The Journal Editorial Report: 11/7

" This week on The Journal Editorial Report Democrats pick -- house seat long held by the GOP in an otherwise dismal election. For the president and his party. They're Republican infighting lead to of the locks and just how deep is a split between party moderates and conservatives going into next year's mid term. And congress extends unemployment benefits for twenty more weeks as the jobless rate hits a stunning ten point 2%. So where are those stimulus job."

" From my perspective we won last night. Because we had one great that we are engaged in -- in New York it was a great and Republican. Healthy since the civil war. And that we -- that he."

" Welcome to The Journal Editorial Report I'm -- that was House Speaker Nancy Pelosi putting up. Positive spin on Tuesday's election results despite. Bruising losses in the governor's races in both Virginia and New Jersey Democrats did pull out a victory in New York's 23 congressional district. Where an intra party showdown between GOP conservatives and moderates. Help Democrat Bill Owens win a seat not held by his party since the civil war conservative third party candidate Doug Hoffman. Forced the Republican beauty -- a -- out of the race just days before the election. With the help of high profile supporters like Sarah -- Rush Limbaugh. And the anti tax Club for Growth which spent more than a million dollars on the race only to give Nancy Pelosi. One more vote. Earlier I spoke to the club's president Chris -- and asked him if it was a mistake to get involved."

" Did -- why don't -- use -- from a policy standpoint conservatives lost nothing. Both the east goes a father and Bill Owens would have voted the same way if they'd been. Elected to the house so you know -- getting. Doug -- in a position where he was very competitive. You know was worth the effort worth the fight. And in the end we had added a -- John -- in the chairman of the NRC this senatorial committee. Says a lesson he learned it was a competitive primaries are a good thing as a victory in itself because I think when the party leaders. Telling voters what they ought to like -- and I give them the chance to weigh in on that decision is always a big mistake. And so this is a lesson that was learned by the party leaders and so I think it was a good investment."

" Well there's no question that she was that the Republican was nominated have been in the back room by New York State. -- but. Ultimate outcome here is that Nancy Pelosi has one more vote for Obama care and when they vote on and it's going to be a very close vote so. It wasn't this counterproductive."

" Apply -- you know it. It's deeds -- 50 is not a moderate Republican issue is left of the Democrat. More than likely gonna vote for Obama care. If she had been elected simply just sat on the sidelines and get nothing. That vote would have been there regardless and so I think that we change a landscape. We engaged in a debate -- had a fight worth having. And I think he's gonna have an impact. And future elections coming up here in 2010."

" Well there's lot of the Democrats are now saying look this is typical of what's happening in the Republican Party you have the civil war these grassroots. Angry conservatives. Who are. Running against Republican moderates even in districts where conservatives we'll have a hard time winning is that the kind of fight we're gonna see going into 2010 all around the country am among Republicans."

" Pleasing. -- advisory is example of a civil war -- the Republican Party I think is a bit of a silly argument. You know there was no moderate Republican in this race -- there was only one real Republican -- that was Doug Hoffman. If indeed party leaders head nominated a principled conservative from the beginning I think that he would -- won. Rather easily. And so I don't think it's a great example to say that there's this struggle within the Republican Party. I do think that the lesson about competitive primaries is important. I do think there are some examples of that possibly coming up in their futures say in Florida in the primary. And -- I don't think that your attorney three was a great example to come to that conclusion."

" What kind of criteria do you use from the Club for Growth deciding whether to support a candidate and how many bad votes if you will do you give somebody -- bad issues do you give somebody before you decide they're no longer going to be somebody the -- Portland giving example. Mark Kirk. Congressman Republican congressman from Illinois -- running for senate in in. -- in Illinois and somebody a lot of Republicans think could wind you know -- he's got a bad vote by your lights I suspect on cap and trade for -- For cap and trade would that disqualify him from a Club for Growth endorsement."

" That probably disqualifies. Is -- for endorsement of the Club for Growth. The you know we have a criteria and very disciplined process that we looking candidates. In -- are viable they can win they can win in the districts they're running and now we like to see sometimes a distinction between candidates. Now where we think that we need to get involved to help somebody. To be able to support pro growth policies you know we we run a campaign in economic freedom is our only candidate we strictly support. Economic issues and you know how we think this -- the electorate really believes in limited government and is it. Tolerant on social issues. And we don't think that things like limiting government personal responsibility -- responsibility are fringe issues we think they're broad based issues. And so those democratic candidates that will stand up and on apologetic police say that they support free market solutions. If they support limited government that they think taxpayers spend their money better than anybody else. And we again think that those are pretty broad base who issues with wide appeal in the center of the electorate."

