally as chil-
omy. Merit systems don’t measure dren. Yet no immigration deal with Democrats
entrepreneurship and would keep out many is possible without some solution for those so-
less-skilled workers who start small businesses called Dreamers.
There’s Nothing to ‘Nationalize’ in 5G Radio
like the neighborhood dry cleaner. The plan also Then again, the new Trump outline is in- Mene Ukueberuwa’s otherwise What happened in January 2018
doesn’t increase or streamline guest-worker vi- tended more as a campaign document than leg- fine interview on 5G was marred by was less momentous, but still impres-
his casual repetition of a misleading sive: A single online publication, in
sas, which are crucial to reduce the incentive islative proposal. Democrats don’t want to give
trope—that the Trump administra- receipt of a leak from parties un-
for illegal immigration. Mr. Trump a victory on immigration before the tion once floated the idea of “na- known, erroneously described the
A labor shortage is one reason Canada has election, and his restrictionist supporters don’t tionalizing America’s next-genera- leaked document as a proposal to “na-
added guest-worker visas for low-skilled occu- want a deal—period. The stalemate is likely to tion wireless network” (“The tionalize 5G,” and a myth was born.
pations. Even Japan is admitting more guest persist through the election, which is a shame Yeoman Work Behind 5G Wizardry,” It’s unclear whether that spin came
workers for blue-collar jobs as a low birth rate for the Dreamers left in limbo and for employ- The Weekend Interview with Dino from the leaker or the writer. But it’s
threatens growth and living standards. ers who need more workers. At least Mr. Trump Flore, May 11). perfectly clear that this spin perfectly
U.S. employers report 7.5 million job open- is acknowledging that America needs the There never was such a proposal. serves the interests of America’s big
ings including 360,000 in construction, one mil- world’s best talent, which could create an open- And there is no singular “next-gener- carriers, which want to kill any idea
lion in leisure and hospitality, and 1.4 million ing for compromise in 2021. ation wireless network” to be seized that would bring new and much-
by the government. Each carrier is needed competition to wireless.
building its own 5G network, and at BRIAN M. CARNEY

Cuomo vs. New York no time did the Trump administra-


tion or anyone else propose expropri-
Rivada Networks
New Paltz, N.Y.

G
ating or buying those networks or
overnor Andrew Cuomo proved again from economic and energy reality claimed the preventing their construction by pri-
this week that the biggest threat to pipeline would hinder development of wind vate businesses—the sorts of things Uber’s Capitalist Innovation
New York isn’t Donald Trump, but pro- and solar, which make up a mere 5% of state that “nationalization” conjures up.
gressive anti-growth policies. electricity though Mr. Cuomo There was a wireless nationaliza-
Battles Union Obstruction
Witness his administration’s The Governor has set the fantasy renewable tion once—the Radio Act of 1927 ef- Your editorial is right to point out
permit rejection for a 23-mile target of 50% by 2030. fectively asserted federal ownership that Uber is classic capitalism at work
natural gas pipeline connect-
cancels another New York’s hostility to of all airwaves back when Calvin (“Uber’s Risk Is Politics,” May 10).
natural gas pipeline. Coolidge was president and Herbert Unions have the responsibility to in-
ing New York City and Long natural gas and nuclear
Hoover his commerce secretary. All crease their employees’ value, but in-
Island with Pennsylvania power could soon lead to an decisions on spectrum use ever stead they tend to obstruct techno-
shale gas fields. energy shortage. Mr. Cuomo since have come under the jurisdic- logical progress like Uber’s
Beyond creating hundreds of construction has pushed for the Indian Point nuclear plant tion of the federal government. innovations.
jobs, the pipeline would boost development. that provides power to New York City to be That includes the airwaves ex- Thus union membership continues
Low-income housing developers urged the decommissioned within the next few years. He ploited by wireless carriers today, to decline. Public unions are another
Governor to approve the permit, noting “the has also banned drilling for natural gas in the who are merely licensed to use fre- matter, however. Even Franklin Roo-
uncertainty related to state approvals” is rich Utica and Marcellus Shale that lie under quencies that the federal govern- sevelt understood the dangers of
“particularly concerning, since alternative en- the state, and he has blocked another natural ment still owns. public unions, where the negotia-
ergy options are unavailable or would include gas pipeline upstate. Due to pipeline con- tors—politicians and union bosses—
costs and design changes that have not been straints, the utility Con Edison in March sus- sit on the same side of the table,
factored into these developing projects.” Don’t pended natural-gas hookups in Westchester Dear Graduates: Risk and while taxpayers pick up the price tag
for political patronage.
they understand that political uncertainty is County north of New York City. Responsibility Get You Far JIM BARBER
a cost of doing business in New York? The Big Apple and its suburbs lost popula- We have written dozens of books Mesa, Ariz.
The pipeline would also lower carbon emis- tion last year for the first time in at least a denigrating the administrators, the
sions since oil is often burned for heating and decade, and the Governor’s senseless pipeline faculty, the students and everything
electricity when demand for gas exceeds sup- veto shows why. It’s getting harder to afford else associated with higher educa- Rotten Regimes Don’t Crack
ply. No matter. Environmentalists detached the illogic of progressive policies. tion. And in one column, Jason Gay
Until the Cash Is Cut Off
sets it all in context (“Class of 2019:

A Metals Tariff Reprieve


The Secret No One Will Tell You,” Ex- Mary Anastasia O’Grady’s column
change, May 11). He gets the chaos, “How to Liberate Venezuela” makes a
the immaturity, the need to find fault compelling argument for putting

T
with anything in the past, and the es- pressure on Havana (The Americas,
rade policy is never a straight line with if either aluminum or steel imports “surge sence of a liberal-arts education: risk. May 13). Cuba receives roughly $3.5
the Trump Administration, and Friday’s meaningfully beyond historic volumes of trade Major in something you love and billion a year in foreign remittances,
agreement among the U.S., Mexico and over a period of time, with consideration of have passion for, make sure you’ve mostly from Cubans living in the U.S.
Canada to lift steel and alumi- market share, ” according to got enough technology, and then President Obama also opened up cer-
num tariffs is a good example Good news for steel the joint U.S.-Canada state- jump into the void. That’s why it’s tain forms of travel to Cuba and al-
of two steps forward and one consumers, but border ment. called commencement: It’s the begin- lowed cruise ships to call on Cuban
step back. This is a U.S. warning to ning. We educate for risk; that’s what ports, thus giving Cuba access to
The good news is that the taxes could be reimposed. Canada in particular to re- makes us exceptional and why the more U.S. dollars.
countries agreed to lift the tit- strain its exports, since the rest of the world can’t replicate what Remittances to Venezuela total
for-tat tariffs that the U.S. im- word “meaningfully” is likely we do in those four years of college. roughly $4 billion a year, helping
EM. PROF. SOL GITTLEMAN keep the Maduro regime in power.
posed last year on the dubious grounds that to be defined by the U.S. steel and aluminum in-
Tufts University Until all remittances are prohibited to
steel and aluminum from our close northern dustries. They’ll complain to the White House Lexington, Mass. Cuba and Venezuela, the current situ-
ally is a threat to national security. Canada and at the first sign of price and supply competition ation will not change.
Mexico in turn will lift their retaliatory tariffs and call it a “surge.” Perhaps an equally important out- JON C. JACOBSON
that have been hurting the U.S. Farm Belt, At the very least this provision means there come of “Class of 2019: A Course for San Diego
among other American exporters. will continue to be uncertainty in steel and alu- Undergrads: How to Be a Boss 101”
This will provide more metal for U.S. manu- minum trade flows and supply chains, which (Exchange, May 11) is that students
facturers that have been struggling under price will hang over Canadian exporters and Ameri- not only learn how to be the boss, Pepper ...
increases and supply crunches in many prod- can consumers. At worst it could lead to de- but also how to be an employee. Be-
ing an employee requires under-
And Salt
ucts. It will also provide more competition for facto quotas on steel and aluminum imports,
U.S. steel makers that have been profiting from which means politically managed trade. The Ca- standing, working with others and THE WALL STREET JOURNAL
solving your own problems. As em-
this government favoritism at the expense of nadians are taking a risk in agreeing to this pro-
ployees do more self-managing,
everyone else. vision, but they must believe that lifting the tar- bosses gain more opportunities to
The agreement removes a major obstacle to iffs and aiding the prospects for ratification of lead. If there is one thing that I
consideration of President Trump’s U.S.-Mex- new Nafta were worth it. learned from being a waitress dur-
ico-Canada trade deal that would replace Nafta. Lifting the tariffs offers some relief to the ing college, it is how to respectfully
Republican Senators had made lifting the steel harm that trade policy has done to the North address and appreciate those who
and aluminum tariffs a condition of even con- American economy. Mr. Trump also agreed Fri- wait on me.
sidering support for the new Nafta deal, as Iowa day to postpone a decision on tariffs on Euro- LIZ HERMAN
Senator Chuck Grassley explained on our pages pean cars for 180 days pending negotiations Chicago
last month. with Europe. Both moves are welcome in partic-
The new Nafta deal is still a long way from ular given that U.S.-China trade talks have bro- Letters intended for publication should
having the votes to pass, and Democrats want ken down and may take weeks or even months be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
to rewrite the labor and drug-patent provisions, to strike a deal, if one is still possible before the or emailed to wsj.ltrs@wsj.com. Please
but at least the pact won’t fail because of 2020 election. include your city and state. All letters
Trump Administration steel-tariff suicide. Trade policy is the Trump Administration’s are subject to editing, and unpublished
The step backward is that Friday’s tariff-lift- version of regulation in the Obama years—a po- letters can be neither acknowledged nor “My muscle memory
returned.
ing deal allows the U.S. to re-impose the tariffs litical risk that never really goes away. is getting forgetful.”
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | A15

OPINION

The Myth of ‘Wage Stagnation’


By Phil Gramm Cars last 81.3% longer and are index that adjusts more completely for
And John Early 72.7% safer, and many have GPS navi- changes in quality and innovation, as

P
gation and premium sound systems. well as substitution. For example, us-
erhaps the most common No standard model lacks air-condi- ing data from the American housing
indictment of America’s tioning or power steering. The share survey to quantify size and quality,
legendary prosperity is of the population with college de- they determined that the CPI over-
wage stagnation. Bureau of grees is almost three times as high. states housing inflation by about
Labor Statistics data show Americans live 7.4 years longer and 0.25% a year because it mistakes
that average hourly earnings of pro- their median age is almost 10 years higher payments for bigger and better
duction and nonsupervisory employ- older, yet the proportion of people homes for real price increases.
ees peaked in October 1972 at $23.26 reporting poor health is 20.3% lower. They also used hedonic regression,
(in 2019 dollars) and were at that Real median household net worth is a method of calculating implicit mar-
same level in March 2019. But do up 172.2%. ket prices for different features of an
these numbers remotely describe the By virtually any definition of eco- item, to demonstrate that the CPI
life you have lived over the past 45 nomic well-being, Americans are sub- overstates the yearly rate of increase
years, or square in any way with nu- stantially better off today than they in prices for personal electronic de-
merous official measures of changes were a half-century ago. So how did vices by as much as 5.8%. They cor-

BARBARA KELLEY
in what Americans actually own and we obtain this massive cornucopia of rected the CPI’s overestimation of the
consume? In short, should you believe prosperity without a pay raise since yearly rise in health-care costs by
your eyes or government data? 1972? pricing based on treatment of a con-
Part of the problem is that the BLS’s dition, as well as differences in out-
measure of average hourly earnings comes such as survival, recovery and
Usual measures of excludes employer-provided benefits, based on what people actually buy, al- It may be impossible to discern function.
which now make up 30% of compensa- lowing it to account partially for the perfectly what share of changes in Messrs. Meyer and Sullivan’s im-
inflation don’t count the tion. Counting the value of worker substitution effect. Since 2000 the the costs of goods and services comes provements are only a modest begin-
benefits of better products benefits adds 5% to the 46-year in- Federal Reserve has used this index to from inflation compared with the ning of the needed revisions to tradi-
crease in total compensation. set monetary policy because it’s a share that comes from real increases tional measures of inflation. Yet they
and more consumer choice. More significant, the official index more accurate measure of inflation. In in value. But in communications tech- provide convincing evidence that at a
used to adjust for inflation—the Con- designing the 2017 tax reform, Con- nology, for instance, it’s clear that no minimum, real compensation, in terms
sumer Price Index for Urban Wage gress indexed the new income-tax government metric comes close to of the value of what we can actually
Compared with 1972, American Earners and Clerical Workers, or CPI- brackets using a similar index to ac- capturing the full value of technology buy, hasn’t stagnated since 1972, but
homes today are much more spacious W—overstates actual inflation and count for product substitution. Using as America has progressed from the instead has grown by at least 69.5%.
and modern. The proportion of understates real compensation. Nomi- the PCE price index rather than the Pony Express to the telegraph, tele- For most of us who were around in
homes today that have two or more nal average hourly earnings rose from conventional CPI-W to adjust compen- phone, portable phone, cellphone and 1972, that 69.5% increase more closely
rooms per person is up 33.5%. The $3.99 in October 1972 to $23.26 this sation results in real hourly compen- the smartphone. fits the world we live in.
share of homes with two or more March, a 483% increase, but CPI-W sation levels that are 27.7% higher to- Today 224 million Americans have The suggestion that America
bathrooms has more than doubled; also rose 483%, creating the reported day than they were in 1972. at our fingertips more than two mil- hasn’t gotten a raise in 46 years
central air-conditioning is more than stagnation in real average hourly The biggest challenge in measur- lion apps, forecasting the weather doesn’t pass the laugh test. Poor
three times as common; and the earnings. While the CPI-W accurately ing real compensation and Ameri- anywhere in the world and showing measurements of compensation are
share of homes that have dishwash- measures changes in price for a fixed cans’ well-being is the extraordinary us how to get anywhere we want to more than misleading; they also
ers is up by more than two-thirds. market basket of goods and services, growth in new products that have go. We communicate immediately cause many voters and policy makers
Most homes in 1972 had televisions, it overestimates inflation because it brought new benefits not captured in without stationery or stamps or driv- to favor redistribution that would de-
but only about half were color sets. fails to account for the substitution any government consumer price met- ing to the post office. We get medical press growth and compensation.
Today they are all color and most are effect—how people change their con- ric. The BLS does add new products advice without going to the doctor Nothing is more critical to promoting
flat screens in high definition, at- sumption habits as relative prices to its index when they become widely and obtain instantaneous access to sound policy than measuring eco-
tached to cable or satellites. The av- change. Americans began to fly more used, but it often misses the initial more knowledge than is in the local nomic outcomes accurately. A nation
erage home in 1972 had at least one often in the 1970s when the cost of price decline and understates the library. We shop from our armchairs is only as good as its facts.
phone, but none had cellphones or in- airfare fell relative to the cost of product’s impact on consumer wel- and work for companies thousands of
ternet access. ground transportation, for example, fare, including displacement of other, miles away. Yet no government con- Mr. Gramm is a former chairman
Kitchens today are stocked with a but the CPI-W missed this increase in older products. The cellphone was sumer-price index has ever come of the Senate Banking Committee. Mr.
far wider array of foods, including consumer value by neither raising the first introduced as a specific item in close to adjusting for the value em- Early served twice as assistant com-
out-of-season fruits brought from weight it assigned to spending on air the CPI-W in 1998. But because the bodied in this one of many miracle missioner at the Bureau of Labor Sta-
half a world away and a vast variety travel nor downgrading the weight device entered the index 14 years af- innovations. tistics. This article is adapted from a
of prepared foods. Compared with for ground travel. ter the first public sale, the index Economists Bruce Meyer and James forthcoming book with Bob Ekelund,
1972, this abundance costs an ever In contrast, the Commerce Depart- never accounted for the preceding Sullivan attempted to correct for some “Freedom and Inequality.”
smaller portion of families’ budgets, ment’s personal-consumption expen- 75% drop in cellphone prices, nor the of this problem in a 2013 study, inte-
freeing up some $3,200 on average to ditures price index updates the market value of their lighter batteries and grating the findings of 52 different Peggy Noonan is away.
spend on other things. basket of goods and services monthly longer-lasting charge. economic studies to develop a price

Stressed-Out American Parents Could Learn a Lesson From India


By Erica Komisar ture is the lack of rules. Cars, motor- engaged from and intolerant of our holding the infant, and her older son live in multigenerational households,

A
cycles, rickshaws, bicycles and ani- children. Even when we are with became jealous and aggressive. according to a report by the Interna-
s I waited to board my flight mals do whatever they please in the them, we are frequently on our Within a blink of an eye, she kissed tional Longevity Centre Global Alli-
from New York to India, I saw a streets. Yet, the family—source of the smartphones, talking with other the baby and handed him to the fa- ance. Children learn that the world is
father and his toddler. The boy most important rules and structure— adults, or simply distant emotionally, ther, who was equally affectionate. a safe place full of love and emo-
was active, obviously tired and over- is fully intact. as if we find our children boring. In She attended to the toddler, address- tional security.
whelmed. This father started to From the abjectly poor to the fab- India I got no sense that mothers or ing his emotional needs rather than People work hard in India. They’re
scream and threaten his son with ulously wealthy, Indian parents seem punishing him. Then the older boy even starting to follow our worka-
physical punishment. It took consider- more sensitive, empathic and atten- toddled to his grandfather and his holic example, which is a shame. The
able self-control for me not to go over tive to their children than their The country is chaotic and wheelchair-bound grandmother for average Indian worker puts in more
to the father and instruct him on ev- American counterparts do. One hugs and kisses. I counted nine kisses hours than the average American, al-
erything he was doing wrong. senses they regard the children as underdeveloped, but moms and hugs in less than five minutes. though the female labor-force partic-
The parents I meet in the U.S. of- the center of their world, not as an and dads are sensitive, With the toddler emotionally ipation rate is considerably lower. At
ten seem ill-equipped, overwhelmed obligation or a distraction from indi- soothed, the mother could return to any rate Indians still give priority to
and intolerant of their children’s vidualistic pursuits. empathic and attentive. the baby. family over all other commitments,
emotions. In my two weeks in India, Indian mothers and fathers show a It was remarkable to watch how especially material success and other
by contrast, I never witnessed an im- great deal of physical affection and easily the boy was able to get his self-focused pursuit. Everyone from
patient or aggressive approach to keep younger children physically fathers wished they were doing emotional needs met by so many lov- the youngest infant to the oldest
children. Parents were kind, gentle close. I never saw a stroller with chil- something else. Playing seemed natu- ing and interested family members. grandparent seems happier and more
and accepting, naturally soothing and dren facing away from their parents. ral, and mundane tasks like buying In India, children live with parents, fulfilled. So which is the underdevel-
regulating their children, who in turn Instead parents took turns holding vegetables at a street market became parents live with grandparents, and oped nation?
were content and less distressed. their children, who cried far less than joyful, intimate experiences. there is a constant intergenerational
No country is perfect, and India the children I observe with their par- Grandparents are present and in- exchange. The number of Americans Ms. Komisar is a psychoanalyst
has its share of social and economic ents back home. One little Indian boy volved as well—real alternative at- living in multigenerational homes hit and author of “Being There: Why Pri-
problems, including extreme poverty, hit his mother. She responded with tachment figures to whom children an all-time high of 64 million in oritizing Motherhood in the First
overpopulation and pollution. Chaos gentleness, showing him by her own are deeply connected and on whom 2016—which represented 20% of the Three Years Matters.” She is writing
is everywhere, and the first thing you example how to regulate his anger. they rely. One family had two boys, a U.S. population. In India, 30% of ur- a book for parents about raising ado-
notice after the crumbling infrastruc- American parents tend to be dis- baby and a toddler. The mother was ban families and 60% of rural ones lescents in an age of anxiety.

If U.S.-China Marriage Can Be Saved, Huawei Is the Key


A lot else was go- but the U.S. market for cheap goods world economy and nature of trade the Xi Jinping detour will last. His desire to create trade-war
ing on when the is highly competitive, so producers have changed since the 1930s. Man- Second, China’s dependence on melodramas to demonstrate his ne-
Smoot-Hawley Tar- are likely to relocate production ufactured goods are a smaller share the outside world is still growing. gotiating skills may or may not be
iff Act of 1930 hit from China to countries not cov- of the consumption basket; services Millions of its citizens work directly good politics. He would have had a
a world economy ered by the tariffs. and intellectual property are a or indirectly for U.S. companies. Its successful presidency based simply
laboring under de- In China, business owners and larger part. Factory workers are be- economy is entwined with ours. on not being President Obama and
clining nominal workers will lose jobs and income. coming like farmers—an esoteric Which brings us to Huawei. by calling off the Obama regulatory
BUSINESS
spending thanks to In other countries, factory owners class of producers on whom politi- While acknowledging the risks, the assault on America’s producers.
WORLD
an ill-starred mon- and workers will gain jobs and in- cians find it useful to shower favors eminent trade economist Claude But even here the Trump trade
By Holman W.
etary contraction. come. U.S. importers and their for sentimental reasons. Barfield years ago recommended myopia is tangled up with legiti-
Jenkins, Jr.
President Trump’s customers will be have to be Because it imports less from the opening U.S. markets to China’s mate concerns about China’s direc-
tariffs on China dinged with the costs of finding U.S., China is already running out tion, shared not only by Democrats
will have consequences but not as new sources of supply. But prices of targets for retaliatory tariffs. and business folk but many Chinese.
dramatic. They are a source of cash of internationally traded goods are Plus it worries about raising prices Beijing needs something Mr. Xi’s modern totalitarianism
for the Treasury—yes. They are not not likely to go up sharply or for for its own consumers. Many U.S. based on state-promoted jingoism
a source of “wealth” for the coun- long. companies still feel vulnerable, to gain. Access to the U.S. plus far-reaching digital surveillance
try. Tariffs are a tax on consumers, Let us also understand that the though, because of their direct in- market for its tech champ is not a likely winner in the long
vestment in the China market. GM run. It will not sit well with China’s
made and sold more cars in China would be a potent prize. rising middle class. It won’t sit well
than the U.S. last year. Apple’s de- with its entrepreneurs, artists and
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY pendence on its Chinese subcon- scientists who want to be part of a
Rupert Murdoch Robert Thomson tractors is the paradigmatic case. paramount high-tech equipment global community.
Executive Chairman, News Corp Chief Executive Officer, News Corp
But the truth is, China still wants maker in return for various trans- Mr. Trump annoys economists
Matt Murray William Lewis
Editor in Chief Chief Executive Officer and Publisher
such investment: The practices Mr. parency measures, including the and pundits with his sophomoric
Neal Lipschutz Karen Miller Pensiero DOW JONES MANAGEMENT:
Trump complains about, such as company listing its shares on a U.S. trade thinking, but he wouldn’t be
Deputy Editor in Chief Managing Editor Ramin Beheshti, Chief Technology Officer; extorted technology sharing, are exchange. This is still a better idea the first president to prefer color-
Jason Anders, Chief News Editor;
Michael Kiley, Interim Chief People Officer; calibrated not to deter such com- than trying to shut it out. fulness to cogency. Yet the right
Edward Roussel, Chief Innovation Officer;
Thorold Barker, Europe; Elena Cherney, Coverage
Christina Van Tassell, Chief Financial Officer
mitments but to keep the know- The Trump administration, with moment may have come to serve up
Planning; Andrew Dowell, Asia; Alex Martin,
OPERATING EXECUTIVES: how coming so China can keep its harsh new targeting of the com- to China’s elite a warning about the
Writing; Michael W. Miller, Features & Weekend;
Emma Moody, Standards; Shazna Nessa, Visuals;
Kenneth Breen, Commercial; purloining it. pany this week, has made solving wrong turn they’ve taken under Mr.
Jason P. Conti, General Counsel; If the Trump tariffs are perma- the Huawei problem part of the Xi. His reversion to crypto-totalitar-
Matthew Rose, Enterprise; Michael Siconolfi,
Tracy Corrigan, Chief Strategy Officer;
Investigations; Louise Story, Strategy and Interim
Frank Filippo, Print Products & Services; nent, as they seem likely to be, larger trade negotiation with China, ianism is not a cost-free indulgence.
Product & Technology; Nikki Waller, Live Kristin Heitmann, Chief Commercial Officer; their main effect will be to acceler- which has some hysterics bemoan- It isn’t serving China’s interests. It’s
Journalism; Stephen Wisnefski, Professional News Nancy McNeill, Corporate Sales; ate a shift of low-wage production ing a threat to the global rollout of making a hash of China’s all-impor-
Gerard Baker, Editor at Large Thomas San Filippo, Customer Service;
Josh Stinchcomb, Advertising Sales; from China to other low-wage coun- 5G. Yeah, yeah. But putting the fate tant economic ties with the U.S.
Paul A. Gigot, Editor of the Editorial Page; Suzi Watford, Chief Marketing Officer; tries. Then what? of Huawei on the table finally gives A little carrot always goes well
Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International Too pat is the argument that we Beijing something to gain, not just with stick. By naming terms for
Barron’s Group: Almar Latour, Publisher
know now our openness to China give up. If Mr. Trump can see his opening U.S. markets to Huawei,
WALL STREET JOURNAL MANAGEMENT: Professional Information Business:
Joseph B. Vincent, Operations; Christopher Lloyd, Head; has failed to spur Beijing down a way to naming terms for letting the Mr. Trump could dangle a carrot
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head path of liberalism. Countries in the company enter long-closed U.S. that would make all the right
EDITORIAL AND CORPORATE HEADQUARTERS: industrial age, and China especially, markets for telecommunications points about beneficial interdepen-
1211 Avenue of the Americas, New York, N.Y., 10036 hardly tend to follow smooth tra- equipment, a happy ending is still dence and put the relationship back
Telephone 1-800-DOWJONES
jectories. We don’t know how long conceivable. on a win-win path.
A16 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

SPORTS

TODD OLSZEWSKI/GETTY IMAGES


The field races out of the starting gate during the 143rd running of the Preakness Stakes at Pimlico Race Course in 2018. Last year’s winner, Justify, went on to win horse racing’s Triple Crown.

