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usk made his decision Nominee Mto drop a plan to take Tesla private after coming to have doubts as a deal team Imperiled hustled to give the idea form, according to people BY NICK TIMIRAOS familiar with the matter. A1 JACKSON HOLE, Wyo.— The profitable trade in Some European officials are a group of U.S. and Asian objecting to the candidacy of a tech giants is beginning to top Federal Reserve official to fracture, reflecting esca- helm an international regula- lating U.S.-China trade tory body, soured by President tensions and economic and Trump’s antagonistic posture market uncertainties. B1 toward international institu- Goldman is leading a tions at foreign summits this pack of investment banks summer, according to people that are elbowing into the familiar with the matter. crucial stock-exchange busi- Randal Quarles, the Fed’s ness of end-of-day trading. B1 vice chairman for bank super- vision, had emerged as a A proliferation of bev- front-runner this spring to erages that don’t fit within lead the Financial Stability traditional drinks catego- Board, a body formed in 2009 ries is confusing shoppers

J. DAVID AKE/ to monitor and advise govern- and challenging manufac- Flags flew at half-staff Sunday at the Capitol in Washington in honor of Sen. John McCain, 81, who died Saturday at his home near ments on financial regulation, turers and retailers. B1 Sedona, Ariz., of a brain tumor. Mr. McCain will lie in state at the Arizona Capitol on Wednesday and at the U.S. Capitol on Friday. when the term of the current Natural-food and spe- chairman, Bank of England cialty chains expecting to Gov. Mark Carney, expires in be hurt by Amazon’s ac- December. quisition of Whole Foods McCain’s Death Leaves Void But officials in several have instead seen growth Western European capitals a year after the deal. B2 later argued that a U.S. official championed the troop surge in bust internationalism pro- shouldn’t be rewarded with Chinese ride-hailing Senator was driving Iraq, intervention in Afghani- pounded by Mr. McCain toward the position after Mr. Trump firm Didi temporarily force for a foreign stan, deep ties and joint exer- a more limited role for the U.S. lashed out at both the Group halted one of its services cises with allies from Japan to advocated by President Trump. of Seven summit in Canada in after police said a Didi policy based on U.S.- Europe and an unwavering an- Skeptics often express doubt June and the NATO summit in driver raped and killed a led internationalism tagonism toward Russia. over the wisdom of the Iraq war Brussels in July. passenger. B3 On Saturday, the McCain as well as the costs of the alli- European diplomats were China is using aSany- BY GORDON LUBOLD family said the 81-year-old sen- ances and relationships through dismayed after Mr. Trump run factory as a model for ator died of cancer at his Ari- which the U.S. has exercised pulled his support from a final its drive to make domestic WASHINGTON—The death of zona home, surrounded by his power and kept adversaries in G-7 communiqué after he left firms more competitive by Sen. John McCain will leave loved ones. Washington awoke check. early the June summit in Que- using robots, big data and Congress without perhaps its on Sunday to an outpouring of CAROLYN KASTER/ASSOCIATED PRESS Mr. McCain, along with his bec. Mr. Trump grew irritated other tech advances. B3 loudest voice in support of the grief and condolences, with AWarHero longtime ally in the Senate, after Prime Minister Justin robust, U.S.-led international- flags flying at half-staff, and Lindsey Graham (R., S.C.), saw Trudeau of Canada held a A dispute about who ism that has defined the coun- leaders from both sides of the those partnerships as the only news conference at the confer- should pay for a troubled And GOP Icon try’s security relations since political aisle honoring his way to sustain U.S. foreign pol- ence’s conclusion, where he South Carolina power World War II. years of service as a Navy pilot, icy. Mr. McCain harshly criti- warned Canada wouldn’t be plant is part of a wider de- Sen. John McCain, 81, survived Mr. McCain, throughout his a prisoner of war and above all, cized Mr. Trump’s failure to em- pushed around by the U.S. bate about the right level torture in Vietnam to become a career, was a driving force be- a congressional champion of a brace more forcefully the North Mr. Trump later delivered of public support for the leading figure in his party..... A6 hind the interventionist wing of strong, U.S. military with global Atlantic Treaty Organization al- blunt critiques of European U.S. nuclear industry. B4 the Republican Party, a faction reach. liance and the president’s re- PleaseturntopageA2 that views overseas alliances Mr. McCain will lie in state in ton’s National Cathedral and in fusal to sign a joint communi- World-Wide and troop commitments as a the Arizona Capitol on Wednes- Annapolis, Md., where he will qué among the Group of Seven Bob Davis: How to view stabilizing force in the day, which would have been his be interred. industrialized nations during a Trump's call for zero tariffs... A2 world. Over his decadeslong ca- 82nd birthday. Memorial ser- Many leading Republicans summit this summer. Central bankers discuss new Pope Francis wouldn’t re- reer as a political leader, he vices are scheduled at Washing- have turned away from the ro- PleaseturntopageA6 economic risks...... A2 spond to claims by a former Vatican ambassador to the U.S. that he covered up al- leged misconduct by a prom- In Drinks Market, Lots of Liquidity inent cardinal, amid a deep- Pope Knew of Alleged Abuse Beverage makers, including PepsiCo and Coca-Cola, are increasingly ening crisis over abuse. A1 moving away from their traditional drinks to meet shifting consumer tastes for products such as teas and coconut water. B1 Trump’s antagonistic posture toward international For Years, Archbishop Says Production volume institutions soured some Eu- ropean officials on Quarles’s PepsiCo Coca-Cola BY FRANCIS X. ROCCA lomat, claimed the pope knew candidacy to helm an interna- ’s handling of as early as 2013 about allega- sexual-abuse scandals in Ire- 8 billion gallons tional regulatory body. A1 A former Vatican ambassa- tions that the former arch- land and elsewhere. Iran’s parliament dor to the U.S. accused Pope bishop of Washington, ex-Car- An attorney for ex-Cardinal ousted the economy minis- Francis of covering up alleged dinal Theodore McCarrick, had McCarrick said: “These are se- 6 ter, stepping up an over- misconduct by a prominent car- been sexually active with semi- rious allegations. Archbishop Other haul of Rouhani’s cabinet dinal and called on him to re- narians and that Pope Benedict McCarrick, like any other per- amid opposition to his re- sign, deepening a crisis over XVI had privately disciplined son, has a right to due pro- 4 sponse to U.S. sanctions. A7 sexual abuse that is increasingly him over the charges. Arch- cess. He looks forward to in- An Iranian-British char- overshadowing his pontificate. bishop Viganò alleged that voking that right at the ity worker returned to The pope said he wouldn’t Pope Francis had ignored then- appropriate time.” 2 prison after she was re- respond. “I won’t say a word Cardinal McCarrick’s record Now-Archbishop McCarrick fused an extension to her about it,” he said aboard a and rehabilitated him as a pow- resigned as a cardinal this Soft drinks temporary release. A7 flight from Dublin to Rome on erful figure in the U.S. church. July, the first to do so in 0 Sunday night. The explosive accusations nearly a century, after a The president’s job-ap- 1980 ’90 2000 ’10 ’80 ’90 2000 ’10 proval rating remained In a letter published on two against the pope came amid church investigation found stable amid criminal con- Catholic websites, Archbishop an already-delicate papal visit credible a charge that he had Note: ‘Other’ includes fruit, sports, energy, bottled water, tea and coffee drinks. victions and guilty pleas Carlo Maria Viganò, a former to Ireland, which has been sexually abused a teenager Source: Beverage Marketing Corp. . by two former advisers, senior Vatican official and dip- dominated by criticism of the PleaseturntopageA9 new polling found. A4 The U.S. and Mexico neared an agreement on Mike Pompeo Shows His Swagger: INSIDE key issues holding back a The Unraveling of renegotiation of Nafta. A4 He Adopts the Word for His Staff iii A gunman killed two people and injured nine at State Department incursion into pop Musk’s Tesla Plan a videogame tournament in Jacksonville, Fla., be- culture draws notice from hip-hop world fore killing himself. A3 Confident tweets masked private doubts

A federal judge struck JONATHAN ERNST/ down parts of three BY JESSICA DONATI word searches for “swagger” Trump executive orders and couldn’t figure out why. NEIL SIMON, BY LIZ HOFFMAN tweets suggested. He had that made it easier to fire WASHINGTON—Secretary Across social media, searches AND TIM HIGGINS told the world he had fund- some federal employees. A4 of State Mike Pompeo prom- for #Swagger, which usually KING OF STAGE ing “secured,” and one tweet The Tesla Inc. board con- Died: John McCain,81, ised to bring more swagger to brought up images of fancy COMEDY, 91 elaborated that the deal was vened Thursday at the com- veteran and his far-flung staff after getting cars and attractive young so certain it needed only a the top job in April. women, started showing older pany’s factory in Fremont, shareholder vote. U.S. senator. A1, A6…Neil LIFE & ARTS, A13 Simon, 91, Pulitzer Prize- “We need our men and men in suits. Calif., in a conference room As the team hustled to women out at the front lines, “We look at trends and key where Elon Musk often spent put form to his idea, lining winning playwright. A13 executing American diplomacy words,” editor in chief Steven the night. His sleeping bag up investors willing to put with great vigor Branco said. was still on the floor. up the tens of billions of dol- CONTENTS Markets Digest...... B7 and energy,” Mr. “When we looked The agenda was Mr. lars required for the deal, Business & Finance... B2 Opinion...... A15-17 Business News... B3,5 Sports...... A14 Pompeo said his into it, we could Musk’s audacious plan to Mr. Musk was having doubts, Crossword...... A14 Technology...... B4 first day. Then he see that it was in take Tesla private, which he according to people familiar Heard on Street... B10 U.S. News...... A2-4,6 adopted the politics.” had sprung on the invest- with this thinking. Life & Arts...... A11-13 Weather...... A14 hashtag #Swag- The magazine ment world 16 days earlier A buyout, even if accom- Markets...... B9-10 World News...... A7-9

ger to promote Crisis Mr. Swagger discovered that GETTY IMAGES FOR USTA via tweets. He was joined in plished, would force some of State Department the word swag- the room by board members, the technology mutual funds > work around the world. ger—popularized by hip hop U.S. OPEN , bankers and advis- that had been ardent sup- The former Kansas con- artists and rappers as short- ers, members of a Wall porters to trim their stakes. gressman didn’t realize how hand for confidence and style, COURTS Street transaction machine It might mean allowing com- far afield he had ventured. extending to clothes, cars and ANARCHY put into motion by the en- petitors inside his tent—one Editors at Swagger—an on- dating—was being appropri- trepreneur’s idea. of the investors his bankers s 2018 Dow Jones & Company, Inc. All Rights Reserved line lifestyle magazine for ated by one of the world’s old- Mr. Musk’s plan turned had lined up was Volkswagen men—soon saw a spike in key- PleaseturntopageA10 JASONGAY,A14 out more shaky than his PleaseturntopageA10 A2 | Monday, August 27, 2018 THE WALL STREET JOURNAL. U.S. NEWS

THE OUTLOOK | By Bob Davis How to View Trump’s Call for Zero Tariffs

In more countries would have to make Aug. 20 for follow-up talks than 40 tweets Leveling the Playing Field bigger cuts than the U.S. where the zero-tariff initiative this year, Pres- U.S. tariffs are among the lowest in the world, which the Trump administration claims In a spring remained on the table, said an ident Trump gives trading partners an edge. discussion with trade advis- EU official. has praised ers, Trump trade hawk Peter tariffs for Applied tariff rate Navarro objected, arguing that imilarly, the zero-tariff Manufacturing making Americans richer, re- zero tariffs weren’t sufficient plan could give the U.S. All tariffs Agriculture tariffs tariffs S ducing trade and budget defi- to level the playing field, said a way to re-engage with cits and restoring U.S. pres- South Korea 13.9% 56.9% 6.6% individuals familiar with the trading partners who have tige. Brazil 13.5 10.0 15.3 discussions. The U.S. also dismissed the Trump admin- “Only fools would dis- needed to push for zero subsi- istration as hopelessly pro- agree,” he tweeted in August. India 13.4 32.7 8.8 dies, non-tariff barriers, cur- tectionist. “It gives the U.S. He also calls himself a free China 9.9 15.5 12.1 rency manipulation and value- the moral high ground,” says trader who wants to eliminate added taxes, Mr. Navarro Mr. Moore. tariffs altogether as well as EU 5.0 11.1 2.6 argued, because other coun- If the U.S. cuts deals with industry subsidies and non- Canada 4.1 15.6 2.5 tries used those tools to their allies like the EU, Canada, tariff trade barriers across advantage. The advis- Mexico and Japan, the Trump Japan 4.0 13.1 1.2 countries. ers agreed to push for three administration could then fo- “No tariffs, no barriers. U.S. 3.5 5.2 2.4 zeros: tariffs, subsidies and cus on China. Administration That’s the way it should be,” Australia 2.5 1.2 1.3 non-tariff barriers. trade hard-liners and free- Mr. Trump said at a press At the G-7 summit in June traders alike have been frus- conference after Group of Source: White House Council of Economic Advisers THE WALL STREET JOURNAL. Mr. Trump pitched the idea, trated that fights over steel, Seven meetings in June. which was overshadowed by a aluminum and other issues Is that no-tariff objective The U.S. insisted that auto- icy, which relies on subsidies. appointed National Economic public feud with the host, Ca- have made it tougher to serious after Mr. motive trade be exempted Also off the table: U.S. “Buy Council director earlier this nadian Prime Minister Justin mount a coordinated Western Trump has said in favor of from the talks, even though America” provisions, which year. He and two free-trade Trudeau and then a sum- offensive against China. them? the U.S. is pushing Europe to block foreign firms from gov- economists—Stephen Moore of mit with North Korean leader When it comes to China, a Probably not. As recent eliminate its car tariffs and ernment contracts. and Kim Jong Un. The following push toward zero tariffs and talks with Europe help show, has threatened tariffs as high Arthur Laffer, a Reagan ad- month, the proposal resur- subsidies could produce some most nations have industries as 25% on European car im- egotiators are now ministration adviser—sought faced in talks with Europeans. clear wins for the U.S., given they are determined to pro- ports, if they don’t. N largely talking about ways to make their views jibe Though hard to achieve in China’s much greater level of tect—including the U.S.— The reason vehicles aren’t reducing tariffs on in- better with Mr. Trump’s belief practice, the zero-tariff initia- protection. Chinese industrial which makes it hard even for in the talks: The U.S. auto in- dustrial products, which is the that trade makes some coun- tive still plays a role in U.S. tariffs, for instance, average the most ardent free traders dustry itself relies on 25% tar- usual starting point of most tries winners at the expense of negotiating strategy. In the 12.1%, the Council of Eco- to level the global trading iffs to protect U.S. trucks from trade deals. But the economic others, says Mr. Moore. U.S.-Europe talks, it helped nomic Advisers reports. Cut- field completely. It is one rea- import competition, and the gains of going to zero would They latched on to ease relations, which had been ting them to zero—or at least son the global trade deals that Trump administration wanted be small because tariffs are the 2018 Economic Report of strained by U.S. tariffs on EU a lot lower—could be a big do exist are so complex and to preserve that. The Euro- already low. The average U.S. the President, which showed steel and aluminum exports. win for the U.S. often uneven. pean Union, on the other manufacturing tariff is 2.4%, that the U.S. had among the The U.S. has pledged to not go Getting China to accept The U.S. initially pushed hand, blocked U.S. efforts to compared with the EU’s 2.6%. lowest tariffs among major ahead with tariffs on Euro- dropping all subsidies and the zero-tariff line in recent consider agricultural subsidies The zero-zero proposal trading nations. Zero tariffs pean cars as long as the two other discrimination against talks with Europe, but both because it wanted to preserve springs from work done by would make the U.S. a winner, sides are negotiating. The two foreign companies—now that sides quickly watered it down. the Common Agricultural Pol- Larry Kudlow before he was they argued, because other sides met in Washington on would be a real long shot.

U.S. WATCH

HAWAII closures and power outages. No CHICAGO sioner Jose Santiago. storm-related deaths were re- “We have not had this in Cleanup Begins After ported. At Least Eight Killed many, many, many years—this Storm Moves Out Three feet of rain fell at the In Apartment Fire amount of fatalities and injuries Big Island’s Hilo Airport, the wet- in one location,” he said. was cleaning up Sun- test four-day period there on re- Eight people, including six A makeshift memorial along day from the floods and land- cord, the National Weather Ser- children, were killed when a fire a nearby sidewalk included slides left in the wake of a hurri- vice said. More than 4 feet of rain broke out before dawn Sunday crosses for each child who cane that narrowly missed the fell on other parts of the island. at a Chicago apartment in one died—a small Mickey Mouse doll islands. Hurricane Lane, which last No official tallies of how much it of the deadliest fires in the na- set next to one. week blew 150-mile-an-hour is likely to cost to clean up all the tion’s third-largest city in years, The Rev. Clifford Spears of winds, dissipated and was down- damage have been released. officials say. Saint Michael Missionary Baptist graded to a tropical storm on Fri- There was less rain and flood- Two other people were hospi- Church led a crowd that gath- day evening as it began heading ing on the other islands, but Maui talized in critical condition, Chi- ered in prayer, the Chicago Trib- away from the Hawaiian Islands. contended with brush fires that cago Fire Department spokes- une reported. But the storm brought record damaged some homes and the man Larry Merritt said. One of A candlelight vigil was rainfall to Hawaii’s Big Island and loss of power for thousands. the children who died was an in- planned for Sunday night. MARIO TAMA/GETTY IMAGES caused flooding, landslides, road —Zusha Elinson fant, according to Fire Commis- —Associated Press A man surfed in a hurricane-swollen drainage canal in Hawaii.

obligations. It addresses prob- lems—problems that are of Bankers Discuss Fed Loses great importance to the United States and which, because of the global nature of the finan- New Economic Risks Support cial system, we cannot address alone,” he said in a June speech at a banking confer- BY NICK TIMIRAOS week between the U.S. and In Europe ence in Utah. Such interna- AND PAUL KIERNAN China failed to produce any ContinuedfromPageOne tional groups “help level the visible signs of progress, rais- nations at the July meeting of playing field” for U.S. firms, JACKSON HOLE, Wyo.— ing the odds Washington will the North Atlantic Treaty Or- Mr. Quarles said. Central bankers around the impose tariffs on $200 billion ganization. He pressed them The FSB’s members are world have finally reached the of Chinese goods. to spend more on defense dur- chiefly institutions such as point, after many years, when The U.S. and Mexico on Sat- ing tense meetings and later central banks and finance min- a period of strong economic urday were nearing a bilateral questioned on the istries—including the Fed and growth allows them to unwind agreement on issues holding point of the alliance. U.S. Treasury Department—as their postcrisis easy-money back a renegotiation of the A person familiar with the well as organizations such as policies. North American Free Trade discussions said Mr. Quarles’s the International Monetary But at the Federal Reserve’s Agreement, according to peo- candidacy was firmly on track Fund, the World Bank and the annual retreat here over the ple closely tracking the talks. until the summits this sum- International Accounting Stan- weekend, they found them- Economists generally say mer, when his odds of getting dards Board. selves weighing new risks, in- low barriers to trade and in- the job fell to about 50%. They Mr. Quarles served as a top cluding widening trade dis- vestment reduce consumer might have improved some- AARON P. BERNSTEIN/ official in the Treasury under putes and political challenges prices and allow capital to what after Mr. Trump met late Randal Quarles’s FSB candidacy faces criticism among Europeans. President George W. Bush, and to their independence. flow to the most productive last month with European Treasury officials have backed Traditionally, a healthy ex- companies and industries, fu- Commission President Jean- nor of the Dutch central bank, FSB. He would bring to the po- his bid for the FSB post. Like pansion can lift the economy’s eling rising prosperity. Claude Juncker. The two men is viewed as Mr. Quarles’s rival sition strong leadership, de- Mr. Carney, Mr. Quarles would long-run growth rate if tighter Mr. Carstens highlighted agreed to de-escalate trade for the FSB job. cades of experience with fi- keep his central-bank position labor markets lead to higher the risk of a chain reaction of tensions, and Washington said A White House official said nancial regulation and a well- if he also led the FSB. wages or productivity-boost- unintended financial conse- it would refrain from imposing the U.S. maintains a strong re- deserved reputation for The FSB’s stature has risen ing investments. quences of trade barriers. Tar- auto tariffs on the European lationship with Europe and working cooperatively,” said after governments throughout “Unfortunately, disruption iffs could strengthen the dol- Union. that the administration be- Lindsay Walters, a White the world rallied around the of the global trading system lar in two ways: either by Some of the Europeans who lieved Mr. Quarles’s candidacy House spokeswoman. call for new regulations to has come at just the point spurring inflation and thus are resisting Mr. Quarles’s had broad international back- A Fed spokesman declined stave off further financial cri- where that was about to oc- tighter U.S. monetary policy, candidacy have suggested he ing. This person said having a to comment. ses after 2008. The position cur,” Bank of Canada Gov. Ste- or by weakening local curren- take a less prominent role, person from the U.S. lead the An FSB spokesman also de- has only changed hands once phen Poloz said on Saturday. cies in countries whose ex- such as the chairman of the group, which has never hap- clined to comment. before, in 2011, when Mr. Car- Central bankers didn’t men- ports are targeted. To defend Basel Committee on Banking pened, could strengthen U.S. Those backing Mr. Quarles ney, at the time the head of tion President Trump by name against capital flight as the Supervision, which sets mini- ties with Europe. for the position have said hav- the Bank of Canada, succeeded but made clear they were con- dollar strengthens, emerging- mum standards for large “Randy Quarles is excep- ing a U.S. official who is com- Mario Draghi, who departed cerned about U.S. trade policy. market economies must also banks. Klaas Knot, the gover- tionally qualified to chair the mitted to the organization the post to lead the European Since the beginning of the raise interest rates, curbing could serve it well during a Central Bank. year, the Trump administra- their own growth. period where Washington has Mr. Carney had taken a tion has imposed tariffs on One question is how central THE WALL STREET JOURNAL turned more skeptical of its prominent role defending new tens of billions of dollars of banks might respond to esca- (USPS 664-880) (Eastern Edition ISSN 0099-9660) membership in or leadership postcrisis financial regulations imports from a host of coun- lating trade tensions. Central (Central Edition ISSN 1092-0935) (Western Edition ISSN 0193-2241) of international bodies. in the first years of the FSB, tries. banks typically raise interest Editorial and publication headquarters: 1211 Avenue of the Americas, New York, N.Y. 10036 Mr. Quarles, who was nomi- when it encountered some “It’s paradoxical that the rates to restrain price pres- Published daily except Sundays and general legal holidays. Periodicals postage paid at New York, N.Y., and other mailing offices. nated to his Fed post by Mr. criticism from big banks. United States is starting to put sures or cut rates to boost Postmaster: Send address changes to The Wall Street Journal, Trump, has defended the FSB Mr. Quarles has been obstacles in the road at a time economic activity. Confronting 200 Burnett Rd., Chicopee, MA 01020. against complaints from some viewed skeptically by some when its economy is firing on both rising inflation and slow- All Advertising published in The Wall Street Journal is subject to the applicable rate card, copies of Republicans who have viewed Democratic lawmakers and in- all cylinders,” said Agustín ing growth “is of course the which are available from the Advertising Services Department, Dow Jones & Co. Inc., 1211 Avenue of international regulatory bod- ternational officials, however, Carstens, general manager of most awkward situation for a the Americas, New York, N.Y. 10036. The Journal reserves the right not to accept an advertiser’s order. Only publication of an advertisement shall constitute final acceptance of the advertiser’s order. ies warily. because he has led the charge the Bank for International Set- central bank,” Mr. Poloz said. Letters to the Editor: Fax: 212-416-2891; email: [email protected] “The FSB does not impose at the Fed to simplify or ease tlements, which serves as a He discouraged market as- some of the postcrisis finan- central bank for the world’s sumptions that central bank- NEED ASSISTANCE WITH YOUR SUBSCRIPTION? cial regulations. He has said central banks. ers would ride to the rescue CORRECTIONS those changes will help cor- By web: customercenter.wsj.com; By email: [email protected] Trump administration offi- by keeping rates lower if trade By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat rect some overly burdensome cials have said they see tariffs disputes accelerate. “This is AMPLIFICATIONS rules without jeopardizing the as a way to boost U.S. indus- going to hurt something, so REPRINTS & LICENSING gains that have made the fi- tries by forcing other econo- you think monetary policy will Readers can alert The Wall Street nancial system safer. By email: [email protected]; By phone: 1-800-843-0008 Journal to any errors in news mies to lower their trade barri- fix it,” Mr. Poloz said. “That articles by emailing The FSB’s seven-member ers, buy more American exports wouldn’t be our job, to clean [email protected] or by calling GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS 888-410-2667. nominations committee will or reduce foreign competition. that up. It just wouldn’t make a final decision this fall. Trade negotiations last [work].” THE WALL STREET JOURNAL. ****** Monday, August 27, 2018 | A3 U.S. NEWS Gunman Kills Two at Videogame Event

BY ZUSHA ELINSON AND KATIE HONAN Deadly Attack Location of the videogame A gunman opened fire, kill- competition shooting ing two and injuring nine others at a videogame tour- Jacksonville nament in Jacksonville, Fla., on Sunday afternoon, author- Jacksonville ities said. Landing The suspected attacker, 24- 115 year-old David Katz of Balti- more, killed himself, said Jack- sonville Sheriff Mike Williams 95 at a Sunday evening news con- ference. Mr. Katz came to par- ticipate at the contest in Jacksonville which players compete at the St. Johnshns Riverer videogame “Madden NFL 19,” Fla. Sheriff Williams said. 1 miles Mr. Katz used a handgun in the attack, the sheriff said. 1km He declined to talk about the Source: OpenStreetMap suspect’s motive. Federal THE WALL STREET JOURNAL. agents were searching the suspect’s home Sunday eve- for the “Madden Classic” in ning, he said. Las Vegas, a tournament with Six victims were brought to a prize pool of $165,000, ac- University of Florida Health cording to the website of EA hospital with gunshot Sports. The Madden NFL vid- wounds. Five were in stable eogame franchise has long condition and one was in seri- been among the most popular ous condition, a hospital sports videogames since its spokeswoman said. debut in 1988.

