'The Journal Editorial Report,' August 30, 2008

This is a rush transcript from "The Journal Editorial Report," August 30, 2008. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: Coming up next on the "Journal Editorial Report," John McCain's VP surprise. What Alaska Governor Sarah Palin brings to the ticket and the risks of nominating a newcomer.

Plus, our GOP convention preview. After eight years of a Bush presidency, is John McCain poised to remake the Republican Party? And a look back at the Denver Democrats. What Barack Obama's big speech says about his strategy for the fall.

The "Journal Editorial Report" begins right now.

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

In a major surprise, John McCain announced Alaska's Sarah Palin as his running mate yesterday, saying that he's found in the 44-year-old first- term governor a fellow maverick and political reformer.


SEN. JOHN MCCAIN, (R), PRESIDENTIAL CANDIDATE: She knows where she comes from and she knows who she works for. She stands up for what's right and she doesn't let anyone tell her to sit down.

She's fought oil companies and party bosses and do-nothing bureaucrats and anyone who puts their interests before the interests of the people she swore an oath to serve. She's exactly who I need.


GIGOT: Joining the panel this week, Wall Street Journal columnist and deputy editor Dan Henninger, editorial board member Jason Riley, Washington columnist Kim Strassel and in St. Paul opinionjournal.com columnist John Fund.

Kim, you advised John McCain to pick Governor Palin. Now you have to defend yourself. What does she bring to this ticket? 44-year-old, 20- month governor?

KIM STRASSEL, WASHINGTON COLUMNIST: She's a moose hunter! I think you've got to look at this strategically. Look at who Sarah Palin is. You know, you have a Republican base that continues to be very demoralized about corruption, about overspending. This is a woman who has staked her claim in Alaska on ethics, on spending reform, on getting rid of earmarks and corruption. She's probably going to have an appeal for independents who like her ideas of good governance, that she's an outsider from Washington. She's going to strengthen John McCain on the social conservative front. She is a mother of five children, pro-life and the social base is going to like that a lot. This adds a lot to his ticket.

GIGOT: All right, Jason, what's the down side?

JASON RILEY, EDITORIAL BOARD MEMBER: All true what Kim said, but I think she brings diversity to this ticket which is important. There are a lot of disgruntled Hillary Clinton supporters out there. This is a play for some of those voters. Also, this would be difficult for Joe Biden, the VP Democratic nominee, to go after her very hard, a mother of five, that is. It won't look very good.

GIGOT: You're saying that's an asset.

What about the risks, Dan? Isn't this risky in the sense she doesn't have a lot of experience, hasn't been on the national stage. We know what the media can do to particularly to a Republicans who make any mistake.

DAN HENNINGER, COLUMNIST AND DEPUTY EDITOR: That's right. The presidential election is truly the big leagues. That was one of the arguments made on behalf of Mitt Romney. He knew the drill. He had been out there. He had been vetted. And by and large he was a successful candidate as a candidate. Sarah Palin has never been on the national stage. She is — first of all she has to learn the policy details quickly.

GIGOT: Particularly foreign policy. She has to debate Joe Biden. Already you can here the Democratic talking points, saying, boy, I'm looking forward to that debate, Biden versus Palin on pronouncing the name of Saakashvili, Georgia vs. Russia.

HENNINGER: She may only talk about foreign policy for 15 minutes in that debate. Look at the fishbowl this people campaign in. She will be followed every waking moment. If she stumbles it can just blow up in John McCain's face.

RILEY: I think the biggest criticism is that she undermines one of John McCain's strongest arguments against Barack Obama which is that he's too great.

GIGOT: John, what about that? Doesn't this take the experience argument off the table for John McCain? John Fund?

JOHN FUND, OPINIONJOURNAL.COM COLUMNIST: We all saw, Paul, the experience argument didn't work when Hillary Clinton tried to use it against Barack Obama. This is more of a change election than an experience election. Having said that, I think Sarah Palin has an argument to make. She has more executive experience than John McCain, Barack Obama, and Joe Biden put together.

They have never run anything other than a senate office.

STASSEL: She also runs more troops, the Alaska National Guard.

GIGOT: I don't know she wants to use that as an argument, Kim. The National Guard is not quite the same as the 82nd Airborne in a foreign...

STRASSEL: I recognize that.

