Growth Revs as Economy Rolls On

* * * * * * * * SATURDAY/SUNDAY, JULY 28 - 29, 2018 ~ VOL. CCLXXII NO. 23 WSJ.com HHHH $5 .00

�The U.S. economy grewat the fastest pace in nearlyfour years this spring, sug-gesting the second-longestexpansion on record isn’t yetrunning out of fuel. A1, A2� Shares of Twitter andFacebook endured a surpriserout this week, as investorswere rattled by signs thatusers are souring on thesocial-media stalwarts. A1� The S&P 500 fell Fridaybutmanaged to post its fourthstraight weekly advance. B13�CBS said it would investi-gate allegations of sexualharassment against CEOMoonves, a development thatcomes as the firm battles itscontrolling shareholder.A1� The world’s largest oilcompanies continued todisappoint investors withlimited cash payouts andprofits that have failed tomatch the rally in crude. B1� Lofty sales goals appearto be at the root of issuesunder investigation withinWells Fargo’s wealth-man-agement business. B1� Shareholders of Disneyand 21st Century Fox ap-proved the $71 billion dealbetween the companies. B3�WPP executiveMark Readhas emerged as the leadingcontender to become CEO. B3

What’sNews

CONTENTSBooks..................... C7-12Business News...... B3Food......................... D6-7Heard on Street...B14Obituaries................. A9Opinion.............. A12-13

Sports....................... A14Style & Fashion D2-3Technology............... B7Travel...................... D4-5U.S. News............ A2-4Weather................... A14World News....... A5-7

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InsideINTERVIEW A11

Devin Nunes,Washington’sPublic Enemy

European officials saidTrump and his aides

were exaggerating the scopeof a new trade pact, a dayafter the president hailed “abreakthrough agreement.”A5� Germany fended offChinese bids for two stra-tegically important indus-trial assets this week. A5� Trump again said hehad no prior knowledge ofa 2016 meeting his eldestson had with a Russianlawyer at Trump Tower. A4�As Khan prepares to takeoffice, Pakistan faces a finan-cial crunch that will likelyrequire an internationalbailout and spending cuts. A7�U.S. officials are probinga network of firms for tiesto two Lebanese menblacklisted for their allegedsupport of Hezbollah. A6�Mediators are increas-ing pressure on duelingPalestinian factions to rec-oncile their differences. A6� Senators may be askedto testify in the criminaltrial of an IntelligenceCommittee staffer. A4� Harvard said an admis-sions-data analysis in asuit alleging bias againstAsian-Americans was “fun-damentally unreliable.” A3

World-Wide

Business&Finance

JOSHEDELS

ON/A

GENCE

FRANCE

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ETT

YIM

AGES

The Bachelorette Party’s Over:Venues Snub Bridezillas

i i i

Hotels, wineries beset by rowdy prenuptialrevelers ban veils, crowns; ‘ro-sé, all day!’

throngs of bachelorettes de-scend with entourages on hotspots from Savannah to SanFrancisco. Some wineries, touroperators and hotels want adivorce.

Bachelorette bashes werebringing a “prom-queen tiaravibe” to Montauk Beach House

on New York'sLong Island, saysthe boutique ho-tel’s operationsmanager, YannisPapagianni. “It’sjust not what wego for.”

Over-imbibingdevolved into dis-plays of drama,

he says. “Half of them end upcrying about something,” hesays. “It came to the pointwhere, is it a bacheloretteparty or a carnival?”

The establishment still al-PleaseturntopageA10

Suellen Tunney gazed outthe French doors toward thestone terrace of Wölffer EstateVineyard in the Hamptons lastsummer and saw noisy groupsof women in tiaras, sashes and“Bride Squad” shirts. Somechanted, “Ro-sé,all day! Ro-sé, allday!”

“They wouldliterally be doinga pyramid ofwomen in thevineyard,” saysMs. Tunney, re-tail-sales direc-tor at the Saga-ponack, N.Y., winery known forits rosés. “You would have bri-dezilla after bridezilla.”

Wölffer updated its websitein May: “Please, no bachelor-ette parties allowed.”

It’s wedding season, when

BY JENNIFER LEVITZ

Tiara non grata

or exactly where they were.There was no unified

tracking system to follow thelocation of parents and chil-dren. Computer systemscouldn’t communicate. Chil-dren as young as a fewmonths old were sent some-times thousands of milesaway from parents in federalcustody with no means to getin touch. Health and HumanServices, which was alreadycaring for thousands of othermigrant children appre-hended crossing the borderon their own, had to manu-ally sort through nearly12,000 case records to figureout which were covered bythe court order.

Cmdr. Jonathan White, theHealth and Human Servicesofficial in charge of family re-

PleaseturntopageA10

For months, federal immi-gration officials along the268-mile stretch of borderthat separates New Mexicoand West Texas from Mexicohad been testing a policy ofseparating migrant parentsfrom their children.

What they didn’t plan forwas how to reunite them.

When a federal judge or-dered the Trump administra-tion to reconnect more than2,600 children separatedfrom their families after a na-tional outcry, the two govern-ment agencies in charge—theDepartment of Homeland Se-curity and the Department ofHealth and Human Services—didn’t have a firm grip on thenumber of children involved

BY NOUR MALASAND ALICIA A. CALDWELL

WHEN THEWORLDOPENED

THE GATESOF CHINA

WSJTHEWALL STREET JOURNALWEEKEND

Sellers Use TricksToGameAmazon

EXCHANGE

an english artists’ retreat

WSJ. MAGAZINE

Shares of Twitter Inc. andFacebook Inc. endured a sur-prise rout this week, as inves-tors were rattled by signs thatusers are souring on the social-media stalwarts.

Twitter said Friday that itsnumber of monthly usersdropped in the second quarterand could continue to fall as itpurges fake accounts, resultsthat echoed Facebook’s bomb-shell guidance Wednesday thatits growth is expected to slowthrough the end of the year.

Both companies sufferedshare-price declines of morethan 20% after results. Face-book’s drop of over 19% onThursday lopped more than$119 billion from its marketvalue—the biggest single-daydrop in U.S. market history.Twitter lost almost $7 billion.

“We’re two for two beingdown 20%,” said Brent Thill, ananalyst at Jefferies, adding, “Ithas not been a great week.”

The S&P 500 dropped 1%over the last two trading daysof the week, its largest two-daypoint and percentage declinethis month, as the disappointingearnings reports put pressureon the technology sector. Thetech-heavy Nasdaq Composite

PleaseturntopageA4

By Marc Vartabedian,Yoree Koh and

Michael Wursthorn

CBS Probes Alleged CEOMisconductCBS Corp. said it would in-

vestigate allegations of sexualharassment by Chief ExecutiveLeslie Moonves, putting himon the hot seat at the sametime he is locked in a legal bat-tle with the media company’scontrolling shareholder.

The accusations surfaced ina New Yorker article publishedFriday. It reported that six

women who had professionaldealings with Mr. Moonves be-tween the 1980s and late2000s claimed he sexually ha-rassed them.

One actress and writer, Il-leana Douglas, alleged that Mr.Moonves sexually assaulted herin a 1997 meeting at his office,holding her down on a couchand violently kissing her. Thearticle also cited accusationsthat Mr. Moonves made ad-

vances in business settings, in-cluding unwanted touching.

The article painted a pictureof systemic harassment prob-lems at CBS and a culture upto the top that tolerates it.

The company in a statementsaid it takes “each report ofmisconduct very seriously. Wedo not believe, however, thatthe picture of our Companycreated in The New Yorkerrepresents a larger organiza-

tion that does its best to treatits tens of thousands of em-ployees with dignity and re-spect.” CBS shares fell by morethan 6% Friday.

Mr. Moonves said in a state-ment that he recognized “thatthere were times decades agowhen I may have made some

PleaseturntopageA7

BY JOE FLINT

Behind the ChaosOf Child ReunificationBorder officials planned how to separate

families, not how to put them back together

InvestorsCut BackOn SocialMedia

WASHINGTON—The U.S.economy grew at the fastestpace in nearly four years thisspring, reflecting broad-basedmomentum that suggests thesecond-longest expansion onrecord isn’t yet running outof fuel.

Robust consumer spending,solid business investment,surging exports and increasedgovernment outlays wereamong the factors that boosted

BY HARRIET TORRY

gross domestic product—thevalue of all goods and servicesproduced across the economy—at a seasonally- and inflation-adjusted annual rate of 4.1% inthe second quarter, the Com-merce Department said Friday.

That was up from the firstquarter’s revised growth rate of2.2% and the strongest growthsince the third quarter of 2014.

While some of the growthcame from a burst of exportsthat some analysts warnedcould be a temporary responseto looming trade tariffs, thedetails of the report suggestunderlying strength that couldtee up one of the best years inthe current expansion, whichbegan in 2009.

After stripping out the vol-

atile categories of trade, in-ventories and governmentspending, sales to private do-mestic buyers rose at an an-nual rate of 4.3%—even betterthan the overall GDP number.

“The outlook for the indus-trial economy remains solid,”United Parcel Service Inc.Chief Executive David Abneysaid during a call with inves-tors this week.

Friday’s report makes ithighly likely the Federal Re-serve will continue graduallyraising short-term interestrates to prevent the economyfrom overheating. Central

PleaseturntopageA2

Growth Revs as Economy Rolls OnConsumer spending,business investmenthelped U.S. GDP growat 4.1% clip this spring

Explosive Wildfires Menace Northern California

CONFLAGRATION: A wildfire flared up near Redding, Calif., claiming at least three lives and forcing thousands of residents to flee Friday.Hundreds of miles south, a separate fire has turned Yosemite National Park, normally teeming with tourists, into a ghost town. A3

2Q, 2018: 4.1%

-1

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2

3

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5%

’18’17’16’15’14’13’12’11’102Q ’09

Sprouting UpGDP quarterly change at an annual rate since the beginning of thecurrent economic expansion

Source: Commerce Department THEWALL STREET JOURNAL.

� Heard: Report points tocontinued momentum........ B14

� Heard: Twitter loses users.Are advertisers next?......... B14

� Former SoFi chief opens upabout affairs............................. B12

REVIEW

A2 | Saturday/Sunday, July 28 - 29, 2018 * * * * * * THEWALL STREET JOURNAL.

while revenue rose 42% from ayear earlier. In some editionsThursday, a Page One articleabout the social-media com-pany’s earnings report incor-rectly said second-quarter rev-enue fell 7% from the priorquarter.

The release of Moses Sum-ney’s new EP was delayed toAug. 10 from Aug. 3 after theAugust edition of WSJ. Maga-zine, which contains an articleabout Mr. Sumney, went topress.

Gen. George Patton ledU.S. troops in France and Ger-many at the end of World WarII. In some editions Thursday,a Page One article about Presi-dent Trump’s meeting withEuropean Commission Presi-dent Jean-Claude Juncker in-correctly said Gen. Patton ledthe invasion of Normandy.

Facebook Inc. said its reve-nue growth rate fell 7 percent-age points in the second quar-ter compared with the firstthree months of the year,

As Americans spent more,however, they saved less. Thepersonal saving rate was 6.8%in the period, down from 7.2%in the first three months ofthe year.

In a potential warning sig-nal for future spending, con-sumer sentiment cooled inJuly, continuing to moderatefrom a 14-year high the indexof consumer sentimenttouched earlier this year, theUniversity of Michigan saidFriday. “Concerns about tariffsgreatly accelerated in the Julysurvey,” said Richard Curtin,the survey’s chief economist.

Trade contributed stronglyto the economy’s performance.Net exports added 1.06 per-centage points to the secondquarter’s 4.1% GDP growthrate, which likely reflected asurge in soybean exports asbuyers abroad rushed to gettheir supplies before China’s25% retaliatory tariffs on theU.S. crop hit in July.

“Some giveback in this un-usual spike should be expected,”JPMorgan Chase economist Mi-chael Feroli said in a note.

For some Americans, tradebarriers are causing anxiety.Terry Schultz, president of

Madison, S.D.-based seed pro-ducer Mustang Seeds, said tar-iffs on U.S. soybean exportshave “ramped up pressure onprofitability” for the farmingsector, which has been underpressure from lower commod-ity prices in recent years.

“Our sales numbers aregood. What’s always a concernis the profitability of our cus-tomers and their ability to payus,” Mr. Schultz said.

A key measure of businessspending moderated from thefirst quarter but remained ro-bust. Nonresidential fixed in-vestment—reflecting spending

on commercial construction,equipment and intellectualproperty products such as soft-ware—rose at a 7.3% rate afterrising 11.5% in the first quarter.

The 2017 tax overhaul wasdesigned to encourage such in-vestments by lowering thecorporate tax rate and by let-ting companies immediatelydeduct certain capital expendi-tures instead of depreciatingthem over time.

Tax cuts were part of Presi-dent Trump’s plan to boosteconomic growth to theabove-3% annual growth ratethat marked the robust expan-sions of the 20th century.

He hailed the GDP reportFriday, saying the economy isgrowing at a “very sustainable”pace and predicting it will ex-pand at least 3% this year.

Economic forecasters largelyagreed the tax legislationwould boost growth in thenear term, but were split overwhether the legislation wouldincrease the economy’s growthrate over the long term in theface of an aging population andmeager productivity growth.

Output rose 2.8% in the sec-ond quarter from the same pe-riod of 2017. Fed officials expectto see growth hit the same pacein the fourth quarter of thisyear from a year earlier, whichwould mark the best calendaryear since 2005. However, theyforecast growth to ebb to 1.8%a year in the long run.

“Enjoy it while it lasts,” IanShepherdson, chief economistat Pantheon Macroeconomics,said of the strong secondquarter. He expects consumerspending to slow in the thirdquarter as the boost from thetax cuts fades.

The GDP report included twomain soft spots—housing andinventories. Residential fixedinvestment fell at a 1.1% rate inthe second quarter. That couldreflect higher mortgage rates,low housing inventory and tax-code changes that diminisheddecades-old perks that encour-aged homeownership.

A drop in inventories sub-tracted 1 percentage point fromthe second-quarter growthrate. Some analysts said thatcould help boost third-quartergrowth if businesses restock.—Theo Francis, Eric Morath

and Vivian Salamacontributed to this article.

Consumers ramped up their spending at a robust 4% annual pace in the second quarter.

DAVID

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bank officials have raised ratestwice this year, and penciledin two more increases in 2018and three in 2019.

The Fed is widely expectedto leave its benchmark rate un-changed at its policy meetingnext week and then increase itin September by a quarter of apercentage point, to a rangebetween 2% and 2.25%.

Consumers—buoyed by lowunemployment, steady jobgrowth and recent tax cuts—ramped up their spending at arobust 4% annual pace in thesecond quarter.

Isaac Gary, 22, who worksfull time as a telecommunica-tions project administrator inChicago, said he recentlybought himself a used car andis planning to go on a cruiseto Cozumel, Mexico, for hisbirthday in September.

Mr. Gary said he also worksfor a private security firm onweekends and has a small on-line shoe reselling business,“so I was pretty comfortableshopping for a new car.” Re-ferring to his multiple incomesources, he added, “I do feelconfident because I have dif-ferent networks coming in.”

ContinuedfromPageOne

ExpansionGainsSteam

U.S.WATCH

POLITICS

Trump Is ‘Open toVisiting Moscow’

President Trump is open toan invitation from Vladimir Putinto visit Moscow, a White Housespokeswoman said Friday, daysafter his invitation to the Rus-sian leader to visit Washingtonprompted bipartisan criticism.

Following his recent returnfrom a summit with Mr. Putin inHelsinki, where Mr. Trump drewwidespread rebukes for appear-ing to side with the Russianleader over U.S. intelligenceagencies on the subject of Rus-sian election interference, theWhite House said the presidenthad invited Mr. Putin to visitWashington in the fall.

The move surprised Republi-can lawmakers and top adminis-tration officials, who said theystill hadn’t been told what Mr.Trump and the Russian leaderagreed to at their Helsinki sum-mit. Republican leaders in Con-gress said Mr. Putin wouldn’t bewelcome on Capitol Hill.

—Rebecca Ballhaus

MICHIGAN

Officials: Stop UsingContaminated Water

Authorities handed out thou-sands of free bottles of waterFriday in two southwesternMichigan communities wherethe discovery of contaminationfrom toxic industrial chemicalsprompted a warning against us-ing the public-water system fordrinking or cooking.

Michigan and KalamazooCounty health officials an-nounced Thursday that testsfound substances known asPFAS in the water supplied tothe city of Parchment and neigh-boring Cooper Township, about125 miles west of Detroit.Roughly 3,000 people are on theaffected water system.

The source of the Michigancontamination is under investiga-tion. The Parchment area has ahistory of paper manufacturing.

—Associated Press

TEXAS

Groups Urge Halt to3-D Gun Blueprints

Gun-control groups made alast-ditch effort Friday to blockthe Trump administration from al-lowing Americans access to blue-prints for 3-D printable guns onthe internet, urging a federaljudge to intervene days before thedesigns are expected to go online.

The Brady Center to PreventGun Violence, Everytown forGun Safety and the GiffordsLaw Center to Prevent Gun Vio-lence want the judge to block acompany called Defense Distrib-uted from being allowed to pub-lish online designs for guns.

“The stated goal of DefenseDistributed is to sound thedeath knell for gun control,” Da-vid Cabello, a lawyer for theBrady Center told U.S. DistrictJudge Robert Pitman during thehearing in Austin, Texas.

The files include blueprintsfor plastic AR-15 rifles, the typeof semi-automatic weapon usedin many U.S. mass shootings.

Joshua Blackman, a lawyerfor Texas-based Defense Distrib-uted, said the gun-controlgroups are trying to litigate apolitical dispute in court.

—Associated Press

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CORRECTIONS� AMPLIFICATIONS

Notice to ReadersThe Numbers column will

return next week.

-0.04

CONSUMER SPENDING NET EXPORTS

Spending contribued 2.7 percentage pointsand grew at a 4.0% rate, the fastest pacesince 2014. Continued job gains and risingwages are buoying strong purchasing.

Surging soybean exports helped drivegrowth, which could reflect buyers'efforts to stock up in light of China'sretaliatory tariffs on the product.

BUSINESS INVESTMENT

Spending pulled back from strongergrowth at the start of 2018, butremained around levels seen beforethe late-2017 tax cuts.

HOME BUILDING

House construction was a drag ongrowth, as rising supply costs and aconstruction worker shortagecontinued to challenge homebuilders.

GDP quarterly growth (%) Contribution (percentage points)

Boosting Bumper GrowthKey contributions to GDP since the beginning of the current economic expansion and how they impacted growth in the second quarter of 2018:

Source: Commerce Department THEWALL STREET JOURNAL.

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5

’18’16’14’122010 ’18’16’14’122010 ’18’16’14’122010 ’18’16’14’122010

2Q, 2018: 2.72Q, 2014 (highest sinceexpansion began): 5.1

0.9

2Q, 2009: 2.4

1.1

3Q, 2011: 2.4

1Q, 2012: 0.6

jority of that, thanks to a re-bound in oil prices and drill-ing from 2016 lows.Excluding that, structures in-vestment had a strong firstquarter then contracted inthe second. Spending onequipment is growing brisklybut no faster than before thetax cut. In fact, recent dataon equipment orders point to

U.S. NEWS

of tariffs, inventories and gov-ernment. The result: 4.3%growth, even faster than theheadline rate. Over the pastyear, it’s up 3.2%, a decentproxy for underlying growth.

Consumers were the stand-out contributor, and the taxcut helped by boosting after-tax income and wealth via lastyear’s stock-market jump. Still,it would take repeated taxcuts, and ever wider budgetdeficits, to maintain that per-formance—the sort of “sugarhigh” demand stimulus Re-publicans once derided. Presi-dent George W. Bush’s 2003tax cut provides a cautionarytale: In the two quarters afterit was implemented, growthleapt to 6%, annualized. It av-eraged less than 2% for the re-mainder of his presidency.

Yet even without the taxcut, the consumer would bein great shape. Wage growthremains subdued, but somany people are finding jobsthat incomes are risingbriskly. And Friday’s reportdisclosed that wages and self-

employed income were muchhigher in recent years thanpreviously thought. Consum-ers sustained their spendingwithout running down sav-ings, so the saving rate, in-stead of sliding to around 3%,stands at 6.8%, in line withits average since 2012.

The expansion now looksto be in its late middle age,not old age. This benefits Mr.Trump, since it makes a re-cession less likely before hefaces voters again in 2020.

The lower corporate rateand the ability to immediatelywrite off capital spending forthe next five years were sup-posed to spark business in-vestment, and with it, workerproductivity and wages. In-vestment certainly hasboomed this year, especiallyfor structures such as stores,factories, offices and drillingrigs—precisely the sort oflong-lived investment thatshould respond most stronglyto lower taxes.

But look closer. Oil andgas accounts for the vast ma-

a modest tapering.Jason Cummins, an econo-

mist at hedge fund BrevanHoward, says the evidencesuggests the tax cut hasworked in the predicted di-rection. “I give it a grade of‘positive signs but incom-plete/too early to tell’ so far.”

As for trade, arithmetically,exports are added to gross do-mestic product and importssubtracted, which implies,wrongly, that widening tradedeficits are bad for growth. (Itmay simply mean that con-sumers are in a better moodin the U.S. than elsewhere.) Bythat metric, trade subtractedfrom growth in the sixmonths before that second-quarter soybean bump.

To be sure, Mr. Trump’s tar-iffs didn’t take effect until thepast few months, and hehasn’t reached any new tradedeals except with South Korea.But a better bet is that tradewill be driven mostly by coun-tries’ differing growth, ex-change rates and commodityprices, not trade war.

Growth has clearly pickedup since Mr. Trump becamepresident even if his policiesaren’t the main reason why. Isit sustainable? The economylast hit this pace in 2014 and2015, before slipping back.Sustained growth requiresboth faster growth in the poolof workers and in their pro-ductivity. For now, the formeris happening. Employer de-mand is pulling in both theunemployed and workers whowere never recorded as unem-ployed. But eventually the U.S.will run out of workers, espe-cially if immigration shrinks,as Mr. Trump intends.

That leaves productivity. Itgrew 1.3% in the past year—still historically slow, thoughan encouraging pickup. Itwill take a few more years todetermine if it returns to anold normal or a new one.

President Trump is justifi-ably delighted with how theeconomy is performing.Though the second quarter’s4.1% annualized growth isunlikely to be repeated, theunderlying picture looks im-pressive.

Less clear is how muchcredit he deserves for this.

PresidentTrump haspromised to ele-vate annual

growth to 3% from 2% throughderegulation, tax cuts andtougher trade policies. He’llget to 3% in the short term,most economists agree. Yet ev-idence that his tax cut has re-vived investment—key to long-term growth—remains elusive.And trade, at least using Mr.Trump’s preferred yardstick ofdeficits, is still a drag.

To get a clear picture ofthe second quarter, excludethe volatile categories of netexports, which were boostedby soybean shipments ahead

BY GREG IP

A Solid Economy With Room to RunMore Gas in the TankPersonal saving as percentage ofdisposable income

THEWALL STREET JOURNAL.Source: Commerce Department

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2012 ’13 ’14 ’15 ’16 ’17 ’18

revised previous

ANALYSIS

THEWALL STREET JOURNAL. * * * * * * Saturday/Sunday, July 28 - 29, 2018 | A3

U.S. NEWS

A mother and daughter packed up in Yosemite National Park on Wednesday. Portions of the park were closed due to nearby fires.

NOAHBERGER/A

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son Fire has burned forroughly two weeks and en-croached on the westernboundary of the park. OnThursday, California Gov. JerryBrown declared a state ofemergency for MariposaCounty to facilitate fightingthe fire and limiting its im-pact.

The park’s partial closure atnoon on Wednesday shutdown the central tourist hubof Yosemite Valley, as well asother park areas including theMariposa Grove and Wawona.The fire has burned 45,911

acres, according to an updateby a unified firefighting com-mand Friday morning, andprompted 3,202 evacuations.

It is the first time a fire hasshut down the area since 1990,damping the region’s economyduring peak season and cast-ing out tourists who have jour-neyed here from across theglobe.

“It’s a huge blow,” park Su-perintendent Michael Reynoldssaid, adding that the closurewould last at least throughSunday but maybe longer de-pending on fire conditions.

The fire is just one of 75large blazes over an areastretching from Oklahoma toAlaska, according to the Na-tional Interagency Fire Center.California has been hit partic-ularly hard, with fires ignitingfrom the Mexican border toOregon amid unusually hotconditions and after years ofdrought.

Last year, millions of parkvisitors spent around $452million in the area, supporting6,670 jobs, according to theNational Park Service, andtourists play a pivotal role in

the local economy.Paul DeSantis has run a

general store just outside thepark for 30 years. Based onprevious fires that affected theflow of visitors from Yosemite,he expects to lose much of hisrevenue.

“It doesn’t make businesssense to be open. It’s just goodwill at this point,” Mr. DeSan-tis said from inside his smokystore, which he has kept openduring the fire to serve thefew remaining locals.

—Jim Carltoncontributed to this article.

corruption,” said JudgeCaproni, noting the federal tri-als of former high-rankingstate officials this year.

The judge ordered Mr. Silver,who is 74 years old, to pay a$1.75 million fine andmillions inforfeiture, although the exactamount hasn’t been determined.

Friday marked the secondsentencing of Mr. Silver, aManhattan Democrat, in frontof Judge Caproni. In 2016, thejudge sentenced Mr. Silver to12 years in prison for his priorconviction on the same crimes.

A federal appeals court threw

out that conviction last year, af-ter the U.S. Supreme Court nar-rowed the definition of somepublic-corruption crimes.

Earlier this year, Mr. Silverwas retried, and in May, a dif-ferent Manhattan federal juryconvicted him of seven countsof honest-services fraud, ex-tortion and money laundering.

During the trial, prosecu-tors argued Mr. Silver had ac-cepted $4 million in kickbacksand bribes through two quidpro quo schemes.

Mr. Silver’s lawyers coun-tered that while his behavior

could be viewed as distasteful,it wasn’t criminal. His attor-neys have indicated he plansto appeal.

On Friday, Mr. Silver askedJudge Caproni for mercy, say-ing he was remorseful for dam-aging people’s trust in govern-ment. “I have spent my lifebelieving in government andits ability to help the citizensof New York,” Mr. Silver toldthe judge, speaking slowly ashe stared at the defense table.

Prosecutors said Mr. Silverdeserved a prison term of atleast a decade. Mr. Silver’s

lawyers proposed a shorter in-carceration followed by com-munity service. “He could dosomething meaningful,” saidMichael Feldberg, his lawyer.

Once a political power-house, Mr. Silver served as As-sembly speaker for two de-cades and as a member of thatchamber beginning in themid-1970s. He lives on theLower East Side in Manhattan,in the same apartment com-plex in which he grew up.

The judge said Mr. Silvermust surrender and start serv-ing his prison term on Oct. 5.

Former New York state As-sembly Speaker Sheldon Silverwas sentenced to seven yearsin prison Friday during a hear-ing in which a federal judgecalled for cleaning up corrup-tion in state government.

U.S. District Judge ValerieCaproni said the public-cor-ruption crimes of which Mr.Silver was convicted were mo-tivated by unmitigated greed.

“New York state has to getits act together and do some-thing institutionally to stop

BY CORINNE RAMEY

Ex-New York Assembly Speaker Gets Seven Years

Harbor, where the identifica-tion process will begin.

The North Koreans, who re-covered the remains, don’tspecify where they werefound, eliminating a vital pieceof battlefield information.Such details could have helpeddetermine whether the loca-tion of the remains matchesup with information aboutwho went missing and where.

Military officials also mustcontend with likely gaps inmedical and scientific infor-mation. Since 1992, the U.S.military has kept blood refer-ence information for all ser-vice members, and has dentalrecords for troops in previous

conflicts. But that kind of in-formation doesn’t exist for alltroops lost in the Korean War.

Hoping to bridge the short-fall, the Veterans of ForeignWars on Friday called on its1.6 million members to contactfamilies of Korean veteransmissing in action—even dis-tant relatives—and urge themto send DNA samples to theDefense Department to aid inidentification.

Defense Secretary Jim Mat-tis said Friday said it isn’t cer-tain that all the remains arethose of Americans. Theycould include remains of sol-diers from allied nations, orthose of North Koreans. Be-

cause of these uncertainties,the returning cases weredraped with United Nationsflags, not American ones. “Wedon’t know who’s in thoseboxes,” Mr. Mattis said.

The Pentagon said it wouldseek multiple forms of identi-fication, using forensic anthro-pology, historical backgroundinformation and DNA. Officialsalso cautioned that the condi-tion of the remains mightmake them impossible to iden-tify.

Pentagon officials said thatbased on remains delivered inthe past by the North Koreans,these remains likely containmore than 55 service mem-

bers, commingled together. Inthe early 1990s, North Koreasent 208 containers to the U.S.that held the remains of asmany as 400 individuals.

Mr. Mattis recalled themeans of communication usedto tell family members theirloved ones had been lost dur-ing the Korean War. “We havefamilies that, when they gotthe telegram, have never hadclosure,” Mr. Mattis told re-porters Friday. “They’ve nevergone out and had the body re-turned. What we’re seeinghere is an opportunity to getthose families closure andmake certain that we keeplooking for those remaining.”

North Korea’s return of 55cases believed to hold Ameri-can remains from the KoreanWar marks the beginning of amonthslong identification pro-cess, U.S. defense officials saidFriday.

Military leaders and veter-ans groups heralded the trans-fer, although officials said theprocess of identifying the re-mains presents unique chal-lenges for forensic specialists.

A U.S. plane carrying theremains flew to South Koreaon Friday. The remains nextwill be transported to Pearl

BY NANCY A. YOUSSEFAND BEN KESLING

Next Step: Identifying War Dead

YOSEMITE VALLEY, Calif.—A wildfire raging through tin-der-dry forest has turned nor-mally teeming YosemiteNational Park into a no-man’sland, as a separate infernohundreds of miles north hassent thousands fleeing whiledestroying dozens of homesand other structures.

While firefighters battled tokeep the Ferguson Fire out ofone of the nation’s most-vis-ited national parks late Thurs-day, the Carr Fire near Red-ding, Calif., flared up underhot, windy conditions andraced toward neighborhoodsaround Shasta Dam.

Officials of the CaliforniaDepartment of Forestry andFire Protection, or Cal Fire,said the Carr Fire—believed tohave been started Monday bya malfunctioning vehicle—hadballooned to 44,450 acres byFriday morning, with just 3%containment. Two firefightersand one civilian operator of afire bulldozer were reportedkilled, while 65 structureswere destroyed and an addi-tional 55 damaged. Thousandswere evacuated as fire officialswarned dangerous conditionswould persist.

Meanwhile, Yosemite Na-tional Park is a ghost town assmoke cloaks the park and itsmost famous attractions.

In the Sierra Nevada moun-tains to the south, the Fergu-

BY MARC VARTABEDIAN

Yosemite Is a Ghost Town as Tourists Flee Fire

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The 55 cases returned by Pyongyang were draped with United Nations flags, not U.S. ones, because it isn’t clear all the remains are those of Americans.

Harvard University in a courtfiling rebutted an analysis of sixyears of its admissions data as“fundamentally unreliable” be-cause it cherry-picked certaingroups of students to try toprove the university intention-ally discriminates againstAsian-American applicants.

The school also reiteratedon Friday that it has tried al-ternatives to race-consciousaffirmative action to diversifyits undergraduate studentbody, but such efforts wouldharm both the diversity andacademic strength of theclass.

The filing, opposing a mo-tion for summary judgment bythe plaintiffs in a federal affir-mative-action lawsuit, is theschool’s latest salvo in aclosely watched battle overhow one of the nation’s mostselective colleges chooses whogets admitted, and whetherthat process discriminatesagainst Asian-American appli-cants.

The lawsuit was brought inBoston federal court in 2014by Students for Fair Admis-sions, a nonprofit whose mem-bers include Asian-Americanswho were denied admission toHarvard.

It claims Harvard’s admis-sions process is unconstitu-tional and illegal under federalcivil-rights law because it in-tentionally discriminatesagainst Asian-American appli-cants and holds them to ahigher standard. The suit alsoalleges Harvard hasn’t fullyconsidered race-neutral alter-natives to achieving diversity.

Harvard argues its admis-sions process takes into ac-count ratings on academics, aswell as personal scores basedon teacher and other recom-mendations, athletics and ex-tracurricular activities.

The school challenged astatistical analysis conductedby Duke University economistPeter Arcidiacono. The schoolargues that the exclusion ofcertain applicant groups, in-cluding recruited athletes, leg-acies and the students of Har-vard faculty and staff,undermines any conclusionshe makes about racial bias.

Harvard said in Friday’s fil-ing that it already diversifiesits class in other ways thanrace, including with a $200million annual financial-aidprogram and flagging appli-cants who seemed to excel de-spite modest backgrounds.The school also eliminatedearly-action admissions from2012 to 2015, based on as-sumptions that such programsfavor students with means

who are more familiar withthe admissions process, butreinstituted it after the switchwas deemed to have “hin-dered” diversity efforts.

The school also noted thatan internal committee in 2017found ending race-consciousadmissions would lead to a50% decline in the proportionof African-American students,and the corresponding in-crease would primarily benefitwhite students.

They also determined thatthe proportion of admittedstudents with the highest aca-demic ratings would drop by19% if Harvard focused moreon socioeconomic diversitywithout consideration of race.

Harvard cites a SupremeCourt ruling that said the lawon affirmative action “doesnot force universities tochoose between a diverse stu-dent body and a reputation foracademic excellence.”

Edward Blum, the conserva-tive backer of Students forFair Admission, said Fridaythat the group looks forwardto presenting its case at trialin October, adding that data,memos, emails and deposi-tions that have been redactedso far will be made publicthen.

Harvard said confidentialityis up to the judge.

BY MELISSA KORN

HarvardRebutsEntranceAnalysis

College says reviewcherry-pickedcertaingroups of studentsto try to prove bias.

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part about valuation. But theepic wipeout in shareholdervalue is forcing investors to re-think the dominance of the so-called FAANG group, which in-cludes Facebook, Amazon.comInc., Apple Inc., Netflix Inc. andGoogle parent Alphabet Inc.

The stocks have been among

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After final votes in the House, congressmen slipped off their jackets Thursday as they left the Capitol for summer recess.

GOP base is at historic levels,which makes it difficult forRepublicans in Congress tostray from his agenda. At thesame time, his slash-and-burnstyle of governing is costingthem in the suburbs, wherethe battleground districts re-side.”

Though Republicans controlall branches of government, ahandful of lawmakers willspend their summer emphasiz-ing that they have opposed thepresident—including Rep.Leonard Lance, a New JerseyRepublican facing a tough racerated a tossup by the nonpar-tisan Cook Political Report.

“I did not vote for the taxbill, I did not vote for thehealth-care bill, I signed thedischarge petition on the im-migration issues, and I am afree trader—and I’ll certainlybe explaining my positions tothe voters,” Mr. Lance said.

—Kristina Petersoncontributed to this article.

eryday needs to provide fortheir family and make suretheir kids can enjoy the Amer-ican dream,” said CaliforniaRep. Adam Schiff, the topDemocrat on the House Intelli-gence Committee, which hasinvestigated Russian interfer-ence in the U.S. election.

Vulnerable Republicans,meanwhile, are walking a fineline between needing to showsupport for the president tosatisfy the party faithful intheir districts and opposinghim in certain cases to win in-dependent voters. A WSJ/NBCNews poll released Sundayshowed 88% of Republicansapprove of the job Mr. Trumpis doing as president—thehighest since the inaugura-tion—but his approval amongindependents is 40%.

“Republicans are facing apolitical conundrum,” said KenSpain, a former House GOPcampaign aide. “The presi-dent’s popularity among the

both issues are expected tohave a limited impact onvotes, meaning Democrats willhave to be careful not to focuson them too much.

To take the majority in theHouse, Democrats must win anet 23 seats. Numerous pro-jections have the party win-ning at least that many races,but forecasters warn thatDemocrats are fighting inmany districts that have longbeen held by GOP stalwartssuch as Rep. Dana Rohra-bacher, a 30-year incumbent inCalifornia, or 11-term Rep.Pete Sessions of Texas. Bothmen represent districts thatHillary Clinton won in 2016—but Democrats will need toconvert independent and Re-publican voters this year.

While Mr. Trump may comeup in conversation in thoseGOP-held districts, “what willmost motivate people to go tothe polls is the conviction thatwe’ll help them meet their ev-

With roughly 100 days to gountil the midterm elections,lawmakers headed home thisweek for August recess. BothRepublicans and Democratswill be treading carefully inhow they engage with voterson issues associated withPresident Trump.

Midterm elections are oftenseen as a referendum on thepresident. Mr. Trump is popu-lar with GOP voters, but notwith Democrats or indepen-dents, meaning lawmakersfrom both parties need tothread the needle in how theytalk about the president onthe campaign trail.

Democrats’ talking pointsinclude the investigation intoalleged collusion betweenTrump associates and Moscowin the 2016 U.S. election, aswell as the president’s rela-tionship with Russia’s Presi-dent Vladimir Putin. However,

BY NATALIE ANDREWS

Recess Is Colored by President’s Effect

but may pursue other optionsif user engagement falls in ameaningful way or if the sitesget overrun with ugly content.Privacy concerns are also af-fecting the way users thinkabout social media, particu-larly Facebook.

This week’s results showsocial media “hitting thepause button” after years ofembracing a growth-at-all-costs mentality, said Colin Se-bastian, an analyst at RobertW. Baird & Co. The combina-tion of Europe’s new privacylaw, which went into effect inMay, and the investments thatFacebook and Twitter aremaking in security are a short-term drag on growth.

Still, he said, “this is morelikely a speed bump than astructural shift in the waypeople are consuming mediaonline.”

Ahead of their earnings re-ports, Facebook and Twittershares had risen 23% and 79%,respectively, since the begin-ning of the year, so the dra-matic slumps were at least in

the best performers in the S&P500 this year, and some inves-tors think of them as a unitrather than individual busi-nesses with unique challenges.

Alphabet and Amazon, forexample, both produced strongearnings in the second quarter,in line with what bullish inves-tors have come to count on.The social-media slump,though, will serve as a warningsign for anyone with broad ex-posure to big tech giants.

“These really high growthrates can’t go on forever,” saidScott Wren, managing directorand senior global equity strat-egist at Wells Fargo Invest-ment Institute. “So peoplehave to readjust for theselower growth rates by takingsome money off the table.”

In the new environment, an-alysts said, the social-mediasites will be under more pres-sure to find fresh sources ofgrowth beyond their core plat-forms and the U.S. market.Facebook’s user growth is morerobust in regions such as Asia,compared with the U.S., and

further expansion internation-ally will be closely watched,several investors said.

They will also be scrutiniz-ing the social-networking gi-ant’s progress of further mon-etizing newer features such asInstagram “Stories,” whichhave become increasingly pop-ular, said Dan Morgan, a se-nior portfolio manager withSynovus Trust Co.

Twitter said the secondquarter was the first in whichrevenue from international adsexceeded that from ads in theU.S., a trend it expects to con-tinue in the near term.

But few expect either Face-book or Twitter to deviatefrom the ad-based businessmodel that has been theirfoundation, an idea that“would be like saying a choco-late company should seriouslythink about getting into thesalad business,” said Brian Wi-eser, senior research analystat Pivotal Research.

Twitter attributed its dropin monthly users largely to itsefforts at “improving the

health of the public conversa-tion” on the platform. It alsocited Europe’s tough new pri-vacy law, as well as a moveaway from contracts in somemarkets where people receivetweets through texts. Com-bined, the three factors erasedmore than 3 million monthlyusers in the quarter.

Chief Executive Jack Dorseytold analysts Twitter is mov-ing faster than expected toclean up the quality of conver-sation on the platform, andthat the efforts will have apositive impact on buildingengagement.

Facebook likewise has beenplowing money to better policeactivity on the platform, effortsthat will ding margins. Untilthis week’s surprise guidance,Facebook had shown few busi-ness effects from the negativeheadlines that have dogged itin recent months. And manyanalysts touted Thursday’smassive drop as a buying op-portunity, but that wasn’t theconsensus: Facebook shares fellslightly on Friday.

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James Wolfe, ex-staffer for theSenate intelligence panel.

in a statement: “We are veryconfident of the accuracy andreliability of the informationthat has been provided by Mr.Trump Jr. and on his behalf.”

Now, escalating his clashwith the president, Mr. Cohenis willing to tell Mr. Muellerthat he was present when the

younger Mr. Trump informedhis father about the meetingbefore it took place, the per-son familiar with the mattersaid. Mr. Cohen doesn’t haveany evidence, such as an audiorecording, to back up hisclaim, the person said. CNNearlier reported Mr. Cohen’s

U.S. NEWS

repeatedly denied that thepresident had advance knowl-edge of the June 2016 meetingwith Natalia Veselnitskaya, aRussian lawyer with stronglinks to the Kremlin. Theyounger Mr. Trump last yearreleased emails showing he ac-cepted the offer for the meet-ing after he was promised theinformation about Mrs. Clin-ton, his father’s opponent inthe election, that he was toldhad been collected as part of aRussian government effort tohelp his father. Participants inthe meeting have testified thatno such information was of-fered, and that the youngerMr. Trump was disappointedby the outcome.

Mr. Cohen didn’t tell theHouse Intelligence Committeethat Mr. Trump had priorknowledge of the TrumpTower meeting in his testi-mony last year, a person famil-iar with the matter said.

Alan Futerfas, a lawyer forthe younger Mr. Trump, said

plan on Thursday.Mr. Cohen is under investi-

gation for bank fraud and pos-sible campaign-finance viola-tions by federal prosecutors inNew York City, and federal in-vestigators are probing his ef-forts to quash negative public-ity for Mr. Trump during the2016 campaign. Mr. Cohen hasdenied wrongdoing and hasn’tbeen charged with any crimes.

In an interview late Thurs-day, Rudy Giuliani, the presi-dent’s lawyer, accused Mr. Co-hen of seeking to obtain a pleadeal by offering testimony toMr. Mueller.

It is unclear when Mr. Co-hen expects to meet with Mr.Mueller. He testified last yearbefore two congressional com-mittees, both of which havereleased reports on electioninterference that made nomention of the president hav-ing prior knowledge of theTrump Tower meeting.

The Trump Tower meetingfactors prominently in Mr.

Mueller’s investigation intowhether Trump associates col-luded with Russia in 2016. Mr.Trump has repeatedly deniedcollusion, and Moscow has de-nied election interference.

In addition to probing themeeting itself, Mr. Mueller isalso examining statements is-sued by the younger Mr.Trump and the White House,with the president’s approval,that were initially misleadingabout the purpose of the Vesel-nitskaya meeting, which wasalso attended by Jared Kush-ner, Mr. Trump’s son-in-law,and Paul Manafort, his cam-paign chairman at the time.

Mr. Mueller is investigatingwhether the president and hisaides sought to obstruct jus-tice in releasing an initialstatement that said the meet-ing focused only on adoptions.

Mr. Trump has denied ob-struction.

—Peter Nicholasand Byron Tau

contributed to this article.

WASHINGTON—PresidentTrump said again on Fridaythat he had no prior knowl-edge of a June 2016 meetingthat his eldest son had with aRussian lawyer at TrumpTower after being promiseddamaging information aboutDemocratic presidential candi-date Hillary Clinton.

The president disputed anaccount that a person familiarwith the matter says his for-mer lawyer Michael Cohen isplanning to tell the team ofRobert Mueller, the specialcounsel investigating allegedRussian interference in the2016 election.

In a series of tweets Fridaymorning, Mr. Trump wrote,“So the Fake News doesn’twaste my time with dumbquestions, NO, I did NOT knowof the meeting with my son,Don jr.”

Mr. Trump and his eldestson, Donald Trump Jr., have

BY REBECCA BALLHAUS

Trump Denies Knowledge of Son’s Meeting

Donald Trump Jr. met with a Russian lawyer in June 2016 afterbeing offered dirt about Democratic candidate Hillary Clinton.

tion that could spark a legalbattle over a constitutionalprovision that gives lawmak-ers certain immunity and priv-ilege for actions undertaken aspart of their official duties, aswell as over how much na-tional security information canbe disclosed in open court.

Testimony from sittingmembers of the intelligencepanel could also give the pub-lic an inside look at the work-ings of one of the most secre-tive committees on CapitolHill, which conducts nearly allof its activities overseeing thenation’s spy services behindclosed doors.

Representatives for the Re-publican chairman and Demo-cratic vice chairman of the in-telligence committee declinedto comment.

Lawmakers are unlikely tobe eager to testify in a trialthat touches upon the innerworkings of a key national se-curity panel.

People familiar with thecase are bracing for the possi-bly that lawmakers could tryto invoke constitutional immu-nity to avoid testifying. The“speech or debate” clause ofthe constitution states thatmembers are largely privi-leged from arrest while at-tending sessions of Congressand that “they shall not bequestioned in any other place”about their legislative duties.

However, very little caselaw exists on the clause. DavidSchultz, who teaches law atthe University of Minnesota,said he wouldn’t expect acourt to entirely excuse mem-bers of Congress from testify-ing in a criminal proceeding,even if it is related to their of-ficial duties.

“That would be a stretch ofan argument. It’s not incon-ceivable to try that argument,”he said. “But I would see thecourt arguing here that what-ever protection the speech ordebate clause would afford toyou, those protections wouldhave to give way to the needsof investigating and prosecut-ing a criminal activity.”

WASHINGTON—Membersof the Senate IntelligenceCommittee have been notifiedthey may be asked to testify aspart of the criminal trial of aveteran Senate staffer accusedof lying to the FBI while work-ing for the panel.

Attorneys for James A.Wolfe sent letters to all 15senators on the committee,notifying them that their testi-mony may be sought as partof Mr. Wolfe’s defense, accord-ing to two people familiarwith the matter.

Mr. Wolfe, who for nearly30 years served as the directorof security for the intelligencecommittee, was arrested lastmonth and charged with lyingto the FBI about his contactswith reporters while the bu-reau was conducting an inves-tigation into leaks of classifiedinformation to journalists. Mr.Wolfe wasn’t charged withleaking any information.

Mr. Wolfe’s defense lawyersare considering calling thesenators as part of the pro-ceedings for a variety of rea-sons, including as potentialcharacter witnesses and to re-but some of the allegationsmade by the government inthe criminal complaint, thesepeople say.

If senators declined to ap-pear voluntarily for either adeposition or at trial, theycould be subpoenaed. That ac-

BY BYRON TAU

Lawyers May SeekSenators’ Help atFormer Aide’s Trial

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suffered a bigger loss of 2.5%.Facebook and Twitter have

different business models buteach is dependent on grab-bing—and keeping—people’sattention and then showingads to them. That imperativeon occasion has led them toembrace content that is viralor provocative, and now theyare trying to find a better bal-ance that will keep users en-gaged without driving themaway. For instance, both arescrambling to clean up theirplatforms, which were the epi-center of Russian misinforma-tion campaigns around the2016 U.S. presidential election.

Advertisers have flocked tothe platforms in recent years


InvestorsCut Back onHighfliers

Toxic ImpactTwitter's monthly active users,change from previous quarter

Source: the company

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ance from authorities.The death toll rose again

Friday, as rescue crews keptsearching scorched areas forbodies, and a search-and-res-cue operation continued at seafor people who tried to escapeon boats or by swimming.

Mr. Tsipras on Fridayblamed the widespread build-ing code violations, repeatingauthorities’ statements that un-regulated construction in areasovergrown with dry bush con-tributed to the high death toll.

“We realize today in themost painful way that we areruling a country where distor-tions dominated for years;where entire towns were builtarbitrarily on streams andbeaches,” Mr. Tsipras said.

“We have to consider whetherwe did enough to change this.”

Mr. Tsipras said that thegovernment would go aheadwith a national plan to tackledecades of building violations.

Greece’s left-led governmentimposed austerity measuresover the past three years. Withthe country set to emerge froman eight-year financial bailoutnext month, the governmentwas hoping to turn the agendain a positive direction.

“To me it’s unthinkable thatnot a single person has re-signed,” said Dimitris Papan-ikolaou, Greece’s former gen-eral secretary for civilprotection, who resigned aftera number of buildings wereflooded in 2002, noting thereweren’t deaths in that event.

“The fire brigade is respon-sible for not paying enough at-tention when the fire started,the police is responsible forblocking the main highwayand sending people back tothe small alleys of Mati, thesecretary of civil protection isresponsible for the whole co-ordination,” he said.

The leader of a junior coali-tion party, Independent Greeks’Panos Kammenos, was the onlygovernment official to visit Matiso far, with locals shouting athim, “You let us burn.”

ATHENS—Greece’s PrimeMinister Alexis Tsipras said hetakes responsibility for thewildfires that killed at least 87people, responding Friday tomounting anger over the gov-ernment’s handling of the di-saster, one of the worst here indecades.

“I take full political respon-sibility for this tragedy in frontof my cabinet and the Greekpeople,” Mr. Tsipras told hisministers at a cabinet meeting.“I urge you to do the same nomatter how difficult it is.”

Mr. Tsipras’s address was achange in direction from re-cent days, when authorities in-sisted they did everythingthey could to avert Monday’swildfires. The cabinet meetingcame after growing criticismby opposition parties and lo-cals in the affected areas thatthe government failed to apol-ogize about the disaster.

Fires fanned by strong windsripped through thousands ofhectares of pine forest and re-sort towns packed with resi-dents and tourists in the Atticaregion near the Greek capital.People in the village of Matitried to escape in their cars orflee to the beach, withoutemergency warnings or guid-

BY NEKTARIA STAMOULI

Greece’s Leader ShouldersBlame After Deadly Wildfires

A woman on Friday carrying flowers near where a 6-month-old baby died in the resort town of Mati.

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WORLD NEWS

A day after PresidentTrump hailed “a breakthroughagreement” on trade with Eu-rope, European officials saidthe president and his aides areexaggerating the scope oftheir new pact.

While Mr. Trump told anIowa crowd Thursday that “wejust opened up Europe for youfarmers,” officials in Brusselslater said he did no such thing.

“On agriculture, I thinkwe’ve been very clear onthat—that agriculture is out ofthe scope of these discus-sions,” Mina Andreeva, the Eu-ropean Commission spokes-woman, told reporters inBrussels on Friday. “We arenot negotiating about agricul-tural products,” added Ms. An-dreeva, who was part of theEuropean delegation visitingWashington this week.

The quick emergence of agap between the two sidesover just what they agreed toat a marathon White Housesession Wednesday highlightsthe vague nature of the pactand indicates the perils of riftsre-emerging as officials at-tempt to flesh out details inthe coming weeks.

The agreement that Mr.Trump reached with EuropeanCommission President Jean-Claude Juncker amounts to atruce in a trade dispute thathas been escalating since Mr.Trump imposed tariffs on steeland aluminum imports thisyear. Europe swiftly retaliated,and Mr. Trump then threat-ened even bigger import curbson European cars.

