• With: Matt Kaminski, Dan Henninger, Kim Strassel

    This is a rush transcript from "Journal Editorial Report," July 26, 2014. This copy may not be in its final form and may be updated.

    PAUL GIGOT, HOST: This week on the "Journal Editorial Report," fighting intensifies in eastern Ukraine. Two more fighter jets shot out of the sky. Putin holds firm. The White House talks new sanctions. So what does it all mean for the future of U.S./Russia relations?

    Plus, the debate is on. Texas Governor Rick Perry and Kentucky Senator Rand Paul square off on foreign policy. If this is round one, who's left standing in 2016?

    And lost and now found -- maybe. The IRS chief says tapes that could contain Lois Lerner's emails are now in the hands of investigators. So what's on them? And will officials finally fess up?

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

    The Russian-backed rebels accused of killing 298 innocent people on a commercial airliner are not backing down. The separatists say they shot two Ukrainian fighter jets out of the sky Wednesday, not far from where the doomed Malaysia Airlines jet went down. Russian President Vladimir Putin is promising help, but says there are limits. Here at home, President Obama is taking a lot of heat for not being tough enough. So is Putin playing us?

    Wall Street Journal deputy editor, Dan Henninger; and editorial board member, Matt Kaminski, join me with more.

    So, Matt, a lot of people hoped -- I'm not saying they expected -- but they hoped that the Malaysia Airlines shoot-down might stop the war in Ukraine. It hasn't worked out that way.

    MATT KAMINSKI, EDITORIAL BOARD MEMBER: No. I mean, it was a very big event for us, for the world that was really forced to wake up to the conflict. But unfortunately, it was actually not that big of an event and didn't really change the calculus either for the Ukrainians, who are trying to defeat essentially foreign troops --

    GIGOT: On their soil.

    KAMINSKI: -- on their soil and trying to defend their country against Russia, nor did it change Putin's calculus.

    GIGOT: Why wouldn't it change Putin's calculus? He's now been exposed in most of the world. You saw the headlines in the London tabloids, around the world, essentially putting the burden, the blame on Putin. Why hasn't he shifted his calculus?

    KAMINSKI: Because I think something important happened earlier this month in the weeks before the shoot-down when both we and the Europeans threatened sanctions and then didn't move to impose sanctions on Putin. Putin didn't think we were serious. But Putin also saw the Ukrainian government, the Ukrainian military doing a lot better to defeat the rebels. So Putin decided in early July to send far more sophisticated weapons, including --


    GIGOT: Including anti-aircraft --


    KAMINSKI: Exactly. But tanks. He's been shelling Ukrainian territory from Russia for weeks, which the U.S. has finally come out and stated as fact this week, that we have also picked this up.

    GIGOT: And he's sending heavy weapons now, since the airliner shoot- down over the border.

    KAMINSKI: Throughout, yes, exactly. Nothing's stopped. The flow has been kept going. But the important thing for Putin, I think, is to realize that Putin has a choice. He is -- he cannot -- I think he has a choice, will he let these rebels lose, or will he do everything to make them succeed? But now he has to do a lot more because the Ukrainian military is getting its act together.

    DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, I think we should the goal here. Vladimir Putin does have a strategic goal here.

    GIGOT: What is it?

    HENNINGER: To absorb Ukraine towards the Russian sphere.

    GIGOT: Pull it back and make sure it doesn't join the West.

    HENNINGER: Make sure it doesn't join the West. And this is something Russian leaders have tried to do for virtually 60 years. He has a goal and he's pursuing it. And I think he understands that the West at this point is not going to push back against him. We have gone back many times on this program to Obama's Syrian red line where he told Bashar al Assad that if they didn't stop using -- then he pulled back from that. This week, on Monday, he stood in the White House lawn and said that if Vladimir Putin didn't understand that these separatists were -- this is after the shoot- down.

    GIGOT: Right, sure.

    HENNINGER: After the shoot-down --

    GIGOT: Holding them responsible.

    HENNINGER: After the shoot-down of the Malaysia Airline. Holding them responsible. But he said if he did not control these separatists, who were now a threat to the broader world community, as Obama put it, there will be costs. This was another red line. And Putin has already had experience with those red lines.

    GIGOT: I want to go back to what Putin is doing in Russia, and saying in Russia, the Kremlin media because it's really an alternative universe from what we're reading and what the rest of the world is reading. They're blaming Ukraine and they're blaming the United States for shooting down the jet.

    KAMINSKI: They're raising all kinds of alternative theories. One of them is that they were aiming for Putin's plane that was coming back from Latin America that was nearby. That it may have been Ukrainian fighters who were shooting jets out of their own air space for reasons that are unclear.

    But the important thing for us is that Putin has boxed himself in in Russia itself. He has told a completely alternative version of essentially global reality of what's happening in Ukraine.

    GIGOT: For years.

    KAMINSKI: For years, but especially since the Ukrainian revolution was such a humiliation for him. His crony was toppled in February. A mass movement for freedom, for democracy. The Ukrainians did it on their own. The West didn't really help in any way. So Putin is trying to explain these are fascists, these are people who hate Russians.

    GIGOT: Right.

    HENNINGER: But, Matt, by all evidence, the Russian population is buying it.

    KAMINSKI: Because they --

    HENNINGER: Even the intelligencia is signing on to it.

    KAMINSKI: Well, a lot of them are actually leaving Russia. The people still in Russia do live in a very closed space. They don't have access to other sources of information.

    GIGOT: When you lie to your own people so systematically, that's how you can take a country to war.