DJIA 31832.74 À 30.30 0.1% NASDAQ 13073.82 À 3.7% STOXX600 420.41 À 0.8% 10-YR. TREAS. À 14/32 , yield 1.545% OIL $64.01 g $1.04 GOLD $1,716.60 À $38.90 EURO $1.1901 YEN 108.49
ChaplainsBecomeShoppersi i i
Mariners stuck oncargo ships get
special deliveriesBY ANNE KADET
Cora DiDomenico hasworked as a chaplain for threeyears at the International Sea-farers’ Center in Port Newark,N.J., visiting with cargo ships’crews from around the world.
It’s an unusual job. Butthanks to the pandemic, herrole has expanded to include aquirky dimension: seafarers’personal shopper.
Last week, the chaplain,armed with shopping bags fromBest Buy and Target, climbedthe long gangway to the deckof a 558-foot fruit-juice tankerwhere she was promptlyswarmed by a half-dozen eagermariners in fluorescent cover-
PleaseturntopageA10
SoftBankConfrontsDeeperLosses onGreensillInvestor put additional$400million last yearinto U.K. firm that filedfor insolvency days ago
GASTON COUNTY, N.C.—The rolling hillsof North Carolina’s Piedmont region are anunlikely setting for a next-generation tech-nology transformation that has become a na-tional priority.
Lamont Leatherman, a 55-year-old geolo-gist who grew up here, is its unlikely instiga-tor. A decade ago, he combed the woodsnear his childhood home in search of lith-ium, a soft, white metal he believed wouldbe crucial to the burgeoning industry ofelectric vehicles.
Now, the company he helped found fiveyears ago to explore the region, PiedmontLithium Ltd., has deployed drilling rigsthroughout the 2,300 acres it owns or con-trols to map out deposits. The company ispreparing to launch one of the first big newlithium mines in the U.S. in decades.
Lithium is an increasingly crucial mate-rial, central to the rechargeable batteriesthat power cellphones and electric cars.These batteries are becoming a disruptiveforce in the energy sector as well. Demand,especially from vehicles, is expected to
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BY SCOTT PATTERSON AND AMRITH RAMKUMAR
Across the Southwest, Drought Takes Toll onWater Supply
DRY SPELL: Parts of the Southwest, such as Mojave County, Ariz., above, are locked in one of the most extreme droughtsin years, jeopardizing farms and ranches and putting new pressure on urban areas in need of water. A3
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BUSINESS & FINANCET-Mobile will give
advertisers data on itsphone subscribers’online activities. B3
SPORTSEarly digital collectorsof officially licensedNBA video highlights
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SoftBank Group Corp.’s Vi-sion Fund injected at least$400 million into GreensillCapital at the end of last year,according to people familiarwith the matter, deepening thepotential losses the giant techinvestor faces in the startup’scollapse.
The infusion of cash was inaddition to the $1.5 billion theVision Fund had invested inGreensill in 2019. The money,not previously reported, wasused as a financial backstopwhen another Vision Fund com-pany, construction startup Kat-erra, came close to defaultingon a loan to Greensill, the peo-ple said.
Greensill, which specializedin making short-term cash-ad-vance-style loans to companies,filed for insolvency this weekafter regulators took over itsbanking unit and Credit SuisseGroup AG froze investmentsfunds critical to the startup’soperations.
Greensill packaged loans tocompanies into securities,known as notes, that were pur-chased by the Credit Suissefunds and sold to investors aslow-risk, money-market-styleinvestments.
SoftBank, founded by bil-lionaire Masayoshi Son, is a gi-
PleaseturntopageA8
By Julie Steinberg,Ben Dummett,DuncanMavin
andMaureen Farrell
value of Ford Motor Co.Some popular companies
that went public by mergingwith so-called SPACs in recentyears—including online real-estate firm Opendoor Technol-ogies Inc., space-tourism com-pany Virgin Galactic HoldingsInc. and electric-car companyLordstown Motors Corp.—added 6% or more on Tuesday.Those all remain down at least30% in the past month.
Tuesday’s swings high-lighted the competing dynam-ics playing out in financial
PleaseturntopageA2
BY AMRITH RAMKUMAR
Swings in Tech Sector SparkVolatility in Hot SPACMarket
INSIDE
Feb. 12 March
–12.5
–10.0
–7.5
–5.0
–2.5
0
2.5%DowJonesIndustrial Average
S&P 500
NasdaqComposite
Index performance
Source: FactSet
–1.5%
–7.2%
+1.2%
CHANGESINCEFEB. 12 CLOSE
Shares of technology firmsand special-purpose acquisitioncompanies surged on Tuesday,bouncing back after a week-slong streak of declines thatpushed some popular SPACsdown 20% or more in a month.
The Nasdaq Compositejumped 3.7% for its biggest ad-vance since November, trim-ming a recent slide that just oneday earlier dragged it more than10% below the high it reached inFebruary. Shares of electric-carcompany Tesla Inc. rebounded20%, adding more than $100billion to the company’s marketvalue, or roughly twice the
Migrants See PathTo U.S. as EasierWith New President
In late February, Honduranteenager Elder Cruz was de-tained by Mexican immigrationauthorities near Mexico’s south-ern border with Guatemala anddeported to Honduras.
But that isn’t stopping the15-year-old, an orphan who saidhe plans to try his luck at theU.S. border again in the comingmonths because “[Donald]Trump is no longer president ofthe U.S. and there’s a new one,”even though he doesn’t knowthe name of President Biden.
“My friends have told methat with the new president, itwill be easier to enter theU.S.,” said Mr. Cruz, who livesin the violent Villeda Moralesslum near the Honduran cityof San Pedro Sula.
Across parts of Mexico andCentral America, the source ofmost illegal immigration to theU.S., many would-be migrantsdon’t follow the ins and outs ofU.S. immigration policy. Butmany agree on one thing: It isprobably easier to get in withMr. Biden than with Mr. Trump.
That perception is a key fac-tor in fueling the increasingnumbers of unaccompanied mi-nors and families currentlyturning up at the border. InJanuary, 5,707 minors, mostlyteenagers, arrived at the borderalone, up from 4,855 the monthbefore. That number is expectedto jump again when Februarydata are released this week.
The surge highlights the dif-ficulties faced by the new U.S.administration in overhaulingwhat it has called Mr. Trump’sdraconian immigration policieswithout sparking a new waveof migrants that leads to a cri-
PleaseturntopageA6
By JuanMontes inMexico City and JuanCarlos Rivera in SanPedro Sula, Honduras
ALithiumMiner Stakes a ClaimFor Nation’s Electric-Car Future
Piedmont is at leading edge of efforts to build domestic supply chain
s 2021 Dow Jones & Company, Inc.All Rights Reserved
>
What’sNews
The coronavirus relief billunder consideration by theHouse after passage by theSenate would increase subsi-dies to people who buy ACAhealth plans, marking thebiggest changes to the healthlaw since its passage. A2Manhattanprosecutorsareintensifying their investiga-tion into Trump’s businesses,taking aim at aWestchesterCounty, N.Y., estate that theformer president unsuccess-fully tried to develop. A4Los Angeles’s school dis-trict reached a tentative dealwith its teachers union thatwould allow some students toresume in-person learning.A6Two of Biden’s nomineesto senior Justice Departmentposts told a Senate panel theywould seek to run an agencyfree of partisan influence. A4The president is expectedto nominate Lina Khan, acritic of big technologycompanies’ market power,to a seat on the FTC. A4TheU.S. andChina are en-gaging on climate change, acautious step that could showwhether they can work to-gether on sharedpriorities.A9 New York Gov. Cuomo’soffice received a complaintfromanother female employeealleging inappropriate be-havior by the governor andreferred it to investigators.A3QueenElizabethexpressedconcern about allegationsraised by Prince Harry andMeghan Markle, but saidthe royal family would ad-dress them privately. A18
SoftBank’s Vision Fundinjected at least $400
million into Greensill atthe end of 2020, deepen-ing the potential losses thegiant tech investor faces inthe startup’s collapse. A1Metals tycoon SanjeevGupta is negotiating a stand-still agreementwith Greensillto give his companies breath-ing space over payments onbillions of dollars of debt. B2 Shares of tech firms andspecial-purpose acquisitioncompanies surged, bounc-ing back after a streak ofdeclines that pushed somepopular SPACs down 20%or more in a month. A1 The Nasdaq jumped3.7%, while the S&P 500 andDow industrials gained 1.4%and 0.1%, respectively. B1 Electric-car startup Lu-cid has an undisclosed com-mitment to build an assem-bly plant in Saudi Arabia. B1Political pressuremountedin Texas to reverse $16 billionin power overcharges fromlast month’s blackouts. A3Walt Disney’s ESPN isclosing in on a long-termrights deal for NationalHockey League games. B1 Disney said its flagshipstreaming service, Dis-ney+, has surpassed 100million subscribers. B4 T-Mobile US will auto-matically enroll its phonesubscribers in an advertis-ing program informed bytheir online activity. B3 Conagra is in talks to sellthe Hebrew National hotdog brand to Brazil’s JBS. B1
Business&Finance
World-Wide
JOURNAL REPORTWorkplace Technology:Updating the laptop for a
new era. R1-10
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A2 | Wednesday, March 10, 2021 * * THEWALL STREET JOURNAL.
recent swings have many in-vestors bracing for more gyra-tions in the days ahead.
“It’s going to be more vio-lent,” said Evan Ratner, aSPAC portfolio manager atEasterly Alternatives. Unlessgovernment-bond yields re-cord a sustained drop, “volatil-ity is here to stay,” he said.
With the yield on the bench-mark 10-year U.S. Treasury notesettling at 1.6% on Monday, upfrom 1% in late January, someanalysts question SPACs andother popular investments.Treasury yields, which climb asbond prices fall, slid on Tues-day, at least temporarily easingconcerns about a fast rise ineconomic activity that couldforce the Federal Reserve toraise interest rates more quickly
than currently anticipated.Rising bond yields hurt
SPACs and other tech stocksbecause they give investors amore appealing alternative tospeculative wagers. SPACshave no business until they ac-quire a startup to take public,so outsize gains in blank-checkfirms were surprising to manyanalysts because money waspouring into the space evenwhen it meant buying atprices that were higher thanthe amount of cash that SPACshad to do a deal.
Market volatility also en-gulfed SPACs that have yet tounveil which companies theyare taking public. Even withTuesday’s climb, hedge-fundbillionaire William Ackman’sPershing Square Tontine Hold-
markets as the economy re-bounds from shutdowns de-signed to halt the spread ofthe coronavirus.
Investors for weeks soldSPACs and popular internetcompanies, rotating intoshares of banks and energyproducers they believed wouldfare better as the economy re-covers and government-bondyields rise.
Also called blank-checkcompanies, SPACs are shellfirms that list on a stock ex-change with the sole purposeof acquiring a private com-pany to take it public. The pri-vate firm, often a startup, thengets the SPAC’s place in thestock market. Merging with aSPAC has become a popularway for companies to go pub-lic because the process carrieslooser regulatory require-ments and brings outsize re-turns for Wall Street and Sili-con Valley investors.
Investors poured moneyinto SPACs at a record pacethis year—about five new onesare being created daily andthey have raised almost $75billion, according to Dealogic—a sign of exuberance becausetraders are often betting onSPAC executives to do an at-tractive deal. Even thoughSPACs and other hot invest-ments rebounded Tuesday, the
ContinuedfromPageOne
benefit from the coverage.Democrats have praised the
subsidy expansion as a way toimprove upon the ACA by end-ing its so-called subsidy cliff,saying it will benefit low- and
middle-income families, andreduce health-insurance ex-penses for lower-income peo-ple. They are expected to pressto make it permanent duringthe 2022 midterm elections.
“Affordable, accessiblehealth coverage is a necessityin a pandemic,” said Rep. Rich-ard Neal (D., Mass.).
Republicans and some con-servative advocacy groups op-
pose the plan, saying the fed-eral government will spendbillions of dollars to help in-sure a relatively low number ofpeople who aren’t financiallyneedy. They also call it a hand-
U.S. NEWS
out to insurance companieswho stand to profit as morepeople purchase ACA plans.
“This liberal dream is a bil-lions of dollars giveaway tohealth insurance companies andencourages more employers todrop their job-based plans alto-gether,” said Republican Sen.Steve Daines of Montana.
Critics of the plan add thatthe need for expanded subsi-dies shows the ACA has madeinsurance too expensive.
The expanded tax creditswould increase federal deficitsby about $34 billion over 10years, according to a Februaryanalysis by the CongressionalBudget Office. The initiativewould expand health insurancethrough the exchanges by 1.7million people in 2022.
The hospital industry andinsurers support the move.“[The] legislation includesmany provisions to help hospi-tals and health systems pro-vide care to their patients andcommunities,” Rick Pollack,president and chief executiveof the American Hospital Asso-ciation, said last week.
The relief package alsowould encourage states to ex-pand Medicaid. The federalgovernment would for twoyears increase its matchingfunds to cover both existingMedicaid enrollees and the fullcost of expanding, up from itscurrent payment covering 90%of costs for states that haven’texpanded yet.
The Senate version alsoprovides more relief for peoplewho have lost their jobs andneed health insurance. Peoplewho lose their jobs can remainon their employers’ healthplans for up to 18 months butmust pay a monthly premium.The Senate bill would subsi-dize all of the premiums, aboost from a House-passed billthat would subsidize 85% ofthe premium costs.
—Kristina Petersoncontributed to this article.
The $1.9 trillion coronavirusrelief bill under considerationby the House after passage bythe Senate would increase sub-sidies to people who buy Af-fordable Care Act health plans,marking the biggest changesto the health law since its pas-sage in 2010.
The subsidy changes wouldbe temporary and expire aftertwo years, but would meanmuch lower payments for al-most 14 million people now in-sured on the individual market.The package also includes fund-ing aimed at enticing statesthat didn’t expand their Medic-aid programs earlier to do sonow, and subsidies to cover thecost of health insurance forpeople who lose their jobs.
Currently under the ACA,people who earn 400% of thefederal poverty level aren’t eli-gible for the tax credits, alsoknown as subsidies, that helpoffset the cost of buying healthplans. That means a singleperson who earns more thanabout $51,000 isn’t eligible,nor is a family of three thatmakes about $87,000.
The legislation would elimi-nate an income cap that limitswho is eligible for ACA taxcredits to reduce monthly in-surance premiums. It wouldalso limit the amount house-holds pay to only 8.5% of theirincome on healthcare, and itwould boost subsidies tolower-income consumers.
With the increased subsi-dies, costs would come downfor many who buy ACA-com-pliant plans. For a 60-year-oldwith a $55,000 income, premi-ums would drop by around50% to 80% depending on theplan, according to a KaiserFamily Foundation analysis.
The subsidy boost for theACA plans has been a long-held goal of Democrats whosay expanding the tax creditswould allow more people to
BY STEPHANIE ARMOUR
Aid Bill Boosts Subsidies for ACA Plans
COVID-19 RELATED$123 billion
*Cobra subsidies and funding for LIHEAP areshared between two committees and includedtwice. $18 billion was subtracted from thetotal to account for cap limiting how muchdrug manufacturers must rebate to Medicaidfor drugs that have increased quickly in price.
**Based on House bill and doesn’t takeinto account changes made in Senate,which reduced cost
†$22 billion was subtracted to accountfor the repeal rule allowing multinationalcorporations to calculate their interestexpenses including foreign subsidiaries
Note: Figures are preliminary and basedon earlier versions of the bill and latest newsreports. Deficit impact of various provisionsmay differ slightly from the total amountof aid offered.
The $1.9 trillion legislation known as the American Rescue Plan Actincludes a range ofmeasures, from stimulus checks to child taxcredits, jobless benefits, vaccine-distribution funds, healthcaresubsidies and restaurant aid. This deal would be the largest aidpackage to pass sincewidespread restrictions tied to thecoronavirus pandemic began inMarch 2020.
What’s in the Covid-19Relief Package?
HEALTH$105 billion*
AGRICULTURE$16 billion
EDUCATION$176 billion
SMALLBIZ$59 billion
State and local government policy
Providemoneyto local govern-ments, terri-tories and tribes
$195 billion
$155 billion
Create paid Covid leavefor federal workers andother policies$400million
Infrastructure$10 billion
Expands:
$47
$16
$10
Covid-19-related policy spending, in billions
Disaster ReliefFund and funeralexpenses related
to Covid-19
$50Testing andcontacttracing
Use DefenseProduction Act tobuy and distributemedical supplies
Vaccinedistribution,confidence andsupply chains
OTHER$194 billion†
Grants to restaurants, bars that lostrevenue due to the pandemic
$25 billion
$246 billion**
Grants
Breakdown ofthe $1.9 trillion2021 stimulusbill
$915B
March 2021package
First stimulusMarch 2020
SecondDec. 2020
$1.9T$1.7T
Latest bill comparedwith previousaid packages
$143 billion
EXPANDTAXCREDITS
EXTENDUNEMPLOYMENTPROGRAMS
$410 billionSTIMULUSCHECK
STATEAND LOCALGOVERNMENT$360 billion
Grants for child careproviders andHead Start
The currentSenate legislationincludes $1,400checks forindividualsmaking less than$75,000 annuallyand formarriedcouplesmakingless than$150,000 beforephasing down.
• Child tax credit• Child caretax credit
• Earned incometax credit
TRANSPORTATION$56 billion
Extend throughSeptember 6with a $300/weeksupplement
Sources: legislative texts; Congressional Budget Office via Committee for a Responsible Federal Budget
Providemoneyto state govern-ments
ings Ltd. fell 11% in the pastmonth, sliding alongside otherpopular SPACs such as venturecapitalist Chamath Pali-hapitiya’s Social Capital Hedos-ophia Holdings Corp. VI and GSAcquisition Holdings Corp. II.
The recent gyrations markwhat some analysts call an in-evitable return to earth. WithSPAC creators clamoring toraise more money and capital-ize on the excitement, some in-vestors see the swings as a nec-essary reality check following aperiod of excessive optimism.
“You see people rushing todo it while the window is stillopen,” said Roy Behren, man-aging member at WestchesterCapital Management and aSPAC investor. And among in-vestors, “everybody wants toown the next DraftKings orVirgin Galactic,” he said, refer-ring to two of the most popu-lar companies to go public bycombining with blank-checkcompanies.
Tuesday’s moves showedhow many on Wall Street havelinked SPACs with technologystocks and cryptocurrencies,meaning that blank-checkcompanies are prone to out-size moves when trend-follow-ing investors buy or sell all ofthose assets together.
The swings mean the enor-mous paper gains earned byactive SPAC creators like Mr.Palihapitiya and former Citi-group Inc. deal maker MichaelKlein have shrunk, and someinvestors who piled into SPACsat high prices took a beating.Investors wagering on declinesin stocks tied to the sector arecheering the shift.
But the turmoil is alsoopening up even more oppor-tunities for bargain-seekinginvestors.
With SPACs on track tosoon eclipse last year’s recordtotal of more than $80 billionraised, individual traders havenew chances to get in earlywith blank-check companies atprices typically available onlyto large institutions.
And some SPACs fell evenbelow levels that correspondto the amount of cash theyhave on hand. Because inves-tors can withdraw that cashbefore a SPAC deal goesthrough, buying at or belowthat price can result in risk-free returns.
With nearly 400 SPACs inthe market seeking companiesto take public, the volatility islikely just beginning.
“It’s still an extremely in-teresting space,” WestchesterCapital’s Mr. Behren said.
Swings inTech SharesRoil SPACs
Founder Richard Branson, celebrating Virgin Galactic’s IPO in 2019,has seen the SPAC’s shares fall by nearly a third in a month.
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get to 12.6% growth in the fol-lowing fiscal year.
The OECD said the slowpace of vaccination in Europereduces the need for furtherstimulus for now, because apartially closed economy wouldbe unable to meet any extrademand.
And in many other parts ofthe world economy, neitherrapid vaccination nor fiscalstimulus are available.
The research body saidthere was a risk that globalgrowth becomes more unbal-anced, leading to potentiallydisruptive flows of capital tohigh-growth countries fromlow-growth ones.
Ms. Boone said the rise inU.S. yields was understandableand not a concern because itreflected an improved growthoutlook. She said rising bor-rowing costs in other parts ofthe world would be more of aproblem because they wouldnot reflect stronger growthprospects and could hold backeconomic recovery.
In particular, the OECD saidinvestors could move capitalinto the U.S. and away fromemerging-market countries,pushing down the value oftheir currencies and weakeningeconomies that are straining torecover from the pandemic.
The OECD made much moremodest changes to its forecastsfor other large economies thanfor the U.S. It now expects theeurozone to grow 3.9% thisyear, up from the 3.6% forecastin November; it expects China’seconomy to expand by 7.8%,having previously predicted 8%.
A surprisingly strong surgein U.S. growth will drive asharp rebound in the worldeconomy this year, but thestrength of the Americanbounce could unbalance weakereconomies, particularly in thedeveloping world.
According to the Organiza-tion for Economic Cooperationand Development, the rise inU.S. government bond yields inresponse to higher growth andinflation expectations couldspark capital flight from emerg-ing economies, where vaccinecampaigns have barely begunand whose economic recoveryis expected to take longer.
The Paris-based researchbody expects the world econ-omy to reach pre-pandemiclevels of output by the middleof this year, six months earlierthan it expected when it lastpublished updated forecasts, inNovember. It now sees globaloutput increasing by 5.6% in2021, having declined by 3.4%in 2020. In November, it fore-cast global growth for this yearof 4.2%.
The main reason for the up-grade is a stronger outlook forthe U.S. economy, which it nowsees expanding by 6.5%, morethan twice the pace it forecastin November and the fastestexpansion since 1984.
OECD Chief Economist Lau-rence Boone said that reflectsan expectation that fiscal stim-ulus will be delivered, as vacci-nations help free the economyof its Covid-19 fetters. The Sen-ate approved Sunday a $1.9trillion coronavirus relief bill,paving the way for passagethrough the House this week.
“Fiscal policy has beenhugely supportive, but you alsoneed to push the accelerator onvaccinations, because if not,the additional stimulus will goon saving rather and not con-sumption,” Ms. Boone said.
The OECD now predicts theU.S. economy will be larger atthe end of 2022 than it had ex-pected before the pandemicstruck. Among other Group of20 leading economies, onlyTurkey is seen being in a simi-lar position.
India is expected to seegross domestic product downabout 8% in its current fiscalyear ending in April, but then
BY PAUL HANNON
U.S. to Drive GlobalGrowth, OECD Says
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India* China U.S. World
0
2
4
6
8
10
12%
December March
AnnualGDP forecasts for 2021,change fromprevious year
*Fiscal years starting in AprilSource: Organization for Economic Cooperationand Development
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U.S. NEWS
save a woman’s life. There areno exemptions in the law forwomen who become pregnantthrough rape or incest.
Abortion-rights advocatessaid they would challenge thelaw because it violates awoman’s constitutional right toterminate a pregnancy estab-lished in the U.S. SupremeCourt’s Roe v. Wade decision.
Mr. Hutchinson, a Republi-can, acknowledged: “It is the in-tent of the legislation to set the
stage for the Supreme Courtoverturning current case law.”
He said he would have pre-ferred the legislation includedexemptions for rape and incest.
The ACLU of Arkansas saidit would challenge the law.“Abortion is legal in all 50states, including Arkansas, andwe’ll fight as long as it takes tokeep it that way. GovernorHutchinson: we’ll see you incourt,” the organization said onTwitter.
sold at sky-high prices duringa severe winter storm.
Amid the freeze, the three-member commission, ap-pointed by Mr. Abbott, or-dered the state’s grid operator,the Electric Reliability Councilof Texas, or Ercot, to raise
wholesale power prices to thepeak price of $9,000 permegawatt hour. The indepen-dent market monitor, who re-ports to the utility commis-sion, said in a report last week
that Texas kept wholesaleprices artificially high formore than 30 hours longerthan necessary, creating atleast $16 billion in over-charges.
Ercot and the utility com-mission didn’t immediately re-spond to requests for com-ment.
The PUCT currently hasonly one sitting member, Ar-thur C. D’Andrea. Former com-missioner Shelly Botkin re-signed Monday. FormerChairwoman DeAnn Walkerstepped down this month afterstate lawmakers called for herouster.
On Tuesday night, 28 Texassenators, including Republi-cans and Democrats, signed aletter to the utility commis-sion urging it to correct thecharges.
drought again, prompting cut-backs to farms and ranchesand putting renewed pressureon urban supplies. Extreme toexceptional drought is afflict-ing between 57% and 90% ofthe land in Colorado, NewMexico, Nevada, Utah and Ari-zona and is shriveling a snow-pack that supplies water to40 million people from Denverto Los Angeles, according tothe U.S. Drought Monitor.
The team of governmentand academic agencies thatproduces the monitor definesa drought as a period of un-usually dry weather thatcauses problems such as croplosses and water shortages.
The current drought, whichbegan last year, is alreadyshaping up as one of the mostsevere on record in the South-west. Utah and Nevada experi-enced their driest years in 126years of federal records during2020, while Arizona and Colo-rado had their second-driestand New Mexico its fourth, ac-cording to Brian Fuchs, clima-tologist with the NationalDrought Mitigation Center atthe University of Nebraska-Lincoln. He said the Southwesthas been mired in drought formuch of the past two decades,and the latest was brought onafter one of the driest sum-mers on record.
In Southern New Mexico’sElephant Butte Irrigation Dis-trict, farmers have alreadybeen warned they face gettingas little as 16% of their normalallotment in June.
“It’s horrific here,” saidGary Esslinger, treasurer-man-ager of the district in Las Cru-ces, N.M. He said the 6,500area farmers already havetaken one-third of their 90,640irrigable acres out of produc-tion from previous droughtyears and likely will keepthose offline this year as well.New Mexico State EngineerJohn D’Antonio Jr. said his of-fice is asking other farmers tonot plant this year, if they can,as reservoirs statewide holdjust 20% of what they nor-mally do.
The drought conditionshave also spread into Califor-nia, where the snowpack was58% of the average as of Mon-day, according to historical re-cords that go back a little lessthan a century. That raises thelikelihood of dryness thatcould contribute to wildfiresand trigger cutbacks to agri-culture, state officials say. Adeluge of precipitation at theend of the winter rainy seasoncould lessen the risk of thoseoutcomes, but isn’t currentlyin the forecast.
“We have time, but we dohave to keep our fingerscrossed,” Mr. Fuchs said.
Meteorologists say a combi-nation of a warming climateand shifting atmospheric pat-terns that divert storms northare making the dry spellsmore frequent and pro-nounced. As a result, the land-scape isn’t getting enough
time to recover before thenext drought sets in, Mr. Fuchssaid.
Colorado enjoyed an above-normal snow season a yearago, but much of the springrunoff was soaked up by soilstill dry from previousdrought, he said. The statewent on in late 2020 to sufferits biggest wildfires on record.
Meanwhile, reservoir levelsacross the Southwest havebeen falling. The biggest ofthose reservoirs, Lake Mead, is41% full after years of declin-ing flow from the ColoradoRiver. Federal officials warn itis on track to slip below athreshold of 1,075 feet overthe next two years, whichwould trigger government-mandated water cuts to mil-lions of users.
Complicating matters is theSouthwest’s explosive popula-tion growth. St. George and itssuburbs—nestled between red-rock canyons and snow-cappedmountains—totaled 188,000people last year, more thandouble the population of91,000 in 2000, according tocensus estimates.
“We’ve always been dry,”said insurance businessman EdBowler, guiding his pickuppast rows of new tract homeson a tour one day in late Feb-ruary. “But we didn’t have allthese people.”
The past two summers havebeen the warmest on record insurrounding WashingtonCounty. St. George went 154days last year without receiv-ing any measurable precipita-tion, shattering the prior re-cord of 121 days that hadstood since 1929.
ALBANY, N.Y.—New YorkGov. Andrew Cuomo’s office hasreceived a complaint from an-other female employee alleginginappropriate behavior and re-ferred it to investigators con-ducting a review of sexual-ha-rassment accusations againsthim, according to a person fa-miliar with the matter.
The Albany Times Unionearlier reported the new com-plaint. The complainant, whowasn’t named by the paper andstill works in the governor’s of-fice, accused Mr. Cuomo oftouching her inappropriatelylate last year at the ExecutiveMansion in Albany, accordingto the Times Union. The personfamiliar with the matter con-firmed that was the allegationin the complaint.
Mr. Cuomo, a Democrat, toldreporters during a Tuesdayconference call that he was un-aware of the claim. He said henever touched anybody inap-propriately or made any inap-propriate advances. Nobodytold him at the time that his ac-tions made them feel uncom-fortable, he said.
The latest accuser is thefourth woman who worked forthe governor to accuse him ofinappropriate behavior or sex-ual harassment. State AttorneyGeneral Letitia James’s office isoverseeing an investigation intothe allegations. On Monday, shenamed Joon Kim, a former fed-eral prosecutor, and employ-ment lawyer Anne Clark to con-duct the probe.
The attorney general’s of-fice declined to comment onTuesday.
The governor said that peo-ple should withhold judgmentuntil the independent review ofthe harassment allegations byMs. James’s office is completed.
Beth Garvey, Mr. Cuomo’sacting counsel, said, “All allega-tions that we learn of directlyor indirectly are goingpromptly to the investigatorsappointed by the attorney gen-eral.”
The accusations have leftMr. Cuomo politically isolatedand led to a growing number ofcalls for his resignation fromDemocrats and Republicans.
Last week, former aide AnaLiss, 35 years old, told The WallStreet Journal that in 2014, Mr.Cuomo asked if she had a boy-friend and once kissed her handwhen she got up from her desknear his office at the State Cap-itol in Albany.
Another former aide, Char-lotte Bennett, 25, recently saidthe 63-year-old governor askedher about her sex life during aJune encounter at the Capitol.Mr. Cuomo has responded toMs. Liss’s and Ms. Bennett’saccounts by saying that he of-ten has personal banter withhis staff.
The governor has said heapologizes if his statementswere misinterpreted and madeanyone feel uncomfortable.
Lindsey Boylan, a formereconomic development adviser,said in February that Mr.Cuomo kissed her on her lipsafter a 2018 meeting in hisManhattan office and had said“let’s play strip poker” duringan October 2017 trip on a stateairplane. Mr. Cuomo has deniedthe allegations. Four aides tothe governor previously said ina statement that they were onthe flights with Mr. Cuomo andMs. Boylan and that those con-versations didn’t take place.
State lawmakers are at oddsover whether to wait for theoutcome of the outside reviewof the accusations or take fur-ther steps to sanction Mr.Cuomo. Republicans in thestate Assembly have introduceda resolution calling for Mr.Cuomo’s impeachment basedon the harassment allegationsas well as concerns over thestate’s handling of Covid-19 innursing homes.
—Corinne Rameycontributed to this article.
BY JIMMY VIELKIND
Cuomo IsAccused ofTouchingBy AnotherEmployee
ST. GEORGE, Utah—For thefirst time ever, rancher JimmieHughes saw all 15 of the pondshe keeps for his cattle dry upat the same time this year.
Now, he and his co-workersare forced to haul tanks of wa-ter two hours over dusty,mountain roads to water their300 cows. “It’s just a dailygrind, we’re not making anymoney,” the 50-year-old Mr.Hughes said late last month,amid another day of unwaver-ing sun in a winter that hasseen very little rain here inSouthern Utah.
The Southwest is locked in
BY JIM CARLTON
Record Drought Strains the SouthwestBennet Hughes helped fill a truck with water from a stock tank fed by a natural spring in Mojave County, Ariz., near St. George, Utah, last week.
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Political pressure mountedin Texas on Tuesday eveningto reverse $16 billion in powerovercharges from last month’sblackouts, with Gov. Greg Ab-bott and most of the state sen-ate publicly pushing the idea.
Mr. Abbott directed statelawmakers to consider as anemergency item whether tocorrect all overcharges identi-fied by an independent marketmonitor. The Texas Senate,meanwhile, sent a letter to thePublic Utility Commission ofTexas, urging it to correct theerror.
The moves heighten thepressure on the utility com-mission, which said last weekthat it wasn’t inclined to re-verse the potential over-charges and reprice electricity
BY KATHERINE BLUNT
Pressure Builds on Texas Agency
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Droughtintensity
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Abnormally dry
Short-term drynessslowing planting,growth of cropsor pastures.
Moderate
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Severe
Crop or pasture losses;water shortages; waterrestrictions imposed.
Extreme
Major crop/pasturelosses; widespreadwater shortages orrestrictions.
Arkansas Gov. Asa Hutchin-son approved legislation Tues-day banning nearly all abor-tions in the state, as he andother supporters said theyhope it prompts the U.S. Su-preme Court to revisit and ulti-mately overturn existing abor-tion case law.
The Arkansas measurewould ban all abortions unlessthe procedure is necessary to
BY KRIS MAHER
Arkansas Bans Most Abortions
The governor saidhe did nothingwrong after a fourthwoman’s complaint.
Gov. GregAbbott toldlawmakers toconsider theovercharges asan emergencyitem.
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Former President DonaldTrump’s relationship with theGOP has gotten more compli-cated over a fundraising dis-pute as he attempts to maintaincontrol over the party and pun-ish critics following the Jan. 6Capitol riot.
“No more money for RINOS,”Mr. Trump declaredMonday, us-ing the expression “Republicansin name only,” without specify-ing particular Republicans.
In another statement Tues-day, he said: “I fully support theRepublican Party and importantGOP Committees, but I do notsupport RINOs and fools, and itis not their right to use my like-ness or image to raise funds.” Inboth statements, he urged do-nors to send money to his SaveAmerica PAC and listed his per-sonal website address.
Mr. Trump’s ability to di-rectly reach supporters has di-minished after he was cut offfrom Twitter and Facebookover his rhetoric leading up tothe Capitol riot, which left fivepeople dead and hundreds ofhis supporters facing federalcharges. But his popularity withthe GOP base means he remainsa huge fundraising draw, in-cluding for the Republican Na-tional Committee, which hasseen a flood of donations sinceMr. Trump’s ascendancy.
Lawyers for Mr. Trump senta letter last week to the RNCand to the National RepublicanSenatorial Committee and Na-tional Republican Congressio-nal Committee, demanding theycease using his name for fund-raising without authorization.
RNC Chairwoman Ronna Mc-Daniel spoke to Mr. Trump overthe weekend and left with hisapproval to use his name infundraising and other materi-als, according to a letter that aparty lawyer sent to Mr.Trump’s attorney.
“Like President Trump, theRNC remains focused on electingRepublican candidates and ad-vancing conservative policies,”the letter read. “The RNC, ofcourse, has every right to referto public figures as it engages incore, First Amendment-pro-tected political speech, and itwill continue to do so in pursuitof these common goals.”
The RNC will hold part of itsspring retreat next month atMar-a-Lago, Mr. Trump’s Flor-ida estate, and he will be a fea-tured speaker, according toparty officials. The RNC willpay the club for food and bev-erages at the dinner, the offi-cials said.
Party leaders considered thematter resolved but then Mr.Trump issued his Monday state-ment, which didn’t refer to theRNC. “He wants to make surethe party won’t help his hard-core opposition,” a top Republi-can fundraiser who is familiarwith the events said Tuesday. “Itwill work out, but he will controluse of his name.”
torney general.The hearing was dominated
by mostly GOP questions abouthow Ms. Gupta would approachtopics including whether shesupported moving some policeresources to other areas, anidea that has been referred toas “defunding the police.”
Ms. Gupta has been a vocaladvocate for a variety of po-lice-accountability measures,but on Tuesday she said: “I donot support defunding the po-lice.” She noted that through-out her career she at timespushed for greater resources topolice departments for ex-penses like body cameras andofficer wellness and safety pro-grams.
vote?” Sen. Alex Padilla (D., Ca-lif.) asked. Ms. Gupta responded:“I believe the civil-rights divi-sion needs to use every tool atits disposal to ensure that everyeligible American is able to ex-ercise their right to vote.”
The top two Justice Depart-ment officials are responsiblefor supervising the bulk of theagency’s day-to-day criminallaw-enforcement operations aswell as its civil-litigation, civil-rights and antitrust work. Bothnominees appeared likely toadvance beyond the Senate Ju-diciary Committee and go onto be confirmed.
The Senate is expected tovote as soon as Wednesday toapprove Merrick Garland as at-
decisions, given that she islikely to be one of three mem-bers of a Democratic majority.
The commission is currentlyled by acting Chairwoman Re-becca Kelly Slaughter. Sheshares many of Ms. Khan’sviews, but is seen as more of aconsensus-builder.
Ms. Khan’s nominationwould mark Mr. Biden’s secondrecent move elevating someonewho is pressing for a more ag-gressive antitrust approach.The White House on Fridaynamed Tim Wu, an advocate ofstricter antitrust enforcementand breakups of large technol-ogy companies such as Face-book, to serve as special assis-tant to the president fortechnology and competitionpolicy at the White House Na-tional Economic Council.
Ms. Khan graduated fromYale Law School in 2017. Thatsame year, she published awidely cited law review article,“Amazon’s Antitrust Paradox,”suggesting that the prevailingapproach to antitrust law is ill-equipped to deal with the po-tential harms posed by onlineplatforms such as Amazon.
—Andrew Restucciacontributed to this article.
Minn.), haven’t endorsed a lawrequiring structural separationand have instead proposed le-gal changes to help the gov-ernment win antitrust cases.
As one of five members ofthe FTC, Ms. Khan would be ina position to influence policies,rulemakings and enforcementactions at an agency with au-thority to administer antitrustand consumer-protection laws.She wouldn’t be able to dictate
on antitrust enforcement arealso wildly out of step with aprudent approach to the law.”
Ms. Khan is among a groupof progressives who have sug-gested farther-reachingchanges, such as the House re-port’s suggestion that Con-gress consider forcing compa-nies to separate large onlineplatforms from other businesslines. Other Democrats, includ-ing Sen. Amy Klobuchar (D.,
Biden administration intends totake a more aggressive ap-proach,” pointing to her experi-ence as a congressional staffer.
Sen. Mike Lee (R., Utah),called Ms. Khan’s potential ap-pointment “deeply concerning”in a statement Tuesday. Hesaid that “being less than fouryears out of law school, shelacks the experience necessaryfor such an important role asFTC Commissioner. Her views
WASHINGTON—PresidentBiden is expected to nominateLina Khan, a critic of BigTech’s market power, to a seaton the Federal Trade Commis-sion, according to people fa-miliar with the situation, in amove that could signal moreaggressive application of lawsto ensure competition.
Ms. Khan is a law professorat Columbia University and for-mer Democratic staffer at theFTC and Congress. She was oneof the House antitrust subcom-mittee staffers who wrote anOctober report that concludedAmazon.com Inc., Apple Inc.,Facebook Inc., and AlphabetInc.’s Google hold significantand durable market power, re-sulting in “less innovation,fewer choices for consumers,and a weakened democracy.”
The White House declinedto comment on the expectednomination, which was re-ported earlier by Politico. Ms.Khan didn’t respond to a re-quest to comment.
Public Citizen, the advocacygroup, called the expected nom-ination “a hopeful sign that the
BY RYAN TRACYAND JOHN D. MCKINNON
Antitrust Scholar Is Biden’s Choice for FTC Post
Lina Khan, a law professor at Columbia University, is a critic of tech giants’ market power.
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Mr. Mastromonaco con-firmed he had received a sub-poena and said he had giventhe district attorney’s officematerials including communi-cations with others involved inthe project.
The district attorney’s officealso requested recordings ofplanning-board meetings inBedford, N.Y., one of threetowns on which the SevenSprings estate sits, people fa-miliar with the matter said.Messrs. Mastromonaco andMartabano appeared before theboard with Mr. Trump’s son,Eric Trump, in 2012 and 2013,meeting minutes show.
Lawyers for Mr. Trump and
the Trump Organization didn’trespond to requests for com-ment. Last month, after the U.S.Supreme Court denied Mr.Trump’s efforts to block Mr.Vance, a Democrat, from ob-taining his tax returns, Mr.Trump, in a written statement,called the investigation a “con-tinuation of the greatest politi-cal Witch Hunt in the history ofour Country.”
Prosecutors’ interest in thelocal planning process could re-late to the property’s valuation,and whether it was improperlyinflated on financial docu-ments, lawyers said. Mr. Trumpvalued the property at $291million in 2012, according to
WASHINGTON—Two ofPresident Biden’s nominees tosenior Justice Departmentposts said they would seek torun an agency free of partisaninfluence, as Republican law-makers pressed the pick for thedepartment’s No. 3 position onher views on policing and pastcriticism of conservatives.
Vanita Gupta, a longtimecivil-rights lawyer who is Mr.Biden’s choice to be associateattorney general, has some bi-partisan support and the back-ing of dozens of police chiefsand law-enforcement organiza-tions. She was a vocal critic ofTrump administration policieson everything from immigrationto federal judicial appointees.
“Would that kind of partisanpolitical advocacy affect her le-gal advocacy in a role whereshe represents all Americans?”Iowa Sen. Chuck Grassley, thecommittee’s ranking Republi-can, said at the outset of ahearing to consider Ms. Gupta’snomination along with that ofLisa Monaco, Mr. Biden’s pickto be deputy attorney general.
“I can pledge to you todaythat if I’m confirmed or re-gardless, you won’t be hearingthat kind of rhetoric from me,”Ms. Gupta said in response.
Senate Democrats pressedMs. Gupta on how she plannedto enforce civil- and voting-rights laws, after House Demo-crats passed legislation lastweek to expand voter partici-pation and curb the role of bigcampaign donors over the ob-jections of House Republicans.
“How do you envision rein-vigorating the civil-rights divi-sion generally, and specificallyits voting-rights section, to de-fend all Americans’ right to
BY SADIE GURMANAND ARUNA VISWANATHA
Justice Nominees Vow No Partisan Influence
Justice Department nominees Vanita Gupta, left, and Lisa Monaco at their Senate Judiciary Committee hearing on Tuesday.
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Manhattan prosecutors areintensifying their investigationinto Donald Trump’s busi-nesses, taking aim at aWestchester County, N.Y., estatethat the former president un-successfully tried to develop,according to people familiarwith the matter.
In recent weeks, accordingto the people, the Manhattandistrict attorney’s office has is-sued new subpoenas and re-quested recordings of local gov-ernment meetings related tothe Trump Organization’s failedattempt to create a luxury sub-division at Seven Springs, a213-acre property that the for-mer president bought for $7.5million in 1995.
Mr. Trump has valued theproperty at up to $291 millionin financial statements that theNew York attorney general’s of-fice, which is also investigatingSeven Springs, said were givento financial institutions. Inflat-ing assets to help secure loans
BY CORINNE RAMEY
or other financial benefits canbe a state criminal offense, ex-perts said.
The scrutiny of SevenSprings is part of a criminalprobe into Mr. Trump, his com-pany and its officers that alsoincludes financial dealings atproperties such as Mr. Trump’sflagship Trump Tower in Man-hattan, The Wall Street Journalhas previously reported. Out-side of New York, prosecutorsare also examining a loan forthe Trump International Hoteland Tower Chicago, people fa-miliar with the matter said,which CNN reported earlier.
Manhattan District AttorneyCyrus Vance’s office has said incourt filings it is investigatingpossible tax, insurance andbank fraud. Investigators nowhave Mr. Trump’s tax returnsand other financial records af-ter an 18-month court fight, al-lowing prosecutors to compareMr. Trump’s statement to lend-ers with his representations totax authorities.
Prosecutors have sent sub-poenas to land-use lawyerCharles Martabano and engi-neer Ralph Mastromonaco,both of whom were involved inplanning the Trump Organiza-tion’s proposal for SevenSprings, the people said.
what he called his “statementof financial condition,” a collec-tion of financial informationcompiled but not audited by hisaccountants. Mr. Trump valuedthe property at between $25million and $50 million on fi-nancial-disclosure paperworkfiled when he was president.
Local tax-assessment rollslist the market value of theproperty at about $19 million.
The new subpoenas add tothe picture of what is knownabout Mr. Vance’s investigation.Prosecutors have previouslysent subpoenas to some of Mr.Trump’s lenders and a longtimeinsurance broker.
The district attorney’s officehas hired Mark Pomerantz, aformer federal prosecutor, towork on the probe, accordingto people familiar with thematter. The office also hashired FTI Consulting Inc. to doforensic-accounting work onthe case, people familiar withthe matter said. An FTI spokes-man declined to comment.
Manhattan prosecutors’ in-terest in Seven Springsstretches back to at least De-cember, when they sent a dif-ferent batch of subpoenas tothe three towns, the Journalhas reported. The subpoenasasked officials in Bedford,
North Castle and New Castle toprovide information about taxassessments, town communica-tions and planning-board min-utes, local officials said.
The towns have since turnedover the materials, local offi-cials said.
The information prosecutorshave requested centers on ayearslong effort to gain localapprovals to build a subdivisionof luxury homes after Mr.Trump’s original plan of build-ing a golf course at SevenSprings fell through. The subdi-vision effort dates to at least2004 and continued through2013, according to planning andzoning board documents.
By 2015, the Trump Organi-zation had scrapped the devel-opment plans, instead opting toplace 158 acres of land in a con-servation easement, or landthat an owner has agreed notto develop.
The final appraisal, sent toMr. Trump in 2016, values theproperty at $56.5 million andthe conservation easement por-tion at $21.1 million. SevenSprings LLC, which is part ofthe Trump Organization,claimed a $21.1 million tax de-duction for the easement in taxyear 2015, a lawyer for the at-torney general’s office has said.