The two leaders announceda broad agreement to launchnegotiations aimed at cuttingtariffs, subsidies, and non-tar-iff barriers affecting trans-At-lantic trade. The U.S. pledgedto avoid imposing car tariffsas long as negotiations are on-going, and both sides said theywould try to find a way to liftthe trade barriers they had

imposed on each other in re-cent weeks.

Officials on both sidesagree that two specific agri-cultural matters came up. TheEuropeans said they were al-ready engaged—beforeWednesday’s handshake at theWhite House—with U.S. coun-terparts to boost high-qualitybeef imports from America aspart of an effort to resolve alongstanding trade dispute.And they said they would seekto buy more U.S. soybeans, apolitically sensitive sector forMr. Trump, because China hascut imports of the crop in aseparate trade tiff.

European officials say thatbeyond those two specific ar-eas, they made quite clearduring the White House meet-ing that they wouldn’t includeany broader discussion of ag-riculture in the pending talks.

Agriculture is one of the

most sensitive and difficulttrade questions for Europe, es-pecially for France, and theU.S. and Europe have foughtfor years over everything fromEuropean tariffs to U.S. use ofhormones and geneticallymodified products.

They say that when Trumpaides tried to broaden thetalks from industrial productsto agriculture, they threatenedto demand the U.S. drop its“Buy American” provisions forgovernment procurement, anonstarter for the Trump ad-ministration.

The U.S. side “heavily in-sisted to insert the whole fieldof agricultural products,” Mr.Juncker told reporters imme-diately after the meeting. “Werefused that because I don’thave a mandate and that’s avery sensitive issue in Eu-rope.”

Indeed, the joint statementreleased by the two govern-ments mentions only theshared goal of phasing out tar-iffs, subsidies and non-tariffbarriers on “non-auto indus-trial goods.” But it also saysthe agreement “will open mar-kets for farmers and workers.”

Mr. Trump and his aides in-terpret that differently thantheir European counterparts.“Our view is that we are nego-tiating about agriculture, pe-riod,” U.S. Trade Representa-tive Robert Lighthizer told aSenate committee Thursday.

Mr. Trump has strong polit-

ical incentives for touting bigtrade gains for farmers. Farm-ers have been among the mostvocal critics of his hardballtrade policies, and been themain target of retaliatory mea-sures from trading partners.

Agricultural trade betweenthe U.S. and Europe totaled$32.5 billion last year, withEurope running a $9.4 billionsurplus, according to U.S. gov-ernment statistics.

Agriculture always has beena tricky subject in trans-Atlan-tic trade, with both the U.S.and the European Union seek-ing to protect and advancetheir industries.

It was one of the factorsthat stalled negotiations on abroad trade agreementlaunched by President BarackObama, alongside public pro-curement and other issues.

—Valentina Popcontributed to this article.

Europeans Dispute Trade Claim

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BERLIN—Germany fendedoff Chinese bids for two stra-tegically important industrialassets this week, in an effortto prevent China from snap-ping up technological know-how seen as crucial to West-ern economic success.

The move, the first of itskind, signals concern in Berlinabout Chinese investment inGermany and reflects a grow-ing effort in the U.S. and Eu-rope to throw up obstacles toChinese acquisitions of cut-ting-edge technology.

The German governmentsaid Friday the state-ownedbank KfW had acquired a 20%stake in German transmissionsystem operator 50HertzTransmission GmbH’s holdingcompany, which was targetedby State Grid Corp. of China.

“On national securitygrounds, the German govern-ment has a major interest inprotecting critical energy in-frastructure,” the economicsand finance ministries said.

It also emerged Thurs-day that the German govern-ment has banned the sale of adomestic company to a Chi-nese suitor on securitygrounds. An official for one ofthe ruling coalition partiessaid the sale of machine-toolcompany Leifeld Metal Spin-ning AG to a Chinese investorwas blocked because it risked“public order and safety.” Boththe government and the com-pany declined to comment.

The ban was possible be-cause the German governmentadopted legislation in 2017that made it easier to veto for-eign acquisitions of 25% ormore of strategically impor-tant companies if the invest-ment puts public order orsafety at risk.

—Bojan Pancevskicontributed to this article.

BY ANDREA THOMAS

GermanyImpedesChina’sTech Push

By JacobM.Schlesinger

in Washington andEmre Peker in Brussels

President Trumpsays he ‘opened upEurope’ for farmers;Europeans disagree.

President Trump met with European Commission President Jean-Claude Juncker in the White House on Wednesday.

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Refugee returnees to Syria by year

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E G Y P T

T U R K E Y

L E B A N O N

S A U D IA R A B I A

J O R D A N

I S R .

Med.Sea

...but the number returning home hasbeen minuscule.

Sources: Turkish government, UNHCR (Turkey); UNHCR (all others)

The Syrian war has pushed millions into neighboring countries...Outward Wave

Turkey

Lebanon

Jordan

Iraq

Egypt

2016

2017

2018

26,061

50,846

15,714

3,541,572

976,065

666,596

251,157

129,737

onciliation efforts have failedsince Hamas seized completecontrol of the 25-mile-longseaside enclave of Gaza in2007 after a bloody battlewith Fatah.

Israel and Egypt have im-posed a blockade on Gazasince then, and the PalestinianAuthority contributed to thepressure by stopping pay-ments to employees in Gazaand reducing payments forelectricity supplied by Israel.

Hamas immediately agreedto Egypt’s plan for Fatah andHamas. Fatah is sending a del-egation to Egypt next week todiscuss it.

“We are hoping to reach acomprehensive agreementwith timelines and dates,” saidSaeb Erekat, a senior Fatah of-ficial.

The peace attempts havetaken on new urgency afterflare-ups in violence betweenHamas and Israel, which havefought three wars since 2008.

TEL AVIV—Internationalmediators are increasing pres-sure on dueling Palestinianfactions to reconcile their dif-ferences, hoping the long-shoteffort could help relieve direconditions in Gaza and createa lasting cease-fire with Israelafter weeks of violence.

Egypt rolled out plans totry to form a unity govern-ment between Fatah, whichruns the West Bank via thePalestinian Authority, andHamas, which controls theGaza Strip. At the same time,the United Nations has en-gaged in a blitz of shuttle di-plomacy, trying to build trustbetween two sides whose splitover a decade ago has roiledefforts to forge a two-statepeace with Israel.

Negotiations face big hur-dles. The two sides mistrusteach other and a series of rec-

BY FELICIA SCHWARTZAND DOV LIEBER

Mediators Push Fatah,Hamas toMend Fences

to return refugees to Syria. Theproposals, submitted after theTrump-Putin summit, includedcollaboration in funding “therestoration of Syria’s infrastruc-ture,” according to Russia.

U.S. officials haven’t com-mented on whether Washingtonwould support the proposal. Ina briefing Friday, Defense Sec-retary Jim Mattis said he was“considering” meeting with his

Russian counterpart.European countries insist

that before they allocate aidthrough Damascus, or funds torebuild Syria, a political tran-sition process must be underway, although they haven’tspecified whether that wouldrequire Mr. Assad’s ouster.

Still, the regime is lookingto leverage the fact that neigh-boring and European countries

are anxious to see the refugeesreturn. Indeed, Lebanon—where Syrian refugees consti-tute 20% of the population—has prevented the vastmajority of them from settlingpermanently in the country.

In Arsal, some 70,000 Syri-ans live in shabby tarpaulintents and have few legal rights.Samaher Bakor and her hus-band fled Syria more than five

years ago with their two smallchildren. They applied for per-mission to return to Syrianearly two months ago and satfor days with their meager be-longings packed in an old truckas they awaited word. On Mon-day, they departed for Syria.

“Of course, we are a littlescared but my relatives say it’ssafe to come back,” Ms. Bakorsaid before the family left. “In

Syria, schools are free, hospi-tals are free. Here everythingrequires so much money.”

The refugees who do returnface an uncertain fate. Manyfear retaliation for having fledthe country. “The regimebrands everyone who left Syriaa terrorist,” said SalemMoham-mad Rahmoun, originally fromRas al-Ain in southwest Syriaand now living in Arsal.

WORLD NEWS

ARSAL, Lebanon—As theAssad regime moves to takecontrol of Syria’s last opposi-tion strongholds, the govern-ment and its foreign backersare calling on millions of refu-gees who fled the bloody con-flict to come home.

But obstacles the regime isthrowing up to their returnshow that President Bashar al-Assad—mindful of the strainrefugees are putting on neigh-boring countries—is willing touse the exiles as bargainingchips to secure foreign aid andsanctions relief, Western diplo-mats and analysts in Beirut say.

The Syrian government inrecent months has postponedor declined without explana-tion hundreds of applicationsfrom refugees in Leba-non seeking to go back, accord-ing to several Western diplo-mats briefed on the matter.

Returnees need identificationand family papers, which manyleft behind during their flight,and approval to travel in Syriangovernment convoys. Manymenhave been rejected, so theirwives and children stayed backas well, the diplomats said.

As a result, the returns sofar are little more than atrickle. Since early June, inLebanon, where more than amillion Syrians live, only about1,400 of 3,000 Syrians whohave applied to return have de-parted, including about 1,000this week, according to theLebanese intelligence agency.

More than five million Syri-ans have fled since the uprisingbegan in 2011. Most settled inneighboring countrieslike Lebanon, Jordan and Tur-key. The Assad regime officiallysays refugees should return torebuild the war-ravaged nation.

“The Syrian governmentwants to use [the refugees] asa bargaining chip,” said MahaYahya, director of the Carne-gie Middle East Center, an in-dependent Beirut-based thinktank. “It wants payment and ismonetizing them. Not all ofwhich would necessarily go to-wards reconstruction.”

The Syrian governmentdidn’t respond to a request tocomment. This month, a Syrianforeign-ministry official toldstate news agency SANA thatthe regime expects the interna-tional community to contributetoward resettling them.

Moscow this month invitedthe U.S. to cooperate on a plan

BY SUNE ENGEL RASMUSSENAND NAZIH OSSEIRAN

In Syria’s Bid for Aid, Refugees Are PawnsRegime slows return ofSyrians as it seeks tosecure reconstructionfunds from West

Syrian refugees drink tea outside their tent in a settlement in the Lebanese city of Arsal. Samaher Bakor, below, waited two months to receive permission to return.

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U.S. intelligence officialsare probing a transcontinentalnetwork of real-estate, weap-ons and electronics firms forties to two Lebanese menblacklisted for their allegedsupport of terrorist groupHezbollah, according to peoplefamiliar with the matter.

The U.S. Treasury probecomes as the Trump adminis-tration ramps up pressureagainst Iran and its proxieslike Hezbollah.

Under scrutiny are individ-uals and companies tied totwo men, Lebanese brothersKamel Mohamed Amhaz andIssam Mohamed Amhaz, sanc-tioned in 2014 for using StarsGroup Holding to purchaseelectronics for Hezbollah todevelop military drones.

Washington-based non-profit C4ADS documented thebroader Amhaz-linked networkin a report last month, map-ping connections through cor-porate registries, real-estaterecords and other documents.

The report is being re-viewed by Treasury officialsand other national security of-ficials, according to people fa-miliar with the matter, raisingthe possibility of additionalsanctions and other legal ac-tion against the network.

Previous reports by C4ADS,whose board and staff includeseveral former U.S. nationalsecurity officials, have been

followed by U.S. action.A Treasury official said the

department “does not tele-graph sanctions or prospectiveactions, and does not com-ment on investigations.”

The C4ADS report zeroes inon Mohammad Al Barghouthy,of the United Arab Emirates;Ali Abu Adas, of Jordan; andthree Lebanese men, AchrafAssem Safieddine, HusseinFahd Rahal and Jihad HusseinEl Anan. It said their collectivereal-estate assets are worthmore than $100 million.

“There is compelling evi-dence the wider Amhaz net-work had the infrastructure tomove substantial amounts ofmoney, as well as market ac-cess to small electronics andarms procurement,” saidC4ADS.

“Individual partners arealso connected to a potentialHezbollah operation, as wellas corruption schemes in Libe-ria and money laundering ac-tivity in Lebanon and possiblythe U.S.,” the group said.

C4ADS noted its reportdoesn’t definitively determineillicit activity, but shows “howsanctioned entities and indi-viduals may be able to usecorporate and real estate-re-lated obfuscation to evadeand adapt to sanctions.”

According to documents re-viewed by The Wall StreetJournal, Messrs. Abu Adas andBarghouthy are founders andlongtime owners of Amhazcompanies sanctioned in 2014.Mr. Barghouthy was the ma-jority shareholder of a sanc-tioned subsidiary of Stars

Group, Dubai-based UniqueStars Mobile Phones LLC, untilat least late 2017. Official Leb-anese documents also list bothmen as founders and directorsof Fast Link SAL, anothersanctioned firm whose namewas changed this year.

While the U.S. Treasurywon’t comment on the case,department officials say en-gaging with blacklisted enti-ties is a violation of U.S. lawthat can incur sanctions andenforcement action.

In an interview, Mr. AbuAdas deniedp a r t n e r i n gwith the Am-haz brothersor Hezbollah.Responding toallegations inthe C4ADS re-port, he pro-vided copies ofofficial Leba-nese docu-ments stating

neither he nor Mr. Barghouthywere shareholders in two com-panies with names similar tothe sanctioned firms. Anotherletter he provided from an ac-counting firm said anotherDubai-based business Mr. AbuAdas owns had no shareholdingin the sanctioned companies.

C4ADS said it didn’t makeany of the claims Mr. AbuAdas disputed with the docu-ments.

An executive at Mr. AbuAdas’s Dubai-based phone dis-tributor, Fast Telecom, saidKamel Amhaz had been a cus-tomer when Mr. Amhaz had acompany in Dubai several

years ago and might have cre-ated false links between hisLebanese business and FastTelecom to make his businessappear more legitimate.

Repeated attempts to reachMessrs. Amhaz and Bargh-outhy were unsuccessful.

Records show the three Leb-anese men C4ADS connectedto the brothers—Messrs.Safieddine, Anan and Rahal—have been involved in firmsfounded or run by the black-listed men, including an arms-importing company. Recentcorporate records for Lebanesefirm Liban Stars SAL, for ex-ample, list Messrs. Safieddineand Anan as primary ownersalongside Kamel Amhaz.

In interviews, the threemen said they had never soldarms to Hezbollah or sup-ported the group.

“It’s stupid to think thatthere is a company in Lebanonimporting weapons and sellingthem to Hezbollah,” said Mr.Safieddine, who co-foundedtwo of the companies sanc-tioned in 2014, in an interviewfrom Lebanon. “We did not doit,” he said, adding that thepartners closed the weaponsfirm in 2015.

Mr. Safieddine also ownsU.S. real estate. He, along witha man named Bill Jamal—reg-istered in state records asmanaging several companieslinked to Mr. Safieddine—isassociated with more than 30U.S. property deals.

“He is a wonderful humanbeing and he pays his taxesyear after year,” Mr. Jamalsaid of Mr. Safieddine.

Web of Businesses Probed for TiesTo Alleged Hezbollah Supporters

By Ian Talleyin Washington, NazihOsseiran in Beirut

and Asa Fitch in Dubai

Palestinians taking part in weekly protests in Gaza on Friday.

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Kamel Amhazin 2008

THEWALL STREET JOURNAL. * * * * * * * Saturday/Sunday, July 28 - 29, 2018 | A7

needed. Pakistan has beenkept going on short-term Chi-nese credit,” Asad Umar, a for-mer corporate chief executivewho is likely to become thenew government’s financeminister, told The Wall StreetJournal just days ahead ofWednesday’s election.

Mr. Khan is a sharp critic ofthe U.S., which supplies someeconomic aid to Pakistan butthis year froze security assis-tance, accusing the country ofinaction against militantgroups on its soil. Islamabadinsists there are no terroristsanctuaries left.

WORLDWATCH

Gross domestic product,change from previous year*

External debt as apercentage of GDP

How many Pakistanirupees one dollar buys

Crunching Numbers...but the government has piled ondebt to cover budget shortfallsand fund infrastructure.

Pakistan’s economy hasbeen growing steadily inrecent years...

To address a current accountcrisis, the authorities recentlyallowed the rupee to devalue.

Note: Fiscal year ends June 30 *Constant prices †PreliminarySources: Pakistan Bureau of Statistics (GDP); International Monetary Fund (debt); Tullett Prebon Information (rupees)


Note: Scale inverted toshow weakening rupee

6

0

1

2

3

4

5

%

FY2013 ’14 ’15 ’16 ’17 ’18†

30

0

5

10

15

20

25

%

2013 ’14 ’15 ’16 ’17† ’18†

90

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130

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100

2013 ’14 ’15 ’16 ’17 ’18

was about to become the latestmedia figure felled by allega-tions of sexual misconduct be-gan circulating last winter. Ms.Redstone began raising the is-sue of the rumors with CBSboard members in December,but received no indication thatany action was taken, accordingto people familiar with thematter. “That speaks towhether the board was provid-ing proper oversight,” said oneperson familiar with her think-ing, echoing charges that shehas made in legal filings in thecourt battle with CBS.

CBS’s board is looking to hirea law firm to conduct the probe,another person familiar with thesituation said.

Friday’s New Yorker story,which was written by RonanFarrow, also accuses CBS Newsexecutive Jeff Fager of inappro-priate behavior and of turning ablind eye toward accusations ofharassment within the division.Mr. Fager oversees the newsmagazine “60Minutes” and wasa former chairman of CBS News.

Specifically, the New Yorkersaid Mr. Fager had a reputationfor “getting really handsy,” ac-cording to one former “60 Min-utes” producer quoted in thestory. The story also said Mr.Fager protected other men whohad been accused of misconduct.

Mr. Fager denied the allega-tions to the New Yorker. Askedfor comment, CBS News referredto Mr. Fager’s denials in thestory.

CBS on Friday said it previ-ously retained attorney Betsy Pl-evan of Proskauer Rose LLP toconduct an independent investi-gation of alleged misconduct atCBS News. It said the probe wascontinuing and included investi-gating allegations in the NewYorker story.

Christine Peters, a producerwho described to the NewYorker a meeting in which Mr.Moonves put his hand up herskirt, said she decided to comeforward to help other profes-sional women. CBS told the NewYorker that Mr. Moonves deniesany inappropriate touching orconduct during the meeting.

“I wanted to say, look, it’s notonly just actresses. It’s womenin the corporate world that haveto deal with this,” Ms. Peterssaid in an interview.

—Keach Hageycontributed to this article.

women uncomfortable by mak-ing advances. Those were mis-takes, and I regret them im-mensely. But I alwaysunderstood and respected—andabided by the principle—that‘no’ means ‘no,’ and I have nevermisused my position to harm orhinder anyone’s career.”

In a statement Friday night,Ms. Douglas said “real changewill occur when I can walkthrough the front doors of CBSand resume the creative andworking relationship that wasso tragically cut short in 1997.”

A group of CBS directorssaid that after the investiga-tion concludes, the board will“promptly review the findingsand take appropriate action.”

The investigation comes ata sensitive time for CBS, whichis engaged in a legal battlewith National AmusementsInc., a holding company thathas nearly 80% voting stakesin CBS and Viacom Inc.

National Amusements Presi-dent Shari Redstone haspushed to merge them despiteresistance from Mr. Moonves


CBS ProbesMisconductAllegations

and his management team.CBS said in a statement that

the “timing of this report comesin the midst of the Company’svery public legal dispute.”

A spokeswoman for Ms.Redstone, who is vice chair-man of CBS, said in a state-ment that “the malicious insin-uation that Ms. Redstone issomehow behind the allega-tions of inappropriate personalbehavior by Mr. Moonves ortoday’s reports is false andself-serving. Ms. Redstonehopes that the investigation ofthese allegations is thorough,

open and transparent.”CBS directors earlier this

year moved to issue a dividendthat would reduce NationalAmusements’ voting power tounder 20%, but National Amuse-ments took steps to block themeasure by changing the com-pany’s bylaws to require ap-proval of a supermajority of di-rectors in such situations. Thefight is playing out in a Dela-ware court and is expected togo to trial this fall.

Rumors that Mr. Moonves

The probe comes asCBS is engaged in alegal battle withNationalAmusements.

count crisis. The reckoningwill likely draw all of the newgovernment’s attention in thecoming months, analysts said.

Mr. Khan’s first major policytask will almost certainly benegotiating a bailout with theInternational Monetary Fund.

“Some sort of bailout is

MIGRANTS

Spain Is Top EuropeanEntry Point by Sea

Spain’s mainland has for thefirst time surpassed Italy andGreece to become the main en-try point for migrants arriving inEurope from Africa by sea.

Overall, the number of arrivalsin Europe has fallen sharply in thepast year. But the growing num-ber of migrants flowing throughSpain in particular shows that Af-rica’s borders remains porous.

The heightened migration is atest for Spain’s new center-leftPrime Minister Pedro Sánchez,who has taken a more welcom-ing stance as other Europeanleaders crack down in responseto public concern over the arrivalof hundreds of thousands of mi-grants to Europe’s shores duringthe past several years.

—Jeannette Neumann

ISLAMIC STATE

Britain Breaks WithU.S. Over Fighters

Britain has stopped cooperat-ing with the U.S. in the case oftwo British Islamic State fighterspending an appeal, the govern-ment said Friday, after concernsthat they could face the deathpenalty provoked a backlash.

The U.S. has designated thetwo men, Alexanda Kotey and ElShafee Elsheikh, as global terror-ists and accuses them of beingpart of a cell that beheaded U.S.citizens. They are being held byKurdish forces in Syria.

This week, the British govern-ment faced criticism for agreeingto share intelligence on the pairwith the U.S. without seeking thecustomary assurances that theywouldn’t face the death penalty.The pair have admitted member-ship of Islamic State but haven'tsaid whether they were part of acell that the State Departmentsays beheaded 27 hostages.

The U.S. hasn’t charged themen or commented on whetherit would seek their extradition.

The State Department saidTuesday it was continuing to ex-plore all diplomatic channels anddeclined to comment further.

—Will Horner

WORLD NEWS

Pakistan, meanwhile, has de-veloped close relations withChina, and it has bridged theeconomic emergency partlywith short-term Chinese com-mercial loans in recent months,on top of the tens of billions ofdollars it has borrowed fromChina for long-term projects. Inthe past, the Arab Gulf stateshave helped Pakistan in a pinch.And some Pakistani officialshave suggested that there couldbe a Chinese bailout.

But the IMF is the mostlikely source of funding of thesize Pakistan needs as rapidlyas it needs it.

Mr. Khan comes in with anambitious domestic agenda offixing public services such aseducation and creating 10 mil-lion jobs, which all require eco-nomic growth and rising spend-ing. But a bailout could force aslowdown in order to reduceimports, and deep cuts in gov-ernment spending. One painfulmeasure has already been takenfor the new government, how-ever: a 20% devaluation of therupee since December, makingexports more competitive.

Imran Khan is a newcomerto power in Pakistan, but hisfirst challenge is a familiarone for the country: a crush-ing financial crunch that willlikely require an internationalbailout and spending cutbacks.

After decades on Pakistan’spolitical fringe, nearly com-plete results show that Mr.Khan’s party took more thantwice as many seats in parlia-ment as its main competitor,whose highest profile leader isthe now-jailed former PrimeMinister Nawaz Sharif.

Mr. Sharif’s Pakistan Mus-lim League-N party and severalother parties have complainedabout election irregularities,though the election authoritiessay the polling was fair. OnFriday, an election monitoringmission from the EuropeanUnion said that the processwas “not as good” as the lastelection in 2013, and that notall parties were competing onan equal playing field. How-ever, it described polling dayitself as "well conducted.”

Mr. Khan will become primeminister within the next twoweeks after taking in indepen-dent candidates and possiblyminor coalition partners, hisTehreek-e-Insaf party said.

He will take control of agovernment whose finances arecrumbling. Pakistan has takenon massive debts in recentyears to cover budget short-falls and build critical infra-structure such as power plantsand roads, and it faces rapidlyrising interest payments.

Meanwhile, the country’sforeign-exchange reserveshave dwindled to critical lows,covering less than two months’worth of imports, as the cen-tral bank has tried to supportan overvalued currency againstrising fuel imports, falling ex-ports and a flood of importedgoods needed for constructionprojects.

While growth increased tonearly 6% under the last gov-ernment, its highest level in 13years, that has also created afiscal deficit and current-ac-

BY SAEED SHAHAND BILL SPINDLE

Pakistan Faces a Financial Test

Imran Khan, poised to become prime minister, will lead a government whose finances are crumbling; above, construction in Lahore.

PPI/ZUMAPRESS

FROM PAGE ONE

CBS CEO Leslie Moonves in Sun Valley, Idaho, earlier this month

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didn’t make the grade.After the U.S. government bailed

out Chrysler in late 2008, Mr. Mar-chionne negotiated a deal thatgave Fiat control of the U.S. automaker in exchange for technologyfrom the Italian firm but no cash.

H e revived profitability atChrysler by jettisoningmost sedans in the U.S.

market and doubling down onSUVs and pickup trucks. At Fiat,he avoided a union confrontationby cutting wages instead of clos-ing factories, and scored a majorsuccess with a small, sporty sedancalled the Grande Punto.

He was born June 17, 1952,in Chieti on Italy’s Adriatic coast.His father, a policeman, moved thefamily to Toronto when Sergiowas 14. The younger Mr. Marchio-nne studied philosophy and busi-ness before earning a law degreefrom York University in Toronto.He worked for the accounting andconsulting firm of Deloitte &Touche and then won senior exec-utive jobs at several industrialcompanies based in Switzerland.

His performance at SGS Group,an inspection and product-testingcompany, impressed members of

O ne day near the end of 2010,Sergio Marchionne receiveda message on one of his six

smartphones: A colleague updatedhim on efforts to fix a door-latchdefect on a new version of theDodge Charger.

“I am getting updates everycouple of hours on the bloody doorhandle,” he told a Wall StreetJournal reporter.

Was this a wise use of time fora sleep-deprived CEO responsiblefor running struggling auto mak-ers Fiat and Chrysler on two conti-nents? Mr. Marchionne thought so.

“I would suspect that some ofthe issues that we’re dealing withnow and cause me apoplexy wouldhave probably been swept underthe carpet 10 years ago,” he said,but “if you really want to run thebusiness, you need to get involvedin this level.”

Mr. Marchionne’s strategy forreviving and melding Fiat andChrysler was partly a matter of ze-roing in on details. The Italian-born CEO of Fiat Chrysler Automo-biles NV also stood out in the autoindustry as a destroyer of bureau-cracy and a shrewd negotiator. Hecombined European design flairwith North American focus onshareholder returns.

Mr. Marchionne died Wednes-day at age 66. His health had dete-riorated rapidly after a recent sur-gery following what his hospitaldescribed as a “serious illness”lasting more than a year but notpublicly known prior to his death.

When Mr. Marchionne wasnamed chief executive of Fiat in2004, he held nonstop meetings athis office in Turin, often with Bachplaying in the background. In briefindividual sessions, he decidedwhich executives had the self-con-fidence and speed he felt were re-quired to salvage the company. Hequickly cleared out hundreds who

BY CHESTER DAWSONAND JAMES R. HAGERTY

Fiat’s founding family, the Agnel-lis, who made him CEO of the Ital-ian car maker in 2004 despite hislack of auto industry experience.

On matters large and small, Mr.Marchionne trusted his instincts.In 2009, during an interview todiscuss how he would save Chrys-ler, the CEO noticed a reporter’ssquare-toed shoes and told him heneeded a fashion update. Design-ers and engineers waited for hisblessing on headlamps and car-body curvatures.

His frequent travels meant col-leagues couldn’t always get aquick answer or a one-on-onemeeting. In August 2009, while hewas unavailable, Chrysler’s saleschief made plans for discounts.When Mr. Marchionne returned,he was furious about the plan andberated the sales chief during ameeting. The sales executive soonleft the company.

He frequently called in Chryslerexecutives for Satur-day and Sunday meetings, some-times lasting from early morningto evening. “If he has a defect, itis one of managing by stress,”Giuseppe Volpato, an Italian pro-fessor who wrote a book on Fiat,told the Associated Press in 2009.“Not everyone can sustain theserhythms for two to three years.”

Even so, he defied many skep-tics simply by keeping the compa-nies alive. Ron Bloom, who was anindustry adviser in the Obama ad-ministration, remembered Mr.Marchionne as an extremely ag-gressive negotiator with a moralcompass who needed frequentoutdoor cigarette breaks duringtalks on saving Chrysler in 2009.“I think there’s no doubt thatwithout his involvement, therewouldn’t be a Chrysler,” Mr.Bloom said.

Mr. Marchionne’s survivors in-clude two sons.

� Read a collection of in-depthprofiles at WSJ.com/Obituaries

SERG IO MARCH IONNE1 952 — 20 1 8

No Detail Was Too SmallFor Legendary Auto CEO

ROBERT TRAUR IG1 92 5 — 20 1 8

Mastery of Zoning PavedMiami Lawyer’s Way

A fter Robert Traurig openeda one-man law firm in Mi-ami in 1954, his first few

cases happened to involve real es-tate. So he made that his spe-cialty. He eventually becameknown as the most effective zon-ing lawyer in his booming city.

He proved so good at winningexceptions to zoning rules forproperty developers that a localnewspaper said his middle initial“might as well be V, for variance.”Another local publication de-scribed him as “a howitzer forhire on a legal battlefield filledwith BB guns.”

He spoke modestly about histalents and ascribed his successto an ability to work out deals tomollify opponents of high risesand other projects. He was gener-

ous with charities and politicalcontributions. “I’ve been in thebusiness of making friends all mylife,” he told New Miami maga-zine in 1991.

In 1967, he and two other law-yers formed the law firm nowknown as Greenberg Traurig,ranked by American Lawyer asthe 14th largest in the U.S. interms of 2017 revenue. Among bignames who have worked for thefirm are Rudy Giuliani and ReubinAskew, a former Florida governor.

Mr. Traurig died July 17 in Mi-ami. He was 93 and had Parkin-son’s disease.

He is survived by his wife of 65years, Jackie, two daughters,three grandchildren and threegreat-grandchildren.

—James R. Hagerty

JOSEF KATES1 92 1 — 20 1 8

Refugee Crunched DataTo Unsnarl Traffic Jams

W hen he demonstrated acomputer tic-tac-toegame called Bertie the

Brain in 1950, Josef Kates thoughthe was on the verge of making afortune.

The game, introduced at theCanadian National Exhibition, fea-tured streamlined vacuum tubesinvented by the Austrian-born Dr.Kates, who came to Canada in the1940s as a refugee from Nazism.He hoped the tubes would revolu-tionize computing.

His timing was off. The rise ofsemiconductors was about to ren-der vacuum tubes obsolete ascomputer components. “I got thepatent, but the patent was use-less,” he said in an oral history.“OK, so on goes the world.”

The inventor, who had a doc-

torate in physics, recast himselfas a consultant, solver of trafficproblems and adviser to compa-nies and government agencies onhow to harness the power ofcomputers. He developed a pio-neering system of computer-con-trolled traffic signals to improvethe flow of cars and trucksthrough Toronto and other cities.He also found ways to eliminatebarge bottlenecks in the St. Law-rence Seaway.

In 1967, he sold his consultingbusiness to the accounting firmPeat Marwick. He later was chair-man of the Science Council ofCanada, a governmental advisoryboard.

Dr. Kates died June 16 in To-ronto. He was 97.

—James R. Hagerty

OBITUARIES

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A10 | Saturday/Sunday, July 28 - 29, 2018 * * * * THEWALL STREET JOURNAL.

The Obama administrationconsidered family separationbased in part on a recommen-dation from U.S. Immigrationand Customs Enforcement dur-ing a 2014 surge in migrantfamilies. The administrationopted not to implement thepolicy. Instead, it opened asmall number of family deten-tion centers, before a federaljudge ruled children couldn’tbe kept there longer than 20days.

Agents reverted to past pro-cedure, usually detaining theadult men while allowingwomen and children to remaintogether under a form of su-pervised release, according toimmigrant advocates.

Early in the Trump adminis-tration, ICE officials made thesame recommendation to then-Homeland Security SecretaryJohn Kelly, according to a per-son familiar with the matter.By last summer, federal immi-gration officials had startedquietly testing the idea under apilot program that received lit-tle national attention.

In March, Customs and Bor-der Protection officials metwith nonprofit groups to tellthem about a new feature theywere implementing: a familytracking number that wouldhelp keep tabs of members ofthe same family in their elec-tronic system.

Advocates welcomed themove, which they hoped wouldhelp ensure separated familymembers wouldn’t get lost inthe bureaucracy. “I told every-body in our offices around thecountry,” said Jennifer Podkul,policy director for Kids in Needof Defense, which works to

represent children in immigra-tion courts.

They soon figured out thatthe family tracking numberdidn’t translate beyond the Cus-toms and Border Protection sys-tem. In practice, the numberswere useless once a child orparent left the agency’s custody.

In April, the heads of CBP,ICE, and U.S. Citizenship andImmigration Services sent amemo to Homeland SecretaryKirstjen Nielsen suggestingthat all adults caught crossingthe border should be referredfor criminal prosecution, in-cluding parents traveling withtheir children.

Deterrent effectOfficials cited the pilot pro-

gram, saying it was a success-ful deterrent to illegal bordercrossers in that area.

By the time Attorney Gen-eral Jeff Sessions went to SanDiego in May to announce thegovernment’s intention tocriminally prosecute most ev-ery adult who crossed the bor-der illegally, including parents,there were already 700 chil-dren who had been separated.

As the prosecutions steppedup, so did the separations. Af-ter families were arrested, theywere held together in a borderpatrol processing center. Whenthe adults were taken to courtto face misdemeanor charges,the children were deemed “un-accompanied minors” in theirabsence, falling into the care ofHHS’s Office of Refugee Reset-tlement.

The agency’s Unaccompa-nied Alien Children programwas caring for nearly 11,800

children, about 80% of whomhad crossed the border ontheir own. This was the pro-gram the government expectedwould care for separated chil-dren, an administration officialfamiliar the planning said.

Under that program, thegovernment sends unaccompa-nied children to any of the 100shelters around the country in17 states. Then case workersbegin the process of locating anin-country sponsor—typically aparent or other relative alreadyin the U.S. That process takesabout two months and can in-volve DNA testing to verify thelegitimacy of adult sponsors.During that time the childrenusually stay in a shelter.

“The reunification planwould be as it always hasbeen,” Matt Albence, a seniorImmigration and Customs En-forcement official, said Thurs-day.

The ORR process, however,had been “built to reunify chil-dren singly, not in bulk,” Mr.White told District Judge DanaSabraw during a hearing in SanDiego earlier this month. Hesaid simply identifying chil-dren and their parents was acomplicated task. Children fellunder the care of ORR. Parentswere detained by ICE. Customsand Border Protection was re-sponsible for the separation.

Mr. White said the govern-ment had to assemble a datateam with representatives fromthe three different agencies,along with a handful of HHSdata experts. Meanwhile, offi-cials from his office manuallywent through each child’s fileby hand to determine if therewere any red flags before de-ciding if a family could be re-united. Mr. White said the file

2,531 103Total children aged 5 to 17 Children underage of five

1,820 711Ineligable forreunification

Ineligable forreunification

57

Reuniting Families, by the NumbersThe Department of Health and Human Services identified 2,634 minorswho were separated from their families at the border. Some crossedillegally, others arrived at ports of entry and most are seeking asylum.

Select reasons children were ineligable for reunification

Adult red flag from background check

Adult red flag from other case file review

Adult outside the U.S.

Adult location unconfirmed

120

46

431

Children

94

THEWALL STREET JOURNAL.Source: Department of Health and Human Services

total children2,634

46ReunitedReunited

IN DEPTH

The Party’sOver forBridezillas

unification, said at a courthearing that the system wasbeing created anew. “We arebuilding a novel logistical pro-cess,” he said.

The chaos surrounding themammoth reunification task,which had little precedent andno single playbook, showswhat happens on the groundwhen an administration makesor reverses policy on the fly.Immigration lawyers and socialworkers who have long inter-acted with the governmentsaid they have rarely beforeseen such disorder among fed-eral agencies.

The U.S. government hasstruggled for years to dealwith the influx of whole fami-lies seeking asylum, ratherthan the adult men and womenwho traditionally came forwork. Under the Obama admin-istration, a federal judge lim-ited efforts to detain parentsalong with their children whentheir cases were being consid-ered. Since then, parents whoarrive with children have beenallowed to leave detention andmelt into the general popula-tion, sometimes for years.

In this case, the Trump ad-ministration wanted to usefamily separation as a bluntdeterrent to would-be bordercrossers.

Sleepless nightNow, four weeks after the

San Diego judge’s order, thegovernment has succeeded inbringing nearly 1,900 childrenback together again with theirparents, saying it met thecourt-imposed deadline. Yetmore than 700 children arestill separated, and the re-unions haven’t gone smoothly.A 12-year-old Honduran girlspent a sleepless night in aparked car outside a SouthTexas immigration jail waitingfor her mother’s release. An-other Honduran mother wasreunited with the wrong 10-year-old girl.

Homeland Security andHealth and Human Services of-ficials have defended their han-dling of the process, sayingthat relying on the existing sys-tem for unaccompanied minorsensures that no child is placedwith someone who isn’t theirparent or who isn’t otherwisesuitable to take care of them.

“Each step of our process isnecessary to protect children,”Chris Meekins, a top Healthand Human Services official,told reporters two weeks ago.

American Civil LibertiesUnion lawyers said in a courtfiling Wednesday some parentswho the government saysagreed to be deported withouttheir children were misled anddidn’t understand the paper-work they were signing. Thefiling included multiple parentswho said they didn’t intend toleave their children in the U.S.and believed that signing thedocument was the only way toget their kids back. In somecases, according to the filing,the parents are illiterate orspeak an indigenous languageand don’t understand Spanish.

“There has been a lack ofcommunication, a lack of care.This has clearly not beenthought through sufficiently,”said Sister Donna Markham,head of Catholic Charities USA,a national network helping thegovernment to care for familiesafter reunification.


Paulina Gutierrez Alonzo was deported back to Guatemala without her daughter, below; immigrant children in a Texas encampment.

MOISES

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IKEBLAKE

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TERS

lows bachelorette parties buthas set new rules forbidding“veils, tiaras, crowns, balloons,inflatable objects or any otherparaphernalia.”

Men’s prenuptial parties, too,can get out of hand, says KyleSamples, sales manager atLaZoom Tours in Asheville, N.C.It forbids bachelor and bachelor-ette parties alike from its com-edy tours, steering them insteadto its “Band and Beer Tour.”

Compared with the malevariation, though, “it’s mucheasier to spot a bacheloretteparty,” because there tend to beveils, sashes and matchingshirts, says Robbie Goldsmith,


chief executive of Bach Week-end, which organizes pre-wed-ding festivities for men andwomen in Nashville and NewOrleans. Bachelorette partiestend to be larger than stags,says Lauren Kay, deputy editorof The Knot, a wedding-infor-mation website. And, she says,many women visit “more re-fined” places where familiesand couples go.

One such place is MackinawValley Vineyard and Winery incentral Illinois. Bacheloretteparties mingle there with theafter-church crowd, says DianeHahn, an owner of the vineyard.

One day, a bachelorettesported an inflatable hat with a2-foot-high model of male geni-talia. “Deflate that thing,” Ms.Hahn says she ordered. Thewoman complied. The vineyardnow warns bachelorettes itwon’t tolerate the “display ofadult gag gifts.”

Former bachelorette RebeccaNeal, 28, says she “was supersurprised” at the antipathy

when trying to book tickets fora March party with sightseeingcompany NashTrash Tours inNashville, a popular bachelor-ette-party destination.

“NO bachelorette parties,”NashTrash’s website says. “Andplease don’t promise us yourgroup is different from all therest.” It adds: “If your groupbehaves like a bacheloretteparty, you will be charged a$20-per-head penalty fee.”

Ms. Neal, who lives in Sher-man, Texas, and works for ahealth insurer, had gotten a“Gettin’ Hitched” sash and aheadband with an attached “bigveil that stuck up.” Her friendsordered “Bride Tribe” T-shirts.

She says her crew behavedand found other Nashville busi-nesses that “didn’t give off thatnegative no-bachelorettething,” including a carriage-rideoperator that let them loudlysing Spice Girls songs.

NashTrash tour guide SheriLynn Nichols says bachelorette-party participants often be-

haved badly. “I was constantlytelling the bachelorette partiesto be quiet,” she says. “Shut thehell up is more like it.”

A retiree in San Francisco,Barbara Backer says Nashville,Savannah, Ga., and Charleston,S.C., were “absolutely crazy”with bachelorettes on her re-cent trip. “There would be

these ‘woo hoos!’ ”Country-music producer and

songwriter Trey Bruce says hewas at a Nashville intersectionwhen a John Deere tractorrolled by pulling a flatbed trailer“full of drunk girls singing anddancing and holding beers overtheir heads in traffic.”

He texted pictures to hismother, Patsy Bruce, co-writerof the famous country song“Mamas Don’t Let Your BabiesGrow Up to Be Cowboys.”

That led the pair last year tolaunch SongBird Tours, whichexplicitly warns “bacheloretteparties and large groups” thatSongBird is “not a party bus.”

Ms. Bruce says she doesn’tfault bachelorettes for cuttingloose. “Men have been doingthis, hiring strippers, for years.”

Partyers find ways to defybans, including the women thismonth at Wölffer who “snuck ina veil,” says Ms. Tunney, thevineyard’s retail-sales director.They “ran into the vineyard”and posted photos on Insta-gram. The postings, she says,clash with Wölffer’s sophisti-cated ambience.

Bachelorettes whomWölfferrejected saw the photos andgave the winery bad reviews.“It appears we’re two-faced,”Ms. Tunney says. “It’s really, re-ally a problem.”

Stacy Favicchio, 34, whoposted the photos, says hergroup didn’t realize it was do-ing anything wrong. “Everyonetakes themselves so seriously.Come on. Chill out.”

Danielle Cantwell, 35, ofScottsdale, Ariz., says a Nash-ville vacation-rental host re-buffed her after she disclosed inher application that her group’sJune trip was her sister’s bach-elorette party. “I just made surenot to mention it on the nextone,” says Ms. Cantwell, ahome-staging consultant.

Plenty of businesses still woobachelorettes. A number ofNashville tours and “pedal tav-erns”—roving leg-powered barstructures that let as many as16 people bike together betweenpubs—cater to bachelorettes.

And there’s always Vegas.The Las Vegas Convention andVisitors Authority describes thecity as “bachelorette bliss.”

The city is maintaining its“longstanding promise of adultfreedom,” a spokeswoman says.

would include details about achild’s life in their home coun-try, whom they traveled withand additional details abouttheir family structure.

The department initially re-lied on detailed proceduresthat barred the agency from al-lowing parents in jail, either onimmigration or criminalcharges, from sponsoring theirown children for reunification.

On July 12, the Office of Ref-ugee Resettlement told theshelters on a phone call it in-tended to “meet or exceed thecourt deadline,” according topeople who were on the call orbriefed on it. The office laidout a truncated process thatwaived the exhaustive proto-cols it had been using.

The next day, an HHS offi-cial told the court the agencywould speed up reunificationsby streamlining the processbut warned that children couldbe endangered, possibly beingplaced with adults who weren’ttheir parents.

Advocates had been relyingheavily on the government’sonline inmate locator to keeptrack of clients, said ChristieTurner, deputy director of legalservices at the legal groupKIND. The system hasn’t al-ways been reliable, she said,and it has become even worseas ICE struggles to update dataquickly enough.

“It’s very hard for us to getinformation about what is hap-pening to some children oradults we’re working with,”Ms. Turner said. “Some peoplehave disappeared from the sys-tem.”

Wrong childHouston lawyer Pierre

Grosdidier represents a Hon-duran mother who was ini-tially reunited at a jail inSouth Texas with a child whowasn’t hers. His client and herchild, whom he declined toidentify, were reunited hourslater that day.

A spokesman for the De-partment of Health and HumanServices, which oversees thecare of separated children, re-ferred questions on this case tothe Department of HomelandSecurity. ICE said it “has noevidence that this alleged inci-dent occurred” and can’t inves-tigate it without specific infor-mation.

Outside the Port Isabel De-tention Center in South Texas,a 12-year-old Honduran girlnestled into the back seat of acar with three other childrenlast Monday.

For the next 13 hours, shesat upright, unable to sleep,squeezing a stuffed bunny tohelp pass the time, her mothersaid, relaying what she saidher daughter told her.

The mother said she waspulled out of her room onMonday afternoon, told shewas being released. She endedup spending the night in a pro-cessing cell where she said itbecame clear her papersweren’t ready.

When the mother was re-leased the next morning, meet-ing her daughter at a nearbyshack, she said her daughterasked her: “Why didn’t youcome out to me?”

In a written statement, ICEblamed processing delays forthe mix-up. The agency said ithas since improved the pro-cessing capacity at the jail andmost children are reunitedwith their parents within hoursof arriving.

“The safety and well-beingof children remains our toppriority as we work to complywith the court’s order as expe-ditiously as possible,” theagency said.

—Arian Campo-Florescontributed to this article.

A hotel bans ‘veils,tiaras, crowns,balloons, inflatableobjects.’

Chaos ofReunitingFamilies


Tulare, Calif.

I t’s 105 degrees as I standwith Rep. Devin Nunes on hisfamily’s dairy farm. Mr.Nunes has been feeling evenmore heat in Washington,

where as chairman of the HouseSelect Committee on Intelligencehe has labored to unearth the truthabout the Federal Bureau of Inves-tigation’s activities during and af-ter the 2016 presidential campaign.Thanks in large part to his work,we now know that the FBI used in-formants against Donald Trump’scampaign, that it obtained surveil-lance warrants based on opposi-tion research conducted for HillaryClinton’s campaign, and that afterthe election Obama administrationofficials “unmasked” and moni-tored the incoming team.

Mr. Nunes’s efforts have pro-voked extraordinary partisan andinstitutional fury in Washington—across the aisle, in the FBI andother law-enforcement and intelli-gence agencies, in the media. “Onany given day there are dozens ofattacks, each one wilder in itsclaims,” he says. Why does he keepat it? “First of all, because it’s myjob. This is a basic congressionalinvestigation, and we follow thefacts,” he says. The “bigger pic-ture,” he adds, is that in “a lot ofthe bad and problematic countries”

that Intelligence Committee mem-bers investigate, “this is what theydo there. There is a political partythat controls the intelligence agen-cies, controls the media, all to en-sure that party stays in power. Ifwe get to that here, we no longerhave a functioning republic. Wecan’t let that happen.”

Mr. Nunes, 44, was elected toCongress in 2002 from CentralCalifornia. He joined the Intelli-gence Committee in 2011 anddelved into the statutes, standardsand norms that underpin U.S. spy-ing. That taught him to look for“red flags,” information or eventsthat don’t feel right and indicate adeeper problem. He noticed somesoon after the 2016 election.

The first: Immediately afterjoining the Trump transition team,Mr. Nunes faced an onslaught ofleft-wing claims that he might bein cahoots with Vladimir Putin. Itstarted on social media, thoughwithin months outlets such asMSNBC were openly asking if hewas a “Russian agent.” “I’ve beena Russia hawk going way back,” hesays. “I was the one who only sixmonths earlier had called theObama administration’s failure tounderstand Putin’s plans and in-tentions the largest intelligencefailure since 9/11. So these attacks,surreal—big red flag.”

Mr. Nunes would later come tobelieve the accusations marked thebeginning of a deliberate campaign

by Obama officials and the intelli-gence community to discredit himand sideline him from any over-sight effort. “This was November.We, Republicans, still didn’t knowabout the FBI’s Trump investiga-tion. But they did,” he says. “Therewas concern I’d figure it out, sothey had to get rid of me.”

A second red flag: the suddenrush by a small group of Obama of-ficials to produce a new intelligenceassessment two weeks before Presi-dent Trump’s inauguration, claim-ing the Russians had acted in 2016specifically to elect Mr. Trump.“Nobody disagrees the Russianswere trying to muddy up HillaryClinton. Because everyone on theplanet believed—including the Rus-sians—she was going to win,” Mr.Nunes says. So it “made no sense”that the Obama administration was“working so hard to make the flipargument—to say ‘Oh, no, no: Thiswas all about electing Trump.’ ”The effort began to make moresense once that rushed intelligenceassessment grew into a centralpremise behind the theory that Mr.Trump’s campaign had colludedwith the Russians.

January 2017 also brought then-FBI Director James Comey’s ac-knowledgment to Congress—thepublic found out later—that thebureau had been conducting acounterintelligence investigationinto the Trump campaign since theprevious summer, and that Mr.Comey had actively concealed theprobe from Congress. Months ear-lier, when Mr. Nunes had seen me-dia stories alluding to a Trump in-vestigation, he’d dismissed them.“We’re supposed to get briefed,”he says. “Plus, I was thinking:‘Comey, FBI, they’re good peopleand would never do this in anelection. Nah.’ ”

When the facts came out, Mr.Nunes was stunned by the formthe investigation took. For yearshe had been central in updatingthe laws governing surveillance,metadata collection and so forth.“I would never have conceived ofFBI using our counterintelligencecapabilities to target a politicalcampaign. If it had crossed any ofour minds, I can guarantee we’dhave specifically written, ‘Don’t dothat,’ ” when crafting legislation,he says. “Counterintelligence islooking at people trying to stealour nation’s secrets or workingwith terrorists. This if anythingwould be a criminal matter.”

Then there was the ChristopherSteele dossier, prepared for Mrs.Clinton’s campaign by the opposi-tion-research firm Fusion GPS.Top congressional Republicansgot a January 2017 briefing aboutthe document, which Mr. Comeylater described as “salacious andunverified.” Mr. Nunes remembersMr. Comey making one otherclaim. “He said Republicans paidfor it. Not true.” Mr. Nunes re-calls. “If they had informed usHillary Clinton and Democratspaid for that dossier, I can guar-antee you that Mitch McConnelland Paul Ryan would havelaughed and walked out of thatmeeting.” The Washington FreeBeacon, a conservative website

funded by hedge-fund managerPaul Singer, had earlier hired Fu-sion GPS to do research on Mr.Trump, but the Beacon’s editorshave said that assignment did notoverlap with the dossier.

All these red flags were morethan enough to justify a congres-sional investigation, yet Mr. Nunessays his sleuthing triggered a neweffort to prevent one. He had beentroubled in January 2017 whennewspapers published leaked con-versations between Mike Flynn, Mr.Trump’s first national security ad-viser, and the Russian ambassador.The leak, Mr. Nunes says, involved“very technical collection, nearlythe exact readouts.” It violatedstrict statutory rules against “un-masking”—revealing the identitiesof Americans who are picked uptalking to foreigners who are underU.S. intelligence surveillance.

Around the time of the Flynnleak, Mr. Nunes received tips thatfar more unmasking had takenplace. His sources gave him spe-cific document numbers to proveit. Viewing them required Mr.Nunes to travel in March to a se-cure reading room on White Housegrounds, a visit his critics wouldthen spin into a false claim that hewas secretly working with Mr.Trump’s inner circle. They also as-serted that his unmasking revela-tions amounted to an unlawful dis-closure of classified information.

