• With: Dan Henninger; Jason Riley, Kim Strassel, Mary Anastasia O'Grady, Matt Kaminski

    This is a rush transcript from "Journal Editorial Report," September 15, 2012. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," mayhem in the Middle East. Four Americans are dead and protests rage across the Arab world. What do the attacks say about the Obama administration's foreign policy? And was Mitt Romney wrong to criticize its response?

    Plus, as the presidential race kicks into high gear, will the president's post-convention bounce last? Are rumors of the Republican ticket's demise premature?

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

    Anti-American protests spread across the Arab world this week over a film deemed offensive to Islam and the Prophet Muhammad. The demonstrations follow the murder Tuesday of four American diplomats, including United States Ambassador Chris Stevens in Benghazi, Libya, in what officials believe was a terrorist attack designed to coincide with the anniversary of September 11th.

    Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; columnist, Mary Anastasia O'Grady; and editorial board member, Matt Kaminski.

    So, Dan, what does the outbreak of protests, the anti-American protests across the Arab world this week tell us about our standing in that part of the world, and the ferment in Arabia?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, Paul, I think what's happening here is essentially a repeat of where we came in when the Arab Spring began in Tunisia, then Egypt, and then spread to about 12 other countries. The theme that came out at that time that came out at that time was the United States couldn't really support any of these movements in the Arab Spring because quote, unquote, "we don't know who these people are," which is to say that the United States, and including the State Department, just was not that engaged with these countries at that time.

    Now, when you think of how -- to what extent Egypt or even Libya since these transitions have been in the news, it's been basically not at all. They've been on their own. And I think it's of a piece with the Obama administration's approach to foreign policy, which was to lower America's direct engagement with situations like this rather let international institutions deal with it. And I think what we're seeing is the result of the United States, with kind of --

    (CROSSTALK)

    HENNINGER: Not withdrawing entirely, but pulling back from its engagement with these transitional governments.

    GIGOT: But, Mary, the administration I think would say, look, we liberated Libya. Yes, it was a U.N. operation and the Arab League and so on got there if first, but we were participants and, in fact, our military assets were crucial, decisive, and so, we weren't as passive as Dan suggested.

    MARY ANASTASIA O'GRADY, COLUMNIST: Well, Paul, I think that we can't forget that there is a -- you know, an intellectual stream in the Middle East that wants to restore this idea of a tyranny through Islam.

    GIGOT: Right.

    O'GRADY: And that may be a small percent of the total population, but it's very easy to engage the larger masses in this kind of violence if you can find something to gin it up. And I think it's very clear that it was not an accident that this happened on September 11th.

    GIGOT: Right.

    O'GRADY: This is sort of the agenda. And they're not going to give up.

    (CROSSTALK)

    O'GRADY: When we had the attacks on September 11th, we knew this was going to be a very long war.

    GIGOT: Hussein Haqqani, who is a former Pakistani ambassador to the United States, and a friend of ours, wrote in the "Wall Street Journal" this week that this really less about the YouTube video and that's just an excuse. This is really about the battle inside Islam for the control of these countries. Do you buy that?

    MATT KAMINSKI, EDITORIAL BOARD MEMBER: It's been the battle inside Islam for the last 20, 30 years, since the Iranian Revolution. What's new here is not that you have mobs in the streets who are incited by some perceived grievance of a YouTube video and our -- and they're burning American flags. What's new here is you no longer have authoritarian governments in place in Libya, Egypt, Yemen and elsewhere.

    Now, I think the real test here is for these new governments. Libya and Yemen, to their credit, the governments there reacted very well. they apologized. They moved forces in. I think there's great regret in Libya, and there's a great surge in American sentiment.

    GIGOT: Right.

    KAMINSKI: The real question mark is about Egypt, which is actually, unfortunately, the most important one that we --

    (CROSSTALK)

    GIGOT: Because it's the biggest and most important in the Arab world.

    KAMINSKI: Basically, we have been supporting the democratic transition there. We sort of -- we backed Mohamed Morsi, the Muslim Brotherhood leader, when he took over as president. there was a very big delegation last week in Cairo of American business leaders who want to forgive their debt. Yet, when this happened --

    (CROSSTALK)

    GIGOT: We agreed to forgive a billion dollars worth of debt only last week.

    KAMINSKI: And we have to sort of get Congress to pass off on that, still, so --

    (CROSSTALK)

    GIGOT: It's going to be harder after this week.

    KAMINSKI: Absolutely.

    GIGOT: But the question is, I think, to Dan's point, is that has American pacifity here, a sense that, well, we really can't influence these events and, if we try too hard, we'll be accused of meddling and so on, so we have to step back. And I've had people who understand what's going on in Libya say that by stepping back in Libya, we've let the Qataris and the Saudis and their money and the Wahhabi influence of Islam play a larger role in that transition.

    KAMINSKI: I think these leaders still know that American is where you get legitimacy. It's where the money ultimately is. And we do have leverage but we're not using it as well as it could be.

    O'GRADY: Yes, but, I think, Matt, the idea of stepping back is perceived as weakness and it's perceived as a sort of a disinterested United States, a disinterested President Obama, who is not going to engage, you know. and the very fact that the Libyan embassy was left so unguarded, it really raises questions about the way the president views our vulnerability in that part of the world.

    HENNINGER: Well, Mohamed Morsi understands that his economy is essentially a basket case.

    GIGOT: The Egyptian president.

    HENNINGER: The Egyptian economy. What happened in Egypt is essentially the result of the fact that there are so many unemployed young people in Egypt. The unemployment rate for young people is now about 78 percent. Morsi has to engage with the rest of the world to raise his economy. And I think that is going to be a complicated process. Some nation has to lead the rest of the world in trying, and that would be the United States. It isn't going to just happen on its own. Somebody has to exercise leadership.