tv The Kudlow Report CNBC July 22, 2009 7:00pm-8:00pm EDT
follow markets in order to stop a new bubble head inflation. like dr. copper, mr. behnke, copper is up 70% from the bottom. are you watching, sir? i'm staying with the buy bank call. toxic assets are still a problem. please don't forget zero interest rates and a steep curve means banks can and will and are earning their way out of the non-performing asset problem. think cash flows, it's not all about toxic assets. give it time. i think banks are still a great investment. even with solid beat the street earnings with pfizer and glasgow smithkline and merck, health care dropped today after rallying pretty good in recent days. you know why health care dropped? president obama will try to recapture victory from the jaws of nationalized health care defeat. you'll see it all right here live on cnbc in just about an hour. this health care debate, which
will be tonight, we will have two smart guys, liberal robert rice and free market another john stossel of "2020, this debate is undoubtedly the piv pivotal issue for this country's free market system and fight stave off socialism. i'm talking a pivotal moment caveat em tore investors. and let's get today's full market central-run down from rebecca jarvis, over there. hello, rebecca. >> hello, larry, a lot of focus on financials. a bit of disappointment from wells fargo and morgan stanley. we're beginning to see winners and losers, wells fargo at this point in time a loser a surge of bad loans overshadowing the bank's record profit. acquiring wachovia bittersweet. they added market share but in
doing so, they inherited some junk. there is some concern that will require more dollars set aside to recover more credit losses and non-performing assets./ and on cnbc, saying things are looking very strong for profitability. that's a good thing. meantime, third straight quarterly lossed a morgan stanley, worse than expected. their fixed asset management results were disappointing. i want to look at the comparison of goldman sachs today, which finished to the up side and morgan stanley, which finished fractionally to the upside as well. a lot of folks saying perhaps there's a winner emerging, perhaps for some time, perhaps it's goldman sachs, morgan stanley got hit by the cost of t.a.r.p. and falling behind on fixed income business that goldman sachs has hit out of the park. totally different reaction. had a narrow quarter second loss
but building up cash reserves to cover bad loans for key corp. set aside $50 million for losses and raised $1 billion in common equity. i'll erase the circle so you can actually see what they did on the day, up 6.6% also in that grurngs suntrust, they, too, adding to the stress trust needs, adding to the caddie so they can cover future problems. other big focus groups, drug makers, ely, pfizer, raised their profit guidance, eli lilly's profit up 21%. investors want to know what will happen in the revenue in years to come. obviously, what this administration chooses to do in terms of its health care plan will play into that. drug giant, pfizer, down 19%, sales hurt by higher costs for a purchase but also hurt by the
dollar, by the revenue line, stock was up a percent. this was an interesting point and jim cramer talking about it. a lot of companies saying, maybe it's the strong dollar that hit our revenue line. perhaps if the dollar were to weaken here- >> what a terrible idea -- >> perhaps. >> they should quit their whining a strong dollar helps consumer pocketbooks, i'm trying to persuade ben bernanke to look at the doctor and look at doctor copper up 70% from the bottom as evidence the economy is stronger than he thinks, time for liquidity in placing, exit strategy sooner than later. >> things like this can happen. china is part of that copper story. >> china is so driving all this thing, you're exactly right. you have to also keep in mind that this economy may be better than bernanke thinks. that's an important point, a very important point. i want to ask you one thing. goldman sachs paid down the
warrants, made a deal with the treasury, 23% annual rate of return for taxpayers. that ain't bad. >> not at all. $1.1 billion. it looks like the government was able to negotiate up on the price of the warrant. the government was able to get a decent deal out of it. dick solvay came out bullish on this as to what took place. >> can't someone say something nice about goldman sachs? is such a thing possible. >> one more thing. i noticed morgan stanley paid out 70% of its revenues to its employees. this in a lousy disappointing quarter. you have to be a semi dummy to lose money in bonds with this kind of steep upward yield curve. why does morgan stanley do this. >> here's the interesting component. morgan stanley and goldman sachs really in the same business, they both manage risk, prop trading. >> one did good, the other didn't. >> exactly. so you can see what happens on a prop trading desk, you can either be very right or you can
