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After the Midterms

The Journal Editorial Report

Paul Gigot: This week on "The Journal Editorial Report," the fallout of the immigration debate on the Republican Party. Did it cost them votes on Election Day? We'll have a debate. Plus, Tony Blair wants the U.S. to negotiate with Iran and Syria about Iraq. Do these countries really want to help? And the Big Three CEOs meet with President Bush. But are they relying on their Democratic allies to save the auto industry? Those topics, plus our weekly "Hits and Misses." But first, these headlines.

Gigot: Welcome to the "Journal Editorial Report." I'm Paul Gigot. For the past year, Republicans have fought with Democrats and among themselves over the difficult topic of immigration. Restrictionists have advocated the construction of a fence to be built intermittently between San Diego and El Paso. Democrats and more-moderate Republicans have also championed tighter security at the border, but in combination with a guest-worker program. But on Election Day, restrictionists like J.D. Hayworth and Randy Graf in Arizona, went down to defeat, leaving some to ask if the debate over immigration actually did damage to the Republican Party.

Joining us now to debate this issue, from the Manhattan Institute, Heather Mac Donald, and from The Wall Street Journal, editorial board member Jason Riley.

Heather, welcome.

Mac Donald: Thank you, Paul.

Republicans made immigration a very big issue in the last year. Do you think it helped or hurt them on Election Day?

Mac Donald: I think it had very little effect, Paul. because just as the national security issue didn't help them, the fact is that the Iraq war smashed everything else, as well as frustration with corruption.

I think it's clear, had they run on amnesty and more liberalized rules, I think the Republican rout would have been even stronger. So I think clearly immigration is not a wedge issue for voters, but I don't think you can say that it hurt them. It didn't help them necessarily in individual races. You know, one can argue either way. But overall, I think the predominant issue that voters were frustrated with was the Iraq war.

Gigot: Well, Jason, they passed the secure fence, 700 miles of fence on the border. What do you think?

Riley: Well, they tried to make it a wedge issue in several races, and it didn't work. I mean, they lost the majority in the House and the Senate. And I also think it's reflected in the number of Hispanics who voted for Republicans. That number went down markedly. Bush got more than 40% of that vote just two years ago. It went down to less than 30%. So I think it not only didn't work, it might have backfired, and there could be some long-term repercussions.

Gigot: Such as?

Riley: Well, Republicans--some Republicans--it's hard to paint with a broad brush because different people bring different agendas to this debate. But there are a lot of Republicans who believe that anti-immigration is a political winner for the party. They envision almost some sort of Southern strategy for Hispanics. It's like using anti-immigrant sentiment to rile up the white vote. And I don't understand the need to do that. Hispanics have proven themselves to be a swing voting bloc. Like I said, Bush won 40-something percent of the vote in 2000.

Gigot: Forty-four percent in 2004.

Riley: Why give that away to Democrats? You can go work for that vote and win it. And yet, there's just a lot of Republicans who are convinced that more immigration means more votes for Democrats, and that's why they oppose it.

Mac Donald: I would hope that this is not purely an electoral issue, a political issue. I think the Republicans are responding to real frustration in the public at the massive violation of the rule of law. And again, I can tell you, if Republicans now continue their decades-long indifference to the public's frustration with illegal immigration, they will never get the House back.

Look at what happened in Texas just this week. You had, on the first day of the new legislative session, a spate of bills being introduced responding to the public's anger about illegal immigration--no driver's licenses for illegals; no welfare benefits for the children of illegals; the police should cooperate with the federal government in enforcing immigration law. The Texas legislators sure did not read this as a pro-amnesty vote.

Again, you could choose any Republican issue that didn't tip the election in their favor. I don't think The Wall Street Journal now is going to back away from cutting taxes or strong national defense, because that didn't save the Republicans.

I just think the context was not about immigration. Had this been in the spring, when we had our amnesty rallies, it may have been different. But this was not an election about immigration. It was an election about the Iraq war. And you are not going to see Republicans change their course and start advocating amnesty because that--if we talk pure politics, that is going to be a loser.