T hat prompted a House EthicsCommittee investigation. InApril 2017, Mr. Nunes

stepped aside temporarily fromthe Russia-collusion piece of hisinquiry, conveniently for thosewho wished to forestall its prog-ress. Not until December did theEthics Committee clear Mr. Nunes.“We found out later,” he says,“that four of the five Democratson that committee had called forme to be removed before this evengot rolling.”

Meantime, the Intelligence Com-mittee continued the Russia-collu-sion probe without Mr. Nunes. InOctober 2017 news finally becamepublic that the Steele dossier had

been paid for by the Clinton cam-paign. This raised the question ofhow much the FBI had relied onopposition research for its warrantapplications, under the Foreign In-telligence Surveillance Act, to spyon onetime Trump campaign aideCarter Page. Throughout the fall,the Justice Department refused tocomply with Intel Committee sub-poenas for key dossier and FISAdocuments.

By the end of the year, Mr.Nunes was facing off with the Jus-tice Department, which was givena Jan. 3, 2018, deadline to complywith Congress’s demands for infor-mation. The New York Timesquoted unnamed government offi-cials who claimed the Russia in-vestigation had hinged not on thedossier but on a conversation withanother low-level Trump aide,George Papadopoulos. The nextday, the Washington Post ran astory asserting—falsely, Mr. Nunesinsists—that even his Republicancolleagues had lost confidence inhim. “So, a leak about how thedossier doesn’t matter after all,and another saying I’m out therealone,” he says. “And right thenDOJ and FBI suddenly demand aprivate meeting with the speaker,where they try to convince him tomake me stand down. All this isnot a coincidence.”

But Mr. Ryan backed Mr. Nunes,and the Justice Department pro-duced the documents. The resultwas the Nunes memo, released tothe public in February, which re-ported that the Steele dossier hadin fact “formed an essential partof the Carter Page FISA applica-tion”—and that the FBI had failedto inform the FISA court of thedocument’s partisan provenance.“We kept the memo to fourpages,” Mr. Nunes says. “Wewanted it clean. And we thought:That’s it, it’s over. The Americanpublic now knows that they wereusing dirt to investigate a politicalcampaign, a U.S. citizen, and ev-eryone will acknowledge the scan-dal.” That isn’t what happened. In-stead, “Democrats put out theirown memo, the media attacked us

more, and the FBI and DOJ con-tinue to obfuscate.”

It got worse. This spring Mr.Nunes obtained information show-ing the FBI had used informants togather intelligence on the Trumpcamp. The Justice Department isstill playing hide-and-seek withdocuments. “We still don’t knowhow many informants were runbefore July 31, 2016”—the officialopen of the counterintelligence in-vestigation—“and how much theywere paid. That’s the big outstand-ing question,” he says. Mr. Nunesadds that the department and theFBI haven’t done anything aboutthe unmaskings or taken actionagainst the Flynn leakers—be-cause, in his view, “they are toobusy working with Democrats tocover all this up.”

He and his committee col-leagues in June sent a letter ask-ing Mr. Trump to declassify atleast 20 pages of the FISA applica-tion. Mr. Nunes says they are criti-cal: “If people think using the Clin-ton dirt to get a FISA is bad, whatelse that’s in that application iseven worse.”

Mr. Nunes has harsh words forhis adversaries. How, he asks, canhis committee’s Democrats, whospent years “worrying about pri-vacy and civil liberties,” be soblasé about unmaskings, surveil-lance of U.S. citizens, and intelli-gence leaks? On the FBI: “I’m notthe one that used an unverifieddossier to get a FISA warrant,” Mr.Nunes says. “I’m not the one whoobstructed a congressional investi-gation. I’m not the one who liedand said Republicans paid for thedossier. I’m just one of a few peo-ple in a position to get to the bot-tom of it.” And on the press: “To-day’s media is corrupt. It’s chosena side. But it’s also making itselfirrelevant. The sooner Republicansunderstand that, the better.”

H is big worry is that Republi-cans are running out of timebefore the midterm elec-

tions, yet there are dozens of wit-nesses still to interview. “But thiswas always the DOJ/FBI plan,” hesays. “They are slow-rolling, be-cause they are wishing and bettingthe Republicans lose the House.”

Still, he believes the probe hasyielded enough information tochart a path for reform: “We needmore restrictions on what you canuse FISAs for, and more restric-tions on unmaskings. And we needreal penalties for those who vio-late the rules.” He says his investi-gation has also illuminated “theflaws in the powers of oversight,which Congress need to reinstatefor itself.”

Mostly, Mr. Nunes feels it hasbeen important to tell the story.“There are going to be two histo-ries written here. The fiction ver-sion will come from an entireparty, and former and even cur-rent intelligence heads, and themedia, who will continue trying tocover up what they did,” he says.“It’s our job, unfortunately, towrite the nonfiction.”

Ms. Strassel writes the Journal’sPotomac Watch column.

Washington’s Public Enemy No. 1

KENFA

LLIN

What did the FBI do in the2016 campaign? The headof the House inquiry onwhat he has found—andquestions still unanswered.

THE WEEKEND INTERVIEW with Devin Nunes | By Kimberley A. Strassel

OPINION

Wolves Attack Wisconsin With Washington’s HelpMilwaukee

When the Trumpadministration an-nounced a plan lastweek to overhaul theEndangered SpeciesAct, the frantic reac-tions were illus-trated with picturesof humpback whalesand baby bald ea-gles. But a much bet-

ter way to understand what Republi-cans have in mind is to considerWisconsin’s wolf problem.

Paul and Judy Canik raise bighornand hair sheep near the small town ofButternut. Their herd has grown toabout 400, each sheep worth around$1,500. Guarding the prized flock arenine Spanish mastiffs, worth $2,500apiece. While checking on their ani-mals two years ago, the Caniks foundthat 17 pregnant ewes and one doghad been killed by wolves. All that re-mained of the dog was its skull. Thiswas the second mastiff wolves hadeaten on their property. Last fall onthe nearby farm of Daniel and KathyPostical, wolves killed three angusbeef calves.

The Caniks “worry all the time”and count their sheep every day.“There’s a place for wolves, but nothere on the farms,” says Ms. Canik.“In summers like this with the win-dows open I can’t sleep when I hearthe dogs barking.”

Since gray wolves in Wisconsin,Michigan andMinnesota are protectedunder the Endangered Species Act,

farmers are forbidden to shoot thepredators that devour their livestock.The penalty for “knowingly violating”the law can reach $50,000 and a yearin prison. But after decades of federalprotection, the wolves have more thanrebounded.

In 2011 the Fish and Wildlife Ser-vice determined that the wolves hadrecovered sufficiently in the GreatLakes region and could be delisted.For a short time, states like Wiscon-sin gained the authority to managetheir wolf populations. But in 2014 a

federal court put the wolves back un-der protection. The judge ruled, in thewords of one news report, that theFWS had failed to consider properly“whether the animal had recovered inother parts of the country where itcould live and whether the Midwest-ern states had adequate plans in placeto protect them.”

Now the FWS is making anotherattempt. The agency announced inJune that it would analyze data onthe wolves’ historical range and re-covery. Depending on the findings, anew proposal to delist could beready by the end of the year. Con-gress is trying to solve the problem

by including language to delist thewolves in the Interior Department’s2019 appropriations bill.

All this is good news for Wiscon-sin’s farmers. In the short period af-ter 2011 when the state had controlover its wolf population, the systemworked, according to Laurie Groskopfof the Wisconsin Wolf Facts blog. “Byallowing Wisconsin to do the man-agement,” she says, “particularly re-sponding to agricultural attacks andharassment, we know from experi-ence in the three years where we didmanage them, the number of inci-dents will decrease.”

The Great Lakes wolf populationcontinues to rise. Wisconsin’s mostrecent numbers, from 2016-17, showthe state had between 905 and 944wolves. Michigan’s count was 662,mostly confined to the state’s UpperPeninsula. Minnesota had 2,856wolves, which now are being blamedfor a worrying decline in the moosepopulation.

Although the Endangered SpeciesAct is a federal law, some statescompensate farmers for the damagewolves cause. Last year Wisconsinpaid $256,148, according to the Mil-waukee Journal Sentinel, up morethan 25% from 2016. The Caniks re-ceived $800 a sheep, $1,500 for thefirst dog, and $2,500 for the second.With the help of the U.S. AgricultureDepartment, they put in an electricfence that, so far, has kept thewolves away.

The state paid the Posticals about$200 per calf, even though they say

the beef could have eventually soldfor upward of $800. They installed anelectric fence, too, but the wolveshave learned how to crawl under thewire. The Posticals worry what mayhappen the next time they haveyoung cattle.

Once the wolves are delisted, Wis-consin could allow farmers to shootthe predators coming after their ani-mals. The state could set up huntingseasons, which would help control thepopulation without putting the spe-cies back in danger. “Wolves wereeliminated in the past because therewas a very large bounty on them, andother methods we would never usewere being used, such as poison,” Ms.Groskopf says. “Simply using trappingand hunting and response to inci-dents could never ever eliminate

them. The main problem will be theirnumbers continuing to increase inspite of these controls.”

Delisting the gray wolves in theGreat Lakes region would be a signifi-cant delegation of authority back tothe states, giving Wisconsin, Minne-sota and Michigan the power to de-cide how to control their wolf popula-tions. Since state legislators arecloser to the citizens, they’re moreattuned than the federal governmentto the needs of farmers in Butternut.That’s why delisting would be a winnot only for the Caniks and Posticalsbut also for federalism and propertyrights.

Ms. Petersen is a writer and re-search associate at the Wisconsin In-stitute for Law & Liberty.

Why do Republicans wantto update the EndangeredSpecies Act? Here’s apredatory case study.

CROSSCOUNTRYBy CoriPetersen

Seth Ackerman writing July 19 atJacobin.com:

Wrong-footing Trump politicallyis a noble goal. But outside the self-enclosed vivarium that is the Twit-ter-cable-news-late-night-show axis,nobody actually cares about the Rus-sia issue. In last month’s Gallup poll,less than 0.5 percent of Americansmentioned “the situation with Rus-sia” as the most important problemfacing the country—coming in justbehind “Children’s behavior/Waythey are raised” and far behind

“Poverty/Hunger/Homelessness.” . . .Think of it as “the expressive

function of the Russia freakout.” Justas there is what Cass Sunstein called“the expressive function of law”—“the function of law in ‘making state-ments’ as opposed to controlling be-havior”—there’s a purpose served bythe constant keening over Putin. Itconveys liberals’ sense of bewilder-ment and disorientation at a countrythey no longer recognize—a feelingnot so different from that which mo-tivated the Right’s manifold freak-outs in the Obama era.

Notable & Quotable: Russia


Bucket Lists Reflect One’s Philosophy, GoalsMy wife and I thoroughly enjoyed

“It’s Time to Kick the Bucket List”(Review, July 21), particularly sincewe’ve seen Notre Dame, the SistineChapel and St. Pat’s, visited the For-bidden City, toured the Taj Mahal andjust returned from Little Bighorn.

My wife won’t let me call it abucket list, as she thinks that’s toomorbid. It’s our “trophy list,” the re-wards of a brief military career andslaving and saving in corporate Amer-ica for more than 35 years. For us, it’sabout having wonderful new experi-ences. We’ve crossed paths with pen-guins in Antarctica, swum with seaturtles in the Galápagos, climbed theGreat Wall in China, looked leopardsin the eye in Botswana and flown apowered hang glider over VictoriaFalls. We even moved to New YorkCity for three months in 2016.

The list never gets shorter, only lon-ger. Next year, we’ll stand on thebeaches of Normandy and honor theGreatest Generation at the 75th anni-versary of the D-Day landings. In 2020,we’ll celebrate relief from the bubonicplague by watching the decennial Pas-sion Play in Oberammergau.

But finding the Holy Grail? Thathappened when I saw my 8-year-oldgrandson’s smile as a hyena camedown the aisle in Broadway’s “TheLion King” and looked him straight inthe face, when my young granddaugh-ter, dressed as Belle, curtsied anddanced with the Beast in his castle atWalt Disney World and when I heldmy newly born twin granddaughtersin my arms for the first time. It’s allabout priorities.

JAY JOYCECincinnati

This morning, I marveled at awak-ing at age 85, almost, my body intact,almost, still enjoying life, mostly,with some capacity remaining to ex-ercise the free will also granted bynature, maybe, or a higher power.

I am particularly taken by the palmtrees outside the bedroom in South-ern California that I share with mywife of 60 years. It was an item fromthe bucket list made decades ago insuburban Boston.

The writer misses a major point ofthe good life. It is not, as he belabors,that since everyone wants to do thesame thing, those things lose theirvalue. They do not.

How many Jews before me havestood at Jerusalem’s Western Wallafter a long journey, placed theirhands and forehead on it and prayedand bawled their hearts out, over-come by sharing the experience ofthousands for more than two millen-nia? For each individual, it is his orher first time.

STEPHEN N. MILLEREncinitas, Calif.

The author’s polemic againstbucket lists overlooks their coreprinciple: self-reflection. If Stone-henge and Machu Picchu are really asinterchangeable in one’s mind asitems No. 6 and No. 12 on a list, thenit doesn’t matter which you visit. Butthe point of a bucket list isn’t to re-place FOMO, fear of missing out,with bragging rights. It is a confron-tation of mortality, a chance to con-sider the goals you have in life andthe broader values they represent.What is it about those experiencesthat brings you such a feeling ofcompletion, and how can you inte-grate that into your daily life?

The writer’s advice to hold off ona bucket list until retirement de-prives us of the opportunity to trackour major life goals and see how weprogress toward them, or to changeour priorities over time. If the topitem on your bucket list is to writethe Great American Novel andyou’ve never written so much as ablog post, it’s time to consider whyyou fixated on that goal in the firstplace.

Even if you fail to cross a singleitem off your list, the examination ofwhat you want to experience in lifeand why is intrinsically valuable. Thetrue goal isn’t to cram a lifetime’sworth of hedonistic indulgences intoa few retirement years but to gain theself-knowledge necessary to live a lifewithout regret.

SIMON STAHLOakland, Calif.

LETTERS TO THE EDITOR

Letters intended for publication shouldbe addressed to: The Editor, 1211 Avenueof the Americas, New York, NY 10036,or emailed to [email protected]. Pleaseinclude your city and state. All lettersare subject to editing, and unpublishedletters can be neither acknowledged norreturned.

“Don’t you have any souvenirsthat just say ‘Earth’?”

THEWALL STREET JOURNAL

Letter Writers Don’t Get Ride-Hailing AppsRegarding James Parrott and Mi-

chael Reich’s “A Wage Hike for DriversWouldn’t Sink Ride Services” (Letters,July 14): They state that a wage in-crease would be beneficial to driversand sustainable to the firms in anoversaturated market. If we acceptthat the market is “oversaturated,”the basic economic law of supply anddemand tells us that a reduction insupply is necessary. If we increase op-erating costs in an oversupplied mar-ket, we don’t improve the odds forsuccess. Simple.

They say that the ride-dispatch in-dustry inefficiently allocates rides, re-ducing driver earnings. Ride-hailingapps are industry disrupting due to al-location efficiency. A driver headingout can check the app for fares goingin the same direction and add anotherrider. Two riders, one car, and thedriver makes money. That is market-disrupting efficiency.

Messrs. Parrott and Reich discuss(evil) industry margins of 600%(though with very little going to driv-ers), qualifying 40% of drivers for

Medicaid and almost one in five forfood stamps. What’s missing? A driverworking only three hours a week is a“driver” and may qualify for aid. Onemay also question how someone whoqualifies for Medicaid or food stampscan own a vehicle meeting ride-hailingcompany standards.

The assertion that their formulawill limit cars on the streets is fan-tasy. Cars are on the street becausepeople need to move. The ride-hailingapps reduce trip duplication. If thewriters have such a great idea, letthem implement it and reap the re-wards. That’s how it really works.

ED BEERYCentennial, Colo.

Papa John Defends HimselfLarge, Plain and Proud

It has been widely reported that ina diversity media-training session Iused a racial slur. As your article“Discord Presaged Papa John’s Fall”(page one, July 25) correctly reports,I didn’t use that word as a racial epi-thet. What isn’t included in yourstory is the fact that I used thatword to condemn racism. In responseto a series of questions, includingone asking whether I was racist, Ianswered no, and said, unlike an-other food-industry spokespersonwho used that word, I never use itnor does anyone to my knowledge atPapa John’s.

JOHN SCHNATTERFounder, Papa John’s

Louisville, Ky.

Is the FTC’s Abusive CyberPolicy Part of a New Trend?

Craig A. Newman describes theFTC using “Tiversa’s data without do-ing any substantive verification”(“The FTC’s Abusive Cyber Enforce-ment,” op-ed, July 25). Isn’t this ex-actly what the FBI did with the Steeledossier? Maybe this is the new nor-mal for our bureaucracy.

MICHAEL P. CARTERSavannah, Ga.

Pepper ...And Salt

The Laws of War Didn’tImpede Past U.S. Victories

In a July 24 letter, Samuel Frazer al-most seems to imply that the laws ofwar didn’t apply during World War II,and that in recent times they have im-peded U.S. military operations. Effortsto create modern-day rules on warfarebegan over 150 years ago and culmi-nated in the Geneva Conventions andother treaties, many of which weresigned and ratified by the U.S. Even be-fore both world wars, The Hague Con-ventions prohibited the killing ofwounded soldiers, using weapons in away to cause unnecessary suffering andattacking undefended towns, amongother rules. Their adoption didn’t comeabout because of weakening Americanresolve in combat. Political leaders andbattlefield commanders around theworld saw the horrors of war and de-cided that adherence to stronger anddetailed standards would better protectour service members who may have tomake the ultimate sacrifice.

MICHAEL RHEENew York Law School

New York

China’s Vaccine Scandal

X i Jinping boasts that he is building the“Chinese Dream” of a strong and pros-perous nation, but the vision of China’s

supreme leader is losing someof its luster. Over the past cou-ple of weeks parents in Chinahave learned that a compul-sory public-health program in-jected an unknown number ofchildrenwith substandard vac-cines. They are understandably furious.

Mr. Xi called the case “hideous and appall-ing,” and he has promised a thorough investiga-tion. But websites and state-runmedia are onlyallowed to republish official pronouncementson the case, suggesting the authorities are stillcovering up the extent of the crime.

Last November officials in Jilin provincefound that the Changsheng Biotechnology Co.falsified production data for a diphtheria,pertussis and tetanus (DPT) vaccine. Afternational regulators found similar problemswith Changsheng’s rabies vaccine this month,the provincial government revealed thatproblems with the DPT vaccine affected morethan 250,000 doses. Another company in Wu-han was responsible for 400,000 faulty DPTinjections.

On July 21 an anonymous report on theWeChat messaging platform, similar toWhats-App, accused corrupt regulators of hiding theproblems of vaccines made by Changsheng.That was plausible because officials have beendisciplined for taking bribes from the companyin the past. Online expressions of anger at thescandal exploded.

Chinese are particularly angry because simi-lar cases have happened in recent years, fol-lowed by similar promises to crack down. In2010 and 2013 hundreds of children were hospi-talized and several died from faulty vaccines.

Chinese companies have used official connec-tions to avoid accountability for producing arange of defective products that kill and maim.

In 2008 Chinese dairy compa-nies knowingly sold infantformula that contained mela-mine, a chemical that dam-aged the kidneys of hundredsof thousands of children. Atleast six died. A decade later,

many parents will only feed their children im-ported formula.

The official response follows a familiar pat-tern. Journalists and lawyers who try to followup or investigate similar cases are jailed. Theofficials responsible are transferred to newposts, having learned that covering up scan-dals is more important than preventing them.Sun Xianze, one of the food-safety regulatorsdisciplined in the 2008 dairy scandal, was incharge of drug safety until his retirement inMarch.

The scandal will hurt Mr. Xi’s plan to buildthe pharmaceutical industry as part of his“Made in China 2025” industrial policy. But thedamage to the public’s faith in his administra-tion is harder to quantify. Because the Commu-nist Party is effectively above the law and Chinalacks a free media capable of being a watchdog,his promise to get to the bottom of the problemrings hollow.

Officials insist that Mr. Xi’s anticorruptioncampaign is a serious attempt to improve Com-munist Party governance and not merely a toolto remove political opponents. Ordinary Chi-nese can be forgiven for reaching a differentconclusion as the health of children is sacri-ficed to protect the Party’s power. And Ameri-cans enamored of China’s supposed authoritar-ian efficiency might contemplate the cost of itslack of accountability.

Children get phonyprotection but officialsaren’t held accountable.

REVIEW & OUTLOOK

OPINION

The Return of 3% Growth

S omuch for “secular stagnation.” You re-member that notion, made fashionableby economist Larry Summers and picked

up by the press corps to ex-plain why the U.S. economycouldn’t rise above the 2.2%doldrums of the Obama years.Well, with Friday’s report of4.1% growth in the secondquarter, the U.S. economy hasnow averaged 3.1% growth forthe last six months and 2.8%for the last 12.

The lesson is that policies matter and sodoes the tone set by political leaders. For eightyears Barack Obama told Americans that in-equality was a bigger problem than slow eco-nomic growth, that stagnant wages were thefault of the rich, and that government throughregulation and politically directed credit couldcreate prosperity. The result was slow growth,and secular stagnation was the intellectual at-tempt to explain that policy failure.

The policymix changedwith Donald Trump’selection and a Republican Congress to turn itinto law. Deregulation and tax reformwere thefirst-year priorities that have liberated risk-tak-ing and investment, spurring a revival in busi-ness confidence and growth to give the long ex-pansion a second wind.

i i i

The nearby chart shows GDP growth byquarter over the last four years. The numbersshow that the long, weak expansion that beganin mid-2009 had flagged to below 2% growthin the last half of 2015 and in 2016. Nonresiden-tial fixed investment in particular had slumpedto an average quarterly increase of merely 0.6%in those final two years of the Obama Presi-dency. An economicexpansion that was al-ready long in the toothbegan to fade andcould have slid into re-cession with a nega-tive shock.

The Paul Ryan-Don-ald Trump growthagendawas targeted torevive that investmentweakness. Deregulationsignaled to businessthat arbitrary enforce-ment and compliancecosts wouldn’t be im-posed on ideologicalwhim. Tax reformbroke thebottleneckoncapitalmobility and in-vestment from the highest corporate tax rate inthe developedworld. Above all, the politicalmes-sage from Washington after eight years is thatfaster growth is possible and investment to turna profit is encouraged.

The chart and the second-quarter GDP reportshow that this policy mix is working. Growthpopped to a higher plane of nearly 3% in themid-dle of 2017 as business and consumer confidenceincreasedwith the TrumpAdministration’s poli-cies taking center stage. A growth dip in the lastquarter of 2017 on tax-reform uncertainties car-ried over to the start of the first quarter, butgrowth has since accelerated.

The acceleration has been driven by businessinvestment, which increased 6.3% in 2017 andhas averaged 9.4% in the first half of 2018. Thisinvestment surge has come in productive areaslike equipment and commercial construction.It has not come from padding inventories thathave to be sold down, or in a housingmania likethe one that drove growth in the mid-2000s.

Both housing and inventories subtracted fromgrowth in the second quarter.

It would be nice to think that all Americanswould take satisfaction in thisgrowth. But in the polarizedpolitics of 2018, the same peo-ple who said this growth re-vival could never happen arenow saying that it can’t last.It’s a “sugar high,” as Mr.Summers has put it, due toone-time boosts like govern-

ment spending and consumption.But there are reasons to think that a 3%

growth pace can continue with the right poli-cies. The investment boomwill drive productiv-ity gains and job creation that will flow tohigher wages and lift consumer spending. In-ventories will have to be replenished and newhousehold formation is increasing again, whichshould help housing demand.

Most intriguing is that the government’s an-nual revisions to long-term GDP on Fridayshowed a sharp increase in the personal savingsrate. The increase was due to an upward revi-sion in wages and salaries and jumped to 6.7%from 3.4% for 2017 and averaged 7% in the firsthalf of this year. That’s about $500 billionmorein the pockets of Americans than previously es-timated and helps to explain why consumerspending has remained strong.With tight labormarkets, consumer spending should keep con-tributing to growth.

i i i

There are risks to this outlook, not least fromMr. Trump’s tariff policies. This is the Presi-dent’s version of Mr. Obama’s regulatory as-sault, with arbitrary victims, uncertainty thatlimits business investment, and the risks of es-

calation. Mr. Trumpcrowed at the WhiteHouse on Friday thathis trade policies arehelping the economy,but the second-quarterlift from net exportsisn’t likely to last amidforeign retaliation forhis steel and aluminumtariffs.

The way to help theeconomy is for Mr.Trump to build on thisweek’s trade trucewith the EuropeanUnion, withdraw thetariffs on both sides,and work toward a“zero tariff” deal.

Meantime, wrap up the Nafta revision withMexico and Canada within weeks so Congresscan approve it this year. Mr. Trump could claimhe had honored another campaign promisewhile removing a pall on investment.

The othermajor risk is the Federal Reserve’sattempt to unwind the extraordinarymonetarypolicies of the last decade. If near-zero ratesand trillions in bond-buying lifted asset pricesartificially, as some our friends think, then re-versing those policies could cause those pricesto fall with uncertain results.

All of which is another reason to thank taxreform and deregulation for unleashing animalspirits and giving the expansion renewed life.It’s worth recalling that not a single Democratin Congress voted for tax reform and nearly allof them opposed every vote to repeal theObama Administration’s onerous rules. Hadthey prevailed, we’d still be experiencing secu-lar stagnation instead of arguing if 4.1% growthis too much of a good thing.

Tax reform andderegulation have liftedthe economy out of theObama doldrums.


OPINION

accord special protections to civil-ians, prisoners of war and the in-firm. They stipulate which actionsare and are not appropriate in war-time, instituting an infrastructure ofnorms that has saved millions oflives.

In similar fashion, our societycould benefit from adopting certainconventions to limit the scope andseverity of the culture wars—ageneral set of guidelines clarifyingacceptable tactics in political war-fare. By necessity, such normswould in substantial part be so-cially, not legally, enforced. Theirpurpose would be to limit the dam-age the culture wars do to our civichealth.

First, we must agree on the needto shield communal spaces from po-liticization—just as schools, hospi-tals and places of worship are pro-tected from military strikes in timesof armed conflict.

Second, we must work togetherto resist the politicization of every-thing. Just as the rules of war pro-hibit military attacks that inflict

undue burdens on civilian life, weshould condemn culture-war tacticsthat cause unnecessary damage tocivil society. Denouncing those whopoliticize things that should not bepoliticized—even when we agreewith their political cause—is theonly way to ensure proportionalityin the culture wars.

Third, we must discourage ha-rassment of public figures and in-cursions into their private lives.Just as combatants and POWs areaccorded certain rights in wartime,government officials and otherswho participate in politics deserveprivacy and respect, no matter howintense the culture wars become. Iapplaud Senate Minority LeaderChuck Schumer for upholding thisprinciple last month, when heroundly condemned harassment ofTrump administration personnel.Reinforcing this norm, as Mr.Schumer did, is essential to creat-ing a safe environment that contin-ues to attract good people to publicservice.

Fourth, liberals and conservatives

Geneva Conventions for the Culture War

A n angry mob recently cor-nered Homeland SecuritySecretary Kirstjen Nielsenin a Washington restau-rant, jeering and chanting

until she left. That same week, aVirginia restaurant refused serviceto White House press secretarySarah Huckabee Sanders. Days later,a group of angry men came withininches of Transportation SecretaryElaine Chao’s face, screaming andposturing in an attempt to physi-cally intimidate her.

America’s culture war hasreached a tipping point. While ourpolitics have always been divisive,an underlying commitment to civil-ity has usually held citizens on both

sides together. As the partisan di-vide deepens, it becomes clear thatwe need to take meaningful stepstoward de-escalation. Somethingmust change before anger succumbsto violence.

To be clear, I am not calling foran end to the culture war. Indeed, itcan and must be fought. Intensedisputes over social issues are afeature, not a flaw, of a functioningdemocracy.

I am, however, calling for a dra-matic reassessment of tactics. Weneed a détente in partisan hostili-ties, an easing of tensions that canbe realized when both sides adoptcertain rules of engagement—normsto rein in the worst excesses of theculture wars.

Foremost among these normsshould be a commitment to prevent-ing communal spaces from becom-ing politicized. Even in our most di-vided times, there have been placeswe could go to escape the partisanclamor—places where we couldleave politics at the door and cometogether as one, including restau-rants, theaters, sports arenas andhouses of worship.

Insulating such spaces from po-liticization is a matter of urgent ne-cessity. A concerted effort is underway to transform these neutralzones into partisan battlegrounds.Consider the calls from progressivegroups to boycott Chick-fil-A oreven ban it from certain cities; thecontroversy surrounding the Na-tional Football League’s national an-them policy; or the wholly unorigi-nal acceptance speech-cum-politicaljeremiad of every Hollywood awardsshow.

The assault on communal spacesis a subset of the politicization of ev-erything—the culture war equivalentof a scorched-earth policy. It is anattempt to burn away the last ves-tiges of civility and common causealong the march to political domina-tion. Everything—from chicken sand-wiches to prom dresses and evencartoon frogs—can be weaponizedfor political purposes. In this world,there is no neutral territory: Everyplace is a battlefield, everything is aweapon, and everyone is a soldier inthe great culture war.

Activists on both sides of the po-litical spectrum can turn back thetide of war by adopting certain con-ventions for cultural combat.

As an analogy, consider thenorms regulating armed conflict.The Geneva Conventions have beenenormously effective in restrainingthe terrors of modern warfare.Among other things, these treatiesban the use of certain weapons and

alike should commit themselves torhetorical disarmament. During theCold War, the U.S. and Soviet Unionsigned treaties to reduce the prolif-eration of nuclear weapons. In aculture war, in which words areweapons, both sides need to easetheir inflammatory language.

Leaders from both parties play acritical role in setting appropriateboundaries for political speech. Theeffect of incendiary statements isespecially harmful when they comefrom political leaders—be theymembers of Congress or the presi-dent himself.

That’s why, even as a strong sup-porter of President Trump, I haverepeatedly encouraged him to useTwitter as a tool for good ratherthan as a cudgel for division. I havelikewise discouraged him from call-ing the press “the enemy of thepeople.” Even with its flaws, themedia is indispensable to our de-mocracy. Insofar as reporters arecommitted to objective journalismand not political advocacy, theyshould be treated as noncombatantsin the culture wars.

To restore decency and balanceto public dialogue, both left andright should embrace a laying downof rhetorical arms. Tough politicalspeech has its place, but mainly onthe campaign trail.

All Americans, regardless of par-tisan affiliation, have a stake in con-taining the fallout from the culturewars. By working together to instillthese norms, we can revive civic lifeand set our nation on a path tohealth and healing.

Mr. Hatch, a Utah Republican, ispresident pro tempore of the U.S.Senate.

CHADCR

OWE

Americans need to fightover social issues, but weshould find a way to do sowith respect and civility.

By Orrin G. Hatch

Peggy Noonan is on leave and willreturn in the fall.

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China Is Losing the Trade War With Trump

O ne thing came through loudand clear in President Trump’spress conference Wednesday

with European Commission PresidentJean-Claude Juncker. When they an-nounced an alliance against thirdparties’ “unfair trading practices,”they didn’t even have to mentionChina by name for listeners to knowwho their target was. Cooperationbetween the U.S. and EU will squeezeChina’s protectionist model, and evenbefore this agreement, there’s beenevidence that China is already run-ning up the white flag.

Yes, China is acting tough in onesense, quickly imposing tariffs in re-taliation for those enacted by theTrump administration. But while U.S.stocks approach all-time highs andthe dollar grows stronger, Chinesestocks are in a bear market, down25% since January. The yuan had itsworst single month ever in June, andis well on its way to a repeat thismonth. Chinese corporate bondshave defaulted at a record rate inthe past six months, yet this weekChina unveiled a new stimulus pro-gram designed to encourage evenmore corporate borrowing.

That’s probably why Yi Gang, agovernor of the People’s Bank ofChina, took the extraordinary step ofchanneling Herbert Hoover, sayingin a statement this month that “thefundamentals of China’s economyare sound.” And it’s why Sun Guo-feng, head of the PBOC’s financial re-search institute, said, China “will notmake the yuan’s exchange rate a toolto cope with trade conflicts.”

Weakening one’s currency is astandard weapon in trade wars, andone that China has often been ac-cused of using—including in a tweetby Mr. Trump last week. Devaluationwould be even more dangerous in thiscase because of China’s power todump the $1.4 trillion in U.S. Treasurysecurities it holds. But by denying itsintention to plunge the yuan, Chinahas disarmed itself voluntarily. Thiswas no act of noble pacifism; it had tobe done. Devaluing the currency

would risk scaring investors away, anexistential threat to an emergingeconomy. For China, whose state-cap-italism model has so far never pro-duced a recession, such capital flightmight expose previously hidden eco-nomic weaknesses.

These weaknesses accumulatewithout the market discipline thatoccasional recessions impose. Thefragility of China’s economy can beseen in its growth rate, which isslowing despite rising financial lever-age, and in its overinvestment incommodities and real estate. The es-calating trade war with the U.S. couldtip China into the unknown territoryof recession—and then capital flightcould push it into a financial crashand depression. That would createmass joblessness in an economy thathas never recorded unemploymenthigher than 4.3%. With that scenarioin mind, the Chinese governmentmust be wondering whether it hasenough riot police.

The risk of capital flight is real.The last time China let the yuanweaken—a slide that began in early2014 and was punctuated in mid-2015

by the abandonment of the dollarpeg in favor of a basket of curren-cies—the Chinese ended up losing al-most $1 trillion in foreign reserves,which they have yet to recover. Nowthe sharp weakening of the yuanshows some degree of capital flightagain is under way.

No wonder that, despite toughtalk from some quarters, the PBOCdisarmed itself voluntarily to avoidfurther capital flight. The bank alsois already offering to reimburse localfirms for tariffs on imported U.S.goods. What’s more, China has putout a yard sign for international in-vestors by announcing unilateraleasing of foreign-ownership restric-tions in some industries.

China is beginning to realize that

trade war isn’t really war. It’s morelike a drinking contest at a fraternity:the game is less inflicting harm onyour opponent than inflicting it onyourself, turn by turn. In trade wars,nations impose burdensome importtariffs on themselves in the hope thatthey’ll be able to stomach the painlonger than their competitor.

Why play such a game? Because acarefully chosen act of self-harm canbe an investment toward a worthygoal. For example, President Rea-gan’s arms race against the SovietUnion in the 1980s was in somesense a costly self-imposed tax. Butit turned out the U.S. could bear theburden better than the Sovietscould—Uncle Sam eventually out-drank the Russian bear and won theCold War.

The U.S. will win the trade warwith China in the same way. ThePBOC’s statements show that the Chi-nese understand they are too vulner-able to take very many more drinks.The only question is what they willbe willing to offer Mr. Trump to gethim to take yes for an answer. Nowonder Beijing has ordered its

state-influenced media to stop de-monizing Mr. Trump—officials aredesperate to minimize the pain whenPresident Xi Jinping has to cut theinevitable deal.

The drinking-contest metaphortakes us only so far. The wonderfulthing about reciprocal trade is thatit is a positive-sum game in whichall contestants are made better off. Ifthe conflict forces China to acceptmore foreign investors and goods,comply with World Trade Organiza-tion rules, and respect foreign intel-lectual property, it may feel it haslost but will in fact be better off.With this openness, both economicand political, China could spur adecadeslong second wave of growththat would bring hundreds of mil-lions still living in rural poverty intoglittering new cities.

It took Nixon to go to China andshow it the way to the 20th century.Now, through the unlikely method oftrade war, Donald Trump is usheringChina into the 21st century.

Mr. Luskin is chief investment of-ficer at Trend Macrolytics LLC.

By Donald L. Luskin

It’s like a drinking contest:You harm yourself andhope your opponent isn’table to withstand as much.

At the Expense of U.S. Tech, a European Star Is BornThe world’s 700million iPhone userswill look at the Eu-ropean Union anti-trust action againstGoogle’s Androidphones and say“Huh?” Even vet-eran users of An-droid phones will belittle more than be-mused if they soon

must spend a few extra minutes toinstall the world’s most popularapps, such as Google’s search andmap apps. This is no biggie: Theaverage Android user alreadydownloads 50 apps to his phonethat weren’t preinstalled by themanufacturer.

Only on one group would there beany immediate effect, and it would

be bad: The up-and-coming poorperson in some less-developed coun-try landing his first smartphone,which will likely be cheap, and likelybe running the Android operatingsystem.

One hopes a considerate salesper-son or knowledgeable friend will behandy to show him how to make hispurchase useful by downloading themost stable, tested and invaluable(though free to the user) apps thatthe rest of the world is using, madeby Google.

The sole practical consequenceof the EU’s action would be to raisean obstacle to this person’s discov-ery of the opportunities created byaccess to the world through themobile internet. Nice work. TheEU’s celebrated competition com-missioner, Denmark’s MargretheVestager, has not made the world abetter place; she has made itkludgier.

Undoubtedly this alone wouldjustify her taking up an honoredplace in a bureaucrat’s Valhalla,where civil servants in the afterlifeare rewarded for their paper-shuf-fling endeavors in this life.

Not for the first time we pointout that it’s Donald Trump’s manner,not so much the content of his poli-tics, that differentiates him.

Europe’s antitrust czar “appearsto be disproportionately targetingU.S. companies.” No, that’s not aTrump tweet, as might be told bythe employment of anemic modifi-ers like “disproportionately.” It wasa statement issued by the U.S.Treasury during Barack Obama’sadministration.

Mr. Obama himself would tell aninterviewer in 2015 that EU actionswere “more commercially driventhan anything else” because their

tech companies “can’t compete withours.”

It’s too late to roll back the tape. IfAmerica is the engine of digital dis-ruption, the EU now views itself ashaving a special mission to disciplineAmerica’s tech giants. Ms. Vestagerhas become that rarest of things: anEU bureaucrat who actually has anardent public following.

Her relentless focus on U.S. techcompanies has paid big dividends.Glowing profiles running to thou-sands of words appear in the Euro-pean press. Young people flock toher public appearances. She hasbeen publicly leaked as the favoriteof France’s Emmanuel Macron to bethe next president of the EuropeanCommission starting in 2019.

Ms. Vestager would not be thefirst to use a law-enforcement port-folio in a questionable way to ad-vance a political career that manywould consider worth advancing.She is resolutely pro-European, adefender of immigration, sociallytolerant but also fiscally conserva-tive. Famously, her office is adornedwith a plaster sculpture of a handwith an upraised middle finger, agift from a Danish union boss inhonor of her support for welfarecuts.

Her example (if only partially thecontent of her politics) has not goneunnoticed even in the U.S. In thecalm and studied opportunism of

Sen. Kirsten Gillibrand as she posi-tions herself to run for president,there’s as much Margrethe Vestageras there is Bernie Sanders or Eliza-beth Warren. Or see the hiring ofLina Khan, the recent Yale studentwhose widely noticed law-review ar-ticle called for breaking up Amazon,to be an adviser to an ambitiousDemocrat on the Federal TradeCommission.

The truth is, except for wallopingGoogle with a $5 billion fine andthreatening to impose an additional$15 million a day if the companydoesn’t change its practices, Ms. Ve-stager has done little. Google appswill remain the preferred apps ofbillions of users, including many us-ers of Apple devices.

Excitable types have called herruling a thunderclap like the 2001U.S. win against Microsoft for tyingits internet browser to the Windowsoperating system. It’s not. What thetwo cases really have in common istheir deep irrelevance to fast-chang-ing technology markets. Facebook iswidely understood to be Ms. Ve-stager’s next target, as she fashionsa theory of antitrust in which “data”equals market power. Her efforts,whatever they are, will be a pinprickto this week’s stock-market vote ofno confidence in Mark Zuckerberg’simmunity to the forces of creativedisruption.

American tech firms have beenhandy punching bags for Ms. Ve-stager, there is no question. Eventhe Economist magazine, which likesher crusade, acknowledges she ispolitically motivated. But the mostinteresting upshot may be that Eu-rope is rapidly acquiring what argu-ably it needs: its first pan-Europeanpolitician with a pan-European pop-ular following.

BUSINESSWORLDBy Holman W.Jenkins, Jr.

Ms. Vestager rides distrustof Google, Facebook, etc.to a unique status in theEU’s troubled politics.


LIMPING IN AWALK YEAR

Washington Nationalsslugger Bryce Harper is ex-pected to hit the jackpotwhen he becomes a freeagent following the end ofthe MLB season. The first-overall pick in 2010 and Na-tional League MVP in 2015turns 26 in October andcould become baseball’s first$400 million player.

But there’s reason for po-tential suitors to be hesitantas Harper’s walk year hasbeen a struggle. While he’sleading the National Leaguein walks and homers, Harperis hitting just .216 enteringThursday—the ninth-worstrate in the majors among 159batting average qualifiers. HisOPS (on-base plus slugging)

of .836 is 63 points worsethan his .902 mark headinginto 2018.

Disappointing walk yearshave been a harbinger ofbusts to come for the mostproductive, under-30 free-agent hitters. Of the 35 play-ers in the past 40 years witha career OPS of at least .800in 2,000 plate appearances,Harper’s walk year is fifthworst. Among the playersahead of him (see table), BillyButler, Ben Grieve, MarcusGiles and Pablo Sandovalended up being complete dis-appointments.

The only batter off a sub-par walk year to receive a re-cord-setting contract some-what comparable to what

Harper is projected to receivewas Dave Winfield, who afterhe signed prior to the 1981season was tagged “Mr. May”by the late Yankees ownerGeorge Steinbrenner. AndWinfield’s walk year OPS(.815) was within seven pointsof his career rate (.822) lead-ing up to it.

Conversely, a great walkyear has foretold a successfulsigning. Barry Bonds beat hisprior OPS by 228 points in hiswalk year in 1992 and MannyRamirez (178) and LarryWalker (170) weren’t far be-hind. They combined to benamed All-Stars 23 times fortheir new teams, winning sixMVP awards (five by Bonds).

—Michael Salfino

TheYearBeforeFreeAgencyOf the 35 players in the past 40 yearswith a career on-base plusslugging (OPS) of at least .800 in 2,000plate appearances,BryceHarper’swalk year is fifthworst.

PLAYERWALKYEAR

CAREEROPSPRIORTO

WALKYEARWALKYEAR

OPS DIFF.Billy Butler 2014 .823 .702 .121BenGrieve 2003 .818 .716 .102MarcusGiles 2006 .831 .729 .102PabloSandoval 2014 .827 .739 .088�BryceHarper 2018 .902 .839 .063Ellis Burks 1992 .805 .744 .061MarkReynolds 2012 .815 .763 .052SteveKemp 1982 .826 .808 .018GaryMatthews 1976 .813 .802 .011

Source: Baseball-Reference

THE COUNT

Washington’s Bryce Harper

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Amsterdam 74 58 t 81 64 pcAthens 88 75 pc 88 74 sBaghdad 106 82 s 107 82 sBangkok 92 81 t 91 79 tBeijing 91 75 s 93 78 pcBerlin 88 65 c 83 64 pcBrussels 77 57 t 81 64 pcBuenos Aires 56 48 r 57 39 cDubai 108 95 s 111 93 sDublin 63 49 pc 69 51 rEdinburgh 67 49 sh 67 52 sh

Frankfurt 89 63 t 90 65 pcGeneva 80 62 t 88 65 sHavana 87 72 pc 88 72 tHong Kong 91 79 t 91 81 tIstanbul 87 75 sh 87 76 pcJakarta 91 74 pc 90 73 pcJerusalem 81 68 s 82 65 sJohannesburg 68 41 s 68 43 sLondon 75 59 t 70 61 shMadrid 95 65 pc 94 63 sManila 87 79 r 88 79 tMelbourne 64 51 s 55 46 shMexico City 76 59 t 78 56 tMilan 92 70 pc 92 73 sMoscow 84 68 c 78 60 pcMumbai 87 81 sh 87 79 shParis 80 62 pc 83 65 pcRio de Janeiro 84 70 s 86 71 pcRiyadh 107 82 s 109 81 sRome 87 68 s 90 72 sSan Juan 87 79 pc 87 79 pcSeoul 93 79 pc 95 78 sShanghai 97 82 s 98 81 sSingapore 87 80 t 87 78 tSydney 68 56 pc 75 49 sTaipei City 94 79 t 98 80 cTokyo 84 78 r 88 80 shToronto 75 58 pc 77 60 shVancouver 78 61 s 81 61 sWarsaw 87 70 c 86 69 tZurich 85 59 t 87 62 pc

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The practice green onthe final day of a majorchampionship rarelyevokes the pressure-cooker feeling that

golfers face once their round be-gins. It’s a place to warm up andget a feel for the speed of thegreens, free from worry about thecost of a miss.

But in the moments before hisfinal round at Carnoustie on Sun-day, Francesco Molinari gave him-self a very particular test.

He challenged himself to makeprecisely eight 5-foot putts fromvarious spots on the green in asfew attempts as he could. That herequired only nine tries was lessimportant than the idea behind theexercise.

“Do you want to be comfortableor do you want to be ready?” saidMolinari’s performance coach,Dave Alred. “They’re not necessar-ily the same.”

Molinari went on to win theBritish Open with a stellar shortgame and almost robotically steadyplay on a volatile leaderboard. Buthis ascent to become the first Ital-ian to win a major championship is

rooted partly in a change he madeonly in the past two years. Itwasn’t in the way he swung. It wasin the way he practiced.

Ditching the time-honored tradi-tion of simply hitting balls withdifferent clubs to different targets,Molinari adopted unusual routinesdesigned to make practice a bettersimulation of competition. Theywere devised by Alred, an English-man who specializes in perfor-mance psychology and has workedwith rugby and soccer stars.

The tests vary in difficulty, butthe philosophy is to make Molinarikeep working until he passes them,adding stress to sometimes other-wise mindless practice shots.

“I don’t see the point of hittinga golf shot in practice without be-ing accountable, given that everyshot in competition, you’re ac-countable in a round,” Alred said.“As a behavior, it doesn’t makesense to me.”

The result is a player who hasbeen remarkably steady when thestakes have been highest. Playingalongside Tiger Woods on Sunday,Molinari was the only player in thefield not to make a single bogey. Inhis three wins this year, he hasmade only one bogey in six com-bined weekend rounds.

the hole. It took him 48 tries.“I said, ‘I’m going to make you

frustrated, you’re going to be an-noyed with me, but if I don’t getyou in that state, then you’re nevergoing to get out of it when it reallymatters,’” Alred said. “We prac-ticed—not all the time—but at amuch higher frustration level thanin the tournament.”

Practice in golf is unique fromother sports in that there is verylittle to automatically simulate com-petition. There are no opponents tochallenge players, coaches are theiremployees and the primary practicesetting—the driving range—hardlymimics the playing experience.Struggling pros and weekend hack-ers alike can strike the ball beauti-fully on the range, only to mishit itbadly on the course.

The best golfers have long de-vised their own ways to make therange a better preparationground. Nick Faldo, a six-time ma-jor champion, used to simulate en-tire courses from tee to green onthe range, never hitting the sameclub twice in a row. But for most,practice entails more repetitionthan simulation.

“We have a transferless practiceenvironment in golf,” said CordieWalker, founder of Golf Science Lab,

which publishes research abouthow to learn and improve at play-ing golf. “We want to have learningenvironments that foster skills thatare retained on the golf course.”

Walker pointed to the idea ofdesirable difficulty, coined by thecognitive psychologist RobertBjork in 1994, which argues thatintroducing a certain degree ofchallenge to the learning processboosts long-term retention.

Most pro golfers practice with apurpose, allotting time and effortto work on various aspects of theirswings. But what Molinari hasdone is to consciously add pres-sure.

When asked what he haschanged under Alred’s direction,Molinari said simply, “A lot. Wecan sit down and have a dinnerand go through it, but it’s a lot.”

A short walk from the practicegreen on Sunday, Molinari was onthe 18th hole facing an almostidentical putt to the ones heneeded to make eight times just afew hours earlier.

If he made the 5-footer forbirdie, he would walk off in strongposition to at least end up in aplayoff. If he missed it, a winwould feel far less secure.

He required only one try.

BY BRIAN COSTA

GOLF

TheUncomfortablePractice HabitsOf a Champion

Francesco Molinari won the British Openafter adopting routines designed tosimulate the pressure of competition

Francesco Molinarilines up a putt duringthe final round of the

British Open.

WILLOLIVER/EPA

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“I felt ready for it,” Molinarisaid of Sunday’s final round.“Calm—you know, as calm as youcan be playing in the last round ofa major close to the lead, playingwith Tiger. I mean, there was ev-erything to make someone ner-vous, but I focused on my process.”

Now 35 years old, Molinari hadlong been among the better golfersin Europe, but for years he strug-

gled even to make the cut at themajors. Two years ago, he hired Al-red, whose book, “The PressurePrinciple,” deals with performingunder stress.

Their first session together, atRiviera Country Club outside LosAngeles, was a preview of howthings were about to change. Alredhad Molinari practice a tricky flopshot on a downhill lie and askedhim to keep hitting it until he hadstopped five balls within 3 feet of

Practice in golf is uniquein that there is very little

to automaticallysimulate competition.

THEWALL STREET JOURNAL. **** SATURDAY/SUNDAY, JULY 28 - 29, 2018 | B1

PHOTO

ILLU

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ATIONBYSEANMCC

ABE

Lofty sales goals were at theheart of the scandal at Wells Fargo& Co.’s retail bank. Incentives alsoappear to be at the root of issues un-der investigation within its wealth-management business.

Wells Fargo financial adviserspushed clients into products thatgenerated additional fees and oftenmoved client assets between differ-ent products or investing platformsto generate more revenue and biggerbonuses, according to more than twodozen current and former employeesand internal documents reviewed byThe Wall Street Journal.

Advisers often targeted wealthyclients in Wells Fargo’s private bank,sometimes steering them into alter-native-investment products of whichWells Fargo was the majority owner—allowing the San Francisco bank tocollect another helping of fees.

Wells Fargo spokeswoman SheaLeordeanu said the bank is commit-ted to thorough reviews of thewealth- and investment-managementbusiness and is making significantprogress in identifying and fixingany issues. “We have supervisoryprocesses and controls in place,” shesaid. “If a team member were to actin a manner not in line with our val-ues and our policies, we would takeappropriate action.”

Last September, four Wells Fargofinancial advisers in Arizona sent aletter to the Justice Department andthe Securities and Exchange Com-mission detailing what they said

PleaseturntopageB12

BY EMILY GLAZER

Advisers BlewWhistle onWells FargoWealth UnitClients were steered toproducts with high fees

The world’s largest oil companiescontinue to disappoint investorswith limited cash payouts and prof-its that have failed to match the rallyin crude, reflecting the fragile natureof a recovery from one of the worstprice crashes in a generation.