be very wrong. >> yeah. >> but there's the argument to be made, i'm certain that morgan stanley would make it at times like this, i know we're under pressure on our own time here. >> always. >> goldman sachs, morgan stanley all trying to get the best talent, trying to retain it. and morgan stanley would make the argument we need to retain the top talent with dollars. >> they're saying even in a lousy quarter, talent search goes on. rumors about john max longevity at morgan stanley. >> that's a good point about john. when i talked to him last quarter, he said a lot of folks in this industry will make jokes to us as well as goldman sachs back when pay caps were in place we can't retain talent without being able to ante up the dollars. it's on their mind and everybody gets that. >> he's good man. i happen to like mack a lot but under a lot of pressure. thank you very much. >> on this key thing, the five
corners of growth in the economy, call them five canaries in the recovery goal mine. we'll bring in zachary karavel in just a moment. while ben bernanke was barely, barely positive in his testimony, sort of eking out somehow, maybe recovery by the end of this year, better to look in 2010, 2% maybe, 2 1/2%, employment unemployment is not going to improve very much at all. okay. fine. that's bernanke's view. but when you see these good earnings from caterpillar, from merck and pfizer, for example, and from am, for example and even from starbucks, who would think people would be buying high priced coffee during a downturn, one thing mcintyre says, he uses the phrase 85%, i say 90% of the people are working in this country and what
these better earnings or better than expected earnings, they're basically saying business is operating. we haven't stopped dead in our tracks in this economy. i want to link that to the bernanke testimony. if he's looking for liquidity exit strategy to stop rising future inflation, which is very important to investors in both stocks and bonds, you might want to consider the message of the stock market, the message of these four different areas, apple, starbucks, merck and cat, you might want to also take a look at improvement in bank, i hope he's looking at that. let me repeat. dr. copper, a classic recovery signal up 70%. this story may be coming on faster. if we can defeat these obama social risks nationalization proposals for health care and energy with huge tax hikes and spending, if those things can be defeated or vastly watered down, we will still be a relatively free market resilient durable
capitalistic economy and stuff may be working out there we do not appreciate and sometimes you have to look at corporate earnings to give you a better fix on the economy than all the statistics coming out of the government gin mims for statistics. anyway, that's my quick talk. i'm very bullish on banks an bullish on stocks and very bullish on leading indicators and bullish on zachary karavel of market research. he's smart guy. you probably know him. i'm giving this to the light of day to the best of my humble abilities. what do you think of it? i thi >> i think it's a mistake to look at corporate earnings as barometer for national earnings. i think it's a mistake to where we should all be investing our capital. i don't think it's a any surprise corporate earnings are doing better. part of what's doing better is not the underlying resilience of this floppy thing called the u.s. economy and what's doing
incredibly well is global growth doctor copper, china. ibm, 60% of its earnings come from outside of the united states, a lot of that drive is very positive. apple is pegging to a higher end consumer we know by the unemployment figures just hasn't been hit the way the lower end consumer has, not to say there aren't pockets of strength. >> it's not high and low. i don't like class warfare. look, with a 9 1/2% unemployment rate, round it up to 10, that means 90% of the folks are working. we've taken our hit, zack. life goes on, your life goes on, my life goes on, caterpillar's life goes on. who'd have thunk people would be buying high priced starbucks coffee in such a nasty downturn, is america more resilient and durable than you think. >> it depends what america you're talking about. starbucks story was a lot of efficiencies and store closings and profitabilities based on cutting back on costs rather
than this major up surge in caffeine consumption with people who need to get more anxious by having more caffeine. you have to be careful by what one is talking about, about the economy. you don't need to make an argument about the resilience of this thing called the u.s. economy in order to be extremely impressed with ability of larger public listed companies to generate extraordinary profits in a relatively anemic climate. >> i want to get down to grassroots. i think these firms are doing stuff and indicating recovery. retailers up big again today. everybody likes to bash them, everybody likes to bash consumers. home builders up big today and tech continues to rise. tech is off the charts. i will give you three shots, home builders, retailers and tech, what is your take. >> i wouldn't touch the home builders at this point. someone will get this absolutely right and be in nowish in the bottom and be right.
