Skip to main content

tv   The Kudlow Report  CNBC  June 4, 2013 7:00pm-8:01pm EDT

7:00 pm
listen, you're going to sell the stock? think about it. when apple's win comes, it didn't affect the stock on the up side. if you want to own apple, you've got to like apple. you always like to say there is a bull market somewhere, i promise to try it find it for you here on "mad money." i'm jim cramer and i'll see you tomorrow! has chris christie thrown an election year curveball at his own party again? new jersey governor steps away from the chance to play the partisan game and decides to call for an early special election to fill frank lautenberg's seat. some conservatives are angry that christie may be as clever as a fox on this one. we'll explain why and get you updated on is this still-developing story. what gives the federal authorities the right to spread innuendo and fear and break up a hedge fund like they are doing to steven a. cohen. maybe he is guilty, but he hasn't even been charged yet. all those stories and much more coming up on "the kudlow report." beginning right now.
7:01 pm
first up, new jersey. governor chris christie today calls for an october 16th special election. he's going to replace the late u.s. senator frank lautenberg, and the decision begs the question, why send voters to the polls just weeks before he faces his own re-election? or might he be smart as a fox on this one? and who is going to be replacing mr. frank lautenberg. anyway, let's go to ace political reporter, cnbc contributor, robert costa of the national review. bob costa, i don't know. if you keep the turnout down, maybe this is a cracker jack, very smart thing that christie is doing. >> we'll see where it's going to be very tough, though, for republicans. because it's going to be an abbreviated campaign. the primary is going to be in august, the special elections in october. who has the money and the name idea on the gop side to
7:02 pm
really -- a race against cory booker, remains to be seen. >> couple weeks wouldn't change that. the chances of a republican taking that seat, let's be serious. >> that's true. the republicans haven't had a senate seat in new jersey since 1992 with nick brady. haven't won in new jersey since 1972. >> and that's why i'm just wondering, okay, if you have the cory booker election, he's going to run against pallone, 300 million bucks. you've got the cory booker election. if you run that thing in october, october 16th, after an august 13th primary, get it out of the way, come november 13th, the cory booker base and the democratic turnout is lower, that not only helps christie, it may help the underticket in the state legislature for the state senate and state assembly. maybe christy is smooart as a f here. >> i buy that argument and i'm hearing that from top inside sources. they believe that now with
7:03 pm
christie's chances of picking up a u.s. senate seat, pretty minimal. especially if you don't have christie's coat tails. but christie is now going to probably coast to re-election against barbara buono and all the new jersey republicans under her will do well, because cory booker won't be on the ballot in november. >> and then maybe christie can get his 10% across the board tax cut also. robert costa, stick around. you're going to tell us who christie is going to appoint if only for a couple months. n now, in another political news, still no answers about who knew what, when, and who ordered the irs targeting of conservative groups. but there were some fireworks in today's hearing. as democrats began pushing back. cnbc's eamon javers joins us now from washington with the details. good evening. >> dweeng, larry. another tough day on capitol hill today. the house ways and means committee looking at the question of why these particular groups were targeted by the irs. a lot of tea party and
7:04 pm
conservative-leaning groups invited to testify. and a lot of the testimony here focused on the outrageous, in their view, questions that the irs asked some of these tea party groups about their nonprofit status applications. take a listen to some of the questions they were asked. >> the most disturbing thing for us was having to agree that we would not protest or picket at planned parenthood. and since there were no similar requests in the application, really, we had no idea what they were even trying to control, if we went there in prayer, would that be considered picketing, protesting. it was very troubling. >> and larry, at times, the testimony today grew emotional. as in this clip. take a listen. >> i want to protect and preserve the america that i grew up in. the america that people cross oceans and risk their lives to become a part. and i'm terrified it is slipping
7:05 pm
away. thank you. >> larry, what we didn't get here today were new details on exactly who ordered this political targeting, and that is the big mystery at the heart of scandal at this appointment. russell george, inspector general who testified yesterday up on capitol hill said that he asked staffers in the irs who ordered this. and he said he was unable in his investigation to get a straight answer to that question, larry. so that's one of the big mysteries we're going to continue to pick at here in washington until this scandal is resolved. >> eamon, just a quickie. was this a democratic pushback today or was that just kind of nothing going on? >> oh, absolutely. democrats came loaded for bear today. they had a couple different messages they wanted to get across. one was a lot of members on the democratic side alleged that under george bush, the irs had similarly targeted liberal-leaning groups. and also, they said that in many ways, the law here is to blame, because it's kind of fuzzy. it prevents some of these nonprofit groups from engaging
7:06 pm