Three more victims who LAURA HEALD/ASSOCIATED PRESS This tournament was were in stable condition were Officers secured the scene of a shooting Sunday in Jacksonville, Fla., where a gunman killed two people at a videogame tournament. scheduled to feature a number being treated at Memorial of past champions and notable Hospital, a spokesman for the horrible situation, and our iff Williams said. tle after 2 p.m., warning peo- team he plays for. competitors, many of whom hospital said. deepest sympathies go out to The National Football ple on Twitter: “Mass shooting Jason Lake, the founder and have sizable followings on so- The attack took place at the all involved,” Electronic Arts League said: “We are shocked at the Jacksonville Landing. CEO of CompLexity, said Mr. cial media or among fans who GLHF Game Bar, according to a said in a statement. and deeply saddened by the Stay far away from the area. Gjoka escaped from the shoot- stream their games online. participant in the tournament. The shooting occurred as horrific tragedy today in Jack- The area is not safe at this ing and ran to a nearby gym The games from this tour- It was inside the Jacksonville the tournament was being sonville. Our hearts go out to time. STAY AWAY.” for safety. One of his thumbs nament could be watched on Landing, an area with shops live-streamed on social media. all those affected.” Drini Gjoka, a professional was hit by a bullet, he said. Amazon.com Inc.’s livestream- and restaurants along the St. As the game was shown, shots The first 911 calls reporting videogame player, was at the “The tourney just got shot ing platform Twitch. Johns River. are heard, then the screen that people were shot came in tournament Sunday, according up,” Mr. Gjoka wrote in a —Elisa Cho, Sarah E. The tournament is spon- says “controller discontinued.” at 1:34 p.m., said Sheriff Wil- to his Twitter account and the tweet. “I will never take any- Needleman and Andrew sored by Electronic Arts Inc., “We are aware of the video liams said. The sheriff’s office account of the CEO of Com- thing for granted ever again.” Beaton contributed to this the game’s creator. “This is a and we have that video,” Sher- reported the shooting at a lit- pLexity Gaming, the esports The event was a qualifier article. Houston Labor Shortage Hits Landscape Businesses

To Rebuild BY SHAYNDI RAICE cancel 846 contracts and said he expects to cancel 1,000 more Brian Friend sat at his next year if things don’t change. Hurricane kitchen table nursing a Friday- He estimates his business lost night beer this spring when he between $2 million and $4 mil- realized he would need to can- lion this year. Defenses cel $80,000 in landscaping con- “We spent 14 years building tracts because he couldn’t hire this business and it can all be BY DAN FROSCH enough workers. “It was a low gone in a second,” he said. point,” said the 42-year-old, Because of the large number Voters in Harris County, who runs Sylvan Gardens Land- of visa applicants this year, the which includes Houston, easily scape LLC in Pittsburgh. Department of Homeland Secu- passed a $2.5 billion bond Like landscapers across the rity switched to a lottery sys- measure to overhaul the re- country, Mr. Friend has faced a tem from its previous first- gion’s flood-protection system, severe labor shortage this year, come, first-served basis. Some a year after Hurricane Harvey spurred by low levels of unem- employers were left without battered Texas. ployment and high demand for any visas. With all of the precincts re- visas under the foreign sea- Mr. Friend’s Sylvan Gardens porting, the measure drew sonal-worker program known was one of those. He applied for

support from nearly 86% of as H-2B. Higher wages and JEFF SWENSEN FOReight THE WALL STREET JOURNAL visas, but received none. voters, according to the Harris added bonuses haven’t at- Like many landscapers, Brian Friend of Sylvan Gardens in Pittsburgh faces a severe labor shortage. He offered a bonus of up to County Clerk’s Office. tracted more workers, some $700 to anyone who could refer In the months leading up to landscapers say. subscribed quickly this year, temporary jobs, especially jobs an employee who would last a the special election, held on Richard Cafaro, owner of Help Wanted leaving landscapers across the that can be physically grueling,” full year. So far, nobody has the first anniversary of Har- family-run Lawn Maintenance Number of requests made for country unusually short- said Laurie Flanagan, who co- stayed more than three months. vey’s landfall in Texas, officials Services Co. outside Pittsburgh, H-2B visas handed. U.S. employers re- heads the H-2B Workforce Co- After canceling contracts, he in Harris County described the said he was forced to shut the quested 167,000 H-2B visas in alition for the landscape and tried to make do with a skele- measure as critically impor- 48-year-old company because it 400,000 the first three quarters of 2018, horticulture industries. ton crew of 22. But they were tant to the future of this flood- didn’t receive any of the sea- exceeding the congressional cap Landscapers who have man- spread too thin and customers prone area. sonal foreign-worker visas it re- of 66,000 workers every 12 aged to make it through the complained. He estimates that, The measure, backed by quested. For 17 years, the com- 300,000 months. season say they will need to in total, he lost $500,000 in property taxes, is the largest pany had relied on those for the In previous tight-labor mar- raise prices and lay off full-time revenue so far this year. bond proposal ever offered in majority of its field crew. kets, Congress allowed an ex- staff to make up for the hit to At the Hidden Valley Manor the history of the county. Customers weren’t happy. 200,000 emption for returning foreign their business this season. community of townhouses in The Harris County Flood Theresa Dozzi used Mr. Cafaro Congressional workers that essentially dou- Philip Brua, who runs Cit- Upper St. Clair, Pa., outside of Control District said the extra as her landscaper for 20 years. cap bled the number of H-2B visas iTurf LLC in Plano, Texas, got Pittsburgh, the shrubs around funding from the bond would Ms. Dozzi, 64, watched this 100,000 awarded. Congress declined to about half of the 110 visas he the streetlights grew so high allow it to finish flood-preven- spring as the grass grew so permit the exemption this year. requested this year, and they that they blocked the light sen- tion projects that have been high it became “unsightly” The Department of Homeland were issued later in the season. sors, leaving the streetlights on slowed by a lack of funding around her 10,000 square-foot 0 Security was given the author- That left him without the all day and night. and pursue other projects it brick home set on 3 acres in FY2006 ’08 ’10 ’12 ’14 ’16 ’18 ity to add as many as 69,000 vi- workers he needed for two Patrick Boyle, president of had not been able to afford. Fox Chapel outside Pittsburgh. Note: Fiscal year ends Sept. 30. sas this year but released only months for the business’s 5,000 the Hidden Valley Manor Home- With the bond measure in “It was a nightmare,” she Source: Department of Labor's Office of 15,000. The extra visas came in landscaping contracts. owners Association, said he hand, the flood control dis- said. Foreign Labor Certification May; many businesses said it He said the company tried to walked Mr. Friend around the trict’s annual budget could The tight labor market and THE WALL STREET JOURNAL. was too little, too late. hire locally by taking out full- complex to point out the lapses. rise to more than $500 million visa shortage are hurting all Filling the temporary, sea- page ads in the local newspa- A Sylvan Gardens team came from $120 million, according kinds of industries that rely on the visa program that allows sonal jobs at landscapers is per. One person showed up for the next day to address prob- to Matt Zeve, director of oper- seasonal workers, from Mary- employers to bring workers even tougher when year-round an interview. lem spots. ations for HCFCD. The county land’s crab-picking industry to from abroad for temporary po- work is more available. Mr. Brua said wages at his “They just haven’t been able estimates that it would in- New England restaurants to sitions, accounting for 50% of “In today’s economy, with company have gone up 40% to keep up,” said Mr. Boyle. “It’s crease the total property tax Michigan fudge shops. But the all such visas certified by the unemployment hovering right over the past four years but it a health issue, an appearance by no more than 1.4% for most $82 billion-a-year landscaping government this year. below 4%, it’s really hard to hasn’t helped attract U.S. work- issue and a property-value is- homeowners in Harris County. industry is the largest user of The visa program was over- find people willing to take those ers. He said he was forced to sue.”

Home Values Eroded By Years of Flooding Damaged Real Estate Top 20 cities by total property value lost due to sea-level rise and flooding, 2005-17 BY LAURA KUSISTO to include the tri-state area, for its research as a previous have studied so far by in- Ocean City, N.J. $530.4 million bringing the total loss for all paper on the effect of flooding creased flooding, the report Miami Beach, Fla. Flooding has erased nearly eight states to $14.1 billion. in the Miami-Dade market, said. The Jersey Shore com- 337.2 $7 billion in value for home- The Northeast tri-state written by Steven McAlpine, munity of about 12,000 resi- Hollywood, Fla. 304.6 owners in New York, New Jer- communities have lost nearly head of data science at the dents lost more than $530 mil- Charleston, S.C. 266.2 sey and Connecticut since as much property value as First Street Foundation, and lion of potential real-estate St. Petersburg, Fla. 244.0 2005, a new study finds. storm-drenched southern Flor- Jeremy Porter, an environmen- value from 2005 to 2017 be- North Beach Haven, N.J. 216.9 Researchers across the ida, according to an August re- tal health sciences professor cause properties appreciated Sea Isle City, N.J. 208.6 country are studying the im- port from First Street Founda- at Columbia. That peer-re- more slowly than they would pact of water levels on real-es- tion, a nonprofit that says it viewed report, published in have without the risk of flood- Fort Lauderdale, Fla. 193.9 tate values. A growing body of advocates “for sea level rise June in the Population Re- ing, the study concludes. Mi- 185.1 research has highlighted the solutions.” This is in part be- search and Policy Review jour- ami Beach lost $337 million of Atlantic City, N.J. 174.7 vulnerability of Miami-Dade cause real-estate prices in the nal, showed $465 million was potential value during the Avalon, N.J. 166.0 County, parts of which sit just region are high relative to the lost in Miami-Dade County. same period. a foot above sea level, to slow- rest of the country, the re- Jesse Keenan, a professor at That said, values still grew Key Largo, Fla. 159.6 ing home-price appreciation port’s authors said in an inter- Harvard University who wrote in the past decade in many ar- Brigantine, N.J. 158.9 because of increased flooding. view. New Jersey overall has a different peer-reviewed eas covered in the report, even Mount Pleasant, S.C. 149.1 The researchers previously lost $4.5 billion in potential study on the effect of flooding if they lagged behind relative Jacksonville, Fla. 146.5 found that a total of $7.4 bil- value from 2005 until 2017 on Miami housing and isn’t in- to some other locations. Mea- North Wildwood, N.J. 138.4 lion in potential home value compared with Florida’s loss volved in the First Street Foun- sures such as elevating homes appreciation had been lost of $5.42 billion, according to dation work, said the method- and building sea walls can Key West, Fla. 133.0 across five southeastern the research. New York has ology is in line with academic help guard against many of Freeport, N.Y. 131.0 states: Florida, Georgia, South lost $1.3 billion and Connecti- research standards. the risks, say developers and Milford City, Conn. 126.9 Carolina, North Carolina and cut lost $916 million. Ocean City, N.J., surpasses some local officials. Mystic Island, N.J. 125.5 Virginia. The newly published First Street Foundation Miami Beach as the city hard- —Joseph De Avila THE WALL STREET JOURNAL. research expands the analysis used the same methodology est hit in the eight states they contributed to this article. Source: First Street Foundation A4 | Monday, August 27, 2018 PWLC101112HTGKBFAM123456789OIXX **** THE WALL STREET JOURNAL. U.S. NEWS

Little Impact Judge Support for Trump President Trump’s approval rating didn’t change by much after court action last week. Restricts President Trump’s job approval Should the Mueller Investigation into dealings with Russia Holds Steady in Poll MOSTLY BEFORE COURT ACTION continue? Executive Approve Disapprove Continue 41% All 46% 51% End 35 Journal/NBC survey strategy, the Manafort and Co- named individuals, while 40% No opinion 23 Orders hen convictions represent a AFTER COURT ACTION said they reflected potential Not sure 1 finds backers remain fool’s gold opportunity rather wrongdoing by the president. All 44% 52% BY ALEXA CORSE steadfast despite than a silver-bullet solution,” Some 30% said they didn’t Has Trump been honest Mr. Hart said. The results are know enough to have an opin- Republicans 90 9 about Russia? A federal district judge in associates’ legal woes a testament to the loyalty of ion of Mr. Trump’s potential the District of Columbia struck Independents 39 58 Yes 38% Mr. Trump’s core supporters, role, a group that included No 56 down parts of three Trump ex- BY JANET HOOK who have throughout his pres- 35% of Republicans. ecutive orders that made it Democrats 10 87 Not sure 6 idency remained largely un- In that survey, 38% of voters easier to fire federal employ- President Trump’s job-ap- moved by the controversies said Mr. Trump has been honest Preference for control of Congress ees deemed to be underper- proval rating remained stable that have swirled around him. and truthful when it comes to 60% forming by their managers. 0 20 30 40 50 amid criminal convictions and “We’ve had this enormous the investigation into Russian 10 Judge Ketanji Brown Jack- guilty pleas by two former ad- series of events, and these interference in the election; 56% August son issued the ruling on Satur- Democratic-controlled visers last week, new polling numbers don’t change very disagreed. That result split 50 50% day, after several public-sector by The Wall Street Journal much,” said Mr. McInturff. mostly along party lines, but unions challenged some por- and NBC News found. The initial poll of 900 regis- Republicans were less certain tions of the orders in court. Mr. Trump’s performance in tered voters was conducted than Democrats. While 81% of 40 The decision is a setback for office was approved by 44% of Aug. 18-22. The follow-up poll Democrats felt strongly that Mr. Republican-controlled 42% Republican lawmakers who registered voters in a survey of 600 voters was conducted Trump hadn’t been honest, just had sought, at the federal and taken after Paul Manafort, the Aug. 22-25. The Manafort-Co- 46% of Republicans felt strongly 30 state levels, to curb the power president’s former campaign hen news broke on Aug. 21. that he had, with an additional 2017 ’18 of labor unions representing chairman, was convicted on In pleading guilty, Mr. Cohen 30% of Republicans saying they Source: WSJ/NBC News telephone polls of 900 registered voters from Aug 18-22 and 600 government employees. fraud charges and Michael Co- implicated the president in a “somewhat’’ agreed that Mr. registered voters from Aug. 22–25; margin of error is +/- 3.27 pct. pts and 4 pct. pts, The judge wrote that, with hen, Mr. Trump’s former , scheme to buy the silence of Trump had been honest. respectively. THE WALL STREET JOURNAL. respect to some portions of the pleaded guilty to tax fraud and two women who alleged they Asked in the first survey executive orders, the administra- campaign-finance violations. had affairs with Mr. Trump. Mr. last week which party is better The Wall Street Journal/NBC News polls were based on nationwide tion overreached by attempting That compares with a 46% Trump has denied playing a equipped to handle the econ- telephone interviews of registered voters conducted by the polling or- to diverge from what Congress approval rating in a Journal/ part in hush-money payments omy, 43% of registered voters ganizations of Bill McInturff at Public Opinion Strategies and Fred Yang had established as federal law. at Hart Research Associates. NBC News survey taken earlier and said last week that he be- said the GOP, while 29% said A survey conducted from Aug. 18-22, 2018, included 900 voters. A The orders, which Mr. last week, mostly before those came aware of the payments to the Democratic Party—a GOP second survey was conducted from Aug. 22-25 and included 600 voters. Trump signed in May, sought to The samples were drawn in the following manner: Individuals were legal developments. The the women “later on.’’ edge twice as big as in a July randomly selected from national lists of registered voters, who were selected by a reduce the clout of federal-em- change wasn’t statistically sig- Journal/NBC polling found Journal/NBC poll. The GOP systematic procedure to provide a balance of respondents by sex. Respondents reached ployee unions in various ways. nificant because it was within that many voters hadn’t yet also held leads when voters on their cellphone were randomly selected from national lists of cellphone numbers. For example, one order re- Of the 900 voters in the first survey, 405 respondents were reached on a cellphone the polls’ margins of error. formed an opinion of Mr. were asked which party could and screened to ensure that their cellphone was the only phone they had. In addition, stricts the amount of time dur- Peter Hart, a Democratic Trump’s role, if any, in the ac- best handle taxes and trade. eight respondents were reached on a cellphone but reported also having a landline. ing the workday that federal pollster who worked on the tivities that led to indictments Still, when voters were Of the 600 voters in the second survey, 270 were reached on a cellphone and workers with full-time govern- screened to ensure their cellphone was the only phone they had. In addition, 10 re- back-to-back surveys with Re- and guilty pleas accumulating asked which party should con- spondents were reached on a cellphone but reported also having a landline. ment jobs can also spend pur- publican Bill McInturff, said among his former associates. trol Congress after the mid- Overall, the data’s margin of error was plus or minus 3.27 percentage points in the suing union activities. the results were a challenge to In the survey conducted af- terms, 50% said Democrats and Aug. 18-22 survey and plus or minus 4 percentage points for the Aug. 22-25 survey. The orders had also sought Trump adversaries who have ter the Cohen and Manafort 42% said Republicans, a margin to reduce to 30 days the amount hoped the legal blows to the developments last week, 27% keeping with Democrats’ con- the midterms: 63% expressed crats: 61% said this year’s elec- of time an employee who isn’t president’s associates last said the indictments and sistent advantage in past high interest, compared with tions were more important to meeting expectations gets to week could be a watershed in guilty pleas of those and other months’ surveys. Democrats 52% of Republicans. them than past congressional show improvement, down from the 2018 midterm campaign. Trump associates reflected also have a continuing edge in In addition, the poll found elections, compared with 43% 60 to 120 days previously. “For the 2018 Democratic wrongdoing only by the their voters’ level of interest in greater urgency among Demo- of Republicans. Judge Jackson struck down those and other provisions of the executive orders, including restrictions on the selection of U.S. and Mexico See Hope in Nafta Talks workplace issues that agencies should consider open for ne- gotiations with unions, such as BY JOSH ZUMBRUN the number of employees told AND ROBBIE WHELAN to work on any given project. Judge Jackson, an appointee The U.S. and Mexico could of former President Obama, reach a bilateral agreement as left other parts of the execu- early as Monday on the key is- tive orders intact, including in- sues holding back a renegotia- structions to agencies to refuse tion of the North American to bargain over efforts to limit Free Trade Agreement, ac- their discretion in terminating cording to Mexico’s chief trade an employee without first tak- negotiator Ildefonso Guajardo. ing disciplinary action. Mr. Guajardo and the rest “What remains of the Or- of Mexico’s trade delegation ders are those provisions that arrived at the office of the U.S. the Unions have not opted to Trade Representative around challenge, and the few chal- midday Sunday—after negoti- lenged provisions” that ating in Washington for weren’t struck down, the judge weeks—and said they would wrote in the ruling. do whatever necessary, includ- The move was welcomed by ing working into the night, to unions. The American Federa- reach an agreement with the tion of Government Employees, U.S. that would then allow the which represents hundreds of return of Canada to the talks. thousands of federal and Dis- Disagreements between trict of Columbia employees, Mexico and the U.S. have posed applauded the ruling Saturday. a major hurdle to renegotiating “Now that the judge has is- the Nafta agreement, which sued her decision, I urge all was a campaign promise of agencies that have attempted to President Trump. Mr. Guajardo enforce this illegal executive or- said negotiators may still need der to restore all previously ne- about a week of talks with Can- gotiated contracts and to bar-

ada before an agreement would ALINA DIESTE/AGENCE FRANCE-PRESSE/GETTY IMAGES gain in good faith with employee be completed. Ildefonso Guajardo, Mexico’s chief trade negotiator, during a break in between meetings on Nafta talks in Washington on Sunday. representatives on any future Trump administration offi- changes as required under the cials and their Mexican coun- effort” at resolving them. ernment. ment provisions. strategy could split the united law,” AFGE National President J. terparts are debating a pro- “Our relationship with Mex- The U.S. has argued that the An idea to resolve the im- front that many business David Cox Sr. said. posal to exempt some ico is getting closer by the tribunals erode national sover- passe is for only certain indus- groups have advanced, with A Justice Department industries from dispute-settle- hour,” President Trump eignty. But many U.S. compa- tries to remain covered by dis- some major industries poten- spokesman said, “We are re- ment provisions, which would tweeted on Saturday morning, nies have pressed the adminis- pute settlement. Negotiators tially welcoming a resolution, viewing the decision and con- remove one of the most diffi- as negotiators continued their tration to preserve the have floated the idea with dif- leaving behind a smaller group sidering our next steps.” cult issues, the people said. work. “A big Trade Agreement dispute-settlement provisions, ferent industries, according to with objections. Thomas A. Kochan, a pro- The negotiations have also with Mexico could be happen- arguing that otherwise their three sources from industries The U.S. Trade Representa- fessor of industrial relations made progress over how much ing soon!” international investments closely tracking the negotia- tive’s office didn’t respond to at MIT’s Sloan School of Man- local content a car should One of the sticking points would be exposed and unpro- tions. Mexico and the U.S. a request to comment. Mexi- agement, said he believes the have, and the cost of labor to throughout talks between the tected. don’t appear to have reached can officials, approached as executive orders so far haven’t produce a car, to qualify for U.S., Mexico and Canada has Mexico and Canada have any agreement on the idea to they entered a negotiating caused material changes, add- tariff-free treatment under been Washington’s desire to also favored keeping the provi- exempt some industries but venue in Washington, declined ing that he hasn’t seen federal Nafta. The auto-related discus- weaken or remove a provision sions, believing they bolster not others. to comment. agencies adopting substan- sions are at an advanced in Nafta known as investor- the confidence of investors. While a compromise on dis- Mexico and the U.S. have sig- tially different approaches. stage, said one official familiar state dispute settlement, or The Chamber of Commerce, pute settlement may bring naled in recent days that they Mr. Kochan said the issue with the matter. ISDS, in which companies can Business Roundtable, National some industry groups along, it are making significant progress has been in his view “over- Heading into negotiations bring claims to an international Association of Manufacturers, could spark opposition from in resolving their remaining blown beyond its real impact.” on Sunday, Mr. Guajardo said tribunal when they believe and American Petroleum Insti- exempted industries that be- disagreements. But they have He also said the administra- that there were still multiple their overseas investments tute are among industry lieve they are losing meaning- stressed nothing is final. tion’s decision to issue the ex- issues outstanding, but that were unfairly treated by an ac- groups that have fought to ful protection of their interna- —Kim Mackrael ecutive orders “leads to ani- they were making their “best tion from another Nafta gov- preserve the dispute-settle- tional investments. The contributed to this article. mosity, but no lower costs.” DNC Votes to Bar Superdelegates From First Ballot

BY REID J. EPSTEIN a procedural measure to ad- ficials bearing battle scars that you’re going to take away vance the rules was passed from generations past. my right, to appease another CHICAGO—Democrats re- with 75% of the vote. Mr. Sanders called Satur- group of people,” Karen Carter solved one of the thorniest in- DNC Chairman Tom Perez day’s vote “an important step Peterson, a DNC vice chair- ternal rifts of the 2016 cam- spoke directly to the party’s forward in making the Demo- woman from Louisiana, told paign by reducing the clout of grass-roots activists in hailing cratic Party more open, demo- party members Saturday. party insiders and elected offi- the adoption of the new rules. cratic and responsive to the Under the new rules, super- cials in picking the party’s “We will listen to you, we input of ordinary Americans.” delegates, formally known as next presidential nominee. want you to have a seat at the Young progressive activists unpledged delegates, will vote Democratic National Com- table,” he said. “understand that the status for the party’s nominee on the mittee members voted Satur- The superdelegate issue be- quo has to change, especially first ballot only if the nominee day to strip from so-called su- came a cause célèbre for sup- when it comes to the issue of has clinched the nomination perdelegates—a group that porters of Vermont Sen. Ber- superdelegates,” former DNC by securing enough delegates includes DNC members, federal nie Sanders during his 2016 Chairman Howard Dean said. from pledged delegates lawmakers, governors and past presidential campaign. As the Other party elders opposed awarded through primaries presidents and party chair- DNC deliberated the rules the moves, fearing the new and caucuses. men—the right to vote on the change during the party’s rules would disenfranchise If the first presidential bal- first presidential ballot at the summer meeting at a Chicago longtime DNC members. lot doesn’t produce a nominee, party’s national convention. hotel, the debate pitted mem- “You’re going to tell me superdelegates would be al-

DANIEL ACKER/REUTERS The committee adopted the bers attuned to the party’s that after 30 years of blood, lowed to vote on subsequent Democratic National Committee executives met in Chicago. new rules by acclamation after grass roots against veteran of- sweat and tears in this party ballots. THE WALL STREET JOURNAL. Monday, August 27, 2018 | A7 WORLD NEWS Iran’s Rouhani Loses Economy Minister

As sanctions return, lawmakers remove Charity Worker Is another member from Returned to Prison leader’s finance team Dual national Iranian-British Iran’s parliament ousted the charity worker Nazanin economy minister on Sunday, Zaghari-Ratcliffe returned to stepping up an overhaul of prison after Iran’s judiciary re- President Hassan Rouhani’s fused to extend her temporary cabinet amid domestic opposi- release, her husband said. tion to his response to new U.S. Ms. Zaghari-Ratcliffe was sanctions. released from Tehran’s Evin prison on Thursday on a three- By Asa Fitch in Dubai day furlough and reunited with and Aresu Eqbali her parents and 4-year-old in Tehran, Iran daughter, Gabriella. She had ap- pealed to the judiciary to ex- Mr. Rouhani, a relative mod- tend her release and allow her erate in Iran’s system, had sur- to return home to London to rounded himself with a cabinet her British husband. of technocrats, vowing to fight Ms. Zaghari-Ratcliffe, a proj- corruption, promote transpar- ect manager for the Thomson ency and open Iran’s economy Reuters Foundation, the charity to the West with the 2015 nu- wing of the media company, clear deal. But after the econ- was arrested in 2016 on a fam- omy faltered and the Iran deal ily visit to Iran at the airport came under threat from the and charged with spying. She Trump administration last has denied the accusation. She year, hard-line opponents have is serving a five-year sentence.

seized on Iran’s growing rich- ABEDIN TAHERKENAREH/EPA/SHUTTERSTOCK —Farnaz Fassihi poor divide and plummeting Iranian lawmakers quarreled Sunday in a session that ousted Economy Minister Masoud Karbasian, who addressed parliament, below. currency to gut Mr. Rouhani’s economic team and undercut tary Fund forecasts at around the country had to come to- liant economy. that strategy. 12% this year. gether to face external threats Parliament members have Slightly more than the re- Mr. Rouhani removed the and renewed a promise to work also called for the impeach- quired majority of 260 parlia- central bank governor last to improve people’s lives. He ment of the education and inte- mentarians present on Sunday month after Iran’s currency fell didn’t respond publicly on Sun- rior ministers. Some have said voted to fire the minister, to new lows against the dollar. day to Mr. Karbasian’s removal. the industry and housing min- Masoud Karbasian, state tele- It now takes around 105,000 ThepressureonMr.Rou- isters should be impeached if vision reported. Parliamentari- Iranian rials to buy a dollar, hani has ramped up since Mr. Mr. Rouhani doesn’t shake up ans said he had failed to ad- compared to about 43,000 in Trump withdrew the U.S. from his economic team himself. dress a currency crisis or tame January. the nuclear deal, which lifted Iran’s economic outlook has high inflation, and declared Adding to the president’s sanctions on Tehran in ex- darkened in recent months. An- him unfit to fight an economic peril are waves of popular un- change for curbs on its atomic alysts at BMI Research in Lon- war with the U.S. Mr. Trump rest that have erupted because program. The Trump adminis- don project economic growth withdrew from the nuclear of the economy. Labor unrest tration began reimposing sanc- to slow to 1.8% this year, fol- deal in May and began impos- and women’s-rights protests tions this month and is prepar- lowed by a contraction of more ing new sanctions. have also percolated in recent ing to unleash potentially than 4% next year. Mr. Rouhani now has three months. crippling restrictions on Iran’s Mr. Rouhani is conferring months to name a new econ- Mr. Rouhani will face ques- oil sales and banks in Novem- with European countries to omy minister. tions Tuesday from parliament, ber as it pushes for large-scale keep the nuclear deal alive

The move against Mr. Kar- where some members have ATTA KENARE/AGENCE FRANCE-PRESSE/GETTYchanges IMAGES in Iran’s behavior in without U.S. involvement, while basian, who held his position called for his impeachment— the Middle East. turning to China as an outlet for little more than a year, fol- though any such effort would naled that he wants the presi- International Crisis Group, a Political support has swelled for oil sales. Iranian authorities lowed the parliament’s im- be a long shot. It would require dent removed. Brussels-based think tank. for a shake-up in Mr. Rouhani’s have made dozens of arrests peachment this month of Mr. a two-thirds parliamentary ma- “Rouhani’s failure to re- “Even his erstwhile allies in the economic team. Many hard-lin- for illegal foreign-exchange Rouhani’s labor minister on jority and signoff by Iran’s Su- spond to the economic crisis parliament are deserting what ers oppose the president’s bid dealings and economic crimes, grounds that he failed to prop- preme Leader Ayatollah Ali with gut and grit has further they believe is a sinking ship.” to modernize Iran and open it although those and other mea- erly address unemployment, Khamenei, who has final say in isolated him,” said Ali Vaez, di- Mr. Rouhani called for unity for business to foreign part- sures have had limited success which the International Mone- state matters and hasn’t sig- rector of the Iran Project at the in a speech Saturday. He said ners, preferring a more self-re- in fixing the currency.

