Will the EU political upheaval reach American shores?

Brexit stunner plunges Europe into economic turmoil; the 'Journal Editorial Report' panel weighs in

This is a rush transcript from "Journal Editorial Report," June 25, 2016. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," a Brexit stunner. Britain votes to leave the E.U., plunging Europe into economic and political turmoil. So what does it mean for the markets, and the presidential race here at home?

And the general election campaign is already heating up with Hillary Clinton and Donald Trump trading personal and political attacks. So are Republicans finally getting the pivot they were hoping for?

Find out, after these headlines.

(FOX NEWS REPORT)

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

Britain voted to leave the European Union on Thursday, plunging the U.K. and the rest of Europe into political and economic turmoil.

Presumptive Republican nominee, Donald Trump, weighed in on the vote from Scotland and said that people may soon be coming to American shores.

(BEGIN VIDEO CLIP)

DONALD TRUMP, R-PRESUMPTIVE PRESIDENTIAL NOMINEE: You're going to have more than just -- in my opinion, more than just what happened last night. You're going to have, I think, many other cases where they want to take their borders back, they want to take their monetary back, they want to take a lot of things back. They want to be able to have a country again. So I think you're going to have this happen more and more. I really believe that. And I think it's happening in the United States. It's happening by the fact that I've done so well in the polls.

(END VIDEO CLIP)

GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; associate editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

So, Dan, you've been following these developments for a long time. What do you think this means for Europe and the U.K.?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Let's start with a long time. It was years ago that former defense secretary, Don Rumsfeld, described Western Europe as Old Europe. Remember how he got his head handed to him for that? When you think of Europe, what do you think of? Other than old buildings, you think of countries run by bureaucracies. This is the bureau state finally hitting the wall. They've run straight into the cliffs of Dover.

(LAUGHTER)

Now the question is, are they going to start breaking up? Are the other countries, like Italy and France and Spain, going to say if they can do it we can do it? There's a whole restructuring I think that has to happen now because this is a vote of no confidence in the bureaucratic elites that have been running Europe for the last 40 years.

GIGOT: It will work for Europe's benefit, James, I think, if it's a wake-up call for them to do exactly what Dan says, more Democratic accountability, more economic reform. I'm a little worried in the short term though about British economy and the chances of recession. And David Cameron has already said he's going to step down. So turmoil within the Tory Party as well.

JAMES FREEMAN, ASSOCIATED EDITORIAL PAGE EDITOR: I think the problems in Britain are short term. Long term, I think, this is a huge advantage for their economy. They've thrown off a huge layer of regulation. Why does Europe not create any Facebooks or Googles? It's because of this huge bureaucracy in large part in Brussels. Now the U.K., fifth-largest economy in the world, people are still going to want to trade with them. Europe is still going to want to trade with them. I think they now can look forward --

(CROSSTALK)

GIGOT: Let me challenge you on that, because you do have Frankfurt as a competing financial capital, potentially, maybe Paris, too. They're going to compete for that business that now goes to London. If the banks - - global banks don't have access to the E.U. like they had, couldn't they shift business to the continent?

FREEMAN: I don't see that happening because London is not -- did not become a great financial center because of the E.U. It became that way because of how the Brits ran it and how they built their companies, and they had sensible laws and they had a lightly regulated environment. That's going to continue. All these bankers who were just in the U.K., Jamie Dimon, from JPMorgan, other places, saying, don't leave, they're now going to start flying to Brussels and saying, let's cut a good deal with the U.K., don't make us tear up the architecture of our European business. I don't think that will happen.

GIGOT: Kim, what do you think the implications are for American politics? You heard Donald Trump say that he really thinks there are implications? I think he's talking about immigration. There's no question they worry about immigration and the ability of E.U. passport holders in go and settle in the U.K. was part of the motivation for this vote. Are there any echoes of that, do you think, are likely to carry over here?

KIM STRASSEL, WASHINGTON COLUMNIST: Yeah. There's a couple of things just to begin with. This is a rebuke, by the way, to Barack Obama, who went over there and meddled in this, said you should stay. This is also rebuke to Hillary Clinton, who got on the same camp. Donald Trump had actually been promoting Brexit, as it were. For those reasons, his argument, you see him already again trying to transfer this back to the United States and this question of immigration and borders and control. And I think what he's trying to do is draw some parallels to what was clearly a populous movement in the U.S., back here, and that's where his base of supporters is. He's really trying to sort of suggest that a vote for him in the fall is about reasserting American independence and control over it in the future.

