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tv   The Kudlow Report  CNBC  March 22, 2012 7:00pm-8:00pm EDT

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retail investor a sign it is time to get out of the stock market? the "kudlow report" just moments away. remember, we're rotating here. right now, the foods, they're hot. the restaurants are hot, and oddly, technology is hot. those are serving, rotating to the front, getting ready to spike. are the oils and the machinery, we have to let them come down because the shorts are building, the hedge funds have to have their pound of flesh before they start rallying again. but they will. i really like the oils tomorrow to buy. like to say it's always a bull market somewhere. promise to try to find it for you. i'm jim cramer, and i'll see you tomorrow. hey, sully, what are you working on? >> what else, jimmy? the president, he's trying to fast track half a pipeline. we're going to ask him whether rick santorum should quit and drop out. your top story, the president
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with full election pomp and circumstance asking to fast-track the oil pipeline. this pipeline just goes from cushing, oklahoma, to refineries on the gulf coast in port arthur, texas, it was going to be built in june with or without the president. that didn't stop him from taking a left jab at republicans. take a listen. >> members of congress who decided this might be a fun political issue. decided to try to intervene and make it impossible for us to make an informed decision. >> going after the right, but is the president himself playing politics? and should he be taking any credit? we will drill down with sandridge oil and gas ceo, tom ward. pressure is mounting for rick santorum to call it quits. mitt romney pays courtesy calls to the tea partiers telling them that he and not rick santorum is the conservative candidate to beat president obama.
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and story three, and another exclusive. ron paul will join us. we will speak with him about rick santorum, mitt romney, keystone oil politics, the gop budget, and much more all of this just minutes away. we certainly will not want to miss that. all right. let us begin, though, with the top story of the day. president obama playing pipeline politics out in cushing, oklahoma. john harwood is joining us now with more. john, is this a change of heart by the president? or did he really, as he says have to wait to do enough environmental checks as he claims and was sort of backed into a corner by republicans? >> well, he was first backed into a corner by environmentalists, brian. i believe the president was intending through his state department to approve that keystone pipeline, then the heat was turned up, he was responding to his political base. so, yes, he was playing politics as republicans are playing politics now. and what he's trying to do in this visit to cushing is to neutralize republican attacks on
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him. republicans are saying by blocking the keystone pipeline, the upper portion for environmental reasons that he's both driving gas prices up and costing american jobs. the president responded that he too is in favor for the use of oil and oil drilling. but republican policies of drill, drill, drill are simply not enough. >> yes, we're going to keep on drilling, yes, we're going to keep on emphasizing production. yes, we're going to make sure we can get oil to where it's needed. but, what we're also going to be doing as part of an all above, all of the above strategy is looking at how we can continually improve the utilization of renewable energy sources, new clean energy sources, and how do we become more efficient in our use of energy? >> now, the visuals of that trip to cushing today tried to -- were intended by the white house to reenforce president obama's
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message of an all-the-above energy strategy which john mccain ran against him on in 2008. but he faced blowback, the president did from house speaker john boehner who made the point that the president may say he's in favor of all of the above strategy, but he doesn't really mean it 6789. >> the only reason the president has taken action on energy involved lobbying senators, personally and successfully to prevent construction of the keystone pipeline. yet today he's out in oklahoma trying to take credit for part of the pipeline that current even require his approval. now, this is what i'm calling the obama energy gap. >> and brian, you can expect to hear that phrase obama energy gap consistently through the rest of the year because republicans, especially as the economy improves and the job market improves, are trying to pin the issue of energy costs and high gas prices directly on this president. they're going to be arguing about this right through election day.