retailers, i don't agree. if you have an income and not as scared, people tend to spend their income, you're right, whether 90% employed or 85% fully employed if you take out the halftime people, they're going to spend that income and spend it on a lot of consumer goods they've been cutting back on the last eight or nine months. >> we wouldn't have known that if it weren't for starbucks. apple is what? a consumer play. it's not about caffeine. >> absolutely. >> people buying iphones instead of i don't know whatever, they may be buying iphones instead of health insurance, think of that. >> you heard me say this line before, i probably said it on the show, always look at the jobs report, steve jobs reports more than the bureau of labor statistics report. >> i like that a lot. >> technology, absolutely, these companies have gotten proficient and learned their lesson in 2001 and 2002 and manage their inventories globally. >> should people stay with tech. >> absolutely. >> a big run staying with tech.
>> absolutely. >> zachary karabell, terrific stuff. >> please tune into squawkbox tomorrow morning at 8:00, an exclusive interview with am f m former citi ceo salli. is ben bernanke listening to dr. copper and other market indicators and other goofy statistics zack karabell referred to. we'll talk to republican senator jim bunning, who has a big beef with bernanke and can president obama make the sale on obama care in the prime conference tonight? we'll see. we have a special debate. robert rice versus john stossel on the disastrous obama care and obama's phony claim he rescued the economy and the fight between free market capitalism and socialism. this debate over obama care is a
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day two for fed head ben bernanke on capitol hill, is he wise enough to make ap exit strategy to stop super inflation and not make the same mistake he and greenspan made six, seven years ago. how about using market change? now to hampton for the full rundown. what did you hear? what happened today? >> day two, in front of the senate banking committee, economic recovery and continued role as regulator were at the much to the list of questions from the senators. chairman bernanke continued to argue the monetary policy the fed controls is the key to the economic recovery. however, there remain some clear and significant threats to that recover recovery. >> the systemic risks today come from the fact the financial markets are still unstable. we have areas like commercial real estate that cause concern, could cause problems in a large number of banks. we have foreclosures and their implications to the housing
markets. we have a number of pretty clear stresses. i don't think in this case there, are hidden problems, i think there are very clear threats to the recovery. >> for a second day, chairman bernanke rejected calls for audits by the government accountability office, arguing it would lead to a compromise of the fed's independent ke kens -- independence. >> we do feel the congress have a right to be concerned but we feel they shouldn't be intervening in monetary policy. >> finally, voiced his optician -- opposition to the obama plan and arguing authority should remain with the central bank. >> thank you. i have to stop off to talk with distinguished senator, jim bunning. are you senior senator from kentucky or is mitch mcconnell the senior senator? >> no. he is a senior senator.
>> you're a senior guy. so let me ask you, i have you here, the obama news is coming up in 40, 50 minutes, going to try to defend nationalized socialized health care. what's your bet now given everything you know about politics in capitol hill, is this thing still alive? could it pass? >> not before the august break. they are having difficulty putting the plan on paper and they're having difficulty getting scoring for the plan from tbo and omb. in my opinion, we will not have a bill out of the senate before the august break. >> your colleague dick durbin said the same thing, democratic deputy leader. if folks go home, what are they going to hear? if the senators go home, house members go home, people talking about big tax, big spending, as you noted, costs don't add up according to the score keepers
cbo? does it get beaten down or rise up from the ashes. >> i think this is utterly pivotal for the american economy and america's future. >> larry, if it passes as proposed in the health committee or house of representatives very shortly, it will do damage to our economy for the next 25 years and we will not be able to change it for 25 years. so the best thing we can do is slow it down, try to correct its. everybody knows we need health care reform. let's do it in incremental type refor reform. >> lightning fast if you can help us, i couldn't resist on the obama-care. what's your biggest beef on chairman bernanke, you gave him what not today as you frequently do. what's your biggest beef. >> my biggest beef is he's wrong most of the time, he's wrong on monetary policy.