Exxon Mobil Corp. said net in-come rose to $4 billion in the April-June quarter, up 18% comparedwith the year-earlier period, butsubstantially below the 50% oil-price increase in that three-monthstretch. The company’s productionfell to 3.6 million barrels of oil andgas a day, the lowest in more than20 years, due in part to an earth-quake in Papua New Guinea and ashift away from less profitable U.S.natural-gas drilling.

Second-quarter profit at ChevronCorp. more than doubled to $3.4 bil-lion and the company said it wouldbegin buying back about $3 billion inshares annually. The results at bothcompanies fell well short of WallStreet expectations—the thirdstraight quarterly miss for Exxon—although Chevron shares rose 1.6%on the buyback announcement whileExxon shares fell 2.8%.

“They are disappointing the mar-ket,” said Brian Youngberg, an ana-lyst at Edward Jones. “You keepthinking the worst is over, but thenthey lay another egg.”

Exxon executives sounded a rarenote of contrition for the results,vowing to address issues that led tounexpected operational challenges.Senior Vice President Neil Chapman,who oversees the company’s oil andgas production business, emphasizedthat Exxon’s decisions on where todrill are based more on what is prof-itable than on growth targets.

“We’re not focused on volume,”he said. “We’re focused on value.”

He also said Exxon is “lookingvery hard” at potential asset sales.

Exxon, Chevron and other largecompanies have posted their highestsecond-quarter profits since 2014,when oil prices began a decline thatbottomed out at below $30 a barrel.Yet as crude has recovered to about

Pleaseturntothenextpage

BY BRADLEY OLSONALE

XNABAUM

Oil ProfitFails toImpressInvestors expect to seemore from crude’s rally

EXCHANGECEO HandbookHow to run a company

in the age ofsocial activism B6

BUSINESS | FINANCE | TECHNOLOGY | MANAGEMENT

DJIA 25451.06 g 76.01 0.3% NASDAQ 7737.42 g 1.5% STOXX600 392.08 À 0.4% 10-YR. TREAS. À 4/32 , yield 2.962% OIL $68.69 g $0.92 GOLD $1,222.60 g $2.70 EURO $1.1656 YEN 111.04

Regulators are try-ing to make it lessconfusing to learnwhat you need toknow about yourstockbroker or finan-cial adviser. But that

effort could create new confusionof its own.

In a disclosure form newly pro-posed by the Securities and Ex-change Commission, brokers andinvestment advisers would have todescribe their services, their feesand their obligations to act in yourbest interest. They’d also have totell you how to research theirbackground and disciplinary his-tory. The dense, four-page “cus-tomer relationship summary” alsorecommends questions to ask abroker or adviser.

Even the SEC’s commissionershave expressed doubts about the

form unless it is redesigned. Thesummary isn’t a “model of clarity,”said Commissioner Hester Peirce,and may “simply mean a few morepages of unread paper landing ininvestor trash cans.” Commis-sioner Kara Stein worried that theform might “actually spawn moreconfusion.” Commissioner MichaelPiwowar said, before leaving theagency, that the summary is“about as comprehensible to theaverage reader as Herman Mel-ville’s ‘Moby Dick.’ ”

The SEC has received many in-formative comments on the pro-posal, including discussions at lo-cal meetings with individualinvestors, says spokesman JohnNester. SEC Chairman Jay Claytonbelieves direct, candid interactionwith Main Street investors hasbeen “incredibly valuable,” saysMr. Nester.

At least since 1913, when futureSupreme Court Justice Louis Bran-deis wrote that “sunlight is said tobe the best of disinfectants,” dis-

closure has been the bedrock of in-vestment regulation in the U.S. Intheory, if you tell investors every-

PleaseturntopageB11

THE INTELLIGENT INVESTOR | JASON ZWEIG

Read This Extremely Important, Totally Incomprehensible,Completely Convoluted Information About Your Broker!

Every day, dozens ofyoung men crowdinto tiny rooms with30 computers eachin northern Bangla-

desh. Their mission: Trick Am-azon.com Inc.

They open Amazon.com andrepeatedly type in searchterms, each time clicking onthe links of products they werepaid to boost, according topeople familiar with the prac-tice. Amazon’s algorithms be-gin recognizing that theseproducts are popular, rankingthem higher in the search re-sults. The higher the ranking,the better chance of sales.

The scams are used to try tooutsmart Amazon’s automatedsystem that ranks some half-bil-lion products in search results,according to interviews withconsultants and businesses en-

gaged in these practices, as wellas sellers who say they havebeen approached by such busi-nesses. It’s one of an ever-rotat-ing wheel of tricks used to gameAmazon’s algorithms. Some sell-ers pay off workers inside Ama-zon to gain competitive infor-mation. Others hurt rivals’listings by barraging them withoverly negative or positive re-views.

The tactics aren’t thwartingAmazon’s sales, which rose 39%in the second quarter, but theythreaten to undermine the in-tegrity of one of the world’slargest web marketplaces, whichcollects nearly half of every U.S.retail dollar spent online.

An Amazon spokeswomansaid in a statement that thosetrying to abuse its systems“make up a tiny fraction of ac-tivity on our site.”

“We use sophisticated tools,including machine learning, tocombat [bad actors], and we are


To Game Amazon,Sellers Use

Scams,Clicks&DirtyTricksUnder attack fromclick farms,

reviewers-for-hire andalgorithmcheats, the digitalmarketplace is fighting back

BY LAURA STEVENS INSAN FRANCISCO ANDJON EMONT IN HONG KONG

Personal BoardSalesforce.com’s CindyRobbins on her trusted

advisers B7

B2 | Saturday/Sunday, July 28 - 29, 2018 * * * * THEWALL STREET JOURNAL.

THE SCORETHE BUSINESS WEEK IN 7 STOCKS

FACEBOOK INC.Facebook had the worst day loss in stock-market his-tory—shedding $119 billion in value amid a 19% dropThursday—after an earnings call that cast doubt onthe social network’s growth story. Several other tech

giants turned in quarterly results to rosier receptions: Alpha-bet Inc. gained 3.9% Tuesday and Amazon.com Inc. closed ata $900 billion market capitalization on Wednesday. TwitterInc., however, slid 21% on Friday amid user concerns.

�FB19%

PERFORMANCE OF TECH STOCKS THIS WEEKSource: SIX

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Facebook

Amazon

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$70 a barrel, many are still hold-ing back on spending and share-holder payouts as they recoverfrom the painful downturn.

Together with European oil gi-ants Royal Dutch Shell PLC, BPPLC and France’s Total SA, thefive largest Western companiesare set to generate about $90 bil-lion in free cash flow in 2018 and2019, exceeding records set in2008 when oil sold for almost$150 a barrel.

Yet they are paying out far lessof their cash haul to investors. In2008, the five companies gener-ated about $85 billion in excesscash, the highest ever, and boughtback more than $50 billion inshares, according to FactSet.

This year, the buyback total isunlikely to exceed $15 billion,about 17% of the free cash flowexpected by analysts at the fivecompanies. The demand for morecash reflects shareholder skepti-cism about long-term oil and gasinvestments. As oil prices roseabove $100 a barrel, many com-panies increased spending bytens of billions of dollars andfailed to boost production or re-turns.

“Oil companies spent likedrunken sailors in the last decadewithout generating great returns,”said Mark Stoeckle, chief execu-tive of Adams Funds, which ownsabout $175 million in Exxon andChevron shares. “Investors noware much more interested inspending discipline and stockbuybacks.”

Smaller oil and gas producersare paying out proportionally farmore, and shareholders are re-warding them for it. Anadarko Pe-troleum Corp., which has a mar-ket capitalization of $37 billion,bought back almost $3 billion inshares from September to March.

The company announced itwould buy back an additional $1billion through June 2019. Includ-ing reinvested dividends, Anadarkoshares are up 62% in the past year,more than double the average in-crease among large companies likeExxon and Chevron.

Shell’s shares fell by more than3% Thursday after the company’squarterly profit fell short of ex-pectations. The company an-nounced a buyback of $25 billionthrough 2020, yet some share-holders were disappointed thatonly $2 billion of shares will berepurchased in the next twomonths, analysts said.

BP shares were little changedFriday after the company an-nounced plans to spend $10.5 bil-lion to buy most of the U.S. shalebusiness of BHP Billiton Ltd.

Exxon, which bought back tensof billions of dollars in shares an-nually when oil sold for morethan $100 a barrel before thecrash, has yet to return to large-scale buyback programs.

“The market loves capital disci-pline and shareholder returns,”said Kris Nichol, an analyst atconsultancy Wood Mackenzie Ltd.“The majors, so far, have been ad-hering to capital discipline, butthey haven’t been on the frontfoot in terms of shareholder re-turns.”

Continuedfromthepriorpagemaking it increasingly difficult forbad actors to hide,” she said, add-ing that Amazon pursues civil andcriminal penalties.

Amazon isn’t the only tech giantthat has dealt with bad actors inthe form of bots and click farms.Twitter Inc. has recently startedclearing accounts flagged for sus-picious activity from its systems,while Facebook Inc. has rolled outnew features to make it easier toidentify fake pages.

Alphabet Inc.’s Google andother advertising platforms havealso faced an increase in poten-tially fraudulent traffic. In a re-cent study, Adobe found thatabout 28% of traffic across thou-sands of its clients’ websitesshowed strong “non-human sig-nals,” leading the software com-pany to believe that the trafficcame from bots or click farms.

Fake Amazon reviews havebeen a problem for years, andAmazon has developed bettercountermeasures to fight them.But sellers are becoming morecreative, spawning an entire un-derground economy offering todeceive Amazon’s algorithms.

The trickery can be seen on Am-azon. A search last week for ablackhead-remover mask turned upmore than a thousand options. Oneof the top-ranked results, labeled“Amazon’s Choice,” had hundredsof reviews averaging 4.3 stars.

But only the first four reviewswere related to the mask—the hun-dreds of others mostly evaluated abattery charger. The merchant, la-beled by Amazon as “justlaunched,” likely co-opted an oldlisting with positive reviews andchanged the product’s image anddescription to fool Amazon’s algo-rithms, according to sellers andconsultants familiar with this gen-eral practice. An attempt to reachthe seller was unsuccessful.

Amazon’s algorithm typicallyweighs a variety of factors to give aproduct an “Amazon’s Choice” label,including positive reviews and price.After an inquiry from the Journal,Amazon removed the unrelated re-views and the product was no lon-ger labeled Amazon’s Choice.

“Reports of abuse have spikedenormously,” says Chris McCabe,who formerly worked at Amazonas an investigator and now helpssellers fight these problems as aconsultant. Companies providingthese types of “services are bolder,now, too” he says.

Competition has grown fierce asthe number of items on Amazon’smarketplace is estimated to havedoubled over the past five years tomore than 550 million, accordingto data-tracker Marketplace Pulse.Amazon also is pushing to expandinternationally by soliciting manu-facturers from China and else-where to sell direct to consumers.

Each time a shopper enters asearch term, Amazon weighs aproduct’s attributes includingsales volume, price and Prime-membership eligibility. It also fac-tors in aspects like the quality ofverified reviews or the number oftimes customers have clicked on aproduct.

To leave a review, a customerneeds to have spent at least $50

Continuedfromthepriorpage

over 12 months using a valid creditor debit card, according to Ama-zon’s policy. A “verified” reviewmeans that the customer pur-chased the product on Amazon anddidn’t receive it at a deep discount.

Amazon allows some methodsfor boosting a product in its searchrankings, including advertising onthe site and selling at a steep dis-count. Sellers can also pay to havea product reviewed by a small, ran-dom selection of Amazon-autho-rized reviewers, though thisdoesn’t guarantee that the reviewswill be positive. But sellers saythose measures can be expensive,and they don’t always work.

Instead, some sellers—particu-larly those in China, according tothe people familiar with the prac-tices—are turning to other sourcesfor help. For a range of about $30to $180 a month, some websitesviewed by the Journal promise acertain number of positive reviewsby offering reviewers cash and dis-

counts as incentives, flouting Ama-zon’s rules. Others promise to helpsellers with rivals’ information.

Some China-based Amazon em-ployees have been paid off by sell-ers to pull confidential seller-ac-count stats, search-optimizationtricks and other internal informa-tion, according to people withknowledge of the practice.

“Data security is a top priority,and we have strict policies andprocedures in place to protect it,”the Amazon spokeswoman said inresponse to allegations of sellerspaying Amazon employees. “Weare conducting a thorough investi-gation of these claims.”

Click farms that manage thou-sands of Amazon accounts havealso proliferated.

In China, for example, some se-cretive businesses rent or sell ac-counts so that merchants can usethem to make purchases and leavepositive reviews. To trick Amazonand boost a product’s ranking,

sellers will ship an empty boxwith a real tracking number to ac-complices in the U.S., who thenleave a positive review for theproduct. They’ll also ship knick-knacks, like cheap watches, as away to reward people who allowthe use of their addresses.

One Chinese product seller saida company recently approachedhim, offering to help improve hissales. The pitch quickly turned toinclude the control of 8,000 U.S.buyer accounts used to stimulatefake purchases and generatephony reviews.

Another company markets itselfas having more than 10,000 Ama-zon accounts, local IP addresses,100% real buying behavior andzero risk, according to a presenta-tion viewed by the Journal. Theaccounts can be used to generatereviews for products, and pur-chases are made with real creditcards, according to the presenta-tion.

It charges an average of $5.42per review—higher than its rivals’average of $1.29—because of itsclaimed precautions. The companylimits each account to eight re-views a month and only about 15%to 20% of products bought by eachaccount is reviewed, according toits presentation, to mimic the be-havior of real customers.

The Amazon spokeswoman saidit determined that less than 1% ofhundreds of millions of reviewswere fake last month, and thecompany has sued more than1,000 people for such abuse. For-mer employees and sellers sayAmazon is frequently scrubbingsuspicious listings, reviews andsellers, and it is catching sometricks like adding items to shop-ping lists to boost rankings.

In addition, Amazon has beenworking with Facebook to removegroups on Facebook that promotefake reviews, according to a personfamiliar with the matter.

But the tactics keep evolving, ac-cording to sellers and consultants.

Innoventic co-founder MichaelHartman said his company’s listingfor a UFlex Athletics knee com-pression sleeve was recently at-tacked by a rival. His listing for theproduct was split into three list-ings, one for each size he offers.Not only did that cause the prod-

uct to drop in the rankings, but italso meant that consumers whofound the listings were frequentlyordering the wrong size. It tookAmazon about three weeks to fixthe problem.

Mr. Hartman has also dealt withcounterfeiters, who have increas-ingly attacked small brands’ list-ings and have hurt his reviews.

“You don’t know how muchtime I’ve spent on this over thepast year,” he said, estimatinghe’s filed between roughly 200cases with Amazon.

After an inquiry from the Jour-nal, Amazon removed some of theillegitimate reviews.

Sellers say fake reviews be-came more prevalent after Ama-zon tried to crack down on incen-tivized reviews in October 2016,where sellers gave away or heav-ily discounted merchandise to so-licit reviews.

As Amazon has cracked down onfake reviews, some sellers are leav-

ing five-star, fake-looking reviewson rival listings so they triggerAmazon’s scam-detecting algo-rithm and get the rival seller sus-pended, according to the people fa-miliar with the practices. Anothertactic is to vote rivals’ bad reviewsthe most helpful. Others buy theproduct and leave safety com-plaints, which typically trigger animmediate listing suspension asAmazon investigates.

Sellers who are unfairly sus-pended will ask Amazon to inves-tigate, but they lose sales duringa typically weekslong probe, saidHoward Thai, a Shenzhen-basedconsultant who works with Ama-zon sellers to improve sales. “Youhave to climb back up that lad-der,” he says.

Some consumers are catchingon. Jennifer Bowen, an Arizona-based photographer, has bought in-effective products like eye creambased on five-star reviews, includ-ing some that appeared fake. Nowshe only looks at two-, three- andfour-star reviews when she shopson Amazon.

“Nothing’s perfect,” she said. “Iwant the real honest assessmentfrom people, and I feel like youfind that more in less-glowing re-views.”

—Wei Zhou in Shanghaicontributed to this article.

HASBRO INC.Investors who had expectedthe bankruptcy of Toys “R”Us to hurt Hasbro, the com-pany behind Play-Doh andPower Rangers, were pleas-antly surprised when the toy

maker reported a profitable secondquarter with revenue well above esti-mates. Hasbro said 26% growth in itsentertainment and licensing segmenthelped offset domestic and interna-tional sales declines from the now-de-funct toy retailer. Revenue fell 7% fromthe year-earlier period to $904.5 mil-lion, beating the $838.1 million analystspredicted. Hasbro’s shares leapt 13% onMonday.

�HAS13%

MATTEL INC.Elsewhere in toyland, it wasa tough spring for themaker of Barbie and HotWheels. After the close ofWednesday trading, Mattelsaid it would cut 2,200 non-

manufacturing jobs world-wide, ornearly a quarter of its workforce, aftertallying larger-than-expected losses inthe most recent quarter. The toymaker blamed the liquidation of Toys“R” Us for its poor results, but the ex-planation struck investors as littlemore than an excuse after rival Has-bro (see above) reported a more suc-cessful quarter. Mattel’s stock sank4.2% on Thursday.

�MAT4.2%

FIAT CHRYSLERAUTOMOBILES NVFiat Chrysler CEO SergioMarchionne died Wednesday,just a few days after theauto maker said he wouldn’tbe able to return to work af-

ter suffering complications from shoul-der surgery. Later, FCA disclosed theauto-industry legend had a “serious ill-ness” lasting more than a year, a con-dition it said it didn’t know about. Mr.Marchionne, who turned around strug-gling Fiat and Chrysler brands by engi-neering a merger in 2008, also ran Fer-rari NV. Shares of Fiat Chryslertumbled 16% on Wednesday whileFerrari was down 2.2%.

�FCAU16%

DEERE & CO.Shares of farm-equipmentmakers got a boost Tuesdayafter the Trump administra-tion unveiled plans to dis-tribute $12 billion in aid tofarmers struggling to cope

with Chinese tariffs against Americanproducts, including meat, soybeans andproduce. Tractor maker Deere, whosestock had fallen 13% this year amidthe international trade spats, climbed3.2% Tuesday as investors anticipatedless severe profit reductions for af-fected farmers. Elsewhere in the agri-cultural sector, CNH Industrial NV wasup 3.8% and Titan International Inc.rose 0.9%.

�DE3.2%

GRUBHUB INC.The mobile food-orderingcompany hit an all-time highafter it announced the pur-chase of ordering platformLevelUp for $390 million. Theacquisition, announced during

the company’s Wednesday earnings call,caps a quarter that saw Grubhub’s prof-its double and active diner count growby 70%. News of the deal sent Grubhubshares soaring 24% Wednesday as in-vestors predicted LevelUp’s softwarethat facilitates payments and customer-relationship management for more than200 restaurant companies could helpexpand Grubhub’s burgeoning base ofhungry customers.

�GRUB24%

CBS CORP.Shares of CBS fell 6.1% Fri-day after reports emerged ofa New Yorker article allegingsexual misconduct by the me-dia company’s chief executive,Leslie Moonves. The New

Yorker declined to comment on the arti-cle, which remained unpublished at themarket close, while CBS’s independentboard said it would investigate theclaims. The investigation into Mr.Moonves comes at a sensitive time asCBS is engaged in a legal battle withcontrolling shareholder National Amuse-ments Inc., which holds nearly 80% vot-ing stakes in CBS and Viacom Inc.

—Laine Higgins

�CBS6.1%

Dirty TricksFor GamingAmazon

Oil ProfitFails toImpress

A seller abroad will shipan empty box with a realtracking number to aU.S. accomplice, wholeaves a positive review.

The number of items listed on Amazon is estimated to have doubled over the past five years to more than 550 million.

THEWALL STREET JOURNAL. * * * * Saturday/Sunday, July 28 - 29, 2018 | B3

Starbucks Corp. must payemployees for off-the-clockwork such as closing and lock-ing stores, the California Su-preme Court ruled on Thurs-day, a decision that could havebroad implications for compa-nies that employ workers paidby the hour across the state.

The decision is a departurefrom a federal standard thatgives employers greater lee-way on compensation for shorttasks, such as putting on a uni-form, that are performed be-fore they clock in or after theyclock out.

The federal Fair LaborStandards Act allows employ-ers to disregard short bits oftime that employees work ifrecording that time is imprac-tical, the time required tocomplete the work is trivial,or the uncompensated tasksare irregular.

The California court ruledthat the federal standard,which was developed beforethe advent of sophisticatedtime-tracking technology, is arelic of a prior industrialworld. The court set a newstandard for the state in whichemployers must track and payfor time spent on regularly oc-curring tasks, even if they takeonly a few minutes.

“The court is saying to em-ployers, you should be activelytrying to pay people for theirwork instead of using a freepass” from the federal doc-trine, said Elizabeth Tippett, aprofessor at the University ofOregon School of Law who hasstudied time-tracking cases.

In a case filed in 2012, Star-bucks shift supervisor DouglasTroester alleged that the coffeechain’s software required himto clock out on every closingshift before completing taskssuch as transmitting sales in-formation to corporate head-quarters, activating an alarmsystem and locking the door.Altogether, the closing taskstook between four and 10 extraminutes a day, according tocourt filings. During 17 monthsof employment, Mr. Troester’sunpaid time added up to about$103, the filings say.

The case was dismissed by afederal court in 2014, so Mr.Troester appealed. The NinthCircuit Court of Appeals sentthe matter to California’s Su-preme Court to decide what ispermissible under the Califor-nia Labor Code.

“We are disappointed withthe Court’s decision,” a Star-bucks representative said. “Wewill await further dispositionof the case before the NinthCircuit as the appeal processcontinues.”

BY LAUREN WEBER

StarbucksLoses PayCase inCalifornia

directly to customers aboutservice problems.

MoviePass said the servicewas back online by Friday af-ternoon “with stability at100%.” Along with the restora-tion of service, MoviePass im-plemented new terms limitingsubscribers’ ability to see cer-tain popular films. The app nolonger allowed subscribers tosee the newly released “Mis-sion: Impossible—Fallout” ex-cept at the theaters with whichthe company has a special deal.

A Hudson Bay spokes-woman declined to comment.

Shares in Helios &Matheson fell 71% to $2 in Fri-day trading. The stock hasplunged from its October high

of $32.90, to as low as 8 centsin the past week. Earlier in theweek, the company imple-mented a 1-for-250 reversestock split.

MoviePass has proven pop-ular with customers, but ana-lysts and industry executiveshave questioned the sustain-ability of its business model.The service lets subscriberspay a monthly fee, currentlyabout $10, to see up to onemovie a day. MoviePass rolledout “surge pricing” thismonth, adding a fee for cus-tomers to see certain filmswhen demand is high.

Theater chains such as Cin-emark Holdings Inc. and AMCEntertainment Holdings Inc.,

the largest U.S. cinema chain,have also launched movie-sub-scription programs for pa-trons.

Helios & Matheson said inmid-June that MoviePass hadmore than three million sub-scribers. It also has said Mov-iePass may not be profitable onsubscriber revenue alone butthat its user data can help sellads and drive box-office reve-nue, which MoviePass can cap-ture through deals with studiosand cinemas. In the quarterended March 31, MoviePasshad a loss of $98.3 million on$48.6 million of revenue, ac-cording to regulatory filings.

—Ben Fritzcontributed to this article.

The movie subscription service experienced technical trouble when some vendors cut it off.

PATR

ICKT.

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BUSINESS NEWS

back from Disney shareholders,with 99% of the shares votedapproving the deal.

Disney still has severalboxes to check before the dealis closed. Though the JusticeDepartment approved the ac-quisition last month, Disney iswaiting for approvals frommore than a dozen interna-tional territories, including theEuropean Union and China.

The Justice Department’sapproval came on the condi-tion that Disney divest itself ofFox regional sports networksthat compete with its ownESPN.

When Disney announced itsbid to acquire Fox in Decem-ber, the offer was valued at

$52.4 billion in Disney stock.Then, in June, Comcast Corp.bid $65 billion in cash for theassets, forcing Disney to coun-ter with a $71 billion mix ofcash and stock.

Comcast dropped out of theFox chase this month. “Wethought we couldn’t buildenough shareholder value” atthe price needed to win thewar, CEO Brian Roberts saidon an earnings call Thursday.Mr. Roberts said his companyis focused on winning its sepa-rate pursuit of Sky, which be-gan during the broader Dis-ney-Comcast contest.

The fate of the pay-TV op-erator remains the biggestquestion. Fox wants to consol-

idate its ownership of Skyahead of the Disney deal, butComcast currently leads thebidding at $34 billion.

Disney executives, whohave the final say on whetherFox continues its pursuit ofthe remainder of Sky, have in-dicated they will resist a “splitthe baby” scenario that cedesit to Comcast. Resolving theSky portion of the deal withComcast isn’t a condition ofthe deal closing.

Even without Sky, acquiringFox would make Disney—al-ready the world’s largest en-tertainment company—a sig-nificantly bigger force at atime of unprecedented box-of-fice success for the company.

But Disney has had to learnquickly how to navigate a me-dia landscape redefined bynewer tech rivals like NetflixInc. and Amazon.com Inc. Inthe past several years, direct-to-consumer offerings likeNetflix have reoriented enter-tainment customers awayfrom movie theaters and tradi-tional cable bundles, whichdrove Disney’s ESPN divisionto billion in profits.

Disney plans to use the Foxlibrary and majority ownershipof Hulu to bolster its own plansto launch a streaming service inlate 2019, piping the company’s“Star Wars” and Marvel Enter-tainment programming straightinto the home.

Shareholders of Walt Dis-ney Co. and 21st Century Foxapproved the $71 billion dealbetween the two companies onFriday, clearing another hurdlefor a deal that will rattle themedia and entertainment land-scape and could inspire a waveof similar tie-ups.

If the deal is completed,Disney will absorb Fox’s sto-ried film and television stu-dios, responsible for fran-chises like “Avatar” and “TheSimpsons,” as well as stakes inthe Sky PLC pay-televisioncompany and the Hulu video-streaming service.

Disney and Fox sharehold-ers voiced their support forthe deal in meetings in Man-hattan. The short formal gath-erings were a noncontroversialproceeding in a merger thathas generated considerabledrama in the past six months.

At Fox’s sparsely attendedshareholder meeting at theNew York Hilton’s downstairsconference room, the moodwas wistful. Although Fox Ex-ecutive Chairman Rupert Mur-doch himself wasn’t in atten-dance, one Fox shareholder,Philip Berman, stood up anddeclared, “Finally, Rupert’sdream is complete.”

Disney’s meeting, presidedover by the company’s generalcounsel, Alan Braverman, lastedless than 10 minutes with onlya handful of procedural ques-tions from shareholders. Thevote faced essentially no push-

BY ERICH SCHWARTZELAND KEACH HAGEY

Disney’s Fox Deal Wins ApprovalWith little fanfare,shareholders bless the$71 billion acquisition;Sky remains in limbo

The acquisition of Fox’s film and television studios will add to Disney’s many entertainment offerings, including Shanghai Disneyland.

RENLO

NG/X

INHUA/ZUMAPRESS

faces increased pressure fromclients and upheaval from thedominance of Facebook Inc. andAlphabet Inc.’s Google in digitaladvertising. Marketers are cut-ting back on the fees they payagencies, hitting WPP and otherad holding companies. Consult-ing firms, meanwhile, are in-creasingly encroaching on Mad-ison Avenue’s turf.

Mr. Sorrell spent decadesbuilding WPP, whose head-quarters is in London, into theworld’s biggest ad company byacquiring advertising agenciesacross the globe.

Word that WPP was consid-ering outsiders as the new CEOstirred fears internally that thead giant was facing a majorshake-up, according to WPP ex-ecutives. Mr. Read, by contrast,is expected to retrofit—ratherthan discard—WPP’s businessmodel for the digital age.

In April, Mr. Sorrell resignedas chief executive after TheWall Street Journal reported

that the company’s board waslooking into an allegation of im-proper personal behavior andwhether Mr. Sorrell had mis-used company assets. Mr. Sor-rell rejected the allegation “un-reservedly.” He has also morebroadly denied any wrongdoing.

The 73-year-old executive,who still owns 2% of WPP, hascreated a rival ad firm thatthis month outbid WPP forNetherlands-based digitalagency MediaMonks.

WPP Chairman RobertoQuarta said the CEO search hasbeen “challenging” for a publiccompany in the U.K., where re-muneration is typically lowerthan in the U.S. and it istougher to attract top talent.WPP also reduced CEO compen-sation after it was repeatedlycriticized by shareholders forhanding Mr. Sorrell some of thead industry’s biggest payouts.

WPP reached out to severaloutside candidates, includingMr. McLennan and Tim Arm-strong, who runs Verizon Com-munications Inc.’s Oath internetbusiness, people familiar withthe matter said. Mr. Armstrongdeclined to participate in thecontest, according to a personfamiliar with the matter.

WPP’s board heard presen-

tations from CEO candidateslast week, according to peoplefamiliar with the matter.

Among those making pre-sentations was Mr. McLennan,who once ran Young & Rubi-cam, one of WPP’s ad agencies.

Investors are counting onWPP’s new chief executive tosteady the company while alsocharting a new course. Clientssuch as Ford Motor Co., Uni-lever PLC and Procter & GambleCo. have been cutting back onfees they pay for ad services.Some have also been producingmore marketing in-house tosave money and give them-selves greater creative control.

Investors expect WPP to cutcosts by ending the practice ofallowing agencies to operatelike independent fiefdoms, du-plicating services as they com-peted against each other.“When we talk with clients,they want us to work together,not to work apart,” Mr. Readsaid in an interview in June.

WPP PLC executive MarkRead has emerged as the lead-ing contender to become chiefexecutive of the advertisinggiant, according to people fa-miliar with the matter, follow-ing the departure of founderMartin Sorrell.

Ad industry veteran andformer WPP executive HamishMcLennan, another top candi-date, is no longer in the run-ning, the people said.

Mr. Read is a longtime WPPexecutive who was elevated tothe role of co-chief operatingofficer in April when Mr. Sor-rell left the company.

“No decision has been takenyet on the appointment of thenew CEO and no announce-ment is expected imminently,”a WPP spokesman said.

Mr. Read, 51 years old,would inherit a company strug-gling to boost growth as it

BY NICK KOSTOVAND SUZANNE VRANICA

WPP Veteran Emerges as Top CEO Choice

Mark Read was elevated to co-chief operating officer in April.

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Cash-strapped movie sub-scription service MoviePasssuffered a service outage andits majority owner took out anexpensive short-term loan topay vendors in order to re-store full operations.

The outage, which causedticketing issues for customerson Thursday and Friday, addsto difficulties that have under-cut the company’s stock overthe past year.

MoviePass majority ownerHelios & Matheson AnalyticsInc. received $5 million undera loan from a Hudson Bay Cap-ital Management investmentfund to help pay merchant andfulfillment processors, whichcut off the movie-subscriptionservice, the company said in asecurities filing Friday.

Customers who tried to ac-cess the MoviePass app Fridaysaw a message saying therewere “technical issues withour card-based check-in pro-cess,” by which tickets are is-sued from a kiosk using a spe-cial debit card. The app notedit was still possible to get e-tickets from theaters withwhich MoviePass has a dealthat lowers its costs, which in-clude several small chains.

A tweet from the MoviePassTwitter account on Friday saidthe technical problem “is notwith our card processing part-ners.” MoviePass, through itsaccount, apologized in tweets

BY ANDREW SCURRIAAND ALLISON PRANG

MoviePass Taps Loan to Maintain Service Teck AnnouncesBoard Appointment

Dr. Norman B. Keevil, Chairman ofTeck Resources Limited (“Teck”) ispleased to announce that DominicBarton has agreed to join Teck’sBoard of Directors effectiveSeptember 1, 2018. He willsucceed Dr. Keevil as Chairman ofthe Board on October 1, 2018.

Mr. Barton has been the Global Managing Partnerof McKinsey & Company for the past nine years. Heis the Chair of the Canadian Minister of Finance’sAdvisory Council on Economic Growth and the Chairof the Seoul International Business Advisory Council.He is also a Trustee of the Brookings Institution, aRhodes Trustee, and an Adjunct Professor at TsinghuaUniversity in Beijing. He is one of the founders andserves on the Board of FCLT Global (Focusing Capitalon the Long Term), and is a member of the Boards ofMemorial Sloan Kettering in New York and the AsiaPacific Foundation in Canada. Mr. Barton graduatedfrom the University of British Columbia with a BAHonors in economics and studied as a Rhodes Scholarat Brasenose College, Oxford University.

Teck is a diversified resource company committed toresponsible mining and mineral development with majorbusiness units focused on copper, steelmaking coal,zinc and energy. Its shares are listed on the TorontoStock Exchange under the symbols TECK.A and TECK.Band the New York Stock Exchange under the symbolTECK. www.teck.com or follow @TeckResources.

Dominic Barton


Chef’d was one of the first com-panies to push into supermarkets,but ran into trouble as it did sowhile also running a complex e-com-merce operation that offered morethan 1,000 recipe choices.

Homebound meal kits are madedifferently than those sold in super-markets. Kit makers worry thatfresh products may linger in backrooms or hit expiration dates on theshelf, so some use ingredients thatcan last longer. HelloFresh, for ex-ample, doesn’t use fish for its super-market meal kits.

While products developed by bigfood companies tend to stay con-stant once they hit the shelves,meal-kit choices are in constant flux,with new recipes every week, saidTim Smith, senior vice president atBlue Apron, whose meal kits areselling in Costco Wholesale Corp.stores.

Despite the challenges, the mar-

as a co-founder and CFO at organic-girl, a packaged salad company.

To help keep a lid on costs, SunBasket, whose meal kits targethealth-conscious consumers, hasgone so far as to set up a Midwest-ern distribution center in a con-verted limestone cave—a cheaperway to keep its products cold thanspending millions to convert a con-ventional warehouse in the regionfor refrigeration. The temperatureinside the underground facility re-mains stable regardless of whetherit’s hot or cold outside, so the com-pany spends less on electricity.

Adding to the complexity of themeal-kit business: Blue Apron, Hell-oFresh and others are now lookingto supermarket sales to supplementsubscription-only revenue. Grocersalso want a piece of the action.Kroger Co. and Albertsons Cos. bothacquired meal-kit startups in thelast year.

Meal kits may makecooking easier, butgetting a box of pre-portioned ingredientsand instructions to acustomer’s door is one

of the most complicated logisticsriddles in the food business.

Companies have poured millionsof dollars into solving such ques-tions as how to stack fish and fen-nel in boxes. They’re also investingin systems to reroute shipmentsduring snowstorms and algorithmsto predict what customers want toeat during the summer months.

“It’s building a supply chain fromscratch,” says Ray Gonzales, vicepresident of U.S. production at Hel-loFresh SE, a Berlin-based meal-kitcompany that is the world’s largestby revenue.

Dozens of meal-kit options arenow on the market, but the pressureis growing for Blue Apron HoldingsInc., HelloFresh and others to showresults and turn profits. Los Angelesstartup Chef’d ceased operationsearlier this month after it couldn’tsecure fresh capital to keep its com-plex operations going. A Californiafood consultancy bought Chef’d ear-lier this week to focus on its retailoperations, rather than e-commerce.

Some meal kits are starting tostabilize financially. HelloFreshhopes to break even companywideby year’s end, and Blue Apron islooking to do the same next year.Chicago-based Home Chef said ithad two profitable quarters lastyear, and expects to have a full-yearof profitability by the end of 2018.

Meal-kit spending by consumershas grown three times as fast as inestablished food sectors such as res-taurants and grocery stores since2015, according to Nielsen. Still,meal kits constitute just a fractionof the overall $800 billion food andbeverage retail market.

Plans typically cost betweenabout $7.50 to $9.99 per serving,though most companies offer dis-counts for new subscribers.

Andrea Dennis, 34 years old, ofOrlando, Fla., and her husband eventook meal kits from HelloFresh withthem on vacation. “They’re all in theindividual packaging, so we justmade them there,” Ms. Dennis said.

But companies that sprang up ingarages or test kitchens are gettinga close look at just how expensiveand complicated it can be to delivermillions of boxes a month to cus-tomers’ homes or to supermarkets.

Startups have had to devise work-arounds for everything from heavyweather to diverting trucks aroundhighway accidents, and companyfounders have lots of war stories, es-pecially from the early days of theiroperations.

At Home Chef, a sudden recipechange could set off a scramble tosource ingredients at the last min-ute, with the chief operating officerin one instance filling up a truckwith potatoes himself.

“We had to figure it out our-selves,” said Pat Vihtelic, founder offive-year-old Home Chef, whoseprofits took a hit after it had toovernight shishito peppers from aCalifornia supplier because of a sub-par prior shipment.

When the “bomb cyclone” snow-storm shut down East Coast trans-portation networks in January, Hell-oFresh turned to one of its producesuppliers to help truck shipmentsfrom its Newark, N.J., warehouse toFedEx Corp.’s nearby regional airhub, flying out some of the boxes.

Many startups have brought infood-manufacturing veterans aspressure builds.

“Building a perishable-food busi-ness is not something you do quicklyor lightly,” said Don Barnett, SunBasket Inc.’s chief operating officer,who began his career at Dole FoodCo. and has 25 years of experiencewith perishable food, including roles

STRATEGY

Sun Basket set upits Midwesterndistribution centerin a convertedlimestone cave tokeep refrigerationcosts down.

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BY HEATHER HADDON AND JENNIFER SMITH

Purple Carrot stuck a recent dealwith Del Monte Produce to guar-antee fresh supply in return for astake in the company.

3. ASSEMBLE THE KITSStrategy: Makers are increasinglyturning to automation to improveassembly.Hurdles: Highly automated pro-cesses require more worker train-ing. Blue Apron lost customers af-ter its automated warehousecouldn’t ramp up as quickly as ex-pected.

Recipe for Success1. PLAN THE RECIPEStrategy: Many companies nowscrape data to learn what sellsbest by region or demographic.Hurdles: Some recipe basics don’tship well—eggs, for instance.Solutions: Some have stopped us-ing finicky ingredients; othershave devised special packaging toship delicate items.

2. SOURCE THE FOODStrategy: Companies now leaveless to chance in their supplychains.Hurdles: Unpredictable weathercan wipe out recipe ingredients.Solutions: Companies are lockingin suppliers or buying them out-right. Blue Apron bought the BNRanch grass-fed beef company.

HelloFresh meals bagged at aproduction facility in Newark, N.J.

Employees dress warmly inside Sun Basket’s warehouse in a cave.

Solutions: Some companies areautomating only some steps. Oth-ers rely more on human labor andingredients such as branded con-diments that come prepackagedfrom suppliers.

4. DELIVER THE BOXStrategy: Companies that deliverto both supermarkets and individ-ual customers face double the lo-gistical headaches.Hurdles: Bad weather can delaydeliveries, putting perishablefoods at risk.Solutions: Sun Basket has a re-frigerated truck network. HomeChef has devised breathable pack-aging for its greens to minimizedamage in transport.

Sun Basket has a refrigeratedtruck network for food delivery.

At Sun Basket, some items are packaged by hand, others by machine.

Getting perishable ingredients to customers is one of the biggest logisticalchallenges in the food business; don’t send eggplant.

TheMessyBusinessOf SellingMeal Kits

public offering last year, with itsshares losing two-thirds of theirvalue after debuting at $10, thecompany has started to recoverfrom operational problems.

But investors are getting choos-ier about where to put their money.Tech companies that venture capi-talists have traditionally backedhave much lower costs than meal-kit companies, financial filingsshow.

“Fresh food by its nature is per-ishable inventory,” said Rett Wal-lace of Triton Research, a providerof data on technology companies.“It’s easy to see how marketing anddelivery costs would zero out anymargin they make on the food it-self.”

Growth phases can also bringtrouble. After cookbook authorMark Bittman endorsed veganmeal-kit company Purple Carrot,demand swelled unsustainably forthe startup, which was founded in2014 by a former pharmaceutical

executive in his Boston-areagarage.

“We were literallybuilding the plane inflight,” said Chief Ex-ecutive Andy Levitt,who said operationshave now improvedand the company is

growing.To survive, startups

are scrutinizing each step oftheir operations. While some relylargely on manual labor, Blue Apronand Sun Basket Inc. are investingmillions in automation, such as ma-chines that dole out sauces or sealsingle-serving ingredients in tinybags.

At Blue Apron, the switch to au-tomation initially caused someglitches, and some customers’ or-ders arrived late or incomplete. Thecompany says timely, full arrival ofboxes has improved and the invest-ments are helping productivity.

At Blue Apron’s most automatedplant in New Jersey, radishes tum-ble down chutes, go through a sys-tem of scales to sort them byweight and are apportioned at arate of 70 bags a minute. Machinesalso make unique spice mixtures,executives said.

“Things that took us hours nowtake minutes,” said Ilia Papas, thecompany’s co-founder and chieftechnology officer.

HelloFresh, on the other hand,relies more on prepackaged ingredi-ents from suppliers, such as com-pany-branded pesto in travel-sham-poo-size bottles, an approach itsays allows for more supply-chainflexibility. But the company is look-ing to do more in-house food manu-facturing, a factor that drove its ac-quisition in March of organic-kitmaker Green Chef Inc.

Executives at several meal-kitcompanies have forged relation-ships with farmers and struck spe-cial deals to ensure supply and highstandards. Blue Apron bought theBN Ranch grass-fed-beef company,while Purple Carrot took a $4 mil-lion investment from Del MonteProduce Inc. in May to improve itssupply and reach.

Home Chef uses wireless sensorsand heat chambers to determinethe amount of cooling materialneeded for different times of theyear and parts of the country. It hasalso built algorithms to pull in liveweather feeds to predict the condi-tions for individual boxes.

Officials say they are also gettingbetter at learning what ingredientsand recipes not to ship or try. Mr.Vihtelic said Home Chef now avoidsshipping eggs, fresh berries and ba-nanas, as they proved too delicate.

Blue Apron’s culinary director,John Adler, says he has learned afew critical lessons: “Don’t sendeggplant. People don’t like bitterfoods. When in doubt, add cheese.”

ket is expected to grow. Meal-kitand food subscription companiessaw $281 million in venture-capitalinvestments last year, up from 2016levels but down from 2015 records,according to a PitchBookanalysis.

Companies havestruggled to acquireand maintain sub-scription customers,though some startupshave shown progressin moving beyond pro-motional deals to bringin paying subscribers.Home Chef, which raisedaround $52 million from investors,said its revenue more than doubledto $250 million last year. Kroger’sannounced acquisition of the com-pany in May for a total of $700 mil-lion gave a boost to the meal-kitsector overall.

After Blue Apron’s initially shaky

Play ourfood delivery game at:wsj.com/graphics/run-your-own-meal-

kit-company


STRATEGY

at affordable prices. At its peak inthe 1970s, it operated more than1,600 department stores, makingit a fixture in many Americanshopping malls. More recently, ithas been closing stores and sell-ing assets, including its corporateheadquarters in Plano, Texas, andits three private jets.

Mr. Ellison took the reins in2015 after more than a decade atHome Depot Inc. At the time, Pen-ney was reeling from the rockytenure of former Apple Inc. execu-tive Ron Johnson, who scaledback private-label brands andpromotions, alienating Penney’sshoppers. He also created in-storeshops to feature younger, hipperbrands such as Joe Fresh.

Mr. Ellison succeeded Mike Ull-man, a former Penney CEO whostepped back in for a brief stintfollowing Mr. Johnson’s depar-ture.

Mr. Ellison tilted the companytoward home appliances, a com-petitive business that Penney hadexited in 1983, in an attempt towin shoppers as Sears HoldingsCorp. closed stores.

There was one problem: Appli-ances have gross margins ofaround 20%, compared with 40%for apparel. As Penney rolled outappliances to 600 of its roughly860 stores, its margins shrank.

The logic was that applianceswould draw shoppers to Penney’sstores and increased sales wouldcompensate for lower margins.But sales haven’t increased much.After 18 months, Penney’s shareof the appliance market stands at0.9%, according to TraQline, aunit of Stevenson Co.

Mr. Tysoe said the strategywas worth trying. “Time will tellwhether it’s a business we stay

After Mr. Ellison’s departure,Penney created an Office of theCEO consisting of four executivesto run the company temporarily.None of them have apparel expe-rience.

The chain has been unprofit-able for 15 of the past 17 quartersand is saddled with $4 billion indebt. Sales in the fiscal yearended Feb. 3 were down by morethan one-third from a prereces-sion peak of nearly $20 billion.

As other retailers turn a cornerafter several tough years, Penneycontinues to flounder. Its shareshave fallen about 24% this yearand now trade below $3. Sharesof Macy’s and Kohl’s Corp. are uproughly 59% and 36%, respec-tively.

Founded in 1902 by JamesCash Penney, the retailer becameknown for selling quality apparel

Penney’s ProblemJ.C. Penney has struggled to turnaround its business, and its shareshave lagged behind rivals’ this year.

Source: SIX


60

–40

–20

0

20

40

%

J F M A M J J

Macy’s

Kohl’s

J.C. Penney

Shortly after the young woman

walks into Howard Gurr’s psychol-

ogy practice, she is taken to a

beach and encouraged to relax. Dr.

Gurr then changes course, bringing

his patient to a restaurant or other

place that is a source of anxiety.

Dr. Gurr is a thera-

pist who is using vir-

tual-reality scenery to

tackle the anxieties

and body-image is-

sues of patients with

eating disorders like

anorexia, bulimia and binge eating.

He uses a combination of cogni-

tive behavioral therapy and virtual

reality to relax his patients in a

peaceful setting and educate them

on anxiety. Then, he introduces

more stressful environments (a res-

taurant or dressing room) through

a program called PsiousToolsuite.

Before VR “I had to have them

sit there and say let’s work through

the anxiety-provoking situations

and reduce your anxiety,” Dr. Gurr

says. “With VR…I can go through

the entire process of desensitizing

their anxiety and it’s in my office.”

Psious has a variety of environ-

ments where professionals can con-

trol the scenery, monitor patients’

stress levels and guide their percep-

tions of reality. The dressing-room

environment, for example, allows a

patient to use a virtual body to rep-

resent her “ideal” body

and how she sees her-

self. Then, the therapist

can introduce a virtual

body that represents

the patient’s actual

measurements. This al-

lows the patient to get a truer sense

of actual body size.

Although VR shows signs of be-

coming a more effective way to

treat eating disorders, it still isn’t

widely used, in part because earlier

iterations were expensive.

Now, doctors can buy subscrip-

tion plans to VR treatment pro-

grams. The Psious program has

three tiers: a $39-a-month plan that

includes four treatment sessions; a

$99-a-month plan that has 12 ses-

sions; and $1,299-a-year plan that

includes unlimited sessions.

—Waverly Colville

in,” he said.Overall, Mr. Tysoe defended

Mr. Ellison’s tenure, saying hepaid down $1.6 billion in debt andimproved e-commerce operations.The former CEO also pushed tomake Penney a more diverse em-ployer. The number of female andminority directors doubled duringhis tenure, according to a com-pany spokeswoman.

Through a Lowe’s spokes-woman, Mr. Ellison declined tocomment on his time at Penney.

But the core apparel businesssuffered. The category underper-formed Penney’s expectations inboth the holiday quarter and thefirst quarter of this year, whichended May 5. Penney’s apparelstruggles come as clothing saleshave picked up across the indus-try. So far this year, apparel is ontrack to post its strongest salesgains since 2012, according to theconsulting firm Customer GrowthPartners.

People close to the companyfault Mr. Ellison for eliminatingthe chief merchant job, a criticalposition that determines whichproducts a retailer carries. Pen-ney’s buyers reported to Joe Mc-Farland, a former Home Depot ex-ecutive recruited by Mr. Ellison tobe the retailer’s chief customerofficer. Mr. McFarland is leavingPenney at the end of July to joinLowe’s as executive vice presidentof stores, according to both com-panies.

Several longtime merchantsleft the company during Mr. Elli-son’s tenure, creating a voidamong executives with apparelexperience, the people said.

“We did lose our way,” saidMike Robbins, Penney’s executivevice president of supply chain anda member of the CEO Office. Hesaid the problem wasn’t a lack ofapparel talent, but rather a pushto woo millennial shoppers “thattook our eye off our core cus-tomer.”

In recent years, Penneylaunched brands such as Belle &Sky, Libby Edelman and a line ofwomen’s clothes inspired by theTV show “Project Runway” to bet-ter compete with H&M and For-

ever 21. The new brands weregiven prime space near store en-trances, crowding out more estab-lished labels favored by its oldercustomers such as Liz Claiborne,Worthington and St. John’s Bay.

Now, Penney is trying to winback women in their 50s and 60s.It recently held an event at itscorporate offices modeled afterthe TV show “Shark Tank,” whereexecutives pitched ideas “to makeher love us again,” Mr. Robbinssaid.

One idea included openingstores an hour early exclusivelyfor loyal customers, who would beable to shop the latest Liz Clai-borne offerings ahead of the gen-eral public.

Brenda Hodgkiss, of MonmouthCounty, N.J., said she hasn’tbought much at Penney since thechain reduced promotions underMr. Johnson, the former CEO.These days, the 78-year-old doesmost of her shopping at Macy’s,which she said has a bigger selec-tion and better quality.

“People don’t really talk aboutPenney anymore,” said Ms. Hodg-kiss. “They’ve almost become ir-relevant.”

‘J.C. Penney doesn’thave several years tofigure this out,’ ex-CEOAllen Questrom says.

For years, conven-tional wisdom saidthe smart way tobuild a blockbustercompany was toamass big amounts ofinformation on your

customers. Now comes the down-side: Big Data can also inflict bigharm on a business.

Companies are facing an erosionof faith in their ability to do theright thing with what they’velearned. A growing number of peo-ple don’t trust tech giants to re-sponsibly handle what we share.

Facebook Inc. Chief ExecutiveMark Zuckerberg is the most visi-ble tech executive to face the musicthus far. Facebook shares crashedthis past week after reportingslower-than-expected revenuegrowth in the wake of the Cam-bridge Analytica privacy scandal.

The confidence problem tran-scends Facebook. In 2017, credit-re-porting firm Equifax Inc. disclosedthat the personal information ofnearly 150 million people was com-promised in a data breach. Beforethat, Uber Technologies Inc. paidhackers $100,000 to keep secretthe theft of 57 million accounts.The list goes on.

Analysts have for a while beenpredicting a downturn in publicsentiment toward Big Data. In 2013,for instance, consulting firm Ernst& Young in a survey report titledThe Big Data Backlash said “theGolden Age of anytime, anywhere,free-for-all access to customerdata” would come to end in 2018.

Regulations could slow the abil-ity to collect data. Take the Euro-pean Union’s new General DataProtection Regulation: Its enforce-ment began in late May and led toa decline of one million Facebookusers in that region during the sec-ond quarter.

Companies are responding byappointing more chief data officerswho report directly to the CEO,Ernst & Young’s global analyticsleader, Beatriz Sanz Saiz, said in aninterview. While this promotes bet-ter accountability, it is primarilybecause “the first priority for mostexecutives is to leverage their owninternal data.”

