tv The Kudlow Report CNBC July 14, 2009 7:00pm-8:00pm EDT
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call or click now. guys, you can do this. just pick up the phone and call. you will lose weight. tonight on "the kudlow report," publisher mort distinguishman in a walt editorial said the economy is worse than you think. but blowout profits say otherwise. we'll debate with our gurus. republican senators will push back against the incredible high tax democratic health care plan. are you ready for a top personal rate over 50%? i'm not. and she's back already. sarah palin buries cap and trade a bridge to economic disaster. fasten your seat belts, "the kudlow report" begins right now. if
good evening, everyone. i'm larry kudlow. welcome back to "the kudlow report" where we believe free market capitalism is the best path to prosperity. i agree with mort zuckerman that the prime numbers foreshadow economic weakness. but the stock market seems to disagree with boast of us. stocks held their ground after yesterday's huge rally. even a subpar retail sales report did not stop the retailing sector from a 1.6% rise today. you know what else, blowout profit makers covering two tech sectors suggest better times are coming. i hear a lot of ankle biting about the goldman performance. i am not with the naysayers on that. i say bravo.
they made $3.5 billion of profits on a 14 barry bonds increase in revenues, unbelievable numbers. you know what else, they paid down 10 billion dollars of their t.a.r.p. money and paid taxpayers $426 million in dividends. i'd like to see goldman get under their $30 billion of government taxpayer guaranteed debt plus more transparencyist in their toxic asset reporting. i continue to argue, the big banks are the best stock market investment right now. that remains my mantra. near zero borrowing rates and a steep treasury yield curve will allow the banks to earn their way out of their problems. if to the intel profits carry through to the other big techie company, that tells me something good is going on in the economy. hopefully, the senate will bury two very anti-growth bills that would clobber businesses in the economy, namely, the cap and trade tax energy takeover, which
will jack up costs for everybody and let the central planners run wild in the economy. then big government health care nationalization that will be funded with above 50% personal tax rates and another hike on capital gains and dividends. folks, if you want to create jobs, we need to help businesses. the obama democrats seem to regard business as a dirty word. that can't be good and has to be changed. speaking of profit blowouts and above expected results, to my pal. he is so important, i will run 100 yard dash just to be next to him. first up, go brian. >> you have to get here, catch your breath and not mess up the bril cream on the way. get over here now. >> today's trading, choppy, relati relatively light. we did finish positive across the board. it's still dropping, the lowest
since last september, 2502, down under 25 for a little bit today. goldman sachs, $2.7 billion in profit after they pay back the t.a.r.p. secondary offering and fixed income, did take on risk. we'll talk about that in a second. the stock, triple off the low. is it one off or harbinger financial? profit fell 3 1/2%, a 4dprks impact, they did beat it slightly today. and start with kfc, taco bell, pizza hut. retabed iined its guidance. currency being attributed but beat, they're down after-hours.. keep that in mind. jim goldman will hit on intel. the e.u. fine makes a major
difference here. gross margins ridiculous. look at these other two companies, applied materials, bro bro broad.com, those names should boost the nasdaq. and we'll talk about that in a little bit. syn syntox, make business uniforms, they made profits last time. i know goldman, i talked to a lot of people, some say it's unfair they're taking risk and have the backing. >> the ankle biters, ankle biters. i just have to believe, when you see a big financial company like goldman with blowout earnings and big chip-maker with blowout earnings, the economy has to be better even though i agree with mort zuckerman who will be here in a few minutes, job picture is terrible and retails at best
mediocre.. what is it stocks know? serious question.. you cover this beat. stocks look ahead. maybe that's the issue. is that what they know that the statistical releases don't know. >> you've been around the block a little longer than i have. >> i just now came all the way around the block and i'm not even winded. >> they talk about how labor is lagging but this time maybe not. are we nine months ahead? i don't know the answer. i do know the profits goldman sachs had are real but not necessarily indicative of the whole financial sector. wait until the names come out. see what happens with morgan, bank of america, citi, i don't know if we should include them. >> perpetual mayor, mike, had a -- >> it is long. borrow long. >> even a banker can make money.
