This is a rush transcript from "Journal Editorial Report," May 20, 2017. This copy may not be in its final form and may be updated.


Months of turmoil in Washington capped off this week with the appointment of a special counsel in the Russia probe. After weeks of political pressure, deputy attorney general, Rod Rosenstein, announced Wednesday that Robert Mueller would lead the investigation, giving the former FBI director sweeping powers to look into Russian interference in the 2016 presidential campaign and, quote, "related matters."

President Trump reacted to the decision on Thursday.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I respect the move, but the entire thing has been a witch hunt, and there is no collusion between, certainly, myself and my campaign. But I can only speak for myself and the Russians, zero. I think it divides the country. I think we have a very divided country because of that and many other things.


GIGOT: Joining the panel this week, "Wall Street Journal" columnist and deputy editor, Dan Henninger; Washington columnist, Kim Strassel; editorial board member, Joe Rago; and assistant editorial page editor, James Freeman.

So, Kim, a special counsel here. Let's talk about the decision first. We can talk about Mueller later. The decision, first, good or bad?

KIM STRASSEL, WASHINGTON COLUMNIST: Not good, because special prosecutors, special counsels have a potential to go on and on for years. They take things out of sight of the public. And the bigger problem is they often come in with the belief that it is their job to nail somebody in the end.

And so whether or not you have a crime that matters or what they were set out to investigate in the first place is often not what comes out of a special counsel investigation.

GIGOT: Now, yeah, Dan, that's the problem, the fundamental lack of political accountability in the sense that, though technically Rod Rosenstein could fire the special counsel, in practical terms, because of this probe, because of how it was created, you really can't do that.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, that's right. I mean, Rod Rosenstein said a couple of things about this special prosecutor that I think are worth drawing attention to. He talked about appointing a special prosecutor because it was necessary to bring that person out of the chain of command, make him independent from the chain of command. To me, that was an oblique reference to the White House and keeping him independent from any conceivable pressure. The other thing he said is, owing to the unique circumstances, he was appointing a special counsel. This is a wholly political case. And I think a lot of pressure should be brought on Mr. Mueller to expedite this investigation, get it done by next summer because, otherwise, he's going to head into that midterm election, and we're going to be right back where we were with James Comey and the 2016 presidential election.

GIGOT: I have to say, Dan, I've lived through a lot of these special counsels, and since then, when these are done within the Justice Department, they don't take a couple of months.

HENNINGER: They take couple of years.

GIGOT: Sometimes longer.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Right. Because this person effectively has no boss. Bob Mueller will not be reporting to anyone on a day-to-day basis. It's basically up to him how long and at what cost he wants to look at really just about anything at all that he decides is in some way related. I would hope that we would remember that this was supposed to be -- it was, at the start, it supposed to be about this Russia collusion claim. We're a year into this story, and we're still waiting for the evidence. You would think it would have come out by now at one of these congressional inquiries.

GIGOT: What about the choice of Mueller, Joe? He's a former FBI director, he served in Vietnam, he's known as a -- his record at the FBI was not a grandstander, he didn't seek out the press. Is there some -- and he's 72 years old, so he's not looking for the next job. Is there a possibility here that he could be the exception to the rule of counsels where he acts in a responsible way, and if there's no charges to be brought, he won't go seeking them?

JOE RAGO, EDITORIAL BOARD MEMBER: Yeah. I mean, he's a man of great integrity, widely respected by both parties. So there is a chance here, I think, if the Trump administration has a little bit more discipline, a little bit more organization --


GIGOT: That's funny.


RAGO: They can say, look, the investigation's ongoing, we're not going to comment, we're going to defer to Bob Mueller. The only thing I would raise is that he's very close with Jim Comey, and so despite his reputation, that's something where you kind of go, huh. Maybe somebody with a little bit more independence should have been selected --

GIGOT: Yeah, Kim, you wrote about that. That's a real question, I think.

He and Comey worked together in the Justice Department during the Bush years. I think they even threatened to resign together over the warrantless wiretapping --


GIGOT: -- episode back then and putting it under legal -- the legal basis they wanted it put under. Does this concern you at all?

