The Wall Street Journal - 13.09.2019

A14| Friday, September 13, 2019 THE WALL STREET JOURNAL.

Government Should Lower, not Raise, Costs

Regarding Henry I. Miller and Shiv

Sharma’s “Cutting Medical Costs Can

Be a Bargain” (op-ed, Sept. 4): It is

too bad that the Centers for Medicare

and Medicaid Services doesn’t agree

with the authors. As a surgeon spe-

cializing in eye surgery, I can tell you

the CMS, through rote, “one size fits

all” regulation, has prohibited cost-

effective methods that have worked

for years. For instance, if we mix a

sterile balanced solution with two an-

esthetics, it costs about $7 per opera-

tion. This solution has been used for

years with tremendous safety. There

is no medical literature that demon-

strates this less expensive solution is

prone to more problems. But from

the ivory towers, mixing three solu-

tions is “inherently unsafe.” In its

place, it has approved one solution

that costs $400 per case, with no im-

provement in safety or outcome.

On the other hand, it has been

documented in several peer-reviewed

journals that restoring someone’s

sight with cataract surgery in their

later years diminishes their chance of

a fall with broken hips, and cognitive

decline. But the CMS is demolishing

the reimbursement for this proce-

dure, because people are living longer

and the CMS simply doesn’t want to

pay for the results of that demo-

graphic. If this trend continues, there

will be no intelligent, highly skilled

person who will be willing to perform

such a valuable, cost-effective opera-

tion. This won’t be much of a bargain

for anyone.

SCOTTWILKINSON,M.D.

Birmingham, Mich.

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are subject to editing, and unpublished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.

“I just heard from upstairs—

the pressure’s on to look like we’re

doing something when we’re out there.”

THE WALL STREET JOURNAL

Water-Trading Has Deep and Ancient Roots

“Water-Trading Market Runs Into

Trouble” (Business News, Sept. 4)

sheds overdue light on the abject

mess Down Under. However, cap-and-

trade water markets are neither

strange nor new. For centuries, trans-

parent water exchanges—Oman’s

aflaj, Morocco’s khettara, Iran’s qanat,

China’s karez, Bali’s subak, Spain’s

Huertas—have built resilience across

diverse cultures. These traditional

self-governing systems weren’t im-

ported and installed by economists or

governments, nor did they emerge

overnight by accident. Each evolved

locally under unique conditions. Yet

all share common traits—transpar-

ency, transactions and trust.

Whether constructing a stable

house or a robust water-conservation

market, any architect worth her salt

recognizes form follows function. Set

the foundation in clearly defined

goals that have been transparently

proposed and agreed to by stakehold-

ers, align rules for engagement and

transactions, and grow organically

from there. Building trust is neither

quick nor easy, but it’s essential. Ulti-

mately, conservation markets succeed

only to the extent that they transcend

mere transaction efficiency to also re-

store ecological health and ensure so-

cial equity, enhancing outcomes

through transparent accountability.

That’s why the most credible natural-

resource-market designers rely less

on economic formulas or the needs of

outside speculators than on anthro-

pologists, hydroecologists, sociolo-

gists and human-rights attorneys.

Our increasingly thirsty planet

can’t afford another hasty launch. So

entrust California natural-resource

markets to California farmers, fami-

lies, fishermen, firms and officials.

We’ll build our own institutional

market systems, from the ground

(water) up.

MATTKENNEDY

Chief Executive, AquaShares Inc.

San Francisco

One Way Electric Cars Hurt

The Driving Environment

Your editorial “Subsidize My Elec-

tric Car, Please” (Sept. 3) might have

mentioned that as more electric cars

clog the poorly maintained highways

and roads here in a state where gas

costs at least $1 more a gallon than

in neighboring Arizona, the state will

be losing increasing amounts of gaso-

line-tax revenue.

The consequences are worse road

conditions and increased gas taxes on

those unwilling or unable to pay for

the expensive, and subsidized, elec-

tric vehicles.

DAVIDW.OGILVY

La Jolla, Calif.