we don't want to interfere with his monetary policy but the fed is into everything the treasury should be doing. he has lent 2$2.8 trillion out and not accounted for it. that concerns me and ought to concern the taxpayers of america. you don't get carte blanche to loan 2$2.8 trillion over $5 trillion in the last six months. that's a no no for the american people. they are worried to death this deficit is completely out of control. >> i agree. they are worried. the question is with respect to bernanke's alleged exit strategy, what should he do? should he look at the dollar to protect consumer pocketbooks or look at his fed models? what do you think he ought to do? >> hie's going to do -- he's no
going to be the one that does. it he will be out as fed chairman. larry summers will make that decision. >> no kidding. >> absolutely. that's my opinion. >> you're the first person to say that. >> that's my opinion, knowing the president of the united states as i know him, he will get rid of bernanke at the time and larry summers will take over. >> even though a bloomberg poll just up on the news today, 70% of global investors are absolutely swooning in love with bernanke and people are saying obama likes bernanke because he's basically going along with his administration policy? >> who no. he's part of the treasury department. is there no independent fed we have. we're supposed to have an independent fed and we don't have one, larry. that's my biggest concern with ben bernanke and his predecessor. who was a much tougher guy. >> yeah, up until the last five or six years, greenspan was a
tough guy. >> kind of cooled. >> you think summers is in fact going to replace bernanke, that's your basic guess. >> that's my basic guess. >> let me ask you, bernanke outlines 2% growth next year, as i read it, and no inflation. do you buy it? >> no. because i don't think he can withdraw the total amount of dollars he's put in circulation quick enough and fast enough to stop inflation at a higher rate. >> all right. senator jim bunning, i have to leave it there. thank you for your outspoken views as always. >> thank you. coming up on the kudlow report, raymond james financial comes in after tbove estimates "closing bell" today. and will he share his story and world views, stocks versus bonds? what's next for that distinguished firm. later, the battle over obama-care, former secretary
robert rice versus "20/20"'s john stossel. i say the thing is a disaster for america. we will let these two highly distinguished and learned gentlemen debate. jim bunning basically says bernanke is out and larry summers is in. what do you think of that outspoken senator from kentucky, grassroots. me, i want to keep capitalism the best i can. (announcer) take your time to find the right time
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raymond james company beat estimates after the "closing bell" and more. here has the ceo of the company, tommy james. thanks for coming back on. >> great to see you, glad to be with you, larry. >> before we get to raymond james and company, you saw bernanke testified and he's basically got a skcenario that says slow growth and no inflation for at least the next year and will keep his target interest rates real real low, i want to ask you, from the standpoint of your own client base, retail guys and institutions, whatever, are people going to bonds or stocks on this kind of forecast? >> well, i'm not sure if it's the forecast, larry, but the facts, the experience that they've recently been through has led them, at our firm, to increase their percentage of bonds in their average portfolio from 29 to 36%.
and we have about 44% in pure equities. >> they buy these index bond funds, these exchange traded bond funds doing very well both for govys and corporates, tommy? >> yes, they do. they do more than they used to, that's a growing trend. i would tell you, they tend to own real good proven bond managers like pimlico, franklin templeton, et cetera. >> what's your own take on the world right now? >> my own take on the world is that it's still suffering, obviously, while unemployment may be a lagging economic indicator, it's for real when you're one of the unemployed. it frightens everyone around them. all of us in the corporate world, of course, have been focused on reducing expenses. and attempting to maintain some degree of profitability and
certainly free cash in an environment where the availability of lending capital is questionable. so, you know, i don't think we're totally out of this until attitudes change. i think it's going to be probably a slow period coming out and we're going toton have some volatility in the market. >> a couple things on the company. your great old company. first, your earnings came out better than the street thought. the revenues underperformed. i want to ask you, what's an operation like yours do to build up revenues? what's the strategy in the next year? >> the prime strategy is to grow productive personnel. in the last quarter, we added 150 new financial advisors. and we added a considerable number of constitutional sales people and traders, public finance people, equity, capital markets people. actually, that decline in revenues is worse than what it