in political activity, but doesn't define what that political activity is. and so the irs's response here was maybe hand-fisted and wrong, said some. but they said it wasn't a conspiracy. this wasn't some kind of big scandal emanating out of washington. it was hand-fisted irs staffers dealing with the law. that's the line you got from democrats today. >> of course, none of the liberal groups got nailed, but that's another subject. let's get some reaction now from the man in charge of today's hearings. joining us, the distinguished chairman of the house ways and means committee, congressman dave camp from michigan. chairman camp, thank you very much. i just want to ask one question. not on today's hearings, but do you intend to call the irs counsel, william wilkins? his computer has been taken away. he is one of the people that people are asking about, did he quarterback this, did he know about this. he is certainly in the upper echelon. are you going to call him? >> we don't know yet, larry. you're right. we don't know who really orchestrated this, who thought
7:07 pm
of it, who implemented it, who directed this. we're still trying to find those things out. so it's unclear. but look, we're going to look at all of this. it's going take some time. it's going to be painstaking. we need to know, really, the extent of this. today's hearing was really a chance to hear from the victims. and i thought their testimony was compelling. i mean, if you thought of average measures americans, they represented people from all over the country who really have been targeted by the irs, and many of them for different reasons. some because they had their donors released, others were 501 c 3s, some 501(c)(4)s, so really an important point to have their voices heard, and really put a person behind the issues that have been going on at the irs, and we are we don't know how far. >> let me stay at the irs part. as you know, i think, you've got the irs has become a corrupt agency, it's exercising political power and never should have had -- we've learned it's a left wing agency, and all of the
7:08 pm
contributions are from democrats. to me, mr. chairman, this is the moment from tax reform and cinchification, which would take the power from the irs, maybe not all of it, but limit that power, and add some growth to the economy. tax reform, sir. >> well, you're absolutely right. obviously, the main purpose of tax reform is to grow our economy, create jobs, people get higher wages and provide for their families. but if we can limit the power of the irs through a simpler, fairer, flatter tax code where they aren't digging in and asking all kinds of questions and discretion, i think that would be a great goal to accomplish, as well. so i think this makes the case for an agency that really is out of control and isn't really doing the job that they should be doing, and i said we need to really limit that authority to the extent we can. >> you've got to explain to me -- tax reform. 501 c 3s. c 4s. c 5s. c 6s, there's a million of these
7:09 pm
littlered through the tax code. all they do is provide cronyiest insider -- for left and right -- kinds of privileges, we're supporting nonprofit groups we probably shouldn't be supporting. giving the irs massive amounts of power. why not just scrap all of that? maybe have a modified plat tax, 10%, 28%. give the middle class some real tax relief. what do we need all these c 3s and c 4s and c 5s anyway. you want to donate money, adjustment donate money. put your name up on the internet and that's that. why give them a tax exemption? >> you're right on that. we don't look at all of that. but you know what, no matter what the tax code looks like, it did not authorize the irs to target people for their conservative political beliefs. and that's what we need to get to the bottom. >> i understand that. >> tax reform, we want to look at all of this. in fact, in our budget, we had two rates, 10 and 25. we want to look at a simpler code. one that really creates economic growth and job opportunities. and we're going to continue to
7:10 pm
do that in the committee. >> look, the irs has no right to do any of this. don't get me wrong. that's not the case i'm making. i do believe that this agency is turning into a corrupt agency. and i do believe, i think you do too, that tax simplification and marginal rate reduction is the way to go. what's wrong with a 25% corporate tax? what's wrong with letting small businesses go from 40% down to 25%? in other words, sir, the urgency for economic growth, the urgency to limit the irs, has never been greater. this is the moment to seize. >> absolutely. and i've got to tell you, that's why we've had more than 20 hearings on tax reform and i am working very hard to have the committee produce a bill this year on tax reform that will simplify the code, lower rates, as you described, also have business reform, corporate reform, so we can actually compete in the world today, and with that, growing u.s. economy, more jobs for families, and higher wages. and that's really the outcome we want to look for in terms of tax reform. >> i think it would be great if you had a tax reform, and one of
7:11 pm
the impact statements would be not only how many pages you can take from the irs and the federal register, but how much staff can you actually cut back. i think that would be great. you know what, these deductions, these exemptions, even the charitable ones, i'm going to -- charitable deductions, i cthink the economic merit is vastly limited. home mortgage deductions, vastly limited. that's what the study shows. if, sir, if the marginal tax rates are low enough, those deductions are -- they have no value. people won't need them and you cut back on the irs so they won't make all their political judgments. >> you are absolutely right in that you need to look at all of that, in light of a lower rate. there's no doubt about that, that that makes a difference. as a current code is now, even with the multiple rates we have, two-thirds of the americans don't itemize. most people that itemize are at the higher scale. if rates come down, that really does, as you say, devalue all of those deductions, and make -- it
7:12 pm
