'The Journal Editorial Report,' April 4, 2009

This is a rush transcript from "The Journal Editorial Report," April 4, 2009. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX HOST: Up next on "The Journal Editorial Report," Barack Obama abroad. The president makes his first big international trip amid rising tensions with North Korea.

Plus, a Spanish court takes steps to indict Bush officials with torture. How will the current administration respond?

And Obama's auto ultimatum. Is the threat of bankruptcy real?

"The Journal Editorial Report" begins right now.

Welcome to "The Journal Editorial Report." I'm Paul Gigot.

President Barack Obama embarked on his first major trip abroad this week with London's G-20 economic summit, the first stop on an eight-day tour that includes a NATO Summit on the French-German border, a European Union summit in Prague and a two-day visit to Turkey. All of this while juggling an intensifying diplomatic crisis with North Korea.

We're pleased would be joined by former U.N. ambassador, John Bolton. Also joining the panel, Wall Street Journal columnist and deputy editor, Dan Henninger; and foreign affairs columnist, Bret Stephens.

Ambassador Bolton, good to have you here with us on the panel.

Let's start with the trip — the meeting with Russian President Dmitri Medvedev. What is the president's game plan here in pushing, promoting an arms control agreement to reduce nuclear weapons?

JOHN BOLTON, FORMER U.N. AMBASSADOR: Well, I think we can see from this particular issue what they mean by the reset button. They mean, basically going back to a Cold War kind of diplomacy, something that the Russians prize, because it puts them on a plane with the United States. But I think it's a very detrimental course to follow. It goes back to a relationship that doesn't exist anymore. And it locks us into a way of thinking about the Russians that I think is going to harm the long-term prospects for better relations.

GIGOT: When you talk to the Obama administration, they argue, look, we need Russia. We need them with Iran principally. We to help them — we need to get them to help us put pressure on Iran to stop its nuclear weapons advancement. Are we going to get that out of the Russians?

BOLTON: Certainly not. And the Obama administration has tried a variety of ways, including offering to give up our missile defense sites in Poland and the Czech Republic.

Look, Russia should understand that an Iranian nuclear capability is more of a threat to it than to the United States. but there are a lot of other things getting in the way. Russia wants to sell a nuclear power plants to Iran, at $2 billion a copy or more. It wants to sell high-end defensive weapons, conventional defensive weapons to Iran. And it wants to unite with Iran and others in oil and natural gas cartels. So when Russia looks at Iran, it sees something that can benefit Russia, that sweet nothings from the American administration are not going to change.

GIGOT: But you would argue, Bret, I would think that Iran is our major foreign policy problem right now.

STEPHENS: That's right.

GIGOT: Isn't it worth trying to get Russia to help us?

STEPHENS: Good luck with that. I mean, we've had three go rounds with the Russia on U.N. Security Council resolutions. Each time they were less and less helpful. The Russians have been supplying the Iranians with a civilian nuclear reactor at Bushehr. There are reports they intend to supply the Iranians with a very advanced anti-aircraft missile system that would prevent or would forestall any kind of military attack. The Russians aren't exactly helping us here or giving any indication that they plan to do so.

GIGOT: Dan, let's talk a little bit about — broaden this out to the whole G-20 and the Obama trip. He's really got rock-star status over there. I mean, the press corps applauded after his press conference on Thursday. It's a remarkable kind of charisma he brings to this. But what about the substance? Is he getting the substantive deals that these summits are supposed to produce?

DAN HENNINGER, COLUMNIST & EDITORIAL PAGE EDITOR: Well, no, he really didn't get much of substance out of this. The Germans and the French are insisting on this global regulatory frame work. I think they're going...

GIGOT: And the U.S. resisted that.

HENNINGER: The U.S. resisted that, but I think there's a flaw in the center of this. Barack Obama is still basically in campaign mode because that's what he's really good at. And he is trying to use his charisma to convey himself to the people of Europe, that the United States is something you can do business with.

However, leaders like Angela Merkel and Nicolas Sarkozy and Medvedev are making cold-blooded calculations about their self-interests. They are not affected by Barack Obama's charisma. And I think he has not succeeded yet in connecting to them at a level that they will understand and respect.

STEPHENS: Well, the irony here is that when he you talk about the reset button...

GIGOT: With Russia.

STEPHENS: Particularly with Russia, for example, it's clearly a return to what the Bush administration — the last — President Bush attempted to do, for example, with Vladimir Putin when they met eight years ago. Bush looked into Putin's soul and was supposed to establish a personal relationship. It really was about the personality rather than the policy. And that didn't reap particularly good rewards for the administration in Europe or in Russia.

GIGOT: John, is the president going to get what he wants out of the Europeans on Afghanistan? He talked during the campaign that he was going to do what president Bush wasn't able to do, which is get them to do more, fight more and supply more. Is he going to get that?