RILEY: But she's also, on the plus side, helped John McCain in a very important way. She has energized conservative base. That was a big problem for McCain. A lot of top radio folks like Rush Limbaugh are excited about this pick and that's important.

HENNINGER: You know what's interesting, Jason, was...

FUND: Paul, Paul, I have...

GIGOT: Go ahead, John, go ahead.

FUND: I have to tell you, I spoke today at a major gathering of conservative leaders. They gave her a standing ovation and she wasn't even in the room! She has lifted up the conservative movement. I'm shocked how enthusiastic people are in the base. I think this is a game-changing nomination.

GIGOT: Kim, let me ask you about her reform credentials. She comes out of Alaska, which is a one-party state essentially. Republicans dominate that state. What did she actually do that would say, you know what, she is a reformer?

STRASSEL: You know, she got appointed to the state commission that oversees oil and gas leases. And she called out a fellow commissioner on ethics charges. The governor at the time, Frank Murkowski, didn't back her up and she resigned in protest. She then turned around and, running in part on that, on ethics and corruption, she ran against Murkowski, beat him, went on to beat the Democrat. She has made ethics a hallmark. This is a state where corruption is rife. Look at the investigations going on at the moment. She has made this her standard.

GIGOT: Dan, isn't that a contrast, pretty good favorable contrast on Palin taking on her own party's political machine in the state of Alaska to what Barack Obama did not do in challenging the daily big-city Chicago Democratic machine? That's also a one-party city.

HENNINGER: Yes. And that has been written about, that Obama really never challenged the Chicago machine. The other piece of this is Washington. I think the main reason the voters are upset with Washington is not necessarily the Republicans. They just think that Washington has itself become a national machine, a political machine. And this woman is bringing credentials — it plays naturally to John McCain's basic instincts. He wants to be a reformer and now he has a woman who can run with him on that.

GIGOT: John, let me ask you about performance issues. You've got 65, 67 days before the campaign. She's got to perform. Any little mistake she makes campaigning will be magnified by the media to say she's not ready for prime time. Doesn't she have some real performance tests ahead?

FUND: Absolutely. But she starts from low expectations. Let me tell you, in Alaska, she has mastered the art of the political symbol. When she became governor, Paul, the first thing she did was fire the official sedate chef for the governor's mansion saying I can make sandwiches for my own kids and she sold the state jet on eBay. You cannot beat political symbolism like that.

GIGOT: John, thanks.

When we come back, as Republicans head to St. Paul, we'll look at the party after eight years of a Bush presidency and the challenges facing John McCain next week and in November.


GIGOT: As final preparations are made in St. Paul for the start of the Republican National Convention Monday, we're back with a look at issues and personalities that will drive Republicans next week and beyond.

John, the Democrats did everything they possibly could to link John McCain to George Bush and Dick Cheney at their convention in Denver. Both the president and vice president are speaking Monday at the Republican convention. How should McCain handle them? After they speak, what should he do, ignore them?

FUND: Look, I think the Democrats did a good job of attacking John Bush McCain, which is morphed both candidates into the same person. But I think John McCain has to go out and simply say, look, you remember I ran against George Bush in 2000. I'm my own man. I support the president when he's right but I've also differed with him. You know the issues. You know I'm my own man. That is my brand in politics.

I think John McCain is going to go up for the next two months against the Democratic attack machine and put his 30 years of maverick, sometimes maddeningly maverick views on the table and say you choose, who's the real John McCain.

GIGOT: Jason, there's one statistic Barack Obama put on the table. He said John McCain has voted with George Bush 90 percent of the time. How does he handle that voting record?

RILEY: I don't think the Republican Party wants to hear John McCain run completely away from the president. So I think part of what McCain needs to do is talk about what Bush has done right, on things like the surge, for instance, which is working.

GIGOT: In Iraq.

RILEY: In which McCain was for and which Bush had to fight some members of his own party on but mainly Democrats on. You talk off what Bush has done right. Domestically, you talk about some of Bush's missed opportunities, health care, social security, things that you would try to get done that Bush was unable to get done.

GIGOT: What about the reaction to 9/11? Should he put on the table the fact that we haven't been attacked again since then? Should he make that fight over security a central point?

HENNINGER: I think he should. Indeed, that is a strong point of George Bush's. Let's not overstate how bad the Bush presidency has been. There have been achievements...