looks like because we added dramatically to our sales forces as a result of the turmoil at the major banks and investment banks. >> your press release mentions a raymond james bank. i didn't know you had a bank. are you a bank? you have discount window privileges with the fed. tell me just a little bit about that. >> actually, we have a savings and loan we started about 13 years ago to provide services to our retail and corporate clients. we really didn't grow it until three or four years ago, when we moved some of our deposits to the bank at competitive rates, i might add, to our clients. now, it's about a $9 billion bank. we're kind of holding it at this level, while we increase capital at the bank to probably around a 12% total capital to asset
ratio. >> tommy, did you take t.a.r.p. money? >> we did not take t.a.r.p. money, larry. >> wow, wow, you have no worries there. do you want to grow the bank? last question, is that going to be a profit center. >> it is a profit center currently. it contributed $27 million in pretax profits this past quarter. actually, we look at it as an ang angle -- ed a zwroungt t angle-adjunct to the financial services. i think multiples are still very attractive. there's still some growth and as revenue growth increases and the economy comes out of this, i think we will see great opportunity for investors. that's why we continue to invest in growing our platform, because i think our services will be very necessary in 2010. >> thank you ever so much for coming back on the program. thomas james, ceo of raymond
james and company, based down there in tampa-st. pete, as i recall. >> your memory is great. great have been with you. >> not bad for an old guy. obama will be a complete and utter disaster for this country, that's my own take. we have two esteemed guests ready to debate the proposition. former labor secretary reich and john stossel. they will battle it out. and later tonight, make sure to catch president obama's press conference right here. he will talk health care but do it on cnbc at 8:00 p.m. eastern immediately following "the kudlow report." we'll be right back. so, katy kicked off the conference call...
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obama speaks in half an hour or so on health care. we'll start right in with two distinguished people, former secretary robert reich and abc's john stossel, the co-anchor of "20/20." we will talk obama-care. john stossel, you're a special guest, we appreciate your time very much. you wrote a good column today, i picked it up on "real clear politics." we'll go relatively short in this segment. what is your initial thought
about obama-care. >> more government care means higher prices and less choice. the only thing that works well in life is capitalism and he wants less of it. that's not a good idea. >> you write in this story today a handful of people who probably never even ran a small business think they can reinvent the entire health care system. it's crazy for a group of mere mortals to try to design 15% of the american economy. >> it is arrogant and crazy. and it's con seat that we the elite in washington d.c. can run your life better than millions of free people compete iing is insane. i agree with you. >> robert reich, you heard him, arrogant, handful of people never been in business trying to redesign the economy, what's your response to the distinguished john stossel? >> i would have hoped for a little bit more trenching and insightful criticism. health care now spending 16% of the economy a couple decades ago
was only 8% of the economy. most americans are paying through the nose directly and indirectly and most people barely holding on, co-payments, deductibles, skyrocketing. not elite in washington, talk about elites, elites in a very narrow range of private insurers and major drug companies and kind of the elites of the ama, these people are control of our health care system. most americans are not. if our democratic system means anything, it means getting some control so the system works for people instead of people being mugged by it. >> but control is where customers spend their own money. that's real control in a market economy. that's what holds prices down and gives us more choice. we're going to have less of that. >> you know as well as -- wait, wait, john you know as i do most people when they spend th care dollars, they're not spending their own dollars, not like regular consumers and don't know what's going on, they have
no idea, if they have pre-existing conditions, they can't even get health care to begin with. if they're relatively poor or near the median wage they can barely hold onto what they have. this is not a regular market. who is kidding whom? >> i agree, it's not a regular market, the government is spending half the money. why is that a good thing. >> medicare is a ponzi scheme, elderly people like it because they're getting free -- >> you won't get an argument from me, we have to reform it. >> whether it's the government or businesses that get tax deductions from the government, they're both bad but no one is going to attack or change that. that's bizarre. >> and robert reich talking about health coverage rather than health care, insurance is the worst of a free market, third party coverage paying for your health care. >> you have to have some insurance somewhere.
larry, if you're suggesting we get rid of employer provided health care tax-free, i was in favor of that. i think john mccain was exactly right. we've gone beyond that. >> i have to get out, producers are screaming, we'll get right back with robert reich and john stossel. breaking news, bristol myers has made a major acquisition, when we come back. kudlow, socialism versus capitalism.