STRASSEL: Yeah, especially because, look, here's the thing, if you look at that letter that Rosenstein said that appoints Mueller, it says he's charged with investigating Russian interference in the election but also any other thing that comes from that. What comes from that now is this question of Jim Comey, whether or not he was fired, as some people claim, by the Trump administration for looking into this probe or whether, as the Trump administration says, just because he was incompetent. Mueller's going to have to look at the question of Jim Comey, and the question, too, of whether the FBI or other intelligence agencies were behind the unmasking of and leaking of American citizens' names. So he's going to be investigating a lot of people he used to work with and who used to work for him. Can he be objective about that?

GIGOT: Yeah, that's a very big ask, Dan.

Now let's step back a bit. There are some people who say, look, this is great for Republicans because it means you can now say, particularly on Capitol Hill, look, this is taken care of over here. We'll ignore that.

Anytime they're asked about it, don't comment. Just say Mueller's doing it and let's get on with business. Do you buy that?

HENNINGER: Well, it would be nice to believe that, and they should get on with business, because they better put up something on the board to show for it. But we live in a different media era, and all of these media outlets are in competition with one another on this story, and they keep squeezing their sources, which nobody can identify, and I think there's going to be continued, constant coverage of this that's going to distract and siphon energy out of Congress. So they're going to have a very difficult time getting themselves to focus on the president's legislative agenda.

GIGOT: And it's not only Mueller that's doing this. You've also got the House and Senate Intelligence Committee investigations. You've got them looking into James Comey and his memos. And I think you're going to see these Comey memos leak one after another after another if they contain any information that potentially damages Trump.

FREEMAN: Yeah. I think James Comey did not follow protocol, did not do what a prosecutor should do. You look at the Hillary Clinton investigation, kind of textbook case of what not to do. But at media relations, he has always been absolutely top notch.


So I think these leaks will continue. Associates of Comey, sharing all kinds of claims about Donald Trump. But I think one thing, not great news for Republicans, that Mueller has been appointed, but now that it's happened, I think the silver lining is it does allow them to say, not our issue, and it takes away their excuse not to do tax reform, not to get health care done.

GIGOT: All right, let's go. Much more ahead as we recap a very busy week in Washington, including the fallout from President Trump's Oval Office meeting with the Russians.



GEN. H.R. MCMASTER, NATIONAL SECURITY ADVISOR: What the president discussed with the foreign minister was wholly appropriate to that conversation and is consistent with the routine sharing of information between the president and any leaders with whom he's engaged.


GIGOT: National security adviser, H.R. McMaster, Tuesday calling President Trump's actions wholly appropriate following a "Washington Post" report that the president shared classified information with Russian Foreign Minister Sergei Lavrov and Russian Ambassador Sergey Kislyak during their Oval Office meeting last week.

We're back with Dan Henninger, Kim Strassel, Joe Rago and James Freeman.

I want to get to this Russian business, Joe, but first, let's go back to James Comey and those memos, those notes he wrote to himself about his meeting with Trump, where he asserts that in the notes, according to partial reading of the notes from Comey associates to the "The New York Times," he said Trump told him to let it go, referring to Michael Flynn's -- the investigation of former national security adviser, Michael Flynn. Democrats are saying obstruction of justice. What do you think?

RAGO: Well, I think if Comey thought contemporaneously that it was an obstruction of justice, he had a duty to report it to his superior, Rod Rosenstein, and if he really thought his investigation of the Russian nexus was being obstructed, he had an obligation to resign.

GIGOT: Now, when you say "obligation," this is not just simply a moral obligation, though that is part of it. This is a legal obligation. If you are somebody in the Justice Department who thinks somebody is trying to block an investigation, you must report it to others in the Justice Department. And as somebody who's leading the investigation, you should resign.

RAGO: That's right. It's not just --

GIGOT: Yeah. That's not just casual, well, oh, maybe if I feel like it.

RAGO: Right. It's not a party of protocol or whatever. It's a legal obligation. And instead he kind of wrote these memos to himself as an insurance policy if something happened to his job. And I think it's another example of Comey acting politically in the sense of preserving his own --


GIGOT: Yeah. It kind of gives him the option of saying, well, I can use this someday to tell my story, and it's really almost unseemly in some respects.

