This is a rush transcript from "Journal Editorial Report," March 10, 2012. This copy may not be in its final form and may be updated.
STUART VARNEY, GUEST HOST: This week on the "Journal Editorial Report," the Republican race heads south. Are Mississippi and Alabama must-wins for Newt Gingrich on Tuesday? And can Mitt Romney finally break his southern losing streak?
Plus, New York's top cop is under fire for monitoring Muslims across state lines. Do his critics have a point or are they putting political correctness above public safety?
All of that, and the Obama economy. Stocks are up and so is the president's approval rating. But just how robust is this recovery?
Welcome to the "Journal Editorial Report." I'm Stuart Varney, in for Paul Gigot.
With the Super Tuesday behind them, the GOP presidential candidates headed to the Deep South this week. Voters in Mississippi and Alabama go to the polls on Tuesday in what could be a make-or-break day for at least one of the three leading contenders.
Here to tell us what is at stake, Wall Street Journal columnist and deputy editor, Dan Henninger; Political Diary editor, Jason Riley; editorial board member, Dorothy Rabinowitz; and Washington columnist, Kim Strassel.
Dan, to you first. Make or break for Newt Gingrich?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Stuart, I don't think the phrase make or break is in the vocabulary of any of these four of these candidates. OK?
Having said that, I think that Newt Gingrich has to finish in a way that bunches him around Mitt Romney and Rick Santorum. If he falls off the pace, 10, 15 points, that would suggest that in the south where he should be doing well, he does not have support and there will be tremendous pressure on Gingrich to get out. The expectation would be a lot of his votes would flow to Rick Santorum. I'm not so sure that's true. Just as an exercise, I'd love to see where the Gingrich votes go, because I think we are not certain if this'll all go to Rick Santorum.
VARNEY: Didn't you talk, Dorothy, to Newt Gingrich?
DOROTHY RABINOWITZ, EDITORIAL BOARD MEMBER: Yes.
VARNEY: And he says -- I'll quote now, "I was born for this." He's not getting out.
RABINOWITZ: That's right.
VARNEY: He's not getting out is he?
RABINOWITZ: He's not getting out. And I think that they have this design coming up which he's going into -- you know, there are two kids of states, there's the south and there's the Deep South. Now, the races that Newt won were the Deep South states and those are coming up again now, Mississippi, Alabama. And if he wins those, this puts Romney in a much better position because Rick Santorum will be blown out of the water.
VARNEY: Blown out of the water?
RABINOWITZ: In significant ways, yes.
VARNEY: The bottom line is you don't think that Newt Gingrich is getting out? Come what may in Alabama, and Mississippi, you don't think he gets out?
RABINOWITZ: I don't think that Newt Gingrich is getting out until way to the end, until the times where it seems hopeless.
VARNEY: Kim, Romney, make or break for him in the south?
KIM STRASSEL, WASHINGTON COLUMNIST: No, I don't think so. But this is a really key moment here. Because, if you look at the exit polls that have come out and all of these races, places like Mississippi and Alabama continue to really be the weak spot for Mr. Romney. He has trouble connecting with evangelicals, with Tea Party supporters and with a lot of blue collar workers. There's going to be a lot of those constituencies in Mississippi and Alabama. He's going to be throwing a lot of money down here. If he can come out of this and win two big Deep South states, then he actually consolidates his chances for the nomination. If he comes to the store, a lot more questions about his candidates.
VARNEY: Unstoppable momentum, you think, Kim, for Mitt Romney if he wins two of the races in the Deep South?
STRASSEL: I think he goes a very long way towards saying that he is the nominee, given the number of delegates he's wrapped up and he could also notch victories into the southern states, which are supposedly benefit weakness, if he can safely do it, that will make a big difference.
VARNEY: Jason, why didn't Romney close the deal in Ohio last Tuesday?
JASON RILEY, POLITICAL DIARY EDITOR: Why hasn't he closed the deal in Michigan, closed the deal in Ohio? I don't think the people which whom he can't close the deal, I don't think they're persuadable at this point. I don't think it matters what Mitt Romney says, they're not going to support him in this primary process.
