The Wall Street Journal - 31.07.2019

A18| Wednesday, July 31, 2019 THE WALL STREET JOURNAL.

Mr. Mueller and the Presumption of Innocence

Regarding your editorial “The

Mueller Show Is a Bust” (July 25):

When the special counsel says that

his report doesn’t exonerate Presi-

dent Trump, it is instructive to reflect

on how we interpret evidence—any

evidence—that informs on a hypothe-

sis. Very simply said, the null hypoth-

esis is that Mr. Trump is innocent

(the presumption of innocence) and

the alternate hypothesis is that he is

guilty. We don’t analyze the evidence

to accept the null assumption, i.e., ex-

onerate the president, but rather to

ascertain if there is enough evidence

to reject that assumption and con-

clude that he is guilty. It would have

been so much less confusing if the

special counsel had remained true to

the logic of hypothesis testing. Mr.

Mueller could have simply said: The

purpose of my investigation wasn’t to

exonerate the president, but to see if

there was enough evidence to accuse

him of any wrongdoing. We didn’t

find sufficient evidence to do so.

PROF.SUBIMALCHATTERJEE

SUNY, Binghamton, N.Y.

Regarding your editorial “Beyond

Mueller’s ‘Purview’” (July 26): How

naive are we? It’s unlikely Russia’s in-

tent was to favor Donald Trump over

Hillary Clinton. Vladimir Putin and

his cronies were happy to torture

them both. Russia didn’t care who

won so long as it could sew doubt

about the outcome and pit us against

each other.

The Russians worked both sides of

the street, hacking the DNC and feed-

ing salacious falsehoods to the Clin-

ton campaign through Fusion GPS.

Why Mr. Mueller’s team chose to ig-

nore what might have been a produc-

tive vein in the investigation is inex-

plicable. Happily, Attorney General

Bill Barr is looking harder. Perhaps,

he can give us a real accounting of

what was done and by whom.

CONANWARD

Princeton, N.J.

As many Democrats insist that

President Trump’s “obstruction of

justice” is an impeachable offense,

they fail to understand that an “im-

peachable offense” isn’t a strict mat-

ter of law. We have a precedent, one I

am sure many Democrats, including

Nancy Pelosi, don’t want to be con-

fronted with. The precedent is Presi-

dent Bill Clinton’s impeachment for

committing perjury, the quintessen-

tial form of obstruction of justice, in

a federal court proceeding. Almost all

Democrats, including Mrs. Pelosi, and

yes, Jerrold Nadler, concluded that

President Clinton’s perjury wasn’t an

impeachable offense, and voted no on

the impeachment resolution.

What has President Trump done?

He has talked about firing Mr. Muel-

ler, inveigled for it, but in the final

analysis neither he nor anyone in his

administration took a single step to

actually interfere in or thwart the in-

vestigation, something Mr. Mueller

has fully acknowledged. So if the

Democrats proceed, Reps. Pelosi, Na-

dler and others will need to explain

why President Clinton’s actual ob-

struction of justice by perjury wasn’t

an impeachable offense, while Presi-

dent Trump’s mere talk with no ac-

tion, justifies it. If Reps. Pelosi and

Nadler think this is a winner, I say

bring it on.

NEILGAFFNEY

Chicago

Watching the Mueller hearings was

akin to watching Toto pull open the

curtain screening the Wizard of Oz.

G.SCHWARTZ

Northbrook, Ill.

LETTERS TO THE EDITOR

Letters intended for publication should

be addressed to: The Editor, 1211 Avenue

of the Americas, New York, NY 10036,

or emailed to [email protected]. Please

include your city and state. All letters

are subject to editing, and unpublished

letters can be neither acknowledged nor

returned.

“We have ways to make you talk.”

THE WALL STREET JOURNAL

Obama Library’s Shameful Public Land Grab

Prof. Richard A. Epstein’s “Chicago

Betrays the Public Trust for Obama”

(op-ed, July 26) is particularly signifi-

cant. It reveals the casual way the

shocking backroom deal and devious

land-flipping maneuvers to give price-

less, dedicated public-park property in

historic Jackson Park to build a tower-

ing political homage to former Presi-

dent Obama. This was rubber-stamped

by every public officer holder who

was under oath to protect the public

park and not permit it to be pillaged.