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>> john harwood, thank you. and it wouldn't be an election year without yet another catch phrase. we appreciate it. so, what exactly is this half pipe going to get us in terms of supply, demand, and what matters to you? the price of gas at the pump. cnbc's bertha coombs joining us with that part of the story. >> brian, in between the keystone section and two other highly anticipated pipeline projects near the gulf, the u.s. should see some price relief but not until next year. pipelines have been the missing link in oil. oil from the bakken up in north dakota and the canadian tar sands have been flooding oklahoma. today wti prices closing at $105.35 a barrel, but the cash prices in the landlocked oil areas are at a steep discount, up in bakken, it was about $16 below wti, $28 below wti over in western canada. meantime, the big refiners on the gulf coast, that's where all the capacity is, that's what
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feeds much of the nation its gasoline, they were paying above import prices, $23 above wti for louisiana light sweet, the gulf coast benchmark. and that's what's feeding into those high prices across the country. transcanada hopes to break ground on the cushing leg to texas down to texas sometime in august and they'll be up and running mid to late 2013 with the capacity of about 700,000 barrels of oil a day. you'll be able to boost that to more than 800,000 barrels. in the meantime, enterprise partners expect to finish reversing the flow of the seaway pipeline which runs more or less in the same area by june. they'll start with 120,000 barrels a day, expanding to 400 k in january and then there's magellan midstream partners, they're expected to boost the flow of their pipeline over in west texas, over to houston, to 225,000 barrels a day. that should also come in next
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year, all told, we're going to see more than 1 million barrels of capacity in 2013 to get that oil unlandlocked. but with shale production growing, he says there's going to be plenty more need and demand for pipelines going into 2015. >> bertha, thank you very much. and joining us now exclusive lip tonight is tom ward, chairman and ceo of oklahoma based sand ridge energy. tom was the co-founder of chesapeake energy. welcome back to the program. listen, i loved bertha's map because it showed our viewers something about the pipeline's path, which is from canada down to port arthur, texas, if and when the whole thing is completed. and what critics say is this, we're just becoming the middle man for canadian gas and oil to basically be pumped south on to the export boats to be shipped over to china and that it will do no good whatsoever for u.s. oil and gasoline prices. your response to that criticism. >> well, that's just wrong.
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thank you for having me on, and the pipeline, what it allows us to do is to get rid of this 46 million barrels of storage at cushing and move it down to the refineries near the ship channel and allow us to have this backlog of canadian and u.s. oil in one particular spot in cushing, oklahoma. we know there's been a renaissance not only in canada but in the united states just recently, in fact. since 1973 until 2008, our production moved down from 9.6 million barrels a day to about 5 million barrels a day. and we've already increased that in the last three years up to nearly 6 million barrels a day. that's just the beginning. our country alone grew last year by 64% and just starting in the main portion of our fields, which will be in kansas and oklahoma. >> so, then, tom explain -- you do mention these are the refineries near the shipping
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channels. explain why this pipeline should help lower the price of oil and gas in the united states and we're not just a middle man for what ed markey called dirty canadian oil. >> well, it's -- actually, i think of canadian oil as fantastic because it's produced in north america. and what it allows us to do is to produce north american oil and not be importing it from overseas. so even if it didn't change the price of gasoline at the pump, that's more of a supply and demand issue. what it does is allow us as americans and canadians and to have a friendly place to deliver our oil to. and instead of -- the canadian oil is going to go some place. >> yep. >> and if it doesn't come to cushing will go to asia or some other place and we might as well be using it here. and that's the same way with the bakken oil and the oil produced in oklahoma and canada. >> and aside from the jobs created by the construction of the pipeline itself, what would
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you expect about job creation anywhere along the route particularly in south texas if we do need to build more refineries to handle this increased flow of crude? how many jobs could we be talking about, tom? >> well, we're talking just a few thousand, 20,000 or so jobs just with the pipeline. but the important thing is that with the renaissance that's going on, not only in north dakota, but just if you look at just kansas and oklahoma in the next three years, we believe our industry will be creating over 100,000 jobs just in kansas and oklahoma along -- and all of that oil goes through cushing, and this is just one new play that's been developed since 2007. >> all right. tom ward, sandridge energy putting a view on it about jobs which really is what we need in this country right now. tom, thank you so much. >> thank you, brian. well, the president may have been show boating a bit today, but yesterday, he was touting his administration's continued commitment to solar and green energy. take a listen to this.