CORRECTION

The size of the global online adver-

tising market is $333 billion. This

was misstated in the Sept. 11 op-ed

“Alternatives to Google? Your Search

Returned No Results.”

Pepper ...

And Salt

Ethanol Industry Calls on Trump to Deliver

Without a strong ethanol industry,

agriculture would suffer greatly, and

the economy of the middle of the

country would be much weaker

(“Trump’s Ethanol Promises Come

Due,” Heard on the Street, Aug. 28).

The ethanol industry consumes more

than a third of the U.S. corn crop ev-

ery year. It is the backbone of the

U.S. agricultural economy. Meanwhile,

owing to the strength of the oil lobby,

appointees from the oil industry have

stacked the deck at the Environmen-

tal Protection Agency. It is truly

amazing how the agency responsible

for clean air and clean water favors

oil over everything else.

For the first time in my 32-year ca-

reer, the groundswell of farmers and

agricultural companies is aligned that

this has gone too far. I have never

seen a more agitated community. I

think the White House now is aware

of this. While the agriculture industry

and my company support the trade

war with China, when you add the

ethanol waivers to that, the combined

policy has put this administration in

a quagmire. It is wearing out its wel-

come in the Farm Belt, and I think it

will fix this. Let’s see what happens.

TODDBECKER

Chief Executive

Green Plains Inc.

Omaha, Neb.

Regarding the mandate to force pe-

troleum refiners to blend ethanol into

their product, it should be matched

by a mandate that corn products

(cornflakes, corn muffins, etc.) be re-

quired to contain 10% petroleum.

Consumers of either product will re-

ceive no benefit, but who cares about

them?

J.R.DONOVAN

Braintree, Mass.

Old Law Partnerships Evolve Into Businesses

I have been an attorney for more

than 34 years and a partner at two

large law firms. Lynn Feldman’s state-

ment that the ability to use limited

liability companies to shield the per-

sonal assets of the partners from lia-

bility has led to law firms becoming

businesses is incorrect (“Making Part-

ner Is More of a Business Today,”

Letters, Aug. 22). The only significant

liability about which the vast major-

ity of lawyers are concerned is mal-

practice liability. To my knowledge, in

every state, an LLC doesn’t protect a

member from malpractice liability for

the member’s acts.

Firms have grown tremendously in

the last two decades in large part

because large clients have lured

them into believing they’ll get more

business if they’re everywhere the

client does business. Firms have

taken the bait. As such, firms that

might have been in one city (or per-

haps one city and D.C.) now have

many offices in many cities. The geo-

graphic changes have necessitated a

different management approach.

Thus, many firms now have manage-

ment lawyers (who tend to view

themselves much like CEOs, with

corresponding greatest compensa-

tion) and those who actually do the

work. The struggle of those who do

the work is to keep control of their

clients so as to possess the ability to

cause the management team to pay

them well. Otherwise, they are dis-

posable. Not all firms are this way.

And small collegial firms still exist.

But most of them are in Mayberry

and Hooterville.

ALLENBUCKLEY

Atlanta

The Stakes of the Vape Debate

A

campaign against vaping products is
moving at land speed records, with the
Trump Administration announcing this
week it will pull flavored e-cig-
arettes from the market. This
is becoming a political pile on,
and regulators risk foreclosing
one of the best opportunities
in public health, which is to re-
duce cigarette smoking.
President Trump on Wednesday popped off
about “a problem in our country,” which is the
new trend of vaping. “There have been deaths
and there have been a lot of other problems.”
The First Lady recently tweeted that she’s
“deeply concerned” about e-cigarette use
among youth, and Health and Human Services
says it is stepping in to clear the market of fla-
vored options.
Vaping devices include an array of products
from pens to tanks. But most associate vaping
with the pod systems like the one from Juul Labs
that delivers nicotine in a pocket-size device.
The point is to offer the buzz of a cigarette with-
out the combustion of tobacco that releases car-
cinogens and makes smoking so dangerous. Nic-
otine is addictive and not without risks, but
agencies like Public Health England have said
such e-cigs are 95% safer than smokes.
Yet readers may have seen the stories about
strange illnesses and deaths related to vaping.
The details are still emerging, though the Food
and Drug Administration has said many of the
tested samples contain THC, a pyschoactive ele-
ment of marijuana, and Vitamin E acetate. FDA
has warned against buying products on the
street, and many of these cases are the result
of vaping black-market cannabis even as the
regulatory scrutiny is on nicotine.
This is a nice summary of the bizarre state
of public-health debate. Some in both parties
are cheering marijuana legalization and the
proliferation of cannabis products, even as the
consequences aren’t well understood. Yet e-cig-
arettes are treated like public enemy No. 1. San
Francisco recently banned e-cig sales.
Health and Human Services cites an increase