Baltimore Fights to Keep Preakness


Organizers of the second leg of the Triple Crown are positioning to move the race from Pimlico to Laurel Park
BY SCOTT CALVERT Racing on the Move yet to be determined.” in fancy hats. This year’s event will
Stronach owns the Preakness, lack some luster because Kentucky

F
Maryland's resurgent racing scene has energized Laurel
Baltimore but a state law requires the race be Derby winner Country House won’t
while Pimlico stagnates.
or Secretariat, Justify, held at Pimlico barring “a disaster be racing due to health concerns,
American Pharoah and 10 Live racing days Maryland thoroughbred wagering or emergency,” a call the Maryland meaning there’s no chance for a
other Triple Crown win- Laurel/Pimlico/Timonium Racing Commission, the track’s reg- Triple Crown.
ners, the road to immor- Pimlico Laurel ulator, would have to make. City of- Laurel is a much busier track,
tality ran through the 150 days $600 million ficials criticize Stronach for invest- with 156 race days last year com-
Preakness Stakes at Pimlico Race ing far more money at Laurel than pared with 12 at Pimlico. Five years
Course. 125 at Pimlico, alleging in their lawsuit ago, Pimlico had 37 race days com-
But an escalating legal and polit- that the only disaster is one the pared with 107 for Laurel. The
ical fight could reroute the second 100 400 Stronach Group is causing through Stronach Group submits race day
leg of the Triple Crown, as soon as neglect. requests to the racing commission
75
2021, by ripping it away from the Stronach denies the claim and for approval.
track where the Preakness debuted 50 200 moved to dismiss the suit. “It’s al- Laurel Park is itself nearly 100
in 1873 and sending it 20 miles most unheard of for a city to seek years old, and Stronach officials
south to Laurel, Md. 25 to confiscate an ongoing business propose an $80 million infusion to
That’s because Pimlico’s owner, enterprise through an eminent-do- turn it into a high-end “super
the Canadian-based Stronach 0 0 main proceeding,” said Alan Rifkin, track,” financed partly with an ex-
Group, has deemed the track to be 2009 ’11 ’13 ’15 ’17 ’19* 2009 ’11 ’13 ’15 ’17 a lawyer for the Stronach-owned isting stream of state funding for
in such disrepair that it has *Scheduled days Maryland Jockey Club. track improvements. The company
reached the end of its useful life as Source: Maryland Racing Commission There is no dispute that Pimlico suffered at least a temporary set-
a major event venue. Stronach says is in poor shape. Last month the back last month when state legisla-
it loses money operating two tracks Baltimore is fighting back. The at the moment,” she said. track closed a 6,670-seat grand- tors failed to authorize a bond sale
in Maryland and prefers to consoli- city has sued Stronach, seeking While no decisions have been stand built over a century ago, cit- for the project.
date racing at its Laurel Park facil- power to seize Pimlico and the made about Pimlico, she said, Lau- ing structural concerns. City officials say Pimlico could
ity, closer to Washington, D.C. Preakness itself, in a bid to pre- rel can better handle year-round The Preakness nets $4 million to be saved through a public-private
The company is pushing for a serve the Northwest Baltimore racing and would be far cheaper to $6 million each year, said Bill rebuilding effort to make it a more
major state-aided overhaul at Lau- track and keep the race from leav- overhaul. She said the company Hecht, who oversees U.S. real estate active horse track, while adding
rel, fueling speculation it intends to ing town. Local officials and many wants to help devise the best use for the Stronach Group. And horse new uses such as housing and retail
close the 149-year-old Pimlico, the residents say Pimlico is part of the for the 120-acre Pimlico site, which racing in the state is on the up- to better serve the nearby low-in-
site of Seabiscuit’s famed 1938 up- city’s identity, and the Preakness sits idle most of the year. swing, thanks to higher-dollar come Park Heights neighborhood.
set of War Admiral in a match race gives the economy a multimillion- “We would like to work with city purses made possible by casino rev- A key question is who would pay.
that enthralled the nation. dollar jolt each spring. officials to have really constructive, enue. Yet Stronach loses money A recent Maryland Stadium Author-
That would deal a blow to Balti- “Baltimore has to do what they progressive thinking about what overall on Maryland racing “pri- ity report said it could cost at least
more’s collective psyche. Already have to do to keep the Preakness in could occur outside of a racing fa- marily because we have antiquated $424 million to raze the complex
the intensifying dispute has further Baltimore,” Mayor Bernard C. cility,” said Stronach, whose family facilities that are not conducive to and start over, though some city of-
marred a rough year for horse rac- “Jack” Young said in an interview. has owned Pimlico and Laurel since be competitive in the entertainment ficials and others with racing expe-
ing that has featured a spate of un- Belinda Stronach, chairman and 2002. The Stronach Group also business that we’re in,” Hecht said. rience think a far cheaper alterna-
explained horse deaths at Califor- president of the Stronach Group, owns Santa Anita and Gulfstream The Preakness annually draws tive exists.
nia’s Santa Anita Park and a said she understands the strong Park in Florida. more than 130,000 fans, who fill the Young said the city is willing to
controversial disqualification at the emotions. “We’re stuck in the mid- Asked if she sees the Preakness stands, jam the party-like infield sit down with company and state
Kentucky Derby. dle of a lot of passion and politics moving to Laurel, she said, “That is and parade through corporate tents officials.

Weather
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. THE COUNT
d t
Edmonton <0
0s
Vancouver
Vancouver C garyy
Calgary

ip
Winnipeg
10s IT’S ALL IN THE CARDS FOR BASEBALL STARS
ttl
70s Seattle 40s 20s

W
Por
P d
Portland 30s 30s ith the stock market taking some months.
Helena
l Montreal
Ottawa
g
Billings
Bismarckk
Augusta
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Eugene
g i
Boise 50s tors may want to turn to the base- Yelich in March even after an MVP season in
30s p s / . Paul
Mpls./St. T t
Toronto A b nyy Boston
Albany t 50s
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Sioux ll
Buffalo
l 60s ball card market, where demand for the cards 2018. But he’s obliterating last year’s pace,
40s 30s P
Pierre Milwaukeek Detroit tf
Hartfordd
Cleveland
Cleve d 70s
of hot prospects is outpacing the number of crushing a league-best 18 homers through
Reno Salt Lake
k City
LLak
ake C Deses Moines Chicago
h 70s New ew York
collectors willing to sell. Even the cards of Thursday. That’s boosted his card
h y
Cheyenne Phhil d lphi
Philadelphia 80s
50s Pittsburgh
Sacramento 30s Denver h
Omaha Spring
p
Springfield d Indianapolis shington
h
Washington D.C.
DC slumping sluggers are holding their value 525%. Similarly, the card mar-
90s
an Francisco
San
60s
C l d
Colorado Top k
Topeka Kansas Ch
Charles
l t
Charleston h
Richmond d value because, just like in fantasy ket figured Javier Baez would slide
Las p g
Springs City 100+
V g
Vegas
40s h
Wichita St.. Louis
Lou
L LLouisville
Lou ill baseball, no one wants to sell low. back to his pre-2018 hitting level
gh
Raleigh
50s Nashville
h ill “People will hold through the for the Cubs. Instead, he picked up
Los A
Angeles
Ange l Charlotte
C h l tt
80s Santaa F
Fe kl h
homaa City
Oklahoma C y Memphis hi loss,” says Brian Fleischer, senior mar- where he left off, boosting in-
Phoenix
Ph 50s Alb 80s C
Columbiab
Albuquerque
b q q Warm Rain
San Diego LLittlee Rockk A t
Atlanta ket analyst for Beckett Media, which pub- vestment returns by 150%.
Tucson
Tuc Birminghamh
El P
Paso Dallas
D Jack
Jackson
Cold
lishes baseball card price guides. “So with Big-market stars such as
Ft.. Worth
Wor 90s T-storms
Bryce Harper suffering through a slump Bellinger and the Yankees’
Mobile
b Jacksonville
40s A ti
Austin
Houston Stationary Snow (that dropped his average to the low Aaron Judge, the face of the
ew
w Orleans
New l d
Orlando
60s an Antonio
San A t i Tampa .200s), sellers wait and hope that he re- hobby in 2017, typically in-
80s 80s turns to his MVP level.” crease prices, according to
50s A h g
Anchorage Honolulu
l l Miami
Showers Flurries
70s 90s Last year’s bums can turn into this Fleischer. With Judge cur-
Ice year’s buys. Dodgers slugger Cody Bell- rently on the injured list, the
inger’s cards were on fire after his Rookie slugger earning the most buzz in New
U.S. Forecasts City Hi
Today
Lo W
Tomorrow
Hi Lo W City Hi
Today Tomorrow
Lo W Hi Lo W of the Year campaign in 2017. A sopho- York is the Mets’ Peter Alonso, whose
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;
Omaha 79 53 t 61 44 pc Frankfurt 74 53 t 74 53 t more slump last year dropped the value of $60 officially autographed card has rock-
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice
Orlando 88 67 pc 90 69 pc Geneva 64 51 t 61 52 t his non-autographed rookie card to just $2. eted to $400. But Mets fans may need
Today Tomorrow Philadelphia 78 62 pc 87 68 pc Havana 86 69 pc 86 70 pc
City Hi Lo W Hi Lo W But Bellinger has regained his form, to be cautious. They flocked to pitcher
Phoenix 87 68 s 83 58 c Hong Kong 87 82 t 89 80 t
Anchorage 57 45 pc 59 46 pc Pittsburgh 82 64 pc 86 65 pc Istanbul 69 61 t 75 63 s smashing 15 homers, with a batting aver- Matt Harvey’s cards after his 2013 break-
Atlanta 88 69 s 88 67 c Portland, Maine 66 49 pc 64 56 pc Jakarta 90 76 pc 91 76 pc age over .400, entering Friday’s play. out season and now those cards can be
Austin 85 72 t 91 73 pc Portland, Ore. 71 53 r 64 51 c Jerusalem 78 57 s 76 55 s This has lifted the value of his card to found in the discount bin.
Baltimore 79 63 pc 87 68 pc Sacramento 59 51 r 62 47 r Johannesburg 73 46 s 74 47 s
Boise 64 48 c 55 45 r St. Louis 87 66 pc 76 54 pc London 65 50 c 69 52 c $15—a 650% increase in less than two —Michael Salfino
Boston 68 55 pc 72 64 s Salt Lake City 61 50 c 63 43 r Madrid 66 43 pc 69 45 pc
Burlington 63 51 pc 78 63 pc San Francisco 62 54 r 62 53 r Manila 95 81 t 95 83 c
Charlotte
Chicago
91 67 s
81 63 t
88 66 s
72 47 t
Santa Fe
Seattle
64
72
36 s
54 c
70 43 pc
65 52 c
Melbourne
Mexico City
69
81
52 s 69 59 pc
56 pc 83 58 pc
Bulls and Bears
Cleveland 79 66 pc 86 60 pc Sioux Falls 68 43 r 50 38 r Milan 59 52 r 63 52 t Here are some players whose early-season play has altered the value of their trading cards:
Dallas 81 64 t 88 71 s Wash., D.C. 82 65 pc 91 72 pc Moscow 70 47 s 66 44 pc
Denver 60 36 t 61 40 pc Mumbai 94 84 pc 96 83 pc PLAYER YEAR/CARD MARCH 2019 CURRENT ROI
Detroit 74 62 pc 82 54 t
International Paris 66 52 sh 66 52 t Cody Bellinger, LAD  2017 Topps Update $2 $15 650%
MARCIO JOSE SANCHEZ/ASSOCIATED PRESS

Honolulu 86 75 s 87 74 pc Rio de Janeiro 77 71 sh 79 71 pc


Houston 87 73 t 89 73 t Today Tomorrow Riyadh 97 75 pc 101 74 s Christian Yelich, MIL 2013 Topps Update $8 $50 525%
Indianapolis 86 68 pc 74 53 t City Hi Lo W Hi Lo W Rome 66 56 t 65 53 t Peter Alonso, NYM 2016 Bowman Chrome Autograph $60 $300 400%
Kansas City 77 56 t 67 46 pc Amsterdam 68 52 pc 69 52 t San Juan 88 77 pc 87 77 pc
Las Vegas 83 62 pc 72 54 pc Athens 78 63 pc 76 61 pc Seoul 77 64 c 79 59 t Domingo German, NYY 2015 Bowman Chrome Autograph $12 $60 400%
Little Rock 83 69 pc 87 64 pc Baghdad 107 79 pc 104 73 pc Shanghai 85 67 pc 83 68 pc Javier Baez, CHC 2011 Bowman Chrome Autograph $100 $250 150%
Los Angeles 71 57 pc 66 54 sh Bangkok 97 82 pc 97 82 s Singapore 88 80 c 87 79 t
Miami 87 77 t 88 76 pc Beijing 81 61 c 77 54 s Sydney 73 59 pc 72 58 pc Jose Ramirez, CLE 2014 Topps Chrome $10 $6 -40%
Milwaukee 68 52 r 65 46 t Berlin 72 54 t 75 57 t Taipei City 94 79 pc 94 78 t Shohei Ohtani, LAA 2018 Diamond Kings DK Rookie Signatures $500 $300 -40%
Minneapolis 55 44 r 48 41 r Brussels 67 52 sh 67 51 t Tokyo 74 63 pc 73 64 c
Nashville 89 67 s 83 63 c Buenos Aires 74 50 t 64 48 pc Toronto 57 47 c 80 59 c Source: Beckett Media
New Orleans 86 75 pc 87 74 c Dubai 100 86 pc 100 86 pc Vancouver 65 51 c 65 50 c Note: Prices listed represent the high estimate of the range.
New York City 75 58 pc 77 67 pc Dublin 59 44 sh 59 41 sh Warsaw 73 58 t 74 59 t
Oklahoma City 70 52 t 78 57 s Edinburgh 55 47 r 61 45 r Zurich 66 49 t 63 50 t
BUSINESS | FINANCE
DJIA 25764.00 g 98.68 0.4%
|
Flight of Fancy
A greater miracle
than flying: enjoying
the airport B4

TECHNOLOGY |

NASDAQ 7816.28 g 1.0%


EXCHANGE
MANAGEMENT
STOXX 600 381.51 g 0.4%
THE WALL STREET JOURNAL.
10-YR. TREAS. À 3/32 , yield 2.396%
* * * * * *

OIL $62.76 g $0.11


House Poor
When does the next
great home-buying
binge start? B16

Saturday/Sunday, May 18 - 19, 2019 | B1


GOLD $1,274.50 g $10.50 EURO $1.1159 YEN 110.07

Google
The Fixers Behind Refunds
Some Ads
The Factories
A cadre of powerful consultants helps companies decide where to build,
Move follows suit over
fraudulent web traffic
BY PATIENCE HAGGIN
pitting states against each other to land the biggest tax breaks Alphabet Inc.’s Google has agreed
to refund advertisers for ads pur-
chased on its ad marketplaces that
BY CEZARY PODKUL ran on websites with fraudulent traf-
fic, following a lawsuit claiming the
tech giant was withholding the pay-
ments, according to court documents
and people familiar with the situa-
tion.
In 2017, Google offered limited re-
Boeing funds to hundreds of marketers and
Everett, Wash. ad agencies who had purchased ad
Aircraft manufacturing plants space through its online ad-buying
Incentives: $8.7 billion in tool. The company had discovered a
2013; $3.2 billion in 2003 wide-ranging fraud scheme that re-
sulted in ads running on sites whose
Foxconn traffic was artificially boosted by
Mount Pleasant, Wis. “bots”—software programs that
Liquid crystal HelloFresh mimic the website clicks of humans.
display plant Newark, N.J.
At the time, Google offered to re-
Incentives: more Distribution and
call centers fund the “platform fee” for its ad-
than $4 billion buying tool, Display & Video 360,
Incentives: about
$37 million which represented a fraction of the
total cost of the ad purchases.
Google said it wasn’t in a position to
Ulta Beauty Amazon return money that had already
Fresno, Calif. Arlington, Va.
Second headquarters flowed from its buying tool to third-
Distribution center party online ad marketplaces.
Incentives: $26 million Incentives:
$573 million But some ad executives weren’t
CZ-USA satisfied. The online ad company
Little Rock, Ark. AdTrader Inc. sued Google in Cali-
Firearm manufac- fornia federal court, arguing the tech
turing plant giant wasn’t fully refunding every-
Incentives: more
thing it could repay since some of
than $24 million
the fraudulent traffic went to ad
marketplaces that Google itself owns
and fully controls: AdX and AdSense.
Automated online ad market-
places, known as exchanges, offer up
for sale ad space from publishers of
thousands of websites. Google’s AdX
is one of the giants in the ad mar-
ketplace business. Advertisers and
their agencies use ad-buying tools to
target audiences that have specific
characteristics with those exchanges.
In internal Google memos detailed
in the court proceedings, portions of
which were unsealed this week and
reviewed by The Wall Street Journal,
a Google engineer said the company
didn’t pay about $75 million of re-
funds linked to its own products.
Please turn to page B2

 Heard on the Street: Google’s


valuable new instrument................ B16

Legg Mason
L.J. DAVIDS

Nears Truce

G With Activist
eorgia rolls out a red carpet for them at the Masters sift through 238 proposals during its recent search for a sec-
Golf Tournament. Kentucky gets them tickets to the ond headquarters. Site selectors from Ernst & Young LLP
Kentucky Derby. Arkansas takes them on a private helped Foxconn Technology Group secure the richest incentive
duck hunt with the governor. Utah recently arranged
a private ski trip with an Olympic medalist.
Such is the life of site selectors—consultants who
package in Wisconsin state history for its now-delayed liquid-
crystal-display manufacturing plant. Foxconn selected Wiscon-
sin’s package, which totaled more than $4 billion in state and
Fund Trian
jet around the country helping corporations decide where to build local support, after a multistate bidding war in which states
new headquarters, factories or expansion projects, often pitting jockeyed to sweeten their offers. Money manager Legg Mason Inc.
communities against each other in multistate bidding wars to In some ways, site selectors act like lobbyists, interacting with is nearing a settlement with Trian
maximize tax breaks, grants, land deals and other incentives. government officials as they help their clients obtain favorable Fund Management LP that would
As communities across America race to win such marquee deals that sometimes require legislative and regulatory changes. give the activist hedge fund three or
projects, these middlemen have quietly become some of the most Unlike lobbyists, site-selection consultants often work on com- four seats on its board and avoid a
powerful consultants in corporate America. mission, which is frequently tied to the size of the incentive pack- proxy fight, according to people fa-
There are about 500 site selectors active in the U.S. and a age they negotiate for their clients. That fee structure has drawn miliar with the matter.
2017 survey found that 54% of companies plan to outsource criticism from some of the very economic-development officials
part of their next corporate location search, according to con- who are competing against each other for the projects. By Cara Lombardo,
sulting firm Development Counsellors International. Moreover, in the vast majority of cases, firms that receive Justin Baer
Amazon.com Inc. retained a site-selection adviser, Alex public incentives for opening factories, expanding headquarters and Juliet Chung
Leath of law firm Bradley, to work with its in-house team to Please turn to page B10
The talks could still fall apart, the
people cautioned—but should the
two sides reach a deal, it could be
announced soon.
The Wall Street Journal reported

Raises for the Best. earlier this past week that Trian may
launch an activist campaign and re-
cently has held discussions with
Legg Mason management about the

And Also, the Rest. need to cut costs and improve mar-
gins—and that a proxy fight was a
possibility.
Should a deal come together, it
would be Trian’s second time to
CEO pay often doesn’t match performance have access to the board of directors
of Legg Mason, which has $758 bil-
lion in assets under management.
BY THEO FRANCIS often-weak relationship be- The activist hedge fund previously
AND VANESSA FUHRMANS tween pay and performance. owned Legg Mason stock from 2009
Median compensation rose to 2016 and co-founder and Chief Ex-
The mechanics of chief-ex- to $12.4 million for the bosses ecutive Nelson Peltz sat on the Balti-
ecutive pay have grown ever of S&P 500 companies last more firm’s board before stepping
more complex, but the rules year, up 6.6% from 2017 and off in 2014.
remain simple: Strong per- the highest since the 2008 re- Former Legg Mason CEO Mark
formers get a raise. So do cession, the Journal analysis Fetting stepped down in October
most of the rest. found. Yet the median share- 2012 after leading the company for
For the fourth year holder return for the compa- four years and facing pressure from
straight, the biggest U.S. com- nies was minus 5.8%, the Trian. His successor, current CEO Jo-
panies set CEO pay records in worst showing since the fi- seph Sullivan, praised Mr. Peltz as “a
2018, a Wall Street Journal nancial crisis. great partner for me and an impor-
RYAN OLBRYSH

analysis found, even as a ma- For 97 CEOs, last year’s pay tant contributor to our turnaround
jority delivered negative was a high-water mark even efforts” when the activist left the
stock-market returns to their while their shareholder returns board.
shareholders—a sign of the Please turn to page B7 Please turn to page B15
B2 | Saturday/Sunday, May 18 - 19, 2019 * ***** THE WALL STREET JOURNAL.

