Lawmakers call for hearings on Facebook data breach

This is a rush transcript from "Journal Editorial Report," March 24, 2018. This copy may not be in its final form and may be updated.

PAUL GIGOT, FOX NEWS HOST: Welcome to the 'Journal Editorial Report.' I'm Paul Gigot.

The White House shakeup continued this week with President Trump announcing late Thursday that former U.N. Ambassador John Bolton would replace H.R. McMaster as national security advisor. This comes on the heels of Secretary of State Rex Tillerson's ouster last week and as the White House faces key decisions on Iran and North Korea. Does it signal a shift in the administration's foreign policy?

Let's ask 'Wall Street Journal' columnist and deputy editor, Dan Henninger, editorial board member, Mary Kissel, and columnist, Bill McGurn.

Dan, I want to read some words that I read describing John Bolton, 'hawkish, super hawk, fire brand, undiplomatic, blunt, confrontational.' Those are the nice ones, the mild assertions, adjectives. Is that fair?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: No, it's not fair. What I'd point out is this is not a position that has to be confirmed because probably that wouldn't happen.

I think we can sum this all up in two words, Paul, and that is status quo. John Bolton has no patience whatsoever for the status quo. Let me say also that he served in two presidential administrations. He served with Jim Baker in the first Bush presidency. He was undersecretary of state in the second Bush presidency. John Bolton has a lot of experience with bureaucracies. And whether the issue is Iran or what we should do about North Korea, the status quo will always be careful. And John Bolton's career has been built around the idea not so much of not being careful but pushing the status quo forward to deal with realities, such as the one facing us with North Korea and the nuclear capability. There won't be buttons pushed here. We're not talking about that. We're talking about a national security advisor that will push the rest of the policy making community to come up with solutions reflecting the reality in front of our faces.

GIGOT: Mary, it's suggested that, somehow, he is dogmatic, can't get along with people. If you look at his diplomatic record, he was also ambassador to the United Nations. He got a lot of sanctions on North Korea through the United Nations. He developed something in the second Bush administration in 2003 called the Proliferation Security Initiative, which got the world together to be able to police arms movements and WMD movements. In the first H.W. administration he worked a peace deal on the western Sahara, which was a real trouble spot that you don't hear about anymore.

MARY KISSEL, EDITORIAL BOARD MEMBER: He got U.N. resolutions that equated Zionism with racism repealed that the United Nations, which has never been accomplished before.

Look I think the bottom line on Bolton is he's a realist and he's been correct throughout the years about the threats to America and he sees them early. He was correct that Pyongyang was not going to give up its nuclear program with the Six Party talks. He went against Condoleezza Rice, then secretary of state.

GIGOT: He was vindicated.

KISSEL: He was absolutely vindicated. He has been writing for years about the danger of the essential nature of the Iran regime, why we can't let them have nuclear weapons. He predicted that the U.N. process that President Obama started on Syria was, quote, 'doomed to failure.' So this is a clear-eyed guy with a lot of experience who is unafraid to tell the truth about the threats to the United States. I think it's a great pick.

GIGOT: But when a lot of people hearing all that and knowing all that and knowing in addition to that that he's actually pretty effective as a bureaucratic insider, as Dan suggested. They go, oh, my god, we're headed for war, we're headed for war with Iran and we're headed for war with North Korea. Are we?

BILL MCGURN, COLUMNIST: I don't think so. I think he's clear-eyed about the experience. It's interesting, a year ago he didn't make it into the administration.

GIGOT: Right.

MCGURN: It tells you something that he's in now. And I suspect --


GIGOT: Why do you think that is? People say it's the mustache.


He's so fixated on looks.


GIGOT: That's not a joke.

MCGURN: I think a lot of it is, look, President Trump campaigned, he knew Obama was weak overseas. But he also campaigned against Bush-style wars. And he probably associated John Bolton with that camp. So it says a lot. It also says a lot, look --


GIGOT: It says a lot that he is replacing -- going to Bolton?