BOLTON: I don't think he's going to get that. In fact, he's already modified what he's asking for, to get more civilian police trainers, more school teachers. This is a way of lowering the expectations, so that he can still declare the NATO summit a success. But I think we're in for a much more pronounced American role in Afghanistan. And I think this is why the Canadian defense minister, a few months ago, said that he thought that Afghanistan represented an existential threat to the NATO alliance. I don't think that we are going to make much progress on this at this summit.

GIGOT: What about the North Korean missile launch? What can the U.S. and the U.N. — you helped negotiate the U.N. Security Council resolution which bans North Korea from ballistic missile launches. How should the U.S. and U.N. respond now?

BOLTON: Well, I see the administration is saying they're going to be very irritated if North Korea violates the U.N. sanction.

(LAUGHTER)

And I'm sure that will have a profound impact. This shows why the whole exercise in the Security Council is fundamentally a waste of time. North Korea does what it wants. I rather doubt if the U.S. will get substantial new sanctions in the Security Council. And it really underlines why the whole six-party talks that have been pursued by both the Bush administration for nearly six years and now by the Obama administration are not going to have the slightest impact on the North Korean program.

We really need a completely different approach, pressuring China. I don't see any sign Obama's prepared to do that, but perhaps this missile launch will give that possibility.

GIGOT: All right, thank you very much gentlemen.

We will be back. Still ahead, a Spanish court weighs indictments against six former Bush officials. How will the current administration respond? And goodbye terrorism, hello man-caused disasters. Goodbye global war on terror, hello overseas contingency operation. We'll take a look at the new Washington lexicon when we come back.

(COMMERCIAL BREAK)

(FOX NEWS BREAK)

GIGOT: A Spanish court has taken the first steps toward opening a criminal case against six former Bush administration officials, alleging that they violated international law by creating the legal frame work to justify the torture of prisoners at the U.S. military prison at Guantanamo Bay, Cuba. The six Americans named in the complaint include former Attorney General Alberto Gonzales, former Justice Department Lawyer John Yoo, former Undersecretary of Defense Douglas Feith and Vice-presidential Chief of Staff David Addington.

John Bolton, when you were giving advice to the two presidents, have you ever imagined that you could potentially be subject to the jurisdiction of a foreign prosecutor?

BOLTON: Absolutely, these people have been at it for 15 or 20 years. This is a concept, this so-called universal jurisdiction that we should reject unequivocally, no compromise, no chit-chat about it. We should reject it. The idea that Spain, that has nothing whatever to do with these allegations, can reach out and get American officials, shows this isn't law. This is political retribution. The real issue is whether the Obama administration will stand up for American sovereignty when we see that it's filled and being filled more by people who don't think American sovereignty is all that important.

I think, for most Americans, sovereignty means our control over our government and to see us basically creed authority to other countries I think would be hugely annoying to most Americans, and amazing if they even knew the implications.

GIGOT: Dan, let me read you a quote from the State Department spokesman when asked about it. "I'm not aware of any contact with the Spanish foreign ministry on this. It's a matter for the Spanish foreign courts as I'm given to understand. I don't have a comment for you on that at this time. The Obama administration's position on the matters that are under discussion I think are quite clear," end quote. Is that adequate?

HENNINGER: It's inadequate. It's a disgrace and dangerous. To extend what John Bolton said, the idea that we're going — this is a matter for the Spanish courts, what is at issue here is the integrity of the U.S. court system. We have a system of law. We fought wars to protect the western system of law. And it is an insult by Spain to our system for them to be doing something like this. And the Obama administration should be denouncing it because it puts at risk any citizen who goes overseas.

GIGOT: Wait a minute. Wait a minute. You said the Obama administration should denounce this. In fact, this kind of prosecution is being encouraged by some of the leading Democrats on Capitol Hill. Carl Levin, John Conyers, Pat Leahy, they've all talked this idea that Bush administration officials were guilty of war crimes and therefore should be prosecuted. They have been unsuccessful in getting the U.S. attorney general interested in this. Eric Holder has basically said he didn't want to that.

So go overseas, and see if you can gin up a Spanish prosecutor to do it.

STEPHENS: We should be more specific. It's more than just an assault on American national sovereignty. It's an assault against the entire concept of sovereignty. If country acts, Belgian, vis-a-vis Israel or Spain, vis-a-vis Chile or now the United States can have what amounts to kind of a snatch-and-grab legal operation, you've created a situation of total legal anarchy.

GIGOT: But there are situations where international courts have trumped sovereignty, say, for example the indictment of Bashir, the leader of Sudan. Say, perhaps the prosecution of Nuremberg, for example, the prosecution of some of the Balkan leaders. What's the distinction of those cases, apart from the substance? In legal terms, what's the distinction?