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Rochester, Minnesota ©2018MayoClinic A8 | Monday, August 27, 2018 ** THE WALL STREET JOURNAL. WORLD NEWS ‘Money Masters’ Nourish Markets In North Korea

BY JONATHAN CHENG gic and International Studies in Washington and the defector- SEOUL—An expanding net- run North Korea Development work of markets in North Ko- Institute think tank in Seoul. rea is emerging as a vital cog Tallies in recent months by in leader Kim Jong Un’s mis- Curtis Melvin, then a re- sion to revive the economy, searcher at the U.S.-Korea In- while forging a class of mon- stitute at Johns Hopkins Uni- eyed elite whose interests the versity, and Daily NK, a Seoul- regime can’t overlook. based news outlet, found 480 New studies show an in- and 387 officially sanctioned creasing number of official markets, respectively, employ- and unofficial marketplaces ing at least 600,000 citizens. selling goods, food and medi- Since the spring, Mr. Kim

cine, helping to mint a mer- has visited factories, farms IVARSSON JERKER/AFTONBLADET/IBL/ZUMA PRESS cantilist group of middle- and and other economic facilities, Signs of private investment are spreading in North Korea, including in some state-run shops. Here, a food kiosk in Pyongyang in April. upper-class North Koreans many in remote corners of known there as donju,or North Korea. But the attention tem began to break down after nomic mission. “If you’re looped into lucra- make money, the more conser- “money masters.” Mr. Kim has lavished on state the end of Soviet support. Though some North Korean tive supply chains, you can vative they become,” Mr. Ward The rise of these enterprises projects belies the central role As these markets have be- markets are as small as 2,800 make a lot of money,” said Pe- said. “They don’t want a revo- in a country whose people that markets play in North Ko- come woven into the fabric of square feet, the largest, in the ter Ward, a scholar at Seoul lution, or to see all their once relied on a state distribu- rea, said Victor Cha and Lisa the North’s urban and rural ar- northeastern city of Chongjin, National University. wages and savings eviscerated tion system, and the compara- Collins, authors of the CSIS re- eas, Pyongyang has imposed a covers more than 250,000 While private enterprise is by inflation or financial col- tive wealth they bring to a port. Many North Koreans now form of taxation on trade that square feet and has thousands illegal in North Korea, busi- lapse.” business-minded elite, make rely on markets more than the nets some $56.8 million a year, of stalls that bring in nesses with links to state- The danger for Mr. Kim is them increasingly important to state for their livelihoods, the according to the researchers’ $850,000 a year in govern- owned enterprises have al- that this influential demo- Mr. Kim, who has signaled an researchers said, basing their calculations. ment revenue, CSIS estimates. lowed the donju to prosper. graphic’s interests eventually emphasis on the economy this assessment on conversations That makes the enterprises The trading centers appear Some provide financing for clash with those of a govern- year after declaring his nuclear with North Koreans inside and a relatively steady source of to be plugged into an increas- starting and expanding market ment that isn’t prepared to force complete. outside the country. income for a government ingly sophisticated supply businesses, for building loosen political authority. A new report counts 436 of- Official centers exist along- squeezed by sanctions. They chain connected to an export houses, or buying raw materi- That makes any attempt by ficially sanctioned markets, up side black markets known as also represent a potential ave- industry of coal, seafood and als for factory production, said Mr. Kim to reverse liberalizing from zero during a famine in jangmadang that sprang up nue for growth if fitful nuclear other commodities—though Ms. Collins. reforms potentially perilous, the 1990s and double the num- beyond state control during talks with the U.S. result in U.S.-led sanctions have In general, the donju are after he staked his legitimacy ber a decade ago, in an esti- the 1990s famine, as North Ko- the easing of sanctions—an- pinched exports generally in aligned with the state’s inter- in part on improving living mate by the Center for Strate- rea’s socialist distribution sys- other key to Mr. Kim’s eco- recent months. ests. “The more they’re able to standards, said Ms. Collins. Strong Dollar Fuels Tourism to Balkans

BY ERIC SYLVERS island near the village called ing beyond whistle-stop tours to Greece have benefited from peo- AND JEANNETTE NEUMANN Our Lady of the Rocks. “If some- delve more deeply into the con- ple’s security fears about vaca- body tries to get a cheaper price tinent’s culture offerings. tioning in the Middle East and PERAST, Montenegro—Vladi- we know they are probably International overnight stays North Africa. Even European cit- mir Milinović has seen Western French.” in Europe rose 7% in the first ies that suffered terrorist at- tourism in his Balkan village So many tourists are de- four months of 2018 compared tacks in recent years, such as swell so much, he now knows scending on Europe this sum- with the same period last year, Paris in 2015 and Brussels in who is likely to tip, and who will mer—drawn in part by the building on what the United Na- 2016, saw temporary dips in try to haggle down the €5 strong dollar—that a growing tions’ tourism organization tourism before bouncing back (nearly $6) he charges for a number are looking beyond the called a “remarkable” 8% in- within about a year and joining short boat ride. continent’s famous destinations, crease in 2017. Above all, Eu- the wider boom. “We like Americans because leaving hardly a spot on the rope’s continuing economic up- The trend of tourists seeking they are very generous,” said map unvisited. As the lines swing has led to strongly rising out locations that were once

MARKO DJURICA/REUTERS Mr. Milinović, as he navigated stretch longer outside Notre- tourism within the continent, considered second tier is evi- Rijeka Crnojevića in Montenegro, which has seen a surge in tourism. his motorboat to a picturesque Dame in Paris, and the crush especially from Germany. Tour- dent even in Spain, whose 82 gets greater on St. Mark’s million foreign guests in 2017 Square in Venice, even tiny made it the world’s second-most Montenegro is enjoying its place visited country after France. In We’ve outdone ourselves... in the sun. the first half of this year, foreign Over 12 carats In well-trodden Europe, you 20% tourists in Spain’s 11 least-vis- of scintillating can’t get much more off the ited regions, including the sparkle finished beaten track than this Balkan Rise in visitors to Montenegro in Basque Country, were about country smaller than Connecti- the first four months of 2018. one-third higher than in the in precious cut, whose pristine beaches and same period in 2016, while visi- platinum over landscape were relatively ob- tors to Andalusia and the Ca- sterling silver scure until recently. nary Islands, two of the coun- Conditions could hardly be ism industry executives expect try’s top destinations, were up a for under better for Europe, which takes the good times to continue. more modest 12% and 7%, re- $80 the lion’s share of global tour- The sector’s boom began sev- spectively, in that time. ism revenues globally. The ris- eral years ago, spurred by Eu- The boom is bringing back ing dollar and strong U.S. econ- rope’s emergence from its finan- fond memories for Montenegro. omy are drawing more cial crisis, and has proved It was a popular destination for Americans here. Russians have largely impervious to Europe’s Yugoslavs, but it didn’t see begun to travel again in Europe, other woes, from the migration many foreign guests for a long especially in the Balkans, after a crisis to terrorism. time after Communism fell. Last hiatus for Russia’s economic With Europe remaining one year, 1 million tourists visited downturn. And the growing of the world’s safest and most this country of 650,000 inhabit- number of Chinese who visit Eu- politically stable regions, desti- ants, according to the national rope are staying longer, ventur- nations such as Spain and statistics office, a 19% rise from the year before. In the first four months of 2018, numbers were up another 20% on the year. 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Extremists lose land Virtual World, Real Extremists but sustain presence A study of about 1,000 recently-active Facebook accounts that in cyberspace for expressed sympathy for Islamic State gives a glimpse of the promotion, recruiting network's social-media presence. Number of users, by region of origin BY SUNE ENGEL RASMUSSEN Africa 206 Southeast Asia 180 Islamic State has lost most Iraq and Syria of the territory it once held in 159 Syria and Iraq. It is vying for South Asia 106 survival with other, sometimes Middle East* 66 stronger, extremist groups. But Central and South America 48 one sphere where Islamic State Europe still reigns supreme among 46 terrorists is in cyberspace. Turkey 24 The group’s vast online North America 23 presence is a critical recruit- East and Central Asia 9 ing and marketing tool that Australia has helped it build a brutish 1 brand using propaganda and Unknown 131 sometimes false claims. Main- *Excludes Iraq and Syria. taining the perception that Is- Note: Accounts were tracked from Oct. 2017-March 2018. By March, nearly 50% of the lamic State can shape the ac- accounts were inactive. tions of loyalists has become Source: Counter Extremism Project THE WALL STREET JOURNAL. all the more important as its territorial control, or self-de- pressed sympathy for Islamic physical footprint has shrunk.

clared caliphate, has almost YOUSSEF RABIH YOUSSEF/EPA/SHUTTERSTOCK State, the Counter Extremism The former al Qaeda affiliate completely collapsed. Syrian Democratic Forces fighters in October in Raqqa, once Islamic State’s de facto capital. Project, a nonpartisan policy or- Hayat Tahrir al-Sham has be- The latest example of the ganization, documented sup- come the dominant rebel role of such online propaganda ing for supporters abroad to of Manila in June 2017 was a the group’s propaganda. porters of the group in 96 coun- group in Syria, while al Qaeda came on Thursday, when Is- continue attacks on Western soldier of its caliphate, despite The group, widely known as tries, including such disparate itself remains strong in sev- lamic State’s official news out- cities. local authorities saying that ISIS, frequently describes “in- locations as Namibia, Argentina eral countries. let claimed that a man who In October, the group the perpetrator was an in- formation wars” as important and the . But neither rivals Islamic stabbed his mother and sister claimed to have inspired the debted gambler trying to make as its military battles, accord- The research shows the State in cyberspace. Both to death in France had re- Las Vegas shooter Stephen off with $2 million in chips. ing to Charlie Winter, senior spread of Islamic State’s influ- groups mostly spread propa- sponded to its calls to attack Paddock, who killed 59 people In internal field guides, Is- research fellow with the Insti- ence and gives an idea where ganda through more decen- citizens of countries that are attending a country-music lamic State regards its propa- tute for the Study of Radical- its soldiers may return to after tralized methods, such as ser- part of the U.S.-led coalition concert. A month earlier, Is- ganda as “projectiles” fired ization and Political Violence, fighting for the group. mons on flash drives, leaflets fighting the group. French In- lamic State said it had planted into mainstream media. a London-based think tank. “By having this big network, or public gatherings. terior Minister Gerard Col- a bomb on a U.K.-bound flight Threats and claims of attacks “ISIS uses propaganda as their propaganda is constantly Western security agencies lomb disputed the statement, that was held in Paris for what are intended to intimidate and an extension of its military being disseminated and have attacked Islamic State saying the perpetrator was officials called a “direct secu- destroy the morale of the en- methods,” Mr. Winter said in spread, and that’s a key thing propaganda outlets, but they mentally unstable. rity threat.” Authorities in emy. In many cases, even if au- an interview earlier this year. for the group,” said Robert have resurfaced. An operation That claim came a day after both cases rebuffed the thorities don’t establish spe- “Terrorism is a way of com- Postings, a researcher who co- by U.S., Canadian and six Eu- Islamic State released what it group’s assertions. cific links between an attacker munication more than any- wrote the study. “This way, ropean agencies in April took said was a recording of its Islamic State also claimed in the West and Islamic State, thing else.” they can continue to radicalize down servers and outlets run leader Abu Bakr al-Baghdadi, that a man who attacked a ca- the perpetrator has turned out In a survey of about 1,000 people and inspire attacks.” by Islamic State. Days later, the first in nearly a year, call- sino in the Philippine capital to have been a consumer of Facebook profiles that ex- Meanwhile, Islamic State’s many were back online. WORLDWATCH Deadly Congo Ebola Outbreak Grows AFGHANISTAN leadership tumult, in which she launched a failed bid to become BY NICHOLAS BARIYO others remain in treatment. Senior ISIS Official prime minister. AND BETSY MCKAY In a region that has seen a Is Killed in Joint Raid Ms. Bishop said she has yet spike in violence, including be- to decide if she will contest the The world has never been headings, in recent months, U.S. and Afghan forces killed next federal election, due by May so prepared for an Ebola out- health workers have struggled the leader of Islamic State in Af- 2019. Ms. Bishop, 62 years old, break, but the latest emer- to reach patients and imple- ghanistan in the eastern Afghan has been in parliament for al- gence of the virus in the Dem- ment safe-burial protocols province of Nangarhar, Afghan most 20 years, serving more ocratic Republic of Congo’s that proved key to controlling officials said Sunday. than half of that time as deputy conflict-ridden east is proving recent outbreaks. Ebola, which The Afghan intelligence leader of the Liberal Party, the the most dangerous in years. causes fever, diarrhea, vomit- agency said Abu Saad Erhabi country’s dominant conservative Seventy-two of 111 patients ing and internal bleeding, is was killed along with 10 militants force. She had served as foreign who were infected with the passed on through bodily flu- in a joint ground and air opera- minister since late 2013. hemorrhagic fever have died, ids, including from corpses. tion Saturday. A spokesman for —James Glynn making this outbreak the The WHO said on Friday a the U.S.-led international coalition deadliest in more than a de- doctor in the town of Oicha

in Afghanistan, Martin O’Donnell, CHINA cade in Congo, where the dis- OLIVIA ACLAND/REUTERS had become ill with Ebola and confirmed a counterterrorism ease was first diagnosed in Workers check a Congo villager before delivering the Ebola vaccine. may have infected his wife. strike that targeted “a senior Fire at Resort Hotel 1976 and named after the Thecasesarethefirstin“an leader of a designated terrorist Leaves 19 Dead nearby Ebola River. and Prevention, which has helped snuff out an outbreak area of high insecurity,” said organization.” IS-K had no imme- While the death toll is far staff working to stem the out- in northwestern Congo last Peter Salama, the WHO’s diate comment. At least 19 people were killed off the 11,300 people who per- break in Congo, neighboring month. It has also cleared five emergency response chief. —Habib Khan Totakhil in a fire at a resort in China’s ished when Ebola spread countries and the Geneva experimental treatments Large numbers of civilians northeastern city of Harbin, the through West Africa from 2014 headquarters of the World meant to reduce the mortality have been killed around Oicha AUSTRALIA local government said. to 2016, international health Health Organization. of the virus, which on average and aid workers, priests and Firefighters found 16 people officials worry about contain- Since 2014, international kills half of those infected. government officials are being Foreign Minister dead at the Beilong Hot Spring ing the virus in an area dense health groups, governments Twoofthefirst10patients held hostage, Dr. Salama said. Resigns From Post Hotel and three more died at a with armed militias and close and pharmaceutical companies who received a medication Health teams from the U.N. hospital, the city government to the porous Uganda border.. have raced to strengthen their which contains an antibody and Congo’s government man- Australia’s Foreign Minister and provincial fire department “This outbreak is still in the defenses against Ebola. Congo isolated from a survivor of an aged to reach the town accom- Julie Bishop on Sunday an- said. It said 18 people were in- escalation phase,” said Robert has approved the use of an ex- Ebola outbreak in 1995 have panied by military escorts, but nounced her resignation follow- jured and 70 evacuated. Redfield, director of the U.S. perimental vaccine made by recovered, Congo’s health min- staff from nongovernmental ing the country’s latest bout of —Associated Press Centers for Disease Control U.S.-based Merck & Co., which istry said Saturday. The eight groups have been locked out.

judge?” In his letter, Archbishop Viganò blamed gay people for Archbishop the bulk of sex-abuse cases. The archbishop’s allegations about the handling of the Mc- Asks Pope Carrick affair are likely to also Home Security. raise concern among the pope’s more liberal supporters. To Resign Pope Francis’ handling of Done Right. ContinuedfromPageOne sex-abuse scandals in a string nearly 50 years ago and of countries has emerged as the banned him from practicing his most serious weakness of his Introducing the all new SimpliSafe. ministry publicly. He has previ- pontificate. The issue has gen- ously said he doesn’t recall the erated pressure on the Vatican It’s smaller. Faster. Stronger than ever. incident involving the teenager since January, when the pope Engineered with a single focus: to protect. and believes he is innocent. sparked international anger by After apologizing in Ireland saying that victims who ac- More than easy to use: for abuses by priests over many HANNAH MCKAY/REUTERS cused a Chilean bishop of cov- It’s downright delightful. decades, but failing to satisfy On his visit to Ireland, the pope apologized for abuse by priests. ering up abuses were them- many victims and critics who selves guilty of “calumny.” All at prices that are fair and honest. want the Vatican to take more the pope has been accused of pope’s impaired credibility on The pope later admitted mis- responsibility and action, Pope wrongdoing himself—by reha- the issue—and not just among steps, and Chile’s bishops col- Francis awoke on Sunday bilitating an influential official conservative critics, who in- lectively offered him their resig- morning to find that he had who, the archbishop alleged, clude Archbishop Viganò, of nation in May after he accused been accused personally of cov- had abused his position of au- the pope’s relatively liberal ap- them of “grave negligence.” ering up sexual misconduct at thority over young men study- proach to moral issues such as Critics said the pope has re- the highest levels of the church. ing to become priests. homosexuality and divorce. peatedly underestimated the Aboard the flight, the pope “The Pope learned about it Pope Francis’ move to en- demand among Catholics in told reporters to make their from me on June 23, 2013 and courage leniency toward di- many countries for the Vatican own “mature” judgment about continued to cover for him,” vorced Catholics who remarry to take immediate action and Archbishop Viganò’s letter. He Archbishop Viganò wrote. “He without an annulment of their responsibility for the past. told a story about Spanish did not take into account the first marriage has drawn sharp During his visit of less than priests who were cleared of sanctions that Pope Benedict criticism from some church 36 hours in Ireland, Pope Fran- abuse allegations only after the had imposed on him and made conservatives. In a lengthy 2016 cis apologized publicly on four media had destroyed their rep- him his trusted counselor.” document, “On Love in the different occasions for sexual utations, adding: “Those who “Pope Francis must be the Family,” the pope effectively and other abuses by priests inform must always begin with first to set a good example for encouraged priests to grant and other church personnel in the presumption of innocence.” cardinals and bishops who cov- Holy Communion to those who Irish institutions, stretching Archbishop Viganò didn’t ered up McCarrick’s abuses and remarry. That stance has deeply back many decades. He also respond to repeated attempts resign along with all of them,” polarized the church, with one met privately with a group of to contact him. Archbishop Viganò wrote. prominent conservative figure, abuse victims on Saturday. Yet Sunday’s allegations, if Then-Cardinal McCarrick U.S. Cardinal Raymond Burke, advocates for abuse victims in proven, would be extremely continued to appear at Masses threatening to issue a “formal Ireland criticized his com- damaging to Pope Francis, and other public events during correction” of the pope. ments as disappointingly Right now get free shipping t who has often been accused of Pope Benedict’s pontificate, Pope Francis has also raised vague. His comments, they SimpliSfe.com/WS not responding effectively or which ended in 2013. conservative concerns with his said, evaded the Vatican’s re- decisively to the church’s sex- The high attention and cre- openness to gay people, most sponsibility for past coverups abuse crisis. Archbishop Vi- dence that Sunday’s allegations famously with his comment on and lacked concrete proposals ganò’s letter is the first time have received is a sign of the gay priests: “Who am I to for increased accountability. A10 | Monday, August 27, 2018 **** THE WALL STREET JOURNAL. FROM PAGE ONE

deal machinery was fully in motion. The Tesla board held Unraveling a meeting by telephone, with ‘In my opinion, Mr. Musk and his brother Kim- bal huddled in Los Angeles. the Tesla the value of Mr. Musk presented ideas about how a transaction could Tesla will rise be structured. When asked Plan about his earlier promise that ContinuedfromPageOne considerably in individual investors would be AG, people familiar with the able to join, he acknowledged matter said. the coming it might not work, according Taking Tesla private also to people briefed on the dis- would displace legions of months and cussions. The meeting ended small stockholders—a merry on a positive note, though, band of electric-car fanatics years.’ one of the people said, with willing to look past Tesla’s most directors believing Mr. rickety finances and its strug- Elon Musk Musk remained committed to gle to master the skill of mass- the idea. producing automobiles. Taking Following the meeting, their place would be more so- however, Mr. Musk sought phisticated investors tugging private counsel about on a tighter leash. whether to proceed from sev- Then there was the photo eral board members. He got emailed to him last week conflicting advice. from an elderly couple, Board members remained dressed in Tesla Inc. T-shirts supportive of Mr. Musk, sev- and baseball caps. The couple eral people familiar with its held up a handwritten sign discussions said, but some congratulating Mr. Musk for were whipsawed by the producing 7,000 electric cars tweets. He told the board he in seven days. Their message: understood that his tweets “Thanks, Elon! Two happy had been rash and promised to stockholders!” exercise more self-control, ac- Mr. Musk forwarded the cording to people familiar email to a friend. “Made my with the matter. day,” he wrote. It also nagged Mr. Musk seemed to view at him. such a complex corporate In the conference room, transaction as an engineering

bankers from Goldman Sachs JOSHUA LOTT/GETTY IMAGES problem he could solve—much Group Inc. and executives at Engineer and tech entrepreneur Elon Musk. as he had spent time pursuing the idea of a submarine to res- analysts for asking “boring, Fund managers including cue a soccer team trapped in bonehead” questions. Ever the Fidelity Investments, a long- Moving Ahead the waters of a Thai cave. Elon Musk had optimist, he viewed Tesla as a time booster of Mr. Musk’s After the board meeting, Tesla's market value - even after a recent drop in its stock price revolutionary business with its tech empire, wouldn’t be able Mr. Musk went to the Tesla complained about the - tops that of much larger mainstream car makers. best days ahead. to roll their entire stakes into factory in Fremont, Calif. He scrutiny aimed at Then on Thursday, he told a private Tesla, because of reg- Market capitalization stayed into the early morning, public companies the board he wouldn’t be pur- ulatory constraints, said peo- $70 billion tweeting at 2:32 a.m. that he suing the deal. ple familiar with the matter. had just gotten home. He slept The Securities and Ex- Each investor that didn’t most of the next day. change Commission is now in- stay with Tesla needed to be 60 On Monday and Tuesday, Silver Lake, the private-equity vestigating his tweets about bought out. Weighed down advisers from Goldman and firm brought in to try to facil- the deal, including the one with debt and bleeding cash, Tesla Silver Lake plowed ahead on a itate a deal, made their pre- saying he had “funding se- the company would be hard- 50 deal that might work. sentation. Then Mr. Musk rose cured,” putting Mr. Musk and pressed to borrow. Mr. Musk GM By Wednesday evening, to speak. the company in jeopardy. needed new shareholders. they had a presentation for Taking Tesla private was an Mr. Musk’s task ahead is to In an Aug. 13 blog post, Mr. 40 Mr. Musk, proposing a roster idea he mulled for years, and try to bury his private-trans- Musk cited ’s sov- Ford of deep-pocketed investors, in- Wall Street was offering him action dalliance and focus in- ereign-wealth fund as the cluding Volkswagen and Silver the chance to try. Despite a stead on mass-marketing the source of his secured funding: 30 Fiat Chrysler Lake itself, that had agreed to meteoric stock-price rise—up Model 3 sedan—a bet-the- “Obviously, the Saudi sover- contribute as much as $30 bil- 78% since the end of 2016— company product—at a scale eign fund has more than lion, people familiar with the Mr. Musk was obsessed with and cost that could make it a enough capital needed to exe- 20 matter said. short-selling investors who mainstream automobile. The cute on such a transaction.” They weren’t the kind of in- bet on Tesla’s price declining. company has significant debt That rankled some senior vestors Mr. Musk had in mind. He complained about the scru- obligations coming due over officials in the kingdom, ac- 10 He was suspicious of rival car tiny aimed at public compa- the next year, and some of its cording to people familiar companies, believing they nies, once chiding Wall Street suppliers are nervous about with the matter. Prince Mo- wanted to piggyback on what 0 Tesla’s ability to pay. hammed bin Salman has big he called the “Tesla halo.” He “In my opinion, the value of ideas to turn his petrostate 2016 ’17 ’18 also was lamenting a loss of Staying Public Tesla will rise considerably in into a technology and solar- Source: FactSet THE WALL STREET JOURNAL. small investors, who had been the coming months and years, power hub as part of his plans his most vocal champions. Tesla’s stock fell about 15% in the possibly putting any take-pri- to develop its economy. And environmentally friendly com- Tesla’s board recently Finally, the deal team ad- days between CEO Elon Musk’s vate beyond the reach of any he was interested enough in pany that built cars in the added independent directors vised him, the money would announcements about the investors,” Mr. Musk said Sat- Tesla to consider being part of U.S., some at Tesla com- James Murdoch and Linda likely come with strings at- company’s future. urday in an email to The Wall a take-private transaction; the plained to Mr. Musk about Johnson Rice but is still domi- tached: The new investors $400 1 2 Street Journal. “It was now or Saudis had already bought a selling a large interest to a nated by Mr. Musk’s longtime would want a lot of say in the perhaps never.” near 5% stake in Tesla in the foreign oil producer. supporters, including his company, and each would This account is based on in- public market. But the Saudis That left Mr. Musk’s bank- brother, Kimbal Musk, a confi- likely want to hammer out 375 terviews with people involved never made a formal proposal. ers casting around for others: dant. terms of their own. in and familiar with the dis- A Saudi government official car companies, sovereign- Mr. Musk had spoken in re- The following day, Thurs- 350 cussions and negotiations that and an adviser familiar with wealth funds, anyone who cent years to Michael Dell, the day, the board meeting was stretched between Mr. Musk’s the talks said the country’s se- might take a strategic interest founder of Dell Inc., who had convened at the Tesla factory 325 first tweets and a blog post nior leadership was divided. in Tesla—or who would be taken his own company public, conference room. Mr. Musk late Friday night that put a Mr. Musk’s tweets and the willing to make a big bet. then private a quarter-century had told some board members bookend on the deal. blog post didn’t help. The later and then public again, earlier in the day that he had 300 government official said his Machine in motion according to a person familiar doubts about the proposal, ac- Zero to 60 behavior worried some offi- with the discussion. cording to people familiar 275 cials about his health as well Despite his over-the-top Once Mr. Musk raised the with the matter. Aug. Mr. Musk’s Aug. 7 tweets as the role he would play in public persona, Mr. Musk idea of a transaction, he ex- The advisers said they were kicked off a frenzy of how-the- the company. keeps close counsel. A key panded his advisers beyond confident it could be done, 1 Aug. 7, 2018 heck speculation about a go- They also fretted about the group of Tesla executives his West Coast loyalists. He and then left. Elon Musk shocked ing-private transaction that expense: The Saudi sovereign- have been at his side for brought in Egon Durban of Sil- Then Mr. Musk spoke. investors by announcing valued at $70 billion—Mr. wealth fund was already years, including Chief Tech- ver Lake, who had brokered Based on the latest informa- during market hours his Musk had offered $420 per weighing an investment in a nology Officer J.B. Straubel; and helped bankroll the Dell tion I have, he said, I’m with- plan to take Tesla private. share—a company that had Tesla competitor, and the General Counsel Todd Maron, buyout. Gregg Lemkau and drawing the proposal. never made an annual profit. kingdom has grandiose plans who once was his divorce Dan Dees of Goldman came on “Woohoo,” one board mem- 2 Aug. 24, 2018 He hired a conventional set that include a massive new lawyer, and finance chief board, too, to advise Mr. Musk ber let out. Musk says Tesla will remain of deal advisers, including city in the desert. Deepak Ahuja, who returned and tap the firm’s connections —Summer Said, Jean a public company. bankers from Goldman, and For Tesla, Saudi Arabia to the company last year af- to wealthy investors around Eaglesham and Dana Source: SIX lawyers from Wachtell, Lipton, wasn’t a perfect fit either. ter retiring from the same the world. Mattioli contributed to this THE WALL STREET JOURNAL. Rosen & Katz. Protective of its image as an role in 2015. By Saturday, Aug. 18, the article.

and speak with assurance Swagger editors decided about America’s value set,” he during their emergency meet- State said, not intending a breach of ing that Mr. Pompeo might pop culture. present an opportunity to He is more familiar with broaden their readership. Shows its the Old Spice brand body wash “Pompeo got the definition and deodorant. “There’s Old of swagger right. A lot of peo- Spice Swagger I’ve had sent in ple think of swagger in terms Swagger the mail,” said Mr. Pompeo, a of hip-hop,” Mr. Branco said. ContinuedfromPageOne scent described in ads as “the “But in his case, it’s about est and most powerful bureau- smell of cedarwood, lime and bringing confidence back to cracies. confidence.” State.” Mr. Branco called an emer- Mr. Pompeo, who graduated He said Mr. Pompeo and his gency meeting at his Toronto from the West Point military team might benefit from headquarters. Employees in academy at the top of his class spending some time reading New York, Los Angeles and in 1986, said swagger has a Swagger online. Recent arti- Miami joined by conference timeless association with such cles offered six ways to arrest call. Could the magazine, or famous military officers as a receding hairline and a guide even the word itself, maintain Gen. George Patton, another to the “growing floral shirt its cool if recast by Mr. West Point graduate. trend.”