MCGURN: That he's going to Bolton for his national security advisor. The national security advisor is in the White House, so it's a very intimate position. You have to get along. And I don't know all the policy differences that General McMaster had with the president, but it sounds like, on a lot of personality issues, he rubbed the president the wrong way, and even there's reports General Mattis and so forth. So clearly there's a comfort level here. And it's interesting that President Trump would pick Mike Pompeo, who is the one that warned us about North Korea, said within months they'll have this capacity to strike us with a nuclear weapon, and John Bolton, who has more hawkish views on this as well.


Dan, what do you think about the implications of this for policy? One of the implications I would suggest is that John Bolton is going to say, as he has written for us many times, Mr. President I think you should pull out of completely of the Iran agreement, for example.

HENNINGER: Yes. That is up for renewal in May. I think the expectation is the president will not renew the Iran nuclear deal in May. And as Bill was suggesting, Mike Pompeo was a primary congressional critic of that deal when he was in the House of Representatives. And I think you can probably see Pompeo and John Bolton now performing something of an alliance to be more forward-leaning with their foreign policy in Iran, North Korea, and I would say Syria, as Mary was suggesting earlier. It's not going to be a stand-pat foreign policy.

GIGOT: Mary, briefly, any change on North Korea?

KISSEL: Look, if you don't want a war with North Korea, then the North Koreans have to believe that President Trump is willing to strike them by naming strong people like Pompeo at State and now Bolton at the national security advisor position. I think you have more of a deterrent there or Pyongyang to try something.

GIGOT: I should add, we should add that H.R. McMaster served the president very well as national security advisor. They didn't mesh on a personal level.



GIGOT: That's not McMaster's fault.


GIGOT: I think that gets more to the president.

When we come back, another shake-up in Trump world this week, this time, on his legal team. What the changes say about the president's stance on the Mueller probe, next.


GIGOT: Another Trump shake-up this week, this time, on the president's legal team as the frenzy surrounding the Mueller probe reached a higher pitch in Washington. John Dowd, the president's lead lawyer in the Russia investigation, resigned this week, just days after Trump hired veteran Washington attorney, Joe DiGenova. The president told reporters at the White House Thursday that he would like to testify before Special Counsel Robert Mueller, something Dowd had argued against.

We're back with Dan Henninger, Bill McGurn, and 'Wall Street Journal' columnist, Kim Strassel.

Kim, how do you read the Dowd resignation? Was it fundamentally about the strategy difference?

KIM STRASSEL, WASHINGTON COLUMNIST: I think there's a strategy difference. I think there was also just a frustration on Mr. Dowd's part. He was frustrated that he didn't have more control over the president. He had asked the president, his entire legal team has asked him not to go out there and be texting and complaining about the Mueller probe in public. Obviously, the president has been ignoring that advice.

Look, I think there's an opportunity here, Paul, in that a lot of people have wondered if this existing legal team is the right one in terms of what we're hearing might come out of the Mueller probe. For instance, an obstruction charge.

GIGOT: Right.

STRASSEL: You might want some lawyers around you that are much more prepared to deal with the constitutional questions of something like that and have a strategy that's designed to counter, and it wasn't clear that this legal team was doing that. So this could be a moment for a shake-up that better positions the president.

GIGOT: Bill, the Dowd concern was that if he put the president in with Mueller, let's face it, the president, you never know what he's going to say, and you never know what he's going to remember. He may say something that he believes it true and it's entirely false.

MCGURN: Yes. Lawyers love that stuff, right? I'm not a lawyer but every lawyer I know would tell you not to do that --

GIGOT: To do that, right.

MCGURN: -- because you open yourself up.

GIGOT: But the president doesn't believe that. He believes, hey, I can handle anything.

MCGURN: Right.

GIGOT: What do you think? Do you think Dowd was right?

MCGURN: I think you have to look at two parts with Donald Trump. One, I think he has legitimate concerns that he feels he didn't do anything, he didn't do anything wrong. There are people trying to overturn an election or make his administration so that it looks illegitimate.


GIGOT: Yes. I can see all that.

MCGURN: But I think it's important to see that because it's a big thing to work against a presidency this way. How he handles it another matter, you know, the tweets. And the lawyers don't seem to have much control over him.

GIGOT: That's the point. Trump can believe all that and come in there with absolute certainty.

