tv The Journal Editorial Report FOX News September 14, 2013 2:00pm-2:30pm EDT
>> president obama stands down. a look at his retreat and america five years after the financial crisis, what lessons have we learned and is our banking system any safer? and fracking and the poor, why it may be america's anti-best poverty program. >> this initiative has the potential to remove the threat of weapons without force, particularly because russia is one of assad's strongest alloys. i have, therefore, asked the leaders of congress to postpone
a use of force while we proceed this diplomatic path. >> welcome to the "journal report." that was president obama tuesday announcing he would provide a diplomatic force in syria, before moving ahead on a congressional vote on the use of force. but after weeks urging military action against the government to bashar al-assad, what does this retreat mean for the president's standing in the world and america's standing? let's ask "wall street journal" columnist and deputy dan heninger, washington columnist kim strassle and foreign affairs columnist bret stevens. this was described as the laurel and hardy presidency, not kind words. what would you sum up this woke? >> the laurel and hardy presidency. beyond that, it's the presidency bouncing off the walls. barak barak we just heard him say has now proposed if they
dispose of assad's weapons, we will have that behind us. one has to wonder who he consulted on this subject. chemical weapons are acting as though these are boxes of box in assad's library. it's the most complicated substance in the defense policy. we read the "wall street journal." it's had a wonderful front page story about something called unit 450 in syria. a highly sophisticated group in the syrian army which is disperseing the chemical weapons to 50 different sites. the idea that we're going to somehow find them and dispose of them is really as we say backless. so one wonders if the president is simply acting on ideas as they enter his mind. >> the argument from the white house is this was actually brilliant diplomacy. i'm in the making this up. that's what they are saying. now they are saying he can getry of the chemical weapons without having to go to war, for example, and solve the problem.
>> ye, well that's what the white house would think. in that reality, you remember how tony blair used to be described as bush's poodle? well, now, the president of the united states is vladmir putin's poodle. it might by a saudi's poodle. whatever resolution there is will have to be geerntd the russians an assad will be making demand. you have been seeing assad saying my demand has been no arming of the syrian rebels and no intervention. so we're going to get into this bizarre sort of middle eastern bizarre bazaar. >> bizarre, bizarre, if you will, in which the united states will be held hostage to the whim of a tyrant and his patron in moscow who writes op-eds to the american president what he may or may not say in speeches. >> ask him what is so striking the day after all of this went down the president went on
national tv to say, vladmir putin's good offices have now been opened to the united states, putin runs this op-ed in the united states essentially boating up obama. i don't think there is any other way to describe it. essentially, humiliateing an american president, taking him to task for saying that he used the phrase american exceptionalism. america is not exceptional any more than anybody else in saying, essentially, humiliateing him. what do you make of the reaction to all of this in washington? >> well, here's the problem. we talked about how obama was doing all this because he was in a box. he put himself in a bigger box. despite his speech he went on tional television and made the need for force against syria. he has given congress an exit here and there is very little chance if this does not work out the congress will take up a vote and actually vote. they were opposed to doing this anyway. now they see absolutely no
reason to. having talked to members of congress, both parties see him, they did not view this as a diplomatic stroke of genius. this could hurt him in other regards, too. >> so what you are saying is you think there is little likelihood the president will at the end of this go back to congress and say, well, the negotiations failed, we need to now act against syria. >> people were already opposed to giving him that authorization. what he has now done is allowed congress to run for the exits. what you are seeing are people talking about prior to his speech, prior to this offer from putin, people in congress were talking about maybe what we ought to do is have a vote on legislation, for instance, that requires assad to surrender his chemical weapons in 45 days. everyone in congress is now themselves looking at the diplomatic options. >> on this point, did you mention the bizarre, we have seen assad saying, look, i'm not going to agree to give up my chemical weapons unless you stop arming the syrian rebels and
essentially repuddiate any future possibility of the use of force. so these negotiations could go on a very long time. >> and people are taking notice all over the world. i think there is a palpable sensation if yourngs and particularly in the middle east, this administration is weak, this administration can be had. this administration is addicted to its own conceits. you remember the carter soviet invasion of afghanistan, to saudi arabia, but didn't arm them. >> that kind of weak signal that deeply troubled our allies in the region. if you were sitting in riyadh as a decision-maker or in jourm as a decision-maker. your american presidency was 40 months left to go and worrying seriously what will hatch in the absence of any fixed american guarantee. >> is there a way the american can retrieve this, dan. >> do you see it? >> i have to say, i have been covering foreign policy and for a long type, i have never seen a