Pompeo, who is 54 years old? “If you go look at history, DITA ALANGKARA/PRESS POOL “They all seem to have an The magazine had regis- you’ll see swagger sticks,” said Secretary of State Mike Pompeo has drawn notice outside of diplomatic circles for using #Swagger. oversize suit going on,” said tered “Swagger” as a trade- Mr. Pompeo, sitting in an arm- Mr. Branco. “We’re working on mark in Canada. The 29-year- chair beneath a painting of the The deep-voiced musician, swagger was an odd choice for referring to his trip to Pyong- a story that will provide more old editor didn’t claim military school in his office. whose real name is Chisenga the secretary of state. yang to retrieve three U.S. citi- direction on what to wear in ownership, noting that Wil- “Patton. Right, in the movie at Katongo, has played venues “I think that’s not really the zens from prison there. the office.” liam Shakespeare was the first least…I think in real life, too.” from Hollywood to his native word you want to send out A #Swagger post this Mr. Pompeo had little say to use swagger in print—just Hip-hop artist Crisis Mr. Zambia. A video for his hit with diplomacy. But that’s just month by Mr. Pompeo shows a on the subject of fashion, look- worry. Swagger, who also has an im- “Mustang Music” features him me. I may be wrong,” said the graduating class of foreign of- ing a little perplexed when “We were a little concerned age to keep, doesn’t mind Mr. ferrying an attractive woman heavyweight professional, ficers, the first graduates asked about his favorite cloth- with Secretary Pompeo’s use Pompeo joining the party, as in a vintage convertible. whose real name is Jake since he lifted a hiring freeze. ing designer. of the term,” said Mr. Branco. long as he does his part. Professional wrestler Jack Hager. Many at State were feeling Yet his adoption of swagger During an interview in his “In hip hop, swagger is the Swagger, who at times enters Mr. Pompeo said he pur- overlooked by the Trump ad- seems to have caught on. At a office on the seventh floor of way you sway, the way you tell the ring in a skintight black le- posely chose the word swag- ministration, in part because recent dinner out, strangers the State Department, Mr. yourself, the way you walk,” otard, said he didn’t know ger. “The work that was done of unfilled positions. came to his table and said, Pompeo said he used the word he said. “If that’s the swagger about Mr. Pompeo using the by our team to return the One of the new officers said “’I’ve got my swagger on,” Mr. to invigorate diplomats. “I we’re talking about, it’s a word until he heard about it three Americans from North Mr. Pompeo seemed particularly Pompeo recalled with a laugh. want our team, when it’s do- pretty cool way of doing busi- from his father. It didn’t Korea was a prime example” energized about swagger during “No idea what they actually ing its mission, to be confident ness.” bother him, he said, even if of swagger, Mr. Pompeo said, his speech at the ceremony. meant.” THE WALL STREET JOURNAL. ** NY Monday, August 27, 2018 | A10A GREATER NEW YORK LIRR’s New Chief Gets a Bumpy Start

Phil Eng is hopeful Hicksville. Around the same Penn Station. Gov. Andrew time, a long-delayed project to Cuomo dubbed the period “the major infrastructure bring the LIRR to Grand Cen- summer of hell.” improvements will tral Terminal, called East Side But LIRR passengers Access, should be completed. weren’t ready for the many give passengers relief Both projects are priorities delays they suffered this sum- of the Metropolitan Transpor- mer, said Mark Epstein, chair BY PAUL BERGER tation Authority, which runs of the Long Island Rail Road the LIRR. Commuter Council, a passen- Phil Eng’s honeymoon pe- Taken together, the im- ger advocacy group. “There’s riod as head of the nation’s provements will add service, not a day goes by when there’s largest commuter railroad reliability and travel options not a disruption,” he said. “We didn’t last long. for the LIRR’s 300,000 daily live in purgatory year-round.” Four months into his job as weekday riders. Mr. Epstein credited Mr. president of Long Island Rail Last year, the railroad re- Eng for an improvement in Road, Mr. Eng has had to con- corded its worst on-time per- LIRR’s communication with tend with many problems, in- formance since 1999, accord- customers about the cause and cluding signal failures, railcar ing to a report by the New length of delays. shortages, overcrowding, de- York state comptroller. Over- The focus on communica- railments and, most recently, a all, just 91% of trains arrived tions is one of several mea- petition signed by more than at their final destination sures Mr. Eng has announced 2,000 people calling for better within six minutes of their since taking over the LIRR. He railroad safety and a fare re- scheduled time, according to has also launched an acceler-

fund. ERIN LEFEVRE FOR THE WALL STREET JOURNAL MTA data. During rush-hour ated program to repair and “I knew it would be short,” Phil Eng acknowledged that turning around the commuter railroad won’t be quick or easy. periods, that rate slipped as upgrade the most problematic Mr. Eng said recently of his low as 86%. railroad switches and track honeymoon period, as he sat jor construction projects like a series of major infrastruc- sengers on an average week- So far this year, systemwide circuits and to improve safety in a conference room at the new highways and bridges. ture improvements. day. on-time performance is only in areas where motorists cross railroad’s headquarters in Ja- He acknowledged that turn- It recently announced plans Because most LIRR lines are 0.4% better than last year’s, rail lines. maica, Queens. ing around the LIRR isn’t go- to open a second track along interconnected, the new track according to MTA data. Mr. Mr. Eng said: “My goal is to Mr. Eng, who is 56 years old ing to be quick or easy. an 18-mile stretch between should provide relief beyond Eng said he is determined to continually get better every and a lifelong Long Islander, “It won’t be an overnight Farmingdale and Ronkonkoma the Ronkonkoma Branch. make it better. day and really drive the on- spent more than 30 years at flip of the switch,” Mr. Eng by Sept. 21. The $431 million By the end of 2022, the Last summer, commuters time performance to the point the New York State Depart- said. “I think many of our cus- project will allow the railroad LIRR aims to add a third track steeled themselves for disrup- where when customers get on ment of Transportation where, tomers know that.” to run concurrent service in on a 10-mile stretch of the tions caused by Amtrak per- they can feel comfortable most recently, he oversaw en- In the coming weeks, the both directions along a corri- heavily used Main Line corri- forming weeks of emergency they’ll get to their destination gineering, operations and ma- railroad will unveil the first in dor that carries 45,000 pas- dor between Floral Park and track-repair work at New York on time.” New Jersey Democrats An Up-Close History Lesson in Brooklyn Look for Middle Path BY JOSEPH DE AVILA

Congressional races are heat- ing up in New Jersey, as Demo- crats put forth moderate candi- dates in an effort to flip right- leaning congressional districts. If Democrats win four of five GOP seats, that would leave New Jersey Republicans with only one member of Congress— AGATON STROM FOR WSJ the fewest in over a century. JULIO CORTEZ/ASSOCIATED PRESS New Jersey Democrats are fa- GOP Assemblyman Jay Webber faces Democrat Mikie Sherrill. vored to win two seats currently held by Republicans, and two Mr. Gottheimer said in an raising filing, faces Democrat additional GOP-controlled seats interview that Democrats can Mikie Sherrill, a former Navy are considered tossups, accord- win in these competitive dis- helicopter pilot and federal ing to the Cook Political Report. tricts with moderate candi- prosecutor who has $2.9 mil- The state’s fourth congres- dates. “I think the way we win lion cash on hand. sional district, held by Rep. is through the common-sense National Republicans have Chris Smith, is considered a middle,” he said. taken notice of the race. Vice safe seat for Republicans. Doug Steinhardt, who be- President Mike Pence head- John Currie, chairman of came chairman of the New lined a fundraiser for Mr. the New Jersey Democratic Jersey Republican State Com- Webber earlier this month. A State Committee, said New mittee in November, said Dem- Monmouth University poll Jersey voters are upset with ocrats are underestimating the from June found Ms. Sherrill President Trump over the new GOP field. “The party with the leading Mr. Webber 40% to federal tax law that capped a presidency tends to struggle 38%. The poll had a margin of deduction popular in the state, during midterms,” he said. error of 4.9 percentage points. and his refusal to chip in “It’s something we are willing Mr. Webber said he knows funds to help double rail ca- to work hard on to combat.” New Jersey Democrats are en- pacity between the state and Thirty-three percent of New thusiastic in this election cycle. New York. Democrats are Jersey voters approve of Mr. “There are some charged- ready to capitalize on those Trump, according to a Quin- up Republicans out there, too,” slights in November, he said. nipiac University poll released Mr. Webber said. “They know New Jersey Democrats Wednesday. what’s at stake. Our party is tapped fiscally conservative GOP Assemblyman Jay Web- committed to keeping this seat candidates to appeal to alien- ber, a former state party chair- in the Republican column.” ated voters in GOP-held dis- man, is running in the state’s Ms. Sherrill said voters in tricts, said Brigid Harrison, a 11th Congressional District in a the district are most con- political-science professor at race the Cook Political Report cerned about the rising costs Montclair State University. She rates as leaning Democratic. of living. Many are worried pointed to the success of U.S. The Republican incumbent, about the new tax law’s

Rep. Josh Gottheimer, a mod- Rodney Frelinghuysen, isn’t $10,000 cap on state and local YANA PASKOVA FOR THE WALL STREET JOURNAL (2) erate Democrat who in 2016 running for reelection. tax deductions, she said. THE BRITISH ARE COMING: Re-enactors took part in events Sunday in Green-Wood Cemetery to won the state’s Fifth Congres- Mr. Webber, whose cam- “I think New Jersey taxpay- commemorate the 242nd anniversary of the Battle of Brooklyn, fought on Aug. 27, 1776. sional District, which Republi- paign had $171,000 left in its ers are paying for this tax cans had held since the 1930s. coffers as of the latest fund- bill,” she said. Real Crime Fighters Help Make Television Shows More True-to-Life

BY KATIE HONAN tions. She worked on the sec- TV. They expect DNA evidence scenes ring true and sees Ms. Jimmy West, a retired New that is real,’” he said. ond season of “Daredevil” in or a bunch of witnesses in ev- Witten’s job as important as York Police Department detec- He has sought out advisers Marvel’s “Daredevil” is a 2015 as well as the ABC drama ery single case.” any other crew member’s. tive lieutenant who last worked for a variety of productions. He show on Netflix about a blind “Conviction” in 2016. She is The role of a technical ad- “We’re exposed to things for on the cold case squad, advised hired journalists to offer in- lawyer turned vigilante who pa- paid between $500 and $1,000 viser on sets is ever more vital, the first time quite often on for a few years on various New sights into what a real news- trols the streets of a fictional, for script reviews and set visits. as the internet has heightened TV,” she said. “I think as a per- York City productions, includ- room looked like for the 1994 gritty New York City. Despite Her role is to make sure the scrutiny of TV shows and films, son who is putting out images, ing “Daredevil.” movie “The Paper” and police its comic-book roots, there is legal aspects of a show are as says Liz Friedlander, co-creator to be careless and be willy-nilly He has helped make sure officers to teach actors the cor- still a level of authenticity ex- accurate as possible, reading and director of “Conviction.” with things in this day and age precincts look as realistic as rect way to hold a gun. pected in the show. scripts to find inconsistencies She strives to make all her is reckless.” possible, recommended dia- “Believe it or not, not every- During a hospital arraign- and errors surrounding the legal logue between officers and one knows how to hold a gun,” ment in the show’s second sea- processes. During set visits, she given suggestions on what un- he said. “The actors have gone son, the script called for the helps give cues to the director dercover police officers wear. to acting school, they didn’t go character’s lawyer to nod his for dramatic courtroom scenes. During his 30 years with the to police training school.” head after the judge asked if he For Ms. Witten, who works in NYPD, he often noticed errors— He even hired a dominatrix waived the reading of the the organized crime and rackets large and small—on police pro- for a scene on the HBO comedy charges. bureau, the show work is a cedurals. “It always bugged me “Bored to Death.” It was a small detail that set chance to flex her legal knowl- on TV that they’d have the de- “Not too many people are off immediate red flags for Mi- edge and help the writers and tective shield on a chain,” he knowledgeable in the S&M chelle Witten, who spends her producers write honest stories. said. When wearing suits, de- world, or at least no one will ad- days fighting crime as a prose- During her own , she tectives usually have them mit it, so you rely on technical cutor for the Queens District usually meets jurors whose un- pinned, he said. advisers to portray something Attorney’s Office. derstanding of the criminal jus- Jeff Bernstein, a production in the correct light,” he said. “He’s going to have to an- tice system is based on works manager who worked with Ms. Although advisers offer valu- swer a question on the record,” of fiction. Witten on “Daredevil,” said ad- able advice, it can be ignored if she wrote in her notes to “One of the first things we visers add expertise, which is the story or character develop- “Daredevil” producers, noting talk to a jury about is: Do you vital in selling a story or plot ment is impeded—or if the fic- that in a real court, a judge re- guyswatch‘Law&Order’or line. Even the smallest gaffe or tional version looks better on quires a verbal response. The these legal TV shows?” said mistake could kill the story line film, Mr. Bernstein said. script was changed. Ms. Witten, who has worked as for a viewer. “There’s a fine line between Outside her job, Ms. Witten a Queens assistant district at- “There’s so many shows that making it real and making it moonlights as a technical legal torney for 10 years. “Jurors ex- AN RONG XU FOR THE WALL STREET JOURNAL you watch, and you’re like, sexy,” he said. “Real is kind of adviser for television produc- pect to see what happens on Prosecutor Michelle Witten moonlights as a technical adviser. ‘What are they doing? None of boring.” A10B | Monday, August 27, 2018 NY ** THE WALL STREET JOURNAL. GREATER NEW YORK

GREATERNEW London Comes Calling to Restaurant Scene YORKWATCH BY CHARLES PASSY THE HAMPTONS

Since it launched in 2006, Arrest Made in Trump D&D London has emerged as Motorcade Incident one of the most prominent dining companies in its name- Police say they have arrested sake city, with more than 30 a truck driver who threw a restaurants. It has also metal object at a dump truck branched out to other loca- protecting President Trump’s tions in England and to Paris motorcade during a recent and Tokyo. Hamptons visit. Now may come its toughest State police said 25-year-old act: making a name for itself Justin Velez faces a felony crimi- in New York City. nal mischief charge stemming The company, whose annual from the Aug. 17 incident on revenue tops £150 million Sunrise Highway in Hampton ($193 million), is opening its Bays. They said more charges first restaurant in the Big Ap- could be filed. ple next month at the Shops at Mr. Velez, of Brentwood, was Columbus Circle. Bluebird issued an appearance ticket for London will be a British-in- Sept. 26 in Southampton Town spired brasserie modeled after Court. its similar spots in London. It Information on his lawyer has a still-to-be-named restau- wasn’t immediately available.

rant planned for 2019 as part STEVE REMICH FOR THE WALL STREET JOURNAL State police say Mr. Velez of Hudson Yards, the residen- D&D London will open its first New York City restaurant next month at the Shops at Columbus Circle in . damaged the hood, mirror and tial and commercial complex door on the driver’s side of a under construction on Man- too numerous to cite. The late sines, from a sustainable sea- day cafe. functions on many levels, said New York State dump truck be- hattan’s far West Side. and legendary Creole and Ca- food restaurant to what the The menu in New York will Kevin Stuessi, vice president ing used as a barricade for Mr. Add up the startup costs of jun chef Paul Prudhomme company bills as a “slick take have plenty of British favor- at Related. Trump’s motorcade. the two spaces, and it couldn’t make a long-term go on the traditional British ites, such as fish and chips and “It can be a special occasion Mr. Trump was attending a amounts to a commitment of of it in New York. Nor could steakhouse.” beef Wellington, but there will place, but it can also be your fundraiser in Southampton about $20 million, D&D offi- celebrity chef Guy Fieri, whose Plus, D&D has an unmistak- be tweaks made with New everyday lunch or weekly din- hosted by a friend who is the cials say. Times Square establishment, able flair for design, profes- York tastes and preferences in ner destination,” he said. chairman of Nathan’s Famous. “We are not coming in un- Guy’s American Kitchen & Bar, sionals say. mind. A case in point: After- The bigger challenge for —Associated Press aware that lot of people come closed at the end of 2017 fol- “They’re known for creating noon tea will be offered, but it D&D may be at Hudson Yards. in and don’t succeed,” said lowing a five-year run. great spaces,” said Julia will feature cocktails served in Although the complex will fea- NEW YORK STATE D&D London Chairman and But D&D has much going in Heyer, a New York-based res- teacups. tureaWho’sWhoofthedin- Chief Executive Des Gunewar- its favor, say restaurant-indus- taurant consultant who has D&D made its way to New ing scene, including high-pro- Law Honors Children dena, who is one of the Ds in try professionals, who often worked in Europe. York in large part because Re- file chefs such as Thomas Slain by Their Nanny the company name. (The other describe it as the British Bluebird London isn’t a sin- lated Cos., the real-estate gi- Keller and David Chang, res- D is David Loewi, deputy equivalent of Union Square gle dining destination as such, ant behind the Shops at Co- taurant-industry professionals New York is making it illegal chairman). Hospitality Group, Danny but an 11,000-square-foot lumbus Circle and Hudson question whether it will draw for nannies to misrepresent their Examples of out-of-town Meyer’s restaurant company. space done with a contempo- Yards, sought it out as a ten- in enough patrons on a regular credentials. chefs whose New York restau- That is, D&D develops many rary British look that com- ant. The Bluebird concept es- basis, especially due to its rel- A new state law signed by rants didn’t last are almost concepts covering many cui- bines a bar, restaurant and all- pecially had appeal because it atively remote location. Democratic Gov. Andrew Cuomo makes it a misdemeanor for a nanny or someone else to lie about their references or back- Speed Cameras to Return in Time for Back-to-School ground for employment purposes. The law is known as “Lulu and Leo’s Law” in honor of two BY KATIE HONAN Department of Motor Vehicle 140 school zones throughout council meeting the following wanted Albany to act, and children who were murdered by records of drivers caught on the five boroughs, expired July day. The mayor is expected to they didn’t, so we had to act.” their nanny in 2012 in New York New York City will bring camera speeding, City Council 25 after the state Senate failed sign it into law on Sept. 4, the “Speed cameras save kids’ City. The woman’s credentials back working speed cameras Speaker Corey Johnson said to pass legislation authorizing day before school starts. lives,” Seth Stein, a spokesman and references had been faked. in school zones before chil- Sunday. And Mayor Bill de Bla- their use. The city kept re- It is a rare peace treaty be- for Mr. de Blasio, said. “We Lawmakers passed the mea- dren return to classes, after sio will take procedural steps cording data on speeding driv- tween the governor and the can’t risk 1.1 million students sure earlier this year. Republican the City Council brokered a necessary to expedite passage ers through its cameras but mayor, who are known for returning to school unpro- Sen. Andrew Lanza of Staten Is- deal between the mayor and of a City Council bill to reacti- was unable to give out tickets. feuding on issues big and tected.” land sponsored the bill. He says governor. vate the issuing of tickets, Mr. The bill to reactivate ticket- small throughout New York Representatives for Mr. it will protect children and fami- Gov. Andrew Cuomo has Johnson said. ing is expected to be discussed City. Cuomo didn’t immediately re- lies and that he hopes it will agreed to sign an executive or- The program for the speed in the City Council on Tuesday “Children’s lives are at spond to a request to com- prevent future tragedies. der allowing the city to access cameras, which are placed in and vote on in an emergency stake,” Mr. Johnson said. “We ment. —Associated Press

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HEALTH The Scan That Saved My Life

After years of exercise and healthy eating, a reporter’s blocked artery came as a shock; the debate over tests to prevent strokes

BY THOMAS M. BURTON Critical Paths Internal “LET’S TALK ABOUT your test The carotid arteries are results,” my neurologist said. passageways through which External She looked as if she had good blood and oxygen move to a news. Instead, it was shocking. person's brain and face. When The carotid artery on the left fatty plaque obstructs an artery, side of my neck, one of the brain’s the blood supply can be reduced two main sources of blood and ox- or cut off, sometimes resulting ygen, was clogged with fatty in a stroke. plaque, the doctor said. The artery was almost completely blocked. There must be a mistake, I Internal carotid Blockage thought frantically. I exercise and arteries supply blood caused to the brain am healthy and young. Actually, by fatty I’m 68, but, you know, a young 68. plaque You are in danger of a major stroke, she said, and need an oper- ation. Immediately. External carotid Blood flow The irony wasn’t lost on me. As arteries supply blood a journalist covering the medical to the face and neck field, I have spent years writing about strokes, most of which are caused by clots blocking blood flow to the brain. Now I faced the unnerving question: Am I going to DETAIL Common become a weird punch line? As in: Did you see that the guy who Common carotid arteries writes all those stories about strokes just had a big one? Sources: Dr. Bruce A. Perler, Johns A blocked carotid artery didn’t Hopkins Hospital; U.S. National seem possible for an active person Library of Medicine Mike Sudal/THE WALL STREET JOURNAL. like me. I’ve never smoked. I’ve run, lifted weights or done some- thing aerobic like playing tennis pretty much every day of my life. I watch what I eat. I even wrote an Getting Screened article about how I kept my bad cholesterol in check with diet and A national company, Life Line exercise, not medication. Screening, will do a carotid While I’m addicted to cheese, screen for $70, or with other and my weight has climbed some, tests such as for aortic I’ve eaten foods like salmon and aneurysms, for $149. oatmeal with fervor for more than 20 years. So I figured I was ex- Hospitals’ accredited labs will empt from medical crises. do carotid ultrasound tests typically for $200 to $300, but usually only on a doctor’s order.

Insurers, private and govern- 200,000 ment, generally will pay only if the patient has symptoms, strokes are caused by carotid disease including a mini-stroke. every year, vascular specialists say The Society for Vascular Surgery’s site, vascular.org, can direct people to specialists who The diagnosis made me recon- can do testing.

sider dilemmas that had once FROM TOP: STEPHEN VOSS FOR THE WALL STREET JOURNAL; CHRISTINA RICHARDS PHOTOGRAPHY seemed academic. For example, should older Americans be A week before Maddie’s wed- screened for blocked carotid arter- ding, my wife and I met with Dr. ies? Perler at Johns Hopkins. On the Clots cause about 700,000 drive to Baltimore, we called Mad- strokes that lead to 130,000 deaths die. She sounded frightened and I annually in the U.S. and are the told her maybe I wouldn’t need primary preventable cause of dis- surgery—or could put it off. We ability, according to the American Thomas Burton, above right, with Dr. also told her brothers, Jamie and Stroke Association. Carotid disease Bruce Perler, who unblocked Mr. Will, and her sister, Samantha, is a main cause of those strokes— Burton's artery. Days before surgery, what was going on. nearly 200,000 strokes a year, vas- Mr. Burton was withhis daughter, Dr. Perler’s test confirmed Dr. cular specialists say. Yet 80% of Maddie, at her wedding, right. Herzfeld’s findings: I definitely those patients have no symptoms needed surgery. My artery was al- before the strokes. Conventional wisdom says that most completely obstructed by In 2014, a U.S. task force con- among the 65-and-older set, only “echolucent” plaque—a type that cluded that people with no symp- those with symptoms should be can easily form clots, break off and toms don’t have to be screened for tested. That often means individu- cause strokes. carotid disease, saying that the als who have had mini-strokes, We discussed timing. Dr. Per- risks, such as poor surgery, “out- which tend to be brief periods in ler’s next surgery day was June 18. weigh the benefits.” But the task which the patient has something That would leave me four days to force—a panel of private doctors wrong on one side of the body, recover before the wedding. He assigned by law to help set U.S. usually for a few minutes. Symp- warned that I would be “misera- medical policy—focused on screen- toms often include slurred speech, ble” doing that. But his surgery ing in the general population, not temporary vision loss, a one-sided day after that wasn’t until June 27. older patients. facial droop and arm or leg weak- “You can safely wait until next The task force said there aren’t ness or numbness. week,” he said, “but I wouldn’t enough carotid-caused strokes to Vascular surgeon George Laven- wait two months.” Then he added warrant screening everyone. Of son Jr. wrote in 2012 in the Jour- the words I remember most: “We’ll course, not everyone with carotid nal for Vascular Ultrasound that incipient epilepsy, a neurological was established two decades ago take good care of you.” blockage will get surgery; thou- among 22,146 people screened for disorder or a tumor. The results by the Asymptomatic Carotid Ar- My wife and I decided on June sands of people with the condition carotid disease during four public ruled them all out. tery Stenosis , funded by the 27—and headed to San Francisco can benefit from drug therapy. screening campaigns between 2001 Then an MRI of my head National Institutes of Health. It for the wedding. It was an untradi- My experience, along with some and 2006, about 7.5% were found showed a few white spots on the showed, in hospitals in the U.S. tional ceremony with no white veil evidence from screening of thou- to have blockage of 60% or more— left side. Dr. Herzfeld wondered if and Canada, that the risk of stroke or a parade of bridesmaids. Mad- sands of individuals, raises ques- enough to warrant treatment with I might have had some “silent or death in surgery patients after die wore a champagne-colored, tions about the task force’s conclu- medication. strokes,” sending tiny bits of ar- a median 2.7 years was 5.1%, less beaded dress. I have never seen sions. The Society for Vascular “It is hard to understand how tery plaque floating to my brain— than half that of people treated her so happy—except maybe when Surgery recommends screening many leaders in the medical pro- and now appearing as white spots only with drugs. An international she was playing My Little Pony as people over 65 with coronary dis- fession can object to a one- to on the scan. Fatty plaque accumu- study published in 2010 in the a 6-year-old. I was simply happy ease, high blood pressure or a his- two-minute accurate screen of se- lates in most people’s arteries, and Lancet showed similar benefits to be there. tory of smoking. niors that can find the 7.5% with can form clots that break off and from surgery. On the morning of June 27, Dr. The task force generally sup- silent carotid artery disease,” Dr. can cause strokes. I consulted with other doctors, Perler started operating at 7:30. ports screening Americans for Lavenson said. Those patients can Dr. Herzfeld ordered a carotid including one who said, “This isn’t Within two hours, he had cleared breast cancer, with 253,000 new be “evaluated and managed to pre- ultrasound of the arteries on both quite an emergency, but it’s ur- the plaque from my carotid artery. cases in women and 41,000 esti- vent them from being one of the sides of my neck. It’s a quick, pain- gent.” Later, he told me it was so mated deaths annually, as well as 700,000 clot-caused strokes we less and very accurate scan. Mo- The operation is serious, with clogged—about 99%—he couldn’t colorectal cancer, with 135,000 new continue to have annually.” ments later, we were talking in her the rates of stroke and death even detect a pulse in it. cases and 50,000 deaths a year. Most doctors would have put office. My right carotid artery was within 30 days after surgery total- When I woke up, I was relieved Government and private insurance me in the asymptomatic, or less- perfectly clear, she said. The left ing about 2.4% in major studies to see that my eyes and fingers all pay to screen for these illnesses, risky, category. But five years ago, was almost completely blocked examined by the task force. The worked. I could think and speak but not for carotid screening of I went out for a run of about 7 and I needed immediate surgery to task force noted that this typical clearly. I was even able to com- non-symptomatic people, which miles along the Potomac River. At clear it. measure can be as high as 5% at plain to the nurses about how can cost about $70 a person. the end of the run, my right leg I asked if we could treat the ob- some low-volume hospitals. lousy I felt. After hearing the jarring news started shaking. That seldom hap- struction with anti-platelet medi- People considering this opera- I spent two days in intensive about my dangerously blocked ca- pened again until the past few cation, such as Plavix. tion should ask their hospital, sur- care, with my blood pressure surg- rotid, I faced a big decision. My months, when it started recurring “No, your blockage is just too geon or academic medical center ing at times. About two weeks af- wife Christa and I live near Wash- more often, along with shaking in extensive,” Dr. Herzfeld said. She about their rates of stroke and ter the operation, I felt pretty nor- ington, D.C. Our daughter, Maddie, the right arm. recommended that Bruce A. Perler, death after surgery. Few hospitals mal. I’ve resumed running and was supposed to be married in San My physician, Joel Taubin, rec- a professor of vascular surgery at and surgeons in the U.S. publish weight-lifting. I recently played Francisco in June, a week after the ommended a neurologist, Rhanni Johns Hopkins Hospital in Balti- their individual results. Dr. Perler’s golf for the first time since the neurologist told me I needed sur- Herzfeld, of the Neurology Center more, do the procedure. rate was well under 1%. He said surgery and feel great. gery right away. Suddenly the in Washington. She prescribed The effectiveness of carotid-ar- my risk of stroke was 10% to 15% But mostly I feel lucky to have prospect of being at the wedding tests to discern the cause of the tery surgery in people without over five years, probably in the gotten a test that may have saved seemed iffy. shaking, perhaps a pinched nerve, symptoms—but major blockage— first year. my life. A12 | Monday, August 27, 2018 THE WALL STREET JOURNAL. LIFE & ARTS

MOST UNIVERSITY town hall WHAT’S YOUR WORKOUT? | By Jen Murphy meetings take place in windowless Education Exercise auditoriums. Greg Crawford, presi- dent of Miami University in Ox- Colleges are getting creative with ford, Ohio, prefers to talk to his A College President’s ways to incentivize health and student body during group bicycle wellness on campus. Here are rides around campus. some fun offerings that go be- Dr. Crawford, 53, averages about yond the typical gym workout. 200 miles a week on his bike, of- Spin on Fitness ten wearing a suit and tie and red- The University of Colorado Boul- and-white bike helmet to match der hosts complimentary rooftop the school’s colors. He says his cy- Greg Crawford, president of Miami University in Ohio, averages about 200 Vinyasa yoga classes where stu- cling commute is better for the en- dents can Zen out to views of vironment, good for his health and miles a week on his bike. In bad weather, he hits the rec center. the Flatirons foothills. The cam- a great way for him to socialize pus also offers goat yoga. with the students and faculty. “I think the focus we put on our un- Each Spring, Nelson Fitness Cen- dergraduates should extend to ter at Brown University in Provi- health and wellness, not just aca- dence, R.I., hosts the Everest demics. I’m trying to lead by ex- Challenge. Those who climb the ample,” he says. equivalent of Mount Everest or Since Dr. Crawford joined Miami Mount Kilimanjaro on a StairMas- University in 2016, he jokes that ter over the course of three it’s gotten harder for freshmen to weeks can win a free fitness gain the dreaded “freshman 15,” membership and T-shirts. The the extra 15 pounds often put on school also offers free monthly in the first year at college. He in- fitness-themed lunchtime classes vites students to join him on bike like stretching at your desk. rides around campus and runs up and down stadium stairs. Several Virginia Tech in Blacksburg, Va., Saturdays each semester, he and recently launched a free high his wife, Renate Crawford, an ad- ropes course with aerial chal- junct professor of physics at Mi- lenges ranging from 14 to 34 feet ami, host a boot camp for students off the ground, including a rappel- and faculty. Dr. Crawford leads a ling wall and zip line. The univer- bike ride around campus that ends sity also offers happiness groups at his campus home. A campus fit- that address issues such as self- ness instructor then leads a high- esteem and self-discovery and intensity workout in the backyard. Virginia Tech President Tim The couple also hosts “Spin and Sands regularly plays pickup bas- Movies with the Crawfords,” in ketball games with faculty and which participants are invited to students at the campus gym. watch a movie at the Recreation Center while spinning the whole The free Fit Club at Bryn Mawr time. “A lot of colleges hold movie College in offers ev- nights, and we thought, ‘Why not erything from 5K training pro- set up the basketball court with Dr. Crawford believes the best way to connect with students and faculty is to bike around campus. He goes on a bike grams to swimming workouts. 100 bikes like a big theater?’” he ride three or four mornings a week, sometimes departing his home as early as 4 a.m., and tries to bike year-round. The Club’s annual Fitness Chal- says. “After an hour of pedaling we lenge allows students and faculty usually lose people who suddenly also took up indoor rowing when dislikes running distances. “Stair three events in an evening and to earn points for workouts, Fit remember they have homework.” he joined the university and at- sprints are our compromise,” he snack on cheese and cookies.” His Club classes, and varsity or club tends 6:15 a.m. classes. “I always says. The couple runs 10 repeats wife handles the cooking. A favor- sports. Points can be registered The Workout thought rowing was all about up- up and down 88 stairs at Yager ite meal is flank steak with beans for weekly and monthly prize Dr. Crawford goes on a bike ride per-body strength but more than Stadium on weekdays and 20 re- and kale salad. “I don’t love the drawings.

three or four mornings a week, half of the power is generated peats on weekends. kale, but I know it’s good for me,” ANDREW SPEAR FOR THE WALL STREET JOURNAL sometimes departing his home as from your legs,” he says. “I wasn’t he says. Dr. Crawford has a sweet early as 4 a.m. During the week real keen at first because it’s The Diet tooth. “Chocolate is my weak brid bike cost $1,000, and he rides he rides 25 miles; on weekends he tough, but it’s a serious full body Dr. Crawford isn’t big on break- spot,” he says. it around campus. A family mem- does more than 50. He tries to workout and perfect for a cold fast. He occasionally has yogurt. bership at the campus rec center ride year-round. He rides a few winter morning.” He grabs a salad for lunch in the The Gear and Cost costs $520 a year. miles every day around campus. On days he doesn’t bike or go to university cafeteria. “We average He spent a few thousand dollars He’s a regular at the Recreation the gym, Dr. Crawford runs cam- 100 events in an academic year on his Specialized S-Works road The Playlist Center. “Most students realize it’s pus stadium stairs. “I absolutely and there is always food out,” he bike, which he uses for morning “I don’t know the songs the kids me because I don’t have much hate it,” he says. “But it’s a great says. “In my first year as presi- workouts. His cycling jersey is em- play these days at the fitness hair,” he jokes. When the weather workout in a short amount of dent I wasn’t eating as well as I blazoned with a RedHawk, the uni- classes,” he jokes. “I just try to is bad, he’ll take a spin class. He time.” His wife is a runner and he should have been. I’d go to two or versity mascot. His Trek x600 hy- keep up with the beat.”

