which gels to ve unsexy waste and reduce cholesterol. taking psyllium fiber won't make you a model but you should feel a little more super. metamucil. down with cholesterol. >> this welcome back -- >> this week, mitt romney's rivals mount a blistering attack on his business tax, how should mitt romney respond? plus, the rise of the super pac, behind the most bruising ads off the campaign so far, where do they come from and are they good for the political debate? and, the first big labor fight of 2012, is taking shape in the hoosier state. why right-to-work may be right on target for indiana's economy. >> president obama wants to put free enterprise on trial. and the last few days we have

seen desperate republicans join forces with him. [audience booing]. >> this is such a mistake for our party and our nation. >> welcome to the journal editorial report. that was mitt romney on tuesday night. fresh off of his decisive victory in new hampshire. the republican front-runner was referring to attacks by newt gingrich and rick perry over his time at the private equity firm bain capital. a group supporting the former house speaker backed a 28 minute video and said they'll spend millions on ads in south carolina, portraying him as the gordon gekko of presidential politics. >> a group of corporate raiders led by mitt romney. the company was bain capital. more ruthless than wall street. >> pulled the rug out from under our plant. >> everybody was fired. they fire people, they cut benefits, they sell assets. >> mitt romney, them guys, don't care who i am. >> i feel that is the man that

destroyed us. >> winning our future is responsible for the content of this message. >> joining the panel, this week, "wall street journal" columnist and deputy editor, dan heading jer, assistant owed tor page editor, james freeman, editorial board member, dorothy ra begrabz and, kim strassel. >> that is well produced smear and, so is the 28 minute film and i think once newt gingrich quits and the pac closes up shop it will be able to sell it to the obama campaign for a large amount of money. >> well, but, is it -- is that what -- a fair description of the public/private equity business. >> it is completely one-sided and the point of private equity is, to spot opportunities to make a profit. how do they make a profit? they see companies under performing and could be made

more efficient and perhaps could go into new market and what they try to do is make money by making those companies more profitable. and the real home run ball is not just taking management fees and paying yourself dividends but, also, building an asset that you can sell to someone else. >> let's get -- look at our comment by rick perry. about this issue. >> we need to have more venture capitalism going on in america and less vulture captainsism. the idea that you calm in and you destroy people's lives, the idea that you come in, just to make a quick profit, tear these companies apart. i understand restructuring. i understand those types of things. but, the idea that we can't criticize someone for these get-rich-quick schemes is not appropriate from my perspective. >> dorothy, get rich quick schemes, does he have a point is

there something vultury about the -- this. >> these are horrendous' equations of free market and assault on human life and decency, having said that, let me point out there is something feverish about the response to these ads. because, let us agree that there is something rumbling in this assault on these two outliers here. and that is, some problem having to do with the feeling about the likely nominee and i think the uneasiness with mitt romney as the nominee is feeding into a lot of the sense of catastrophe and this sense that somehow they have been undone. >> they focused on a weakness here. >> indeed. >> that he has and think in that sense have found something obama would be able to exploit.

what do you think about that? >> i'm not sure i agree. i think it moved the focus away from his personal weakness and his weakness as a candidate to a more structural, proposed weakness as his experience, and, you know, paul, this thing about private equity, we're talking about a specific period of time, in american capitalism which was the 1980s, raid,and takeover artists and they attacked something we called country club capitalism. the united states -- >> the private equity business attacked that. >> that's right and mainly what they took over were very large companies. this is not an attack on mom and pop grocery stores, it was an attack on big media companies, big entertainment companies, energy companies. incorporated -- >> poorly managed. >> poorly managed and complacent and were basically taking american capitalism towards -- in the next -- where you run it for the managers, not the shareholders or even for the employees.

>> and what about the argument that if mitt romney cannot stand up to this attack from republicans how will he do it from barack obama? >> well, i think one of the good things you are seeing out of this is that, you know, the romney campaign for months and months has been steady as you go and careful of not tuning the message and this required it to step up the game and address what is going to be the biggest point of attack from barack obama. you saw him in the clip earlier talking about putting it in the bigger context, free market, you've got an ad that he is going to put up talking about what he did in the private equity market and this is encouraging him to think out there. and that is probably one of the only up sides to this. >> is it going to help him, dorothy? >> i think it will. i certainly think -- this is what he needs. he needs to be out there, saying, you know, if we remember when he first came to see us four years ago he spent an enormous amount of time talk about his background as a business man and, fast forward four years now and he learned