in vaping by teenagers as the reason to ban fla-

vors, which are attracting kids who may not

otherwise use nicotine. Yet flavors like mango

and mint also entice adults

trying to quit smoking, and

over time they help make ciga-

rettes taste less palatable.

No one wants kids addicted

to nicotine, and the question

is how to balance these com-

peting equities. It is hardly obvious that ban-

ning flavors will keep teens from vaping. Juul

said this week that it “strongly” agrees “with

the need for aggressive category-wide action

on flavored products,” and will comply with the

eventual policy.

The irony is that Juul pulled its flavors other

than tobacco and menthol from retail stores last

year and sells flavors directly from its website

that requires multiple steps for age verification.

A Juul executive told Congress this summer that

a result of exiting convenience stores has been

other actors exploiting the vacuum by selling il-

legal flavor pods.

Expect more such unintended consequences.

And if the flavor ban doesn’t reduce the number

of teen vapers, then what? The next step looks

like an even broader ban, which won’t be a net

positive to public health.

The political and cultural background of this

fight deserve mention. Much of the outrage

about e-cigarettes has come from affluent sub-

urban parents who are justified in wanting to

keep their kids off nicotine. Yet teens abuse al-

cohol and you don’t see moms in Greenwich

calling for a ban on pinot noir.

The difference is that these voters aren’t

from the classes of society that tend to produce

smokers, who are more likely to be low income

and have less education, among other identifi-

ers like serving in the military.

The question is not whether vaping is

healthy—it isn’t—but whether the frenzy

against e-cigarettes is moving faster than the

evidence. The answer increasingly looks to be

yes, and forgotten in the rush are the 480,

Americans who die each year from smoking.

The political frenzy

ignores adults who

want to quit smoking.

Draghi Leaves With No Exit

M

ario Draghi is a learned man, and we
wonder if the European Central Bank
President is fond of French existential
literature—specifically “No
Exit” by Jean-Paul Sartre. He
had thought that as he finished
his historic eight-year term this
fall he’d be unwinding negative
rates and quantitative easing.
Yet here is back at the same
monetary stand.
Mr. Draghi announced Thursday that to pre-
vent a European recession the ECB is reviving
QE asset purchases to the tune of €20 billion per
month indefinitely. The negative interest rate
the ECB charges banks for reserve deposits will
also fall again—to minus-0.5% from minus-0.4%.
And the ECB will rejigger some of its subsidies
for bank lending to companies.
It’s a measure of Europe's economic despond
that some are grousing that even this isn’t
enough. In QE’s first iteration, monthly pur-
chases hit €80 billion for a spell. Other central
banks such as Switzerland’s have pushed rates
as low as minus-0.75%.
We recall not too long ago when extraordinary
monetary policies were reserved for recessions
or financial panics, and the eurozone isn’t there
yet. No less a monetary authority than President
Trump seemed to get at this when he kvetched
on Twitter about how “quickly” the ECB is acting
relative to the Federal Reserve because the euro
will now fall against the dollar.
But in Europe these days monetary policy is
the only economic resort. The ECB on Thursday
also announced it will “tier” interest on bank
reserves, exempting a portion of reserves from
the negative-rate tax the ECB charges for park-
ing cash at the central bank. This should satisfy
complaints from Germans and other northern
Europeans that their reserve-larded banks pay
the lion’s share of the roughly €7.5 billion the
ECB’s negative rate extracts from banks each
year, and is a necessary political condition for
future rate cuts.