>> even i can. i can't get the line out. >> that is it exactly, been my man trachlt thank you, brian shachtman, nobody likes to come on at the midnight hour. citi chief jim goldman snagged an interview after they reported earnings a short while ago, and here he is in living color and live, jim goldman, from the west coast. hello, jimmy. >> good evening.. key takeaways from my interview with cfo, stacy smith.. it isn't bad news but actual good news, the same country that called a bottom to the pc industry last quarter and every one was wondering if intel could reaffirm that call tonight.t. when i spoke with stacy smith, he did so in spades. >> our second quarter results and outlook we set for q 3 are to reinforce the view we had a quarter ago, we saw the computer markets bottoming in the first quarter, saw improvement in the
second quarter and expect a seasonally up second half. >> a seasonally up second half. good news. unusual for intel tonight, issuing gap and non-gap numbers to reflect that big billion european fight accrued during the quarter. i asked smith if that meant intel was abandoning its vigorous appeal with all of this, he says, no way. >> we absolutely are planning to appeal it. we disagree with the ruling. that will play out over a period of time. the right accounting is accrued in this quarter. >> brian alluded to this on a gap basis. intel recorded its first quarterly loss in 23 years, the reason for today's unusual non-gap numbers released to offer better apples to apples comparison for investors. intel calls for seasonal improvements to the end of 2009. that should bode well not just for intel but a big s.w.a.t. of tech tomorrow. >> jim goldman, hang on a second, i want to ask you a couple of questions.
how much of this intel boom is overseas, thinking china, asia and so forth. >> yeah. the company did reference the china stimulus package, part of the reason for the company's success. 85% of intel's sales come from overs overseas customers. $8 billion of revenue when the street was looking for $7.3 billion a big chunk is coming from overseas success stories. >> i have a lot of people telling me china this is economic tail wagging the american dog. second point, jim, is this intel number a hash in ger, foreshadowing, i'm running out of verbs. we have microsoft coming up, dell coming up, what can i read into this for the rest of this tech sector, as you reported, tech stocks have been hot as a pistol? >> i think it stands to reason intel enjoys the bellwether status a company that hits so many different areas, talking about microsoft and software and
windows 7 upgrade a few weeks away, dell, hulett packard, the net book sector on fire and intel a massive player in that and even wireless, still a big play we are that deal from nokia no revenue just yet but another big chip this company can play in quarters to come. this is a good news story and should send ripples through all of wall street tomorrow. >> great stuff from jim goldman from the east coast. i say way to go, goldman, i'll give him two thumbs up, no, three thumbs up. and the market held its gains. we may be headed in the right direction. my pal, mort zuckerman disagrees, i'm sympathetic because the market numbers are terrible.. and we will share information on this subject. later on, obamanation, house dems propose an out of control tax hike on wealth neiest
tax hike on wealth neies and le wealthy. and we will get the inside opposition and take on whether this health care thing can pass the senate because that is the big question. then, sarah palin, she's tanned, rested, ready, back already. a big piece in today's "washington post" editorial page. i think she's got it right. cap and trade will bury the economy. sarah say, i agree, drill drill drill, throw some nuke, let's grow the economy for a change. folks, can anyone think of something good for business for a change? because that is the way out. we are "the kudlow report," we'll be right back after this. gecko vo: geico's the third-largest
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mort distinguizuckerman is gett plane and will join us. i've been saying for two weeks, the june jobs report was an enormous disappointment. i'm being a realist on this story and acknowledge that. today's retail sales reports, the head line was up but go below, core sales, take out high gasoline prices, the stuff that feeds into gdp, down four straight months, we'll put a picture up, core retail sales down four straight months. who's right? stocks or stats. >> you frame it out right, stocks are 40% below the high they achieved a few years ago and in the last four weeks, the stock market has swooned again because there's a realization that the economy does not have a robustness about it that the second stimulus package failed like the first and there's no follow on plan.
quite frankly, the market is running from group to group. they tried tech then energies, back to tech. tech is probably the only sector showing decent performance. keep in mind, even in intel, their revenue is about the same it was five years ago. i guess if you cut estimates far enough, somebody will jump over them, even the worst of companies and i guess that's what you're seeing for the second quarter. second quarter earnings will probably be down fairly substantially, and if you calculate it at the end, it will look better. the market is stuck with difficult economy and difficult profit picture in the united states. >> welcome to the program. i want to go to the same question, who's right, stocks or stats, with this mediocre retail sales quarter, spending is down. 1.6% rise in retail stocks, looking at a few retailers, radio shack up 3.5%, office depot, up, macy's up 3.5%.
what do you make of it? stocks or stats. >> stocks are confirming what we already knew, this is a period the economy will continue to struggle along. we have two big overhangs, consumer with a huge debt burden still working through, going through the process of repairing balance sheet and this not fully functional credit creation process, banks struggling with issues of asset writedowns and losses and coming off a very low base. when we had this market recovery from early march through mid-june, it wasn't that things gotbetter, they got marginally worse. we have to see incrementally better news for the market to continue to extend these. >> will that happen. >> are you bull or bear. >> right now, we're moderately constructive in the market. we need proof points.