But, ultimately, what he says, Dan, can be something that trips him up. We have personal friends who still believe that they told the truth and they ended up getting indicted for making false statements.

HENNINGER: Well, one good example of someone who did not get indicted but went through the process is Ted Olson --

GIGOT: Right.

HENNINGER: -- the Supreme Court solicitor, former Justice Department official who, when he was in the Reagan government, was investigated by an independent counsel, became a very famous Supreme Court case. It was a nightmare for Ted Olson. And the Trump team has reached out to Mr. Olson to see whether he would join them. He declined. But nonetheless, there's an awareness that dealing with a special counsel like Robert Mueller is a dangerous enterprise.

On the other side, there is Donald Trump who thinks he has been wronged and he doesn't want those kinds of lawyers selling him out, so-to-speak. I think he's brought in someone like Joe DiGenova to be the guy who is going to be kind of the bad cop, someone who is going lean on the system and make sure Trump's personal interests are represented and that the lawyers dealing with Mr. Mueller don't make a deal that puts the president in jeopardy.

GIGOT: Kim, let's turn to some other news this week on the Mueller probe and the Russia issue. The House Intelligence Committee, Republicans, majority, released their report, initial report on what they discovered. What did we learn? What are the highlights?

STRASSEL: This matters, first and foremost, Paul, because it's the first of any congressional committees to actually finish up a probe on this. They put out both findings and recommendations. And I think the top line answer is here they did not find any evidence of any collusion between the Trump White House and Russians in any way. That's the important thing. They did identify a number of holes in our system that the Russians have been able to exploit. And I think this is important because we want to be looking forward here, not just back. And that is very much what the oversight -- I mean, the Intelligence Committee has been trying to do. What's extraordinary is the depth and the breadth of the number of people they interviewed and went through. This was a very thorough investigation in the end.

GIGOT: All right, Bill, and in another move, momentum is building for something I know you don't support, which is the naming of a second special counsel, this time, to investigate how the FBI and justice handled Hillary Clinton's e-mail investigation, among other things.

MCGURN: Right. Look, the idea is that DOJ and FBI are resisting all these efforts to investigate themselves. Again, remember, under Donald Trump, Rod Rosenstein at Justice and Christopher Wray at the FBI tried to make an end-run around the Intel Commit at this and at this and they only coughed up with documents because they were threatened with contempt.

GIGOT: Right. But do we need special counsel?

MCGURN: I don't think we need -- the problem with special counsel, if it's really special, it's unconstitutional. Right? And if it's not special, what's the difference? I think what we need is for Congress and the president to exert the levers that they have. For example, there's impeachment. If the FBI director doesn't cough up the documents and is really resisting, they could use that. There's a lot of legislative tools that they have.

President Trump baffles me by not assigning someone at Justice to do as we recommended to disburse information since it mostly vindicates him.

GIGOT: I think the political momentum is building for the special counsel. We'll see what the inspector general report --

MCGURN: Right.

GIGOT: -- we're all waiting for says. If it says something that there was bad behavior, I think we'll get a second special counsel, notwithstanding advice. I agree with you, your advice.

President Trump following through on a campaign promise and hitting China with tough tariffs. How the markets and Beijing reacted to Thursday's announcement, next.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Doing things for this country that should have been done for many, many years. We've had this abuse by many other countries and groups of countries that were put together in order to take advantage of the United States. And we don't want that to happen. We're not going to let that happen. It's probably one of the reasons I was elected, maybe one of the main reasons.


GIGOT: President Trump making good on a central campaign promise Thursday and slapping tariffs on nearly $60 billion worth of Chinese imports, a move meant to punish Beijing for what White House officials say is a pattern of economic aggression that has robbed U.S. companies of millions of jobs and billions of dollars in profit. The Dow plunging more than 700 points in the wake of Thursday's announcement as fears of a trade war increase.

We're back with Dan Henninger, Bill McGurn and "Wall Street Journal" editorial board member, Mary Kissel.

Mary, what do you make of the announcement?

KISSEL: I think it's a very dangerous game, Paul, because you never know, when you start a trade war, where it's going to end. And the China have already said they would also impose tariffs as well on states that, by the way, are important to Trump's base, most notably agriculture.