THE SCORE
THE BUSINESS WEEK IN 7 STOCKS

BOEING CO. WALMART INC. DEERE & CO.


PERFORMANCE OF SEMICONDUCTOR STOCKS THIS WEEK
 It may be months before
Boeing’s 737 MAX jets return
Source: SIX
2%  Walmart shares rose 1.4%
Thursday after the company  The U.S.-China trade battle is
taking a toll on American
BA totorsthearen’t
skies. Federal regula-
likely to approve a
WMT reported strong first-quarter
sales growth, adding to four
DE farmers—and Deere. The
maker farming machinery
4.9% software fix to the plane’s 1.4% years of strong results. Sepa- 7.7% lowered its profit and sales
automated flight-control sys- rately, on Tuesday, Walmart forecasts as farmer demand
tem for several weeks, The Wall Street 0 said it will invest $800 million to ex- waned amid a host of headwinds, includ-
Journal reported, a delay that is likely to pand one-day delivery, a service it will ing weaker soy demand and an unsea-
create headaches for airlines heading begin offering free on about 200,000 sonably cold spring. Chief Executive Sam-
into the summer travel season. Boeing products for shoppers in Phoenix, Las uel Allen said the challenges have
shares lost 4.9% Monday. The delay is Vegas and Southern California. The ini- prompted farmers to become “much
–2
particularly troublesome for Southwest tiative takes aim at Amazon.com Inc., more cautious about making major pur-
Airlines Co., which has been unable to which this past week rolled out a pro- chases.” Deere now expects full-year
operate scores of its planes since Boe- gram that offers employees three profit of $3.3 billion on a 5% increase in
ing grounded the model in March fol- months of pay and a bonus of $10,000 equipment sales, down from expectations
lowing two fatal crashes. Southwest fell –4 to quit their jobs and start their own lo- for $3.6 billion in profit on a 7% bump in
3.2% Monday. cal package-delivery businesses. sales. Deere shares dropped 7.7% Friday.
Broadcom
Qualcomm
APPLE INC. BEYOND MEAT INC. BAIDU INC.
–6

 Consumers can sue Apple for


forcing them to buy apps ex-
Mon. Tues. Wed. Thurs. Fri.
 Coming soon to a fast-food
joint near you: alternative  The Google of China posted
its first quarterly loss since
AAPL clusively from the tech giant,
the Supreme Court ruled,
BYND meat. Tim Hortons said
Wednesday that is testing
BIDU going public in 2005, report-
ing a net loss of 327 million
5.8% threatening a lucrative reve- QUALCOMM INC. 12% three breakfast items with 17% yuan ($47.5 million) in the
nue source for the company
amid slowing iPhone sales. The split rul-  Shares of semiconductor companies shuddered after
the Trump administration clamped down on U.S. ex-
plant-based products from
Beyond Meat and could roll out the
latest period. Baidu execu-
tives attributed to the loss to weak ad-
ing focused on a preliminary issue in a
broader antitrust case that could make
QCOM ports to Huawei Technologies Co., requiring suppliers items to its 4,000 locations by the end
of summer. Beyond Meat shares rose
vertising, a trend they said could con-
tinue amid a slowdown in the Chinese
Apple liable for substantial monetary 4% to apply for a license in order to keep selling to the 12% Wednesday following the news. economy. Prospects for a quick rebound
damages. Apple typically takes a 30% cut Tim Hortons is now the second fast- are cloudy: The company’s attempts to
of every app it sells, and a 15% cut of Chinese state-run tech giant. Huawei last year spent about food chain owned by Restaurant Brands diversify into new sectors, like driverless
subscriptions sold through the App Store $11 billion on components made by American firms, including International Inc. to offer alternative- vehicles and artificial intelligence, have
after subscribers’ first year. Apple shares chip makers like Qualcomm and Broadcom Inc. Qualcomm meat products to its menus—in April, yet to offset declining revenue from its
tumbled 5.8% Monday. A spokeswoman Burger King began selling an Impossible core search business. Baidu’s American
said the company is confident it will pre- shares fell 4% Thursday, while Broadcom shares shed 2.3%. Whopper made with a patty from Be- depositary receipts plunged 17% Friday.
vail in the antitrust lawsuit. yond Meat rival Impossible Foods Inc. —Laine Higgins

KEYWORDS | CHRISTOPHER MIMS


Google
Rise of the Online-Only Relationship Refunds
For Gen Z, it’s not so unusual to have a significant other you’ve never met in person
Some Ads
Continued from page B1
If we’re looking yet to give them the ability to tele- followed wasn’t exactly a whirl- worked up the courage to meet, The engineer blamed technical
for an explanation of port their bodies as easily. It’s pos- wind romance—more of a modern- and everything turned out fine. difficulties related to the links
why today’s teens are sible to find someone who happens day version of “Pride and Preju- “We were just scared we between the different arms of
having less sex than to share one’s particular combina- dice” involving chaste encounters wouldn’t feel the same after we Google’s vast ad operation.
previous generations, tion of tastes—but what are the in group voice chats on the gam- met each other,” Mr. Tahib says. Google has offered to pay re-
there’s this: Many of odds they go to your school or ing chat app Discord, and, instead Fear that people we know only funds linked to its own market-
them spend months even live in the same town? of coy glances at the ball, joint through the internet might not be places, the people familiar with
or even years dating without ever While there is little or no re- play sessions on a shared Mine- who they seem—or even claim—is the situation said. The company
meeting face to face. search on the phenomenon of long- craft server. perfectly rational. In the most ex- said, “While we have had a long-
When Nicole Nguyen was 16, she distance-only relationships among “I started getting more and treme cases, people will create standing policy of refunding ad-
met her first serious boyfriend for young people, it’s not surprising more out of my shell, which is fake online personas, known as vertisers for invalid traffic, we
the first and last time—after that it’s happening, experts say. It’s something I did not do in real life,” “catfishing,” to defraud the lonely. recently expanded this policy to
they’d broken up. They had 20 one of the ways teens and twenty- says Ms. Bobbitt. “I became closer In Ms. Nguyen’s case, both of include ads purchased via Display
minutes. They hugged once. It only somethings are adapting to a com- to these people online than I did the online-only relationships she & Video 360.”
happened because that day, they bination of two demographic with my friends I had in high had from age 14 until she was 16 The tech giant has planned
just happened to find themselves trends—earlier puberty and later school.” Eight months into their ended when she discovered that these refunds since before the
the attentive, always-on- suit was filed, according to a
line boys she was dating Google spokeswoman.
were busy also dating The revelations highlight
other girls, online...and Google’s unique role in the online
in real life. ad world, where it is dominant in
Tiffany Zhong is chief multiple areas. It is a major
executive of Zebra IQ, player in facilitating ad buying on
which gathers insights behalf of marketers and agencies,
on the behavior and but also operates powerful ad
tastes of Generation Z, marketplaces, receiving 37.2% of
usually defined as people digital ad spending in the U.S.,
born since 1995. She runs according to eMarketer. Google
an app and online com- dominance, including its role in
munity, of which Ms. online advertising, has become an
Nguyen, Ms. Bobbitt and issue of interest for regulators
Mr. Tahib have been par- around the world.
ticipants. Another re- The complexity of online ad
spondent told Ms. Zhong purchasing—which includes lay-
that when she was 16, ers of middlemen separate buyers
she had a brief online- and sellers—makes it susceptible
only relationship with a to fraud and very difficult for ad-
boy two years her senior. vertisers to recoup money wasted
Two years later, after she on sites with invalid traffic. Some
PHOTO ILLUSTRATION BY JOHN KUCZALA; ISTOCKPHOTO (4)

had ended the relation- $5.8 billion in ad spending will be


ship, she discovered that wasted this year to fraud, accord-
he was in jail for assault- ing to a report released this
ing a female relative. month by the Association of Na-
Even when things are tional Advertisers.
going well, there are In the memos that surfaced in
other challenges. the court proceedings, the Google
“Long-distance rela-
tionships don’t give you
the physical touching, The news highlights
which is so important in
terms of what it does for the firms’s dominance
people’s immune systems in multiple areas of
and their health—not
just sexual touching but the online ad world.
affectionate touching,”
says Prof. Coontz.
in the same state. marriage—using the technology at online friendship, Ms. Bobbitt and Research connecting this engineer described how Google’s
Yet for an entire year, they spent hand, says Stephanie Coontz, Jacob Ribeiro declared themselves change in behavior to other automatic system for issuing re-
almost every waking moment tex- emeritus professor at Evergreen boyfriend and girlfriend, though changes in the habits of young funds through its ad-buying tool
ting each other, talking on voice- State College and the director of they still had yet to meet. people is virtually nonexistent, wasn’t connected to the database
chat apps, and even communicating research and public education at A year after they first struck up but it’s at least plausible that one of ads flowing through AdX. Rele-
over webcams through Skype and the Council on Contemporary Fam- a conversation in a YouTube chat reason America’s young people vant teams within Google weren’t
Oovoo. Ms. Nguyen, 24, is now a ilies, based at the University of thread, Ms. Bobbitt, then 19, told are engaging in less risky behavior even aware of the automatic re-
pre-kindergarten teaching assistant Texas at Austin. her parents she was in love and than previous generations is sim- fund system, he said, according
living in Brooklyn Park, Minn. To that she was getting on a plane to ply that they are hanging out on- to the court documents.
this day her parents have no idea meet a boyfriend they didn’t know line instead of in person. Google said in court that while
they ever dated in the first place. ‘We met for only 20 existed. “I just straight up told For example, the percentage of it has agreed to make the retro-
They might sound unusual: on- them I’m doing this and you can’t Americans age 18 to 29 who report active refunds, its contracts with
line relationships that bloom, minutes and that was tell me no,” says Ms. Bobbitt, who not having had sex in the past year advertisers don’t require it to do
reach a fever pitch of teenage in- the first and last time we had saved money to pay for air- was 23% in 2018, where in the so, according to a Google spokes-
tensity and—possibly—even wither fare. “But my dad was just like, early 1990s the figure was about woman.
before the two parties ever meet. ever saw each other.’ ‘You better call me.…You better tell half that. Google promised AdTrader
But they’re becoming more com- me where this boy lives.’ ” But America’s “sex drought” is that its advertiser clients would
mon than ever. Ask any teenager— Now Ms. Bobbitt and Mr. Ri- not, in itself, a bad thing, says receive refunds for ads that ran
if they haven’t been in a relation- “So you have a period of life of beiro live together. Prof. Coontz. Finding creative ways on sites with fraudulent traffic.
ship like this themselves, they can 15 to 20 years where people have Expectations of that eventual to address their psychological and Based on its view of the situa-
probably name friends who have. to manage their sexual, romantic physical encounter can become so physical needs with technology is tion, AdTrader determined it
Liking someone’s Instagram is and intimate needs in ways that great, the couple fears their first just what young people do, she wasn’t being compensated for
the modern-day equivalent of smil- are more flexible than they used to in-person meeting could be a dis- points out. On one hand, there’s a money flowing through AdX.
ing at them across a crowded be, and young people are experi- appointment. hookup culture enabled by apps AdTrader and its clients filed
room. Every online service eventu- menting with how to handle that,” That’s what kept Seyar Tahib, a such as Tinder, while on the other suit in the Northern District of
ally becomes a chatroom—be it she says. 21-year-old college student living hand, there’s the emergence of on- California in December 2017,
TikTok, Fortnite or any of the “The way me and my boyfriend in Fremont, Calif., from meeting up line-only relationships. months after the fraud scheme
other distractions that allow peo- met was very strange,” says Kate- with his girlfriend, he says, even “It used to be that getting into a was detected and initial refunds
ple to connect. lyn Bobbitt, 20 years old and liv- though they’d talked online on and steady relationship was how you had been paid. The suit is pend-
The technologies that make it so ing in Providence, R.I. “We origi- off for a year, and had even begun started your life, now it’s what you ing. AdTrader is seeking certifi-
easy for young people to connect nally met through a YouTuber who “dating” without even hearing one do when you have all your ducks in cation to represent a class of ad-
with others all over the world have was streaming Minecraft.” What another’s voices. Finally, they a row,” says Prof. Coontz. vertisers.
THE WALL STREET JOURNAL. * * * * * * * Saturday/Sunday, May 18 - 19, 2019 | B3

BUSINESS & FINANCE NEWS

Wynn
In Talks
HPE to Buy Cray for $1.44 Billion
BY AISHA AL-MUSLIM other projects requiring gar- Laboratory. Earlier in the year, we be able to unlock the an- facturing operations and about

To Sell Hewlett Packard Enter-


prise Co. agreed to buy super-
gantuan computing power.
The company’s competitors
included International Busi-
it booked another government
order for a $500 million su-
percomputer in conjunction
swers to critical challenges
across medicine, climate
change, space and more.”
1,300 employees world-wide.
Its chief executive, Peter Un-
garo, is slated to join HPE af-

Casino computer maker Cray Inc. for


$1.44 billion as part of its ef-
forts to invest in high-perfor-
ness Machines Corp., Fujitsu
Ltd., Dell Technologies Inc.,
Lenovo Group Ltd. and Huawei
with Intel Corp.
Both systems are expected
to surpass one quintillion cal-
The Silicon Valley company
has been trying to revamp its
operations under a program it
ter the deal closes.
The company had revenue
of $456 million last year, up
BY AISHA AL-MUSLIM mance computing. Technologies Co. culations per second, making calls HPE Next, focusing its 16% from 2017, but below the
AND JON KAMP HPE, the business-technol- For HPE, the deal brings them the fastest in the world technical prowess and spend- nearly $630 million generated
ogy provider born from the strong revenue flow from gov- ing on such areas as data ana- in 2016. Gross profits have
Wynn Resorts Ltd. and 2015 split of Hewlett-Packard ernment-led supercomputing lytics and high-performance fallen over the past two years.
MGM Resorts International Co., said Friday it will pay $35 projects that have multiplied computing. The market for Cray has forecast modest reve-
are in talks for Wynn to sell its a share in cash for each Cray as competition in high-perfor-
Business with deep high-performance computing nue growth and a “substan-
Boston-area casino project to share, or more than a 17% mance computing heats up be- supercomputing and associated storage and tial” net loss for this year.
rival MGM. premium to the stock’s closing tween the U.S. and China. The services is expected to grow to On a conference call Friday,
Wynn Resorts and MGM price Thursday. San Jose, Calif., company
roots fits buyer’s about $35 billion in 2021 from Mr. Neri said Cray has book-
have engaged in conversations Shares of Seattle-based would also expand a customer broader plan. about $28 billion in 2018, HPE ings “way in excess” of total
in the past several weeks about Cray rose 23% to $36.52 on base typically made up of cor- said. revenue. Noting that the two
the potential sale of Wynn’s Friday, while HPE gained 0.6% porations; about 80% of Cray’s Patrick Moorhead, presi- companies in some cases com-
Encore Boston Harbor property to $14.62. business comes from govern- dent of the technology-con- pete for the same business, he
in Everett, Mass., the compa- Cray, which designs super- ment clients. if others don’t beat them to sulting firm Moor Insights & said growth prospects implied
nies said Friday. The 671-room computers, traces its roots to Cray, which doesn’t produce the punch. Strategy, said the play for Cray by broader technology trends
hotel and casino is slated to 1972, when computer engineer the main processor chips for “Answers to some of soci- is consistent with HPE’s stated also helped persuade HPE to
open in June. Seymour Cray founded prede- its machines, said this month ety’s most pressing challenges goals. Its success, he said, make the purchase.
The talks “are very prelimi- cessor firm Cray Research, an that it is teaming up with Ad- are buried in massive amounts hinges on the larger com- HPE is due to report its fis-
nary and of the nature that early innovator in supercom- vanced Micro Devices Inc. to of data,” HPE Chief Executive pany’s ability to integrate cal-second-quarter financial
publicly traded corporations puting. Its software runs high- build a $600 million super- Antonio Neri said in prepared Cray’s expertise and intellec- results Thursday.
like ours often engage in, and performance computers used computer for the Energy De- remarks. “Only by processing tual property. —Asa Fitch
in fact when opportunities such for scientific research and partment’s Oak Ridge National and analyzing this data will Cray has U.S.-based manu- contributed to this article.
as this are presented, we are
required to explore,” the com-
panies said in a joint statement.
The Boston Globe reported
earlier Friday that the two ca-
sino giants were in recent dis-
cussions regarding a sale of
the property. Wynn Resorts
had been in early talks last
year to sell the project to
MGM, as Massachusetts regu-
lators were investigating the
company’s handling of sexual-
misconduct allegations against
its founder and former chief
executive Steve Wynn.
Such a deal would be compli-
cated in Massachusetts, where
a 2011 law permitting Las Ve-
gas-style gambling doesn’t al-
low casino operators to own
more than one facility in the
state. MGM opened a casino
costing nearly a billion dollars
in Springfield, Mass., last year.

STEVEN RUARK FOR MARLIN STEEL WIRE PRODUCTS


Springfield Mayor Domenic
Sarno said that Bill Hornbuckle,
MGM’s president and operating
chief, contacted him Thursday
and reassured him of MGM’s
commitment to the city.
Last month, the Massachu-
setts gambling regulators al-
lowed Wynn Resorts to retain
its license and open a casino
near Boston but fined it $35
million after an investigation
found that executives had run a
sophisticated coverup to pro- The company said it would reduce production of farm equipment this year to lower inventories at dealerships. Above, a worker puts wheels on a tractor at a plant in Iowa.
tect Mr. Wynn from allegations

Deere Trims Outlook Due to Farmers’ Struggles


by employees that he had en-
gaged in sexual misconduct.
The state also fined current
Wynn Resorts Chief Executive
Matt Maddox $500,000. BY BOB TITA lions in U.S. goods including could also weigh on demand lion projection earlier this year. Tractor Drag
Mr. Wynn, who declined to some agricultural products. for U.S. grain, further under- The company raised its pro-
Deere is expecting only a 2%
be interviewed by Massachu- Deere & Co. lowered its “Further trade progress be- mining business for farmers. vision for credit losses in the
rise in farm and turf
setts investigators, issued a profit and sales forecasts to tween the U.S. and China is Those problems are hurting financing business to 0.23% of
equipment sales this year as
statement to them included in reflect slackening demand for becoming increasingly impor- demand for Deere equipment. the average owned-equipment
U.S. farmers struggle.
the report saying he had never its tractors and planters as tant,” Cory Reed, president of Deere said it would reduce portfolio, up from 0.17% last
had a nonconsensual relation- trade disputes and bad Deere’s financial-services busi- production of farm equipment quarter but in line with the 15- Deere’s farm and landscaping
ship. weather weigh on the incomes ness, said on a call with ana- this year to lower inventories year average for the finance equipment sales
of U.S. farmers. lysts on Friday. at its dealerships. Deere ex- business.
Farmers who buy Deere ma- Cold, wet weather in the pects about $3.3 billion in For the quarter ended April $30 billion
chinery are being hurt by Midwest is also delaying profit and a 5% increase in 28, profit declined 6% to $1.13
CBS Floats lower overseas purchases of
U.S. corn, soybeans and other
spring planting, raising ques-
tions about how much revenue
equipment sales this year,
down from previous estimates
billion, or $3.52 a share, com-
pared with $1.2 billion or 20
Bid for Starz crops as a result of tariffs on
farm commodities, exacerbat-
farmers will generate this
year. The U.S. Agriculture De-
for $3.6 billion in profit and a
7% rise in equipment sales in
$3.67 a share last year. Net
sales of equipment rose 5.4%
10
Channel ing a multiyear price slump af-
ter years of bumper harvests.
President Trump this
partment estimates just one-
third of the expected corn
crop has been planted, com-
2019.
The Moline, Ill.-based com-
pany said weakness in the U.S.
to $10.27 billion. Analysts
were expecting $3.59 a share
on sales of $10.19 billion.
BY JOE FLINT month increased tariffs on bil- pared with a 66% average for was weighing on its lending —Allison Prang 0
lions of dollars in Chinese this time of the year. arm as well. Deere forecast in- contributed to this article. 2013 '14 '15 '16 '17 '18 '19
CBS Corp. has had talks with products. Deere said that an African come from its financing busi-
Note: FY2019 ends Oct. 31 and the figure is
Lions Gate Entertainment Days later, China said it swine fever outbreak that has ness this year of about $600  Heard on the Street: Easier a forecast
Corp. about acquiring its pay- would increase tariffs on bil- decimated hog herds in China million, down from a $650 mil- tilling ahead for Deere ...... B16 Source: the company
TV channel Starz, according to
people familiar with the matter.
The talks between the two
companies started in recent
weeks, and a price of about
Nike Amends Pregnancy Policy Nissan Reworks Board
$5 billion was floated by CBS,
one of the people close to the
situation said. The CBS board
BY KHADEEJA SAFDAR For Post-Ghosn Era
also gave a green light to the Nike Inc. said it is adding
company to pursue the acqui- language to new contracts for BY SEAN MCLAIN auto maker’s partner and top
sition, another person said. female athletes that will pro- shareholder, Renault SA. The
No formal offer has been tect their pay during preg- YOKOHAMA, Japan—Nis- French auto maker has sought
made by CBS and nothing is nancy, after coming under fire san Motor Co. unveiled a new to revive merger talks in re-
imminent, another person for cutting compensation for slate of board directors, aim- cent weeks, an idea that Nis-
with knowledge of the matter some athletes. ing to fortify outside over- san executives fiercely oppose.
said. People close to Lions The sneaker giant said Fri- sight of management in the Under the new lineup, Nis-
Gate said the movie produc- day that it had adopted the wake of governance problems san Chief Executive Hiroto
tion company is seeking a policy last year but was now the auto maker blamed on for- Saikawa keeps his job and
higher price than what CBS writing the terms into its fu- mer Chairman Carlos Ghosn. board seat along with Renault
initially suggested. ture endorsement deals. Previ- Seven directors on the 11- Chairman Jean-Dominique Se-
The Information earlier re- ously, the contracts gave Nike member board would be nom- nard and Renault Chief Execu-
ported on the talks about a the right to reduce pay if run- inally independent. Five are tive Thierry Bolloré.
potential Starz sale to CBS. Li- ners failed to meet perfor- from Europe or the U.S.; the “Anything is an improve-
ons Gate’s stock rose 15% on mance thresholds for any rea- other candidates are Japa- ment over the current board,”
Friday following the report. son, including pregnancy or nese. said Zuhair Khan, a Jefferies
CBS, which already owns childbirth. Although Nike isn’t Keiko Ihara, an independent analyst specializing in corpo-
the pay-TV channel Showtime, changing existing contracts, director who led the nominat- rate governance. “But the big
came close to acquiring Starz the company said current ath- ing committee, described the question is: Is it good enough?
ANDY LYONS/GETTY IMAGES

in 2016 but lost a bidding war letes would receive similar proposed board as diverse and Is it going to look after the in-
to Lions Gate. protections. “the result of a fair selection terests of minority sharehold-
The discussions with Lions The move comes days after process.” ers, rather than just the inter-
Gate come as CBS and its sis- one of its former runners, Aly- Shareholders will vote on ests of Nissan and Renault?”
ter company, Viacom Inc., are sia Montaño, criticized Nike the slate in late June. Mr. Saikawa has faced pres-
again expected to consider a and its rivals for their policies The nominees include An- sure from critics and Nissan
merger. Both companies are around pregnancy. drew House, former head of shareholders to resign as com-
controlled by National Amuse- In an op-ed published in the Alysia Montaño said Nike told her it would pause her contract. Sony Corp.’s videogame divi- pany CEO. While Nissan’s
ments Inc., whose president, New York Times, Ms. Montaño sion, and Jenifer Rogers, an board had an animated debate
Shari Redstone, has been ea- said that when she told Nike with Asics. ened to end her contract. American lawyer who sits on over whether to replace him,
ger to see a deal. several years ago that she Ms. Montaño, an Olympian A spokesman for Asics said the boards of two other Japa- Ms. Ihara said, it was decided
A Starz sale would give Li- wanted to have a baby during and U.S. national champion, the company “honors the con- nese companies. that he should stay on to en-
ons Gate a needed cash infu- her career, the company told couldn’t be reached for com- tracts of our athletes during The independent directors sure stability.
sion at a time its movie and her it would pause her con- ment. the duration of their preg- may be asked to weigh in on Nissan on Tuesday reported
television units have strug- tract and stop paying her. She After having her daughter, nancy and return to competi- differences between Nissan a steep profit decline for the
gled. changed sponsors and signed she said that Asics also threat- tion.” management and the Japanese year ended March 31.
B4 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

STRATEGY

AGATON STROM FOR THE WALL STREET JOURNAL(3)


The TWA Hotel originally served as the now-defunct carrier's New York hub; the lobby area was designed by Finnish-American architect Eero Saarinen.

