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Europe, The Economy and The Election

The Journal Editorial Report

Paul Gigot: This week on "The Journal Editorial Report," "America Alone," a new book, says the United States will be the last line of defense against a growing tide of Islamic fascism. Plus, the good economic news keeps coming. With 17 days until Election Day, will rising take-home pay and stock prices boost the Republicans? And Tennessee Democrat Harold Ford Jr. makes a surprisingly strong run for the Senate in Tennessee. Those topic, plus our weekly "Hits and Misses," but first, these headlines.

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

"America Alone: The End of the World as We Know It" forecasts a dark future in which the nations of Old Europe fall to Islam fundamentalism, and the United States remains the last Western democracy. Earlier, I spoke to the author, columnist Mark Steyn.

Gigot: In your book, you write that "much of what we loosely call the Western world will not survive the 21st century, and much of it will effectively disappear within our lifetimes, including many, if not most, European countries," end quote. That sounds like a doomsday scenario. Why don't you explain that?

Steyn: It is. I've tried to be cheerful, but it is hard to be cheerful about apocalyptic-type stuff. And this is what it is. Basically, 17 European countries have what demographers call lowest-load fertility, from which no society has ever recovered. That means they are basically not having enough babies.

And the way Europe is set up, they have these unsustainable social programs and welfare, and they imported the babies that they didn't have. And they imported them essentially from the North Africa and the Middle East. So we're seeing one of the fastest population transformations in history, whereby an aging ethnic European population is being replaced by a Muslim population. And the Muslims understand that, in fact, Europe, as they see it, is the colony now.

Gigot: Is there any way that Europe can avoid being Islamacized in this way?

Steyn: Well, I think, to be honest, some of the Eastern European nations didn't throw off communism in order simply to throw their lot in with the doomed French and Belgians and Dutch 15 years later. And I think Poland and Hungary and so forth will be determined not to go down the same path that the West Europeans have.

But basically, an awful lot of the Western European political class has given up. You read extraordinary statements by Dutch and Swedish cabinet ministers essentially conceding that the future of their country is as a Muslim entity.

Gigot: Is the problem only demographics, or is it somehow broader, a kind of lack of intellectual confidence, cultural confidence, in what we used to call, at least, the West?

Steyn: Yes, I think so. I think basically, the lack of babies is only a symptom of the real problem. You know, American exceptionalism is a very practical term. We celebrated the birth the other day of the 300 millionth American, and God bless him. That is great news, because the most indispensable resource of all is human capital, and that's what Europe is running out of. And even as they are in that situation, the newspapers, reacting to the birth of this 300 millionth American, regarded him as some sort of abomination who is simply going to add to the appalling U.S. consumption of the world's resources. They said it's an unsustainable level of population. In fact, the problem they have in Europe is they got an unsustainable lack of population. It is the complete opposite.

Gigot: I remember during the Cold War, there was a strain of pessimism about whether the West would prevail in that conflict. James Burnham, the great strategist, wrote about the suicide of the West, and some people, as late as the late 1980s, were still saying we're going to lose the Cold War. Yet we won that because the West had a great--demonstrated a lot of resilience, democratic resilience. Why is this conflict, in your view, different?

Steyn: Well, I think we understood then, anyone who met Czech or Hungarians or Poles or any of these people on the other side of the Iron Curtain during the Cold War, understood that they actually had no dog in the fight. They weren't interested. They weren't interested in conquering the world.

And I think it is different now. I think the average Muslim does, in some basic sense, when he emigrates to the Netherlands, when he emigrates to the United Kingdom, when he immigrates to Canada or Michigan, wants eventually to live in a Muslim society in those places. And he expects effectively--I am not saying he wants to fly planes into buildings or any of that nonsense--but his expectation is that the host society will assimilate with him rather than the other way around. And that's a profound challenge in a way that communism wasn't.

Gigot: But other than more babies, more Western babies, how do you combat that in the United States?

Steyn: Well, I think you have to stand up and resist what I would call the phenomenon of creeping Shariah. Because I think when you see things like, for example, England feeling that you can't fly the English flag because the Cross of St. George is offensive because of the Crusades--I mean every time you concede a little inch of ground like that, you are basically surrendering piecemeal. And Muslim leaders--not just terrorists, but Muslim governments--draw the lesson from that, that the West is ideologically insecure. And not just Muslims, but all kinds of other fellows, from Chavez to Kim Jung-Il actually, see that too.

Gigot: All right, Mark Steyn, thanks for being here.

Steyn: Thanks very much, Paul.