" If you have senate race for example that tell you've got somebody who's sort of moderately conservative versus a clear democratic liberal are you gonna support that candidate. Because there's some people say in Pennsylvania -- think the club. For growth helped to drive Arlen Specter out of the Republican Party and now they've got only forty. Republicans in the Senate -- that's going to be hard to filibuster Obama -- some of these other some of these other. Issues I'm sure you disagree with."

" The following a look at the history some of their race is a Club for Growth has gotten involved and you -- Jewish -- it's. You can't tell -- you look at Arlen Specter you look at these because if they all have one thing in common. They all defected to -- Democrat party. And we don't take solace in saying they are the things we said day they are. But the reality is they're not moderate Republicans they're people that are on the far left. Did you vote with the Democrats. And today he defected the Democrat party as soon is they're basically called on the issues -- did you we're looking for principled conservatives that we can support that we think wide base of America."

" can support as well Chris -- thanks so much for being here. -- when we come back the Republican Party split and the 2000 mid term elections just how deep is the divide between moderates and conservatives. It is Florida the next front in those so called civil war."

" You saw there was I think the future of the near term -- future of the Republican Party. Civil war in which the right wing ran the moderates out of the party. And they ran right to the democratic candidate and I think that has some harbingers for what's to come."

" That was senior White House adviser David Axelrod putting his own spin on the New York congressional race and the split between moderates and conservatives in the Republican Party. Is he right about what's to -- Florida the next front. In this intra party fight joining the panel this week Wall Street Journal columnist and deputy editor Dan -- Editorial board member Jason Riley and Washington columnist Kim Strauss."

" All right Jason you heard -- Chris -- a very different takes on this how serious is this rift in the GOP. Well obviously Axelrod that's overstating the case somewhat but -- there is an issue here particularly if the road to majority for the Republican party of back -- majority. Is independent voters if you have to bring those voters that left for Obama back into the Republican fold this could become an issue. Targeting moderate makes perfect sense when you're in the majority and you want the votes to pass major pieces of legislation but it makes less sense I think. When you're in the minority trying to stop things. The timing of the of the purification Republican Party might be a little bit off here you want. People conviction sure but you also want coalition builders and your party right to."

" I think it's what's going on is very healthy at this point look the Republican Party at the at this point in time does not have a coherent set of ideas they didn't have a coming out of the bush presidency and certainly the McCain. Candidacy did not reflect particularly on the size of government exact issue they have lost there was there's there's the bearings that and I think what's going on places like New York -- three but it is a very healthy. Discussion I mean you know what our favorite. Things is James Madison's Federalist ten which warned against factions and there's a reason why it parties have these debates internally it's so that we don't split off and the smaller parties and that's what's going on with Republicans right now it's a good thing."

" It's fascinating -- that Bob McDonnell who won the governor's race in Virginia came out of the social conservative movement but he really didn't run on social conservative issues you stress -- just the economy stress transportation stressed taxes. And -- he was -- able to unite his party. Why could he do that in Virginia and New York blew up."

" It's because of the Republicans are learning a lesson here which is exactly what you just described there's no question Bob McDonnell is a real conservative but. He didn't run a divisive campaign he came out he didn't talk about social and cultural issues for very divisive. He talked about the mainstream. Bread and butter economic questions that matter right now. Now that the difference between New York is that -- what happened in New York this is not really. Relevant to this bigger discussion of -- civil war because as Chris topless and you didn't have what was a very liberal. If you wanna collar Republican -- and you didn't have a primary didn't have a discussion about this among the base. What you basically -- her being chosen a back room and then a conservative candidate running against her he later became a cause for some of these activists out there. But this was I think as -- very healthy discussion and and there is a big difference between. That. Fight up there and and in -- campaign in Virginia where you had a and social conservative going out there were talking about what people care about."

" wasn't the only -- social conservative who want. On Tuesday Chris Christie is also a social conservative he won it in New Jersey. He did not make it an issue either and it's also interesting that both of those. Those victories by McDonnell -- At Sarah Palin not to campaign for them total matters here. And in that. New York 23 where Scott the -- of stepped out of the race right in payroll and who eventually won. Hoffman got support from some of the more -- populist members of the Republican Party and it didn't help them."

