The Wall Street Journal - 13.03.2020

(C. Jardin) #1

A14| Friday, March 13, 2020 THE WALL STREET JOURNAL.


LETTERS TO THE EDITOR


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“I kinda miss that morning
newspaper you used to hold
in front of your face.”

THE WALL STREET JOURNAL

Private Sector’s Accommodation of Religion


Nathan Lewin points out in “The
Justices Punt on Religious Liberty”
(Houses of Worship, March 6) that
he has worked as an attorney in the
public sector. He states that Justice
John Harlan, Attorney General Ram-
sey Clark, Judge Richard Williams
and the Supreme Court all gave him
time off so could attend to his reli-
gious obligations. Consequently his
reference about how an employer
should respond to religious liberty
is quite a bit skewed.
For at least much of Mr. Lewin’s
career, his time off for religious
reasons was paid for by taxpayers,
not a private employer, and his po-
sition apparently didn’t need to be
covered by another employee. In

the private sector an absent em-
ployee’s work generally needs to be
covered by another employee. Take
nursing. In a hospital all nurses
generally rotate weekends and holi-
days. If all Christians were given
Sunday off to abide by the com-
mandment not to work on Sunday,
our hospitals and patients would be
in bad shape. Nurses work on Chris-
tian holidays such as Christmas and
Easter, too.
Mr. Lewin is privileged to have
worked in the taxpayer-funded pub-
lic sector where there seems to be
little regard for the cost of service.
He laments the fact that private in-
dustry doesn’t provide the same re-
ligious liberty that the public sector
does. He clearly doesn’t realize that
the private sector has a financial
bottom line to account for.
FRANKWEBER
Palatine, Ill.

Many Are Happy With Bike
Trails in the Neighborhood
I am surprised to read that Steven
Malanga lumps in converting old rail
lines with other eminent-domain cases
(“We’re From the Government and
We’reHeretoBuildaBikePath,”Cross
Country, Feb. 15). Let me just say that
people walking, running or biking on a
linear park are no more “wandering
across their [private landowners’]
properties” than if they were on the
street side of their homes.
For a long time my family has en-
joyed living sandwiched between a
street in front and a bike path in back,
without issues. In fact, homes for sale
here are routinely marketed as “trail
access” or “walkable.”
Ohio, come visit your neighbors in
Indiana and see a successful rail-to
trail-conversion in the Monon Trail.
PAMHITCHCOCK
Carmel, Ind.

Is There a Flu Silver Lining
In the Covid-19 Response?
Holman Jenkins, Jr. notes that
there are upward of 300,000 human
deaths globally from ordinary flu ev-
ery year (“A Chinese Mystery and
Covid-19’s Economic Puzzle,” Busi-
ness World, March 7).
Could it be that the well-pub-
lished recommended precautions re-
sulting from fear of contracting
Covid-19 virus—(1) stay home if you
are sick; (2) wash your hands fre-
quently; (3) cover you mouth when
you sneeze; (4) avoid large gather-
ings—might actually reduce cases of
ordinary flu and flu deaths while
helping to contain the new coronavi-
rus infection?
RODNOLES
Alexandria, La.

Pepper ...
And Salt

Federal Reserve Should Let
The Market Correct Itself
In “The Fed Can’t Wait to Re-
spond to the Coronavirus” (op-ed,
Feb. 27), Kevin Warsh notes that: “If
the Fed had normalized policy in the
decadelong recovery, it would be far
better situated...totakenecessary
action now” to confront a new risk,
the coronavirus. But at the same
time he is making the wrong policy
recommendation. The recent sharp
and steep decline in equity prices is
partially due to the fact that the
Federal Reserve’s easy-money policy
has separated finance from the econ-
omy. Missteps in policy decisions
have elevated equity prices to record
levels versus nominal GDP, and it
would be prudent to let the rebal-
ancing occur naturally. Yet in this
highly political world the odds of
that happening seem very low.
JOSEPHCARSON
Former chief economist
Alliance Bernstein
Westport, Conn.

