tv The Journal Editorial Report FOX News June 16, 2012 8:00pm-8:30pm PDT
>> this week on the journal editorial report with news that middle class families have lost 40% of their net worth. president obama tried to reboot his campaign and retool his economic message. will it work? plus, eric holder, on the the hot seat, with resignation calls growing, is it time for the attorney general to go? and europe as greek decides the euro zone future and closer to the abyss. central banks prepare the mother of all bailouts. will that work? this election presents a
choice between two fundamentally different visions of how to create strong, sustained growth. how to pay down a long-term debt. and most of all, how to generate good, middle class jobs. >> welcome to the the journal editorial report, i'm stuart varney in for paul gigot. and president obama tried to sell americans on for more years of his economic policies, calling mitt romney a return to the failed approaches of the past and his retooled campaign pitch days after the federal reserve reported almost 040% drop in the net worth of middle class families, putting most back where they were in 1992. joining the panel, deputy editor dan henninger, and mary o'grady and kim strassel.
and the big speech on the economy, was this a policy reset? >> yeah, i think call it obama campaign 8.0 or 9.0. a lot of concerns among democrats that this campaign is faltering and runnihither, a dither, they've gone after mitt romney on bain and the massachusetts record and saying that the economy is getting better and saying that it could have been worse, this was an attempt to reset and the argument is now as you've heard, there is a choice and implicit in this is the president's argument, he decided he was going to argue that everything that's wrong in the economy today is the-- the bush policies and republican philosophy and make the case that mitt romney if he were elected would take us back to that point. so it's yet another attack on mitt romney, the president hopes will be more positive. >> it may have been a reset,
but can he just change course and repudiate three years of policy and change direction? >> in theory he certainly could, but he won't. what democrats are saying is that like cory booker, the mayor of newark, new jersey, he should run on his record. let's run through on his record. first thing, passed an 800 stimulus, and still have 8% employment. then passed the obama health care law, the greatest thing the democrats wanted since the new deal. he won't talk about that. then he passed dodd-frank, too complex to talk about and he raised spending to 24 to 25% of gdp, which is not what the american people want to hear, that's the obama record and he won't talk about that and there's nothing grand beyond that for him to talk about. he's locked into what he's done the last three years and he's there in cleveland trying to sell it any way he can. >> how did the speech go. did it fall flat? >> it got panned broadly by democrats who think there's a
magic new policy that they think obama should announce to win the election. >> mary shall how about the housing problem? let's go back to 40% drop in the net worth of middle class families reported by the fed. that was largely due to the housing bust what. about housing and president obama and the federal reserve. >> it's more, stuart, as if we needed it that the federal reserve cannot reslate the housing market. it's tried and basically, the market has not repaired, even though ben bernanke has been putting out all this money. and i think beyond that, what's interesting this week is the increasing sense that we are either headed for another recession, or perhaps even in another recession. and you know, when you-- it tells you something, when the market rallies because you have bad economic news and we had some discouraging news on the unemployment front this week. and why is the market rallying? because it thinks, well,
perhaps the fed will get out there and print more money, and basically, i think, markets are saying, look, we want to change in fiscal policy and structural policy and this is something that president obama is not willing to do. >> are we headed for recession? does it look like it? >> yes, it looks like the economy is not growing. employment and economic growth have been going in a downward direction for the last two quarters and that is part of his problem, there doesn't seem to be any lift at all at all for the president or in the economy itself. >> okay. the real problem is that the president doesn't understand of the relationship between risk taking and welt creation. and investors are not going to take risks when they're in an environment where the government is so hostile to profits. >> are you saying he does not understand private enterprise? >> i have a hunch. kim, what's the politics of that speech. if he came across as a pure
government man, a man who wants more government spending, not the rejuvination of private enterprise, does that sell politically in 2012? >> again, you know, this was, make no mistake, this was another attack on mitt romney. just done in a different form. one of the things that the president has struggled with, and you heard dan say this, is that democrats, a lot of people in this party and in some of the following suggested the problem, is that he has spent so much time focusing on his opponent. nobody has a sense of what he would do next. so this is where the president's in a bind. what can he do? ifs your he a keynesian, the president talks about a bill last year, it's absoluteli actu splus by another name. he talks about his own vision and it's a rehash what he's done the past three years.