BY TOBIAS GREY

HOMER’S EPIC POEM “The Iliad” opens with a dispute between Achilles and his commanding general, Agamemnon, over two BOOKS young women. Reading it centuries later, the writer Pat Barker says she was struck by how “the ‘The Iliad,’ From a girls, who say nothing at all, are simply transferred like parcels. It seemed impor- tant to me to address that and try to fill in Woman’s Perspective that silence.” So for her latest novel, “The Silence of the Girls,” which comes out on Sept. 4, Ms. Barker decided to tell the story of “The Iliad” from the per- spective of those women and others who were taken cap- tive during the Tro- jan War. She has written about World Wars I and II for the past 25 years, in- cluding the Booker ‘In the morning Prize-winning “The she’s a princess, Ghost Road,” but and by the evening Greek mythology for her was uncharted she’s a sex slave,’ territory. novelist Pat Barker “I have no classical training whatsoever,” says of Briseis, the says the 75-year-old English author, “other narrator of her new than having failed Latin more times than book ‘The Silence anyone else in my school.” of the Girls.’ In her version of the story, the narrator is Briseis, princess of the city Lyrnessus, who

is given to Achilles as a trophy after he kills CHRIS BLOTT FOR THE WALL STREET JOURNAL her brothers and husband. Ms. Barker com- pared the fate of Briseis and the other cap- novel “An Orchestra of Minorities,” slated the beginning of ‘The Iliad,’ ” Ms. Barker not history, it’s myth, so I deliberately in- tured Trojan women to that of the Kurdish- for release in January, retells “The Odys- says. “She sees these old men looking very troduce anachronisms like having my speaking Yazidi women who have been sey” from an immigrant perspective. uneasy because they think their time is wounded Greek warriors sing English rugby targeted by Islamic State militants in Iraq “I think there was something really fresh over, young men are spouting a lot of non- songs, which of course you would never and Syria. that happened to Pat’s writing when she sense they’ve read in the newspapers, and knowingly do writing historical fiction.” “It’s all very quick for Briseis,” she says. latched onto Briseis,” says Ms. Barker’s U.S. the women have gone completely silent.” The mystery of war is one that has con- “In the morning she’s a princess, and by editor Gerry Howard. “She went at her ma- Her interest in “The Iliad” goes back sumed Ms. Barker, who was born in north- the evening she’s a sex slave.” terial in a way that Homer could not have even further, to her “Regeneration” trilogy ern England in 1943 and never met her fa- “The Silence of the Girls” is one of sev- imagined himself doing. His culture and of World War I novels, which includes “The ther. “He was a Royal Marine and died on a eral new books recasting Greek mythology, civilization did not give him the possibility Ghost Road.” ship that was transporting the Marines particularly “The Iliad” and “The Odyssey,” of having that sort of perspective.” “It’s quite striking how the officer class when it went down,” she says. in ways that speak to the present. Madeline The seed for Ms. Barker’s latest novel in the first World War, on all sides, would “The Iliad” fascinated her partly because Miller’s best-selling “The Songs of Achilles” was planted in an earlier one called “Life be going into battle imbued with these ide- of what she sees as Homer’s tenderness to- drew on “The Iliad” to tell a gay love story Class,” published in 2007. In it she tells the als of heroism—which they got, essentially, ward his characters—the male ones, at least. between Achilles and his best friend Patro- story of a group of art students in London from Greece and Rome,” she says. “He had a very compassionate mind,” clus. Before that, Margaret Atwood’s no- during World War I. In an early passage, But for Ms. Barker, writing about World she says. “Nobody is allowed to die in his vella “Penelopiad” revisited “The Odyssey” one of them writes to her boyfriend after War I and the Trojan War are two different poetry without something personal being from the perspective of Odysseus’s left-be- war has been declared. things. “There’s no real evidence that the added, some information that distinguishes hind wife Penelope. Chigozie Obioma’s “She comments on the fact that it’s like Trojan War ever happened,” she says. “It’s them at the moment they are killed.” THE WALL STREET JOURNAL. ** Monday, August 27, 2018 | A13 LIFE & ARTS

BY TERRY TEACHOUT writing tends to be a young man’s game, and his creative flame had dimmed after All comedy dates, and ev- NEIL SIMON (1927-2018) three decades of exhaust- ery pure comedian sooner or ingly hard use. Perhaps he later becomes passé—even had by then simply said one as beloved as Neil Si- what he had to say. In any mon, who died on Sunday at The King of case, American comedy in the age of 91. Not only did the 1990s was giving way to Mr. Simon have a quarter- newer, less specifically joke- century run as America’s Stage based approaches, and what most popular playwright, had once seemed fresh and but “Lost in Yonkers,” his immediate increasingly 20th and best play, won him sounded old-fashioned. a Pulitzer Prize in 1991. The Comedy Whatever the reason, Mr. Si- Pulitzer jurors described it mon would never again ring as “a mature work by an en- the gong of unequivocal box- during (and often underval- office success on Broadway. ued) American playwright,” And while his plays remain and pretty much everybody popular with amateur agreed by then that he had troupes and smaller compa- evolved into something nies elsewhere in America, other than a joke merchant. most of the major regional But Mr. Simon would never theaters tend to steer clear again write a full-fledged of his work. box-office smash, and none All this notwithstanding, of his plays has since been I’ve come to feel in recent successfully revived on years that Mr. Simon’s best Broadway save as a star ve- plays are worthy of revival— hicle. His last bow there as a if they’re directed in a way playwright, a 2009 revival of that brings out their serious- “Brighton Beach Memoirs” ness instead of going for directed by David Cromer, too-easy laughs. Jenn closed after nine perfor- Thompson’s 2012 off-Broad- mances. way revival of “Lost in Yon- Nonetheless, it’s just as kers,” which she staged as a noteworthy that Mr. Simon down-the-center family suited the tastes of American drama instead of leaning on audiences so well for such an The playwright, whose ‘Lost in the comedy, persuaded me extraordinarily long time. Yonkers’ won a Pulitzer Prize in that I’d been too quick to His one-two-here-comes-the- 1991, died on Sunday at age 91. dismiss Mr. Simon as a voice punchline style of comedy, from the distant past. Since which took shape in the then I’ve seen several 1950s during his tenure as a equally compelling regional writer of sketches for “Your revivals of his work that Show of Shows,” Sid Caesar’s bode well for its long-term classic TV series, continued prospects. to come across with fresh- It will, of course, take ness and immediacy time for posterity to sort out throughout the 1960s and Neil Simon. But the process 1970s, even as the culture has begun, and I have no around him was changing in doubt that his very best

waysthatwereradicalinev- DAN GROSSI/ASSOCIATED PRESS plays will eventually come to ery sense of the word. And be remembered not as mu- as Mr. Simon grew older, he were tougher than their pre- A case in point is “The cess. But these plays, like ralysis. “I thought I was seum pieces but as compel- chafed at its limitations and decessors. As he explained to Sunshine Boys” (1972), the their predecessors, are an writing the bleakest of ling comic commentaries on started turning out stage an interviewer, “I used to story of two feuding vaude- uneasy blend of emotional plays,” he later said. So he the fears and foibles of life comedies like “The Prisoner ask, ‘What is a funny situa- ville comedians who attempt directness and stand-up was—but he took care to in postwar America. Yes, of Second Avenue” (1971) tion?’ Now I ask, ‘What is a to reconcile just as one of comedy. It was as if Mr. Si- leaven the loaf of sorrow they were also pulverizingly and screenplays like “The sad situation and how can I them starts to show clear mon felt the need to apolo- with biting, at times fero- funny—but Mr. Simon, like Heartbreak Kid” (1972) that tell it humorously?’” signs of succumbing to gize for their underlying se- cious humor, and the result all great comedians, was al- early-stage dementia. At riousness. was a play that had some- ways kidding on the square. once explosively funny and In “Lost in Yonkers,” by thing genuinely serious to arrestingly, even unnerv- contrast, he broke decisively say about American family Mr. Teachout, the Journal’s ingly dark in tone, “The Sun- with precedent, writing for life and its discontents. drama critic, writes shine Boys” made it clear the first time an unabash- Alas, Mr. Simon was un- “Sightings,” a column about that there was far more to edly black comedy about a able to build on the artistic the arts, twice monthly. the author of “The Odd Cou- Jewish family that is dys- success of “Lost in Yonkers.” Write to him at ple” (1965) than virtuoso functional to the point of pa- This stands to reason: Play- [email protected]. wisecrackery. In the 1980s, Mr. Simon started quarrying his own life as the subject matter for his plays, turning out “Brigh- ton Beach Memoirs” (1983), “Biloxi Blues” (1985) and “Broadway Bound” (1986), a trilogy of explicitly autobio- graphical comedies in which he told how a child of De- pression-era near-poverty shinned his way up the greasy pole of theatrical suc-

American masterpiece John Singer Sargent

Mr. Simon in 1997, top; Martha Coolidge, Mr. Simon and Mercedes Ruehl on the set of the film Celebrated painter. Charming subject. version of ‘Lost in Yonkers,’ above; Mr. Simon and actor James Coco in 1981, below Intimate portrait. This captivating original portrait of three-year-old Laurence Millet was composed by John Singer Sargent, the leading portraitist of his generation. Young Laurence was the son of Sargent’s close friend and fellow painter Frank Millet, and he is captured here with a charm and vivacity that places this work among the greatest achievements of Sargent’s early career. Intimate and modern, it represents all the best qualities of his finest portraiture. Signed and dated 1887 1 (upper edge). Canvas: 30 /4”h x 20”w; 3 3 Frame: 39 /4”hx29/4”w. #30-8246

630 Royal Street, New Orleans, Louisiana • 877-677-2801 • [email protected] • rauantiques.com Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry. Backed by our unprecedented 125% Guarantee, we stand behind each and every piece. FROM TOP: MONTY DAVIS/AP; COLUMBIA PICTURES/EVERETT COLLECTION; MARTY LEDERHANDLER/AP

wsj_20180827_a013_p2jw239000_2_a01300_1______xa2018.crop.pdf 1 27-Aug-18 06:13:28 THE WALL STREET JOURNAL. Monday, August 27, 2018 | A15 OPINION

The Chip That Changed the World BOOKSHELF |BY Bartle Bull Conquest Sixty years. companies and even NASA in Now what? Despite the rou- Maybe architecture will But how much its Apollo rockets. One bit tine media funeral for Moore’s keep the growth alive. Twenty longer? In turned into four, then 16, then Law, it’s not dead yet. But it is years ago, Google created giant 1958 Jack St. 64. This started the shrink, in- old. We are starting to count parallel computer systems to And Conquerors Clair Kilby— tegrate, shrink, integrate, rinse, finicky atoms. Intel and Sam- solve the search problem. The from Great repeat motion that’s still going sung are making chips with 7- same may be seen for artificial INSIDE Bend, Kan.— strong today. This relentless nanometer features, and sili- intelligence, which is in its in- VIEW created one of cost decline creates new mar- con atoms are 0.2 nanometer fancy. It’s only been, what, Crusade and Jihad By Andy the greatest kets out of nothing. wide. Atoms and the speed of three years since voice and fa- By William R. Polk Kessler inventions, a In 1965 Fairchild research light are hard limits. Three-di- cial recognition really started great bend, in chief Gordon Moore wrote a mensional structures might working? And that’s thanks to (Yale, 632 pages, $37.50) the history of now-famous article for Elec- add time. There are even lab machine learning and neural mankind. Kilby recently had tronics magazine, “Cramming networks, mere baby steps. hen the Prophet Muhammad died in 632, Islam had started at Texas Instruments as More Components Onto Inte- Economics are uncertain, but W not expanded beyond the borders of the Arabian an electrical engineer. Most ev- grated Circuits.” Today known Jack Kilby built the I’d bet a Moore’s Law for AI is peninsula. His Islamic state grew swiftly in the eryone left on a mandated as Moore’s Law, the article’s postulated soon. following century, reaching farther than the empires of summer break, but he stayed in thesis was that chips would first integrated circuit Energy is being disrupted Alexander and Genghis Khan and sinking deeper roots. Islam the lab and worked on combin- double in density every 18 to 60 years ago. We need but not fast enough. Where is was the only world religion to spread almost entirely by the ing a transistor, capacitor and 24 months. By 1969, the 3101 that battery breakthrough? sword, from North Africa to the northern tier of Sub-Saharan three resistors on a single piece 64-bit memory chip shipped at a new Moore’s Law. Nuclear fusion has been 30 Africa, from the Levant to Mesopotamia and Iran, from of germanium. On Sept. 12, he $1 a bit. We’ve come a long years away for the past 30 Central Asia to India and western China. In foreign lands showed his boss his integrated way. Your iPhone probably has years. But between Tokamaks, from the Ganges to the Pillars of Hercules, the invaders left circuit. At a half-inch long and a trillion bits at picocents a demos of nanotechnologies Stellerators, JET and Z Ma- an enduring faith. It was a peerless achievement. not very wide, it had ugly wires bit. Kilby received the Nobel spraying on integrated cir- chines, perhaps some fusion By the time Muhammad died, he had conquered an area sticking out, resembling an up- Physics Prize in 2000 and cuits. Still, I give Moore’s Law technique will output more larger than Western Europe, but his Arabs were still stopped side-down cockroach glued to a credited Noyce, who had died a another decade. than we put in. up in their sandy peninsula by the ancient and powerful glass slide. decade earlier, in his accep- Brace yourself. When Biocomputing is another empires to the north: Persia and Byzantium. Yet the coming In January 1959 Bob Noyce, tance speech. You have to Moore’s Law finally gives up fascinating area. We already imperial expansion was in the DNA of the system he left be- another Midwesterner, was wonder what took the Nobel the ghost, productivity and have gene editing in the form hind. Offensive jihad—war- keeping busy at Fairchild Committee so long. economic growth will roll over of Crispr. New food supplies fare against the Unbeliever— Semiconductor in Palo Alto, Integrated circuits are the too—unless. The world needs and drugs may change how hu- was a primary obligation of his Calif. He deployed a photo- greatest invention since fire— another Great Bend, another mans live and not die and bend followers. Muhammad’s own graphic printing technique— or maybe indoor plumbing. Kilbyesque warp in the cos- the curve. But I’ve learned daily example had the force of the planar process, which uses The world would be unrecog- mos, to drive the economy. over the years that eternal law, and according to the glass as insulation—to deposit nizable without them. They One hope is quantum com- involving biology is painfully holy traditions he had fought aluminum wires above silicon have bent the curve of history, puting, which isn’t limited by slow. Computing takes nano- successfully as a military transistors. Without the messy influencing the economy, gov- binary 1s and 0s, but instead seconds; biology takes days, commander, personally killing, or cockroach-leg wires, the inte- ernment and general human uses qubits (quantum bits) weeks, even years. Break- ordering the killing of, numerous grated circuit, or chip, became flourishing. The productivity based on Schrödinger’s quan- throughs may still come, but foes as he brought Jews, Christians manufacturable. unleashed from silicon com- tum mechanics. I’ve seen 17-, experiments take so long that and pagans under his rule. In March 1960, TI intro- puting power disrupted or de- 50- and now 128-qubit proces- progress lags behind. Still, I’d Islam’s imperial success, then, duced the Type 502 Flip Flop— stroyed everything in its path: sors—a familiar progression? watch this space closely. was a success on the faith’s own basically one bit of memory for retail, music, finance, adver- Quantum computers are Something better work. Hu- terms. A glorious undertaking, in an $450. A few weeks later, tising, travel, manufacturing, wicked fast but operate just manity will need a new stimu- old-fashioned martial way, it was trium- Fairchild announced its own. health care, energy. It’s hard above zero Kelvin (minus 459 lus soon. Let’s hope the next phant for nigh on a millennium, with the reign The U.S. Air Force used them in to find anything Kilby’s inven- Fahrenheit), a little cold for Jack Kilby skipped this sum- of Suleiman the Magnificent (d. 1566), the Ottoman sultan, 1961. So did new computer tion hasn’t changed. iPhones. mer’s vacation. the approximate pinnacle. The Islamic world subsequently grew weak and the West strong—to simplify somewhat—and the West soon enough became the imperialist side. In “Crusade and Jihad: The Thousand-Year War Between Venezuela’s Tyranny of Bad Ideas the Muslim World and the Global North,” William R. Polk presents things a bit differently. In 1095, Pope Urban II called By Daniel Pipes Today the country with the golden eggs, replacing compe- Radical theories prolifer- the First Crusade. Since then, Mr. Polk contends, a pattern of world’s largest oil reserves tent professionals at the gov- ated, especially during the Western aggression has produced the generally illiberal and deas run the world. Good suffers from a severely con- ernment-owned oil company French Revolution. The flood- often violent condition of the Islamic world today. I ones create freedom and tracting economy, runaway in- with agents, stooges and syco- gates were opened for ideas Many facts in his book likely will be new to some readers. wealth; bad ones, oppres- flation, despotism, mass emi- phants. In the grandest social- unmoored from experience Various details emphasize European cruelty toward Muslim sion and poverty. You are not gration, criminality, disease, ist tradition, his daughter and common sense, such as populations: In 1502 Vasco da Gama cut off the “hands, ears what you eat, but what you hunger and starvation, with María accumulated a fortune theories. These and noses of some eight hundred ‘Moorish’ seamen” of Calicut, think. circumstances deteriorating estimated at $4.2 billion in ideas incubated through the for example. Other observations point out curious continuities Politicians in particular fall daily. Venezuela’s economy 2015, according to Venezuelan 19th century and came to ter- across the years: During the U.S. fight to suppress the Moros under the sway of ideas. As contracted by 16% in 2016, 14% press reports. rible fruition after World War (“moors”) of the southern , the Moros used suicide John Maynard Keynes put it, last year and a predicted 15% “The trouble with social- I with fascism, Nazism, social- fighters called fidayin, just like Saddam Hussein’s suicidal “Practical men, who believe in 2018. Inflation was at 112% ism,” Margaret Thatcher once ism and communism. As histo- fedayeen, as well as “improvised explosive devices.” themselves to be quite exempt in 2015 and 2,800% at the end observed, “is that eventually rian Paul Johnson notes, “The Unfortunately, the book is sometimes on factually shaky from any intellectual influ- of last year. Economist Steve you run out of other people’s worst of all despotisms is the ground. The Dutch suppression of Java between 1825 and ence, are usually the slaves of Hanke finds an annualized rate money.” Chávez pre-empted heartless tyranny of ideas.” 1830 (Mr. Polk says it happened a decade later) most likely some defunct economist. Mad- of around 65,000% for 2018, that problem by seeking treat- The roll call of tyrants who killed somewhat less than 200,000 natives—not, as the men in authority, who hear ment for his cancer in Havana, have imposed their own phi- author states, 300,000. In Libya, we are told, Mussolini’s voices in the air, are distilling where, reports, he losophies over the past cen- repression of the Senussi revolt of 1923-32 “killed about their frenzy from some aca- Socialism was a “was assassinated by Cuban tury is depressingly long, in- two-thirds of the population.” Again the truth is bad enough: demic scribbler of a few years malpractice.” He died in cluding Mussolini, Lenin, The Italian campaign in eastern Libya (Cyrenaica) led to the back....Itisideas, not vested proven failure, but March 2013, about a year be- Stalin, Tojo, Hitler, Ho, Mao, death of perhaps a quarter of that region’s people while interests, which are dangerous Hugo Chávez got his fore oil prices tumbled, and Kim, Nasser, Pol Pot, Mugabe, missing western Libya (with about 70% of the country’s for good or evil.” conveniently bequeathed the Assad, Saddam Hussein, Kho- population) more or less entirely. The story of Venezuela countrymen to try it. disaster that followed to Nico- meini, and Chávez. They fully makes this point with singular lás Maduro, his still more bru- understood their own game; clarity. In 1914 the discovery tal and incompetent hand- as Stalin reportedly observed, Islam created a mighty empire—and historical of oil brought the country vast making Venezuela’s one of the picked successor. Once oil “Ideas are more powerful than narratives that assign the Muslim world to the revenues and produced a rela- most severe hyperinflations revenues shrank, the true guns.” Each one devastated his tively free economy. By 1950 ever. Food shortages led to an costs of Chávez’ bankrupt fiefdom. status of perennial victimhood are infantilizing. Venezuela enjoyed the fourth- average weight loss among ideas became clear. Venezuela If bad ideas bring horror, highest per capita income in Venezuelans of 18 pounds in is now sinking into totalitari- their antidote lies in conserva- the world, behind only the 2016 and 24 pounds in 2017. anism, using military force to tive, modest, tried-and-tested The conduct in Islamic lands of the English, Americans, U.S., Switzerland and New What caused this crisis? keep socialism afloat. ideas that respect tradition Chinese, Japanese, Russians, French and others has indeed Zealand. As late as 1980, it Foreign invasion, civil war, Bad ideas have always ex- and human nature; not in rev- been frequently appalling. Mr. Polk’s case would be better boasted the world’s fastest- natural disaster, substitutes isted, but they acquired new olutionary lurches and grandi- served, however, if he mentioned that such conduct often growing economy in the 20th for oil, or agricultural importance with the advent of ose experiments, but in incre- occurred in lands Islam itself had conquered first—usually century. In 2001 Venezuela plagues? No, bad ideas, pure liberalism in the late 17th cen- mental improvements on through great violence. The Muslim subjection of Iran took still ranked as Latin America’s and simple. tury. Before then, conserva- customary practices. nine years (642-651) of bloody warfare. Tamerlane (d. 1405), wealthiest country. Socialism might have been tism—respecting tradition At a moment when many the self-appointed “Sword of Islam,” left pyramids of skulls Venezuela’s troubles, how- a proven failure globally, but while adapting it to new cir- Democrats are ignoring the outside the wrecks of great cities. The “great Mughal ever, had begun long before. Hugo Chávez convinced Vene- cumstances—had prevailed. lessons of Venezuela and Empire,” as Mr. Polk repeatedly calls Babur’s admittedly Starting around 1958, govern- zuelans to try it. On becoming An individual king’s or reli- swooning over socialism, it’s splendid 16th-century creation, likely saw at least two mil- ment interference in the econ- president in 1999, he stole, gious leader’s besotted vision back to the barricades in the lion killed in a single war (the Deccan campaign, in present- omy, including price and ex- dominated, polarized and could progress only so far be- warofideas. day southern India, of the fanatic emperor Aurangzeb). change controls, higher taxes, jailed. Benefiting from about fore convention rolled it back. To accommodate his view that Islam is a victim in ways and restrictions on property $1 trillion in oil sales during Liberalism rendered tradition Mr. Pipes is president of the that other faiths are not, Mr. Polk frames his book as rights, led to decades of stag- his 14 years as president, he optional by optimistically Middle East Forum. (predator) “North” versus (victim) “South.” His “North” nation, with per capita real in- had the means to launch mas- deeming each person capable includes Chinese, Russians, Mongols (in their day), come declining 0.13% from sive social spending programs to think through the great is- Mary Anastasia O’Grady is Europeans and Americans. His “South” is Islam, though on 1960-97. Still, it remained a to secure votes. He could even sues from first principles on away. occasion he opens up the construct to include Comanches, normal, functioning country. afford to kill the goose laying his own. Congolese, Hindus and others who are not what he calls “the white man.” In general, books using such a “kitchen sink” approach to moralizing about the world’s races and religions make me McCain Was a Warrior for the Climate doubt an author’s motives. There is something insincere about claiming to offer an explanation of today’s terrorism By Fred Krupp lead, the risks Americans face stop McCain. “The question,” House and cast the deciding and jihad problem but telling only one side of the story. from climate change today he said in 2005, “is how much vote to preserve the limits. First, Mr. Polk promises to explain contemporary jihad on s a prisoner of war two would be far more manageable damage will be done before McCain didn’t abandon his the basis of the humiliations Islam has suffered at the hands A generations ago, John and less costly. we start taking concrete ac- conservatism when he em- of neighbors generally. Then he claims that “imperialism” is McCain proved his pa- McCain spoke with young tion.” After he won the Re- braced conservation. He be- the evil he cares about. Finally, near his conclusion he triotism and bravery. But it people passionate about cli- publican presidential nomina- lieved the government’s job is confesses his fundamental concern: “After Christopher was through his more recent mate change during his 2000 tion, one of his first major to limit pollution, then let free Columbus...theactions of the North have been uniformly work to protect future genera- presidential campaign. Con- speeches was on climate enterprise innovate and hunt destructive.” But if the bad guy is anyone who has fought tions of Americans that I knew vinced that “most of the ob- change and clean energy. down the lowest-cost solu- against imperial Islam, then he can’t be “the white man” Sen. McCain. Tributes to the served warming over the past Yes—only a decade ago both tions. For McCain, the prob- because he would also be Chinese, Hindu and more. If he is American hero, who died Sat- major-party presidential can- lem was that companies don’t the West, why call him the North? And if the perpetrator is urday at 81, must not overlook didates supported limits on bear the costs they impose on “imperialism” itself, then Islam is as big a culprit as any. the political bravery—and, He saw curtailing carbon pollution. the American public when This confusing outlook reflects, broadly, the modern yes, patriotism—he showed in pollution as part of Since McCain’s defeat, the they pollute. He wanted a orthodoxy in respectable letters. The people it mainly insults the fight to meet the threat of further hardening of partisan market system that recognizes are the faithful themselves: Infantilizing “the other” robs climate change. his patriotic mission. lines paused progress on fed- the cost of climate pollution— swaths of mankind of their agency. The moral colonialists of Long before other Republi- eral legislation addressing cli- one that rewards companies the West today seem to have taken up a new project: to steal can lawmakers, McCain spoke mate change. Noting this real- for reducing emissions. the other man’s history. Islam, the contemporary Ivory out loudly about the dangers 50 years is attributable to hu- ity, McCain stepped back from I did not always agree with Tower suggests, was never a mighty faith-empire, built with climate pollution posed to man activities,” he hoped to the issue for a time. But McCain on policy and strategy, glittering conquests by brave men on fast horses; Muslims, America and the world. While build a bipartisan consensus through my conversations but I always believed he would rather, were always victims and always will be. his colleagues treated climate for action. with him in recent years, I never stop fighting to make What this condescending message chiefly does is deny to change as a political issue, or Along with his friend, Dem- know it was never far from his America better, safer and the faith a sense of inner dynamism and enterprise—exactly sought to protect their bene- ocratic Sen. Joe Lieberman, mind. Indeed, when the Trump more prosperous. For him, the what is needed in finding a modern future. Most of the factors, the gentleman from McCain sponsored the first administration tried last year fight against climate change Islamic world now ignores ancient calls to jihad, concubi- Arizona warned about “the Climate Stewardship Act in to overturn restrictions on was a natural part of that life- nage or the execution of apostates and homosexuals. But the melting of glaciers, the dying 2003, which would have emissions of methane, a major long crusade. more we emasculate a great tradition, the less we support of coral reefs, and rising ocean capped U.S. carbon-dioxide cause of climate change, Mc- its future embracing today’s world. temperatures.” If McCain’s emissions at the 2000 level. Cain withstood enormous Mr. Krupp is president of the colleagues had followed his The bill failed, but that didn’t pressure from the White Environmental Defense Fund. Mr. Bull’s next book is a history of Iraq. A16 | Monday, August 27, 2018 THE WALL STREET JOURNAL. OPINION