America’s Self-Shutdown


F


or all the foreboding about the novel
coronavirus—foreboding that is justi-
fied—it is heartening to see the Ameri-
can people responding in
ways reminiscent of the fron-
tier spirit. Most people are
doing what they have to do to
survive a clear and immedi-
ate threat to their lives and
communities.
The new watchword is “social distancing.”
That means minimizing the transmission of an
infectious virus for which no personal immunity
exists by minimizing the chance that any one
carrier will pass the virus to others. The speed
with which the American people and their insti-
tutions are executing that sound strategy is
breathtaking.
Private companies, where possible, are ad-
vising their employees to work from home. To
minimize large crowds, professional sports
leagues are suspending seasons. St. Patrick’s
Day parades, held back to the 19th century, have
been canceled. Broadway’s theaters are closed.
Universities are voluntarily replacing in-person
classes with online instruction. The list length-
ens by the hour.
Health emergencies in the U.S. mainly and
appropriately remain the responsibility of state
and local officials. Governors in states with the
greatest outbreaks so far—Washington, Califor-
nia, New York and New Jersey—are closing
schools and ordering limitations on the size of
public gatherings. These closures will come at
enormous cost to affected individuals and the
broader economy. The possibility that the virus
will tip the U.S. into a recession is real, though
unlike 2008 the economy was healthy when the
virus struck.
Here at the Journal, we regard the stock
market as a sensitive barometer of expecta-
tions. The historic decline of the market this


week is posing an obvious question: Where is
the nation headed with the coronavirus?
Given the scale and costs of voluntary miti-
gation underway, the moment
has arrived for the relevant
authorities in Washington to
inform the American people
more precisely about the pur-
pose and parameters of social
distancing. President Trump’s
10-minute talk Wednesday evening wasn’t
nearly enough, and his focus on travel bans
from Europe is not adequate to explain the do-
mestic disruption. The answers have to come
from the presidential task force headed by Vice
President Mike Pence.
Useful primers are available online, such as
a recent article in the Lancet—“How will coun-
try-based mitigation measures influence the
course of the Covid-19 epidemic?” We recom-
mend it. But Americans shouldn’t have to poke
through medical journals or watch C-Span to
see NIH’s Anthony Fauci testify before House
committees.
Mr. Trump should assemble his specialists
prominently to describe the realities and goals
of all these voluntary closures. They ought to
explain the math behind minimizing person-to-
person transmission of the virus—the so-called
reproduction number. Or why it’s important to
suppress infectious spreadbeforethe onset of
detectable symptoms. They should explain how
mitigation will “flatten the curve” of the virus’s
course by spreading it over 12 to 18 months,
rather than letting it spike destructively across
the population in two months.
We no longer live on the frontier. Science
may not fully understand this virus yet, but it
knows a lot about the reasons for dislocating
a nation’s social and economic life. It’s time for
leaders to explain this to a worried but resilient
American public.

The public has made


‘social distancing’ de


facto national policy.


The Liquidity Cavalry


T


he good news Thursday—and there was
some—is that the Federal Reserve rode
to the liquidity rescue of financial mar-
kets. The bad news is that eq-
uity markets rallied only
briefly and then kept falling to
close down a harrowing 10%.
Flooding the Treasury mar-
kets with cash was still the
right Fed call, though in this
evolving panic the Fed ought to explain better
what it’s doing and why.
For the second time this week, the Fed in-
creased its support for the market in Treasury
securities, and this time in a big way. The New
York Fed, with support from Fed Chairman Je-
rome Powell, added $500 billion each to its one-
month and three-month repo operations. This
is on top of the $175 billion the Fed was already
providing in overnight repo funding and $
billion in two-week repos.
This is a gigantic increase in short-term
funding aimed at addressing problems that
were arising in the market for Treasurys. Per-
versely, the yield on 30-year Treasurys had been
rising even as investors were fleeing stocks for
the relative safety of Treasurys. This suggests
a lack of liquidity as financial institutions were
having a hard time finding buyers.
It could also signal that some big financial
institution has been caught in losing positions
and needs more liquidity to get out as financial
lenders grow more wary of counterparties. This
is what central banks are supposed to do in a
panic, and good for the Fed for finally doing so
with enough financial force.
More intriguing, but left unexplained, is that
the Fed also said it will shift its current pur-
chase of $60 billion in Treasury bills from
short-term to longer maturities across the yield
curve. By any other name, this is quantitative
easing (QE) as the Fed takes duration out of the
Treasury market.
Yet strangely the Fed didn’t call it that, per-