GIGOT: But, Kim, do you buy that? Do you think that parallel is going to work?

STRASSEL: I don't know. I think it may be a little bit vague because Britain's circumstances were specific. But I do think that there is some truth to the idea that the support that Donald Trump has out there is in part motivated by people who feel that the United States is no longer in control of its destiny and ought to reassert that.

GIGOT: Let me break in reverie here from Brother Freeman.

(LAUGHTER)

The idea -- Vladimir Putin is also very, very happy about this because he thinks that if you can divide Europe, then they'll have less resistance to his designs in Ukraine, and maybe in the Baltics and maybe elsewhere. How concerned are you about that?

HENNINGER: I'm very concerned. I think that's one of the biggest downsides of what has just happened here. That brings up the question of U.S. leadership. Look, Europe has not been united. Their defense budgets are very low. And the United States is going to have to step up. Germany is going to play a central role here, for sure. England has to be -- they have to hold them inside of NATO. And then on the periphery, where the threat is coming from, from Vladimir Putin, you have those eastern European nations that actually have been in tension with Western Europe over the running of the E.U. There's a big role for the leaders right now, and the U.S. has got to be involved in that.

GIGOT: James, on that point, what should the U.S. do now? How should they respond to that, particularly with the U.K.?

FREEMAN: I think we ought to invite the U.K. into NAFTA. We ought to be doing free trade deals with them. On the defense thing, I think, long term, this is good for a united Europe because it moves the defense issue, the alliance, back to focus on NATO where it should be, not the E.U. Strengthening NATO, undermining the E.U., I think, is better for our security alliance. And this is an inspiration. I mean, I think they are inspiring us, throwing off a whole layer of government.

GIGOT: All right. All right.

FREEMAN: Maybe we can get rid of Obamacare.

GIGOT: We'll see if your optimism pays.

When we come back, the presidential race is heating up here at home with Hillary Clinton and Donald Trump attacking each other's personal and political ethics. Are Republicans finally getting the pivot they were hoping for?

(COMMERCIAL BREAK)

GIGOT: Well, the general election campaign kicked into high gear this week with both Hillary Clinton and Donald Trump going on the attack, taking aim at each other's past records and personal ethics.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, D-PRESUMPTIVE PRESIDENTIAL NOMINEE: He bankrupted his companies not once, not twice, but four times. Hundreds of people lost their jobs. Shareholders were wiped out. Contractors, many of them small businesses, took heavy losses. Many went bust. But Donald Trump, he came out fine.

TRUMP: Hillary Clinton has perfected the politics of personal profit and even theft. She ran the State Department like her own personal hedge fund, doing traders for oppressive regimes and many others and really many, many others in exchange for cash.

(END VIDEO CLIP)

GIGOT: So, Kim, you can see the campaigns getting off to a high- minded start.

STRASSEL: Whoo.

GIGOT: It's going to be Socrates seminar before it's over.

(LAUGHTER)

Why do you think Clinton is going after Trump's business record as opposed to his policies?

STRASSEL: This was part of broader speech to suggest he would be a disaster running a U.S. economy. She's trying to tap into the fears that many people do have, the anxieties they have at the moment about the economy, and that's going to be her main pitch going forward. So it's an aspect of her broader appeal.

GIGOT: I think also, James, I think that if you look at the head to heads on issues, Trump's big advantage right now, the economy, about 10 points ahead. Part of that advantage is people know he's a business success. They say, you know what, he can carry that over. She's trying to undermine that image and aura, and say he can't translate to good economic management.

FREEMAN: She's trying but I think that was really a missed opportunity for her this week because there was really nothing new. The story of the casino bankruptcies in Atlantic City has been well told --

(CROSSTALK)

GIGOT: Yeah, but you know it and I know it but do the American people know it?

FREEMAN: Yeah, but you're -- there are a lot of misses in the Trump businesses resume.

(LAUGHTER)

There are some hits, too. I think the more -- we're going to talk more about what business the Clintons are doing, but I think this is not a good contrast for them generally between his career, which has been in the private market, and theirs, which has been basically selling government influence.

HENNINGER: But I think, James, she's laying the groundwork. We've got a long way to go to November. She has made huge ad buys in six battleground states. And it's just going to saturate the voters in those states with negative advertising, some of it based on his business experience, and Trump is going to have to respond to that at some point before he gets defined inside those states as unfit to be president.