Ms. Sanz Saiz estimates compa-nies typically use only 5% to 10% ofthe data they collect. They wouldlike to use more. That’s why a slateof industries—from oil to transpor-tation to health care—are beefingup internal data departments orforging new partnerships with techgiants like Alphabet Inc.

Companies can’t just leave thesestrategies to the tech guys, saidAndrew White, an analyst with techresearch firm Gartner. Boards of di-rectors need to look at the func-tions tied to Big Data (machinelearning, artificial intelligence orcloud computing, for instance) withthe same rigor as executive pay, fi-nancial auditing or managementsuccession.

“IT cannot do the type of gover-nance we’re talking about,” Mr.White said.

Ernst & Young’s survey foundnearly 80% of respondents believecompanies collect data in order toline their pockets rather than tosimply make life easier for consum-ers. “As a result, they are becomingmore selective about who theyshare data with and a backlash isbuilding,” the firm said.

To counter this, companies mustprove they can do more than sim-ply “monetize” our data. TheCleveland Plain Dealer recentlypublished columns illustrating oneconsequence of Big Data fears:Older people were being requiredto have their license swiped beforebuying age-restricted items at Gi-ant Eagle grocery stores—and theywere concerned about the protec-tion of their personal information.

“They’re not scanning it becauseof your age,” Roy Hewitt, a 71-year-old-retired sports editor at that pa-per, told me.“My beard is olderthan 21.” He alerted a columnist atPlain Dealer about the practice.

A Giant Eagle spokesman said:“We understand that some custom-ers might have reservations abouthaving their identification cardsscanned and want to reassurethose customers that Giant Eagletakes its responsibility to protecttheir personal data very seriously.”

Mr. Hewitt says he no longergets carded, but still has a dimview. “You can’t trust some banksand some companies to look atyour credit and not get hacked.How in the world are you going totrust a grocery store?”

Big DataFalls VictimTo a Breach—Of Trust

ON BUSINESS

JOHN D. STOLL

After spending the pastfew years chasing aftermillennials, J.C. Pen-ney Co. executives saythey are now focusedon wooing another elu-

sive group: middle-aged moms.The shift is the latest about-

face for a retailer that has veeredfrom one strategy to the next asit has cycled through three chiefexecutives in nearly seven years.The company is on the hunt foranother leader following the exitin May of Marvin Ellison, who leftto become CEO of home-improve-ment chain Lowe’s Cos. Analystsand investors say time is runningout to revive a retailer that wasknown for dressing Middle Amer-ica.

“J.C. Penney doesn’t have sev-eral years to figure this out,” saidAllen Questrom, a retired retail-ing executive who ran BarneysNew York Inc., the Neiman Mar-cus Group and the predecessorcompany to Macy’s Inc., beforehelming Penney from 2000through 2004. “They are at riskof becoming irrelevant. They’velost a lot of customers. Gettingthem back becomes more andmore difficult.”

Penney Chairman Ronald Tysoesaid the board’s priority is to re-cruit a CEO with apparel experi-ence. The category accounts formore than half of the chain’s$12.5 billion in annual sales andstruggled under Mr. Ellison, a vet-eran of the home-improvementsector who pushed Penney intoappliances.

“The challenge is to reinvent,but you don’t want to throw thebaby out with the bathwater,” Mr.Tysoe said. “To some extent, wedid that.”

After a failed attempt to woo millennial buyers and an ill-fated push intoappliances, the retailer is refocusing on its core middle-aged customers

J.C. Penney has been unprofitable for 15 of the past 17 quarters. Above, a customer at a Penney in Peoria, Ill.

DANIELACK

ER/B

LOOMBERGNEWS

BY SUZANNE KAPNER

J.C. PenneyTries to

Win Back MomsPSIOUS

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TECHNOLOGY

tics system around bar code scan-ners, which allowed it to beat outsmaller retail rivals. Notably, itnever sold this technology to anycompetitors.

Just spending money on technol-ogy doesn’t cut it, however. “In re-tail, Sears in the ’80s was IBM’sbiggest customer,” says Mr. Bessen.“They were a big investor in IT butthey just proved incapable of com-peting effectively with Walmart andits systems.” Part of the problem

RIKIBLA

NCO

almost matches their outlay forR&D and capital expenditures.

This also has implications forwages—the rise in the wage gapsince 1978 is almost entirely attri-buted to an increase at more-pro-ductive firms that occurred aspay at less-productive firms re-mained relatively static, accord-ing to the National Bureau of Eco-nomic Research.

When new technologies weredeveloped in the past, they woulddiffuse to other firms fast enoughso that productivity rose acrossentire industries. Samuel Slater,the “father of America’s industrialrevolution,” was able to more orless single-handedly bring Eng-land’s pioneering power-loomtechnology to the U.S. by appren-ticing himself to an English weaverand memorizing the design of hislooms and mills. And 20 years ago,firms could adopt Microsoft Officeor Adobe’s desktop publishing soft-ware and instantly disrupt largerfirms that were slower to adoptthis new technology.

But imagine instead of powerlooms, someone is trying to copyand reproduce Google’s cloud infra-structure itself. What if Excel hadnever been consumer software, butinstead was, say, a closely guardedpiece of Ernst & Young’s internal in-frastructure?

What we see now is “a slowdownin what we call the ‘diffusion ma-chine,’” says Dr. Calligaris.

One explanation for how thiscame to be is that things have justgotten too complicated. The tech-nologies we rely on now are mas-sive and inextricably linked to theengineers, workers, systems andbusiness models built around them,says Mr. Bessen. While in the past itmight have been possible to license,steal or copy someone else’s tech-nology, these days that technologycan’t be separated from the systemsof which it’s a part.

Think of Facebook’s artificial-intelligence engine, which it de-veloped at great cost for its name-sake social network, but then wasable to migrate with relative easeto Instagram. Could Instagramhave developed something equiva-lent on its own? Snap and Twittermay try to copy aspects of it, butthey can’t see enough under thehood to truly clone it.

And what about Amazon? Sure,you can start a business that usesAmazon’s cloud-computing servicesand taps into its logistics platformby selling on its site, but the soft-ware Amazon developed to enableAmazon Web Services and its retailmarketplace are not themselvesavailable for other firms.

Walmart built an elaborate logis-

A 12-year veteran of the human-resources department of cloud-computing company Sales-force.com, Ms. Robbins describesherself as an “introverted leader”who relies on close friends andmentors to instill confidence andcurtail her tendency to be self-critical. Day to day she considersher “champion” to be Keith Block,Salesforce’s vice chairman, presi-dent and chief operating officer.Here, four of her other trustedadvisers.

Age 46Education B.S. in political sciencefrom Santa Clara UniversityFamily Husband, Jim, and hope-fully a labrador or a beagle atsome point in the futureFavorite Book I love to cook andfrequently read cookbooks.When does your alarm go off onweekdays? I set an alarm for 6a.m., but I usually wake up before.

—Laine Higgins

CindyRobbinsChief people officer,

Salesforce.com

ANASTA

SIIASAPONFO

RTH

EWALL

STR

EETJO

URNAL

PERSONAL BOARD OF DIRECTORSThe trusted advisers of top business leaders

JimRobbins,husband anddirector ofengineering atAlta Motors

When Ms. Rob-bins was tappedto lead Sales-force’s human-re-sources division,her husband be-came a stabilizinginfluence when-ever she doubtedherself. “We havethis phrase, ‘Let’sgo for a walk,’ ”she says. “When Ineeded to go fora walk thatmeant I neededsome fresh per-spective.”

George Hu,chief operatingofficer at Twilio

Mr. Hu, the for-mer chief operat-ing officer ofSalesforce, is thefirst person Ms.Robbins thankswhenever she re-ceives profes-sional recognitionbecause of therole he played as“my biggest advo-cate and mytoughest critic,”she says. Hetaught her topush boundariesby embracing theuncomfortable.

Leyla Seka,executive vicepresident ofAppExchange atSalesforce

A friend of 20years, Ms. Sekateamed up withMs. Robbins in2015 to spearheadthe first of twoaudits of Sales-force’s gender-paypractices—an ini-tiative thatyielded salary ad-justments forthousands of em-ployees, earnedthe company in-ternational praiseand Ms. Robbins apromotion to hercurrent role.

Ken Burke,vice president ofmajor accounts atDocuSign

Fast friends sincetheir freshmanyear of highschool, Mr. Burkeand Ms. Robbinswere classmatesat Santa ClaraUniversity andbriefly colleaguesat Salesforce. Shethinks of Mr.Burke as “thatperson I couldphone any time Ineeded” and heregularly remindsher to be proudof her accom-plishments.

Your suspicionsare correct: The big-gest companies in ev-ery field are pullingaway from their peersfaster than ever,sucking up the lion’s

share of revenue, profits and pro-ductivity gains.

Economists have proposedmany possible explanations: topmanagers flocking to top firms,automation creating an imbalancein productivity, merger-and-acqui-sition mania, lack of antitrust reg-ulation and more.

But new data suggests that thesecret of the success of the Ama-zons, Googles and Facebooks of theworld—not to mention the Wal-marts, CVSes and UPSes beforethem—is how much they invest intheir own technology.

There are different kinds of ITspending. For the first few decadesof the PC revolution, most compa-nies would buy off-the-shelf hard-ware and software. Then, with theadvent of the cloud, they switchedto services offered by the likes ofAmazon, Google and Microsoft. Likethe difference between a tailoredsuit and a bespoke one, these sys-tems can be customized, but theyaren’t custom.

IT spending that goes into hiringdevelopers and creating softwareowned and used exclusively by afirm is the key competitive advan-tage. It’s different from our stan-dard understanding of R&D in thatthis software is used solely by thecompany, and isn’t part of productsdeveloped for its customers.

Today’s big winners went all in,says James Bessen, an economistwho teaches at Boston UniversitySchool of Law and who recentlywrote a new paper on the policychallenges of automation and artifi-cial intelligence. Tech companiessuch as Google, Facebook, Amazonand Apple—as well as other giantsincluding General Motors and Nis-san in the automotive sector, andPfizer and Roche in pharmaceuti-cals—built their own software andeven their own hardware, inventingand perfecting their own processesinstead of aligning their businessmodel with some outside devel-oper’s idea of it.

The result is our modern econ-omy, and the problem with such aneconomy is that income inequalitybetween firms is similar to incomeinequality between individuals: Aselect few monopolize the gains,while many fall increasingly behind.Might it eventually be the case thatthe biggest firms aren’t just domi-nant, but all-encompassing?

The measure of how firms spend,which Mr. Bessen calls “IT inten-sity,” is relevant not just in the U.S.but across 25 other countries aswell, says Sara Calligaris, an econo-mist at the Organization for Eco-nomic Cooperation and Develop-ment. When you compare the top-performing firms in any sector totheir lesser competition, there’s agap in productivity growth thatcontinues to widen, she says. Theresult is, if not quite a “winner takeall” economy, then at least a “win-ner take most” one.

That productivity gap corre-lates with the increase in spend-ing on proprietary IT, says Mr.Bessen. In 1985, firms spent onaverage 7% of their net invest-ment (which includes software,new buildings, R&D and the like)on proprietary IT, according todata from the Bureau of EconomicAnalysis. In 2016, about 24% ofU.S. firms’ net investment wentinto proprietary IT. That’s nearly$250 billion in a single year, and

IT IntensityPercent of net investment thatcompanies spend on proprietaryinformation technology

THEWALL STREET JOURNAL.Source: James Bessen/Bureau of Economic Analysis

30

0

5

10

15

20

25

%

’90 2000 ’101985

with Sears’s approach could be thatit hired an outside technology firminstead of doing the work—andbuilding the infrastructure of talent,systems and institutional knowl-edge—itself.

This seemingly insurmountablecompetitive advantage that comeswith big companies’ IT intensitymay explain the present-day maniafor mergers and acquisitions, saysMr. Bessen. It may be difficult orimpossible to obtain critical tech-nologies any other way.

And Mr. Bessen doesn’t think theadvantage is due to differences inregulation, as the biggest firms arebecoming more productive acrossmany countries—in both the U.S.and in Europe. It might, in fact, ex-plain why recent efforts by the Eu-ropean Union to penalize Googleand other tech companies withmassive fines could come to naught.

It’s not clear just how long thisphenomenon will drive the biggestfirms in each sector to grow fasterthan their competitors. But astech’s giants tiptoe toward monop-oly, it’s worth asking whether mod-ern information technology hasbuilt in a kind of natural law thatsays we’re destined to buy all ourgoods and services from just ahandful of ultra-giants, once they’redone buying or out-competing ev-eryone else in their markets.

KEYWORDS | CHRISTOPHER MIMS

Tech Will Make

The BiggestEven Bigger

The secret of success for Amazon, Google andMicrosoft in the winner-take-all economy is how

much they invest in their own IT


For State Street Corp., thecompany that pioneeredthe $5 trillion exchange-traded fund industry, it’sbeen a long way down.

Earlier this month, theBoston firm’s asset-management di-vision reported that investors tookout as much cash as they put intoits $639 billion ETF business thisspring. It was the worst showingamong the three largest issuers andsent State Street Global Advisors’share of the U.S. ETF industry to anall-time low.

State Street launched the firstETF 25 years ago and dominatedthe market for a decade. Today, itsslice of U.S. ETF assets is just17.3%—down from 49% 15 years ago.More worrying for its future, StateStreet captured just 5.9% of the$343 billion that poured into ETFsin the past year. By contrast, Van-guard Group and BlackRock Inc.’siShares took in a combined 67%.Even Charles Schwab Corp., a rela-tive newcomer with just 22 ETFs,had a fatter haul.

How State Street squandered itsfirst-mover advantage for one ofthe most popular financial productsever created shows that being firstcan sometimes be as much of a hin-drance as a head-start.

It’s easy to point out StateStreet’s missteps in hindsight, butno one knew then how big the ETFindustry was going to be, said JimRoss, chairman of State Street’sglobal SPDR business. “If you goback 25 years, you can think ofsome things you might do differ-ently,” he said.

To be sure, State Street is still thethird-largest ETF issuer, but it hasbeen hamstrung by a product suitethat’s vulnerable to market whims.It has struggled to connect withmom-and-pop investors. Some of itsmost popular funds are burdened bydecades-old agreements that makeState Street’s funds more expensivethan the competition’s, a disadvan-tage in an industry where the cheap-est funds win the most assets.

State Street doesn’t even ownthe brand name of its ETF fran-chise, and instead pays hefty fees torent it from index provider S&PGlobal Inc.

Nowhere are State Street’s prob-lems more apparent than in its flag-ship fund. The SPDR S&P 500 ETFTrust, best known by its ticker SPY,has swelled into a $269 billion be-hemoth and is one of the most-traded securities on the planet. Butit has seen $4.2 billion in investorwithdrawals in the past year whilenearly identical products fromBlackRock and Vanguard—whichcost half as much—gained a com-bined $26.3 billion.

Named after Standard & Poor’sDepositary Receipts, shortened toSPDR (pronounced “spider”), SPYwas the first to package every com-pany in the S&P 500 index into a

FINANCE

NEW

YORKSTO

CKEXCH

ANGE

“The ETFs were a small part ofa big bank that didn’t get thisbusiness,” said John Jacobs, a for-mer Nasdaq executive wholaunched the popular Nasdaq 100ETF in 1999. “They were really, re-ally conflicted about how much toput into the business and howmuch to go after it.”

When a quirky San Francisco off-shoot of Barclays PLC rolled outdozens of new iShares ETFs inmid-2000, State Street was slow toperceive the threat. In the yearsthat followed, the upstart hired amassive sales force, sponsored aTour de France team (later droppedamid doping allegations) andbacked a catamaran racing seriesthat traveled the world, iShares em-blazoned on the sails.

IShares unseated State Street asthe world’s largest ETF issuer inearly 2004 and widened its lead inthe years that followed. Vanguard,too, pushed into the market, and itslow-cost funds quickly began gob-bling up market share.

State Street was caught flat-footed. Its ETFs were sold undermultiple brand names. The ideas forits biggest successes, notably SPYand the sector ETFs, had come fromoutside the firm. In fact, StateStreet nearly declined the WorldGold Council’s idea for a bullion-backed ETF. The fund, better knownby its ticker GLD, is now one ofState Street’s most lucrative.

To amp up its brand recognition,State Street consolidated all of itsETFs under the SPDR name in 2007,but there was a downside: TheSPDR trademark belongs to S&P.When it expanded its use of thename, State Street also extendeduntil 2031 a contract under whichS&P gets one-third of the fees paidby SPY’s investors. S&P’s cutalone—$3 a year for every $10,000invested—is almost as much as theentire fee BlackRock and Vanguardcharge for their comparable funds.

Between SPY and other fee-shar-

Spider Wars

THEWALL STREET JOURNAL.Source: FactSet

State Street's flagship S&P 500 ETF is facingincreasing competition from cheaper rivals.

SPDR S&P500 ETF Trust

ETF assets, in billions

0

100

200

300

400

$500

’14 ’15 ’16 ’17 ’182013

Vanguard S&P 500 ETF

iShares Core S&P 500 ETF

SPDR S&P 500 ETF Trust

State Street's Long FallState Street launched the first ETF in1993, but its market share has declinedto an all-time low.

State Street

iShares

Vanguard

THEWALL STREET JOURNAL.Source: Morningstar

75

0

25

50

%

20102000 ’05 ’15

ing arrangements, State Street paidalmost $143 million to S&P lastyear, more than triple the licensing,data and other fees paid by Van-guard and almost double those ofBlackRock, which bought iSharesfrom Barclays in 2009.

Those legacy contracts make itdifficult for State Street to matchaggressive price cuts from Black-Rock and Vanguard, especially afterBlackRock launched an ultra-low-cost ETF lineup in 2012.

Compounding the problems, thefallout from the financial crisis leftState Street financially hobbled. In2011, activist investors urged thefirm to sell off the investment-man-agement division. Market sharekept falling, along with morale in itsETF business.

The firm hired a consultant tofigure out where it had gone wrong.Some of the client feedback wasscathing. Customers called StateStreet “amateurish” and “plain va-nilla” compared to the “rocket scien-tists” at the competition, accordingto a copy of the 2013 report re-viewed by The Wall Street Journal.

Executives summoned dozens ofmanagers to a two-day meeting atBabson College in October 2013, afew miles from its Boston headquar-ters. The message: State Streetneeded a comeback. But some ofState Street’s ETF veterans grum-bled that the firm had paid consul-tants to repeat what they’d beentelling their bosses for years.

Following the report, State Streetrecruited several new executives,among them iShares alum RoryTobin, who is now head of the SPDRETF business.

Shortly after he arrived, Van-guard overtook State Street as thesecond-largest ETF issuer, and StateStreet’s market share continued tofall as investors flocked to thecheaper ETFs offered by BlackRockand Vanguard.

“When I started here in Decem-ber 2014, I was struck by the way itwas organized—or maybe the de-gree to which it was not orga-nized—the way iShares was,” Mr.Tobin said.

State Street has since restruc-tured its fragmented ETF business,an ongoing process that included anoverhaul of its sales force last year,Mr. Tobin said.

One of the biggest changes wasState Street’s introduction of itsown low-cost lineup last October, amove that industry analysts viewedas long overdue. The funds havesince attracted more than $16 bil-lion in new investor cash. But justas it took years for State Street tosquander its lead, it will also takeyears to regain its former domi-nance, if it can.

“It’s step by step,” Mr. Tobinsaid. “I’m not going to say there’s asilver-bullet answer that gets usback up to significant marketshare.”

The New,Confusing,Disclosurething they need to know aboutrisk and return, they will makegood decisions. In practice, in-vestors rarely read disclosures,seldom understand them and,even if they do, often ignorethem anyway.

Nowadays, the typical dis-closure drones on for dozensof pages, largely to immunizeinvestment professionals orthe issuers of securities fromgetting sued later if anythinggoes wrong. It turns out thereare perils in this prolixity: Along enumeration of risks canlead investors to believe thatevery possible hazard has beenaccounted for. It can also makeany given risk seem harder tounderstand and more improba-ble. Thus, the more you readabout risks, the less they mayseem to matter.

Requiring advisers to dis-close their conflicts can alsobackfire, say Don Moore of theHaas School of Business at theUniversity of California, Berke-ley, and Daylian Cain at YaleSchool of Management, whostudy the psychology of con-flicts of interest.

When an adviser discloses aconflict, investors may con-clude he is being candid, para-doxically leading them to trusthim more. An adviser may alsofeel biased advice becomesmore justifiable once he re-veals his conflicts.

No wonder financial advis-ers thrive on dizzyingly com-plex disclosure requirements.“They don’t have to disembarkfrom the gravy train,” saysProf. Cain. “They just have todisclose that they’re on it.”

One way to simplify: RussellGolman, a professor of behav-ioral economics at CarnegieMellon University, suggests theSEC should recruit a largegroup of investors and use anonline survey tool to “see if or-dinary people can figure outwhat the form is supposed totell them.” The agency couldthen keep simplifying untilmost—ideally, 95%—of the in-vestors understand the form.

Even that approach mightnot be simple enough, saysRichard Thaler, an economistat the University of Chicago’sBooth School of Business andwinner of the 2017 Nobel Prizein economics. “All these paperdisclosures and all the fussabout which numbers need tobe on what page are just sillyand a waste of time,” he says,“because no one reads themanyway.”

Instead, regulators shouldrequire a standard set of datain a uniform, machine-readableformat. Such “smart disclo-sure,” says Prof. Thaler, is “awonder drug.”

Open access to structureddata, he says, would quicklyfoster a new marketplace inwhich third parties could rateand analyze financial adviserson their fees, conflicts andother relevant factors.

Online businesses are al-ready applying smart disclo-sure: Yelp uses public-healthrecords to display hygienescores for restaurants, andTrulia trawls data from theU.S. Census Bureau and othersources to map neighborhoodsby such quality-of-life mea-sures as average household in-come, commuting time andcrime rates.

“People should be able tosimplify their choices so theydon’t keep making costly mis-takes,” says Sophie Raseman,head of financial solutions atBrightside Benefit Inc., astartup in San Francisco thatseeks to help employees makebetter choices across a varietyof everyday decisions.

If the SEC required com-puter-readable disclosure offees, conflicts and a few otherfactors, “that structured datawould give the next generationof entrepreneurs the raw mate-rial they need to provide newapps and services that couldprovide people with unbiasedassistance” in choosing an ad-viser, Ms. Raseman says.

That should also bring feesdown and focus more sunlighton conflicts. Every investorwould be better off.

ContinuedfrompageB1

It Pioneered the ETF—

Then Lost Its Market MagicTwenty-five years ago, State Street launched the hit investment product. Now, it’s No. 3 in the market

it started, outflanked by savvy rivals with better marketing and lower costs.

To celebrate the 1993 debut of the SPDR S&P 500 ETF Trust, the now-defunct American Stock Exchange brought in a 9-foot inflatable spider.

BY ASJYLYN LODER

Even some on the SEChave expressed doubtsabout a proposedbroker-disclosure form.

single share that, unlike a mutualfund, could be bought and sold onthe stock exchange. The now-de-funct American Stock Exchange cel-ebrated SPY’s January 1993 debutby hanging a 9-foot inflatable spiderover the trading floor and givingout hundreds of plastic spider rings.

SPY was a far bigger hit than itsinventors had predicted, and StateStreet followed with new ETFspegged to other stock indexes, in-cluding the popular sector ETFsthat invested in industries like en-ergy and technology.

But there were early signs oftrouble. The staid Boston institutionhas long treated its ETF business asan afterthought compared with itsfar larger businesses in trust bank-ing and asset management for ma-jor institutional investors.

Earlier in July, State Street’sshare price plummeted after thefirm announced it was buying a fi-nancial-data firm and cancelingplanned share buybacks. In theearnings call that followed, ETFswere barely mentioned.


BANKING & FINANCE NEWS

Seeking a fresh start in Sili-con Valley, former Social Fi-nance Inc. chief and co-founder Mike Cagney nowadmits that an affair with asubordinate was a reason forhis abrupt departure last yearfrom the firm.

Mr. Cagney resigned in Sep-tember 2017 from the finan-cial-technology company fol-lowing accusations andlawsuits from former employ-ees that managers sexually ha-rassed female employees with-out repercussions. In afarewell note to employees,Mr. Cagney cast his departureas a way to refocus attentionon SoFi’s mission of savingconsumers money on theirstudent loans.

Now, Mr. Cagney is addinganother reason for deciding toleave a startup he led for sixyears. In an interview withThe Wall Street Journal, hesaid that he had consensualsexual relationships with fe-male subordinates, somethinghe had previously denied pub-licly. He also said he had mis-led SoFi’s board of directorsabout one of the affairs.

“I made a regrettable mis-take,” Mr. Cagney said. “Iwasn’t forthright with theboard, and it’s part of why Istepped down.” A SoFi spokes-man declined to comment.

Mr. Cagney is opening up ashe debuts his latest venture:Figure Technologies Inc., a fi-nancial-technology startup fo-cused on home-equity lendingthat made its first loan thisweek. It has hired around 90employees and raised $58 mil-lion in venture capital, a pro-cess that involved persuadingpotential investors and re-cruits that he has learnedfrom his leadership shortcom-ings at SoFi.

“He deserves a secondchance,” said David Chao, a

general partner at DCM Ven-tures who invested in Figureand was on SoFi’s board whenMr. Cagney left. Mr. Cagney“did a lot of soul searchingand learned a lot from thosemistakes,” Mr. Chao said.

Mr. Cagney was one of sev-eral Silicon Valley executiveswho have relinquished theirjobs since last year as part ofa wider reckoning of the treat-ment of women in the technol-ogy industry and beyond.

Over a span of six years,SoFi went from an idea Mr.

Cagney cooked up with class-mates from Stanford Univer-sity’s business school to astartup valued at more than$4 billion that had extendedmore than $20 billion in loans.As recently as August 2017, itwas marching toward an ini-tial public offering.

Around that time, a formeremployee in a SoFi operationscenter in Healdsburg, Calif.,filed a lawsuit against SoFi,claiming he was fired for re-porting that a manager madesexual or inappropriate com-ments to female colleagues.The employee, BrandonCharles, accused Mr. Cagney ofallowing male employees to“engage in inappropriate sex-ual conduct.”

The lawsuits filed againstSoFi related to harassment orwork culture have either beensettled or are in the process ofhaving settlements finalized.Mr. Charles dropped Mr. Cag-ney as a defendant and in Maythe parties settled the case,according to court filings anda SoFi spokesman. Mr.Charles’s lawyer and SoFi de-clined to discuss the settle-ment, saying terms were con-fidential.

Mr. Cagney said he neverwitnessed any incidents ofsexual harassment in the of-fice but was aware that thehuman-resources departmenthad addressed some issues. He

added that he “should havetaken a harder line” on one in-cident involving a top execu-tive’s inappropriate banter.

After Mr. Charles’s lawsuitwas filed, the Journal reportedthat in 2012 SoFi’s board hadauthorized a payment to alower-level employee to settlea dispute she had with Mr.Cagney.

At the time the board said“there was no allegation or ev-idence of a romantic or sexualrelationship between Mr. Cag-ney and the employee.” Mr.Cagney and the board haven’tdiscussed the nature of thedispute.

Mr. Cagney said in the in-terview his sexual relation-ships weren’t with the em-ployee involved in the dispute.

SoFi’s cultural issuesweren’t limited to how womenwere treated. An intense focuson growth created an environ-ment where some employeesfelt pressure to work extrahours at night and on holidaysto avoid being fired and whereexecutives would break furni-ture and throw telephones outof anger, the Journal previ-ously reported in September.

“The culture [at SoFi] wasvery results-oriented,” Mr.Cagney said in the interview.“What that does is create astructure where you can lookpast bad behavior when re-sults are delivered.”

He said he is doing thingsdifferently at Figure. Hebrought in a mostly female ex-ecutive team, including itschief risk officer and its gen-eral counsel. His wife and co-founder, June Ou, serves asthe company’s chief technol-ogy officer, a role she previ-ously held at SoFi. She de-clined to comment on Mr.Cagney’s sexual relationships.

He is also giving any em-ployee who meets recruits achance to a chance to weigh inon how the hire would affectFigure’s culture, said AlanaAckerson, a former vice presi-dent of SoFi and Figure’s chiefpeople officer. While at SoFi,Mr. Cagney said he didn’t pri-oritize cultural fit in hiring de-cisions.

SoFi has continued to ex-pand its lending in Mr. Cag-ney’s absence. The company ex-tended a record $3.6 billion instudent, personal and mortgageloans in the first quarter. Its fi-nancial performance hasslipped, however, as higher-than-expected delinquencies ledSoFi to miss its earnings pro-jection for the fourth quarter.

Meanwhile, investors inFigure are expecting Mr. Cag-ney can generate earnings be-fore interest, taxes, deprecia-tion and amortization of $150million in 2020, according to adocument reviewed by theJournal.

BY PETER RUDEGEAIR

Former SoFi Chief Opens Up on Affairs

Former SoFi CEO Mike Cagney now runs Figure Technologies.BRENDANMCDERMID/R

EUTE

RS

beating Wall Street expecta-tions. Earnings have jumped25% from a year earlier, above19% growth for domesticfirms.

Investors have worried inrecent months that tarifffights between the U.S. andkey trading partners likeChina and Europe would hurtmultinational firms that relyon overseas sales. Companiesare also struggling with laborshortages and higher costs forthings including raw materialsand transportation.

Those fears had encouragedinvestors to dump shares ofexporters in favor of domestic-focused companies. That is a

Wells Fargo’s brokerage di-vision was known for salesgoals—and payouts—that werehigher than industry peerssuch as Morgan Stanley andBank of America Corp.

Advisers across the wealth-management business some-times shifted client assets be-tween products such ascertificates of deposit andstructured notes, or put cli-ents into products that earnedthe bank higher fees, currentand former employees said.

In doing so, financial advis-ers relied on opaque fee ar-rangements, the employeessaid. What’s more, once a cus-tomer signed certain paper-work, advisers were often ableto make changes to accountswithout having to update the

customer, they added, whichcould trigger additional fees.

Ms. Leordeanu said “all feesare fully disclosed.”

For years, managers pres-sured advisers to funnel cli-ents with assets of more than$2 million into a higher-feeplatform known as InvestmentFiduciary Services, currentand former employees said.

Wells Fargo often mandatedclient quotas for riskier alter-native investments, such asprivate equity and hedgefunds, regardless of whetherthey were appropriate, accord-ing to employees and internalbank documents reviewed bythe Journal. Wealthier clientsoften were placed in the GAIAgility Income Fund or theGAI Corbin Multi-StrategyFund, which are majorityowned by Wells Fargo andfrom which the bank couldalso collect management fees.

Ms. Leordeanu said not allclients pay these managementfees, and some are refunded.

Dave Coffaro, who ran theInvestment Fiduciary Servicesplatform, was asked to leavethe bank earlier this month, ac-cording to people familiar withthe matter. Mr. Coffaro said hisexit wasn’t related to fees orinappropriate sales goals.

The East Valley region ofPhoenix was a hotbed forthese problems, according tocurrent and former employees.

Advisers had goals of$64,000 in annual productsales for private-bank clients,or those with assets above $2.5million on the Investment Fidu-ciary Services platform. If theydidn’t hit the target, they wereremoved from top branches,according to the September let-ter sent to regulators, whichwas described to the Journal.

Wells Fargo recentlymarked the brokerage file of aformer regional manager inArizona as under review forpossible “inappropriate refer-rals or recommendations orwhether he failed to superviseany inappropriate referrals orrecommendations,” accordingto a document from the Finan-cial Industry Regulatory Au-thority, Wall Street’s self-regu-latory group. The manager,Mahes Prasad, left the bankearlier this year.

Mr. Prasad said he left thebank for “personal reasons un-

related to any issue WellsFargo is reviewing.” He addedthat he didn’t pressure em-ployees to sell, refer or recom-mend inappropriate solutionsto clients or move advisers toother branches if they didn’tachieve sales goals.

Between 2012 and 2015, cer-tain advisers were eligible fora “Growth Award,” a bonus ofat least 15% for growing reve-nues by 15% each year. Whilesuch awards are common inthe industry, Wells Fargo’spayouts were much higherthan that of other firms, in-dustry participants said.

The bank allotted $250 mil-lion for the Growth Award bo-nuses. But since advisers usedloopholes to hit goals, WellsFargo had to pay out more

than $750 million between2012 and 2015.

Among employees, 2015 be-came known as “the year ofthe annuity” because adviserswould push clients into thesehigher-fee products to meetrevenue targets. Some adviserswould redeem clients from an-nuities that had large surren-der charges, employees said.

One practice within thewealth-management businessharks back to the fake-accountscandal that rocked the bankin 2016.

Some advisers could earnhigher payouts through de-ferred compensation by put-ting more clients into so-calledEnvision plans, which the banktouts as a way to stay in touchwith clients’ “real-life goals,dreams, and needs.”

Employees wrote fake or in-accurate client information toboost their plan numbers to-ward deferred compensationas recently as 2016, accordingto current and former employ-ees and internal documents.

“If we determine a plan isnot updated as recommended,we take action to improve it orturn off the plan,” Ms. Leor-deanu said.

were longstanding problemswith the bank’s dealings withwealth-management customers.In January, two financial advis-ers in Orange County, Calif.,sent a formal complaint to theSEC alleging similar problems.

The Arizona letter, whichhasn’t been previously re-ported, led to investigationsby the Justice Department andthe SEC. The Journal has re-ported on those probes.

ContinuedfrompageB1

WhistleBlown onWells Fargo

The bank oftenmandated clientquotas for riskierinvestments.

turnaround from last year,when investors poured moneyinto multinational companiesthey felt were best positionedto benefit from a synchronizedpickup in the global economy.

The Russell 2000 index—composed of smaller firmswith less foreign exposure—isup 8.3% this year, comparedwith a 5.4% gain for the S&P500 and 3% for the Dow JonesIndustrial Average.

Recent earnings reportsfrom companies includingHoneywell International Inc.and Boeing Co. indicate strongeconomic growth is offsettingthose pressures for now.

During its earnings call this

month, industrial conglomer-ate Honeywell described theimpact of tariffs as “minimal”while raising its 2018 salesguidance. Boeing, the world’slargest plane maker by sales,on Wednesday boosted its rev-enue outlook amid strongglobal demand. The company’sshares have been hard-hit bytariff concerns this year.

“We’re not necessarilyhearing companies voice anoverwhelming amount of con-cern about trade,” said PatrickPalfrey, an equity strategist atCredit Suisse. “For all the con-cerns, demand is still there;consumers are still opening uptheir wallets.”

U.S. exporters are stillgrowing faster than companiesthat do most of their businessat home, a sign that tradespats and rising costs forthings such as labor and com-modities aren’t derailing thecorporate profit expansion.

Firms with large overseasbusinesses have reported 12%growth in revenue so far forthe second quarter, accordingto Credit Suisse. That isroughly double the rate ofgrowth for domestic-focusedfirms.

Exporters’ profit growth forthe second quarter is also

BY CHELSEY DULANEY

Earnings Thrive for U.S. ExportersYear-over-year growth Stock performance since Jan. 26

Overseas BoostMultinationals are posting stronger earnings growth thandomestic-focused firms even as trade concerns weigh on their shares.

Sources: Credit Suisse (revenues and earnings); SIX (stock performance)THEWALL STREET JOURNAL.

25

0

5

10

15

20

%

RevenuesEarnings

5

–15

–10

–5

0

%

FDomestic-focusedExporters M A M J J

Russell 2000 index

Dow JonesIndustrial Average

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THEWALL STREET JOURNAL. * * * * * * Saturday/Sunday, July 28 - 29, 2018 | B13

The U.S. dollar inchedlower on Friday after the firstreading of U.S. growth for thesecond quarter showed theeconomy grew at the stron-gest pace in nearly four yearsbut slightly less than analystsexpected.

The WSJ Dollar Index,which measures the U.S. cur-

r e n c yagainst abasket of 16o t h e r s ,

closed down 0.1 point, or 0.1%,at 88.29, paring its early gainsfollowing the gross domesticproduct data. Growth momen-tum shifting back to the U.S.has kept the dollar near itshighest levels in more than ayear.

Friday’s data showed GDProse 4.1% in the second quar-ter, up from the first quarter’srevised growth rate of 2.2%but below the 4.4% clip ex-pected by economists sur-veyed by The Wall StreetJournal.

Analysts said the readingshould do little to derail U.S.growth momentum, thoughsome are skeptical that pacecan be maintained. Investorshad been expecting a strongreading Friday for weeks, andPresident Trump Thursdayeven predicted a positivenumber.

“Because it was so hyped,the real expectation washigher,” said Lee Ferridge,head of macro strategy forNorth America at State StreetGlobal Markets. “There’s a lit-tle bit of disappointment, butit’s hard to be too disap-pointed with a 4.1% GDP num-ber.”

Investors are waiting to seeif the Federal Reserve willraise interest rates morequickly than previously antici-pated to keep the economyfrom overheating, as somethink the central bank willneed to get more aggressive tosend the dollar to fresh 2018highs.

The Fed staying on a grad-ual path has still supportedthe U.S. currency with othercentral banks acting morecautiously. The dollar surgedThursday after the EuropeanCentral Bank confirmed it in-tends to end its bond pur-chases in December but prob-ably won’t raise interest ratesthrough next summer.

Analysts are also monitor-ing comments from Mr.Trump, who has said he wantsfewer rate increases and aweaker dollar, to see if theymove the U.S. currency out ofits current trading range.

Some doubt the dollar willmove much higher unless in-flation picks up or more inves-tors start betting recent U.S.growth rates are sustainable.

CURRENCIES

An LNG terminal in Yokohama, Japan. U.S. gas fetches a higher price in Asia than in Europe, where Russian gas is more economical.

TOMOHIROOHSUMI/BLO

OMBERGNEWS

rigs climbed to match its high-est total since January 2015.

Expectations for a restart ofoperations at the Canadian oil-sands facility Syncrude at theend of the month also pres-sured the market, said BobYawger, director of the futuresdivision at Mizuho SecuritiesU.S.A.

“People are trying to unloadthese barrels because they’rejust not economical at theselevels,” Mr. Yawger said.

Major oil producers havebeen increasing productionahead of U.S. sanctions on Iran,due to come into force in No-vember.

“The extra supply is comingbefore the loss of supply,” saidTorbjørn Kjus, co-founder of oiltrader Vistin Trading.

On Wednesday, top crude ex-porter Saudi Arabia halted ship-ments via a Red Sea trade routedue to attacks on two of itstankers by Houthi rebels.

The market reaction wasmuted, analysts said, due to thekingdom’s recent increase insupply, alongside rising outputfrom other members of the Or-ganization of the Petroleum Ex-porting Countries and Russia.

Oil prices declined on Fridayas signs of rising productionhelped ease geopolitical con-cerns that had bolstered themarket this week.

Light, sweet crude for Sep-tember delivery fell 1.3% to

$68.69 abarrel on theNew YorkMercantile

Exchange. Brent, the globalbenchmark, lost 0.3% to $74.29a barrel.

On Friday, Russia’s energyminister indicated that thecountry may increase produc-tion by more than previouslyanticipated this year, whichcould undermine a joint agree-ment among major oil exportersto limit supply made in 2016.

Meanwhile, anticipation ofincreased supply in NorthAmerica also weighed on prices,traders said.

Data on Friday from BakerHughes showed that the num-ber of active oil rigs in the U.S.increased by three to 861.

In the Permian Basin in WestTexas, the number of active oil

BY STEPHANIE YANGAND SARAH MCFARLANE

Oil Declines on SignsOf Increasing Supply

COMMODITIES

comparison, delivery to Guan-dong, China, will bring in $8.08and to Futtsu, Japan, $8.47.

Peter Altmaier, Germany’sminister of economic affairs,said that Europe has expressedwillingness to build the infra-structure needed to take U.S.LNG. However, “it will, ofcourse, have to be competitive[in terms of price],” he said.

At the moment, it isn’t. Atcurrent prices, U.S. gas deliv-ered to Europe costs, on aver-age, over $7 per million BTUs.In comparison, Russian pipelinegas costs between $4.5 and$5.5, according to Energy As-pects.

Russian gas flows throughlong-established pipelinesstraight into Europe.

Since the U.S. started export-ing gas in 2015, very little hascome to Europe. Last year,around 3 billion cubic meters ofU.S. gas was delivered to the EUand Turkey, up from 0.5 bcm in2016, according to S&P GlobalPlatts Analytics.

By comparison, in 2017, Rus-sian gas giant PAO Gazprom’sexports to Europe rose nearly8% to 192.2 billion cubic meters,mostly to Western Europeancountries.

—Laurence Normancontributed to this article.

Gas GripGazprom’s natural-gas exports to Europe rose to a record last year

THEWALL STREET JOURNAL.Source: PAO Gazprom

200

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75

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125

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175

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’80s1975 ’90s 2000s ’10s

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U.S. government bondprices rose Friday after a keymeasure of U.S. economicgrowth reached its strongestlevel in four years but fell be-low some forecasts.

The yield on the benchmark10-year Treasury note settledat 2.962%, according toTradeweb, compared with

2.975% Thurs-day. Despite Fri-day’s decline,the 10-year yieldnotched its big-

gest one-week advance sincemid-May.

Yields fell sharply after theCommerce Department saidgross domestic product, abroad measure of the goodsand services produced acrossthe U.S., had reached 4.1% inthe second quarter. Econo-mists surveyed by The WallStreet Journal had estimated a4.4% increase.

“If we’d seen a more wide-spread, or more non-tariffdriven increase in certaincomponents, the market wouldbe more comfortable with thisnumber,” said Ian Lyngen,head of U.S. government strat-egy at BMO Capital Markets.

The 10-year yield hadclimbed late Thursday aheadof the GDP data. Some ana-lysts had expected a strongerprint to push the benchmarkyield above 3% for the firsttime since May 17.

Friday’s U.S. economic datamean it is still likely the FederalReserve will raise interest ratesat its September meeting tokeep the economy from over-heating, some analysts said. Atits June meeting, the Fed tenta-tively scheduled two additionalrate increases this year.

“I think it is a reinforce-ment of the fact that the econ-omy is doing quite well andgrowing, but not at a pacethat it’s likely to cause infla-tion to spiral,” said Jim Sarni,managing principal at Payden& Rygel Investment Manage-ment. Inflation poses a threatto the value of bonds becauseit erodes the purchasingpower of their fixed paymentsand can spur the Fed to raiseinterest rates.

Fed funds futures, used byinvestors to bet on the directionof interest-rate policy, late Fri-day showed a 71% probabilitythat Fed officials will raise ratesat least twice more this year,according to CME Group data.

BY ORLA MCCAFFREY

Economic ReportBuoys Bond Prices

CREDITMARKETS

President Trump wants Eu-rope to buy more U.S. gas, butVladimir Putin’s Russia standsin the way.

On Wednesday, Mr. Trumpand European CommissionPresident Jean-Claude Junckerdialed down trade tensions withmeasures that include a prelim-inary agreement for Europe tobuy more liquefied natural gasfrom the U.S.

Surging U.S. LNG exportsand Europe’s desire to reduceits dependence on Russian fuelwas widely expected to helpbreak Moscow’s dominance onthe continent. However, in re-cent years, Russia has increasedits exports to Europe, and U.S.LNG has failed to take anymeaningful market share. Rus-sia is the European Union’s topsupplier, with around a 35%market share.

Russian gas is simplycheaper and U.S. exporters maynot actually want to rush to Eu-rope, given their gas fetches ahigher price in Asia, driven byChinese demand.

“Where that gas goes is justdictated by the dynamics of theglobal gas market and it’s notclear to me what any [EuropeanUnion] policy maker could actu-ally do to change that,” saidTrevor Sikorski, an analyst atLondon-based consultancy En-ergy Aspects.

A U.S. LNG cargo out of Sa-bine Pass, La., currently fetches$6.58 per million British ther-mal units in the U.K. and $6.65in the Netherlands, according toS&P Global Platts Analytics. By

Tough Sell: U.S. Gas Exports to Europe

The S&P 500 fell Friday butmanaged to post its fourthstraight weekly advance, asstrong earnings from a num-ber of firms helped offset an

end-of-weekslide in thetechnologysector.

Investorsparsed a mixed batch of dataand earnings results over thecourse of the week thatbroadly suggested the U.S.economy remains strong, evenas certain industries haveshown signs of weakening.

Data on Friday showed theU.S. economy grew 4.1% fromApril through June—the fast-est pace in nearly four years,though lower than the expec-tation of economists surveyedby The Wall Street Journal.Tech titans like Alphabet andAmazon.com reported earn-ings that blew past analysts’estimates, sending theirshares higher.

Yet disappointing earnings

from a number of other com-panies put pressure on thetech sector, sparking wildswings.

Facebook logged the biggestone-day loss in market capital-ization ever Thursday afterwarning its growth was slow-ing, while Intel and Twittertumbled after their earningsfailed to meet investors’ ex-pectations. Twitter slumped$8.82, or 21%, to $34.12 Fri-day, logging its biggest one-day decline since February2014. Meanwhile, Intel shed4.48, or 8.6%, to 47.68 andNetflix—which earlier in themonth had missed its own es-timates for subscribergrowth—fell 7.88, or 2.2%, to355.21.

Shares of home builderssuch as PulteGroup and Len-nar also struggled for tractionafter data showed home salesslipping in the second quarter,even as the broader economycontinued expanding.

After a nine-year rally, in-vestors have largely come toexpect solid earnings acrossthe board. That makes compa-nies that have missed earningsestimates vulnerable to sharpreversals, said Mohit Bajaj, di-rector of ETF trading solutionsat WallachBeth Capital.

The Dow industrials fell76.01 points, or 0.3%, to

25451.06 on Friday. The S&P500 shed 18.62 points, or 0.7%,to 2818.82, and the NasdaqComposite lost 114.77 points,or 1.5%, to 7737.42.

For the week, the blue-chipindex added 1.6% and the S&P500 climbed 0.6%, while theNasdaq fell 1.1%—notching itsbiggest one-week slide sinceJune.

Elsewhere, European andAsian stocks headed higher,with investors citing reliefover a tentative trade trucebetween the U.S. and the Eu-

ropean Union. Stocks receiveda midweek bump after Presi-dent Trump and EuropeanCommission President Jean-Claude Juncker agreed not toimpose new tariffs while thetwo trading partners sortedout their differences.

The Stoxx Europe 600 fin-ished up 0.4% Friday andposted a weekly gain, led bythe telecommunications andbasic-resources sector.

In Asia, Hong Kong’s HangSeng gained 0.1% Friday, andJapan’s Nikkei rose 0.6%.

BY AKANE OTANIAND BEN ST. CLAIR

Tech Sparks Bumpy RideS&P 500 ekes outfourth straight weeklyadvance, buoyed bystrong earnings

FRIDAY’SMARKETS

Swing and a MissShares of Twitter and Intel tumbled Friday after both companiesreported earnings that disappointed investors.

Source: SIX THEWALL STREET JOURNAL.

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S&P 500

By SarahMcFarlane,Bojan Pancevski

and Georgi Kantchev

BY AMRITH RAMKUMAR

Dollar IsNudgedLower byGDP Data

year were rather lackluster,especially for financial firms,he said.

In addition, millions of Indi-ans are pouring money intoshares for the first time. Thathas supported stock priceseven as overseas buyers, whoown roughly a quarter of themarket, have grown more cau-tious.

Locals added roughly $800million in new positions thismonth, overwhelming the $44

million sold by foreigners.Unlike rivals in Tokyo and

Shanghai, for example, whichexperienced previous huge ral-lies, peaking in 1989 and 2007respectively, it is also compar-atively easy for this market tobreak new ground.

Moreover, India is compara-tively less exposed to changesin U.S. trade policy. The U.S.-China spat has rippled

through Asia, hurting compa-nies that rely on cross-bordertrade.

Shares of outsourcers andsome banks have driven thisyear’s gains in the Sensex,which has 31 constituents andis dominated by financial com-panies, which make up roughly41% of the index’s value.

Kotak Mahindra Bank andYes Bank are some of the big-gest advancers, gaining more30% and 17% respectively thisyear.

The rally in banking sharesis partly driven by a newbankruptcy code, which ana-lysts say should help chipaway at the bad loans cloggingup Indian banks and con-straining lending.

Outsourcers Tata Consul-tancy Services Ltd. and InfosysLtd. have surged the most, by46% and 33% respectively forthe year.

It could be difficult for therally to go much further. Manyanalysts say valuation multi-ples already look rich: theSensex trades at more than 19times expected earnings forthe next 12 months, higherthan its 10-year average of lessthan 16 times, according toFactSet.

Indian shares have surgedto a series of all-time highsthis week, fueled by soaringprofits and the country’s rela-tive isolation from globaltrade.

The widely followed S&PBSE Sensex rose nearly 1% onFriday to 37,336, a recordclose. The index has surged9.6% in 2018, making it thebest-performing major bench-mark in the Asia Pacific re-gion.

Analysts point to severalreasons for the rally. For astart, India is booming, evenas neighboring China showssigns of slowing, and was thefastest-growing big economyin the first three months of2018. All else being equal,solid growth bodes well forcorporate earnings, and tendsto send shares higher.

In fact, per-share earningsfor companies in MSCI’s Indiaindex should rise 28% in 2018,far outpacing the roughly 15%growth for emerging marketsin Asia as a whole, said BenLuk, a global macro strategistat State Street Global Markets.It helps that net profits last

BY SAUMYA VAISHAMPAYANAND DEBIPRASAD NAYAK

India Shares Rally to Record

The BSE Sensex hassurged 9.6% in 2018,fueled by soaringprofits.


The next fortune in the auto in-dustry will be made by companiesthat dominate the electric car mar-ket. Good luck picking the winners.

Within a decade or two, electriccars are widely expected to replaceconventional engine cars. A bigwave of new models is comingnext year. Right now, though, rela-tively few fully electric cars arebeing sold. The market is wideopen.

Investors trying to pick winnersare parsing what little data isavailable, but that could lead themdown the wrong path. Wide varia-tions in quality, price and profit-ability make handicapping the racenearly impossible.

Sales data tell one story. China’sBYD and BAIC are in the lead, fol-lowed by Tesla and BMW. The alli-ance of Renault, Nissan and Mit-subishi is ahead of Tesla if thethree partners’ sales are aggre-gated. But this ranking could lookvery different in two years’ time,after nearly all the big brands havelaunched electric cars. In the lux-ury market currently dominated byTesla, Audi and Jaguar are due tolaunch fully electric products laterthis year.

Moreover, unit sales data saynothing about a car’s price or prof-itability. Tesla’s average sellingprice in the first quarter wasroughly $85,000, about four timesthe price of the most popular elec-tric cars in China. As for profitabil-ity, Tesla isn’t the only one thatstruggles to make money: Mer-cedes-owner Daimler warned inSeptember 2017 that its electriccars come with a lower marginthan its traditional cars.