GIGOT: You worked in Hong Kong, as Bill did and as I did, and you know from covering China that they discriminate against foreign firms. Is there a point, unlike maybe with steel tariffs, that Trump is actually seriously addressing, a real problem with China?

KISSEL: In other words, does China commit, quote, unquote, 'economic aggression?'

GIGOT: Yes. Yes.

KISSEL: Trump says yes. Yes. The answer is yes, they absolutely do.

GIGOT: OK. All right.

KISSEL: They steal intellectual property. They have state champions that get subsidized loans from state-owned banks. Yes, Trump has a point. The problem is, as we've pointed out in numerous editorials, is that you want to put in place a system that doesn't harm American businesses and American consumers. And to be frank, that's a difficult challenge. How do you punish a country that's such a large part of global trade without also punishing American consumers at the same time?

GIGOT: Well, Dan, Mary raises a good question, how do you do that? There is no question in my mind that China has been guilty of bad behavior. I've talked to many business executives who operate over there, and their point, they said we go over there with enormous optimism and for a while things were opening up. The last few years, it's gotten really tough and they're coerced to turn over trade secrets, intellectual property. And the regulatory system is rigged to get them to do that. How do you address that if not with tariffs?

HENNINGER: You start with the understanding that doing anything is an enormous undertaking. The entire developed world is deeply invested in China. It's difficult to extract themselves from those commitments.

That said, you're going to need a strategy. And a strategy is not what it looks to be on offer from the Trump administration. To take on China in any sort of targeted way is going to require the support of our allies, Western European nations, the other nations that trade with Europe. But you roll the tape back about 10 days and the president was threatening to impose tariffs on the European Union. Now it may look like they're being exempted at the moment, but what are they supposed to think about the United States' trade strategy. One day it's on, another day it's off, and now it's targeted at China. So I think the president at this point is really heading for an uphill battle in trying to do negotiation with China because I suspect he won't have that much support from, say, Australia, South Korea, japan or the European Union.

GIGOT: All right.

What do you make, Bill, of the market response, down in a big way? And if you look at what the market's done since the tariffs began on steel, since the trade initiative started, the momentum from tax reform has really ended.

MCGURN: I don't think the president sees this, but I think this is a break with his pro-growth tax reform policy. As we were saying, China does cheat. We've seen it. But it's very hard to hit them without hitting yourself. It reminds me of someone shooting a gun in a small constricted place and it ricochets off the walls. I think China exports $1 billion worth of steel to us, but we export $13 billion of soybeans to them.

GIGOT: Right.

MCGURN: Who's going to -- I fire at you, China, and then you the farmer gets hit. It's just --


GIGOT: But is there a real economic risk here?

MCGURN: Uncertainty is what markets fear most, right, and trade wars are among the most uncertain. I'm a hawk in everything except for trade wars. And it just -- it's the definition of uncertainty. You do your thing and you expect them to do one thing, but they could branch out into completely different areas.

KISSEL: I do have to maybe play devil's advocate a little bit. No one forced the companies to go over and do business with China. A lot of the CEOs, I know many of the financial institutions CEOs, were cheerleaders for China's authoritarian regime. They thought they had great connections and they'd get a different kind of bargain. Then they woke up 10 years later and realized their intellectual property was stolen.

GIGOT: But if you're a CEO, how do you ignore the Chinese market?

KISSEL: There are several large Fortune 500 companies that haven't gone in there, Paul. I have sympathy for them. They had their intellectual property stolen. But I also don't want to let them off the hook.

GIGOT: The other thing --

KISSEL: They should have gone --


GIGOT: You had an arc of reform in China.

MCGURN: Right.

GIGOT: And with Xi Jinping and his predecessor, it stopped. It's gone backwards.


GIGOT: So, I mean --

MCGURN: It's also the phony argument on trade deficits. People that don't understand how these numbers are put together -- our former boss, Bob Bartley, said the way to fix the deficit problem is to stop keeping statistics. Just take Hong Kong, Taiwan and China. What Hong Kong and Taiwan did was export their deficits to China. The way they value something is the last person that puts something into an iPhone, they get the full cost of it. So the bulk of the value can be from somewhere else, but China gets stuck --

GIGOT: That's literally true in the case of the iPhone. All China does is assemble it and it's counted as total value as part --


GIGOT: Part of the deficit.