U.S. NEWS
Probe Into a Trump Estate Moves AheadNew York subpoenascenter on failedefforts to develop a213-acre property
BY ALEX LEARY
FormerPresidentSparsWith RNC
The Seven Springs estate in Westchester County, N.Y.
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National Guard toRemain at Capitol
The National Guard will ex-tend its mission at the U.S.Capitol into May, the DefenseDepartment said Tuesday, ascongressional officials weighhow to secure the complex go-ing forward.
Secretary of Defense LloydAustin approved extending theGuard’s presence in Washing-ton through May 23, after theU.S. Capitol Police requestedcontinued support. The Guard’smission previously was slated
to end on Friday.Capitol Police formally re-
quested the Guard extensionlast week, saying threatsagainst members of Congressduring the first two months ofthis year were up 93% com-pared with last year.
As of this week, just under5,200 Guards troops were de-ployed in Washington frommore than 30 states and terri-tories, defense officials said.
After Friday, nearly 2,300Guard members will remain inWashington due to the exten-sion, Pentagon spokesmanJohn Kirby said Tuesday.
—Alexa Corse
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casts this as a more humanepolicy, Republicans in Congresssaid it is encouraging more mi-nors to turn up at the border,filling up shelters and poten-tially sparking a crisis.
The new Democratic admin-istration is also slowly unwind-ing the Trump administrationpolicy that forced adult asylumseekers to wait in Mexico whiletheir cases went through U.S.immigration courts; the major-ity of asylum cases are eventu-ally turned down. The Bidenadministration has started toallow in some of those whohave been waiting in somecases for years in Mexico.
Even as it makes these
moves, the administration hastried to tamp down expecta-tions among would-be mi-grants, telling them via social-media messages that changesin the system will take time.
“We are not saying, ‘Don’tcome,’ ” Homeland SecuritySecretary Alejandro Mayorkassaid last week. “We are saying,‘Don’t come now because wewill be able to deliver a safeand orderly [asylum] processto them as quickly as possi-ble.’”
The U.S. Embassy in Guate-mala put out a short video viaTwitter on Saturday warningwould-be migrants about therisks of trying to enter the U.S.
illegally, including an arduousand dangerous journey throughMexico. #ATripinVain, read themessage, which included a tes-timonial from a presumed mi-grant saying she regretted hav-ing undertaken the journeynorth.
That message—asylum seek-ers are welcome, but not yet—is ambiguous and fueling mi-grants’ hopes, said GabrielRomero, the head of a migrantshelter in southern Mexico.
Mr. Romero’s shelter in Ten-osique, near the border withGuatemala, served some 6,000people in January and Febru-ary, more than the total 5,000for the whole of 2020, when
Central American migrants rested at a shelter in Tenosique, Tabasco state, Mexico, in February.
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didn’t need the vaccine becausehe felt healthy and took care ofhimself. Another worried thatside effects might aggravate hisasthma. Some mentioned aconspiracy theory—that themass vaccination effort is anattempt to cull the population.
Agricultural workers’ reluc-tance stems in part from fearsthat any side effects would ne-cessitate medical care, result-ing in bills these workers can’tafford or debt that could com-plicate applications for legalresidency, said Alma Moreno, afarm worker who previouslyhad Covid-19 and opted to getvaccinated in Fresno that day.
Agricultural workers’ hesi-tancy is reflected in thebroader Latino community. AFebruary poll by the KaiserFamily Foundation showed that48% of Latino adults eitherdidn’t want the vaccine, pre-ferred to wait, or would take itonly if required for work,school or other activities, com-pared with 37% for whites and44% for the population overall.The figure for Latinos hasfallen from 72% in December.The foundation projects thathesitancy will continue to fallas more people see theirfriends and family vaccinatedsafely.
“Every time we’re out in thecommunity educating peopleabout the vaccine, we’re de-bunking a lot of myths,” saidMs. Gallegos, who said she hadlost three relatives and fiveclose friends to Covid-19.
Besides the tracking chip fal-lacy, other myths hold that thevaccine will make women infer-tile, that it contains live virusand that it will sicken or kill re-
cipients, rewrite their DNA orchange their gender. Anothersays the vaccine tags peoplewith the “mark of the beast,” areference to the New Testa-ment’s Book of Revelation.
A March 3 analysis ofCovid-19 vaccine misinforma-tion on Facebook prepared forThe Wall Street Journal by so-
cial-media research firm Story-ful found more than 100,000Spanish-language posts thatappeared to reference the vac-cine microchip conspiracytheory. That was more thantwice as many as in English andan increase since early Febru-ary, when Facebook said itwould remove more vaccine
misinformation along withgroups and accounts thatspread it.
One post by an Ohio-basedevangelical preacher linked thevaccine to the “mark of thebeast” before calling it part ofa plot for world domination byglobal elites like Bill Gates. Thepost has been shared morethan 22,000 times.
A Facebook spokeswomansaid the company has removedor labeled millions of posts onFacebook that violate itsCovid-19 and vaccine misinfor-mation policies, including con-tent in Spanish. She said theStoryful analysis also includessome posts that warn againstthe vaccine microchip conspir-acy theory rather than seek tospread it. Facebook deleted theOhio preacher’s video for vio-lating its misinformation policyafter the Journal inquiredabout it. The spokeswomandidn’t say why it wasn’t re-moved previously.
Undocumented Latinos areespecially reluctant to get vac-
U.S. NEWS
cinated, community healthworkers said. Even before thepandemic, many avoided doc-tors because they feared theywould run afoul of the “publiccharge” rule, which the govern-ment can use to disqualify poorand disabled people from re-ceiving permanent legal statusif it determines they can’t sup-port themselves without publicassistance.
Online misinformation fuelsthese fears with claims that thevaccine will cause serious sideeffects or necessitate medicalcare, healthcare workers said.
President Biden has ordereda review of public charge policyafter the Trump administrationtoughened it in 2019. On Tues-day, the Supreme Court dis-missed cases involving the pol-icy at the joint request of theJustice Department and plain-tiffs who challenged it, sug-gesting that the Biden adminis-tration was planning toabandon the Trump-era crite-ria.
“People [with Covid-19] arejust scared to go to the doctorbecause of public charge,” To-dec’s Ms. Gallegos said.
In California, Maria Garcia, a75-year-old undocumented for-mer agricultural worker, testedpositive for Covid-19 in Januarybut hasn’t sought medical care,including for brain fog andother lingering symptoms. Shelacks health insurance andfears any healthcare expensescould jeopardize her pendingimmigration application orcause her to be deported. Sheis also hesitant to get the vac-cine, she said.
“You’re always afraid,” saidMs. Garcia.
Luz Gallegos stood in aHemet, Calif., orange grove lastmonth and asked for a show ofhands among the farm workersassembled there: How many ofyou want a Covid-19 vaccine?No hands went up.
Ms. Gallegos said her teamof health workers from Latinoadvocacy organization Todechave done hundreds of vaccineeducation events like this inSouthern California since earlyOctober to encourage agricul-tural workers to get the shots.Each time, she said, the healthworkers encounter broad reluc-tance. They must disabuse theagricultural workers of vaccinemyths that are circulating—in-cluding a common one that theshots contain a microchip tohelp the government trace anddeport undocumented workers.
Community health workerslike the Todec team are work-ing across the U.S. to reachsome of the millions of Latinoslaboring on farms and in meat-packing and poultry plants, agroup that is at once amongthe most vulnerable to Covid-19and yet more reluctant thanothers to get vaccinated.
The health workers are bat-tling a deluge of vaccine misin-formation spread among agri-cultural workers’ friends andfamily as well as in churchesand on social media. The healthworkers point to Facebook, inparticular, saying posts oftendiscourage the shots by ampli-fying widespread distrust ofimmigration authorities or ex-ploiting religious beliefs.
The health workers’ effortsmay be crucial to bringing aswift end to the pandemic,given the spread of the virus inthis community. Scientistswarn that any delay in vaccina-tions could give rise to variantsthat are more transmissible, le-thal or resistant to existingvaccines. California has givenpriority to food and agricul-tural workers for early doses.
Agricultural workers are vul-nerable because many work inclose quarters in food-packingfacilities or in meat and poultryprocessing plants. Many com-mute together or live in multi-generational or multifamilyhomes, which helps the virusspread.
A study of excess deaths inCalifornia among working-ageadults by job category showedthat Latinos died at higherrates across most categories.The heavily Latino food and ag-riculture sector was hit hard-est, suffering a 59% increase inmortality from March to Octo-ber. Overall mortality rose 22%,the study showed. Nationally,Covid-19 death rates are 2.3times higher for Latinos thanfor whites, according to theCenters for Disease Control andPrevention.
When offered a shot at avaccine event in a Fresno, Ca-lif., orchard in February, ahandful of agricultural workersdeclined. One worker said he
BY ROLFE WINKLERAND DANIELA HERNANDEZ
FarmWorkers Balk at Vaccines
The Los Angeles UnifiedSchool District has reached atentative agreement with itsteachers union that would al-low some students in the na-tion’s second largest schooldistrict to resume in-personlearning for the first time inmore than a year.
The deal will allow pre-schools and elementaryschools to reopen in mid-April,though no specific date wasgiven. Services for studentswith disabilities of all ageswould resume on campuses atthe same time.
Middle- and high-schoolstudents would continue withonline learning for the fore-seeable future, though thedistrict said secondaryschools would reopen in lateApril for “peer interaction, so-cial-emotional learning andlessons for college and careerexploration.”
“The right way to reopenschools must include the high-est standard of COVID safetyin schools, continued reduc-tion of the virus in the com-munities we serve and accessto vaccinations for schoolstaff,” school superintendentAustin Beutner and CecilyMyart-Cruz, president of theUnited Teachers Los Angelesunion, said in a joint state-ment. The district teachesabout 550,000 students, 84%of whom qualify for free or re-duced-price lunches.
The deal is less robust thanreopening agreements bro-kered in other major cities. El-ementary and middle-schoolstudents are already back inclassrooms in New York City,for example, and some in-per-son learning will resume athigh schools later this month.
Los Angeles experienced oneof the worst Covid-19 surges inthe country in December andJanuary, but case rates in thecounty have plummeted sincethen. The seven-day averagepositive rate for coronavirustests is now 2.3%, comparedwith 21% in late December.
The agreement comes aftermonths of negotiations be-tween district officials and theteachers union, one of themost powerful in the nation,which had taken a hard linestance on vaccinations andother safety measures as aprerequisite for reopening.
Mr. Beutner has been urginga return to in-person instruc-tion for weeks and announcedlast week that he had securedenough doses to inoculate allelementary-school teachers. Inaddition, California Gov. GavinNewsom signed a bill last weekthat provided billions of dol-lars in incentives for schooldistricts that started openingby the end of March.
BY CHRISTINE MAI-DUC
Los AngelesDeal SetsIn-PersonSchooling
Advocacy group Todec shared vaccine information last month in Riverside, Calif. Below, Luz Gallegos, executive director of the group.
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MigrantsSee EasierU.S. Pathsis at the border. It also threat-ens to overwhelm U.S. govern-ment shelters for children.
The White House didn’t re-spond to a request to com-ment.
Since the death of hismother more than two yearsago, Mr. Cruz has led a wan-dering life, eating and sleepingin friends’ houses. He said heeats once or twice a day be-cause he doesn’t earn enoughmoney to buy food.
“I can’t read or write, so Ican only work as a bricklayerand earn very little,” he said.“I’m going to travel again andhope to get into the U.S. I wantto have a better life, there’snothing to do here.”
The Biden administrationhas stopped his predecessor’spolicy of returning unaccompa-nied minors back to their homecountries, instead holdingthem in a U.S. governmentshelter before releasing theminto the U.S. after a Covid-19test. The minors are handedover to an adult sponsor orfamily member, pending immi-gration proceedings to deter-mine whether they can stay orshould be deported.
While the administration
ContinuedfromPageOne
the pandemic almost haltedmigration flows, he said. Cur-rently, he is attending to 250people, most from Honduras.Of those, 25 are unaccompa-nied minors and around 100are family members.
One migrant is a 17-year-oldwho left Honduras in Novem-ber in the hopes that the newU.S. president would be morewelcoming to young peoplelike him. He ran out of moneyin southern Mexico and got ahumanitarian visa that allowedhim to work a few months. Hesaid he planned to resume hisjourney in the coming days.
“I think it will be easier nowfor us to enter the U.S.,” hesaid by phone from the Teno-sique shelter. “[Biden] looksfriendlier, he looks like a goodperson. He doesn’t have a badheart like Trump, but is agood-hearted man.”
Many would-be migrantsare in constant communicationwith relatives who are alreadyin the U.S., who advise them onhow and when to leave whenconditions are more favorable,said José Luis González, a Je-suit priest who heads the Gua-temala branch of the nonprofitJesuit Migrant Network.
“News of what’s happeningin the U.S. arrives prettyquickly to these communities.When you change the messageor the policy, that has an im-mediate impact in the commu-nities of origin,” he said.
While illegal immigrationoverall to the U.S. is down overthe past two decades, the num-ber of unaccompanied children
from Guatemala, Honduras andEl Salvador arriving to the U.S.southern border began to in-crease a decade ago. Borderapprehensions reached a peakin 2019 at 76,000, according toU.S. Customs and Border Pro-tection data.
Migration slowed consider-ably last year during the pan-demic, when fear of gettingCovid-19 made many migrantsstay home. But the underlyingfactors causing migration haveall grown worse. Endemic pov-erty, poor crop yields becauseof extreme weather, gang vio-lence, the economic hit fromthe coronavirus pandemic andtwo hurricanes that hit the re-gion in November are pushingyoung people to head north.
In the Guatemalan Mayantown of Colotenango, migra-tion has picked up in recentmonths after a lull during thepandemic, said Gloria Ve-lásquez, a single mother whoseincome depends on remit-tances from four of her six sib-lings in the U.S.
“People here say it is a goodmoment to leave, to be at theborder,” said Ms. Velásquez,32. “The rumor is that childrenare allowed to enter.”
Florencio Carrascoza, themayor of Joyabaj, said migra-tion is difficult to prevent, nomatter which U.S. administra-tion is in charge. “The Ameri-can dream is something we allhave,” he said. “Immigration isvery hard to stop.”
—Santiago Pérez and Joséde Córdoba in Mexico Citycontributed to this article.
Health workerspoint to Facebookposts that amplifywidespread distrust.
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A8 | Wednesday, March 10, 2021 * * * * * THEWALL STREET JOURNAL.
pany’s shares plunged during thepandemic and Mr. Son took fur-ther hits when big bets on ridehailing and hotels floundered asthe economy froze. The VisionFund wrote down its investmentinOyoHotels & Homes bymorethan half last year, The WallStreet Journal reported.
He then embarked on a mas-sive series of asset sales toraise cash. As the economyopened, some of SoftBank’sother tech bets flourished. Inthe last quarter of 2020, the Vi-sion Fund recorded a $13 billiongain on its investments. Meal-delivery service DoorDash Inc.,which went public earlier thisyear, proved a huge hit. The Vi-sion Fund is likely to earn mul-tiples on its investment inSouth Korean e-commerce com-pany Coupang Inc., which is ex-pected to go public soon at avaluation exceeding $50 billion.
Vision Fund executives havelong talked about the potentialbenefits to be gained by having
its investee companies collabo-rate. The Greensill falloutshows the reality has beenmore complicated.
The $400 million was thelatest in a long series of com-plex financial arrangements be-tween the Vision Fund andGreensill. SoftBank is preparingto write down its Greensill in-vestment, The Wall Street Jour-nal reported last week, citing aperson familiar with the matter.
In March 2020, as Covid-19hit markets, SoftBank plowed$1.5 billion into the CreditSuisse-Greensill funds to helpkeep them operating, the Jour-nal reported last week.
That money was separatefrom the $1.5 billion investmentSoftBank’s Vision Fund madedirectly in Greensill in twoparts in 2019.
Greensill used the CreditSuisse funds to lend to otherSoftBank Vision Fund compa-nies. The Credit Suisse fundshad in aggregate around $750
million of supply-chain-financeloans to Vision Fund companiesat the end of March 2020, ac-cording to fund documents sentto investors.
These included auto-financ-ing company Fair FinancialCorp.; Indian hotel chain OyoHotels & Homes; glass manu-
facturer View Inc.; and Chineseonline car-trading platformChehaoduo Group.
In essence, SoftBank wasGreensill’s biggest outsidebacker, a lender through theCredit Suisse funds and a bor-rower through its Vision Fundcompanies.
The multiple roles sparked areview inside Credit Suisse thatled to changes around how thefund operated, the Journal re-ported last year. SoftBank re-deemed its position in thefunds by July of last year,though the loans to the VisionFund companies continued.
Another Greensill borrowerfrom the Vision Fund was U.S.-based Katerra, a factory-assem-bly building contractor. In De-cember, SoftBank put $200million into the constructionstartup to help it avoid bank-ruptcy. Katerra’s chief executivetold the Journal at the timethat Greensill also had forgiven$435 million in financing in ex-change for a roughly 5% stakein the company.
It wasn’t clear how Greensillwould absorb the loss from for-giving the loan.
SoftBank’s $400 million in-jection into Greensill was madein the form of convertible debt,one of the people said.
The money was earmarkedto make up for Katerra’s inabil-ity to pay back Greensill, andwould protect Credit Suisse in-vestors against taking a loss onany notes tied to Katerra, someof the people familiar with thematter said.
Greensill’s customers in-cluded a range of blue-chipcompanies and governmentagencies. It also lent heavily tocompanies affiliated with U.K.steel magnate Sanjeev Guptaand coal companies owned byWest Virginia Gov. Jim Justice,the Journal has reported.
On Tuesday, Apollo GlobalManagement’s efforts to buyGreensill’s core operating busi-ness out of insolvency hit aroadblock, according to peoplefamiliar with talks. The compli-cating factor: JPMorgan Chase& Co. made a play for Green-sill’s former clients by offeringto provide $3.8 billion of fi-nancing, according to people fa-miliar with the matter.
ant in the field of investing,with interests spanning micro-chips, self-driving cars, satel-lites, e-commerce and mobile-phone networks. The Japaneseconglomerate’s $100 billion Vi-sion Fund, and a smaller succes-sor fund, have invested in morethan 80 companies. In additionto Greensill, these include UberTechnologies Inc. and TikTokowner ByteDance Ltd.
The Greensill stumble is asetback for Mr. Son, following adramatic comeback in 2020.Nursing massive write-downsfrom its investment in officelandlord WeWork, the com-
ContinuedfromPageOne
SoftBank’sGreensillWoes Grow
TENNESSEE
Panel Votes to PullBust of KKK Leader
A Tennessee panel over-whelmingly voted to remove thestate Capitol’s bust of a Confed-erate general and early Ku KluxKlan leader.
The decision on Tuesdaymarked a key win in a decades-long effort to oust the NathanBedford Forrest bust from thesecond floor of the Capitol build-ing, but it remains unclear howsoon it will happen.
While the Tennessee Histori-cal Commission agreed that thebust should be moved to theTennessee State Museum, itdidn’t lay out clear next stepsfor its removal.
—Associated Press
HAWAII
Fear of Dam BreachPrompts Evacuations
Heavy rains prompted evacu-ations over fears that a dammight breach on the island ofMaui, and officials asked peoplenot to return to their homes onTuesday because flood adviso-ries were still in effect.
Officials initially thought theKaupakalua Dam in the commu-
nity of Haiku was breached byfloodwaters, “but after closer in-spection, county officials deter-mined there was no structuraldamage,” said a statement fromMaui County late Monday.
Maui and all of Hawaii’s islandsare under a flash flood watchamid heavy rains expected to lastthrough Wednesday morning.
—Associated Press
WHITE HOUSE
‘Minor’ Injury CausedBy Major Biden
One of President Biden’s Ger-man shepherds caused a minorinjury to an unidentified personthis week, White House presssecretary Jen Psaki said Tuesday.
Ms. Psaki said the incident
Trial in the U.S., with over53,000 people enrolled. An-other more recent study in Eu-rope with 15,792 generallyyounger participants showed agreater benefit in livessaved—and was largely re-sponsible for the panel’s low-ering the age range for recom-mended CT screening.
The panel is an independentgroup of medical specialistswhose advice helps determinefederal policy. The federalMedicare program has agreedwith the recommendations, ac-cording to a panel member,and private insurers will be re-quired to include free CTscreening under the federalAffordable Care Act.
The task force estimates 15million Americans should getCT scanning under its updatedrecommendation, from abouteight million previously.
Lung cancer is the nation’sleading cause of cancer death,with an estimated 137,720 peo-ple dying of the disease in2020.
A federal medical panel iscalling for a significant expan-sion of CT scanning for smok-ers to detect lung cancer, cit-ing studies that found theimaging studies can save morelives than previously known.
The U.S. Preventive Ser-vices Task Force is advisingpeople ages 50 to 80 to getthe screening if they havesmoked on average a pack ofcigarettes daily for 20 years,and currently smoke or havequit within the past 15 years.
The panel’s previous recom-mendation, in 2013, recom-mended people get screenedbetween ages 55 and 80, ifthey have smoked the equiva-lent of a pack a day for 30years, and currently smoke orhave quit within the past 15years.
The task force decision isbased on accumulated evi-dence from 223 publishedstudies, with the largest beingthe National Lung Screening
BY THOMAS M. BURTON
More Lung CancerScanning Urged
U.S. WATCH
occurred on Monday and in-volved the first family’s youngerdog, Major, who was adopted bythe Bidens in 2018. She saidboth dogs have since been takento Delaware. “Major was sur-prised by an unfamiliar personand reacted in a way that re-sulted in a minor injury to theindividual,” Ms. Psaki said.
—Sabrina Siddiqui
BIG MESS: Floodwaters from the Ohio River pushed up debris Tuesday in Owensboro, Ky.
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A bigWeWork losswas followed by a2020 rebound, andnow a new stumble.
U.S. NEWS
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THEWALL STREET JOURNAL. * * Wednesday, March 10, 2021 | A9
HONG KONG—The U.S. andChina are engaged in a confi-dence-building exercise thatcould show whether theworld’s two largest economiescan work together on sharedpriorities despite deep dis-agreements and a badlystrained bilateral relationship.
Washington and Beijing areto co-chair a Group of 20 studygroup focusing on climate-re-lated financial risks. It is a cau-tious step in a low-stakesvenue. Still, neither country iseager to take credit for evensuch a modest initiative, un-derscoring sensitivities on bothsides about any outreach.
In February, U.S. TreasurySecretary Janet Yellen told herG-20 counterparts the U.S.would co-chair the group. Aday later, Chinese central bankgovernor Yi Gang said thebank was pleased to co-leadthe group.
Neither side mentioned theother in its announcement.
“Both sides are inchingcloser to each other and tryingto make climate a safe lane forcommunication,” said John Po-desta, founder of the left-lean-ing Center for American Prog-ress think tank in Washington.
The U.S. views China as itsmajor competitor. A new Bidenadministration strategy docu-ment labeled China the onlyrival potentially capable ofcombining economic, diplo-matic, military and technologi-cal power “to mount a sus-tained challenge to a stableand open international sys-tem.”
China has been trying towean itself from dependenceon U.S. technology and makeclear to the new administra-tion that it won’t back off onissues of human rights or Tai-wan, which Beijing views as
part of China.Still, both Beijing and the
Biden administration havetalked about the urgency ofaddressing climate change,and the need to work togetheron the issue.
In response to questions,the State Department pointedto remarks by Secretary ofState Antony Blinken last weekcalling for the U.S.-China rela-tionship to “be competitivewhen it should be, collabora-tive when it can be, and adver-sarial when it must be.”Spokespeople for the TreasuryDepartment declined to com-ment.
On Sunday, Chinese ForeignMinister Wang Yi describedclimate change as a commoncause that could help improveU.S.-China relations.
Chinese leader Xi Jinpingsaid in September that Chinawould achieve carbon neutral-ity—net zero carbon-dioxideemissions—by 2060, withemissions peaking before2030.
Since then, Beijing has sentother signals pointing to aturn in its domestic energy
China’s environment ministryand international climate ad-vocates called for more strin-gent environmental criteria forBeijing’s overseas investments.
Senior Chinese governmentofficials attended the report’slaunch event, which has beeninterpreted as a signal of Bei-jing’s willingness to reconsiderits overseas climate impact.
In February, Beijing ap-pointed Xie Zhenhua, whoserved as China’s climate en-voy from 2007 to 2018 andknows the new U.S. climateczar John Kerry from negotia-tions over the Paris Agree-ment.
Throughout 2020, Messrs.Kerry and Xie and their confi-dants were in regular commu-nication, people familiar withthe matter said, exchangingideas and sounding out oneanother’s positions as the pos-sibility of a Biden victory be-came apparent.
The two men have sincebeen in direct contact, China’sForeign Ministry said in Feb-ruary, while Mr. Kerry haspraised Mr. Xie as “a capableadvocate.”
It isn’t clear who the U.S.will name as the co-chair ofthe G-20 working group.
On China’s side, the co-chairwill be Ma Jun, a World Bankveteran and former chief econ-omist at the People’s Bank ofChina who is an expert on envi-ronmentally sustainable financeand adviser on the report inDecember calling for stricterenvironmental criteria for Chi-nese overseas investments.
Mr. Ma, who confirmed hisappointment as China’s repre-sentative on the G-20 studygroup in an interview, said theU.S. Treasury Department andChina’s central bank each pro-posed—independently fromone another—upgrading theG-20 study group to a workinggroup, which unlike a studygroup can make concrete pol-icy recommendations.
The full G-20 is expected toapprove the change, thoughthe group’s agenda hasn’t yetbeen set.
The People’s Bank of Chinadidn’t respond to a request tocomment.
—Bob Davis in Washingtoncontributed to this article.
BY SHA HUA
WORLD NEWS
U.S. and China Engage on Climate ChangeTentative cooperationin studying financialrisks is cautious steptoward repairing ties
Chimney smoke in China's Hebei province. Beijing has appointed two highly regarded officials to oversee climate-related policy.
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Kerry, EU DiscussMore Cooperation
BRUSSELS—Renewedtrans-Atlantic cooperation onaddressing climate change willprompt other countries totake more action and improveprospects for coming globalmeetings on the issue, saidPresident Biden’s special envoyfor climate change, John Kerry,after meeting with allies here.
Mr. Kerry, making one ofthe first international trips bya senior member of the Bidenadministration, is meetingwith leaders this week inLondon, Brussels and Paris,following the U.S. return tothe Paris climate accord. Onhis agenda are efforts to co-ordinate with Europeans for aplanned Earth Day environ-mental summit Mr. Biden ishosting in April and theUnited Nations COP26 envi-ronmental summit in Glas-gow, Scotland, in November.
“This is the rekindling of apartnership that helped tomake Paris happen, and we’regoing to work hard to makeGlasgow a success,” Mr. Kerrysaid in a meeting with Euro-pean Union Executive VicePresident Frans Timmermans.“Our leadership, we hope, willbe critical in bringing othersignificant emitting nations tothe table.”
Mr. Biden has made tack-ling climate change one of histop priorities, signing an exec-utive order returning the U.S.to the 2015 agreement hoursafter taking office. The U.S.officially rejoined on Feb. 19.
Former President DonaldTrump had exited from the ac-cord in 2017, saying it put theU.S. at a competitive disadvan-tage through increased regula-tions and burdens on Americancompanies. The response to cli-mate change was one of manyareas of tension between Mr.Trump and his European coun-terparts. —Daniel Michaels
policy.The U.S. has recently
agreed to rejoin the Paris cli-mate agreement, though theaccord is criticized by climateactivists who say the commit-ments countries have madeare insufficient for keeping theworld from warming by 2 de-grees Celsius, the benchmarkmany of them cite.
Climate advocates have alsoexpressed concern about Bei-jing’s commitment to fightingclimate change overseas. Since2000, Chinese policy bankshave extended nearly $52 bil-lion in loans to support coalprojects through its Belt andRoad Initiative, according toBoston University’s Global De-velopment Policy Center.
In December, researchers at
The U.S. hasrecently agreed torejoin the Parisclimate accord.
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duce battery-grade materials,experts say.
Australia was the biggestlithium producer last year, withnearly 140,000 metric tons, ac-cording to Benchmark MineralIntelligence, which tracks prod-ucts in the lithium-ion batterysupply chain. Chile was the sec-ond biggest, with almost100,000 tons, followed by Chinaat about 35,000.
The U.S. produced roughly3,000 tons, but it has amongthe largest resources in theworld, according to the U.S.Geological Survey. The troubleis that at today’s prices, muchof that American lithium is tooexpensive to pull out of theground.
Much of the lithium minedin the world today comes fromtwo sources: a salty brine that’spumped out of the ground, incountries such as Chile, andspodumene, the mineral con-tained in hard rocks found inplaces such as Australia andNorth Carolina. Chemical pro-cesses are then used to makethe compounds that go intobatteries.
Processing plants, which cancost several hundred milliondollars, are about half as ex-pensive when they’re built in-side China. The country alsohas looser environmental regu-lations for mining and chemicalprocessing than in much of theWestern world.
Piedmont is betting govern-ment support, demand fromelectric car makers and a solidsupply of raw materials close athand can make its processingplants profitable. It and otherlithium companies are wager-ing that soaring demand willpush up lithium prices.
While China powers many ofits plants with coal, Piedmontplans to use solar and naturalgas. Like most startup explora-tion companies, it will likelyneed a deep-pocketed partneror lender to help develop themine site itself.
Piedmont might be one ofthe few new sources of lithium
world-wide with enough invest-ment to come to market in thenext two to three years, ana-lysts say. That constraint is amajor reason Benchmark seessupply only doubling from thisyear to 2025, even as demandrises more quickly.
Once it’s operational, Pied-mont expects to produce160,000 tons a year of concen-trated spodumene, yielding22,700 tons of refined material.
Rich veinsPiedmont got its start more
than a decade ago, when Mr.Leatherman heard about aboom in lithium prices at aconference in Toronto. Pricesfor gold, one of his specialties,were plunging due to the globalfinancial crisis.
Mr. Leatherman thoughtback to the green-striped rocksin the yard of his childhoodhome in North Carolina. Therocks contained rich veins oflithium. “I had no idea theywere going to be special,” hesaid.
He obtained decades-old U.S.Geological Survey maps thatdetailed lithium deposits in theregion. Braving ticks andsnakes in the forests and hills,
Mr. Leatherman cracked openrocks with his hammer to ex-pose the lithium inside.
Lithium’s boom-and-bust cy-cles have made it an unforgiv-ing commodity to produce. Theprice soon fell, and Mr. Leath-erman set aside his maps andeventually turned to blueberryfarming on Vancouver Island,off Canada’s west coast. He alsopursued a gold project in SouthCarolina.
Prices had begun to riseagain when Taso Arima, anAustralian with a backgroundin coal-mining finance, con-tacted him in 2016. Mr. Arimahad moved to the U.S. a yearearlier to develop a coal projectin Kentucky, but he was wor-ried the fossil fuel faced a long-term decline.
“The writing was on the wallfor coal,” said Mr. Arima, 36.
Looking to transition towardclean-energy materials such aslithium, he came upon a newsarticle about Mr. Leatherman’searlier prospecting work. SoonMr. Leatherman was leadinghim on a tour of the area thathe’d surveyed years before.Lithium-bearing rocks were justlaying on the ground, Mr.Arima said.
Mr. Arima helped arrange in-
vestments through an Austra-lian shell company, whichraised several million dollars inseed capital to launch the firm.
Mr. Leatherman began meet-ing with nearby landowners tonegotiate agreements to ex-plore on their property. Being alocal helped, he said. Now thecompany’s chief geologist, hesplits his time between Vancou-ver Island and North Carolina.
In 2017, Piedmont hired Mr.Phillips as CEO, giving the com-pany a direct line to financierson Wall Street.
Lithium prices grew. Bench-mark’s price index that tracksprices of several different lith-ium chemicals used in batteriespeaked in early 2018. Thencame the inevitable bust, asproducers, lured by high prices,flooded the market. By the endof last year, prices were downby about two-thirds. Industryanalysts say that of the roughly200 companies in the lithiumbusiness when prices peaked,nearly all of them have failed.
Few are predicting anotherbust. Analysts expect thegrowth of electric cars willcause lithium demand to triplein the next five years, far out-pacing current supply. Lithiumprices this year notched their
Source: Benchmark Mineral IntelligenceNote: After production, lithium must be processed into battery-grade checmicals. Figures beyond 2020 are projections
Metal QuestAlthough China dominates lithium processing, deposits can be foundworld-wide. Analysts expectdemand to soon outpace supply.
Global lithium supply and demand
1.0
0
0.2
0.4
0.6
0.8
millionmetric tons
2018 ’19 ’20 ’21 ’22 ’23 ’24 ’25
Demand Supply
2020 lithiumproductionby country
Australia
Chile
China
Argentina
Other
U.S.
138,150metric tons
95,400
33,800
29,250
18,000
3,150
surge, and controlling the re-sources that power them isthe 21st-century version of oilsecurity.
For now, the U.S. remainslargely reliant on China andother countries for lithium,having fallen far behind in min-ing and refining it. Piedmont isat the leading edge of efforts tobuild an American supply chainfor the ultralight metal—and itsfate will be a sign of whetherthe U.S. can succeed.
The modern lithium-miningindustry started in this NorthCarolina region in the 1950s,when the metal was used tomake components for nuclearbombs. One of the world’s big-gest lithium miners by produc-tion, Albemarle Corp., is basedin nearby Charlotte. Nearly allof its lithium today, however, isextracted in Australia andChile, which have large, accessi-ble deposits of the metal.
Only about 1% of global lith-ium output is both mined andprocessed in the U.S. China,with a huge chemical industryand low costs, unearths about10% and processes about two-thirds of what’s dug up.
Scientists say switching fromfossil fuels to batteries will becrucial to reducing carbon-diox-ide emissions, a key contributorto climate change. Increasingdomestic production of lithiumis vital for the U.S. to supportits auto industry and meet itsclimate goals, analysts say.
Supply chainsPresident Biden signed an
executive order in late Februarycalling for a review of supplychains for critical materials, in-cluding those needed for elec-tric cars, such as lithium. Thegovernment has said that rely-ing on overseas sources forthese materials creates a “stra-tegic vulnerability” to the U.S.economy.
Piedmont is still about twoyears away from pulling lithiumout of the ground in North Car-olina. Last September, it an-nounced a deal to supply lith-ium to Tesla Inc. once its minecomes into operation. The com-pany plans to spend more than$500 million to build a pair ofplants to extract lithium.
“We’re going to build a bigbusiness here,” said Chief Exec-utive Keith Phillips, a formermining banker for firms such asJPMorgan Chase & Co.
Piedmont’s U.S.-listed sharesrecently hit $80, up from $11before the company unveiledthe Tesla deal. The surgebriefly gave the company amarket value above $1 billion.
Exploration is well underway. In January, a small team ofworkers bored tubes hundredsof feet into the earth to map de-posits. Spodumene, the mineralthat contains lithium, is abun-dant in what’s known as theCarolina Tin-Spodumene Belt.
While Piedmont is one of thefarthest along, exploration ef-forts by others are under wayin Nevada, California and Ar-kansas.
Although lithium depositscan be found all over the world,it’s difficult to turn them intothe chemicals that power bat-teries. Refining the metal in-volves large amounts of equip-ment and intricate chemicalprocesses that can cause waterand soil pollution withoutproper controls. It can take fiveor more years for a new lith-ium-mining operation to pro-
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alls. The ship travels betweenNew Jersey and Brazil, withmany crew members from thePhilippines and officers fromCroatia and Ukraine.
“Your cellphone is arrivingon Wednesday,” she told one.She distributed SIM cards toseveral others. A darts gameand a 50-pound kettlebell wereon the way, she promised thecaptain.
Because of Covid-19, mostcargo ship workers can’t leavetheir vessels these days—oftenfor months at a time. Seafar-ers docking in Port Newarkcount on Ms. DiDomenico and
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her two fellow chaplains withthe Seafarers’ Center to fetchitems they used to buy ontheir own shore-leave shop-ping expeditions.
Maksym Neklesa, a ship en-gineer from Ukraine, was es-pecially happy to receive hisorder: 15 tubes of Crest tooth-paste and three bags ofsmoked almonds. They weregifts for his wife and kids.
“In Ukraine, you cannot buythe Crest,” he said.
Ms. DiDomenico sees theerrand-running as an opportu-nity to build long-term rela-tionships with the mariners.But she’s had to set boundar-ies, trying to limit the serviceto sourcing essentials like un-derwear and cellphones.
The shopping requests gotout of hand last year, says Sea-farers’ Center Director TimWong. Crews docked at theport requested vast amounts ofmerchandise, for which theyoften reimbursed the chaplains
in cash. It started with basicslike socks but soon expanded toinclude toys, electronics, hand-bags and speakers. The center’soffice started to look like anAmazon warehouse. “We had a70-inch TV here, a ping-pongtable, a bicycle,” says Mr.Wong. “It really got to ridicu-lous amounts. There was onemonth we went over $100,000.”
The center is run by the Sea-men’s Church Institute, a non-profit affiliated with the Epis-copal Church that is dedicatedto the welfare of a global mari-ner workforce of 1.6 million. Itoffers free hospitality servicesincluding a chapel, game room,gym, lounge and Wi-Fi. Basedin lower Manhattan since 1834,the institute also advocates onissues ranging from shore leaveto mental health, says the pres-ident and executive director,the Rev. Mark Nestlehutt.
Center chaplains still pro-vide ministry and counseling,of course. The same morning
Ms. DiDomenico visited thejuice tanker, the Rev. JamesKollin, another center chap-lain, boarded a bulk ship thatwas carrying rock salt fromHaiti. He delivered a TagalogBible requested by a crewmember. Inside the ship’smess hall, seafarers were din-ing on chicken masala, curriedvegetables and watermelon.
The shipboard life is de-cent, mariners said. They usu-ally work eight-hour days withbreaks and spend their eve-nings working out, chatting onthe phone or watching movieson their laptops. They typi-cally earn $1,500 to $3,000 amonth—several times whatthey might earn at homeworking as a telemarketer orstore clerk. “Everything is forthe money, no?” said AshinChathoth, a ship-crane opera-tor from India.
But it’s a strange existence.Thanks to modern efficiencies,a container ship the length of
three football fields is typi-cally manned by just twodozen men who see no one buteach other for long stretches.
While the job has alwaysrequired lengthy stints awayfrom family, many marinerssaw their stays on these float-ing isolation tanks extendedfrom the usual nine months to18 months or more during thepandemic, with few opportuni-ties to go ashore.
“It is maddening, disturb-ing,” said Zibran Hussain, anofficer aboard the bulk ship.“When you know you arestuck, you do not enjoy yourtime on the ship. You just takeit one day at a time.”
Rev. Kollin says that whenthe mariners share theirstruggles, there’s not much hecan do but listen, recognizethem, pray with them andthank them for their service.“It’s good that you are thereso you can help provide forthe world,” he tells them.
Thankfully, things are open-ing up again, and some mari-ners, depending on whethertheir ship grants them leave,are once again taking advan-tage of the free shuttle vanservice that the center pro-vides between the port andthe Mills at Jersey Gardens, anearby outlet mall.
Last week, Jan Santos andJimboy David, mariners work-ing aboard a 984-foot con-tainer ship, got leave to hit themall. After an hour, theyemerged carrying sodas andbags from the Levi’s outlet.“This is the first time we goashore…” said Mr. Santos. “Infive months!” said Mr. David,finishing his friend’s sentence.
They enjoyed cheeseburg-ers, shopping and seeing newfaces. They were soon leavingfor Norfolk, Va., where theywould again be stuck on theship. “This was great,” saidMr. David. “We don’t knowwhen we’ll go outside again.”
two biggest monthly increasesever, rising about 33% from theend of 2020, according toBenchmark’s index.
Years of low prices and weakinvestment in new mining proj-ects have set the stage for apossible scarcity, executives say.
“What we have today is thisreally dangerous place for thegrowth forecasts of the EV in-dustry,” said Paul Graves, CEOof Philadelphia-based LiventCorp., one of the largest pro-ducers in the world, with oper-ations in North Carolina, Ar-gentina and China. “There willbe a massive shortage of lith-ium at some point.”
EV shiftFor the auto industry, plenti-
ful lithium is crucial to the shiftto electric cars. Electric vehi-cles are expected to account forabout 50% of vehicles producedin the world by 2030, accordingto UBS Global Research, upfrom about 3% to 4% today.
Batteries account for be-tween 30% and 40% of the costof most electric cars, and asurge in lithium prices couldslow the decline in prices nec-essary to make them attractiveto a swath of consumers.
Tesla Chief Executive ElonMusk last year announced anunprecedented move by an automaker into commodities mar-kets, including lithium. Theauto maker has pledged to pro-duce its own lithium in the Ne-vada desert.
Lithium Americas Corp., aCanadian mining company, inJanuary raised $400 million,part of which it said will helpfund a Nevada project to ex-tract lithium from clay deposits.
Albemarle said it’s consider-ing reopening some long-moth-balled lithium mining assets inKings Mountain, N.C. Eric Nor-ris, president of Albemarle’slithium business, said the com-pany has spent more than $30million over the past few yearsto assess the area. It is invest-ing between $30 million and$50 million to expand produc-tion at a project in Nevada.
Investors including WarrenBuffett’s Berkshire HathawayInc. and a fund run by BillGates are also backing compa-nies seeking new ways to ex-tract lithium as part of a globalrush of firms trying to breakinto the sector.
There is no public market tobet on higher lithium prices inthe future like there is for com-modities like oil and gold, soinvestors have bet on thestocks of lithium miners.Shares have been volatile latelyas investors retreat from hotstocks tied to electric cars, butAlbemarle has still gained morethan 60% since the end of Sep-tember. Shares of Livent haveadded nearly 90%. The marketvalue of Lithium Americas,which is also trying to producein Argentina, approached $3billion in January before a re-cent retreat.
One risk to lithium miners isthat demand doesn’t material-ize, or a new battery technol-ogy reduces the amount of lith-ium needed.
“You can still paint a lot ofscenarios in both directions,”said Mathew Lazarus, manag-ing member at New York-basedhedge fund Red Hook AssetManagement LLC, who investsin lithium companies.
Mr. Arima of Piedmont Lith-ium said he isn’t concerned. Ascompetition among nations forcontrol of the lithium-ion bat-tery supply chain ramps up, heexpects more resources, and in-vestors, to pour in.
“We need to do it here inAmerica,” he said. “It’s part ofour future. We can’t rely onoverseas supply chains.”
—Micah Maidenbergcontributed to this article.
The RaceTo MineLithium
ChaplainsBecomeShoppers
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Lamont Leatherman, top, first searchedNorth Carolina’s Piedmont region forlithium, used in rechargeable batteries,more than a decade ago. His company isnow mapping out deposits.
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museum world remains Europe-centric in its approach, withLatinx artists represented onlymarginally in permanent collec-tions or exhibition calendars.
At the same time, “EstamosBien” is intended to give ElMuseo a stronger foothold inthe national art scene.
The institution, founded in1969 to showcase Puerto Ricanculture, has grown in its scopeand ambition to represent abroader constituency. It re-mains, however, fairly devotedto Latinx artists with a NewYork City connection.
Indeed, the museum previ-ously had produced a biennialshow, from 1999 to 2013, withsuch a local focus.
It was nevertheless a signif-icant challenge for El Museoto mount a triennial show ofsuch ambition, to say nothingof the fact that some of the re-search, including interviewingpotential artists, was doneduring the pandemic.
El Museo chief curator Ro-drigo Moura said about 500
exhibited at the museum previ-ously. But she said she washonored to be included in thetriennial, a show that she em-phasized will help put heryounger colleagues on the map.
“With every exhibition likethis, you draw more attentionto artists who haven’t had op-portunities,” she said.
The triennial showcasecomes at a time when otherNew York cultural institutionsare focusing on the Latinxcommunity in different ways.
Officials with MetropolitanMuseum of Art, the Museumof Modern Art and the Whit-ney Museum of American Artpoint to recent and comingshows featuring Latinx artists.
BRIC, a Brooklyn cultural in-stitution, also has a currentshow, “Latinx Abstract,” de-voted to contemporary artworkfrom the Latinx community.
Susie Wilkening, a Seattle-based museum consultant,said the shift is coming afteryears of neglect. “There’s a lotof catching up” to do, she said.
Officers from the OnondagaCounty sheriff’s office, the statepolice and the DeWitt police re-sponded to the family’s homeafter the teen’s mother called911 for a mental-health check onher son, police said.
Four officers from the threeagencies fired at Mr. Albahm af-ter authorities say he pointedwhat appeared to be a handgunat them. The weapon turned outto be a BB gun made to look likea Glock handgun, authorities said.
Mr. Zukher said Tuesday thatthe teen’s family had no com-ment on the attorney general’sinvestigation.
A spokesperson for the sher-iff’s office said in a statementthat the three police agenciescouldn’t comment.
—Associated Press
NEW JERSEY
Lobbyists SpendRecord Amount
Lobbyists spent a recordamount of money trying to influ-ence New Jersey’s governmentin 2020, the state’s Election LawEnforcement Commission saidTuesday. Spending topped $105million, up 3.4% over 2019, whichset the previous record.
Jeff Brindle, the commission’sexecutive director, connected thespending to the coronavirus pan-demic, pointing out that about40% of the bills lawmakers tookup last year centered on the virus.
Another factor was the legal-ization of the recreational mari-juana marketplace.
—Associated Press
CONNECTICUT
Man, 19, Dies AfterShooting in Hartford
A 19-year-old man was fatallyshot in Hartford early Tuesday,police said.