" Now what about some of these other -- let's say take Connecticut to Rob Simmons lost his congressional seat in 2006 may run against Chris -- again but he's not a really -- powerful. Social conservatives now are they as the party going to be able to unite against somebody like Chris Dodd who is very very vulnerable."

" and you know the Connecticut is moderate to liberal state I think you have to make a choice there whether you're going to. Win or where they're gonna fall on your sort one of -- you mentioned with mr. chocolate I thought was -- it was Mark Kirk in Illinois right look. A Republican win and Barack Obama's home state would be devastating for the Democrats. And I can't imagine the Republicans including a Club for Growth would not support Kirk if he were the nominee it will be wholly self destructive fall on your sort because you can't. Cozy up to a candidate -- those are."

" speaking of healthy competition or maybe unhealthy if you're Charlie Crist the governor of Florida he's being challenged in the Senate Republican primary next year by Marco rubio was a conservative and has been gaining. So you think this kind of brawl within the GOP is a good healthy thing."

" Yet been part because look not all of these primaries are created equal we -- talking about Mark Kirk okay as Dan said this is more about. A moderate to liberal state -- you've got to pick a candidate that you know can winning and running a super hard conservative there may not actually win. But let's not Florida Marco rubio who is is challenging Charlie crest. Was that don't already proven leader of the Florida house he comes out of the Jeb Bush -- who was a very successful governor down there. And certainly would have a shot of winning that seat so what he's doing is challenging a guy that. Has made a lot of conservatives unhappy Charlie Crist he's he's been very populist on economic issues supported Obama in the stimulus right. And and I think that is healthy discussion and debate."

" let's let's let's shift gears just briefly Jason of the Democrats because we talk about their problems but but in fact. One of the big emerging lessons in this election is the emerging. Split among Democrats. Between those who are blue dogs moderates who won -- Republican leaning districts to give Democrats the majority in the agenda. That is being pushed there's some real doubts about that agenda."

" And this is the double edged sword of the big tent strategy. You get more more bodies you'd -- your caucus. But then it becomes a less disciplined caucus and that is what the Democrats are finding out right now some of these blue dogs they. They they recruited Jim lab tester Virginia classical on the -- these aren't swing states is a conscientious effort to go get them to bring them into the fold. But now are they gonna be there in the big vote."

" We'll talk about a little bit more that later when we come back congress extends unemployment benefits as the jobless rate. Reaches double digits. So where are all those new jobs the Democrats promised from the economic stimulus."

" Unemployment hit double digits in October climbing to a stunning. Ten point 2% the bad news came the same day in the President Obama signed a bill giving out of work Americans up to twenty more weeks of benefits the bill also extends until. April 30 a tax credit. For first time homebuyers that was set to expire. At the end of this month we're back with Dan -- hand -- straw so. And also joining us is Wall Street Journal assistant editorial page editor James Freeman so -- you've been looking. At the details of this jobs report. Are the details any more reassuring perhaps than the --"

" and the reason this number was surprising to economists kind of scary. Is that there are some other good news in the economy where you thought this is where jobs would start to rebound but the -- her job growth is up. Productivity surged after employers cut payrolls to the bone. This would be the point in the cycle where you'd expect some hiring again but. Ten point 2% unemployment it's really closer to 20% if you count people who have given up looking. Or who were working part time because they can't find a full time job so. It's basically -- something dragging the jobs down and I think -- have to say it's the Fear Factor Obama edition with what's going on in Washington."

" Well on -- for the future there's -- Number that I focus on which is a -- average jobs worked in -- weekend it's 33 when more normal working week is forty what that tells me is that you're gonna have. Maybe a ways to go before people start to hire new people like forty hours a week because they're gonna. Make that work we go out people working part time temporary got to work going to be hired first for more hours. And that means a job growth may be a -- company yet in coming."

" Well I think that's right and I take issue with just one thing James said which was so employer's been cutting jobs -- bone I think they're actually coming into the bone now James. I mean the only recent productivity is up this because they're getting more work out of the people we've got. And Johnson & Johnson just this week announced was going to lay off 7% of its workforce that's a huge number of people. Healthy company if Johnson Johnson is still laying people off you know there's got to be a lot more marginal companies out there doing the same thing so there is really no."