makes their worth just completely different. so we need to look at it in that context. no doubt about it. >> you've government a great economic case, mr. chairman. great economic case. now you've got a great corruption case. the whole country hates the irs, probably did before this. and then they're going on to obama care. this is the moment. i wouldn't let anybody off the hook, sir. anyway, i've got to get out of here. you've got to vote. i'm told you have to vote. dave camp, thank you very much for helping out. you've been terrific. now, let's talk some more about tax reform. let's check in with dan clifton, head of policy research. dan, you're going to be with us for a while. i was trying to put the heat on dave camp who i think basically agrees with me. my question to you, as somebody who follows the policy game on capitol hill, seriously, seriously, am i whistling dixie or is there something really going on on tax reform? >> it's starting to build, larry, a lot of challenges to removing deductions and lowering tax rates, the big government
7:13 pm
politicians want to keep those rates high. the special interest benefit from those deductions are starting to spend money in washington to preserve those deductions. but here's the chairman of a ways and means committee getting up every single day, trying to move the ball forward on tax reform. and you also have this from senate finance chairman max baucus on the democratic side. so you're starting to see develop, you throw in the irs issue, you throw in the hearings on kind of this corporate deductions overseas and all of a sudden the pot is starting to bake. the key, larry, is that the committees have to be ready for when the opportunity strikes. that opportunity will be the debt ceiling debate. and chairman camp has not been doing this for a week. he has been doing this for 18 months. and when you look on his website, larry, pro growth tax reform that changes the international tax code, that allows companies to bring their profits back to the u.s. and lower tax rate. this is a real serious stuff
7:14 pm
that's going on. >> i think politically, you always need some kind of political hook. >> they're. >> you're not going to get any presidential leadership on this. the political hook this time, dan clifton, is a corrupt, politically motivated irs. in other words, to me, you can turn a bad into a good. and then really do something good right now. that's what makes this moment different than any other moment i've seen in the last half dozen years when everybody talks about tax reform, doesn't do a thing about it. irs corrupt. they're corrupt. you see that tim carney article, we had him on the show last night. with all their money, they give all their money to democrats, the irs in the cincinnati office. the treasury employers' union, all left-wing democrat. it's a corrupt agency. so curb them by cutting tax rates. >> that's absolutely correct, larry. so now we have been steadily increasing our probability for doing tax reform. but i still have to go back to presidential leadership is critical here.
7:15 pm
one of the things that we're seeing, larry, is the president's approval rating is slowly coming down. at a time when consumer confidence in the economy is getting better. that's telling us that maybe the president may have to see there is some benefit to doing tax reform, given the situation that he's in. it's still a long shot. but you never know how these political issues -- >> you're right. and we don't know how deep into the administration this irs scandal is going to reach. we don't know that. that could be another important factor. dan clifton, hang out for a bit. you're coming back to talk to us more about the budget, heaven forbid. now here's yet another dicey issue for the obama team. we're learning that more and more cabinet officials used secret e-mail accounts under different names. what were they hiding? where is the transparency that obama promises at the beginning of the administration? and is this too a budding scandal? later on, the white house says it still wants a grand budget deal. but all the president has is veto threats, and he's got this
7:16 pm
scandal-ridden atmosphere. you know what, a government shutdown after the summer may become more likely. and please don't forget, free market capitalism. it's the best path to prosperity. a free market tax system that puts away the corrupt irs. i'm kudlow. we'll be right back. [ male announcer ] frequent heartburn? the choice is yours. chalky... not chalky. temporary... 24 hour. lots of tablets... one pill. you decide. prevent acid with prevacid 24hr. sparkly water and pure white sand
7:17 pm
might not get you off your couch, but there's not a creature on earth that can resist this. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small.
7:18 pm
7:19 pm
here's another one for the books. the ap reports today, the top political appointees in the obama administration are using secret government e-mail accounts to conduct federal business. the list includes health and human services secretary kathleen sebelius and lisa jackson who reportedly used the alias richard windsor. is there ever going to be an end to the cover had be-ups in the administration? matt lewis, senior contributor at the daily caller. matt, what is this all about? >> well, there is a owe there is a possibility there this is all innocent, larry, because it does make sense you would have a couple e-mail addresses. i'm not being facetious. if you have a public e-mail address being inundated with hundreds of e-mails, you may have a second one to communicate
7:20 pm
internal internally. the problem, though, is that when citizens or media outlets -- do a freedom of information act request to obtain this information, which they have every right to do, usually, almost every time, these secret e-mails go unreported. and so whether it's by design or just a nice coincidence, some of the things being said by our government officials and people in these departments are not discoverable. >> yeah, now you're cooking, come on. the usual e-mail accounts they're setting up, this is not to text message the babysitter, okay? can we just -- let's just put that right on the table. we know that, okay? now, you've got this other guy, tom perez. he's the former assistant attorney general, a very controversial guy, who is trying to become labor secretary. the ap tries to go to the labor department, got nowhere.