Officers responded to a ShotSpotter alert at around 2 a.m.,Hartford police said. While theywere headed to the shootingscene, a dispatcher notified themthat the victim had been droppedoff at Hartford Hospital.
The victim, identified as An-dres Bonilla, of Hartford, had beenshot once in the upper body, po-lice said. He was pronounced deadjust after 3 a.m.
Police have made no arrests inthe shooting.
—Associated Press
individuals and collectiveswere considered for inclusionbefore the final 42 were se-lected.
Some of the work in theshow speaks to the currentmoment, both in terms of thepandemic and the fight for ra-cial equality, Mr. Moura said.He cites a multimedia work byLizania Cruz, a New York-based artist, that was devel-
oped online by asking Ameri-cans how and when they feltthe American dream died forthem.
Ms. Alvarez, the veteran art-ist behind the “Estoy Bien”painting, is no stranger to ElMuseo, having had her work
The ElMuseo delBarrio show in NYCfeatures works by 42Latinx artists.
This new list of eligibleworkers joins a wide spectrumof other occupations that cur-rently have been given prior-ity for inoculations in NewYork, including restaurantworkers, taxi drivers and cer-tain grocery store workers.
“These are the people that
are the everyday heroes,” Mr.Cuomo said. “They are essen-tial for us to continue operat-ing.”
The Civil Service Employ-ees Association, a union thatrepresents public-sectorunions, welcomed the expan-sion of eligibility for govern-
ment workers.“Since the start of this pan-
demic, essential front-linepublic workers have riskedtheir own safety and thesafety of their families tomake sure our state and localgovernments keep providingneeded services to all New
Yorkers,” said Mary Sullivan,president of CSEA. “They de-serve to be protected so thatNew York can fully and safelyreopen.”
The governor said vaccinesupplies have been improvingbut still lag behind demandfor shots in New York. Avail-
GREATER NEW YORK
ability of doses, however, isexpected to improve in thecoming weeks, allowing thestate to expand the eligibilitylist for vaccinations at thistime, he added.
New York has administeredat least one dose to 3.75 mil-lion people or about 19% ofthe state’s population, accord-ing to state data. About 1.89million people have been fullyvaccinated so far in the state,about 9% of the population.
Meanwhile in New YorkCity, officials are hiring 2,000people from 33 neighborhoodshard hit by the Covid-19 pan-demic to work at vaccinesites, Mayor Bill de Blasio, aDemocrat, said at a separatenews conference on Tuesday.
This is part of the city’s ef-forts to get residents reluctantto take the vaccine to becomecomfortable with the process.
“We are bringing on boardmore and more good NewYorkers to help us in this ef-fort,” Mr. de Blasio said.
These are people “whowant to serve their fellowNew Yorkers, folks from thecommunities most affected byCovid who want to give back,who want to help make surepeople get vaccinated andknow its OK, know its safe,see people who look like them,see their neighbors helping inthe vaccination process,” themayor said.
These new workers willhelp the city meet its goal ofvaccinating five million peopleby June, Mr. de Blasio added.
New Yorkers age 60 and upcan sign up for Covid-19 vacci-nations beginning Wednesdayas the flow of vaccine suppliescontinues to improve, Gov.Andrew Cuomo said.
People who are 60 andolder can register for appoint-ments starting at 8 a.m. onWednesday, Mr. Cuomo, aDemocrat, said at a news con-ference Tuesday.
There are about 500,000residents in the state betweenthe ages of 60 and 64 thatpreviously weren’t eligible forthe vaccine who will nowqualify with this expansion,according to the governor’soffice. Currently, New Yorkersage 65 and up are eligible forthe vaccine.
The state also is expandingvaccination eligibility onMarch 17 to certain essentialworkers who interact with thepublic, Mr. Cuomo said. Thisincludes some governmentemployees, building workersand certain nonprofit employ-ees. Additionally, social-ser-vice and child-service case-workers, sanitation workersand employees working in thestate Department of MotorVehicles will be eligible forthe vaccine.
BY JOSEPH DE AVILA
New Yorkers 60 and Up to Be Offered ShotGov. Cuomo says theycan start signing up onWednesday as suppliesof vaccines increase
People at a vaccination site run by NewYork-Presbyterian Hospital. About 1.89 million residents have been fully inoculated so far in N.Y.
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firm that holds the largestnumber of New York City taximedallion debt, said: “This is asurprising, but welcome devel-opment,” The spokesman, Lin-den Zakula, said the fundwould help stabilize the indus-try by allowing drivers tolower their monthly payments.
Marblegate, which holdsthousands of medallion loans,began offering drivers the op-tion of restructuring in 2019.So far, the firm has forgivenabout $140 million of debt at-tached to about 800 medal-lions, according to Mr. Zakula.
Many taxi drivers have hadto find new ways of earning aliving during the pandemic af-ter ridership plummeted asschools, offices and businesseswere forced to close. Drivershave delivered food to seniorsand shuttled people who hadthe virus and were suspectedof having the virus to doctors’offices and dialysis centers.
City officials say the taxi in-dustry is starting to rebound.But data suggests it still has along way to go.
About 5,400 drivers oper-ated yellow cabs in the city inJanuary, according to city fig-ures, down from more than20,000 drivers in January 2020.Average daily revenue for eachdriver in January was $128,down from $169 a year earlier.
The New York Taxi WorkersAlliance says the best way tohelp drivers is to restructuremedallion loans to $125,000and to reduce monthly pay-ments to about $750. Thegroup has called on the city toact as a backstop by guaran-teeing the purchase of medal-lions if borrowers default.
Drivers with the allianceprotested outside the mayor’sresidence, Gracie Mansion,Tuesday afternoon. Theyvowed to protest every dayuntil the mayor finds a bettersolution to their plight.
—Katie Honancontributed to this article.
New York City will helpstruggling taxi-medallion own-ers by providing $29,000 inloans to help drivers restruc-ture their debts.
Mayor Bill de Blasio saidthe program, funded by $65million of federal coronavirusrelief, will help cabbies emergefrom a yearslong crisis thathas been exacerbated by thepandemic.
Driver advocates criticizedthe fund, saying it would en-rich lenders while doing noth-ing to help drivers. “It’s just amatter of time before every-body ends up in bankruptcy,”said Bhairavi Desai, executivedirector of the New York TaxiWorkers Alliance.
A medallion is a metalshield that gives a driver theright to pick up street hails inNew York City. Medallionswere once worth more than $1million each. Their valueplummeted below $200,000several years ago following aninflux of tens of thousands ofdrivers working for ride-hail-ing companies such as UberTechnologies Inc.
Many medallion owners owehundreds of thousands of dol-lars. Some paid too much for amedallion at city auction. Oth-ers borrowed against the medal-lion’s value to finance a home orto put children through college.
City officials say the fundwill provide a no-interest loanof up to $20,000 toward a downpayment for a debt restructur-ing. It also will provide a no-in-terest loan of up to $9,000 to-ward up to six monthly loanpayments of $1,500.
The head of the city’s taxiregulator, Aloysee Heredia Jar-moszuk, said officials havebeen in discussion with lend-ers, who are receptive to re-structuring loans.
A spokesman for Marble-gate Asset Management LLC, aGreenwich, Conn., investment
BY PAUL BERGER
NYC EstablishesFund for TaxiMedallion Owners
Beleaguered cab drivers protested last month in New York City.
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Museums and other institu-tions have long made theirmark with recurring art exhi-bitions, held every two orthree years, that are designedto survey the field in an ex-pansive way. In New York City,the most notable example isthe Whitney Museum ofAmerican Art’s biennial show,which is set to take placeagain in 2022.
Now, another institution inthe city is joining the currentfold: El Museo del Barrio, theManhattan museum that fo-cuses on the art and culture ofPuerto Ricans and Latin-Amer-ican communities in the U.S.,is offering its first triennial ex-hibition, set to open Saturdayand run through Sept. 26.
Called “Estamos Bien—LaTrienal 20/21,” the show fea-tures works by 42 Latinx art-ists and art collectives fromthroughout the U.S.
El Museo officials said “Es-tamos Bien” aims to be broadin its outlook—the artistscome from several states, inaddition to Puerto Rico, andrepresent various cultures,from Chicano to Dominican.The show reflects the impor-tance, relevance and strengthof this diverse community ofcreators, they added.
“Estamos bien” translatesfrom the Spanish as “We’regood,” though officials saidthe phrase, echoing the title ofa song by the Puerto Ricanmusical artist Bad Bunny, isintended to be both positiveand sarcastic. The title also re-fers to a painting featured inthe show, “Estoy Bien” (“I amgood”), by the New York-bornand Chicago- and Michigan-based artist Candida Alvarez.
The exhibition is borne from“the level of exclusion that theLatinx community is facing,”said El Museo executive directorPatrick Charpenel. He and otherofficials note that much of the
BY CHARLES PASSY
MuseumHosts First Triennial Exhibition
From left: Chief curator Rodrigo Moura, curator Susanna V. Temkin, and artist and guest curator Elia Alba.
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CENTRAL NEW YORK
AG to Probe KillingOf Teen by Police
New York’s attorney generalwill investigate the death of ateenager who was shot by po-lice near Syracuse last week, At-torney General Letitia James an-nounced Tuesday.
The move by state officials toinvestigate the death of 17-year-old Judson Albahm came afterthe teenager’s family membershired their own attorney to con-duct an independent probe intohis death last Thursday.
Lawyer David Zukher told thePost-Standard that Mr. Albahm’sfamily wants to know how a callfor help with a mental-health cri-sis ended with the teen’s death.
NY
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Inspiration Amid a PandemicAsked how the crisis changed their lives, readers shared stories of strength and resilience
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PERSONAL JOURNAL.FAMILY & RELATIONSHIPS
James Hanken and his wife,Helen James, feed raw chicken to apair of black vultures in theirbackyard in Arlington, Va.
From Toronto, Yusen Wang, top,connects with his mother Shen Yu,above, and father in China.
give up, but to fight back.I lost 90% of our
hard-fought shelfspace when Covidstarted. First,food distribu-tors refused topick up palletsfrom smallvendors. Sec-ond, our prod-ucts were soldat all the shopsin NYC airports,which all closeddown. Third, ouronline grocery re-tailer, the largest one inNew York, canceled allits orders, after we hadalready produced thepallets.
As New York closed down, oursales vanished. We had to findways to get consumers to taste ourproduct. So we filled our coolerand set up our Hälsa stand in frontof stores, feeling like kids with alemonade stand, and handed outfree yogurts. Within a month, wehad gained back about 80 indepen-dent stores.
Slowly but surely, we’re gettingback to normal, although the word“normal” will not be the same fora long time. So many things havechanged and will keep changing.There are thousands of small busi-nesses that did not make it, nomatter how hard their foundersworked and how much they risked.
—Mika Manninen, New York
WALKING NOWADAYS is like tak-ing a break from society. Going onwalks allows for a freeing timewhere I can process, observe andlive in the present moment. Walk-ing helps me engage with naturein a self-help kind of way. Naturehas become a central part of whatit means to be human during thequarantine.
—Lori Armine Sinanian,Glendale, Calif.
WE MOVED from our home of 38years in Pittsburgh to Maryland inJune to be close to our grandchil-dren. Our home went on the mar-ket in May, at a time when Real-tors were restricted from their
normal practice of showing homes.So, we took pictures for our Real-tor and conducted our own videotours, with my wife Rhonda nar-rating while I did the video withmy iPad. By May 15, we were al-lowed to bring in two people at a
time to view the home,which sold a couple
weeks later.Leaving our
home wasemotional butwas coun-tered by theexcitementof a new be-ginning. Af-ter a couplemonths ofsettling in,
our secondgranddaughter
was born on Sept.1, which is alsomy birthday and aspecial gift. Thesedays as we con-tinue to shelter in
place, our joy is our family andlooking forward to sharing bettertimes ahead.
— Joe Matt,Fredericksburg, Md.
MY PARENTS live 3 kilometersaway from the Huanan seafoodmarket [in Wuhan, China]. On Jan.23, two days before Lunar NewYear, I was in my MBA class in On-tario when a push notificationcame that read: Wuhan to be putunder lockdown, with all forms ofoutbound transportation sus-pended in 10 hours. It took 76 daysbefore the lockdown of my home-town was lifted.
During those 76 days, I had 152video calls with my parents. Everyday there was one chat in my eve-ning (their morning), in which Iwould share with them how myday was; and a second one in mymorning before class (their eve-ning before sleep), in which Iwould tell them my plan for theday, and ask about their day. Mychats were to provide them withdistractions, anecdotes and gos-sip—anything that could alleviatetheir torment from isolation.
—Yusen Wang, Toronto
I LOST TWO UNCLES and twofriends directly to Covid. Mymother also passed away, and al-though not directly due to the vi-rus, it was partly due to the isola-tion of being unable to see herfamily at her nursing home. Thisyear has taught me a great dealabout loss, but also about theworld we live in. The manner inwhich the virus was politicizedshows the character, or lackthereof, that politicians exhibit. Ialso learned that things I thought Icould not live without, like profes-sional sports and movies, are re-ally unimportant to me. Themoney I saved I used for addi-tional investing and plan to do soevery year. The time I previouslyspent on sports and movies, Ispent during Covid reading books.
—Vincent LoNigro,Bethpage, N.Y.
Compiled by Anne Michaud andCarrie Reynolds
Mika Manninen at hisnatural-foods company
The Wall Street Journal invitedreaders to share their storiesabout how the pandemic changedtheir lives. The responses were sur-prisingly uplifting. Here is a sam-pling of letters, which have beenedited for length and clarity.
When [HarvardUniversity]closed becauseof Covid-19 inmidsemester lastspring, I relo-
cated to my wife’s home in Ar-lington, Va. There, I’ve been de-livering my course lectures viaZoom, along with just about ev-erything else in my professionallife. What I had not anticipatedwas that shortly after my arrival,my wife and I would be joined bya pair of black vultures, whothought the attic of her garagewould be the ideal place to raisea family. And that’s just whatthey’ve done.
We’ve been following the com-ings and goings of the vultures(there are now four—the originaltwo adults and two offspring)since April. They prance and flyaround our backyard each day, in-centivized since last summer whenwe began serving them a dailybreakfast or lunch of raw chicken.These days, they wait politely out-side the kitchen door, perched onthe railing of the back porch andstaring into the kitchen to remindus that it’s mealtime.
Watching the vulture parentscanoodle with one another andcare for and protect their younghas provided a welcome relieffrom the daily dose of grim newsof human misery and politicalgridlock. It’s made isolating inplace for most of the last ninemonths a lot easier to take than itmight have been. Most important,it’s reminded us that life goes on.
—James Hanken,Cambridge, Mass.
IN PRE-PANDEMIC 2020, my hus-band and I found out we were ex-pecting our second child. We hadEliza on Aug. 31, and when shewas 1 month old, we foundout she has cystic fi-brosis.
Some mightsay this is parfor the coursein 2020, justmore badnews, and ofcourse wewere initiallyheartbroken.We googled“life expec-tancy” and“symptoms” andwere devastatedthat she would haveto face this. Parentsdon’t want to see theirchild suffer or face thepossibility of outlivinga child.
However, we have come to findthat her diagnosis has over-whelmingly brought more posi-
tives than negatives into ourlives. We met with her care teamat Texas Children’s Hospital inHouston. Right away her doctortold us about Trikafta, a medicinethat may offer her a normal lifeexpectancy. She may even be ableto avoid many of the treatmentsthat cystic fibrosis patients bornin the ’90s and early 2000s havehad to take throughout their lives.As we learned about the vaccinesbecoming available, we were in-trigued by the huge potential formRNA to treat genetic diseases.
I will never utter the commonphrase that 2020 is the worst yearever. It has refocused us on ourfamily and our faith; 2020 is ayear to remember for bringing joyamidst the uncertainty.
—Kristen Witte, Houston
IN LATE MARCH 2020, I lost myjob. Fast-forward another week,and my daughter’s school closeddown and implemented onlinelearning. The challenges with sucha transition is another subject al-together, but what I will say isthat it was drastic and confusing.My husband’s job had talks aboutcutting hours, but ultimately they
and over time, myperceptions and be-havior toward spend-ing have changed. Mypriorities werechanging.
Yes, this year hasbeen unexpected, but at the sametime, it opened up a lot of doorsfor me, perception-wise. As I be-
gan to reflect on the year, I seejust how much I’ve learned aboutmyself and the world. Despite theinitial setback, there have been alot of opportunities that havecome my way. And for that, Iam grateful.
— Hoang Samuelson,Portland, Ore.
MY BOYFRIEND AND I moved toWashington State last year fromDallas. We had started househunting in January, and it wastough. Our budget was $300,000,and homes in that range evapo-rated in minutes. Or you’d be upagainst 30 other people. Some of-fered $100,000 over the askingprice, in cash.
We found a converted mobilehome on a dirt road, in the mid-dle of farms in Kingston. It wasunder contract but due to thepandemic, the potential buyer’s fi-nancing fell through. We made anoffer which got accepted andmoved in in late June.
So we’re spending all our sparetime, cleaning, repairing, makingthis house our own. For all itsfaults, it sits on a small but daz-zling (to us) 1½ acres with trees,the occasional deer, and gangs ofpileated woodpeckers who inch upand down tree trunks. Across us isa cattle pasture; in the back, abeaver pond. Atnight, the sky isincredibly clear, apincushion stud-ded with millionsof stars. Youcouldn’t find abetter place towait out apandemic.
— Alicia Kan,Kingston, Wash.
I CAME VERYCLOSE to losingmy [natural-food]business this year.I would like to in-spire other smallbusinesses not to
Hoang Samuelson with her children, Lily and James, in Portland, Ore.
Kristen Witte andher baby Eliza
Alicia Kan moved to Kingston, Wash.
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had cool styling, it was affordable,it had durability, performance, andeconomy. I was living in SouthFlorida and it was a perfect placeto drive with the top down.Though it had a small four-cylin-der, it was a double overhead camengine. The car loved to go fast. Idefinitely got some tickets. It wasthe kind of car that made youwant to go into your garage so youcould say good night to it.
Now, so many years later, I canlook back and say that I havenever owned any car for morethan three years except this one,which I have owned for over threedecades. It amazes me that whenI first saw it, I’d never heard ofthe Miata. Now you see them ev-erywhere. It has its own success-
still drive the Miata to its fullest.When I take it out, I want to takeit out. Recently I went on a roadtrip with one of my favorite girl-friends, south into Mexico. Wewere on a straight road that hadno speed limit. I was hauling at120 mph. The car was as happy asa camper, as they say, and so wasits driver.
Racing legend Lyn St. James withher 1990 Mazda MX-5 Miata atPhoenix Raceway. Right, one of herracing victories, this one atWatkins Glen, N.Y., in 1985.
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W ith federal healthand education offi-cials making a big
push to restart in-personlearning, more kids are re-turning to school. But aftermonths of wearing pajamasto virtual math class, beingback in school will be a majortransition for many studentsand their parents. “It’s goingto feel new and everybody isgoing to spend time figuringit out,” says Lynn Linde, chiefknowledge and learning offi-cer at the American Counsel-ing Association, a trade groupin Alexandria, Va. “Parentscan expect that kids are go-ing to come home withmixed feelings about beingback in school.”Students may experienceseparation anxiety, feel over-whelmed at the prospect ofbeing around so many peopleagain, or worry about the vi-rus. Here are some strategiesfrom counselors, pediatriciansand psychologists.
Anticipate challenges. Thesocial adjustment is likely tobe challenging for many kids.One way to help alleviate wor-ries is to role-play situations inadvance. Helping a youngerchild plan out who she’ll sitnext to on the bus or whatshe’ll bring for lunch can helpher feel more in control, saysJoshua Coleman, an Oakland,Calif., psychologist. Ask yourchildren what they are mostworried about and talkthrough different approachesshould uncomfortable situa-tions arise. “You’ll help themthink of things they can do inthat moment,” he says.
Restart a consistent sched-ule. Children may find it eas-ier to get back into a struc-tured routine if they startfollowing the new schedulewell before the first day ofin-person classes, says Dr.Linde. Get back to setting the
ManagingAnxietyAs SchoolsReopen
alarm each day and shuttingoff electronics earlier in theevening; do some morningtest runs to practice gettingready. “It’s going to be an ad-justment,” she says.
Plan informal gatherings.Parents worried about howmore introverted children willtransition to the school envi-ronment may want to sched-ule virtual, outdoor or otherCovid-cautious meetups withfewer classmates, says IanBrodie, a counselor at LakeBraddock Secondary Schoolin Burke, Va. These informalgatherings may be less intim-idating for students and helpbuild back their social skills.“It’s important for develop-
ment…as they are transition-ing into a more adult way ofthinking,” he says.
Help students embrace newprotocols. With mask-wearingand social distancing in place,the school day will have morerules about how students canact around their friends. Par-ents should speak with stu-dents ahead of time about theimportance of following newprotocols and help them un-derstand the reasons behindthe new rules, says StevenAbelowitz, a pediatrician inNewport Beach, Calif.
Set expectations aboutothers. Even with all thesafety protocols in place, kidsare likely to encounter situa-tions where other kids aren’tfollowing the rules. Parents
can help kids handle thosesituations by talking throughpotential scenarios. In somecases it might be best forkids to avoid confronting therule-breakers, and instead dis-tance themselves and let anadult know, says Byron Mc-Clure, a school psychologist atAnacostia High School inWashington, D.C. “It’s impor-tant that parents instill intheir children ways that theycan still exert control in thosesituations,” he says.
Troubleshoot with open-ended questions.While somechildren are eager to sharetheir feelings, others are lessinclined to tell a parent what’sgoing on. It may be easier to
first ask your kids how afriend’s day went, or ask thechild to share one thing theyliked or disliked about the day.Starting small and specific canopen the door to conversa-tions about bigger concerns.
Monitor for signs of anxiety.Look out for signs of anxiety,which in children can includeirritability, a decrease in theability to focus, lagging per-formance in school or achange in appetite. Be flexi-ble about your expectationsof your kids during thisstressful time. Talking to theschool about concerns is im-portant, as many are workingto provide resources to theirstudents to help with thetransition. If problems persist,consult a mental health coun-selor or pediatrician.
Students practice social distancing at a school in Las Vegas.
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Lyn St. James, pro-fessional race cardriver, advocate forwomen, and the firstwoman to win the In-dianapolis 500’sRookie of the Yearaward (1992), on her1990 Mazda MX-5Miata, as told toA.J. Baime.
IN THE SPRING of1990, I was at a rac-ing function in Co-lumbus, Ohio, and the guy whowas hosting said, “Hey, do youwant to see my new baby?” Isaid, “Sure.” We went out in hisgarage and there it was, this littlered sports car. I had never seenor heard of a Miata before. Iasked if I could sit in it and whenI did, I put my left hand on thesteering wheel and my right onthe shifter. I said to myself, “Itjust feels right.”
Soon after, I started seeing bill-
boards and print advertisements.Mazda’s motto for the new carwas, “It just feels right.” Total co-incidence. At the time, I was undercontract to race with Ford MotorCo., and so I always had Ford cars.I didn’t need a new car, but Ibought one anyway—a Miata fromits very first model year.
There wasn’t anything like theMiata at the time—a new, small,two-seat convertible sports car.And this one hit every mark. It
Lyn St. James ‘Feels Right’ in HerMiataMY RIDE | A.J. BAIME
BY ALINA DIZIK
ful racing series, the MX-5 Cup.[Built in Hiroshima, Japan, theMiata is today, by far, the best-selling two-seat convertiblesports car of all time.]
About five years ago, I was go-ing to visit my daughter who livesin San Francisco, and I learnedthat Tom Matano—who led the de-sign of this car for Mazda—wasworking in SanFrancisco. I madean appointmentand I met him.To me, it waslike meetingEnzo Ferrari ifyou’re a Ferrarinut, or CarrollShelby if you’re aShelby nut. Heturned out to bethe most humble,delightful humanbeing, and it wasan honor to getto know him.
These days I
PERSONAL JOURNAL.NY
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10-disc set featuring seven femalevocalists and more than threedozen instrumentalists in ensem-bles of various sizes and formats,performing Mr. Parker’s music andhis lyrics—a body of work, hewrites in a liner note, “dedicatedto all people in the world search-ing for freedom.”
As an ensemble, the Westerliesproduce magisterial sounds as wellas pained ones, execute deft im-provisations, and project both af-fecting sincerity and knowing wit.The same can be said of Mr. Bleck-mann, who here sometimes altershis pure and transparent voicethrough electronic processing.
“This Land” features four songs(though, curiously, not “This Landis Your Land”) by Woody Guthrie,as clear a protest singer as Ameri-
can music has produced, played bythe Westerlies as brief, up-tempoinstrumentals. These punctuate aprogram that includes inventivereconstructions. The pro-laborditty “Look for the Union Label”arrives via brass fanfares but endswith a foreboding air, and then se-gues directly into a solemn versionof the spiritual “Wade in the Wa-ter,” on which Mr. Bleckmann’selectronics create a mournful washof sound beneath his vocal.Throughout, an artful blend offolk, jazz and chamber music ele-ments refreshes and reframeswell-known songs. The originalsongs here channel complex emo-tions, sometimes drawn from trag-edy. Mr. Bleckmann wrote “An-other Holiday,” a sombermeditation on absence, in response
Vocalist Theo Bleckmann and brass quartet the Westerlies, above;bassist and composer William Parker, right
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THERE IS a long tradition ofsongs meant to gather us in pro-test against injustice and unite usaround troubling truths and uplift-ing ideals—think “Strange Fruit,”made famous by Billie Holiday, orWoody Guthrie’s “This Land IsYour Land” or Curtis Mayfield’s“Move On Up.” There’s anothertradition—just as vital, and grow-ing—in which legacies of jazz, pop-ular, folk and classical music con-verge, or rather where suchcategories fall away in the inter-ests of collective intent.
Two new releases—“This Land”(Westerlies Music), from vocalistTheo Bleckmann and a brass quar-tet, the Westerlies; and “Migrationof Silence Into and Out of the ToneWorld, Volumes 1-10” (Centering Re-cords), from bassist and composerWilliam Parker—extend these tradi-tions. Both involve singers and in-strumentalists as equal partners, as-signing the same emphasis to wordsas to music (and in Mr. Parker’scase, silence). Yet they differ starklyin scale, scope and sound.
On “This Land,” Mr. Bleckmannand the Westerlies reconsider20th-century protest songs, hymnsand poems, and present new com-positions addressing more currentevents. The resulting 15 tracksform concise expressions of resis-tance and resilience. Mr. Parker’s“Migration of Silence Into and Outof the Tone World” is a sprawling
MUSIC REVIEW
RefreshedProtestSongsBY LARRY BLUMENFELD
based tunes. On another, vocalistJean Carla Rodea, from Mexico,and instrumentalists from Israel,Morocco and the U.S., blend har-monica, oud and piano, amongother instruments. Two discs aresolo efforts: stately piano piecesplayed by Eri Yamamoto, and play-ful texts sung a cappella by LisaSokolov, all of them brief. Thereare also long pieces, 20 minutes ormore: “If We Play Soft Enough” ex-plores sonic textures from, amongother instruments, vibes, tuba andsoprano saxophone; “On Being Na-
tive” sounds like aconversation be-tween DanielCarter’s alto saxo-phone and a stringquartet.
Some songstrack Mr. Parker’shistory. The lyricsto “HarlemSpeaks” recall theSavoy Ballroom,where his parentsmet. The melodycoursing through“A Great Day to BeDead” comes fromhis earlier organquartet album,here assigned tooboe, underscoring
lyrics about a favorite aunt.Mr. Parker—whose discography
includes several boxed sets, rangingfrom solo pieces to orchestralwork—favors grand gestures. Suchoutpourings would seem redundantor unwieldy were the music not sovaried, so vital and so full of freshdiscoveries and consistent beauty.And were they not staked to suchclosely held beliefs in unities ofcomposition and improvisation, ofsound and silence, and of music andwords as means of empowerment.
Mr. Blumenfeld writes about jazzand Afro-Latin music for theJournal.
to the 2016 Pulse Nightclub massa-cre. Composer Phil Kline’s riveting“Thoughts and Prayers” quotespress-conference comments byEmma González, who survived the2018 Marjory Stoneman DouglasHigh School mass shooting: “Wenever got our moment of silence,”Mr. Bleckmann sings.
“Listen to the soft silence,” assung by Raina Sokolov-Gonzalez,are the first words uttered on Mr.Parker’s new release. Like much ofhis vast body of recorded work, hiscompositions here explore the manyways sound mani-fests as music. Hislyrics consider howsuch music answersbasic needs (on onetrack, simply, “cos-mic funk will savethe world”). In thenearly half-centurysince Mr. Parkerperformed in pia-nist Cecil Taylor’sband at CarnegieHall, he has cometo be known as afather figure of theavant-garde scene.With one lyric, heshrugs off such cat-egories to get atsomething deeper(“the most avant-garde thing wecan be is human”). His insistentbass playing and his overall ap-proach have attracted musiciansrepresenting many traditions; hiscompositions lend themselves to allsorts of ensembles.
These 10 discs are independentsuites, each with its own cast. Mr.Parker performs on seven of them,playing bass as well as other in-struments, including the donsongoni, a West African harp. On onedisc, drummer Hamid Drake, oneof Mr. Parker’s closest collabora-tors, and Fay Victor, among NewYork’s most compelling singers,join the bassist to perform jazz-
‘You could buy a housefor what this shindigcost!” is the kind ofthing people say atweddings, perhapswhile downing truf-
fled foie gras and Veuve Clicquot.Regardless of the menu, they don’treally mean it. And neither does“Mortgage or Marriage,” though itdoes use a similar sentiment as itslaunch point: Do you spend yourentire bankroll on a wedding? Or ahouse?
What the 10-part series meansby that is the money its marriage-minded couples could alternativelyspend on a down payment—whichin most cases here is somewherebetween $20,000 and $35,000—ora party. The couples are preap-proved for mortgages of about$350,000 in pre-pandemic Nash-ville (one of the nation’s hotterreal-estate markets, at least rightnow). Their dream weddings willconsume all the money they have.Everyone wants more house thanthey can afford. Everyone wantsmore wedding than makes sense.
Wouldn’t most people pick ahouse? Not necessarily. The deci-sions that couples make are almostalways surprising, the wild cardsbeing the two very persuasive ad-vocates hosting the show—Nichole
Holmes, real-estate agent, andSarah Miller, party plannerand design consultant. Theycompete devilishly for the fi-nancial souls of their clientsand will do almost anythingto swing a decision their way.Both are attractive, poised,infinitely patient and non-judgmental: When one bride-to-be insists that her recep-tion feature a ranch-dressingfountain—yes, indeed—Ms.Miller has one conjured up.Appetizing it is not.
As is the case with mostreality TV, “Mortgage or Mar-riage” provides an alibi forvoyeurism, adding vicariousvenue-shopping to the well-established cable commodityof real-estate porn. It’s also astudy in expectations, loweredexpectations, and things peo-ple think are important andmay not be, especially whenthey’re presented with myriadchoices. Nashville seems to befull of artisanal distilleries,breweries and other hipster partyspaces, and Ms. Miller knows themall. The housing stock we see islargely new, though a few of thelived-in places are horrifying. Ms.Holmes knows an aesthetic night-mare when she sees one, but she
also knows what the couples canafford, as well as what constitutesa reasonable trade-off: Will youtolerate a hellscape of texturedwall treatments if you also get twoacres of backyard? I would.
But therein lies the rub. One of
them anyway: Younger viewersmight think it totally reasonable tospend all their available cash on abig wedding. Older viewers willlikely be saying “go for the house.”What’s slightly askew about “Mort-gage or Marriage” is that people
prepared to spend $30,000 on awedding aren’t people looking at$350,000 homes. They’re lookingat $650,000 homes. Home buyersin New York and San Francisco willjust be laughing, albeit mournfully.
But it’s a fantasy program, afterall. There’s no hard sell. Neither, toa viewer’s relief, is there any ex-cessive promotion of the busi-nesses involved in each episode,despite the extras they kick in.While it isn’t explained at all, Ms.Holmes and Ms. Miller obviouslyaren’t motivated by their ownprofit, so their guidance is honestand realistic. And often very, verykind.
What’s fun is how they try tocut each other’s figurative throatswith freebies and concessions. Ms.Miller squeezes gratis guest trans-portation out of one company. Ms.Holmes gets an appliance allow-ance from a homeowner desperateto sell. There’s a free upgrade to aplated meal for a bride and groomwho had resigned themselves to abuffet. The hosts are devious, cal-culating, shameless: One couple—whose immediate plans includeadopting a baby—walks into athree-bedroom townhouse only tofind one of those bedrooms deco-rated as a nursery. The musicswells. The tear ducts empty. It’spositively ruthless.
All the couples, who range inage, race, sexual orientation andcareer status, are facing a personalchallenge. Some have been engagedfor a long time and want to getthings moving. One couple, Liz andEvan (no one in the show is identi-
fied by anything but afirst name), have a 30-day housing allowancefrom Evan’s new em-ployer and don’t want topay a Nashville rent.“That’s a mortgage pay-ment,” declares Liz, as ifsuddenly aware of the re-alities of rental housing.
Another couple, Alexand Precious, reveal thatPrecious has alreadybought her dress—for$6,000 of their $30,000down payment—so Ms.Miller is encouraged.They also reveal thatAlex’s mother, Dorothy—whom they refer to asMadea—will cosign themortgage. “Gamechanger!” proclaims Ms.Holmes. Mom alsocomes along when theyinspect potential hous-ing. “I’m so excited thatDorothy is house shop-ping with us today,” Ms.Holmes says. Sure she is.
You have to respect the hosts inthe end, not just for their generos-ity but for disguising—so well—how appalled they often are.
Marriage or MortgageWednesday, Netflix.
Party planner Sarah Miller in yellow,left; a couple on the show, below
TELEVISION REVIEW | JOHN ANDERSON
Picking ‘Marriage orMortgage’
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B-EAST | By Chase Dittrich & Jeff ChenAcross1 Anonymityprotector
6 Like a horse’shoofs
10 “Quiet down!”
13 Place on ascale?
14 Offer viewpoints
15 Pirouette point
16 Bring joy to
17 Excellent bird?
19 “The EndlessEnigma” painter
20 IndigenousPeoples’ Daymo.
21 Oozed
22 Insect that’s intowitchcraft?
25 Penn who playedKumar
26 52 keys out of 88
28 Atkins, e.g.
31 Motorcycle racerValentino
34 Yarn unit
36 Classic Pontiacmuscle car
37 With 39-Across,PETA focus, anda hint to thetheme answers
39 See 37-Across
41 Up to, informally
42 Beginners inesports, say
46 D.C. honcho
47 Off-roaders, forshort
49 Pamplonapoliteness
51 Polish off
53 Chickencoordinating abig shindig?
56 Starts a set
59 Journalist Curry
60 “You’re on!”
62 Bunny workingat a New Yorkpaper?
64 Country singerTravis
65 Historicalperiod
66 Narnia’screator
67 Succinct
68 Cooler
TheWSJ Daily Crossword | Edited by Mike Shenk
1 2 3 4 5 6 7 8 9 10 11 12
13 14 15
16 17 18
19 20 21
22 23 24 25
26 27 28 29 30
31 32 33 34 35 36
37 38 39 40
41 42 43 44 45 46
47 48 49 50
51 52 53 54 55
56 57 58 59 60 61
62 63 64
65 66 67
68 69 70
Previous Puzzle’s Solution
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Solve this puzzle online and discuss it atWSJ.com/Puzzles.
E L S F S T O P A Q U AD A W G A R E N A R U N SS P A R E T I R E S K I D SE S T A T E P B S A T I EL E T I T O S C A R N O D S
E L E N A T I SP D A A S P S T A S T EC O M P U T E R C R A S H E SB A S I S S O A K E N S
G E N M O S H EB U L L D O Z E S K A P P AA L L A V E X T E S S I ES C A T I R I S H W A K E SS E M I C O T T A T I T OI R A N E S S E N N A P
69 Spaghetti ___carbonara
70 Sluggish
Down1 Made like
2 Pastel color
3 “Invisible Cities”author Calvino
4 Campaigning forchange
5 That woman
6 Launch of 1957
7 Cool
8 Small bills
9 Jeter who’s CEOof the Marlins
10 It’ll have youseeing red
11 Player withthe most NHLAll-Star Gameappearances
12 Kept in custody
14 11 for “Titanic”
18 Abacus slider
20 Musician Yoko
23 Fiji rival
24 Casual shirt
27 Respectfuladdress
29 Question forBrutus
30 Throw out, asfood or an idea
31 Pro ___
32 Doing the job
33 Emmy-winningcomedian Sarah
35 Gently bite
38 Something tothrow on the fire
40 “Heck!”
43 Mine material
44 NeuschwansteinCastle’s setting
45 Movie makeup
48 Keep for later
50 Quaint hotel
52 Electric auto
54 Wee
55 Candidate of1996, 2000,2004 and 2008
56 Somethingcounted by aFitbit
57 Dublin’s land
58 Name on thecover of “TheGiving Tree”
61 Uberalternative
63 Hole puncher
64 Diamond stat
WeatherShown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
City Hi Lo W Hi Lo W City Hi Lo W Hi Lo WToday Tomorrow Today Tomorrow
City Hi Lo W Hi Lo W
Anchorage 31 13 sn 18 1 snAtlanta 73 51 pc 73 52 pcAustin 79 66 pc 82 67 cBaltimore 68 49 s 72 56 pcBoise 51 29 s 53 28 sBoston 50 40 s 65 48 pcBurlington 51 43 pc 56 46 cCharlotte 74 47 pc 75 51 sChicago 64 57 sh 60 39 rCleveland 63 55 pc 64 40 rDallas 75 65 c 76 64 cDenver 53 27 pc 47 28 cDetroit 68 56 c 65 37 rHonolulu 80 69 sh 81 68 shHouston 79 67 sh 81 66 pcIndianapolis 65 58 c 65 45 rKansas City 75 49 t 62 41 shLas Vegas 55 40 pc 54 41 cLittle Rock 70 62 c 72 62 shLos Angeles 59 45 sh 58 42 tMiami 77 68 pc 78 69 shMilwaukee 58 51 sh 54 35 shMinneapolis 48 33 r 47 29 pcNashville 71 58 pc 73 61 cNew Orleans 77 64 pc 77 64 pcNew York City 54 46 s 68 55 pcOklahoma City 74 62 pc 74 59 t
Omaha 73 34 c 56 32 pcOrlando 77 57 pc 78 59 sPhiladelphia 65 47 s 72 56 pcPhoenix 68 47 s 63 46 pcPittsburgh 67 53 pc 66 49 cPortland, Maine 45 37 pc 56 43 cPortland, Ore. 53 34 pc 57 33 pcSacramento 54 40 t 58 37 pcSt. Louis 69 63 c 70 46 rSalt Lake City 51 32 pc 47 32 sSan Francisco 57 44 t 58 44 pcSanta Fe 57 23 s 56 27 sSeattle 51 35 pc 52 35 pcSioux Falls 44 28 r 47 26 pcWash., D.C. 71 54 s 74 58 pc
Amsterdam 47 43 r 52 42 shAthens 65 53 pc 56 44 shBaghdad 79 59 s 87 62 pcBangkok 93 78 t 96 79 tBeijing 60 41 pc 63 45 pcBerlin 45 35 pc 50 40 rBrussels 49 43 r 54 40 shBuenos Aires 79 72 s 85 70 sDubai 87 71 s 86 69 sDublin 55 41 r 46 38 shEdinburgh 51 44 r 47 40 t
Frankfurt 49 41 c 55 39 rGeneva 51 41 pc 56 38 shHavana 81 64 pc 83 64 sHong Kong 74 67 pc 76 68 cIstanbul 55 44 pc 47 36 rJakarta 87 75 sh 86 74 shJerusalem 74 53 s 64 46 cJohannesburg 85 64 s 86 61 sLondon 50 47 r 50 42 shMadrid 58 36 s 62 41 pcManila 91 79 pc 91 79 sMelbourne 68 55 pc 73 61 pcMexico City 80 51 s 80 52 sMilan 56 38 s 55 41 pcMoscow 8 -9 s 16 -3 sMumbai 94 78 pc 93 78 pcParis 50 45 r 56 41 rRio de Janeiro 84 74 pc 83 74 pcRiyadh 88 67 s 89 72 sRome 59 35 s 58 50 sSan Juan 85 73 sh 85 73 pcSeoul 61 33 pc 57 38 cShanghai 60 48 c 55 50 shSingapore 91 77 pc 89 77 cSydney 76 69 pc 78 71 tTaipei City 69 63 c 80 62 sTokyo 63 43 s 58 51 sToronto 58 50 c 60 34 pcVancouver 48 33 pc 48 36 cWarsaw 38 23 s 40 35 shZurich 50 38 pc 57 37 sh
ing exorbitant sums of money forotherwise free NBA highlights.
Many of them are young. Someare now rich.
The millionaires of Top Shotwere the bullish investors who hadthe money to pour into an emerg-ing market once they spied a prof-itable opportunity before the restof the world could see it. Theirluck, timing and knowledge ofblockchain and basketball turnedout to be worth a fortune.
They still have to explain to con-fused friends what they’re buying,why they’re not selling and how aglorified YouTube clip that can beviewed by the rest of the world canalso trade for hundreds of thou-sands of dollars.
“If someone tells me they don’tsee the value of diamonds, art,stamps, physical cards, these intan-gible items that don’t have intrinsicvalue, it’ll be impossible to getthem across the line on a digitalasset,” said Levy.
It’s easier to understand throughanother kind of collectible. A base-ball card is a few cents of ink andpaper, but the most valuable onesare limited in supply, reflect an ex-
perience and come with a guaran-tee of authenticity. Top Shot mo-ments have the same forcesworking in their favor.
“It’s the story, the scarcity, thejoy you get as a collector,” Levysaid. “It’s not the ability to hold itin your hand.”
But there is some value to that,too. Gharegozlou recently ordered avideo frame to display his clip ofVince Carter’s last shot in the NBA.It will live on a shelf next to hisLarry Bird signed basketball.
One of the Top Shot whales is a27-year-old software developernamed Andy Chorlian. Except forthe size of his bank account, he istypical of the Top Shot demo-graphic. He traded Pokémon cardsas a kid. He owns so many sneakersthat they no longer fit in his Brook-lyn apartment. And he wasn’t sur-prised by what happened once hediscovered Top Shot. “I just be-came really obsessed,” he said.
Six months later, he ownsroughly 3,800 moments, and theyare valued around $15 million—giveor take a few million bucks depend-ing on the day.
Chorlian flipped part of his col-
TheWhales of NBATop ShotMade a Fortune Buying Highlights
They were early to the hottest NFT market—and their collections are now worth millionsBY BEN COHEN
lection to pay taxes—he also sold aportion of his cryptocurrency hold-ings to cover his student loans—but otherwise he’s staying in themarket passively. “I spent moretime thinking about Top Shot whenevery moment was $5 than I donow,” he said.
But to make a fantastic amountof money, it wasn’t enough to buyon the cheap. There were timeswhen Levy and Chorlian had tosplurge.
Levy set the record for the high-est price ever paid on Top Shotwhen he purchased a Giannis Ante-tokounmpo dunk in late December.The serial number: 34. His jerseynumber: 34. The price: $8,034.
A few weeks later, Chorlianbought a special LeBron Jamestribute dunk to Kobe Bryant, a mo-ment that felt canonical to him. Hispurchase was also the most expen-sive in Top Shot’s history. The re-cord of $71,455 lasted for an hour.
It was around that time whenLevy was offered $100,000 for a Le-Bron James moment. He refused.And he knows how that sounds.But the reason he said no was sim-ple.
“I think it’s worth more,” hesaid.
The action has been so dizzyingthat Levy and Chorlian do theirbest to ignore it altogether. Themarket has dipped since then, but
Levy says he tries not tofocus on short-term noise,and Chorlian says he’scomfortable with volatilityas 95% of his net worth isheld in cryptocurrencies.In the worst-case scenarioof a Top Shot crash, hefigures he would still havea job that pays well. “I’dbe in the same position asa lot of 27-year-olds in theUnited States,” said Chor-lian, who described him-self as “a bit of a degener-ate gambler.”
But he wouldn’t be ableto cash out right now evenif he wanted to. Top Shotusers have to wait 30 days
before they can withdraw money,and there are limits for certain us-ers because of the company’s safe-guards against money laundering,Gharegozlou said. He cautions thatTop Shot is still in beta testing andsays he’s confident that market-place outages, technical difficultiesand other challenges of scaling abusiness will be worked out.
Levy made an investment inDapper Labs in February as his TopShot collection was growing invalue, a stake that increased his ex-posure to the risks of an unpredict-able industry. He doesn’t have to betold he should be diversifying. “Anytraditional portfolio theory wouldsay this is too outsized an asset,”he said.
Every time the whales looks attheir accounts and see previouslyunimaginable amounts of money isa reminder they must decide whatto do with their millions of dollars.Levy’s plan for now is to do noth-ing. He is holding.
“I don’t know where this isheading,” he said. “I just know thatit has enormous potential that noother investment I have access tocan mimic.” A
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Michael Levy wasscrolling Twitter lastSeptember when henoticed someonemention something
that he wanted to know moreabout. What is NBA Top Shot? hewondered.
This platform to buy, sell andcollect officially licensed videohighlights was months from be-coming a market that would capti-vate and mystify basketball fans,cryptocurrency enthusiasts, sneak-erheads, pandemic day traders andthousands of people stuck at home.But it wasn’t long before Levy tex-ted his friends: “This could bebig.”