>> kim, could he not have offered a compromise to his republican opponents and said, all right, maybe we won't tax the rich, but i want to spend more money. he put no sign of compromise at all. why not? >> no, there isn't. i think the time for that, stuart, was long ago. if this guy were bill clinton, going back to the 1990's, over the past year would have sat down with republicans to have done some sort of big thing, whether it's corporate tax reform, looking at bowles simpson, something to suggestion he was going to work with the other side. he isn't willing to work with the other side. it's a problem, a hope and change thing and it hasn't proven the the last two years and he can't run on that again either. >> when we come back, new calls for eric shoulder to resign amid growing outrage over the intelligence leaks investigations and allegations of stonewa i went to a small high school. the teacher that comes to mind for me
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>> the attorney general, it's more with sorrow than regret than anger that i would say that you leave me no alternative, but to join those that call upon you to resign your office. >> that was republican senator john cornyn of texas. holder rejected accusationsway as stonewalling congress on the fast and furious gun running operation and failing to properly investigate leaks of classified information. we're back with dan henninger and kim strassel, wall street editorial stage writer, colin levy joins the panel. get us up-to-date. where are we. >> and eric holder said, hey, i'm willing to partially comply with some of these
requests for documents. some of the subpoenas from congress so he said he's going to meet with congressional regulators on monday to hash that out. i think the real question here is exactly what his definition of compliance is. what we've seen so far and what a lot of congressional republicans have been jobbing to. justice is running an internal investigation into which they've produced about 80,000 documents, but actually only turned over about 7600 to congress. so, that's just an enormous gap and i think that that's what people are going to be looking for, what he's actually willing to show now. >> is the expression stonewalling legit? >> i think it's certainly legitima legitimate. there's no question this has been an incredibly political operation, one that's not willing to participate and what is a purposely appropriate exercise. >> there's a contempt vote for june the 20th. what's your judgment on the wisdom of that and whether to go forward? >> i think the republicans are in an awkward position here.
because, you know, they were very critical and rightly so when nancy pelosi was running the congress of her oversight and what they felt were nakedly political, overtly partisan efforts to go after bush officials which were abuse of power and wasted a lot of time and they promised when they came to power that they were not going to run the shop this way and don't like being involved in the situation. at the same time as colin said, eric holder has not given them a choice. one of the problems here is that the justice department, one thing that we know about fast ap furious is that the justice department was not honest with congress about the very existence. and that's a provocation that congress had to therefore investigate. and now that he's handing over the documents they go on with the contempt proceedings. >> the contempt proceedings, it's a big deal. in the last 40 years, there's
only within four contempt citations by congress against the executive branch. during the carter administration, janet reno during the clinton administration and most interestingly, they issued one against harriet miers and john bolton during the bush administration over the firing of federal attorneys. so, i'm not sure that the-- this is a serious issue between congress and eric holder, but in the political season right now, there are political liabilities for both of them going down this path. the republicans might not win that con at the point in time vote, on the other hand, the democrats don't necessarily want eric holder's role elevated in the public mind because then people will start asking about the other political things he's done and make him an issue in the campaign. but, this is a very serious battle between these two and i think that both have to have reason to think they might come out on the down side, if they push with contempt vote. >> and eric holder is a
friend. >> i am neat sure there that much loyalty, but i think that eric holder has been carrying water for the president, and voter i.d. laws and sort of meant to inflame the african-american base and the idea that somehow these white states are opposing them or pushing them. it was a pretty rank thing for the attorney general to do, but it was pointed towards the president's reelection campaign. >> and can you bring us up-to-date on the leaks investigation? >> well, the leaks investigation has been another situation where, you know, eric holder could have taken a much more, of much less political, political stance here, but what he basically did was say, hey, my justin department guys are perfectly capable of doing this, instead of appointing an independent prosecutor. so, people are looking at this and saying, now what? he's covering for the administration, he's not taking this seriously, and this is a, you know, another example of where he's just carrying water during you know, prime time political
season. that's the real concern. >> kim, where is the greatest vulnerability for the attorney general, fast and furious, leaks investigation? >> i think it's all of the above and i think the worry for the obama administration is that mitt romney gets a hold of this and he ties it in. this is a growing scheme about the obama administration, when it comes to sort of rule of law, they sometimes play fast and loose and you've seen it, everything their handling of the oil spill and they're sort of pushing of bp to pay into a fund, to all of the things and the leaks as well. and what they should worry about is that mitt romney gets there, republicans, start to make the case that the justice department is far more political than it is about doing its job and that's a knock on the president. >> all right, when we come back, as greece decides its future in the euro zone and the crisis in hand as it grows. is europe planning to print money, lots of it and will the money, lots of it and will the u.s. be a part of that? [ male announcer ] if a phone rings at your car insurance company