7:21 pm
defense department, got nowhere. in other words, if congress or somebody wants to do some investigation, like the irs, for example, then they can't find the e-mails. they wonder who said what to whom. that's what this is all about. this is one of these cover-up deals. >> whether it's by design or just a convenient sort of coincidence, it still stinks, and it's horrible. and by the way, maybe -- there's a lot of funny things involved in this story or ridiculous things. maybe the most ridiculous was that when the ap asked the labor department to turn over their secret e-mails, they said pay us $1 million to do it. which violates the law. so, look, it doesn't look good. and let's give them the best motive, assuming that this is all on the up and up and it's just a way to sort of manage being inundated with e-mails. nobody is really managing this. and so you know, if someone works in the justice department, and by the way, there are still ten departments who have not
7:22 pm
turned over their secret e-mails yet, the justice department is one of them, to the ap, let's say you worked in the justice department two years ago, and you left. maybe nobody knows what your secret e-mail was. >> right. >> so you would never know what you said. >> that's right. let's say there's some kind of investigation. how are you going to figure it out? when did this start? i want to know, did this start under this administration? >> that's a good question. the -- i'll put it this way. this administration claims that this is a -- that there is a long-standing precedent of this happening. look, i have no reason to doubt that in the past some people have had, you know, multiple e-mails. but, look, i think that clearly this is a problem. and it's documentbly a problem, because the associated press requests hundreds of pages of documents, and they only received one -- one of these secret e-mails. and so clearly things -- so look, i don't care if it's an obama thing or bush thing. i think that this needs to be
7:23 pm
fixed, because the public has a right to know. these officials need to be held accountable. they don't have the same privacy, you know, concerns that citizens who don't work for, you know, for the taxpayers have. >> one of the things i like about this story -- we've got to get out. i love it. the ap is really on the war path. and you know why they're on the war path? because they got prosecuted by the justice department on national security grounds, and the ap is one pissed off news agency. >> and gutsy. they're being gutsy. >> that's right. they are going after everything and they are going it to dig and come up with and do the job we always wanted them to do. matt lewis, daily caller turks very much. last week we told you about ohio state president foot in mouth disease. a major development in that story and seema mody has it for us next up on "the kudlow report." [ male announcer ] it's intuitive and customizable,
7:24 pm
just like a tablet. so easy to use, it won a best of ces award from cnet. and it comes inside this beautifully crafted carrying case. introducing the all-new 2014 chevrolet impala with the available mylink system. ♪ [ beeps ] ingeniously connecting you to your life and the road. that's american ingenuity to find new roads. (announcer) at scottrade, our clto make their money do (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning
7:25 pm
every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies." has oats that can help lower cholesterol? and it tastes good? sure does! wow. it's the honey, it makes it taste so... well, would you look at the time... what's the rush? be happy. be healthy. yeah... try new alka seltzer fruit chews. they work fast on heartburn and taste awesome. these are good. told ya! i'm feeling better already. [ male announcer ] new alka seltzer fruits chews. enjoy the relief! [ male announcer ] new alka seltzer fruits chews. why not make the day unforgettable?
7:26 pm
with two times the points on travel, from taxis to trains. you'll be asking why not, a lot. chase sapphire preferred. there's more to enjoy. new developments today in the story of ohio state university president gordon ghee. seema mody brought this to our attention and now is back with the latest. >> evening, larry, that's right. gord gord gordon ghee is retiring, not firing. but ghee did say the controversy surrounding his comments about catholics played a role in his decision on a conference call, gee jokingly referred to the executives at the university of notre dame as, quote, those damn catholics. gee is 69 years old, and says his age is another reason he
7:27 pm
decided to retire now. larry? >> they going to replace him? any candidates? >> we'll have to see what the update is. >> put a catholic in there. >> that would be perfect. >> all right. seema mody, thanks for that update. up next on kudlow, the white house says it won't settle for anything less than a major long-term budget deal in congress that ends the sequester, and jacks up taxes. no way, friends, president has got a veto strategy and that could lead to a government shutdown later on this year. that's next up on "the kudlow report." my mantra? always go the extra mile. to treat my low testosterone, i did my research. my doctor and i went with axiron, the only underarm low t treatment. axiron can restore t levels to normal in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant
7:28 pm
and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. hoo-hoo...hoo-hoo. hoo-hoo hoo. sir... i'll get it together i promise... heeheehee. jimmy: ronny, how happy are folks who save hundreds of dollars switching to geico?
7:29 pm
ronny:i'd say happier than the pillsbury doughboy on his way to a baking convention. get happy. get geico. fifteen minutes could save you fifteen percent or more.