He was so convinced that he de-cided to spend $175,000 over thenext six months on digital tradingcards. They are now worth $20million.
The investment was a sizableone for Levy, a 31-year-old financialanalyst who says his interests aresports, poker, markets and “tryingto identify advantages and edges,”but it appears that he found thelatter in Top Shot. It’s why he’s notselling.
“I continue to think it’san asymmetric bet withfantastic upside,” he said.
Levy is one of the big-gest winners of a manicnew market that true be-lievers say is the future ofcollecting and skeptics calla slightly absurd form ofspeculation. At the centerof the frenzy are assetsknown as non-fungible to-kens, or NFTs, which usethe blockchain technologypowering cryptocurrenciesto authenticate digital art,memorable tweets and aremarkable variety ofephemera suddenly wortha mind-blowing amount ofmoney.
The most popular andperhaps most confoundingNFT market is NBA TopShot. It has minted unlikelymillionaires and left manyscratching their heads as itprocessed more than $250million in sales from 100,000 buy-ers over the last month alone.
The peculiar but lucrative sub-culture of Top Shot reminds othersof a similar hit from the same com-pany, Dapper Labs, in which peoplecollected virtual cats instead ofNBA highlights. CryptoKitties was afad that was mostly forgotten aftera few crazy weeks in 2017.
Now the idea is roaring back inpart because Top Shot is built for adifferent audience: the averageNBA fan.
Dapper Labs cut deals to givethe league and its players a slice ofevery transaction—the company
takes a 5% fee—with the goal ofreaching casual basketball consum-ers and not just blockchain evange-lists. It’s working. Instead of swap-ping jerseys after games, NBAplayers are exchanging Top Shotmoments.
“We knew this was rocket fuel,”said Roham Gharegozlou, chief ex-ecutive of Dapper Labs. “The thingthat surprised me is how quicklymainstream basketball influencersadopted it.”
For a generation accustomed toplaying daily fantasy sports andgambling on their phones, there isnothing particularly odd about pay-
Andy Chorlian, above, spent $71,455on NBA Top Shot to buy the No. 1serial number of a LeBron Jamestribute dunk to Kobe Bryant. Below,NBA Top Shot collector Michael Levy.
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THEWALL STREET JOURNAL. Wednesday, March 10, 2021 | A15
The EugenicsHistory NearbyPure AmericaBy Elizabeth Catte(Belt, 199 pages, $26)
BOOKSHELF | By Barbara Spindel
The Swiss Won’t Miss the Burqa
S witzerland voted in areferendum on Sundayto ban face coverings,
and it wasn’t a revolt againstCovid restrictions. Medicalmasks are excluded from theprohibition. Its real target isthe burqa.
The measure, approved 51%to 49%, prohibits the wearingof full facial coverings in pub-lic. No specific garment or re-ligion is mentioned, and theproposal is sex-neutral. Theban includes the balaclavasbeloved by anarchists as wellas the facial draping worn bysome Muslim women. Yetthere was never any doubtabout the intent. The proposalwas introduced by, amongothers, the nativist Swiss Peo-ple’s Party, whose campaignfeatured posters of a black-veiled woman.
Switzerland joins Austria,Belgium, Denmark, France andGermany in banning theburqa. A challenge to theFrench ban was dismissed bythe European Court of Human
Rights. Europeans democra-cies differ from America’s innotable ways, and manyAmericans have reservationsabout the Swiss prohibition:Aren’t burqa bans an illiberalcurbing of religious and ex-pressive freedom? By somereports, fewer than 100women in Switzerland wear
the burqa. Do they constituteso great a threat to the vener-able Swiss nation that theirconstitution, which guaran-tees freedom of faith and con-science, has to be amended toalter their sartorial practice?
Aware that judgments fromafar can sometimes be glib, Iput these questions to ElhamManea, author of a book pub-lished last month titled “ThePerils of Nonviolent Isla-mism.” A Swiss Muslim of Ye-meni descent, she teaches at
the University of Zurich’s Po-litical Science Institute andcampaigned for the prohibi-tion with “a group of like-minded feminists, leftists andSwiss of Muslim heritage.”(She stresses that she dis-tanced herself from the SwissPeople’s Party.)
Ms. Manea is quick to dis-miss the argument that theban curbs freedom. You can’tseparate the burqa and niqabfrom their “religious and po-litical contexts” and turn thisinto “a simple question of‘choice.’ ” The burqa didn’t“come out of nowhere” andMuslim women haven’t “de-cided to embrace it on awhim.” Many Western femi-nists, she says, tend to “neu-tralize the context, as if it isof no consequence.” She urgesthose who are squeamishabout the ban to ask whichideology teaches women tocover themselves completely.What are its theological fea-tures? What does it say aboutwomen?
The burqa is “a symbol,”she says. When you see it in a
Western society, “it indicatesthat a neofundamentalist Is-lam is at work.” Women, ac-cording to this worldview, area “source of evil, to be cov-ered from head to toe to pro-tect men from seduction. Theyare perpetual minors, to becontrolled by their maleguardian.”
In her view, the burqa isthe “face” of Islamist separat-ism in Western societies. Itrepresents a form of Islamthat “leads to the secessionof Muslim minorities” intoclosed enclaves, paving theground for radicalizing “dis-oriented youth.” So when wesee women in burqas in theWest, Ms. Manea warns,“think of the ideology theyembody. It is not choice weshould look at in this discus-sion,” but the consequencesof leaving the dangersunaddressed.
Mr. Varadarajan, a Journalcontributor, is a fellow at theAmerican Enterprise Instituteand at NYU Law School’sClassical Liberal Institute.
By Tunku Varadarajan
Voters ban the ‘face’ ofIslamist separatism inWestern society.
OPINION
W hen historian Elizabeth Catte moved to Staunton, asmall city in Virginia’s Shenandoah Valley, in 2016,her daily commute took her past the original site of
Western State Hospital, which was then being reborn as anupscale hotel and high-end property development. She foundsomething so incongruous about this transformation that,she recalls, “I began asking people, ‘That’s the Western State,right?’ as if there might be another former asylum in townthat hadn’t become $500,000 condominiums.”
The dissonance stemmed from Western State’s gruesomehistory: It was one of the primary sites of forced sterilizationin Virginia, with roughly 1,700 people subjected to the pro-cedure between 1927 and 1964. But as Ms. Catte notes in herriveting book “Pure America: Eugenics and the Making ofModern Virginia,” the development’s marketing materialshearkened back to an earlier period in the institution’s
history, eliding the eugenicsera altogether. Then andnow, she writes, “eugenics iseverywhere and nowhere atthe same time”; Ms. Catte’sdetermination to pin it downpropels the narrative.
Western State opened in1828 and for its first fewdecades practiced a humanetype of care. Its scenicgrounds and handsome build-ings were intended to providerespite for patients (all ofwhom, until the hospital wasintegrated in 1965, werewhite). A fence was erected notto keep the residents in, but to
keep the public out, so inviting was the expansive lawn totownspeople looking for a place to picnic.
But this brief era gave way to a longer, darker one, whichis nowhere to be found in the development’s upbeat branding.Beginning in the late 19th century, psychiatric treatmentbecame less about caring for patients than about containingthe threat they were believed to pose. As Ms. Catte writes,“people perceived to have disabilities, along with those whocouldn’t care for themselves due to poverty or age, wereviewed by society as an expensive and disorderly classprone to criminal behaviors.”
The term “eugenics” was coined by Francis Galton, acousin of Charles Darwin, in 1883. The idea that a host ofsocietal ills could be traced to bad genes gained widespreadacceptance in the United States in the decades to come, withTheodore Roosevelt, Alexander Graham Bell and PlannedParenthood founder Margaret Sanger among those whoembraced its principles to varying degrees.
Eugenics gave a scholarly veneer to a racist and sexistpseudoscience whose aim was to prevent those consideredto be of poor hereditary stock from reproducing. Coursesin eugenics were common at American universities in theearly 20th century, including at the University of Virginia.Compulsory sterilization was legalized in the state in 1924and upheld by the Supreme Court in Buck v. Bell three yearslater; approximately 60,000 people were sterilized in Americaover the next four decades. The general targets were the“feebleminded,” defined in Virginia as “permanently andexpensively anti-social.” Many of those involuntarily com-mitted were simply indigent, seen as a drain on resourcesand made to submit to spurious clinical assessments.
Poor white women were a particular source of eugenicanxiety to segregationists because of the possibility thatthey might give birth to biracial children. “Virginia, like allSouthern states, had methods in place—racial segregation,disenfranchisement, incarceration, extralegal violence—toachieve social control over Black people,” Ms. Catte writes.Sterilization was a method of extending that control to whitewomen, to prevent them from, in Ms. Catte’s words, “con-taminating the race from within.” The year 1924 saw boththe legalization of sterilization and the passage of Virginia’sRacial Integrity Act, which banned interracial marriage.
Focused on economics as much as on race, eugenicsproponents were consumed by the cost to society of the so-called unfit. Prominent eugenicist Joseph DeJarnette,Western State’s superintendent from 1905 to 1943, preferredsterilization to institutionalization largely on the basis ofcost: Deinstitutionalizing sterilized patients saved the statemoney. Moreover, with the risk of reproduction eliminated,young women in particular became available as a cheaplabor source (paroled residents were often sent to live withfamilies as domestic workers), offsetting the financialburden created by their very existence.
“Pure America” is a slim but capacious volume. Ms. Catte,the author of 2018’s “What You Are Getting Wrong AboutAppalachia,” a forceful rebuttal to J.D. Vance’s “HillbillyElegy,” centers the narrative around Western State, but shealso tells the wrenching story of Carrie Buck, the youngplaintiff in Buck v. Bell, and of the removal in the 1930s ofhundreds of mountain families labeled as defective to makeway for the creation of Shenandoah National Park.
The book is tightly argued and impatient—“I think mosteugenicists were bad people,” Ms. Catte declares at the outset.“There will be no ‘man of his time’ hedging here.” Still, theauthor asks searching questions that she acknowledges haveno easy answers. Redevelopments like Western State’s fueltourism and growth, and Ms. Catte understands that many ofher neighbors believe the town has earned the right to moveon from past traumas—even if, as she pointedly observes,most of Staunton’s residents can’t afford the new condos.After spending a night in the newly opened Blackburn Inn,she grudgingly admits that “the hotel is really nice.”
One reason to face up to the past is that it has a way ofinfringing on the present whether or not we want it to.Echoes of eugenicist thought have appeared in arguments,made throughout the Covid-19 pandemic, that expendablemembers of society should be sacrificed to preserve theeconomy. As for the inn, its morbid history asserts itself in amore physical way. An intrepid guest exploring the groundscould come upon a neglected cemetery with the remains ofseveral thousand unidentified patients. This smart, scrupu-lous book might lead readers to wonder what their ownsurroundings would reveal, were they to investigate them.
Ms. Spindel has reviewed books for the Christian ScienceMonitor, the San Francisco Chronicle and other publications.
The belief that social problems could betraced to heredity led to a monstrousconclusion: forced sterilization of the ‘unfit.’
A lab acci-dent in Wu-han is un-likely only inthe sensethat a pan-demic virus’semergence isalways theculminationof a series ofu n l i k e l y
events. If it weren’t, wewouldn’t be here as a species.
This trillion-to-one collisionof circumstances can be simpli-fied in one obvious way. Say, ifa human agent collected themost dangerous viruses tostudy them in the middle ofone of the densest populationcenters on earth. These experi-menters would at least havebeen alert, if all other precau-tions failed, to a coworker de-veloping unexplained symp-toms. Except that the Sars-Cov-2 virus, once it was loosein a human crowd, showed thatit can be spread by people whonever develop symptoms.
Preventing future pandem-ics, being better prepared nexttime—these are the reasonsgiven for trying to understandhow the new coronavirusemerged. But one instance ofa virus bridging the speciesgap the natural way might bean anecdote that doesn’t tellus much about the next risk.The lab theory is the big forkin the road. We might have toreset our risk perceptions dra-matically—worry less abouthumans messing around in an-imal habitats, worry moreabout scientists messing
Lab Theory a Dark Cloud on Chinaaround in labs.
On that basis alone, the labtheory is the most importantinformational chokepoint aswe move ahead. But there’s an-other reason. If the lab theoryremains unresolved, especiallyif China’s refusal to cooperatemakes it unresolvable, it willhang over global politics fordecades to come even withoutconspiracy theorists and dem-agogues taking a hand.
Alas, the World Health Or-ganization mission is turninginto a case of disaster foretold.A credible inquiry requiresChina’s full cooperation, notjust cooperation with thoselines of inquiry that are con-sistent with its own propa-ganda. And couldn’t somebodyhave put Peter Daszak, teammember from New York City’sEcoHealth Alliance, under per-manent mouth quarantine?
To insist that human en-croachment on nature is thegreat risk tells us nothingabout what happened in thisparticular case. To insist, as hedid on NPR, that China’s man-handling of the delegationwith greeters in full hazmatgarb, its forcing of the delega-tion into quarantine for 14days, was merely testament toChina’s Covid rigor overlooksanother possibility: China wasseeking to intimidate anddominate the investigators be-cause of the colossal impor-tance it places on controllingthe virus narrative.
The WHO’s report, expectednext week, need not be a fail-ure if seasoned with properskepticism. China would have
been hard-pressed not to letsome new information out ofthe bag, adding to our store ofknowledge. That Beijing em-phasized the theory that thevirus entered the country inimported frozen food at leasttells us about China’s propa-ganda strategy. This is worthknowing but the WHO’s owngratuitous nods to the frozen-food theory raise anew thequestion of who really controlsthe World Health Organizationand to what end.
Mr. Daszak tweeted that thegroup’s meeting with the Wu-han virus lab staff went swim-mingly, “key questions asked& answered.” He might haveexpected a warm welcomesince his organization chan-neled U.S. research dollars tothe lab at one time. Assur-ances mean nothing withoutaccess to the lab’s records. De-leted web pages have been re-covered referring to experi-ments with rabbits and ferretbadgers, animals seen as likelyvectors for human infection.The lab is reputed to have en-gaged in “gain-of-function” ex-periments with bat viruses towhich the new coronavirus isclosely related.
China could have other rea-sons, of course, for keeping lab
data secret. Its most implausi-ble stonewalling is its unwill-ingness to supply “highly con-fidential” patient samples thatmight show where and whenthe virus was present prior tothe Wuhan outbreak. And it’sobvious why: China haslatched onto the good workdone in other countries toidentify early unrecognizedcases of Covid-19 to suggestthe virus originated elsewhereand was brought to Wuhan byforeign devils, never mind thevirus’s close similarity to batviruses found in China’s Yun-nan province.
It’s time to be realistic. Mr.Daszak and most others longago figured out there won’t bean unimpeachable answer tothe origin question, only a bat-tle of narratives. Politics wasdestined always to swamp thehunt for Covid-19’s beginnings.The global scourge has becometoo politically explosive. Therewas zero chance of China let-ting the chips fall where theymay. There is little chance ofthe U.S. sacrificing its otherdealings with Beijing to get tothe bottom of the mystery. Inthat sense the big “kick me”sign the WHO has placed on it-self may be convenient for allwho want to get back to rela-tions as usual. Yet I would notbet on the lab theory goinggently into that good night.This would be another highlyunlikely event given the long-standing fears voiced by somany scientists over the yearsthat such an accident might bethe world’s biggest pandemicrisk.
In last week’scolumn, I madethe case thatChina’s invest-ments in tech-nology posed achallenge toAmerican lead-ership, andthat the U.S.has mostlyfailed to re-
spond. This week, I want tohighlight some signs that weare beginning to recognize thethreat.
Several recent surveys re-veal a hardening of public at-titudes toward Beijing. In arecent Pew Research Centerpoll, 67% of Americans saythat their attitude towardChina is negative or very neg-ative, up from 46% threeyears ago. The share of Re-publicans with these attitudeshas risen by 22 percentagepoints; among Democrats, 23points. Nearly 90% see Chinaas a competitor (55%) or en-emy (34%), and 84% regardChina’s growing technologicalpower as a serious or very se-rious problem for the U.S.Nearly half say that limitingChina’s power and influenceshould be a priority.
There is a convergence ofviews among leaders as well.For example, the 2019 NationalDefense Authorization Act es-tablished a bipartisan commis-sion on artificial intelligence.Its report, released last week,recommends steps such asdoubling the federal invest-ment in nondefense researchand development to $32 bil-lion by 2026 and enacting a
America Wakes Up to the China Threatnew version of the 1958 Na-tional Defense Education Act,passed in the wake of the So-viet Union’s Sputnik launch.
The commission high-lighted the challenge of artifi-cial intelligence. “We take se-riously China’s ambition tosurpass the United States asthe world’s AI leader within adecade,” the commissionerswrote, asserting that the U.S.must “win the AI competitionthat is intensifying strategiccompetition with China.” Thesame could be said of theother areas that Beijing hasidentified as essential toachieving technological pre-eminence within the nextgeneration.
The “Interim National Se-curity Strategic Guidance” theBiden administration releasedlast week offered more evi-dence of bipartisan consen-sus. “We cannot pretend theworld can simply be restoredto the way it was 75, 30, oreven four years ago,” the doc-ument declared, and nowherewas that clearer than in itsstance toward China. TheObama administration pur-sued the policy of cooperationwith Beijing that had domi-nated U.S. thinking for de-cades, a stance the Trump ad-ministration reversed. But thetestimony Secretary of StateAntony Blinken gave duringhis confirmation hearing wasnotably hawkish, earningpraise from several Republi-can senators. On China, atleast, the new administrationwould continue the previousadministration’s more con-frontational stance.
The new administration re-port underscores this shift,referring bluntly to a “moreassertive and authoritarianChina” that is “the only com-petitor potentially capable ofcombining its economic, dip-lomatic, military, and techno-logical power to mount a sus-tained challenge to a stableand open international sys-tem.” This challenge will re-quire a multifaceted U.S. re-sponse, especially in scienceand technology.
“The world’s leading pow-ers are racing to develop anddeploy emerging technologies,such as artificial intelligenceand quantum computing,” theadministration asserts, thatcould reshape everything“from the economic and mili-tary balance among states tothe future of work, wealth,and inequality within them.”The conclusion: “Americamust reinvest in retaining ourscientific and technologicaledge and once again lead.”
Last year Senate Demo-cratic Leader Chuck Schumerteamed up with a thoughtfulyoung conservative, Sen. ToddYoung (R., Ind.), to introducethe bipartisan Endless Fron-tier Act, which aimed to fundresearch, technology transfer,and education in 10 technol-
ogy areas. Reps. Ro Khanna(D., Calif.) and Mike Gallagher(R., Wis.) introduced a com-panion bill in the House. Thisambitious legislation wouldestablish a new technology di-rectorate within the NationalScience Foundation. The di-rectorate would fund under-graduate, graduate and post-graduate scholarship as wellas university centers and in-centives for moving technol-ogy from the laboratory to themarket.
Last month Mr. Schumerrenewed his support for bi-partisan legislation to counterBeijing. The predicate is alarmabout a shortage of semicon-ductors, but the point wouldalso be to invest in areas suchas quantum computing, bio-medical medical research, anddata storage. The EndlessFrontier Act would serve asthe basis for this new legisla-tion, which Mr. Schumer aimsto introduce this spring.
Sen. Jack Reed (D., R.I.),chairman of the Armed Ser-vices Committee, has pointedto what he terms China’s “ag-gressive attempts to undercutour current technological su-periority” and expressed con-cern about the strength of ourentire national research andinnovation enterprise from re-search to the manufacturingand industrial base.” Sen.Marco Rubio has called for a“21st century pro-Americanindustrial policy.”
Beijing’s relentless advancehas finally awakened thesleeping American giant. Par-tisanship must not stall ourresponse.
Public opinion onBeijing is hardening,as lawmakers proposemore tech funding.
POLITICS& IDEASBy WilliamA. Galston
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A16 | Wednesday, March 10, 2021 * * THEWALL STREET JOURNAL.
America Needs History, but What History?Regarding “America Needs History
and Civics Education to PromoteUnity” signed by six former secretar-ies of education (op-ed, March 2): It’snice, I guess, that the former educa-tion secretaries want to reinvigoratehistory and civics education, but it’sprobably too late. Given that thesesubjects have been ignored for de-cades, where are we going to findfair-minded teachers (those whomight take seriously the idea that theU.S. isn’t irredeemably tainted)? Inschools of education? Puh-leeze.
The same problem exists withbadly needed instruction in grammar.Who can do it? Few under the age of50 (60?) had such instruction. Justbetween you and I (which is incor-rect, by the way), the younger folksdidn’t learn the rules, and manyolder folks have forgotten what theydid learn.
EM. PROF. ERIK M. JENSENCase Western Reserve University
Cleveland
Lamar Alexander et al. are correctin their urgent call for prioritizinghistory and civics in K-12 education,but getting there is the problem. Asa graduate student in history in theearly 1970s, I studied under liberaland conservative professors whosenumbers included military veterans,a former diplomat, a missionary anda farmer—people of diverse viewswho knew life outside the ivorytower. In contrast, today’s historyand political-science professors ar-rived on campus at age 18 and neverleft. As students their mentors werethe radical students of the 1960s and’70s whose ideology was shaped bythe antiwar movement and thewarped teachings of Howard Zinn.Aided and indulged by timid collegeadministrators and unchallenged bywoke CEOs and progressive politi-cians, yet another generation of left-
ist historians is emerging to furtherdemonize our country. For all thepromise of the Roadmap to Educat-ing for American Democracy, therecan be no progress as long as halfthe country embraces identity poli-tics, worships at the altar of diver-sity for diversity’s sake and seeks af-firmation by criticizing that whichthey do not understand. Unfortu-nately, getting to that point will re-quire a level of moral courage on thepart of our elected and other leadersthat is sadly lacking.
TOM SEALStafford, Va.
I am impressed to see six peoplein agreement, but I quickly sensedthe nod to current victim ideology,making sure to call out the need forgrappling with “painful parts of ourhistory.” These “painful parts” areindeed a real part of our history, andthey should be taught. The questionis, are they the defining part of ourhistory? If the suggestion is to de-vote a semester to these issues (likethe 1619 Project, for instance) andfocus on our sins versus our vir-tues—count me against it. We shouldteach all of our history, and recog-nize we are not the only countrywith painful parts. To achieve epluribus unum we need to startteaching as one, not shaming eachother for sins of the past.
ALAN DOMZALSKIGrosse Pointe Woods, Mich.
Why not simply make the Ameri-can citizenship test a requirement forgraduation? The thousands of folkswho take (and pass) those tests dailyare demonstrating the very civicspirit that the illustrious secretariesdescribe as lacking in American pub-lic schools.
SHANNON VOWELLFrisco, Texas
LETTERS TO THE EDITOR
Letters intended for publication shouldbe emailed to [email protected]. Pleaseinclude your city, state and telephonenumber. All letters are subject toediting, and unpublished letters cannotbe acknowledged.
H.R.1 Would End Bipartisanship at the FECIn “An Unconstitutional Voting ‘Re-
form’” (op-ed, Feb. 17), David B.Rivkin Jr. and Jason Snead show thatH.R. 1, the so-called “For the PeopleAct,” is unconstitutional (besides be-ing a bad bill on policy grounds) inits many provisions that would feder-alize the conduct of our elections.Former Federal Election CommissionChair Trevor Potter disagreed in aFeb. 25 letter, citing his credentials atthe FEC. However, as a former chairof the FEC, I know that the FECdoesn’t regulate the conduct of elec-tions, as Mr. Potter intimates; it onlyregulates the financing of politicalcampaigns. It counts the money, notthe votes.
H.R.1 is nevertheless troubling forits fundamental changes to the FEC. Itwould end that agency’s bipartisanstructure that prevents either majorparty from controlling the commissionand using its enforcement and rule-making powers to the partisan detri-
ment of candidates of the other party.The FEC’s present statutory structureprovides that no more than threemembers of the six–member commis-sion may be from the same politicalparty, and requires four votes to findviolations or promulgate regulations,ensuring bipartisan support for thosecritical actions.
H.R.1 would change all that by re-vamping the commission to only fivemembers, with no more than two fromany one party but the fifth potentiallyswing vote ostensibly independent(like Sen. Bernie Sanders is an inde-pendent), appointed by the president,and who would likely be ideologically-aligned with the two partisan mem-bers of the president’s party to forman effectively partisan majority.
Destruction of the present biparti-san structure of the FEC is one reasonthat nine former FEC commissioners,including myself, have submitted a let-ter to Congress opposing H.R. 1.
DARRYL R. WOLDVilla Park, Calif.
An Improvement on the 12thAmendment for Elections
Instead of using John Steele Gor-don’s remedies for the 12th Amend-ment in “The 12th Amendment’sDangerous Defect” (op-ed, Feb. 23),why not totally take Congress out ofthe election process should there bean Electoral College vote tie orthree or more candidates with nonesecuring the needed 270 electoralvotes?
I propose an amendment thatshould no candidate receive the nec-essary 270 votes, the candidate whowon the popular vote would be de-clared the winner. This would stillkeep the Electoral College intact,but should the unlikely occurrenceof a tie or a popular third-partycandidate taking enough votes hap-pen, we won’t have to worry aboutJim Jordan or Alexandria Ocasio-Cortez picking our next president.
JOSEPH H. VERENEAULTMickleton, N.J.
Stimulus Will Kill Jobs andCreate More Dependency
Regarding Casey B. Mulligan andStephen Moore’s “How Many JobsWill the ‘Stimulus’ Kill?” (op-ed Feb.26): The economic effect of losingfive to eight million jobs is only oneaspect of the damage. I appreciatethe authors pointing out the cruel di-lemma presented to workers: losemoney by going back to work. Notonly a Faustian bargain for this andfuture generations, but a sinister ef-fort to buy votes by increasing gov-ernment dependency and robbing cit-izens and their families of the dignitythat comes with work.
DUNCAN MERRITTVestavia Hills, Ala.
“Pains me to say this, but corporateis telling me you’re allowedto wear jeans to work.”
THEWALL STREET JOURNAL
Charging Stations for AllThose New Electric Vehicles
“Keywords: The Electric-Car Revo-lution Needs More Plugs” (Exchange,Feb. 27) discusses more governmentsubsidies to build charging stations.Sorry, more subsidies for the richwho can afford electric vehiclesaren’t the answer. Don’t forget thatabout 80% of charging is done athome and is adequate for local driv-ing. Recent data shows EVs aredriven only about 5,800 miles ayear. EV owners usually have an-other vehicle. Gas-station conve-nience stores, shopping malls andcompanies are adding charging sta-tions even when they aren’t profit-able to attract high-income shop-pers. That is why the DelawarePublic Service Commission and com-missions in other states have de-clared charging a competitive mar-ket with the support of two differentmajor charger suppliers.
DAVID T. STEVENSONCaesar Rodney Institute
Lewes, Del.
Pepper ...And Salt
Democrats to States: No New Tax Cuts
D emocrats in Congress aren’t satisfiedwith spending $1.9 trillion to help bluestates and union friends. They’ve also
launched a sneak attackagainst conservative states.Read their legislation’s lips:No new state tax cuts.
That’s the news from aprovision added last week bySenate Democrats that limitshow states and localities can use their $360billion windfall. States can use the loot to pro-vide government services, cover revenuelosses during the pandemic and “respond tothe public health emergency” or “its negativeeconomic impacts, including assistance tohouseholds, small businesses, and nonprofits,or aid to impacted industries such as tourism,travel, and hospitality.”
Much of the relief will invariably flow to gov-ernment union pension funds, which are under-funded in states like Illinois, New Jersey andConnecticut. To inoculate themselves fromGOPattacks, Democrats specified in the bill that re-lief fundsmay not be used “for deposit into anypension fund.” Butmoney is fungible. States canpay out of their general funds for pensions anduse the federal cash for something else.
But here’s the political gut punch. The bill ex-plicitly bars states from cutting taxes. States“shall not use the funds,” the bill says, “to eitherdirectly or indirectly [our emphasis] offset a re-duction in the net tax revenue” that results“from a change in law, regulation, or adminis-trative interpretation during the covered periodthat reduces any tax (by providing for a reduc-tion in a rate, a rebate, a deduction, a credit, orotherwise) or delays the imposition of any taxor tax increase.”
Wow. Democrats in Washington are tryingto dictate to governors and state legislaturesthat they can’t change their tax laws if they ac-
cept their share of the $1.9 trillion. The sweep-ing prohibition would last through 2024, andthe bill grants Treasury Secretary Janet Yellen
authority to write regulations“as may be necessary or ap-propriate to carry” it out.
The language is so expan-sive that states could be lim-ited frommaking any changesto their tax codes that reduce
revenue even if they don’t use federal funds asdirect offsets. Much will depend on how Ms.Yellen defines “indirectly.” States that don’tcomply with her interpretation will have to re-pay federal funds.
Several states includingWest Virginia, Mis-sissippi, Arkansas and Idaho are considering taxcuts to attract people and business. Some GOPlegislatures also want to start or expand pri-vate-school choice programs that give tax cred-its to businesses and individuals that donatemoney for scholarships. Treasury could saythese policies break the law. Beltway Democratsare essentially barring GOP-led states from im-proving their competitiveness against high-taxDemocratic states.
Democrats in California recently approved$600 stipends for low-income residents and un-documented immigrants, and these and otherhandouts to liberal constituencies appear per-missible under the bill as “assistance to house-holds.” A corporate tax cut? No way.
The constitutionality of this is open to ques-tion. The Supreme Court’s “anti-commandeer-ing” doctrine prohibits Congress from usingfederal funds to coerce states. But even if thetax cut ban doesn’t meet the Court’s legal testof coercion, it’s still an egregious affront to con-stitutional federalism. In the 2020 election,Democrats failed in their goal of retaking state-houses, but now they plan to control them any-way from Washington.
The Covid bill says morespending is fine, but
cutting taxes is barred.
Sheldon Whitehouse vs. Supreme Court
S heldon Whitehouse is at it again. TheSenator who threatened the SupremeCourt with retribution over a gun-rights
case in 2019 is now threaten-ing Congressional action ifthe Justices don’t follow hisorders on how they conductjudicial business.
On Wednesday the RhodeIsland Democrat will hold aJudiciary Committee hearing on “What’sWrongwith the Supreme Court: The Big-MoneyAssault on Our Judiciary.” Subtlety is not Shel-don’s speciality. The hearing is intended to ad-vance his Amicus Act that would force theCourt to change its rules on amicus briefs,which the Justices invite to inform them on thelaw and facts on cases.
Note the disrespect for the Court. The titleof the hearing signals a foregone conclusionthat the Justices are corrupted by money. Thisis a running theme of Mr. Whitehouse, whosepreoccupations in the Senate have been under-mining judicial independence and restrictingthe First Amendment rights of private citizensto influence their government.
The Supreme Court already has arule—37.6—that governs amicus filings. It re-quires that amicus briefs “indicate whethercounsel for a party” involved in the litigation“authored” or “made amonetary contribution”to the preparation of the brief. It further re-quires disclosure of “every person other thanthe amicus, its members or counsel, who madesuch a monetary contribution.”
Mr. Whitehouse wants to go further and re-quire amicus filers to disclose all of their do-nors. This would hit groups on the left andright that aren’t required to disclose their do-nors but have scholars or legal experts whosubmit briefs. The Chamber of Commerce andNAACP would have to disclose all of their do-nors if they want to file briefs. This would de-ter some filers and thus less fully inform theCourt, or it would open donors to these groupsto political harassment—from the likes of Mr.Whitehouse and his political allies.
All of this is almost certainly a violationof the First Amendment right to free associa-tion and speech. The Supreme Court ruled in
NAACP v. Alabama (1958) that forcing donordisclosure can chill such rights. Mr. White-house nods to this concern but claims that
“granting sweeping anonym-ity protections to allmemberorganizations, includingbusiness networks like theU.S. Chamber of Commercewhose corporate membersface no serious threat of re-
prisal for the public expression of their views,simply does not follow.”
In other words, some groups have a right tofree association but others don’t. Mr. White-house will be the judge.
The Senator’s quote comes from a Feb. 23letter he co-wrote with Rep. Henry Johnson(D., Ga.) to the chairman of the Committee onRules of Practice and Procedure of the U.S. Ju-dicial Conference. The committee writes guide-lines for judicial practice, and the letter says“we believe a legislative solution may be in or-der to ensure much-needed transparencyaround judicial lobbying.” The Amicus Act ishelpfully attached.
This is a clear threat that, if the courts don’tfollow his orders, Congress will rewrite the ju-dicial rules. The Amicus Act probably wouldn’tpass today’s 50-50 Senate, but the Senator issending a message to Chief Justice John Rob-erts. The Chief joined the liberals in backingaway from ruling on a New York gun regulationafter Mr. Whitehouse and four other Senatorswrote an amicus brief threatening that theCourt might have to be “restructured” if theJustices ruled the wong way.
We hope the Court ignores these threats,but it can also fight back though the law. TheCourt recently agreed to hear a case challeng-ing California’s donor disclosure rules, Ameri-cans for Prosperity Foundation v. Becerra. TheNAACP, the ACLU and other progressive groupshave joined the Cato Institute and others onthe right in filing amicus briefs against the lawas a violation of their First Amendment rightof association.
If the Justices overturn California’s law,they will send a message to Mr. Whitehousethat his disclosure obsession is way over theconstitutional line.
The Senator threatensthe Justices on amicus-
brief disclosure.
More Defenders of Campus Speech
I t’s not a sign of good fire managementwhen communities start calling on privatefirefighters, and it’s not a sign of health in
American higher education that organizationsdevoted to defending academic freedom areproliferating.
The Foundation for Individual Rights in Ed-ucation has expanded rapidly in recent yearsas threats to campus liberties multiply. In 2015Heterodox Academy emerged to promote view-point diversity in the progressive-dominatedsocial sciences. This week comes the AcademicFreedom Alliance, a cross-ideological group ofscholars who aim to defend faculty members’rights to engage in unpopular speech and ad-vocacy.
The group, announced Monday, says on itswebsite that “ourmembers will defend facultymembers’ freedom of thought and expressionin their work as researchers and writers or intheir lives as citizens.” Some of the 200 mem-bers havewritten for these pages, such as politi-cal scientists Keith Whittington and CarolSwain and the economist Luigi Zingales.
The group is also advised by litigators suchas liberal First Amendment expert FloydAbrams
and the prominent conservative appellate law-yer Paul Clement. “TheAFAwill aid in providinglegal support to faculty whose academic free-dom is threatened by institutions’ or officials’violations of constitutional, statutory, contrac-tual, or school-based rights,” its website says.
The last year of pandemic, lockdown and po-litical upheaval has seen an alarming contractionin political tolerance, not least on campus.Princeton faculty promoted a petition calling for“a committee” to “oversee the investigation anddiscipline” of scholarship deemed racist. Stan-ford’s faculty senate passed a resolution censur-ing Scott Atlas, a formerWhite House coronavi-rus adviser, essentially for political positions.Pressure has grown for academics towithdrawpolitically unpopular papers, including a “sci-ence of science” study of femalementorship bythree NYU-affiliated researchers.
The AFA could put institutional heft andscholarly prestige behind the old-fashionedview that a society is served by free inquiry, notpolitical control of scholarship. The effort mayseemhopeless in the short term, but critics out-side the academy should support thoseworkingto reform from within.
REVIEW & OUTLOOK
OPINION
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THEWALL STREET JOURNAL. Wednesday, March 10, 2021 | A17
I Despised GorbachevUntil I Played His Role
I t’s hard to describe how I feltwhen I received the call. I amPolish. For me and for my coun-
trymen, Mikhail Gorbachev symbol-ized everything we despised in aleader. He was our enemy, the onewho headed a system that tookaway our freedoms, including ourability to travel, associate with oth-ers and express ourselves. But Inever let him and the system herepresented shatter my dreams. Istood in a long line, got my passportto travel the world, and eventuallybecame an actor.
Now I will play Mr. Gorbachev inthe upcoming biopic “Reagan.”
I had mixed emotions when thefilmmakers offered me the role. Thiswas a man I grew up disliking, but Ihad to find a way to get in his head,humanize him, and play the role. Be-fore accepting, I looked for every-thing I could find about Mr. Gorba-chev’s life. I watched interviews,speeches and anything else I couldget my hands on. I read his autobi-ography. I wanted to understandwho he was and is, how he lived hislife, and how he governed. I couldtell right away the job of capturingthis man would be difficult. I love achallenge, so I called the producersand told them I’d take the part.
When I arrived on the set inGuthrie, Okla., I was immediatelyimpressed by what I saw. It was asafe place for actors to explore theirunique characters. I noticed rightaway that producer Mark Joseph
and director Sean McNamara workedvery well together and trusted eachother. But I admit I was still nervousabout how I would play oppositeDennis Quaid, who was playing Ron-ald Reagan. He was humble and gra-cious, and a tremendous bond beganforming between us.
Our first scene together found usat the Geneva Summit in 1985, and Ibegan to see the characters as tworomantics who stood for what theybelieved. We were moving beyondtwo actors having a dialogue. Istarted witnessing Dennis embody-ing Reagan’s character, and the samehappened with myself and Mr. Gor-bachev. By the time we performedour finale, an emotional showdownat Reykjavik, Iceland, in 1986, we hadconnected in a remarkable way. Ourcharacters had gone from yelling andfighting to sharing with each othertheir fears and dreams.
I left the set as an admirer of theincredible team I had a chance towork with. And I learned an impor-tant lesson about how all of us arecapable of growth and change. WhileI don’t and will never support Mr.Gorbachev’s policies, I began to un-derstand more of who he was as aperson. I respect the ways that heworked with Reagan even when theiradvisers told them to cut ties andcontinue fighting. I came to the setof “Reagan” with preconceived ideasabout my character, which meltedaway as I opened my heart to acting.For that I will always be grateful.
Mr. Krupa is an actor.
By Olek Krupa
T he new Covid-19 reliefplan, passed by the Senateover the weekend, includes$123 billion for K-12 publicschools, supposedly to help
them reopen. That’s almost theamount the U.S. dedicated, in realterms, to the Marshall Plan to rebuildEurope after World War II. And it’son top of the mostly unspent $54 bil-lion federal bailout for public schoolsfrom December and the $13 billion al-location from last spring.
Major teachers unions haveclaimed repeatedly that publicschools need gobs of cash to reopenin person. American Federation ofTeachers chief Randi Weingarten pro-tests that “countless places lack theresources to implement the necessarysafety provisions.” But our new anal-ysis suggests funding isn’t the reasonteachers unions are keeping schoolsshut. In fact, our prior work hasfound that union influence, ratherthan scientific concerns about thespread of the virus, is the primarydriver behind reopening decisions.
Private schools have either beenopen for most of the past year orhave been fighting to reopen. Ken-tucky private schools took the fightto the U.S. Supreme Court to returnto in-person instruction, and privateschools in Ohio and Michigan pur-sued similar legal action. A privateschool in Sacramento, Calif., even re-branded itself as daycare to getaround the government’s arbitraryclosures.
Many teachers unions, by contrast,have been fighting to stay at home.The difference is one of incentives.
School Isn’t Closed for Lack of Money
Public schools get their funding re-gardless of whether they open theirdoors.
A study published by Brown Uni-versity’s Annenberg Institute foundthat public schools with more Catho-lic school competition nearby weremore likely to reopen in person in2020. It also found, and three otherstudies confirm, that public schooldistricts with stronger teachersunions are substantially less likely toreopen in person.
Our new analysis throws anotherwrench in the teachers union narra-tive. We examine data from morethan 12,000 school districts nation-wide, covering more than 90% ofschool-age children, and find no evi-dence to suggest that higher revenueor expenditures per student are asso-ciated with a higher probability ofreopening schools for in-personlearning.
Instead, we find that public schoolfunding is either uncorrelated oreven negatively correlated with in-person instruction. Some models sug-gest that schools that went fully re-mote were better off financially thantheir in-person counterparts in thesame state.
These results hold across variousanalytic techniques and specifica-tions that control for district size and
a rich set of county-level demograph-ics such as political tendencies,Covid-19 risk, household income, edu-cational attainment, and race and agedistributions.
Like other studies, ours didn’t finda consistent negative relationship be-tween Covid-19 risk in the communityand the probability of reopening inperson. School reopening was stronglyrelated, however, to county-level vot-ing patterns in the 2016 election.
The contrast between Florida andCalifornia is a prime example. Thismonth’s data from Burbio indicatesthat in Florida, which spends about$10,700 a student each year, nearlyall public schools offer full-time in-person instruction. In California,which spends about 38% more perstudent and has much strongerteachers unions, most public-schoolstudents still don’t have access to in-person learning options.
Another analysis, from researchersat Georgetown University, found thatpublic school districts that decided toteach remotely generally had finan-cial surpluses. The researchers esti-mated that Los Angeles publicschools, which opted to keep theirdoors shut, had a more than $500million funding surplus, or about$1,100 a student, for the 2020-21school year.
The Congressional Budget Officeestimates that only about 5% of the$123 billion in school “relief” fundingwill be spent this fiscal year, whilethe rest would be paid out through2028. If the goal is to reopen schoolsin person now, and the relief moneyis urgently needed, then why spendup to 95% of the money after the pan-demic? And why did Senate Demo-crats vote unanimously to block anamendment from Missouri Republi-can Roy Blunt that would have maderelief funding conditional on reopen-ing schools in person if all teacherswere vaccinated?
Something doesn’t add up. FromVirginia to California, some schooldistricts have opened public-schoolbuildings for in-person child-careservices but not for in-person learn-ing. A California teachers unionleader working to delay school re-opening took his own daughter to anin-person private preschool. A Chi-cago union leader urged teachers torefuse to return to the classroomwhile vacationing in Puerto Rico.
This suggests that the school re-opening debate has always been moreabout politics and power than safetyand the flourishing of the next gener-ation. For that, children have paid theconsequences and will continue topay in the decades ahead. Parents ha-ven’t had it easy either.
The basic problem isn’t new: In-centives are misaligned. Taxpayersfund schools rather than students.The only way to fix the system is togive families real options by fundingstudents directly and letting themchoose where to spend the educationdollars. This would force schools torespond to the needs of students, notthe other way around.
Mr. DeAngelis is director of schoolchoice at the Reason Foundation, ex-ecutive director at the EducationalFreedom Institute and an adjunctscholar at the Cato Institute. Mr.Makridis is a research professor atArizona State University, a nonresi-dent fellow at Baylor University anda senior adviser at Gallup.
By Corey A. DeAngelisAnd Christos A. Makridis
ROBY
NBE
CK/A
FPVIA
GET
TYIM
AGES
Teachers union influence,not government funding orthe latest science, drivesreopening decisions.
A student learns remotely in Culver City, Calif.
OPINION
The U.S.Needs MoreFederalJudges
By Thomas Berry
D emocrats and Republicansagree the U.S. needs morefederal judges to keep up
with expanding caseloads. But theyhaven’t taken action because of par-tisan differences over when to cre-ate them. Congress hasn’t autho-rized a new appellate judgeshipsince 1990 or a new permanent dis-trict court judgeship since 2003.
The culprit is an increasingly po-larized and partisan judicial confir-mation process. It is no coincidencethat new appellate judgeships driedup soon after Robert Bork’s 1987Supreme Court confirmation hear-ing. In an environment where judi-cial philosophy increasingly corre-lates with the party of the presidentmaking the appointment, both sideshave concluded that it’s better tohave no new judgeships than to leta president of the other party fillthe vacancies.
In 2018 a Republican-sponsoredbill called the Judiciary ROOM Actwould have created 52 new districtjudgeships, following the recom-mendation of the Judicial Confer-ence of the U.S. Opposing the bill,Rep. Jerrold Nadler (D., N.Y.), nowchairman of the House JudiciaryCommittee, said it would give “52new opportunities for the presidentto pack the federal courts with ex-tremist judges.” Rep. David Cicil-line (D., R.I.) called it “an effort topack the courts with ideologicallydriven individuals.” Now that Presi-dent Biden has been inaugurated,the roles have reversed: Republi-cans are pumping the brakes onnew judgeships.
There’s a way out of this im-passe. In 2018 Rep. Jamie Raskin(D., Md.) offered a compromise: cre-ating the new judgeships in 2021,after the next presidential inaugura-tion. That way, Mr. Raskin said,“neither side will know who is go-ing to be president of the UnitedStates, and this will not proceed asa court-packing plan by one party.”Mr. Nadler agreed: “The decision toadd new judges can be made on abipartisan basis without knowingwho will ultimately be in control ofthe nomination and confirmationprocess.”
The Judiciary Committee adoptedMr. Raskin’s amendment and favor-ably reported the Judiciary ROOMAct. In a recent hearing, Republicanrepresentatives including Ohio’sSteve Chabot and California’s Dar-rell Issa expressed potential supportfor a compromise modeled on Mr.Raskin’s proposal.
But delaying the entire batch ofnew judgeships—the Judicial Con-ference now recommends 70—to2025 may not be enough. Lawmak-ers from both parties will be waryof potentially giving the oppositiona windfall akin to the one in 1978,when an omnibus judgeship act gavePresident Jimmy Carter 145 new va-cancies to fill. That might have beena factor in the 2018 ROOM Act’sfailure to receive a vote by the fullHouse. Such an approach would alsorisk further politicization of the ju-diciary by giving outsize importanceto a single election.
