• With: Dan Henninger, Mary Anastasia O'Grady, James Freeman, Dorothy Rabinowitz

    This is a rush transcript from "Journal Editorial Report," December 28, 2013. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," from the ObamaCare implosion to America's global retreat, we take a look back at the big stories from 2013. And from stock market highs to sports- cheating lows, our panel picks for the "Hits and Misses" of the year.

    Welcome to this special edition of the "Journal Editorial Report," our look back at the biggest stories of 2013. I'm Paul Gigot.

    Joining our final panel of the year is Wall Street Journal columnist and deputy editor, Dan Henninger; editorial board member, Dorothy Rabinowitz; columnist, Mary Anastasia O'Grady; and assistant editorial page editor, James Freeman.

    So let's get right to it.

    Dan, certainly, a lot to talk about. What's your choice?

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I think obviously the biggest story of the year was ObamaCare, officially the Affordable Care Act. It isn't that it was a big story in itself but it also has a story in what it has told us about the future of liberal governance. Barack Obama came into the presidency. And from the first inaugural speech, he told us he was going to deliver benefits from the government, the government should be able to do that. In fact, two weeks ago, he even said we are all, the American people, the government, the government is us. They introduced ObamaCare. The first thing that didn't work was the website. It just simple didn't function. This was when people expect websites to work. But I think in some ways, more important thing is the cancellation of the policies, the limited choice of doctors. This was not a failure of the act. It was intended to work this way. In other words, policies would be terminated, people would go into the ones defined by the act because they were broader, and this would be a good thing. Instead of being a good thing, people are turning against the idea of a plan like this. Normally, big government operates below the surface. This one has been all up for everyone to see. It's been a bad experience for the promoters that government could help.

    GIGOT: And it's gone directly to the question -- the president's reliability.

    Mary, because what's happened is, is his promises, you can keep you policy is you like it and you can keep your doctor in you like him, directly undermined by the bill itself, but also the way it's rolled out. Also the way it was designed. This was intentional.

    MARY ANASTASIA O'GRADY, COLUMNIST: Absolutely. You have all these people who voted for the president and now finding out they feel like he actually lied to them. That's very distressing for his former supporters.

    What really amuses me is how the Millennials seem to be waking up to this president that they played a large role in putting into office, and now all of a sudden they're realizing that government doesn't create wealth. It has to come from someone, and they didn't realize it, but they're supposed to be one of the suppliers.

    GIGOT: Liberalism is suddenly expensive again.

    (LAUGHTER)

    For years, it was not so expensive.

    JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: And now people are discovering it costs money, a lot -- maybe in other ways.

    FREEMAN: I think not just the Millennials, but all Americans, when you look at polls, are returning to the natural distrust, the healthy distrust of government that I think is really our tradition and has served us well. In a lot of ways, it could only get worse. You look at these initial reports that people are not signing up, especially healthy people, especially young people, so what it means is, along with all the problems of the last few months and the canceled policies, you're going to see a big premium spike next year.

    GIGOT: Let's move on to another subject.

    Mary, your choice?

    O'GRADY: My big story for the year is the oil and gas revolution in North America. In the last four year, Paul, we've had $150 billion in new foreign direct investment come into the U.S. in the shale fields. And basically what's happening is we're having a gusher, an oil gusher. We have 800,000 barrels per day increase between now -- per year, between now and 2016, where we'll reach 9.5 million barrels per day. That's two million per day higher than the Energy Department forecast this time last year. So --

    GIGOT: That's happening in places like Pennsylvania, North Dakota and Texas.

    O'GRADY: Yeah. This is really a technology revolution. Because what's happening is the drillers can actually see through the rock because of the seismic -- it's really a seismic technology that allows them to know where the oil is. That's what the real change is. And of course, put that together with fracking and you have lots of new supplies. So the U.S. is a big energy producer now. Canada has been an oil gusher for at least a decade. Now Mexico's buying in by allowing private investment into what has solely been a state-owned sector.

    GIGOT: Big competitive implications for the North American economy for manufacturing, in particular, potentially company -- users of energy, manufacturers and chemical industry and so on.

    FREEMAN: Yeah, it's really -- it's a huge change. It couldn't come at a better time. Because, we catalog all of the mistakes coming out of Washington, all of the policies, ObamaCare and other things that are a big drag on hiring, a big drag on productivity. And countering that is roughly $4 natural gas makes manufacturing in the United States a lot more appealing and efficient and competitive.

    GIGOT: Let's move on here for the third -- your story, James?

    FREEMAN: I think the biggest story of 2013 was the IRS scandal, the deliberate targeting of Tea Party groups leading up to the 2012 election. I think it's really -- as bad as ObamaCare has been, as positive as this energy revolution is, I think the IRS scandal is really the biggest story of the year, because it goes right to the heart of our democratic process. You're talk about an agency of the federal government attacking the opponents of the president and really, in a close election, possibly having an impact on the outcome.

    GIGOT: Why has the scandal vanished then? It seems to have gone away in terms of the mainstream media and so on.

    FREEMAN: Well, it's partly the stonewall. But they may not be able to stonewall forever, because what's happened relatively recently is that the Obama appointee, William Wilkins, who is the IRS chief counsel, was interviewed by House investigators and basically didn't know, didn't recall, avoided answering dozens of questions. As they continue to look for documents, and let's hope the congressional and private litigants continue their effort here, I think we may learn more.

    GIGOT: Dan?

    HENNINGER: Yeah. It says something about the mood of the country right now, Paul. I mean, polls show that belief and faith in government is at an all-time low, almost dangerously low. This is an example of the sorts of reasons people have -- I think, no matter what their politics -- to wonder what are is going on in Washington. It creates a very deep level of discontent.

    GIGOT: And it undermines the ability of government or Congress to accomplish goals that might actually be constructive. For example, like immigration reform, things like that. It undermines trust in things we need for our security, like the National Security Agency surveillance policy.

    DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: And the lies, Paul, are exceptional. I mean, you can talk about presidents who refuse to -- who lied to us about the war and about hidden munitions and all of that. But when you got to ObamaCare and that outright lie, this is the most permanent incandescent lie that will live in the hearts of Americans. People simply cannot get past it.

    GIGOT: All right, Dorothy, thank you.

    Much more to come as we reveal our pick, for the biggest stories of 2013 right after the break.

    (COMMERCIAL BREAK)

    GIGOT: Welcome back to this special year-end edition of the "Journal Editorial Report" as we continue with our picks for the biggest stories of 2013.

    Dorothy, what's yours?

    RABINOWITZ: I think now of America's retreat phrase on everybody's lips now and I think also of 1941 when Henry Luce, Time, Fortune, Life editor, said America must involve herself, this is the American century. He was talking about a crumbling civilization.

    GIGOT: Involve themselves in the war.

    RABINOWITZ: In the war. What would he think now? Look back on Obama and Syria and Obama and Iran. Think about, first, Iran. We have given up, thanks to Obama's push, the only ingredient that would have kept Iran in check, the sanctions. We've badly loosened them. Look back to September when we had --