something, but, still, there is' sense that you cannot run on your biography as a business man alone, you need the larger vision, the vision thing and i think one of the strengths, one thing most feared about newt gingrich is, he had the vision. >> and it will force romney to raise his level of debate so it's not just about him, james? >> that's right. it is actually one reason i doubted the romney electability claim. maybe it isn't the best year for a wealthy finance guy to run for president. but, having said that, the bain record is really exceptional and it created wealth and created jobs an 900 jobs at bain capital alone. >> but there are failures on the record. no question, there are bankruptcies and people are not making up the stairs about having be-- stories about being laid off. >> even in the film the stories they pick from the film, one company went bust after bain

capital sold it to someone else and maybe it was the next donor that screwed up the business and you look at another company in there, in many cases people didn't want to work anymore, the business said we have to rationalize or costs and people have to take less pay or benefits. >> details are vulnerable to demagoguery and at some point he has to stands back and launch aa defense of modern managerial capitalism people can understand. >> it doesn't sounds like a winner. managerial capitalism? >> capitalism and free markets, he'll have to defend the way the economy is run. >> but, also -- promote free markets and lower taxes and regulation. >> all right, thank you all, when we come back the rise of the super pac. the gingrich allied assault on bain capital is nearly the latest in a string of attack ads put out by the supposedly independent groups. why did they spring up and, are they good for the political debate3q

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>> the so-called super pac behind newt gingrich's bain capitalal assault is not the only one making headlines. you will remember that he, himself, blamed attack ads funded by a group supporting mitt romney for his disappointing fourth place finish in iowa. the pac, restore our future, spent a reported $2.7 million there, and it is spending millions more on ads in south carolina. and florida. so, why are these groups springing up and are they good for the political debate? "wall street journal" senior editorial page writer, colin leavey joins us with more. so, why are these super pacs coming to the fore, now? >> the super pac phenomenon is the result of two major legal decisions that happened in the past couple of years. 2010 citizen united versus sec restored the rights of corporations and unions as you know to participate in the political process and it was followed by a case called speech

now versus sec, where allowed contributions to be bundled together. so, before these decisions you had a situation where a wealthy individual could spend unlimit amounts of money and as soon as you had 2-3 people in a room, they had to register as a political committee and abide by the rules and regulations and, now you are seeing the rise of political committees, because of that new freedom. >> these are essentially down to our -- because the first amendment right now the supreme court says individuals had and, dorothy, that of course does beg the question, whether it is good. >> the impact is now, you see in clear, living, vivid color when you have a limitless amount of money, especially in a cheap market like iowa was and you see newt gingriknutnewt gingrich de watching this clear limitless money, and it is laughable now, because i see people like

mr. campaign finance reform, senator mccain, advocate, of mitt romney, appearing on television to attack newt gingrich, for having accused mr. romney, a short memory, senator mccain, who, four years ago, when running against mr. romney, attacked him for all of those layoffs. so, it depends on where you are. but, the answer to your question is, it has had a very questionable effect. >> okay. >> paul, understand why the super pacs exist. they exist because there are limits on the am of money that individuals can give to individual candidates. in a primary that is $2500 and as a result, the candidates cannot raise as much money as they need and the super pacs operate independently of the campaign, what you should have is no limit on those contributions and the money would go inside the campaigns where they would be better run and organized along with the

campaign rather than running alongside of them. >> colin, all the campaigns have the ability to marshall the pax if they want. does it increase political competition by making it easier for a few backers to get behind somebody who otherwise would not be able to make 4,000 phone calls, say, to get $2500 from each individual donor? the limits you have -- candidates can raise money on? >> right. there is no question here, it made the race more competitive, without the super pacs, they were running bare bones operations and the pacs pulled them out of the mud and you talk about the negative ads but the am of money they have spent supporting candidates is twice what they've spent opposing candidates and so it isn't a net negative influence it is also something you are looking a and

voters are getting more information. >> pull them out of the mud? it pulled them into the mud. into an expansion and spread of the mud and that is what the voters are registering. this is politics. >> if you had the money run by the campaign, instead of the super pacs, you would get a better quality of candidate as well. the candidate wants to be in control of his own message. >> now they have the deniability. and it is phony but -- hey, i had nothing do with that. and the people running it are their former aides. >> and it is obviously ridiculous and congress ought to lift though limits. >> limits on these campaign limits, colin in a way reduced political accountability? >> oh, they have, for sure, but lesson number 2, you know, people talk about this as they are driving some sort of loophole here but the real reality is that the loophole is the first amendment, and, the machinations you are seeing remain the result of the restriction on campaign finance,

not the new freedoms we are seeing. >> okay. thank you, still ahead, the first big labor fight of the year is taking shape in the hoosier state. how indiana's right-to-work push could change the political and economic landscape in emily's just starting out... and on a budget. like a ramen noodle- every-night budget. she thought allstate car insurance was out of her reach. until she heard about the value plan. dollar for dollar, nobody protects you like allstate.