A better course is to spread newjudgeships evenly across severalterms, starting immediately. A singlebill creating four new judgeships ayear for the next 16 years would giveMr. Biden some immediate appoint-ments, which could be used for thosedistricts where the caseload crisis ismost acute. But it would also give anequal number of new vacancies tothe winners of the next three presi-dential elections, most likely givingat least some appointments to presi-dents of both parties.
During the recent judgeshipshearing, Duke Law Professor MarinK. Levy noted that “all the othertimes in which we have addedjudgeships to the courts of appeals,we have not staggered them.” Butperhaps the failure to pass anyjudgeship bill in recent decades isevidence that the old way is no lon-ger feasible. Delaying some of thenew judgeships to future termswould give both sides a fair chanceto benefit and give a judgeship billa real chance of becoming law.That’s better than waiting another30 years.
Mr. Berry is a research fellow inthe Cato Institute’s Robert A. LevyCenter for Constitutional Studiesand managing editor of the Cato Su-preme Court Review.
Neither side wants to givethe other an appointmentwindfall, but there’s a wayto break the impasse.
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Biden’s $1.9 Trillion Great Society RemakePresident Biden ispoised to put hissignature to what isarguably the largestexpansion of thewelfare state sinceLyndon Johnson’sGreat Society. Andif past is prologue,liberals are poisedto take credit forany positive trend
lines that follow implementation,regardless of whether credit iswarranted.
Even the Biden administrationhas come around to acknowledgingthat its Covid-19 relief package—the“most progressive piece of legisla-tion in history,” White House presssecretary Jen Psaki bragged theother day—has little to do directlywith Covid. The Journal reports thatonly $50 billion, or 7% of the $1.9trillion price tag, is directed at test-ing and contact tracing, and only$16 billion is earmarked for vaccinedistribution. Most of the rest con-sists of state bailouts, student-debtrelief and various income-redistri-bution schemes involving tax cred-its, health-insurance subsidies andunemployment benefits.
Likewise, the Great Society’s am-bitions extended well beyond thewar on poverty and included pro-grams designed to address racial in-justice, healthcare, immigration andenvironmental conservation. To-day’s liberals also share with their1960s precursors an abiding beliefthat government is best suited tohelp the underprivileged. The objec-tive is to widen by as much as pos-sible the eligibility requirements forpublic assistance and then ask aslittle as possible from the recipientsin return.
Johnson’s stated goal was a re-duction in dependency, not simply aredistribution of wealth to the poor.“The days of the dole in our countryare numbered,” he declared in 1964.
Alas, the opposite occurred. Afterhis antipoverty programs were im-plemented, the proportion of peoplewho relied on government aid tostay above the poverty line in-creased, a sharp reversal of the pre-Great Society trend.
Poverty rates at the time tell asimilar story. It’s true that privationfell under Johnson in the 1960s, butthat had already been happening formore than a decade before his war
on poverty began. The poverty ratewas approximately 30% in 1950 buthad dropped to 18% by 1964. More-over, as the scholar Charles Murraydetailed in his landmark study,“Losing Ground,” the poverty ratewould start to increase in the 1970s,after two decades of steady decline,and even as Johnson’s successorsthrew more and more money at cre-ating new antipoverty programs orexpanding the existing ones.
“The real [inflation-adjusted]annual expenditures of the 1970swere far larger—by many orders ofmagnitude, for some of the pro-grams—than expenditures in thesixties,” Mr. Murray wrote. Yet “thenumber of people living in povertystopped declining just as public-as-sistance program budgets and therate of increase in those budgetswere highest.”
This history won’t sway the ideo-logues who believe in cradle-to-grave entitlements, or the politi-cians who believe that spendingmoney—even counterproductively—is the way to win elections. But theexperience of the 1960s should helptemper expectations for the rest of
us. And it ought to give pause tothose Republicans and conservativethinkers who now argue that GOP-style government interventions—inthe form of higher minimum wages,tax credits or guaranteed basic in-come—will somehow work betterthan the Democratic versions.We’ve already gone some distancedown this road, and the laws ofeconomics don’t care which partyyou belong to.
History shows that no govern-ment program has been able tomatch what people can do for them-selves, and this applies equally tosome of society’s most historicallymarginalized groups. No Great Soci-ety program was ever able to matchthe rate of progress made byblacks—in poverty reduction, in-come, homeownership or other mea-sures—before that program’s imple-mentation. Instead of helping,welfare-state expansions too oftenbecome lures and traps, inflictingdamage that can last generations.
Democrats insist that the so-called stimulus is necessary to help
the unemployed find work, but whatworking parents most need areschools to reopen, and what’s hold-ing businesses back are lockdownrules that keep away potential cus-tomers. Liberals say the reliefchecks will give people money tospend. But the personal savings ratein 2020 was the highest in 50 years,which suggests that consumers al-ready have money to spend but fewplaces to spend it until the economyfully reopens.
It is quite possible that a yearfrom now, if not sooner, the U.S.economy will be thriving, kids willbe back in school, parents will beback to work, and the virus will beunder control. Democrats will citethe bloated Covid-relief package asthe reason. But the country was al-ready experiencing generationallows in poverty and unemploymentbefore the pandemic, and wageswere rising fastest for the workingclass. A lot of people may not re-member what was going on in the1960s, but Democrats are hopingthat they won’t remember 2019.
The Covid relief package isthe largest expansion ofthe welfare state sinceLBJ’s signature program.
UPWARDMOBILITYBy Jason L.Riley
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A18 | Wednesday, March 10, 2021 THEWALL STREET JOURNAL.
Argentine farmer Javier Ro-tondo says he should be reap-ing a historic bounty withgrain prices surging to theirhighest level in years.
Instead, he reduced his corncrop by 20% after authoritiestemporarily suspended exportsto reduce food prices, one ofseveral measures by Argentina’sleftist government that econo-mists say are suffocating busi-ness. Mr. Rotondo expectsto take on debt to pay a newwealth tax, and he is bracing forprice controls after PresidentAlberto Fernández recentlywarned ranchers that risingbeef prices won’t be tolerated.
“There’s a lot of uncer-tainty. They are implementingcrazy policies that don’t makemuch sense,” Mr. Rotondosaid. “There will be less in-vestments, less production,and that’ll be very negative.”
Three years into a grindingrecession, Argentina’s econ-omy is in the worst shape ithas been since a 2001 debt de-fault that led to rioting anddeaths in the streets. ForMr. Fernández, the solution isto kick-start the economy andtax a prosperous farm sectorand wealthy individuals, whileavoiding austerity measuressuch as cutbacks to billions ofdollars a year in subsidies.
“Industry will be the motorof the country’s reconstruc-tion,” the president has said.
The challenges aresteep. The country’s total stock-market valuation has collapsedfrom $350 billion in 2018 to$20 billion last year, accordingto EcoGo, an economic consult-ing firm. The economy shrank10% in 2020, one of the world’sworst contractions during thepandemic. Poverty has risen tomore than 44%, according tothe Catholic University, the
highest since the early 2000s.Business owners—from tech
titans to airline executives andthe farmers and ranchers whopower what was once one ofthe world’s wealthiest na-tions—say they see little hopefor a recovery in Latin Amer-ica’s third-biggest economy.
“I’m not sure where growthwill come from,” said EduardoLevy Yeyati, a former central-bank chief economist and deanof Torcuato di Tella Univer-sity’s School of Government inBuenos Aires. The governmentdoesn’t have the resources tostimulate the economy, hesaid, “and businesses are pull-ing back on investments.”
Debt payments are loomingand Argentina is virtuallybroke, with just $5 billion incash and gold reserves, half ofwhat is on hand in neighbor-ing Uruguay, whose populationis 8% of Argentina’s 45 million.
beans, wheat and corn. Thegovernment last year paid upto 50% of the salaries of work-ers at tens of thousands ofsmall businesses. It also hasrestricted corporations fromaccessing dollars needed toservice foreign debt.
The government says themeasures will protect jobs andhouseholds struggling with a36% inflation rate. The econ-omy is starting to recover, Fi-nance Minister Martin Guzmánsaid in an interview. He ex-plained that capital controlsare needed to prevent a deple-tion of reserves. “It is a rem-edy to a worse evil,” he said.
Several foreign companies,including Walmart, Nike and re-gional airline Latam, have aban-doned Argentina. Some of thecountry’s most successful entre-preneurs have packed their bagsfor Uruguay, which offers whatArgentina doesn’t: A business-
friendly and stable economy.“The day-to-day became un-
bearable,” said Marga Clavell, aHarvard-trained corporate law-yer who moved to Uruguay inOctober. “There is a feeling likethe country is closing itself offto the world, once again.”
The ban on firing workerswas intended to protect jobsduring the start of the pan-demic when the governmentenacted a strict lockdown. Buta year later, business ownerssay it is saddling them withmore costs in what alreadywas a restrictive labor market.
“It is really serious, it’s a bigproblem for the economy,” saidBlas Briceño, the chief execu-tive of Finnegans, a softwarecompany. “We have peoplewho are not performing, whoare not adequate for the posi-tion, but we can’t let them go.”
Mr. Fernández, a member ofthe nationalist Peronist move-
Opposition protesters scuffled with police outside Armenia’s parliament in the capital Yerevan on Tuesday, pressing their demand that Prime Minister Nikol Pashinyan resign.
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BY RYAN DUBE
WORLDWATCH
INDO-PACIFIC
Bloc Against ChinaTo Meet Virtually
President Biden will meet vir-tually on Friday with the leadersof Australia, Japan and India, hisfirst joint conversation with thefour-nation group known as theQuad that has sought to counterChina’s regional influence.
“That President Biden hasmade this one of his earliestmultilateral engagements speaksto the importance we place oncollaboration with our allies andpartners in the Indo-Pacific,”White House press secretaryJen Psaki said Tuesday.
Ms. Psaki said the leaderswould discuss climate change,economic cooperation and thecoronavirus pandemic, but shemade no direct mention of China.
Since taking office, Mr. Bidenand his top advisers have beenlaying the foundation of a strat-egy to work with foreign allies toconfront Beijing. The Quad is astrategic group seen as a bulwarkagainst Chinese expansionism.
During a recent phone meet-
ing, Secretary of State AntonyBlinken and his counterparts inthe group committed to workingtogether on the coronavirus pan-demic and to countering Chineseterritorial and maritime claims.
Established in part to helpwith disaster relief in the Indianand Pacific Oceans, the Quad—orQuadrilateral—has increasinglyfocused on military coordinationand exercises, as well as com-bating the Covid-19 pandemic.Japan and Australia are U.S.treaty allies, and India has in-creasingly worked with Wash-ington on defense, including af-ter a deadly border skirmishwith Chinese forces last year.
—Andrew Restuccia
ARMENIA
Opposition Pushes toOust Prime Minister
Thousands of opposition sup-porters blockaded the Armenianparliament building on Tuesday topress a demand for the country’sprime minister to step down.
Nikol Pashinyan has rejectedthe opposition’s pressure to re-
sign over a November peace dealthat ended six weeks of fiercefighting over the Nagorno-Kara-bakh region, in which Azerbaijanrouted the Armenian forces.
The tensions escalated lastmonth when the military’s GeneralStaff demanded Mr. Pashinyan’sresignation, and he responded byfiring the chief of the GeneralStaff, Col. Gen. Onik Gasparyan.
On Tuesday, the oppositionsought to build pressure on Mr.Pashinyan by urging its support-ers to blockade the parliament.Thousands of opposition demon-strators surrounded the parlia-ment building and engaged inoccasional scuffles with police.
Mr. Pashinyan has faced op-position demands to resign sinceNov. 10 when a Russia-brokeredpeace deal ended 44 days of in-tense fighting in Nagorno-Kara-bakh that killed more than6,000.
The agreement saw Azerbai-jan reclaim control over largeparts of Nagorno-Karabakh andsurrounding areas that had beenheld by Armenian forces formore than a quarter-century.
—Associated Press
SPAIN
Three EU LawmakersLose Immunity
The European Parliament onTuesday lifted the immunity ofthe former president of Spain’sCatalonia region, Carles Puigde-mont, and two of his associates,a move that could pave the wayfor their extradition and reopenthe scars of separatism in Spain.
The Spanish governmentwelcomed the decision by theEuropean Union’s legislature as avictory for the rule of law andagainst those who sought tobreak the region away from therest of Spain. The decision willlikely also extend the legal sagaby months, if not years, sincemany avenues for appeal remain.
Mr. Puigdemont and a numberof his separatist colleagues fledto Belgium in 2017, fearing arrestafter holding an independencereferendum for Catalonia thatthe Spanish courts and govern-ment said was illegal. In 2019, heand his two associates, ToniComín and Clara Ponsatí, wonseats in the European Parliament
and were afforded protection asmembers of the EU assembly.
—Associated Press
TUNISIA
Migrants’ Boat SinksOff Coast, 39 Killed
Thirty-nine African migrants,including several children, perishedat dawn on Tuesday off the Tuni-sian coast after a boat carrying93 people sank, authorities said.
Their bodies were recoveredby relief units in the waters offthe Mediterranean port city ofSfax in southern Tunisia, thespokesman for the Tunisian Na-tional Guard, Houssameddine Jeb-abli, said.
A second boat also ranaground in the same area. Navyand coast guard teams and vol-unteer fishing boats found 39bodies and rescued a total of165 migrants from both vessels,according the Tunisian DefenseMinistry. Most of the migrantswere from sub-Saharan Africancountries, and the boats were enroute to Italy, Mr. Jebabli said.
—Associated Press
Facing the crisis, Mr. Fernán-dez’s government is imple-menting interventionist policiesthat will undermine hopes ofincreasing investments neededto generate employment, saidCarlos Melconian, an economistand former chief of the coun-
try’s top state-run bank.“The measures are going to
fail,” he said. “There are no in-vestments.”
Argentina has banned com-panies from laying off work-ers, frozen telecom prices andincreased export taxes on soy-
The economy shrank10% in 2020, one ofthe worst pandemiccontractions.
LONDON—Queen Elizabethexpressed concern about alle-gations of racism in the royalranks raised by Prince Harryand Meghan Markle this week,but said the royal familywould address them privately.
In an interview with OprahWinfrey broadcast Sunday, theDuchess of Sussex spoke offeeling suicidal while workingin the palace and said a mem-ber of the royal family voicedconcerns about how dark herunborn child’s skin would be.
On Tuesday, BuckinghamPalace issued a statement onbehalf of the queen saying “theissues raised, particularly thatof race, are concerning. Whilesome recollections may vary,they are taken very seriouslyand will be addressed by thefamily privately.” They addedthat the couple will always be“much loved family members.”
The statement appeared toexclude a full-blown probeinto the allegations of racismin royal circles and insteadaimed to draw a line under abubbling crisis that has sweptthe monarch since Sunday.
During the two-hour inter-view, the Duke and Duchess ofSussex said they had experi-enced racism before and dur-ing their 2018 marriage.Prince Harry said that dis-crimination in Britain was a“large part” of the couple’s de-cision to relocate from theU.K. to the U.S. last year.
The interview hasn’t mean-ingfully swung public opinionagainst the royals in the U.K. Apoll conducted by YouGov af-ter the program showed that36% of British adults said theirsympathies mostly lie with thesenior royal family members,while 22% back the Sussexes.A third said they had sympa-thy with neither side.
Surveys also showed thatthe nation is divided along agelines, with people under 50backing the Sussexes andthose older siding with seniorfamily members.
BY MAX COLCHESTER
MonarchyTo AddressAllegationsPrivately
ment, inherited a highly in-debted economy upon takingoffice in December 2019. Acurrency crisis had forced hispredecessor, Mauricio Macri,to request a bailout from theInternational Monetary Fund,which now seeks payment on$44 billion.
Mr. Fernández is bettingthat the global economic recov-ery will mean higher prices forgrain exports, helping rebuildreserves. The idea is to spend,even if it means acceleratingthe money printing that hassustained Argentina thus far.
There have been somegains. Whirlpool has plans toopen a new plant that the gov-ernment says would create1,000 jobs. Canada’s Lundinmining company said in Febru-ary it will invest $3 billion tobuild a gold and silver mine.
Mr. Guzmán, the financeminister, said the economyshould grow fast enough thisyear to reduce the fiscal defi-cit to 6% of gross domesticproduct from 8.5% in 2020.
Some of Argentina’s mostimportant companies are reel-ing. In February, state oil com-pany YPF was pushed to thebrink of its first default after itcouldn’t access dollars to pay$413 million in debt. Privatecreditors agreed to restructure.
WORLD NEWS
Argentina’s Economy Slows to a CrawlPresident aims to liftcountry out of thecrisis by taxing the richand the farm sector
Three years into a recession, Argentina’s economy is in the worst shape it has been since a 2001 debt default.
TECHNOLOGY: DISNEY+ REACHES MORE THAN 100 MILLION SUBSCRIBERS B4
S&P 3875.44 À 1.42% S&PFIN g 0.86% S&P IT À 3.41% DJTRANS À 0.48% WSJ$ IDX g 0.53% LIBOR3M 0.177 NIKKEI (Midday) 29040.82 À 0.04% Seemore atWSJ.com/Markets
BUSINESS&FINANCE
BUSINESS NEWSDick’s expectssales to ease
after growth duringthe pandemic. B3
PROPERTY REPORTReal-estate investors
from the U.S.have a taste
for British pubs. B6
Cyclical stocks, thosemost sensitive to short-runeconomic growth, have beendoing well since Covid-19vaccines raised hopes of eco-nomic reopening. The stimu-lus trade accelerated in Feb-ruary as it became clear thatPresident Biden’s $1.9 trillionpackage would pass. Cyclicalstocks such as airlines andoil companies, commoditiessuch as oil and copper, andbond yields all soared.
Exxon is what a winnerlooks like in this new worldof stimulus-driven demand.Oil is the most sensitivecommodity to global con-sumption, and everywhere isheading for reopening thisyear. As demand picks up, sodoes the price.
Exxon has such high fixedcosts and had such an awfulyear last year—revenuefailed to cover its costs evenbefore a $20 billion write-
down of the value of its as-sets—that any rise in reve-nue falls almost entirely tothe bottom line. It has a lotof what investors call oper-ating leverage, which hasjust the same effect as a lotof borrowing: Every extradollar of revenue has a muchgreater effect on its earningsthan for a company wherecosts are variable.
Last year’s weakness meansPleaseturntopageB11
The pact would put gameson ESPN’s TV channels andcontinue to keep the NHL onESPN+, people close to thecompany said.
Currently, Comcast Corp.’sNBCUniversal is the biggesttelevision partner of the NHLin the U.S. It has a 10-yearpact valued at $2 billion thatexpires at the end of this sea-son.
NBCUniversal is also inPleaseturntopageB2
Walt Disney Co.’s ESPN isclosing in on a long-termrights deal for NationalHockey League games thatwould bolster both its cableplatforms and its ESPN+streaming service, people fa-miliar with the matter said.
An agreement between theNHL and ESPN could be un-veiled as early as this week,the people said.
BY JOE FLINT
ESPN Nears Deal forRights to NHL Games
agreement is likely weeksaway and Conagra could endup keeping the business orselling it to someone else, thepeople cautioned.
Conagra in April 2019 saidHebrew National’s sales overthe previous year were $170million, and Egg Beaters’ were$78 million.
But the kosher hot dog’spopularity and cultural cachetranscend the brand’s size,thanks in part to its long-run-ning slogan, “We answer to a
higher authority.”Conagra, which has a mar-
ket value of around $17.6 bil-lion, has been retooling itsportfolio to boost its frozenfood and snack brands such asHealthy Choice and Slim Jim.
For JBS, the biggest beefprocessor in the U.S., buyingthe business would expand itsreach into grocery store meatcases when consumers haveshifted their food-buying pref-erences toward supermarketsand away from sit-down res-
taurants.JBS has a market value of
over $12 billion and derivesmost of its revenue from theU.S., where its businesses in-clude the Swift beef and pork-processing company and Pil-grim’s Pride, the nation’ssecond-largest chicken sup-plier.
Should JBS clinch the deal,it would expand its portfolio ofconsumer brands, which thecompany aims to build. Name-brand meat products tend to
carry higher profits than bulkmeat sold to restaurants andto supermarkets. In February2020,
Hebrew National’s kosherfranks were first sold in NewYork City in 1905, and Conagraacquired the brand’s parentcompany in 1993. Over the de-cades, the all-beef hot dogshave become a staple at base-ball stadiums and backyardcookouts.
—Annie Gasparrocontributed to this article.
Hebrew National may soonanswer to a different authority.
Conagra Brands Inc. is intalks to sell the famous hotdog brand to Brazil’s JBS SA,people familiar with the mat-ter said.
A deal, which the peoplesaid could also include the EggBeaters and Odom’s TennesseePride brands, could be valuedat around $700 million. Any
BY JACOB BUNGEAND CARA LOMBARDO
Conagra in Talks to Sell Hebrew National to JBS
STREETWISE | By James Mackintosh
‘Sell Tesla, Buy Exxon’ Explains the MarketFrom the
start of Feb-ruary to Mon-day’s close,Tesla wasdown almost
30% and Exxon Mobil upmore than 30%, a stunningreversal of the pattern sincethe start of last year.
It would be easy to con-clude that oil is back in fash-ion and electric cars are sud-denly passé. But the first isonly partly true and the sec-ond clearly false. In fact themoves reveal two biggertrends: the stimulus-driveneconomy and its effect onbond yields.
Tesla is a bet on the longterm and Exxon is a bet onthe short term. Last year, in-vestors were convinced tolook to the long run by acombination of awful short-run prospects and the Fed-eral Reserve’s crushing of in-terest rates and bond yields.Since November, investorshave increasingly focused onshort-run profits as bothtrends reverse, although onTuesday the sensitivity toTreasurys showed up in theother direction as a sharpdrop in yields helped Teslastock leap 20%.
accepting more than $1 billionin financing from the SaudiPublic Investment Fund in2018, according to people fa-miliar with the matter.
The plant promise repre-sents a significant investmentcommitment for the startup,which hasn’t yet sold a carfrom its one existing factory inArizona. It is also a potentialboon for Saudi Arabia, whichhas struggled to lure Westerncompanies to the country afterthe 2018 murder of Saudi jour-nalist Jamal Khashoggi.
Last month, Lucid agreed toa SPAC merger, a deal that ifconsummated would allow itto trade publicly later thisyear. The merger agreementvalued the Silicon Valleystartup at about $24 billion.
Lucid hasn’t discussed theSaudi car plant plans publicly,but at least one big, institu-tional investor that has agreedto invest as part of the SPACdeal was told about them, ac-cording to people familiarwith the discussion.
A Lucid Motors spokesper-
son said it “expects to estab-lish manufacturing facilities inmultiple geographies, includ-ing Asia-Pacific, the MiddleEast and potentially Europe inthe coming years.” Thespokesperson said the com-pany’s “near-term priority” isbeginning production laterthis year at its Arizona facility.
Spokespeople for ChurchillCapital Corp. IV, the SPACthat agreed to merge with Lu-cid, and PIF didn’t return re-quests for comment.
Churchill Capital is run by
former Citigroup Inc. invest-ment banker Michael Klein. Hehas worked for years as a fi-nancier in the Middle East andadvised Saudi Arabia on the2019 local listing of SaudiArabian Oil Co., or Aramco.
PIF, a Saudi Arabia sover-eign-wealth fund, first agreedto invest more than $1 billionin Lucid in 2018. It has agreedto boost that investmentthrough Lucid’s SPAC merger,and it recently provided theauto maker with $600 million
PleaseturntopageB5
Electric-car startup LucidMotors Inc. has an undis-closed commitment to build anassembly plant in Saudi Ara-bia, a potentially costly prom-ise the company made after
BY SUMMER SAIDAND BEN FOLDY
Startup Committed to Saudi PlantE-car maker LucidMotors accepted $1billion, didn’t widelydisclose agreement
BRUSSELS—The EuropeanUnion is pledging more than$150 billion to develop next-generation digital industriesthis decade as it seeks to re-verse a widening gap with theU.S. and East Asian rivals inadvanced technologies likechips and artificial intelligence.
Funded as part of the EU’s$2 trillion Covid-19 economicrecovery package, the new“Digital Compass” aims to sig-nificantly boost the bloc’s tech-nological autonomy by 2030.
Europe’s need to improvewhat politicians have termeddigital sovereignty was high-lighted by trade disputes withthe U.S. under former PresidentDonald Trump and growinggeopolitical tensions with China.Over the past year, supply-chainbottlenecks from coronaviruslockdowns and a shortage ofmicrochips crucial to the auto-motive industry—a pillar of theregion’s economy—have furtherincreased Europe’s awareness ofits industries’ reliance on othereconomies for daily essentials.
“We need to become lessdependent on others when itcomes to key technologies,”said European Commission Ex-
PleaseturntopageB4
BY DANIEL MICHAELSAND STU WOO
EU Plots a Course to Boost Its Digital Sector
A display by the Dutch firm NXP in Las Vegas. The EU is pledging more than $150 billion to develop chip manufacturing and AI.
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The flashiest trend in fi-nance traces back three de-cades to a pair of old law-school buddies. Now, they arefinally cashing in.
Investment banker DavidNussbaum and lawyer DavidMiller—known to each other as“Nuss” and “Miller”—inventedthe special-purpose acquisitioncompany in 1993 to give pri-vate firms another way to ac-cess everyday investors. SPACswere rarely used and obscurefor much of their careers butare now all the rage—attractingthe biggest names in finance,technology and entertainment.Messrs. Nussbaum and Millerhave never been busier.
“It’s taken me 27 years tobecome an overnight sensa-tion,” said Mr. Nussbaum, a 66-year-old from Roslyn, N.Y., whoco-founded the SPAC-focusedinvestment bank EarlyBird-Capital Inc.
Also called blank-check com-panies, SPACs are shell firmsthat list on a stock exchangewith the sole purpose of com-bining with a private company
PleaseturntopageB5
BY AMRITH RAMKUMAR
Pioneers ofSPACs ReapThe Rewards
INSIDE
Technology stocks re-bounded Tuesday and treatedthe Nasdaq Composite to itsbest session in more than fourmonths, a day after the indexslid into correction territory.
Investors appeared to bar-gain-hunt, pouncing on stocksthat had been beaten downover the past several weeks.Shares of Tesla, Roku andSquare all rose by double-digitpercentages, while tech’sheavyweights, Apple, Ama-zon.com and Facebook, eachadded more than 3%.
At the same time, a selloff ingovernment bonds paused forthe first time in five sessions.The yield on the 10-year Trea-sury note ticked lower to1.545%. It had ended the previ-ous day at 1.594%, the highestlevel in more than a year.
The stabilization in bondPleaseturntopageB11
BY MICHAEL WURSTHORNAND CAITLIN OSTROFF
TechStocksStageRebound
P2JW069000-6-B00100-1--------XA
B2 | Wednesday, March 10, 2021 * * * * * * THEWALL STREET JOURNAL.
INDEX TO BUSINESSESThese indexes cite notable references to most parent companies and businesspeoplein today’s edition. Articles on regional page inserts aren’t cited in these indexes.
Social Finance.............B3SoftBank.....................A1Southwest Airlines ....B2Stitch Fix.............B5,B12
TTencent......................B11Tesla............................A1Tishman Studio ..........B6T-Mobile US................B1TSG Consumer Partners.....................................B6
U - VUber Technologies......A8ViacomCBS..................B4View............................A8Virgin Galactic............A1VTS..............................B6
W - XWalt Disney................B4WeWork Companies...A8Xiaomi.......................B11
INDEX TO PEOPLE
BUSINESS & FINANCE
the plane makers to place air-craft.”
Boeing declined to com-ment. The aircraft maker haspreviously said it worksclosely with lessors, whichcompany executives saidhelped the industry by movingplanes around to meet de-mand. Airbus said it main-tained a good relationshipwith AerCap and Gecas anddeclined to comment on anypotential transaction.
The aircraft-leasing indus-try developed in the 1970s, ini-tially serving weaker airlinesthat couldn’t afford to buyplanes themselves. Lessors or-der in bulk and secure cheaperfunding, passing on some ofthe savings to airlines. Carri-ers rent planes, usually forfive to 12 years, rather than
buying them outright, keepingdebt off their balance sheets.
The business has now gonemainstream. Delta Air LinesInc., JetBlue Airways Corp.and Southwest Airlines Co.are among carriers sellingplanes they ordered themselvesto leasing companies and rent-ing them back. That relation-ship has made big aircraft-leas-ing companies a vital source ofcash for airlines over the pasttumultuous year. The jet salesraised billions of dollars, withthe cash boost coming on topof lessors agreeing to defersome rent on existing planes.
“I believe that without usand the leasing community,the airline industry would bein far worse shape than it istoday,” John Plueger, chief ex-ecutive of Air Lease Corp., a
big aircraft lessor, said on aninvestor call last week,
With more than 900 aircraftowned or managed for otherinvestors, Gecas is surpassedonly by AerCap in fleet size.
It leases passenger aircraftmade by Boeing and Airbus—many with GE-made engines—as well as regional jets andcargo planes to customersranging from flagship airlinesto startups. Gecas had $35.9billion in assets as of Dec. 31.
AerCap has a market valueof $7.5 billion and around1,050 aircraft owned or man-aged as well as almost 300 onorder. The company has expe-rience in deal making, payingaround $7.6 billion in 2014 tobuy International Lease Fi-nance Corp. from American In-ternational Group Inc.
Still, the aircraft-leasingmarket remains fragmented,likely lessening the chance ofan antitrust challenge to acombination.
A merged AerCap and Gecasentity would have around 7%of the global jetliner fleet and4% of Airbus and Boeing or-ders, according to Jefferies.
The big leasing companieshave concentrated their buy-ing on the most popularplanes, including the AirbusA320neo and Boeing 737 MAXnarrow-body jets most com-monly used on domestic andshorter routes. Their fleets ofwide-body jets used on inter-national routes consist mainlyof Airbus A350s and Boeing787 Dreamliners.
This concentration allows
lessors to shuttle the planesbetween customers if demanddrops in one region, even re-possessing them if a carriergets into trouble.
The leasing companies usu-ally don’t want to buy thefirst planes off the productionline, which can have teethingproblems.
Aircraft-leasing companiesalready account for half theworld’s jetliner fleet, and adeal that would combine thetwo largest players is expectedto have knock-on effects forairlines and the two dominantplane makers, Boeing Co. andAirbus SE.
On Tuesday, AerCap Hold-ings NV said it was in discus-sions with General ElectricCo. about its GE Capital Avia-tion Services leasing unit. GEdeclined to comment. A dealwould create a leasing com-pany with more than 2,000planes and an additional 500on order, renting to hundredsof carriers.
The Wall Street Journal re-ported Sunday that AerCapwas in talks to combine withGecas in a deal valued at morethan $30 billion.
The creation of a new indus-try giant figures to do twothings. It could mean airlinesget better deals on planes, as alarger leasing company canwrangle lower prices from Air-bus and Boeing. It could alsointensify long-simmering com-petition between lessors andplane makers trying to secureorders from carriers as theylook beyond the pandemic-driven travel downturn that hasleft thousands of planes parked.
“It’s going to be a buyer’smarket for airlines,” said EricBernardini, a managing direc-tor at AlixPartners LLC, a con-sulting firm. “The lessors aregoing to be competing with
W - ZWang, Dan ..................B4Zeidan, Rami...............B6
talks with the NHL aboutmaintaining its relationshipwith the league, one of thepeople said.
NBCUniversal currently car-ries most of its NHL coverageon the NBC Sports Networkand the NBC broadcast chan-nel. The company has said it isshutting down NBC SportsNetwork at the end of the yearand moving its NHL games tothe USA Network.
An agreement with ESPNand the NHL wouldn’t neces-sarily mean the end of theleague’s relationship with NBC,the person close to those talkssaid.
The NHL also carries gameson its own channel, the NHLNetwork. Comcast is a partnerin the NHL Network.
A deal with ESPN is ex-pected to increase the overallvalue of NHL rights and wouldcontinue a trend of escalatingsports costs.
ESPN, along with NBC, Via-comCBS Inc.’s CBS and FoxCorp.’s Fox are also in themidst of negotiating new long-term rights contracts with theNational Football League.
Besides games, ESPN+’s ex-isting NHL offerings include adaily studio show, “In theCrease” on ESPN+.
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ESPNNears NHLAgreement
U.K. metals tycoon SanjeevGupta is negotiating a standstillagreement with Greensill Capi-tal to give his companiesbreathing space over paymentson billions of dollars of debt,according to a person familiarwith the matter.
Greensill is among Mr.Gupta’s biggest lenders, butfiled for insolvency protectionMonday. Its troubles haveprompted Mr. Gupta to flyabroad to seek new sources offinancing, a person familiarwith the matter said, whilegovernments and workers inseveral countries are seekingclarity on the fallout on his net-work of steel, aluminum andenergy companies.
Greensill’s operations seizedup last week when Credit SuisseGroup AG froze $10 billion in in-vestment funds that were criti-cal to the startup’s functioning.Regulators have since taken overits banking unit.
The unwinding has rippledthrough investors, venture-capi-tal firms and German municipal-ities that deposited money withGreensill’s bank. But GFG Alli-ance, an umbrella company forthe Gupta family’s businesses, isone of the most closely con-nected to the supply-chain fi-nance specialist.
The GFG Alliance group ofcompanies is negotiating withGreensill representatives for astandstill agreement in whichboth parties wouldn’t need tomake payments to each other.
Greensill had $5 billion inloans outstanding to GFG Alli-
ance, according to a person fa-miliar with the relationship.
On Tuesday, Mr. Gupta toldBritish union officials thatGreensill’s difficulties create “achallenging situation whichneeds careful management,” ac-cording to a transcript of hisremarks, seen by The WallStreet Journal. Mr. Guptaadded at the online meetingthat GFG Alliance has adequatefunding, but that it was lookingto refinance the business,which could take time.
In a typical supply-chain fi-nance deal, Greensill would paya company’s suppliers soonerthan they would normally ex-pect, but at a discount. Thecompany then would payGreensill the full amount downthe road. But Greensill alsopaid GFG Alliance companiesfor future profits on the sale ofsteel and other products, mean-ing payments could flow both
ways.Greensill has looked at seiz-
ing GFG Alliance assets in Aus-tralia, but has yet to act, ac-cording to another personfamiliar with the matter.
With its major lender nowbankrupt, Mr. Gupta is lookingfor new finance, and reassuringcurrent clients that his compa-nies are trading as normal. Lastweek, the Anglo-Indian entre-preneur flew to Switzerland totalk to at least one bank, whilealso visiting the aluminumtrading business of commodi-ties giant Glencore PLC, accord-ing to a person familiar withthe matter.
On Tuesday, Mr. Gupta toldunion officials that he has askedall of his businesses to “managecash carefully and reduce theirreliance on group funding,” ac-cording to the transcript.
GFG Alliance is also talkingto customers and suppliers to
try to improve cash flow, whilelooking to secure additionalworking capital facilities andtapping furlough program pay-ments set up by governmentsduring the pandemic, he said.
Mr. Gupta’s GFG Allianceowns more than 200 manufac-turing assets and employs35,000 people. Its interestsrange from steel plants, mines,energy companies and a bank,to a Scottish bicycle manufac-turer and a company thatmakes parts for vintage cars.
The company has expandedrapidly in recent years, buyingup unloved steel and aluminumassets, often in places with lit-tle other skilled employment,meaning governments fromFrance to Australia are waitingto see how Greensill’s demisewill affect GFG Alliance’s opera-tions in their country.
So too are those employedby GFG Alliance operations, andthe other companies that dobusiness with them.
There are around 600 com-panies in South Australia thatsupply goods or services to GFGAlliance in that region, accord-ing to John Chapman, an officialin that region. Last week, Mr.Chapman wrote to Mr. Gupta,asking for assurance that localsuppliers would be paid on time.Mr. Chapman said he had notreceived a reply as of Tuesday.
France’s finance minister,Bruno Le Maire, said Tuesdaythat given the risk to jobs, thegovernment would step inshould there be financial diffi-culties at French businesses.
—Alice Uribeand Noemie Bisserbe
contributed to this article.
BY ALISTAIR MACDONALDAND RHIANNON HOYLE
Tycoon Seeks to Delay PaymentsOf Billions in Debt to Greensill
Sanjeev Gupta of GFG, which owns over 200 manufacturing assets.
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AerCap and GE Capital Aviation Services have concentrated their buying on the most popular planes, including the Airbus A320neo that is used on domestic routes.
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Boeing’s OrdersGrew in February
Boeing Co.’s orders grew forthe first time in 14 months dur-ing February as it notched dealsfor 82 wide body planes and737 MAX jetliners.
Customers continue to can-cel and defer some aircraft or-ders because of the pandemic-driven travel slowdown, but thereturn of the MAX to commer-cial service is lifting overall deliv-eries.
Boeing’s order haul included27 of its KC-46A military refuel-ing tankers and a VIP version of
its 747-8 jumbo that previouslyhad been left unsold, as well as54 commercial jetliners.
Singapore Airlines Ltd.added 11 Boeing 777X jets, con-verting a previous order for 19of the smaller 787-10, while un-identified customers added fourmore Dreamliners.
Boeing shares rose 2.9%Tuesday to $230.61.
United Airlines Holdings Inc.last month agreed to buy an-other 25 MAX jets, with 14more going to unidentified cus-tomers. Boeing also added backorders for 16 planes previouslyclassified as doubtful because ofcustomers’ financial position.
—Doug CameronWe are pleased to announce that
Brittny Allred, CFA
Dan Downes, CFA, CPA
Jim Kerrigan, CFA
Dave Lehmann, CFA
Michael Yeager, CFA, CPA
have been appointedShareholders of our firm.
Luther King Capital Management
Fort Worth | Dallas | Austin | San Antonio
December 2020
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Fintech startup Social Fi-nance Inc. agreed to buy atiny California communitylender to accelerate its pushinto the banking business.
The San Francisco-basedcompany will spend about $22million to acquire Golden Pa-cific Bancorp Inc., which hasthree branches in and aroundSacramento and about $150million in assets. SoFi plans tocontribute an additional $750million to capitalize the bankfor a national, digital expan-sion should regulators approvethe transaction.
Last year, SoFi was part ofa wave of banking wannabesthat filed paperwork with reg-ulators for charters that wouldallow them to take depositsand lend nationally.
The Office of the Comptrol-ler of the Currency gave con-ditional approval to SoFi’splans to build a bank fromscratch in October, but ChiefExecutive Officer AnthonyNoto said the company de-cided it would be more effi-cient to acquire a small bank.Golden Pacific, he said,checked all the boxes.
SoFi has laid out a boldgrowth plan to investors. Itsaid it expects to increase itsuser base to three million cus-tomers this year, up 75% fromthe 1.7 million it had in De-cember. SoFi also told inves-tors it expects adjusted netrevenue from its lending busi-ness to increase 38% in 2021.
BY PETER RUDEGEAIR
SoFi PlansTo AcquireCaliforniaLender
3MNumber of customers SoFiexpects to have this year
Dick’s Sporting Goods Inc.reported strong demand forits latest quarter but said itexpects sales to slow downthis year.
The retailer on Tuesdaysaid sales for its fiscal fourthquarter rose 20% to $3.13 bil-lion. Profit of almost $220million was roughly triple thatof a year earlier, and adjustedearnings were ahead of fore-casts from analysts.
Consumer interest in itemslike bicycles, golf equipmentand other so-called hardlineproducts was robust in thequarter, according to Dick’sChief Executive Lauren Ho-bart.
“Hardlines were really quitea champion,” she said on aninvestor call.
The gains for the periodended Jan. 30 capped a strongyear for the company, whichtemporarily closed stores lastspring as the pandemic beganto spread.
Like other retailers, thecompany bolstered its e-com-merce operation to continue toreach shoppers adjusting tonew work and lifestyle pat-
terns.Dick’s e-commerce sales
during the fourth quarter rose57%, accounting for about one-third of total sales.
Now, Dick’s faces the chal-lenge of building on last year’sstrong gains. Other retailchains, such as Walmart Inc.,
have also said they believegrowth will slow.
Dick’s said annual sales,which rose nearly 10% on acomparable basis last year,could fall as much as 2% or in-crease by that margin thisyear. Per-share earnings areexpected to decline.
The company has a newstore prototype covering100,000 square feet that it an-ticipates opening in April inthe Rochester, N.Y., area, ac-cording to a spokesman.
The newly conceived Dick’sSporting Goods House ofSport will include assets like
an outdoor field and wellnessspaces, allowing Dick’s to of-fer events and test out storeexperiences that could be ap-plied more broadly to thechain, Ms. Hobart said.
Shares of Dick’s declined6.3% on Tuesday to close at$71.82.
BY MICAH MAIDENBERG
Dick’s Warns That Sales Could Cool
The retailer said fourth-quarter profit of almost $220 million was roughly triple that of a year earlier, but its forecast was muted.
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acquired through the carriers’2020 merger. Sprint had pre-viously shared similar dataonly from customers whoopted into its third-party adprogram.
A T-Mobile spokeswomansaid the changes give subscrib-ers advertising that aligns withtheir interests. “We’ve heardmany say they prefer more rel-evant ads so we’re defaultingto this setting,” she said.
T-Mobile ended 2020 withmore than 60 million phoneusers under its main brand andmore than 20 million custom-ers on prepaid plans. The com-pany said the changes wouldn’tapply to business accounts orchildren’s lines.
Many big tech companiesare under pressure from regu-
lators to move in the oppositedirection on user data. Googleowner Alphabet Inc. recentlypledged to change the part ofits business that relies on re-cords of users’ browsing acrosswebsites, while Apple Inc. isadding strict new privacy pro-tections for its device users.
AT&T Inc. automatically en-rolls wireless subscribers in abasic ad program that poolsthem into groups based on in-ferred interests, such as sportsor buying a car. An enhancedversion of the program sharesmore-detailed personal infor-mation with partners fromcustomers who opt into it.
Verizon CommunicationsInc. likewise pools subscriberdata before sharing inferencesabout them with advertisers,
with a more detailed sharingprogram called Verizon Selectsfor users who enroll. Its sepa-rate Verizon Media divisionshares data gathered throughits Yahoo and AOL brands.
T-Mobile said it masks us-ers’ identities to prevent ad-vertisers and other companiesfrom knowing what websitesthey visit or apps they have in-stalled. The company tags thedata with an encoded user ordevice ID to protect the cus-tomers’ anonymity.
But privacy groups saythose IDs can be linked back topeople by comparing differentdata sets.
“It’s hard to say with astraight face, ‘We’re not goingto share your name with it,’ ”said Aaron Mackey, a lawyer
for the Electronic FrontierFoundation, a consumer-pri-vacy advocate. “This type ofdata is very personal and re-vealing, and it’s trivial to linkthat deidentified info back toyou.”
Past telecom-industry ef-forts to take a piece of a multi-billion-dollar ad market havestumbled more because ofcompetitive pressures thanprivacy concerns.
After spending more than$9 billion to acquire Yahoo andAOL, Verizon has scaled backits internet ambitions andwritten down more than $4billion. The company has alsocut jobs after the businessfailed to loosen Facebook Inc.’sand Google’s grip on the digi-tal-ad market.
T-Mobile US Inc. will auto-matically enroll its phone sub-scribers in an advertising pro-gram informed by their onlineactivity, testing businesses’ ap-petite for information thatother companies have re-stricted.
The No. 2 U.S. carrier bysubscribers said in a recentprivacy-policy update that un-less customers opt out it willshare their web and mobile-app data with advertisersstarting April 26. For example,the program could help adver-tisers identify people who en-joy cooking or are sports en-thusiasts, the company said.
T-Mobile’s new policy willalso cover Sprint customers
BY DREW FITZGERALD
T-Mobile to Share User Data With Advertisers
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VICTOR A. YANCHICK, PHDDEAN EMERITUS, EDUCATORVCU SCHOOL OF PHARMACY
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TECHNOLOGY WSJ.com/Tech
needed so viewers stay engagedweek to week. Disney+ launchedwith a massive library of mov-ies and TV shows that hasplayed a large role in hookingfamilies—and an introductoryprice of $6.99 a month, consid-erably less expensive than otherservices. (It will start costing$7.99 a month later this year.)
The company’s original-pro-gramming strategy has reliedon fan-favorite hits such as“The Mandalorian,” a Star Warsspinoff that premiered whenthe service launched in Novem-ber 2019 and offered it its first
viral star in the creature knownby fans as “Baby Yoda.” WhenCovid-19 shut down U.S. the-aters, Disney shipped theatricalreleases such as “Hamilton” tothe service, which providedsubscription bumps and playeda critical role in convincingviewers to keep paying theirmonthly fee. Wall Street has re-mained focused on Disney’sstreaming plans, a company re-orientation that has sent Disneyshares to records.
Only 45% of North Americanmovie theaters are currentlyopen, though Disney reiterated
home and would-be ridersshied away from busses, sub-ways and trams for fear ofcatching the virus in closedspaces. Large cities are stillworking to assuage riders’fears, a key step needed beforeeconomies around the worldcan fully reopen.
“Last summer, it becameclear that…existing transpor-tation systems were too rigidand weren’t working,” said Mr.Ramot.
To pay for the deal and theother recent acquisitions, Viaused money it raised last yearwhen Italy’s Agnelli familypaid $200 million for a 9%stake in the company. Thatfunding round valued all of Viaat $2.25 billion.
Via’s software helps citiesintegrate their public transpor-tation systems by adding as-pects of ride-hailing apps likethose of Uber TechnologiesInc. and Lyft Inc. to existing in-frastructure. Cities can use Viato offer on-demand transporta-tion and prescheduled pickupsfor people who don’t live nearbus stops. The services, whichhave been rolled out in 24countries, can be accessed by asmartphone app, computer orwith a phone call. The softwarecan also be used to quicklyidentify unexpected surges indemand so extra buses can besent to a specific route.