Gigot: When we come back, the week was full of good economic news. How will it change the political landscape three weeks before Election Day? Plus, Democratic Harold Ford Jr. is trying to stage an upset in Tennessee. Our panel weights in on those topics, and our "Hits and Misses" of the week when "The Journal Editorial Report" continues.

Gigot: Welcome back. Between the Dow flirting with 12000, a sudden drop in jobless claims, and the continued decrease in gas prices, the week was full of good economic news. So why are Democrats still bemoaning a bad economy, and why aren't Republicans running on their record?

Joining the panel this week, Wall Street Journal columnist and deputy editor Dan Henninger, as well as Wall Street Journal editorial board members Kim Strassel and Steve Moore.

Steve, the economy, good news. This week, news that real wages are finally rising after some time. What role is the economy playing this year, if anything, in the election?

Moore: Well, it's not just this week that the economic news has been good. It's been now 3 1/2 years of really good economic news. I mean, 6 1/2 million new jobs, with energy prices falling. It's no longer a wageless expansion; in fact, wages are rising now. If Bill Clinton had these numbers when he was president, he would be doing cartwheels down Pennsylvania Avenue. And so it's a--it's the greatest story never told. And the Republicans are doing a very poor job of sort of relating this good economic news to their policies. And I think they are directly related to the investment tax cuts.

Gigot: That passed in 2003.

Moore:: Yes.

Henninger: Well, I think there is a sense in which probably the Republicans, the president, have to think about truly explaining the economy. We're in a new kind of economy. We have written about--we call it the Dangerfield economy. Rodney Dangerfield was this old guy, and, you know, the former economy was old-line manufacturing, big companies, people worked there all their lives. I think we're living in the "40-Year-Old Virgin" economy, which is to say, as Brian Wesbury wrote on our page the other day, a lot of self-employed people, people--small contractors, entrepreneurs. And those people live in a little edgier kind of economy, a little more uncertain about where it is going.

And so I think the president and the Congress have to try to talk about the globalized economy, explain to people it is changed, and try to help them understand the energy behind it.

Strassel: That's especially important because there are a lot of things that are giving some people pause right now. You know, people tend to value their own worth on their house price; house prices have been going down. Interest rates have been creeping up. Gas prices have been very high.

And in addition, you have a lot of media commentators out there who are Bush critics that have been doing their best to say this isn't a recovery. They were saying, you know, there was no recovery. Then they were saying it was a jobless recovery. Then the jobs started to roll in. And then, they were saying that it is a wageless recovery and that the wages aren't--now, the wages are creeping up.

But the Republicans have to be better about explaining this and counteracting some of the criticism.

Gigot: Let's talk about the jobs, Steve, because we have, what, 4.6% unemployment, which is lower than the average of the '90s, the '80s, the '70s. Now we have real wages, after-inflation wages, rising at a 4% annual rate. So it is not a wageless recovery. What are the sources of the anxiety or is it made-up anxiety?

Moore:: Well, I was just in Michigan this week. And that's one of those states where this expansion really has bypassed.

Gigot: Seven point one percent unemployment.

Moore:: Right. Fifty percent above the national average. And it gets to your point, Dan. It's that kind of old manufacturing sector that is dying off. But in the rest of the country, you have this vibrant sort of technology-driven economy. Even when it comes to the issue of auto jobs--I told the people in Michigan, we're not losing auto jobs in America. You're just losing them here in Michigan.

Gigot: Losing them to Ohio and Tennessee and Alabama and Ontario.

Moore:: Exactly. They're all going south to more pro-growth places. One thing to think about, just in terms of how the economy plays in the election: The last piece of economic news that comes out before the election is going to be the October unemployment rate. We now know from the unemployment insurance claims that the number's going to--big job gain. Bush is going to have some good news right before the election.

Gigot: In Michigan, you have two incumbents. Incumbent Democratic senator and governor. Can the Republicans use that against the incumbent Democrats in those elections?

Moore:: They are trying. They are trying to say, look--the ad that I saw in Michigan was that every eight seconds a job leaves under Jennifer Granholm and goes somewhere else.

Henninger: Well, let me give you a concrete example. Yes, a job leaves. A person has to move from, say, New York to California, or Michigan to Ohio. We have editorialized all year asking the Republicans to pass something called the Shadegg bill, which would allow insurance companies to sell insurance across state lines. So that you--it would be like auto insurance. You wouldn't have to worry so much when you were moving to another state about your health insurance. And people do worry about it, because it is a complicated subject for them to deal with.

Gigot: With the stock market doing so well, does this mean--and even in the face of what people think might be a Democratic takeover of the House or the Senate or both--does this mean that the investors really are not all--

Moore:: Well, that's the big question--

Gigot: --discounting a Democratic takeover?