7:30 pm
new jersey governor chris christie under fire tonight for his decision to call a special general election to fill the seat of late senator frank lautenberg. that's just weeks before christie's own election in november. take a listen to cla writesty told reporters today. i want to have -- the only option i have is in 2014 or special election in 2013. i believe that it is important for the people to have a voice and a choice. and the statute clearly and
7:31 pm
unequivocal unequivocally, my sole discretion to make that decision. i have made that decision. it is final. it has been signed and it's over. >> all right. my question is, did christie throw a curveball to the gop, or did he do something very clever to take over the state senate and the assembly run by democrats for time in memorial. back now, welcome ari medical ber to the show, and dan clifton and robert costa. this is too much fun. he could have waited until 2014. get that. but now cory booker, the favorite to win the senate race, that's all going to be over, let's see, october 16th. christie's race is november 13th. with the underticket in the state legislature. and all the cory booker supporters will not be around. i think that's pretty clever, ari. >> it is pretty clever. i also think this was the right move for voting. that is to say, he got voters
7:32 pm
involved earlier, rather than delaying it. i think that's always good. you know right now, larry, since 2008, we've had 11 different people appointed to the senate. the appointment's process is controlled by political insiders. he's well aware of that, wants to look like he's on the side of democracy, although it's good for his politics, as well. one thing funny about christie and why he has to be careful in dealing with republicans here, larry, look, if you talk to christie voters in the public policy polling from may, he's got 39% approval among people who backed romney. among obama voters, it's 45%. this guy is beloved more by democrats around the country than republicans. so he's got to be careful on that front at home. >> all right. i've seen some different polls, too. but, okay. robert costa, who is governor christie going to choose now to have this interim position which will be, what, three months long? >> that's a great question. the looming question right now in trenton, larry. just spoke to my sources there. i hear christie will make a decision by friday afternoon. there's going to be an
7:33 pm
announcement this week. top of the list, tom cain senior, former governor. second on the list, tom cain jr., his son, a state senator. third on the list, a state senator who ran against bob mendez, but lost. >> it's going to be a republican. i saw speculation, he might appoint a democrat. he's going to appoint a republican. there's going to be a primary. in fact, there costa, there's going to be two primaries. one on the republican side. the other on the democratic side. frank pallone is going to run against cory booker. and all those names you mentioned, except tom cain senior, may primary each other. >> that's exactly right. here's the thing why it's going to be tempting for some republicans to run in this august primary. even though the window to run is so small. they look at the democratic primary, and they think pallone, who is from long branch, new jersey, connected to the democratic machine. he could upset booker. if he upsets booker, that gives the republicans a chance to maybe win the seat. >> great point. we have had frank pallone -- do not underestimate frank pallone.
7:34 pm
dan clifton, you know, you could win in august. look at these numbers. august 13th is the primary. the general election for the senate seat is october 16. let's say you come out of the august thing, you get all the newspaper coverage in the world. you could be on the front page of the "new york times," "new york star ledger", all the papers, going to be famous. there is momentum there. there is a lot of momentum there. in a quick election, anything can happen. >> that's right. but i also believe that this will get swamped by the governor race ads, which will be happening at the same time. in a very expensive media market. and so there's a real opportunity for a republican to skirt underneath the radar screen and be able to pull this one out if the democratic machine is not working. it's very interesting. when we were -- knew what's going on in new jersey, larry, a lot of democrat power brokers who want chris christie to become governor or at least don't mind him being governor. they're not willing to give up the governor seat and creates opportunities for republicans.
7:35 pm
christie has gotten the politics right all of the time since he has been in office and is probably going to get this one right again. >> that's what i think. very underrated as a political guy. anyway, robert costa, thank you very much. fellas, you stay with me. another budget battle looming. the obama strategy could wind up leading to a government shutdown. let's discuss. dan clifton, ari mel ber. as i understand it, budget chairman ryan has at least one bill to fund veterans' affairs and the defense department. and president obama has said no way, i'm going to veto this bill unless you give me an end to the sequester and a tax hike. now, if obama takes that attitude, and you can't fund these appropriation bills, you can be looking at a government shutdown. >> that's absolutely correct, larry. so we have started the budget process. we are going through the first round of appropriation bills. and the president has made it very clear that he wants to see a larger budget deal that
7:36 pm