My Glamorous Night at JFK Airport


The $265 million TWA Hotel, fashioned from the iconic Eero Saarinen terminal, sells a mostly forgotten Jet Age vision
BY JASON GAY

I have come to an The TWA Hotel wants to smash that’s perfect.


airport in New York this cynicism. It is clear from the I should talk about the actual
City, voluntarily, to moment I walk in the door, into staying-in-the-hotel part. The
eat, sleep and spend the hotel’s soaring, swanky hub, TWA is quite a bit more dashing
the next 15 or so which was designed by Finnish- than the typical airport sleep
hours—and not fly American architect Eero Saarinen, cave, and even on opening night,
anywhere. I promise and opened as TWA’s New York with more than a few unfinished
I have made this decision sound terminal in 1962. This is pure Jet loose ends, it impresses. Check-in
of mind, and not under duress, Age stylishness, and the effect is is easy—though it’s that part-au-
but I understand if you are skepti- transporting; I immediately feel tomated, slightly cold experience,
cal. To spend time in one of New underdressed in my frumpy athlei- with rows of do-it-yourself touch
York City’s airports is basically sure wear. screens and wandering assistants
like getting your foot chewed On a walkway above, a group of that make me feel like, well, I’m
upon by an alligator, slowly. It is handsome young people in ’60s checking into a flight in 2019. The
the sort of activity one avoids. clothing dance to “Twist & Jean-Georges joint, called The
I should clarify: I’m not in the Shout,” though my gritty journal- Paris Cafe, is also on its game for
airport itself, but airport-adjacent. istic training tells me they are Night No. 1, but $22 for a turkey
I’m a paying guest on opening hired ringers (they are). But burger and $16 for a ginger mar-
night at the TWA Hotel, the plenty of real guests are gamely garita is a little rich, even for the
sprightly restoration/accommoda- attempting Jet Age cosplay: sharp airport. My kid is bummed the
tion that debuted Wednesday in suits; narrow ties; dresses straight It’s a weird sensation to wake up in the morning at a bustling airport. rooftop pool isn’t open yet,
the landmarked TWA terminal at out of Twiggy’s closet. I see a man though privately I am grateful.
JFK airport. It is a big, dreamy in a tuxedo. I see a kid wearing a broken occasionally by the sooth- ten restaurant!), it’s Saarinen’s de- Our room is small and spartan,
project that cost a lot of money fedora. My 6-year-old son, who ing, retro flip-flip-flip of the ana- sign that’s the true star. The re- and the Wi-Fi is fussy, but the
($265 million) and seeks to regen- has come with me for the night, is log arrivals/departures board. stored main structure is, as long minibar has Swedish Fish, and the
erate the rakish glamour of air not in a fedora. I can barely get My son is not Sunken Lounge claimed, a midcentury master- bathroom towels are so soft, I
travel, which I’ve heard from that kid to wear socks. material, so we take on a stroll piece—a swoopy, swerving assem- swear they‘re made from unicorn
older friends is something that ac- outside and board “Connie,” a bly of curves, glass and tubes. fur. I don’t know if this is because
tually once existed. Howard Hughes-era Lockheed Whether walking up its curling it’s opening night for bathroom
It’s been a long time since com- People are thrilled to be Constellation on the premises staircases, or running down its towels, too, but again: They feel
mercial air travel in the United that’s been turned into, yes, an- red-carpeted, Kubrickian hallways like unicorn fur. I am very
States has been glamorous. Today, at the airport. It’s other bar. In the elevator, we over- (now renamed for Saarinen and tempted to steal one. I do not.
we are essentially flung across the extremely unsettling. hear a conversation—I swear this former TWA owner Hughes), you It’s a weird sensation to wake
continent in clammy tubes, with is true—about Burt Bacharach. Ev- cannot help but think: They don’t up in the morning at a bustling
cramped seating, dodgy Wi-Fi and erywhere we turn, we encounter make them like this anymore, and airport, and an even weirder one
the option of purchasing a wet tur- merry humans who appear to have they never will again. This is an to leave the airport without hav-
key sandwich for $12. Airports The place is popping. It’s barely traveled back in time. People are upscale hotel (my modest-sized ing boarded or disembarked from
aren’t much better. They’re 5:30 p.m., but the jaunty crowd al- thrilled to be at the airport. It’s deluxe room was $269), but hon- a plane. But this is what my son
crowded, anxious places, with not ready seems Don Draper’d up, a extremely unsettling. estly, you could stick a Jiffy Lube and I do Thursday. I earn no miles
enough seating, and comically over- couple drinks in. The “Sunken It feels important to point out in Saarinen’s structure and it for this experience, and yet I have
priced food. You haven’t felt despair Lounge,” the hotel’s centerpiece that, despite the many millions would be a triumph. no regrets. I have enjoyed myself
until you’ve been forced to stand in cocktail bar, buzzes with the chat- being spent, and all the 21st-cen- “The roof is the sky, but it’s at an airport in New York City,
an airport waiting area, sadly ter of Instagrammers, air-travel tury accouterments (Intelligentsia not really,” is how my son puts it, which feels like a greater miracle
munching on a $6 airport bagel. obsessives and Saarinen junkies, coffee! A Jean-Georges Vongerich- staring at the ceiling, and I think than flight itself.

H
igher tariffs mean 8,000 bicycles last year. “But the
more pain for an al-
ready reeling bicycle
industry.
The U.S. last week
A Trade War’s Vicious Cycle: bike industry is almost exclusively
out of Asia.”
Moving production isn’t easy
for a small bike company, Mr. Za-
increased tariffs on
$200 billion of Chinese goods,
from burglar alarms to spark
plugs, ratcheting up the trade con-
Tariffs Dent the Bike Industry gata said. “It’s not simply flipping
a switch when you are moving to
a factory across the border,” he
said. “We are not a big enough
flict with Beijing. The latest move brand to justify dropping that
added to pressure on the bicycle China accounted for 94% of the bicycles imported to the U.S. in 2017 much money.”
industry, which had already been Some companies already have
hit by earlier rounds of tariffs. BY RUTH SIMON made the move. Pedego Electric
The increase in tariffs to 25% Bikes, based in Fountain Valley,
from 10% is particularly painful Calif., had been looking to shift
for the bicycle industry because mance Bicycle brand. the year-earlier period, according istration last year pushed the manufacturing out of China be-
much of the production comes They come on top of the 5.5% to market research firm NPD company from a profit to a loss. cause of European tariffs imposed
from China. China accounted for to 11% tariffs on bicycles and bicy- Group Inc. Revenue dropped by Kent passed along much of the in early 2018. It accelerated that
94% of the 15.3 million bikes im- cle parts that were already in about 2% as bike sellers passed added cost to its customers in the shift in response to last year’s tar-
ported into the U.S. in 2017, ac- place before the start of the trade along higher costs to consumers. form of higher prices, but “sales iffs imposed by the Trump admin-
cording to the Bicycle Product war between the U.S. and China. Kent International Inc., which dropped 5% to 10% below forecast istration; the company now makes
Suppliers Association, a trade The number of bicycles sold in sells about three million bicycles a because of sticker shock,” said Ar- 70% of its bicycles in Vietnam and
group, as well as nearly 70% of the U.S. dropped by about 15% in year world-wide, said the 10% tar- nold Kamler, chief executive for 30% in Taiwan. Pedego said it
imported inner tubes. About the first quarter compared with iffs imposed by the Trump admin- more than 30 years. paid a little over $200,000 in tar-
500,000 bicycles are manufac- The Parsippany, N.J., company iffs on Chinese-made bikes before
tured in the U.S., the group says, early last year put on hold plans to the shift was complete.
but builders must still source expand production at its Manning, “We were big enough that we
components from abroad, mostly S.C., factory because of higher tar- could afford to do it, but not so big
from China. iffs on imported steel and parts. Its that we can’t find production ca-
“It’s made it a much more chal- main supplier recently purchased a pacity,” said Don DiCostanzo, chief
lenging environment,” said Matt large property in Cambodia, but executive of Pedego, which sold
Moore, general counsel of Quality Kent slowed plans to shift produc- about 12,000 electric bicycles last
Bicycle Products, a Bloomington, tion when it appeared a trade deal year. Mr. DiCostanzo is looking at
Minn., distributor with 850 em- was near. Given the company’s size, building bicycles in the U.S., but so
ployees and more than $300 mil- that type of shift isn’t easy, said far can’t find anyone here who can
lion in annual sales. Mr. Kamler, who intends to revisit make bicycle frames. “We are con-
Companies have been looking at a potential move at the end of May. sidering opening our own frame
shifting production to other loca- Brooklyn Bicycle Co., which spe- factory,” he said.
tions. But such moves are disruptive cializes in city and commuter bikes, Bicycle helmets and bicycle
to an industry that operates with a raised prices by as much as 12% lights were excluded from the
three- to six-month time frame be- last year. Now, it’s looking at add- higher tariffs, but Gloria Hwang,
tween factory order and delivery for ing a 10% “tariff surcharge” as a chief executive of Thousand LLC, a
parts, he said, and up to 12 months separate line item, an approach four-year-old bicycle helmet
for frames and bikes. When compa- that will make it easier to dial back maker based in Los Angeles with
TRAVIS DOVE/BLOOMBERG NEWS

nies shift production, they typically pricing if the U.S. and China reach 11 employees, is still worried. She
retest products for safety, Mr. a trade agreement. The eight-year- fears helmets could get hit by the
Moore said, adding to the expense old company assembles its bicycles next round of tariffs. Even if that
and delay. in China and gets about 70% of doesn’t happen, a slump in bike
The tariffs added to the strain parts from Chinese vendors. sales could hurt helmet demand,
from bankruptcy filings of retailer “There’s nobody who would like Ms. Hwang said.
Toys “R” Us and Advanced Sports to build our bikes in the U.S. more “We are in the accessories busi-
Enterprises Inc., which made Fuji than me,” said Ryan Zagata, presi- ness,” she said. “If our main cate-
and other bikes and operated dent of Brooklyn Bicycle, which gory is affected, we will be af-
about 100 shops under the Perfor- Employees at Kent International Inc.’s assembly facility in Manning, S.C. has five employees and sold about fected, too.”
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | B5

WEEKEND INVESTOR
THE INTELLIGENT INVESTOR | JASON ZWEIG

Your Caveman
Brain Isn’t Built
For Investing
Evolution has sensitized humans to danger,
whether it’s a hungry bear or a bear market

When stock mar- That’s no less true among pro-


kets fall sharply and fessional investors than it is
immediately recover, among amateurs. “There’s a sur-
the losses seem to prising similarity in understand-
disappear. But that ing these things between individ-
doesn’t mean no one ual and professional investors,”
feels any pain. says Prof. Shiller. “The profession-
The Dow Jones Industrial Aver- als may be better at reading bal-
age fell 617 points, or 2.4%, on ance sheets and income state-
Monday—then promptly went up ments and the like, but not at
by an almost identical amount evaluating whether this is 1929 all
over the next three days. If you over again.”
headed off for a hike in the wilder- One plausible explanation: In

ALEX NABAUM
ness on May 10 and came back on general, negative events sear
May 16, you might have concluded themselves into the human mind
that nothing had happened: Over more deeply than positive out-
the full stretch of those four trad- comes do. Mr. Market gets inside
ing days, the Dow ended up just your head.
about where it started. Over the millennia, evolution economic indicators, geopolitical closer attention to market news Narratives don’t have to be logi-
But big market moves, like has sensitized humans to danger. events, or remarks by policy mak- than individuals were. cal to stick. The Dow dropped 617
flashbulbs that go off in your face, “Imagine that you’re a caveman ers or financial commentators. What’s more, when stock points on Monday, according to
do blur your vision—whether in- and saw a horrible mauling by a In March 2009, U.S. stocks had prices make big moves, investors market pundits, on the bad news
vestors realize it or not. bear on a certain path,” says Prof. fallen nearly 40% in the previous crave explanations. When the that trade talks with China were
Robert Shiller, the Yale Univer- Shiller. “That will stick in your 12 months. Still, more than four Dow swings by hundreds of taking too long. It rose almost as
sity economist who shared the No- mind and you will tend to think, out of five institutional and indi- points, especially downward, says much over the following three
bel Prize in economics in 2013 for ‘I’m going to avoid that path even vidual investors thought there was Prof. Shiller, “people are looking days on the good news that the
his analysis of how human behav- if the bear isn’t there anymore.’ A a strong chance of another stock- at each other for ideas, and they trade negotiations were still inch-
ior shapes asset prices, has long path with delicious fruit will also market crash in the ensuing six ing along.
tracked investors’ expectations of stick in your mind, but that’s not months, according to the Yale sur- Big price moves are much more
stock returns. as important to your survival, so vey. (They were wrong: U.S. stocks Investors who have common now, with the Dow
His Stock Market Confidence In- it’s not as memorable.” returned 32%.) around 26000, than they used to
dices are based on surveys now That doesn’t mean every inves- Many investors in Prof. Shiller’s witnessed a recent sharp be. Since 1896, the Dow has fallen
compiled monthly by the Interna- tor will sell in a panic. It does 1987 survey reported “unusual decline are more likely by at least 2% in a single day 1,011
tional Center for Finance at Yale. mean investors who have wit- symptoms of anxiety,” including times, according to Dow Jones
They show that investors are more nessed a recent sharp decline are sweaty palms or a racing heart- to fear another. Market Data. That’s once every 33
likely to believe a market crash— more likely to fear another in the beat, during the crash that Octo- trading days on average. At today’s
on the scale of 1929 or 1987—is near future. ber. Among individual investors on levels on the Dow, by historical
imminent in the coming sixth In a survey he conducted imme- Oct. 19, about 19% who bought look to the media for interpreta- standards alone, investors should
months if a recent sharp drop in diately after the Dow fell 23% on stock—and 31% who sold—re- tions of numbers that could be expect stocks to fall by at least 520
stock prices was prominently cov- Oct. 19, 1987, Prof. Shiller asked in- ported being anxious that day. meaningful.” points once every six weeks or so.
ered in the media. The sharper the vestors what was most important Roughly 45% of institutional in- As soon as a reasonably plausi- That will put big negative num-
recent fall and the more prominent to them in evaluating the pros- vestors who bought or sold shares ble cause gets attached to a price bers squarely in view. And that, in
the news coverage, the more in- pects of the stock market. The on Oct. 19 experienced anxiety, the swing, “narratives have a certain turn, could help keep investors’
vestors will tend to worry that a crash in the Dow was much more Shiller survey found. That’s pre- exogenous life of their own,” says expectations from getting too far
crash is coming. important, they said, than major sumably because they were paying Prof. Shiller. “It’s just contagious.” out of hand.

TAX REPORT | LAURA SAUNDERS

How to Know if a Roth 401(k) Is Right for You


Many workers now have the opportunity to save for retirement in a Roth plan alongside a traditional 401(k). But should they?
Amanda Bennette well be lower—so she may want
works hard at her to contribute more to her tradi-
finances. tional 401(k).
A product man- A 2018 study by Vanguard
ager at a New York- tweaked this rule. It found that
based retailer, the choosing a Roth account can be
32-year-old sticks to smart even if a saver’s tax rate will
a budget, funds a rainy-day ac- be somewhat lower in retirement.
count every month and is saving Thus if the top rate on the contri-
to buy an apartment. But one butions is 35%, a Roth 401(k) could
thing stumps her: the Roth 401(k) make sense even if the saver’s
retirement-savings account offered withdrawal tax rate is 30%—or
by her employer. lower in some cases.
Currently she contributes just In practice, say specialists,
a bit, while most of her work- funding a Roth 401(k) often makes
place savings go into a traditional most sense for younger workers
PHOTO ILLUSTRATION BY MIKEL JASO; ISTOCKPHOTO

401(k) plan. and those nearing retirement.


“I don’t understand,” she says. Younger employees can expect
“Why is there a Roth account in- their incomes and tax rates to rise,
side my 401(k)? And how are taxes and older ones are more able to
involved?” predict their future rates.
Ms. Bennette isn’t alone in her As you plan, consider these
confusion. Fewer than 15% of issues:
workers who have access to Roth  It’s not either/or. Employers
401(k) plans put money into usually allow workers to split
them, according to separate sur- 401(k) contributions between tra-
veys conducted by Vanguard ditional and Roth accounts. Most
Group and Alight Solutions. By savers who contribute to Roth
contrast, the participation rate 401(k)s also put money into tradi-
for traditional 401(k) retirement tional 401(k)s, according to Rob
plans is often 80% or more, ac- the worker puts in. Contributions ment, payouts from traditional sive in the short run, because the Austin, head of research at Alight
cording to spokesmen for Van- to a traditional 401(k) plan are 401(k)s are taxable at ordinary in- saver pays tax up front. Solutions.
guard and Alight. typically tax-deductible, while con- come rates, while payouts from This drawback has an upside. But savers can contribute only a
There are big differences be- tributions to Roth 401(k)s are Roth 401(k)s can be tax-free. The annual limit is the same for total of $19,000 or $25,000 to
tween the two plans—but more made in after-tax dollars. When The upshot is that choosing a both traditional and Roth contri- their 401(k) accounts this year,
savers should be using their Roth the money is withdrawn in retire- Roth 401(k) is often more expen- butions—$19,000 per employee un- however it’s allocated.
accounts. der 50, or $25,000 for those 50  Don’t miss the match. If your
“Especially for younger workers, and older for 2019. So a worker employer provides matching dol-
a Roth 401(k) can be a great way To Roth or Not to Roth... who puts $10,000 into a Roth lars, make sure to contribute
to save,” says Allan Roth, a finan- The percentage of companies offering Roth 401(k)s has 401(k) saves more for retirement enough to get them—even if that
cial planner with Wealth Logic. (As grown significantly, but most workers aren't taking advantage. than the worker who puts $10,000 means putting more in your tradi-
far as he knows, Mr. Roth isn’t re- into a traditional 401(k), because tional 401(k). Employer matches
lated to William Roth, the Dela- 70% 401(k) retirement the Roth dollars are after tax. are always in pretax dollars.
ware senator who gave Roth ac- plans offering a When is it smart to opt for a  Think about whether you’ll
counts their name.) 60 Roth option Roth 401(k)? Finance specialists need the money. Roth 401(k)s dif-
Many workers now have access, cite this rule of thumb: If a saver fer from Roth IRAs. Retirement
as the number of companies offer- 50 expects a higher federal and state savings specialist Ed Slott says
ing a Roth 401(k) has surged re- tax rate at withdrawal than when that contributions to Roth IRAs
cently. Vanguard estimates that the money was put in, a Roth ac- can be withdrawn tax-free if
40
71% of the traditional 401(k) plans count is better. needed, so some savers use them
it administered in 2018 included a Your tax rate in several decades as a source of emergency funds or
Roth 401(k) option, compared with 30 is hard to predict, of course. But if to save for a down payment.
37% in 2009. a worker is under age 30 and his But Roth 401(k) withdrawals be-
Both traditional 401(k)s and 20 top tax rate is 12%, it’s likely that fore retirement often incur tax or
Roth 401(k)s are tax-favored sav- his retirement tax rate will be penalties, if you can take them at all.
ings plans that encourage employ- 10 Eligible workers higher. So if he can afford it, con-  Go for tax diversification. If
ees to set aside dollars now and who contributed tributing more to a Roth 401(k) you can’t guess what your future
withdraw them in retirement. Of- 0 to a Roth 401(k) could be smart. tax rate will be—and few can—Mr.
ten the employer matches some of 2006 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 On the other hand, if a 45-year- Slott advises dividing your savings
the worker’s contribution. old worker’s top tax rate is 32%, into different tax baskets to pro-
The differences begin with what Source: Vanguard Group data on 401(k) plans of all sizes for which it serves as record-keeper her tax rate in retirement may vide future flexibility.
B6 | Saturday/Sunday, May 18 - 19, 2019 **** THE WALL STREET JOURNAL. THE WALL STREET JOURNAL. **** Saturday/Sunday, May 18 - 19, 2019 | B7

EXCHANGE EXCHANGE
Roughly three
months ago, Doug
Parker, the chief exec-
Raises for $12.6 million for those CEOs.
One-year performance can be skewed by bad
luck and long-term plans that take time to bear
A recent study by researchers at Cornell
University and the Massachusetts Institute of
Technology suggests part of the problem may
utive of American Air-
lines, wrote his com-
pany a personal check THE CAPTAIN CLASS | SAM WALKER The Best—and fruit. Over longer time periods, pay and perfor-
mance correlate better—but still far from ro-
bustly, analysts and many consultants say. Com-
lie in the operating and stock-market goals
that corporate boards set to measure company
performance, and thereby determine executive
for $10,000.
Also for the Rest paring CEO pay growth against shareholder pay. Often they use measures that don’t meet

The Airline
For a 57-year-old airline industry returns over five years shows pay growing faster generally accepted accounting principles, in-
titan who earned almost $12 million at about 28% of S&P 500 companies, sometimes stead substituting metrics that exclude some
on paper last year, the dollar figure sharply so, according to data from proxy advi- costs or financial benefits that the company
wasn’t too significant. The remark- Continued from page B1 sory firm Institutional Shareholder Services. deems outside management’s control or not
able thing about this payment is were in the bottom half of the group. Among “There are lots of individual cases where reflective of core performance.