The winner in the electric carderby could be the company that

on company policy. Tesla rejectedpatents in 2014, “in the spirit ofthe open-source movement.”

Perhaps the simplest way tojudge who is ahead in electric carsis to assume that experience mat-ters: Aside from Tesla, Nissan,BMW and GM were industry pio-neers, and still have some of themost credible all-electric modelscurrently on the market. Nissan’sLeaf, first launched in 2010, is stillthe world’s best-selling electric carin cumulative terms.

The lack of solid data on theleaders and laggards of automotivetech may not be as great a prob-lem for investors as it seems. Thatis because improvements in elec-tric cars will come not from carmakers but from battery supplierslike Samsung and LG Chem work-ing out how to increase power fora given cost.

The real winners from the revo-lution in car tech could be suppli-

makers to join it. Fiat Chrysler hasjoined in the belief there is novalue in fighting a technologicalarms race.

GM has taken the opposite ap-proach with Cruise, its autono-mous car unit. This has earned it a$2.25 billion investment from Soft-Bank Group’s Vision Fund, and pe-riodic jumps in its stock price, butin the long run it could prove ex-pensive.

Car stocks are unusually cheapjust now, none more so than Daim-ler and BMW, which are trading atsix and seven times earnings, re-spectively. Buying the currentdip—and then selling when senti-ment improves based on electriccars or something else—could beprofitable for investors.

All car manufacturers will endup making the car of the future.Tempting as it is, investorsshouldn’t fixate on who wins therace.

EXCHANGE

HEARD ONTHESTREET

FINANCIAL ANALYSIS & COMMENTARY

figures out how to sell a mass-market electric car at a profit.Tesla’s problems with its Model 3show the challenge, while Chevro-let’s all-electric Bolt is reportedlysold at a loss. It is unclear whetherNissan’s new Leaf, the latest mass-market rollout, is profitable,though Alliance boss Carlos Ghosnhas claimed he is alone in startingto turn a profit on electric cars.

The problem is companies aren’tselling electric cars now for profit.Batteries are still too expensive forthat. Instead they need to meet en-vironmental restrictions in Europeand China, while hoping to gener-ate returns in a somewhat distantfuture.

One way to get insight into fu-ture profitability is through patentdata. But that can give a skewedview: BYD has a larger book of pat-ents covering powertrain electrifi-cation than BMW, according todata firm Aistemos. Much depends

The Fool’s GameOf Picking the

Electric Car ChampBY STEPHEN WILMOT Charging

THEWALL STREET JOURNAL.Sources: EV-volumes*June 2017 through May 2018

Electric vehicle sales overthe past year*

0 thousand 15050 100

BYD

BAIC

Tesla

BMWGroup

SAIC

VW Group

Geely

Nissan

GM

Hyundai-Kia

Battery electric Plug-in hybrids

Assembly workers connect a battery pack underneath a 2018 Chevy Bolt, a car that GM reportedly sells at a loss.

Growth Outlook:Solid for Rest of Year

UnderlyingGDP trend points to continuedmomentum

BY JUSTIN LAHART

The economy did fine in the sec-ond quarter. The question for inves-tors is how it will do for the rest ofthe year.

Gross domestic product grew at a4.1% annual rate in the second quar-ter, up from 2.2% in the first, theCommerce Department said Friday.The reality isn’t quite so good, buteven though the economy might notbe off to the races, it is growing sol-idly and set to retain that momen-tum throughout 2018.

GDP reports are always a bit of amess, with oddities in the data cre-ating distortions. This one wasmessier than most.

The first issue: the effects oftrade skirmishes. The reportshowed that the U.S. trade deficitnarrowed appreciably, adding a bitmore than a full percentage point toGDP growth. A big reason is that ex-porters were racing to get goods offthe dock before retaliatory tariffs ona number of U.S. products were im-posed. Exports of foods, feeds andbeverages—a category that includesthe soybeans China placed a 25%tariff on this month—rose at a 110%annual rate. That export surge won’tbe there in the third quarter, andthe likely result is that trade will bea negative for GDP as a result.

On the other hand, businessescut their inventories and this low-ered GDP. To some extent this mighthave happened because goods thatotherwise would have been stock-piled got put on boats to Europeand China, but it also might reflecta pickup in demand that businessesdidn’t anticipate. That could set thestage for inventory restocking in thethird quarter, which could boostGDP.

Stripping out trade and inventoryeffects, final sales to domestic pur-chasers grew at a 3.9% annual rate,driven by a 4% increase in con-sumer spending. These measures ofunderlying demand also might beslightly misleading as they reflect acatch-up from the first quarter. Fi-nal demand grew by 1.9% and con-sumer spending grew at an annualrate of just 0.5% in the first quarter,in part due to issues like harsh win-ter weather.

For now, the best thing to do isto look at the underlying trend in fi-nal demand. It is up 2.9% from ayear earlier, which is better than the2.4% this time last year, as well asthe 2.3% rate it has averaged sincethe recession ended in 2009. Thathardly counts as a boom, but it indi-cates the economy has gained a bitof momentum that ought to carrythrough the year.

Twitter Loses Users.Are Advertisers Next?The social-media platform’s shares were duefor a decline, but the stock remains vulnerable

BY ELIZABETH WINKLER

Twitter’s stock, which had beenup over 70% this year, was over-heated. Though it flattened aftera crackdown on fake accounts, thestock was due for a spill. Inves-tors should have seen it coming.

On Friday, the social-media com-pany reported declining monthlyactive users. Analysts had expecteda monthly average of 338.5 millionusers, up from 336 million lastquarter, but Twitter hit only 335million. That sent the stock tum-bling more than 20%.

The company blamed factorsincluding changes it has made toimprove the “health” of the plat-form and the impact of Europeanregulations to protect consumerdata. Like Facebook, which suf-fered its steepest stock-marketdecline since its IPO six years ago,Twitter is seeing the conse-quences of its sometimes-toxicnetwork.

The recent purging of fake ac-counts occurred after the close ofthe second quarter, so thoselosses weren’t reflected in this re-port. About 70 million accountsthat were removed in May andJune weren’t part of the report

either, according to Chief Finan-cial Officer Ned Segal, becausethey weren’t active on the plat-form for 30 days or more.

More disappointing, still, forinvestors, was Twitter’s loweredforecast. Full-year projections de-clined, suggesting the companymay see a drop in users nextquarter, too.

On other measures, the com-pany performed well. It reportedearnings of 17 cents per share,meeting analysts’ estimates, andrevenue of $711 million, exceedingestimates of $696 million. The24% year-over-year revenuegrowth was a reflection particu-larly of gains in its advertisingbusiness, which grew 23%. Twit-ter’s success in figuring out howto make money from its businesshas been the big driver of thestock’s run-up. But if users leave,advertisers may, too.

As with Facebook, investorsstayed too enthusiastic for Twit-ter amid serious headwinds. ButTwitter doesn’t have the earningspower of Facebook, making thestock more vulnerable to furtherdeclines. Twitter had a good run,but it’s time to take a more soberview of the stock.

Twitter TroubleAdvertising revenue, quarterly

THEWALL STREET JOURNAL.Source: the company

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Tariffs, such as the 25% levy China put on soybeans, are clouding theeconomic picture. Here, soybeans are loaded into a trailer at a Buda, Ill., farm.

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;OVER

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OVERHEARDMoviePass lets customers

see unlimited films in the-aters for less than $10 amonth. If horror is your pre-ferred genre, though, simplybuy and hold the parent com-pany’s stock for seemingly un-limited chills.

Shares of Helios &Matheson Analytics, whichowns the majority of Mov-iePass, plunged on Fridaymorning. What would be acataclysmic fall for moststocks is, in this case, as pre-dictable as what happenswhen the clueless teenagergoes into the dark basementor whether Jason will returnto hack again. The stock isdown more than 90% just thispast week.

The company recently an-nounced a 1 for 250 reversesplit in the shares.

“We believe this is an im-portant step that will facili-tate our access to capital overthe next several years” ChiefExecutive and Chairman TedFarnsworth said in a press re-lease.

After all, it can be hard tomake money charging peoplea fraction of what you paythe people who provide thema service. On Friday, the com-pany said in a regulatory filingthat it had borrowed $5 mil-lion to pay ”merchant and ful-fillment processors.”

If the selling continues, an-other reverse split in the nearfuture wouldn’t be much of aplot twist.

‘Hereditary’ star Toni Collette.

ers in established and defensibleindustry niches. Heard on theStreet has previously featured car-chip group Infineon and battery-cathode manufacturer Umicore asplays on electrification.

One implication is that car com-panies should share technology,

and the costs of developing it,rather than driving solo. This ap-plies equally to driverless cars, forwhich electric vehicles are oftenseen as a prerequisite: BMW in2016 formed a partnership with In-tel and Mobileye—since bought byIntel—and encouraged other car

Little data and fewprofits make it difficultto identify winners inthe electric car market.

THEWALL STREET JOURNAL. **** SATURDAY/SUNDAY, JULY 28 - 29, 2018 | C1

GENETIC ENGINEERING

A new technology maygive scientists thepower to alter speciesforever. But what sayshould affectedcommunities have? C3

EVERYDAY MATH

Paradoxes helpmathematicianssolve problems—and the rest of usmake our morningcoffee. C4

ForeverWarsAfter four decades ofconflict, the U.S. hasstopped looking foran exit from theMiddle East.C4

InsideVIDEOGAMES

The Joy of‘Fortnite’

The blockbustergamemeetsneeds that othershave ignored. C3

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General and StatesmanThe life of Charles

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CULTURE | SCIENCE | POLITICS | HUMOR

lated trade deficits. The U.S. is now bypassing WTO rulesand threatening Beijing with tariffs on up to $500 billionof imported goods.

The moves against China are part of Mr. Trump’swider effort to upend longstanding U.S. policy on tradeand also the international institutions and agreementsthat govern trade. Whether the administration’s shift isa much-needed corrective or a disastrous reversal de-pends in large part on how one views the original deci-sion to bring China into the international trade regime.

Given China’s enormous presence in the world econ-omy today, it’s difficult to remember how economicallybackward the country was in the early 1990s. Inflation hit24% in 1994. Nearly 60% of the population lived on lessthan $1.90 a day. Bicycles jammed the streets, not cars.

Chinese reformers saw their country’s entry into theWTO as a way to modernize. To join, China would haveto reduce sky-high trade barriers and allow a greater rolefor foreign firms. State-owned firms would finally facecompetition, and private enterprise, they hoped, wouldsoar. “WTO membership works like a wrecking ball,smashing whatever is left in the old edifice of theplanned economy,” said Jin Liqun, China’s vice ministerof finance at the time.

The WTO is a membership organization. To get in,China had to cut deals with all the members but most im-portantly with the U.S., the world’s dominant economy.U.S. officials thought they were driving a hard bargain.The deal forced Beijing to slash tariffs, permit foreign in-


With a congressional vote looming inthe spring of 2000, President BillClinton mustered his best argumentsfor why lawmakers should approvehis proposed deal for China to jointhe World Trade Organization.

Adding China would link Beijingto Western economies and reduce the government’s abil-ity to control its vast population, he said in a speech thatMarch at Johns Hopkins’s School of Advanced Interna-tional Studies. “By joining the WTO, China is not simplyagreeing to import more of our products, it is agreeingto import one of democracy’s most cherished values, eco-nomic freedom,” Mr. Clinton said. “When individuals havethe power not just to dream, but to realize their dreams,they will demand a greater say.”

Mr. Clinton’s idealistic rhetoric played well amongmost of Washington’s elites, but a trade lawyer often dis-missed as a protectionist, Robert Lighthizer, was skepti-cal. As he had warned in a New York Times op-ed a fewyears earlier, if admitted to the WTO, mercantilist Chinawould become a “dominant” trading nation. “Virtually nomanufacturing job in [the U.S.] will be safe,” he wrote.

Mr. Lighthizer is now the U.S. Trade Representative,President Donald Trump’s chief negotiator on globaltrade. In the administration’s view, allowing China to en-ter the WTO in 2001 was a historic mistake that cost theU.S. millions of jobs and trillions of dollars in accumu-

BY BOB DAVIS

Left, ChinesePremier ZhuRongji andPresident BillClintonconferred inApril 1999,with trade akey topic.

REVIEWCulture in the AirThe pleasures of outdoormusic and theater, despitethe rain and gnats. C5

WHEN THEWORLD OPENED

THEGATESOFCHINA

Was it a mistake forthe U.S. to allowChina to join theWorld TradeOrganization?Assessments of

the 2001 deal oftendetermine positionsin today’s bittertrade debate.

C2 | Saturday/Sunday, July 28 - 29, 2018 * * * * THEWALL STREET JOURNAL.

Mr. Trumptouched aCaterpillarwheel loaderwhile touringa Made inAmericaproductshowcase inJuly 2017.

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ics but also homes and cars.Economic reform has waxed and waned in

China. The WTO deal was supposed to curb thepower of China’s state-owned enterprises, whichBeijing pledged would operate on commercialterms only. By some measures, that has occurred.Nicholas Lardy, a China expert at the Peterson In-stitute for International Economics, estimates thatstate-owned firms now account for just 20% ofChina’s industrial output, down from double thatshare in 2001.

But there has been a reversal in the past fewyears, according to Mr. Lardy. State investment inthe economy is growing as much as three timesfaster than private investment, he says. State firmshave once again become the heart of Chinese eco-nomic policy-making.

Beijing is counting on such firms to becomeglobal leaders in semiconductors, electric vehicles,robotics and other high-technology sectors and isfunding them through subsidies and financing from

state banks. These initiativeshave raised protests from U.S.companies that now find them-selves competing with the Chi-nese state. In solar and windpower, for example, state invest-ment created a glut that drovemany foreign companies out ofbusiness.

China never fully followedthrough on its WTO pledge to al-low foreign banks to operate inits local currency. It also pledgednot to force foreign firms totransfer their technology, but to-day about one in five compa-nies—many in aerospace andchemical industries—say thatthey’ve been pressured to do justthat in order to do business in

China, according to a July survey by the AmericanChamber of Commerce in Shanghai.

At a WTO session this month, China’s vice minis-ter of commerce, Wang Shouwen, denied that Chinatwists arms to gain technology. Arrangements ontechnology are “absolutely contractual behaviorbased on voluntary business deals,” Mr. Wang saidin July, according to a Geneva trade official.

China has also maneuvered to its advantagewithin the WTO. In one case it blocked exports ofscarce raw materials needed by high-tech indus-tries, hurting foreign firms. When the WTO ruledagainst Beijing on one set of restrictions, it re-moved the barriers—but then blocked another setof raw materials. “The core issue isn’t whetherChina lived up to the vast number of obligations,but whether it lived up to the spirit” of the deal,says Prof. Wu.

Other Chinese efforts to win an advantage intrade have happened outside the WTO’s purview.For years after joining the international trade re-gime, Beijing kept its currency undervalued by30%, boosting Chinese exports by making themcheaper abroad, says Brad Setser, a currency ex-pert at the Council on Foreign Relations. Former

U.S. officials say that China and other WTO mem-bers wouldn’t have agreed to a provision punishingcountries for such measures.

Charlene Barshefsky, who was Mr. Clinton’s U.S.Trade Representative, says that her successors couldhave used the WTO to sue China to live up to itsagreements. She points in particular to provisionsthat protected U.S. industries from escalating Chi-nese imports. President George W. Bush turneddown all import-surge cases brought by Americancompanies, and President Barack Obama approvedjust one. Neither brought any cases on their own.

A former senior Bush administration official saidthat “the national interest was not served by raisingprotectionist barriers.” Growth in imports, the for-mer official says, doesn’t mean that China has actedimproperly. Obama officials made similar arguments.

Mr. Lighthizer, who is now helping to call theshots on U.S. trade policy, says that if the WTO dealhad failed in Congress, “uncertainty would have keptthe trade deficit from growing and probably wouldhave saved millions of manufacturing jobs.”

But other WTO opponents believe that congres-sional rejection wouldn’t have made much of a dif-ference for the U.S. With its vast supply of industri-ous, low-wage workers, China would havecontinued to rise as an export powerhouse, theysay. Indeed, in the 15 years before its WTO entry,U.S. imports from China grew at a faster rate thanin the 15 years after, albeit from a much lower base.

Keeping China out of the WTO might have de-layed by a few years the damage to U.S. communi-ties from low-cost imports, though it’s not clear thatthe extra time would have helped. In the 17 yearssince China’s entry, the U.S. has poured few re-sources into worker retraining programs or othersocial safety net programs for laid-off workers. Theprograms in which it did invest had mixed results.

“I don’t know that [a defeat for the Clinton WTOdeal] would have made a difference,” says DavidBonior, a former Democratic House Minority Whip,who led the congressional fight against it.

Ms. Barshefsky still believes in a multilateral ap-proach to China. She would revive the Trans-PacificPartnership, a free-trade pact between the U.S. and11 Pacific Rim nations, which Mr. Trump discardedon his first working day in office, and extend it toother Asian nations and Europe. The members couldnegotiate new rules of trade, cutting tariffs and cov-ering state-owned enterprises, import surges, subsi-dies and other issues relevant to China. “Then Chinawould need to make a decision,” she says. “It cancome on board, or it can decide it doesn’t want fullaccess to 60% of the global economy.”

Mr. Lighthizer has a different view. The U.S.should go it alone and threaten China with heavytariffs, he says, largely leaving the WTO out of themix as an adjudicator of U.S. grievances.

“The notion that our problems with China can besolved by bringing more cases at the WTO alone isnaive at best and at worst distracts policy makersfrom facing the gravity of the challenge,” his agencysaid in a January 2018 report. Instead, the USTRsaid, the U.S. must rely on its own economic muscle.

“Ultimately, that’s all you have anyway,” Mr. Ligh-thizer says.

China’s Rise,With U.S. Helpvestment in Chinese industries and give foreign banks more freedomto do business. For a dozen years, Beijing also agreed, the U.S. couldblock Chinese imports that threatened specific American industries.

In exchange for the Chinese concessions, the U.S. just had to sur-render its annual rite of deciding whether to grant China “most fa-vored nation” status as a trading partner, ensuring full access to theAmerican market. China’s allies in Congress had succeeded each yearin getting the measure through anyway, but by allowing China intothe WTO, the annual reviews would end.

Mr. Clinton also linked China’s WTO accession to the democraticvision of President Woodrow Wilson, who dreamed, he said, of “aworld full of free markets, free elections and free peoples workingtogether.” The growth of the internet, in particular, would undermineBeijing’s control and make China more like the U.S., Mr. Clinton ar-gued. (He declined to comment for this article.)

Many shared this hopeful view, pointing to the examples of SouthKorea and Taiwan, which had shaken off dictatorships as they be-came more prosperous. Henry Rowen, chairman of the Reagan ad-ministration’s National Intelligence Council, forecast in 1999 thatChina would “join the club of nations well along the road to democ-racy” in 2015, when he expected its per capita GDP to reach $7,000.As it turned out, China hit that mark two years sooner than he hadpredicted, but even now, it is far from being a democracy.

A coalition of labor, environmental and human-rights groups op-posed China’s admission to the WTO. Robert Scott, an economist atthe Economic Policy Institute, a labor-backed research group, crankedout alarming numbers. In 2000, he forecast that nearly a million U.S.manufacturing jobs would be lost to Chinese competition.

Donald Trump was absent from the debate. In 2000, he toyed witha run for president and wrote a campaign book, “The America We De-serve,” which called China the U.S.’s “biggest long-term challenge.”But he didn’t mention the WTO decision. He did say he would appointhimself U.S. Trade Representative and negotiate better deals.

After the deal, foreign investment in Beijing mushroomed from$47 billion in 2001 to $124 billion a decade later. The lower invest-ment and import restrictions required of China as part of its WTOentry also encouraged multinationals to rush in, as did the prospectof serving the vast Chinese market. China became the world’s manu-facturing floor, and Chinese imports to the U.S. soared.

Looking back now, whose expectations for the wider impact of thedeal proved most accurate? On the issue of U.S. manufacturing jobs,critics made the right call. A study by the MIT economist David Au-tor and colleagues calculated that Chinesecompetition cost the U.S. some 2.4 millionjobs between 1999 and 2011, battering fac-tory towns that made labor-intensive goods.

That result haunts one of Mr. Clinton’ssenior China negotiators, Robert B.Cassidy, who believes that his work onlyhelped big businesses, not ordinary work-ers. “When you retire you like to think thatyou accomplished a lot,” he says now, atage 73. “What kind of benefit did I producefrom working around the clock? I was in-credibly disappointed.”

Nor did China open up politically, asmany WTO advocates had hoped. Beijingtamed the internet by limiting its use tocommerce, technology and social media. Itblocked political organizing by threateningand sometimes jailing those who postedcritical comments. More recently, it hasturned the internet itself into an instrument of the state by usingit to identify and track dissidents. “It’s Orwellian,” says Jerome Co-hen, a New York University law professor and China specialist.

Greater economic growth led to greater political control, said MarkWu, a professor at Harvard Law School whose research focuses onChina and the WTO. China’s leaders believed that they needed unchal-lenged authority to carry out economic reform in the face of opposi-tion from entrenched interests. According to Mr. Wu, the point offreer markets, in their view, was to encourage competition and pre-vent the system from becoming sclerotic, not to bolster individualrights.

As for President Clinton and his allies in the WTO debate, they canpoint to real gains from integrating China into the global economy. Ac-cording to the World Bank, some 400 million Chinese have been liftedfrom extreme poverty—that is, from living on less than $1.90 a day—since 1999. And during the global recession of 2008 and 2009, Chinawas able to go on a spending spree that supported global demand. Chi-nese building projects sucked in iron ore, coal, oil and other commodi-ties, boosting other developing nations.

Today, technology companies tap the Chinese market to boost prof-its and defray research costs. Last year, about 20% of Apple ComputerInc.’s sales came from China, up from about 12% in 2011. The low infla-tion associated with cheap imports, together with Chinese purchasesof U.S. government bonds, has also helped to hold down interest rates,making it cheaper for Americans to buy not only clothes and electron-

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IS THERE ANYTHING that can’tbe “weaponized” these days?

When the Supreme Courtruled in a 5-4 decision lastmonth that public employeecontracts could not requireworkers to pay union dues, Jus-

tice Elena Kagan issued asharply worded dissent: By bas-ing the opinion on free-speechgrounds, she said, the Court’smajority was “weaponizing theFirst Amendment.”

A Term forArms TakesAim atTennis andEconomics

As Lyle Denniston noted onthe National Constitution Cen-ter’s blog, “‘weaponizing’...latelyhas come into vogue in publicdiscourse, where it usuallymeans turning something harm-less or normal into a weapon ofwar or combat. It is hardlycommonplace in Supreme Courtopinions, however.”

As a vogue word, “weap-onize” is showing up all overthe place. At Wimbledon, theWall Street Journal’s Jason Gaywrote about how tall tennisplayers “weaponize heavyserves.” Wired magazine re-ported on “the weaponizationof Yelp” when a Lexington, Va.,restaurant’s refusal to serveWhite House press secretary

Sarah Sanders ledto rash of bad user-generated reviewson the website Yelp.And New JerseySen. Bob Menendezrecently opposed

President Donald Trump’s pickto head the Internal RevenueService, Charles Rettig, becausehe worried that Mr. Rettigwould weaponize the agencyagainst Democratic-leaning

states.The commentariat is

particularly fond of weap-onizing the word “weap-onize.” In the magazineThe Week, Reason Founda-tion policy analyst ShikhaDalmia titled a column,“The Weaponization ofMilton Friedman,” aboutthe abuse of the econo-mist’s work by anti-immi-grant conservatives.

People have been at-taching the suffix “-ize” to“weapon” for at least 80years now. The earliest ex-ample cited in the OxfordEnglish Dictionary comesfrom a 1938 book by theBritish author W.J. Grantcalled “The Spirit of India.” De-scribing a debate betweenHindu and Muslim representa-tives in Calcutta (now Kolkata),Grant says of the Muslims,“However unassailable their ar-guments might be, they couldnot weaponize their strength.”

But it wasn’t until the ColdWar that “weaponize” trulycame into its own. Starting inthe mid-1950s, the word startedshowing up in U.S. defense cir-

cles, particularly to describethe process of equipping a bal-listic missile with a nuclearwarhead.

In February 1957, Deputy De-fense Secretary Reuben Robert-son Jr. appeared before aHouse Appropriations subcom-mittee to discuss funding mili-tary weaponry, including theRedstone missile, the first to begiven nuclear capabilities. Rob-ertson began describing the

proposal before he was cutoff by Kansas Rep. Errett P.Scrivner, who asked what“weaponizing” meant.Robertson replied some-what obliquely that in thecase of the Redstone,“weaponizing” meant “put-ting it into production andinto the hands of troops.”

Editorialists from Oak-land to Omaha pounced onthe exchange, highlightingthe new word as a primeexample of the Pentagon’spenchant for gobbledy-gook. But the term contin-ued to flourish, especiallyafter 9/11, likely encour-aged by reports of anthraxbecoming weaponized in

bioterrorism.Can “weaponize” maintain

its metaphorical power? BenYagoda, in a Lingua Francacolumn last year for theChronicle of Higher Education,predicted that “the next fewyears will be a hotbed of‘weaponized’ uses, but thatwe’ll then see its swan song.”For now, at least, “weaponize”shows no signs of abating as adurable rhetorical weapon.

[Weaponize]‘Weaponizing’ serves: Kevin Anderson

REVIEW

THEWALL STREET JOURNAL. * * * * Saturday/Sunday, July 28 - 29, 2018 | C3

AS I STOOD JUST outside Junk Junc-tion the other day, I could see thatthe gas-blue clouds were starting toclose in fast. The storm would arrivesoon, and I knew that no one sur-vives the storm. I started sprinting,my sniper rifle in hand. Havingreached safety, I quickly built myselfa makeshift shelter and then indulgedin a madcap spree of assassinations.

If this account of my recent activi-ties strikes you as menacing and ut-terly enigmatic, chances are that youhaven’t spent much time lately withteenagers and people in their early20s. Otherwise, you would recognizethe unmistakable details of “Fortnite:Battle Royale,” a videogame releasedlast September that became an ex-traordinary cultural phenomenon al-most immediately. A big virtual sand-

box where players both build thingsand blow them up, all the while at-tacking each other, it’s more inven-tive, freewheeling and fun than anygame in recent memory. It has at-tracted huge numbers of devotees,including people who aren’t usuallygamers.

How popular is “Fortnite”? Themarket-research firm Sensor Towerreported this month that the gamerakes in $2 million every day on mo-bile platforms alone, putting thecompany that produces it, North Car-olina-based Epic Games, on track to adizzying valuation of $5 billion to $8billion by year’s end, according toBloomberg. The game itself is free toplay, so the money is spent on in-game purchases of everything fromvirtual outfits to cool new dancemoves.

But numbers alone fail to capture

BY LIEL LEIBOVITZ

In recent years, scientists have begun using thegene editing tool Crispr to experiment in thelaboratory with altering embryos and changingthe DNA of animals. But the consequences ofusing the technology outside the lab are hard topredict—and potentially enormous. As a result,

a world-wide debate is under way about how much sayordinary citizens should have over the use of Crispr intheir communities.

Earlier this month, Richard Johnson, a biologist whoruns the Martha’s Vineyard Tick-Borne Illness ReductionInitiative, attended a discussion of Mice Against Ticks,an ambitious project working on using the Crispr geneediting tool to create mice resistant to the bacteria thatcauses Lyme disease. Someday, the genetically engi-neered mice might be released on Martha’s Vineyardand neighboring island Nantucket, where they couldbreed with the local mice and pass on the immunity totheir offspring. Ticks that feed on the mice would notbecome infected, so they would not transmit the patho-gen to humans, lowering the incidence of the disease.

Mr. Johnson believes that the scientists can find away to make the disease-resistant mice. For him, it’s theethical and political questions about the project that arehard to answer: Should the scientists do it, and whogets to decide?

Crispr, which stands for clustered regularly interspacedshort palindromic repeats, isn’t the first new technologyto pose such complicated questions. But Crispr offers “thepotential to control evolution and change future species,”says biochemist Kevin Esvelt, an assistant professor at

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The Secret of aVideogameSensation: Joy

The brush-tailedpossum, aNew Zealandpredator(top); Dr.Kevin Esvelt,whose workon Crispr hasstarteddebates.

the Cambridge, Mass.-based MIT Media Lab,where Mice Against Ticks was born.

Crispr is the immune system of bacteria.Scientists adapted Crispr and the Cas9 en-zyme that it produces to serve as a tool toedit DNA in plants, animals and humans.Researchers soon realized that Crisprmight be used not only to edit or repairgenes of people living with diseases butalso to edit embryos, changing the DNA offuture generations. It could also be used tocreate a so-called “gene drive,” spreadingengineered genetic changes through popu-lations of wild animals but also alteringthe environment in unpredictable ways.With so much at stake, Dr. Esvelt says, sci-entists must not make such decisions by themselves.

At the event on Martha’s Vineyard, Dr. Esvelt re-counted how, historically, scientists often developed newtechnologies behind closed doors, without meaningfulinput from the people most likely to be affected by theiruse. By the time the public was asked to weigh in, hesaid, it was usually too late to influence the direction ofthe science. With Crispr, Dr. Esvelt and his collaboratorssee an opportunity to take a different approach—achance not just to do powerful science but to test newways of discussing and deploying it.

They found that when scientists and communitieswork together, there can be unexpected consequences.Last year, a group of academics invited Dr. Esvelt to at-tend a workshop they were holding in New Zealand todiscuss, among other things, the possible use of genedrives as a tool in conservation. New Zealand has

launched an ambitious plan to ridthe country of predators such asrats, stoats and possums that havedecimated native flora and fauna.Crispr is one of the technologiesthat offers a potential solution.

Dr. Esvelt gave a presentationabout his research on a form ofCrispr gene drive that he is de-veloping called a “daisy drive.”He thinks that the daisy drive ispotentially a safer technologythan a standard Crispr genedrive, because the changes areengineered to be passed on onlyfor a limited number of genera-tions, not to spread indefinitely.The concept has not yet beentested in a field trial.

Among the people Dr. Esveltmet in New Zealand were mem-bers of Te Tira Whakamataki, orthe Maori Biosecurity Network, agroup of Maori elders, academics,tribal leaders and others inter-ested in ensuring that the Maorihave a voice in biodiversity is-sues. Melanie Mark-Shadbolt,CEO of the network, says thatthey liked Dr. Esvelt’s idea ofcodeveloping research and newtechnologies with community in-put. “We want to be active par-ticipants in research, not sub-jects,” she says.

Shortly after the visit, Dr. Es-velt and a New Zealand collabora-tor, Neil J. Gemmell of the Univer-sity of Otago, published a paper inthe journal PLOS Biology, layingout their concerns about the po-tential environmental conse-quences of standard Crispr genedrives. The paper caused a back-lash, say researchers in New Zea-

land, because some felt that the authors implied that theactual use of gene drives in New Zealand was imminentrather than hypothetical. Ms. Mark-Shadbolt felt blind-sided. “When he met with us, he should have said, thereis a paper coming out that talks about New Zealand andconversations I am having about gene drives, would youlike to take a look?” she says.

Dr. Esvelt took the criticism to heart and in January is-sued a public apology on his own blog and in Medium. Heagreed that he should have offered the Maori a chance tomake suggestions while the paper was being revised. Re-flecting on the experience, he says, “I made the same mis-

take with respect to the local political envi-ronment that we’re hoping to avoid with thenatural environment: our lack of under-standing leading to unwanted side effects.”

On Martha’s Vineyard and Nantucket, Dr.Esvelt’s plan for community partnershiphas been on surer footing so far. Eventhere, however, the outcome is not certain.Regulatory approval is not enough, the sci-entists believe. They also have promisednot to release the genetically altered micewithout approval from the communities.The prospect is still years away, but CarrieFyler, a biology teacher at the public highschool in Martha’s Vineyard and one of therepresentatives on the Mice Against Tickssteering committee, says that some wonderwhat a vote on the issue might look like.

Would 51% be enough to move forward or would it re-quire everyone to agree? As she says, “You can’t have asingle town opting out, because mice don’t know townlines and will cross them.”

At the meeting in Martha’s Vineyard in July, one ofthe ethicists pointed out that discussions about whetheror not to use a scientific advance often turn on assess-ments of potential risks and benefits. Perhaps, the ethi-cist suggested, the quality of public engagement anddepth of community involvement in making decisionsshould also be considered.

On every seat at the meeting was a pamphlet that Dr.Fyler’s students had created to explain ticks and tick-borne illness in language that they and their parentscould understand. Dr. Fyler says that she reminded herstudents, “Whatever happens, it won’t be the scientistsdetermining what will happen, it will be us.”

the cultural im-port of “Fort-nite.” The gamehas satisfied a setof emotional andsocial needs therest of the gamerworld has largelyignored: It’s a

multiplayer shooter game that revelsin goofy, gleeful self-expression.

“Fortnite” is a cartoonish virtualuniverse where, in each game, abouta hundred avatars run around, de-lighting in killing each other in out-landish ways as a gathering stormmakes their playground smaller bythe minute. Only one player can ulti-mately survive and emerge trium-

phant, which is why any moment notspent shooting at perfect strangers isdedicated to smashing stuff up, col-lecting raw materials and building allsorts of shelters. Players can also“emote,” which means doing a funkyvictory jig. It’s chaotic, silly and evensweet in its way.

Few other videogames havegrasped the appeal of this unlikelycombination. For at least a decade,the gaming industry, with a few ex-ceptions, has been locked in its owngrim arms race, with publishers jock-eying for prominence by releasingdigital behemoths such as “Battle-field 4” or “Assassin’s Creed Origins,”which feature hyper-realistic graph-ics, ever more convoluted story

lines—and very little byway of joy.

Unsurprisingly, thistrend has helped to cre-ate a generation of gam-ers who are highly com-petitive and oftenentirely unpleasant. Inthe darker, more brutalmultiplayer games,you’re much more likelyto hear a curse or a slurthan a yelp of delightand playful triumph.

“Fortnite” has buckedthat trend. It recognizesthat even in a culture

that presses young adults to grow upfast, there’s a lot to be said for a bitof immature and largely innocentmayhem. It’s as much about con-struction as it is about destruction,which makes it a more inviting envi-ronment for many who have foundprevious games too violent andstressful.

“Fortnite” understands that agame isn’t really worth playing un-less you can celebrate your smallwins by shaking your hips to a bois-terous, loud riff. It’s the stuff child-hood dreams are made of.

Mr. Leibovitz is a senior writer forTablet magazine and a co-host of itspodcast, Unorthodox. A

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Zap That Possum’s Genes?LocalitiesWant a Say

Crispr technology may allow scientists to change the environment forever,but working with the affected communities presents a challenge


REVIEW

Paradoxes,FromYour Coffee

To Calculus

EVERYDAY MATH

EUGENIA CHENG

Resigned to

EndlessWarNow four decades into the struggle against Islamic extremism, the U.S. has

stopped looking for an exit from the Middle East

IF YOU WEAR glassesyou’ve probably experi-enced the problem of beingunable to find your glassesbecause you’re not wearing

your glasses. There’s also the conundrumof needing to drink coffee before you’recapable of making coffee in the morning.More seriously, there’s the question ofwhether tolerant people should be toler-ant of intolerance. These are all types ofparadox arising from self-reference, as inthe sentence “I am lying.”

Mathematicians and philosophershave long studied paradoxes. In 1901,Bertrand Russell discovered a famousparadox that shook the foundations ofmathematics. It is often described infor-mally by imagining a man in a town whois a barber. He shaves every man in thetown who does not shave himself andnobody else. This causes a looped-upcontradiction if we start wonderingwhether or not the barber shaves him-self: If he doesn’t, then he does. And ifhe does, then he doesn’t. It’s a paradox.

This might sound pedantic and con-trived, but the mathematical study ofparadoxes is important for several rea-sons. The first is that the presence ofparadoxes alerts us to the limits of ourown logical thinking and points us in thedirection of improving it. Russell’s para-dox was formally stated in terms of setsand caused mathematicians to realizethat a naive or intuitive definition of aset as “a collection of things” is not logi-cally sound when self-referential sets be-come involved. Because mathematics isbased on making sound logical deduc-tions, the logic of the initial definitionsis crucial. Paradoxes tell us that greatercare is sometimes needed in setting outthese premises.

Thinking about how to resolve para-doxes has helped mathematicians makeprogress throughout history. More than2,000 years ago, the Greek philosopherZeno pondered a range of paradoxes hav-ing to do with motion. One of them said:In order to travel from A to B, you mustfirst cover half the distance, then halfthe remaining distance, then half the re-maining distance and so on forever. Weneed to cover an infinite number of dis-tances, but we only have finite time, sowe can never arrive.

Here the conclusion is blatantly un-true: We arrive at places every day. Toresolve this paradox, what was neededwas a new theory of adding up infinitelymany infinitely small numbers. Thislaunched the field of calculus, which ana-lyzes things that change continuously.And calculus, of course, would become acrucial tool of science, engineering andeconomics. Thus the apparently arcanestudy of ancient paradoxes led to themathematical foundation of much ofmodern life, whether or not technologyusers are aware of the math involved.

Understanding how mathematiciansavoid paradoxes in abstract cases canhelp us to work out how to deal withsimilar contradictions in life. For theparadox of the barber, we can simply say,“Oh well, no such barber can exist.” ButRussell’s paradox is formally stated interms of sets rather than barbers, andthe paradox comes from considering theset containing “every set not containingitself.” Instead of just saying this setcan’t exist, we say it exists but at a dif-ferent level from ordinary sets. It is away of breaking the self-referential loop.

This has helped me work out how tobreak the loop problems in life as well.I’ve made it easier to find my glasseswithout wearing my glasses, for instance,by always storing them in the sameplace. For my coffee, I’ve broken the loopby setting up my espresso machine thenight before so that in the morning I justhave to turn it on. In the case of toler-ance, I make a distinction between peo-ple themselves and their ideas aboutother people, so that I can be tolerant ofindividuals who are intolerant but don’thave to accept their ideas.

Paradoxes are not just useful puzzlesin mathematics. They can point the wayto thinking more clearly about resolvingcomplex situations in everyday life.TO

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A U.S. Marine lookedon last August asAfghan National Armysoldiers raised theAfghan national flagon an armed vehicle.

good on his threat would be prudent.He also tried to “rebalance” U.S. foreign pol-

icy away from the Middle East and toward Asia.But with the rise of Islamic State (ISIS) startingaround 2013, this process could only go so far.By 2016, the Chairman of the Joint Chiefs ofStaff, Gen. Joseph Dunford, had developed aframework for planning future military forcesbased on facing “4+1” threats. Two of those topfive threats were located in the broader MiddleEast: Iran and transnational violent extremistmovements such as al Qaeda and ISIS.

President Donald Trump has faced a simi-lar conundrum. He ran as a candidate wary ofintervention in the Middle East, stated force-fully that the invasion of Iraq was a mistakeand consistently opposed the Afghanistanwar. In January 2013, he had tweeted, “I agreewith Pres. Obama on Afghanistan. We shouldhave a speedy withdrawal.” Two months later,he added that “We should leave Afghanistanimmediately.”

Yet like most Americans, Mr. Trump alsowanted to defeat ISIS, ensure the security ofallies like Israel and Jordan, check Iran andprevent nuclear proliferation. Once in theWhite House, he decided to increase forces inAfghanistan for an open-ended period. And de-spite huge progress against ISIS in Iraq andSyria, President Trump can’t quite decide toleave the region—because ISIS is not entirelydefeated and could come back and becauseIran may benefit from any vacuum that a U.S.departure creates.

Secretary of Defense Jim Mattis has em-phasized the importance of planning future

U.S. military forces againstthe Russian and Chinesethreats. Gen. Dunford’s “4+1”strategic planning frameworkhas morphed into a “2+3”threat assessment. Russia andChina now lead, with NorthKorea, Iran and terrorism fol-lowing. After decades of warin the Middle East, the regionis still prominent on theshortlist.

The U.S. role in the MiddleEast has evolved greatly overthe years, however. There willlikely be no more U.S.-led inva-sions or surges. Gen. Votel andGen. Dunford now talk about“building partner capacity,”enabling local forces and get-ting a high return on our in-vestment. The idea is to de-ploy modest numbers ofAmerican troops to support

far larger indigenous forces, who do the pre-ponderance of the fighting, especially on theground. We surely need better strategies forthe conflicts in Syria, Yemen and Libya, butthe country seems to have accepted the factthat even if we succeed in one theater, thebroader struggle will go on.

The U.S. has no realistic way out of itscommitments in the Middle East. But astragic as the continuing wars are for the peo-ple of the region and despite the sacrifices ofour military personnel, we appear to have re-signed ourselves to the forever war. Given ourcore interests, and our current options, it’sprobably the best we can do.

Mr. O’Hanlon is senior fellow and directorof research in the foreign policy program atthe Brookings Institution.

Tell me how this ends.” So saidthen-Maj. Gen. David Petraeus tothe journalist Rick Atkinson soonafter the U.S. invasion of Iraq in2003. As far as we can see today,

the answer to Gen. Petraeus’s prescient rhetori-cal question appears to be that it doesn’t.

What many strategists predicted would be ageneration-long struggle against Islamic ex-tremism and sectarianism in the Middle East isnow well into its second generation. It has beenalmost 40 years since the Iranian revolution andthe Soviet invasion of Afghanistan; 35 yearssince the bombing of the U.S. embassy and Ma-rine barracks in Lebanon; 30 years since theformation of al Qaeda. It has been almost twodecades since President George W. Bush, afterthe attacks of 9/11, told Congress and the nationthat “Americans should not expect one battlebut a lengthy campaign unlike any other wehave ever seen.” The “forever war,” as the jour-nalist Dexter Filkins called it in his 2008 bookof that title, is living up to its name.

To wage these wars, there are currentlysome 15,000 U.S. troops stationed in Afghani-stan, 10,000 in Qatar, 5,000 in Iraq, 4,000 inBahrain, 2,000 each in Syria and Kuwait, andmore than 1,500 each in Djibouti and Turkey.Add to this some 10,000 sailors and Marinesafloat in the region, as well as Coast Guardpersonnel and civilians. All told, there aremore than 90,000 Americans working for U.S.Central Command, according to Centcom com-mander Gen. Joseph Votel. These “overseascontingency operations” costmore than $30 billion a year,on top of the $600 billion-plus core defense budget. It’sa huge, expensive effort, andthere’s no end in sight.

But maybe all of this is OK.It seems that Americans haveeffectively reached a consen-sus that the status quo repre-sents the least bad optionavailable. To put it differently,maybe we’ve taken a pagefrom Israel’s handbook: We nolonger expect to solve prob-lems in the broader MiddleEast, only to manage them, atleast for the foreseeable fu-ture. As a practical matter,that means relying today notprimarily on U.S. ground com-bat troops but on our specialforces, drones, aircraft, train-ers, intelligence operatives andstandoff forces.

In the past, Americans ex-pected wars to end with victo-ries and ticker-tape parades,or at least with some clearconclusion. Not anymore. Thewar in Afghanistan is nownearly 17 years old. The cur-rent Iraq war began 15 years ago. If we countOperation Desert Storm and the ensuing no-flyzone operations in Iraq, it is 28 years old.

One reason that Americans are putting upwith these seemingly endless wars is that therehave been relatively few U.S. casualties since2015, averaging a total of 20 to 30 fatalities ayear, including accidents. For most of us, thewar is far away and impersonal, even as weowe a huge debt to the all-volunteer Americanmilitary. Enough patriotic and dedicated Amer-

icans of this new greatest generation want toserve that even with all the deployments, re-cruiting and retention are holding up well.

The last time we had a full-throated debatein a presidential race about whether to pullout of a war in the Middle East was 2008, inthe contest between Barack Obama and JohnMcCain. Congress periodically considerswhether to write a new authorization on theuse of military force, to replace the 2001 ver-sion still on the books, but even in the absenceof such a legislative overhaul, our representa-tives keep funding these operations.

We’ve tried various ways to escape thismorass. The first President Bush let SaddamHussein re-establish order in Iraq after Opera-tion Desert Storm rather than have U.S. troopsdo the job. A dozen years later, Mr. Bush’s son

decided that the strategy hadn’tworked and removed the butcher ofBaghdad. President Bill Clinton usedcruise missiles to go after al Qaeda inthe wake of the 1998 bombings of U.S.embassies in Tanzania and Kenya, butthat approach only allowed the prob-lem to metastasize. The second Presi-

dent Bush tried to minimize the U.S. footprintin Afghanistan after the overthrow of the Tali-ban, but by 2007, it had become clear that theTaliban were returning, which led to a U.S.surge.

Then President Obama pulled U.S. forcesfrom Iraq—until he decided that he had to sendthem back. Mr. Obama tried pressuring the Af-ghan government to reform, with threats everyyear or two to end the military mission there.But he never decided that actually making

PresidentGeorge W. Bushdeclared theend of majorcombat in Iraqin May 2003.

BY MICHAEL O’HANLON

President Trump at a March cabinetmeeting with Defense Secretary Jim Mattis.


HISTORICALLY SPEAKING

AMANDA FOREMAN

had was themselves—and, needlessto say, Shakespeare.

When it comes to theatrical per-formances, I find that an invaluabletrick is to find ways to integrate thestaging and scenic design of a pro-duction into its physical surround-ings. That doesn’t require a big bud-get—all you need is imagination. Ionce reviewed a “Macbeth” directedby Kate Buckley that was presentedin the 1,100-seat outdoor amphithe-ater of Wisconsin’s American Play-ers Theatre, which sits atop awooded hill. Thirteen summerslater, I still remember with flash-bulb clarity the chilling scene inwhich the leaves on the trees be-hind the stage were shaken by un-seen stagehands to signal the omi-nous moment when “Birnam Woodbe come to Dunsinane.”

As for the weather…well, some-times you just have to go with theflow. “The Letter,” an opera byPaul Moravec for which I wrote thelibretto, was given its premiere in2009 in the 2,100-seat theater ofthe Santa Fe Opera, whose perma-nent canopy permits rain-or-shineperformances. Just as the lightswent down for the second perfor-mance, dark clouds scudded acrossthe moon that shone on the the-ater. Gorgeously theatrical-lookingbolts of lightning split the sky, anda gusty wind blew through the the-ater during the last scene, knock-ing the plates and glasses off adinner table at center stage.

Once I saw the ground cloth startto billow beneath the singers’ feet, Iwas sure the stage manager wouldstop the show. Fortunately, the mem-bers of the cast kept their heads, andthe opera proceeded to the finalblackout without further incident.

Naturally, by the time we allcame out for the curtain call, every-body was feeling very loose. WhenPaul and I stepped back from theedge of the stage to join the cast fora group bow, I looked over at himand said the only thing possible un-der the circumstances: “Well, weblew ’em away!”

Mr. Teachout, the Journal’s dramacritic, is the author, most recently,of the play “Billy and Me.”

EXHIBIT

Phoned-InPhotography

SUBMISSIONS to the 11th annual iPhone Photography Awards,from users in 140 countries, were lighter on selfies and foodthan in previous years and stronger on remote locations andemotional moments. The winning images in the contest (whichis not affiliated with Apple) were announced on July 18 and in-cluded a pensive terrier in China’s Hunan province (left) and aone-legged boy in Myanmar watching a soccer game (below).The competition’s founder, Kenan Aktulun, said, “I don’t thinkiPhones will replace other cameras, but users are definitely get-ting more fluent in visual storytelling.” —Alexandra Wolfe

In Awe of theGrand Canyon

STRANGE as it maysound, it was watchingGeena Davis and SusanSarandon in the tragicfinal scene of “Thelma

and Louise” (1991) that convincedme I had to go to the Grand Can-yon one day and experience itslife-changing beauty. Nearly threedecades have passed, but I’m fi-nally here. Instead of a stylish 1966Ford Thunderbird, however, I’mdriving a mammoth RV, with myfamily in tow.

The overwhelming presence ofthe Grand Canyon is just as Idreamed. Yet I’m acutely aware ofhow one-sided the relationship is.As the Pulitzer Prize-winning poetCarl Sandburg wrote in “ManyHats” in 1928: “For each man seeshimself in the Grand Canyon—eachone makes his own Canyon beforehe comes.”

The first Europeans to encounterthe Canyon were Spanish conquista-dors searching for the legendarySeven Golden Cities of Cibola. In1540, Hopi guides took a smallscouting party led by García Lópezde Cárdenas to the South Rim (60miles north of present-day Williams,Ariz.). In Cárdenas’s mind, the Can-yon was a route to riches. After try-ing for three days to find a path toreach the river below, he cut hislosses in disgust and left. Cárdenassaw no point to the Grand Canyon ifit failed to yield any treasure.

Three centuries later, in 1858, thefirst Euro-American to follow inCárdenas’s footsteps, Lt. JosephChristmas Ives of the U.S. ArmyCorps of Topographical Engineers,had a similar reaction. In his officialreport, Ives waxed lyrical about themagnificent scenery but concluded,“The region is, of course, altogethervalueless.... Ours has been the first,and will doubtless be the last, partyof whites to visit this profitless lo-cality.”

Americans only properly “discov-ered” the Grand Canyon through theworks of artists such as ThomasMoran. A devotee of the HudsonRiver School of painters, Moranfound his spiritual and artistichome in the untamed landscapes ofthe West. His romantic picturesawakened the public to the naturalwonder in their midst. Eager to seethe real thing, the trickle of visitorsturned into a stream by the late1880s.

The effusive reactions to the Can-yon recorded by tourists who madethe arduous trek from Flagstaff,Ariz. (a railway to Grand CanyonVillage was only built in 1901) havebecome a familiar refrain: “Not forhuman needs was it fashioned, butfor the abode of gods.... To the endit effaced me,” wrote Harriet Mon-roe, the founder of Poetry maga-zine, in 1899.

But there was one class of peoplewho were apparently insensible tothe Canyon: copper miners. Watch-ing their thoughtless destruction ofthe landscape, Monroe wondered,“Do they cease to feel it?” PresidentTheodore Roosevelt feared so, andin 1908 he made an executive deci-sion to protect 800,000 acres fromexploitation by creating the GrandCanyon National Monument.

Roosevelt’s farsightedness mayhave put a crimp in the profits ofmining companies, but it paid divi-dends in other ways. By the 1950s,the Canyon had become a must-seedestination, attracting visitors fromall over the world. Among themwere the tragic Sylvia Plath, authorof “The Bell Jar,” and her husband,Ted Hughes, the future British PoetLaureate. Thirty years later, thevisit to the Canyon still hauntedHughes: “I never went back and youare dead. / But at odd moments itcomes, / As if for the first time.” Heis not alone, I suspect, in never fullyleaving the Canyon behind.

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From Tanglewood to the HollywoodBowl, summertime means outdoorperformances of every kind, includ-ing classical concerts, opera, danceand, most often, theater. I’ve re-

viewed them all, and some of my happiestmemories are of the countless shows I’ve seenunder the stars.