fiasco from a u.s. president. >> i agreement i think he needs to stop running foreign policy in his own mind and bring people in to advise him on a larger strategy. he has to understand what a mistake this was. this president seems incapable of -- >> how do you retrieve it? >> look, one of the things he can simply say is we will have a red line, a ten-day deadline, these are my demands, if they're not met, i will act against syria, whether congress likes it, whether putin likes it. >> what are the chances you think? >> what makes matters worse is there are no adults in the room. you look at president obama's cabinet. do you see in kerry or chuck haggle or martin dempsey, serious people? >> i would say in the sent of kerry, he wanted to do something. i think the problem is the president is operating, he runs this thing, himself, that's one
. >> this sunday marks the fifth anniversary that investment giant lehman brothers touched bankruptcy, touching off a financial meltdown that brought the u.s. economy to its knees, five years out, what lessons have we learned from that time and is our banking system any safer? we are back with dan henninger, kim strassle and editor james freeman joins us. so let's ask that fundamental question, which i guess is the main issue here, five years later, are we safer from another meltdown? >> we wish. we'd like to say that we are. but absent a few minor reforms, we are missing the role of credit ratings, maybe we'll see
some reduction in the amount of debt banks can take on. basically what we've had is a codification of the 28 bailouts of wall street. now firms are officially, systemically important and implicit, too big to fail label. >> but wait, now, there has been more capital standards have been raised. banks have to keep more capital, which is a buffer between them and trouble. i think that's an improvement, isn't it? >> well, we'll see. that's not entirely clear how that finishes up. but i think that assumes that regulators know the right amount of capital and they've set the right rules on what counts is in terms of the risk of certain assets, a lot of variables there. what is really amazing is if you think of the outrage back in 2008, taxpayers finding out, we're standing behind investment banks, bear stearns, we are standing behind wall street treedr trading. >> bear stearns did go under? >> no, there was a rescue of the creditors and the shareholders that let lehman go, yes, aig
obviously an intervention, all the other banks, we now have the tax player explicitly behind wall street trading clearinghouse. >> five years later it feels safe, maybe it's too safe. because over those five years, we've had a growth rate of about 2%. it should be 3%. there is a sense in which the bank, the industry are supporting the status quo. very formulaic investing. there is no createtivety and creating new jobs. if we have long-term growth at 2%, we may be safe but we will be very sorrowful i think. >> no financial innovation. >> no financial innovation. >> the other thing that has not happened is any reform of fannie mae and freddie mac, the big mortgage giants that combined private profit with public risk. those things were put into conservatorship and they're
still in existence and now they're able to make money again, which gives congress the ability to spend that money and less impetus to reform. own process that those will be changed? >> no, this gets to the risk james was talking about having labelled all of these banks as systemically having to back them so that they cannot fail. fannie and freddie were at the heart of this crisis. they were political creatures and part of the reason we have this is because government exerted pressure on them to make loans to people who are not qualified to pay them back. when the crisis hit, it was an excellent opportunity to put them into receivership. instead, we put them into conservative where they are coming back to haunt the market. while the white house said they want to wind these energies down, even floefls they have, they've replaced them with other goeventties that would be involved in the private mortgage market. the problem we have here is we are now creating an even bigger
poll with banks, with clearing houses, with insurers that are getting an implicit backstop and inviting politicians to meddle. >> and to be fair with the white house, the president has said he would like to do away with fannie may and freddie mac. they have both parties in congress, it's hard for them to resist the home builders, the realtors, the mortgage brokers, the panoply of lobbyists. >> they're strong. it is shocking to think five years later the government is standing behind more of the mortgage market. >> is that 90%? >> of the market. >> remember, the only government could create a problem like 2008 where normally there is a pricing mechanism. there is a diversity investments. investors, sure, they're prone to irrational exuberance, but there is a lot of options in the market. government says housing, housing, housing, incentives for individuals, for investment banks, for everyone for the get
into this market. that's one of the reasons the price was so difficult to deal with. >> the biggest reform was dodd-frank, it was operated on the premise that the regulators who missed the last crisis, not to mention all previous crises will be so much smarter with new power that they'll predict the next one. that's the premise. >> yeah. >> they have more power. >> yep. >> but is it likely to happen? >> i don't think it's likely to happen. regulators, by definition, look into the rear view mirror and this was a bubble. it was a housing bubble. what is the one biggest financial phenomenon out there right now? it's the fed's zero interest rate policy, which has run for four years. the greatest policy experiment in history. as soon as they talk about tapering, the market comes down. if things go back with that, are the regulators going to jump on the feds back? don't count on it. >> good question. we'll wait and see when we come back, fracking and the poor. why america's natural gas bomb
. >> well, it turns out america's oil and natural gas boom may wind up being its best anti-poverty program as well. according to a recent study, lower utility bills have leaded to a windfall for american consumers, especially the poor. hoping to add $1,200 to real disposable income last year alone. editorial member jones us with the details. joe, give us the details here, what do the studies show? >> what happened is gas encentives from $7 to $2 or $3, those lower raw material costs have been passed down the energy cheney. >> there is not gasoline, this is natural gas.
