this week on the journal, editorial report. newt gingrich continues to surge does mitt romney play a safe strategy needs some rethinking? plus, barney's rubble, the man is retiring. we'll take a look at his legacy and accusations of insider trading have members of congress on the defensive but how big a scandal is it really? i'm paul gigot. with five weeks to go for iowa caucuses, newt gingrich pulls ahead by a wide margin in a new national poll that has the former house speaker with 38% support of likely voters and he is leading is iowa, south carolina and florida.

he has been capitalizing on the momentum pitching himself as the conservative alternative to mitt romney. >> i'm clearly the more conservative candidate. i helped ronald reagan and jack kemp develop the supply side of economics. i helped defeat communism. i helped balance the federal budget for four straight years. reform entitlement and take conservatism is, there is places where i have done that stuff. >> joining the panel, mary oh grady and dan henninger and jane freeman. dan, what is behind the gingrich surge? >> one of the things that is behind it, paul, there was always structural weaknesses in the come any campaign. he was running a campaign that

was going to put one foot in the center. he needed to win independent voters. part of his appeal has been for them and the other has been the conservative camp. the problem is he had to run an early primary, iowa, new hampshire, south carolina and florida, these are conservative voters. he has been lucky so far, most of his opponents were basically pretty weak. i think we have the parable of the tortoise and the hare. romney is the hare. gingrich has been plodding along slowly making his case and finally the conservative problem for romney caught up with him. >> what you are saying, the gingrich surge is not about gingrich, bits romney's weaknesses, is that what you are saying? >> i think so. >> it's less to do with gingrich's appeal. we had the flavor of the month here. they all popped up and newt is

the latest? >> i think you have to give newt some credit. she good debating. this has been focused on debates. it's clear in this race if you are looking at gingrich versus romney, gingrich is the conservative. he is the one that is giving a very aggressive defense of free markets, cut taxes dramatically. repeal dodd-frank and repeal obamacare. >> he is for cap and trade. >> but look, if you are saying who is giving the conservative message, it is gingrich. >> the history is going to be a problem. >> i think romney has two problems. one he was out in front. he saw these weak players and he thought i can hold the ball. i can just run out the clock. he is going to have to take the fight to newt. the problem that he is facing against gingrich is with george

h.w. walker bush called the vision thing. gingrich is better and creating a vision, kind of an exciting change. whereas romney is a techno accurate. data, data, data. he wants to change everything and rearrange it and make it work. i think people are more excited about the vision sense. >> romney has to offer a vision of his own, or are you saying that romney needs to attack gingrich and find a way to knock him down and say, no, he is not the real conservative? >> i don't think he should make it about attacking gingrich. i think he has to come up with his own version of the vision thing. something that would get people excited. the neat hair and controlled discipline campaign is like a lot of people thought. they both have big government baggage they will not be able to shed. he shouldn't be afraid of that with newt. >> i think its healthy

department. mitt romney needs better sparring partners. recall in the 2009 democratic primary it was barack obama versus hillary clinton. that was a heavyweight fight. if it's going to be gingrich and romney, both be better candidates, if newt has to defend himself against the baggage and romney has to clarify who he is. >> is there a vision thing that romney can offer? his political persona, i agree with mary, is as a technocrat. his critique of obama is technical one. he says i know how to do it because i'm a man of the private sector. gingrich's critique, obama is radical, outside the mainstream and offers a philosophical

alternative. the question for romney at this point, is it too late to recast himself? a lot of people coming into the campaign you have to repeated yate your massachusetts health care disaster. whether he can say i'm going to run as a conservative, i don't know. he may get to that. >> what about the gingrich baggage. there is a quote that was reported this week from 2007 where gingrich, even after he had gotten important an million dollars from freddie mac in consulting fees, basically said put it in terms, i think the government sponsored enterprises is a good thing, alexander hamilton and teddy roosevelt, putting a historical thing on it. >> and hoping the american public doesn't know their history very well. i don't think anybody who is a conservative doesn't want to the

re-elect a modern day version of teddy roosevelt. >> is that possible in this race? >> i don't think so. he is always going to be compared to romney, they both have problems. romney says he should raise taxes on the wealthy. i don't think it will be a big problem for him, but i do think he will be able to shrug it off, going with the vision thing. >> we'll see. thanks. when we come back. saying goodbye to barney. that's right, our favorite congressman is retiring. we'll take a look at barney frank legacy. >> one of the advantages for me of not running for office, i don't have to pretend to be nice to people i don't like.

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>> patti: that was congressman barn if i frank, 16 term massachusetts democratic has been chair of the financial services committee since 2009 where he co-authored the dodd-frank bill. previous clip james, when did he ever pretend to be nice to people. >> we don't remember it. but the comments, he talks about how he spent time dealing with the crisis and writing legislation. he left out a part about creating the crisis. that would have to do with being

part of that washington mania, more and more for home ownership. >> paul: we don't have to worry about safety and soundness. let's roll the dice with those? >> and in answer, but reckless endangerment when a reporter said, what if the people can't pay the money back. what if the home ownership goes too far. he said we'll deal with it if it happens. >> i think another thing that drove him out was the euro crisis. he is man of the left. he is a man of big government. he has enabled government to be larger. the euro crisis the welfare model is breaking apart. i think congressman frank understood that in the future being a person of the left in

congress was not going to be fun. he is a guy that likes to have fun with his politics. it's going to be grim going forward for the next four to eight years. >> paul: his generation of liberals, they had a window of opportunity, they grew up in the '60s and they got the sweet spot. 60 votes in the senate and controlled the house and barack obama coming in. they passed everything they wanted, universal hammer and they fulfilled a lot of -- universal health care. >> right but he may be leaving congress but he may have left us with a ticking time bomb with dodd-frank. it por tends to make this not happen again but there is a lot of problems and it's global that they haven't cleaned up. i think also --.