From the very beginning, the Protect

Our Parks lawsuit to stop the con-

flicted land grab seemed a no-brainer.

There is a specific statute in the Park

District Code that details and prohib-

its every step taken by the Park Dis-

trict and city to effect that illegal gift.

Ah, but this is Chicago.

Prof. Epstein has shown this to be a

case of national constitutional impor-

tance. It may introduce political re-

form to Chicago, which has seemed

forever locked into a history of cor-

rupt insider self-dealings. Buying

souls in Illinois, and especially Chi-

cago, has never been difficult. Since

the 1970s a former state treasurer,

four governors and more than 30 Chi-

cago City Council members have been

sent to jail for misconduct while in

public office. In the 1980s Operation

Greylord bagged 93 people, including

17 judges, 48 lawyers, 10 deputy sher-

iffs, eight policemen, eight court offi-

cials and one state legislator. More are

currently under indictment. When is

enough enough?

There is now the opportunity for

that historic public park, and the here-

tofore powerless residents of the city,

to experience what the law has always

promised to be: “open, clear and free.”

HERBCAPLAN

President, Protect Our Parks

Chicago

Pepper ...

And Salt

Joe Biden, BernieCare and Medicare for All

In your “Biden Goes Half Way to

BernieCare” editorial (July 18), you

state: “The public option would un-

dercut competitors on price, stiff

providers with low reimbursement

rates, and crowd out private insur-

ance over time.” A more cogent argu-

ment couldn’t be made in favor of

Medicare For All. It incorporates the

very essence of a market economy,

which has been frequently espoused

in your pages.

Medicare For All would eliminate

shareholder dividends, excessive

management compensation, wasteful,

diverse, insurance administrative

costs borne by providers and lobby-

ing costs, all which come from pri-

vate-insurance premiums. These con-

tribute nothing to health care. Any

engineer or systems analyst will

readily confirm that elimination of

parasitic losses will improve the effi-

ciency of any given system.

RONALDB.BLACKBURN,PE

Augusta, Mich.

You say that “the only way to save

big on drugs is to restrict or deny pa-

tient access,” i.e., to ration care. That

reflects classic economic analysis:

Marginal cost and marginal demand

curves intersect at a particular price

and output level. A price above that

level goes with output below that

level. Monopoly profits go with out-

put restriction.

One possible workaround: Give the

drug company its profit without re-

stricting output. For example, the

drug company and buyers—perhaps a

consortium of governments and in-

surers—could agree on a lump-sum

payment in exchange for access to

the product at marginal cost, perhaps

by licensing. The drug company gets

its profit. Buyers get their drugs

cheaply. No rationing required.

It will not be simple. Buyers and

sellers must agree on a price, reflect-

ing anticipated profits, discounted to

the present and adjusted for uncer-

tainty. They must exclude free riders

who don’t contribute to the lump-

sum payment. The public and the

BernieCrats must accept the legiti-

macy of large profits and resist the

temptation to expropriate them. Anti-

trust and other regulations must be

changed to allow such agreements.

It might be worth a try.

S.PAULPOSNER

New York

Individual Dysfunction and

Government Drug Control

The letters of July 20 responding

to Timothy McMahan King’s descrip-

tion (“Even Heroes Can Struggle

With Addiction,” op-ed, July 13) of

William Wilberforce’s addiction to

opium help reveal the tragedy of gov-

ernment control of drugs. “Addiction”

is when “dependency” becomes dys-

functional. I learned this from my

long experience in court.

JUDGELARRYSTIRLING (RET.)