When we come back, Facebook under fire. CEO Mark Zuckerberg promises changes after data from more than 50 million users was harvested by a data analytics firm with ties to the Trump campaign. Is big tech getting different treatment than it did in the Obama years?


PAUL GIGOT, FOX HOST: Facebook under fire this week after revelations that more than 50 million user profiles were harvested by a data analysis firm employed by President Trump's 2016 campaign. CEO Mark Zuckerberg broke his silence on the growing furor Wednesday apologizing for the breach and promising to do better.


MARK ZUCKERBERG, CEO, FACEBOOK: This was a major breach of trust, and I'm really sorry that this happened. We have a basic responsibility to protect people's data, and if we can't do that, then we don't deserve to have the opportunity to serve people.


GIGOT: Andy Kessler was a co-founder and president of Velocity Capital Management, an investment firm based in Palo Alto. He also writes the 'Inside View' column for the 'Wall Street Journal.'

Good to see you, Andy. How are you?


GIGOT: Taking a look at this news about Facebook and Cambridge Analytica, is this a real scandal or kind of overdone?

KESSLER: Well, first, I have good news, which is Cher deleted her Facebook account, which means democracy is safe again.


My sense is this is a big P.R. problem for Facebook, but the reality of it is, it's not going to affect their business. I mean, by now, if you use Facebook, you know your data's not safe. You know you're inundated with fake news. Yet, people still use it. And their engagement numbers have rolled over a little bit. It's mostly the younger generation moving to Instagram, which Facebook owns.

GIGOT: Facebook owns, yes.

KESSLER: So big P.R. problem, not so much an operations problem.

GIGOT: Wait a minute. This is not a big deal then? So why are people paying so much attention to it? We knew, for example, the 2012 campaign, the Obama campaign used Facebook data, and when that was discovered they were hailed as geniuses for --

KESSLER: That's right.

GIGOT: -- for using that data to help their campaign. This time, Trump campaign-related group used it, and did it make a difference? We don't know. So is this just politics?

KESSLER: The hypocrisy is piled high. In June of 2013, 'The Sunday Times' ran a piece called 'Obama's Masterminds Catch In.' They basically admitted they stole the social graph, which is the connections between the users from Facebook, blowing all of the terms of use of Facebook. And Facebook let them. The quote from the article was, 'You can do this, as long as you stop doing it on November 7th.' So there was no backlash then. But now there's a huge -- people are calling it the tech-lash, as big tech is blamed for everything. It's inequality problems, diversity problems and now swinging elections. We're in a lot different environment for these companies as they become these big, massive multi-hundred-billion-dollar valued enterprises.

GIGOT: On that point, Facebook has had a really dream ride, right, up 500 -- more than $500 billion, $500 billion in market capitalization. A big chunk of that, 10 percent, 12 percent off this week. So clearly the market is fearing that there might be some threat to the business model, if not, because users will abandon it, because the regulators will decide to come in and start to impose controls. How big a fear is that?

KESSLER: Well, Mark Zuckerberg came out on CNN and other places saying he wanted to be regulated. Sheryl Sandburg said they would welcome regulation. I think they have to be careful what they wish.


I think Facebook has big problems down the road in that they now have 2.3 billion users and they're running out of them. They're shut out of China. They can't go into Russia because there's competition, can't grow much more in Russia because of the competition. And so at some point, Wall Street will get annoyed with their growth rate as that rolls over, as new users are hard to come by. But right now, I look at this as an opportunity for Facebook. Think about it. Here's these companies that have been stealing the social graph, all the data about all these inner connections. Facebook should look at that as a profit possibility. Look at what TV networks make on campaigns. Every four years, it's a huge growth in revenues for TV campaigns. Facebook should say this is our business, stop stealing our data, we're going to leverage it ourselves. Near term, I look at it as a positive, as a new business opportunity.