GIGOT: And Kim, I think that what she's also trying to do is undermine his argument for change. She knows that she's -- she's not going to win the change argument, but she's trying to pitch Donald Trump as too dangerous change, saying you can't trust him, don't take the risk. Look, that's why he stressed his bankruptcy, and that's why four years ago Barack Obama went after Mitt Romney and Bain Capital. I wonder if that's the script she's trying to replay.

STRASSEL: Yeah. That is exactly when I heard that speech, Mitt Romney was all through my mind because that's the additional thing she's going to try and do, too, is this is heartless capitalism, this is -0 even if Donald Trump were able to implement what he wanted to do, this is not the kind of reform or change you want in the American economy because it's going to be one in which we have more income inequality and more people out of work and the wealthier get wealthier. So that's getting woven in here as well.

GIGOT: James, you're shaking your head.

(LAUGHTER)

FREEMAN: This is not going to be the Romney campaign. Mitt Romney's Bain Capital was better than the Trump organization. By any metric, Mitt Romney was a better businessman than Donald Trump. But unfortunately, he was embarrassed about his wealth, Romney. He was embarrassed about his business career. He wouldn't defend it. I don't know why. Trump does not have that problem. He's going to defend it and he's going to say, well, there were some failures but look at Trump Tower. People swear by a lot of these golf courses. So he is not going to have a problem standing up for himself on the business case.

GIGOT: Dan, Donald Trump's attacks on Hillary Clinton, what is he trying to do with her, going after her political ethics and personal ethics as well?

HENNINGER: He's defining her as the special interests. Those are his words, "crony capitalism." She is very vulnerable. And the one thing he is showing her is the one thing Republicans have wanted for a very long time, a candidate who will take the bark off the opposition. He's going mono-a-mono with Hillary Clinton. It's going to be a fistfight. And he is showing her, you want to attack me, I am just going to dump on you relentlessly. I'm going to attack you as a corrupt person. And there's a lot of suspicion out there in the country about Hillary Clinton's trustworthiness. I think it's an effective response.

GIGOT: What do you think, Kim?

STRASSEL: Oh, yeah, absolutely. It was also just interesting, too, the way Trump delivered it. We're seeing the beginnings this week. We'll see if that lasts. That's my caveat. But beginning --

(CROSSTALK)

GIGOT: You also have to with Donald Trump.

STRASSEL: You've got to. Yes. But the beginnings of a real presidential campaign, in that they're now fundraising, they're now putting together operations out in the states. And we've got a candidate whom at least for the rest of this week, since they had this campaign shake-up, is talking in measured tones, making points about his opposition, and not going off down rabbit holes on things and land him in trouble with the press.

GIGOT: Just one quick point, James. I think Donald Trump also has to make a positive case for the economy. Like what is he actually going to do to make it better?

FREEMAN: He does. That's what we would have liked to see in the speech this week. I hope he talks more about tax reform. But this is no Trump business deal that will look as bad as the Clinton's cut with the dictator of Kazakhstan. Clinton friends got rich. Russia got a huge supply of uranium.

GIGOT: All right.

(CROSSTALK)

HENNINGER: -- Kazakhstan --

(LAUGHTER)

GIGOT: When we come back, once the champion of civil liberties, is the political left now in the business of bullying Americans out of free speech? Kim Strassel previews her new book, "The Intimidation Game," next.

(COMMERCIAL BREAK)

GIGOT: We're back with the Wall Street Journal's Potomac Watch columnist, Kim Strassel. She's author of the new book, "The Intimidation Game: How the Left is Silencing Free Speech."

So, Kim, you cited some examples of how you think free speech is being under attack. Give us a couple.

STRASSEL: The book goes through a number of examples where you're seeing the same thing happen, this strategy, and the same tactics that are being used sometimes by the same people on the left, to silence and intimidate their conservative opposition into getting speech out of the political debate. You saw it in the IRS. You saw it in Wisconsin where a prosecutor went after 30 conservative groups that had supported Scott Walker's government reforms. You've seen it again with conservative donors. You've seen it in attacks by liberal activists groups against corporations and free-market think tanks --

(CROSSTALK)

GIGOT: How does it manifest itself? Is this the use of prosecutorial power? Is that what you're saying? I guess in the IRS case, it was targeting tax-exempt groups for additional scrutiny. But the Democrats would say the IRS also went after liberal think tanks and liberal non- profits, too, so it's not really partisan.