San Diego

The Race-to-the-Bottom Standard

J

ohn Maynard Keynes described the gold
standard as a “barbarous relic” because
it deprived governments of the ability to
fine-tune monetary policy to
national economic condi-
tions. What a surprise to dis-
cover, then, that his intellec-
tual heirs have adopted a new
monetary standard that de-
prives governments of the
ability to fine-tune policy to national economic
conditions.
That’s the point getting lost in this month’s
flurry of activity from the developed world’s
major central banks. The European Central
Bank is preparing to cut rates and restart quan-
titative easing in the autumn. The Bank of
Japan on Tuesday laid the groundwork for new
rate cuts. The Federal Reserve is under enor-
mous pressure to cut rates at its meeting this
week, and the Bank of England probably won’t
be far behind no matter what Governor Mark
Carney says Thursday in his new set of eco-
nomic prognostications.
Each of these monetary maestros has con-
cocted a rationale tied to domestic economic
developments. Inflation is too weak in Japan,
say, or business investment is too soft in Amer-
ica, or Italy is too Italian in the eurozone. Mr.
Carney inevitably will proclaim that Brexit is
too Brexit-y for Britain.
Yet to a remarkable degree they all are chas-
ing each other down. Fed Chairman Jerome
Powell and ECB President Mario Draghi are
trapped in a staring contest over the world’s
most important exchange rate, between the dol-
lar and the euro, as each tries to offset policy
moves from the other that could trigger a de-
stabilizing appreciation on his own side.
The only intellectually coherent argument
for a Fed rate cut this week (and not a wholly
convincing one) is the need to avoid the ex-
change-rate consequences of falling out of sync
with the ECB. The risk of uncontrolled yen ap-
preciation against the dollar appears to be
weighing on BOJ Governor Haruhiko Kuroda.
And commentators are warning Mr. Carney that
he’s falling behind the global pack.
In none of these cases are the central banks’
policy moves obviously appropriate for domes-

tic conditions. In the U.S., last week’s GDP data

highlighted the extent to which President

Trump’s trade policies rather than monetary

constraints are limiting busi-

ness investment and growth.

There’s also reason to worry

that ill-judged monetary pol-

icy could inflate asset-price

bubbles.

Four years of quantitative

easing and ever-more-negative rates in the euro-

zone have produced only anemic growth, and

they are straining banks in the bloc’s healthiest

northern economies while subsidizing fiscal

recklessness in southern laggards and punishing

savers everywhere. Now the politicians want

more of the same, potentially inserting the ECB

into future sovereign default dramas via its in-

creased holdings of government bonds.

The Bank of England’s preference for, or tol-

erance of, a relatively weak pound in the Brexit

era is triggering significant import-price infla-

tion. Meanwhile, ultralow rates have inflated

debt bubbles among retailers and casual-dining

restaurant chains. Mr. Kuroda’s low-rates-for-

ever policy is dragging down bank profits and

sending more Japanese investment abroad in

search of yield.

Central banks are adopting these policies out

of an understanding that in a global economy

with floating exchange rates and vast capital

flows, no central banker is an island. They must

balance domestic economic conditions against

the rigors of an ad hoc system of quasi-coordi-

nation with their peers. Convention also re-

quires them to deny they’re sparing any

thought for exchange rates—no matter how ob-

viously they are.

Is this any better than a gold standard? We

ask this not to argue for the re-adoption of

Keynes’s barbarous relic, but to note that the

alternative is barbarous in its own ways. It’s

fashionable to mock those such as likely Fed

board nominee Judy Shelton who stress ex-

change-rate stability as one guide for the Fed.

But central banks are doing that anyway.

They’re simply doing it haphazardly, and often

badly. Now is as good a time as any to ask

whether a more formal system might serve be-

leaguered economies better.

Look who’s heeding

Judy Shelton’s advice

on exchange rates.

The 99% Get a Bigger Raise

P

olitical discourse nowadays is enough to
depress anyone, and the media don’t
help by ignoring good economic news.
But buck up, Americans:
Worker wages are growing
much faster than previously
reported.
The Bureau of Economic
Analysis (BEA) on Tuesday
published its annual revisions
to personal income data, and the surprise was
the huge jump in disposable income and em-
ployee compensation.
The revisions show that employee compen-
sation rose 4.5% in 2017 and 5% in 2018—some
$4.4 billion and $87.1 billion more than previ-
ously reported. The trend has continued into
2019, with compensation increasing $378 bil-
lion or 3.4% in the first six months alone.
Wages and salaries were revised upward to
5.3% from 3.6% in May year over year. And in
June wages and salaries grew at an annual rate
of 5.5%, which is a rocking 4.1% after adjusting
for inflation.
This is far more than the 3.1% year over year
increase in average hourly earnings that the La-
bor Department’s jobs report showed for June.
One reason for the disparity may be that em-
ployers are hiring millions of younger, lower-in-
come workers, which may be depressing aver-
age hourly earnings as older, more highly paid
workers retire.
The BEA also revised overall personal in-
come up by 1.7% for 2017 and 2018 and transfer
receipts down 0.7%. In sum, Americans are
earning more and relying less on government.
Personal savings estimates were also increased
by $217 billion for the last two years and are
now $1.3 trillion, which means Americans are
socking away more of their earnings.
The personal savings rate was revised up-
ward to 8.1% from 6.1% in May, which is much