replaces the sequester with tax increases and maybe some marginal spending cuts spread out over a long period of time. you and i both know, that's not going to fly in the house of representatives. so we're really faced with two options. one, we can have a government shutdown, or we can do kind of a continuing resolution, temporary budget, until we get to the debt ceiling. i think speaker boehner is saying to chairman ryan and to the appropriations committee, get all the appropriations bills done the way the house wants to do them. and then in september, pass a bill that just raises the debt ceiling, includes tax reform, pipeline approval. and funds the government. and then let's see what the senate can do where it's very hard to get -- >> i'm surprised at this. i don't think president obama is in any political position right now to be making demands and threatening vetoes and shutting the government down. the guy has a lot on his plate. i guess the charm offensive is completely over. why is he so confrontational on this? >> i'm sure the republicans would love it if he didn't
7:37 pm
exercise his constitutional right to a veto. luckily, it doesn't have anything to do with his political standing. he has that power, much the way the house is obviously very difficult to deal with and get certain things passed. that is their right. they have effectively a legislative veto, a revenue that comes out of the senate. if you look at their votes this year, larry, they have only held one vote out of 183 on a jobs pack. and so they're not doing much for growth or jobs in that sense. and look, the president can do this. the other point i'll make here, the meltdown of the government is has already begun. that's what the sequester does. and sooner or later, there are a lot of programs from veterans' benefits to airports, as we saw, that many people, not just liberals, will be concerned about. no reason for democrats to trade away their hand on the stuff that everyone cares about, which i'm glad to see is veterans. there's got to be more than veterans. >> ryan, actually, is trying to move some money around with the veterans' bill and defense bill. that's very important point. but i don't -- i mean, you tell me if i'm wrong, dan. i think the president is
7:38 pm
operating from position of political weakness. now, i'm -- i know the irs scandal has not reached into the oval office. okay, i get that. and the other scandal, so-called, has not reached into the oval office. but the atmosphere is not favorable to obama. his numbers are slipping. the last thing in the world he wants to do is be responsible for government shutdown. it won't come over the debt ceiling. it will come over the failure to do these appropriation bills to run the government. >> well, i think you're right, larry. and when he had to temporarily -- had had to lift the air traffic control, it just showed just perilous they were in changing the sequester. but, larry, the key to this, the onus right now is on speaker boehner. he has to be able to deliver a bill that can get 218 votes out of the house of representatives, and then push the burden over to harry reid in the senate. whether the republicans are unified, they win on fiscal policy. when the republicans are divided, they have lost on fiscal policy. >> what are you telling your investors? are you telling them that not much is going to happen this
7:39 pm
fall? got budget surpluses coming down the road, and deficit is much lower, or are you telling them, beware, there may be fireworks come autumn? >> both. improved budget, but volatility is creeping into this process. both in the government shutdown and both in the debt ceiling, because both parties are hardened and divided, and speaker boehner can deliver this. he can put tax reform bill on there, deliver that bill out and the democrats will be hard-pressed not to do what the republicans -- >> ari melber, is there a budget train wreck coming? >> i think the republicans will eventually fold. i think the president has cut the deficit now by nearly half. i think the deficits are ultimately low when democrats are in charge for two terms in a row and not when republicans are. and when you lose that deficit hyster hysteria, you lose the argument for why we have to do this over jobs. >> i think you're right about that. the president's spending has come down, the deficit, because
7:40 pm
of the sequester and 2011 spending cuts. and i don't know, the economy a little bit. they're doing better. you raise taxes, and you cut spending. and you've got to lower the budget deficit. i don't know. i like the charm offensive better, harry. i really did. i thought something might be done, including tax reform, which we desperately need to shut down the irs. but that's for another segment. a ari melber, thank you very much. a little more work to do with dan clifton on the stock market. crunch time for steve cohen and his hedge fund. will cohen lose all his outside investors and will the fed stop at anything to put him in jail? cnbc's kate kelly has the latest for us coming up next. vo: traveling you definitely end up meeting a lot more people but
7:41 pm
a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours. i honestly loved smoking, and i honestly didn't think i would ever quit. [ male announcer ] along with support, chantix (varenicline) is proven to help people quit smoking. it reduces the urge to smoke. it put me at ease that you could smoke on the first week. [ male announcer ] some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these stop taking chantix and call your doctor right away. tell your doctor about any history of depression or other mental health problems, which could get worse while taking chantix.
7:42 pm
don't take chantix if you've had a serious allergic or skin reaction to it. if you develop these stop taking chantix and see your doctor right away as some can be life-threatening. tell your doctor if you have a history of heart or blood vessel problems, or if you develop new or worse symptoms. get medical help right away if you have symptoms of a heart attack or stroke. use caution when driving or operating machinery. common side effects include nausea, trouble sleeping and unusual dreams. with chantix and with the support system it worked for me. [ male announcer ] ask your doctor if chantix is right for you.