On the other hand, I also remember a fewthat I would have paid not to see, usually be-cause Mother Nature chose not to cooperate.Yes, it’s festive and fun to eat a picnic dinnerand then stroll to Shakespeare in the Park. Butif the sky falls, the show stops—unless the per-formers are protected by a tent or canopy, inwhich case it may simply be paused, leaving theaudience soaked to the skin by evening’s end.Mere skull-busting heat is rarely consideredsufficient reason to send a paying crowd home,and I’ve covered plenty of performances wheregnats were out in force, flying in funnel-cloudformation with orders to kill.

Another common problem is the scale ofoutdoor venues. If you’re seated too far froma stage, you’ll feel out of touch with the artistswho are performing on it. This is especiallytrue when the art form doesn’t normally makeuse of electronic amplification, as is the casewith classical music and theater. CarnegieHall, which has 2,800 seats, is big but notmammoth, whereas the 3,800-seat Metropoli-tan Opera House places most of the audiencetoo far away from the action for comfort. Nowconsider the Hollywood Bowl, which seats17,500. It’s been amplifying symphonic con-certs since 1936, andthough sound-design tech-nology has improvedgreatly in recent years, it’sstill disorienting to attenda concert where you canhear the musicians but notquite see them.

Can such performanceswork anyway? One of themost exciting classical con-certs I’ve ever heard tookplace in 2003 on the GreatLawn of New York’s CentralPark, where the jazz singerLuciana Souza and the NewYork Philharmonic per-formed Manuel de Falla’s“El amor brujo” in front of50,000 listeners. Not onlywas the amplification ser-viceable, but the backdropenhanced the experience:The skyline of midtownManhattan bounced lightoff the low-lying clouds,with the Chrysler Buildingpeeping between the high-rises on Central Park South.The management even shotoff fireworks after theshow! On the other hand, I R

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An audiencewatchesShakespeare atthe SeabreezeAmphitheaterin Jupiter, Fla.,earlier thismonth.

REVIEW

“As for theweather,sometimesyou justhave to gowith theflow.

had a press seat, which putme far closer to the stagethan the vast majority ofmy fellow music lovers. Isimply can’t imagine get-ting much aesthetic plea-sure from sitting all theway at the back of a50,000-seat “concert hall.”

Theatrical perfor-mances are—or can be—different. I’ve enjoyedshows presented in out-door spaces ranging insize from the Hudson Val-ley Shakespeare Festival’s540-seat tent to the11,000-seat amphitheaterwhere the Muny in St.Louis revived “JeromeRobbins’ Broadway” togalvanizing effect earlierthis summer. By compari-

son, most regional theaters hold nomore than 350 people, whileBroadway theaters seat between600 and 2,000.

The bigger the space, the harderit is to make a small show work, butit can be done. This is particularlytrue of dance. I’ve seen the PaulTaylor Dance Company commandthe attention of a crowd of 3,000 inLincoln Center’s Guggenheim Band-shell with Mr. Taylor’s “Esplanade,”which uses just nine dancers.

Yet another possible pitfall isthat the natural beauty of an out-door setting can sometimes swampa show. The tent for the HudsonValley Shakespeare Festival, for in-stance, is pitched on a green lawnnear the edge of a bluff overlook-ing the Hudson River. The eye-catching spectacle of the water be-low and the mountains beyond canbe dangerously distracting. Still,any theatrical production will over-whelm you if it’s imaginativeenough, and once the sun sets, thestage soon becomes your onlyworld. It’s even possible to create afeeling of intimacy under such cir-cumstances, as was the case withEric Tucker’s 2015 Hudson Valleystaging of “A Midsummer Night’sDream,” in which five actorsdressed in dirt-cheap costumesheld the crowd spellbound withoutbenefit of set or props. All they

Art UnderThe Stars—And AmongThe GnatsIn summer, audiences have thechance to enjoy theater andmusic in the open air, with allthe accompanying challengesand revelations.


Her firm, Yu Holdings, has taken stakes in theLondon-based fashion designer Mary Katrantzou,the eco-friendly handbag and accessories line Bottle-top, and Asap54, a startup that provides shoppinginformation. She has pledged to invest up to $20million in emerging businesses this year.

As CEO, she personally chooses her investments,which also include the tech firms Didi Chuxing, aride-hailing app similar to Uber, and Tujia, a Chinesetake on Airbnb. She says that she takes particularinterest in the management of the fashion firms sheinvests in. In April she hosted Ms. Katrantzou inChina, introducing her to other potential investors.

Her rising profile in fashion has drawn the atten-tion of some of the industry’s biggest names. “Shetakes a globally minded view of [fashion],” saysVogue editor-in-chief Anna Wintour, “and is as wellversed in fashion history as she is in knowing whofrom the new generation of designers is worthy ofher support. She’s an absolute lover of culture—andcreativity.”

Born in the Zhejiang province of China, an east-ern coastal area south of Shanghai, Ms. Yu is theonly daughter of billionaire Jingyuan Yu, whofounded and runs China’s biggest wooden-door man-ufacturer. She says that her father groomed her tobe a businesswoman from an early age.

At age 15, she moved to England to attend board-ing school. She excelled in math and became capti-vated by the fashion scene. “Since I went to Eng-land, probably my major has been fashion,” she says.“In China you are not really encouraged to dress upas a child, and you’re more encouraged to focus onstudy.” She studied Fashion Management at the Lon-don College of Fashion and took business courses atthe University of Oxford, the University of Cam-bridge and Columbia University in New York.

Today, Ms. Yu spends about half the year in Chinaand says she wants to be a bridge between Westernfashion executives and the evolving Chinese market.“Chinese economic growth and consumer power forluxury and designer goods is going from strength tostrength, and there is a rising appreciation for inde-pendent designers,” she says.

Traditionally, Chinese luxury goods consumersgobbled up big-name global brands like Louis Vuit-ton and Gucci. She says that those remain popularbut sees younger Chinese consumers exploringsmaller brands as well, such as Aquazzura and Su-preme, and some Chinese independent designerssuch as Huishan Zhang, Bao Bao Wan and Xiao Li.

Chinese shoppers are also buying more of theirluxury goods at home rather than on overseastrips—though it’s still mostly foreign brands they’reafter. Luxury spending inside China grew 20% in2017, outpacing overseas purchases, according toBain & Co. “New consumers, mostly millennials,have been major contributors to the marketgrowth,” said the Bain report, noting that Chineseluxury consumers tend to be younger than in othercountries.

Ms. Yu hopes that China will one day have itsown LVMH-style fashion conglomerate, with brandsthat appeal to both Chinese and global consumers—particularly millennials interested in newer nichebrands. (A spokesperson notes that while she is in-spired by such fashion conglomerates, she herself isnot looking to replicate them.)

Ms. Yu has established herself as one of China’smost fashionable millennials. She has over 700,000followers on Weibo, a Chinese Twitter-like service.On Instagram, she posts pictures of herself in glam-orous poses, such as sitting in a horse-drawn car-riage in Cuba, wearing a baby blue fur jacket whileholding a pony in Iceland and modeling a long whitegown as she pets deer in a Japanese meadow. A Chi-nese business magazine named her one the 300most powerful people in China, and the society mag-azine Hong Kong Tatler crowned her one of Asia’seight most stylish women.

She lives part-time in London but has offices inHong Kong and Shanghai. She says that she spendsmost of her time traveling to meet company found-ers, fashion designers and the leaders of charitableorganizations. In a typical month, she’ll travel to fiveor six different countries.

“I love when life is moving fast and when you’rereally moving toward your vision and your goal be-cause it makes you feel very satisfied,” she says. “Iwant to create a legacy,” she says. “I love to be thepainter who paints my own life.”

WEEKEND CONFIDENTIAL| ALEXANDRA WOLFE

Two years ago the Chinese heiress Wendy Yu showcasedher luxurious lifestyle in a British television documentarycalled “Britain’s Billionaire Immigrants.” The show por-trayed her as a hardworking, socially ambitious 20-some-thing eager to impress her billionaire father. Viewers

watched her take courses on how to be a lady as she prepared for Lon-don’s party season and glimpsed the massive collection of Barbie dollsinside her sprawling Knightsbridge apartment.

Today, Ms. Yu says, “I’m so done with television.” Now 28, she saysthat she is taking her life in a more serious direction as an investor and

philanthropist, with a particular interest in fashion.Through investments, donations and attendance

at high-profile events, she has catapulted herselfinto the top ranks of the global fashion scene. Ear-lier this year, she endowed a position at New York’sMetropolitan Museum of Art, the Wendy Yu Curatorin Charge of The Costume Institute. In London, shehas made donations to the Victoria & Albert Mu-seum, the National Portrait Gallery and the BritishFashion Council Fashion Trust.

WendyYuAn investor-heiress turns to fashion

Ms. Yu, a 28-year-oldheiress, haspledged toinvest up to$20 million inemergingbusinessesthis year.

Plants,like pets,are aperfectexcuseto avoidvisitingmomand dad.

MUCH HAS BEEN WRITTENlately about the rise of theplant-loving millennial. Thephenomenon has an obviouseconomic explanation, becausein many parts of the country,young people cannot afford tobuy houses or raise kids.

Inevitably, they look else-where to satisfy their emo-tional needs. They once couldfind emotional sustenance inplaying videogames or shop-ping or watching John Oliverimplode. Now Dracaena fra-grans, aka the corn plant, andspider plants are being dra-gooned into doing the job.

As reported earlier thismonth in the Journal, plant

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lovers ceaselessly blog aboutthem, buy them on subscrip-tion sites and post photos onFacebook and Instagram. Theytrade anecdotes with similarlyminded plant owners aboutthrilling developments involv-ing their plants. My own ex-tensive, cross-country researchfinds that millennials are shar-ing plants, naming plants andlending plants out, while anincreasing number are lovinglytending to virtual plants ontheir smartphones.

Of course, these plant lovers’reliance on social media has itsdark side, too. The desireamong millennials to upstageand embarrass each other intheir bid for social statushas not stopped at theborders of the green king-dom. How many timeshave online photos of ivywith brown edges led tothe kind of mass shamingthat finds its targets wa-tering their plants with tears?

Indeed, these plant lovershave the same emotional con-nection to flora that theYoung and the Houseless used

to have to fauna like beagles,Siamese cats, budgerigars and,in certain highly unusual cases,Rottweilers. They are transfer-ring their affection to Chinesebamboo, Schefflera arboricola(the dwarf umbrella tree) and,where there is enough sun-

light, jasmine.

Young people’s affections forFido and Muffy are often seenas serving as a dry run for par-enthood. But I think the explo-sion of houseplant ownership isprobably rooted in an entirelydifferent phenomenon. Plants,like pets, are a perfect excuse tostay home—and an especiallygood excuse to reject invitationsto travel great distances. “Ican’t fly home for Thanksgivingbecause I don’t trust anyone tolook after the African violet andthe Spathiphyllum,” a millennialmight say. “When I came hometo see you guys last Christmas, Igot back here a week later tofind all my bromeliads dead.That set me back three grand.”A key question here: Are mil-

lennials so cunning, so diaboli-cal that they would use house-plants as an excuse to avoidvisiting their parents?

“Absolutely,” says one WestCoast millennial whose parentslive in tony, twee Sleepy Hol-low, N.Y. “As soon as I setfoot in their house, my par-

ents give me a hard time aboutdating a tone-deaf sitar playerand not doing anything about

my hair. Now that I have 135houseplants, I have a perfectexcuse not to go home. Youcan’t ask your friends or neigh-bors to stop by every threedays to water 135 plants. Any-way, I don’t have any friends.”

Adds a second millennial,who hasn’t flown home toWest Texas from a small townin Newfoundland since 2007:“It’s not that I love my plantsmore than I love my parents.It’s just that my plants are awhole lot less annoying.”

Angry parents, in turn, havecrossed houseplants off theirChristmas shopping lists fortheir adult progeny and areeven attaching stringent con-ditions to all future cashtransfers.

“I’m sick of hearing that ‘Ifyou can’t be with the ones youlove, love the plants you’rewith’ nonsense,” says onemiffed parent. “If you want touse my hard-earned money tohave kids, I’ll turn the faucet onfull-blast. But if you’re usingthe money to buy yet anotherEpipremnum aureum, I’m cut-ting you out of the will.” P

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The DarkSecrets ofAmerica’sMillennialPlantLovers

THEWALL STREET JOURNAL. **** SATURDAY/SUNDAY, JULY 28 - 29, 2018 | C7

In Pursuit ofMach 1TheAmerican aces

who broke thesound barrier. C8

READ ONLINE AT WSJ.COM/BOOKSHELF

BY RICHARD NORTON SMITH

‘THERE CAN be noprestige withoutmystery,” Charlesde Gaulle insisted,“for familiarity

breeds contempt.” Nearly half a cen-tury after his death, de Gaulle’s pres-tige has never been greater. Forget-ting how divisive a figure he was inlife—as evidenced by the nearly 30assassination attempts he survived—Frenchmen across the political spec-trum rank le grand Charles aboveNapoleon, Clemenceau and the SunKing himself. In 1940 de Gaulle re-deemed French honor by carrying onthe war against Hitler, not from occu-pied France but from makeshift battlestations in London and equatorialAfrica. Before and after Liberation hebattled apologists for the quislingVichy regime of Marshal PhilippePétain as well as French Communistsloyal to Moscow.

In May 1958 he came out of a rest-less retirement to avert civil war overcolonial Algeria. Later that year he es-tablished the Fifth Republic, tailoredto his contempt for party politicianslike former French president AlbertLebrun (1932-40), of whom he ob-served, “What he lacked as Head ofState was that he was no Head andthere was no State.” Insisting “Franceis not really herself unless in the frontrank,” in the 1960s de Gaulle elbowedhis way into the select club of nuclearpowers, even as he relinquished anempire and rebranded France a credi-ble champion of Third World inter-ests. Identifying Russian nationalismas a greater threat than Soviet Com-munism, he warned John Kennedyagainst a Vietnam quagmire. He rec-ognized Mao’s China nearly a decadebefore Richard Nixon, an unabashedadmirer, set foot in Beijing.

Nixon’s countrymen showed lessappreciation of the aging autocrat inthe Élysée Palace. To most Americansin 1969, de Gaulle was the personifi-cation of French pride, a nationalisticrelic who had withdrawn his countryfrom NATO’s military structure, ve-toed British membership in the Euro-pean Economic Community and en-couraged Quebecois separatism whileon Canadian soil. Such behavior keptde Gaulle center stage in his twilightyears. Equally important, it sustainedan exaggerated view of French powerand influence. (“All my life,” he wrotein his war memoirs, “I have had a cer-tain idea of France.”)

De Gaulle as illusionist—the themepervades Julian Jackson’s door-stopper of a biography. A Britishhistorian noted for his volumes on the1940 fall of France and the ensuingperiod of collaboration and resistance,Mr. Jackson sets out to demytholo-gize the General without debunkinghim. With a fluent style and near-total command of existing and newlyavailable sources, he peers behind themonolithic façade to unmask a com-posite of opposing traits—the lifelongsoldier with a gift for insubordi-nation; the fervent nationalist andchampion of Europe “from the Atlan-tic to the Urals”; the modernizer whocould surpass any student protestorin his disdain for the “civilization ofthe termite heap.”

Born in 1890, de Gaulle was theson of a Jesuit-trained academicwounded in the Franco-Prussian Warand a mother passionately attachedto church and crown. Young Charleswas educated in Catholic schoolsbefore enrolling at Saint-Cyr, thenational military academy. Woundedin the opening days of World War I,he spent much of the war as a Ger-man prisoner, making no fewer than

five escape attempts. At 6 foot 4, hewas a hostage to his own body. “Wegiants are never at ease with others,”he ruefully acknowledged to a war-time aide.

His ungainly physical stature con-tributed to de Gaulle’s natural shy-ness, a reserve that was mirrored byYvonne Vendroux, the biscuit maker’sdaughter he married in 1921. Herhusband passed the interwar years ina variety of teaching positions, in-structing the officer corps of the newPolish army, lecturing on militaryhistory at Saint-Cyr, and writingbooks on French military doctrineand the self-denying requirements ofcommand. In between tours of dutyin the Rhineland and the MiddleEast, he gained a reputation for chal-lenging official dogma. Given theopportunity to test his advancedtheories of battlefield mobility andtank warfare against Nazi invaders,de Gaulle could not wean a fossilizedmilitary establishment from its de-fensive outlook. As a junior ministerin the short-lived government of PaulReynaud (March-June 1940), he re-jected the counsel of defeatist gen-erals who far outranked him.

by the superiority of German arma-ments and tactics. The prediction:the defeat of French forces was notdefinitive since France still had anEmpire, she had an ally in the formof Britain, and behind both was theUnited States. . . . The appeal: ‘I,General de Gaulle, currently in Lon-don, invite the officers and theFrench soldiers who are located inthe British territory . . . to contactme.’ The message: ‘The flame ofFrench resistance must not be ex-tinguished and will not be extin-guished.’

The original broadcast was thought tooinsignificant to preserve for posterity.Many listeners, then and later, assumed“de Gaulle” to be a pseudonym.

In July 1940, Churchill ordered thedestruction of the French fleet ratherthan risk having it fall into Nazihands. A despondent de Gaulle con-sidered withdrawing to Canada as aprivate citizen. Two months later therepulse of a hastily planned jointexpedition against Dakar, a Vichystronghold in West Africa, led theleader of Free France to contemplate

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‘A Certain Idea of France’From themoment he became a voice for freedom duringWorldWar II, de Gaulle embodied the Gallic spirit in his time

LE GRAND CHARLES Bronze statue of de Gaulle (1993) by Angela Conner, in Carlton Gardens, London.

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MOST historiansagree that the worldcame closest to anuclear war with theCuban Missile Crisis

of October 1962, when President JohnKennedy discovered that the SovietUnion had installed nuclear missiles inCuba and warned Soviet leader NikitaKhrushchev to remove them—or else.For two weeks messages flashed backand forth between Moscow andWashington. As tension mounted andU.S. forces, including nuclear-loadedB-52s, were placed on high alert, theSoviets blinked, agreeing to dismantlethe sites and ship their missiles backto Russia.

But now a British popular historianand a veteran American reporter, inseparate books, contend that the mostdangerous moment of the Cold Waroccurred in early November 1983,

the elevated Soviet alert when theylearned of it, because they couldn’t be-lieve that the Soviets would seriouslythink a U.S. strike was imminent.

According to Mr. Downing and Mr.Ambinder, the Soviet worry over U.S.militancy had been intensified byrecent events: Reagan’s description ofthe Soviet Union as an “evil empire,”made in a speech in March 1983;NATO’s decision to deploy Pershing IIand Cruise missiles in WesternEurope, a response to the Sovietplacement of SS-20s aimed at targetsin NATO countries; and the Reaganadministration’s commitment to thedevelopment of the Strategic DefenseInitiative, the high-tech missile shield.But the immediate cause of theSoviets’ fear was Able Archer, as itwas called: an exercise conductedannually to test, among other things,NATO’s response to a Soviet tank-ledinvasion.

While NATO engaged in make-believe warfare, Moscow trackedsuspicious moves, like increasedcommunications between Washington

and London, and a U.S. fieldcommander suddenly transferring hisheadquarters to another mobileconvoy. Able Archer’s test-scenariopresumed the possible NATO use oftactical nuclear weapons; the Sovietsnoticed the participation of B-52s forthe first time in the exercise. The B-52presence meant one thing to theSoviets, writes Mr. Ambinder: nuclearstrikes.

At times, Mr. Ambinder’s bookreads like a Tom Clancy novel, aswhen Soviet Capt. Viktor Tkachenko,deep in an ICBM bunker, and 26-year-old U.S. Capt. Lee Trolan, in charge ofa dozen nuclear weapons, aredescribed handling the escalatingtension. We watch Capt. Trolan guard-ing nuclear weapons with six men forevery ten he should have had, workingseven days a week. “If you asked methen whether I thought we were goingto have a shooting war with theWarsaw Pact . . . I would have said,yes.” As for Capt. Tkachenko, he hadheard rumors that “the Americanswould wait until the eve of a majorSoviet holiday,” when ordinary Sovietswere relaxed and happy, “to launchWorld War III.” He returned again andagain to the critical question: Is “AbleArcher 83” a normal military exerciseor the incomprehensible—prepara-tions for a nuclear strike?

With Soviet forces on high alert,Mr. Downing takes us to the KuntsevoClinic outside Moscow, where a criti-cally ill Andropov is receiving dialysistreatment. It is the evening of Nov. 9.Three men could give the launchorder—Andropov himself, DefenseMinister Dmitri Ustinov or Chief ofthe General Staff Nikolai Ogarkov.

PleaseturntopageC8

TheMostDangerousWar Game

SQUARE SCARE Celebrating the October Revolution in Moscow, Nov. 7, 1983.

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“What is remarkable about deGaulle in 1940 is not so much his intel-lectual analysis of the future of thewar,” Mr. Jackson asserts, “as his read-iness to act”—beginning on the eve-ning of June 18, when the rebelliousone-star general lit the flame of Frenchresistance in a little-heard BBC radio

appeal. Four minutes long, the found-ing text of Gaullism was initiallyvetoed by the British Cabinet, whichhoped to forestall an armistice be-tween the Nazi victors in Paris and thevassal ministry headed by MarshalPétain. De Gaulle’s speech, Mr. Jacksonwrites, “offered a diagnosis, a predic-tion, an appeal and a message”:

The diagnosis: [France’s] defeatwas a purely military affair caused

When theNazis occupiedParis, deGaulle took tothe airwaves: ‘The flameof French resistance . . .will not be extinguished.’

1983: Reagan, Andropov,and a World on the BrinkBy Taylor Downing

Da Capo, 391 pages, $28

The BrinkBy Marc Ambinder

Simon & Schuster, 364 pages, $27

BY LEE EDWARDS

when the Soviets nearly launched anuclear attack against the Westbecause they thought that NATO wasplanning a first strike under the coverof a war-game exercise. Drawing ondocuments obtained through the Free-dom of Information Act and first-timeinterviews with national-securityexperts, Taylor Downing in “1983:Reagan, Andropov, and aWorld on theBrink” and Marc Ambinder in “TheBrink: President Reagan and theNuclear War Scare of 1983” concludethat, without most of us knowing it,the world came close to war 20 yearsafter the crisis in Cuba.

Among those who were not aware,at the time, of a possible nuclearArmageddon were President RonaldReagan, on an official visit to Japanand South Korea, and Mikhail Gorba-chev, then a Politburo member, whonow recalls that he celebrated theOctober Revolution asplanned and knew noth-ing of a war alert. OnNov. 18, 1983—a weekafter the war-game exer-cise ended—Reagan wasbriefed on the Soviets’startling belief that afirst strike from the U.S.might soon be launched.He wrote in his diary: “Ifeel the Soviets are sodefense-minded, so para-noid about beingattacked, that withoutbeing in any way soft on them, weought to tell them no one here has anyintention of doing anything like that.”

Mr. Downing and Mr. Ambinderstress that the paranoia of Soviet lead-ers, especially that of Yuri Andropov,the general secretary of the Commu-

nist Party and former KGB head, wasreinforced by a global intelligenceoperation that the Soviets had under-taken around the same time. It wasnamed Project RYaN, an acronymtaken from the Russian words meaning

“nuclear missile attack.”KGB agents in the U.S.,Britain, other NATOcountries and Japan hadbeen tasked to look forindicators that a nuclearattack was beingplanned. Be on the look-out for more aggressivelanguage by politicalleaders, they were in-structed, as well as anyheightened military alert.

Trained to give theirbosses what they wanted,

KGB agents responded so enthusi-astically that, before long, they hadidentified 292 different “signs oftensions,” strengthening the suspicionsof Andropov and other hard-corePolitburo members. U.S. intelligenceofficials, for their part, played down

TheSovietsfeared thatAbleArcher—an annualNATOmilitaryexercise—wascover for anactual attack.


BY DANIEL FORD

HOLLYWOOD’S famousmaxim for publish-ers—“When the leg-end becomes fact,print the legend”—

was delivered earnestly in a westernmore than 50 years ago. The phrase iscited today, with knowing irony, as awarning against mere myth-making.Somehow, though, we keep printinglegends.

There is, for instance, the story ofa civilian named George Welch whowas supposedly the first human tofly faster than the speed of sound butwho was cheated of the glory byconspirators going all the way up toPresident Harry Truman. Washingtonneeded to celebrate the newly estab-lished United States Air Force, soCapt. Chuck Yeager, USAF, got thecredit.

The story has been around foryears, in magazine articles and atleast one book. Here it is again in“Chasing the Demon,” as told by DanHampton. Mr. Hampton is himselfsomething of a legend—a fighter pilotwho has written a well-regarded per-sonal memoir and, more recently,“The Flight” (2017), an impressivepilot’s-eye view of Charles Lind-bergh’s trans-Atlantic crossing.

Chuck Yeager and George Welchwere fighter aces in World War II.Sidelined by malaria, Welch went towork for North American Aviation, thebuilder of the war’s best fighter plane,the P-51 Mustang. As Mr. Hamptontells us, the company’s postwarassignment was to design a turbojetfighter. The result would become theF-86 Sabre, a swept-wing beauty thatdominated the skies over Korea.

Just as the war was ending, BellAircraft won a contract to build arocket plane with no other purposethan to exceed the speed of sound.The so-called sound barrier—the“demon” of Mr. Hampton’s title—hadlured and terrified wartime pilotswho experienced buffeting, crazy con-trols and sometimes death at veryhigh speeds. Bell gave its X-1 the pro-file of a bullet, as if to honor the Aus-trian physicist Ernst Mach, who in the1880s, for his research on soundwaves, had photographed a bullettraveling at supersonic speed. Accord-ing to Bell’s designs, the X-1 would becarried aloft by a four-motoredbomber and then cut loose, with thepilot inside, to blast through “Mach

One” with the help of engines thatburned for less than five minutes.

Like most 1940s aircraft, NorthAmerican Aviation’s jet fighter andBell’s rocket plane, in their firstdesigns, had wings that stuck straightout. But U.S. scientists, benefitingfrom newly accessed Germanresearch, learned that a Pfeilflügel, or“arrow wing,” aircraft could reachvery high speeds without shakingitself to pieces. North Americanpromptly modified its jet fighter withwings that swept 35 degrees to therear. Bell Aircraft, for reasons of itsown, left its X-1 design in place.

In October 1947, both planes wereready for testing in California’s Mo-jave Desert. There the X-1, piloted byYeager, reached Mach 1.07 (about 807mph) on Oct. 14, in the thin air of40,000 feet. Like the snap! of a bullet,a supersonic aircraft trails a shockwave that expresses itself as noise.Anyone below, including the hostessesat Pancho Barnes’s dude ranch andtavern near the Mojave test site,heard the ba-boom that trailed the

X-1. So they knew that somethingremarkable happened on Oct. 14. But,as the story is told, they had alsoheard a sonic boom 13 days before, onOct. 1, when Welch had tested theSabre prototype.

That was the legend published in“Aces Wild” 52 years after the fact. AlBlackburn, test pilot and author, madehis case for Welch’s primacy withinvented dialogue and no hard evi-dence, asserting along the way thatthe Air Force lied to us. Mr. Hamptonadopts the story wholesale, though inmore dignified prose. Indeed, “Chas-ing the Demon” begins as a treatiseon aerodynamics and the history offlight, sometimes lucidly but some-times not. “Perhaps,” he tells us atone point, “[Otto] Lilienthal’s greatestcontribution was the formulation ofaerodynamic coefficients that permit-ted the use of dimensionless quanti-ties to characterize forces acting onan airfoil.”

The legend of Welch’s stolen glorywas most vigorously debunked byRobert Kempel, a retired NASA flight-

Chasing the DemonBy Dan Hampton

Morrow, 331 pages, $28.99

BOOKS‘There are no great men, just great challenges which ordinary men, out of necessity, are forced by circumstances to meet.’ —WILLIAM FREDERICK HALSEY JR .

How will the day end: in a nuclearattack on the Soviet Union, or willMoscow strike first?

Mr. Downing speculates that, in theend, Andropov and the other Sovietleaders, conscious of the terrible lossof Soviet life during World War II,“did not want to push the nuclearbutton unless they absolutely had to.”Separately, they were uncertain thatRYaN was correct about NATO’s warpreparations. And there was the re-assuring report, as Mr. Ambinderrecounts, from a reliable Soviet spy atNATO headquarters that “nothing washappening.”

By the time dawn broke on Nov. 10,Moscow had not received any alarm ofenemy launches, and Soviet forceswere ordered to stand down. Mr.Downing writes that “probably themost dangerous moment of the ColdWar passed.” But was it truly thatdangerous? We can say with certainty,thanks to Mr. Downing and Mr.Ambinder, that both Soviet and Amer-ican intelligence got it wrong—theSoviets displaying a scary degree ofparanoia and the Americans unable toaccept the truth of their paranoia. Butthere is still a great deal that we don’tknow—not least about what Andropovwas thinking and how close he cameto launching a nuclear attack. Untilthe Kremlin opens its files, we are in aswamp of speculation. In any case, theauthors are to be congratulated for asplendid job of research about acritical event in the Cold War thatother historians have overlooked orunderplayed.

It should be added that RonaldReagan had been talking about doingaway with all nuclear weapons sincethe 1960s. He often remarked that theU.S. policy of Mutual Assured Destruc-tion (MAD) reminded him of aMexican stand-off: There had to be abetter way. As Mr. Ambinder writes inan epilogue: “Reagan realized thatonly presidents can truly understandthe entire dimension of the nuclearproblem, only presidents have thepower to elevate global stewardshipand sovereignty above patrioticpartiality, and therefore only presi-dents can keep the world from the ashheap of Armageddon.”

Mr. Edwards, a distinguished fellowat the Heritage Foundation, is theauthor of a recent memoir, “JustRight: A Life in Pursuit of Liberty.”

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Reagan,AndropovAnd 1983

test engineer and the author of “TheRace for Mach One,” published in2010. Mr. Kempel argued that theSabre prototype, powered by a lack-luster Chevrolet turbojet, just didn’thave the thrust to go supersonic. Allthe evidence to the contrary, he said,was anecdotal (those ba-booms) orwrongheaded. Welch wasn’t “clocked”from the ground, as had beenclaimed, because no such clockinginstrument existed. Yeager’s MachOne achievement was derived fromon-board instruments and the mathskills of Roxanah Yancey and twoother “computers” on the ground.Nor did anyone interview GeorgeWelch on the subject, for he died in1954 in the breakup of another fastjet. The dude-ranch hostesses werealso long gone, chased out by a fireand the expanding flight-test center.Still, the legend lives on in Mr.Hampton’s book.

Mr. Ford is the author of “FlyingTigers: Claire Chennault and HisAmerican Volunteers, 1941-1942.”

Boom Times for Jet Pilots

BREAKING BARRIERS The Bell X-1 over the Muroc Test Range.

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People onthe leftand rightoftenseempanickedthatwhat

they prizewill betakenfromthem.

MARTHA NUSSBAUM begins“The Monarchy of Fear”

(Simon & Schuster, 249 pages,

$25.99) with her emotionalresponse to Election Day 2016.She was in Kyoto, Japan, thelaureled philosopher recalls,“where I had just arrived for anaward ceremony.” As the elec-tion results became clear, shefelt the same wave of emptinessand fear experienced by millionsof other American liberals andprogressives (and more than afew conservatives). “It graduallydawned on me,” she writes,“that fear was the issue, anebulous and multiform fearsuffusing US society.” Manypeople similarly dismayed bythe election “are reacting as ifthe end of the world is at hand.”

She’s right about that, and itdoesn’t apply just to Democrats.Republican activists andprimary voters—among whomI’ve spent a lot of time—oftenseem racked by the fear thatsomething has been taken fromthem. Such fears aren’tirrational, but they will makeyou say and do dumb things.Fear induces panic, and panic“doesn’t just exaggerate ourdangers,” Ms. Nussbaum writes,“it also makes our momentmuch more dangerous than itwould otherwise be, more likelyto lead to genuine disasters.”

Ms. Nussbaum, a professor oflaw and ethics at the Universityof Chicago, has written severalbooks on the political signifi-cance of emotions. The presentvolume draws on the material inthose books, especially “HidingFrom Humanity” (2004), inwhich the author argues thatthe emotion of disgustencourages laws that oppress

those with unorthodox sexualidentities. “The Monarchy ofFear” examines Greek andRoman literature as well asbehavioral economics andevolutionary psychology tocontend that fear is the first andcentral human emotion and thatit’s a singularly dangerousemotion in the political sphere.

The book’s subtitle—“APhilosopher Looks at OurPolitical Crisis”—leads one tothink that Ms. Nussbaum’sanalysis of today’s volatile anduncertain politics will offer aneeded element of precision. Itdoesn’t. The book is rife withsloppy arguments and arrestingbut unsubstantiated claims. Ms.Nussbaum doesn’t argue butmerely states, for example, thatmonarchies are based on fear(hence the title), whereasdemocracies are based on trust.She illustrates that bold claimwith an even bolder, undefendedone: “Think about a marriage,”she writes. “In an old-stylemarriage, in which the malehead of household was like amonarch, there was no need fortrust. Spouse and children justhad to obey.”

Ms. Nussbaum seems to thinkthat the biblical principle of “aneye for an eye” allowed forwanton retribution. In fact, itbanned disproportionalpunishments. Her understandingof dueling seems limited towhat she has learned from Lin-Manuel Miranda’s musical“Hamilton”; she supposes thisstrange practice was only aboutan “obsession with status” andso doesn’t notice that itdiscouraged precisely the sort ofirresponsible rhetoric rightlycensured elsewhere in the book.

The more interesting failureof “The Monarchy of Fear” isthat it exhibits just the veryuninformed fear it laments. Ms.Nussbaum’s introduction, aboutpeople “reacting as if the end ofthe world is at hand,” seems toaugur criticism of the left. Butwith one exception—she gentlyscolds Paul Krugman forsuggesting that Congress “getrid of” Donald Trump the waythe Roman senate got rid ofCaligula, i.e., by assassination—Ms. Nussbaum’s chastisementsare reserved for Trumpsupporters and other nonliberalAmericans.

Unsupported generalizationsabound. In a discussion of Amer-icans’ suspicion of the burqa, theauthor alleges that “manyAmericans shrink from Muslimsin a way that people don’t shrinkfrom more familiar-lookingmembers of groups some ofwhose members engage in vio-lence.” How many Americans?And how does she know this?

We learn similarly that in2016 male Trump voters blamedwomen for taking their jobs,reviled women as “disgusting”and envied them for theirsuccess. The evidence? Theyvoted for Mr. Trump, didn’tthey? Some of these guys, welearn further, “object on moralor religious grounds to womenwho pursue personal indepen-

dence and career success, ratherthan making care for home andfamily their primary concern.”

Ms. Nussbaum frequentlymentions racial animosities as ifthey were on the rise again. Heronly support for this claim isthat neo-Nazis marched inCharlottesville, Va., in 2017. So—if I may oversimplify onlyslightly—a single gathering ofabout 500 racist nincompoopshas led her to suppose thatAmerica is in the grip of anirrational fear. Maybe she’sright—though, as she noted onthe book’s first page, the fearshe senses is probably her own.

Still, Ms. Nussbaum concedesthat “the basic institutions ofour government are reasonablyhealthy”—quite a concession intoday’s climate of panic. DavidRunciman’s “How Democracy

Ends” (Basic, 249 pages, $27)

is similarly measured, but moreconsistently so. Mr. Runciman, aprofessor of politics atCambridge University, doesn’tbelieve that Mr. Trump’s victoryheralds the approaching col-lapse of democracy in America.Indeed, he thinks this country’spolitical elite absorbed theshock of that event withimpressive resilience. Hisargument is that democraticgovernments are far less likelyto collapse into totalitarianismthan to slowly mutate into someother form of undemocraticgovernment—and that processmay only have begun in the U.S.with the ascension of apresident who openly attacksthe press and understands littleabout America’s Constitution orgoverning institutions.

The book proposes three setsof circumstances under which

democracies are likely to end:coup, nuclear or environmentalcatastrophe, and technologicaltakeover. The last seemslikeliest. The online revolution,once the great hope for civicrenewal, has proved a grievousdisappointment. Ourgovernment now has vastlygreater surveillance powers;hostile foreign entities have newways to confuse and rob us; andcitizens have more reasons tohate one another.

“How Democracy Ends” is nota doomsday warning but aclearly written thoughtexperiment. But Mr. Runcimanundersells the value ofdemocracy. He rightly rejectswhat’s fashionably known asepistocracy—an updated versionof mandarinism, or governmentby technocratic elite—as well asanarchism, which is morepopular among younglibertarians than you’d think. Buthis presentation of 21st-centuryauthoritarianism is too rosy.Contemporary authoritarians, hethinks, are much more “prag-matic” than their 20th-centurypredecessors: “In place ofpersonal dignity plus collectivebenefits, they promise personalbenefits plus collective dignity.”The problem arises, I think, fromMr. Runciman’s assumption thatdemocracy’s chief strength is itsability to offer citizens “dignity”rather than its capacity to assurethem of that dignity’s legiti-macy—and thus provide bothfreedom and stability. Life forcitizens in a democracy doesn’talways feel dignified, but it’shard to conclude that yourgovernment is illegitimate whenyour friends and neighbors putit there.

Nothing to Fear but Everything

THIS WEEK'S BOOKS

The Monarchy of FearBy Martha C. Nussbaum

How Democracy EndsBy David Runciman

POLITICSBARTONSWAIM


BACK IN THE late 1990s,I attended a performanceof Eugene O’Neill’s “LongDay’s Journey IntoNight” at the American

Repertory Theater in Cambridge. Iremember a long and relentlessevening as the audience watched theTyrone family battle one another ontheir joint descent into the abyss.Afterward there was a panel discus-sion, and someone must have asked aquestion about why we should sufferall that angst. The late Harvard Ameri-canist Daniel Aaron, who was on thepanel, responded, with grim satisfac-tion, “Because it’s good for you.”

That line went through my mind asI was reading, in a state of increasingalarm, Simon Lewis and Mark Maslin’srelentless reckoning of how we, as aspecies, got ourselves into the messwe’re in today: the undisputed domi-nators of a vulnerable planet that, intime, won’t leave us much to domi-nate. Much of the news packed intothis book—a compact doorstopweighted with discouraging facts—isn’t new. But it is indeed good for usto have it all together, told with deter-mination and in chiseled, almost lit-erary prose. Indeed, the book’s mainstory—how one species, Homo sapi-ens, fresh off the trees of Africa, cameto rule the Earth so completely that itnow stands a good chance of wreckingit—has the force of a Greek tragedy.Hubris is an essential ingredient ofthat story, and Messrs. Lewis andMaslin point to several early predic-tions, all of them unheeded, of loom-ing disaster. “We live,” wrote AlfredRussel Wallace, the co-discoverer ofevolution, in 1876, “in a zoologicallyimpoverished world, from which allthe hugest, and fiercest, and strangestforms have recently disappeared.”

Yet, as in any Greek tragedy, fateplays a part, too, if by that we mean aseries of connected circumstancesthat restrict our freedom to act other-wise. Messrs. Lewis and Maslin callthem “positive feedback loops”: Ashumans upgraded from hunter-gather-ers to farmers to industrialists to con-sumer capitalists, the same spiral ofneed and greed, conquest and profithas repeated itself, reeling us in andgoading us on to ever higher levels ofachievement. And so here we are,burning fossil fuels on an overpopu-lated globe that is chafing under

suicide. All his life de Gaulle battled“military melancholy,” part of theprice for willing himself to be that“man of character” to whom hisbleeding country would turn in timesof crisis. Hidden from the world wasthe loving devotion and playful for-bearance de Gaulle reserved for hisdaughter Anne, whom he called “myjoy and my strength.” Born withDown syndrome, she died of pneu-monia in 1948, age 20. Leaving thevillage churchyard the day of herfuneral, de Gaulle clutched his wife’shand. “Come,” he reportedly said tothe grieving mother, “now she is likethe others.”

That is something he could never be.Of course he was insufferable. “The

arrogance that makes him from timeto time almost impossible to dealwith is the reverse side of an extremesensibility,” wrote British Prime Min-ister Harold Macmillan, no stranger toemotional concealment. “He belongsto the race of unhappy and torturedsouls to whom life will never be apleasure to be enjoyed but an ariddesert through which the pilgrimmust struggle.” But what a pilgrim-age! The initial trickle of recruits whoanswered his radio call was soonfreshened by a parade of French colo-nies from Chad to Tahiti. His growingprestige helped de Gaulle negotiatethe byzantine corridors of Resistancepolitics while also claiming for FreeFrance a status unjustified by its mili-tary contributions alone.

More illusions, however adeptlystage-managed. Of all his World WarII contemporaries, none achieved so

ContinuedfrompageC7

much with fewer resources or moredisputed claims to legitimacy. Theycommanded armies, received defer-ence, governed at the head of existinginstitutions; de Gaulle’s authority, likeFree France itself, was largely theproduct of one man’s imaginationand, still more, his intransigence.After one especially rancorous con-frontation with his prickly ally,Churchill marveled: “His country hasgiven up fighting, he himself is a refu-gee, and if we turn him down he isfinished. Well, just look at him . . . Hemight be Stalin with 200 divisionsbehind him.”

By contrast Churchill’s Americancounterpart, Franklin Roosevelt, spentmuch of the war auditioning substi-tute saviors less inclined to bite thehand that fed them. In November1942, de Gaulle went into a rage whenEisenhower’s armies invaded NorthAfrica without the U.S. informing himin advance. (“I hope the Vichy peoplethrow them back into the sea!”) Onlywith difficulty could he be persuadedto broadcast a message of solidaritythe day that Allied troops set foot onthe beaches of Normandy.

That de Gaulle’s political judgmentcould be erratic was demonstrated inJanuary 1946. Sixteen months after hestrode down the Champs-Élysées tothe cheers of liberated Paris, he aban-doned his provisional governmentrather than cede power to the de-spised “regime of parties.” He mis-gauged the popular appetite for hissubsequent return, as wartime memo-ries yielded to fears of dictatorshipand the parliamentary games resumedunder the guise of the Fourth Republic(1946-58), in which economic andsocial gains were purchased at the costof ministerial stability.

Retreating to his austere countryhouse at Colombey-les-Deux-Églises,de Gaulle wrote his memoirs andscorned all recognition from his suc-cessors in Paris. (“One does not deco-rate France.”) From 1947 to ’55 hemaintained an awkward oversight of

a vaguely conceived policy of “asso-ciation” de Gaulle hoped to narrow thegap between the working class andtheir employers. Then came May 1968,and the far more radical demands ofFrench students, soon echoed by thecountry’s powerful unions.

Never had the old man seemed soout of touch. On May 29, 1968, hisgrip on events fading fast, de Gaulledisappeared to a French military baseon German soil. Even now, his move-ments during those frantic 24 hoursare more easily traced than hismotives. Having assured himself ofthe armed forces’ loyalty, he repairedto Colombey. But only for a night.Back in Paris the fever broke whenPrime Minister Georges Pompidoubought off the unions and de Gaulletook to the airwaves to announceelections for a new National Assem-bly. A month later the forces of ordertriumphed at the polls.

Much of the credit, however, wentto Pompidou. In establishing a credi-ble successor, de Gaulle had madehimself expendable. A victim of hisown success, he renounced the presi-dency in April 1969, following defeatin a referendum on reforming regionalgovernment and the French Senate.Asked why he had quit over such aminor issue, he replied, “For theabsurdity of it.” Once before, in 1946,he had justified abdication by explain-ing, “One’s acts have to be picturesque. . . What is picturesque is not forgot-ten. I take my mystery away with me.”

He took it to his grave, on Nov. 9,1970, at age 79. But in crafting thefinest one-volume life of de Gaulle inEnglish, Julian Jackson has comecloser than anyone before him todemystifying this conservative at warwith the status quo, for whom na-tional interests were inseparablefrom personal honor and “a certainidea of France.”

Mr. Smith, a historian and biogra-pher, is currently at work on a lifeof Gerald R. Ford.

The LifeOf CharlesDe Gaulle

the Rally of the French People (RPF),memorably described by the NewYork Times as “a party against par-ties.” Then he again left the stage,only to reappear three years later,when a French army employing brutaltactics proved unable to suppress theviolent uprising of native Algeriansdemanding independence.

Mr. Jackson’s meticulous recon-struction of the tumultuous monthof May 1958, and the decolonizingpolicies that followed de Gaulle’s re-turn to power, constitute the mostovertly revisionist parts of his story.He shows us a Machiavellian exileflirting with right-wing army offi-cers whose commitment to Algériefrançaise exceeded their allegianceto republican government, whilesimultaneously flattering Socialistparliamentarians whose support hewould need to reclaim power. Hispursuit of an Algerian peace waspure pragmatism, spurred by fearsof a French army increasingly self-absorbed and tainted by treason.The resulting wound was not easilycauterized. In April 1961, de Gaullecrushed a revolt led by extremistgenerals. The following year terror-ists belonging to the paramilitaryOAS (“Algeria Is French and WillRemain So!”) came within inches of

killing the hero who had betrayedtheir cause.

De Gaulle’s ultimate achievement,Mr. Jackson argues, was less to havegranted Algeria independence “thanto have persuaded people that that iswhat he had done; . . . to create acompelling narrative that explainedFrance’s disengagement from Algeriaand turned it into a victory ratherthan a defeat.” No wonder RichardNixon would draw on his example adecade later in fashioning the strate-gic retreat he called Vietnamization.Freed to pursue grandeur on theworld stage, de Gaulle undertook tri-umphal tours through Africa, LatinAmerica and Asia. Presenting Franceas a civilized alternative to soullesscapitalism and socialist tyranny, hecultivated West German ChancellorKonrad Adenauer, cut off French armssales to Israel and denounced theSoviet invasion of Czechoslovakia inAugust 1968.

De Gaulle’s personal frugality con-trasted sharply with the splendor ofhis public stewardship. As First Ladyof France, Madame de Gaulle did herown marketing, while the coupleinsisted on paying their personalelectric bills at the Élysée Palace.Others were less willing to forgo thefruits of 1960s consumerism. Through

LIBERTÉ Charles de Gaulle in Paris on Aug. 26, 1944, the day afterGerman forces surrendered the city.

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The Human PlanetBy Simon L. Lewis

& Mark A. Maslin

Yale, 465 pages, $25

BY CHRISTOPH IRMSCHER

rising temperatures, acidic oceans andmelting icebergs, with parts of itclouded by toxic fumes and devastatedby species loss. In a tantalizing mo-ment, Messrs. Lewis and Maslin imag-ine how plants would tell the historyof life on Earth—very differently, to besure, and likely with different pro-jections for a sustainable future. But,then, imagining how plants think issuch a deeply human thing to do.

As is, arguably, writing big booksabout our situation. Current geologi-cal wisdom has us living in the Holo-cene, an epoch that began about12,000 years ago. Yet many scientistsargue that global shifts in our envi-ronment have risen to the level of anew epoch, the “Anthropocene,” aterm cobbled together from the Greekword for “human” and a suffix mean-ing “recent epoch.” That new statewould have been caused not by platetectonics, volcanic interruptions or ameteor strike but entirely by Homodominatus, as Messrs. Maslin andLewis suggest we rename Homo sapi-ens: a lethal biped, the weakest andyet most efficient predator Earth hasever known. (I am not a fan, by theway, of their Latin coinage—to my ear,Homo dominans would make moresense.) Whether or not the appro-priate professional bodies will finallyratify the Anthropocene, the term hashaunted public discourse for years.

The problem is that for a geologicalepoch to be defined, there needs to bea “golden spike,” a precipitating eventthat has left its unmistakable traces ingeological deposits for future geol-ogists to come see. The so-calledAnthropocene Working Group, asubcommittee of the InternationalCommission on Stratigraphy, thinks ithas found such a spike in the 1950s, inthe radioactive elements from nuclearbomb tests that were blown into thestratosphere before settling down inthe rocks. But Messrs. Lewis andMaslin have little patience with suchscience-by-committee, and repeat atheory they first aired in 2015 in amuch-discussed article in the journalNature, a bold attempt to meld naturaland human history. They remind usthat in the aftermath of 1492, diseasesand warfare killed about 50 millionNative Americans, significantly inter-rupting human activities in the NewWorld such as farming or fire-burning.As the 18th-century German wit GeorgChristoph Lichtenberg observed: “Thefirst Indian who saw Columbus madea terrible discovery indeed.” Forestswere taking over former farmlands,and by 1610, the newly grown treeshad pulled enough carbon dioxide outof the atmosphere for temperatures todecline and a brief ice age to holdsway. That rupture is Messrs. Lewisand Maslin’s “golden spike”: a dip in

carbon-dioxide levels researchers havelocated in an Antarctic ice core.

Not all scientists agree that theHolocene is over. You might evenwonder if naming an entire epochafter ourselves wouldn’t be the pin-nacle of hubris, a pat on our collectiveshoulders rather than the slap in the

face we deserve. Mention, if youcould, the Anthropocene to a roach,and it would continue to go about itsbusiness. So why the fuss? Messrs.Lewis and Maslin frankly acknowledgethe political reasons that drive theirown model; denying that there is sucha thing as the Anthropocene is, theysay, a political move, too. Whatmatters is that, barring fundamentalchanges in our behavior, our time onthis planet, the only home we know,will be limited. Yet we are more thanalgae drifting lazily in a lake; if ourlarge brains and our ability to workcollectively got us in trouble, surelythey can get us out of it, too.

And with that our authors boldlyswitch genres, abandoning tragedyfor utopian fantasy. The fix they pro-pose—the introduction of UniversalBasic Income and the “rewilding” ofparts of the world—will strike manyreaders as a dreamy trip to Never-land rather than a real policy pro-posal. But large problems requirelarge solutions, and those are diffi-cult to accomplish in political sys-tems that ask politicians and votersalike to think in terms of short-termelection cycles rather than environ-mental impacts lasting for millions ofyears. Messrs. Lewis and Maslin,pointing to advances such as theemancipation of women and increas-ing local investments in renewables,offer what they consider compellingevidence that some of our sins arereversible. One thing is clear: From afootnote in Earth’s history (given thebrief time our species has spenthere), we have become the authors ofits fuzzy future. What Messrs. Maslinand Lewis want us to do is embrace—now, and not only because it is goodfor us—the awesome responsibilitiesthat come with such authorship.

Mr. Irmscher is director of theWells Scholars Program at IndianaUniversity Bloomington. Among hismany books is “Louis Agassiz:Creator of American Science.”

A Perilous Past and a Fuzzy Future

SET ADRIFT Tourists view icebergs in the fjords of southern Greenland.

UIG

VIA

GETT

YIM

AGES

BOOKS‘What it lies in our power to do, it lies in our power not to do.’ —ARISTOTLE

After 1492, new forestgrowth in the Americaspulled enough carbondioxide out of the airto create a brief ice age.