Via Transportation Inc. hasacquired mapping softwaremaker Remix for about $100million, Via’s chief executivesaid in an interview, as theNew York-based company seeksa larger slice of the new marketbringing together ride-sharingand public transportation.
The deal is the third acquisi-tion over the past severalmonths for Via, which is bid-ding to play a central role ascities, transportation authoritiesand universities rejigger theirtransportation offerings in thewake of the coronavirus pan-demic. The cash-and-equity dealcomes almost two years afterVia first became interested inbuying Remix, said Daniel Ra-mot, Via’s CEO and co-founder.
San Francisco-based Remix,which was founded in 2014, hassoftware that uses data to helpcities plan their transportationroutes and make decisions onsuch things as where to putone-way streets, bike lanes orspecial lanes for emergency ser-vices. Remix investors cashingout as part of the deal includeventure-capital firm Sequoiaand Y Combinator, a SiliconValley startup accelerator.
A year ago, the pandemicthrew into doubt the future ofVia and public transportation.Lockdowns kept people at
BY ERIC SYLVERS
Transport Concern ViaBuys Mapping Firm
that it expects to give a theatri-cal release to its Marvel Studiossuperhero film “Black Widow”when it comes out in May.
Disney is exploring differentstrategies in various markets tomaintain its subscriber growth,including an option in someoverseas territories to coupleDisney+ with more adult-ori-ented programming availableon its Star platform.
Questions loom about the fu-ture of Disney+, particularly inhow aggressively Mr. Chapekdecides to use it to shake uptheatrical distribution.
Walt Disney Co.’s flagshipstreaming service, Disney+, hassurpassed 100 million subscrib-ers, the company said Tuesday,a symbolic win that emphasizeshow the company has been themost successful of the new en-trants trying to chip away atNetflix Inc.’s direct-to-con-sumer dominance.
Disney+ reached 100 millionsubscribers in its first 16months of operation.
Powered by fan favorites like“The Mandalorian” and “Wan-daVision,” the service is ontrack to meet the company’sprojection of 260 million sub-scribers by 2024. The companylast reported 94.9 million sub-scribers as of Jan. 2.
Disney Chief Executive BobChapek reiterated at a share-holder meeting Tuesday thatthe company’s streaming strat-egy is his priority, noting thatDisney has set a bullish targetof adding more than 100 new ti-tles to the service each year.Leading streaming platformNetflix said in January that ithad 203.7 million subscribers.
Disney’s torrential growth,which has been faster than atrivals such as Amazon PrimeVideo, speaks to the company’saccidental timing in releasing anew service months before na-tionwide shutdown orders, aswell as its strategy to ship newprogramming to the service as
BY ERICH SCHWARTZEL
Disney+ Shows Steady Growth
The streaming service has reached 100 million subscribers and says it projects 260 million by 2024.
supply-chain disruptions fromfactors including “geopoliticaland economic competition.”An initial review will focus onhigh-tech products includingsemiconductors, electric-vehi-cle batteries, certain pharma-ceutical ingredients and criti-cal elements and minerals.
Europe’s new plan, whichbuilds on a digital agenda theEU issued last year, seeks tomake European businesses andpublic services more digital, im-prove Europeans’ digital skillsand upgrade digital infrastruc-ture. Funding will come fromthe €672.5 billion (equivalent to$796.6 billion) Recovery andResilience Facility in the EU
economic package agreed lastsummer, of which at least 20%has been pledged to promoteEurope’s “digital transition.”
Among the plan’s specificgoals is for Europe to produceat least 20% of the world’snext-generation semiconduc-tors by value in 2030, com-pared with 10% of the worldchip market last year, accord-ing to the European Commis-sion, the EU’s executive arm.
The plan, which still re-quires final approval, will in-clude a monitoring system toensure money is being spenteffectively, Ms. Vestager said.
The EU will vie againstother chip initiatives around
the world. China in 2019 setup a government-backed $29billion fund to boost its do-mestic chip industry, and thisweek it announced plans tospeed up development in ad-vanced technologies, includingchips, over five years. In theU.S., Congress recently passedlegislation to give chip compa-nies grants and financial in-centives, which could be bil-lions of dollars per project.
Shifting market share toEuropean concerns fromAmerican and Asian chip com-panies will be a challenge. Eu-rope lacks heavyweights suchas Intel Corp. or Taiwan Semi-conductor Manufacturing Co.
that make chips for industry’sbiggest segments, which in-clude data centers, smart-phones and laptops.
Europe’s biggest semicon-ductor companies include theNetherlands’ ASML HoldingNV, which builds machinesthat make chips, as well as
Germany’s Infineon Technolo-gies AG and the Netherlands’NXP Semiconductors NV. Bothmake chips for the compara-tively small automotive andindustrial sectors.
It has proven hard to upendthe chip industry’s status quo,said Dan Wang, a technologyanalyst at Gavekal Dragonomics.“As China has shown, throwingmoney at chips does not guar-antee success,” he said. “For thelast few decades, Europe hasseen its number of semiconduc-tor companies shrink, and itwill require a mighty effort towrest leadership from the U.S.and Asia, which are also invest-ing heavily.”
ecutive Vice-President Mar-grethe Vestager.
The U.S. is also addressingreliance on foreign technology,particularly from China. Lastmonth President Biden issuedan executive order launching areview of products and sectorswhere the country could face
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EU SeeksTo Spur ItsTech Sector 20%
EU goal tomake this amount ofglobal chips by value by 2030
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Member VoicesThe Wall Street Journal CMO Network connects leaders of the world’s most influential brands to examinewhat — and who — is driving trends and provide the facts they need to chart the path forward.
TheWall Street Journal news organization was not involved in the creation of this content.
Whomakes up yourmost importantcommunities, and howdo you connectwith them?
The obvious answer is Oracle’s430,000-plus customers. But, sinceour employees are also customers (aswe heavily use our ownproducts), thatadds another 140,000-person customercommunity—one that is not shy abouttelling uswhenwe can do better.
What’s in your toolbox for gettingyour team focused, supportedandproductive?
Set clear goals, make sure everyoneunderstands them and provide theentire teamwith visibility into results.I maintain an annual list of the top 50goals to capture themost importantprojects and outcomes wewant toachieve. Each goal has a single ownerto ensure strong accountability,and we publish results on a regularbasis to the entire organization. Thismechanism ensures everyone isaligned on priorities.
Howdo you switch focuswhenfacedwith a similar challengeagain and again?
Well, the definition of insanity isdoing the same thing over and overagain and expecting different results.For recurring problems, I ask twoquestions: One, are there any potential
solutionswe aren’t pursuing becausewe believe that “It’s just not howwedo things here”? (I push the team tochallengewhether those constraintsare real.) Two, is the problem actuallyan organizational ownership problem?I have a rule that all functions that areboth complex and important requirea single ownerwhose full-time job isthat function. Often, a good deal of thedysfunction found in large companiescomes from not following this rule.
Howdo you balance relying on dataversus instinctwhen developing amarketing strategy?
I like to say that the data is just onedata point. Almost every interestingmarketing challenge I’ve encountered inmy career has involved key data pointsbeing either unavailable (aswe allhave a backlog of analytics projects) orultimately unknowable (e.g., customerdemand for a newproduct that doesn’tfit into any existing categories).
Whatwas a keymilestone thatshaped your career path?
In 1998, I quitmy job as a sales engineerat a software company to create astartup to automate thework I wasdoing every daymanually — helping oursalespeople communicate effectivelywith customers. I didn’t know it atthe time, but that ended up being thebeginning ofmy career inmarketing.
Imagine you’re not in your currentrole and have a superpower to doanything—whatwould you do?
That’s easy — offensive coordinatorof the 49ers so I could put my years ofMadden play-calling experience to use.This would not end well, but it wouldbe fun!
When it’s time to get creative,whatdo you do to get inspired?
Nowmore than ever, I find thatbeing outdoors helps clear myhead for new ideas.
What new technology are youmost excited about?
Applying machine learning tomarketing problems. So muchof marketing involves patternrecognition, so it’s a natural fitfor ML.
What’s the biggest learningexperience you’ve had?
My failed startup experience. I co-founded amarketing technologycompany in 1998 with two friends,raised $65million, hired 140 peopleand then went through seven roundsof layoffs over the final four years.As they say, the best lessons in lifedon’t come from your successes.
Read the extended version:CMONetwork.wsj.com/membervoicesoracle
Ariel Kelman
EVP, ChiefMarketingOfficer, Oracle
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THEWALL STREET JOURNAL. * * * * Wednesday, March 10, 2021 | B5
BUSINESS NEWS
BY NINA TRENTMANN
Still, SPACs struggled tocompete with traditional initialpublic offerings and othermethods for raising money un-til splashy names like sports-betting firm DraftKings Inc.started using them to go publicin recent years and more start-ups began using them to makeprojections to investors—some-thing that isn’t allowed in atraditional IPO.
“It’s become bigger thananyone expected,” said Mr.Miller, a 66-year-old fromQueens, N.Y., who is managingpartner at law firm GraubardMiller and still has stacks ofregulatory documents from thefirst blank-check companies be-cause they were created beforeSecurities and Exchange Com-mission filings were digitized.
Even though shares of manySPACs and companies that havemerged with them have strug-gled lately,DraftKings and other popularstocks like electric-car batterycompany QuantumScape Corp.are still up about 55% or morein the past six months. An in-dex of companies that recentlywent public is up more than30% in that span.
Graubard Miller has a 10-person corporate-law depart-ment and has been involvedwith about $6.3 billion of SPACdeals this year, according todata provider SPAC Research,already topping its 2020 totaland making it one of the top 10advisers in the sector alongwith much bigger law firms onWall Street.
Bankers and lawyers earnfees when blank-check compa-nies are created and when theycomplete deals to take privatecompanies public. They canalso make money helpingSPACs raise additional funds toacquire startups.
Mr. Nussbaum’s 25-personinvestment bank is also bene-fiting from its co-founder’s rolein forming the SPAC. Nearly allof EarlyBird’s business is fromSPACs, and it has been involvedin creating blank-check firmsvalued at $2.3 billion in 2021,
to take it public. They have be-come a popular way for start-ups to access individual inves-tors and a cash cow for thewealthy individuals who createthem. SPAC founders now in-clude everyone from hedge-fund manager William Ackmanto former baseball player AlexRodriguez.
SPACs have raised nearly$75 billion this year and ac-count for more than 70% of allinitial public offerings, up from20% two years ago and a negli-gible total for much of the past20 years, according to Dealogic.
The products’ sudden ubiq-uity has been jarring forMessrs. Nussbaum and Miller.
Many on Wall Street weresuspicious of SPACs becausetheir predecessors were called“blind pools” and tied topenny-stock fraud in the 1980s.
Messrs. Nussbaum andMiller met at New York Univer-sity Law School in the late1970s before going on to workat law firms. Mr. Nussbaum de-cided to open his own broker-age in the late 1980s, then wasinvolved in a blind-pool dealthat inspired him to begin workon the SPAC.
In the early 1990s, the Da-vids spent over a year workingwith regulators to install pro-tections for investors and otherchanges to prevent fraud be-fore completing the first blank-check firm.
Among them was the rightfor a SPAC’s investors to gettheir money back before amerger with a private companygoes through. They also beefedup disclosure requirementsahead of such deals. Those fea-tures are touted by blank-checkcompany bulls.
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PioneersReap theRewards
The company continues to experiment with different fulfillment solutions for online orders.
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eclipsing its total from lastyear and keeping the companyamong the 15 most activebanks in the area. WheneverEarlyBird does a SPAC transac-tion, every employee gets a bo-nus, Mr. Nussbaum said.
Critics of the blank-checkboom warn that the high vol-ume of deals done by smallerbanks is a signal that the SPACsurge has gone too far becausethose deals often feature lessheralded investors and compa-nies.
The firms that have recentlybecome worth billions of dol-lars in SPAC deals involvingMessrs. Nussbaum and Millerinclude agricultural-technologycompany AppHarvest Inc. andelectric-car battery maker Mi-crovast Inc. Both men say theirexperience is helping them reelin more mergers.
“I am really happy forthem,” said Arthur Spector, aventure capitalist who ran thefirst SPAC Messrs. Nussbaumand Miller worked on in 1993.“They put in a huge amount ofwork and from some peopletook a lot of grief.”
The blind-pool deal thatprompted Mr. Nussbaum to be-gin work on SPACs in the 1990stook toy maker THQ Inc. public.THQ shares initially soaredthanks to the popularity of agame tied to the movie “HomeAlone”—the company eventu-ally went bankrupt many yearslater—inspiring Mr. Nussbaumto look more closely at theblind-pool structure.
Shortly after that deal, hecontacted Mr. Miller to addmore investor protections tothe process.
Those changes eventuallyled to the 1993 SPAC—Informa-
Blankcheck firmsraised nearly $75billion this year, 70%of initial offerings.
The finance chief of theowner of Peapod, Stop & Shopand Food Lion plans to keepinvesting in new distributionchannels and technology sothat online shopping will be-come a larger part of the gro-cer’s overall revenue.
For Ahold Delhaize NV—the Zaandam, Netherlands-based owner of the U.S. gro-cery chains—the pandemicserved as a wake-up call to ac-celerate its e-commerce busi-ness, including click-and-col-lect services that allowcustomers to pick up onlinepurchases from a store, andhome delivery. In the U.S.,Ahold’s biggest market, onlinesales grew to €1.97 billion,equivalent to $2.37 billion, in2020, up more than 100% com-pared with the previous year.
declined to provide an esti-mate of how much these syn-ergies could be worth. Thecompany has stated that it ex-pects annual synergies of €100million by 2023 from its own-ership of a larger segment ofthe U.S. distribution network.
Ahold also continues to ex-periment with different ful-fillment solutions for onlineorders, following the exampleset by Walmart Inc. and otherretailers. Instead of having anemployee shop for the cus-tomer in a store, one solution
Ahold is testing will have ro-bots pick and choose productsin a micro-fulfillment centerin Philadelphia. The new trialcomes after Ahold in 2019launched another automatedfulfillment facility in Hart-ford, Conn.
Mergers and acquisitionscould be part of the strategy togrow the e-commerce business,Ms. Knight said, adding thatAhold is particularly interestedin assets that would enhanceits ability to serve customers inmultiple ways. “We are pickier
than we used to be, as it has tofit the omnichannel vision,”Ms. Knight said. Ahold paid€269 million for the stake inFreshDirect, she said.
Ahold is right to keep test-ing different solutions toboost online sales, analystssaid. “The whole industry is influx how to best serve thechannel shift,” said James Gr-zinic, an analyst at investmentmanagement firm Jefferies In-ternational Ltd. “The bestthing for Ahold is to try differ-ent things,” he said.
Still, this representsroughly only 4.3% of the com-pany’s U.S. sales, which to-taled €45.47 billion last year,up 15.6% compared with theprior-year period. Chief Finan-cial Officer Natalie Knight isworking to increase onlinesales further, she said.
“We doubled our invest-ments in omnichannel in 2020,and we will do that again in2021,” Ms. Knight said, declin-ing to provide a dollar amountfor these investments. Overall,Ahold spent €2.6 billion oncapital expenditures in 2020,slightly higher than the €2.5billion it originally forecast.
The company intends to allo-cate about €2.2 billion on cap-ital expenditures in 2021.
Ms. Knight is pulling a rangeof levers to boost Ahold’s e-commerce sales. The companyis expanding its click-and-col-lect business to cover 1,400 lo-cations in the U.S. by the endof the year, up from 1,116 at theend of 2020. It recentlylaunched a subscription serviceat its Giant Company business,on top of other existing sub-scription services.
Ahold also wants to learnfrom FreshDirect, in which itbecame the majority stake-holder after its deal to acquirean 80% share in the online gro-cer closed in January. Private-equity firm Centerbridge Part-ners LP holds the remaining20%. “FreshDirect is fasterwith local supplies,” Ms. Knightsaid. “They are further ad-vanced in their thinking aboutcustomer retention rates.”
There could also be syner-gies in areas such as procure-ment and information technol-ogy between FreshDirect andAhold, Ms. Knight said. She
Ahold Aims to BoostE-Commerce GrowthGrocer’s online salesrose 100% in the U.S.last year but is still atiny piece of the pie
CFO Natalie Knight says mergerscould be part of the strategy.
tion Systems Acquisition Corp.The company raised $12 millionand eventually combined with asoftware firm. That companywas later acquired by HP Inc.
Messrs. Nussbaum andMiller initially had a trademarkon the name “SPAC,” prompt-ing others to create similar ve-hicles with different acronymslike “SPARC” and “TAC.” Thefounders eventually let othersuse “SPAC” and more were cre-ated, but the dot-com boom ofthe late 1990s made traditionalIPOs more popular and blank-check firms fell out of favor.
At the time, Mr. Miller won-dered if SPACs were a “one-trick pony” that might go awaycompletely.
He and Mr. Nussbaum con-tinued working on traditionalIPOs and other deals. In 2000,Mr. Nussbaum co-founded Ear-lyBird Capital.
Following the internet bust,Mr. Spector approachedMessrs. Nussbaum and Millerabout doing the first SPAC ofthe new millennium.
Blank-check companiesbriefly took hold in themid-2000s as larger stock ex-changes began listing SPACsand big-name investors likeNelson Peltz used them as deal-making tools, but the financialcrisis again interrupted the vol-atile market.
Investor returns in SPACswere muted until early-stage,high-growth companies likespace-tourism firm Virgin Ga-lactic Holdings Inc. startedmerging with them in 2019, akey shift that returned blank-check firms to their originalpurpose, Messrs. Nussbaumand Miller said.
Both men plan to work untilit is no longer fun. Like otherson Wall Street, they acknowl-edge that the current pace ofSPAC activity isn’t sustainable.But for now, they are thrilledafter overcoming years of resis-tance.
“The reputational disadvan-tage SPACs had is dissipatingdramatically,” Mr. Nussbaumsaid.
David Miller (left) and David Nussbaum invented SPACs in 1993 to give private firms another way to access everyday investors.
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in bridge financing to providestability through the deal’sconclusion, Lucid Chief Execu-tive Officer Peter Rawlinsontold The Wall Street Journallast month. PIF will continueto be Lucid’s majority share-holder once it lists through itsSPAC deal, the company hasdisclosed.
Lucid, originally calledAtieva, was founded as a bat-tery-technology company in2007 before pivoting to mak-ing its own cars. In 2013, it re-cruited Mr. Rawlinson, for-merly of Tesla Inc., where hewas chief engineer on thecompany’s first mass-pro-duced Model S luxury sedan.Lucid hasn’t sold any cars butranks among the most-matureelectric-vehicle startups in arace to one day compete withTesla, according to analysts.The company plans to beginselling its first model, a luxurysedan called the Air, this year.
Lucid recently finished thefirst phase of a $700 millionplant in Casa Grande, Ariz.,which the company says is ca-pable of making 34,000 carsannually.
With expansion, the site is
ContinuedfrompageB1
capable of increasing produc-tion up to 365,000 vehicles ayear, the company has said. Ina presentation to investors,Lucid said by 2030 it plans toproduce upward of 500,000vehicles annually.
Some people familiar withthe Saudi factory promise saidsuch an investment could costseveral hundred million dol-lars or more.
Saudi Arabia has very littleof the manufacturing footprintnecessary for building cars,meaning many of the cars’parts would likely need to beimported. That would poten-tially double the manufactur-ing costs at the plant, thesepeople said.
Lucid executives have beenpushing for more Saudi incen-tives to help cover the costsand make up for the inefficien-cies that building the plantwould create, these peoplesaid.
Senior PIF executives arepushing the company to followthrough on their 2018 commit-ment, these people said.
Saudi officials have beentrying for nearly a decade toentice an auto maker to buildan assembly plant in SaudiArabia.
Jaguar Land Rover, ownedby India’s Tata Group, signeda letter of intent with the gov-ernment in 2012 to evaluatethe feasibility of a Saudi as-sembly plant. The plant wasnever built.—Mike Colias contributed to
this article.
Startup,SaudisHave Pact
IN MEMORIAMFormore information visit: wsj.com/InMemoriam
B6 | Wednesday, March 10, 2021 THEWALL STREET JOURNAL.
VTS CEO Nick Romito said ‘every owner has to make sure their tenants know what’s going on.’
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just over 60,000 pubs in Brit-ain. That count fell by morethan 20%, after the 2007 banon smoking, higher alcoholprices and the rise in home en-tertainment hurt the business.
But the Oaktree deal sug-gests there are still investorswho believe in a future for asocial ritual that began in the
first century, when the Ro-mans invaded Britain and setup stalls selling food and wine.
“The expectation would bethat there would be a lot ofdistress in the market, but inreality it has been quite thereverse,” said Stephen Owens,managing director, pubs andrestaurants, at the commercial
real-estate broker Christie &Co.
Instead, he said, the U.K.government has subsidizedpayments to furloughed pubworkers and cut taxes. Thissupport has enabled most publandlords to survive. “Therehas not been a fire-sale situa-tion,” Mr. Owens added.
Some American investorscan’t get past the door. Plati-num Equity, another L.A.-based investment firm, lastmonth tried to take over Mar-ston’s PLC, a major brewerand operator of around 1,400pubs. But the company re-jected Platinum Equity’s £666million offer, saying that the
THE PROPERTY REPORT
business was worth more.After pubs are allowed to
reopen in the summer, pent-updemand from Brits long de-nied a pint or a pub meal willpropel the sector back to prof-itability, a new report by theU.K. investment bank Numissaid. In Australia, the reportnoted, pubs reopened aroundsix months ago and visits hadreached pre-pandemic levelsby October.
Mr. Owens agrees that 2021is looking positive for pubs.“We have got more buyersthan we have got sellers,” hesaid. “It seems rather counter-intuitive, but because of thevaccine rollout there is light atthe end of the tunnel.
Before Covid-19, he added,pub closures had started tolevel off and beer sales wereup. “We are having a lot ofconversations with a lot ofprivate-equity firms in the U.S.and the U.K.,” Mr. Owens said.
American interest in thepub market predates the pan-demic. In 2017, TSG ConsumerPartners, a San Francisco pri-vate-equity firm, acquired a23% interest in BrewDog, thecraft-beer brewer and pubchain based in Scotland, in adeal worth £213 million.
The company now has morethan 100 venues in 15 coun-tries. Founder James Wattsaid last month that it has an-other 42 sites in the pipeline,including across the Atlanticin Atlanta and Cleveland.
The pandemic hasn’t stoppedBrits from drinking. But it hasbeen a bad year for the U.K.’s47,200-strong pub sector, whichwas battered by three lock-downs, long-term bans on eat-ing and drinking indoors, andrestricted operating hours.
Yet even though lockdownrestrictions are expected to re-main until at least June 21,there are recent signs that thisclassic British institution is onthe path to recovery.
International investors ha-ven’t been deterred. OaktreeCapital Management, a LosAngeles real-estate owner, re-cently said it would invest£200 million, equivalent to$280 million, in the newlyformed RedCat Pub Co.
RedCat is led by RooneyAnand, former chief executiveof the U.K.’s largest pub firmby number of pubs, GreeneKing, who said he plans to ac-quire venues in the affluentsouth and east of England.Since pubs survived “the Blitz,the Great Plague and the creditcrunch,” he said, they shouldwithstand the pandemic.
Still, their numbers aredwindling. In 2000, there were
BY RUTH BLOOMFIELD
U.K. Pub Industry Draws U.S. InvestorsOaktree Capital islatest American firmto invest in sector,undeterred by crisis
Before the Covid-19 pandemic, the pub business was hurt by a 2007 ban on smoking and higher alcohol prices.
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tate software and data firmVTS is acquiring Rise Build-ings, a Chicago startup thatdeveloped a mobile app usedin over 130 million square feetof office space. VTS, whichprovides online tools for man-aging leases to landlords, ispaying about $100 million, ac-cording to people familiarwith the matter.
“In the return to work, ev-ery owner has to make suretheir tenants know what’s go-ing on,” said Nick Romito, VTSchief executive.
Other mobile office appfirms, which are part of theexpanding proptech business,are experiencing growing de-mand from landlords and in-terest from investors.
Lane, which launched in2014, closed its first venturecapital funding round in May,raising $10 million. The To-ronto firm is used in morethan 300 buildings in eightcountries. It expects to an-nounce another round in thenext few months, according toco-founder and Chief ProductOfficer Kofi Gyekye.
Big landlords like Brook-
field Office Properties, Ox-ford Properties and TishmanStudio have signed up withLane this year, Mr. Gyekye said.
Some office workers arebound to be uneasy with addi-tional corporate scrutiny oftheir movements through theseapps, and some employee ad-vocates have raised this issue.
Rise Chief Executive PrasanKale said privacy is a priorityand that the firm collects andaggregates data in a way thatindividuals are anonymous, hesaid. Employees can also optout. “You can never downloadthe app if you don’t want to,”Mr. Kale said.
Rise says most workers optin because they recognize thehealth benefits, such as en-abling workers to alert build-ing staff about arriving visi-tors. If too many are arrivingat any given time, passeswon’t be granted. Or if work-ers see unsafe conditions, appsprovide a quick way for themto alert building management.
Launched in 2018, Riseadded 150 buildings to its cli-ent roster during the pan-demic for a total of 350 prop-
Investors are pouringmoney into phone apps thatenable companies to monitoremployees’ movements and en-sure they are complying withsocial distancing and otherCovid 19-related protocols.
Employers can tell from aglance at the screen whether aconference room has exceededthe number of employees whocan safely meet, or whethertoo many people are on onefloor. Workers can use the appsto take precautions like check-ing how many colleagues areusing the gym, or how recentlythe cafeteria was sanitized.
While apps with similarfeatures have been availablefor years for office security orconvenience purposes, land-lords and big corporate ten-ants are giving these tools afresh look during the pan-demic. This is especially trueas the rollout of vaccines inthe U.S. raises the prospectthat millions of workers couldreturn to their office this year.
In one of the biggest invest-ments in this sector, real-es-
BY PETER GRANT
Office AppMakers Cash InOn Pandemic-Safety Needs
erties, Mr. Kale said.Before the pandemic, mo-
bile office app firms marketedtheir products to landlords asan amenity for tenants andtheir employees. They wereused for a range of services,from booking conferencerooms to ordering coffee orfinding lunch companions.
“We began researching thecategory about one year and
one half ago,” Mr. Romito said.When Covid-19 hit, VTS stoodback to see if the category was“going to die really quickly” orwhether the pandemic would“shine a massive light” onlandlords’ need for tools thatcommunicate directly with alltheir tenants and employees.
Landlords say they are hop-ing office apps will give themcritical data on how much
their tenants are using theirbuildings. This will help themidentify which ones are ex-panding or might be in dangerof leaving, landlords say.
“In a post-Covid or living-with-Covid world, they’re go-ing to have to up their game,”said Charles Garbarino, chiefexecutive of HqO, an officeapp firm that raised a $34 mil-lion funding round in 2019.
and Expedia Group Inc., by in-centivizing guests to book di-rectly through their apps orwebsites and offering lowest-price guarantees.
Kayak, in offering hotels aphone app that allows gueststo interact with the propertyelectronically, is providing aservice that has been ingreater demand among thosetraveling during the pandemic.
But it is also well behindsome of the global brands thathave offered this amenity foryears. Hilton, which started of-fering a mobile phone room-key option in 2015, said thatguests have opened hoteldoors more than 111 milliontimes with this digital service.
Kayak was founded in 2004by Mr. Hafner and a partner asa so-called metasearch sitethat enables users to compareprices for hotels, airlines andother travel services from avariety of online travel agen-cies. Before the pandemic,Kayak processed around sixbillion travel requests a year,Mr. Hafner said.
Rami Zeidan, CEO of LifeHouse, founded the companyin 2017. His firm operatesmore than 20 properties, andit created proprietary softwarethat helps owners run theirhotel back-office operationsand determine room pricing tohelp maximize revenue.
“Millions of consumers al-ready have the Kayak app ontheir phones,” he said. “Wesee a big opportunity to applyour audience and technologyto the accommodation space.”
Kayak is scouting otherproperties, from Los Angelesto Berlin, for future hotelsites, Mr. Hafner added. Thecompany, which is part of on-line travel giant BookingHoldings Inc., is also explor-ing a Boston-area location to
offer short-term rental accom-modations.
Kayak’s foray into the hotel-operations business is the lat-est sign of how companiesconnected to the hospitalityindustry are invading eachother’s turf. Airbnb Inc. listshotels on its site, and in 2019acquired the hotel-bookingapp HotelTonight. Marriotthas entered the shorter-termrental business. The big lodg-ing brands have been trying towean customers off onlinetravel agents, such as Booking
The travel search companyKayak is launching a new fea-ture that will enable guests atindependent hotels to use theKayak app to check in, locktheir rooms and order food orfresh towels.
The company will debutthis new system next month atthe Kayak Miami Beach hotel,the newly branded propertythat is reopening after beingclosed for about a year. The1934 art-deco style hotel willbe managed by the boutiquehotel operator Life House,which is joining with Kayak onthis venture.
Hotel guests can also usethe Kayak app to pick a typeof room or to request house-keeping or a late checkout.
Giant hotel operators suchas Hilton Worldwide Hold-ings Inc. and Marriott Inter-national Inc. already offerapps that allow their guests todo things like open their roomdoors or order a room-servicecheeseburger at propertiesacross the U.S. and abroad.
But independent hotel own-ers don’t have the financial re-sources to invest in systemsthat offer these features. TheKayak app would elevate thisservice to the same level asthe biggest brands, said KayakChief Executive Steve Hafner.
BY CRAIG KARMIN
Travel-Search Firm KayakAllies With Small Hotels
Guests can use theKayak app to requesthousekeeping orother hotel services.
The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSEAmerican and Nasdaq Stock Market stocks that hit a new 52-week intraday high or lowin the latest session. % CHG-Daily percentage change from the previous trading session.
How to Read the Stock TablesThe following explanations apply to NYSE,NYSE Arca, NYSE American and Nasdaq StockMarket listed securities. Prices are compositequotations that include primary market tradesas well as trades reported by Nasdaq BX(formerly Boston), Chicago Stock Exchange,Cboe, NYSE National and Nasdaq ISE.The list comprises the 1,000 largestcompanies based on market capitalization.
Underlined quotations are those stocks withlarge changes in volume compared with theissue’s average trading volume.
Boldfaced quotations highlight those issueswhose price changed by 5% or more if theirprevious closing price was $2 or higher.
Footnotes:s-New 52-week high.t-New 52-week low.dd-Indicates loss in the most recentfour quarters.FD-First day of trading.h-Does not meet continued listingstandardslf-Late filingq-Temporary exemption from Nasdaqrequirements.t-NYSE bankruptcyv-Trading halted on primary market.vj-In bankruptcy or receivership orbeing reorganized under theBankruptcy Code, or securitiesassumed by such companies.
Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. andchanges in the closing prices from 4 p.m. the previous day.
NetStock Sym Close Chg
Allegion ALLE 114.44 -2.05AlliantEnergy LNT 49.88 0.17Allstate ALL 111.59 -1.69AllyFinancial ALLY 44.29 0.44AlnylamPharm ALNY 137.68 -0.94Alphabet C GOOG 2052.70 28.53Alphabet A GOOGL 2040.36 32.86AlticeUSA ATUS 33.60 1.11
s Altria MO 47.68 0.78AlumofChinaACH 11.78 -0.21Amazon.com AMZN 3062.85110.90Ambev ABEV 2.64 0.08Amcor AMCR 11.75 -0.01
s KB Fin KB 44.71 1.09KE Holdings BEKE 53.75 6.67KKR KKR 47.07 -0.01KLA KLAC 294.10 20.06KSCitySouthernKSU 212.77 2.20
Biggest 1,000 Stocks | WSJ.com/stocks
Continued on Page B8
BUSINESS & FINANCE
put forward a new kind of dis-closure to investors: how envi-ronmental, social or gover-nance issues such as climatechange or poor corporate ethicscould affect the value of theirinvestments. They will also
have to put out a statementabout the impact of their port-folios on the wider world suchas the carbon emissions ofcompanies they contain.
Private market funds arealso included.
managing partner of NomuraGreentech, a sustainable-infra-structure-focused investmentbank that is part of Japanese fi-nancial services conglomerateNomura Group. “Investors thinkthey’re investing behind a man-ager doing ESG, but when youpeel back the onion, it’s a differ-ent story.”
The rules, known as the Sus-tainable Finance DisclosureRegulation, or SFDR, address along-running concern for the in-dustry: ESG’s lack of supervi-sion. There is no hard definitionof what constitutes a sustain-able investment and no watch-dog to enforce it. Fund manag-ers and ESG ratings firms havebeen free to set their own defi-nitions, which has sparked con-
cerns that claims may be exag-gerated, a practice known asgreenwashing.
This “is a first step in reallytrying to get to a place wherecompanies are reporting dataon a consistent basis,” Mr. Mc-Dermott said. “This is going to,I think, make it much more dif-ficult to greenwash.”
Sustainable investing has at-tracted huge volumes of capitalas the financial services industryhas come under greater scrutinyfor its role in pollution and cli-mate change. Investors directed$152 billion into investmentsmarketed as ESG in the fourthquarter of 2020, an 88% risefrom the previous one, accord-ing to data from Morningstar.
ESG is cropping up in cor-
ners of finance that aren’t sus-tainability-focused at firstglance. When Saudi Arabia heldan investor call ahead of aeuro-denominated government-bond sale last month, ittouched on topics such as therising number of women in itsworkforce and its cleaner gas-fired power stations, a bankerinvolved in the deal said. Thekingdom was able to raisemoney at a negative interestrate for the first time, althoughit didn’t label the bonds asgreen. Some money managershave included Saudi debt inESG funds.
The rules dictate that all fi-nancial firms that have inves-tors in the EU, including U.S.money managers, will have to
The European Union isbringing rules into effect onWednesday that seek to regu-late the fast-growing sustain-able-finance industry for thefirst time.
Managers of funds that in-vest in line with environmental,social or governance consider-ations, known as ESG, will haveto put forward a tangible, mea-surable plan for how they willdo so. This will apply to all as-set managers that raise moneyin the EU, whether they arebased within its borders or not.
“Today there’s quite a bit ofvariability, too much variability”in how ESG investments are de-fined, said Jeff McDermott,
BY ANNA HIRTENSTEIN
EU to Set Rules on Do-Good Funds Capital flows intosustainability-marketedfunds, quarterly
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brookes; H=American Commodities Brokerage Co;M=monthly; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA;W=weekly; Z=not quoted. *Data as of 3/8
Source: Dow JonesMarket Data
CashPrices Tuesday,March 9, 2021These prices reflect buying and selling of a variety of actual or “physical” commodities in themarketplace—separate from the futures price on an exchange,which reflectswhat the commoditymight beworth in futuremonths.
ConsumerSavingsRatesBelow are the top federally insured offers available nationwide according to Bankrate.com'sweeklysurveyofhighestyields.For latestoffersandreviewsofthesefinancial institutions,pleasevisit bankrate.com/banking/reviews. Information is believed to be reliable, but not guaranteed.
Highyield savingsBank Yield Bank YieldPhone number Minimum (%) Phone number Minimum (%)
Moneymarket and savings account Six-monthCDLiveOakBank $1 0.60 Presidential Bank, FSB $1,000 0.50(866) 518-0286 (800) 799-1424ComenityDirect $100 0.60 Goldwater Bank $5,000 0.50(833) 755-4354 (480) 281-8200VioBank $100 0.57 First InternetBank of Indiana $1,000 0.45(888) 999-9170 (888) 873-3424
One-monthCD One-year CDLoneStar Bank $1,000 0.20 ConnexusCredit Union $5,000 0.71(713) 358-9400 (800) 845-5025StateBank of India California $1,000 0.15 CFGCommunityBank $500 0.67(877) 707-1995 (888) 205-8388Presidential Bank, FSB $1,000 0.10 LiveOakBank $2,500 0.65(800) 799-1424 (866) 518-0286
Two-monthCD Two-year CDLoneStar Bank $1,000 0.20 ConnexusCredit Union $5,000 0.81(713) 358-9400 (800) 845-5025StateBank of India California $1,000 0.15 Goldwater Bank $5,000 0.80(877) 707-1995 (480) 281-8200VirtualBank $10,000 0.15 ComenityDirect $1,500 0.75(877) 998-2265 (833) 755-4354
Three-monthCD Five-year CDGoldwater Bank $5,000 0.35 ConnexusCredit Union $5,000 1.01(480) 281-8200 (800) 845-5025BrioDirect $500 0.25 First InternetBank of Indiana $1,000 0.96(877) 369-2746 (888) 873-3424LoneStar Bank $1,000 0.25 Goldwater Bank $5,000 0.95(713) 358-9400 (480) 281-8200
Highyield jumbos -Minimum is $100,000
Moneymarket and savings account Six-monthCDCFGCommunityBank 0.66 Goldwater Bank 0.50(888) 205-8388 (480) 281-8200BrioDirect 0.60 Presidential Bank, FSB 0.50(877) 369-2746 (800) 799-1424LuanaSavingsBank 0.55 First InternetBank of Indiana 0.45(800) 666-2012 (888) 873-3424
One-monthCD One-year CDLoneStar Bank 0.20 ConnexusCredit Union 0.71(713) 358-9400 (800) 845-5025StateBank of India California 0.15 CFGCommunityBank 0.67(877) 707-1995 (888) 205-8388VirtualBank 0.10 LiveOakBank 0.65(877) 998-2265 (866) 518-0286
Two-monthCD Two-year CDLoneStar Bank 0.20 ConnexusCredit Union 0.81(713) 358-9400 (800) 845-5025StateBank of India California 0.15 Goldwater Bank 0.80(877) 707-1995 (480) 281-8200VirtualBank 0.15 ComenityDirect 0.75(877) 998-2265 (833) 755-4354
Three-monthCD Five-year CDGoldwater Bank 0.35 ConnexusCredit Union 1.01(480) 281-8200 (800) 845-5025LoneStar Bank 0.25 First InternetBank of Indiana 0.96(713) 358-9400 (888) 873-3424StateBank of India California 0.25 Goldwater Bank 0.95(877) 707-1995 (480) 281-8200
Notes: Accounts are federally insured up to $250,000per person. Yields are based onmethod ofcompounding and rate stated for the lowest required opening deposit to earn interest. CDfigures are for fixed rates only.MMA:Allows six (6) third-party transfers permonth, three (3) ofwhichmay be checks. Rates are subject to change.
Source: Bankrate.com, a publication of Bankrate, Inc., PalmBeachGardens, FL 33410Internet:www.bankrate.com
s LamarAdv LAMR 95.55 0.23LambWeston LW 81.60 -2.70LasVegasSands LVS 62.12 -1.14Lear LEA 178.96 -1.42Leidos LDOS 93.26 1.26Lennar A LEN 88.43 0.31Lennar B LEN.B 71.58 1.26LennoxIntl LII 290.22 -2.00
s LeviStrauss LEVI 24.79 0.01LiAuto LI 23.08 1.75LibertyBroadbandA LBRDA 146.08 0.03LibertyBroadbandC LBRDK 150.63 0.54LibertyGlobal B LBTYB 24.15 0.39LibertyGlobal A LBTYA 24.54 0.39LibertyGlobal C LBTYK 24.36 0.52LibertyFormOne A FWONA 40.85 0.35LibertyFormOne C FWONK 45.83 0.23LibertyBraves A BATRA 32.00 0.24
s LibertyBraves C BATRK 31.16 0.20LibertySirius B LSXMB 45.21 0.58LibertySirius A LSXMA 44.74 0.69LibertySirius C LSXMK 44.63 0.58EliLilly LLY 206.11 -0.92LincolnNational LNC 60.13 0.17Linde LIN 262.34 8.66LithiaMotors LAD 374.98 -2.84LiveNationEnt LYV 87.26 -2.14LloydsBanking LYG 2.24 -0.04LockheedMartin LMT 337.50 -3.95Loews L 49.17 -1.03LogitechIntl LOGI 97.00 5.85Lowe's LOW 165.99 3.07LufaxHolding LU 15.16 0.30
s Nasdaq NDAQ 146.65 1.66Natera NTRA 99.30 6.03NationalGrid NGG 58.32 0.54Natura&Co NTCO 16.50 0.12NatWest NWG 5.24 -0.06NetApp NTAP 64.61 2.02NetEase NTES 110.68 8.60Netflix NFLX 506.44 13.11Neurocrine NBIX 91.01 1.64NewOrientalEduc EDU 185.93 8.73NYTimes A NYT 50.52 1.10NewellBrandsNWL 24.88 -0.32Newmont NEM 57.25 0.86
s NewsCorp B NWS 23.80 0.57s NewsCorp A NWSA 24.85 0.61NextEraEnergyNEE 74.02 3.16NielsenHoldings NLSN 25.80 -0.46Nike NKE 135.95 1.39NiSource NI 22.03 -0.01Nokia NOK 3.96 0.09
s StateStreet STT 81.84 1.34SteelDynamics STLD 47.39 -0.68Stellantis STLA 17.56 0.45Steris STE 179.03 6.38STMicroelec STM 35.83 2.53StoneCo STNE 70.91 1.58Stryker SYK 237.17 1.17SumitomoMits SMFG 7.23 -0.05SunComms SUI 143.17 0.18SunLifeFinancial SLF 50.86 0.30SuncorEnergy SU 21.86 -0.15SunRun RUN 53.68 6.13Suzano SUZ 13.63 0.65SynchronyFin SYF 40.17 -0.47Synopsys SNPS 228.40 9.91Sysco SYY 79.36 -2.34
T U VTAL Education TAL 75.75 6.91TC Energy TRP 45.33 -0.32TE Connectivity TEL 129.41 2.26Telus TU 21.20 0.02TelusIntl TIXT 28.81 -0.13TJX TJX 66.08 0.90T-MobileUS TMUS 126.31 -0.75
* PrimarymarketNYSE, NYSEAmerican NYSEArca only.†(TRIN)A comparison of the number of advancing and decliningissueswith the volumeof shares rising and falling. AnArmsof less than 1 indicates buying demand; above 1indicates selling pressure.
PercentageGainers... Percentage Losers
Volume %chg from Latest Session 52-WeekCompany Symbol (000) 65-day avg Close % chg High Low
CrucibleAcquisition Cl A CRU 322 1756 10.17 -0.59 11.10 9.85KraneCICCCn5GSemicon KFVG 610 1676 24.49 0.57 30.40 24.16IQMacKayMun Inter MMIT 711 1445 26.64 0.26 27.51 22.05AthlonAcquisition Cl A SWET 107 1295 9.76 -0.41 9.91 9.65LifeSci Acquisition II LSAQ 360 1270 10.60 4.23 12.68 9.96* Common stocks priced at $2 a share ormorewith an average volumeover 65 trading days of at least5,000 shares =Has traded fewer than 65 days
Nasdaq Composite Index13073.82 s 464.66, or 3.69%High, low, open and close for eachtrading day of the past three months.
Year agoLast
Trailing P/E ratio *†P/E estimate *†Dividend yield *†All-time high:
36.55 26.35
27.52 22.15
0.80 0.98
14095.47, 02/12/21
10800
11400
12000
12600
13200
13800
14400
Dec. Jan. Feb. Mar.
65-day moving average
EQUITIES
CREDIT MARKETS
CommoditiesPricing trends on some rawmaterials, or commodities
Tuesday 52-Week YTDClose Net chg %Chg High Low %Chg % chg
Dow Jones Industrial Average31832.74 s30.30, or 0.10%High, low, open and close for eachtrading day of the past three months.
Year agoLast
Trailing P/E ratioP/E estimate *Dividend yieldAll-time high
32.39 19.45
20.39 16.69
1.86 2.57
31961.86, 02/24/21
25000
26200
27400
28600
29800
31000
32200
Dec. Jan. Feb. Mar.
Current divisor 0.15198707565833
Bars measure the point change from session's open
tt
Session high
Session low
Session open
Close Open
CloseDOWN UP
65-day moving average
S&P 500 Index3875.44 s54.09, or 1.42%High, low, open and close for eachtrading day of the past three months.
Year agoLast
Trailing P/E ratio *P/E estimate *Dividend yield *All-time high
43.22 23.86
22.15 17.42
1.51 2.01
3934.83, 02/12/21
3300
3425
3550
3675
3800
3925
4050
Dec. Jan. Feb. Mar.
65-day moving average
*Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.; †Based on Nasdaq-100 Index
MARKETS DIGEST
P2JW069000-0-B00900-2--------XA
B10 | Wednesday, March 10, 2021 * THEWALL STREET JOURNAL.
Net YTDFund NAV Chg %Ret
American Century InvUltra 75.20 +2.53 -1.0American Funds Cl AAmcpA p 40.27 +0.65 3.0AMutlA p 46.68 +0.17 4.6BalA p 30.76 +0.24 1.9BondA p 13.39 +0.03 -2.7CapIBA p 65.03 +0.38 3.2CapWGrA 61.02 +0.86 2.7EupacA p 69.02 +1.29 -0.5FdInvA p 71.85 +1.15 3.9GwthA p 68.28 +2.08 1.1HI TrA p 10.23 -0.01 1.8ICAA p 46.38 +0.49 4.4IncoA p 24.48 +0.08 3.9N PerA p 61.13 +1.80 1.1NEcoA p 59.45 +1.51 -0.1NwWrldA 87.95 +1.50 ...SmCpA p 81.29 +1.92 2.2TxExA p 13.54 +0.02 -0.2WshA p 53.04 +0.31 5.7
Top 250 mutual-funds listings for Nasdaq-published share classes by net assets.
e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. j-Footnotes eand s apply. k-Recalculated by Lipper, using updated data. p-Distribution costs apply,12b-1. r-Redemption charge may apply. s-Stock split or dividend. t-Footnotes p and rapply. v-Footnotes x and e apply. x-Ex-dividend. z-Footnote x, e and s apply. NA-Notavailable due to incomplete price, performance or cost data. NE-Not released by Lipper;data under review. NN-Fund not tracked. NS-Fund didn’t exist at start of period.