REVIEW & OUTLOOK LETTERS TO THE EDITOR A Salute to John McCain Wage Subsidies Are No Cure for Stagnation

hen John McCain was shot down contributor. McCain was the least culpable, William A. Galston’s prescription much higher labor income would be over Hanoi in October 1967, he was having been dragged in by the others. But he to cure wage stagnation—expanded if its share had not dropped. Labor’s W government wage subsidies—would share dropped partly because added near death: his leg, both arms and was scarred by the event and devoted the rest be worse than the disease (“Wage capital raised GDP. Without added left shoulder were broken. of his career to rehabilitating Stagnation is Everyone’s Problem”, capital, there would have been no Some of his fellow POWs A Hanoi prison his name by promoting cam- op-ed Aug. 15). Employers will quickly added GDP for labor to get a piece didn’t think he’d make it. But could not shake his paign-finance reforms that in incorporate the expected subsidies of. With less capital, wages would the Naval Academy grad beat theory take money out of pol- into their salary planning activities. have fallen. the odds then and continued faith in American itics but in practice dent the Because subsidies won’t change the Shares shifted because production to do so until Saturday, when First Amendment. market price for labor, it is more now involves more capital per he finally succumbed to brain exceptionalism. Over time he adopted the likely that they will be used to offset worker. One reason is the technology cancer at age 81. media’s label as a “maverick,” current wages as to raise them. What revolution and surge in intellectual McCain’s calling card was nicknaming his 2000 presi- business wouldn’t want the govern- property (computer hardware, soft- honor and character. When he was fished out dential-campaign bus the “Straight Talk Ex- ment to pick up part of its labor ware, patents and media content) in of that lake in downtown Hanoi, the North press.” But while he often referred to the me- costs? Once embedded, the subsidies recent years. Compensation for this will become a permanent part of the new capital comes from added GDP it Vietnamese first withheld treatment until they dia as “his base,” with only partial irony, his economic landscape, forever misallo- creates, not by taking income from discovered his father was an admiral and com- positions put him at odds with many of his cating labor to jobs and industries other capital or labor. Capital gets a mander of naval forces in Europe. The late, own party and cost him the nomination that no longer represent our best in- larger share of GDP, but the level of great Admiral James Stockdale, who was tor- against George W. Bush. vestment opportunities. labor compensation is higher too, be- tured in that prison, said McCain “received an He tried again and won in 2008, but that Mr. Galston should brush up on cause new capital increases labor offer that, as far as I know, was made to no was the worst possible moment for a Republi- Bastiat: “A bad economist will pursue productivity. We are still building out other American prisoner: immediate release, can: amid a financial crisis, a long and unpop- a small current benefit that is fol- the new capital, and high returns are no strings attached.” ular war in the Middle East, and an attractive lowed by a large disadvantage in the being earned. These will eventually The young pilot told the Vietnamese what African-American on the Democratic ticket. future, while a true economist will subside with competition and innova- they could do with their special treatment, ef- The same media that praised his anti-GOP po- pursue a large benefit in the future tion, lowering new capital’s share. fectively sentencing himself to four more sitions abandoned him against , at the risk of suffering a small disad- Another reason for using more vantage immediately.” capital is growth of regulation. Regu- years of beatings. This reflected his profound citing his choice of Sarah Palin as a running JONATHAN COBURN latory-related capital (safety, envi- sense of duty. In the Hanoi Hilton he and his mateasanexcuse. Branford, Conn. ronmental control, etc.) must earn a fellow POWs resisted the enemy despite tor- In his last decade McCain continued to ad- return like any other capital, which ture and returned with honor. vocate for a stronger military and continuing Mr. Galston is right when he says must come out of GDP, reducing in- McCain stayed in the Navy after returning U.S. leadership against the advancing authori- “This isn’t charity, nor is it welfare.” come shares and levels of other in- home until he retired in 1981 to pursue a polit- tarians in Russia, China and the Middle East. It is extortion. puts. Costs of regulation cannot be ical career. In 1982 he was elected to Congress But his vote against reforming ObamaCare and ROBERT ALLAN SCHWARTZ countered by raising taxes on capital from his new home in Arizona, and four years Medicaid contradicted his support for the mil- Lexington, Mass. to subsidize labor, as Mr. Galston later he won a Senate seat he would hold until itary. Without reforms, entitlements will grow suggests. That would reduce capital his death. and inevitably squeeze military spending to Mr. Galston confuses levels of in- formation and wages. come with shares of income. He STEPHEN ENTIN In the Senate his politics was generally con- European levels. takes GDP as given, and he asks how Arlington, Va. servative but more personal than ideological. Most important to McCain’s view of politics His abiding priority was the men and women was his devout patriotism and unaltering faith in uniform. McCain was determined that when in American exceptionalism. Hailing to the America sent its soldiers, sailors, airmen and service of his grandfather and father, and his A Free Education May Not Be the Right Rx Marines into harm’s way, they would have own in Vietnam, McCain believed in the right- what they needed to prevail—including the ness of American purposes around the world. Regarding your editorial “A Free American Hospital Association and moral support of their representatives. And This belief caused him in his final years to re- Tuition Education” (Aug. 21): Alexan- the insurance industry is much stron- he wasn’t afraid of sacred cows: McCain spoke sist the drift in his own party toward isola- dria Ocasio-Cortez, Bernie Sanders or ger than that of the medical profes- loudly and honestly about ethanol subsidies, tionism. This was the principled root of his Ken Langone may each have his or sion, politicians won’t have their knowing it would cost him in the Iowa prima- differences with . her own agenda toward free tuition. back. Their intentions are irrelevant. Although capitalism has worked ries if he ever ran for President. When McCain received his brain-cancer di- City University of New York well for our country, using the medi- McCain’s preoccupation with personal agnosis, his daughter called him a “warrior at schools in New York City were free cal profession to extol its virtues is a honor did not always serve him well. He was dusk.” It is an apt description. While the sear- for decades providing the world with poor example. tarred by the Keating Five scandal in 1989 ing experience of Vietnam led so many to lose Colin Powell, Alan Dershowitz and BRIAN KENT, M.D. when he and four other Senators were accused their faith in America’s goodness, for John Bernie Sanders along with Nobel lau- Tulsa, Okla. of improperly intervening with regulators on McCain it was the opposite. “I fell in love with reates and other notable graduates behalf of the Lincoln Savings & Loan run by my country,” he said, “when I was a prisoner who improved the lives of Americans I am bewildered by the diagnosis Charles Keating, who had been a campaign in someone else’s.” and the people around the world. and treatment path of NYU Medical Further proof of the value of a col- School. If the “diagnosis” is lack of lege education comes from the World accessibility by low-income families, Rules for Liz and Bernie War II GI Bill college benefit, which the treatment is wrong. Many medical sent hundreds of thousands to col- students are children of highly suc- lege, many the first in their families cessful people and many don’t require he 2020 presidential campaign will be- Party more open, democratic and responsive to to go. Members of the greatest gener- any “treatment” at all. Further, are T gin all too soon, alas, and one question the input of ordinary Americans.” He means ation, armed with that education, we to be overly sympathetic for ca- is whether Democrats nominate a cen- more likely to nominate himself, Senator Eliza- went on to make America the greatest reers where the “low end” of salaries trist or someone from the ris- beth Warren, or another fa- nation in the world. is $200,000 a year? It seems that the ing left wing. The chances of Democrats increase the vorite of the populist left. A college education is an invest- treatment would be better rendered the latter rose Saturday when chances they’ll nominate To the degree the entire ment in America. Free tuition levels in the college of education where fu- the Democratic National party is marching left in reac- the playing field allowing those with ture incomes are much lower. Committee changed its rules a left-winger in 2020. tion to Donald Trump, the new capabilities and no fiscal means to If the disease isn’t enough pri- to strip superdelegates of rules may not matter. But we improve our nation’s means. mary-care doctors or other “low pay- CHARLES PLUSHNICK ing” jobs, then the proposed treat- their first-ballot nominating know more than a few Repub- Brooklyn, N.Y. ment is malpractice. The choice of leverage. licans who would have liked to have the equiva- specialty is complex. I have never Superdelegates are party officeholders and lent of superdelegates in 2016. The point is to As these doctors in training gradu- been impressed that future income is insiders who in 2016 represented about 15% of give some leverage to party professionals ate and go on to face the realities of the primary or even secondary con- nominating delegates. Most favored Hillary whose goal would presumably be to nominate the health-care marketplace, they will sideration. If the disease is a complex Clinton, and they were her backstop had Bernie the most electable candidate, or, heaven for- immediately be downgraded to “pro- interaction between debt and career Sanders won enough delegates in primaries and fend, the candidate they think might make the viders,” implying a lower pay scale choice, the obvious treatment is to in- caucuses to take the nomination fight to the best President. than that for “physicians.” They will centivize and reward those who, at convention. Mr. Sanders failed, but he and the Democrats also changed the rules to dimin- see that most corporate health-care the end of medical school, commit to party left still resent the role of superdelegates, ish the role of insiders after their 1968 defeat, and insurance executives, as well as pursue primary care and pediatrics in and on Saturday the insurgents carried the day and one result was that in 1972 they nominated most hospital administrators, pull their residencies. This could be done down compensation that dwarfs their by tuition and loan forgiveness once in a vote that stripped party officials of any po- George McGovern, who lost in a rout to Richard salary, demonstrating that capitalism the commitment is fulfilled. tentially decisive nominating role. Nixon. Democrats figure they can’t possibly lose rewards profit over education and RICHARD M. WESTMARK, M.D. Mr. Sanders called Saturday’s vote “an im- to Mr. Trump again, but that’s also what they training. They will soon realize that Neurosurgeon portant step forward in making the Democratic thought the last time. because the financial clout of the Houston A Trade ‘Security’ Safeguard Russian Ads Essential to the Resistance View

s President Trump wields his tariff that is supposed to promote commerce. U.S. Curt Levey asks “Why Should We more stories about the economy sword at friend and foe, Congress has weapons acquisition is global, and U.S. secu- Fear Russian Political Ads? (op-ed, gaining steam after eight years in the A Aug. 17) when evidence is crystal doldrums. been struggling to restore a check on rity strategy requires allies. Countries with clear that the entire Russian effort to The Russian interference story has his unilateral whim. The lat- strong U.S. trading ties tend manipulate the American electorate kept Washington’s investigators gain- est idea would put the Penta- The Pentagon these to be allies. couldn't have been more than a drop fully employed, swamp denizens in gon in charge of deciding days is less protectionist In a memo last year to in the ocean. The answer is equally demand and the media enthralled. If when imports threaten na- Commerce on steel and alu- as clear: The entire case against the Democrats ride the interference and tional security. than Commerce. minum imports, Defense legitimacy of Donald Trump’s presi- collusion narrative to recapture con- The Constitution gives Con- Secretary James Mattis dency rests on Russian interference trol of Congress, despite the reality gress the authority to regulate noted that “the U.S. military and Russian collusion with the that Russia’s effort to manipulate the foreign trade. But with Section 232 of the Trade requirements for steel and aluminum each Trump campaign narrative. Pull that U.S. electorate was completely insig- Expansion Act of 1962, Congress ceded to Presi- only represent about three percent of U.S. rug out from under the Trump resis- nificant social media messages will dents the power to impose tariffs when the production. Therefore, DoD does not believe tance and the media would have had bow to the perception that the effort to fill airspace and columns with was akin to God’s flooding the planet Commerce Department decides that imports that the findings in the reports impact the in the days of Noah. harm U.S. security. Presidents Nixon and Ford ability of DoD programs to acquire the CORRECTION DEAN RICHARDS used the power to tax oil imports in the 1970s. steel·or aluminum necessary to meet national Annapolis, Md. But Mr. Trump has used it like no other Presi- defense requirements.” dent as a protectionist carte blanche, as Com- We prefer the proposal from GOP Senators Pia Viewing of the Jeu de Paume is merce has followed his orders to conjure threats Bob Corker of Tennessee and Pat Toomey of a co-curator of “Susan Meiselas: Medi- Pepper ... from steel and aluminum imports and may soon Pennsylvania that would require the President ations.” The photographer’s series And Salt do the same on autos and auto parts. to get congressional approval before the Ad- about the boardinghouse in Cam- Enter Senate Republicans Rob Portman ministration can impose 232 tariffs. But for bridge, Mass., where she stayed as a THE WALL STREET JOURNAL (Ohio) and Joni Ernst (Iowa) and Alabama now that doesn’t have the votes to pass the Harvard graduate student, is titled Democrat Doug Jones, who are pitching the House or Senate, and the Portman-Jones effort “44 Irving Street.” In another project, she recorded conversations with strip- Trade Security Act. The bill’s main feature might. If nothing else it would give free-trad- pers who worked the carnival circuit would take responsibility for investigating na- ing Senators in both parties a chance to send in towns around New England before tional-security trade threats away from Com- a message to Mr. Trump that his political leave or after they performed. An Aug. 7 re- merce and give it to the Defense Department, on trade has limits. It would also give farm view of the exhibition, “Turning Sub- whose business is national security. state Senators a chance to show they’re stand- jects Into Collaborators,” misstated If Defense finds a security threat, Commerce ing against tariffs that are damaging exports the curator and the title of the series. and the U.S. Trade Representative would fash- and farm income. It also mischaracterized her inter- ion a remedy. The President would decide on After the Smoot-Hawley disaster of 1930, views with the strippers. the remedy, but Congress would have the right Congress ceded trade power to Presidents on to disapprove of his decision with a joint reso- the assumption that they would open foreign Letters intended for publication should lution in the House and Senate. This would ex- markets and expand commerce. Mr. Trump is be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, pand Congress’s role in Section 232 cases, the first President to use this authority largely or emailed to [email protected]. Please which is currently limited to disapproving a de- for protectionist ends. Restoring better judg- include your city and state. All letters cision on oil imports. ment to Section 232 findings with Pentagon are subject to editing, and unpublished Believe it or not, today’s Pentagon is less analysis and congressional oversight would re- letters can be neither acknowledged nor “We just bought a bunch returned. protectionist than the civilian bureaucracy store some constitutional balance. of things to simplify our life.” THE WALL STREET JOURNAL. Monday, August 27, 2018 | A17 OPINION A Life of Service and Good-Natured Irreverence

By John Lehman that I won’t die in a plane crash—I Shortly before McCain was diag- already tried that three times.” He nosed with cancer last year, a few ohn McCain was not a model was referring to his naval career, friends traveled with him to midshipman. While at the which involved two crashes before to meet Prince Albert and Princess Naval Academy, he earned so he was famously shot down over Caroline. After a lovely dinner in the J many demerits for unsanc- North Vietnam. garden, McCain was shown the pal- tioned outings that by grad- Sometimes McCain’s humor ace pub, where he discovered a uation he was made to march the struck closer to the bone. On the plaque commemorating his first equivalent of 17 round trips between morning of the 2008 New Hampshire cruise to the Mediterranean aboard Annapolis and the fleshpots of Balti- primary, he addressed the press out- the USS Independence in 1962, given more. He later regretted finishing side a hotel owned by his friend to Princess Grace by the ship’s cap- fifth from the bottom of his class in- Steve Duprey. Asked for his thoughts tain. It was on that port call that stead of dead last. As his mother— on the primary, with Mr. Duprey at McCain learned to play craps in the still alive at 106—often said, “He his side, McCain answered: “I am so casino. After a gracious and very was really a scamp.” McCain pre- glad to be leaving this terrible hotel, late farewell to the royals, McCain ferred “maverick.” with threadbare towels, thin soap joyfully led us to the same craps ta- and cheap furniture.” ble at which he had first played and, The forthrightness of McCain’s amid a large selfie-clicking crowd of John McCain’s mother, private persona was of a piece with Europeans, he won €900 before the boldness he displayed as a sailor. In GETTY IMAGES sun came up. still alive at 106, called 1967 McCain was caught in a fire on John McCain on April 24, 1973, about a month after returning from Vietnam. Soon after, when McCain was di- him a ‘scamp.’He always the USS Forrestal off the coast of agnosed with brain cancer and be- Vietnam. Suddenly surrounded by young McCain famously refused to this day, emails circulate purporting gan the long ordeal of his treat- preferred ‘maverick.’ explosions while strapped into his go until all prisoners of war who to come from unnamed “fellow ment, his character was bomb-laden jet, he climbed over the had been there longer had been re- POWs,” “squadron mates” and “au- undiminished. He always bore a la- windscreen, swung to the deck, and, leased. After enduring five more thoritative sources,” accusing Mc- conic smile and frequently offered A distinct, good-natured irrever- instead of running for cover, rushed years of beatings and torture, Mc- Cain of being a coward, a squeal, a wisecracks, invariably comforted his ence was among John McCain’s to help a sailor manning a thrashing Cain returned home with his brother lousy pilot and worse. many visitors, and occasionally abiding features, and for decades I fire hose until the blaze was con- POWs. Soon after that I met him— Even Americans who knew him hurled verbal thunderbolts at his saw it firsthand. He kept friends at tained hours later. still on crutches—and we remained only as a politician couldn’t doubt former adversaries. To his pals he his side during both of his presiden- After he was shot down and cap- friends thereafter. his boldness. As chairman of the would say: “Cheer up, none of us tial campaigns—not only to tell him tured later that year, McCain’s be- In addition to rankling his critics Senate Armed Services Committee, gets out of this alive, and I have had the unpleasant truth when he made havior was even more heroic. His in Congress, McCain’s indomitable he led the passage of the most im- more than my share of years and mistakes dealing with the press or North Vietnamese captors intensi- attitude occasionally earned him en- portant reforms to the Pentagon in blessings.” He showed not a tinge of answering town-hall questions, but fied his torture upon learning of his emies overseas. In 2001 when seven decades in the National De- apprehension about his next great also to share in his biting wit and famous father, the Pacific com- George W. Bush said he had looked fense Authorization Act for 2017. adventure. wry sense of humor. mander. When the press asked Adm. in ’s eyes and seen his More broadly, McCain rekindled When turbulence frightened the John McCain what he planned to do soul, McCain retorted that he had Americans’ understanding of inter- Mr. Lehman, Navy secretary in local politicians aboard a flight about his son, he replied, “Pray for also looked into Mr. Putin’s eyes but national threats and the urgent need the Reagan Administration, is au- across the Midwest, McCain put him” and never commented again. had seen just three letters: “K-G-B.” for strategy. He did all of this with a thor of a new book, “Oceans Ven- them at ease with one line delivered In July 1968 when the North Viet- The Russians soon thereafter started bipartisan openness that earned his tured: Winning the at cool as ice: “You are safe. I know namese offered to release him, the targeting him with online lies. To colleagues’ respect. Sea.” Republicans, Save Your Party by Impeaching the President

By Tom Steyer always emphasized that America owned companies invested $1 bil- meeting with Mr. Putin in Helsinki fied nine impeachable offenses, must be a nation of laws. At the lion in a Trump Organization real- last month, Mr. Trump questioned ranging from Mr. Trump’s intended s news spread that Michael 2016 Republican National Conven- estate project. our foreign intelligence services on obstruction of justice to his abuse A Cohen’s plea deal had all but tion, party leaders agreed on a plat- Mr. Trump’s former administra- a global stage, revealing that he of the power. Republicans in named President Trump as an form asserting that “the rule of law tor of the Environmental Protection can’t be trusted to put America’s in- the House—particularly those retir- unindicted co-conspirator in a fed- is the foundation of our Republic.” Agency, Scott Pruitt, was forced to terests first. ing, like Speaker Paul Ryan—should eral crime, I thought back to a con- Yet Mr. Trump has been disman- resign after sending his staff on Take your pick of the GOP’s find the courage to act. versation I had earlier this summer tling the rule of law to try to pro- personal errands while allegedly so- guiding principles—moral leader- At that same South Carolina in South Carolina. tect himself. liciting gifts from industries the ship, fiscal responsibility, the im- town hall, another attendee told me A woman approached me at the He has repeatedly tried to ham- portance of family. Mr. Trump’s be- that while he typically votes Repub- end of our Need to Impeach Town per ’s havior runs contrary to virtually lican, “My wife and I like to say Hall in Columbia, where I’d dis- investigation into Russia’s role in Trump traduces the GOP’s all of them. Some longtime Repub- we’re not Republicans or Demo- cussed the threat Donald Trump the 2016 elections. He bragged that lican stalwarts, like Steve Schmidt crats, we’re Americans.” They un- poses to our democracy. At 52, she he fired James Comey in an effort guiding principles as he and George Will, have renounced derstand that the movement to im- was a lifelong Republican, but she to end that investigation, signaled erodes the foundations the GOP in response. More have peach Mr. Trump and remove him couldn’t understand why her party’s that he may pardon allies caught in convinced themselves they can ig- from office isn’t partisan. It’s patri- elected leaders wouldn’t stand up to the probe, and has even claimed he of our country. nore the president’s cruelest and otic. After all, if it succeeds, the Mr. Trump. has an “absolute right” to pardon coarsest qualities and instead fo- Oval Office will still be occupied by “We’re under attack by our own himself. His legal team has justified cus on the ways he’s advanced a Republican until at least January president,” she told me. this by claiming that he is effec- EPA was supposed to regulate. Me- their policy agenda. But no one 2021. She’s far from the only GOP sup- tively above the law—a gravely dia reports suggest that Commerce should set aside their values to ac- Ideological disagreements and porter who feels this way. More worrying stance given the new alle- Secretary Wilbur Ross might have commodate his. Instead, Republi- policy goals shouldn’t blind anyone than 500,000 people who have gations of criminal behavior made committed insider trading last year cans should seize an opportunity to the ways this president puts our added their voices to our call to by his former personal lawyer. using information he received as to reclaim their party and stand up democracy at risk and our values impeach Mr. Trump and ultimately From day one, Mr. Trump’s ad- part of his official duties. for their ideals, by joining the push under siege, or the need to act as a remove him from office identify as ministration has made a mockery of The Republican platform criti- for impeachment. result. Mr. Trump demonstrated his Republicans. When I meet these a party platform that states opposi- cizes Democrats for what it de- The Framers of the Constitution unfitness for office long before Mr. voters at our Town Hall events, tion to “crony capitalism and corpo- scribes as a failure to “stand by al- created the impeachment process to Cohen implicated him in a federal they often tell me how disgusted rate welfare.” The decision to lift lies or stand strong against our meet what James Madison de- crime. If Americans across the po- they feel watching Mr. Trump the federal government’s ban on foes.” Yet this president has alien- scribed as the “indispensable” need litical spectrum demand his re- trample their party’s core beliefs as ZTE—a Chinese telecom giant that ated allies with insults, threats and for a defense against “the incapac- moval, we can force him out. he erodes the foundations of our had illegally sold American technol- destructive tariffs while embracing ity, negligence or perfidy of the country. ogy to Iran and North Korea—came dangerous authoritarians like Kim chief Magistrate.” The nonprofit Mr. Steyer is the founder of Need The GOP, as they’ve told me, has just after Chinese banks and state- Jong Un and Vladimir Putin. At his Free Speech for People has identi- to Impeach and NextGen America. Europe Takes a Second Look at Conscription

By Elisabeth Braw scription seven years ago. In its fi- conscription concept with all kinds might need to survive for several for the authorities to come to their nal years, only about one-third of of problems they want to solve: in- days without power or access to aid. The massive Cyclone Gudrun, onscription is back. After the young Germans performed military tegration, unruly youths, teaching grocery stores. The same skills which hit southern Sweden in 2005, C Cold War, most European service, about one-third chose civil- young people rules,” noted Annika help communities deal with natural left nearly half a million people countries suspended manda- ian national service, and the re- Nordgren Christensen, a Swedish disasters. without power. Had these rural tory military service, but now maining third were not called up or former member of Parliament who Currently, communities hit by dwellers not been in the habit of they’re rediscovering the institu- signed up as professional soldiers— wrote the report that led to the se- calamities rely on the government looking after themselves, there tion that added muscle to the Germany’s post-Cold War armed lective draft, told me. “But what re- for help. A few residents may re- would have been far more than armed forces and some measure of forces simply didn’t need that many ally matters is its military value.” member skills learned in scouting, seven fatalities. social cohesion. The practice is of- soldiers. But with the armed Ms. Kramp-Karrenbauer’s proposal Imagine, then, the everyday ben- ten more a burden than an aid to forces—the Bundeswehr—now is essentially an updated, co-ed re- efits of trained citizens who know the military. But with natural disas- struggling to recruit professional turn to Germany’s previous model; The Continent needs what to do in an emergency. No ters and other emergencies increas- soldiers, Ms. Kramp-Karrenbauer’s young men and women would be craned-necks at traffic accidents; ing, what we really need is citizen suggestion is not surprising. Swe- required to serve in the better preparation instead, trained Samaritans. No resilience training. den has reinstated selective con- Bundeswehr or in a civil-society or- for disaster of all kinds, able-bodied men and women wait- “I can promise you one thing: scription to beef up its active-duty ganization such as a fire brigade or ing for the government to send uni- We’ll have to discuss the issue of forces, as has Lithuania. Norway an assisted-living facility. as well as more soldiers. formed personnel to pile sandbags military service and national ser- has expanded the selective draft to What, then, should countries do during floods. “We’re used to train- vice very intensively again,” Anne- women, while French President Em- if they want to strengthen their re- ing young people for military tasks, gret Kramp-Karrenbauer, secretary- manuel Macron is planning a new silience and instill more civic pride but most of us would have no idea but we can also train them to com- general of Chancellor Angela form of mandatory national service and cohesion? Though some na- what to do in the case of, say, a bat a variety of civilian crises,” Merkel’s Christian Democratic that includes a civilian and a mili- tions would benefit from more mil- storm that knocked out power. We Gen. Richard Barrons, a former Union, said in a video message re- tary segment. itary muscle, what it is more ur- may have good instincts, but with- commander of Britain’s Joint Forces leased earlier this month. That sen- These initiatives are laudable, gently needed is resilience. If out training and organization our Command, told me. “And let’s not tence unleashed this summer’s big- but only the best-executed con- Russia decided to attack another efforts are inefficient. Much of Hur- forget that our ability to absorb gest debate in Germany. scription models generate substan- country tomorrow, by cyber or con- ricane Katrina’s damage occurred blows at home strengthens our de- The government suspended con- tial military value. “People fill the ventional means, the population as New Orleans residents waited terrence against adversaries.” Of course the government should play a central role in national resil- ience. But when we discuss na- PUBLISHED SINCE 1889 BY DOW JONES & COMPANY Notable Quotable: McCain tional service, it makes sense to fo- Rupert Murdoch Robert Thomson & cus on the skills communities need Executive Chairman, News Corp Chief Executive Officer, News Corp From John McCain’s speech ac- When they brought me back to most to limit the effects of various Matt Murray William Lewis Editor in Chief Chief Executive Officer and Publisher cepting the Republican presidential my cell, I was hurt and ashamed, and calamities. Here’s one way to do it: nomination, Sept. 4, 2008: I didn’t know how I could face my Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT: Instead of working in fast-food Ramin Beheshti, Chief Technology Officer; fellow prisoners. The good man in chains or performing truncated Jason Anders, Chief News Editor; Thorold Barker, Mark Musgrave, Chief People Officer; Europe; Elena Cherney, Coverage Planning; I was in the cell next door, my friend, Bob military service, teenagers could Edward Roussel, Chief Innovation Officer; Andrew Dowell, Asia; Neal Lipschutz, Standards; when my captors offered to release Craner, saved me. Through taps on a Anna Sedgley, Chief Operating Officer; spend one summer in resilience Meg Marco, Digital Content Strategy; Christina Van Tassell, Chief Financial Officer me. I knew why. If I went home, they wall he told me I had fought as hard training. They would enjoy learning Alex Martin, Writing; Michael W. Miller, Features & Weekend; Shazna Nessa, Visuals; OPERATING EXECUTIVES: would use it as propaganda to de- as I could....Andthen he told me survival skills, and the training Rajiv Pant, Product & Technology; Ann Podd, News Kenneth Breen, Commercial; moralize my fellow prisoners....I to get back up and fight again for would give them the opportunity to Production; Matthew Rose, Enterprise; Jason P. Conti, General Counsel; wasn’t in great shape, and I missed our country.... interact with teenagers from other Michael Siconolfi, Investigations; Tracy Corrigan, Chief Strategy Officer; Nikki Waller, Live Journalism; Frank Filippo, Print Products & Services; everything about America. But I I fell in love with my country when backgrounds. Stephen Wisnefski, Professional News; Steve Grycuk, Customer Service; turned it down. I was a prisoner in someone else’s. I They would also learn what it Carla Zanoni, Audience & Analytics Kristin Heitmann, Chief Commercial Officer; A lot of prisoners had it worse loved it not just for the many com- means to be a citizen. Because re- Nancy McNeill, Corporate Sales; Gerard Baker, Editor at Large Josh Stinchcomb, Advertising Sales; thanIdid....Ialwayslikedtostrut forts of life here. I loved it for its de- silience training doesn’t need to in- Paul A. Gigot, Editor of the Editorial Page; Suzi Watford, Chief Marketing Officer; a little after I’d been roughed up to cency; for its faith in the wisdom, jus- volve weapons, people of all stripes Daniel Henninger, Deputy Editor, Editorial Page Jonathan Wright, International show the other guys I was tough tice and goodness of its people. I could embrace it. WALL STREET JOURNAL MANAGEMENT: DJ Media Group: Almar Latour, Publisher Joseph B. Vincent, Operations; Professional Information Business: Christopher enough to take it. But after I turned loved it because it was not just a Larry L. Hoffman, Production Lloyd, Head; Ingrid Verschuren, Deputy Head down their offer, they worked me place, but an idea, a cause worth Ms. Braw is an associate fellow