the employer report was disappointing, the retail when you strip out energy was disappointing. we need additional proof points. i think you will see a fairly wide trading range, set the lows in march and it will take time for this market recovery process to unwind. >> by year end, do you think we'll have better level of stocks by year end. >> everything we talked about so far is about the u.s. economy. let's not forget what you led the show with. the motion is increasingly we're seeing a better profit picture from corporations generating revenues outside the u.s. >> intel, china. a lot of people telling me, joe, including my friend, dougy, had very very good calls this year, china is really the economic tail wagging the u.s. economic dochlgt i found that interesting. what's your take? >> that may be the case but unfortunately doesn't account for 75% global gdp. you look at the united states, japan and european, they suffer
in commonality the fact they have very very sluggish economic activity and final demand.. it is true the chinese put in place a very aggressive stimulus package for their domestic economy, have done serious restocking in inventory building but that is not sustainable as we saw in the energy marketplace they drove energy prices from 40, 50 to 75, 80 range and not sustainable, rolls down the hill and i fear the same is true for china's economy and not big enough to offset the drag in japan, europe and the united states. >> follow-up, crude fell below $60. a week or two back, we had an analyst that said oil is going below 20 bucks. anything possible. >> anything is possible because we have significant supply and inbalances world-wide and could be touched off by geopolitical event, strikes in africa, et
cetera. when demand is shrink inning recessions and higher energy price brings out more supply, you clearly get pressure for prices to abeaut, that's what we're enjoying, i suspect 45 to 55 is the proper range but 20 is certainly possible if you went into a deep recession. >> joe, are you still in the market? >> no.o. we think at this point, you're probably fairly valued, all considered. 750, low end for s&p 500, 950 to 1,000 is the upper end. we got up toward that area when we thought the market was going to take off with an economy booming. now we see the economy is not booming, stimulus plan not working, we go back towards a lower level of valuation where we should stay until we get meaningful improvement in top line growth in the aggregate, not just a or b but aggregate and we're not there yet. >> do you still like corporate bonds. >> very much show. the yields atraktsz me as risktaker and deflation story is
more prevalent than inflation. i have to find yields where i can so best quality is what drives our investment decision. >> i want to circle out to the goldman numbers. i don't care how you slice the pie, they're terrific numbers. there's a lot of ankle biting going on a bad case of goldman envy. is there a generic story, here, mike? big financial company, a lot of people including myself believe the banks will keep reporting good profits because of the steep curve, even a banker can make money borrowing near zero and loaning it out at 4, 5, 6, 7%. what's your taken to the goldman story as it pertains to the future? does it signal financial healing or economic healing. >> on the market, it says things are marginally better. i don't want to take one company and extrapolate what will happen over the entire sector. goldman's position is very
unique the way they generate the profit, the footprint they have in the market, the less constraints with regard to how they operate. we're still looking at the banks, you're absolutely right, steep yield curve provides potential for banks to make money on operating basis. >> what if you get -- don't mean to butt in, we're running out of time. morgan an bank of america, what's your expectation for those big guys. >> they can beat them but they're still operating with training wheels on with assistance from the government. >> what's your favorite sector from the government? joe likes corporate bonds. >> we don't disagree with that we like corporate bond market better than equity market. >> thanks very much. we're going to have more. zuckerman will be here later in the program. he had a big piece in today's "wall street journal," very embarrassed because of the economy and it makes sense because of the job numbers.
but the stock market looks better. goldman sachs blowout numbers, i don't know, maybe something better is happening than economic stats suggest. coming up later. in the perfect storm of tax and spend, house democrats slap a 4.5% prosperity killing surtax on their trillion obama care. by the way, not only that surtax on income, also they gotten a 8% payroll tax hidden in there for companies that don't want to play. that is the dumbest thing i have ever heard. meanwhile, sarah palin is back. she is tanned and rested and ready. she is right that cap and trade will bury our economy. she had a big op-ed in today's "washington post" for those who want to write her off, i say, not so fast. drill drill drill, that's my mantra. i'm glad to see governor palin agrees. kudlow report will be right back in two minutes. please stay with us.