HENNINGER: Well, unseemly would be one word. I can't imagine what our viewers listening to this or people out in the country watching it must think is going on. It is so Machiavellian, so Byzantine, and this is a young, new presidency trying to operate. The president contributes to some of these problems. But you can see a Beltway establishment sort of coming together to simply try to undermine the White House at this moment. I'm not sure they're set up quite well enough to fight back against this torrent that's coming at them from things like the Comey leaks.

GIGOT: If there were real obstruction of justice, OK, fine. Let's investigate that. We're not trying to cover it up at all. But Comey, apparently, didn't think it was.

FREEMAN: Right. Whatever "it" was, because, let's remember, this whole story runs contrary to what Comey has testified to, what acting FBI Chief McCabe has testified to, that there wasn't political interference, that they were able to do their job. So there's a lot of reason the doubt this.

The White House has denied it. But if it's true, in some fashion, that the president was urging him to back off on an investigation, that would be disturbing, and that brings memories of President Obama with the Clinton administration

GIGOT: All right, Kim, let's go back to the Russian story and the fact that Trump seems to have confirmed that he shared some secrets about an aviation plot with Lavrov. How big a deal is this?

STRASSEL: Look, it's not as big a deal as many people in the press are suggesting it is. It would appear that the information that he passed on had come from an Israeli source. That was sort of the concern, was this might undermine Israel's ability to continue with some of its intelligence operations. That does not seem to be the case.

Also, by the way, we do share intelligence with Russians, the Obama administration did it as well, given the relationship between the United States and Russia, vis-a-vis ISIS and some actions in Syria, for instance. So it's not unheard of.

That being said, it does seem pretty clear that President Trump seemed to maybe do this on the spur of the moment, and that does raise some questions about how much thought he's giving before he's going into these meetings with world leaders.

GIGOT: Yeah. It plays into the stereotype of Trump as the impulsive, inexperienced guy who blurted out because, well, he likes to brag about what he knows, Joe.

RAGO: Right. You don't think I have great intelligence? I've got the best intelligence. So it appears that he did not compromise intelligence sources and methods, which is good. But the entire way that this was handled was, I guess I would say sub-professional.


HENNINGER: Well, look, I mean, they say that we broke relations with the Saudis and the Israelis over this. Let me tell you, Israel and Saudi Arabia couldn't be happier to be dealing with President Obama after what they went through with -- with President Trump after what they went through with President Obama.

GIGOT: All right, thank you, gentlemen.

After we come back, President Trump leaving the White House turmoil behind as he embarks on his first foreign trip. Ambassador John Bolton joins us next with a look at the challenges and opportunities awaiting the president abroad.



TRUMP: I will make my first trip abroad as president with the safety, security and interests of the American people as my priority. I will strengthen all friendships and will seek new partners. But partners who also help us, not partners who take and take and take.


GIGOT: President Donald Trump this week previewing his first trip abroad during the U.S. Coast Guard Academy commencement in New London, Connecticut. The president kicking off his nine-day trip with a stop in Saudi Arabia, then continuing on to Israel and Rome, before a NATO meeting in Brussels and a G-7 summit in Sicily.

John Bolton is the former U.S. ambassador to the United Nations and a FOX News contributor.

Ambassador, welcome.


GIGOT: First, let's take on this Russian intelligence story. You worked for other presidents. Sometimesthey share intelligence with other presidents, do they not?

BOLTON: Amazingly, yeah.


And, you know, if you look at what's been reported about the so-called leak, taking the worst case as I've seen it, he told the Russians that Israel has an agent inside ISIS in Raqqa, which is the capital of the caliphate there, which is roughly saying that China has an agent in the U.S. government in Washington. Well, where else do you think the agent would be? And we don't know whether Israel hasn't shared this intelligence with Russia already. They have a relationship on the terrorist front that could well encompass that.

GIGOT: You know, my issue is why was he meeting with Lavrov at all? He shouldn't have been meeting him that week when he fired Comey, but why given what Russia is doing to our interests abroad?

BOLTON: I think, unfortunately, it was presented to the president as an equivalent to Rex Tillerson meeting with Putin in Moscow, that is Putin received our secretary of state, Trump had to receive Lavrov. I would have rejected that parallel, especially given the circumstances.

GIGOT: OK. Let's talk about the president's trip. First stop, Saudi Arabia. Highly unusual for the first foreign trip to be this Saudi Arabia.