Gigot: But you're equating amnesty with a guest-worker program, right? How do you solve the immigration problem if you don't solve the issue of the incentives that people have to come here? In other words, if you just have an enforcement-only policy, what incentive do you have for people to actually--they're still going to come for jobs because we know that they earn more here. Don't you have to do something about that incentive?

Mac Donald: The incentive is the future amnesty. At this point, people know that if they wait it out long enough, at some point the Congress is going to grant an amnesty. The incentive is also the lack of enforcement--that basically, once you cross that border, you are home free. The entire country is virtually a sanctuary zone.

This is why I think we need to finally, for the first time in decades, start enforcing the immigration laws. You can't say that that hasn't worked, because it's never been tried. There's never really been interior immigration enforcement since '86 when that law was passed. So let's do that first. And then, we can see what the need is for other measures.

Gigot: Jason?

Riley: Well, I'm sort of curious what the harm being done is to the country by the presence of these immigrants. I mean, we have 4% unemployment. We have--the Dow set new records this week. These people are obviously here working, not stealing jobs. They are filling jobs. I'd like to know who is in the country. So what's the best way to do that--to bring them to the above-ground economy?

But my problem isn't that they are here. It's that they are here illegally. And some way to legalize their presence, I would be all for. And I think, so would the American people.

Gigot: All right, Jason and Heather, we've got to leave it there. Thank you both for being here.

Riley: Thanks.

Mac Donald: Thank you.

Gigot: When we come back, Tony Blair wants a new partnership with Iran and Syria. But is this the answer the Middle East is looking for? Plus, the Big Three are looking for help in Washington. But does Detroit actually hold the key to its own survival? Our panel weighs in on those topics and our "Hits and Misses" of the week, when "The Journal Editorial Report" continues.

Gigot: Welcome back. British Prime Minister Tony Blair said this week that it is time for the West to form a new partnership with Iran and Syria to help stop the violence in Iraq. This comes as reports from Iran indicate that another corner of the axis of evil is nearing completion of its nuclear program. And at the same time, the leaders of Syrian-backed Hezbollah again threatened this week to bring down the U.S.-backed government in Lebanon. But are these the sorts of people the West can trust? And can they really help stop the violence in Iraq? Joining us now from the American Enterprise Institute is Michael Rubin.

Michael, you've heard what Tony Blair is recommending, negotiating--the U.S. negotiating with Iran and Syria. Do you think this has any chance of working?

Rubin: Frankly, I think Tony Blair is making a huge diplomatic mistake. It has no chance of working. Let's take Syria first. Syria is a country that will never reject its rejectionist stance. Bashar al-Assad, the Syrian president, relishes the position of being the leader of the rejectionist bloc. If he were to join in cooperatively with Middle East peace, which is what Tony Blair was saying--not only in Iraq, but with regard to Israel--he'd have to subsume himself to all the other Arab leaders, namely Hosni Mubarak. It is not going to happen.

And lastly, Bashar al-Assad is about to face a tribunal when the U.N. issues its report, perhaps implicating him in the murder of the former Lebanese Premier Rafik al-Hariri. I'm not sure whether we should let him off scot-free.

Gigot: Now, Michael, I assume that if you go into negotiations with a country, you've got to give them something. What would Syria want from us in return if--in return for them stopping assisting the insurgency in Iraq?

Rubin: This is the problem. I am not sure that Syria really knows what it wants. It will talk a lot about the Golan Heights. But in the past, we have engaged with Syria, and Syria has spoken a good game, and it's never delivered. And it's a similar problem with regard to Iran: that we can't get into a pattern whereby countries expect reward for intransigence. This old strategy of speaking softly and carrying a large carrot has failed time and time again.

Gigot: Well, would Syria want to have its dominance reasserted over Lebanon, for example? Would it want to have the Hariri investigation, that you mentioned, essentially soft-pedaled and pushed aside? Would those be some of costs, some of the prices that they would want to us pay?

Rubin: Yes and yes. A lot of people forget that Syria doesn't formally recognize Lebanon's independence. There is no Syrian embassy in Lebanon. And Bashar al-Assad wants, in effect, a get-out-of-jail-free card with regard to his murder not only of Rafik Hariri, but a number of other reformist journalists. If we engage with Syria, at this point, and if we're about to offer them something, it will mean the end of every other diplomatic initiative we have in the Middle East. And it will continue to undercut our security in Iraq.

