Transcript: 'The Journal Editorial Report,' March 8, 2008

This is a rush transcript from "The Journal Editorial Report," March 8, 2008.

PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," Hillary Clinton comes back from the brink and exposes some of Barack Obama's weaknesses along the way. What Tuesday taught both Democratic candidates. And how the party is preparing for the brawl ahead.

Plus, he clinched the Republican nomination, now comes the hard part. How strong of a general election candidate will John McCain be? Our panel weighs the pros and cons.

But first, these headlines.

(NEWSBREAK)

GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

She is back from the abyss, again. While Hillary Clinton's big victories in Texas and Ohio Tuesday night weren't enough for her to pull even with Barack Obama in the delegate count, she did manage to break his 11-state winning streak and cast doubts on his experience and toughness heading into next month's Pennsylvania primary.

But contrary to conventional wisdom, my guest this week says it doesn't come down to the keystone state.

Former White House advisor and FOX news analyst, Karl Rove, joins me from Washington.

Karl, good to have you here.

KARL ROVE, FORMER WHITE HOUSE ADVISOR & FOX NEWS ANALYST: Great to be here Paul, thanks.

GIGOT: John McCain went to the White House this week, got the endorsement of your former boss, President Bush. Most Republicans say if John McCain is going to win in November he can't run as a candidate of continuity but the candidate of change, much as Nicolas Sarkozy did in France. Do you agree with that?

ROVE: Sure. Every presidential election is about change. No more than the election — none more than the election at the end of an eight- year term of a party in the White House. You bet. He needs to run as his own man, his man, his character, his values his vision for the next four years.

GIGOT: What does that leave for a role for President Bush? Does he have to distance himself from President Bush?

ROVE: No. Al Gore distanced himself, deliberately went out of his way to find places where he differed with Bill Clinton, and it didn't help him. What McCain needs to focus on is himself and what his values and vision and talk about those and articulate those, and do so with passion and conviction. and if sometimes he is in agreement with the president, fine. If sometimes he is in disagreement sometimes too, that's fine. But he needs to be himself in all of this process.

GIGOT: Does that mean picking two or three big issues, health care, tax reform, or something, make them his signature domestic reform issues and campaign on these — define himself by position on those issues?

ROVE: That's right, Paul. He needs to find out what he thinks is important and articulate that other candidates have picked something close to their heart and talked about it. absolutely. He will — Iraq will be a big component of this election. But there needs to be a domestic issue or two that people talk about around the kitchen table, that John McCain says this is something I care about. And people hear it and say that makes sense to me.

GIGOT: One thing you wrote in the article for the "Journal," you said McCain has to talk about Iraq and war on terror in a way that gets Hillary Clinton and Barack Obama to attack him.

ROVE: Right.

GIGOT: I would think he would attack them. What do you mean by getting them to attack him?

ROVE: In politics, oftentimes, the counterpunch is more powerful than the initial assault. I think there is a difference — if John McCain articulates a vision and says this is what I want to do in this troubled region and this is what I think is important for the American people to think about, I think it is better for him to do that then for him to say I will start by picking a disagreement with Obama or Clinton and going after them.

He is better off saying what he believes and letting them come after him and having defined a position that's the most defense able and strongest in his term, let them come after him.

GIGOT: You think Iraq and the war on terror, should be strong general frowned for McCain.

ROVE: Absolutely. In fact, look, there is a significant gap within the Democrats as to who is seen more as commander in chief. Hillary Clinton is seen by far more many Democrats as ready to be commander in chief than is Obama. My sense is, thought there is not a lot of data, is that McCain will be seen if the question is who should be commander in chief, John McCain will out distance his Democratic competitors.

GIGOT: Let's talk about the Democrats. One lesson you could draw, and some are drawing, about Tuesday's results is that Hillary Clinton's negative attacks, on Obama on the commander in chief and a couple of other things, hasn't worked. Does that mean Obama, who is flying above it all and says he wants to change politics, does it mean Obama has to go back and attack Hillary?

ROVE: Well, what he ought to do — but what is not really capable of doing — is articulating a concrete vision at that moves beyond the inspiring rhetoric. What happened to him was the inspiring rhetoric we saw begin at the Jefferson-Jackson dinner in December in Iowa, which galvanized the caucus goers in Iowa, has been followed for essentially the last three months. But it is wearing thin. There is very little to it. It is changing from inspiring to insipid.