GIGOT: But their model has been we'll get content for free, they'll get content, they'll get Andy Kessler's column because the 'Wall Street Journal' runs it and then they'll get advertising against it. And they don't pay Andy Kessler. They don't pay the 'Wall Street Journal.' Is that basic advertising model, free content, and putting advertising against it, is that going to be in jeopardy because of -- this is a little different than the privacy element, but this gets into the fake news problem, where people are putting -- they're putting content and advertisers next to really bad actors.

KESSLER: I think that's a huge issue for Facebook. And I think they've made noise about taking steps to identify which content is real or more trustworthy than those that aren't. And when he talked about regulation, he had talked about -- Zuckerberg talked about regulation, he talked about transparency in advertising. Well, I'd like to see a little more transparency in the content that they run, that people link to. Is this a trustworthy site? The 'Wall Street Journal' is going to be a lot more trustworthy than the Onion or something like that. Right?


GIGOT: Or 'Russia Today.' Or 'Russia Today.'


KESSLER: -- the steps they take over the next year or so.

GIGOT: But they're going to have to act to do something to stop this furor because the market is really -- is skeptical.

KESSLER: Well, the market -- that's the fun part about the stock market. It shoots first and asks questions later. As long as their growth continues to tick up, I think the stock is going to continue to do fine. Again, I worry long-term. But Facebook has been resilient. They changed their news feed a bunch of years ago, a bunch of users were up in arms, I'm going to quit, and yet the numbers went up and up. It's a very addicting platform and they seem to be able to do the right thing.

GIGOT: Andy Kessler, thanks for being here.

Still ahead, as calls grow on Capitol Hill for hearings on the Facebook breach, can government regulation of social media be far behind? We'll ask our panel, next.



SEN. DIANNE FEINSTEIN, D—CALIF.: If the industry won't solve these kinds of problems themselves, we'll have to solve them with legislation. And I don't think that's the most desirable course of action, but you can't have 50 million people lose the privacy of their data this way.


GIGOT: Well, as calls grow on Capitol Hill for hearings on the Facebook data breach, can legislation regulating the social media giant be far behind?

We're back with Dan Henninger, Kim Strassel and 'Wall Street Journal' editorial board member and devoted Facebook user - well, maybe not so much --


-- Allysia Finley.

You heard Andy Kessler and Dianne Feinstein. Is the Cambridge Analytica uproar overblown?

ALLYSIA FINLEY, EDITORIAL BOARD MEMBER: It's definitely overblown. We don't even know if Cambridge Analytica used this data for the Trump campaign. The Trump campaign last year said that it used the Republican National Committee's database because the data from Cambridge Analytica wasn't very good. Cambridge Analytica has also said that it deleted any data that was improperly accessed.

GIGOT: So why, then, the uproar now? For years, we know Democrats in Congress and the Obama administration provided a lot of political protection for Facebook, for Google, for the big tech companies. Now Democrats are saying, look, we're going to look at you.

FINLEY: Because they're discovering that Republicans can exploit the same avenues that Democrats did.

GIGOT: You really don't think that Donald Trump won because of Facebook?

FINLEY: No. Anything that can be social associated with Donald Trump automatically becomes a target. They're looking for any kind of target to hit. Tech companies happen to be convenient.

GIGOT: Dan, what about the risks to Facebook's business model? Free content next to advertising. Is that in threat at all?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: I don't think the business model is so much in threat. I mean, that's kind of a larger subject. Are they a publisher? Should they pay people for their content?

GIGOT: Right.

HENNINGER: The problem here is political. We just listened to Dianne Feinstein address it. I expect Senator Feinstein knows pretty much nothing about Facebook's technology.


But she says, if they don't solve the problem, we'll solve them for it. No. Washington, Congress will not solve the problem through regulation. They will probably make it worse. That doesn't mean, though, that Facebook doesn't have some vulnerabilities. They are not able to police the privacy of their users. It's like YouTube and jihadist videos. They, too, are unable to really police the videos. Unless the idea privacy is simply dead, and people say we don't care what companies like Facebook do, there will always be pressure to try to do something to protect people's privacy. Look at the European Union. They're actively trying to fine Google and Facebook on this basis.