7:43 pm
with chantix and with the support system it worked for me. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." cohen's hedge fund is expected to loflt nearly all of its outside investment as the government doggedly goes after it for alleged insider trading. i say alleged. cnbc's kate kelly has been following this story. kate, let me just ask you this. what gives these federal authorities the right to
7:44 pm
innuendo, rumors that can completely break down hedge fund. i don't know in guy from adam, but there is something about this i don't like. >> there is a central point here that can go either way depending on your point of view. the central point is the federal prosecutors have been at this for years, larry and have not yet indicted steve cohen. that means they don't have the goods, they would have indicted him by now or flipped one of the key players already indicted and pleading not guilty so far or would have brought charges against him. on the other hand, you can argue they have been at it for years, gathering information, they have numerous different trades that the firm was involved with, he may have had some touch points with, so they're carefully gathering information, and they're going to go in for the kill sometime this summer before a key statute of limitations runs out. >> what is that statute of limitations? >> two sets of statutes to keep in mind, and there may be others out there, as well. the focal points are late july and late august. and the july relates to two
7:45 pm
pharmaceutical sales made by a trader matthew martonlia, cooperating with a doctor who gave him alleged information about a not yet public clinical trial of an alzheimer's includidrug. the other is a late august statute against cohen or anybody new in regards to trades of dell and invidia. >> how long have they been chasing him, the feds. >> years. i've seen differing reports, i've read since 2006. >> 2006. this is 2013. seven years. there is something arbitrary -- isn't this sort of like the irs going after certain tax exempt groups. it's almost like the authorities -- >> nobody is doing line dancing here that i know. >> not yet. but who knows. the prosecutor, the u.s. attorney -- i mean, i guess he's doing his job. i'm not going to take his inventory either. but the power of the federal government can often be the power to destroy.
7:46 pm
the power to destroy a business. and in this case, the power to destroy a hedge fund. which are we're talking jobs here, we're talking families here, and we're talking innocent until proven guilty, or did i miss that? >> sure, absolutely. the question you raise is a good one. this is a fund that employs 1,000 people. by head count, maybe not as large as bridge water, but up there. and they i am employee these people, have a huge headquarters in stanford, connecticut, half a dozen offices around the world. an active market participant. at any given time, 2 to 3,000 stock names they're dealing with, long, short, macro, what have you. and a huge customer of wall street. people may not care about that, and in this case, my sense is prosecutors are not focused on the head count, loss of potential jobs. it's not that they're apathetic, but a bigger fish to fry. >> part of this, too, in addition to the fact haven't charged him and the innuendo out there and all these rumors, it's almost like some of these
7:47 pm
prosecutors want to go after him because he's successful, because he's a rich guy. because people who invested in him are rich guys, even though some may be pension funds and unions, ordinary people that benefit. but the government says there could be abuse and should speak up. i'm not a crusader. i'm saying what is up with this. >> a number of theories touch on these points. one of them, cohen got particular iyer out of washington in general, because he made high profile purchases, which, by the way, he has been doing for years. he's a modern art collector but within the last six months, bought something for $155 million from steve wynn after a side note in which winn put his elbow through the painting and patched it up and sold it for more than originally going to. bought a hamptons house, has a manhattan property on the market. >> what's wrong with that? >> nothing wrong with it, except that the optics go to the notion of wall street fat cats that
7:48 pm
drive people nuts. >> i want some optics to talk about american prosperity. again, i don't know if he's guilty or innocent. i just don't like the feel for it. kate kelly, thank you very much. we appreciate it. are oo. >> you're welcome. stock market tuesday winning streak came to an end today. wall street's obsession, seems like the culprit once again. we're going to talk about your money next up on kudlow. you hurt my feelings, todd. i did? when visa signature asked everybody what upgraded experiences really mattered... you suggested luxury car service instead of "strength training with patrick willis." come on todd! flap them chicken wings. [ grunts ] well, i travel a lot and umm... [ male announcer ] at visa signature, every upgraded experience comes from listening to our cardholders.
7:49 pm
visa signature. your idea of what a card should be. from the united states postal service a small design firm can ship like a big business. just go online to pay, print and have your packages picked up for free. we'll do the rest. ♪
7:50 pm
7:51 pm
rebounded from session lows, but still finished in the red. snapped this terrific tuesday winning streak. i guess fears over the future of the fed's bond-buying program are in play. i also wonder about that bad ism manufacturing number and the proje probability that the second quarter gdp will be below 2%. here now is don lusk and trend macro chief investment officer and head of policy research atstra teaguis, dan clifton. apart from the script from one second, the prior story. what do you think about these feds, prosecutors, going after steve cohen, and ripping his hedge fund apart, and they haven't even charged him yet. you're a professional money manager. you've been in all aspects of the business. what do you think of this? >> larry, i think you and i feel exactly the same way about it. i thank you and congratulate you on saying what you said. this should be a nation of law, of innocent until proven guilty. we're seeing the war against cohen now that looks exactly
7:52 pm