His problem is he has two choices. The easy choice is to go after her. The better choice is to flesh out what it is that he believes that he wants to do and do so with a way that conveys passion.

I think his problem is that his record in the Senate shows he is an amused ironic observer, not an engaged passionate committed leader. As a result, it is hard for him to do the latter. It is easy to do the former, go after her. We saw it yesterday on the plane trip where he brought the press forward and began to raise questions about her. And we've seen it in the rhetoric of his press spokesman, who are clearly are signaling the gloves are off and we are going after her. They called her a serial — they called her a liar. They said she was — secretive and so forth.

GIGOT: But there is a lot of ethical baggage with the Clintons going back to the 1990s. You know, it hurt Al Gore in 2000.

ROVE: Oh, sure. Oh, sure.

GIGOT: So why shouldn't he take the gloves off and say the Republicans are going to use it against the Clintons in November. Democrats, you ought to understand this is what you are going into the election with if you nominate Senator Clinton.

ROVE: Because this is politics, I have two answers to your question. Each one is different.

As a political practitioner, I would say the best thing for him to do is give substance and depth to the vision which is inspired people thus far. As a Republican — and I'm happy to see him go after her on ethical behavior and because she is going to respond in kind. And it will get ugly and mean and there will be deep wounds.

If you do the former, there are not a lot of wounds left at the end of the day. If you do the latter, go after each other personally and nastily and viciously for seven weeks — remember we have seven weeks until Pennsylvania.

GIGOT: A long time.

ROVE: Eight weeks ago we were in Iowa. Seven weeks from now, we will be in Pennsylvania. That's a long time to get down in the mud and get vicious and nasty, pull out the knives, stab each other a couple times, draw blood and create wounds that will last all the way through November.

GIGOT: All right. Karl Rove, you are giving free advice. You could get paid for that by the Obama campaign. We'll see if they take your advice.

ROVE: I doubt they will.

GIGOT: When we come back, the Democrats' delegate problem. Should there be a do-over in Michigan and Florida? Our panel weighs in after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHARLIE CRIST, (R), GOVERNOR OF FLORIDA: It is unconscionable to me that some party boss in Washington is not going to permit the people to be heard. That's not what America is all about.

(END VIDEO CLIP)

GIGOT: That was Florida Governor Charlie Crist, teaming up with Governor Jennifer Granholm of Michigan this week, to urge the Democratic Party to seat the delegates from their states at the National Convention in August. The Democratic National Committee stripped the states of their delegates after both states moved up their primary dates. With only 100 delegate votes separating Barack Obama and Hillary Clinton, party officials are considering the possibility of rerunning races in those states.

Joining the panel this week, "Wall Street Journal" editorial board members Dorothy Rabinowitz, Jason Riley and Steve Moore.

Jason, what weaknesses back program balance, did Hillary Clinton expose this week.

JASON RILEY, EDITORIAL BOARD MEMBER: Well, I think the biggest weakness that was exposed is that Obama has a problem attracting white voters. For all this talk that he is post-racial, he has crossover appeal, Obama is not appealing to working class whites and lower middle class whites.

GIGOT: Why is that? Is it a class issue or is there some racial component to it?

RILEY: I don't know. I don't know the answer to that. I do know they comprise the bulk of the electorate and he has a serious problem there. In Ohio, the exit polls showed Hillary Clinton got 55 percent of white men. That does not bode well for Obama. He does well among affluent voters. Does well among young voters. He does well among blacks. But those numbers put together can't put him over the top. He has to bridge the gap. And that 55 percent of white men that Hillary won in Ohio does not bode well for Pennsylvania and other states going forward.

GIGOT: I thought another weakness that Senator Clinton exposed was on the commander in chief question. It is clear she has an advantage on that over him, Dorothy? How does he close that gap?

DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: I don't think he can, actually. And to answer your previous question as well, there is might I little down-to-earth substance for people worried about jobs in Obama's speeches. All that talk, Jason is right. That it is talk.

GIGOT: Not much of a sell. Not much really tangible.

RABINOWITZ: No sense in them. The sense of being commander in chief, even if you have only been the first lady, you have been in that White House. She has been on missions. I doubt that Obama has been out of the country more than once. It is one of these things the electorate doesn't know about him but they sense a person with experience.

MOORE: You know what, Dorothy, when I saw that ad that is famous the 3 a.m. call, I literally watched the first 25 seconds of that ad, I thought it was a John McCain ad. That's exactly going to be the message John McCain has.