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viehbacher. we've got some breaking news from mike huck mman on bristol myers. what have you got? >> reporter: good evening, we have bristol myers squibb with a $2.1 billion acquisition of a pharmaceutical company called met to metorex. 2$2.1 billion. bristol gets a drug in late stage development for mel anoma metastatic skin cancer. bristol reports earnings tomorrow morning. >> thank you very much. drug stocks have been pretty hot
except for mr. obama's news conference tonight which may have scared a few people. we are talking with john stossel, debating the issue of obama-care and what to do about it. robert reich, i cwant to do thi. consider the following, we had massive break through in technology, whether drug technology, hostile procedure technology, operations, things that are just fabulous we never dreamed of, yet in the short run, it costs more money, in the long run, just like the cell phone and computer many years ago, those costs will come down. why is that such a bad thing? why do we condemn the american health system for some of the greatest technology breakthroughs on the planet earth? >> technology is great, larry. i don't know anybody. i have not met a doctor or many people i talked to in the insurance industry with regard to health care who think the system is good. most people think it is broken. only you and john stossel think
it is a great system. most americans do like their own doctor and do like their own way they get medicine. in terms of how they're paying and what they do with insurance companies, most people can't stay it. >> polls show 70 to 80% of the people are satisfied with the health care insurance they have. that's what the polling shows. >> no, larry, they are not satisfied. they're not satisfied. >> i beg your pardon. the q poll and gallup poll. >> and the insurance system. >> i agree with him. it's not a good system. >> people are satisfied. >> health savings accounts would be where the consumer runs it. the tiny area of medicine like lasik eye surgery or cosmetic surgery, quality is going up, prices going down, doctors give out their phone numbers and e-mail account, it's market. >> hang on. let me follow-up. >> cosmetic surgery is not what we -- >> in other words, i would give those who are truly needy and
uninsured, i would give them vouchers so they can shop around or might give them health savings accounts, debit cards, like food stamps. >> high deductible policies that they -- >> that needs changing. i do want some change. i want to ask you, where is the free choice and competition? where is the hsas? where is the interstate insurance competition that would have brought down costs. >> politicians have made it illegal. i can't buy from out-of-state because new york has crazy rules that say i have to pay for acupuncture and mid-wives and who knows what? it would be more of a market if you could at least buy out-of-state. obama tonight, i read his opening statement, abc sent it to me will say insurance companies should have less freedom. >> see that, robert reich, less freedom. >> every one of the bills now coming out of congress would create more competition and would create exchanges in which consumers can get more and better information about what
they're paying and what they're getting for what they're paying, that's what they're paying, you free marketers and i'm a free market going out to be celebrating these exchanges and celebrating the fact there will be a public option, let me underscore the word "option." it would actually put pressure on the private insurers. >> i'm sorry, investors business daily broke this story, it has been confirmed by the ways and means staff. if you change your insurance policy for any reason, if your employer takes you out of it, if you want to make a change yourself because you don't like the coverage or you want a better hospitalization or doctor, you cannot get a new insurance policy. that is in the law. mr. obama promised choice, he said you can keep your policies, that is not in the law. this is the government takeover. that is all this is. >> can i make one point. >> this has been confirmed by investors business daily and every news outlet across the country. you lose choice. you have to go back --
>> hey, kudlow, let me just say there, are four separate bills on the hill right now, there's not even been a vote in either the house or senate. this thing is still a, you know, a project information. you guys who are nay saying it so quickly, why don't you get involved? roll up your sleeves, make sure your representatives and senators know what you think. this is a democracy here. >> we'll come back. >> don't close the door. by the way, it's not, larry, capitalism versus socialism. >> i think it is. i see it in very stark black and white terms. we will come back, you want us to roll up our sleeves, that's just what we're going to do and do more with you and john stossel, a pleasure a great debate. make sure to catch john stossel on "20/20" friday, july 31st, when he'll be taking a special look at the costs and consequences of health care. and president obama claiming economic rescue from the great recession, uh-huh? reich and stossel, i hope will debate that, too. mainly focusing on health care.