I can't remember that ever happening before. What do you think the president is trying to accomplish here by meeting with the Saudis first?

BOLTON: Well, I think he has a dramatic opportunity to put to rest the line of chatter in this country that he's anti-Muslim, he's trying to ban Muslims from the country. He can talk about Islamic terrorism. After all, the king of Jordan said it's a civil war within Islam. People have already begun to compare this speech the president intends to give with Barack Obama's Cairo address in 2009, to see the differing ways of handling the terrorist threat in the Islamic world. And then I think by going directly from Saudi to Israel he demonstrates that there's a lot going on in this most-important bilateral relationship between Israel and the United States, a world of difference from the Obama years, and the direct contrast with Iran.

GIGOT: Right. And that's what I wanted to ask about. By going to the Saudis first, he is -- is this -- does this mark the end of what I would call the Obama tilt to Iran, to the Shiite Islamic world, and back towards a more traditional U.S. relationship where we are closer to the Sunni Arabs in the gulf states, but also in Egypt and elsewhere?



And he is going to meet with the Gulf Cooperation Council, heads of state in Saudi Arabia. So this is a very, I think, well-planned-out --


GIGOT: But do you see that tilt, do you see the Trump administration tilting away from Iran and back towards the Sunni Arabs?

BOLTON: I have to say, not yet.


BOLTON: I think the amazing thing is the continuity with respect at least to the nuclear deal from the Trump administration and Iran. The secretary of state certifying Iranian compliance with the deal, which I find absolutely incredible in the literal sense. Incredible.


And then, this past week, extending the waiver on certain critical economic sanctions held over from the Obama administration. So it's directly continuous. They say the policy on the Iran deal, the nuclear deal is under review --


GIGOT: Yeah, that's what they're saying, we want to extend these because we want to do these things comprehensively and it's under review. That was the argument there.

BOLTON: But it sends a terrible signal. The compliance certification sends a worse signal because it's contrary to fact.

GIGOT: Let's talk about one item on his route. The president in the campaign promised I will recognize Jerusalem as the capital of Israel. Of all the promises he made in the campaign, that was one of the clearest.

And yet, now, he's saying, the administration is saying we're not going to do that. Is that a mistake?

BOLTON: Yes, it is, and it reflects, I'm afraid, the dominance of the State Department thinking that infuses the advice that the White House is getting. Look, the argument is that the final status of Jerusalem is the subject of negotiation.

GIGOT: Right.

BOLTON: OK, fine. Does anybody seriously think anything behind the 1949 green line that Israel held then will go to the Palestinians? Of course not. Is Jerusalem manifestly Israel's capital? Yes, it is. As the Russians recognized this fairly recently. You pointed that out in an op-ed in the "Wall Street Journal." Will our embassy be built in west Jerusalem territory, unquestionably Israeli? Yes. So what is the problem?

GIGOT: Well, the argument is that if the president does that, this will blow up any chance of having a Palestinian agreement, because the Palestinians will rise up in horror and say, this is unacceptable.

BOLTON: You know, this is another legend about the Arab street. We're constantly waiting for the Arab street to explode. It's a recognition of reality. Occasionally, foreign policy should be based on reality.


It's incredible that anybody can tell the United States where to put its diplomatic representation in a bilateral relationship like this.

GIGOT: Why is it that every single president in my lifetime has believed that he had the secret sauce to get a Palestinian peace? He was the one who was going to do the deal. And now we have Donald Trump. He's now got it. He's the great negotiator. What is it?

BOLTON: I think it's the challenge. It's the Mt. Everest of international diplomacy.


GIGOT: But these things have to come up -- peace has to come up organically from the parties in the region.

BOLTON: Jim Baker put it best. He said, once testifying, he said, "Here's the phone number at the White House. When the parties are ready for peace, give us a call."


I say Donald Trump's an optimistic man. God bless him. It's not going to happen.

GIGOT: It's not going to happen, no matter how much Rex Tillerson tries.

BOLTON: Or anybody else.

GIGOT: Thank you, Ambassador.

BOLTON: Thank you.

GIGOT: Good to be here. Glad to have you here.

Still ahead, a stock selloff amid fears that is the White House turmoil will derail the GOP's tax cut plan. So can Republicans in Congress keep their agenda on track?