CEO Who
why he made it. them: dialysis chain DaVita Inc., which doubled things aren’t working great yet,” said John Roe, Companies that make big adjustments to
Four years ago, during a boom in Kent Thiry’s pay to $32 million and recorded a head of ISS Analytics. measures of profit tend to pay their CEOs
executive compensation, Mr. Parker negative 29% return, and Gap Inc., which paid David Seaton led engineering and construc- more—by an average of 16%—than other compa-
stunned many CEOs (not to mention Art Peck $20.8 million, the most of his four-year tion company Fluor Corp. starting in 2011. His nies, the researchers found. The difference aver-
their accountants) by asking Ameri- tenure, when it logged a negative 21% return. reported pay rose 24% last year, even as Fluor aged $1.9 million a year above and beyond what

Canceled His
can’s board to start compensating Such mismatches highlight lingering ques- posted a negative 37% return in 2018. Annual re- the CEOs would otherwise be expected to earn.
him exclusively in stock. Since then, tions about how successfully corporate boards turns trailed those of most other S&P 500 capi- Mr. Kay, the pay consultant, said directors
he’s been leading the world’s largest have tied executive pay to company perfor- tal-goods companies in the Journal analysis for are careful in picking performance targets. “I
airline without a salary, a bonus, or mance. Urged on by investors and governance each of the past five years. see that the boards definitely agonize over
even a matching 401(k) contribution. advocates, companies have spent years crafting Mr. Seaton’s total pay rose in three of those whether these adjustments are appropriate to

Salary
This unusual plan, unique mechanisms to do this. In many cases, new re- five years, and overall he was paid $56 million, make,” he said. “In the final analysis, we do
among airline CEOs, effectively search suggests, the fault lies with the execution much of it in stock, during that time. In 2018, think they add the right things back and take
erases Mr. Parker from the com- and complexity. restricted stock made up $9.6 million of the the right things out.”
pany’s payroll. Since American “The more complicated the scheme is, it’s less total, compared with a $5.6 million award in Celgene Corp. relied on non-GAAP metrics
can’t deduct the cost of his health transparent to consumers and society,” said Alex 2017. Fluor said much of that increase last year to determine pay for CEO Mark Alles.
insurance, he’s on the hook for it. Edmans, a professor of finance at London Busi- stemmed from a change in the way the com- The drugmaker’s shares fell nearly 40% over the
Hence, the $10,000 check. ness School who has studied executive-compen- pany structured its equity awards beginning in course of 2018, battered particularly after Cel-
Many CEOs can rightfully say sation trends on both sides of the Atlantic. 2016, leaving the reported value of stock gene hit setbacks in the development of several
that a majority of their pay is tied With his pay entirely in stock, DaVita declined to comment. Its proxy state- grants that year and in 2017 smaller than they potential drugs. Still, Mr. Alles’s compensation
to the company’s performance, al-
though that’s hardly a perfect sci-
Doug Parker wanted to change ment notes that $14 million of the increase in
Mr. Thiry’s reported pay came from a new re-
otherwise would have been.
Yet cost overruns on some projects and
rose 24% to $16.2 million.
Despite its drug-development stumbles, the
ence. Only a few, however, have American Airlines’ culture tirement benefit that lets executives keep re- other issues forced the company to take more company said, just under half of Mr. Alles’s an-
dared to join Mr. Parker in the 100% stricted stock they otherwise would forfeit on than $1 billion in write-offs over the three nual bonus was based on meeting selected ob-
stock club. One of the reasons Mr. retirement if they meet certain age and tenure years, hitting its shares and leading to several jectives in expanding Celgene’s product pipeline.
Parker favors this approach is the thresholds. Absent that change, Mr. Thiry’s pay earnings misses in re- While Celgene posted GAAP earnings of
same one that makes it frightening: would have risen 13% to $17.3 million. Mr. Thiry cent quarters. On May 1, $5.65 per share for 2018, the adjusted earnings
It subjects him to the same risks as will step down as CEO June 1. Mr. Seaton stepped the company reported to investors came in at
American’s shareholders.
Given the level at which top exec-
Gap said that since Mr. Peck’s appointment to
CEO in February 2015, stock-price changes and
$12.4 down just before the
company reported a
$8.87, once the company stripped out the cost
of acquiring research assets and other items.
utives are paid, he says, it’s only fit- other factors mean he ultimately received cash million first-quarter loss that For the purposes of its management incentive

COOPER NEILL FOR THE WALL STREET JOURNAL


ting that their interests should be and equity averaging about $4.75 million a sent the stock tumbling plan, Celgene tweaked its EPS figure further to
aligned with investors. “I don’t year—considerably less than the $12.9 million
Median 28% in a day. adjust for an acquisition and share buybacks.
know why all CEOs don’t do the average reported in securities filings. In 2018, compensation Fluor’s proxy notes That revised figure: $9.06, surpassing the
same. It seems really logical.” Mr. Peck also gave up his bonus “in light of busi- for the heads that the pay Mr. Seaton $8.70 to $8.90 target range it had set for its
Mr. Parker, who took over at ness performance.” of S&P 500 could actually realize top executives to hit. Pay consultants generally
American in 2013 after its merger For its annual ranking, the Journal examined companies from the last three years say boards take into account adjustments from
with US Airways, said he also hoped 442 companies with fiscal years ending after last year, was about 60% of his tar- standard accounting measures when setting
this symbolic gesture would signal June 30, 2018, and disclosing pay data through another get compensation, thanks targets for executive compensation.
to American’s employees that he May 1. Companies that changed CEOs during the to stock-price declines Ultimately, Mr. Alles could get an even bigger
was a different breed of airline ex- year were omitted, leaving 400 CEOs. The analy-
post-recession and other factors. “What payout: Celgene crafted new change-in-control
ecutive. “Nothing about this is some sis includes salary, bonus and stock awards as record. you’re granted is not provisions for him and other senior executives in
earnings-maximization policy of valued in securities filings. what you receive,” said December, as the company negotiated a $74 bil-
mine,” he says. American Airlines’ Doug Parker is the rare CEO who gets paid entirely in stock, a decision that prompted friends to ask what he was thinking. The highest-paid executive was Discovery Dawn Stout, Fluor’s vice lion sale of the company to Bristol-Myers Squibb
The shares Mr. Parker receives Inc.’s David Zaslav, whose pay tripled to $129 president of law. “We feel Co. He would receive an exit package of $28 mil-
are not options: They’re granted at million thanks to an equity grant tied to a new pretty strongly we have a performance-based lion if he departs after the acquisition closes.
the current market price and may says. Choosing stock over ready executives like him care only about peers at United and Delta were ex- mally with employees aboard planes. two-thirds said they were proud to five-year contract. Discovery posted a 10.5% plan, and 90% of his compensation is variable, A Celgene spokesman noted that the com-
decline in value before they vest. cash and short-term incentives lining their pockets. He was right pected to make. “I’m doing this be- When the pricey seats are full, he work at American. shareholder return for the year. tracking performance.” pany’s 2018 results exceeded its forecasts and
In addition, the value of the shares would signal that he was bullish about that. cause it feels better,” he says. flies in coach. Mr. Parker recently In the meantime, there’s another The television-channel owner said Mr. Indeed, companies and pay consultants of- that by GAAP standards, its earnings rose more
he gets and how soon they vest about the long term. His message at “He can put whatever kind of Boy In another unorthodox move, he posed with a mortified flight atten- group Mr. Parker hopes to lead—fel- Zaslav’s pay increase is largely the result of ten complain that the figures reported in secu- steeply than on an adjusted basis, climbing 51%
depends in large part on how well the time: “We’re good. This busi- Scout explanation he wants on the asked the board in 2016 to tear up dant who accidentally spilled a tray low chief executives. For years, he stock-option awards tied to his new contract rities filings can be misleading. Equity is val- per share from 2017. The spokesman also said
American performs over time, rel- ness has been transformed. It’s time way he gets paid,” says John Samu- his employment contract, making of drinks on him. “I want people to says, CEOs have fought to be paid through 2023, with exercise prices that escalate ued at the time options and restricted stock Mr. Alles took on the duties of board chairman
ative to rival airlines. to worry about building.” elsen, international president of the him the rare CEO who serves as an know they work for a company that the same as their peers, only to see each year. Future pay will approximate earlier are awarded, even though CEOs might not get last year, in addition to serving as CEO. The com-
Put simply, Mr. Parker isn’t For the record, nobody—includ- Transport Workers Union, which at-will employee without any spe- cares about them,” he says. their rivals receive counterhikes the years, it said. Mr. Zaslav has averaged $41 mil- full title to it for years. pany’s securities filing indicates his salary rose
likely to outearn his industry peers ing Mr. Parker—interpreted this has been in protracted negotiations cial protections. His effort to change the culture next year. “That doesn’t seem right, lion in pay in most recent years. Measuring the pay CEOs ultimately receive— about $265,000 a year and his bonus target rose
unless American has a series of plan as a vow of poverty. If Ameri- with American. “It doesn’t matter to So far, Mr. Parker’s experiment has seen its own share of ups and frankly,” he says. By opting out of There are almost as many ways of measuring including stock-price appreciation or declines— about $670,000 at the time of the promotion.
bang-up years. can’s share price booms, he stands the average worker—all we know is hasn’t broken any compensation re- downs. The airline finished next- this perpetual loop, “I like thinking corporate performance as there are ways to shows much better correlation with perfor- The growing complexity of CEO compensa-
When this arrangement began, to earn more than he’d get from a that he’s rich and we’re not.” cords. He’s earned about $11.7 mil- to-last in 2018 in The Wall Street that I’m not facilitating that.” compensate a CEO. None of them are perfect, mance, said Ira Kay, managing partner at tion packages and the performance mismatches
the airline industry was still emerg- traditional pay package. Besides, he While it may not be especially lion a year on average. Median pay Journal’s annual study of on-time Even if he never outearns his air- experts caution. One widely used measure—total consulting firm Pay Governance. “We measure have spurred some investors to call for revamp-
ing from a brutal stretch of bank- admits, the reason he’s in a position brave, there’s a fair argument to be for the CEOs of the biggest U.S. performance. And despite posting line counterparts, Mr. Parker’s ap- shareholder return, which tracks stock perfor- whether there’s after-the-fact alignment.” ing executive pay in a radically simple way: Pay
ruptcies, mergers and historic labor to ditch his salary is that he’s al- made that Mr. Parker is doing companies in 2018 was $12.4 mil- an above-average rating in J.D. proach to compensation does afford mance and assumes dividends are reinvested— In 2018, half of compensation awarded to CEOs in cash and give them shares they must
strife. Few investors saw major car- ready benefited from years of gen- something commendable. lion. Although American has turned Power’s 2015 study of airline cus- him one unique luxury. He gets to illustrates the challenge. S&P 500 CEOs consisted of restricted stock. In- hold for, say, at least five years.
riers as healthy, viable businesses erous compensation. Over the last In 2015, when he retooled his a profit in five straight years, its tomer satisfaction, American has imagine how they must feel defend- Only two of the 25 highest-paid CEOs in the cluding stock options, two-thirds of CEO pay last The idea of compensating CEOs primarily by
worth accumulating stock in. When three years, the airline stock-appre- own compensation, many of Ameri- stock has skidded to about $32 from fallen below the average in each of ing their own pay. “They have to Journal analysis led companies in the top 25 for year was equity. Increasingly, those awards con- making them long-term shareholders in their
Mr. Parker first broached his un- ciation rights he’d earned before can’s workers were underpaid by in- last year’s high of $59. The un- the past three years. talk about how their compensation 2018 shareholder return: Netflix Inc.’s Reed Has- sist of performance shares and options, meaning companies has been recently endorsed by Nor-
orthodox plan, a few friends on the 2015 have helped him pocket more dustry standards. Mr. Parker set out vested shares Mr. Parker earned in Mr. Parker says he has seen some is higher than mine,” he says. tings and Adobe Inc.’s Shantanu Narayen. the executives get more of the securities when way’s sovereign-wealth fund and recommended
board pulled him aside to ask him than $50 million. “I’ve been ex- to rectify that by offering workers 2018 have lost nearly half their progress. Workers rarely complain More broadly, sorting CEOs into groups by the company meets key targets—and fewer by a House of Commons committee in the U.K.
what he was thinking. tremely fortunate,” he says. mid-contract pay raises. He also de- value. “I’m not complaining,” he to him about the indifference of Mr. Walker, a former reporter and company performance shows the 20% with the when they fall short. examining corporate governance. Removing the
To Mr. Parker, this lingering prej- Mr. Parker also knew that no cided that until his employees says. “I feel the stock will rebound.” management, as they used to. They editor at The Wall Street Journal, highest shareholder return claimed the biggest So why, with formulas yoking CEOs’ pay specific, but often arbitrary, performance targets
udice against airlines was Ameri- compensation formula could elimi- achieved pay parity, he would ask In his quest to improve Ameri- tend to lobby him for better tools to is the author of “The Captain paychecks, with a median of about $14 million. to the success of their companies and to would free CEOs from trying to hit them and in-
can’s biggest problem. “It was time nate the perception among many the board to set his annual income can’s culture, Mr. Parker hosts do their jobs. The company’s first Class: A New Theory of But the 10% of companies with the worst re- share performance, are pay and performance stead let them focus on creating long-term value,
to get out of survival mentality,” he longtime airline employees that targets about 20% below what his monthly town halls and meets infor- employee survey in 2017 found that Leadership” (Random House). turns also gave big packages, with a median of so misaligned? said Mr. Edmans of London Business School.

Just Leaving: Parting Pay The Outliers With Top Salaries


Last year brought turnover atop some of the largest U.S. companies, including several high-pro- Some of the biggest CEO paydays last year don’t appear in the WSJ’s rankings (pages B8-9),
file leaders like Les Moonves and Meg Whitman. Some left under a cloud of scandal or were either because the companies aren’t part of the S&P 500 index or because of the timing of
fired while others exited in a more orderly fashion. Here’s how six of the S&P 500’s departing their fiscal year. Here’s a look at five firms whose leaders would have ranked near the top.
CEOs were compensated on the way out.

Elon Musk, Tesla Inc. be enough to rank Mr. Arora second if Palo
Leslie Moonves, CBS Corp. about $4.3 million in severance over 12 The electric-car company awarded options Alto were a member the S&P 500. A Palo Alto
Mr. Moonves was forced to resign last Sep- months. GE also agreed to let Mr. Flannery valued at $2.28 billion to its founder and spokeswoman said some of Mr. Arora’s stock
tember amid accusations of sexual harass- keep equity awards that could add up to CEO last year—an amount roughly equivalent awards are tied to his own investments in the
ment, which he has denied. The longtime several million dollars more depending on to the combined 2018 compensation of the company’s stock.
CBS chief forfeited nearly $34.5 million of GE’s performance. When Mr. Flannery turns 92 top-paid CEOs in the Journal’s rankings.
his annual compensation as part of a sepa- 60 in about three years, he will receive a (Tesla isn’t in the S&P 500 index.) The op- Larry Ellison, Safra Catz,
ration agreement, but he still received pension valued at nearly $23 million at the tions grant, approved by shareholders last Mark Hurd, Oracle Corp.
about $12.6 million for the year. CBS’s end of 2018. According to the company’s year, vests in 12 tranches if Tesla’s stock The business-software maker has three
board denied Mr. Moonves a severance proxy, he was paid a total of $16.6 million surges and the company hits performance leaders who each received $103.7 million
package of $120 million following a com- in 2018. “John Flannery dedicated over 31 goals. “This award was designed to be en- option awards during its last full fiscal year,
pany probe into his conduct that concluded years of service to GE, and the arrange- tirely an incentive for future performance but they don’t appear in the WSJ ranking
that he breached his employment contract, ments reached with him…reflect that ser- that would take many years, if at all, to be because Oracle ends its year after the Jour-
a decision he challenged; it is now in arbi- vice,” a GE spokeswoman said. achieved,” the proxy says, and directors se- nal’s analysis is published. Chairman Larry
tration. Representatives for CBS and Mr. lected ambitious performance milestones. A Ellison and co-CEOs Safra Catz and Mark
Moonves declined to comment. Stephen Wynn, Wynn Resorts Ltd. Tesla spokesman said none of the 2018 op- Hurd each made just over $108 million in
The billionaire casino mogul left after sex- tions have vested and Mr. Musk receives no the year ended May 2018. The options are
Indra Nooyi, PepsiCo Inc. ual-misconduct allegations were leveled salary or bonus. “Elon’s entire compensation tied to share price, market capitalization
Ms. Nooyi retired as CEO in October after against him. He said the idea he ever as- is directly tied to the long-term success of and performance goals; if all goals are met,
leading the beverage and food company for a saulted a woman is preposterous. He re- Tesla and its shareholders,” he said. the awards could be worth as much as $175
dozen years. She was paid $24.5 million in signed, with no severance, as chairman and million at July 2018 share prices, the com-
2018, compared with $31.1 million the year CEO of Wynn Resorts in February 2018 and Rick Smith, Axon Enterprise Inc. pany said in its proxy. The award represents
earlier. Ms. Nooyi was paid about $1.7 million the following month sold his 12% stake in The maker of Taser stun guns gave its co- five years of equity compensation and no
in salary in each of the past three years, the company for $2.1 billion. Under his founder and CEO a stock-option award val- additional awards are expected until at least
while the rest of her compensation was per- original employment agreement, Mr. Wynn ued at $246 million last year. The 10-year 2022, Oracle says. An Oracle spokeswoman

PHOTO ILLUSTRATION BY RYAN OLBRYSH; BLOOMBERG (2); NASDAQ OMX; GETTY IMAGES (4)
formance-based awards. PepsicCo didn’t could have been eligible for a severance
PHOTO ILLUSTRATION BY RYAN OLBRYSH; BLOOMBERG (3); GC IMAGES; GETTY IMAGES (2)

award, Axon said at the time, was modeled declined to comment.


comment beyond its proxy statement. payout of more than $300 million, had he after Mr. Musk’s package at Tesla: The op-
been terminated without cause, according tions vest only if Axon’s market value Henry Kravis, George Roberts,
Lloyd Blankfein, to the company’s April 2018 proxy state- climbs and it achieves other performance KKR & Co.
Goldman Sachs Group Inc. ment. In 2018 he received about $786,000 targets. The $246 million figure is nearly The private-equity firm paid its founding
Mr. Blankfein, who retired in October after in salary and other compensation, accord- double the highest pay figure among full- co-CEOs $56.5 million apiece in 2018—a
12 years running the investment bank, ing to Wynn’s proxy. Wynn Resorts and a year S&P 500 CEOs. It “assumes that Rick sharp drop from just over $113 million
earned $20.5 million in 2018. Goldman lawyer for Mr. Wynn declined to comment. achieves operational and market capitaliza- apiece a year earlier. Nearly all of that con-
Sachs could withhold millions of dollars in tion milestones, but to date, no milestones sisted of cash payments of “carried inter-
pay from Mr. Blankfein because of the Margaret Whitman, have been achieved and therefore, Rick has est”—a share of the company’s investment
scandal around a Malaysian investment Hewlett Packard Enterprise Co. not received any compensation,” an Axon profits. In addition to their $300,000 sala-
fund. His 2018 compensation isn’t affected Ms. Whitman stepped down in February 2018 spokeswoman said. She added that he won’t ries, they received perks including $25,000
by the potential clawback, which stems and moved to Los Angeles for a job running receive additional equity for 10 years, unless apiece in tax-preparation fees, $168,000 for
from a deferred cash grant he received in mobile-video startup Quibi. From 2011 to he meets all the targets in this award first. Mr. Kravis’s personal use of a company car
2011 that was to be paid out this past Jan- 2015, Ms. Whitman was CEO of Hewlett-Pack- Axon isn’t in the S&P 500. and driver, and nearly $216,000 for Mr. Rob-
uary. Goldman is temporarily withholding ard Co., overseeing the separation of the com- erts’s use of a car and driver. The company
that award, which was originally granted pany into Hewlett Packard Enterprise and HP Nikesh Arora, Palo Alto Networks Inc. also reported a combined $850,000 “related
at $7 million. Goldman declined to com- Inc. Hewlett Packard Enterprise said in its lat- The former Google and SoftBank executive re- to certain personnel who administer per-
ment on behalf of Mr. Blankfein. est proxy that she earned about $750,000 in ceived a $125 million pay package last year af- sonal matters” for the co-CEOs, on the
2018. Hewlett Packard Enterprise and Ms. ter he joined the cybersecurity firm midyear. grounds that the company doesn’t track
John Flannery, General Electric Co. Whitman didn’t comment beyond the com- Nearly all of Mr. Arora’s compensation was in how much of these employees’ time is spent
Mr. Flannery was fired in October after 14 pany’s proxy filing. restricted stock and stock options that vest on such matters.
months as CEO, but he will still be paid —Patrick Thomas over as many as seven years. The total would —Theo Francis
P2JW138000-4-B00600-1--------XA https://avxhm.se/blogs/hill0

B6 | Saturday/Sunday, May 18 - 19, 2019 * * * * THE WALL STREET JOURNAL. THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | B7

EXCHANGE EXCHANGE
Roughly three
months ago, Doug
Parker, the chief exec-
Raises for $12.6 million for those CEOs.
One-year performance can be skewed by bad
luck and long-term plans that take time to bear
A recent study by researchers at Cornell
University and the Massachusetts Institute of
Technology suggests part of the problem may
utive of American Air-
lines, wrote his com-
pany a personal check THE CAPTAIN CLASS | SAM WALKER The Best—and fruit. Over longer time periods, pay and perfor-
mance correlate better—but still far from ro-
bustly, analysts and many consultants say. Com-
lie in the operating and stock-market goals
that corporate boards set to measure company
performance, and thereby determine executive
for $10,000.
Also for the Rest paring CEO pay growth against shareholder pay. Often they use measures that don’t meet

The Airline
For a 57-year-old airline industry returns over five years shows pay growing faster generally accepted accounting principles, in-
titan who earned almost $12 million at about 28% of S&P 500 companies, sometimes stead substituting metrics that exclude some
on paper last year, the dollar figure sharply so, according to data from proxy advi- costs or financial benefits that the company
wasn’t too significant. The remark- Continued from page B1 sory firm Institutional Shareholder Services. deems outside management’s control or not
able thing about this payment is were in the bottom half of the group. Among “There are lots of individual cases where reflective of core performance.