GIGOT: Kim, I think this is one of the vulnerabilities here. The government will go after Facebook and Google I think very hard on privacy. The E.U.., the European Union, is leading the way on this and we know kind of when they get in, they do it not with a light touch. So I think the FTC, Federal Trade Commission, is looking at it. Is that something Facebook needs to worry about?

KIM STRASSEL, WASHINGTON COLUMNIST: Look, here's the danger here. You now have Democrats furious at Facebook because it helps the Trump campaign. You have Republicans who have always been skeptical of these tech giants, because they've long believed they're biased against conservatives, that they censor conservatives more. You have Facebook inviting people to come in and regulate it. Sheryl Sandberg, Mark Zuckerberg, because they would love that. They can then say, well, we're following the rules. We have a safe harbor.

But whenever you're talking about regulating an organization like this, you are in essence talking about regulating free speech. And this becomes then something akin to the campaign finance regulations that you have out there, where the party in power has an interest in making sure that its opponents are not allowed to speak as much as it is. And we know from Facebook's history that it has a predilection for Democrats, so the way it interprets the regulations could be biased against one political party or the other. We don't want to go down that road. That requires Facebook stepping up to do something itself.

GIGOT: Paying for content, Allysia?

FINLEY: Well, I think it's going to try to resist that because it doesn't want to be held responsible for the content. And that would obviously also crimp its profits.

Look, right now, they've enjoyed legal protection under Section 230 of the law which protects it from liability for user-generated content. I think there's a concern, if it had to pay for content, maybe Congress would reinterpret Section 230, or courts could, in order to hold it liable. It doesn't want to be in the position of curating content or actually --

GIGOT: Why couldn't they -- they wouldn't necessarily have to do that if they paid other people to do it for them. For example, the cable companies pay for cable content. Could they pay newspapers for content, as our proprietor, Rupert Murdoch, has suggested?

FINLEY: Maybe so. Why should they do that when they get it for free? They may have to eventually try to sift through the fake news and the actual quality news when users start demanding it. Right now, they're saying basically we're giving users what they want, and users apparently don't want quality news.

We hope that's not true.

GIGOT: We hope that's not true. Yes. We hope they will pay for quality.

Thank you, Allysia.

Still ahead, President Trump defending his decision to congratulate Russian President Vladimir Putin on his reelection amid a leak that the White House calls a fireable offense.



DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I had a call with President Putin and congratulated him on the victory, his electoral victory. We had a very good call. And I suspect that we'll probably be meeting in the not- too-distant future to discuss the arms race and also to discuss Ukraine and Syria and North Korea and various other things.


GIGOT: President Trump facing blow-back for his call this week to Russian President Vladimir Putin. The president congratulated Putin for his victory in last Sunday's election, despite his national security advisors reportedly instructing him not to do so. Trump defended the call Wednesday, tweeting, quote, 'I called President Putin of Russia to congratulate him on his election victory. In the past, Obama called him also. The fake news media is crazed because they wanted me to excoriate him. They are wrong. Getting along with Russia and others is a good thing, not a bad thing. They can help solve problems with North Korea, Syria, Ukraine, ISIS, Iran, and even the coming arms race.'

We're back with Dan Henninger, Mary Kissel and Bill McGurn.

Mary, was he right to congratulate Putin?

MARY KISSEL, EDITORIAL BOARD MEMBER: No. Absolutely not. By the way, when Obama called, he didn't congratulate Putin, he congratulated the people of Russia. Paul --


GIGOT: Since when is Obama a role model?


KISSEL: Exactly. Look, first of all, it was absolutely a rigged election. Putin invalidated his opponent. The only credible opponent he had. He controls the media outlets. The election was rigged. There was ballot box stuffing. Look, this is nothing to congratulate him on.

But, Paul, it wasn't just what Trump said, it was what he didn't say. There was no question at all about the chemical weapons attack on British soil that had happened only a few days prior. That's a very serious incident. So I think the president mishandled this one.

GIGOT: Bill?

BILL MCGURN, COLUMNIST: I probably have an unpopular view. I think there was a lot -- it's a lot like Facebook. People are angry because Trump did it.