STRASSEL: No, part of this one tactic is, indeed, sic'ing a bureaucracy on your opponents. And we've seen that manifest itself in many ways. The IRS -- one thing I'd like to think this book really is an expose of what did happen at the IRS. And what is important is that what we know is that in fact this wasn't just a screw up out in Cincinnati by a few line agents. And liberal groups were not targeted. This was a concerted effort by a number of people to -- for partisan and ideological reasons, to keep conservative groups silenced during not just one but two election cycles.

GIGOT: Lois Lerner, who ran that tax-exempt organizations operation at the IRS, she did lose her job. But has there been any other consequences politically, professionally, as fallout from the IRS case?

STRASSEL: There has been no accountability whatsoever. We now see the House committee move to censure IRS Commissioner John Koskinen. Because the kind of ongoing story of the IRS is that it has stonewalled every probe and not really implemented any reform. In fact, some of the targeting is still going on. There are still groups that have not received their non-profit status.

GIGOT: One of the things you talk about is campaign finance, limitation on campaign finance and disclosure or donations to candidates, especially independent political groups. And you argue that that's an infringement on free speech. What about people who argue that the, in fact, money is not speech, because the wealthy can have an outside influence on political campaigns, you basically need to limit their ability to have that influence?

STRASSEL: Look, money is a proxy for speech. If I told anybody that they were going to run for president and they could only have $50 to do it, I think everyone would agree you'd have a bit of difficulty getting your message out. The ability to spend money is a question of being able to effectively get out speech.

As for the question of limitations, it's often the little people who are hurt most when there are limitations on big spending. Americans all through history have come together and pooled their money in order to magnify their voices. And sometimes that money does work its way into politics, but usually with the outcome of having more debate.

GIGOT: You'd even go so far as to say that you ought to be able to keep those donations private, you shouldn't have to disclose those if you don't want to.

STRASSEL: In some circumstances, yes. I think we, as a nation, need to rethink our disclosure regime. What we're seeing, and is in this book, is that there are people out there who are now using disclosure as a weapon. They use it to put together lists of new targets of people to go after. We've got a situation where disclosure has been turned on its head. It's supposed to be allowing us to keep tabs of government officials. But look at Hillary Clinton and her server, that's clearly not working out so well. Instead, it's being turned back on citizens.

GIGOT: All right. Thank you, Kim.

We have to take one more break. When we come back, "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for our "Hits and Misses" of the week.

Kim, start us off.

STRASSEL: Everyone will remember that in 2014, Barack Obama issued an order legalizing millions of illegal aliens, authorizing work permits. This is another way of saying that he broke the law as issued by our Congress. So this is a hit to the 26 states who sued him, the federal judge who issued an injunction against that, and a deadlocked Supreme Court that upheld that injunction this week. The rule of law does matter.

GIGOT: All right.

James?

FREEMAN: Paul, this is a big hit to Vin Scully, who is retiring this year after the greatest broadcasting career ever. But in his 67th year, he made his greatest call. Here he is setting up a Venezuelan player at the plate recently.

(BEGIN VIDEO CLIP)

VIN SCULLY, SPORTS BROADCASTER: Socialism failing to work as it always does, this time in Venezuela. You talk about giving everybody something free and, all of a sudden, there's no food to eat. And who do you think is the richest person in Venezuela? The daughter of Hugo Chavez. Hello.

Anyway, 0-2.

(END VIDEO CLIP)

(LAUGHTER)

FREEMAN: Hello.

(LAUGHTER)

FREEMAN: We have to say goodbye to Vin Scully.

GIGOT: All right.

Dan?

HENNINGER: Well, as a native of Cleveland, I have to give a hit to the Cleveland Cavaliers for their historic come-behind victory over Golden State, breaking a title curse going back 52 years. But I would like to tell my favorite Clevelanders, don't drink all the champagne yet. Next month, they have to host the Republican National Convention and Donald Trump and the Trump's left wing protest entourage. I think Cleveland will overcome this one, too, but I'll be watching.

(LAUGHTER)

GIGOT: It'll be a close call.

HENNINGER: Yeah.

GIGOT: And remember, if you have your own hit or miss, please be sure to tweet it to us at JER on FNC.

That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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