Key annual interest rates paid to borrowor lendmoney inU.S. and internationalmarkets. Rates beloware aguide to general levels but don’t always represent actual transactions.
Notes ondata:U.S. prime rate is the base rate on corporate loans posted by at least 70%of the 10 largestU.S. banks,and is effectiveMarch 16, 2020. Other prime rates aren’t directly comparable; lending practices varywidely by location; Discount rate is effectiveMarch 16, 2020.SecuredOvernight FinancingRate isas ofMarch 8, 2021. DTCCGCFRepo Index is Depository Trust&Clearing Corp.'sweighted averagefor overnight trades in applicable CUSIPs. Value traded is in billions ofU.S. dollars.Federal-funds ratesare Tullett Prebon rates as of 5:30 p.m. ET.
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; FactSet;Tullett Prebon Information, Ltd.
IndexFuturesMiniDJ Industrial Average (CBT)-$5 x indexMarch 31857 32118 s 31792 31811 35 83,677June 31785 32003 s 31680 31697 36 7,419S&P500 Index (CME)-$250 x indexMarch 3813.80 3874.00 3828.50 3873.30 54.00 29,699June … … … 3863.40 54.10 44Mini S&P500 (CME)-$50 x indexMarch 3831.25 3901.25 3826.25 3873.25 54.00 2,613,007
June 3820.00 3891.50 3816.50 3863.50 54.25 164,446Mini S&PMidcap400 (CME)-$100 x indexMarch 2542.70 2570.50 2533.30 2546.90 17.90 49,557June 2560.00 2566.50 2529.60 2542.00 17.70 28MiniNasdaq 100 (CME)-$20 x indexMarch 12345.75 12867.50 12326.00 12788.75 491.50 258,138June 12336.25 12856.50 12316.50 12778.00 492.25 10,925Mini Russell 2000 (CME)-$50 x indexMarch 2211.50 2263.60 2202.50 2245.70 44.90 551,345
June 2210.70 2260.00 2199.60 2242.30 45.10 6,838Mini Russell 1000 (CME)-$50 x indexMarch 2163.70 2202.20 2157.10 2187.80 33.70 10,190U.S. Dollar Index (ICE-US)-$1,000 x indexMarch 92.45 92.53 s 91.92 91.96 –.37 33,927June 92.43 92.53 s 91.92 91.96 –.38 9,334
Source: FactSet
Global GovernmentBonds:MappingYieldsYields and spreads over or underU.S. Treasurys on benchmark two-year and 10-year government bonds inselected other countries; arrows indicatewhether the yield rose(s) or fell (t) in the latest session
Country/ Yield (%) Spread Under/Over U.S. Treasurys, in basis pointsCoupon (%) Maturity, in years Latest(l)-2 -1 0 1 2 3 4 Previous Month ago Year ago Latest Prev Year ago
0.125 U.S. 2 0.165 s l 0.163 0.117 0.3451.125 10 1.545t l 1.594 1.156 0.501
5.500 Australia 2 0.124 t l 0.140 0.114 0.426 -4.5 -2.9 2.91.500 10 1.790 s l 1.786 1.243 0.617 24.8 18.8 4.8
0.000 France 2 -0.599 s l -0.618 -0.641 -0.770 -76.8 -78.7 -116.60.000 10 -0.057 t l -0.037 -0.223 -0.387 -159.9 -163.5 -95.5
0.000 Germany 2 -0.679 t l -0.676 -0.704 -1.002 -84.7 -84.5 -139.90.000 10 -0.299 t l -0.273 -0.444 -0.858 -184.1 -187.1 -142.6
0.050 Italy 2 -0.367 t l -0.342 -0.423 0.413 -53.6 -51.1 1.60.900 10 0.694 t l 0.750 0.514 1.404 -84.8 -84.9 83.6
0.100 Japan 2 -0.117 t l -0.113 -0.127 -0.299 -28.5 -28.2 -69.60.100 10 0.130 s l 0.122 0.070 -0.143 -141.2 -147.7 -71.2
0.000 Spain 2 -0.450 t l -0.433 -0.527 -0.400 -61.9 -60.2 -79.60.100 10 0.364 t l 0.406 0.132 0.267 -117.8 -119.3 -30.2
0.125 U.K. 2 0.088 t l 0.103 -0.038 0.086 -8.1 -6.6 -31.14.750 10 0.729 t l 0.756 0.464 0.159 -81.3 -84.2 -40.9
Source: Tullett Prebon, Tradeweb ICE U.S. Treasury Close
CorporateDebtPrices of firms' bonds reflect factors including investors' economic, sectoral and company-specificexpectationsInvestment-grade spreads that tightened themost…
Spread*, in basis pointsIssuer Symbol Coupon (%) Yield (%) Maturity Current One-day change Lastweek
International BusinessMachines IBM 3.375 0.31 Aug. 1, ’23 15 –11 19SiemensFinancieringsmaatschappij SIEGR 2.000 0.56 Sept. 15, ’23 40 –9 n.a.BPCE BPCEGP 2.375 1.46 Jan. 14, ’25 64 –7 n.a.DeltaAirlines, Inc. RetirementPlan … 4.750 3.23 Oct. 20, ’28 168 –7 178
*Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-runTreasury; 100basis points=one percentage pt.; change in spread shown is for Z-spread.Note: Data are for themost active issue of bondswithmaturities of two years ormore
TrackingBondBenchmarksReturn on investment and spreads over Treasurys and/or yields paid to investors comparedwith 52-weekhighs and lows for different types of bondsTotalreturn YTD total Yield (%)close return (%) Index Latest Low High
*Constrained indexes limit individual issuer concentrations to 2%; theHighYield 100 are the 100 largest bonds † In local currency §Euro-zone bonds
** EMBIGlobal Index Sources: ICEDataServices; BloombergBarclays; J.P.Morgan
Totalreturn YTD total Yield (%)close return (%) Index Latest Low High
KEY:A: annual;M:monthly; Q: quarterly; r: revised; SA: semiannual; S2:1: stock split and ratio; SO: spin-off.
COMMODITIES wsj.com/market-data/commodities
P2JW069000-1-B01000-1--------XA
THEWALL STREET JOURNAL. * * * * Wednesday, March 10, 2021 | B11
China equities at AberdeenStandard Investments in HongKong. He said the long-termgrowth outlook for the coun-try’s internet and technologygiants remains intact but thattheir stocks are vulnerable tobig swings because they wereamong the main beneficiariesof excess liquidity in the mar-kets during the coronaviruspandemic.
Barely a month ago,Meituan, a Beijing-based com-pany that runs a popular shop-ping, food-delivery and book-ings app, was flying high asChina’s third most valuablecompany, with a market capi-talization in excess of $300billion.
Investor enthusiasm overMeituan’s recent expansioninto grocery bulk-buying inChina caused a rapid run-up inits shares, even though thecompany generates only asmall profit.
Meituan has been one ofthe biggest casualties of therecent selloff, which has cutits value by a third since Feb.
17. The stock was one of themost popular purchases by in-vestors in mainland China us-ing the Stock Connect tradinglink to buy stocks listed inHong Kong.
Outflows through that linkhave recently picked up.
Armies of individual inves-tors who have become moreactive users of mobile tradingapps have been driving upmarket volumes.
As a result, “When thingsstart to go up, they go up veryquickly. But when they start togo down, the whole thing un-ravels quickly, too,” said WeiWei Chua, a portfolio managerat Mirae Asset Global Invest-ments in Hong Kong.
He said his firm has rotatedinto cyclical financial names,such as insurers, and defen-sive plays, such as utility com-panies.
Ken Peng, head of Asia-Pa-cific investment strategy atCiti Private Bank, said that asthe world gradually recoversfrom the coronavirus pan-demic, technology stocks could
fall out of favor with inves-tors. “There’s going to be lessdemand for tech,” he said,“and more demand for leavingyour house.”
Many individual investorssuffered losses in the swiftselloff.
Huang Xiaohu, a 35-year-old technology entrepreneur inShenzhen, earlier on profitedfrom the strong trading debutof Kuaishou Technology, anoperator of a popular shortvideo app in China. After sell-ing shares he received in thecompany’s initial public offer-ing, he decided to buy themback following a recent tum-ble, but the shares kept falling,and he is sitting on paperlosses equivalent to more than$10,000.
“I don’t want to talk aboutstocks anymore. My heart isbroken,” said Mr. Huang, whoalso holds the Hong Kong-listed shares of Alibaba, with apaper loss of around 20%.
He said he plans to keepboth stocks in the hope of arecovery.
MARKETS
AUCTIONRESULTSHere are the results of Tuesday's Treasury auction.All bids are awarded at a single price at themarket-clearing yield. Rates are determined by the differencebetween that price and the face value.
(0.355%)Interest rate 0.250%Bids at clearing yield accepted 90.33%Cusip number 91282CBR1
The notes, datedMarch 15, 2021,mature onMarch 15,2024.
Investor bets on rising U.S.interest rates are testing theshort-term cash markets thatserve as the financial system’splumbing.
Hedge fundsand other institu-tional investorsare paying an an-
nual rate of as much as 4% toborrow the most recent issueof the 10-year U.S. Treasurynote in the market for repur-chase agreements, or repos.These hedge funds and otherswant to borrow and sell thebonds now in a wager thatthey can buy them back later
for less, as rising U.S. ratespush bond prices lower.
The 10-year yield settledTuesday at 1.545%, accordingto Tradeweb. That’s downfrom 1.594% at Monday’sclose, its highest level in morethan a year.
Usually, those hedge funds,central banks and other insti-tutions lending in the repomarket receive both Trea-surys, which function as col-lateral, and interest paymentsin exchange for providingovernight cash.
Now they are paying to bor-row Treasurys and part withcash. The inversion—whichlast reached these levels a de-cade ago—has caught tradersand investors off guard.
“The cost of borrowing se-curities has skyrocketed in thepast few days as the markethas been under enormouspressure,” said Gennadiy Gold-berg, U.S. rates strategist at
TD Securities in New York.The $1.3 trillion overnight
repo market is where hedgefunds, banks and financialcompanies borrow cash over-night from one another. Thismarket exists to allow compa-nies or investors that own lotsof securities but are short oncash to cheaply borrow money.And it allows parties with lotsof cash to earn a small returnwhile taking little risk, be-cause they hold the securitiesas collateral.
A September 2019 spike inthe cost of borrowing in therepo market stemming from ascarcity of cash prompted theFederal Reserve to inject hun-dreds of billions of dollars intomoney markets.
Traders betting on higherU.S. rates want the most easilytraded bonds for the purpose,which tend to be the most re-cently issued 10-year notes.And to locate them, they lend
money in the repo market andreceive the bonds in return ascollateral.
Usually, they would also geta small fee. Instead, expecta-tions for an increase in interestrates in a post-pandemic, stim-ulus-fueled expansion havedriven those fees to the lowestsince 2003, when technical fac-tors sparked a similar inver-sion. At those levels, it ischeaper to pay a fine for failingto complete the transaction.
Even though the Fed hassaid it plans to keep rates lowfor a long period, investors areconcerned about inflation andthe long-term effects of un-precedented fiscal policy.
While financial markets areflush with U.S. governmentbonds issued in recent yearsto fund tax cuts and pandemicrelief, the concentrated de-mand for the most recently is-sued 10-year Treasury noteshas created a supply shortage,
according to traders and ana-lysts. Speculative bets againstthe 10-year Treasury note lastweek posted their largest one-week increase on record indata compiled by TD Securi-ties, suggesting increased de-mand for the $41 billion of 10-year notes issued in Februaryoutstanding.
Some analysts expect thesituation will ease this weekafter the U.S. Treasury’sscheduled auction of $38 bil-lion in 10-year notes onWednesday.
The expiration of a specialexemption that allowed banksto hold less capital comparedwith the size of their balancesheets is also fueling someanxiety in funding markets.
The exemption to the so-called supplementary leverageratio rule allowed large banksto not count their holdings ofTreasurys and central-bank re-serves when working out how
much capital to hold to remainwithin regulatory limits. If theexemption expires on March31, banks would have to holdmore cash against Treasurysand deposits at the Fed. Thatcould prompt them to cutholdings of U.S. governmentbonds, perhaps increasingmarket volatility.
Regulators are expected tomake a decision soon onwhether to extend the specialexemption.
BY JULIA-AMBRA VERLAINEAND SEBASTIAN PELLEJERO
Bets Against 10-Year Note Hurt ReposAs yields rise, the costto large investors toborrow overnightskyrockets
CREDITMARKETS
NasdaqStagesComeback
20
0 5-minute intervals
2
4
6
8
10
12
14
16
18
%
10 a.m. 11 noon 1 p.m. 2 3 4
Source: FactSet
Tesla
Square
Roku
NasdaqComposite
S&P 500
Share-price and indexperformance, Tuesday
Shares of technology heavyweight Amazon.com increased 3.8% to $3,062.85 on Tuesday.
MARK
HER
TZBE
RG/ZUMAPR
ESS
rising sales. Biotechnology, fi-nancial technology, electriccars and clean energy allpeaked and began to fall atroughly the same time.
It isn’t that sales look lessgood. It isn’t that their profitprospects were damped—inmany cases, including Tesla,12-month earnings forecastshave risen even as stockprices fell. It is that the fu-ture earnings from thosehigher sales are less valuablewith bond yields up, so evenmany of their fans realizethey shouldn’t trade at suchmultiples. Add to that mo-mentum traders switchingfrom pushing up the price toadding to the downward pull,and things have been grim.
S till, the falls havebarely begun to reverselast year’s gains. Tesla
has still more than tripled inthe past year, despite a fallof more than a third from itslate January high.
If bond yields keep goingup, the speculative growthstocks will be hurt. Some ofthe weakest might even suf-fer the ignominy of having tochange from expansion at allcosts to cash-preservationmode as they find it harderto tap investors for newmoney. Newly listed loss-making stocks that havebeen going public via SPACsare most exposed.
Against that, bond yieldshave already risen a lot, andif they fall back could reinvig-orate the growth stocks, asTuesday’s swings showed. Ev-eryone knows economic ex-pansion is on the way and oilbriefly topped $70 a barrelthis week, suggesting the re-covery might already be an-ticipated in prices.
My view is that even afterthe big gains for cyclicalsand bombed-out stocks, andbig losses for the growthstocks, there is probably fur-ther to go as life returns tonormal. But the scale of themoves means I’m a lot lesssure of further gains for theExxons of the world.
operating leverage is thehighest since the aftermathof the 2008-09 recession, ac-cording to David Kostin, chiefU.S. equity strategist at Gold-man Sachs.
Tesla is only barely profit-able, but investors don’t re-ally mind. Its stock dependsnot on this year’s earningsbut on earnings further inthe future, when sales areexpected to be much higherand it will finally—share-holders hope—deliver on thepromise of self-driving cars.
Unfortunately for Tesla in-vestors, the stock marketcares less about the long runthat it did. The election of aDemocrat committed to com-bating climate change surelyimproved the long-run out-look for electric cars. But in-vestors’ heads are turned bythe rapidly improving pros-pects of companies that canmake profits in the here-and-now from a better economy.
T his isn’t about theshort-term greed stockmarkets are so often
accused of. The improvingeconomy means higher bondyields, as markets price inhigher future inflation.Higher yields push investorsto prioritize the near termeven more. That is becauseprofits many years hencelook less attractive if thesafe alternative of Treasurysoffers a decent income. Fall-ing prices for long-datedbonds as yields rise arematched by falling prices forstocks with earnings that arelong-dated, too.
The pattern holds acrossthe speculative growthstocks, companies with littleor no profitability but fast-
ContinuedfrompageB1
Market IsThinkingShort Term
While U.S. technologystocks Tuesday bounced backafter a weekslong losingstreak. Chinese technologystocks fell even more duringthat time.
An index of the largesttechnology stocks listed inHong Kong dropped 26% inless than three weeks, reflect-ing how a sudden turn in themarket snowballed into signif-icant losses for investors whopiled into popular stocks ear-lier this year.
The Hang Seng Tech In-dex—which tracks 30 compa-nies including Chinese inter-net giants Tencent HoldingsLtd. and Alibaba Group Hold-ing Ltd., and smartphonemaker Xiaomi Corp.—closedTuesday at its lowest level in2021 and is in bear-marketterritory, defined as a drop ofat least 20% from a recenthigh.
In comparison, the NasdaqComposite closed on Monday10.5% lower than the index’srecent high on Feb. 12.
Money managers say thetrigger for the U.S. and Asiamarket declines was similar: afast and unexpected rise inTreasury bond yields, whichmade stocks of fast-growingcompanies less attractive andcaused some investors to shiftfrom technology into banking,energy and other less volatilestocks.
China’s big technology play-ers have taken a bigger hit,because a flood of money frominvestors in mainland Chinahad pushed up their stockprices and market valuationssharply.
“It’s hard to call the bot-tom, but we see this as ahealthy correction, and themarket was due for one,” saidNicholas Yeo, who oversees
BY XIE YU AND JOANNE CHIU
Tech Stocks in China Were HitHarder Than U.S. Counterparts
One-month shareperformance
Source: FactSet
10
–30
–20
–10
0
%
MarchFeb. 8
Meituan
Tencent
Xiaomi
The Hang Seng Tech Index, which includes Xiaomi, closedTuesday at its lowest level in 2021.
QILAIS
HEN
/BLO
OMBE
RGNEW
S
markets helped tech shares re-coup some of their losses, in-vestors said. Money managersexpect many companies in thesector to continue to benefitfrom increased online shoppingand at-home access to media,entertainment and computingoptions even as Covid-19 lock-
downs ease.“It is this buy-
the-dip mental-ity,” said Daniel
Morris, chief market strategistat BNP Paribas Asset Manage-ment. “It’s not like we’vechanged our long-term view ontech. Everyone expects it to dowell—it was just really expen-sive.”
The Nasdaq rose 464.66points, or 3.7%, to 13073.82, itslargest one-day percentagegain since Nov. 4. The rallyshaved the index’s decline fromits Feb. 12 high to 7.2%.
The S&P 500 added 54.09points, or 1.4%, to 3875.44. Andthe Dow Jones Industrial Aver-age added 30.30 points, or0.1%, to 31832.74, after risingmore than 300 points earlier inthe session. The blue-chip in-
ContinuedfrompageB1
dex is off just 0.4% from its re-cord set last month.
The buy-the-dip mentalityhad been largely absent duringa broader rotation out ofgrowth stocks into shares ofcompanies better positioned tobenefit from an economic up-swing. But opportunistic buy-ing has been a reliable constantduring previous episodes ofstock-market pullbacks—lookno further than the dizzyingclimb stocks mounted after lastMarch’s slide.
On Tuesday, that buyingtranslated into massive gainsthat cut the recent losses suf-fered by some stocks in asmuch as half. Helping the mar-
ket’s overall mood were signsthat lawmakers remain ontrack to pass the latest versionof the $1.9 trillion coronavirusstimulus package this week.
But some investors say thebig gains likely won’t translateinto an end of the volatility.Too many variables remain inplay, from whether the addi-tional stimulus Congress plansto inject into the economy willlead to inflation to concernsthat high-growth stocks likeTesla remain expensive.
“There will be heightenedvolatility as long as the path ofinflation remains as uncertainas it is,” said Jase Auby, chiefinvestment officer for the
Teacher Retirement System ofTexas. Mr. Auby said the pen-sion fund’s stock allocation istilted toward value stocks, orshares of companies morelikely to benefit in a reflation-ary environment.
For now, investors appearedto be putting those concerns onhold.
Tesla shares led the S&P500, rising $110.58, or 20%, to$673.58, cutting the electric-car maker’s loss over the pastmonth to about 21%. Rokushares added $33.92, or 10%, to$361.11, while Square gained$23.22, or 12%, to $225.09.
Big tech stocks also rallied.Apple shares rose $4.72, or
4.1%, to $121.09, Amazon added$110.90, or 3.8%, to $3,062.85and Facebook gained $10.43, or4.1%, to $265.74.
Several of those stocks arefeatured in ARK InvestmentManagement’s five popular ex-change-traded funds, all ofwhich rose more than 7%. Thegains helped stem a wave oflosses that, at one point, hadknocked the five actively man-aged funds down more than20% from their recent highs.
Meme stocks rallied, too.Shares in GameStop gained$52.40, or 27%, to $246.90 asshares climbed for a secondday after the board tappedChewy co-founder Ryan Cohen
to lead a committee dedicatedto transforming the retailer.AMC Entertainment added$1.21, or 13%, to $10.50.
Some investors expect thatbond markets could calm as ap-petite for U.S. government debtrevives following the sharp risein yields. The 10-year Treasuryyield was as low as 0.915% nearthe start of the year.
Overseas, the pan-continen-tal Stoxx Europe 600 ticked up0.8%. Early Wednesday, Japan’sNikkei Stock Average was upless than 0.1%, Hong Kong’sHang Seng Index was up 0.5%and the Shanghai Compositewas up 0.7%. U.S. stock futureswere down 0.2%.
TUESDAY’SMARKETS
P2JW069000-4-B01100-1--------XA
B12 | Wednesday, March 10, 2021 THEWALL STREET JOURNAL.
HEARD ONTHESTREET
FINANCIAL ANALYSIS & COMMENTARY
Stitch Fix Trips on Its HeelsE-tailer needs amakeover, but prospects for increased revenue appear bright
Bond-Market MovesAren’t Inflation’sTIP-ping Point
Don’t take the surge baked into Treasury inflation-protected securities too literally
The Treasury market is imply-ing substantially more inflationover the next decade than it did inthe fall. That might have as muchto do with investors worrying lessthat the world is about to fallapart than a belief that inflation isheaded inexorably higher.
The 10-year break-even rate, thedifference between the yield onthe 10-year Treasury note and the10-year Treasury inflation-pro-tected security, is often looked atas bond-market investors’ judg-ment of where inflation is headed.It now stands at 2.2 percentagepoints, a half-point above its levelat the start of November and nearits highest since 2014.
There are some good reasonsfor thinking inflation over the longhaul might be higher than believedback in the fall. With vaccinationstaking off and more governmentsupport on its way, expectationsfor how quickly the economy willrecover from the pandemic havestepped up. The Federal Reservehas remained steadfast about itsintention to get inflation a bitabove its 2% target—and not justfor a little while.
Forecasters, Wall Streeters andordinary Americans never had in-flation forecasts quite as low aswhat the break-even rate impliedthrough much of last year. By thesame token, while they havenudged up their expectations for
Stitch Fix’s quarterly revenue
Source: FactSetNote: Fiscal year ends on the Saturday that is closest to July 31 of each year.
$600
0
100
200
300
400
500
million
FY2019 ’20 ’21
PROJECTIONS
Next week, Japan’s central bankwill formally review its monetary-policy strategy for the first timesince 2016. Relatively little is ex-pected from that review. Worse still,relatively little is expected of Japan.
Even those skeptical of the oft-re-peated talking point that centralbanks exhausted their ammunitionmust admit that the Bank of Japanis at the very least out of ideas. Jap-anese bond yields are now margin-ally higher than they were at the be-ginning of 2020 across almost everypart of the yield curve. Average in-terest rates on loans are functionallyunchanged. Core consumer priceshave been declining for six months.
Reducing interest rates any fur-ther into negative territory is prettymuch a no-go, because of the delete-rious effect on the profits of banks,and regional banks in particular.Having reached the end of its ropewith conventional monetary policyby the time of the global financialcrisis, the BOJ seems to havereached the limits of its own com-fort with unconventional policy too.
Virtually no one really believesthe central bank has any hope ofhitting its target for 2% inflationsustainably anytime soon.
Some inside the BOJ seem tounderstand the problem. GoushiKataoka, a BOJ board member whohas pushed for greater stimulus,said last week that the centralbank needs a new strategy.
What that might be is a moredifficult question. A frank andhonest assessment of where Japa-nese economic policy stands—anda retrospective view of the suc-cesses and limitations of Abenom-ics—would be required. Betweenlate 2012 and late 2019, the Bankof Japan facilitated the best periodof nominal gross domestic product
Sometimes the arcana of bankregulation becomes a matter ofmarket fascination. Often it endsup not being quite as important aseveryone had hoped.
The latest example is whetheror not the Federal Reserve will ex-tend an emergency pandemic pol-icy to exclude cash and Treasurysfrom banks’ supplementary lever-age ratios, a key regulatory mea-sure. Doing so would give themmore capacity to gather depositsand buy government bonds. If theFed doesn’t extend this after it isset to expire on March 31, the ar-gument goes, there might be evenmore upward pressure on yields inthe Treasury market.
Extending this relief could bringcalm to anxious markets, and theFed may consider it good house-keeping for monetary policy orTreasury-market functioning. Butit is unlikely to be a cure for risingrates in general.
So far, the biggest U.S. banks asof the end of the fourth quarterwere operating within their lever-age requirements, even without theexemption, and so had room to ex-pand their balance sheets, accord-ing to analysts at Wolfe Research.Bank of America said in late Feb-ruary it was still “well positioned”and “could manage” without an ex-emption, which it said it hasn’tused. Citigroup said that the sup-plementary leverage ratio “wouldnot become binding for us,” evenassuming further balance-sheetgrowth and capital return.
This isn’t to say expiration mightnot cause some issues down theroad. JPMorgan Chase has warnedthat without an extension of SLRrelief, it could be an issue for thebank if the Fed keeps expanding itsbalance sheet as anticipated. Otherways the bank could relieve thepressure include issuing preferredshares or turning away deposits.
But even if banks weren’t bal-
ance-sheet constrained, they haveto weigh a number of factors whenconsidering putting their growingliquidity into long-term Treasurys.If rates continue to rise, Treasurysfall in value, which can deductfrom banks’ capital levels. Bankscan opt to hold Treasurys to matu-rity and avoid a capital hit. But ul-timately in an improving economy,banks are looking to lend to con-sumers and businesses, not parkmoney in government debt forever.
One indicator of banks’ mind-set:JPMorgan Chief Executive JamieDimon said this month in aBloomberg interview that there is agood chance of interest rates goingup, and that “I’ve been very clear, Iwould not buy 10-year Treasurys.”Large U.S. banks did sell about $33billion of Treasurys in the fourweeks ended Feb. 24, according toweekly Federal Reserve figures. Butthey offset that with purchases ofagency mortgage-backed securities.
Banks also have to consider thenature of their new deposits. Manyincoming dollars could leave as theeconomy picks up, which means abank would in any event want tohave highly liquid assets such as
cash at the Federal Reserve orvery short-term instruments.“These may be flighty deposits,”says Wolfe analyst Steven Chubak.“Banks have to think about whathappens in the future.”
It is also not clear that banks’roles as market intermediarieswould be immediately affected, ac-cording to rates strategist MarkCabana at Bank of America. Dealerdesks typically fund themselvesvia repurchase agreements, or “re-pos,” which weren’t exemptedfrom leverage ratios, noted ratesstrategists at Bank of America.The strategists wrote on Fridaythat extending the current SLR ex-emption may be “only marginallybeneficial” for rates, though it mayhelp current market conditions.
A wider review of how banks andTreasury markets are regulated in aworld of a bigger Fed balance sheetis warranted. But for now, there arestill many underlying forces push-ing up rates: a quickening economy,inflation concerns and expectationsof future Fed tapering. Regulatorytweaks will be only part of thatmuch bigger story.
—Telis Demos
The company said it expects fiscal 2021 revenue to grow at least at double the rate it achieved the year prior.
NICKOTT
O/W
ASH
INGT
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Weekly dollar amount change in largeU.S. bank holdings
Source: Federal ReserveNote: Large domestically chartered banks, seasonally adjusted
$30
–20
–10
0
10
20
billion
Jan. 2021 Feb.
Agencymortgage-backed securities
Treasurys
Stitch Fix may be having anidentity crisis, but it isn’t anythinga good makeover can’t fix.
On Monday, the e-tailer thatprides itself on algorithmic-basedstyling said it had missed its ownforecast for both revenue and ad-justed earnings before interest,tax, depreciation and amortizationfor the second period ended Jan.30. Its shares fell 28% Tuesday.
Stitch Fix said holiday carrierdelays resulted in expected reve-nue being pushed out. Unlike othere-commerce companies that tendto recognize revenue when an itemships, Stitch Fix does so only whena client checks out after havingtried it on at home. The longer ittakes clients to receive a Fix, thelonger the next might take sincethey tend to buy regularly.
Meanwhile, a la carte purchas-ing suffered, too, during the holi-days. Direct-buy purchases arepersonalized to the client—a topalready purchased but in anothercolor, for example. That took aback seat to gift giving, leading tosofter holiday performance in thatsegment. The company said it ex-pects to roll out a la carte pur-chasing to new clients by the endof the fiscal fourth quarter. Inves-tors had hoped it would be sooner.
But there is light at the end ofthe runway, especially with theshares falling so significantly. Thecompany said it is now allowingclients to preview Fix items before
they are shipped. It also said it isgearing up for drop shipping, adramatic change to holding all itsown inventory. It is also beta test-ing a consignment-like model inwhich it essentially holds new in-ventory from vendors but doesn’tpay for it until it is sold. Lastly,Stitch Fix said it is testing livestyling video calls, which wouldgive clients the ability to show astylist around their closets ratherthan trusting an algorithm.
These changes should materiallyincrease Stitch Fix’s addressablemarket. Even without them,though, Stitch Fix is due for awindfall. Growth in new clients re-ceiving a Fix for the first time was
up 50% year on year in the fiscalsecond quarter. Clients tend to in-crease their spending as they ma-ture on the platform. The companyalso said spending by men hasn’tyet come back as quickly as it hasfor women, but that this seemslikely to change as offices openback up. Stitch Fix said it expectsfiscal 2021 revenue to grow atleast at double the rate it achievedthe year prior.
Recently at all-time highs,Stitch Fix is now working on animproved model at a more reason-able price.
Investors might want to try iton for size.
—Laura Forman
what inflation will do over thenext decade, they haven’t done soby nearly as much.
A Federal Reserve Bank of Phila-delphia survey shows that, as ofthis quarter, economists expect theLabor Department’s measure ofconsumer inflation to average 2.2%over the next decade versus an es-timate of 2.12% last quarter. A Jan-uary Federal Reserve Bank of NewYork survey showed that bond-market participants expect infla-tion of 1.95% over the next fiveyears, and 2.14% in the five yearsafter that compared with Octoberestimates of 1.85% and 2.1%, re-spectively. And the University ofMichigan’s February surveyshowed respondents expecting in-flation to average 2.7% over thenext 5 to 10 years, close to its fallreadings.
The bigger factor in the rise inthe break-even rate seems to be anincrease in term premiums, nothigher expected inflation. Termpremiums are the extra yield in-vestors demand over what theythink is appropriate for a Treasuryto compensate for the possibilitytheir view is wrong. “Premium”has become a bit of a misnomersince in recent years they have of-ten been negative. That may be be-cause rather than worrying about1970s-style inflationary shockssending rates unexpectedly higher,investors now worry more aboutrecessionary shocks.
Economists’ models show that,while the term premiums remainnegative, they aren’t as negativeas back in the fall. A New York Fedmodel, for example, shows a termpremium on the 10-year Treasuryof negative 0.34% versus negative0.75% at the end of October. Thatless negative term premium makesfor higher Treasury yields and ahigher break-even rate.
A future with a bit more infla-tion certainly seems likelier nowthan when the possibility of effec-tive vaccines still seemed murky.But the more important messagefrom the bond market is that theworld seems a little less fraughtnow than it did then.
—Justin Lahart
Japan Risks ResumingGlobal Irrelevance
Regulation Tweak Helps Treasurys Only So Much
RECESSION
10-year break-even inflation rate
Source: Federal Reserve Bank of St. Louis
2.5
0
0.5
1.0
1.5
2.0
%
’16 ’17 ’18 ’19 ’20 ’212015
growth in a generation, but the ex-pansion still wasn’t in line withthe central bank’s goals.
The missing component was fis-cal support, rather than furthermonetary expansion. Contrary toperceptions, Japan’s budget deficitdeclined almost continually as aproportion of GDP through formerPrime Minister Shinzo Abe’s timein office. Two poorly consideredsales-tax increases worked directlyagainst reflation efforts.
Most of the responsibility forpreventing Japan from returningto the morass of nominal stagna-tion therefore belongs to politi-cians. But Japan’s central bankers
need to admit that, rather thansaying yet again that they believethey have the tools they needthemselves. Options such as heli-copter money—giving cash directlyto citizens, rather than simplyswapping assets with them—are ofuncertain legality and would re-quire clear cooperation from thegovernment.
The best element of Abenomics,despite its flaws, was a degree ofconsensus between the Bank ofJapan and the prime minister’s of-fice on economic ambition. With-out similar coordination and anhonest acceptance of the limits towhat the BOJ can do alone,Japan’s stagnation is likely to re-sume. —Mike Bird
Reducing interest ratesany further into negativeterritory is pretty mucha nogo.
I’ve long worried about howmy autistic son will fare whenhe enters the workforce. He’sgot the sort of autism that usedto be known as Asperger’s syn-drome: On the one hand, he’s ex-traordinarily brilliant, incrediblyfriendly and can do anything hesets his mind to.Yet his sensory challenges
and unique style of social inter-actions mean that the tradi-tional workplace could be diffi-
BY ALEXANDRA SAMUEL
Insidecult for him. From the overloadcaused by ambient noise andfluorescent lights to the anxietyof constant conversation, thereis a lot about conventional of-fices that can be challenging forpeople on the autism spectrum.It always seemed my son
would be more comfortable work-ing on his own, in an environmentand on a schedule he could con-trol—but those are options thatmany people don’t get.Covid, though, has rewritten
the possibilities. By normalizingremote work for everybody, thepandemic has made it easier forpeople who don’t adapt well tooffice environments to thrive.
The longtime resistance to sup-porting remote accommodationsfor disabled employees evapo-rated when neurotypical (i.e., notautistic) people had to workfrom home.At the same time, the grow-
ing awareness of neurodiver-sity—the idea that humansaren’t all wired the same way,and that differences like autismand ADHD also come withunique strengths—means thereis more appreciation for whatneurodivergent employees cancontribute.A decade spent navigating
the medical and educational sys-PleaseturntopageR6
More Remote—butMore InclusiveWorking from homeoffers opportunities forautistic employees
Slack, Zoom or Gmail?
Picking the right tool fordifferent situations, orhow to communicatewithout driving yourcolleagues crazy. R9
GoingUpElevator makers have ideas onmaking users feel safe again ina small box with other people,from foot-operated buttonsand gesture commands to bet-ter ventilation. R8
C ompanies spend alot of money ontechnology. Theywaste a lot, too.It happens for all
sorts of reasons.Maybe they are
chasing the latest shiny new thing.Or they misunderstand what con-sumers want. Or they buildsomething new ratherthan buy off the shelf.Whatever the reason,
the likelihood ofspending mistakes isgreater than ever, asthe pandemic hasmade companiesscramble even fasterfor new tools, to ac-commodate peoplerushing to work fromhome. Worldwide ITspending is expected toreach $3.9 trillion this year, up6% from last year, according toGartner Inc., a research firm.“With Covid, everyone’s seeing
digital acceleration, but very few or-ganizations are tracking whatthey’re getting in terms of businessoutcomes,” says James Anderson,research vice president at Gartner.“Where are people wasting money?They’re not using business metricsto influence investment. They’re do-ing what people tell them to do.”The Wall Street Journal asked
technology leaders and business-people about the biggest tech mis-takes companies make that costthem money. Here are some of theiranswers.
Spending too muchon the cloudEverybody knows the benefits ofthe cloud—lower infrastructure and
storage costs, for instance—and thetechnology is improving all the time.But many companies end up
spending way too much to make themove online—because they don’t re-alize what the shift entails. Accord-ing to Gartner analyst Ed Anderson,organizations that lack plans totrack and monitor cloud costs over-spend by an average of 40%.“Basic services in the cloud continueto decrease in price, and by beingdeployed in the cloud you cantake advantage—but this doesnot always happen automati-cally,” says Brian Tosch, princi-pal consultant at Tech DNA, aSeattle-based technology-ad-visory firm.Often the problems arise
because of poor planning. Manycompanies simply move all oftheir software online as a whole—so it can operate in the cloud in-stead of on the company’s servers—without modifying it. MichaelKauffman, principal and chief legalofficer at Tech DNA, calls thesekinds of moves online “lift and shift.”The problem: If software isn’t
modified, it may run all the time anddraw on cloud resources need-lessly—running up big usage costs.This could happen with lots of
applications, such as email and col-laboration systems, says Mr. Ander-son. Most applications are writtenso that you “launch the applicationand let it run. That model isn’t nec-essary in [the] cloud, because re-sources can be allocated dynamicallywhen the application needs them.”In other cases, companies some-
times don’t realize they are storingtheir data online in a way that costsa lot more money, which is anotherproblem that could be solved withmodification.
PleaseturntopageR8
What aWaste!Theways companies overspendwhen it comes to technology
BY SUMAN BHATTACHARYYA
P2JW069000-0-R00100-1--------XA
R2 | Wednesday, March 10, 2021 THEWALL STREET JOURNAL.
JOURNAL REPORT | WORKPLACE TECHNOLOGY
Many technology companies be-moan how difficult it is to find goodemployees. A new study suggeststhe companies themselves might bepartly to blame.At issue is a widespread reliance
on what is known as the technicalinterview process. In addition to theusual vetting of credentials seen inmany industries, technical inter-views typically subject job candi-dates to layers of intense testing.Generally, such tests evaluate criti-cal thinking and problem-solvingskills. They can include brainteasersand complicated technical problemsunrelated to actual on-the-job rolesand responsibilities.The trouble is this: Candidates
often get so flustered from thepressure and the mechanics of theinterview that their performance is
significantly hindered.Companies that rely on these
stressful tests are eliminating po-tentially qualified candidates—totheir own detriment, says Christo-pher Parnin, assistant professor ofcomputer science at North CarolinaState University and senior authorof the study, which was publishedin November. This is particularly un-fortunate, Dr. Parnin says, given theavailability of other, less stressfuland perhaps more appropriate test-ing metrics.Relying on technical interviews
can also have a disproportionateimpact on minorities and other un-derrepresented groups, and discour-age job seekers from applying, Dr.Parnin says, noting that even se-nior-level employees can be afraidto transfer within their own organi-zations for fear of failing such tests.Dr. Parnin and his fellow re-
searchers designed an experimentin which 48 computer-science stu-dents were given a problem tosolve—one used within the pastseveral months in technical inter-views at well-known software com-panies. Nearly half, 22 of the indi-viduals, were tasked with solving atechnical problem in private on awhiteboard. The other studentswent through the typical interviewformat, in which they were asked tosolve the problem out loud with aproctor present. An experimenterwas situated nearby but did not in-terrupt the participant’s thought
that among women with a proctorpresent, no one successfully solvedthe problem, whereas all of thewomen working alone solved theproblem.While the study is based on lim-
ited data, Dr. Parnin says the resultsshould, at the very least, lead to fur-ther research in this area. Addition-ally, he says, tech companies shouldconsider alternative testing meth-ods for potential new hires and foremployees looking to advance tomore senior-level jobs. A shift totesting problem-solving skills in aprivate setting, for example, couldrelieve some pressure and allow formore accurate assessment, he says.Such a shift could substantially in-crease the number of qualified can-didates, particularly in traditionallyunderrepresented groups enteringthe workforce, he says.Companies could also drop prob-
lem-solving tests as currently of-fered and instead ask candidates tospend five minutes explaining howthey would perform a particular job-related task, Dr. Parnin says. Focus-ing on communication skills in thisway, Dr. Parnin says, can reveal howa candidate thinks.
confusing. Has a person finishedspeaking? Or has the internetconnection caused the screen tofreeze? “Pauses or silence be-tween thoughts or topics feelsmore unbearable and difficult tointerpret due to the video,” saysDr. Lamson.Another feature of video
meetings with special challengesfor introverts: those embarrass-ing moments when children, petsor roommates wander throughthe background.“One second I’m a psychologist,
then a father, then a husband,” Dr.Lamson says. “Having to keepswitching can cause fatigue.”To mitigate some of these is-
sues, a good first step for intro-verts is to eliminate optionalvideo calls where possible andswitch social Zoom calls to phonecalls, says Dr. McIntyre.“Portion control is critical for
everyone,” he says. Shorter videocalls or making the video featureoptional can help.For video calls that can’t be
avoided, and that feature a largeor particularly talkative group, us-ing the chat features or “raise-hand” buttons can make it easierto be recognized and given achance to speak, says Dr. Baker.Setting boundaries beforehand
can also help, says Dr. Lamson.This could take the form of tell-ing others at the beginning of acall when you need to leave, soyou’re not stuck trying to exit acall gracefully.
Ms. McConnon is a writer in NewYork. She can be reached [email protected].
BY AILI MCCONNON
Putting people on thespot to solve a problemcan leave them flustered.
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Over a year into theCovid-19 pandemic,more people are in-creasingly familiarwith “Zoom fatigue,”the tiredness andburnout caused byoveruse of videocon-
ferencing tools such as Zoom.Zoom fatigue, however, can hit
people differently depending onwhether they are extroverts, whoneed more external stimuli to re-charge their batteries, or intro-verts, who can be depleted by toomuch stimulation.Surprisingly, some medical ex-
perts say the toll of these videotools might be harder on extro-verts. The reality is that both per-sonality types prefer socializing inperson, even if they do so differ-ently. Here’s a look at the difficul-ties extroverts and introverts facewith videoconferencing, and someworkarounds depending on whichpart of the personality spectrumpeople land on.
ExtrovertsDiminishing returnsAfter the pandemic hit, lots ofpeople loaded their work and so-cial calendars with videoconfer-ences and virtual happy hours. Tomany people—extroverts in partic-ular—it seemed like a smart, funand safe way to see people.The experience, however, has
proved to be less rewarding to
many extroverts. “Zoom does notprovide the same visceral feed-back as a live conversation, so itis less satisfying,” says RogerMcIntyre, a professor of psychia-try and pharmacology at the Uni-versity of Toronto.In a videoconference, Dr. McIn-
tyre says, the body language andother visual cues that are so oftenpart of in-person conversationaren’t fully there. And that canweigh especially on extroverts.“One area where extroverts
excel is the in-the-moment pro-cessing of bodily cues,” says Wil-liam Lamson, an assistant profes-sor of psychology in clinicalpsychiatry at Weill Cornell Medi-cine. But because video calls aremore about talking heads, extro-verts end up “using more focusand not likely getting the samereward as a live interaction,” Dr.Lamson says.Extroverts can also chafe at
some of the structure and con-trols that videoconferencing plat-forms impose on conversations,says Elias Aboujaoude, a clinicalprofessor of psychiatry at Stan-ford University. Functions such asmuting, for example, control theconversation in a way that doesnot happen with in-person con-versations, says Dr. Aboujaoude.Dr. McIntyre suggests that ex-
troverts who want to improvetheir videoconferencing experi-ences experiment by makingtheir calls more immersive.Larger screens, louder audio andshared activities such as listeningto music can help, says Dr. McIn-tyre.For others, trying different vir-
tual backgrounds or participatingin larger groups to increase theamount of stimuli could be fun,says Allison Baker, a child andperinatal psychiatrist at Massa-chusetts General Hospital. “Extro-
verts seek out and thrive on in-teractions with many people andstimuli,” says Dr. Baker, who isalso an instructor at HarvardMedical School. “Virtual meetingplatforms can be particularly en-ergizing,” she says, “as they offerthe capacity to engage with 100-plus faces at the same time.”Creating more satisfying Zoom
experiences does not, however,mean adding more video calls,say experts. Each individual hasto find the right balance. KenSchmitt, an executive recruiter inSan Diego, says he used to useZoom to socialize and even orga-
nized 40-person Zoom celebra-tions for his own and his wife’s50th birthdays in 2020. Now hehas cut back as he finds he expe-riences some Zoom fatigue everyday from his virtual work calls.“I break up my day and Zoom
fatigue with mini workouts likerunning up and down the stairsfor 10 minutes or I take the dogfor a walk,” Mr. Schmitt says.