CEO Who
why he made it. them: dialysis chain DaVita Inc., which doubled things aren’t working great yet,” said John Roe, Companies that make big adjustments to
Four years ago, during a boom in Kent Thiry’s pay to $32 million and recorded a head of ISS Analytics. measures of profit tend to pay their CEOs
executive compensation, Mr. Parker negative 29% return, and Gap Inc., which paid David Seaton led engineering and construc- more—by an average of 16%—than other compa-
stunned many CEOs (not to mention Art Peck $20.8 million, the most of his four-year tion company Fluor Corp. starting in 2011. His nies, the researchers found. The difference aver-
their accountants) by asking Ameri- tenure, when it logged a negative 21% return. reported pay rose 24% last year, even as Fluor aged $1.9 million a year above and beyond what

Canceled His
can’s board to start compensating Such mismatches highlight lingering ques- posted a negative 37% return in 2018. Annual re- the CEOs would otherwise be expected to earn.
him exclusively in stock. Since then, tions about how successfully corporate boards turns trailed those of most other S&P 500 capi- Mr. Kay, the pay consultant, said directors
he’s been leading the world’s largest have tied executive pay to company perfor- tal-goods companies in the Journal analysis for are careful in picking performance targets. “I
airline without a salary, a bonus, or mance. Urged on by investors and governance each of the past five years. see that the boards definitely agonize over
even a matching 401(k) contribution. advocates, companies have spent years crafting Mr. Seaton’s total pay rose in three of those whether these adjustments are appropriate to

Salary
This unusual plan, unique mechanisms to do this. In many cases, new re- five years, and overall he was paid $56 million, make,” he said. “In the final analysis, we do
among airline CEOs, effectively search suggests, the fault lies with the execution much of it in stock, during that time. In 2018, think they add the right things back and take
erases Mr. Parker from the com- and complexity. restricted stock made up $9.6 million of the the right things out.”
pany’s payroll. Since American “The more complicated the scheme is, it’s less total, compared with a $5.6 million award in Celgene Corp. relied on non-GAAP metrics
can’t deduct the cost of his health transparent to consumers and society,” said Alex 2017. Fluor said much of that increase last year to determine pay for CEO Mark Alles.
insurance, he’s on the hook for it. Edmans, a professor of finance at London Busi- stemmed from a change in the way the com- The drugmaker’s shares fell nearly 40% over the
Hence, the $10,000 check. ness School who has studied executive-compen- pany structured its equity awards beginning in course of 2018, battered particularly after Cel-
Many CEOs can rightfully say sation trends on both sides of the Atlantic. 2016, leaving the reported value of stock gene hit setbacks in the development of several
that a majority of their pay is tied With his pay entirely in stock, DaVita declined to comment. Its proxy state- grants that year and in 2017 smaller than they potential drugs. Still, Mr. Alles’s compensation
to the company’s performance, al-
though that’s hardly a perfect sci-
Doug Parker wanted to change ment notes that $14 million of the increase in
Mr. Thiry’s reported pay came from a new re-
otherwise would have been.
Yet cost overruns on some projects and
rose 24% to $16.2 million.
Despite its drug-development stumbles, the
ence. Only a few, however, have American Airlines’ culture tirement benefit that lets executives keep re- other issues forced the company to take more company said, just under half of Mr. Alles’s an-
dared to join Mr. Parker in the 100% stricted stock they otherwise would forfeit on than $1 billion in write-offs over the three nual bonus was based on meeting selected ob-
stock club. One of the reasons Mr. retirement if they meet certain age and tenure years, hitting its shares and leading to several jectives in expanding Celgene’s product pipeline.
Parker favors this approach is the thresholds. Absent that change, Mr. Thiry’s pay earnings misses in re- While Celgene posted GAAP earnings of
same one that makes it frightening: would have risen 13% to $17.3 million. Mr. Thiry cent quarters. On May 1, $5.65 per share for 2018, the adjusted earnings
It subjects him to the same risks as will step down as CEO June 1. Mr. Seaton stepped the company reported to investors came in at
American’s shareholders.
Given the level at which top exec-
Gap said that since Mr. Peck’s appointment to
CEO in February 2015, stock-price changes and
$12.4 down just before the
company reported a
$8.87, once the company stripped out the cost
of acquiring research assets and other items.
utives are paid, he says, it’s only fit- other factors mean he ultimately received cash million first-quarter loss that For the purposes of its management incentive

COOPER NEILL FOR THE WALL STREET JOURNAL


ting that their interests should be and equity averaging about $4.75 million a sent the stock tumbling plan, Celgene tweaked its EPS figure further to
aligned with investors. “I don’t year—considerably less than the $12.9 million
Median 28% in a day. adjust for an acquisition and share buybacks.
know why all CEOs don’t do the average reported in securities filings. In 2018, compensation Fluor’s proxy notes That revised figure: $9.06, surpassing the
same. It seems really logical.” Mr. Peck also gave up his bonus “in light of busi- for the heads that the pay Mr. Seaton $8.70 to $8.90 target range it had set for its
Mr. Parker, who took over at ness performance.” of S&P 500 could actually realize top executives to hit. Pay consultants generally
American in 2013 after its merger For its annual ranking, the Journal examined companies from the last three years say boards take into account adjustments from
with US Airways, said he also hoped 442 companies with fiscal years ending after last year, was about 60% of his tar- standard accounting measures when setting
this symbolic gesture would signal June 30, 2018, and disclosing pay data through another get compensation, thanks targets for executive compensation.
to American’s employees that he May 1. Companies that changed CEOs during the to stock-price declines Ultimately, Mr. Alles could get an even bigger
was a different breed of airline ex- year were omitted, leaving 400 CEOs. The analy-
post-recession and other factors. “What payout: Celgene crafted new change-in-control
ecutive. “Nothing about this is some sis includes salary, bonus and stock awards as record. you’re granted is not provisions for him and other senior executives in
earnings-maximization policy of valued in securities filings. what you receive,” said December, as the company negotiated a $74 bil-
mine,” he says. American Airlines’ Doug Parker is the rare CEO who gets paid entirely in stock, a decision that prompted friends to ask what he was thinking. The highest-paid executive was Discovery Dawn Stout, Fluor’s vice lion sale of the company to Bristol-Myers Squibb
The shares Mr. Parker receives Inc.’s David Zaslav, whose pay tripled to $129 president of law. “We feel Co. He would receive an exit package of $28 mil-
are not options: They’re granted at million thanks to an equity grant tied to a new pretty strongly we have a performance-based lion if he departs after the acquisition closes.
the current market price and may says. Choosing stock over ready executives like him care only about peers at United and Delta were ex- mally with employees aboard planes. two-thirds said they were proud to five-year contract. Discovery posted a 10.5% plan, and 90% of his compensation is variable, A Celgene spokesman noted that the com-
decline in value before they vest. cash and short-term incentives lining their pockets. He was right pected to make. “I’m doing this be- When the pricey seats are full, he work at American. shareholder return for the year. tracking performance.” pany’s 2018 results exceeded its forecasts and
In addition, the value of the shares would signal that he was bullish about that. cause it feels better,” he says. flies in coach. Mr. Parker recently In the meantime, there’s another The television-channel owner said Mr. Indeed, companies and pay consultants of- that by GAAP standards, its earnings rose more
he gets and how soon they vest about the long term. His message at “He can put whatever kind of Boy In another unorthodox move, he posed with a mortified flight atten- group Mr. Parker hopes to lead—fel- Zaslav’s pay increase is largely the result of ten complain that the figures reported in secu- steeply than on an adjusted basis, climbing 51%
depends in large part on how well the time: “We’re good. This busi- Scout explanation he wants on the asked the board in 2016 to tear up dant who accidentally spilled a tray low chief executives. For years, he stock-option awards tied to his new contract rities filings can be misleading. Equity is val- per share from 2017. The spokesman also said
American performs over time, rel- ness has been transformed. It’s time way he gets paid,” says John Samu- his employment contract, making of drinks on him. “I want people to says, CEOs have fought to be paid through 2023, with exercise prices that escalate ued at the time options and restricted stock Mr. Alles took on the duties of board chairman
ative to rival airlines. to worry about building.” elsen, international president of the him the rare CEO who serves as an know they work for a company that the same as their peers, only to see each year. Future pay will approximate earlier are awarded, even though CEOs might not get last year, in addition to serving as CEO. The com-
Put simply, Mr. Parker isn’t For the record, nobody—includ- Transport Workers Union, which at-will employee without any spe- cares about them,” he says. their rivals receive counterhikes the years, it said. Mr. Zaslav has averaged $41 mil- full title to it for years. pany’s securities filing indicates his salary rose
likely to outearn his industry peers ing Mr. Parker—interpreted this has been in protracted negotiations cial protections. His effort to change the culture next year. “That doesn’t seem right, lion in pay in most recent years. Measuring the pay CEOs ultimately receive— about $265,000 a year and his bonus target rose
unless American has a series of plan as a vow of poverty. If Ameri- with American. “It doesn’t matter to So far, Mr. Parker’s experiment has seen its own share of ups and frankly,” he says. By opting out of There are almost as many ways of measuring including stock-price appreciation or declines— about $670,000 at the time of the promotion.
bang-up years. can’s share price booms, he stands the average worker—all we know is hasn’t broken any compensation re- downs. The airline finished next- this perpetual loop, “I like thinking corporate performance as there are ways to shows much better correlation with perfor- The growing complexity of CEO compensa-
When this arrangement began, to earn more than he’d get from a that he’s rich and we’re not.” cords. He’s earned about $11.7 mil- to-last in 2018 in The Wall Street that I’m not facilitating that.” compensate a CEO. None of them are perfect, mance, said Ira Kay, managing partner at tion packages and the performance mismatches
the airline industry was still emerg- traditional pay package. Besides, he While it may not be especially lion a year on average. Median pay Journal’s annual study of on-time Even if he never outearns his air- experts caution. One widely used measure—total consulting firm Pay Governance. “We measure have spurred some investors to call for revamp-
ing from a brutal stretch of bank- admits, the reason he’s in a position brave, there’s a fair argument to be for the CEOs of the biggest U.S. performance. And despite posting line counterparts, Mr. Parker’s ap- shareholder return, which tracks stock perfor- whether there’s after-the-fact alignment.” ing executive pay in a radically simple way: Pay
ruptcies, mergers and historic labor to ditch his salary is that he’s al- made that Mr. Parker is doing companies in 2018 was $12.4 mil- an above-average rating in J.D. proach to compensation does afford mance and assumes dividends are reinvested— In 2018, half of compensation awarded to CEOs in cash and give them shares they must
strife. Few investors saw major car- ready benefited from years of gen- something commendable. lion. Although American has turned Power’s 2015 study of airline cus- him one unique luxury. He gets to illustrates the challenge. S&P 500 CEOs consisted of restricted stock. In- hold for, say, at least five years.
riers as healthy, viable businesses erous compensation. Over the last In 2015, when he retooled his a profit in five straight years, its tomer satisfaction, American has imagine how they must feel defend- Only two of the 25 highest-paid CEOs in the cluding stock options, two-thirds of CEO pay last The idea of compensating CEOs primarily by
worth accumulating stock in. When three years, the airline stock-appre- own compensation, many of Ameri- stock has skidded to about $32 from fallen below the average in each of ing their own pay. “They have to Journal analysis led companies in the top 25 for year was equity. Increasingly, those awards con- making them long-term shareholders in their
Mr. Parker first broached his un- ciation rights he’d earned before can’s workers were underpaid by in- last year’s high of $59. The un- the past three years. talk about how their compensation 2018 shareholder return: Netflix Inc.’s Reed Has- sist of performance shares and options, meaning companies has been recently endorsed by Nor-
orthodox plan, a few friends on the 2015 have helped him pocket more dustry standards. Mr. Parker set out vested shares Mr. Parker earned in Mr. Parker says he has seen some is higher than mine,” he says. tings and Adobe Inc.’s Shantanu Narayen. the executives get more of the securities when way’s sovereign-wealth fund and recommended
board pulled him aside to ask him than $50 million. “I’ve been ex- to rectify that by offering workers 2018 have lost nearly half their progress. Workers rarely complain More broadly, sorting CEOs into groups by the company meets key targets—and fewer by a House of Commons committee in the U.K.
what he was thinking. tremely fortunate,” he says. mid-contract pay raises. He also de- value. “I’m not complaining,” he to him about the indifference of Mr. Walker, a former reporter and company performance shows the 20% with the when they fall short. examining corporate governance. Removing the
To Mr. Parker, this lingering prej- Mr. Parker also knew that no cided that until his employees says. “I feel the stock will rebound.” management, as they used to. They editor at The Wall Street Journal, highest shareholder return claimed the biggest So why, with formulas yoking CEOs’ pay specific, but often arbitrary, performance targets
udice against airlines was Ameri- compensation formula could elimi- achieved pay parity, he would ask In his quest to improve Ameri- tend to lobby him for better tools to is the author of “The Captain paychecks, with a median of about $14 million. to the success of their companies and to would free CEOs from trying to hit them and in-
can’s biggest problem. “It was time nate the perception among many the board to set his annual income can’s culture, Mr. Parker hosts do their jobs. The company’s first Class: A New Theory of But the 10% of companies with the worst re- share performance, are pay and performance stead let them focus on creating long-term value,
to get out of survival mentality,” he longtime airline employees that targets about 20% below what his monthly town halls and meets infor- employee survey in 2017 found that Leadership” (Random House). turns also gave big packages, with a median of so misaligned? said Mr. Edmans of London Business School.

Just Leaving: Parting Pay The Outliers With Top Salaries


Last year brought turnover atop some of the largest U.S. companies, including several high-pro- Some of the biggest CEO paydays last year don’t appear in the WSJ’s rankings (pages B8-9),
file leaders like Les Moonves and Meg Whitman. Some left under a cloud of scandal or were either because the companies aren’t part of the S&P 500 index or because of the timing of
fired while others exited in a more orderly fashion. Here’s how six of the S&P 500’s departing their fiscal year. Here’s a look at five firms whose leaders would have ranked near the top.
CEOs were compensated on the way out.

Elon Musk, Tesla Inc. be enough to rank Mr. Arora second if Palo
Leslie Moonves, CBS Corp. about $4.3 million in severance over 12 The electric-car company awarded options Alto were a member the S&P 500. A Palo Alto
Mr. Moonves was forced to resign last Sep- months. GE also agreed to let Mr. Flannery valued at $2.28 billion to its founder and spokeswoman said some of Mr. Arora’s stock
tember amid accusations of sexual harass- keep equity awards that could add up to CEO last year—an amount roughly equivalent awards are tied to his own investments in the
ment, which he has denied. The longtime several million dollars more depending on to the combined 2018 compensation of the company’s stock.
CBS chief forfeited nearly $34.5 million of GE’s performance. When Mr. Flannery turns 92 top-paid CEOs in the Journal’s rankings.
his annual compensation as part of a sepa- 60 in about three years, he will receive a (Tesla isn’t in the S&P 500 index.) The op- Larry Ellison, Safra Catz,
ration agreement, but he still received pension valued at nearly $23 million at the tions grant, approved by shareholders last Mark Hurd, Oracle Corp.
about $12.6 million for the year. CBS’s end of 2018. According to the company’s year, vests in 12 tranches if Tesla’s stock The business-software maker has three
board denied Mr. Moonves a severance proxy, he was paid a total of $16.6 million surges and the company hits performance leaders who each received $103.7 million
package of $120 million following a com- in 2018. “John Flannery dedicated over 31 goals. “This award was designed to be en- option awards during its last full fiscal year,
pany probe into his conduct that concluded years of service to GE, and the arrange- tirely an incentive for future performance but they don’t appear in the WSJ ranking
that he breached his employment contract, ments reached with him…reflect that ser- that would take many years, if at all, to be because Oracle ends its year after the Jour-
a decision he challenged; it is now in arbi- vice,” a GE spokeswoman said. achieved,” the proxy says, and directors se- nal’s analysis is published. Chairman Larry
tration. Representatives for CBS and Mr. lected ambitious performance milestones. A Ellison and co-CEOs Safra Catz and Mark
Moonves declined to comment. Stephen Wynn, Wynn Resorts Ltd. Tesla spokesman said none of the 2018 op- Hurd each made just over $108 million in
The billionaire casino mogul left after sex- tions have vested and Mr. Musk receives no the year ended May 2018. The options are
Indra Nooyi, PepsiCo Inc. ual-misconduct allegations were leveled salary or bonus. “Elon’s entire compensation tied to share price, market capitalization
Ms. Nooyi retired as CEO in October after against him. He said the idea he ever as- is directly tied to the long-term success of and performance goals; if all goals are met,
leading the beverage and food company for a saulted a woman is preposterous. He re- Tesla and its shareholders,” he said. the awards could be worth as much as $175
dozen years. She was paid $24.5 million in signed, with no severance, as chairman and million at July 2018 share prices, the com-
2018, compared with $31.1 million the year CEO of Wynn Resorts in February 2018 and Rick Smith, Axon Enterprise Inc. pany said in its proxy. The award represents
earlier. Ms. Nooyi was paid about $1.7 million the following month sold his 12% stake in The maker of Taser stun guns gave its co- five years of equity compensation and no
in salary in each of the past three years, the company for $2.1 billion. Under his founder and CEO a stock-option award val- additional awards are expected until at least
while the rest of her compensation was per- original employment agreement, Mr. Wynn ued at $246 million last year. The 10-year 2022, Oracle says. An Oracle spokeswoman

PHOTO ILLUSTRATION BY RYAN OLBRYSH; BLOOMBERG (2); NASDAQ OMX; GETTY IMAGES (4)
formance-based awards. PepsicCo didn’t could have been eligible for a severance
PHOTO ILLUSTRATION BY RYAN OLBRYSH; BLOOMBERG (3); GC IMAGES; GETTY IMAGES (2)

award, Axon said at the time, was modeled declined to comment.


comment beyond its proxy statement. payout of more than $300 million, had he after Mr. Musk’s package at Tesla: The op-
been terminated without cause, according tions vest only if Axon’s market value Henry Kravis, George Roberts,
Lloyd Blankfein, to the company’s April 2018 proxy state- climbs and it achieves other performance KKR & Co.
Goldman Sachs Group Inc. ment. In 2018 he received about $786,000 targets. The $246 million figure is nearly The private-equity firm paid its founding
Mr. Blankfein, who retired in October after in salary and other compensation, accord- double the highest pay figure among full- co-CEOs $56.5 million apiece in 2018—a
12 years running the investment bank, ing to Wynn’s proxy. Wynn Resorts and a year S&P 500 CEOs. It “assumes that Rick sharp drop from just over $113 million
earned $20.5 million in 2018. Goldman lawyer for Mr. Wynn declined to comment. achieves operational and market capitaliza- apiece a year earlier. Nearly all of that con-
Sachs could withhold millions of dollars in tion milestones, but to date, no milestones sisted of cash payments of “carried inter-
pay from Mr. Blankfein because of the Margaret Whitman, have been achieved and therefore, Rick has est”—a share of the company’s investment
scandal around a Malaysian investment Hewlett Packard Enterprise Co. not received any compensation,” an Axon profits. In addition to their $300,000 sala-
fund. His 2018 compensation isn’t affected Ms. Whitman stepped down in February 2018 spokeswoman said. She added that he won’t ries, they received perks including $25,000
by the potential clawback, which stems and moved to Los Angeles for a job running receive additional equity for 10 years, unless apiece in tax-preparation fees, $168,000 for
from a deferred cash grant he received in mobile-video startup Quibi. From 2011 to he meets all the targets in this award first. Mr. Kravis’s personal use of a company car
2011 that was to be paid out this past Jan- 2015, Ms. Whitman was CEO of Hewlett-Pack- Axon isn’t in the S&P 500. and driver, and nearly $216,000 for Mr. Rob-
uary. Goldman is temporarily withholding ard Co., overseeing the separation of the com- erts’s use of a car and driver. The company
that award, which was originally granted pany into Hewlett Packard Enterprise and HP Nikesh Arora, Palo Alto Networks Inc. also reported a combined $850,000 “related
at $7 million. Goldman declined to com- Inc. Hewlett Packard Enterprise said in its lat- The former Google and SoftBank executive re- to certain personnel who administer per-
ment on behalf of Mr. Blankfein. est proxy that she earned about $750,000 in ceived a $125 million pay package last year af- sonal matters” for the co-CEOs, on the
2018. Hewlett Packard Enterprise and Ms. ter he joined the cybersecurity firm midyear. grounds that the company doesn’t track
John Flannery, General Electric Co. Whitman didn’t comment beyond the com- Nearly all of Mr. Arora’s compensation was in how much of these employees’ time is spent
Mr. Flannery was fired in October after 14 pany’s proxy filing. restricted stock and stock options that vest on such matters.
months as CEO, but he will still be paid —Patrick Thomas over as many as seven years. The total would —Theo Francis
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https://avxhm.se/blogs/hill0

