>> paul: this week on the "journal editorial report" with new york city's rate on track to hit new lows, charges of racial profiling persist and ray kelly is here. president obama pivots to the economy again. what does it say about his record so far. and labor leaders cry foul after the motor city files for bankruptcy. does detroit deserve a bailout? could your city be next? >> paul: welcome to the journal editorial report. i'm paul gigot. good news from the big apple,

murders are down 30% from all-time low. fewest shootings in two decades. despite the progress, new york city police department has come under fire for stop question and frisk policy which opponents say is tantamount to racial profiling. last month they passed two bills that could restrain the controversial program. my guest says this week will be a set back for the city. ray kelly, new york city police commissioner. tell us how stop, question and frisk works and why you do it? >> it's a practice that is integral to policing in america. police officers are authorized by statute and also validated by supreme court decision in 1968. they are authorized to stop and question someone who is a reasonably believed has

committed is committing or is about to commit a crime. it is fundamental to policing that officers are given the right to inquire as to what is going on. people lump stop, question and frisk. in new york city half the stops result in the frisk. what is a frisk? it is a limited pat down to give the officer some sense of safety, looking for something that could endanger the officer. only 9% of the stops result in a full-blown search. >> paul: what about those people that say, i think the figure is 52% of the stops is actually african-americans. this is tenant contaminant to racial profiling, how do you, tantamount to racial patrolling? >> we had the rand corporation take a look at the issue.

most meaningful indicator whether racial profiling is taking place would be the description of victims of violent crime. they said census data makes no sense because half the people you stop would be women. arrest records or arrest data makes no sense because it could be biased. so they said the most meaningful thing is the description of victims. in new york city, reality is that roughly 70% of the people described as committing violent crimes are described as being black by the victim. as far as the stops are concerned, we stop about 53% of our stops are african-american. roughly 24% of the people identified as committing violent crimes are identified as hispanic. >> paul: do you put safeguards on it? when you instructor your

police officers to go out, you are not stopping people because they just happen to be black or hispanic? >> there is an ongoing training program. they are trained by attorneys, trained by experienced officers. they are given a test in the police academy before they leave. they have to get hundred on the test. >> paul: do the people that show the record of bias? >> certainly if we see a record of bias we will discipline people. >> paul: here is one of the criticisms. the crime rate in new york -- you've had this second tour as police commissioner, has been declining since the early 1980s. it preceded stop, question and frisk. it's really not important in the reduction of crime. >> we have had stop, question

and frisk since 1990s. in 1990 we had 245 murders. we have a population fewer than now. so what you see is a dramatic decline. >> paul: you think it is central to it? >> it is central to policing. it's all over america. its function -- that is what you pay your police officers for. you see something suspicious nature when you get out of the car and intervene, gather some information as to what is happening. what happened here, this has been a 15 years of litigation. the center for constitutional rights brought a case in 1999 they continue to go forward. we've been criticized because the number they claim to be so high, 680,000 three years ago and now down to 530,000

last year. that seems to be very high number, but it really amounts to less than one stop a week for police officers. we have 23 million citizen contacts a year. >> we had mike bloomberg for 12 years. now, we have all the candidates criticizing stop, question and frisk and what you do. what is behind that? they don't want dangerous streets? >> what is behind it is the notion that in order to get the win the democratic primary here, you've got to go way out to the left and catering in my judgment to those extreme groups. in new york city you have almost six to one differential between registered democratic voters

and republican voters. that is the concept. you get way out there. you get the nomination of the democratic party driven by what i would call some extremist views. then, of course, because the overwhelming majority of democratic voters here you will win the election. >> paul: do you want to be secretary of homeland security. you have been mentioned? >> it's very flattering on the part of president. he made some positive comments. i appreciate it, but i'm not going to commented on it. >> paul: all right. thank you commissioner kelly. when we come back president obama pivots to the economy again. is it something else? --- [ both ] oooooh... [ female announcer ] as you get older, protein is an important part of staying active and strong. ensure high protein... fifty percent of your daily value of protein. low fat and five grams of sugars. [ major nutrition ] ensure! nutrition in charge!