Gigot: What about Iran? What is its big goal, strategic goal here? What does it want to accomplish? And what would they want the United states to put on the table if they're going to help us in Iraq?

Rubin: Well, to start with, I really don't understand why we would even consider, or Tony Blair would consider, putting U.S. national security in the hands of the Iranian leadership. What does Iran want? Tony Blair gave--in his speech, talked about, if we just address all of Iran's concerns, then maybe they would be reasonable. History suggests otherwise.

Basically, Tony Blair forgets the problem of ideology. Iran is dedicated--the Islamic Republic is dedicated to the export of revolution. Their leader--their ambassador in Iraq isn't a diplomat, but a member of the Quds Force, this elite Revolutionary Guard unit charged with export of the revolution. He's the former liaison to Hezbollah in Lebanon. Iran also wants, frankly, to run down the clock with pointless negotiations so that they can become a nuclear power.

Gigot: So we would have to--you think we would have to accommodate their nuclear ambitions to have any chance of cooperation from Tehran in Iraq, at a minimum.

Rubin: Exactly. On May 31, Condoleezza Rice offered to sit down and talk with Iran. The only precondition was the suspension of uranium enrichment during the talks. Four days later--that was widely reported in the American press. Four days later, what wasn't reported in the American press is Ayatollah Khamenei, the supreme leader of Iran, got up, and he said in response, Why don't you just admit that you've lost? Why don't you just admit that you're weak and your razor is blunt? The fact of the matter is the Iranians don't approach diplomacy the same way that the Americans do. They don't see it as compromise. They see it as weakness to exploit.

Gigot: Michael, we don't have a lot of time, but quickly, how do you think the Bush administration is going to respond to this Tony Blair effort, and what might come out of the Baker-Hamilton Commission on Iraq? Are they going to accept dealing with Syria and Iran?

Rubin: There's going to be some real debate, and there's a lot of real pressure. A lot of people in the administration are convincing themselves they can live with a nuclear Iran. I believe the president is firm in his convictions, but what I fear is that the less we prepare to abide by the president's declarations he is not going to tolerate a nuclear Iran, the less time we have for alternative nonmilitary means to counter it.

Gigot: All right, Michael Rubin, thanks for being here.

Rubin: Thanks for having me.

Gigot: We'll be back after this short break. Coming up next, Detroit is looking for help in Washington. They may not find it at the White House. But will their old Democratic friends on Capitol Hill bail them out? That, and our "Hits and Misses" of the week, when "The Journal Editorial Report" continues.

Gigot: Welcome back to "The Journal Editorial Report." The CEOs of the big three American auto makers met with President Bush this week asking for federal help to help save the American automobile industry. President Bush didn't promise anything other than more dialogue. And it now seems likely that the leaders from Detroit will take their case to the new leaders on Capitol Hill. But does Washington have the answers for an industry in trouble? We are joined once again by Jason Riley, and also joining us is editorial board member Brian Carney.

Brian, everybody agrees that pension costs and health-care costs are really weighing down GM and Ford in particular. Why shouldn't the federal government come in and help them compete with foreign auto makers?

Carney: Well, I'll tell you, Paul, Rick Wagoner of GM likes to tout this $1,500 in health-care costs per car produced. A number that he doesn't like to emphasize is that GM gives about $3,500 in incentives to everyone who buys one of their cars. Toyota gives about $1,000. So that's a $2,500 cost disadvantage that GM is imposing on itself because it can't sell its cars at full price. And if they want to solve their problems, they might as well look at how to produce better cars that people want to buy without steep discounts, instead of asking Washington for handouts on contracts they made themselves with their workers to supply health-care benefits.

Riley: And the other problem with the government bailout of the U.S. auto industry begs the question: What constitutes the U.S. auto industry these days? It is not just the Big Three anymore. I mean, something like 75% of Hondas and 80% of Toyotas that are sold in the U.S. are made here. I mean, the U.S. is still a great place to produce cars, if you don't live in Michigan anymore. Just ask Georgia and Mississippi and South Carolina. And so you have a lot of foreign auto manufacturers, who are based here in the U.S., who are providing a lot of jobs. And when you talk about a government, the government helping out the U.S. auto industry, are we including everyone?