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>> there is no doubt, europe is on the edge. and with the debt crisis threatening to sink italy and spain and this weekend, deciding the euro zone future. news now that european central banks are prepared to step in with the biggest bailout yet. will it work? and will the u.s. get sucked in as well? we're back with dan henninger and mary o'grady and wall street foreign affairs columnist bret stevens. i want to start with you, bret. am i right you say let them crash, are you saying that? >> well, the europeans have been bailing out successive
governments, hundreds of billions of dollars for greece and all the countries bailed ut are on the verge of total catastrophe and you saw spain, and immediately the yields on spanish funds went up. the bailout strategy is a failure. >> stuart: you're saying let them crash, really? >> look, in the case of greece, greece is essentially, it's in debt. we shouldn't even be having a conversation about greece. there are things that might be done to prevent a run on the banks in spain and italy and it is important to prevent a, a panic, a panic in europe, on the other hand, the only thing that's going to save the european countries is returning to a real growth strategy, which is not government-led. private sector led, which means low taxes and less regulation and-- >> and i know you disagree. >> no, i actually don't disagree entirely. the only thing i would say is that spain is very important
to europe. so, if you let spain go, you have a real serious crisis with the euro, whereas with greece, i think probably the only problem with greece is that it provokes more challenges for spain. but i think with spain, it's very important to remember that this is not a run of the mill sovereign debt crisis, what's spain's problem is is a financial crisis, a problem in the banking sector and a competitiveness crisis and both of those things can be dealt with. you know, there's a think tank in spain this week, created quite a buzz with the suggestion, what they should do with the banking sector is actually bail in the creditors, in other words, make them equity owners of the banks, as opposed to bailing out the banks, and that requires leadership, but that would be a much better solution and more, i think, the population in general would appreciate that more than, you know, putting this off on the taxpayers, and you won't have problem with the labor market. you have to make the labor
market competitive in spain, requires leadership. >> stuart: i've got it, and i'm sitting here in america and we're all sitting in america, looking at the chaos over there. dan, i want you to tell me why should i care? why is it such a big deal to us here? tell me. >> well, if the nightmare scenario or the dark scenario that bret was suggesting happening, and couldn't have depositors pulling money out of european banks and first spain and italy get into deep trouble. the euro zone economies will decline. you're talking about a major part of the global economy, there's no way that would not affect the american economy, if the euro goes into a deep recession and affect the asian economies as well. >> stuart: should america's federal reserve be part of this mother of all bailouts, if it came to pass, should it? >> no, we are ultimately going to court inflation and massive inflation, the moment that growth starts to pick up. and you have all of this
mountains of free money lying around. look, i would differ with dan in one respect. remember in 1997. the asian contagion and currency crisis, the united states sailed through that, even though numerous asian economies collapsed in the summer. what we need to do is look at europe and understand what it means when you run an entitlement state decades after decade. >> and what about the absolute now? remember september of '08, in the united states? if we'd let everybody crash, it would not have tarp, what would have happened? >> our problems cannot be attributed now to europe, our exposure to europe is limited. trade with europe has been growing and europe is an objectless son in the failure of a welfare state. >> if we should have europe going on its own, and maybe stop giving them bad advice.
spain has 18%, and what's the advice. raise value added tax. income taxes in spain are among the highest in europe. capital gains taxes went up under the the socialist government and further under this government. let's give spain good advice. >> stuart: as a former european i could talk about this for hours. i haven't the time. thank you, everybody, when we come back our hits and misses [ female announcer ] think it's impossible to reduce the look of wrinkles after just one use? think again. [ female announcer ] with olay regenerist wrinkle revolution, it's possible to reduce the look of wrinkles in just 10 minutes. now you've seen it. experience it for yourself. [ female announcer ] olay regenerist. on my journey across america, i found new ways to tell people about saving money. this is bobby. say hello bobby. hello bobby. do you know you could save hundreds on car insurance over the phone, online or at your local geico office? tell us bobby, what would you do with all those savings?
>> time now for hits and misses of the week. you're first. >> stuart, a big hit to emanuel who this week is standing up to the chicago teacher's union. and the teachers union is annoyed because the mayor has basically said he's not going to agree to demand. and 20% pay raise in two years and lengthening of the school day and previously the shortest of the nation.
and select in new york and in washington, and learning that the teacher's unions are a formidable challenge to improving education in his city. so, we wish him well. >> stuart: yes, he is. bret, you're next. >> this is a big hit to jp morgan ceo jamie dimon testifying before congress this week. he said about the infamous trades, the buck stops with me. he cast doubt on whether all those regulators who have been added thanks to dodd-frank are doing a lick of good. maybe if jamie dimon, a democrat by the way, were secretary of the treasury this economy wouldn't be in the shape it's in and we wouldn't be blaming somebody else. >> stuart: and-- >> lance armstrong has been accused of multiple drugs, by the anti-doping agency. do you believe we've got an anti-doping agency? of course you can, and a pristine and beautiful sport with