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president obama on the road telling people in michigan we not only need health care reform, we need it now. >> now is the time to build a firmer stronger foundation for growth that will not only withstand future economic storms but that will help us thrive and compete in a global economy. to build that foundation, we have to slow the growth of health care costs that are driving into debt. we're going to have to do that. there's going be a major debate over the next three weeks. don't be fooled by folks trying to scare you saying we can't change the health care system, we have no choice but to change the health care system because right now, it's broken for too many americans. democrats have clearly decided to risk the heat from the class warfare argument. look at these details of the plan. 1% surtax on incomes above $350,000. a 1.5% surtax on nucleus over
$500,000 and 5.4% over $1 million. if the health care system is deemed by the government to need more money, those rates go up to 2% for $350,000 family incomes, 3% for $500,000 and top rate at 5.4% would stay the same for those over a million.n. democrats are justifying this in the name of their determination not to increase the budget defici deficit. >> we're going to be paid for. i don't know we'll be underbudget, we'll be on budget. we'll pay for this bill. we won't add additional debt to the american people. we will produce a product that will give to the american people a sense of security and well-bei well-being. >> larry, i know that assurance from steny hoyer won't make you feel better. i just talked to a real estate
agent shortly before coming on camera that said that 5.4% rate may be reduced some in committee. we'll see what happens when that goes through the ways and means committee with your friend, charlie rangel. >> he is my friend. i'm trying to get him back on the program. he's a very wonderful man although i will really disagree on this. john, also according to the "wall street journal," if you go through the plan for small businesses who choose not to play in the mandatory health insurance, they would taken a 8% payroll tax hike a huge number. >> 8% of wages, larry. for larger business, there would be a sliding scale for smaller business, so somewhat less than that. there's a step stair proposal depending on the size of your payroll. >> give me a forecast, john, you're best at it. >> no. i believe this plan is designed purely to get a bill out of the house as rapidly as possible before the august recess. the senate will take a different notion and the senate, i think,
will get its way on this, i do not believe this will become law. >> john harwood. we appreciate it. coming up, two republican senators, bob corker and dr. jo john. they will give us the p side of this story. can we stop prosperity killing taxes and this whole health care shenanigans. later on, she's back and ready to rock, sarah palin buries cap and trade in a "washington post" editorial today. she calls it the economic bridge to nowhere. me, too. "the kudlow report." we'll be right back. mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help?
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now, for republican senate response to the house democrat tax and spend health care bill we have republican senators john boros so of wyoming and john corker of tennessee thank you very much. as a doctor let me start with y you, john, you may actually know something of the details how this works. what's going on here? i'm hearing a new government entitlement of insurance and x taxes to fund it, president obama saying this will help the economy? >> this will not help the
economy. it's bad for the people and patients and doctors and hospitals. we have a trillion deficit we just passed today, the highest in the history of the united states. that will get worse. we can't afford this right now. there is plenty of money in the health care system not necessarily helping people get better. there are ways to be more efficient and help people and save money that way. we do need health care reform and get the costs under control to. throw another trillion dollars or more at it, what i see the democrat plan, i don't see this as the right solution. >> senator corker, what do you and your colleagues think of these tax proposals coming out of the house. >> if you look at this health care plan, you have small business paying for most of it. on the medicaid side until earlier today, it was states paying for it through medicaid
programs. we have this medicaid program we know is insolvent, $38 trillion in liabilities, taking money from that program insolvent almost makes madoff look like a piker. it's pretty phenomenal to me. i do think as someone said earlier, it will be a little bit 16er in the senate. -- saner in the senate. i do not think this will come out of the senate. >> dr. barraso. you have a 5 1/2% surtax on the top income, maybe it's unpopular to be millionaires, a new survey from the "washington post" said the highest earners, successful earners have been the hardest hit in this recession.n. i don't know if anybody's looking at this, they have been the ones that have been killed. you can't have a successful economy without the high
earners. this would raise the tax on capital gains. the history is when you raise the tax on capital gains and raise the top income tax, you actually get lower revenues. >> you do get lower revenues, look at massachusetts. it ended up costing much more than the anticipated amounts. i have great concerns, i agree with bob corker, they talk about doing this against medicare, take $500 billion off medicare is ridiculous. our seniors will be paying for people who don't have insurance. people in medicare right now are having a hard time finding physician, we'll take $500 billion away from medicare, our seni seniors, is irresponsible. >> mr. corker, what will happen here? can you walk us through this. >> it's interesting. i felt until a week ago there might be a bipartisan solution.. about 80% of the thing we actually have some agreement on. i feel a train wreck coming.