Moore:: --because in the last three or four elections, the Republicans have really capitalized on this new investor class of voters. Those people have voted about 60% to 65% Republican. They may not do so this year.

Gigot: But if the stock market is doing so well, are they afraid--are they afraid of a Democratic Congress? Or are they not afraid?

Strassel:: They should be very concerned. Because look at the tax revenues, what we've got here: money flowing in, and it is because of these tax cuts. And we've now extended them for two years, but if you have a Democratic Congress, there is no way you're going to make them permanent. And that's what behind our economy.

Moore:: And don't forget--don't forget, Kim, what No. 1 issue is for Nancy Pelosi: canceling the capital gains and dividend tax cuts.

Gigot: All right, Steve, last word. We'll be back after this short break.

Coming up next, Tennessee Democrat Harold Ford Jr. is giving his Republican opponent a run for his money in the race to fill Bill Frist's seat. That and our "Hits and Misses" of the week when the "Journal Editorial Report" continues.

Gigot: Welcome back. In the perennial red state of Tennessee, Democratic Congressman Harold Ford is making a spirited challenge to the former Republican mayor of Chattanooga, Bob Corker, to fill the seat being vacated by Majority Leader Bill Frist. The most recent Zogby-Wall Street Journal online poll shows Corker with a seven point lead over Ford. But several other polls have put the Democrat ahead. And the race is expected to get tighter in the final two weeks.

Kim, you were in beautiful Eastern Tennessee this week. Nobody gave Harold Ford much of a chance a year ago. What's he doing right?

Strassel:: Well, one thing is, I mean, this guy is incredibly charismatic. He is a good politician. The TV cameras absolutely love him. So that has helped him a lot. And his competitor isn't quite as seasoned as him.

The other thing is, Harold Ford is running a really conservative campaign. He presented himself as very strong on social issues, pro-life, against flag burning, prayer in schools. And then on other things, he can point to times in his record where he has cut taxes, where he's--he's got support for the war in his record.

And on the other hand, his competitor, Bob Corker, is moderate in Tennessee. And he has not been able to get a lot space between himself and his Democratic competitor.

Gigot: Let's show an ad that Harold Ford is running that gives you a flavor of the themes he is running on. Let's take a look.

Ford: I started church the old-fashioned way: I was forced to. And I'm better for it. I'm Harold Ford Jr., and here, I learned the difference between right and wrong. And now Mr. Corker's doing wrong. First, spending millions telling untruths about his republican opponents, both of them good men, and now me.

Gigot: Well, has he cleared that ad in the church with Howard Dean?

[Laughter]

Moore:: You know, this is a serious race for the Republicans, because one way the Republicans have captured the Senate is by really capturing control of those Southern states. They can't allow Democrats to win a red state like Tennessee. So this is a real battleground.

Gigot: I didn't think Democrats were supposed to allow God in an election. Aren't we heading towards a theocracy, run by George Bush?

[Laughter]

Henninger: If Harold Ford gets into that Senate with those Democrats, it is really going to be pretty interesting. And you're right, he is not supposed to win down there. I mean, Bill Frist in year 2000 won 65% to 32%, and this is now neck and neck. It is really incredible.

And I think another thing going on here--you can see it in that ad--he's talking about, quote unquote, "a new generation of leadership." I think that's having an effect in some of these races. Because the older baby boomers--Bill Clinton's generation, the ones who are in Congress now--have shown to be completely inept and poor performers. And I think guys that age, Barack Obama and so forth, that voters are looking at them and saying, yeah, I think maybe there is--

Strassel:: You've totally hit on something. I mean, Harold Ford is so good at this, on the classic issues down there. You've got a lot of Republicans in the state who are not happy with the way that Republicans have done stuff. But they don't want to vote for the traditional Democratic sort of view. So you got Harold Ford. War, a great example--you know, Republicans aren't happy with the way things are going. They don't want to vote for a cut-and-run guy, though. So he is down there saying, I support the troops, I just think we need a new approach. We need to partition the country. This is sort of an in-between, independent view that resonates.

Henninger: He's running kind of a populist Southern conservative campaign down there.

Gigot: Let's look at how the Republican, Bob Corker, is trying to counter that, with one of his ads.

Announcer: Tennessee, the beauty of the land, the strength of her people. For years, she has produced solid leaders with vast experience outside politics. Senators like Howard Baker and now Bill and Lamar. Bob Corker is in that same tradition.

Gigot: Well, that's a biographical ad, Steve.