RABINOWITZ: That's what Hillary Clinton did. She linked that point about Obama and commander in chief, to saying the fact that John McCain will bring in November.

MOORE: Effectively. And the other thing is...

GIGOT: Obama is not a good standard bearer against McCain on that point.

MOORE: In the general election, I don't think that Hillary will be too strong against McCain either. The other thing that happened last week, I think is an issue, is the kind of waffling that you saw from Obama on NAFTA and saying one thing out of one side of his mouth...

GIGOT: The trade agreement with Mexico and Canada.

MOORE: Yeah, and one to the Canadian officials. That cut into in idea that this is a straight shooter. This is a guy who means what he says. Both of those things really emphasized that.

GIGOT: Despite that, Jason, we move ahead. Obama is still ahead in the popular vote. He's still ahead in delegates. I don't see a way Hillary Clinton can win unless somehow Michigan and Florida voters are allowed to go to convention. Are we headed here for a re-do of that vote?

RILEY: That might be the most fair way to resolve this is to vote again rather than looking backwards and seating delegates. The Democrats agreed not to campaign in those states. So Barack Obama can say I abided by the rules we set up. If they want to seat those delegates they probably should re-vote.

MOORE: Jason, the issue of course is, who will pay for it? I like your idea, Paul, of maybe George Soros. The Democratic National Committee doesn't want to pay for it.

GIGOT: $25 million.

MOORE: The people in Florida and Michigan don't want to pay for it. But I think you're right, these are two battleground states. If those voters feel like they have been disenfranchised, it does not bode well for the Democrats come November.

RILEY: I don't think Obama wants to go that route. Hillary proved she can win big states — New York, California, Texas, and Ohio. Florida is a big state. Michigan is a big state. Her record there, I think, shows that she might have the advantage.

GIGOT: These superdelegates are not profiles in courage. Most of them are barely profiles. They don't want to settle this themselves. I think that's why we are headed for a re-do.

Still ahead, he clinched the nomination. Now comes the hard part. What John McCain needs to do to seal the deal in November, after the break.

(COMMERCIAL BREAK)

GIGOT: Well, he clinched the Republican nomination this week but how strong a general election candidate will John McCain be?

Dorothy, "The Washington Post"-ABC poll this week has McCain losing RIGHT now. If the election were held today — it isn't — but if it were, both to Hillary Clinton and Barack Obama. How does he erase that deficit?

RABINOWITZ: He has five months. He has many things — let us say, that he was born lucky in this regard. He won that nomination. He won against every conceivable. I don't discount the sense of character against adversity that will push him through.

GIGOT: Tenacity. Individual tenacity.

RABINOWITZ: Tenacity indeed. And he is lucky in his opponents, one far left personage and Hillary Clinton. Not exactly the most popular person.

McCain can make hay out of that. Third, and most important, there are intangibles and the intangibles are you don't know a person of this vigor intellectually, of his capacity and of his fantastic knowledge, which we have all seen of issues in the world. The only thing I could hope is that his voice was stronger, he spoke faster and he got a little temper.

GIGOT: If eloquence were the issue in this election, Obama would win for sure.

MOORE: I think the big problem, Dorothy, for John McCain is two out of three voters that have gone to the primary are saying the economy and country is going the wrong direction.

GIGOT: I think that McCain has the advantage on commander in chief and foreign policy. He is comfortable on that turf. He knows what he thinks about it.

MOORE: Right, no question.

GIGOT: You're saying that the debate will be economy and domestic issues, perhaps the dominate debate?

MOORE: If it is, it weighs heavily in favor of the Democrats. They are the party of change. The Republicans are the party of the incumbent.

RILEY: The Democratic nominee, for example, we know, is going to make a big issue of health care. McCain is not comfortable with this issue. He needs to bone up and be more comfortable with it. Because whether it is either Obama or Clinton, they both want to talk about this issue and we know that they can.

GIGOT: You know what's interesting about that, Jason? McCain is has a good health care plan. He has a good tax plan. I don't think he really understands it.

RILEY: He does

GIGOT: Or...

RILEY: Everyone knows he can talk foreign policy. That won't be a problem. But Steve is right. The economy, we can still be in a slow down by November. he has to be more comfortable. He's gone out there and acknowledged it is not a strong suit. He's got to make it a strong suit.