This should help Mr. Draghi’s successor,

Christine Lagarde, if she wants to go even fur-

ther when she takes over in November. She is

not a monetary technocrat and

faces a steep learning curve.

Mr. Draghi has deployed his

considerable talents to spare

her the challenge of crafting

new monetary stimulus for a

eurozone nearing recession in

her first weeks on the job.

The catch is that this might not be Ms.

Lagarde’s biggest challenge. Mr. Draghi on

Thursday primed investors to expect more

deeply negative rates in the future, at the pre-

cise moment economists are starting to ques-

tion this policy’s merits.

The ECB’s negative rate has probably con-

tributed only 0.1% or so to eurozone inflation

per year, ECB Chief Economist Philip Lane ad-

mitted in a recent speech. Banks complain this

tax on reserves makes it harder to attract in-

vestment compared to their American peers,

and negative rates haven’t done much for Japan.

Unless Europe grows again, how will Ms.

Lagarde return to positive rates?

The other looming problem is that as QE

grinds on, seemingly forever, the ECB will ac-

quire larger and larger proportions of the debts

of the governments whose bonds it buys. Mr.

Draghi claimed Thursday that the central bank

has considerable headroom before it hits its

self-imposed limit of 33% of the debt issued by

any one borrower.

But he’s punting on the question of how the

ECB might behave if it one day finds itself em-

broiled in a sovereign default, and Ms. Lagarde

should fervently hope she never has to navigate

that minefield.

Mr. Draghi’s most important legacy is that

the eurozone is still intact. It’s a remarkable

achievement considering the stresses the cur-

rency and its members have faced. Ms. Lagarde

has a tough act to follow, but at least she can

read Sartre in her native tongue.

His legacy is a eurozone

intact—and policies his

successor can’t quit.

The High Court’s Injunction Slapdown

A

fter three flip-flops in lower courts, the
Supreme Court intervened Wednesday
to let President Trump’s new asylum
rules take effect as legal challenges proceed.
This is a victory for a functioning judiciary and
the rule of law, no matter who is President.
To review: On July 15, the Trump Administra-
tion moved to bar asylum claims from refugees
who transited a third country, such as Mexico,
without trying to stay there first.
On July 24, Judge Jon Tigar in Oakland, Calif.,
issued a sweeping injunction that blocked the
asylum policy’s enforcement nationwide.
On Aug. 16, the Ninth Circuit Court of Appeals
narrowed that order to apply in its jurisdiction
alone, saying Judge Tigar had “failed to discuss
whether a nationwide injunction is necessary to
remedy Plaintiffs’ alleged harm.”
On Sept. 9, Judge Tigar reinstated his original
order’s unlimited scope, saying the plaintiffs in
the case could get “complete relief” only if the
policy were blocked entirely.
On Sept. 10, the Ninth Circuit reversed that
reversal, issuing a stay of Judge Tigar’s renewed
injunction, pending further review.
This is no way to run a judiciary. In seven

weeks, federal officials got five different direc-

tives: implement, stay, implement, stay, imple-

ment. The Ninth Circuit covers California and

Arizona, but the other end of the Mexican border

is 1,000 highway miles away, in Texas.

Nationwide injunctions are supposed to be

extraordinary measures to prevent irreparable

harm. Judge Tigar couldn’t make a convincing

argument. The plaintiffs are aid groups that help

migrants. If the asylum rules took effect in Texas

and New Mexico, what permanent injury would

befall them? Judge Tigar’s first example was

that one of the nonprofits would have to “rede-

sign its workshops and templates.”

The Supreme Court’s intercession isn’t about

Mr. Trump’s policy choices. It’s about the proper

operation of the lower courts. The Justices’ un-

signed order puts Judge Tigar’s overdrawn in-

junctions on hold, awaiting Ninth Circuit and

perhaps High Court consideration. Courts may

eventually rule that Mr. Trump’s asylum rules

contravene the law. But until then the Supreme

Court is right to rein in a judge who blocks the

policy nationwide, with little evidence of irrepa-

rable harm and no respect for the President’s au-

thority or duty to protect the border.

REVIEW & OUTLOOK

OPINION