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president obama's news conference, eight minutes right here on cnbc, we're previewing it here in our usual low-key fashion. we have the great robert reich and our special guest, equally great, john stossel, abc "20/20." john, you were back pedalling at the end of that, there are four or five bills, we don't know
which bill. we do know what the house wants, whether it gets through the senate but you're kind of back pedalling. >> the house bill has been supported by the ama and pharmaceutical association and private insurers. >> with preconditions. >> she's interest groups are exactly the interest groups you would claim are representing capitalism. >> with pre-conditions. >> and yet they are supporting the house bill. you explain that to me. >> the ama is supporting it. that's because they're trying to get out of medicare cost cutting. that may never go through, in fact, peter or zog, obama's guy said that will probably never go through and lose the ama. this is like the corporate welfare part. what about these big washington trade lobbying groups weigh in on it? >> they make me nervous, when business and the politicians agree, i think that just means they'll take more of our money and we'll have less choice. >> less choice. maybe we shouldn't listen to any of these guys.
>> wait a minute. >> what about the mayo clin snik what about limited government. >> robert reich did not mention the fact the mayo clinic president obama praised to the high heavens during the campaign -- >> we can't pay for it if you cut our -- >> what happened to that, robert, you forgot to mention the mayo clinic opposition to this. >> there are certain insurers and certain hmos that are opposed. i do think mayo is doing a good job, prepaid hmo, accountable care organizations will feature very very high and very important lin the legislation that comes out of all of this. i also want to say that the clock is ticking. i don't think -- i don't think right now there is going to be a vote before the august recess in the senate, maybe not the house. that's going to be a problem for obama come september because speed is essential. as you guys represent, the longer this thing hangs around, the more kind of nay-saying and scare mongering goes on and the more the public gets a little
bit nervous because people like the two of you. >> we have to stop socialism. john stossel, you are a votee of free market capitalism. you write about it and cover it on your program in 2020. what's the free market solution? what's the option. what did mr. obama quote-unquote forget. >> he forgot where it works is when you pay for it with your own money. with people with health savings account, the doctor said the mri would cost this much and i went across the street and it was half as much and no one had ever asked, you'll pay cash? only when the consumer is spending his own money -- >> will we fix the problem on cost control. markets better than government? how about that? you guys have been great. i'd like to do this again if you agree to it. catch me tomorrow morning on the call with melissa and trish at 11:00. coming up, live coverage of president obama's press coverage, right here on nbc.
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conference. . >> welcome back, folks, you can see, that's shot of the east room of the courthouse. there's our own john harwood on the left side. president obama set to start speaking to the nation in about two minutes. good evening, everybody, i'm larry kudlow. >> i'm dennis kneale, the president focus squarely on health care to rescue this plan and john harwood is inside the east room to rescue this plan. what should we expect. >> reporter: we can expect the president will weave together his arguments on health care and the economy very much on the minds of the american people with unemployment having hit 9 1/2% and he has a lot of legislation in motion on the hill in the house and senate. >> president obama has to snatch victory from the apparent health care jaws of defeat. they will go out for the august recess with no bill and b, apocolypse now, i see this as
straight up, free market capitalism versus nationalization socialism. >> reporter: you can frame it that way, but i don't think we're near the jaws of defeat yet. for 70 years people have tried to get comprehensive national health care reform. you still have motion in all of the important committees in the hill, you have the finance committee bipartisan negotiations, now likely to drag into next week, not likely to produce a bill by the end of this week, as many people had hoped. we're a long way from seeing this thing about to fail. >> you say they've been working on comprehensive health care for 70 years, why i always felt why do we have to pass this by august? do you think the president will ease that demand tonight or will say, no, i want this baby passed by august recess? >> reporter: i think he wants it passed before then but that's not in his control. the congress moves on its own timetable. they recognize the white house, it's getting exceedingly difficult to get action in the senate and difficult if not im
possible get action in the house. they'll have to roll with that. i don't think there's much appetite for holding the congress in session over the august recess, because it's going to be very difficult to have a productive session at this point. >> john, number two democrat in the senate, dick durbin said late this afternoon, it ain't going to get done before the august recess. will obama concede that fact and maybe concede the wisdom of that fact? >> reporter: i don't know if he'll do it explicitly but i think he recognizes the score, he understands how difficult it is. he served in the senate and knows that especially if you're trying to get democrats and republicans together on things like the shape of a potential public option -- here's the president, guy, we'll listen to him. >> good evening. please be seated. before i take your questions, i want to talk for a few minutes about the progress we're ma