At the same time, Stuart, Kim is right. He's having trouble with certain segments of the electorate. At the end of the day, he's got their votes in December. They're not going to stay home or vote for Barack Obama. I look at the tax plan he's put out there, strong, Reaganesque supply side, he's talking about it in his speech the other night, how it will help grow the economy and saying the right things, if those folks haven't come over yet, they're not going to come over at least not until November.
VARNEY: I've got Dan and Dorothy dying to come in. Dorothy first.
RABINOWITZ: I just wanted to say, one of the things animating the Gingrich now if the fact that according to the Republican National Committee, Newt has won more bound delegates than Santorum has. All those other races have been in caucus states where the delegates are not bound. So Newt is ahead by the official count.
HENNINGER: It will be so hard for him to overcome Romney's lead. This thing is going to go to June. I believe the reason that Romney isn't closing the deal is because Santorum and Gingrich are in some sense better retail politicians than he is. They're both more charisma -- Mitt Romney is not a very charismatic public figure. He keeps making these clunky mistakes. He has good policy. He's announced 20 percent across-the-board tax and becoming more coherent in that sense, but as long as the other candidates are in the race, I think you're going to see the results and these primaries being more or less the way they've been. It will keep bobbing up and down. Now, I don't think there's any possibility of Mitt Romney winning in Mississippi or Alabama. If he won the two states, I would say the pressure on the others to get out would be overwhelming. That would be amazing.
VARNEY: Let me ask this. The people now voting for Gingrich and Santorum -- Jason, to you. If the people voting for those two candidates now, if they drop out and Romney is the candidate, will the Gingrich and Santorum people vote with enthusiasm in a big turnout for Romney in November?
RILEY: I think they will.
VARNEY: They will?
RILEY: I think they care most about removing Barack Obama.
VARNEY: Kim, can I ask you that question?
STRASSEL: I think if Romney wins the nomination, he still has work to do with these people. He's got to somehow show that he understands blue collar concerns. He's got to convince Tea Partiers that he's someone they can trust ideologically. And he has to make changes for instance on the position on Romney-care back in Massachusetts. He still has a little bit to do for an enthusiastic turnout.
VARNEY: Last word, Dorothy?
RABINOWITZ: I find it hard to believe that whatever the Tea Party has felt, that they would stay home because they were dissatisfied. They want to beat the president of the United States.
VARNEY: All right. When we come back, Ray Kelly's war. New York City's top cop is under fire from some big guns for his Muslim surveillance program, but he's also finding support in some unlikely places. Details coming up next.
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE, R-N.J.: That's the real danger of this, that they can screw up cases that are ongoing, that you can miss leads, that you can put people's lives in danger.
(END VIDEO CLIP)
VARNEY: All right. Strong words from Governor Chris Christie who says the New York City Police Department overstepped its bounds by not telling New Jersey law enforcement officials about the monitoring of Muslims in the Garden State in 2007. The NYPD's surveillance programs came to light last month. And this week, Attorney General Eric Holder told a Senate panel that he is, quote, "disturbed by what he read about it" and the Justice Department is reviewing the matter.
Dorothy, we've had strong words from Governor Christie. I think you've got strong words for Governor Christie.
RABINOWITZ: Well, Stuart, Governor Christie's words, how can you tell they're strong words. All his words are strong. There's no modulation.
Number two, Governor Christie is one thing. We're used to the fact that surveillance and anti-terror techniques always had a bad name among progressives and college presidents and (INAUDIBLE). But when we get to the governor of New Jersey and the FBI head of New Jersey, it's odd to sound them, find them sounding exactly like the people. They're talking about the chilling effect that surveillance has, they're talking about how bad this is, it's going to cause bad relations. What are they talking about, is the question of most rational Americans.
The Muslim Students Associate has been the host and has produced more radical terrorists, more attempted, everybody but Abdul Azazi (ph) from the underwear bomber, Abdulmatullab, who was the head of his agency. So to attack Ray Kelly for having gone after where -- as Willy Sutton said, why do I rob banks, that's where the money is --
VARNEY: Jason, the attorney general says he's disturbed by the NYPD going over in New Jersey, and you?
RILEY: I'm disturbed by Eric Holder's interest in this because Eric Holder sort of represents, as well as anyone represents the pre-9/11 mind set to terrorism, that this is a law and order matter, that this can be handled in the criminal justice system. This is the same person that wanted to try terrorists in lower Manhattan and that's what's disturbing about Eric Holder being interested and looking into this case.
