• This is a rush transcript from "The Journal Editorial Report," June 2, 2007.

    PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report." President Bush meets with Vladimir Putin in Germany amid talk of a new Cold War, as Bush chastises Russia for its crackdown on democracy and Putin threatens the U.S. over its missile shield plans. Can the two patch things up?

    And cover your ears, and appeals court strikes down the FCC's rules on decency. Is your summer TV about to get a whole lot raunchier? Our panel debates after these headlines.

    (NEWSBREAK)

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

    President Bush and Vladimir Putin met this week at the G-8 summit in Germany amid what many see as the worse political tensions between Russia and the U.S. since the Cold War.

    At issue, the Bush administration's plan to install a missile defense shield in Eastern Europe, a move Russia sees as a threat to its security.

    Putin, who earlier vowed to aim missiles at the region in response, promised to drop his objection if the system was built in the former Soviet Republic of Azerbaijan.

    David Satter is the former Moscow correspondent for the "Financial Times of London." And he is now at both the Hoover Institution and the Hudson Institute and the author of the book "Darkness at Dawn: The Rise of the Russian Criminal State."

    David Satter, welcome.

    DAVID SATTER, AUTHOR OF "DARKNESS AT DAWN": I am glad to be here, Paul.

    GIGOT: It was a startling remark by Putin earlier in the week about re-aiming missiles at Europe. What was he trying to accomplish.

    SATTER: Well, it is a little friendly intimidation. Obviously, he understands that that will get a response in Europe and with public opinion in Europe. And he is hoping to create problems for the United States.

    He doesn't want those antiballistic missile systems stationed in Poland and the Czech Republic. And he is tempting to use traditional Russian or Soviet methods to prevent it.

    GIGOT: But those missile defenses are not aimed at Russian missiles. Russia has more than enough missiles to hit Europe if it wants to anyway and they can be re-aimed obviously re-targeted very quickly.

    They are supposed to be — the defenses are supposed to be for Iran. Why is Putin so concerned about them?

    SATTER: Well, I think it is a mistake to look for a rational explanation. The Russians are trying to assert themselves. In fact, the issue of the missiles is insignificant for Russia. Russia has hundred of missiles and thousands of warheads. We are talking about 10 interceptor missiles in Poland. So it makes no sense at all for them to object.

    And in fact, they are contributing to the very threat that we are trying to guard against, because they are aiding in the nuclear development of Iran.

    But this is a very effective way of distracting Russian public opinion. Of creating the impression that Russia is a kind of besiege fortress, that it's surrounded by enemies, and that makes it that much easier for the people who are in charge in Russia to eliminate what is left of the Democratic liberties in the country.

    GIGOT: So Putin it playing to domestic national sentiments, trying to rouse up public opinion to do what? To consolidate his rule inside Russia or to get the domestic support to be able to reassert Russian power in the near abroad or both?