Gigot: But Brian, the U.S. government helped the airlines after 9/11, and it helped the steel companies with tariffs. Why shouldn't the auto makers get in on this assistance?

Carney: You know, that's a good point. The steel makers were helped with the tariffs. And you know who that hurt? That hurt the car maker,s and other users of steel too, of course. But the car makers have finally gone to Washington to plead for elimination of a lot of those tariffs, and that's the kind of help that I would support. Because it is also pro-free trade and pro-economic efficiency.

Gigot: To get rid of the help for steel to help the auto industry, but don't help the auto industry itself?

Carney: Right. But the help for the steel industry is a good example of how in trying to help one industry, you often end up hurting another. And the same thing is likely to be true with any kind of handouts that are given to the auto industry. It's going to hurt somebody else in ways we don't anticipate.

Riley: Another argument that the U.S. auto makers are making is that there's--has to do with the foreign auto makers, the home countries of these auto makers. For instance, they are claiming that in Japan, the yen has been undervalued. That's something Wagoner and these others have discussed with Bush. Well, first of all, both the Treasury Department and the Federal Reserve looked into this. They did not find any currency manipulation. But secondly, this has nothing to do with Honda's inability--or GM's inability to compete with Honda in Ohio. This is about exporting cars.

And Bush said, I will encourage these countries, like Korea and Japan, to open up their markets to U.S. imports. And that is the role of the government. Not to inflict protectionist policies on the U.S.

Gigot: Very quickly, Brian, will President Bush be able to resist this pressure?

Carney: I hope so.

Gigot: But you are not sure. It sounds like you're not sure.

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, are Senate Republicans taking a step back in time with their choice for minority whip? Jason?

Riley: Yeah. I can't figure this one out, Paul. Ken Mehlman, the former head of the Republican National Committee, has spent the past year going around to black groups apologizing for the Southern strategy. So then, this week, Republicans elect Trent Lott as their No. 2 man in the Senate. Trent Lott is someone who has said America would have been better off if Strom Thurmond, a Dixiecrat segregationist, had been elected president in 1948. I just think that's kind of a mixed message that the party is sending to blacks.

Gigot: All right, Jason.

Next, Democrats might have a whole new ethics problem on Capitol Hill--Brian?

Carney: That's right. Nancy Pelosi gets a miss for supporting Alcee Hastings and Jack Murtha for leadership positions in the Democratic House.

Earlier this year, the Democrats were running on the need to clean up a culture of corruption in Washington. Alcee Hastings is a former federal judge who in 1989 was impeached and convicted by a Democratic-controlled Congress and removed from the bench, which didn't stop him from running for Congress in 1992. Jack Murtha was an unindicted co-conspirator in the Abscam probe in the early '80s. And yet, Nancy Pelosi supported him for majority leader.

Now, to the Democratic Caucus's credit, they elected Steny Hoyer in favor of Jack Murtha as majority leader. Maybe they can put Murtha on the Ethics Committee instead.

Gigot: Oh, I don't know, Brian. All right, thanks.

And finally tonight, a word about Milton Friedman, arguably the greatest economist of the 20th century, who died this week at age 94. Because of the economic prosperity of recent years, many Americans take it for granted. But there was a time, not too long ago, back in the 1970s, when inflation and unemployment were both very high. And neither economists nor politicians seemed to know what to do about it.

Fortunately, Milton Friedman understood the problem. He had explained, years earlier, that inflation was not caused by too many people working. It was caused by the Federal Reserve printing too much money. And his insight made it possible for central bankers to break inflation in the 1980s.

Friedman was also one of the world's great troubadours of economic liberty, writing newspaper columns and the 1980 best-seller "Free to Choose," and first proposing education vouchers 50 years ago.

For much of his life, he was a voice in the wilderness. But he later won the Nobel Prize and lived to see his faith in economic liberty vindicated. And we're all better off for it.

That's it for this week's edition of "The Journal Editorial Report." Thanks to Jason Riley and Brian Carney. I'm Paul Gigot. Thanks to all of you for watching. And we hope to see you right here next week.


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