SEN. MITCH MCCONNELL, R-KY, SENATE MAJORITY LEADER: We could do with a little less drama from the White House on a lot of things so that we can focus on our agenda.




REP. PAUL RYAN, R-WI, SPEAKER OF THE HOUSE: I think people in America turn on the TV, and they think this is all that's happening, this is all we're doing and all we're discussing. That's just not the case. I want the American people to know that we're busy, hard at work fixing their problems. We're going to walk and chew gum at the same time. We're going to keep doing our jobs, we're going to passing our bills, we're going to keep advancing our reforms, and that's what we will be judged in 2018.


GIGOT: House Speaker Paul Ryan addressing the ongoing controversies engulfing the White House and vowing not to let it interfere with the GOP's agenda in Congress. Still, stocks saw their biggest one-day selloff since Trump took office Wednesday as fears grow that tax reform and other Republican priorities will stall amid the turmoil.

So, Dan, you heard the speaker. Is he whistling past the Trump graveyard when it comes to the agenda?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: No, I don't think so. He described things accurately, but there's a couple of additional point it is make. Opinion polls show that Trump supporters still support him, upwards of 70 percent. And I think a lot that means that's not so much they support Donald Trump. They voted for him for his agenda, which is what Congress is supposed to do. And you've got, at issue, the control of Congress, of the House in the 2018 election. They are not going to vote for these Republicans if, as Speaker Ryan was just saying, they are shown to have been working on their behalf. They're going to have to accomplish something on their behalf, and that means getting ObamaCare repeal and replace passed, the tax reform bill passed, and getting spending under control. I think some of these members are going to have to trim back on the politicking. They're going to have to get these things passed so that they can run on them.

GIGOT: Now, Joe, you were down this Washington this week, you met with the majority leader, Mitch McConnell, and a half dozen other Senators or so.

What's the mood down there?

JOE RAGO, EDITORIAL BOARD MEMBER:  I would say it's compartmentalized.


GIGOT: What do you mean?

RAGO: Well, in the sense that they've got to respond to the Russia stuff, the FBI stuff, this sort of swirling controversy all around them. But as an escape, they're looking at policy. And they're actually focusing on the substance, trying to craft a health care bill that can actually get 50 votes in the Senate and then actually become law.

GIGOT: But can they do that with all of this incoming, you know, this over their heads and their ducking and covering, and they walk out and there's camera crews saying, what do you think of the latest story, sir? Should he be impeached?

RAGO: I mean, they're certainly trying. The thing is Washington can really only handle one big thing at a time.


It's like they just don't have the bandwidth to cover all this stuff. And so I think there is a sense of exhaustion that's starting to set in, like every night at six when the new story breaks, it's like, oh, what is it this time.

GIGOT: And I guess, Kim, that time is of the essence here. Certainly, that's my view. Every day this goes on, you're losing a day where you could -- you have the chance to move ahead with the agenda, and the closer you get to the election, panic is more likely to set in. And right now, I mean, if the president's approval rating stays at 38 percent or so or under 40, and you go into November 2018 with that, the House Republican majority is in jeopardy. So if they want to get something done, they need to get it done fast.

KIM STRASSEL, WASHINGTON COLUMNIST: Yeah. And here's the problem, Paul, is that Paul Ryan is correct, they can walk and chew gum at the same time. But only part of this is negotiating a bill behind the scenes. You want to really pass this, you have to sell it to the public. And that means it has to be out on the airwaves. And right now, there is just no capacity to do that selling, because everyone's talking about the White House problems. And somebody, I think, at some point, needs to get this message across to Donald Trump. It is remarkable, if you look back over the past four months, there has been very little criticism of Donald Trump on his actual policy agenda. Almost all of it is self-caused drama over something he said or something he tweeted.

GIGOT: Well, and it's not just, Dan, your point about getting the legislative agenda passed. It's also that's only insurance the Republicans have, protection that they have, against being identified with all of the Trump drama. Is actually saying, we passed these things, see? It didn't matter. We could do these things and get it done, so re-elect us next time because, look, these are the results you wanted, you got them.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: Yeah. And it's not just how they sell it, it is not just their political presentation. They need to get a big tax cut done this year if they want the economy to be moving to a higher growth level next year.