EDITORIAL AND CORPORATE HEADQUARTERS: over harder than they ever had be- fighting for. I was never the same at the Royal United Services Insti- 1211 Avenue of the Americas, New York, N.Y., 10036 fore. For a long time. And they again. I wasn’t my own man anymore. tute for Defence and Security Telephone 1-800-DOWJONES broke me. I was my country’s. Studies. TECHNOLOGY: NUCLEAR PLANT PROJECT SPARKS CLASH BETWEEN UTILITY AND LAWMAKERS B4 BUSINESS&FINANCE

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Last Week: S&P 2874.69 À 0.86% S&P FIN À 0.24% S&P IT À 1.69% DJ TRANS À 0.51% WSJ$IDX g 0.55% LIBOR 3M 2.317 NIKKEI 22601.77 À 1.49% See more at WSJMarkets.com Global Tech-Stock Rally Fractures Goldman Crashes Cracks are appearing tors searching for growth piled uncertainty whether the tech “The market feasted all of and Amazon’s most recent into shares of a group loosely sector’s rally has gone too far. 2017. This year it’s been a very quarterly profit soaring to a for the sector’s largest known as “FAANG-BAT,” com- While the U.S. FAANG stocks different environment,” said record on the back of its cloud- Party at Chinese firms, making prising U.S. tech giants Face- have continued their surge Matt Forester, chief invest- computing, advertising and re- book Inc., Apple Inc., Ama- with a 38% gain this year, the ment officer of BNY Mellon’s tail businesses. some investors wary zon.com Inc., Netflix Inc. and BAT group is down 5.3%, al- Lockwood Advisors. When But the biggest Chinese tech EndofDay Google parent Alphabet Inc., though it remains well above cracks appear in sectors that stocks have stumbled this year BY AKANE OTANI as well as Chinese firms Baidu an index of mainland Chinese have dominated, such as tech- as investors have grown warier BY ALEXANDER OSIPOVICH AND STEVEN RUSSOLILLO Inc., Alibaba Group Holding listed stocks, the Shanghai nology, “it’s difficult to see of slowing growth, possible AND LIZ HOFFMAN Ltd. and Tencent Holdings Ltd. Composite, which is down 17%. whether you’re seeing a signal government regulation and The biggest Chinese tech- The group of stocks collec- Some investors are asking or if it’s just a correction for fractious trade negotiations. Goldman Sachs Group Inc. nology stocks are stumbling tively rocketed 62% higher last whether a pullback in China’s what’s been a very strong sec- After rising at a more than is leading a pack of investment while American tech giants year, more than tripling the tech firms may presage a simi- tor of the market,” he said. 40% annualized rate over the banks that are elbowing into power market gains in the U.S., S&P 500’s gains. But that trade lar one in the U.S., and if so Technology stocks have 10 years through 2017, Tencent the crucial stock-exchange a divergence that is breaking has begun to fracture in recent which stocks might lead the continued to power much of has tumbled 13% this year business of end-of-day trading. apart one of last year’s most months, reflecting escalating market higher next—as well as the broader market’s gains in through Friday, at one point In the past, banks would profitable trades. trade tensions between China whether the longest-ever U.S. the U.S., with Apple becoming wiping out over $175 billion in route orders for such 4 p.m. For much of the most recent and the U.S., doubts about the stock bull market may be on the first American company to market value. This month, the trades to the New York Stock leg of the bull market, inves- global economy’s health and borrowed time. top $1 trillion in market value PleaseturntopageB9 Exchange and Nasdaq Inc. But as the exchanges raised fees, banks such as Goldman and PERSONAL Morgan Stanley sought to exe- TECHNOLOGY Robots Lend a Hand in China’s Manufacturing Push cute more of these orders in private, off-exchange transac- By David Pierce tions. Credit Suisse Group AG and UBS Group AG have also recently stepped up businesses Securing aimed at handling end-of-day trades. The share of closing-price Your Home trades executed outside ex- changes, by broker-dealers such as Goldman, doubled from The Fast, mid-2015 through the end of last year, to 32% from 16%, ac- cording to Virtu Financial Inc., Easy Way an electronic-trading firm in U.S. stocks. My first The shift raises questions plan for an about transparency and comes easy DIY as more financial activity of all home-security stripes is moving away from system was to public markets. Some traders get one of and exchange executives worry those Nest cams. My wife im- that the NYSE’s and Nasdaq’s mediately ruled out the idea. end-of-day prices—which serve She’s right—even if theo- as daily checkups on thousands retically only she or I would of global companies—could be- ever see the footage, some- thing about an always-on camera seems creepy. Be- sides, I realized my motiva- Some banks are eager tion was largely to spy on to take on more risk my dog. Seriously, what does he do all day? in plain-vanilla When I thought about it, I businesses like stocks. realized what I really want is

to know whether everything GIULIA MARCHI FOR THE WALL STREET JOURNAL is OK: Nobody has come in Machinery maker Sany is at the forefront of Chinese efforts to promote innovation and quality rather than lower prices for copycat who shouldn’t have, nothing products. Digital factories are a blueprint for the future. Robots, at rear, weld piles at a factory in Beijing’s Changping district. B3. come less reliable measures of is on fire, the dog isn’t stuck investors’ sentiment. And some outside on the balcony. And I Automation Nations World-wide shipments of Industrial robot density Sany’s revenue investors fret that banks might don’t want to have to sell be extracting trading profits China is the world's industrial robots Installed robots per 10,000 In billions of yuan bone marrow to pay for pro- from clients’ orders. fastest-growing buyer of robots, employees in the manufacturing fessional installation or 24/7 The change threatens the but it's still playing catch-up to sector in 2016 monitoring. 400,000 40 NYSE and Nasdaq, which have industrial rivals. Sany's sales are I found four systems that collected hundreds of millions rebounding as it embraces seemed to suit my needs. Al- 300,000 30 of dollars in trading fees from automation. South Korea 631 phabet’s Nest Secure, the their closing auctions in recent Japan Amazon.com-owned Ring 200,000 303 20 years. It also shows that some Alarm, Samsung Electron- U.S. banks, after lean postcrisis ics’ SmartThings ADT Home 189 years, are embracing their *Preliminary 100,000 10 Security Starter Kit, and Note: 10 billion yuan=$1.45 billion China 68 trading arms, eager to take on SimpliSafe’s Foundation kit. Sources: International Federation of Robotics more risk in plain-vanilla busi- (shipments, density); FactSet (revenue) 0 To China 0 They are easy to install and World average 74 nesses such as U.S. stocks. pair with a phone app for THE WALL STREET JOURNAL. 2007 ’09 ’11 ’13 ’15 ’17* 2014 ’15 ’16 ’17 Trading around 4 p.m. has quick status checks; optional surged over the past decade, in professional monitoring (for part because of the trillions of a relatively low monthly fee) dollars flowing into index can alert you to problems funds that mirror broad bas- and even call the police. New Beverage Options Are Exploding kets of stocks. Such funds tend All four do the job a bit to do a lot of trading at the differently, but the good market’s close because the in- news is they’re all pretty BY JENNIFER MALONEY dexes they track are based on good at it. In one leisurely AND JULIE JARGON end-of-day prices. work afternoon, you can set As index giants piled into up an impressively robust When Colorado-based the close, the flood of orders security system. Lucky’s Market first started they brought with them at- PleaseturntopageB4 carrying kombucha and cold tracted other investors, includ- brew coffee in its stores about ing more traditional stock pick- two years ago, the grocer ers. Last year, trades in the wasn’t sure where the drinks closing auctions accounted for INSIDE belonged, so it stocked them more than 8% of volume in in small coolers next to the S&P 500 stocks, nearly four checkout aisle. times the level in 2004, ac- Consumers bought them up cording to Credit Suisse. so quickly that employees That has led some banks to across the chain’s 31 stores build up a business called the had to constantly replenish “guaranteed close.” the coolers. Eventually, the It works like this: In lower stores carved out space for the Manhattan, the NYSE’s bell popular new drinks in the rings at 4 p.m. ET each trading juice section by eliminating day, signaling a giant auction GROCERS gallon jugs of juice and other that determines the closing slow-selling sizes, according to prices for thousands of stocks. SHRUG OFF Andrew Vialpando, the chain’s Seconds later, across town, AMAZON DEAL vice president of center-store Goldman’s trading systems pair merchandise. up buyers and sellers on tens A proliferation of beverages of millions of shares—using the BUSINESS NEWS, B2 that don’t fit within traditional STEPHANIE AARONSON/THE WALL STREET JOURNAL price published by the NYSE drink categories is creating The fermented tea kombucha is shelved in the organic produce section at a Brooklyn, N.Y., grocery store. but avoiding the Big Board. tough choices for retailers, con- Investors looking to buy or fusion for shoppers and a chal- more of a coffee company, re- nated by upstarts as Ameri- treat, she has a can of Zevia sell shares of Apple Inc., for ex- lenge for manufacturers that cently renamed Keurig Dr Pep- cans’ thirst for lager and sug- cola made with stevia, a zero- ample, can get a guarantee are trying to keep pace with per. Anheuser-Busch InBev, ary soda continues to wane. calorie, plant-based sweetener. from Goldman or another in- changing consumer tastes. the world’s largest beer brewer, Shifts in the beverage aisle Figuring out what people vestment bank to honor their No longer do soda compa- is selling ready-to-drink ice tea are being driven by people like want to drink is tricky. The an- orders at the closing price set nies, coffee companies and alco- and organic caffeinated spar- Lisa Fink, who used to drink swer, for many companies, has on Nasdaq, where Apple is hol companies stay in their kling water. black coffee in the morning and been to mix their traditional listed. lanes. Coca-Cola Co. and Pep- As they expand onto others’ again in the afternoon. Now, the beverages with popular new in- At 4 p.m., the bank pairs SOYBEANS siCo Inc. have expanded into turf in search of growth, the 46-year-old personal trainer in gredients to create hybrids. Apple buyers with Apple sell- dairy, tea, coffee, juice, soy lines between the companies Thousand Oaks, Calif., drinks PepsiCo’s Tropicana offers ers. It can send unmatched or- ABOUND ON milk, bottled water and coconut and their products are blur- chai tea with bone broth, pro- “Coco Blends,” fruit juices ders to the exchange or take U.S. FARMS water. PepsiCo last week an- ring. The pressure is greatest tein powder and coconut mixed with coconut water, and the other side of the trade it- nounced a deal to buy seltzer- on the big makers of soft creamer—a drink that serves as “Tropicana Essentials Probiot- self, storing the extra Apple machine maker SodaStream In- drinks and beer, which are breakfast—and switches to tea ics,” a line of juice made with shares or short interest on its COMMODITIES, B9 ternational Ltd. Dr Pepper jockeying for market share in and sparkling water for the rest the type of active cultures nor- books overnight. Snapple Group Inc.isnow new categories mostly domi- of the day. Sometimes, as a PleaseturntopageB2 PleaseturntopageB2 B2 | Monday, August 27, 2018 THE WALL STREET JOURNAL. INDEX TO BUSINESSES BUSINESS & FINANCE

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

A Epic Games...... B10 P Alibaba Group Holding F PepsiCo...... B1 ...... B1 Facebook...... B1 Pfizer...... B5 Alphabet...... B1 Fifth Third Bancorp..B10 S Amazon.com...... B1,B2 G Samsung Electronics..B1 Amneal Pharmaceuticals Sany Group...... B3 ...... B5 GAM Holding...... B9 SimpliSafe...... B1 Anheuser-Busch InBev Goldman Sachs GroupB1 ...... B1 Gree Electric...... B10 Sprouts Farmers Market B2 Apple...... B1,B10 I Stewart Brothers...... B2 AQR Capital Intel...... B9 Management...... B9 T Intercontinental B Exchange...... B2 Tencent Holdings...... B1 Teva Pharmaceutical..B5 Baidu...... B1 K Twitter...... B9 Beijing Xiaoju Keurig Dr Pepper...... B1 U Technology...... B3 M C UBS Group...... B1 Morgan Stanley.....B1,B2 V Coca-Cola...... B1,B2 M&T Bank...... B10 Comerica...... B10 Mylan...... B5 Virtu Financial...... B1 Credit Suisse Group...B1 N X E Netflix...... B1,B10 Xiaomi...... B10 INDEX TO PEOPLE NATURAL GROCERS A Green, Nicholas...... B2 Mingzhu, Dong...... B10 A year after Amazon bought Whole Foods, sales are up at Natural Grocers by Vitamin Cottage. One of the chain’s stores in Texas. Antoci, Tony...... B2 H N B Harburg, Ben...... B9 Nooyi, Indra...... B2 Harding, David...... B9 O Grocers Shrug Off Amazon Threat Barris, ...... B10 Henry, John...... B9 Beddall, Matthew...... B9 Olson, Tony...... B2 Hueber, Dan...... B9 Braga, Leda...... B9 Q BY HEATHER HADDON from federal tax cuts to fund the I shares of Natural Grocers by effort. Analysts remain con- C Quincey, James...... B2 Some Investors Irwin, Scott...... B9 When Amazon.com Inc. Vitamin Cottage have climbed cerned about how they will con- Corbae, Dean...... B8 S See Opportunity in K bought Whole Foods last year, by around two-thirds. tinue to fund the efforts. D Saksena, Nitin...... B9 Kemper Isely worried about Food-Retail Sector Many analysts said prospects “We have been and remain Kinak, Mehmet...... B2 Schachter, Ben...... B10 how his regional health-food are uncertain for grocers com- cautious on the bottom-line Disney, Linda...... B2 Kudlow, Larry...... A2 Seidner, Meghann...... B2 chain would compete with the peting with Amazon and deep uncertainty within food retail F L Sinisi, Vincent...... B2 e-commerce giant. Grocery shares plunged last discounters. Since the Whole given ever-increasing competi- Forester, Matt...... B1 Laguarta, Ramon...... B2 Suderman, Arlan...... B9 A year later, the chief exec- summer after Amazon.com Inc. Foods deal, grocery executives tion,” said Vincent Sinisi, Mor- utive of Natural Grocers by said in June that it would buy mentioned the chain twice as of- gan Stanley equity-research Friedland, Ben...... B2 Lei Jun...... B10 Sweeney, Tim...... B10 Vitamin Cottage Inc. is sleep- Whole Foods. Stocks for six large ten on average during earnings analyst. G Levine, Ross...... B8 V ing better. Sales are up, shares food retailers including Kroger calls compared with calls in the Foot traffic at Whole Foods M Gamerman, Jacob...... B2 Vialpando, Andrew.....B1 have nearly doubled since Jan- Co. and Walmart Inc., lost about months before, financial-data stores was up 8% in June and uary and the Colorado-based $12 billion in value. Some inves- firm Sentieo Inc. found. July compared with those company is expanding its net- tors saw an opportunity. Trader Joe’s and Aldi, chains months last year, before Ama- The NYSE, owned by Inter- work of 147 stores. “There is a world where re- that sell natural and organic zon took over, according to continental Exchange Inc., cut Executives at many natural tailers and manufacturers can goods at a discount, have posted data firm inMarket. Amazon re- Banks Join its closing-auction fees in Jan- and specialty chains who ex- coexist with Amazon,” said Ja- strong sales growth since the ported $4.3 billion in physical- uary. The move was partly in pected Whole Foods under Am- cob Gamerman, senior research deal, according to an analysis of store sales during its latest response to the threat from the azon ownership to hurt their analyst for Neuberger Berman anonymized consumer credit- quarter, mostly at Whole Foods. Party at banks’ bustling 4 p.m. busi- businesses have seen growth Group LLC, the asset-manage- and debit-card transactions. That was up from the $3.7 bil- ness, a person familiar with instead. One year after Ama- ment firm that took an activist Tony Olson, chief executive of lion in sales for the same pe- the matter said. zon’s $13.7 billion takeover of position in Whole Foods last the Spins research firm, said the riod last year when the chain End of Day Executives at NYSE and the natural-foods pioneer year. One of the firm’s funds sector will have challenges, given was a stand-alone company. ContinuedfrompageB1 Nasdaq say they fear that if closed on Aug. 28, sales at built up a stake in Kroger after that many competitors are Amazon has added dis- Goldman is the largest com- more trading moves to banks, Sprouts Farmers Market Inc., the Amazon-Whole Foods deal smaller and face rising costs. counts and delivery at Whole petitor in this market, handling it will make closing prices less Natural Grocers and hundreds was announced. “We will have the same wor- Foods stores for Prime mem- between 60 million and 80 mil- trustworthy. of other health-food stores are Ayearlater,Kroger’s ries,” said Natural Grocers’ CEO bers. A pricing study by Mor- lion shares on a typical day, ac- Generally, cheaper fees ben- up in dollar and unit terms shares are up around 20%. Kemper Isely, who estimated gan Stanley earlier this month cording to people familiar with efit investors. But some traders from a year ago, according to Sprouts Farmers Market that 60% of his company’s stores found the price for a basket of the matter. Morgan Stanley, said they are worried about retail-data firm Spins. shares are up roughly 20%, and were near a Whole Foods. items at Whole Foods was the the top stock-trading shop on what happens if a bank can’t “Our growth rate has dou- second-lowest since the survey Wall Street, has a competing find a matching order. bled since the Amazon transac- began in 2014. product, internally dubbed MO- If Goldman has client orders tion,” said Nicholas Green, co- haven’t suffered. clusively. Some of those food Some shoppers say they CHA, for “market on close han- to buy 100,000 shares of Apple founder and chief executive of Some natural grocers said makers were unhappy that don’t like the new feel at dling aggregator.” and only 70,000 “sell” orders, Thrive Market, a natural and or- they have attracted new cus- Whole Foods centralized pur- Whole Foods. “Except for an What began at these firms the bank might need to scram- ganic online grocery site. tomers in the past year be- chasing and raised supplier occasional sale on tomatoes as internal tools to help cen- ble to fill the demand at the Some natural grocers low- cause of better service and fees, Mr. Green said. and avocados, so far there’s tralize orders has since been end of the day. So it might turn ered prices after Amazon more local products. At the Jimmy Stewart, co-owner of hardly a positive,” said Vik pitched to clients as a way to to the exchange and buy slashed the price of staples same time, they said, Whole Stewart Brothers Inc., an Ore- Puri, a 56-year-old nonprofit save on exchange fees. The 30,000 Apple shares before 4 such as organic produce. Some Foods stores have become gon-based juice company, has founder who switched from products are used by index- p.m., which solves its problem. said they have always kept more mainstream. lost shelf space recently to big- shopping at Whole Foods to fund managers including Van- That buying, though, could their prices a notch below “After they put their blue ger brands at Whole Foods and Seattle Metropolitan Market, a guard Group and BlackRock nudge up Apple’s closing those at Whole Foods. signs all over everything and is sending more juice to inde- local chain. Inc., as well as smaller broker- price—resulting in a worse “We’ve been hyper-focused started selling Amazon Echos, pendent natural grocers and Some believe Whole Foods dealers, people familiar with outcome for the buyers. on price,” said Ben Friedland, it really kicked in that this is conventional chains instead. is stocking more conventional the matter said. In an agreement that it vice president of marketing at no longer this specialty, “They left us in the dust,” brands in products such as ce- Yet some clients are wary. asked one prospective client Lucky’s Market, a 31-store nat- healthy chain,” said Tony An- said Mr. Stewart, whose family real and beer and displaying “To me, it’s a black box,” said to sign, Goldman acknowl- ural-food chain based in Colo- toci, chief executive of Califor- company has sold products at them more prominently. Mehmet Kinak, global head of edges that efforts to execute rado. Kroger Co. invested in nia’s Erewhon Market, where Whole Foods for 20 years. Whole Foods executives systematic trading and market the trade while protecting it- Lucky’s in 2016 to expand its same-store sales are up more Spokeswomen for Amazon have previously said that its structure at T. Rowe Price self from adverse price moves health-food reach. than 20% from a year ago. and Whole Foods declined to centralization push is helping Group Inc. He said T. Rowe, “may impact market prices” in Mr. Friedland, who previ- Lucky’s recently hired a comment. the chain become more effi- which manages $1.04 trillion, ways that are unfavorable to ously worked for Whole Foods, manager to help in recruiting Whole Foods rivals have had cient and promote products avoids guaranteed-close trad- its clients, according to a copy said the Amazon deal spurred local brands. Thrive Market is to sacrifice margins to keep up better, and the company still ing because it is “completely reviewed by The Wall Street Lucky’s to speed up its rollout signing more deals with sup- on pricing, staffing and conve- works with local suppliers in nontransparent.” Journal. of online ordering, and sales pliers to sell their products ex- nience. Some have used savings getting their goods on shelves.

uct categories. “We’ve stopped thinking in Beverage terms of category and more in terms of need states,” such as hydration and fuel, said Options Meghann Seidner, vice presi- dent of marketing for Coca- Cola’s Zico coconut water brand. Expand Zico in March launched a ContinuedfrompageB1 new line of “Coco-Lixirs” made mally found in yogurt. from coconut water, cold- All the new varieties have pressed juice and ingredients created confusion for retailers like ginger and turmeric. and the shoppers who traverse This year the maker of the supermarket trying to find Keurig coffee machines took their favorite drinks. over Dr Pepper Snapple Group Linda Disney was shopping Inc. for $26 billion, the biggest

at a Vons store in Thousand LUCY NICHOLSON/REUTERS nonalcoholic drinks deal on re- Oaks, Calif., on a recent day, The new varieties of drinks have created challenges for retailers. cord, according to Dealogic. The looking for four-packs of bot- rationale behind the deal, exec- tled Starbucks Frappuccino, taining alcohol. Mr. Vialpando “The consumer is moving to utives said, was to be able to which were no longer in the decided to stock the alcoholic this triangle of taste, nutrition sell a wider variety of bever- same spot. “They’re always kombucha next to the beer. and convenience where I think ages in multiple retailers. moving things around,” said The introduction of so many we are in a very sweet spot,” Coffee makers are adding Ms. Disney, 77. “I’m sure new drinks isn’t smooth for the PepsiCo’s incoming CEO Ramon sparkling water to cold brews there’s some logic to it, but as manufacturers, either. Laguarta said in a recent video and, separately, experimenting a consumer it’s confusing.” PepsiCo’s departing Chief Ex- to staff. “Yes, there are some with ingredients foreign to cof- That store has seven differ- ecutive Indra Nooyi more than a headwinds coming our way, but fee, such as honeysuckle, sour ent sections devoted to cold decade ago staked her career— also a lot of tailwinds.” cherries and bitters. drinks, in addition to coolers at and the company’s future—on a Rival Coca-Cola Co., by con- La Colombe’s latest drink, every checkout lane stocked plan to expand the company’s trast, was criticized for taking “The Shandy,” is a canned nitro with bottles of soda, iced coffee portfolio into healthier, more too long to acknowledge public- cold brew made with lemonade. and energy drinks. There is nutritious products. Then sales health concerns about the links The coffee company is calling even a display of bottled spar- of its core brands tumbled, and between sugary sodas, obesity the drink a “hybrid” of coffee kling water near the gourmet Ms. Nooyi had to fend off an at- and diabetes. Last year, the new and juice, and when it makes its cheese case. tempt by an activist investor to CEO, James Quincey, set a goal way to retailers, CEO Todd Car- Mr. Vialpando, of Lucky’s, break up the company. for Coca-Cola to meet consum- michael said he’s not sure where which operates supermarkets in More recently, the soda- ers’ needs every time they want in stores it will be displayed. 11 states, recently was trying to and-snacks giant has been un- something to drink. Beer companies, too, are try- decide where to put new alco- der pressure to restructure its “We’re trying things; we’re ing to reinvent themselves. An- holic varieties of kombucha, a U.S. beverage business after it testing things,” Mr. Quincey heuser-Busch last year bought fermented tea drink. He came shifted too much marketing said in an interview. Consumers Hiball Inc., a San Francisco- up with the idea of creating a money and shelf space to are looking for a greater diver- based startup making organic divider between the alcoholic newly launched brands in hy- sity of beverages, he said. caffeinated sparkling water and and nonalcoholic varieties when brid categories such as Izze That has led beverage mak- fruit-juice soda blends. the grocery director pointed out Fusions, a combination of fruit ers to revise their approach to Part of a Wall Street Journal that an underage customer juice and soda. Market share marketing and merchandising. series on how the beverage could easily confuse the two fell for Pepsi-Cola, Mountain And it has prompted them to business is changing as con- and accidentally buy one con- Dew and Gatorade. branch out into different prod- sumer tastes shift. THE WALL STREET JOURNAL. Monday, August 27, 2018 | B3 BUSINESS NEWS China’s Didi Halts Beijing Puts Robots to Work

Carpooling After Machinery maker Sany and other big firms Passenger Is Killed are encouraged to use automation, big data BY YOKO KUBOTA Saturday, and on Sunday said it must get better at recog- BY NATASHA KHAN BEIJING—Chinese ride- nizing risks and speeding up hailing company Didi Chux- responses. “As the scale of CHANGSHA, China—The ing Technology Co. said it is our services grow, we also blueprint for China’s industrial temporarily halting one of its face an immense challenge future lies on a dustless fac- services for the second time against our ability to manage tory floor known as Workshop in three months after police safety,” it said. “We will hum- 18, where workers in dark blue said a Didi driver raped and bly and sincerely accept the uniforms work alongside ro- killed a female passenger in criticisms of the public and bots to build pump trucks that eastern China. government overseers.” can blast cement up the Didi, which said it plans to Officials from the Ministry world’s tallest skyscrapers. halt its Hitch carpool service of Transport met with Didi on Engineers at the plant run as of Monday, is also firing Sunday and ordered the com- by Sany Group Co. figure out two executives in charge of pany to take additional mea- how to make better products the carpool business and cus- sures to protect passenger by analyzing information fed tomer service, the company safety, the ministry said. in real-time from machines

said Sunday. In May, Didi halted its car- operating around the world to GIULIA MARCHI FOR THE WALL STREET JOURNAL One of the world’s biggest pool service for a week after a data center nearby. The com- The company can track 380,000 internet-connected concrete mixers, excavators and cranes. tech startups, Didi dominates pany tracks 380,000 of its in- the ride-hailing market in ternet-connected concrete many cities in China and is mixers, excavators and cranes, Smart Factories, A Sany facility in Beijing is ecutives are working with do- Uber Technologies Inc.’s chief Officials ordered the and it has collected more than festooned with flags bearing in- mestic manufacturers to cus- rival globally. company to take 100 billion items of engineer- Unmanned Vehicles spirational slogans. One reads: tomize robots. It was the second death ing data. Push ‘China Dream’ “To achieve the China Dream, Sany has received subsidies since May involving a passen- additional measures Workshop 18 is designated achieve the Sany Dream.” Engi- from the government through ger using Didi Hitch, a service to protect passengers. by Chinese industry officials neers there use robotics to the years, documents show, but that allows private car own- as a model demonstration fa- Sany has built four smart make better pile drivers. the company has largely grown ers to register as drivers. The cility for Beijing’s plan to up- factories since 2012 as it Welding robots—made by through its reinvested profits, latest incident triggered grade its corporate champions heeded Beijing’s call to upgrade. Japan’s Fanuc Corp.—allow becoming the world’s eighth- widespread criticism of Didi the death of a 21-year-old so they can better compete in Its real-time data-collection pro- workers to design a drilling rig biggest machinery maker. on social media, and state woman who was killed after the world, a policy known as gram garnered praise in June that can run around the clock Sany and other machinery news agency Xinhua blasted she booked a ride through “Made in China 2025.” The from Chinese Premier Li Keq- in extreme conditions, accord- makers were hit by a produc- Didi in a commentary Sunday Didi in central China. The adoption of robots, big data iang. Sany also uses unmanned ing to workers. Sany has drills tion glut after 2012—oversup- for “indifference” to the suspect—the driver, who was and other technological ad- vehicles in its Workshop 18 in in the world’s northernmost ply is a frequent result of safety of passengers. using his father’s Didi ac- vancements is seen by Chinese Changsha to deliver materials construction site in Russia, China’s economic plans. But Police said the latest vic- count—was found dead days leaders as key to developing and parts to assembly-line pounding the Arctic seabed for Sany’s sales began to rebound tim booked a Didi carpool later. domestic giants in areas such workers. natural gas. Now, company ex- last year. ride in Zhejiang province Fri- That incident also sparked as power equipment, electric day, and later sent a message outrage, leading Didi to an- cars, marine products and to a friend calling for help. nounce plans to improve pas- chips—sectors it wants to be- equipment industry will rely dollars available through state nese manufacturers to buy That led the victim’s family senger security, including us- come largely self-sufficient by as much on software and data and provincial programs to more robots have made and friends to contact Didi ing facial recognition to the middle of the next decade. as it does on hardware,” help companies catch up with China the world’s fastest- and local law enforcement, ensure the identities of its Sany, one of China’s three Sany’s Chief Information Offi- foreign rivals. Chinese compa- growing automation market. but Didi’s customer service drivers and upgrading an big heavy-machinery makers, cer Pan Ruigang said. nies that want to build or in- In 2016, China installed a re- didn’t respond for hours until emergency help function on said the integration of tech- The “Made in China 2025” vest in plants similar to Work- cord 87,000 robots, more police intervened, according its app. nology has increased capacity, strategy has drawn criticism shop 18 can apply for than the U.S. and Germany to a statement from police in Didi’s biggest business in shortened order-delivery in Washington, with members government subsidies worth combined, according to the the city of Wenzhou, who are China is the Didi Express times and slashed operational of President Trump’s adminis- up to $45 million, according to International Federation of investigating the case. ride-hailing service, which costs, all by at least 20%. The tration accusing Beijing of us- ministry documents. Robotics. Beijing wants to The suspect, a Didi driver, isn’t affected by Hitch’s sus- company is also betting that ing subsidies and protection- Loans are plentiful: The reach a robot density of 150 was arrested Saturday and pension. The company also the technology will enable it ism to unfairly bolster Chinese country’s development bank per 10,000 employees by confessed to raping and stab- operates taxi and premium to build a reputation for inno- companies. China has said its is working with China’s in- 2020, more than double 2015 bing the victim before throw- car-hailing services, which vation and quality, rather than targets are transparent and dustry ministry to provide levels, though still behind ing her body off a cliff, police aren’t affected by the suspen- for lower prices for copycat that other countries have poli- about 300 billion yuan the U.S., where the ratio is said. The suspect’s lawyer sion. products that made Sany a big cies aimed at strengthening ($43.9 billion) of financing 189. couldn’t be identified. —Yang Jie player domestically. domestic industries. for major projects. —Yoko Kubota in Beijing Didi issued an apology on contributed to this article. “The future of the heavy- Beijing has made billions of Incentives offered for Chi- contributed to this article.