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♪ this growing inequality is bad economics. when the runnings on the ladder of opportunity grow farther and farther apart.

it understand mines the essence of america, tha the idea if you work hard you can make it here. that is why reversing these trends has to be washington's highest priority. >> paul: that was president obama on wednesday in the first of series of speeches the white house hopes will shift the spotlight back to the economy. latest pivot comes as washington prepares for another showdown over the budget and taxes. new poll finds more than half of americans disapproves the job he is doing on the economy. wall street journalist james freeman. mary o'grady and steve moore. steve, usual a resident bull on the economy. why is the president pivoting now if things are going to get better? >> there is an old saying that puritan someone blees someone may be having a good

time. now, we learn what a progressive someone is making money and getting rich. i think emphasis on income inequality is a big mistake. president should be focusing on growth. by the way, he used the term inequality more than he did growth in that speech. the problem is the middle-class doesn't care if some people are getting rich. they want to see their incomes rise. the big problem for this president is that middle incomes have fallen by more than $2500 since his policies went into action and recession ended. >> paul: that is data that looks at census bureau data. mary, if growth should be the emphasis, why the stress on inequality? >> i think what we know about this president, his world view is that he wants government to have a larger and larger role.

>> paul: he thinks that promotes growth? >> he thinks it's promotes growth and he is up against congress directly oppose today that. what he is trying to do is make his last run to get control of the congress in 2014. that is to appeal to people who are down-and-out by saying to them, government can do more for you. the reason why you are suffering is because government hasn't done enough and reason why is those guys over there. >> paul: the start of 2014 campaign? >> absolutely. he is known for his permanent campaigning anyway. he feels if he is going to reach this transformation of the u.s. government, he needs to do it with control of the house. >> paul: gun control is going nowhere. immigration may not pass, i could still. >> get those things out of the way. >> paul: most of the rest

agenda, that is chuck schumer says stay out of way -- you are not helping. his agenda so far not going anywhere. is this an attempt to change the subject? >> the first most recent of many attempts. any time it becomes clear that the economic plan is not working, the white house says, got it. president will give another speech or president obama is saying i got to give another speech. the problem is underlying policies. there are a lot of people are suffering in this economy. they don't want to wait for another political adventure. you have to go back to the 1970s and middle-class incomes stagnant. >> paul: american people who are actually working. >> that's right. >> paul: since the recovery began? >> we have seen the unemployment rate tick down but it has happened over the last few years because a lot of people are leaving the

work force. as we said wages are declining, as well. i think the problem is the inequality, if you think -- i thought it was phony argument because i don't care whether george soros is worth $10 billion or $20 billion, it's about my neighbors progressing. for the president here, this is a problem. it's another campaign and people want results. he is talking about the policies of the last ten years when he is in the office for half of it. >> paul: steve? >> i wanted to make a point about this. this is new line in washington, that the recent economy is doing well and the president is floundering is because the republicans in congress won't pass his initiatives. for the first two years of the presidency he did everything he virtually wanted to do. that actually was negative for the economy. the american voters turned thumbs down to that. i would make the case, i'm the resident bull.

i'm bullish because precisely president obama can't do anything he wants to do. he can't do cap and trade and union card check and second stimulus bill. ironically he may be saved by the fact there is gridlock in washington because most of the ideas that he mentioned in the speech were the things he did in the first two years. >> paul: mary. >> what steve is missing that stocks don't matter to the president. he is going for the heart. he is going for the emotion. that is what the speech is about. i see a bright sunny america. if he will get behind me, i will bring you that. they are austere and cutting government and cutting growth. >> paul: republicans may have given him an opening by focusing so much on budget and not on growth. a federal judge rules that motor city can move ahead with bankruptcy proceedings despite the objections of unions and pension funds, is it the right move and could