GIGOT: I have to tell you, James, I don't think that tax cut's going to happen.

FREEMAN: Well, this is the problem. They're now talking about the winter or and maybe it'll be next year. And what they need to do is stop making excuses, stop whining about how they've got to respond to every tweet. I know it's a challenge, but you have a president who is ready to sign a big tax cut. Put it on his desk, and that will sell itself as people get more jobs and higher incomes next year.

GIGOT: Yeah, but I'm going to --


FREEMAN: That's how you maintain congressional majorities.

GIGOT: Why has the stock market taken the plunge it has? It's the Trump slump, not the Trump rally.

FREEMAN: No, basically, it's like a law of physics. Whenever investors think that the Trump agenda of lower taxes and deregulation is going to get enacted, stocks go up. The big hit this week was when it looked like politics was going to interfere with that program, stocks went down. So the market is sending Republicans a very strong message: Here is how you save yourselves and get reelected, pass a big tax rut right now.

GIGOT: Briefly, anybody disagree with that?

HENNINGER: No. Short version, this is what happens when the market thinks Nancy Pelosi's going to become speaker.


GIGOT: All right, Dan, thank you very much.

Still ahead, Purdue University embracing online learning and changing the landscape of higher education with a deal that is stirring up its share of controversy. Purdue president and former Indiana Governor Mitch Daniels is here to answer his critics, next.


GIGOT: When Indiana's Purdue University announced last month it would acquire for-profit Kaplan University, it shocked many people in higher education and set off a fierce debate over the deal. The agreement will allow Purdue to increase its reach into online and adult learning, and access some 32,000 current Kaplan students. In exchange, Kaplan will collect 12.5 percent of the revenue from the new venture for 30 years. Some are hailing the deal by Purdue as bold, a necessary move as public universities get squeezed by shrinking state funding. But critics are calling it a dangerous marriage between a public university and a firm that answers to private investors.

Former Indiana Governor Mitch Daniels is the president of Purdue University. He joins me now. Welcome.


GIGOT: So you have, you purchased Kaplan for $1. Why would going concern sell itself to Purdue for a buck?

DANIELS: I wanted 50 cents --


-- in the negotiations. We settled out. They'll have a chance the it's successful through a services agreement, they're going to do the back- office stuff. All the academics will be overseen and controlled by --

GIGOT: But they'll do marketing, too, right?

DANIELS: Under our supervision, strict supervision.


DANIELS: But if it's successful, then over the course of time, they will earn out the value that they built in a really fine university over the course of a couple decades.

GIGOT: There's the sense they just couldn't make it as a for-profit institution, and they need to move under their auspices?

DANIELS: They've spoken for themselves, so I think I'm within my rights to recap that they felt that the -- their mission -- and they're very idealistic about their mission. It's important to note, the average student they're serving is a female, three-quarters are, 33 years old, as likely to be minority as not. 55 percent are first-generation college students. And they felt they could serve that mission better freed from what they feel is the unfair stigma of a multi-year onslaught from the federal government.

GIGOT: That's what I wanted to get at. This is actually shrewd in the sense that it's an act of regulatory arbitrage. Let me explain what I mean. You are a nonprofit, Purdue, a public university. You're not subject to all the rules the Obama administration imposed on for-profits.

Right? It's the debt forgiveness rule, the gainful employment rule. That really limits their running room. By going to Purdue, they're all freed from that.

DANIELS: Yeah, you know, it's -- I've never thought that business form was

-- should be the test. To me, it's the results you're getting or not getting. There are a lot of nonprofits that are not getting near as good of results as Kaplan has been. But what you say is true. For whatever reasons, the federal government's focus was entirely on the proprietary sector. And, you know, even though that may not be the case in the new administration, the folks at Kaplan were pretty forthright in saying they thought they'd be better off partnered with a university like ours. And I do hope it has something to do -- they sure say it does -- with the quality that's always been associated with Purdue University and the standards we hold ourselves to.

GIGOT: Well, why does pursue and, granted, that quality and reputation, why does Purdue need an online presence to expand? You have, what, how many students on campus, 40,000?

DANIELS: On the main campus, 31,000 undergrads and 10,000 graduate students, and more at our regional campuses, which we've had for six decades.