VARNEY: It's a jurisdictional process thing? You don't have the right to go over to New Jersey without telling them that you're looking at Muslims in New Jersey if you're the NYPD?
RILEY: I see no evidence that any laws were broken here.
VARNEY: Go ahead, Dan.
HENNINGER: I don't think that Eric Holder's problem was going over to New Jersey. It was the nature of the surveillance within the five boroughs of Manhattan. There were some of us here on 9/11, right? And the 9/11 Commission made clear one of the breakdowns was in intelligence and not catching them. In the wake of that, New York Police Department put together one of the strongest most effective intelligence agencies in the United States and has done a good job of preventing it from happening here, the sorts of things that happened in London. The subway bombing were carried out by educated Muslims and the foiled car bombings carried out by Muslims, and doctors living in England. So, you know, there's obviously a basis for doing what the police department is doing in the city.
VARNEY: Look, I think it's a jurisdictional thing and --
VARNEY: A jurisdictional objection. Is that just --
RABINOWITZ: So, this is a kid of pretense on the part of Governor Christie, who simply wants to march forward, making a pitch to perhaps the Muslim community in New Jersey. He's going to be among the righteous. That's the posture and what it's all about. He's taking the side of people who believe that to surveil is to attack the community.
VARNEY: And you think he's flat out wrong to do that?
RABINOWITZ: I think, I think that it's close to absurdity, but it's also the most obvious kind of political pretense.
VARNEY: So, Dan, is Ray Kelly doing the right thing?
HENNINGER: I think he's doing the right thing, but I also think that Chris Christie is a sitting politician who obviously did not know this was going on in his jurisdiction, and it was an embarrassment and he had to crack back against it. I can't believe that Chris Christie would oppose the sort of surveillance like this.
VARNEY: Jason, in the future will we take a back step, will we retreat on this kind of surveillance because of this happening?
RILEY: Oh, if Eric Holder and the Obama administration have their way, I'm afraid that might happen.
All right. When we come back, the Obama economy. What February's unemployment numbers really say about the recovery. That's next.
VARNEY: The unemployment rate held steady at 8.3 percent in February, with the economy adding 227,000 new jobs. That could be more good news for the president, whose approval rating is back up to 50 percent in the new "Wall Street Journal" poll. That's his highest mark in the poll since the death of Osama bin Laden in May. It's a sign that voters are feeling better about the economy. So, should they?
We're back with Dan Henninger and Kim Strassel, and also joining the panel is "Wall Street Journal" columnist and editorial board member, Mary Anastasia O'Grady.
Dan, to you first. Can you legitimately say that Obama is getting a pass on the economy with numbers like this?
HENNINGER: Stuart, I am going to try really hard to be fair.
VARNEY: I'll be balanced, you be fair.
HENNINGER: I may even be balanced. Look, this economy had an 8 percent unemployment rate for last three years. The average American is not happy that the unemployment rate is that high. And most Americans are not so politicized that they hope the high unemployment will damage Barack Obama. They want the economy to get better. If that happens, if the president's approval rating blips up 2 or 3 percentage points, I don't think that's a big deal. The consensus forecast for GDP growth this year is between 2 and 2.5 percent, which suggests an 8 percent unemployment rate through the end of the year. That's the real issue. And I think the burden will be on the Republican candidate not to give the president a pass on the policies that have caused us to have an economy like this for three years.
VARNEY: Kim, what are the politics of an economy in this kind of shape, running in the election?
STRASSEL: I think the risk here is that Republicans simply decide that they're going to try it make this a referendum on the president, on the basis of the indicators like that, keeping a close eye on the unemployment rate, and long gas prices. The problem with that is the news begins to improve a little bit and he turns around and says, look, it's not so bad after all. What they're going to have to do is what Dan just said. They have to make this about a choice, a choice of vision, a focus on the policies. he had and say that this is not good enough economic growth overall, we offer a different way forward, and that's going to be the way that they can win in the fall, not just simply by bashing on 8.3 percent unemployment or $3.80 a gallon gas.
VARNEY: Mary, you have to say Obama does have at least a modest, modest recovery going for him.