President Obama did do it. I went back and I looked, very little condemnation. Charles Krauthammer wrote a strong condemnation. Not only that, 12 days after Obama had called Putin, he issued his statement about, 'I could be more flexible after the elections,' and we criticized him.

GIGOT: Criticized him.

MCGURN: But very few others did.

So look, I think the problem -- I wouldn't have done it. I think the defense of it is harder than the actual doing it to justify. But I think it's a lot -- it's a lot to do about very little. I'm heartened that John Bolton actually is on record as calling Putin's interference in the elections an act of war.


GIGOT: In our election in 2016.


GIGOT: Mary?

KISSSEL: It wasn't just about congratulating him on a sham election or what he didn't say about Britain. It was also the assertion that Russia can work with us on things like Syria or the nuclear arms race. On what planet? There's no evidence at all that Putin is helpful. In fact, what Putin does is he creates problems, like Syria, and then he goes to the United States and says, I can help you solve your problem, just happens to be the problem that I created. So I think Trump has some idea about Putin that's not grounded in reality.

MCGURN: Very similar to the reset idea. That's what I'm saying.


GIGOT: Obama's reset.

MCGURN: Obama's reset. I'm more interested in the policy. There's a lot more I would like to see President Trump do vis-a-vis Putin. As I say, I'm heartened by John Bolton. I don't think John Bolton has any scales on his eyes about Russia and so forth. But I'm more interested in what the policy direction will be.

GIGOT: Dan, when you look at the policy record on Russia in the first year of the Trump administration, it's tougher than Obama's. There's lethal weapons sales to Ukraine. The statement last week from the White House joining the leaders of Europe in condemning the chemical attack in London.

But there's this issue people raise, which is, why can't Donald Trump himself seem to say a discouraging word about Vladimir Putin?

HENNINGER: And that is the big question, Paul, which I have said and written several times is one of the reasons people continue to think that there is something to the Trump, Russian collusion story. That may drive people crazy to hear that. But when they see the president, going back 15 or 16 months, praising Vladimir Putin, having all of these Russian aggressions take place, and then this very week, call him to congratulate him, they default -- many people default to the belief there is something there. And I think that will just hang out there until the president either explains why he keeps making these congratulatory calls to Putin or shows some evidence that they're producing policy as a result.

GIGOT: Mary, assuming there is nothing there -- OK, you would think it would have come out by now. Let's assume there's nothing there that they have over Trump, it's almost as if he won't say it because everybody wants him to.

KISSEL: Yes. That's entirely possible, Paul. He got criticized as well for congratulating Xi Jinping. Similar situation.

GIGOT: Thank you all.

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


GIGOT: Time now for our 'Hits & Misses' of the week -- Bill?

MCGURN: A hit for Cynthia Nixon. The former 'Sex in the City' star, this week, announced she's running in the Democratic primary against Governor Andrew Cuomo.

GIGOT: In New York.

MCGURN: In New York. And now she's done something very un-Hollywood. She came out against the tax breaks for film and TV that work out to about a $420 million subsidy in New York. Asked by the 'Buffalo News' about it, she said these breaks mostly benefit large entertainment companies and she didn't think it was worth it. If this is progressivism, we need more of it.

GIGOT: Allysia?

FINLEY: This is a hit to California's pot industry that is rebelling against high taxation over regulation. Only about 1 percent of California pot growers are licensed. They blame the state's heavy handed regulation, land use regulation, zoning restrictions, water conservation, you name it.

GIGOT: And tax rate of what?

FINLEY: Forty to 60 percent.

GIGOT: Now, suddenly, they're all Libertarians.

All right.


HENNINGER: Paul, I'm going to give a hit to the American people for their common sense on gun control. There's no more volatile issue than gun control. But an IPSO/Reuters poll just out shows that a majority of Americans, including Republicans, Democrats, and gun owners, want more restrictions on guns and they want armed guards in schools. About 75 percent of adults say they want armed guards in schools, and 83 percent of Republicans want more gun registration. Paul, it looks like there's a solution here if the Republicans and Democrats would just see it in front of their faces.

GIGOT: All right.

Thanks to all of you.

And remember, if you have your own hit or miss, be sure to tweet it to us, @JERonFNC.

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

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