>> this is natural gas largely from america's fracking renaissance and as in terms of lower home heating bills, utility, electricity bills, lower prices for goods and services, those gains have been reached by consumers and $1,200 in real disposable income added in 2012. >> fracking is a new kind of drilling and horizontal drilling, instead of drilling straight down, it allows them to drill and go across for hundreds of yards or farther to find new miles, new sources of energy. kim, what's the political consequence of this kind of study, this kind of news in washington? i would think the people who care about the quality issue, in particular, with i is a whole lot of folks down if your neighborhood, are, they'd be joyed at this. >> well, you would think, though, especially when you look at other comparesons here, one of these studies showed that the
lowering of natural gas prices took about $10 billion off the household bills of low income americans. now, compare that, for instance, for one of the federal government's biggest programs to help the poor called the low income all meeting assistance program, liheap, we spent about $6 being in subsidy payments to low income americans to assist with their heating bills. so, in essence, fracking and lower natural gas prices did three times more for these people than the federal government program. now, i think there are a lot of republicans who see this. they have been very forceful about trying to get, for instance the federal government to not crack down on fracking on federal landsch they've been encouraging home state governors to do this. you know, democrats are very much in control, often to the environmental community, which continues to hate this fracking operations. >> and another benefit here, joe, is the benefit of lower natural gas costs is to make
american manufacturing industries more competitive, some more jobs here in the united states. >> right. it's led to a manufacturing resurgence in places like rural pennsylvania, youngstown, ohio. these are often poor, depressed areas. this is leading to more jobs, far more than the 47 federal job training programs, for instance, and really a boone for a lot of displaced workers. >> and dan, miracle of miracles, even california, governor jerry brown is saying, you know what, maybe we ought to investigate our own natural gas reserves, using this technology. >> well, california's legislature voted this week in a way that might allow fracking. >> that is a miracle. >> meanwhile, at the other end of the country, new york state, they have a moratorium on fracking, chesapeake announced it is throwing in the towel on 13,000 acres of leases that they have. they're leaving the state and no
other energy companies are interested in coming into new york state, which may be the ka boos on the fracking train. >> so who behind this moratorium 134. >> well, andrew cuomo will not lift the moratorium. he is opposed by bobby kennedy, jr., yoko ohno and matt damon. those four people are listed as the primary opponents of new york. >> governor cuomo, andrew cuomo will not stand up to them. even despite the economic benefits to a new york upstate in particular. this is a way for new york city that has been on hard economic times for a long, for many years. >> i'll tell you, palm, some of those towns up in upstate new york look like east berlin during the cold war. they are devastated. they are dyeing to try to get access to this energy. >> all right. a sad story. we have to take one more break when we come back, hits and misses of the week. ugh! actually progresso's soup has pretty bold flavor. i love bold flavors!
. >> it's time now for hits and misses of the week. bret, first to you. >> this is a hit for pope frances who this week took possession of the new popemobile. it has 186,000 miles on it. it's a 1984 renault, the gift of a priest from verona who had used it to minister in some of the rougher neighborhoods of his city and handed it to the pope. we've gotten used to popes moving around in huge motor canadi motorcads. i think it's a good sign about the pope and a good thing for the church. >> joe. >> paul, is it for once new york city democrats who know a sociopath when they see one or two. this week, eliot spitzer lost his bid for comptroller and anthony weiner for mayor, now that they're returned to private life, hopefully for good,
hopefully our politics will be healthier or at least less moved. >> okay. >> i thought this was going to be a menace. now i think it's a hit to the afl-cio for truth in advertising. at their convention this week, the big union voted for lots of new members who don't actually work in places that are unionized and could even be not in the work force at all. sort of like the brothers of delta kai, it means big dues, decarolinaing membership. so i think this is going to be helpful. it's going to make clear unions are less and less about speaking for blue collar people, more politicos. >> basically, what they're saying is you could donate to the afl-cio. you can get a mug. >> a tote bag. >> like a pbs fun ride. >> did you ever say what's in it for the afl-cio? when you have a political axe to