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TECHNOLOGY WSJ.com/Tech S.C., Utility Battle Over Nuclear Plant

Completion costs tomers by 18%, according to a spokesman for SCE&G parent weigh on dispute as Scana Corp. That translates to industry competes about $27 a month for resi- dential ratepayers, the spokes- against renewables man said. Since 2009, it col- lected about $2 billion to BY MENGQI SUN cover interest costs on its project-related debt, the The primary owner of a spokesman said. power plant with two partially One resident affected by built nuclear reactors in South the increases was Doris Carolina walked away from the Fletcher, 78 years old, who has $9 billion project last summer a utility bill of $100 to $150 a because of high construction month. That accounts for 18% costs and delays. Now no one of her monthly expenses, she wants to pay for it. said. The utility overseeing the “I get upset with what they Virgil C. Summer plant is ask- have done to us and other ing ratepayers across the Pal- people,” said Ms. Fletcher, metto State to shoulder its who lives in West Columbia, construction expenses of $4.7 S.C. “Because there [are] a lot billion, citing a law passed last of people on fixed income be- decade. But local lawmakers sides me.” are trying to force South Caro- South Carolina lawmakers lina Electric & Gas Co. to pick started considering a law to up more of the tab. temporarily walk back the A federal judge handed law- rates after an audit of the makers an initial victory ear- project highlighting cost over- lier this month, ruling that a runs and delays became public temporary state-imposed rate last September. The temporary cut for customers could stand. rate cut went into effect ear-

The utility, known by its acro- ASSOCIATED PRESS lier this month, giving nym SCE&G, is appealing the Lawmakers and South Carolina Electric & Gas Co. are fighting over the costs to complete the Virgil C. Summer power plant. SCE&G’s customers an average decision. monthly reduction of $22 in This dust-up is part of a ceived state support, said ear- assistance to keep them from posing a new plan to bail out owned utility, Santee Cooper. their power bill until Decem- larger U.S. dispute over how lier this month that it would closing. New York, New Jersey failing nuclear and coal-fired SCE&G benefited from a ber. much public support should be take an earnings charge to and Illinois are putting up plants, arguing that grid reli- new financing arrangement South Carolina Gov. Henry provided to support nuclear cover more than $1 billion in public money to refurbish old ability is a national security granted by the state legisla- McMaster, a Republican, said power at a time when the in- new cost overruns. plants or allowing utilities to issue. ture that diverged from how he wanted the rates to be even dustry is struggling to com- “What is happening in charge rate payers for fixes, A decade ago the subject of big power projects had been lower. “It is unacceptable, irre- pete with lower-cost natural South Carolina is reflective of citing nuclear power as an im- public assistance for nuclear paid for in the past. The utili- sponsible, and unconscionable gas and renewable energy. how challenging the econom- portant source of clean energy. power was considerably less ties would have approval to for any South Carolinian to The South Carolina plant ics of nuclear power are Other states with power controversial. In South Caro- charge rate payers as the proj- pay another dime” for the and a similar project in Geor- across the country,” said Jason plants, like Ohio and Pennsyl- lina the expansion of the exist- ect was built. abandoned project, the gover- gia both encountered massive Bordoff, a Columbia University vania, have thus far resisted ing V.C. Summer Nuclear Sta- “We didn’t have near nor said in a letter to state cost overruns that led to the professor who was senior di- those efforts. Some in those tion was initially billed as a enough skepticism,” said House members. bankruptcy of nuclear project rector for energy and climate states argue that the power source of job creation, a pro- South Carolina Republican SCE&G sued the state to builder Westinghouse Electric change for the National Secu- companies should be left to ducer of lower emissions and state Sen. Greg Gregory, one of stop the rate cut but a federal Co. rity Council. fail or succeed on their own. a cheap solution to surging the sponsors of that legisla- judge said it could stand. A The company that owns the Existing plants across the The same debate is unfold- energy demand in the coming tion. state commission that regu- Georgia plant, which like the U.S. are also struggling, ing in Washington, D.C. The decades. The partners Since 2007 SCE&G has in- lates utility rates will set a South Carolina project also re- prompting new calls for public Trump administration is pro- were SCE&G and a state- creased the rate charged cus- permanent rate in December.

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                  ' #   ,   ;  "  % *' ' '  &  J' ) 3 '      setup required some software feature is Secret Alerts,   3   ' ) )'     . ;' updates and a little more which can ping your phone    ' * 1    '   &      )  *! &'$(    &   '    )   ))6     $)  6 )  .  )      =) *'   * 3 ' *' ) )   time, but even it worked in but keep the base station si-    &   ,   $)    * .     ''( &    ' #   ,   ;  " less than 20 minutes. lent. It’s like a superhigh-    '           !   $)    % *' &   '  * *             *'  ''  ' * *    Once it’s set up, your tech version of putting a     . ;'       *  *' *       $)   " *' & 3 % alarm exists in one of three piece of tape on the door to           *  1 ' *' &               THE states. When it’s off, it’s off. see if the teenagers were ''( &   ' #   ,   ;  & '     $)      ) '  ) / 0   '   When it’s set to Home, it sneaking out. =) *'     )    ''( &   MARKETPLACE  B   ,    ) * $)  C  monitors doors and windows The SmartThings system '  )  ' * 4  '  )1   ) *  ' #   ,   ;  *'      4             but won’t worry about your works as a hub for a uni- $)  '    ) D ' *   ' ADVERTISE TODAY $    "  +;  -% )  '  )  ''( &   ' #   motion inside. When you flip verse of smart-home devices: ,   '    ,   ;  ;'  6 J' )  ' )   )  ,   ;   &  )  *6 )        3  it to Away, the alarm gives You can manage home secu- ) &      $)  2 ;*  ')  '  (800) 366-3975 youaminuteorsotogetout rity from the same app you * ) &   '  )      7' For more information visit: ;  E $  ;  E $  =   4  '  +     )  *! &'$( @   =  E '4(' 8  E '4(' @'    @  wsj.com/classifieds and then watches for any would use to control your 88;E ''( & #   ;  8  E @  ''( &  =  E . ;'   '          disturbance at all. All sys- lights, TV and robot vacuum. ''( & /  ,*   @   =  )C(C ''( & 8     &   2   ''( & tems can be armed from the In all, the Ring Alarm ;   8  ''( & ;  E 9 , #     ' #      E    =  E 9 , /  ,*   =  E 9 , /  ')  '  =  E )  '  )  ''( &   ' #   devices themselves, and all ended up closest to what I’ve 8  ;  E 8#< = /  ,*   =  E 8  ,   ' E    ))6 '  6 J'  ) but SimpliSafe work from been looking for. Ring sells 0   =  E  ' #   ;  E  ' &  )  *6 )        3  your phone by default. (Sim- the least costly hardware, of- #   B, 0   =  E  ' #   @'    )  ''( &   ' #   ,   '  @   =  E ,'    #   = '  8  E ,'    .    *  '    '    pliSafe lets you control your fers the cheapest monitoring /  ,*   8  E ,'    #   /  ,*   )     *    & ' )'     *' system remotely if you pay and has the features I want =  E FG, /  ,*   =  E ,'    /  ,*   =) *'   *'    )    ''( & for the $25-a-month moni- at the moment. If at some "B , @ % =  E .(  :( ;  8  E .:@ =  E 7 5 (    ' #   ,   ;  *'  ' toring plan.) point I would prefer a more ;  E  7 5 (   @   =     * )    & ' *'   @   )  ,     ;               Whenever something trig- expansive system, I would hit "+  -% &          )  ''( & =) *'   J'            *' * gers the sensors, the system Ring’s limits pretty quickly.   ' #   ,   ;    '   *   )  ,   ;  ;'   1 sends an alert to your phone. For now, I have what I @''   .         ,      "    "    -           ,   ;    &  You’ll also get alerts if the need: an easy way to know            =) *'    $ 2 @'' >  base station is unplugged, at my apartment is still stand-     *' *   *      H7 <:$#: <2 which point an internal bat- ing. I still don’t know what &&& @'   @  ' 8      *     . B   ,  $  ;' )  #   © 2018 Dow Jones & Company, Inc. &    * )  ) &  ,   ;  ;'  2 $  )   ,'  $ tery kicks in. If something the dog’s up to, though. The All Rights Reserved. trips the system and nobody crafty little guy’s too short to enters the disarming code in set off the motion detectors. THE WALL STREET JOURNAL. Monday, August 27, 2018 | B5 BUSINESS NEWS EpiPen Wait Spurs Worries

Patients feel effects of shortage more intensely amid peak back-to-school demand

BY JOSEPH WALKER

Parents are scrambling to find pharmacies carrying EpiPens for the new school year as regulators and the

WARNER BROS./EVERETT COLLECTION drug’s manufacturer struggle The romantic comedy led the box office for a second weekend. to abate a continuing global shortage of the lifesaving de- vices. ‘Crazy Rich Asians’ EpiPens, the emergency epi- nephrine treatment for aller- gic reactions, have been in Continues Its Reign short supply since at least May, when the U.S. Food and Associated Press ing on its first weekend with Drug Administration first de- $35.3 million from Wednesday clared a shortage. Some phar- NEW YORK—The opening to Sunday, and with $26.5 mil- macies around the country weekend for “Crazy Rich lion for the second weekend, have been unable to restock Asians” was historic. Its sec- the Warner Bros. release—the the medication for weeks at a ond weekend was even more first Hollywood studio movie time because of the shortages.

impressive. in 25 years with an all-Asian A rival epinephrine injector LYNDON FRENCH FOR THE WALL STREET JOURNAL The romantic comedy sen- cast—has already grossed product, a generic version of Julie Cook, center, has been unable to fill EpiPen prescriptions for her children Maddie and Josiah. sation slid just 6% from its $76.8 million. Adrenaclick made by Amneal chart-topping debut to again The adaptation of Kevin Pharmaceuticals Inc., is also dren. As a backup, she also month that “Pfizer supplies to However, some patients lead the box office with $25 Kwan’s bestselling novel, star- in short supply, according to gave each an old, expired in- Mylan are inconsistent and in- have said they are reluctant to million in ticket sales, accord- ring Constance Wu and Henry the FDA. That product is man- jector from among the dozen adequate in meeting global de- use Auvi-Q because it isn’t ing to studio estimates on Golding, was helped by weak ufactured at a different Pfizer or so she keeps just in case. mand.” covered under their insurance Sunday. Almost as many peo- competition. STX Entertain- plant in Kansas, where produc- “It’s so frustrating,” Ms. There are months where or because it has a different ple turned out over the week- ment’s critically slammed R- tion delays have caused short- Cook said. “Why is this hap- supply from Pfizer is good, mechanism that they and their end for “Crazy Rich Asians” as rated puppet caper “The Happy- ages since the first quarter of pening in August? What’s go- and “then suddenly we get children aren’t used to. they did for its opening Fri- time Murders” made its debut the year, an Amneal spokes- ing on? And what’s going to very erratic,” and supply is Patient access to EpiPens day-to-Sunday bow—an un- with $10.1 million, a career-low man said. happen in the future?” 30% to 40% off expectations has been a controversial issue heard-of outcome for a non- wide release for star Melissa The scarcity is being felt EpiPens are sold by Mylan “because of the quality is- since the summer of 2016, holiday release. Drops of close McCarthy. The robot-dog fan- more acutely now amid the NV and manufactured at a sues,” Mr. Malik said, accord- when parents looking to buy to 50% are common for wide tasy “A.X.L.,” from the belea- back-to-school rush of August Pfizer Inc.-owned plant in ing to a transcript. the devices for their school- releases. guered Global Road Entertain- and September when demand Brentwood, Mo. Pfizer has To help alleviate the effects age children complained they But propelled by enthusias- ment, flopped with $2.9 million. for the devices is highest. For been unable to make enough of the shortage, the FDA on had to pay hundreds of dollars tic reviews and an eagerness The talk of the weekend was parents of children with food EpiPens because it is changing Tuesday extended the expira- out of pocket to meet insur- for a major Hollywood film led the sustained success of “Crazy allergies, refilling EpiPen pre- its manufacturing processes in tion date for certain EpiPen ance deductibles. Congress be- by Asian stars, “Crazy Rich Rich Asians,” which grossed scriptions, which are typically response to an FDA inspection lots for an additional four gan scrutinizing Mylan for Asians” is showing almost un- approximately the same from for sets of two in case the first last year that found several vi- months. The devices typically raising the list price of EpiPen precedented legs. After open- one Saturday to the next. injection doesn’t work, has be- olations, including a failure to have a shelf life of 20 months, 548% over several years to come part of the annual back- investigate serious complaints the agency said. The FDA has about $608 for a set of two. to-school ritual. about product quality. also been in touch with manu- Mylan later began selling its Estimated Box-Office Figures, Through Sunday Julie Cook has been unable Pfizer said, “We are work- facturers of rival products to own generic version of EpiPen to fill EpiPen prescriptions for ing tirelessly to increase pro- help ensure alternatives are for $300. SALES, IN MILLIONS her two teenagers since the duction and expedite ship- available, the agency said. Earlier this month, the FDA FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE beginning of August and is re- ments as rapidly as possible.” Kaleo, the closely held approved the first generic lying on a single unexpired set Mylan referred questions maker of the Auvi-Q epineph- EpiPen from a rival, which the 1. Crazy Rich Asians Warner Bros. $25 $76.8 -6 if one of them has an allergic about manufacturing delays to rine injectors, has significantly agency said was part of an ef- 2. The Meg Warner Bros. $13 $105.3 -38 reaction. When she called a Pfizer. In a statement earlier increased manufacturing ca- fort to inject more competi- 3. The Happytime STX $10 $10 -- Walgreens near her Wheaton, this month, the company en- pacity to help meet demand in tion into the pharmaceutical Murders Entertainment Ill., home a few days ago, the couraged patients to call its the U.S. and Canada due to the industry and bring down pharmacist said they may not customer service hotline for EpiPen shortage, said Kaleo prices. Teva Pharmaceutical 4. Mission: Impossible Paramount $8 $193.9 -26 —Fallout have more until September. assistance in locating pharma- CEO Spencer Williamson. Industries Ltd., which will On the first day of school cies with EpiPens in stock. Some 40% of all epinephrine market the generic version in Christopher Robin Disney $6.3 $77.6 -28 5. last week, Ms. Cook split the Rajiv Malik, Mylan’s presi- injectors are purchased during the U.S., said the product *Friday, Saturday and Sunday Source: comScore unexpired EpiPen set and gave dent, said on an earnings call the back-to-school season, he would be launched in “coming one injector each to her chil- with analysts earlier this said. months.”

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wsj_20180827_b005_p2jw239000_0_b00500_1______xa2018.crop.pdf 1 27-Aug-18 06:14:23 B10 | Monday, August 27, 2018 THE WALL STREET JOURNAL. MARKETS The Dilemma of the Non-U.S. Dollars

Currencies of Canada, Rising U.S. rates and a stronger dollar have put the spotlight on Canada, Australia and New Zealand, lowing the Bank of Canada to a trio of countries that share a reliance on foreign investments and commodity exports. raise rates four times since Australia and New 2017. Zealand take hit from Yields on two-year government bonds But heightened worries over the fate of the North 3.5% increasing U.S. rates American Free Trade Agree- ment and a chill in the hous- BY IRA IOSEBASHVILI ing market have made inves- AND JAMES GLYNN 3.0 tors wary, a worrying development for an economy Canada, Australia and New that leans heavily on invest- Zealand are rich countries, 2.5 U.S. ment from across its borders. but currency traders are Foreign purchases of Cana- watching them with interest dian stocks and bonds have for signs of the sort of mal- 2.0 Canada slowed to 43.7 billion Canadian aise that often hits emerging Australia dollars (US$33.5 billion) in the markets when the U.S. dollar New Zealand first half of the year, down is rising. 1.5 more than half from the same Only a few years ago, com- period last year. At the same paratively high interest rates time, the country’s current-ac- and solid economic perfor- 1.0 count deficit rose to just below mance made these countries a C$19.5 billion (US$15 billion) in destination for investors seek- the first quarter. ing solid returns at a moder- 0.5 That financing gap will ate risk. But rising U.S. inter- likely put pressure on the Ca- est rates are hitting their nadian dollar, said Mark Mc- currencies and diminishing 0 Cormick, head of North Amer- their attractiveness to over- 2014 ’15 ’16 ’17 ’18 ican FX Currency Strategy at seas capital, an unwelcome TD Securities. development for economies Year-to-date currency Foreign investment in Canadian securities Australia's household debt as a New Zealand’s dollar, that have relied increasingly performance percentage of gross domestic product known as the kiwi, has lost on inflows of foreign invest- 5.7% this year. The Reserve C$40 billion 105% ment to finance current ac- U.S. 3.9% Bank of New Zealand has indi- count deficits. Australia –6.2% 30 cated it intends to keep bor- The currency declines rowing rates at record lows Canada –3.5% 100 stand to add to existing weak- 20 for the next two years, amid a nesses in these economies, New Zealand –5.7% softer economic growth out- which are driven in part by Switzerland –0.9% 10 95 look. commodity exports and fea- “We are experiencing a United Kingdom –4.9% ture deep trade ties with 0 slowdown in economic activ- China—another red flag as Japan 1.3% 90 ity that we project as tempo- trade tensions mount. Norway –1.5% –10 rary, but could be more pro- While few expect Australia, Sweden –10.3% longed,” the RBNZ said in a Canada and New Zealand to –20 85 statement earlier this suffer the type of shocks that Eurozone –3.2% 2014 ’15 ’16 ’17 ’18 2006 ’10 ’17 month. Trade wars, “or even have rocked Turkey and Ar- their threat—can stall global Note: C$1 =0.77 gentina this year, the plight of Sources: Thomson Reuters (yields); Tullett Prebon, Dow Jones Market Data (currencies); Statistics Canada (foreign investment); investment and spending, and the non-U.S. dollars under- IMF via Federal Reserve Bank of St. Louis (household debt) THE WALL STREET JOURNAL. reduce demand for our prod- scores the risks associated ucts.” with rising U.S. rates and de- climbed to almost 200%, put- central bank’s reluctance to nally vulnerable than most substantially,” said Saul Es- New Zealand’s economy has pendence on global capital ting it among the highest lev- raise rates. A depreciating AAA-rated sovereigns given lake, a former chief economist struggled with many flagging flows for financing. els among developed coun- Australian dollar could curb the economy and financial for Bank of America-Merrill indicators in recent months, The Australian dollar has tries. Those households could investor appetite for the system’s dependence on exter- Lynch in Australia. including retail sales, car sales fallen around 6.2% this year, be subject to a severe shock if country’s assets and raise the nal financing,” Moody’s said. Trade worries have also and housing-market activity. hit by falling commodity a sharp fall in the country’s risk of destabilizing outflows Should a fresh emerging- pressured Canada, where the The trio of countries is “re- prices and fears that years of currency triggered a rise in of foreign capital, Moody’s markets crisis break out, Canadian dollar—known as liant on international inves- debt-fueled prosperity have interest rates, Moody’s Inves- said. Net foreign debt is now “there’s little doubt that the the loonie—is down 3.5% this tors, yet are becoming less at- left it vulnerable to an eco- tors Service warned last at 56.5% of gross domestic Reserve Bank of Australia year. Robust growth in Can- tractive to investors,” Mr. nomic or market shock. month. product, up from 37% of GDP would again regard the cur- ada’s economy has pushed up McCormick said. “It’s like a Household debt as a share of For now, the Australian two decades ago. rency as the first line of de- inflation to a seven-year high miniature version of emerging disposable income has currency has been hurt by the “Australia is more exter- fense, and allow it to fall quite and spurred employment, al- markets.” HEARD ON THE STREET Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard Why No One Can Catch Netflix OVERHEARD Regional Banks Need Knocking Netflix is easy. flix has had many tumbles Lei Jun, founder of Chi- Critics say the streaming Flix Fiends over the years, and strong nese smartphone maker Xi- Lending Rise company can’t grow without Netflix total subscribers, quarterly growth has resumed. Thanks aomi, just enjoyed one of the big spending, making it im- to its algorithm, Netflix biggest paydays in global cor- 125 million possible to turn a profit. But knows better than anyone porate history. He could be in A promising rebound in that assessment misses the else what kind of content it for another jackpot soon. loan growth now appears to key insight driving Netflix’s 100 International needs and when to launch it Back in 2013, Mr. Lei made be fading. That could become success, and why the stock is Domestic to keep subscribers happy. a 1 billion yuan (roughly $145 an issue, especially for small likely to climb again after 75 Disney’s streaming ser- million) bet live on television and midsize lenders. last month’s tumble. vices, set to launch next year, with Dong Mingzhu, chair- Weak loan growth has What Netflix understands 50 are the only possible threat woman of rival Gree Electric, been one of the mysteries of is that getting subscribers to Netflix. But Netflix has a that within five years Xiaomi’s the economic recovery in the and, just as important, keep- 25 giant lead; it will take Disney revenue would overtake that past two years. It slowed sig- ing them, is everything in the years to catch up, in part be- of Gree, a company that sells nificantly last year and re- new media environment. The cause lots of Disney content electrical appliances, from air bounded, but only modestly, definition of success has 0 is still licensed to Netflix. conditioners to refrigerators. in the first half of 2018, top- shifted from how many eye- 2013 ’14 ’15 ’16 ’17 ’18 Admittedly, the bar for At that time, Xiaomi’s annual ping out at just over 5% in balls a channel can grab on a Note: Third-quarter 2018 is a projection. Netflix shares is higher now, sales were only around a late June. Commercial and given night to how effectively Source: the company THE WALL STREET JOURNAL. and investors are nervous quarter of Gree’s. The bet is industrial loans, which had a piece of content helps re- about whether it can keep due to expire by year end. been particularly sluggish, tain subscribers month after Ryan Murphy from 21st Cen- over its rivals is it doesn’t growing at the same levels. As Xiaomi’s sales have peaked at 6.5%, still well be- month. That insight has pro- tury Fox and Shonda Rhimes need to show profits, as long But Netflix has plenty of eye- taken off, the once-unimagi- low the double-digit in- pelled Netflix far ahead of from Disney. It is expected to as the subscriber numbers balls still to sweep up—not nable looks closer to become creases seen a few years ago. Hulu and prompted the costly book $8 billion in expenses keep climbing. Profits can only in international markets reality. Analysts expect that But both metrics have takeover battle between Com- this year, though it will likely come at Netflix when it has such as India and South Amer- Gree’s sales this year may since decelerated. The latest cast and Walt Disney for 21st spend closer to $12 billion, ac- locked in enough subscribers ica, but also at home, where edge out Xiaomi’s—by 0.2%. figures show outstanding C&I Century Fox assets. cording to Michael Morris, a who keep paying for content cord-cutting continues apace. It isn’t clear if Mr. Lei and loans up 5.7% from a year ear- It is also why Netflix is media analyst at Guggenheim at higher prices. Netflix’s big lead may be its Ms. Dong are taking the bet lier in the week through Aug. sweeping up Hollywood tal- Securities. To some, those The major risk for Netflix most important strength. It seriously. But Mr. Lei has al- 14, with total loans up 4.7%. ent. Earlier this month Netflix numbers seem excessive, but is that it somehow miscalcu- can keep bringing in talent, ready won big this year. He “For a while now, we’ve wooed Kenya Barris, the cre- by spending to have the best lates what its subscribers which will bring in new sub- received a $1.5 billion share been waiting for loan growth ator of “Black-ish,” away from content, Netflix is locking in want and doesn’t draw in as scribers and keep existing award before Xiaomi’s $4.7 improvement, and it’s been Disney, signing him to an ex- its subscribers and locking many as expected. That hap- ones happy. It will take a pow- billion initial public offering slow,” said Barclays analyst clusive, multiyear deal. Netflix out its competitors. pened last quarter, when the erful competitor to break that last month. Jason Goldberg. Continued has also nabbed producers Netflix’s great advantage stock tumbled 14%. But Net- cycle. —Elizabeth Winkler uncertainty over trade policy and higher interest rates are likely still holding things back. The real pickup in loan App Tax Is a Difficult One to Beat for Most Developers growth was expected for big regional banks rather than Apple Inc. can live with- seems limited. Macquarie an- June 30, up 27% year over sales. “Fortnite” is the top- the giant commercial banks. out the “tax” it imposes on Margin Call alyst Ben Schachter estimates year. The company cited its grossing app on Apple’s App The regional banks and their Netflix . That is both good and Apple’s estimated App Store results the move could add about 1% App Store as a key growth Store at the moment. investors have been counting bad for the iPhone maker. to Netflix’s 2019 revenue. driver. Mr. Schachter esti- Developers bear most of on strong loan growth to $25 billion Netflix is reportedly devel- That would also make it just a mates App Store gross mar- the costs for making and op- boost earnings. In a note, oping a system that would 20 Revenue little more than 1% of the $16 gins are around 90%. erating apps, so many are sen- Morgan Stanley analysts said Gross profit direct new users to sign up 15 billion in revenue Apple is ex- But that very resilience sitive to the cuts they pay to 13 of the 28 “midcap” banks for the streaming company’s pected to generate through its could eventually work Apple and Google. Epic Games they cover need to see a loan subscriptions outside its 10 App Store that year, accord- against Apple. Most app de- CEO Tim Sweeney has vo- growth acceleration in the apps that run on Apple de- 5 ing to consensus projections velopers don’t have the mar- cally criticized the current second half to meet their own vices. This would spare Net- from Visible Alpha. ket power to bypass Apple’s system, once describing the full-year guidance. This in- 0 flix the need to pay the com- Apple, in other words, is system in the way Netflix is commissions paid to app cludes Comerica, Fifth Third mission Apple has levied on ’16FY2015 ’17 ’18 ’19 ’20 ’21 unlikely to be hurt much by attempting. Even big players stores as a “parasitic loss.” Bancorp and M&T Bank,ac- such transactions over its de- Note: Fiscal year ends in September. the loss of a major player in have limited options. Epic That could inspire regula- cording to Morgan Stanley. vices—typically 30%. Accord- Source: Macquarie Capital its App Store ecosystem. Games made a splash earlier tors already closely eyeing The KBW Regional Bank- ing to TechCrunch, Netflix is Spotify’s similar move three this month by launching an Big Tech to take action. The ing index is up 6.3% this testing the system in 33 in- bad for the Cupertino, Calif.- years ago also did little dam- Android version of its block- U.S. Supreme Court has year, outpacing a tepid 3.3% ternational markets. based tech giant, which in- age. Apple doesn’t break out buster “Fortnite” videogame agreed to hear a case involv- rise in KBW’s index of large- Netflix is currently the creasingly depends on reve- App Store results, but its ser- that bypasses Google’s Play ing Apple’s App Store fees in cap banks. It may be time for third-highest-grossing app on nue generated from “services” vices segment generated store. No such move is possi- its next term. investors to give these re- Apple’s App Store, so such a amid slowing device sales. $27.2 billion in revenue for ble for iOS, though, given the It may take a taxman to beat gional lenders a rest. move would presumably be But the potential damage the nine-month period ended game’s dependence on in-app a taxman. —Dan Gallagher —Aaron Back