Moore:: This gets to the problem that Corker won't talk about the real core issues that usually win for Republicans, like taxes, right? I mean, he can't talk about that because he is tied with to tax increases.

Strassel:: Well, he was a finance minister under Sundquist, who was a Republican governor that it's not liked; he raised income taxes there. And he went to be mayor of Chattanooga and raised some taxes there. So that issue is neutralized.

Gigot: But what is he going to run on? What themes is he going to run on to beat Harold Ford? He's got to have something or than I'm an experienced person. That doesn't work in an election like this.

Strassel:: That ad, though, is kind of the new thing. They didn't get any traction on the I'm-a-conservative-you're-a-liberal thing. The new thing is I am an East Tennessean. I am one of you. And Harold Ford is part of the political machine. His daddy gave him his seat. He's been Congress for 10 years. He's Washington.

Henninger: He's trumped him or everything. Ford is for, quote unquote, "controlling our borders," quote unquote, "no amnesty for terrorists." He has gotten to the right of Corker on virtually everything.

Gigot: Well, Steve, is this the model, then, for Democrats to win in the South?

Moore:: It should be.

Gigot: Neutralize on social issues and neutralize on security issues?

Moore:: Yes.

Gigot: And then run a kind of populist campaign on the economic issues.

Moore:: Yeah. Run against the Democratic leadership. And also be pro-tax-cut. Be pro-growth.

Strassel:: Now, let's be clear though. One thing Corker does have in his favor is there is a lot of people that are a little skeptical of how genuine Ford is on a lot of these things.

Moore:: That's true.

Strassel:: You go back in his record. Recently, he's looked conservative. You go back, he's got votes, for instance, against a ban on partial-birth abortion. So a lot of people are going, Is he really this person or is he a closet liberal? What are we going to get?

Henninger: And Paul's point, he's going back to Washington to join a very liberal Democratic Party. What's he going to deliver for the state?

Gigot: He also said he would raise taxes on the rich, above $1.5 million. So he probably would vote for a tax increase if the Democrats support it.

All right. That's it. 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, a miss for New Jersey Sen. Bob Menendez--Dan?

Henninger: Right. Sen. Menendez is in a tight race in New Jersey with Tom Kean Jr., and since it's New Jersey, the issue of corruption inevitably comes up. Well, Sen. Menendez is from Hudson County, which has a glorious tradition of political corruption. And this has been coming up over and over. And in a recent interview with a reporter, Sen. Menendez said he was sick and tired of people cast aspersions--aspersions on the hardworking people of Hudson County.

[Laughter]

Now, this is what's known in politics as a pivot--changing the subject from political corruption to the poor hardworking people.

[Laughter]

What's going to happen in New Jersey? I think Tom Kean is going to win in a whisker. But I wouldn't bet the size of a New Jersey real estate tax on it.

Gigot: New Jersey. Louisiana North they call it. All right, thanks.

Next, a botched survey of Iraqi casualties--Kim?

Strassel:: Yeah, you've got to wonder why we even elect politicians when we have scientists to do their jobs for them these days. And this was a study in the Lancet medical journal, said that 655,000 Iraqis had died, largely because America had invaded the country. This was a ludicrous number, 10 times higher than the most accurate things that have been out there, and the study is now being picked apart.

So what's really going on here? Why do you put this out? Well, the editor of the Lancet wrote an op-ed last week, which was fairly revealing. He was defending the study and pointing out Iraq was a terrible misadventure that was all about territorial ambition and economic self-interest. That sure sounds like a political statement to me. And I think Americans are getting used to our scientists distorting their evidence for their open political convictions: this, global warming. But they better be careful, because pretty soon Americans might put them on the same level of trust as politicians.

Gigot: Finally, the fallout from last weekend's very ugly football brawl in Florida. Steve?

Moore:: Yeah. Last week the people of Miami went to a football game, and it turned into a Ali-Frasier fight. This was an ugly incident and an embarrassment to college football. Now Florida International, to its credit, suspended all of the players involved in the brawl. What about Miami University? A one-game suspension--a slap on the wrist, especially since they play Duke next week, which is the weakest team in the NCAA.

What was really embarrassing was the statement by Donna Shalala, where she said that she was not going to suspend these players, because she didn't want to throw them under the bus. And then, she said that we are going to have a zero tolerance policy in the future for these kinds of things. Now this is a university, Paul, that has had about 15 of these incidents over the last five years. In my opinion, Miami University is going to have to determine whether this is going to be an academic institution or football factory.

Gigot: Donna Shalala, the president of Miami University.

All right, that's it for this week's edition of "The Journal Editorial Report." Thanks to Dan Henninger, Kim Strassel and Steve Moore.


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