higher than the roughly 5% before the last two

recessions. This should make the current eco-

nomic expansion more durable since consump-

tion isn’t being pumped up

largely by increased house-

hold debt. Instead consumer

spending has increased as

wage growth has accelerated

amid a tight labor market.

Recall how liberals blamed

“secular stagnation” as the reason worker in-

comes weren’t growing faster during the latter

years of Barack Obama’s Presidency. Yet em-

ployee compensation has increased by $150 bil-

lion more in the first six months of 2019 than

all of 2016. Compensation increased 42% more

during the first two years of the Trump Presi-

dency than in 2015 and 2016. This refutes the

claim by liberals that the economy has merely

continued on the same trajectory since 2017 as

it was before.

The economy barely skirted recession in the

final Obama years, and economic policy

changed in 2017. Deregulation has unleashed re-

pressed animal spirits, especially in energy. Tax

reform has also spurred business investment

in new facilities and equipment, which over

time should translate into higher worker pro-

ductivity and wages.

Those reforms are continuing to pay eco-

nomic dividends despite the damage from Mr.

Trump’s trade policies. While Democrats and

even some conservatives complain that workers

haven’t benefited from tax reform, the evidence

suggests otherwise.

Corporate after-tax profits increased by

about $220 billion between 2016 and 2018 while

employee compensation swelled nearly $1 tril-

lion. Corporate profits declined 2.9% in the first

quarter of 2019 even as wages grew at an an-

nual rate of 10.1%. This sure sounds like an

economy that is benefiting the 99%.

New data show much

faster growth in wages

and incomes.

Celebrating American Democracy

I

f any place embodies American exception-
alism, it is Jamestown, Virginia. There in
1619 the first representative legislative as-
sembly in the New World was
convened. On Tuesday Presi-
dent Trump traveled to
Jamestown to pay tribute to
the place he says forged “the
timeless traits of the Ameri-
can character.”
In the midst of the President’s ugly spat
with Rep. Elijah Cummings, it can be easy to
overlook commemorations such as this one.
The President’s dispute followed him to James-
town, where African-Americans in the Virginia
state Legislature boycotted his speech and one
interrupted him as he gave it, holding signs
that said “Deport Hate,” “Reunite My Family”
and “Go Back to Your Corrupted Home.”
This was unfortunate, not least because Mr.
Trump was at his most eloquent when he re-
ferred to a less admirable anniversary associ-
ated with Jamestown. This was the arrival of the
first enslaved Africans in the English settle-
ments and what he called the “beginning of a
barbaric trade in human lives.” The President

noted it took another 150 years before the Decla-

ration of Independence would recognize that all

men are created equal, a Civil War to abolish

slavery—and another hundred

years to start realizing Martin

Luther King Jr.’s dream that

all Americans could enjoy the

blessings of freedom.

“In the face of grave op-

pression and grave injustice,”

Mr. Trump said, “African Americans have built,

strengthened, inspired, uplifted, protected, de-

fended and sustained our nation from its very

earliest days.”

This is the way to talk about race in Amer-

ica. To acknowledge challenges and injustices,

but without forgetting the potency of Amer-

ica’s founding promise. As Mr. Trump put it,

America is “the story of citizens who take

ownership of their future and their control of

their destiny.”

Those who know President Trump only by

his tweets might find his Jamestown remarks

worth reading. They point all of us, including

Mr. Trump, to a more hopeful path than the one

we’re on.

The President pays

tribute to the triumph

of Jamestown.

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