i do because i think the pay force, the things you're talking about are getting cast in stone. i know a number of practical thinking democrats have great problems on the senate side with much that's being discussed.. i was with chairman baucus today, said he will have a bill out of the senate by the time of this work session by august recess. i see things spinning apart right now. i don't know what will happen. i would have predicted the possibility of bipartisan solution not long ago. >> senator, what can you predict on health care reform? what are areas of agreement. >> i believe we can have health care reform and cut down costs and do that by allowing people to buy across state lines and giving people the analyst to mato -- the ability to make
lifestyle changes not just the prevention in the kennedy bill said we'll put sidewalks and street lights and jungle gyms. i'm talking to help an individual person incentivize them, lose weight, i diabetes under control, blood pressure under control, the incentives. i have to tell you, larry, from all the years of practicing medicine, people are very smart about their own money deductibles and co-pays but when it comes to insurance money and government care, people are focused more on theirselves and medicare has been the biggest deadbeat in terms of paying and never done anything to coordinate care or work at prevention. we need to redefine the way medicare works and get that under control and incrementally build from that. >> senator corker, give you the last word, appreciate the time from both of you. president obama saying health care costs are the cause of this recession or one of them.
i don't know a single economist that makes that point. therefore, if we're aiming for growth and we're aiming for jobs, i don't know a single economist who believes health care reform is a job creator. in other words, i don't understand the logic. what is the immediate issue here? i thought it was to create jobs and generate economic recovery, a massive spending bill and massive tax hike to go with it doesn't make sense to me. i have to believe the american people, it doesn't make stones them either no matter how much we need improvements in health care. >> i hear the music and agree with you and look forward to seeing you soon. >> the logic is not there, that is the thing that has baffled me. we could have just fixed the medicare a lot of people would like to do that because they're furious at the deficits, i don't know. >> let me say, republicans are willing to want to look at ways of helping people that can't afford private insurance to do that. that's the 80% area we need to work on. >> if you're going to change one-sixth of the entire economy of this country, you need to
slow it down and get it right. we should be focused on getting it right instead of getting something passed quickly. >> thank you very much. thanks again. coming up, sarah palin is back and she is taking on cap and trade, the economic bridge to nowhere is what that one is. first up, let's check in with my pal, dennis. let's see what's up at theton of the hour. >> hello. the recession is over. it's not me saying it, i have one of the biggest firms in the world saying it and the question is, will democrats raise our taxes so much they kill it. and i have a new message to the bloggers who hate me. >> dennis, nobody can possibly hate you. stick around for the show. coming back, mort zuckerman and sarah palin's op-ed today. i want you to see this on "the kudlow report," right here, me, stay with us.
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rise. we got off to a good foot on the blowout earnings from financier goldman sachs and after the bell chip-maker intel, two really important sectors and maybe they're a sign better economic times are coming. let's see what our guests have to say. we have art, former reagan economic advisor and mark bitner, senior economist at wells fargo and publisher mort zuckerman, chairman of u.s. news and world report. and op-ed of "the economy is even worse than you think." gentlemen, thank you, i know, mort, we pulled you off an airplane and you're wonderful to do this. you wrote a hell of a piece in the journal, which means we're both probably wrong. you wrote a piece about the jobs picture is terrible. we'll get everybody to chime in after you talk. >> we are losing jobs in this
recession instead of creating them. we're still losing them at 500,000 a month and 467,000 by the time they're adjusted upwards, which they will be, over 500,000 jobs. this is a huge dropoff in jobs at this stage in the recession. the idea is this is always a lagging indicator. i'm just not sure that this is case, we've had such a dramatic increase so quickly, so many people anxious about their jobs, so many people losing a part of their compensation either because they're on furlough or cutting out some of the medical care contributions, et cetera, et cetera. i just think we are in for a very very difficult time because that is going to have a dramatic effect on the consumption sized of the economy and they're on the investment side of the economy. we've already seen it in consumption going down. you have a 7% savings rate that i believe will go up to 10%. every dollar saved comes out of consumption. when people are worried about their jobs, they have the
concern about saving money and spending money. i don't see we'll have a recovery either when the economy stabilizes. that's what i think means we will have a longer term, very weak economy than people have been talking about. >> all good stuff, well pit. mort makes a lot of sense. when you look at that june jobs report that frankly shocked me not only jobs drop in payroll, jobs in the household jobs reports sometimes a turning point leading indicator, plus, wages flat, hours worked in the private sector down, so the income proxy is falling off. how do you react to what mort is saying and what's the way out of this, art? i'd like to see some way out, we have had better stock market stuff, maybe that's the way. >> that way, i don't think is. but you and mort are completely correct. this labor market is a disaster. what really bothers me is more than feedback on consumption and
savings, today, we have a bill that will be put through the house that will raise taxes dramatically and cause the situation to last longer and longer and longer. mort, i think the recovery is not coming for years ahead if they keep on doing this cap and trade, they keep on doing this health care stuff and raising taxes, it's a guaranteed way to lose jobs not only here but the world at large, it's a doctors. >> do you have a different take on this? i do want to repeat as we led this show, blowout earnings from goldman sachs, i think the financial sector is healing, a leading indicator but a powerful one. bond spreads mark have come down, corporate versus treasuries a good leading indicator, intel may turn out to be a leading indicator, they blew everybody away with their earnings and revenue numbers. is there more hope? are you more optimistic than mr.