" Upside at the moment Kim I suppose in Washington a patent that -- the panic among Democrats is gonna be palpable here they're gonna scramble to try to do something because they promised. It when they pass a stimulus that if -- you could keep the jobless rate below 8% below. 8% now it's 2.2 percentage points higher than that so they're scrambling now with unemployment benefits. What else is is in the policy -- here."

" Well not mean that's absolutely right if you look we -- just document the Virginia election mean they're looking at this race and here's a guy who went out there and he wanted. Almost 60% of the state Bob McDonnell by talking about the need to create jobs not all the stuff that's going on right now in Washington about. Health care and climate change and there's a growing feeling out there among Americans that. You know Democrats -- more interest -- growing government -- they are growing jobs. So you Saudi unemployment extension you saw the in the extension of the tax -- first time home buyers is is all designed to give them a little bit of cover. But they are a little bit in a pickle right now because there are stuck in the middle of this health care debate. They feel -- they can't do anything else until of that debate is over it may well get dragged out into next year. And all the while the American public is saying what have you done for us lightly on the jobs front."

" Let me let me give you the definition of insanity -- economics and he has a five point 4%. Surcharge on small businesses that create jobs with a ten point two unemployment. Rate and yet that five point 4% surcharge is in the house health care bill."

" It is well you know looking at this is the glass is half full the if they they would just stop the insanity there there are. But people eager to hire I mean -- we were getting -- good news for my retailers. Starbucks is is getting more bullish I mean this is the ultimate discretionary purchase right so. So all Washington has to do -- they were not gonna go over the cliff on health care cap and trade and I think you'd see you see this economy you know what you think yeah."

" The jobs for if they just stopped you agenda that you would begin -- your employer would begin to say you know what OK I -- I know what my costs will be per person I higher. I'm willing now to hire somebody. Well the -- gonna insists that -- keep going with the health care bill but you know I think we -- kind of a tipping point here. A lot of Democrats are getting nervous. Senator Jay Rockefeller West Virginia card carrying liberal if ever there was one. Said this week. I don't think the people in my state are gonna stand up as they're cheering over -- an agent which is the climate change conference next December he said people are concerned about jobs. -- more Democrats are talking like this I think to have a problem with -- health care -- Kim the some Democrats are prohibited jobs tax credit which would be temporary giving employers. Certain amount of money for each new hire they tried this in the 1970s though and it really didn't work Jimmy Carter. -- and after about a year or so is that where they're going here and other jobs tax credit."

" Well you know they're looking for something that they can do they can say they've passed and hopefully not also call -- stimulus which is starting to become a dirty word. You know one of the problems of that idea that -- that even some tepid Republicans support and -- you saw the unemployment benefits. And that were -- weekend and also the -- tax credit and and the support with which they were -- losers suggests that Republicans -- little worried about suggesting that they're doing something. Here in Washington. That you know. And that but they're they -- getting a bit of running out of stuff that they can actually propose and and one of the problems that they're stuck doing these things that look like they're actually gonna meet the economy --"

" Maybe if we pass another stimulus we get the jobless -- of the thirteen or 14%. Call the whole thing off. We have to take one more break when we come back our hits and misses of the week. Time now for our hits -- misses of the week -- first."

" Well Derek Jeter may have won the World Series this week but he struck out last year when a New York State tax authorities that he couldn't keep track on there he's lived in new York and pulled them a lot of money. This week hedge fund billionaire Julian Robertson won against New York State taxing authority. Saving himself 27. Million dollars. This was a victory I think for every working Joe in New York -- the sit in this state and take it in the -- from its high taxes -- good for --"

" Jason this is a hit for another billionaire Oregon that it could Warren Buffett just purchased a railroad that specializes in transporting. Coal. I think he's a realist here the political left would have us believe that that solar and wind power about it displace -- But that's not about to happen just -- Warren Buffett. Coal produces something like half the electricity in this country and will -- time all right James."

" I've noted for billionaires but for -- Ford Motor Co. TARP free government financing free. It just had a great quarter made almost a billion dollars and and made their financing arm in particular made. Half a billion dollars so it's it shows you can buy -- you can sell cars you can finance cars without the government. All right here here that's it for this week's edition."

" Of The Journal Editorial Report thanks to my panel and all of you for watching I'm -- go. And we hope to see you all right here. Next week."