>> the idea there no worker should be forced to pay union dies as a condition of keeping a job is simple and just but the benefits in new jobs would be large. a third or more of growing or relocating businesses will not consider a state that is not providing workers this protection. >> he was reportedly booed by protesters in the state house hallways for those remarks in the annual "state of the state address" but governor mitch daniels hopes to make indiana

the first state to approve right-to-work legislation that would allow individual workers to decide if they want to join a union and ban contracts that require nonunion members to pay dues once the work site is organized and republican leaders in the state made it their top legislative priority this year and democrats and their union allies are not giving up without a fight. and we heard last year after the brawl in wisconsin, somehow this was over for a union reform movement. what -- why is it happening in indiana now? >> well, i mean, i think it is a really interesting situation you see happening in indiana, because indiana is just sort of industrial state of the midwest and you have a particular situation now where indiana is poised to achieve enormous competitive advantages over states in the midwest like michigan and illinois, these are high tasked unionized states and the governor has taken the moment to say, you know, we have already made significant gains in terms of improving the business climate here, and we saw what happened in wisconsin but, look, you know, we have an

opportunity to lure a lot of businesses here, if we can make it clear that workers can act as free agents, you know? unions are portraying it as a radical change but it is really about worker freedom. >> the nearest right-to-work state in the midwest is iowa. how much economic benefit could there be here, really when you get down to it? >> it is huge. when mitch daniels talks about this. he's looking at the south, where the epicenter of most right-to-work states have been and where there has been a flood of manufacturers who have moved from the north to the south, over recent decades to take advantage of those lower-cost, nonunionized states and if indiana could do this it would be a sort of central pole for people to remain in the midwest and locate and give an enormous advantage over competitors. >> the last state to try to do that was new hampshire, which had huge legislative majorities in 2010, tried to pass it and it was vetoed by the democratic

governor and, indiana republicans also have big majorities and looks like they are poised to do it? >> and i hope they do. it is almost a life and death issue for indiana. 20% of indiana's workforce is in manufacturing. the highest percentage in the united states. and people don't -- indiana, what is indiana -- >> 11% of the entire u.s. economy. >> about 20% in indiana, they make elevators an ridefrigerato and they attracted toyota and honda to the state but if you are in manufacturing, that is about half of your costs, labor costs, half and total cost of a company, they have to be competitive with the southern tier of states, we just saw in that map or those companies will inevitably migrate, there's a lot of out-migration in indiana now, the level of real income is falling because the manufacturing is going to the south. it is a make or break deal for indiana, paul. >> colin, democrats are trying to may a game of hide and seek

in indiana, trying to leave the state or leave the -- not provide a quorum for republicans to pass this. is it likely to succeed? >> no, it's not and one reason is, if you recall after the wisconsin battle after year and walkout, also had a five week walkout by indiana democrats after which time republicans and -- in the legislature passed a law that said if you are gone, from work for more than three days, guess what, there are consequences, there is a thousand dollar personal fine and, so, what you are seeing now are the rolling walkouts, where they are here for a few days and gone for a day and, so, that is what is happening. but, i don't think that that is going to hold. they -- basically the democratic leader has acknowledged that this is probably going to go forward. >> quickly what would be the impact nationally and on the presidential election in 2012 if indians passes this? >> it puts the union issues back here and on the political point, paul, i want to point out, this is different than what happened in wisconsin.

the tough thing for scott walker, in wisconsin was union guys could say you are attacking the middle class and this is an issue that resonates with americans, and they say fill you be forced to join a union and pay dues and most americans don't agree with that and republicans can frame that in a national debate and it definitely helps them. >> we have to take one more break, whe

>> time for hits and misses of the week. colin. >> this is a big hit to the supreme court which ruled this week, that the government can't second-guess the decisions of religious institutions, about who they hire and fire as ministers. the decision was unanimous and a big smackdown for the obama administration, which is basically arguing churches an synagogues were do no more deference than labor unions and social clubs in terms of employment disputes and is a major victory for religious freedom and an important

reminder the first amendment was intended not to protect people from religion but to protect religion from government. >> kim. >> a hit to jerry brown for his honesty. california is about to run the first in the nation state program for cap-and-trade. to regulate carbon emissions and the governor came clean and said he intends to use half of the money generated from the program to pay down the state's deficit, in other words this is exactly what critics always said, it is a tax on energy, to give people like mr. brown mr. ability to spend. >> james. >> a rehit, really, to eli manning, you recall at the end of the summer before the nfl season began he said that he was an elite quarterback and some people expressed skepticism including the moderator of the program and i gave him the hit and i thought he showed confidence and this year broke and nfl record, for