zuckerman and art? >> i do in the near term. things don't have to be perfect in order for the economy to grow, that's a good thing, they're far from perfect. we will have a positive gdp in the second quarter and the third quarter should be up at least 2.2% annual rate a. lot of improvement we'll see in the near term is a bounceback from overcorrection in inventories and overcorrection in trade.e. the credit shock we had caused trade to contract much too much and we're getting a little bounceback there. inventories were cuddle way too much. i think that's part of the good news behind the intel story. >> it's funny, mark, i agree with you, john agrees with you, some others, do sort of statistical recovery, not a real one. employment is a coincident indicator, as you know, that's the biggest recession recovery indicator the national bureau of
economic research uses but employment indicator and household is the most important indicator. if that doesn't show lifelines as mark is suggesting, we're in the soup. >> we are, larry but the recovery may still be with us and may be very very weak until the middle of next year. >> middle of next year. we'll take a break and talk about what is to be done. i want to hear from all of them, what is to be done. later on, she's back, she's tan, rested, she's ready to rock, sarah palin, she takes on obama's cap and trade economy killer. i say drill drill drill, nuke nuke nuke, governor palin agrees, "the kudlow report." you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping is easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. come on.
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save big otoday. gasks. we're back with art, mark and mort zuckerman, my great friend. i'm sorry, i was thinking about something else. mort go, to you. you are a classic business successes, job creator, you've done amazing things in your l e life. one of my issues regarding policy is why doesn't washington do anything to help businesses, a serious issue, you know this as well as i. we're talking about health care costs, energy costs, i don't hear anything to help business and make it cheaper to hire a new job. what's your take? i want to get out of this mess. >> i don't think there's
anything being done to help this business and not the philosophy of this administration it doesn't mean business can't be more energetic but the fundamentals, employment and rise in housing prices what it will do to the credit system because credit cards and student loans and home loans are going to be dramatically affected as the unemployment numbers go up. i think we're heading in for a very very difficult time. what distresses me, i don't get the sense there's any planning on the part of the government that does focus on jobs jobs jobs and doesn't put in a whole list of democratic wish list programs that are so diluted the original stimulus program a lot of people including a lot of people favorable to this administration pointed that out at the very beginning. i don't know where they're going, if they're going play politics with this going forward, i think we're in for a very difficult time. >> art, in mort's excellent piece, he points out transfer payments and welfare type
payments don't create jobs. >> no, they don't. >> what's the way out? what should they do? give me a prescription. i will ask the others the same thing. >> let's take the total amount they spent over the last 18 months or so, total amount, maybe 3 1/2 trillion dollars, that's about a year and half total tax take from the federal governme government. just imagine what would have happened if they said we will have a federal tax holiday a year and half, no income taxes, no pay rely troll tax, no estat, no federal task force a year and half. the deficit would be a heck of a lot smaller and you'd have huge growth in this u.s. economy and 3% unemployment rate and sizzling along beautifully but they just destroyed it. >> the tax holiday is fascinating. maybe it's too late for that but a great approach.
we have industrial production, customer price index and housing starts to be released for the months of june in the remaining days of this week your thoughts. >> i think the consumer index is scary, i think up about six 11 tens. auto production was shut down in the month of june and housing starts aren't going anywhere. i think they will stay flat.. the best stimulus we can do is get rid of cap and trade and get rid of free choice act and reappoint bernanke and it won't cost a dime. >> i can't thank you enough. mort, congrats on your piece today and art laffer in your snappy red tie, look like a million bucks. i like the tax holiday idea a lot. sarah palin coming up, wrote an op-ed report, taking on
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