like the war against -- by rudolph guiliani against mike millkin in the '80s where if you have a weak case against the guy, you don't take him to the court of law, take him to the court of public opinion, destroy his name, throw so much mud, something is going to stick. and the politics of character assassination. it's the way prosecutors become mayors and hope to become presidents. and it's sick, sick, sick. >> nobody says a word about it. dan clifton, just briefly, just give me your quick response to this. i don't know why the cohens h e have -- i just feel he's -- if he is guilty, dan, then charge him, okay? they have been going after him, according to our kate kelly, since what, 2005, 2006. that is nuts, dan. that is absolutely nuts. >> well, i can't disagree. i couldn't say it better than don luskin. but at some point, you know,
7:53 pm
there is a theme that's building that the government is just going to go after all its enemies. we've got to be mindful of that, as well. it seems like whether you're a 501(c)(4) or somebody else who has politics or sheldon aidleson in las vegas, seems like there is a lot of targets. maybe it's a popular news story and it's outrageous. >> no, you're right. there is government overreach going on here. there is bureaucratic overreach going on. a great point. all right, don luskin, let's get back to stocks. look, over the last year, you know this. ten-year treasury rates have gone from about -- i'm sorry, 1.5% to 220. i'm going call it 220 today. that's supposed to be bad for stocks, rising interest rates. on the other hand, stocks have done fabulously, up 25, 26%. so what's happened here? >> what's happened here is that same thing every time the fed takes on a large-scale asset purchase program. they say they're doing it at the lower interest rates and raise
7:54 pm
interest rates, because the idea is to make stocks go up. easy part. larry, the hard part, when we look at the real numbers that are just pouring out now, like that scene in "the shining" when the elevator doors open and blood pours out. april, a fall in personal consumption in the united states, a rare thing. core pce inflation, now on a year over year basis at just 1.05%, larry, i don't know if you know this. that is the lowest inflation reading in the history of the data. okay? things are going bad. below 50 ism print, and bernanke goes before congress and says he's going to trail off these purchases. well, either he's changed everything and all of a sudden he wants deflation, or he's admitting -- he might as well taper them off, it's not working. look at what the fed is doing and they can't even prevents deflation. we have the lowest deflation in the history of the data.
7:55 pm
it ain't working. >> i think you'll agree -- let me say again. interest rates going up over the past year by 65, 70 basis points, which in this environment is a lot, because the rate structure is so low. you would think that would be associated with increasing economic growth. real interest rates, real growth. i think don is right. i don't think the economy is improving. i say it's still a 2% economy. what's supposed to happen hasn't happened. stocks have gone up, even though rates have gone up. the economy has not gone up with rising rates. i can't quite figure this out. >> well, maybe they know something we don't know. but i doubt that to be the case. you know, i tend to look at -- unemployment claims. they have moved a little bit higher. but they're not falling off the cliff itself, and they're generally lower. lower in may than they were in april. on average basis. so there is some employment being created. the question is, we've got to get wages higher. and to do that, you need capital investment. larry, there has been in the last nine months capital
7:56 pm
investment has separated from jobs and long historic relationship. it's really a question whether we're going to get that investment or are we going to start losing jobs. that's really the test. seems like don thinks that maybe the economy is getting worse and the data shows that. i think we're in for a capital expenditure boom in the second half of 2013 and that's going to be quite positive. so let's talk about the fed -- we can have higher -- we can have higher stock prices with rising interest rates. it's happened the last two times we have raised rates. >> don luskin, since early mid may when rates have moved up, utilities are down 7%, home builders down 13%. so is this going to be an interest-sensitive stock market, is that the way it has to be played? >> well, look, that is the way it works. i mean, larry, if -- it depends why, right? if, in fact, we have real growth coming back to the economy, they know you have a 3% ten-year or 4% ten-year. that would be great, the economy
7:57 pm
is going. but if -- you know, the way it looks right now, none of that is happening. i honestly think what's going to happen -- if the fed tapers off and starts giving up on qein tinty, what's going to happen the same thing that's going to happen the year before that when the programs ended, which is the economy is going to slow even further, interest rates are going to fall and we're going to be sorry it happened. >> thank you, don luskin and dan clifton. thanks very much. that's it for this evening's show. thanks for watching. i'm larry kudlow. we'll be back tomorrow evening. [ male announcer ] it's intuitive and customizable, just like a tablet. so easy to use, it won a best of ces award from cnet. and it comes inside this beautifully crafted carrying case. introducing the all-new 2014 chevrolet impala with the available mylink system.
7:58 pm
♪ [ beeps ] ingeniously connecting you to your life and the road. that's american ingenuity to find new roads. and the road. join us at i've always kept my eye on her... but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information and rewards for addressing my health risks. but she's still going to give me a heart attack. that's health in numbers. unitedhealthcare.
7:59 pm
8:00 pm
>> welcome to the marriott. >> hello. how are you? welcome back. >> every year, 36 million americans spend the night. >> good morning, this is your wake-up call. >> a hotel empire with 18 brands and 3,700 properties around the world. >> we don't do things ordinary. we do it extraordinary. >> a crown jewel obsessed with service. >> the ritz-carlton is a place where the genuine care and comfort of our guests is our highest mission. >> who else goes through 1.4 million towels and 200,000 slices of bacon a day? welcome to marriott international.


info Stream Only

Uploaded by TV Archive on