haps because the central bank committed to
these purchases only to mid-April. But if the vi-
rus threat is continuing in a month, you can bet
the Fed will keep the pur-
chases going. If the Fed is go-
ing to revive QE in an attempt
to lift asset prices, why not
say so and explain the reason?
Doing this on the sly is confus-
ing to markets.
Strangely, too, the announcement was made
by the New York Fed, which runs the central
bank’s trading desk, and not the Fed Board of
Governors who set policy. This made some of
our friends wonder if there is a disagreement
inside the Fed over how to proceed in this panic.
So far it has been noticeably slow in employing
its liquidity operations.
The Fed’s Open Market Committee can clear
up this confusion at its regular meeting next
week. That would be the moment for Mr. Powell
to revive other Fed tools from its 2008 crisis
handbook. This should include expanded dollar
swaps with other central banks, and perhaps
Section 13(3) authority to provide financing to
all comers against good collateral. Better to do
this early to head off financial failures than try
to revive the wounded too late.
As for that 10% stock plunge, investors are
pricing in the considerable economic damage
as much of American commerce and normal life
shuts down to reduce the spread of the corona-
virus (see nearby). This all but guarantees that
the economy will head downward until the
threat passes, and probably into a recession of
uncertain magnitude and duration.
At least this virus panic struck when the U.S.
economy was much stronger than in 2008, with
a buoyant labor market, most corporations with
plenty of cash, and better capitalized banks. The
Fed can’t stop a viral contagion but it can help
to prevent a financial one. Next time Mr. Powell
should also explain to markets the economic ra-
tionale for the Fed’s decisions.

The Fed aids the


Treasury market but


in confusing fashion.


Bernie’s Offer Sheet to Joe


A


fter multiple primary defeats, Bernie
Sanders seems to know he can’t win the
Democratic nomination, but he isn’t go-
ing away. In a speech Wednesday, Mr. Sanders
claimed he “has won the ideological debate” but
is “losing the debate over electability.” Then he
listed questions he intends to ask Joe Biden in
their televised debate Sunday, including:
“Joe, what are you going to do to end the absur-
dity of the United States of America being the only
major country on earth where health care is not
a human right? Are youreallygoing to veto a
Medicare for All bill, if it is passed in Congress?”
“Joe, at a time when most young people need
a higher education to make it into the middle
class, what are you going to do to make sure that
all of our people can go to college or trade
school, regardless of their income?”
“Joe, importantly, what are you going to do to
end the absurdity of billionaires buying elections
and the three wealthiest people in America owning
more wealth than the bottom half of our people?”
At least he gave Joe a couple of days to prac-
tice answers. On the first, Mr. Biden could read
from articles on Britain’s National Health Ser-
vice. How about this from April: “Tens of thou-
sands of elderly people are left struggling to see
because of an NHS cost-cutting drive that relies
on them dying before they can qualify for cata-
ract surgery, senior doctors say.”
On college, Mr. Biden could say that economic
mobility doesn’t require taxpayers to fund 100%