GIGOT: Yeah, but its approval rating is about 30, 35 percent.

HENNINGER: That may be. But it would be out of character with John McCain to abandon the president. It would be out of keeping with his point of view. Secondly what he really ought to do is go in and say, look, my differences with this president were overspending. He didn't use his veto power. I will use the veto.

GIGOT: Kim, when John McCain talks about making a party a reform party and with his pick of Governor Palin, looks like that's big them. What does he mean by that? Where will he reform where George Bush didn't?

STRASSEL: This is what he's got to do at the convention. Barack Obama went to his convention to introduce himself to the country, reassure them about his experience. This country knows John McCain. They know he has experience. He needs to stretch this reform message.

GIGOT: What does it mean, reform what? Health care? What?

STRASSEL: Yes. It's a whole gamut of things that didn't get done unfortunately because there was a focus on national security with the last president. So it's reforming health care, putting consumers back in charge, reforming the tax code, making it more flat, going out there and dealing with earmarks and corruption and the government profits, which people are so unhappy about. That's got to be his reform message, more power to voters and getting Washington working again.

GIGOT: John Fund, the Republican Party has been shrinking the last four years, losing members, particularly a lot of middle class, working class voters. How does John McCain get those back with an economic message?

FUND: Well, he's the only Republican who has significant strength of Independent voters right now. The Republicans have not netted the right person for that job. He basically has to say we do not think big government is going to work to solve your problems. It never has and it never will. And if you thought the government messed up Katrina and other things these last eight years, wait until they get their hands on health care, wait until they get their hands on your tax dollars, including your capital gains, big government is not going to make a bad situation you're unhappy with better. You want change? You are going to have to pick the change I want, not the change Barack Obama wants.

GIGOT: Does he have to run, briefly Jason, against the Republican Congress? The Republicans and Democrats of Congress?

RILEY: I think it would be smart to do that given Congress's approval ratings right now. But he also needs to emphasize how liberal this Democratic ticket is. Joe Biden and Barack Obama are two of the most liberal members of Congress. He should emphasize that. Biden is a product of the unions, just like Obama. He's a big spender. He's anti-corporate. He should drive that home.

GIGOT: As Republicans flock to St. Paul, Democrats head home from Denver. What last week's Democratic convention tells us about that party's strategy for the fall.


GIGOT: America's got their closest look yet Thursday night at Democratic nominee Barack Obama. His speech before an adoring crowd of 85,000 at Denver's Invesco Field was as much coronation as nomination. But did it tell us anything about how he will govern?

You were out there in Denver with me and the rest, Dan. What did the speech and the convention tell you about their strategy for the fall?

HENNINGER: We do recall that speech after speech attacked George Bush. And a lot of us have been sitting around as they did this, this week several weeks, saying but George Bush is not running again. John McCain is the candidate. Nonetheless, Democrats keep bringing up George Bush.

What I took away from Obama's acceptance speech was that what he and the Democrats are going to do is run on the idea that the country is on the wrong track. I mean, the number of people who think that is huge. It has a lot to do with the current economic anxiety, the idea that they have beaten down George Bush's reputation. His approval rating is low. They have to make an argument the country is in bad shape and they did make that argument.

GIGOT: I thought, Jason, he really pitched that speech. It was — he didn't have the highfalutin rhetoric. It was a lot less grandiose. But he made it almost traditional Democratic speech.

RILEY: Exactly. Exactly.

GIGOT: It was as if they are trying to pitch this election as a choice between a standard Democrat and a standard Republican and fit McCain into that standard Republican box. They figured Republicans are so unpopular, that's how we beat McCain.

RILEY: Right. What we found out from the speech is Barack Obama's Democratic politics are pretty standard issue. You can't run forever on these vague notions of change. You have to eventually produce some details. That's what he tried to do with this speech. It was smart to do that. The problem is that once we heard those details, it's the same thing we've been hearing for years from the left. And he's got a problem there.

GIGOT: John Fund, did Obama create an opening for McCain on that point by talking about — in relatively vague terms but with some specificity on some issues like taxes — what his agenda is going to be? Is that something McCain can attack?