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EXCHANGE

The Fixers
Behind the
Factories

STEVE ZIEGELMEYER; SULLIVAN: ALEX GOODLETT FOR THE WALL STREET JOURNAL
Continued from page B1
or creating jobs would have taken
those actions even without a sweet-
ener, according to a pair of 2018
studies by the W.E. Upjohn Institute
for Employment Research.
Despite that, Upjohn research
shows that the state and local costs
of incentives have at least tripled
since 1990, reaching $45 billion an-
nually as of 2015. Average incentive
awards have also tripled in size as a
percentage of business taxes owed by
the companies receiving the perks.
What the incentives can alter, in
some cases, is the location of the
project. That’s fueling competition
that has helped turn site selection
into a booming cottage industry.
“Kentucky Derby. Mississippi
governor’s quail hunt, Georgia quail
hunt…I’ve been to all of them,” said
Mike Mullis, a Tennessee-based site
In Cincinnati, site selectors were
greeted like NFL stars. Amazon’s How to Max Out
selector. He works alongside his fi- Holly Sullivan, right, says skilled There’s a booming industry built
ancée, Denise Mott, at a site-selec- workers were Amazon’s top factor around helping companies maximize
tion firm he founded in the 1970s, when picking its new location. tax breaks and other incentives
J.M. Mullis Inc. when they relocate or expand their
Mr. Mullis has developed a reputa- operations. Here are some tips from
tion for being a tough negotiator on other production inputs. site-selection consultants at Ernst &
incentives. When he represented Jeff When the U.S. arm of Czech fire- Young on how companies can max
Bezos’s rocket company, Blue Origin, arm maker Česká Zbrojovka began out, excerpted from an article they
on a site-selection search in 2016, a looking for its first U.S. factory site wrote on the topic.
Washington state official told the last year, the company had already
Puget Sound Business Journal that
Mr. Mullis “constantly hammered”
the state to see what incentives they
committed to the expansion. Even if
the subsidiary, called CZ-USA, re-
ceived no incentives, it still would
1 ‘Leave no stone unturned’
Look for tax and nontax benefits
at the federal, state and local lev-
could offer. Mr. Mullis told the paper have proceeded with the project, said els, E&Y says. Examine both tax
that the characterization was “pretty CZ-USA’s chairman, Bogdan Heczko. breaks that are already available
consistent with how we operated.” Still, he decided it would make under current law as well as other
Blue Origin didn’t respond to a re- sense to “see how much we can get.” incentives that officials might grant
quest to comment. Mr. Heczko’s company was origi- at their discretion—so-called discre-
Mr. Mullis was also an early mem- nally deciding between two states— tionary incentives.
ber of an exclusive club of consultants Kansas and Missouri—which have a
known as the Site Selectors Guild.
The guild hosts an annual conference
where government officials and other
long history of competing on incen-
tives. Then CZ-USA hired Mr. Mullis
to help with the search. Mr. Mullis
Site selectors sometimes explicitly
ask for legislative changes to accom-
modate their clients. And when the
Michigan raised its offer twice, ac-
cording to documents the state pro-
vided under a public-records request.
2 ‘Use a formal request for
proposal’
Send out a request for proposal
attendees pay $2,000 a ticket for a advised CZ-USA to broaden the deal is big enough, officials move The state’s package of discretionary that outlines your project and “initi-
chance to hobnob with them. search to more states, according to quickly to act on those demands. incentives rose from about $1.7 bil- ate a dialogue” with governments
Guild members also get treated to Mr. Heczko. Mr. Mullis said he helped In the spring of 2017, Ernst & lion in May 2017 to $4.4 billion to about what they can offer, E&Y
extravagant parties and perks by lo- the firm scout locations in a dozen Young sent Wisconsin and other about $4.5 billion by late June. In- says. Doing so “opens the discus-
cal communities that host the states, including Arkansas. states a request for proposals for an cluding other available exemptions sion to possibilities such as special
events. Last year’s festivities, held in In early December, Mr. Mullis and investment opportunity it identified already on the books, Michigan’s legislation and creative alternatives
Cincinnati, featured a private recep- a handful of other site selectors went only as “Project Flying Eagle.” The package totalled about $7 billion, al- for ‘off-menu’ benefits” such as dis-
tion at Paul Brown Stadium, where hunting at a private retreat with Ar- document included an explicit re- though many of the promised tax counted rent or free land.
the Cincinnati Bengals play. Site se- kansas Gov. Asa Hutchinson. Mr. quest that governments “provide off- breaks would have paid out later
lectors were greeted on the field like
NFL stars: Plumes of fire shot in the
air and a squad of cheerleaders
Mullis said that at the end of the day,
Mr. Hutchinson approached him to
ask for his advice on how to attract
sets to all taxes levied at the state
and local level” and “propose poten-
tial administrative and/or legislative
than Wisconsin’s package.
Correspondence between Wiscon-
sin and E&Y shows that the state also
3 ‘Compile your wish list’
Be creative in what you ask of-
ficials for and don’t limit yourself
waved pompoms as the selectors ran the gun manufacturer to his state. changes” if they are “unable to close sweetened its offer during the pro- to the laws that are already on the
onto the field dressed in personal- Mr. Hutchinson confirmed in an the cost differential” with the com- cess. A spokesman for the state’s eco- books. “Perhaps existing legislation
ized Bengals jerseys. interview that Mr. Mullis gave him pany’s existing manufacturing facili- nomic development arm said the could be changed” to benefit your
Since its founding in 2010, the advice on how to “fine-tune” Arkan- ties in Asia. boost was justified because the scope project, E&Y says. Or you could ask
Guild has grown to include 50 con- sas’ pitch to his client. He also said At least three states—Wisconsin, of the project had increased. to amend tax provisions to give
sultants and now attracts 355 paid Mr. Mullis “is a very good shot.” Ohio and Michigan—made it to the The administration of Wisconsin’s your project special treatment.
attendees at the marquee event, Mr. Hutchinson—who has okayed final round of bidding for what then-Gov. Scott Walker relied on an
which usually sells out within an
hour, according to the guild’s execu-
tive director, Rick Weddle. Mr. Wed-
435 incentive deals since becoming
governor in 2015—ultimately allo-
cated $4 million from a fund he con-
turned out to be the Foxconn plant,
according to interviews and docu-
ments disclosed under public-re-
economic-impact study provided by
E&Y to craft a package of tax credits,
infrastructure improvements and
4 ‘Communicate your position
clearly and succinctly’
Convince government officials that
dle says the industry’s mantra is that trols, the “Quick Action Closing cords requests. other incentives for Foxconn, emails your project is worth it by putting
“incentives can never make a bad lo- Fund,” to pay for improvements at After back-to-back pitches from show. The state’s share was about $3 together an economic impact study
cation good. They can make a good the site in Little Rock selected by CZ- the states’ governors, E&Y worked billion and wouldn’t result in a posi- that quantifies its benefits, such as
location better.” He said site selectors USA. That was among more than $20 with state officials to help the com- tive return to taxpayers until 2042, job creation. It’s not just a good
help companies weigh a variety of million of loans, rebates, tax breaks pany maximize incentives, accord- according to a state review of the in- financial tool, but also a “public
factors, such as the availability of and other incentives Mr. Mullis ing to a person involved in the con- centives published by Wisconsin’s relations tool” which public officials
qualified workers, access to infra- helped negotiate. The company fidential negotiations. Legislative Fiscal Bureau. But if ev- can use “in internal and external
structure, proximity to customers pledged to invest $90 million and “All they did was ask for more erything would pan out as expected, discussions to build support for
and suppliers, the cost of utilities and create 565 jobs. money,” the person said. Wisconsin would gain 13,000 jobs your project,” the firm says. (E&Y
and be home to a $10 billion liquid- puts together such studies for its
crystal-display manufacturing plant, site selection clients.)
Bigger Bets the first in the U.S.
Wisconsin promised close to $3 billion of tax credits to incentivize Foxconn’s
investment in a new factory. An analysis by a state agency found Wisconsin
State and local governments have
been boosting the size of the tax
E&Y’s study was cited by Wiscon-
sin officials as they sold Foxconn’s
incentive package to the state legis-
5 ‘Take precautions’
Be careful to provide an
accurate picture of the proposed
taxpayers won’t get a positive return until 2042. breaks they give to businesses
lature. E&Y executives said in a project. E&Y warns that incorrect
Cumulative benefit Incentives as a share of taxes owed 2018 article on maximizing incen- headcounts and investment
Net of Wisconsin’s tives that such studies can be useful projections can undo the benefits
$400 million 30%
payments under as a “public-relations tool” to “build of your public relations pitch.
Foxconn's incentive
support” for a project.
contract and increased
state tax collections 0
Timothy Bartik, a senior econo- Source: ‘Maximizing the Benefits
over time. mist at Upjohn, reviewed E&Y’s eco- of Incentives’ by Ernst & Young
20 nomic-impact study. Mr. Bartik said
Wisconsin’s fiscal year ends it wrongly assumed that the added
June 30. –400
jobs wouldn’t result in any addi-
tional costs to governments, such as
increased costs for schools or added home for its second headquarters,
–800 10 The average magnitude of
state and local incentives as spending on roads. the availability of a skilled workforce
a percent of state and local “I think a true fiscal analysis was the top concern. “This was really
business taxes owed by the would show that this project will about talent,” Holly Sullivan, Ama-
–1,200 companies receiving them. NEVER break even fiscally,” Mr. Bar- zon’s head of world-wide economic
FY2018’20 ’25 ’30 ’35 ’40 ’45 tik said in an email. development, said at the Site Selec-
0
Sources: Wisconsin Department of Administration via the state’s Legislative Fiscal Bureau (Wisconsin); Panel Since Wisconsin signed the deal, tors Guild’s conference in March.
Database on Incentives and Taxes via W.E. Upjohn Institute for Employment Research (incentives) 1990 ’95 2000 ’05 ’10 ’15 Foxconn has scaled back its ambi- The event was held at the Grand
tions in the state. The company America, a luxury hotel in Salt Lake
said in a January letter to the Wis- City featuring a landscaped garden
consin Economic Development and a daily harp concert. Perks in-
Corp. that it has “adjusted our re- cluded a cowboy-themed dinner
cruitment and hiring timeline” and with Utah Gov. Gary Herbert at the
had created fewer than 200 of Grand Hall of the Union Pacific De-
13,000 jobs it had promised. It also pot and a ski trip with two-time
said it would forgo the $9.5 million Olympic medalist Shannon Bahrke.
of job-creation credits the com- It was hard to find any part of the
pany was eligible for in 2018 under event that didn’t have a state logo
its contract with Wisconsin. The on it. Louisiana paid for the Wi-Fi;
company declined to comment. South Carolina paid for breakfast.
Wisconsin Economic Development Each cost $10,000. A chance to
Corp. Chief Executive Mark Hogan spend an hour at a private cocktail
said that Foxconn’s incentives are party with the guild’s members also
performance-based and meant to cost a good amount. “I paid $20,000
provide the company flexibility to to go to this thing,” said one state
adapt to changing circumstances. official as he waited to go in to the
“We came up with what we felt was “silver sponsors” reception.
the best deal for the state of Wiscon- Like the competitive bidding pro-
sin and the taxpayers,” he said. cess used by site selectors, the se-
In a meeting with the Journal, lection of the conference location it-
E&Y’s site-selection leader, Paul Nau- self was conducted via a request for
moff, declined to comment on his proposals. A winning bid can cost
company’s work for Foxconn, citing upward of $100,000, according to
client confidentiality. A spokes- two economic-development officials
MITCH CHANDLER

woman who attended the meeting who hosted past conferences.


advised him not to answer when a Val Hale, executive director of
reporter asked if site-selection work the Utah Governor’s Office of Eco-
bears similarities to lobbying. nomic Development, said it is
Incentives aren’t always the key money well spent. When it comes
Site selector Mike Mullis speaks with Arkansas Gov. Asa Hutchinson, second from the left, at the factor in companies’ relocation deci- to economic-development events,
announcement of a new firearms factory Mr. Mullis helped bring to the state. sions. When Amazon searched for a he said, “this is the Super Bowl.”
THE WALL STREET JOURNAL. * * * * Saturday/Sunday, May 18 - 19, 2019 | B11

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t 98.68 P/E estimate * 15.75 16.32 t 16.79 P/E estimate * 17.15 17.11 t 81.76 P/E estimate * 20.92 20.25
Stock Currency, Commodity, Exchange-
Dividend yield 2.30 2.18 Dividend yield 1.94 1.91 or 1.04% Dividend yield 1.04 1.00
or 0.38% or 0.58% index vs. U.S. dollar traded in U.S.* traded fund
All-time high:
All-time high Current divisor All-time high Corn 11.90%
8164.00, 05/03/19
26828.39, 10/03/18 0.14744568353097 2945.83, 04/30/19 Wheat 10.98
Lean hogs 10.30
27500 3000 8200 Soybeans 3.11
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26000 2800
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Session high IBEX 35 1.78
25250 2700 7450
DOWN UP S&P GSCI GFI 1.72
DAX 1.49
t

Session open Close


65-day moving average 7200
24500 2600 Euro Stoxx 1.38
Close Open
t

65-day moving average S&P 500 Real Estate 1.36


23750 2500 6950 S&P BSE Sensex 1.25
Session low
Bars measure the point change from session's open S&P 500 Utilities 1.17
23000 2400 6700 Stoxx Europe 600 1.16
Mar. Apr. May Mar. Apr. May Mar. Apr. May FTSE MIB 1.10
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
iSh 20+ Treasury 0.99
S&P 500 Consumer Staples 0.89
S&P/ASX 200 0.86
Major U.S. Stock-Market Indexes Trading Diary WSJ Dollar Index 0.82
Latest 52-Week % chg Volume, Advancers, Decliners S&P/TSX Comp 0.64
High Low Close Net chg % chg High Low % chg YTD 3-yr. ann. NYSE NYSE Amer. Russian ruble 0.62
Dow Jones Total volume* 845,374,776 14,573,882 iSh 7-10 Treasury 0.57
Industrial Average 25948.74 25657.78 25764.00 -98.68 -0.38 26828.39 21792.20 4.2 10.4 13.7 Adv. volume* 208,686,860 4,194,425 iShNatlMuniBd 0.48
Transportation Avg 10619.79 10469.27 10491.85 -113.76 -1.07 11570.84 8637.15 -2.2 14.4 11.3 Decl. volume* 628,805,760 10,149,432 Nymex natural gas 0.46
Issues traded 3,016 279 VangdTotIntlBd 0.41
Utility Average 793.21 782.28 790.23 3.91 0.50 790.23 656.93 18.3 10.8 6.5
Advances 743 105 iShiBoxx$InvGrdCp 0.33
Total Stock Market 29708.10 29393.10 29425.66 -202.57 -0.68 30390.61 24126.04 4.3 14.4 11.8
Declines 2,143 161 VangdTotalBd 0.30
Barron's 400 688.52 678.14 678.77 -9.99 -1.45 786.73 571.68 -8.3 11.3 10.3
Unchanged 130 13 S&P 500 Telecom Svcs 0.26
Nasdaq Stock Market New highs 112 9
iSh TIPS Bond 0.23
-1.04 New lows 80 12
Nasdaq Composite 7918.71 7810.35 7816.28 -81.76 8164.00 6192.92 6.3 17.8 18.3 iSh 1-3 Treasury 0.15
Closing tick 273 20
Nasdaq 100 7605.67 7496.92 7503.68 -76.46 -1.01 7845.73 5899.35 9.3 18.5 20.2 IPC All-Share 0.15
Closing Arms† 1.02 1.81
Swiss franc 0.09
S&P Block trades* 7,002 176
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500 Index 2885.48 2854.23 2859.53 -16.79 -0.58 2945.83 2351.10 5.4 14.1 11.8 Nasdaq NYSE Arca
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MidCap 400 1913.09 1888.29 1889.40 -22.01 -1.15 2050.23 1567.40 -2.8 13.6 9.5 Total volume*2,132,458,605 232,598,379
-0.34 iShiBoxx$HYCp
SmallCap 600 948.69 933.58 934.56 -14.78 -1.56 1098.36 793.86 -6.8 10.6 11.6 Adv. volume* 701,174,707 41,769,473
-0.34 iShJPMUSEmgBd
Decl. volume*1,412,817,431 188,355,884
Other Indexes -0.34 Mexico peso
Issues traded 3,179 1,575
Russell 2000 1557.55 1534.69 1535.76 -21.48 -1.38 1740.75 1266.92 -5.6 13.9 11.8 -0.44 Nikkei 225
Advances 872 281
NYSE Composite 12751.09 12643.07 12657.63 -80.73 -0.63 13236.44 10769.83 -0.5 11.3 7.3 -0.50 S&P 500 Health Care
Declines 2,201 1,262
Unchanged 106 32 -0.51 Indian rupee
Value Line 532.70 526.01 526.29 -6.25 -1.17 593.57 446.06 -7.1 11.4 5.6
New highs 74 35 -0.68 Euro area euro
NYSE Arca Biotech 4550.10 4473.99 4487.95 -43.01 -0.95 5400.34 3890.37 -4.6 6.3 14.6
New lows 104 22 -0.69 Dow Jones Industrial Average
NYSE Arca Pharma 579.72 574.00 576.77 -0.82 -0.14 609.15 520.61 8.4 1.4 4.5
Closing tick 128 257 -0.73 S&P 500 Energy
KBW Bank 97.44 96.00 96.30 -0.59 -0.61 111.44 80.78 -12.1 12.3 13.1
Closing Arms† 0.80 0.97 -0.76 S&P 500
PHLX§ Gold/Silver 67.68 66.68 67.49 0.07 0.10 84.67 61.84 -17.7 -4.5 -9.5 Block trades* 7,816 1,224 -0.79 S&P 500 Materials
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PHLX§ Semiconductor 1436.15 1396.80 1402.01 -28.10 -1.96 1589.02 1069.39 4.2 21.4 29.9 †(TRIN) A comparison of the number of advancing and declining -0.87 Comex gold
16.81 14.86 0.67 issues with the volume of shares rising and falling. An
Cboe Volatility 15.96 4.38 36.07 10.85 18.9 -37.2 0.8 -0.94 Norwegian krone
Arms of less than 1 indicates buying demand; above 1
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Think Mutual Bank 3.09% Australian dollar .6862 1.4573 2.8 Sweden krona .1037 9.6418 8.9
Friday 3.00 5 WSJ Dollar index Switzerland franc .9892 1.0109 3.0
5.50% Rochester, MN 800-288-3425 s China yuan .1445 6.9186 0.6
Prime rate t
t

Hong Kong dollar .1274 7.8497 0.2 Turkey lira .1652 6.0550 14.5
Cambridge Savings Bank 3.24% 2.00 0 Yen Ukraine hryvnia .0379 26.3570 –4.9
s

5.00 t India rupee .01423 70.292 1.0


Cambridge, MA 888-418-5626 Indonesia rupiah .0000692 14450 0.5 UK pound 1.2711 .7867 0.4
One year ago 1.00
t 4.50 First Savings Bank of Hegewisch 3.50% –5 s Japan yen .009085 110.07 0.4
Euro Kazakhstan tenge .002633 379.76 –1.2
Middle East/Africa
New car loan Chicago, IL 773-646-4200
0.00 Macau pataca .1237 8.0845 0.2 Bahrain dinar 2.6522 .3771 0.03
4.00 First Command Bank 3.75% –10
Malaysia ringgit .2395 4.1760 1.1 Egypt pound .0587 17.0465 –4.8
Fort Worth, TX 888-763-7600 1 3 6 1 2 3 5 710 30 2018 2019 New Zealand dollar .6517 1.5344 3.1 Israel shekel .2800 3.5712 –4.5
3.50 month(s) years
J J AS O N D J FMAM PNC Bank 3.89% Pakistan rupee .00675 148.250 6.0 Kuwait dinar 3.2867 .3043 0.4
maturity Philippines peso .0190 52.680 0.3 Oman sul rial 2.5965 .3851 0.03
2018 2019 Washington, DC 888-PNC-BANK
Singapore dollar .7256 1.3782 1.1 Qatar rial .2745 3.643 0.2
Sources: Ryan ALM; Tullett Prebon; Dow Jones Market Data
South Korea won .0008370 1194.73 7.2 Saudi Arabia riyal .2667 3.7502 –0.04
Yield/Rate (%) 52-Week Range (%) 3-yr chg
Sri Lanka rupee .0056880 175.81 –3.9
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Corporate Borrowing Rates and Yields Taiwan dollar .03187 31.378 2.6
South Africa rand .0692 14.4419 0.6

Federal-funds rate target 2.25-2.50 2.25-2.50 1.25 l 2.25 2.00 Yield (%) 52-Week Total Return (%) Thailand baht .03140 31.850 –1.5 Close Net Chg % Chg YTD%Chg
Bond total return index Close Last Week ago High Low 52-wk 3-yr Vietnam dong .00004275 23390 0.8 WSJ Dollar Index 91.26 0.24 0.26 1.77
Prime rate* 5.50 5.50 4.75 l 5.50 2.00
Libor, 3-month 2.52 2.53 2.30 l 2.82 1.90 Treasury, Ryan ALM 1518.800 2.340 2.398 3.154 2.318 7.193 1.155 Sources: Tullett Prebon, Dow Jones Market Data
Money market, annual yield 0.67 0.67 0.41 l 0.67 0.42 10-yr Treasury, Ryan ALM 1796.853 2.396 2.455 3.232 2.374 9.017 0.374
Five-year CD, annual yield 1.97 1.97 1.71 l 2.07 0.71
30-year mortgage, fixed† 4.12 4.15 4.02 l 4.99 0.53
DJ Corporate n.a. n.a. 3.739 n.a. n.a. n.a. n.a. Commodities Friday 52-Week YTD
Aggregate, Barclays Capital 2019.610 2.890 2.940 3.660 2.870 6.719 2.033 Pricing trends on someClose
raw materials, or commodities
Net chg % Chg High Low % Chg % chg
15-year mortgage, fixed† 3.57 3.63 3.52 l 4.34 0.78
High Yield 100, Merrill Lynch 3023.170 6.206 6.197 7.825 5.746 5.910 6.760
Jumbo mortgages, $484,350-plus† 4.34 4.39 4.25 l 5.16 0.05 DJ Commodity 614.29 -4.84 -0.78 667.35 572.87 -6.69 7.23
Fixed-Rate MBS, Barclays 2066.630 3.070 3.110 3.810 3.020 6.172 1.828
Five-year adj mortgage (ARM)† 4.22 4.28 4.00 l 4.89 1.15 TR/CC CRB Index 180.99 -1.34 -0.73 206.38 168.36 -11.14 6.59
New-car loan, 48-month 4.78 4.76 3.70 l 4.78 1.52 Muni Master, Merrill 549.704 1.975 2.049 2.908 1.975 6.506 2.328 Crude oil, $ per barrel 62.76 -0.11 -0.17 76.41 42.53 -11.95 38.21
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan n.a. n.a. 6.252 n.a. n.a. n.a. n.a. Natural gas, $/MMBtu 2.631 -0.008 -0.30 4.837 2.455 -7.59 -10.51
banks.† Excludes closing costs.
Sources: SIX Financial Information; Dow Jones Market Data; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Gold, $ per troy oz. 1274.50 -10.50 -0.82 1343.30 1176.20 -1.22 -0.30
B12 | Saturday/Sunday, May 18 - 19, 2019 * *** THE WALL STREET JOURNAL.