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for local foster children. bring your gift to any sleep train, and help a foster child start the school year right. not everyone can be a foster parent, but anyone can help a foster child. ♪ >> paul: this we could to block attempts to block the bankruptcy despite cuts to wages and pensions. city is largest municipality in u.s. history to file for chapter 9 protection. despite calls from labor leaders to intervene, obama administration so far has shown little appetite for stepping in. >> we will, of course, as we do with every city, work with them to find ways to assist them in their efforts as detroit tries to get back on the feet and continue to make progress. the issue of insolvency and creditors and detroit need to resolve. >> this week the afl/cio says

they need help. they have a lot of influence among democrats. do they deserve a bailout? >> absolutely not. not any more than california deserves a bailout or any other municipality or state that got into trouble because they took on too much debt which is basically what the problem is. $18 billion in debt. some portion of that is pensions, but to not even a majority. >> paul: what about the argument, detroit is victim of the economy. auto industry had a terrible time for a few years there. that is basically it and innocent bystander we need to help it like a natural disaster? >> you could make that argument in a lot of cities in the northeast. in the rust belt, as well. the economy changes and populations move, innovation moves. because of innovation,

economic activity moves to other places. that can't be the justification for a bailout because you are continuing to have these challenges. in a lot of ways, detroit didn't take the right steps to attract capital back. that is really the problem. >> paul: cities like boston and new york, certain industries, textiles in boston, they brought in new industries? >> right and the facts, just like individuals to have respond if their business is not doing well, they might want to move or pursue a different career path. while michigan's economic problems were continuing, you didn't see an effort on detroit to lower its costs. to reduce the state's highest tax burden to attract industries that might have come in. this is really a question of political promises that were not justified by about the amount of revenue.

>> paul: should pensions be on the table, unions are saying no? >> they have to be. they should be and i don't know why public sector workers should be exempt from the realities the rest of the world faces. >> paul: you would say bondholders, too? >>? >> when you are talking about bailing out the creditors. these people took risks. got the spread and one of the reasons they did it because they expected a bailout. i think it's very dangerous to perpetuate that idea. >> paul: how many other cities are in danger here with pension obligations and debt -- i'm not saying they are going to file bankruptcy. they've got some real troubled financing? >> detroit may be the canary in the coal mine. you probably got dozen cities

that are in severe financial trouble. you are talking about my hometown of chicago. talking about a lot of cities in california, cities like oakland, san bernardino that are very severe problems. the trouble is exactly the same. they have incredible pension programs that they can't pay for. that means they have to cut fire service and police service and schools. that is the big problem. by the way, i think bankruptcy not a bad option here for cities like detroit. it's way for them to hit the restart button and start over again. i'm actually optimistic about american cities if they can start over, get rid of these huge debts. many people are moving back to cities like chicago and so on if they can get those debts under control. >> really what you are saying, when government is bailing out companies, bankruptcy is way to revive an institution.

this is beginning of rebound. >> paul: and willing to get all liabilities on the table. not just bondholders. when we come back, hits and misses of the week. ♪ [ lighter flicking ] [ male announcer ] you've reached the age where giving up isn't who you are. ♪ this is the age of knowing how to make things happen. so, why let erectile dysfunction get in your way? talk to your doctor about viagra. 20 million men already have. ask your doctor if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help

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♪ >> paul: time for hits and misses of the week.james? >> this is miss to the ownership and management of newly patriots team. this is for saying again and again how shocked they are their player aaron hernandez has been charged with a crime. terrible tragedy, he has been charged with murder. certainly everyone deserves their day in court. there is reason that no other team in the national football league drafted him until the patriots raised their hand in the fourth round. everyone agreed he was a blue chip talent but there were questions about him. >> this is miss for the united nations agency known

as unesco. that has announced it will preserve in the memory register the life and work of che guevero as ruthless partner to fidel castro that was responsible for a lot of executions during the cuban revolution. thankfully the u.s. has dropped out of unesco funding but the obama administration is trying to restore it. >> paul: steve? >> it was exactly 20 years ago the former ncaa basketball coach riddled with cancer gave his famous speech never give in to cancer. he started a foundation called the "v" foundation which has raised tens of millions of dollars for cancer. he said that money won't save his life but it could save the lives of our children. the great news of this story

is that 20 years later the survival rate for cancer is 80%. >> paul: all right. that is it for this week's show. i'm paul gigot. hope to see you right here next week. >> in the news this week president obama taking his economic agenda on the road giving a series of heavily promoted speeches defending his office's handling of the economy and trying to refocus the media attention. >> with this endless parade of distractions and political posturing and phony scandals, washington has taken the eye off the ball. >> more details emerge about the irs targeting conservative groups. >> you said you only worked on tea party groups, is that correct? >> in 2010, that is correct. >> why is the mainstream media ignoring the details? "new york times" reporter fights to protect his sources and try