GIGOT: Why the online expanded presence? Particularly, look, quality control is always an issue with the management of any new acquisition.

DANIELS: Two main reasons. One, although, a lot of people don't know this, we are a land-grant school. We take that very seriously. Abe Lincoln and his allies put us there explicitly to democratize the higher education, to open to it up beyond the wealthy and the privileged. In this era, when there are tens of millions of Americans who missed a chance at a postsecondary degree the first time around, we cannot honor that mission if we stop at age 22. So that's number one.

GIGOT: And these online students, a lot of them, are full-time workers, so they're doing this at night, on weekends. They're mid-career people.

DANIELS: Almost all of these are working adults. I gave you the demographics a little while ago. Those people will simply never be able to move for four years to a campus like ours for four years or even -- except for those who happen to live close to one of our regional campuses. So it's either go to an online platform or not serve them at all.

And the other thing, Paul, is I don't pretend to know the exact direction or trajectory of the online phenomenon. But I know it's not going to get any smaller. And I did not want my successor 10 years from now to look back and say how could they miss this? What were they thinking? Why do we not have the ability to use these tools as well as anyone? And so that's -- that was the other part.

GIGOT: Well, you know, I can tell you, being in the newspaper business, the Internet has a big effect.


DANIELS: Well, it didn't escape --


-- higher Ed has felt it, but what sector didn't?

GIGOT: I know.

DANIELS: We're different, we're bulletproof, and, you know, I'm just not so sure.

GIGOT: So you think the traditional four-year college, with tuition that is, in some cases, $50,000 $60,000, not Purdue, for instance, but nonetheless, it is high, that is going to be dis-intermediated -- pardon the jargon phrase -- just like a lot of other industries.

DANIELS: Yeah, we'll see. I still believe there will be an important role for those residential institutions who can unimpeachably add value that can't be delivered at home. I like to talk to his friends at Purdue about the pajamas test. I say, you know, we've got to have features here, direct contact with faculty and coaching, participation in research, would be another good example, leadership opportunities, that can't be delivered at home, because a lot of smart people are saying to folks just sit home in your bathrobe, I'll bring the best teachers in the world to you. And I think to be dismissive of that would be to invite the kind of difficulties that your industry and others have had.

GIGOT: Briefly, you going to bring along the faculty on this? There's some grousing.

DANIELS: Well, some. But, you know, the faculty, we're now swarmed with faculty who have ideas of their own, who want to take part, who have a course they might like to put online. So as in anything, the questions that were asked were good questions, there were good answers to them. And if you were to survey our faculty as a whole, I think you'd find a lot of excitement about this.

GIGOT: Thank you, Governor Daniels. Appreciate it.

When we come back, as Amazon celebrates its 20th anniversary, a look at how the online giant changed the face of retail.


GIGOT: Amazon celebrated its 20th anniversary this week. The online retail giant went public on May 15, 1997. And in two decades, has gone from selling books and C.D.s to groceries, clothing, furniture, jewelry, just about everything else. Today, the company is worth about, oh, just

$460 billion, almost twice as much as brick-and-mortar king, Walmart. And if you were lucky enough to buy $1,000 of Amazon stock on that first day 20 years ago, it would be worth more than $490,000 today.

We're back with Dan Henninger, James Freeman and Joe Rago.

So, James, knowing that you had the wisdom to be an investor 20 years ago -

- sorry, I know --


FREEMAN: Yeah, yeah, not quite.

GIGOT: What do you make, what are the lessons of Amazon's success?

FREEMAN: Well, some of them are very -- a lot of them very encouraging in terms of what the Internet, largely unregulated to this point, thank goodness, has allowed in terms of new companies, new business models, new competition. It's been -- Amazon has been very tough on competitors but great for consumers because it has been a kind of a relentless force to offer more convenience and lower prices.

And also, a lesson here about the value of our public markets. And this has kind of changed over the years where you don't have so many coming to the public where individual investors can own them.

GIGOT: Flip side of that, if you put a buck in Macy's 20 years ago, do you know what it would be worth now? A buck.


FREEMAN: A buck.

GIGOT: As opposed to $400--


HENNINGER: Here's an ironic lesson of the market, Paul, which is, the "Wall Street Journal" took a look at this, and $1,000 of Amazon turning into $490,000, almost nobody did that. Nobody held Amazon from start to finish because that stock went up and down like a roller coaster.