MARKET DATA
Futures Contracts Open
Contract
High hilo Low Settle Chg
Open
interest Open
Contract
High hilo Low Settle Chg
Open
interest Open
Contract
High hilo Low Settle Chg
Open
interest

Metal & Petroleum Futures Dec 28.44 28.45 27.82 27.93 –.46 142,248 30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg. Mexican Peso (CME)-MXN 500,000; $ per MXN
Rough Rice (CBT)-2,000 cwt.; $ per cwt. May 97.610 97.613 97.608 97.610 .002 285,142 June .05211 .05214 .05177 .05198 –.00012 269,866
Contract Open July 97.640 97.645 97.635 97.635 –.005 338,153
July 1091.50 1109.00 1089.00 1107.00 16.50 6,433 Sept .05134 .05135 .05102 .05121 –.00012 863
Open High hi lo Low Settle Chg interest 10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
Sept 1102.00 1118.00 1101.00 1117.50 15.50 254
Copper-High (CMX)-25,000 lbs.; $ per lb. Wheat (CBT)-5,000 bu.; cents per bu. June 106.000 106.000 s 105.719 105.766 .125 24,021
Euro (CME)-€125,000; $ per €
May 2.7600 2.7600 2.7400 2.7480 –0.0105 1,666 June 1.1204 1.1211 1.1182 1.1187 –.0011 490,679
July 469.00 473.25 462.50 465.00 –2.00 272,686 1 Month Libor (CME)-$3,000,000; pts of 100%
July 2.7480 2.7530 2.7210 2.7385 –0.0095 138,286 Sept 475.50 479.25 469.00 471.25 –2.25 89,176 June ... ... ... 97.5850 … 30 Sept 1.1285 1.1295 1.1267 1.1271 –.0011 14,081
Gold (CMX)-100 troy oz.; $ per troy oz. Wheat (KC)-5,000 bu.; cents per bu. Eurodollar (CME)-$1,000,000; pts of 100%
May 1280.00 1280.00 s 1280.00 1274.50 –10.50 69 July 419.75 425.50 415.50 420.25 3.50 195,561 June 97.4900 97.4950 97.4825 97.4825 –.0025 1,237,848 Index Futures
June 1287.20 1289.00 1274.60 1275.70 –10.50 263,678 Sept 431.00 436.25 426.25 431.00 3.25 63,638 Sept 97.6100 97.6250 97.5850 97.5950 –.0050 1,444,726
Aug 1292.60 1294.60 1280.40 1281.40 –10.60 162,923 Wheat (MPLS)-5,000 bu.; cents per bu. Mini DJ Industrial Average (CBT)-$5 x index
Dec 97.6600 97.6900 97.6350 97.6500 .0050 1,601,332
Dec 1304.10 1305.90 1292.00 1293.00 –10.50 53,039 June 25879 25949 25628 25780 –87 77,972
July 526.75 543.75 525.75 527.75 1.00 33,134 Dec'20 97.9750 98.0200 97.9400 97.9600 .0100 1,146,181
Feb'20 1310.20 1310.60 1298.40 1298.70 –10.60 22,968 Sept 25888 25950 25636 25784 –88 708
Sept 537.25 553.00 534.75 536.75 1.00 15,195
April 1315.40 1316.80 t 1303.50 1303.80 –10.70 8,307 Cattle-Feeder (CME)-50,000 lbs.; cents per lb. Currency Futures S&P 500 Index (CME)-$250 x index
Palladium (NYM) - 50 troy oz.; $ per troy oz. May 134.200 t 132.425 134.525
135.325 .300 2,536 June 2879.70 2888.00 s 2852.50 2862.00 –16.60 40,243
May … … s … 1310.50 –18.90 30 Aug 143.700 t 140.500 145.500
146.050 2.175 28,211 Japanese Yen (CME)-¥12,500,000; $ per 100¥ Mini S&P 500 (CME)-$50 x index
June 1329.30 1329.30 1302.40 1305.80 –18.90 12,045 Cattle-Live (CME)-40,000 lbs.; cents per lb. June .9124 .9154 .9095 .9102 –.0022 173,742 June 2879.75 2887.50 s 2852.50 2862.00 –16.50 2,569,435
Sept 1320.10 1321.50 1300.00 1303.30 –18.30 7,066 June 111.000 112.500 t 109.050 111.275 .800 78,510 Sept .9190 .9218 .9165 .9168 –.0022 1,088 Sept 2884.75 2892.25 2857.00 2866.50 –16.75 65,939
Platinum (NYM)-50 troy oz.; $ per troy oz. Aug 108.250 109.775 106.425 108.925 .975 142,952 Canadian Dollar (CME)-CAD 100,000; $ per CAD
May ... ... ... 818.40 –12.50 5 Mini S&P Midcap 400 (CME)-$100 x index
Hogs-Lean (CME)-40,000 lbs.; cents per lb. June .7436 .7449 .7404 .7444 .0010 134,411
June 1914.30 1916.20 1888.70 1890.20 –22.90 65,606
July 835.80 836.10 818.20 820.30 –13.30 67,903 June 91.750 92.825 89.650 92.375 .150 37,024 Sept .7445 .7462 .7421 .7459 .0010 4,890
Silver (CMX)-5,000 troy oz.; $ per troy oz. July 91.875 93.025 90.050 93.000 .600 71,923 Mini Nasdaq 100 (CME)-$20 x index
May 14.485 14.580 t 14.345 14.348 –0.131 353
British Pound (CME)-£62,500; $ per £ June 7600.8 7620.0 s 7506.5 7511.5 –88.8 219,122
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft. June 1.2813 1.2816 1.2733 1.2744 –.0067 168,592
July 14.545 14.555 t 14.380 14.388 –0.151 158,330 July 328.70 330.30 321.10 324.00 –4.10 2,774 Sept 7627.0 7646.5 7534.5 7539.0 –88.8 1,541
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl. Sept 1.2872 1.2872 1.2791 1.2800 –.0068 1,127
Sept 330.00 334.50 324.40 326.80 –5.00 945
Swiss Franc (CME)-CHF 125,000; $ per CHF Mini Russell 2000 (CME)-$50 x index
June 63.12 63.64 62.52 62.76 –0.11 98,367 Milk (CME)-200,000 lbs., cents per lb. June 1559.60 1561.70 1534.70 1537.60 –22.30 422,608
July 63.30 63.82 62.70 62.92 –0.14 422,994 May 16.28 16.34 16.27 16.30 .02 3,438 June .9931 .9942 .9907 .9917 –.0010 90,717
Aug 63.38 63.89 62.78 62.99 –0.18 171,277 Sept 1.0012 1.0026 .9993 1.0002 –.0010 121 Mini Russell 1000 (CME)-$50 x index
June 16.21 16.49 16.14 16.45 .22 4,604 June 1584.70 1599.80 1584.00 1585.50 –9.90 9,188
Sept 63.40 63.86 62.78 62.98 –0.21 193,835 Cocoa (ICE-US)-10 metric tons; $ per ton. Australian Dollar (CME)-AUD 100,000; $ per AUD
Dec 62.86 63.23 62.19 62.39 –0.33 245,881 July 2,375 2,378 2,342 2,353 –19 90,067 June .6896 .6902 .6869 .6872 –.0025 172,749 U.S. Dollar Index (ICE-US)-$1,000 x index
Dec'20 58.45 58.65 57.96 58.10 –0.32 148,042 Sept 2,365 2,370 2,340 2,354 –10 49,773 July .6901 .6901 s .6878 .6877 –.0024 263 June 97.67 97.86 97.59 97.82 .15 48,068
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal. Coffee (ICE-US)-37,500 lbs.; cents per lb. Sept .6913 .6917 t .6888 .6889 –.0024 1,713 Sept 97.16 97.32 97.14 97.29 .15 1,468
June 2.1273 2.1338 2.0870 2.0955 –.0277 64,037 May 88.05 88.05 88.05 87.35 –2.65 44 Dec .6932 .6932 t .6913 .6906 –.0024 326
July 2.1274 2.1330 2.0886 2.0963 –.0273 96,279 July 91.15 91.60 88.45 89.00 –2.65 158,794 March'20 .6942 .6945 t .6942 .6921 –.0023 103
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal. Source: SIX Financial Information
Sugar-World (ICE-US)-112,000 lbs.; cents per lb.
June 2.0675 2.0854 2.0352 2.0473 –.0145 86,930 July 11.75 11.76 t 11.43 11.55 –.23 439,874
July 2.0343 2.0511 2.0055 2.0182 –.0098 123,185 Oct 12.12 12.12 t 11.83 11.93 –.21 258,859
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
June 2.636 2.660 2.616 2.631 –.008 147,847
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb.
July 26.00 26.00 t 26.00 26.00 –.40 3,228
Bonds | WSJ.com/bonds
July 2.671 2.694 2.652 2.664 –.010 293,852 Sept 26.50 26.50 26.25 26.30 –.35 3,030
Aug
Sept
2.687
2.682
2.708
2.702
2.669
2.664
2.680 –.009
2.675 –.009
83,896
169,376
Cotton (ICE-US)-50,000 lbs.; cents per lb. Global Government Bonds: Mapping Yields
July 66.66 66.80 65.83 65.99 –.81 102,361
Oct 2.713 2.732 2.694 2.706 –.008 120,084 Dec 67.27 67.27 66.31 66.38 –.71 89,914 Yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds in
Dec 2.951 2.970 2.936 2.950 –.003 97,300 Orange Juice (ICE-US)-15,000 lbs.; cents per lb.
July 102.55 102.75 96.40 96.75 –5.75 15,654
selected other countries; arrows indicate whether the yield rose(s) or fell (t) in the latest session
Agriculture Futures Sept 105.60 105.60 100.30 100.75 –5.45 2,208 Country/ Yield (%) Spread Under/Over U.S. Treasurys, in basis points
Corn (CBT)-5,000 bu.; cents per bu. Coupon (%) Maturity, in years Latest(l)-2 -1 0 1 2 3 4 Previous Month ago Year ago Latest Prev Year ago
July 380.00 384.75 380.00 383.25 4.25 807,524 Interest Rate Futures 2.250 U.S. 2 2.217 s l 2.188 2.402 2.569
Dec 397.50 400.00 397.25 398.25 1.75 359,177 Treasury Bonds (CBT)-$100,000; pts 32nds of 100% 2.375 10 2.398 s l 2.392 2.596 3.113
Oats (CBT)-5,000 bu.; cents per bu. June 149-190 150-040 149-120 149-220 8.0 973,075
July 297.00 298.00 293.25 294.00 –.25 4,661 Sept 148-280 149-150 148-250 149-020 8.0 32,259 5.750 Australia 2 1.221 t l 1.235 1.511 2.061 -99.6 -95.3 -50.8
Dec 268.00 269.00 266.75 271.75 .75 1,240
Treasury Notes (CBT)-$100,000; pts 32nds of 100% 3.250 10 1.652 s l 1.651 1.965 2.931 -74.6 -74.1 -18.2
Soybeans (CBT)-5,000 bu.; cents per bu. June 124-165 124-250 124-115 124-155 2.0 4,043,393
July 840.75 841.75 820.50 821.75 –18.00 408,725
Sept 124-250 125-020 124-210 124-250 2.5 190,010 0.000 France 2 -0.552 s l -0.565 -0.493 -0.461 -276.9 -275.3 -303.0
Nov 865.25 866.50 846.00 847.25 –17.50 173,778
Soybean Meal (CBT)-100 tons; $ per ton. 5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100% 0.500 10 0.289 t l 0.295 0.427 0.874 -210.9 -209.7 -223.9
July 301.90 302.70 293.70 294.30 –7.60 226,246 June 116-027 116-077 115-310 116-010 .5 4,468,574
Sept 116-080 116-130 116-040 116-060 .7 553,851 0.000 Germany 2 -0.645 t l -0.635 -0.568 -0.557 -286.2 -282.4 -312.5
Dec 309.10 309.80 301.60 302.20 –7.00 83,218
Soybean Oil (CBT)-60,000 lbs.; cents per lb. 2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100% 0.250 10 -0.101 t l -0.091 0.084 0.640 -249.9 -248.2 -247.3
July 27.80 27.80 27.11 27.22 –.50 248,805 June 106-196 106-215 106-180 106-187 0.0 3,603,655
0.050 Italy 2 0.621 t l 0.678 0.470 0.035 -159.6 -151.0 -253.4
3.000 10 2.673 t l 2.687 2.468 2.116 27.5 29.5 -99.8
Exchange-Traded Borrowing Benchmarks | WSJ.com/bonds 0.100 Japan 2 -0.161 t l -0.160 -0.146 -0.134 -237.7 -234.8 -270.3
0.100 10 -0.055 s l -0.060 -0.009 0.061 -245.3 -245.2 -305.3
Portfolios Money Rates May 17, 2019 0.050 Spain 2 -0.312 s l -0.319 -0.262 -0.297 -250.7 -286.6
-252.9
Largest 100 exchange-traded funds, 1.450 10 0.871 t l 0.904 1.111 1.434 -152.7 -148.8 -167.9
latest session Key annual interest rates paid to borrow or lend money in U.S. and
international markets. Rates below are a guide to general levels but 2.000 U.K. 2 0.718 t l 0.734 0.793 0.873 -149.9 -145.4 -169.6
Friday, May 17, 2019 don’t always represent actual transactions. 1.625 10 1.036 t l 1.075 1.238 1.563 -131.7 -155.0
-136.2
Closing Chg YTD
ETF Symbol Price (%) (%) Week —52-WEEK— Source: Tullett Prebon
Inflation Latest ago High Low
AlerianMLPETF AMLP 10.00 ... 14.5
April index Chg From (%)
CnsmrDiscSelSector
CnsStapleSelSector
XLY
XLP
115.91
57.75
–0.76
–0.33
17.1
13.7 level March '19 April '18 Britain 0.75 0.75 0.75 0.50 Corporate Debt
EnSelectSectorSPDR XLE 63.75 –1.01 11.2 1.50 1.50 1.50
Australia 1.50 Price moves by a company's debt in the credit markets sometimes mirror and sometimes anticipate, moves in
FinSelSectorSPDR XLF 26.88 –0.67 12.8 U.S. consumer price index
FT DJ Internet FDN 141.47 –1.46 21.3
Secondary market that same company’s share price.
HealthCareSelSect XLV 88.44 –0.21 2.2 All items 255.548 0.53 2.0
IndSelSectorSPDR XLI 74.82 –1.11 16.2 Core 262.332 0.19 2.1 Investment-grade spreads that tightened the most…
InvscQQQI QQQ 183.04 –1.02 18.7 Fannie Mae
InvscS&P500EW RSP 104.71 –0.66 14.6 International rates 30-year mortgage yields Spread*, in basis points Stock Performance
InvscS&P500LowVol SPLV 53.77 0.07 15.3 Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg
iShCoreMSCIEAFE IEFA 60.66 –0.58 10.3
Week 52-Week
30 days 3.612 3.706 4.607 3.497
iShCoreMSCIEmgMk IEMG 48.55 –1.76 3.0
Latest High Low 60 days 3.625 3.722 4.632 3.531
Deutsche Bank AG* DB 7.500 April 30, ’49 640 –22 655 7.58 –1.04
iShCoreMSCITotInt IXUS 57.15 –0.90 8.8 ago
iShCoreS&P500 IVV 287.90 –0.57 14.4 Notes on data:
Barclays BACR 3.200 Aug. 10, ’21 85 –21 100 ... ...
iShCoreS&P MC IJH 189.03 –1.11 13.8 Prime rates U.S. prime rate is the base rate on corporate CNH Industrial CNHI 4.500 Aug. 15, ’23 127 –21 n.a. 8.96 –2.50
iShCoreS&P SC IJR 76.83 –1.63 10.8
iShS&PTotlUSStkMkt ITOT 65.09 –0.70 14.7 U.S. 5.50 5.50 5.50 4.75 loans posted by at least 70% of the 10 largest Chubb INA Holdings CB 2.700 March 13, ’23 39 –14 n.a. … …
iShCoreUSAggBd AGG 109.03 0.03 2.4 Canada 3.95 3.95 3.95 3.45 U.S. banks, and is effective December 20, 2018.
Other prime rates aren’t directly comparable; 3M MMM 2.875 Oct. 15, ’27 61 –14 n.a. 169.09 –1.58
iShSelectDividend DVY 98.16 –0.47 9.9 Japan 1.475 1.475 1.475 1.475
iShEdgeMSCIMinEAFE EFAV 71.37 –0.21 7.1 lending practices vary widely by location. Huntington National Bank HBAN 3.550 Oct. 6, ’23 63 –9 n.a. … …
59.73 –0.13 14.0 Complete Money Rates table appears Monday
iShEdgeMSCIMinUSA USMV Policy Rates through Friday.
Mylan MYL 5.200 April 15, ’48 315 –9 325 19.64 –2.82
iShEdgeMSCIUSAMom MTUM 113.81 –0.28 13.5
iShEdgeMSCIUSAQual QUAL 89.26 –0.55 16.3 Euro zone 0.00 0.00 0.00 0.00 Sources: Bureau of Labor Statistics; SIX Financial Credit Agricole S.A. ACAFP 3.750 April 24, ’23 107 –8 n.a. ... ...
iShFloatingRateBd FLOT 50.88 0.02 1.0 Switzerland 0.50 0.50 0.50 0.50 Information
iShGoldTr
iShiBoxx$InvGrCpBd
IAU
LQD
12.22
119.25
–0.81
0.01
–0.6
5.7
…And spreads that widened the most
iShiBoxx$HYCpBd HYG 85.94 –0.03 6.0 General Electric GE 5.000 Jan. 21, ’49 251 16 246 10.00 –1.28
iShJPMUSDEmgBd EMB 108.96 –0.23 4.9
3.500 Jan. 23, ’24 70 15 65 130.22 –0.67
iShMBSETF
iShMSCI ACWI
MBB
ACWI
106.28
71.99
–0.04
–0.76
1.6
12.2
A Week in the Life of the DJIA PNC Financial Services
Comstock Resources
PNC
CRK 9.750 Aug. 15, ’26 1061 14 n.a. 5.60 –2.10
iShMSCIBrazil EWZ 36.99 –1.75 –3.2
iShMSCI EAFE EFA 64.77 –0.66 10.2 A look at how the Dow Jones Industrial Average component stocks Societe Generale S.A. SOCGEN 7.875 Dec. 18, ’49 389 12 n.a. ... ...
iShMSCI EAFE SC SCZ 57.17 –0.73 10.3 did in the past week and how much each moved the index. The DJIA BP Capital Markets BPLN 3.506 March 17, ’25 79 10 81 ... ...
iShMSCIEmgMarkets EEM 40.29 –1.80 3.1
iShMSCIJapan EWJ 53.69 –0.37 5.9 lost 178.37 points, or 0.69%, on the week. A $1 change in the price of Marriott International MAR 4.150 Dec. 1, ’23 90 10 n.a. 130.91 –1.21
iShNatlMuniBd MUB 112.43 0.04 3.1 any DJIA stock = 6.78-point change in the average. To date, a $1,000 Royal Bank of Scotland RBS 8.000 Aug. 10, ’49 368 10 n.a. 5.87 –2.65
iShPfd&Incm PFF 36.52 –0.27 6.7
iShRussell1000Gwth IWF 153.72 –0.78 17.4 investment on Dec. 31 in each current DJIA stock component would UBS Funding Switzerland AG* UBS 7.000 Jan. 31, ’49 325 10 349 11.96 –0.25
iShRussell1000 IWB 158.97 –0.71 14.6 have returned $33,456, or a gain of 11.52%, on the $30,000
iShRussell1000Val
iShRussell2000Gwth
IWD
IWO
124.29
195.32
–0.50
–1.45
11.9
16.3 investment, including reinvested dividends. High-yield issues with the biggest price increases…
iShRussell2000 IWM 152.84 –1.39 14.1 Bond Price as % of face value Stock Performance
iShRussell2000Val IWN 120.37 –1.30 11.9 The Week’s Action Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg
iShRussell3000 IWV 168.45 –0.72 14.7 Pct Stock price Point chg $1,000 Invested(year-end '18)
iShRussellMid-Cap IWR 54.30 –0.86 16.8 chg (%) change in average* Company Symbol Close $1,000 Berry Global BERY 4.500 Feb. 15, ’26 100.125 5.13 93.750 48.62 –0.37
iShRussellMCValue IWS 87.09 –0.75 14.1
iShS&P500Growth IVW 175.41 –0.61 16.4 5.60 2.99 20.28 Cisco Systems CSCO $56.35 $1,319 Chaparral Energy CHAP 8.750 July 15, ’23 64.750 2.75 n.a. 4.60 –10.33
iShS&P500Value IVE 113.27 –0.57 12.0 2.45 3.53 23.94 Travelers TRV 147.49 1,239 Hecla Mining HL 6.875 May 1, ’21 92.000 2.00 98.220 1.52 0.66
iShShortCpBd IGSB 52.78 –0.02 2.2 Lions Gate Capital Holdings LGF 6.375 Feb. 1, ’24 104.000 1.48 102.750 ... ...
iShShortTreaBd SHV 110.49 ... 0.2 2.10 3.38 22.92 Visa V 164.09 1,248
iShTIPSBondETF TIP 113.53 –0.10 3.7
2.10 1.01 6.85 Coca-Cola KO 49.20 1,048 CommScope Technologies COMM 5.000 March 15, ’27 88.750 1.25 90.500 18.80 0.21
iSh1-3YTreasuryBd SHY 84.15 0.02 0.6
2.07 Revlon Consumer Products REV 6.250 Aug. 1, ’24 65.000 1.25 61.250 … …
iSh7-10YTreasuryBd IEF 106.73 0.05 2.4 1.18 8.00 Verizon VZ 58.09 1,055
iSh20+YTreasuryBd TLT 125.99 0.22 3.7 AMC Entertainment Holdings AMC 5.875 Nov. 15, ’26 89.250 1.05 91.750 13.13 –2.01
iShRussellMCGrowth IWP 137.34 –0.89 20.8 1.84 0.75 5.09 Pfizer PFE 41.47 967 Montage Resources MR 8.875 July 15, ’23 94.450 0.95 94.470 10.18 –0.68
iShUSTreasuryBdETF GOVT 25.25 0.06 2.4
PIMCOEnhShMaturity MINT 101.61 0.02 0.7 1.36 1.44 9.77 Procter & Gamble PG 107.45 1,187
SPDR BlmBarcHYBd JNK 107.40 –0.03 6.6 0.75 1.00 6.78 Walt Disney DIS 135.04 1,232 …And with the biggest price decreases
SPDR Gold GLD 120.65 –0.71 –0.5
SchwabIntEquity SCHF 31.18 –0.57 10.0 0.74 0.62 4.20 Nike NKE 84.57 1,144 Mauser Packaging Solutions Holding BWY 5.500 April 15, ’24 95.500 –3.87 98.500 ... ...
SchwabUS BrdMkt SCHB 68.75 –0.71 14.7
SchwabUS Div SCHD 52.04 –0.55 10.8 0.74 0.94 6.38 Microsoft MSFT 128.07 1,271 Exela Intermediate EXLINT 10.000 July 15, ’23 91.250 –2.75 96.250 ... ...
SchwabUS LC SCHX 68.40 –0.62 14.6 Pioneer Energy Services PES 6.125 March 15, ’22 58.500 –2.50 n.a. 0.79 –15.69
SchwabUS SC 70.10 –1.35 15.5 0.68 0.53 3.59 Merck MRK 78.72 1,037
SCHA Weatherford International WFT 9.875 March 1, ’39 58.000 –2.00 64.500 ... ...
SPDR DJIA Tr DIA 257.44 –0.42 10.4 0.51 0.61 4.14 American Express AXP 119.07 1,259
SPDR S&PMdCpTr MDY 344.41 –1.22 13.8 Brand Industrial Services BRANDI 8.500 July 15, ’25 88.650 –1.35 92.500 ... ...
SPDR S&P 500 SPY 285.84 –0.65 14.4 0.33 0.79 5.36 UnitedHealth Group UNH 241.38 973
SPDR S&P Div SDY 98.96 –0.52 10.5 Tenneco TEN 5.000 July 15, ’26 77.500 –1.35 78.500 11.87 –2.14
0.10 0.35 2.37 Boeing BA 355.02 1,113
TechSelectSector XLK 75.38 –0.80 21.6 Embarq EQ 7.995 June 1, ’36 92.750 –1.25 94.500 … …
UtilitiesSelSector XLU 58.78 0.51 11.1 –0.32 –0.44 –2.98 Johnson & Johnson JNJ 138.61 1,081 PetSmart PETM 8.875 June 1, ’25 87.500 –1.25 89.250 ... ...
VanEckGoldMiner GDX 20.75 0.92 –1.6
VangdInfoTech VGT 204.00 –0.99 22.3 –0.39 –0.77 –5.22 McDonald’s MCD 199.22 1,129 *Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread.
VangdSC Val VBR 128.92 –1.20 13.0
VangdSC Grwth VBK 179.63 –1.25 19.3 –0.74 –1.00 –6.78 IBM IBM 134.32 1,210 Note: Data are for the most active issue of bonds with maturities of two years or more
VangdDivApp VIG 111.38 –0.46 13.7 –0.85 –0.65 –4.41 Exxon Mobil XOM 75.91 1,138 Sources: MarketAxess Corporate BondTicker; Dow Jones Market Data
VangdFTSEDevMk VEA 40.67 –0.56 9.6
VangdFTSE EM VWO 40.07 –1.91 5.2 –1.03 –1.05 –7.12 WalMart WMT 100.86 1,094
VangdFTSE Europe VGK 54.01 –0.64 11.1
VangdFTSEAWxUS VEU 49.40 –0.90 8.4
–1.03 –2.00 –13.56 Home Depot HD 192.58 1,129