of every degree for majors in bagpipe perfor-
mance, “puppet arts” or Canadian Studies. As for
billionaires buying elections, does Mike
Bloomberg get a $550 million refund?
The question is whether Mr. Biden has the
brass to push back, which he hasn’t shown so
far. For decades in the Senate he opposed tax-
payer funding of abortions. Then last summer,
after progressive furor, he flip-flopped in a
matter of days. Last year his advisers said he’d
pitch his climate agenda to the “middle
ground.” Then he unveiled his version of the
Green New Deal to spend $1.7 trillion, slap car-
bon tariffs on imported goods, and build an
“end-to-end high speed rail system that will
connect the coasts.”
Mr. Biden should now be trying to win voters
in the middle. Mr. Sanders is set on preventing
that, which could hurt Democrats in November.
It’s strange: Bernie is losing because of his ex-
treme positions, so he wants to use his leverage
to make Joe Biden...stayopen-minded about
abolishing private health insurance?
The implicit threat is that if Bernie’s bros stay
home on Election Day, Mr. Biden might end up
like Hillary Clinton. Yet if Mr. Biden looks like
he’d be buffeted by the social-justice left as Pres-
ident, he could bleed moderate voters. His best
move now is to signal the opposite. Would he re-
ally veto Medicare for All? Mr. Biden’s strongest
answer Sunday is simple: “On behalf of 150 mil-
lion Americans, you bet I would.”

REVIEW & OUTLOOK


OPINION


Some Favor New California Election Process


Regarding your editorial “California
Steals Its Own Election” (March 7): I
am not a fan of California’s politicians’
often nutty ideas and free-spending
ways, but the new voter system
worked better than the old one, in my
opinion. It allowed me to easily vote
before Super Tuesday at a convenient
location of my choice. The staff was
knowledgeable and helpful. I voted on
Monday and was in and out in five
minutes. I purposely chose a site that
had been up and running for several
days, as I have worked on software
implementations and did not want to
use the “beta” sites that had only
been running a day or two.
What worries me is that it would be
easy for me to represent myself as
someone else and vote twice. There
was no ID check to confirm I was who
I said I was. The bar code on the sam-
ple ballot that I had in hand was all I
needed to get a ballot. For others just
a name and address were needed,
nothing else was required.
I think what went wrong on Super
Tuesday was because of voter procras-
tination. Voters had up to a week be-
fore Super Tuesday to cast their bal-
lots in person. Why did they wait until
Tuesday? For a high-tech state with a
new system, it surprised me how
many procrastinators there were.
I think we should keep the new vot-
ing system but go back to the old rule
and say that absentee ballots must be
received by Election Day. Voters
should have to register or change par-
ties by, say, 14 days before an elec-
tion—simple common-sense rules.
SUEPEDERSON
Claremont, Calif.

My voting experience in Los Ange-
les County was great. Conveniently,
many polling centers were open 10
days before the election. I chose to
vote the day before Super Tuesday at
a nearby voting center. I completed
my voting in less than 10 minutes. I
found the new electronic voting sys-
tem easy to use.
Your editorial seems to focus on

voters who waited until the last min-
ute to vote. They should have antici-
pated longer lines and realized there is
a new voting system. The county sent
out election materials saying: “Don’t
wait, vote early!” Those same materi-
als included several pages of helpful
instructions on the new voting system
and the many voting options available.
You fault California for the delay it
takes to count mail-in and provisional
ballots. Why? Mail-in ballots allow
voters to vote at their convenience,
and they increase access to voting.
J.MARTINAKERSON
Burbank, Calif.

Your editorial blames incompetent,
progressive government for Sen. Bernie
Sanders being denied a bigger victory.
Don’t blame our government, blame
voters. I have proudly never voted in
person, and never will. I will never wait
in line to vote. I will never wander lost,
looking for my polling station. Unlike
my progressive friends who have an ir-
rational attachment to the voting
booth, I have a 100% voting record.
The state did a great job of inform-
ing me, a former Republican anti-
Trump conservative who is registered
with a party preference, about what I
needed to do to vote in the Demo-
cratic primary. Incompetent voters de-
serve some of the blame for the voting
fiascos you mention.
XAVIERBARRERA
San Francisco

Waiting to vote in the California primary.

ROBYN BECK/AFP VIA GETTY IMAGES
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