IntrovertsPortion ControlFor introverts, the structure andcontrol of videoconferencing plat-forms could be somewhat com-forting, compared with typicalworkplace social exchanges.“There is less spontaneous
water-cooler chitchat, which isn’t
necessarily their forte and cansometimes provoke anxiety,” saysDr. Aboujaoude.Video meetings feature fre-
quent glitches that can offersome cover to introverts who of-ten worry about how they look toothers. “Introverts can be harshcritics of their social performanceand second-guess what they havesaid in social settings,” says Dr.Aboujaoude. When people cometo expect little things to gowrong—like having images freezeon the screen—it can help peoplefeel less responsible for how theirown performance came across.In some social contexts, such
as first dates, many introverts ac-tually prefer video meetups, saysWes Colton, a coach for introverts.“It’s a good halfway step to an
in-person date, and you can avoidthe extra pressure of finding theperson and still practice conver-sation,” says Mr. Colton, who alsoconsiders himself an introvert.Still, video calls pose their own
special challenges for introverts.For one thing, in most virtualmeetings, with multiple partici-pants observing one another,“you feel like you’re being con-stantly watched,” says Dr. McIn-tyre. “Introverts prefer to controlwho is in their personal spaceand for how long.”Or, as Dr. Aboujaoude says, “a
Zoom call with 15 faces lookingat you can feel more draining ifyou naturally prefer to connectwith people one-on-one or insmall groups.”What’s more, speaking before
a group rarely comes easily to in-troverts, who tend to prefer one-on-one conversations. In-personconversation also offers pausesthat, while sometimes awkward,can give a person time to con-template a new thought. Pauseswhile on-screen, however, can be
Zoom Fatigue: Introverts vs. ExtrovertsThe toll of video toolshits people differently,and sometimes insurprising ways
Zoommeetingsmay be harder onextroverts thanintroverts.
Wes Colton (left), a coach forintroverts, and Ken Schmitt, anextroverted executive recruiter
process. If a participant asked forclarification, the response was brief.Participants in both settings wore
specialized eye-tracking glasses soresearchers could take measure-ments associated with high cogni-tive load and stress and comparethe data.The disparities in test results
achieved by the two groups weretelling. About a third of the partici-
pants who were watched solved theproblem correctly, compared withabout two-thirds of those withoutproctors.Participants with proctors pres-
ent reported feeling nervous, rushed,stressed and unable to concentrate.Participants without proctors re-ported feeling more at ease, and ap-preciated being given time on theirown to understand the problem andreflect on their solution. Analysis ofthe eye-tracking data supportedthose feelings: Participants whowere asked to problem-solve in apublic setting had slower eye move-ments, a marker for high stress.Here’s another interesting take-
away for a male-dominated industrythat is increasing efforts to attractmore women: Researchers observed
R4 | Wednesday, March 10, 2021 * * THEWALL STREET JOURNAL. THEWALL STREET JOURNAL. * * Wednesday, March 10, 2021 | R5
JOURNAL REPORT | WORKPLACE TECHNOLOGY
trum with the ever-increasing num-ber of connected devices in homes.More recently, Wi-Fi 6E products
have been announced that will usenew spectrum at 6 GHz that the
Federal Communications Commis-sion recently made available for unli-censed access. This represents thebiggest increase in spectrum for Wi-Fi in 20 years.
Almost four in 10 employed adultssay their jobs canmostly be donefrom home. Among those, thepercentagewho say they ___ all ormost of the time:*
Worked fromhome before the
coronavirusoutbreak
Among employed adults currentlyworking from home all ormost of thetime andwhoseworkplace is open,the percentagewho say each of thefollowing is a ____why they arecurrently working from home:
Currently areworking from
home
Preferworking from
home
Concerns aboutbeing exposed tothe coronavirus
Wouldwant toworkfrom home after the
coronavirusoutbreak ends
*Share of respondentswho didn’toffer an answer not shown.Note: Not all answers shown.Source: PewResearch Center onlinesurvey of 10,332 U.S. adults, Oct.13-19, 2020
Major reason Minor reason
20%
71
54
Home to Stay?
2960
2257
74%
77
76
55
56
44
80
37
26%
23
24
45
44
56
20
63
Getting It DoneRemotelyMany peopleworking from home havemaintained or improved productivity onindividual tasks during the pandemic, but not somuch on collaborative tasks
Note: “Stayed onsite” are repsondents who reported working a majority of their time (≥ 3 days per week) onsite priorto and during the Covid-19 pandemic, “Stayed remote” worked ≥ 3 days per week remotely prior to and during thepandemic, “transitioned to remote” reported switching from working ≥ 3 days per week onsite prior to the pandemic toworking ≥ 3 days per week remortely during the pandemic.Source: Boston Consulting Group survey of 12,000 professionals in the U.S. Germany and India, May-June 2020
Stayedonsite
Stayedremote
Transitionedto remote
Stayedonsite
Stayedremote
Transitionedto remote
Satisfied
Not Satisfied
Collaborative
AmongU.S. employees, those satisfiedwith social connectivity aremore likelytomaintain or improve productivity on collaborative tasks
Individual
Satisfactionwith social connectivity
ASORMOREPRODUCTIVE
NOTASPRODUCTIVE
GIACO
MOBA
GNARA
BY DAN WEIL
TheNo. 1purposeof an office,according toemployers,is to increaseemployeeproductivity
83%of employerssay remote
work has beena success,
compared with71% of
employees
TheNo. 1purposeof an office,employeessay, iscollaboration
Source:PricewaterhouseCooperssurvey of 133 executives and1,200 office workers in theU.S., Nov.-Dec. 2020
68%of executivessayemployeesshould be in theoffice at leastthree days aweek to keep astrong companyculture
The low-cost RFID tags put on ma-chines in retail stores don’t workwell, due to the presence of signifi-cant amounts of metal in laptops.To ensure high read rates at a dis-tance, metal mount tags can beplaced on the laptop. Then a corpo-ration can use its existing RFID-based tracking system to keep tabson its laptops.One issue with the surge in
tracking is whether the user’s pri-vacy will be breached. There’s theperennial dilemma between privacyand utility. It will be essential forlawmakers to roll out legal guid-ance as to how such ubiquitoustracking information can be usedby law enforcement in cases involv-ing private citizens.—Somali Chaterji, assistant pro-
fessor of agricultural and biologicalengineering, Purdue University
9.Keeping the laptop safe(from kids and others)
Individuals and companies are fo-cusing on how to protect work lap-tops now that they are being usedmore often from the home. Thereare a number of basic security hy-giene rules that can be put in placeto protect a device.These include screen-lock timers,
so kids can’t access a device whenthe employee has left the room;limiting administrative-level privi-leges to the general workforce, soothers can’t download inappropri-ate products onto a device; and us-ing complex passwords or multifac-tor authentication to providefoundational defense against mis-use by casual threats, such as fam-ily members, friends or domesticworkers.Meanwhile, security-conscious
organizations are placing added se-curity tools and layered encryptiononto devices to protect them notonly from family members, but alsonation-state actors and the com-mon thief. These tools can limit un-authorized user behavior, such asplugging in removable media de-vices or using Wi-Fi at a local cof-fee shop.Organizations also might deploy
a heartbeat security model. That’swhen devices have an authorizedamount of time they are allowed towork outside organization-ownedbuildings or off the enterprise net-work. In addition, laptops can beequipped with advanced securitysoftware that takes defensive ac-tions, such as powering off devicesto wipe clean the entire hard driveif the device doesn’t check inwithin the approved intervals.—Jason Myers, principal at Booz
Allen Hamilton
Mr. Weil is a writer in West PalmBeach, Fla. He can be reached [email protected].
With remote work here to stay, a lotof focus has turned toward the keywork-from-home technology tool: thelaptop. But relying so heavily on thelaptop has raised all sorts of issues—from camera and sound quality to se-curity and privacy.What developments are coming to
laptops to make remote work easier?And what developments should becoming? Here’s what a variety of ex-perts had to say about that.
1.Improve the way welook on camera...
The better we get at videoconfer-encing, the more we notice bad vid-eoconferencing and poor camera an-gles. Innovation in software willmake us all look better on camera.There’s already software to edit
the view of the pupil of your eye soit looks like you’re focused on thecamera. It’s not a big leap to thinksoftware will scan our faces andpresent a virtual camera view thatshows us at our most flattering an-gle with a little motion thrown in forrealism.Going a step further, more work-
ers who are in continuous meetingsdon’t want to stare into a camera orat a single screen all day. Havingmore than one camera—think a pro-duction studio for the home office—could enable meeting software tosmoothly switch automatically fromone camera to another depending onwhere you focus your eyes.We should also see an evolution
of tablet and laptop design to im-prove the way we look on camera. Ifyou have a device with a detachablekeyboard, you can already positionyour screen and its camera on astand to get a better angle. Separat-ing the laptop camera so you canput it anywhere is a logical step.You already have another camera:
your smartphone. With the rightapp, you can send smartphone-cam-era video to your computer, and,jumping through a hoop or two, get
0
50
100
150
200
250million
´20´152010
Source: IDC
Year of the LaptopGlobal unit sales of laptops surged in2020 as peopleworked and learnedfrom home
that video into a meeting.This could be more plug-and-play in the future,making the camera onyour mobile device just an-other peripheral that youcan put wherever you likefor your computer to use.Cameras under the
screen are coming insmartphone design. Thatwill make its way to lap-tops. We’ll look our col-leagues right in the eye onscreen and we won’t needto make any special effort.
—Adam Preset, seniorresearch director, collabo-ration and employee expe-rience, at Gartner Inc., a re-
search and advisorycompany
2....And the way we
sound
Perhaps the least-expen-sive and biggest-impactupgrade to current speak-ing/hearing systems onlaptops would be bettermicrophones. Not onlydoes everyone on confer-ences sound echo-y andtinny, but it is hard to un-derstand the words some-times.And, just as important,
it can be difficult to hearthose small sounds thatsignal approval, such asuh-huh; confusion, such ashmm; or when someonewants to speak, such as ahor mmm. The inability tohear these small signaling soundsmakes conversations more stress-ful and less effective.Real-time, artificial-intelligence
analysis of conversations can solvethis problem, providing additionalcues that help people have moremeaningful conversations. This re-ally works and is available today.In addition, research shows that
the audio quality is just as impor-tant as video quality when judgingthe overall “quality” and “presence”of the conference experience. Whilemicrophone quality is most impor-tant to the audio experience,speaker quality is also a big factor.With additional speakers, one couldhave small group meetings thatwere much closer to the “natural”experience of in-person meetings.They would be so much lessstressful and more effective.
—Alex “Sandy” Pentland, Toshibaprofessor of media arts and sci-ence, Massachusetts Institute of
Technology
3.Better wirelessconnections
For most people the main form ofconnectivity for their laptop iswireless. Various forms of wirelessconnectivity are being substantiallyimproved. The latest generation ofWi-Fi (Wi-Fi 6) hit the market in2019. It offers increased speed,lower latency and the ability tomore effectively share Wi-Fi spec-
Looking forward, work has alreadybegun on Wi-Fi 7. Each of thesebrings further performance improve-ments in speed and latency. In paral-lel, the rise of 5G cellular is enablingsimilar improvements for laptopsequipped with 5G modems, with theadded benefit of being able to easilyconnect when users venture out oftheir homes.The improvements in Wi-Fi and
5G can enable laptops to supporthigher-quality videoconferencing andaugmented-reality/virtual-reality ap-plications. They will also allow usersto unload much of their memory andcomputing into the cloud, resultingin thinner and lighter laptops withlonger battery lives.
—Randall Barry, John Dever pro-fessor of electrical and computer en-gineering, Northwestern University
4.More, and better,
screensScreen sizes of individual devices areunlikely to get bigger, but the totalamount of screen real estate will in-crease. People will prefer using mul-tiple monitors for better multitask-ing—to access other applicationswhile videoconferencing, for exam-ple.People will benefit from software
that can flexibly migrate their workacross multiple screens, rangingfrom situated workstations to laptopcomputers to mobile devices. For in-stance, people might want to move
their meeting to a different deviceto enable a walk outside or a moveto the kitchen.If there is a strong demand for
working outside, software inter-faces will have to become moreadaptive, adjusting contrast andbrightness.We will need longer-lasting bat-
teries to power brighter screens.And computer processors and oper-ating systems need to be smarterto allocate resources from else-where if maximizing screen bright-ness is a higher priority. We mighteven see alternate display technol-ogies (such as head-mounted reti-nal displays) that can avoid the im-pact of outdoor light.
—Xiang “Anthony” Chen, assis-tant professor of electrical and
computer engineering, UCLA Samu-eli School of Engineering
5.Nix the noise
All sorts of audio issues arise withwork-from-home use of laptops.Roommates quarreling, pets bark-ing or just the hum of the city havebeen hard to suppress while laptopusers are in video or audioconfer-ences. However, help is on its way.Algorithms on laptops will soon
be able to separate out backgroundnoises, and do so fast enough thatthe disturbances get continuouslyfiltered out before leaving the lap-top. The same can be done at thereceiver’s end: If Bob’s laptop can-
not filter out its own back-ground noise, his counter-part Alice could run thefiltering, so her laptopspeakers only play Bob’sclear voice.Of course, random back-
ground noises are harderto eliminate than steady,familiar noises. But thesefiltering algorithms can re-train themselves to be-come better gatekeepersthe next time around.Peering further down
the audio road, it mighteven be possible for lap-tops to create sound bub-bles around the user’shead. This means the lap-top speakers would radiatethe sound in a way that’sclearly audible around auser’s ears, while ensuringnear silence close by, saywhere the user’s room-mate is reading.
—Romit Roy Choudhury,professor of electrical andcomputer engineering, Uni-
versity of Illinois
6.Sharpening thebackground
Virtual backgrounds are ontheir way to being a neces-sary part of the onlinemeeting experience.As a host, dynamic
background images can goa long way in differentiat-ing your 10 a.m. Zoommeeting from the 3:30 p.m.meeting. Likewise, as ameeting attendee, you canmake your contributionsmore memorable by eitherremoving the distractionsof your living room or byusing a background thatmight complement thesubject matter or time ofday of the meeting.Good lighting and a lap-
top camera that can placeyou in front of an abstractdesign or tropical back-ground without looking likeyou were cut out andpasted in with a pair ofsafety scissors will aid inmaking virtual meetingsfeel more professional.
—Peter Plotica, managerof web and digital design,Data Science Institute, Co-
lumbia University
7.Security inside andoutside the laptop
Working from home creates anumber of security concerns forcompanies, which will lead to en-hancements for laptops that youcan and can’t see.As for those that are visible,
we’ve already started to see lap-tops adopting new fingerprint rec-ognition to unlock a device. Simi-larly, laptop manufacturers mayadopt facial recognition or other bi-ometric unlocking software similarto what we have grown accus-tomed to on cellphones.Beyond the device itself, we may
see a rise in personal and corpo-rate virtual private networks andmultifactor authentication. In addi-tion, companies may focus on post-quantum security, leveraging cryp-tographic algorithms in theirsystems.
—Mark Gibson, U.S. technology,media and telecommunications
leader, KPMG
8.High-tech lostand found
Laptops are coming with varioushardware and software to trackthem if they are lost or stolen.The most obvious method is
GPS tracking of laptops. There aresoftware tools available with allpopular laptop operating systemsthat use GPS to find the device.Still, GPS tracking can be disabled,and its effectiveness can be com-promised indoors.The second line of defense is ra-
dio frequency identification tags.
Let’s RedesignThe Laptop for a
Work‑From‑Home EraIt’s the key technology for remote work.
We asked experts what improvements arecoming, and what they wish was coming.
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JOURNAL REPORT | WORKPLACE TECHNOLOGY
ing implications for job securityand income inequality, it may begood news for people who canthrive as freelancers in waysthey might not as full-time em-ployees.
Good news for everyone?No doubt my optimism aboutthe impact of remote workstems from the fact that myson is a tech enthusiast, like me.But I wonder if I’m being a bittoo sanguine.Ms. Johnson, the behavioral
analyst, offers an alternativescenario: that instead of creat-ing more options, the rise of re-mote work could roll back hard-won accommodations fordisabled and neurodivergent em-ployees. “Pre-corona, peoplewere at least attempting” to ac-commodate neurodivergent em-ployees, she says. “But now wecan solve that problem by ban-ishing them to their homes.”That scenario is worrying pre-
cisely because not every autisticchild or adult is like my son,who has blossomed through re-mote learning. A world thattreats remote work as the de-fault option may be great forsome autistic people, and harm-ful to others—if it reduces ac-commodations for those whowould prefer to be at the office,excludes neurodivergent peoplefrom face-to-face contexts inwhich key decisions (still) getmade or pre-empts the opportu-nity for younger workers to getacculturated into the workplace.The best way to avoid that?
Ms. Johnson suggests hiring au-tistic experts to identify and ad-dress considerations that canexclude neurodivergent employ-ees.A workplace that reduces
sensory stressors and embracesthe neurodiversity of its work-force is a friendlier place notjust for autistic employees, butfor all of us. I hope we can cre-ate workplaces in which neu-rodivergent and neurotypicalpeople can make their ownchoices about where and howthey work best.
Dr. Samuel is a technologyresearcher and the co-author ofthe forthcoming book “Remote,Inc.: How to Thrive at Work…Wherever You Are.” She can bereached at [email protected].
75%of the staff atUltranauts, anengineering qualityservices firm, isautistic, and thecompany’s revenuehas been growingmore than 50% ayear
2xThe number of youngpeople with autismreceiving vocationalsupport services inthe U.S. doubled to18,000 from 2009 to2015, according to arecent analysis
HP, Microsoft andSAP are among thecompanies thatparticipate inprograms aimed athiring more autisticemployees
Sources: Ultranauts; Anne M.Roux et al., Journal of VocationalRehabilitation, Nov. 14, 2019, andSpectrumNews.org; SHRM
BRIANST
AUFF
ERway instructions are deliveredto me vocally or verbally.”Remote work means that
neurodivergent people no lon-ger have to justify or even dis-close their communicationspreferences: Digital is now thedefault. People who are morecomfortable online, and moreadept at learning new technol-ogy, now enjoy the opportunityto shape the terms of teamcollaboration.
Changing the nature ofworkThe rise of remote, digitally en-abled collaboration will mostprofoundly affect the prospectsof many neurodiverse or dis-abled workers through itstransformation of the nature ofwork. That is because it willmove us away from the 9-to-5,centrally organized model ofemployment and toward newtypes of hybrid workplaces andflexible employment.As long as work was some-
thing that had to be done at aspecific time and place, employ-ment options were limited foranyone who couldn’t sustain a40-hour workweek in a centraloffice. But as soon as you moveto a distributed team, you openup other possibilities.Since remote work makes it
harder to work together in realtime, but easier to get stuffdone separately (without theinterruptions or distractions ofthe office), it can and shouldshift us away from teamworkas the default. For people whothrive when working solo butstruggle with team dynamics,that shift makes it a lot easierto contribute and deliver value.The rise of the distributed
team also blurs the line be-tween employee and contrac-tor in ways that make workmore accessible to people whomay not succeed in the con-ventional employment model.While that shift has worry-
tems with an autistic child hasimmersed me in the world ofautism advocates and re-searchers, and driven my ownwork on the interaction be-tween neurodiversity and tech-nology.That is why the shift to re-
mote work has made me newlyhopeful: It is not only a posi-tive change in itself, but it hassparked a revolution in remote-collaboration technology thatcould transform the long-termopportunities for neurodiverseworkers like my son.The shift to remote work has
changed the kinds of technolo-gies we use in our working lives;it has changed how readily weembrace and adapt new gad-gets and applications; and it haschanged the nature and struc-ture of work itself. All of thesedimensions bode well for neu-rodiverse workers—and for themany organizations that standto benefit from their talents.
A new wave of techJust think about all the techthat has blossomed in the pastyear, thanks to the main-streaming of remote work. Forinstance, as messaging plat-forms like Slack and Teams re-place hallway conversations oroffice drop-ins, they remove amajor obstacle for people whostruggle with distraction or so-cial interaction.“Being autistic, there’s no
such thing as a welcome sur-prise,” says Hunter Hansen, abusiness analyst who is autis-tic. When he was working inan office, he says, “I had tokeep myself from bristling: Icouldn’t triage the interruptionif someone sneaked up behindme. It really did affect my abil-ity to lock in and focus.”Some autistic people experi-
ence a similar benefit from theshift to video meetings.When people are physically
ContinuedfrompageR1
sitting around a boardroom ta-ble, there are all kinds of non-verbal cues, like the way peo-ple shift in their seats, thatconstitute an important part ofthe meeting. That nonverbalcommunication can be hard forautistic people to parse, so itcan end up shutting them outof the dynamic.When meetings move online,
we all lose access to most ofthose nonverbal cues. Whatleads to “Zoom fatigue” forneurotypical people—who oftenfind the loss of nonverbal com-munication disorienting and ex-hausting—can actually be liber-ating for neurodivergentworkers..
Learning to learnThe overnight increase in digi-tal collaboration offers anotherbenefit for neurodiverse work-ers: Not only are lots of newtools available for remotework, but they are becomingthe norm.
When we all sat side-by-sidein a physical office, it was stillpossible to opt out of virtualcollaboration. In a distributedteam, it is a lot harder to wrig-gle out of collaborating viaGoogle Docs. The assumptionthat face-to-face interaction isthe norm created a power im-balance that worked in favor ofpeople who were more com-fortable with in-person, real-time conversation, and disad-vantaged people who weremore comfortable online orwho need time to think andprocess before responding.“I don’t like to be asked
questions on a whim, or havepeople pop into my office,” saysJoy F. Johnson, a behavior ana-lyst who works with autisticfamilies, and is herself autistic.“Now, because I’m working re-motely, most questions comevia email, and I can take 24hours to process and respond. Idon’t have to worry about the
New Options forAutistic People
We are moving away from the centrallyorganized model of employment towardnew types of hybrid, flexible workplaces.
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The Wall Street Journal news organization was not involved in the creation of this content
WithSlack, the futureofworkishappier andmoreproductiveA year into remote work, or at least partiallyremote, we’re still adapting and finding waysto make it better. New data from the FutureForum, a consortium backed by Slack, revealsone surefire way to unlock work for your team:staying flexible.
The Remote Employee Experience Index surveyedover 9,000 employees about their work life tounderstand which key elements of remote workare better or worse than working in the office.
83%of employees don’t want to goback to the old way of workingOf those, 63% prefer a flexible remote-office workmodel and 20% want to remain remote full-time. Ifyou’re ready to go hybrid, you need technology that’sjust as flexible. Slack acts as a digital headquartersthat connects teams and tools across locationsand companies. With Slack, people can work fromanywhere and still stay in sync.
57%higher work-life balancescores reported by those withflexibility in when they workGiving people the freedom to work when and wherethey want is good for business—and employees.People with flexibility in where they work reported44% higher work-life balance scores; scores were57% higher for those who set their own hours. Slacksupports work on all kinds of schedules, from differenttime zones to child-care-friendly working hours.
53%People report a 53% higherproductivity score when theycan choose when they workAnd when they can choose where they work, theyreport a 43% higher productivity score. To helpyou move beyond five days of 9-to-5, try Slack. Itbrings work, discussions and decisions into digitalchannels. Employees can catch up and contributeon their own time, from anywhere, and then getback to getting work done.
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Air purification:Elevatormakers are adopting filtrationsystems that they say bring in clean air and killmicrobes. Otis has a plasma fan (left) that sucks in airand runs it through an ionizer; charged ions attach tobacteria and viruses, causing a chemical reaction thatneutralizes them. A KONE fan system (below) passesair from the elevator shaft through filters and UV-Clight before entering the cab
Foot selection: KONE offersindustrial-strength buttonsat foot level so you can tellthe elevator whether youwant to go up or down.
Touchless keypad:Mitsubishi Electric has aPure Ride System thatincludes a touchless 12-keypad inside the elevator car.You put your fingers overthe numbers and otherbuttons, but not touchingthem, to operate the pad.
Voice control: Otis hasbeen testing a product atFoxwoods Resort Casino inConnecticut. Passengerscan say, “Hey, Otis” towakeup the elevator, and thentell it to go to a floornumber or “casino.”
Elevator-hailing apps: Someelevators can be summonedby smartphone.MitsubishiElectric is among thecompanies that have createdsmartphone apps enablingusers to hail the elevatorfrom their phone. An appcould someday track usersthrough the building and getto knowwhat they need andwhen, says Erik Zommers,senior vice president andgeneral manager ofMitsubishi Electric U.S. Inc.’sElevator & Escalator Division.
Swipe to call: In Otis’sFoxwoods pilot, whenyou reach the elevatorbank, you can swipe upor down—touchless—withyour hand over a pad on thewall, and you’re directed tothe elevator to take.
Standing room: Companiesmay try to limitthe number of people in elevators and dictatewhere they stand. Ideas include placingstickers on the floor to indicatewhere peopleshould stand and instructing them to face thewalls, says Lee Gray, an architectural-historyprofessor at the University of North Carolinaat Charlotte and the author of a book onelevators.
GoingUp (Safely)Howelevator companies aremaking their productsas contact-free as possible
Whatwill it take tomake people feel safe getting into elevatorsagain? Elevatormakers areworking tomake their products ascontact-free as it is possible tomake a 4-by-6-foot box sharedwith strangers. Here’s how companies such asMitsubishi ElectricUS Inc., Otis Elevator Co. and KONECorp. are changing theirelevators:
Mr. Kornelis is a writer in Seattle. He can be reached at [email protected]: Otis, Mitsubishi and KONE Kevin Hand/WALL STREET JOURNAL
By Chris Kornelis
Exhaust
Ventilationsystem
Elevatorshaft
Virus
NeutralizedvirusIons
Elevatorshaft
Elevator
Ion generator
IntakeFan
Buildinglocation
Negative pressuresucks air intosanitationchamber
Sanitized air
Air is forcedthrough 2filters andUV-C light
Filter
Filter
UV-C light
Otis
KONE
JOURNAL REPORT | WORKPLACE TECHNOLOGY
alized that they wanted a simplerpayment experience overall, not nec-essarily PayPal itself.Mr. Rosen says the company is
rolling out a new e-commerce plat-form and payment technology thatallows it to connect to multiple pay-ment methods with one click.PayPal is “a fantastic solution” if
you optimize your systems tomatch PayPal’s strengths, says Mr.Rosen, but “when you try to force itinto another process, you may losesome of the great benefits.”(A PayPal spokesperson says that
the company doesn’t comment onspecific situations. But “we workwith our broad partner ecosystemto offer all of these options andallow businesses to integrate oursolutions however they prefer.”)
Building softwareinstead of buying itCreating tools like a website orapp from scratch can cost hun-dreds of thousands of dollars,says Oliver Dore, technologypartner at Work & Co., a NewYork-based firm that works withbrands to build customer-experi-ence technology.So, why do so many compa-
nies build software instead ofbuying it off the shelf? Some-times it is company politics.In businesses that have strong
technology capabilities, teamsthat oversee the company’s tech-nology may push to develop newtools or services in-house insteadof buying them, says Mr. Dore.“We have worked with com-
panies where the insistence to buildversus buy is so great, [and] there’ssuch a bias toward that,” he says.“You end up doing a lot of workthat, to be honest, is already avail-able either cheaply or for free in theopen source community.”For instance, Authentic Brands
Group, a New York-based companythat owns retail brands Forever 21,Brooks Brothers, Lucky Brand andothers, used to use highly custom-ized technology. Although their sys-tems weren’t built from scratch, theyhad customized it enough that it re-quired a lot of specialized oversightto manage work flow. But during thepandemic, the company needed to
roughly half the time.But the team never passed along
the information about the secondscraper, so the original one waskept online. The company was pay-ing $1.80 an hour to keep it running,about $7,800 total over six months.The lack of communication, and
possibly a hesitancy to communi-cate a failure, may be why the prob-lem took so long to resolve, Mr. Kh-izar says. “It could be a mix of notwanting to be embarrassed orsomething,” he says. “But we neverhad a culture of embarrassing ourteammates for their mistakes.”
Hanging on tooutdated systemsIn some cases, companies wastemoney because they can’t keep upwith every new trend—so they endup sticking with old technologywhen it isn’t cost-effective anymore.Vivek Kundra, chief operating of-
ficer at Sprinklr, a customer-experi-ence-software company based inNew York, saw this dynamic playout in his early years as chief infor-mation officer in the Obama admin-istration. At the time, many organi-zations were moving toward cloudcomputing, but government re-sources were directed toward ex-panding its own data centers.“One of the things I noticed was
that the government from 1998 to2009 had gone from 400 data cen-ters all the way up to over 5,000data centers, and the average utili-zation of those data centers wasunder 27%,” Mr. Kundra says. “Oneof the biggest problems in technol-ogy is that you’ll have leaders whowill continue to throw good moneyafter bad money in this way.”Mr. Kundra says that planning
and monitoring is an important partof ensuring that a technology solu-tion will meet business objectives.“Companies need to ensure that
they understand what their ownconcrete business goals are beforemoving forward with any softwareimplementation,” he says. “Theyshould work with the vendor to un-derstand how the technology willsupport their business goals.”
Mr. Bhattacharyya is a writer inPhiladelphia. Email [email protected].
Cirrus Data, which assists largefirms with cloud-migration and data-storage projects, had a client thatunderestimated the effort requiredto move to the cloud and didn’ttransform its applications to take ad-vantage of cost savings, says ChiefExecutive Officer Wayne Lam.The result: The client incurred cloudbills 200% higher than forecast.In other cases, companies movesoftware to the cloud that they’d bebetter off running on their ownservers. For instance, it can becheaper to run software with heavyprocessing-power requirements—such as video-rendering tools—out-side of the cloud.
Misunderstandingthe customerSometimes companies go for tech-nology based on what it seems cus-tomers want—without realizing thattheir assumptions are off base.Take the case of Harry Rosen, a
17-store luxury menswear chainbased in Toronto. In 2018, it did acustomer survey, asking if buyerswould use PayPal if the companyoffered it on the site—and a signifi-cant number said yes. So, the com-pany hired a systems integrator toadd PayPal into its e-commerceplatform, at a cost of $80,000.But then only a small portion of
the company’s online paymentscame through PayPal—just 10% bylate 2018. The trouble seemed to bethat PayPal wasn’t a one-step pro-cess. Customers had to click “buy,”fill out their payment informationon the PayPal platform, and then goback to the Harry Rosen site tocomplete the transaction.In retrospect, says Ian Rosen,
Harry Rosen’s executive vice presi-dent, digital and strategy, the com-pany should also have asked custom-ers a broader question: What kind ofpayment experience best suits yourneeds? The company might have re-
ContinuedfrompageR1
Waste inTechnologySpending
ensure an easy transition to remotework—a major reason why it shiftedto widely used off-the-shelf toolssuch as Dropbox and Trello.Because those products have
their own support in place, the com-pany could minimize the number ofemployees needed to maintain workflow, says Adam Kronengold, chiefdigital officer of Authentic Brands.“We learned that our complex
business doesn’t require complextools, and tweaking our own inter-nal processes while adopting off-the-shelf technology was the more
scalable solution for our business,”says Mr. Kronengold.To be sure, Mr. Dore says, there
are instances where building fromscratch can save money over time.This consideration becomes impor-tant when there are high licensingcosts for off-the-shelf tools; whenbundled features result in servicesthat aren’t needed or offer littlevalue; and when cost to integratean external service into a company’sexisting toolset is prohibitive.Poor internal communicationWhen tech problems arise and
waste company money, it is some-times because different depart-ments are at cross-purposes.
That is what happened at Luck-yTruck, a Cincinnati-based digitalinsurance broker that allows cus-tomers to apply for trucking insur-ance online. In early 2020, thecompany built a web tool to auto-fill information on insurance appli-cations by scraping publicly acces-sible online databases. The toolcould reduce the time needed to fillout an application by as much asan hour, says Haseeb Khizar, tech-nology lead at LuckyTruck.Soon after the scraper was
launched, though, the company no-
ticed that the scraper could gatherinformation but couldn’t move it tothe company site. Tech teammembers were directed to fix it.Shortly after, the problem seemedto be resolved.But a few months later, Mr. Kh-
izar noticed something unusual—thecompany was running two of theseweb scrapers concurrently.What happened? Communica-
tions problems. According to Mr.Khizar, the tech team thought thatfinding a workaround for the origi-nal scraper would have taken threeto four weeks—and they felt heavydeadline pressure. So, the teambuilt a second scraper instead—in
Money PitsSome of the placeswhere surveyed tech professionals say their companies' techspending is wasted
Waste in software spending
Cloud spending andwaste
Self-estimatedwasted spendingEfficient spending
Self-estimatedwasted spendingEfficient spending
30%70%
28%
72%
Desktopsoftware
23%
77%
Softwareas a service
24%
76%
Data centersoftware
$235 billionEstimated global cloud computing spending in 2020
Source: Flexera 2021 State of the Cloud Report and 2021 State of ITAM Report
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When it comesto collaborat-ing with col-leagues thesedays, choos-ing the rightcommunica-
tion tool can be as important asthe communication itself.Send an email, and you might
not get a timely reply. Post a ques-tion in Slack, and you might missinformation from a colleague whonever checks your team channel.Schedule a videoconference whena phone call would have sufficed,and you’ll annoy everyone who’sexhausted by living life online.How do you assess the relative
strengths of your communicationoptions, the preferences of col-leagues and your own digital skills?Some people are quicker than
others to figure out how to leveragethe features of the new technologiesin platforms such as MicrosoftTeams, Google Workspace, Slack,Basecamp and Zoom—which cancause friction with co-workers whoare slower to adapt.“We are expecting people to learn
etiquette at breakneck speeds andthen getting frustrated with eachother because we don’t know howwe ought to be doing it,” says JeffreyHall, professor of communicationstudies at the University of Kansas.We asked some experts about
the strengths and weaknesses ofthe most common communicationtools—and the best practices to use.
EmailEven in this age with a proliferationof tools, the old standby has a fewbig advantages. For one thing,emails almost always get saved andare easy to search, which makesthem a good way to send thingsthat need to be referenced quickly.“If you are sending out some-
thing that is for information only,you still can’t beat email,” saysBrian Hanssen, clinical assistantprofessor of management commu-nication at the New York Univer-sity Stern School of Business.Likewise, it is easy to attach a fileto a message, making it a goodchoice for distributing documentsor other material. “If I have a newemployee guide, I am going toemail it,” says Andrew Meadows,senior vice president of human re-sources at Ubiquity Retirement +Savings, which has been operatingremotely and using digital collabo-ration tools for 10 years.In addition, for contacting
someone outside of your own or-ganization, email is still the pre-ferred method. It is ubiquitousand has norms that mimic a busi-ness letter. “In an email, you canexpress yourself in a way that
eoconferencing: It lets you havedeeper conversations, collaborate insmall groups and make presenta-tions to larger ones.“The richer and more nuanced
the conversation needs to be, themore case there is for making avideo call,” says Mr. Johnson of For-rester. When delivering really goodnews or really bad news, the inflec-tion and facial expressions con-veyed in video can enhance thecommunication.Videoconferencing is also a good
tool for conveying and discussingcomplicated information, and it ismuch easier to take turns on a vid-eoconference than it is on a tele-phone conference call. While peopleoften talk over each other due todigital lags on a videoconference, itis simpler to figure out who’s talk-ing and to signal that you want totalk.But there are definite limitations
to the medium. When you add achat and a video gallery of partici-pants, there is a lot of stimuli, andan extended video meeting can befatiguing.And, just like with in-person
meetings, the size of the groupmatters. Don’t pack them in virtu-ally just because you can. “Mostmeetings should be a minimum ofthree to four, a maximum of some-where between seven and 12,” saysMr. Hanssen.Videoconferencing can work
with a larger group, though, if youhave a small number of presentersand then allow questions from theaudience. It helps to have a moder-ator who, for instance, picks ques-tions out of the chat and spells outspecific times that he or she willpose them to the speaker. (And,unlike in a smaller gathering, par-ticipants should turn off their cam-eras, perhaps after a brief time forsocializing, to cut down on thestimuli.)
TelephoneThere are times when it is best toput the screen aside and get backto the very basics.Unlike a videoconference, where
looks can matter, you don’t have tomake sure your appearance andworkspace are camera ready—whichmeans a less demanding experiencefor participants.The telephone is also still best
for urgent matters that are toocomplicated for messaging or email.It is also preferred for sensitive con-versations that you may not wantrecorded in text on company plat-forms. Knowing your company’s pol-icies regarding information reten-tion and privacy will help youdecide.“In general, it is probably safer to
have sensitive discussions over aconfidential telephone call,” says Mr.Johnson.
Ms. Oliver is a writer in New York.She can be reached [email protected]. KE
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Slack, ZoomorGmail?
JOURNAL REPORT | WORKPLACE TECHNOLOGY
ConnectingWithColleaguesYou have something youwant todiscusswith a co-worker. Should youchoose a chat platform like Slack,email, one-on-one phone call, orvideomeeting?Based on guidancefromseveral experts, here are somequestions to ask yourself.
• Plan aphone call
• Email
• Chat• Email• Videomeeting• Phone
• Chat• Email• Videomeeting
• Chat• Email• Videomeeting
• Chat
• Chat
• Phone
• Phone• Email• Chat
• Chat• Email
• Email
• Phone• Chat
• Email
• Chat
Is it sensitive?
If no, do youwant others inthe office toweigh in?
If no, is it very urgent?
Does your colleaguelike to use thework-place chat platform?
Is it a complex, time-consuming conversation?
If no, is it urgent?
If yes, does the conversationconvey resources thateveryonewill need inmonths to come?
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
feels established,” says Bilal Bal-och, co-founder of GlobalWonks, aservice that links clients with ex-perts, and a visiting scholar at theUniversity of Pennsylvania.Email, though, isn’t great when
you’re trying to work in concertwith a group. If Mr. Meadows waslooking for feedback on a document,he says, he would be more likely topost that document in the project-management tool Basecamp, whereco-workers could makecomments.“If you are try-
ing to collabo-rate or cometo a con-sensus in
a group,email is apoor choice,”says Mr. Hanssen.It is difficult to keeptrack of the thread of in-formation and the latest ver-sions of documents, and if some-one doesn’t “reply all,” the wholecommunication chain breaks down.In some cases, it is also impor-
tant to use email in conjunctionwith other tools, because messagescan get lost in a crowded inbox.Mr. Baloch and his team, for in-
stance, use not only email but alsoLinkedIn messages and old-fash-ioned phone calls for making ex-ternal business connections. “Therecipient is probably receivingmany, many emails, so we try totriangulate through multiple medi-ums,” he says.
Direct messageSending messages in applicationslike Microsoft Teams and Slack isgood for asking quick questions,getting task updates and accessing
shared knowledge and files bysending people links. It is also lessformal than email, so you don’thave to spend time writing ex-tended greetings or goodbyes inyour notes.But there are lots of things to
bear in mind before you start typ-ing.First, channel messages should
be short and easy to skim. Directmessaging isn’t a good place for
long conversations, discuss-ing nuanced topics, mak-ing time-consumingrequests or givingnegative feed-back. Thesetypes ofcommu-
nica-tions needthe richercommunicationenvironments thattelephone and videocon-ference offer.Also bear in mind that mes-saging can be more disrup-tive than email, becausepeople assume that an an-swer is needed quickly. “Ifyou are going to interrupt what Iam doing with a direct message, itshould be important,” says DavidJohnson, principal analyst at For-rester Research Inc. “If it can waitovernight or even a few hours,email is probably fine.”Once you decide that your commu-nication is appropriate for messag-ing, it is important to identify your
audience. Microsoft Teams andSlack enable you to target yourmessage by recipient name, channeltopic and user groups.Project-related information that
is relevant to more than a few peo-ple is best shared in dedicatedchannels instead of sending all ofthem a direct message. Before youpost, check the channel to makesure it is still active and that yourmessage fits the channel subject. Ifyou’re writing a response to a previ-ous message, use a thread to sepa-rate the discussion, which makes iteasier to follow and keeps the chan-nel uncluttered.You can use tags to help you
reach the right people—such as@JaneSmith—while interrupting thefewest with unnecessary notifica-tions. If you need an immediate re-sponse to a general question, use atag—@here on Slack, for example—to alert anyone on that channelwho is currently signed in.Finally, remember thatchannel communicationis more like a conver-sation than a filecabinet. Itkeeps mov-ing, and it
has an ending—messages can get
lost in a long, fast-moving discussion, and
your conversations arelikely erased by your com-
pany after a certain period.“Instant messaging goes away,”
says Mr. Johnson.To that end, don ’t rely on
a channel as your soleaccess point for im-
portant docu-
ments. It can be difficult to findthem again or to access them frommobile or remote devices.
VideoconferenceSince the pandemic, many peoplehave discovered the upside of vid-
How to pick the rightcommunications tool
BY SUZANNE OLIVER
P2JW069000-0-R00900-1--------XA
R10 | Wednesday, March 10, 2021 THEWALL STREET JOURNAL.
But AI can do a much better job inaggregating all the data, and alsoresponding consistently by voice,or by text, through a chatbot in-terface, email or phone.It takes a lot of work to build
that infrastructure. But to take aquestion and provide an answerand have a conversation, whetherby text or speech, would be one ofthe lower-hanging fruits in an IT in-frastructure that would providehigher customer satisfaction, agreater consistency and lower costs.
• WSJ: Is that a use case that isgenerating meaningful value forcompanies?
• DR. LEE: Certainly. It’s a double-edged sword. The more successfulyou are with your AI, you’re poten-tially replacing jobs and displacingjobs that may cause reduction inforce, so that has to be taken intoconsideration. I think we all wouldprefer to look mainly at the wayAI increases profit margins ratherthan focus on job displacement.But, by and large, AI is designed todo tasks and things that peopledo. So, more and more significantportions of the AI tasks will havean impact on human jobs.
• WSJ: Deep learning has reallytaken off. What are some of theuse cases there that, again, com-panies can find value in using?
• DR. LEE: Deep learning is the pri-mary way in which we do AI ormachine learning. It functionsquite differently from our brain.We think, if A, then B, if not C,then D. That is not how AI works.AI works by presenting it a largeamount of data, teaching it thecorrect answer, and then it wouldlearn to do that for new cases.It can also be used, let’s say, for
recruiting. We can have a lot of ré-
sumés coming in, and we want tomatch those résumés with job de-scriptions and route them to theright managers. If you’re thinkingabout AI computer and video in-teraction, there are products toscreen candidates by AI having aconversation with the person, viavideoconference. And then itwould grade the people based ontheir answers to your questionsthat are preprogrammed, as wellas your microexpressions and fa-cial expressions, to reflect whetheryou possess the right IQ and EQfor a particular job.
It could be an AI watching asalesperson in action, talking tosomeone else. Then, when theconversation is done, the AI wouldgive advice to the salesperson,“Here’s how you might have donea better job in closing the sale.”
• WSJ: In your book, you say thatby 2033, AI and automation willbe able to do 40% to 50% of ourjobs. How should CIOs prepare?
• DR. LEE: Keep in mind, techno-logical progress has always re-placed jobs. This one is going tobe larger than before. In prepara-tion for this, as an adviser to theCEO, it would be great if you couldsuggest what is the proper way,what is the likelihood that varioustasks will get replaced, and reallywork out a way to do it that’s sen-sitive to employees. And start theretraining. As the jobs go away,help place them in the right newjobs that they’ve got training for.
• WSJ: You encounter a lot ofstartups. What kinds of AI inno-vation are you seeing?
• DR. LEE: Well, I’m based in China,and as you know, China’s theworld’s factory. So I would say inthe past year, the most excitingthings I’ve seen are robots. We’reseeing really smart robots advanc-ing quickly in factories and in ware-houses. And these robots can havesoft fingers, they can pick up any-thing. We have robots that some-times look like people, or our limbs.But more often, they look like ma-chines. So we have this investmentin this giant laboratory robot. Itcompletely automates a laboratory.Whether it’s for Covid testing,
or for research, it’s a giant ma-chine. So I think the advancementof machinery, the mechanical engi-neering, combined with software,is pushing the speed of automa-tion in factories and warehouses.And that’s an area that I think ismost suitable for China.In the U.S., Covid has made
work from home a very convenientmatter. And that has digitized theworkflow of employees, which Ithink will cause an enterprise-levelautomation to take place.It will become much easier,
much more accelerated, for tasksand jobs to become automated insoftware in enterprises in the U.S.The U.S. and China have gone off
in kind of two different areas, butboth very innovative and exciting. W
SJ
AI ‘canmakesmart decisions inmany, many areas.Customer service,IT, human resources,finance, sales.’
Venture capitalistKai-Fu Lee sees atidal wave of changecoming, caused bythe myriad ways inwhich artificial intelli-gence will help com-panies and organiza-
tions do work more efficiently.Dr. Lee, chairman and chief ex-
ecutive of Sinovation Venturesand author of “AI Superpowers:China, Silicon Valley and the NewWorld Order,” spoke to Wall StreetJournal reporter Jared Councilabout AI and the role of chief in-formation officers at the Journal’svirtual CIO Network summit.
• WSJ: Across the enterprise land-scape, what are some of the topAI use cases you see?
• DR. LEE: AI is an incredibly excit-ing technology for enterprises. Itcan be used in any number of sce-narios and departments. When youfeed a lot of data, it’s able to makesmart decisions, predictions andclassifications in many, many areas.Customer service, IT, human re-sources, finance, sales.One example. We get a lot of
customer calls, and we need to re-spond to customer questions andrequests. Currently, it’s largely doneby people who have access to theknowledge database in a company.
WhereBusinessIsUsingAIVenture capitalist Kai-FuLee identifies some of themost-prominent earlyexamples—and whatCIOs need to do toprepare for an AI future
BY JARED COUNCIL
• WSJ: What do CIOs need to doto help their companies prepareand best harness AI?
• DR. LEE: You want to under-stand the technology, becomesomeone who could answer ques-tions, and become somewhat ofan evangelist. AI means somethingdifferent to every department.
Shape opportunity. Boldly.Technology is business. Which means your enterprise is lookingto you—to create business value, champion innovation, andlead as a trusted adviser. As you reimagine what technologycan do, you’ll set strategy and partner across your organization,fostering talent and a culture ready to invent the future. Deloittecan help with insights, connections and custom services fitto the scale of your bold vision.
Drive opportunity with technology.deloitte.com/us/cio