GIGOT: Except Bezos.


HENNINGER: Except Bezos, exactly. He believes in this platform, and he emphasized growth over growth in the share price over that time. But, I mean, there's very few people who have kind of cashed in on Amazon. But he had great belief in his idea.

GIGOT: But my point, Joe, is about the disruption. And retail, you can see it. There's, you know, malls, the cornerstone, the big department store that used to be the cornerstone of malls in America, that's fading away. A lot of these companies are really under pressure because people are shopping at home. So there's a lot of turmoil within the retail marketplace.

RAGO: Well, there is a lot of turmoil, but you have to ask, are consumers better off? It's not like, because the mall closed, they're being deprived of books and music and all the rest of it. And you need that disruption in an economy to keep it dynamic. I mean, if you just go down the list of things that Amazon has disrupted, it's not only Macy's.

GIGOT: Right.

RAGO: I mean, it's Walmart, Apple, Google, Netflix. I mean, you can just go down the line, and it's one after another.

GIGOT: The capital markets point, James, you know, they're not as dynamic now as they were 20 years ago. There are a lot fewer companies like Amazon, which went public at a relatively early stage so that average investors could buy a share in them and write it up. Now more and more of these company are waiting longer because they just don't want to go public because their costs are too great.

FREEMAN: Yeah. It's not fun being the CEO of a public company in the way it used to be. The burdening Sarbanes-Oxley is the big one. But there are others. Lots of both laws and regulations over the last 20 years that have made it much more difficult, everything from accounting to how you can talk to investors, and the circumstances, and what you can disclose. This is a problem that we've made it very difficult and cumbersome if you want to be owned by owned by mom-and-pop investors as opposed to private equity.

GIGOT: To put a number on that, the new head of the SEC, Securities and Exchange Commission, said there's 37 percent fewer public companies now than 20 years ago?

FREEMAN: Yeah. That's not a healthy market. I mean, you -- it's not that Washington ought to have a set number in mind, but certainly, a growing economy, you'd want more companies, more opportunities to invest.

GIGOT: All right. We have to take one more break. When we come back, "Hits & Misses" of the week.


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

Kim, start us off.

STRASSEL: So, Paul, Chelsea Manning, formerly Private Bradley Manning, walked out of a military prison this week having served only seven years of a 35-year sentence for perpetrating one of the biggest leaks of classified information in the country's history. This happened because Barack Obama commuted the sentence. That is my miss. If you want to know every newspaper every day is full of classified leaks, it is because the people at the top are sending message that it is perfectly OK to do that. And until we make examples of people, it will continue.

GIGOT: All right.


RAGO: Paul, a hit this week to Chobani Yogurt Company, which succ3essfully sued to get an apology from the Internet conspiracy theorist, Alex Jones. The yogurt company has helped resettle refugees in Idaho, and Jones and his website spread just vicious falsehoods about abetting criminality and other abuses. Defamation lawsuits are often abused but, in this case, it was necessary to vindicate reality and strike a blow against fake news.

GIGOT: All right.


FREEMAN: Paul, this is miss to New York City Mayor Bill de Blasio, who for some reason is going to march in a parade next month at which a convicted terrorist, Oscar Lopez Rivera, will be honored with an award. Obviously, de Blasio has set the bar very low in his tenure here, but this is -- really should be beyond that for him.

GIGOT: All right. Dan?

HENNINGER: I'm going to give at hit to the last bastion of anti-Communism in America, California, believe it or not. A California legislator introduced a bill that said that you could officially and legally hire Communists in the California government. In California, you would think that would fly right through? But, no, he had to pull the bill because of opposition from, guess what? Vietnamese Americans who had fled Communism in Vietnam, and from veterans who had served in Vietnam. Good for them.

GIGOT: Did they have to remind the legislature what Communism is?


GIGOT: At this stage? It's been around a while.

HENNINGER: I suspect they are already serving in the California government, but this makes it official.


GIGOT: 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 here next week.

Copy: Content and Programming Copyright 2017 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2017 ASC Services II Media, LLC. 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 ASC Services II Media, LLC. You may not alter or remove any trademark, copyright or other notice from copies of the content.