THE TROUBLESOME new clientfor the First Class India USADestination Vacation TourCompany, as related in LeahFranqui’s debut novel, “Amer-

ica for Beginners” (Morrow,

310 pages, $26.99), is PivalSengupta, a well-to-do Bengaliwidow who has booked a cross-country sightseeing trip but,because she is “traveling scan-dalously alone,” requires afemale companion toaccompany her. Enter Rebecca,a luckless New York actress whoresignedly takes the role ofjoining Pival and her young,bewildered male guide, Satya,as they rush through thecountry’s tourist hot spots, aswell as some lesser destina-tions—no offense to the Corn-ing Museum of Glass—that areon the itinerary because Satyagets a cut of the gift-shop sales.

Only in America, as they say,would the unlikely trio bebrought together. Satya is astruggling recent immigranttrying to hide his Bangladeshiorigins, since in the widow’srigid social hierarchy this makeshim virtually untouchable.Rebecca is your average artsyEast Coaster who has moresexual activity in a single bar-hopping weekend than Pival hashad in her entire life. Pival has asecret, too: When her son, Rahi,who moved to California for hisstudies, came out of the closet,her husband cut off ties withhim. Soon after, her husbandannounced that Rahi had died of

a heart attack. But Pival hasnever believed him, and her tripis a labyrinthine route to findingout the truth.

Ms. Franqui covers the latentmelodrama of this story withthe amusing misadventures ofthe tour. The culture clash isrooted in rules of propriety.Satya is servile and deceptive;Rebecca, candid and egalitarian.And in observing the pair asthey form a cagey alliance,Pival comes to better under-stand the constraints of her lifein India and the liberties Rahiwould have found in America.

The pleasure of this smart,mild-mannered novel is that,through its juxtapositions, thereader, too, begins to see thecountry afresh. Pival acutelyreflects on the unruly power ofNiagara Falls, the deep sadnessof the Lincoln Memorial(“President Lincoln was somassive and weighed down inthis prison of marble”) and thecontrived prurience of LasVegas. The novel returns theembattled promise of freedomto the heart of the immigrant’stale. The old idea that Americais where you come to re-createyourself, to live according toyour own lights, animates thisbook like a misplaced truthnewly rediscovered.

America’s reputation forsexual permissiveness is whatmost excites Kailash, thenarrator of Amitava Kumar’s“Immigrant, Montana”

(Knopf, 304 pages, $25.95),

current vogue for mixing fictionand memoir (this is, he writes,an “in-between novel”). Thesuspicion of autobiographyturns these wistful evocationsinto something crass andembarrassing: a middle-agedguy bragging about his collegeconquests. Kailash’s first girl-friend, Jennifer, leaves himafter getting pregnant andundergoing an abortion. Heblithely chalks up the episodeto youthful error and, a fewpages later, hops into bed withNina. But Jennifer seems tohave been deeply disturbed bythe experience, and the verypossibility that an actualperson has had the mostprivate and distressing detailsof her life made public hangslike a toxic cloud over the restof the book. The irony is thatMr. Kumar’s celebration ofsensuality is an unwittingtestimony to the virtues ofmorality and discretion.

David Chariandy’s novel“Brother” (Bloomsbury, 180

pages, $22) centers on a 1991killing in a housing complex inthe Toronto suburbs known asthe Park. The victim is namedFrancis, a talented, restlessteenager who had grown“dissatisfied with the world andwith his destined place in it.”The survivors are his mother,Ruth, a Trinidadian immigrantwho provided for her sons bycleaning houses, and hisbrother, Michael, the book’sintrospective narrator. Depict-

ing their tightly bound relation-ship triangle and its remnantsin the aftermath of the tragedy,Mr. Chariandy’s novel is smallbut emotionally dense, a dwarfstar of mourning and regret.

The story runs on paralleltracks. The first captures theneighborhood of Michael’schildhood and gradually pro-gresses toward Francis’s death,while the second finds Michaeland his mother a decade later.Ruth suffers from what doctorscall “complicated grief,” a con-dition that leaves her prone tofugue states and hallucinations.Michael has spent the yearsworking himself to exhaustionin a supermarket stock room.Despite the passage of time,neither has managed to get anydistance from their loss. “Mem-ory’s got nothing to do with theold and grey and faraway gone,”Michael thinks. “Memory’s themuscle sting of now.”

But the neat trick of “Brother”is its ability to explore the dis-orienting effects of grief withoutsacrificing any sharpness in itsportrayals. Mr. Chariandy’sdescriptions of life in the Park—the hangouts, the late-nightdangers, the home cooking andmost of all the music—have thetexture of felt experience. Mostmemorable is the character ofRuth, whom we see as both aredoubtable matriarch and aconfused, heartbreakingly bereftwoman. In her strength and hersuffering, she seems as agelessas literature itself.

An Indian Visitor in Search of America

Three forthe road:A primBengaliwidow,herartsyNewYork

chaperonand theirBangla-deshitourguide.

few weeks between his trial and executiondate, more than 20,000 people signed apetition on his behalf, and the powers that beended up commuting his sentence to lifeimprisonment and hard labor. One journalistpointed out the irony: Slater was “too guiltyto be released, yet not guilty enough to behanged.” It doesn’t seem melodramatic to callthe case, as many have done, the “ScottishDreyfus affair.”

Slater cannot be called a lucky man, butfrom the start he was fortunate enough toattract tireless advocates. The most prominentof them was Sir Arthur Conan Doyle. He firstentered the Slater fray in 1912, when he rigor-ously reviewed the case and trial. He publishedhis conclusions—a round condemnation of theshabby proceedings—in a book called “TheCase of Oscar Slater”: “The trouble . . . with allpolice prosecutions is that, having once gotwhat they imagine to be their man, they arenot very open to any line of investigation

which might lead to other conclusions.”Both Conan Doyle’s book and the many

letters he wrote to newspapers and govern-ment officials had no practical results. In 1925he was galvanized back into action whenSlater managed to smuggle out a note in thedentures of a just-released convict begginghim to re-energize the famous author. At thispoint, Conan Doyle joined forces with theGlasgow journalist William Park, whose book“The Truth About Oscar Slater” finallybrought about Slater’s release in 1928, afternearly 19 years of imprisonment.

Conan Doyle was, of course, the father ofthe most famous detective of his day: SherlockHolmes. Conan Doyle shared his creation’s“passion for definite and exact knowledge.”Back in 1906 he had moved from detectivefiction to real-life crime when he helped over-turn the conviction of George Edalji, a half-English, half-Indian solicitor who had beenfalsely accused of maiming animals.

BY ALEXANDRA MULLEN

THE VICTORIANS alwaysthrilled to a good murder.And what might its appur-tenances be? Well, startwith a respectable setting,

perhaps with a smattering of diamonds,a puzzling locked room, a trans-Atlanticchase and, of course, violence: the morebrutal the better. A mysterious foreignermight add a pleasant fillip—perhapseven pointing to the murderer himself.

The sensational murder that MargalitFox describes in “Conan Doyle for theDefense” fits the bill. In 1908 the still-Victorian Marion Gilchrist, an 82-year-old Glaswegian spinster, was going abouther daily routine, solitary and secure inher padlocked flat. She felt closer to hermaids, past and present, than to thenieces and nephews who wondered ifthey would inherit the family money thatshe had persuaded her father to leaveher—and the extravagant jewels she’dbought with it.

When her body was discovered in herdining room a few days before Christmas,her face was bashed in. Whodunnit? Therelatives who had assumed they wouldbe her beneficiaries? The former maidwho had replaced them in the new willthat Miss Gilchrist had made out only amonth before? Or, in Ms. Fox’s words,the “sterling embodiment of everythingthat post-Victorian Britain had beentaught to fear”—a nattily dressed, olive-skinned German-Jewish cardsharp withan accent and a soupçon of the pimpabout him?

Ms. Fox calls the murder “one of themost notorious . . . of its age.” Thenotoriety had less to do with the murderitself than with the conviction of aforeigner calling himself Oscar Slater—even if his height, clothes and nosedidn’t match the recollections of themaid (returning from errands) and adownstairs neighbor, both of whom said thatthe murderer, whoever he was, had brushedby them on his flight from the scene. Nor didSlater match the descriptions of those whoremembered a lurking “watcher” over theprevious days. Yet he was fingered by amember of the club he belonged to, based ona police description of the suspect and theclaim that he possessed a pawn ticket.

By the time the Glasgow police put out awarrant to extradite Slater from New York,where he had traveled in the meantime, theyalready knew that the pawn ticket—for adiamond brooch—had proved a dead end. AtSlater’s trial in Scotland in 1909, witnesses,experts, lawyers, police officers and even thejudge ignored the lack of evidence and insteadprejudged him by what they wanted or fearedto see in him. As the judge said in hissumming up: “A man of that kind has not thepresumption of innocence in his favour.”

Slater was sentenced to death. But in the

BOOKS‘I am the last and highest court of appeal in detection.’ —SHERLOCK HOLMES

Conan Doyle for the DefenseBy Margalit Fox

Random House, 319 pages, $27

When Conan Doyle took up the Slater case,he showed, Ms. Fox writes, “a readiness towade into battle, a sense of honor so intensethat it trumped personal antipathies.” Hethought Slater “a disreputable rolling-stone ofa man” when he first wrote about him; whenhe finally met him, he disliked him. Althoughan ugly personal wrangle forms the batheticclose of their joint story, Conan Doyle’s integ-rity shines through. So does Slater’s humanity.The loving letters he wrote from jail to hisparents and sisters in Silesia, sampled by Ms.Fox, form a poignant counterpoint to theimpersonal rhetoric of the police report, lawcourt and newspaper story.

Ms. Fox, a former obituary writer for theNew York Times, has an eye for the tellingdetail, a forensic sense of evidence and arelish for research. She weighs the materialevidence that, at one point, put Slater’s life inthe balance (it is “barely an ounce: I have heldit in my hand”): a piece of paper from aLondon watchmaker that may have connectedSlater to the victim’s house. Along the way,she explores conflicting schools in early 20th-century criminal investigation as well.

Some scientists, she tells us, like the ItalianCesare Lombroso (1835-1909), tried to antici-pate future criminals by identifying telltalephysical signs—from “enormous jaws, highcheekbones, prominent superciliary arches” to“extremely acute sight, tattooing, excessiveidleness, love of orgies, and the irresistiblecraving for evil for its own sake.” Thisapproach was dubbed “criminology.” A quitedifferent approach—called “criminalistics”—was developed by the Austrian Hans Gross(1847-1915); it concentrated on evidence leftafter a crime had been committed: footprints,blood stains, fingerprints. Ms. Fox counteractsany smugness she suspects we might feel atLombroso’s expense by bringing up one wayin which law enforcement still seeks toprevent crime: profiling.

As for the Slater case, the approach was ahodge-podge of inadequate evidence and testi-mony and opportunistically wishful thinking,as Ms. Fox shows so vividly. So in the end,whodunnit? Victorian novels often end with atidy chapter that ties up the loose ends. AsOscar Wilde’s Miss Prism opines, “The goodended happily, and the bad unhappily. That iswhat fiction means.” Slater’s story—and MissGilchrist’s—didn’t end in a blaze of gloriousresolution. A great deal about the murderremains a mystery. If you fancy yourself asecond Sherlock Holmes—or Conan Doyle, forthat matter—the game is still afoot.

Ms. Mullen writes for the Hudson Reviewand the New Criterion.

The Case of the Innocent Man

ELEMENTARY One judge in Glasgow said of Oscar Slater, a German-Jewish cardsharp who spokewith an accent: ‘A man of that kind has not the presumption of innocence in his favour.’

NATIONALREC

ORDSOFSCO

TLAND

When an82-year-old Scottishspinsterwas brutallymurderedin 1908, the crimewas pinnedon a suspicious foreigner—until SherlockHolmes’s creatordecided to play detective.

when he comes from India tograduate school at Columbia inthe early 1990s. First he’seducated in the art of pleasureby listening to Dr. Ruth West-heimer’s radio program. Thenhe matriculates to a successionof relationships with smart,beautiful women on campus. Ameditation on “youth and loveand politics,” the book puts anerotic spin on the phrase “landof opportunity.”

What we get is a lot of pillowtalk interspersed with gleaningsfrom Kailash’s postcolonialstudies, the latter meant to lendan intellectual sheen to theformer. Mr. Kumar makes muchof his status as an exile, yet it’snot clear how his experiences dif-fer from those of any other randygrad student. The title is a redherring—Kailash passes throughMontana during a weeklongvacation with his girlfriend Nina—and was presumably chosenbecause it sounds sexier than“Student, Ivy League University.”

The crux of the problem isthat Mr. Kumar follows in the

THIS WEEK'S BOOKS

America for BeginnersBy Leah Franqui

Immigrant, MontanaBy Amitava Kumar

BrotherBy David Chariandy

FICTIONSAM SACKS

wsj_20180728_c010_p2jw209000_4_c01000_1________xa2018.crop.pdf 1 28-Jul-18 06:17:44


BY PETER PLAGENS

TWENTY YEARS ago, I was sentto Los Angeles for a story onthe American painter R.B. Kitaj(1932-2007). He had recentlyreturned to the U.S., after more

than three decades in England, over anartistic brouhaha and a personal tragedy:His 1994 retrospective at the Tate Galleryhad been roundly panned; shortly thereafter,his second wife, Sandra Fisher, had died atthe age of 47 of a stress-related aneurism.Kitaj was convinced the English press hadkilled her.

Kitaj’s art uniquely combines a hugedrawing talent with restless, acidic color anda mastery of off-handedly complexcomposition. I respected Kitaj’s work andthought that the British critics had beenunduly savage. When I visited him in LosAngeles in 1998, he was finally painting againand delving deeper into his Jewish identity.Lem Dobbs, the artist’s screenwriter son byhis first wife, had helped him find a housenear the University of California, Los Angeles,where Kitaj would live until his suicide nearlya decade later. (He suffered intractable painfrom Parkinson’s.) After Kitaj’s death, it wasdiscovered that from 2001 to 2003 the artisthad written, by hand, what would become“Confessions of an Old Jewish Painter.” It isnot a flattering autobiography.

In the 1950s Kitaj studied at Oxford’sRuskin School and London’s Royal College ofArt, where he became best friends with DavidHockney. (Mr. Hockney contributes a deftlynoncommittal preface to the book). Kitajgained immediate success with the powerfulMarlborough Gallery—the Gagosian of itsday—and coined the term “School of London”to put himself, Mr. Hockney, Francis Baconand Lucian Freud under the same anti-abstractionist umbrella. Kitaj later becameonly the third American, after John SingerSargent and Benjamin West, to be invited intothe Royal Academy.

Kitaj married Elsi Roessler in 1953. The twohad Lem and adopted a daughter, Dominie. ButKitaj left Roessler behind on any number ofoccasions—to join the Army, to ship out onfreighters and, finally and fatally, to take up ateaching gig in California. Roessler committedsuicide in 1969. Kitaj glosses over her death,writing only that “she was a good, quiet,innocent, very pretty young American girl-next-door who never grew old in exile.” Soonhe set his sights on Fisher, then but a teenager,who in 1970 was employed at a Los Angelesworkshop where Kitaj was making prints. Shebecame the love of his life, but theirs was a

semiturbulent relationship: She once left himto be with a Frenchman in Paris, and he con-tinuously pursued sex outside their marriage.

Kitaj seems to have compulsively slept withhis students: a “little affair” at Kent State, anorgy at Berkeley, but no luck at Dartmouth,where, he writes, there were “plenty of prettyWASP girls, but they wouldn’t put out.” He alsoindulged his “great interest in whoring, which Ithink of as a lifelong romance, almost an ‘art’of its own. . . . Whoring is deeply traditionaland instinctive. It’s instinct with tradition.” Tojustify himself, Kitaj invokes such “heroes” ofhis as Degas, Flaubert, van Gogh, Manet andProust. “I would cruise the street about twice aweek with Sandra’s blessing,” Kitaj writes, “anda few times with her.”

Kitaj’s other obsession was his Jewishness.During our interview, he told me that he washaunted by two questions: Why, for threemillennia, have Jews been so hated? And why,with so many Jewish greats in such disparatefields as physics and literature, were there nogreat Jewish artists? The creative result ofcontemplating his own “Jewish Question,”however, wasn’t some great project on theorder of Jacob Lawrence’s “The MigrationSeries,” which depicted blacks movingnorthward from the American South in the

CHILDREN’SBOOKSMEGHAN

COX GURDON

A lost,orphanedteen

faces theterribleurgencyof findingshelter,food andfire incold

northernCanada.

BOOKS‘Autobiography is usually honest but it is never truthful.’ —ROBERT A. HEINLEIN

Confessions of anOld Jewish PainterBy R.B. Kitaj

Schirmer/Mosel, 398 pages, $45

‘THE WILD DOESN’T careand won’t remember,” 16-year-old Jess Cooperreflects, as she stares out atthe impassive surface of alake in the remoteness ofnorthern Canada with thesmoking ruins of herfather’s cabin behind her.Her mother is dead, killedthree months before in a carcrash that left Jess scarredand limping. Her estrangedfather is dead, murdered bythe same men who torchedthe cabin before climbingback into their plane. NowJess is on her own withonly a dog named Bo andwhat little she canremember of her father’shasty tutelage in survivingthe wild: the terribleurgency of finding shelter,food and fire.

In Kate Alice Marshall’s“I Am Still Alive” (Viking,

314 pages, $17.99), Jessnarrates her story bytoggling back and forth intime, filling us in on thereasons for her predicamentwhile tracing her struggleto survive. Early on, we seeher trying to overcome hercity-girl squeamishness atkilling fish and rabbits. Assummer gives way to thepremonitory cold ofautumn, she will have toovercome revulsion of a fardeeper kind when sherealizes that a crucial toolfor her survival—and forrevenge—is buried with therotting corpse of her father.

It’s a gripping adventure,if stylistically overwroughtwith the present-tensevehemence so common inyoung-adult novels. Jess isnot merely a resourcefulteenage girl in a bad spot;

she’s an emotional wrecksuffering continual painthat pounds and pulses andthrobs; she bleeds andaches and shakes, and she’sforever dragging, flailing,grabbing, cramming, fling-ing, slamming and digging.Eventually she does someserious killing, too, in thisheart-pounder for readersages 13 and older.

A little boy named Elliotwakes up one morning inperplexity. He notices “amost terrible smell.” Whatcan it be? That’s the ques-tion that animates BlakeLiliane Hellman’s endearingpicture book “Something

Smells!” (Atheneum, 48

pages, $17.99). Witty ink-and-watercolor pictures bySteven Henry (see belowright) show the boy trottingaround in his favorite skele-ton costume, scouting andsniffing for the source of thestench. “Was it the cat food?Nope.” Is it the baby, or thetrash? Or perhaps thebubbling soup kettle full ofGrandma’s famous“Gefartzenschnaffer”?Readers ages 3 to 7 willdelight in following smallclues to solve the mysteryeven as, right through hissudsy bath and thelaundering of his outfit,Elliot remains oblivious.

While on safari in Africa,the prolific British rhyme-writer Julia Donaldsonnoticed that though every-one admired the “big five”animals of the veldt—thinktrunks and horns andmighty roars—few seemedto appreciate the “lumpsand bumps and wrinkles” ofless comely creatures. Inthe rollicking picture-book

‘YOU DON’T HAVE A SELFuntil you have a secret.”That is one bit of allegedwisdom given by a recklessmother to her vulnerableteenage daughter in “Give

Me Your Hand” (Little,

Brown, 342 pages, $27),the latest thriller from the ever-impressiveMegan Abbott.

As it happens, the daughter herself, thescientifically gifted Diane Fleming, soonacquires such a secret—one so terrible thatshe feels the need to share it with her onlyhigh-school friend, Kit Owens. But Kit,another able science student (and thebook’s narrator), is so alarmed by Diane’sconfidence that she breaks off theirfriendship.

Jump ahead 12 years: Kit is now a 29-year-old postgrad in the lab of the brilliantscientist who inspired her career, and she ishoping to be chosen for a spot on a reputa-tion-making research project. With the luckyfew soon to be named, a surprise last-minutecandidate is brought in: Diane Fleming.

Ms. Abbott sows suspense by shiftingbetween past and present, demonstrating

how life’searlier actsaffect futureones. Will Kitbetray Diane’ssecret toadvance herown prospects?Will Diane’spast resurfacein this “nest ofvipers”? Thesudden violentdeath of one of

the other lab members forces both women—“accidental accomplices” and “wary conspir-ators”—to confront their darkest impulses.

Another woman’s disturbing memories ofa troubled adolescence form the core ofEmily Arsenault’s “The Last Thing I Told

You” (Morrow, 401 pages, $15.99). As ahigh-school student, Nadine Raines was soemotionally at sea that she committed anact of violence upon one of her teachers.Twenty years later, Nadine returns to herConnecticut hometown for a holiday visit,during which the therapist who treated herin the aftermath of that incident isbludgeoned to death.

“The Last Thing I Told You” is partlynarrated by Nadine. Her chapters constitutea posthumous monologue delivered to theslain doctor, whom she recalls with disap-pointment, some affection and much anger.The other chapters are from police detec-tive Henry Peacher, a former classmate ofNadine’s and the town’s hero emeritus forhis quick action years ago stopping a massshooting at a nursing home. It’s Henry whois tasked with investigating the doctor’sdemise. “Yes, this is my first homicidecase,” he admits in his own one-sidedconversation with the murder victim. “Butno, that doesn’t mean you’re getting somekind of a raw deal here.”

Ms. Arsenault, in her earlier books,displayed impressive abilities and greatcharm. With this new work—its diversesupporting cast and mix of wry wit andpsychological dread—she vaults to an evenhigher plateau of achievement. Intertwiningstrands of police-procedural and personal-confessional details set the reader up forone of the most surprising plot twists inrecent memory.

In Riley Sager’s “The Last Time I Lied”

(Dutton, 370 pages, $26), some of theprivileged teenage girls who attend CampNightingale, at the base of the Adirondacks,play a game called Two Truths and a Lie:“You say three things about yourself,” oneof these young women explains. “Two ofthem must be true. One is false. The rest ofus have to guess the lie.”

Emma Davis, the 28-year-old New Yorkpainter who narrates this book (whichalso flashes back and forth in time), firstplayed this game at age 13, egged on byolder camper Vivian, a bold “alphafemale” whose attention she craved. Butone night Vivian and two other girlsvanished from Camp Nightingale, never tobe seen again.

Fifteen years later, the wealthy womanwho ran the summer camp (closed in theaftermath of the girls’ disappearance) plansto reopen it and invites Emma to be its artteacher. Hoping to exorcise her guilt overthat awful incident by discovering whathappened to the missing girls, Emmaagrees. But her new stay is marred byanonymous acts of hostility—and then bythe disappearance of three more girls.

The first half of “The Last Time I Lied” issleekly written and involving. The secondpart seems to meander, then erupts in anabundance of physical action. Readers whopersist to the novel’s truth-or-lie endingwill be rewarded, though, with a startling,film-noir turn of fate.

Alpha FemalesAnd the SecretsTheyKeep

pages of “The Ugly Five”

(Scholastic, 32 pages,

$17.99), for children ages3-8, Ms. Donaldson cele-brates the wildebeest, thewarthog, the spotted hyena,the Lappet-faced Vultureand the Marabou Stork.

Marching through AxelScheffler’s colorful pictures,the deprecated animalschant: “We’re the ugly five,we’re the ugly five. Every-one flees when they see usarrive.” Ah, but are they sougly? Not to their babies,they aren’t: “We love allyour spots and your wartsand your bristles, / Yourgrunts and your groansand your hoots and yourwhistles. / We really don’tthink you lookugly at all. /You’re beau-ties! You’rebombshells!The belles ofthe ball.”

Just as ugli-ness is a relativeconcept, so is size, asreaders ages 2 to 5 willnotice while visiting aprimeval playground in

Hyewon Kyung’s picturebook “Bigger Than You”

(Greenwillow, 32 pages,

$17.99). “Who wants to playwith me?” a gray, ridge-backed Dimetrodon callsfrom one end of a toppledtree balanced on a boulderlike a prehistoric see-saw. Inreply, a spiked orange Minmiclimbs on the other end ofthe tree and it thumpsdown. “I’m bigger than you,”he says. With each turn ofthe watercolor-dappled pagecomes a new and slightlylarger dinosaur to disconcertthe one before. When toothyTyrannosaurus getsoutmatched by colossalBrachiosaurus, he changesthe rules: “I’m more terriblethan you!” T. rex is terrible,too, and the other dinosaursseem to be at a loss whenorder is restored—and theyoung reader’s perspectivewidens—with the arrival ofa much larger dinosaur:“Mom!”

Into theWildWith aDogNamed Bo

early 20th century. Rather, Kitaj produced ahit-and-miss collection of images that amountto an aggregate of mug shots of famousintellectuals.

As “Confessions” makes clear, Kitaj is allabout celebrating Kitaj. “By 1982,” he writes,“I probably became the first prominentJewish painter to engage the JewishQuestion.” He has a whole chapter titled “ICan Draw Better Than Any Jew in History”and says that “at 70 I had become the mostcontroversial easel-painter alive.”

A charitable interpretation would say that“Confessions” is a diary and that almost everyfamous contemporary artist’s jottings wouldsimilarly be marked by contradictions andembarrassments. Yet by writing, as Kitaj does,that “I want you to keep reading my book,” hemakes clear his grander intentions. Thetakeaway is that Kitaj blamed the British artcritics for the death of his beloved Sandra,probably felt a repressed complicity in Elsi’ssuicide and never suffered any doubt abouthis own greatness. His is not a confession onthe order of an Augustine or Rousseau butrather the ruminations of an artist given tograndiosity. Stick with the paintings.

Mr. Plagens is an artist and writer in New York.

One Final Vanity Project

RUMINATIONS ‘Unpacking My Library’ (1991) by R.B. Kitaj.

ECKHARDJ.

GILLE

NARCH

IVE/SCH

IRMER/M

OSEL

THIS WEEK'S BOOKS

Give Me Your HandBy Megan Abbott

The Last ThingI Told YouBy Emily Arsenault

The Last Time I LiedBy Riley Sager

MYSTERIESTOMNOLAN

THIS WEEK'S BOOKS

I Am Still AliveBy Kate Alice Marshall

Something Smells!By Blake Liliane HellmanIllustrated by Steven Henry

The Ugly FiveBy Julia DonaldsonIllustrated by Axel Scheffler

Bigger Than YouBy Hyewon Kyung

ATHENEUM


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Magnolia Table 3 2Joanna Gaines & Marah Stets/William Morrow & Company

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Educated 9 10Tara Westover/Random House

Calypso 10 9David Sedaris/Little, Brown and Company

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LASTWEEK

TheOtherWoman 1 NewDaniel Silva/Harper

The President IsMissing 2 1J. Patterson & B. Clinton/Little, Brown & Company & Knopf

Cottage by the Sea 3 NewDebbie Macomber/Ballantine Books

TheOutsider 4 3Stephen King/Scribner Book Company

TheGood Fight 5 2Danielle Steel/Delacorte Press

TITLEAUTHOR / PUBLISHER

THISWEEK

LASTWEEK

TheHate UGive 6 7Angie Thomas/Balzer & Bray/Harperteen

The Perfect Couple 7 6Elin Hilderbrand/Little, Brown & Company

Spymaster: A Thriller 8 5Brad Thor/Atria Books

Children of Blood and Bone 9 –Tomi Adeyemi/Henry Holt & Company

AllWe EverWanted 10 8Emily Giffin/Ballantine Books

Methodology

NPDBookScangatherspoint-of-salebookdata frommore than16,000 locationsacross theU.S.,representingabout85%of thenation’sbooksales.Print-bookdataproviders includeallmajorbooksellers (now inclusiveofWalmart) andwebretailers, and foodstores. E-bookdataprovidersincludeallmajor e-book retailers. Freee-booksandthosesold for less than99centsareexcluded.The

fictionandnonfiction lists inall formatsincludeadult, youngadult, and juveniletitles; thebusiness list includesonlyadult titles. The combined lists tracksalesby title acrossall print ande-book

formats; [email protected].

NonfictionE-BooksTITLEAUTHOR / PUBLISHER

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Educated 1 1Tara Westover/Random House Publishing Group

Girl,Wash Your Face 2 3Rachel Hollis/Thomas Nelson, Inc.

The7HabitsofHighlyEffectivePeople 3 2Dr. Stephen R. Covey/Stephen R. Covey

Bad Blood 4 5John Carreyrou/Knopf Doubleday Publishing Group

A. Lincoln 5 –Ronald C. White, Jr./Random House Publishing Group

The Subtle Art of Not Giving a F*ck 6 –Mark Manson/HarperCollins Publishers

Hidden Figures 7 –Margot Lee Shetterly/HarperCollins Publishers

VanGogh 8 –Steven Naifeh/Random House Publishing Group

Mayflower 9 –Nathaniel Philbrick/Penguin Publishing Group

Modern Sauces 10 –Martha Holmberg/Chronicle Books LLC

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LASTWEEK

Liars, Leakers, and Liberals 1 NewJeanine Pirro/Center Street

Girl,Wash Your Face 2 1Rachel Hollis/Thomas Nelson

Magnolia Table 3 3Joanna Gaines & Marah Stets/William Morrow & Company

The Subtle Art of Not Giving a F*ck 4 4Mark Manson/HarperOne

The Plant Paradox 5 2Steven R. Gundry/Harper Wave

Educated 6 7Tara Westover/Random House

YouAre ABadass 7 5Jen Sincero/Running Press Adult

12 Rules for Life 8 6Jordan B. Peterson/Random House Canada

Kitchen Confidential 9 8Anthony Bourdain/Ecco Press

Calypso 10 9David Sedaris/Little, Brown and Company

FictionE-BooksTITLEAUTHOR / PUBLISHER

THISWEEK

LASTWEEK

TheOtherWoman 1 NewDaniel Silva/HarperCollins Publishers

The President IsMissing 2 1James Patterson & Bill Clinton/Little, Brown & Company

Cottage by the Sea 3 NewDebbie Macomber/Random House Publishing Group

HerMother’s Grave 4 NewLisa Regan/Bookouture

Every TimeWe Fall In Love 5 NewBella Andre/Bella Andre

The Perfect Couple 6 3Elin Hilderbrand/Little, Brown and Company

All Your Perfects 7 NewColleen Hoover/Atria Books

AllWe EverWanted 8 4Emily Giffin/Random House Publishing Group

TheOutsider 9 –Stephen King/Scribner

Hornet Flight 10 –Ken Follett/Penguin Publishing Group

FictionCombinedTITLEAUTHOR / PUBLISHER

THISWEEK

LASTWEEK

TheOtherWoman 1 NewDaniel Silva/Harper

The President IsMissing 2 1J. Patterson & B. Clinton/Little, Brown & Company & Knopf

Cottage by the Sea 3 NewDebbie Macomber/Ballantine Books

SharpObjects 4 2Gillian Flynn/Broadway Books

Origin 5 –Dan Brown/Anchor Books

TheAdventure Zone 6 NewClint McElroy/First Second

TheOutsider 7 9Stephen King/Scribner Book Company

The Perfect Couple 8 5Elin Hilderbrand/Little, Brown & Company

The Rooster Bar 9 4John Grisham/Dell

AllWe EverWanted 10 8Emily Giffin/Ballantine Books

HardcoverBusinessTITLEAUTHOR / PUBLISHER

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StrengthsFinder 2.0 1 1Tom Rath/Gallup Press

TotalMoneyMakeover 2 6Dave Ramsey/Thomas Nelson

Emotional Intelligence 2.0 3 2Travis Bradberry & Jean Greaves/TalentSmart

ExtremeOwnership 4 5Jocko Willink and Leif Babin/St. Martin’s Press

Bad Blood 5 3John Carreyrou/Knopf Publishing Group

The Five Dysfunctions of a Team 6 8Patrick Lencioni/Jossey-Bass

Principles: Life andWork 7 7Ray Dalio/Simon & Schuster

Radical Candor 8 10Kim Scott/St. Martin’s Press

MeasureWhatMatters 9 9John Doerr/Portfolio

The Power of Positive Leadership 10 –Jon Gordon/Wiley

Best-Selling Books | Week Ended July 22With data from NPD BookScan

BOOKS‘Where does a thought go when it’s forgotten?’ —SIGMUND FREUD

The Weather DetectiveBy Peter Wohlleben

Dutton, 195 pages, $20

BY GEOFF WISNER too. She doesn’t saywhy”—the book hasbeen translated intomore than 40languages and wonthe Prix Goncourt.

The WonderfulWizard of OzBy L. Frank Baum(1900)

3 I read thisbook at theage of 9,before I saw

the film, and am gladthat is so. Theimaginative reach ofL. Frank Baum’smighty story is stilllively in my mind. NoHarry Potter,Dorothy hasn’t got awand—but does havemagical silver shoesand the comfort of her beloved dog.“It was Toto that made Dorothylaugh, and saved her from growingas gray as her other surroundings.”The idea that the much-fearedWizard of Oz was a whimperingweakling was subversive to me, butnot as thrilling as Dorothy beingasked to wear green-tintedspectacles so as not to be blinded bythe light of the Emerald City. Baumcreated a glittering literary eclipseand made humble Dorothy the mostpowerful character in the book.

Cocaine NightsBy J.G. Ballard (1996)

4 J.G. Ballard was the bigdreamer of British fiction.His major influences wereFreud and the Surrealists,

and he put this heady mix ofpsychological acuity and absurdjuxtaposition to work in “CocaineNights.” Set in the south of Spain,the novel is peopled by wealthy,tanned British expats. Afflicted by acrashing boredom, they look to theiradored and charismatic tenniscoach—who, it turns out, is also anarsonist and thief—to make theirlives more exciting. The mild-mannered narrator steering usthrough this dystopia is travel writerCharles Prentice, who views thissun-drenched world as one of “thosestrips of no-man’s land between thecheckpoints [that] seem such zonesof promise, rich with thepossibilities of new lives, new scentsand affections.” But they also set off“a reflex of unease that I have neverbeen able to repress.” Charles

doesn’t repress much for very long.Civilization is just a thin veneerunder which the id waves at theseexpats, who have becomedisenchanted with the good life ofconsumerism and leisure.

CrudoBy Olivia Laing (2018)

5 Olivia Laing’s debut novel,“Crudo”—the Italian wordfor “raw,” often used for akind of cuisine—is about

love and all the vulnerability, fearand feelings of omnipotence itbrings. It’s a narrative written withimmense vitality and, miraculously,the lightest of touches. The narratoris 40-year-old Kathy, who is, in thesummer of 2017, feeling raw aboutfalling madly in love. In the run-upto her wedding, “she’d been uneasyfor weeks.” She is afraid thatmarriage might pin her to asocietally conforming status thatdoes not fit her. Most of all, she isanxious about the toxic dangers ofsocial media; she worries that onerogue tweet might push the worldinto nuclear war, just as things aregoing right for her. She wants toexplore all the dimensions of thisnew love, mostly told later throughthe meals she shares with her newhusband. “There was goat’s curdand tomatoes, there was a tiltingbowl full of razor clams and regularclams with little dots and dashes ofchorizo.” At the same time, “herhusband’s sad eyes upset her butalso infuriated her.” It’s asubversive love story that shouldn’twork, but does.

SLIPSSigmund Freudin 1935.

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PETER WOHLLEBEN, aprofessional forester,manages an ancientbeech forest for theGerman municipality of

Hümmel, near the Belgian border. Hebelieves that not only do trees com-pete with one another for light andnutrients, they support one anotherwhen a tree is sick or injured, andthey communicate threats to one an-other by sending electrical impulsesor by releasing chemicals into theair. His unusual insights made “TheHidden Life of Trees” (2015) an in-ternational best seller.

Now his earlier book “TheWeather Detective” has been pub-lished in an English translation byRuth Ahmedzai Kemp. While “TheHidden Life ofTrees” focusedsquarely on itssubject, “TheWeather Detec-tive” ranges morewidely in fewerpages. Many ofits tips and ob-servations areaimed at garden-ers, though theauthor’s moregeneral aim is toencourage peopleto spend moretime outdoorsand to notice andunderstand moreof the phenom-ena that sur-round them.

Some of theauthor’s notes onunderstanding weather are fairlybasic: “To determine the wind di-rection, you can’t beat the classicweathercock.” Others are more sur-prising: The daisy closes its petals,or even droops over, if rain is onthe way, and the flowers of the wa-ter lily “close when they sense rain,often hours before it comes.”Whether the flower senses a changein air pressure or responds to thedimming of sunlight because ofcloud cover remains unclear.

A small insect called a thrips,whose fringed wings work like pad-dles, swarms when a storm is onthe way. Why? The resistance of airfor thrips is like the resistance ofwater for humans, so “their motionis more like swimming through theair, and it’s therefore a rather slowaction.” When the air is hot, stickyand moving, they can get aroundmore easily.

Other observations are intriguingbut have less to do with the weather.

The Psychopathology ofEveryday LifeBy Sigmund Freud (1901)

1 The father of psychoanalysisloved to chain-smoke cigars,yet he didn’t encourage hiscolleagues to ponder the

unconscious significance of hisaddiction. “Sometimes a cigar is justa cigar,” was his famous (andcontested) retort. But Freud didbelieve there was significance to theways we mysteriously forget thenames of people well known to us,or to the seemingly innocuous slipsof the tongue. When we forget aname, we “are robbed by anunknown psychic force.” Everydayspeech blunders, he explained, resultfrom the intrusion of an unwelcome,unconscious thought. Unable toremember the name of a colleague,Freud was reminded that the nameis “Nervi,” to which he replied, “tobe sure, I have enough to do withnerves.” A patient asking about theconsultation fee is told it’s $10. Afterthe examination he asks again,adding that he didn’t like to owemoney, especially to doctors, andthat he liked to “play right away.” Hemeant, of course, to say “pay.” “Iwas sure his mistake betrayed him,”Freud wrote, and that “he was onlyplaying with me.” This intuitioncouldn’t have been far from themark. All his inquiriesnotwithstanding, the patientpresented just $4 for the fee andwould remain unreachable whenbilled for the rest. I have alwaysmarveled at the painstaking ways inwhich Freud attempted to explain tothe lay readers of his generation thenew avant-garde science of theunconscious—this was his geniusand it lit up the world.

The LoverBy Marguerite Duras (1984)

2 Set in 1930s Saigon, a youngFrenchwoman wearing afedora and gold sandals isstanding on a ferry. A

wealthy Chinese banker, 12 years hersenior, observes her. They begin anaffair, which is culturally taboo atthe time. She lives in genteelpoverty with her harsh, widowedmother and brothers. Written inchiseled, intense prose, everysentence exquisite, “The Lover” ismore than the story of a forbiddenseduction. It is also aboutcolonialism and the need to make alife of one’s own. Erotic andexistential—“He says he’s lonely,horribly lonely because of this lovehe feels for her. She says she’s lonely

FIVE BEST BOOKS THAT OPEN THE MIND

Deborah LevyThe author, most recently, of ‘The Cost of Living’

The common swift, we learn, “some-times flies for several months with-out interruption, even sleeping inflight, albeit for a mere few secondsat a time.” The moon’s gravity notonly causes the tides but pulls on theEarth to a surprising extent. “Overthe course of the day, your gardencan bob anywhere between 24 and32 inches up and down without younoticing it.” Many scientists believethat the water that covers almostthree-quarters of our planet’s sur-face came mainly from comets,“which traveled through the universelike dirty snowballs and, veering offcourse, crashed into the Earth.”(Other scientists say asteroids werethe source.)

At many points in this brief bookit becomes clear that the author is aEuropean writing for other Europe-ans. Whether you find this annoyingor interesting may depend onwhether your main interest is grow-ing flowers or enjoying unfamiliar

perspectives onthe natural world.

For instance,Mr. Wohllebenquotes the saying“red sky in themorning: shep-herd’s warning,”which we may re-member as “sail-ors take warn-ing.” The spells ofwarm weather inthe fall that wecall Indian sum-mer are known inGerman as “oldwoman’s sum-mer,” after thesilvery threadsleft by spiders inthe air. He men-tions “the ex-tremely unpopu-

lar European water vole” but doesn’tpause to say what makes them sounpopular. (In addition to lookinglike rats—Ratty in “The Wind in theWillows” was a water vole—theysometimes feed on crops.) A coupleof pages are devoted to ways you cankeep martens, a forest-dwellingmember of the weasel family, fromnesting in your car or chewingthrough the rubber tubing: a seriousissue in Germany, where drivers canbuy marten insurance, but less so inthe U.S., where spotting a marten isan unusual event.

“The Weather Detective” is pep-pered with fun facts about naturebut breaks little new ground. Read-ers in search of the wide-ranging in-sights they found in Mr. Wohlleben’sbook on trees may find that this onewhets their appetite but does notsatisfy it.

Mr. Wisner’s latest book is“Thoreau’s Animals.”

AnswersIn theWind

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different—Mr. Toguo built a life-size boat and plans toload it with baggage made from colorful African fabricsand set it on a sea of glass bottles. Reflecting the peril-ous journeys of migrants and refugees around theglobe, the work also suggests a broader interpretation.“We’re all living in some kind of an exile,” Mr. Toguosaid in French, with translation by Corinne Erni, seniorcurator at the Parrish. “We’re all immigrants in someway, or migrants.”

Mr. Toguo could be counted among them. Born in1967 in Mbalmayo, Cameroon, he studied at art schoolsin Ivory Coast, France and Germany. Originally workingin sculpture, in the 1990s he expanded into photogra-phy, video and performance. In 2011 France gave hima major cultural award, and in 2015 the Venice Bien-nale featured his work. These days, Mr. Toguo divideshis time between Paris and Bandjoun, Cameroon.

Curated by Ms. Erni, the exhibition is part of the Par-rish’s annual “Platform” series, which invites individualartists to consider the entire museum, its architecture,landscape and local community as a site for their work.Although Mr. Toguo is well known in Europe, “TheBeauty of Our Voice” is his first solo museum show in

MASTERPIECE | ‘BIBLIOTHÈQUE’ (1926-27),BY GERALD MURPHY

A Severe Take onTimeless Pleasures

IN A ROOM in the Yale UniversityArt Gallery alive with great works ofAmerican modernism, each onebursting with energy and clamoringfor attention, there is one, monumen-tal in size, aloof, cool, an other-worldly silent presence, that stopsyou in your tracks. Could it be by thesame man who with his wife, Sara,inspired F. Scott Fitzgerald’s protago-nists Dick and Nicole Diver in “Ten-der Is the Night,” and who were atthe center of a glittering circle of Eu-ropean and American expatriates inParis and the French Riviera in the1920s? It is. For a brief seven years,from 1922 to 1929, Gerald Murphywas a brilliant and inventive artistwho created paintings that seem asdaring and original today as they didwhen they were first painted.

The Murphys had moved to Francewith their three young children inSeptember 1921 to escape the stiflingsocial conservatism of their New Yorkfamilies, determined to create a lifethat was “fresh, new and alive.” Theyquickly became part of a circle of ex-perimental artists, writers, dancersand composers, and were seen as the

epitome of modern America in theirtaste, informality and stylishness.

Murphy’s career as a painter couldbe said to have begun on an Octoberday soon after arriving in Pariswhen, by chance, he walked past agallery showing works by Picasso,Braque and Gris. “I was astounded,”he later recalled. “My reaction to thecolor and form was immediate. Tome there was something in thesepaintings that was instantly sympa-thetic and comprehensible.”

Until this “shock of recognition”Murphy had considered paintingstrictly an art of verisimilitude. Cub-ism was not only a radical form ofpainting, with its shifting points ofview, geometric forms and emotionalambiguity, but it was a new way toexpress the fractured pace of con-temporary life.

For six months the 33-year-oldAmerican took daily lessons from theexpatriate Russian painter NataliaGoncharova, whose reductivist con-centration on abstract shapes andblocks of color left an impact on him,as did the Cubism of Picasso and es-pecially Léger. The result was whollyunexpected paintings of boat decks,turbines, ball bearings, and the new-

BARTH

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“Bibliothèque” portrays a world oftimeless pleasures—literature, geog-raphy, classical architecture, philoso-phy. We are seduced. But then wenotice the books’ spines are bereft ofletters, the countries and continentsdepicted on the globe have no names,and the magnifying glass, which atfirst glance offers an invitation forcloser examination, reveals only ablank, opaque lens. Even the bust ofRalph Waldo Emerson, his father’sfavorite philosopher, remains halfhidden. This library is an austere, un-welcoming place—one of learningand rich taste but giving nothing ofitself. It’s not hard to imagine thefeelings of a young Gerald called into answer for some transgression.

In 1929 the Murphys’ charmed lifein France ended when their youngerson became ill and their financescrumbled in the stock-market crash.The death of Murphy’s father twoyears later put the family business injeopardy. So in 1934, they reluctantlyreturned to New York, where the art-ist took over the management of thecompany—not only saving it, butmaking it more successful than ever.

The deaths of their two sons soonafter changed everything. Murphynever again took up a brush. Beforedeparting France, he had put all buttwo paintings, which he took toAmerica, into storage. Two decadeslater he asked friends to retrievethem; ultimately, only five werefound. It is on these surviving sevenremarkable works that Murphy’sreputation lives.

Ms. Cooper is curator emeritus atYale University. YA

LEUNIVERSITYARTGALLERY/V

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YORK

BY HELEN A. COOPER

Above, a 2009iteration of‘Road to Exile,’Mr. Toguo’swork thatincludes a boathe buildshimself—aproject he isdoing in theHamptons.

the U.S. It’s also the first col-laboration in a partnershipbetween the Parrish and thenearby Watermill Center, aninterdisciplinary center forthe arts that hosted Mr.Toguo this past June as anartist in residence.

Presented in one of the mu-seum’s largest galleries, “Roadto Exile” is surrounded byroughly a hundred works fromthe Parrish collection—paint-ings, videos and works on pa-per that largely celebrate sea-faring and global commerce,and ships as symbols of pres-tige, wealth and power. Theyoffer a provocative contrast tothe handmade boat at the gal-lery’s center, with its cargo ofhope and desire.

A second gallery housesthe latest edition of Mr.Toguo’s “Mobile Cafeteria,” aparticipatory installation rem-iniscent of African street ca-fes. Here, visitors will be ableto play African board games,watch recorded African soccergames and learn more aboutBandjoun Station as a culturaland agricultural center.

This gallery also hostsworks from different seriesby Mr. Toguo, including threefrom “Stupid African Presi-dent” (2005–08)—large-scalephotographs of the artist thatcaricature politicians whoruthlessly exploit the conti-nent’s resources for their ownbenefit. That series, Mr.

Toguo said, is “a way of raising awareness for Africansthemselves—that they have to do something about thissituation and these autocratic leaders.”

A series of dreamlike paintings done at the WatermillCenter depicts human and animal forms fluidly mergingand morphing, dissolving the boundaries between hu-man beings and nature. The relationship with nature isan important topic to Mr. Toguo, said Ms. Erni. “As afarmer, he very much sees the degradation” of the envi-ronment, she added. The exhibition also marks the de-but of “Black Lives Matter” (2018), 10 pencil drawingsdepicting African-Americans killed by police in recentyears. Mr. Toguo said that he had been inspired in hiswork by French author and philosopher Albert Camus,who pointedly questioned the role of the artist in soci-ety. “I’m very aware of what is happening in the UnitedStates,” he said. “I couldn’t do my first museum showhere without addressing these social problems.”

The show also gave Mr. Toguo an opportunity to ex-pand one of his most extensive ongoing series. “HeadAbove Water—Hamptons” (2018) is the latest additionto a world-wide project, begun in 2004, in which peoplein local communities—often living under challengingcircumstances—write to him about their lives andhopes, using postcards that he designs. Mr. Toguo saidhe wanted to make sure that, along with young adultsfrom area schools, the project included members of theShinnecock Indian Nation, a Native American people ofeastern Long Island. “Head Above Water” gives voiceto people who are not normally heard, he explained.The 96 framed “Hamptons” postcards are on view inthe central gallery running the length of the museum,alongside previous editions from communities in Lagos,Nigeria (2005) and Mexico (2008).

As for the coffee, Mr. Toguo sees serving BandjounStation coffee at the museum reception as a way to un-derscore the self-sufficiency that can follow when Afri-can producers set the price for coffee as well as art. It’sliterally a wake-up call.

REVIEW

He Builds the BoatAnd Serves the CoffeeIn a Hamptons show, Cameroon-born Barthélémy Toguo treats serious issues in a vivid style

ICONS

est consumergoods—safetyrazors, fountainpens, watches—executed insignlike flatnessand often en-larged to colos-sal size, all ren-

dered in meticulous detail, turningthe ordinary into the emblematic.

He entered important avant-gardeexhibitions where he stunned criticsand the public. In less than a decadehe produced at least 14 paintings thatwere celebrated in France as the em-bodiment of American modernity.

“Bibliothèque” (1926-27) is Mur-phy’s most personal painting. He saidit was inspired by childhood recollec-tions of his father’s study, but it isimpossible not to read it also as a

portrait of his difficultrelationship with his fa-ther. Patrick Murphywas a witty, eruditeman of commandingpresence who had takena failing saddlery, MarkCross, and made it intothe most prestigiousleather-goods companyin America. Gerald, whohated his brief stint inthe business, knew hehad never lived up tothe expectations of hisstrict and emotionallydistant father.

A narrow paintedblack band encloses thecomposition of archi-tectural columns andcapitals, books, a globe,

a classical bust, and a magnifyingglass, their strictly frontal and profileviews adding to an impression of se-verity. Heroic in scale (6 feet tall),with flat planes of muted tans,browns and greens (the colors ofMark Cross leathers?) rendered in in-visible brushwork, the painting’sstyle lies midway between realismand abstraction. A Cubist grid ofoverlapping repeated linear androunded forms, arranged along verti-cal and horizontal axes and punctu-ated by circles, lock the picture intoplace around the central column. Thebisected composition is indebted toLéger, while the pale tonalities, clar-ity, classical poise and immaculateedges reveal the impact of Purism, aCubism-derived movement pioneeredby Le Corbusier in response to thechaos of World War I.

Inspired by hisfather’s study,the paintingcan be read asa portrait ofhis difficultrelationshipwith the man.

The work of African artist BarthélémyToguo encompasses painting, sculp-ture, photography, installation, per-formance—and coffee.

Mr. Toguo’s coffee is grown androasted by local workers at BandjounStation, the cultural center and or-

ganic farm that he established in 2007 in his native Cam-eroon. Adorned with labels based on his own watercol-ors, packages of Bandjoun Station coffee are sold at artfairs, often in limited editions created for each event.

Mr. Toguo plans to personally serve the coffee at anAug. 4 preview reception for “Platform: BarthélémyToguo: The Beauty of Our Voice,” opening Aug. 5 atthe Parrish Art Museum in the Hamptons hamlet ofWater Mill, N.Y. Like his limited-edition coffee, theshow deals with weightier subjects than the materialsmight at first suggest.

The centerpiece of the exhibition is “Road to Exile,”a large-scale installation that made its debut in Parisin 2008. For the Parrish version—each one is slightly

BY SUSAN DELSON

Growth Revs as Economy Rolls On

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