• This is a rush transcript from "The Journal Editorial Report," December 26, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," at home and abroad it has been a tumultuous year for America and President Obama, from his handling of the economy and his left-hand turn on domestic issues to his offer of engagement to the world's dictators, and his new approach to the War on Terror. We'll look back at the highs and the lows of 2009.

    All of that, and our panel's "Hits and Misses" of the year.

    Welcome to this special edition of the "Journal Editorial Report," a look back at President Obama's first year and some of the biggest stories of 2009.

    We begin here at home where a new president faced an economy in crisis. A Democratic Congress is ramming through an unpopular health care bill. And a public is increasingly skeptical of both their public officials and the role of government in general.

    Joining us this week, Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board members, Dorothy Rabinowitz, Jason Riley; columnist, Mary Anastasia O'Grady; and in Washington, senior economics writer, Steve Moore.

    Well, Dan, Rahm Emanuel began the year saying a crisis is a terrible thing to waste, famously, did they waste it?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, someone's going to write a book called "A Crisis Is a Terrible Thing to Waste." They most certainly did not. They had an agenda. It's turned out to be a left-wing agenda. I think the biggest story of the year, frankly, is the realization by the American people that they've elected a left-wing president. Now, people sitting at this table and many of our viewers probably say, so what else is new.

    GIGOT: We predicted it.

    HENNINGER: We predicted it. Look, Independents were 30 percent of the vote and they gave 52 percent of that vote to Barack Obama. Their support for him has been in a straight decline. It's down to about 39 percent. So they have not wasted the crisis in terms of their agenda. But what they have wasted is Barack Obama's approval rating with the Independents who elected him.

    GIGOT: It's interesting, Jason, but that would be if they get health care passed and it looks to me, at this stage, they'll get it passed. That would be the fulfillment of a historic left-wing dream. They wanted to nationalize health care and do what's done in Canada and Europe. And this takes a giant step in that direction. Wouldn't you have to give Obama credit for at least fulfilling that promise, politically?

    JASON RILEY, EDITORIAL BOARD MEMBER: Yes. Yes, you would have to give him credit. He campaigned on it heavily. He said, in the first year of office, this is what he is going to do. The problem he's run into is that the real story is the economy and he has been busy pushing this health care agenda while the jobless rate has continued to rise. He started off thinking that he could pass the stimulus package and that that would take care of things. And the administration said we have to pass this or unemployment will rise to 8 percent. And in fact, we passed it and unemployment rose to more than 10 percent.

    (LAUGHTER)

    GIGOT: So, wrong agenda?

    MARY ANASTASIA O'GRADY, COLUMNIST: Well, the thing is that he ran as a left-wing interventionist and he's behaved like a left wing interventionist, but what he did not do is manage expectations. He came in as the great messiah, who was going to do right everything that George Bush did wrong. And, in the end, I think he's having trouble in the polls because the expectations were so high for him. And as Jason mentioned, you know, even things like unemployment, they put a number on it and they didn't achieve that. And he's going to have the same problem I think in 2010 because all these expectations about people getting free health care now and they're going to be saying, where is my free health care.

    GIGOT: But, Steve, the economy has recovered. We're in a recovery. The stock market, after it hit the skids early in the year, went down to below 8,000. And — but now, it's back to about 10,500. So what is that — doesn't that the administration — well, the administration's going to take some credit for this no matter what. How much credit do you give them?

    STEVE MOORE, SENIOR ECONOMICS WRITER: Well, he's taking for the credit for the expansion that's barely here yet. Of course, he's going to take credit for it as the economy improves in 2010. I think this would have happened anyway. In fact, I think we have a more robust expansion if it hadn't happened.

    I'd like to make this point about a big mistake I think that Barack Obama and the Democrats made. Think about, Paul, where the Democratic Party is today in public standing versus exactly a year ago, and think about the Republicans. A year ago, the Republicans were flat on their back. They were comatose. Because Barack Obama has thrown out bipartisanship and all of these major initiatives have been passed only with Democrat votes, there is a revolt, a counter-revolt that's going on right now that expressed by the tea partier. And I think one of the big stories, the backlash against Obamanomics across the country.

    GIGOT: But here's what I would think, Dorothy. A lot of Democrats would say, you know, you've got to spend political capital. We had it. We're spending it. And the payoff will be in the future. If we're unpopular while the stuff is going through, so be it. If you lose a few votes in the midterms, we've passed historic legislation.

    DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Well, the public has shown by a majority that they're not really totally behind this health care bill and they also have a countervailing force called the presence of Barack Obama. You know, there's a significant picture on the front cover of New Yorker magazine, not known for its conservative leanings.