>> paul: it was jon corzine's firm that recently went bankrupt? >> it was highly leveraged but we were supposed to have regulations to avoid that. what happened to barney frank is the redistricting in massachusetts. there is a good chance he wasn't going to win the election. >> paul: he is going to have face a lot voters he hasn't faced. >> and he wouldn't get the chairmanship of the committee. >> paul: that means chris dodd and frank are out of congress. does that increase that dodd-frank could be repealed? >> it increases the odds. >> i think there is a lot of fixes that have to be made. you recall when he was creating it was about taxpayers behind housing. what they gave us was derivative trading among other problems

love. [ laughter ] >> there are a lot of these issues that anyone in the public they need reform. you have to fix a lot of these problems that went unaddressed while they spent 2300 pages pursuing their liberal social policies. >> all these congressman think they have legacies and glass eagle, two congressmen lasted for 50 years, dodd-frank is not going to last for 50 years. it will be taken apart piece by piece. >> paul: and it was signed by bill clinton. when we come back. with the approval rating in the single digits, members of congress are battling accusations of insider trading accusations of insider trading but are the charges fair? [ men grunting ] [ male announcer ] great things can come out of sat. ♪ so don't let odor stop you.

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>> paul: senate held hearings that would ban lawmakers from using non-public information and making trades on wall street. it gained momentum after 60 minutes reported last month that members of congress be trade stocks on information they get from private meetings and other official congressional work. they alleged john boehner and nancy pelosi enriched themselves by purchasing or trading stocks based on such insider information. in a recent "wall street journal", former alaska governor sarah palin called it an endemic problem on both sides of aisle and they are feathering their

own nests. >> how bad is this scandal? >> it's terrible, paul. it really is. no matter what you think about what they are doing, you have to admit that if people in the private selling for were doing the equivalent. these people in congress would not only go after them, they would be leading the lynching party. >> paul: so it's a double standard. >> secondly, a conflict of interest. they have a meeting in a private room. they have enormous amount of power to affect the market and come out and trade on that information? >> paul: they aren't classic insiders under definition like illegal trading laws. i understand you have to be a corporate fiduciary, a lawyer or board member. those are classic insiders that have inside information what is company is going to do.

this is sort of public information about the direction of the economy is. >> but the information is not in the public sector. in order to make it ethical let's do it this way. i had a meeting with ben bernanke and hank paulson today. i can't tell you what the meeting was about, only we can run this. but when i came out i called my broker and bought 1,000 puts on the s&p 500. every night they should report that every night. i'm fine with it. >> paul: are you okay? >> it is outrageous, it's a double standard. there are lawyers the s.e.c. can go after members of congress if they trade on insider information. inside information has been basically defined by case law. >> paul: when ben bernanke and paulson went to capitol hill and says the sky is going to fall if

you don't pass the bill. everybody knew about it? >> everybody knew after it leaked out. >> paul: they knew there was financial crisis brewing? of course, you did? >> i think we see it every day. whenever the fed makes a new policy move, markets react. that is understandable. markets move on information. >> paul: where are you going to draw the line? at congressional hearings? >> realtime information about what they are doing in their stock accounts. at the end of the day. >> paul: you want to go through 535 members of stock trades everyday? >> who people who want to study it, it's journalists and not every citizen can study it and track this and watch how people are voting and what their transactions are. it is a problem because it is a double standard. you see the situations where the crisis meetings and they are

making trades before the instances have been reported in the press, moments before. that is all you need. >> the problem is more of the disease. i'm going to disagree with you and give you a contrary solution. i think each one of these committee's budgets should be tied to the index of stocks to the industries they are governing. if you want to pass dodd-frank and destroy the financial industry, your budget is going to fall with the stock. >> paul: they help certain firms and define the index they help with the legislation, it will go another way. >> that is the problem if you go too far in this you end up with people are people like ralph nader who above trading in stocks. >> i don't want to preclude them from trading. i want to make it what they are doing transparent.

>> what if they were index funds it wouldn't solve everything. when are they buying and when are they selling. maybe they shouldn't do trades when congress is in session. that would prevent them from acting that some provision is getting in the final bill. >> paul: should you put it in a blind trust? >> i'm not saying. that i think they have means to take advantage of the information they have and in order to be ethical and to create more confidence in washington, i think what they are doing in their stock accounts should be transparent. i don't think it's hard to do. >> paul: i'm more worried what they are doing with our money. >> they are affecting our money. >> paul: that is one of lessons, they find a way. i'm going to give myself the last word on this. [ laughter ] >> paul: we when we come back, >> paul: we when we come back, our hits and misses of the week. my coat? solid gold.

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>> paul: time for hits and misses of the week. first to you. >> paul, i would like a cautionary hit to the people of egypt in parliamentary voting had an orderly and peaceful vote unlike the turmoil and violence in tahrir square. you have to be careful about it. it was the islamic parties that won big, but we cannot underestimate the power of being able to cast a pre-vote. we should have modest optimism about it. >> and the crisis manager or has been at the fukishima nuclear plant, anybody that stuck it out for eight months is a hero. he had to step down because he is ill. it's not been revealed what is

wrong with him. he said i am leaving but it breaks his heart to leave the project. i think he is a patriot and a true hero for japan. >> jon corzine the governor from new jersey whose bets on european market destroyed ms global and here we are a month after the bankruptcy and billion dollars appears to be missing from client funds. he needs to explain where the money went. he needs to tell us what he knows. >> about regulation, jane? >> it doesn't work. >> if you have your own hit or miss, please send it to us. visit on the web. that is it for this edition of the journal editorial report. i'm paul gigot. hope to see you right here next week.