FUND: Yes. But, remember, there's the old Barack Obama that had much bigger tax increases than the current Barack Obama has. The current Barack Obama says 95 percent of you are going to get a tax cut. That's a good line. In addition, the dogs that barely barked during that speech, Paul, abortion barely mentioned, gun control barely mentioned, global climate change barely mentioned. Barack Obama is shedding every issue that he thinks will cost him votes in the fall. It's a very clever strategy.

GIGOT: John, if he's not running on those, how are you going to attack him? Hasn't he given himself some insulation by not raising those issues?

FUND: I agree. He's going to be the elusive mystery man of the debate. That's going to be John McCain's challenge because this is a race between Barack Obama attacking George Bush and John McCain trying to find out who the real Barack Obama is.

GIGOT: What about the doubts, Kim, about Obama's thin resume, the fact he's only four years out of the Illinois senate? Did they bulk that up enough? Did they give Obama enough heft with the many speakers at the convention? Bill Clinton said flat out he is ready to be president. They said the same things about me in 1992. I turned out all right. Did that do enough to help Obama?

STRASSEL: Well, you know, they certainly tried. I thought the most interesting part was the video they ran before Mr. Obama spoke in which they got a bunch of state legislators, who actually tried to talk about some of the things he'd done in the state senate, which we don't know much about at all.

I actually thought his speech was interesting and Joe Biden's for what this campaign is worried is still their weaknesses, which is their connection with white working class voters. If Joe Biden mentioned his roots from Scranton one more time, I didn't know what I was going to do. This is very much they're talking about economy, kitchen table issues. You had his line, which I thought was very important in the end, where he was talking about personal responsibility. This is all pitched at this group.

GIGOT: All right, Kim.

Very briefly, Dan, the Clinton psycho drama, is that over?

HENNINGER: It's never over with the Clintons. They'll be back. I think her speech was intended to say to other Democrats, if he loses, don't even think about challenging me for the nomination.

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


GIGOT: Winners and losers, picks and pans, "Hits and Misses," it's our way of calling attention to the best and the worst of the week.

Item one, further proof, Dan, that Washington is broken?

HENNINGER: That's right, Paul. You want broken, I'll give you broken. Earlier this week the computer system that the Federal Aviation Administration uses to send out flight plans broke down, which meant that flights were grounded all over the United States because air traffic controllers had to verbally give the flight plans to the pilots while they're trying to keep the planes from flying into one another. Admittedly, the FAA is trying to upgrade a system with 40,000 pieces in it. When you talk about fixing government, you almost have to laugh. The FAA, FEMA, Medicare, these are big, sprawling, slow moving bureaucracies. You have to wish they don't fall over and crush people. Fix government? The only way you can fix government is make it smaller.

GIGOT: Dan, thanks.

A hit to U.S. troops in Iraq as another important milestone is reached — Jason?

RILEY: Yes, a very important milestone. This is a hit for U.S. forces. We are about to give back control of Anbar Province in Iraq, back to the Iraqis. This is a huge deal. Anbar was the heart of a very bloody Sunni insurgency not that long ago. We've cleaned up the place. Violence is down. This will be the 10th of 18 provinces going back to the Iraqis. General Petraeus, the commander of forces over there, says two more provinces should be back in Iraqi control by the end of this year. This illustrates that progress is being made over there. But it also speaks to the idiocy of Barack Obama's plan to bring our forces back home regardless of what's going on on the ground.

GIGOT: All right, Jason, thanks.

Finally, a miss to our old friend Senate Majority Leader Harry Reid — Kim?

STRASSEL: Paul, the Republicans are hitting so hard on the drilling issue that the Democrats are starting to get a little desperate for...

GIGOT: Drilling for oil and natural gas is what you mean, right? Yes.

STRASSEL: That's right, drilling. So the winner goes to the Majority Leader Harry Reid, who out in Denver this week — his latest reasons why we don't drill is over the last hundred years he said it was all about how oil drove us to war. And he used as one of his prime examples, the Nazi invasion of Russia. Not only is this a bizarre reading of World War II. I'd argue that when the Democrats have to start turning to Hitler as their excuse for why we don't drill at the outer continental shelf, they're at the bottom of the barrel.

GIGOT: All right, thanks, Kim.

Remember, if you have your own "Hit or Miss," send it to us at jer@foxnews.com .

That's it for this week's edition of the "Journal Editorial Report."

Thanks to my panel and especially to all of you for watching.

I'm Paul Gigot. We hope to see you right here next week.

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