STEPHENS: Well, in legal terms, the difference is that a number of countries, about a hundred countries, have actually ratified the treaty that creates the international criminal court, which issued the arrest warrant for Omar Bashir. The irony there is that Mr. Bashir, the dictator of Sudan and responsible for the killings in Darfur, is travelling freely to the Doha summit. He's warmly received by other leaders of the Arab League. Whereas Bush administration officials now have to watch their back if they take a vacation in Canada or New Zealand or any other country.

HENNINGER: In 2002, a case like this came before the International Court of Justice, and they ruled that state officials do have immunity when carrying out their state functions like this. Garzon is in contradiction of that ruling. Heads of state don't have immunity, but state officials like these men do.

GIGOT: John, let me ask you — let me take up another subject here, a little more light hearted, but serious in its way. We have the Obama administration changing the rhetoric. No longer the global war on terror, Secretary of State Clinton said this week they're not going to use that. It' now an overseas contingency operation according to the Pentagon. What's going on here?

BOLTON: Again, this would be laughable if it weren't serious. I think they're trying to distract attention from the war on terror. I don't think that was necessarily the best name myself. I thought we should have been more specific that it was about Islamic fundamentalism. We weren't concerned about dealing with the Baath's or the IRA in Northern Ireland.

But when you remove the whole threat of terrorism out of your rhetoric, what you're trying is get it out of the center of American foreign policy. I think that's a mistake. I think people read that as a sign of weakness and will cause us problems down the road trying to rally other countries to our side for what overseas contingency?

GIGOT: Well, you know, the Obama's administration's actual policies haven't been that much different on terror than the Bush administration's, but they're trying to put it as this overlay of different rhetoric.

STEPHENS: Yes, as Rex Harrison says in "My Fair Lady," it's the new small talk. There's a real danger with the kind of politics or foreign policy of euphemism, peace-keeping operations, humanitarian interventions. This tends to confuse this issue and confuse people's minds and people ought to call terrorism for what it is.

GIGOT: All right, Bret, thank you.

Still ahead, Obama's auto ultimatum, will the administration really leave G.M.'s fate to a bankruptcy judge?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Let me be clear, the United States government has no interest in running G.M. We have no intention of running G.M.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

GIGOT: Responding to their plea for $21.6 billion more in taxpayer cash, President Obama this week declared the end of that road for G.M. and Chrysler. Chrysler got a 30-day ultimatum to sell itself to Italy's Fiat. And with CEO Rick Wagner now out, G.M. was given two months to reorganize or get forced into what administration officials are calling a quick and surgical bankruptcy. But, do they mean it?

We're back with Dan Henninger. And joining the panel, "Business World" columnist, Holman Jenkins; and Washington columnist, Kim Strassel.

Holman, you wrote this week that this talk of bankruptcy for G.M. is a bluff. Why?

HOLMAN JENKINS, BUSINESS WORLD COLUMNIST: Because Obama needs the UAW and there's millions of UAW...

GIGOT: United Auto Workers.

JENKINS: United Auto Workers. Not just the working union members, but now the retirees that vastly outnumber the members. Those are his political base in the Midwest, those battle ground states like Michigan and Ohio. He needs them. He's not going to put G.M. through bankruptcy because it poses too much danger to the UAW.

GIGOT: If they did go into bankruptcy, the first on the block would be the retiree health benefits?

JENKINS: Yes, the retiree health benefits. And pensions would automatically go to Uncle Sam. He would become responsible for those.

GIGOT: The pensions are a matter, would go to Uncle Sam...

JENKINS: They're protected. The retiree health benefits...

GIGOT: The current. Are not protected.

JENKINS: G.M. could have walked away from them now without going into bankruptcy. If it goes into bankruptcy, you can bet that the first thing to go would be those benefits. And then I think Obama will have to fund them directly. I think that's the only political solution.

GIGOT: Dan, did Rick Wagner have to go?

HENNINGER: I think Rick Wagner had to go. He was in some way, an impediment. He wasn't moving the process forward. Something has to move forward here and Wagner just wasn't getting the job done.

The question now is whether that they've made this move of removing a CEO forcibly like this, they're going to make any progress that will actually economically fix G.M. or whether they're seeking a wholly political solution of the sort that Holman is describing.

GIGOT: Do you think at that Wagner had to go?

JENKINS: It was symbolic, like the bankruptcy talk was symbolic. If you look at what Obama actually did, he said that he waived the deadline for the reorganization plan that G.M. didn't deliver. And then said, by the way, no matter what, you're getting the money, one way or the other you're getting the money. That's new. That's basically guarantees the G.M. bondholders they're going to be bailed out one way or the other. So I think they're going to become more entrenched.