MARY ANASTASIA O'GRADY, COLUMNIST & EDITORIAL BOARD MEMBER: Well, it's not down. But I agree with Dan that it's pretty anemic. And when you factor in the global growth outlook -- China is slowing down and Brazil is slowing down and bad news out of Europe. I think that he has a problem on his hand. And also, the Fed had its food on the accelerator. You have extremely low interest rates which should have done more and an environment of good policy, should have done more to get the economy growing. A 2 percent, 2.5 percent outlook for the year, that's pretty week. And when energy prices, I'm afraid, when gasoline prices start to eat into household budget and start taking discretionary spending as the year goes on, I think that's going to be digging into, you know, the broader economy.
VARNEY: Look, I'm describing this as a modest recovery. I follow the economy for a living. What I see is the worst recovery from a significant recession of any since the end of World War II, since the end of the Great Depression. And I'm calling this modest recovery at best.
I'm going to have to agree with you, Dan. It's not modest, not a good recovery.
HENNINGER: Let's say the worst in the post-war period after a recession. The "Wall Street Journal: had an interesting story this week in which they surveyed the treasurer on large corporations, and they were asking why there has not been more big mergers and big buyouts. The answer was, look, we can't commit ourselves to big purchases that accrue a lot of long-term debt. Why? Because of the uncertainty that's out there in the future. And you have to ask yourself, what is the problem? Why is there so much uncertainty going forward? And there are probably two reasons, the economic policies of this president, and this crisis over the euro. If you can't resolve either of those things, you're not going to get the sort of really big-time economic activity that would cause a lot of growth, job growth in this country.
VARNEY: Kim, I have to ask you about the mood of the country. Do you think perhaps we're getting -- after four years, do you think we're kind of getting used to modest, oh, so modest growth, just getting use today mediocrity, can I say that?
STRASSEL: I think there's some aspect of this in that, because things have been so poor for so long, any small change in the indicators that look up is probably magnified to some degree. But I think in a way though, interestingly, this is a double-edged sword for the White House itself. The uncertainty it's created in the economy has become political uncertainty for it as well. It can't necessarily go out there and parade these numbers as some great break through because they don't know what's going to happen either. Those numbers could kick back up again next month and they don't want to heighten expectations, so this is not what they would like to see either.
VARNEY: Last word.
O'GRADY: Well, I think that the Republican candidates have to make it clear that there's a lot of lost opportunity. There's a lot being left on the tables, particularly in the energy sector. This is because the president has not allowed drilling on federal land and not allowed the Keystone Pipeline, and has been generally hostile to oil and gas development which could be an engine of growth in this country.
VARNEY: All right, we have to take one more break. But when we come back, our "Hits and Misses" of the week.
VARNEY: Time for "Hits and Misses" of the week.
Kim, first to you.
STRASSEL: This is a miss for President Obama for, once again, this week killing the Keystone Pipeline. The Senate put forward a provision that would have fast tracked that and overcome the president's supposed objections on procedural grounds that would have given Congress control of the project. Instead of getting on board with 20,000 jobs, the president personally called Senate Democrats and lobbied against it, helped kill the bill and proved against that this is not -- the objection is not on procedure, it's against oil and oil jobs.
VARNEY: All right, a miss on the pipeline.
Mary, what do you have?
O'GRADY: This is a hit for Pat Robertson, the preacher and former presidential candidate, who, this week, called for the legalization of marijuana. Mr. Robertson did not do this because he's a user of marijuana. And he made very clear that this -- he's not advocating the use of marijuana, but he said that the war on drugs is not working, an obvious conclusion. And he says that he's concerned about the young people who go to prison where they learn to become criminals. And he thinks we need to pursue a different policy.
VARNEY: Very interesting.
Dan, what do you have?
HENNINGER: A miss to former Congressman Dennis Kucinich, who lost election campaign in Cleveland on Tuesday. Of course, Dennis was famous for two things, his hopeless runs for the presidency and for suing the restaurateur at the House office building after he bit into an olive pit.
Now there's a rumor that Mr. Kucinich is going to abandon Cleveland and move to Washington State, where he will run for Congress.
VARNEY: And be safe from olive pits.
HENNINGER: I'd tell Washington, I see olives out there.
VARNEY: That's it for this week's show. Sorry about that. Paul is back next week. You can watch me every weekday 9:20, FBN, "Varney & Co." See you then.
Content and Programming Copyright 2012 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2012 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.