MOORE: One issue, I think, it is a great contrast between two parties. Obama and Hillary are talking about raising taxes, canceling the Bush tax cuts. A lot of Americans, people are concerned about the economy. McCain can make a strong case, look, the economy is in trouble. This is the last time — this is the worst time to be raising taxes.

GIGOT: Dorothy, I think this is a serious point these guys raise because if you read the interview John McCain did with our Washington bureau this week — I thought he was incoherent on the economy. He could not defend his tax plans. He could not make the case for it. And I wonder if this is linked to a kind of intellectual laziness. He's just not interested, therefore, it doesn't work hard enough.

RABINOWITZ: Well, he's no grad student, Paul. That is the truth. But I think, in the end, when it comes down to it, if you tell the American public, and truthfully, that there is this value called protecting the homeland as opposed to the economy — both abstractions — but I think one hits home harder.

And then there is the question of this strong character standing in front of them. He is no Bob Dole. He doesn't growl, you know.

MOORE: Even if he looks like him a bit.

GIGOT: There is one other factor that could help McCain and that is, unlike any other Republican who could have run, a more plausible agent of change because of his maverick image, because he is not a cookie-cutter Republican. He does have the ability to reach out to Independents and Democrats. A lot is made of Obama appeal to Republicans and Independents but McCain has the appeal to Independents.

RILEY: He does. And that will come into play, especially if Obama is the candidate, this ability to bring people in over from the other side and to appeal to Independents. If Hillary is the nominee, it is more of a get out the base type of election. But if Obama is the nominee, I think you have a different campaign dynamic.

GIGOT: Steve, is age a vulnerability for McCain?

MOORE: No question about it, especially if you have a young vibrant guy like Obama as his opponent. Two things that are coming up that are big issues. One is earmark reform, which is a great reform issue. The other is tax reform.

GIGOT: If he gets behind it, he can benefit from those.

MOORE: I think so.

RABINOWITZ: Do you know how many people around McCain's age are voting.

MOORE: Yeah, but a lot of them think they are too old to be president too.

GIGOT: All right. We have to get out of this one.

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.

Item one, the government's latest give-away. Steve, you love this subject.

MOORE: Paul, politicians love to give away special favors to voters. And their latest one is to give voters free TV. That's to say that the government will be giving away $40 coupons to voters to upgrade their TV for digital broadcasts next year. Americans already watch four hours of TV a day. The last thing we need is more subsidies to get them to sit on the couch. Maybe it would be better if they red newspapers rather than watch TV.

GIGOT: Steve, do you realize you are on TV now?

Next, a miss to Ben Bernanke — Jason?

RILEY: Yes, a big miss. Up until now, the solutions to this housing situation focused on freezing interest rates. On Tuesday, the Federal Reserve chairman came out and suggested that banks should also reduce the principal on certain loans.

GIGOT: The size of the loan.

RILEY: The size of the loan. This is not only bad advice because real estate prices are falling, banks are struggling and this would increase their losses. But it is also introducing an element of moral hazard here. He doesn't have a role to play in this area of the economy. He should stay out of it.

GIGOT: Wait for the Feds.

OK. Finally, the latest literary fraud undone by her own sister — Dorothy?

RABINOWITZ: Yes and a hit to the sister who nailed her. You know, in the grand tradition of "The Washington Post," Janet Cook, long ago the Pulitzer Prize winning fraud, who made up with a story about little Jimmy in the projects — this personage, the new one, the author of something called "Love and Consequences" or something like it, decided to present the story of a woman who was brought up by a black mama, ran with gangs. But she is herself half Indian and half white, so she touched all the bases which is, of course, wonderful for publishers. So they bought into this fantastic tale of a young woman who is given a gun at 14.

Well, guess what? You know? Her sister saw her picture in the paper. Jason was about to point out last week that, who is dumb enough after committing this fraud, to go and put yourself in the "New York Times" home section. Sister saw it and nailed her, indeed.

(LAUGHTER)

So let's just say — and she told us, that she did it for humanity. She was speaking for the voiceless. Yeah. So the publishers have withdrawn the publication. And they've withdrawn her publicity tour. And I am sorry about that.

GIGOT: Good for her sister. Thank you, Dorothy.

That's it for this week's edition of the "Journal Editorial Report." Send your e-mails to jer@foxnews.com. And visit us on the web at www.foxnews.com/journal.

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

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

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