GIGOT: Kim, here is one question about the politics. He's early in his administration, Obama is. He could put G.M. into bankruptcy and he's got four years before reelection. Why not take that hit now, rather than basically adopt G.M. and Chrysler, make it his problem so that, as Holman says, going forward, he's going to be responsible now for any cuts in retiree health care benefits any real concessions and any real problems and any more taxpayer dollars that have to go to the companies. Why not cut your political losses now? Blame it on Bush and then let the bankruptcy judge do the hard lift?

KIM STRASSEL, WASHINGTON COLUMNIST: Look, Obama's juggling a lot of different special interests right now. And I think Holman is correct, he doesn't want to end up in a situation where he's going head to head with the UAW

Look, this is why those companies got this auto money bailout in the first place, the public was screaming don't give them the money. They got it because the unions put a lot of pressure on Democrats in Washington to go ahead.

But one of the problems that — the bigger thing, Dan mentioned, well, can they actually get them on a path of economic prosperity? The problem is a confused Washington policy. On the one hand, giving them billions of dollars, and a bailout. On the other hand, Washington is now demanding that they make exactly the sort of cars that have got them into these losses in the first place, namely, small, green cars that a lot of Americans don't really want to buy. So, he's just sort of — this is a policy that doesn't make fundamental sound sense from a broader level.

GIGOT: But, Holman, there are political risks for Obama going forward, are they not? I mean, yes, OK, he needs the United Auto Workers in the Midwestern states, but if he has to shuffle billions of dollars two years from now, three years from now, four years from now into the companies, there's a political price to pay.

JENKINS: It's a no-win for him. You kind of feel bad for the guy. If he doesn't get an agreement and G.M. goes into bankruptcy, it could be more chaotic and the shell-outs to the UAW could become even more naked, which would just make it worse.

GIGOT: Dan, what about the tension between the policies that Kim mentioned on green cars, which the viability for some reason the administration basically said aren't profitable, and on the one hand, that's what Obama says these companies need to make. On the other hand, he wants them to be profitable presumably.

HENNINGER: Well, that was the most striking thing that emerged from this, was that their own reports said that the G.M. Volt and some of the green cars simply can't make money for G.M. The administration's response is, go forward with it anyway. If I can relate it to another issue, they've just run into a tremendous problem with their cap and trade proposal. 26 Democrats in the senate have opposed.

GIGOT: Global warming.

HENNINGER: The global warming thing, the carbon tax, there's a certain illogic to some of Obama's policies. And now that it's become something other than a campaign, that reality has become manifest.

GIGOT: Holman, how long do you think it will take the government to figure out it can't run a car company?

JENKINS: I think sometime after 2012 they'll figure it out.

(LAUGHTER)

GIGOT: It took, what, about 10, 15 years to figure out had he couldn't run a railroad, Conrail, and finally sold it in the '80s.

HOLMAN: That's right. The fuel economy thing has been going on since 75. It's never worked. It's been killing these companies and they keep doing it.

GIGOT: All right, Holman.

We have to take one more break. When we come back, our "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Winners and losers, picks and pans, "Hits and Misses," it's our way of calling attention to the best and the worst of the week.

Dan, first to you.

HENNINGER: A hit to Attorney General Eric Holder who, this week, set aside the ethics conviction of Alaska Senator Ted Stephens. He did so because the prosecution in the case withheld important information from the defense team.

Admittedly, Ted Stephens is a prominent member of Congress' pork- barrel aristocracy. But his prominence draws attention to one of the serious problems in our legal system, abuse of prosecutors of their powers. And the fact is Stephens' case shows it can happen to famous people and also to normal citizens as well.

GIGOT: All right, Kim?

STRASSEL: Well, just to mix it up, I'm going to give a miss to Attorney General Holder. It turns out, a couple months ago career attorneys in the Office of Legal Council issued an opinion saying that legislation that would give Washington D.C. full voting rights in Congress was unconstitutional. Now, this isn't necessarily a surprise. It's rooted in legal theory going back to the JFK administration.

But the problem with Mr. Holder, his own party is trying to pass this legislation in Congress. So he ordered up a second opinion from the solicitor's general's office, which surprise, surprise, said this was legal. This is exactly the sort of politicalization that the Democrats complained about in the Bush administration.

GIGOT: All right, Bret, over to you.

STEPHENS: Yet, another miss for the Obama administration which found a lot to talk about with the Russians, with President Medvedev. But they did manage to raise the subject of human rights in Russia. Just this week, probably the central figure in the Russian human rights community, Lev Ponomarev, was savagely beaten. He's the second figure in just a matter of weeks. This should be part of the reset button with our policy toward Russia.

GIGOT: Bret, thank you very much.

That's it for this week's edition of "The Journal Editorial Report."

Thanks to my panel, and to all of you for watching.

I'm Paul Gigot. We hope to see you all right here next week.

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