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>> if some politicians had their way, there won't be any more public investment in solar energy. there won't be as many new jobs and new businesses. i want everybody here to know that as long as i'm president, we will not walk away from the promise of clean energy. >> joining us now to discuss the president's take on both solar as well as fossil fuels, dan sherp, a member of the solar industries association and jack gerard president and ceo of the american petroleum institute. all right. it's an interesting discussion, gentlemen. and dan, i want to begin with you because it's often painted that it's one against the other, fossil versus so-called clean. it's wind and solar or it's oil or nothing. there's no middle ground. is there room in america? is there money in america for both and all to succeed? >> absolutely. i appreciate the question.
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just take our company, we have plug-in electrical vehicle charging stations there so folks drive in on electric, they plug in, but then if they take a long drive, the gas kicks in. so there's a technology right there that shows both technologies working together. >> you know, there's a criticism, though, of your industry, dan, because of solyndra and others, a lot of people say, hey, we're just throwing federal taxpayer money, loans going down the drain at an industry that's doomed to fail because of cheap chinese imports of solar panels, and america simply cannot compete in solar against china and maybe even germany. your response to that? >> well, we already have over 100,000 jobs in solar today. and our company we're hiring, there's other companies hiring. the number of u.s. jobs has doubled in the last two years. and there's a million -- the amount of energy being generated
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by solar power systems right now in america serves about 1 million homes. so this industry's been the fastest growing revenue technology for years, and i think the president's really on to something with all of the above strategy including solar. >> jack, your industry put the nantucket whalers out of business and put the khaki makers into business. you're not trying to destroy solar. do you believe there's room for everybody to win here? you're not trying to kill clean energy, are you? >> no, not at all, brian, in fact, we encourage solar energy, wind energy. the oil and natural gas industry are the single largest investors and have developed over the years. what's important to remember, though, is solar energy, wind energy, and some of the other renewables are a very small part of our energy equation. they can fill some of the gaps, but 62% of all the energy we consume in the united states is oil and natural gas. so while we bring on other forms
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of energy, we can't forget our economy is still driven and relies on oil and natural gas. and it will for many years to come. >> will your industry be willing to kick back a little bit and maybe higher taxes on oil and gas to help out dan's industry a little bit. share the wealth? >> well, our industry and the earnings that we make, of course, go back to the shareholders who are pension plans, 401(k)s, firefighters, school teachers, and others. but currently, we are the large investors. we have investored over $71 billion in low-carbon technologies from 2000 until today. that's almost twice what the federal government has invested. so we take second seat to no one in trying to develop these renewable alternative forms, but we've got to be realistic. they've got to be competitive, and they've got to be able to scale or to bring enough online to make a difference. >> well said both of you jack
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and dan. thank you very much. we'll see you again on the "kudlow report." >> thank you. on deck, signs the retail investor is beginning to tiptoe back into the stock market. so does that mean it is time for you to get out? and don't forget what larry says, free market capitalism is the best path to prosperity. the "kudlow report." a route map shows you where we go. but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta... must anticipate the unexpected. and never let the rules overrule common sense. this is how we tame the unwieldiness of air travel, until it's not just lines you see... it's the world.
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as always, the top-notch cnbc team putting together some fascinating figures relating to ceos and their stock performance. these are winners and losers and ceo bangs for the shareholder buck. these are only for dow 30 companies, but here they are, and first up the winners. in the dow 30 by stock price, shares of cisco up 950% since john chambers took over in 1995, although stock certainly had its rough patch too lately. mcdonald's up 229% since jim skinner took over in 2004. he announced today he'll be stepping down soon. and caterpillar shares up 81% since july of 2010 when doug oberhelman named to the top spot. alcoa down 74% when laus
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kleinfeld took over. and microsoft shares down 40% since steve balmer took over for a guy named bill gates all the way back in the year 2000. hard to believe it's been about 12 years. well, good news, jobless claims fell to the lowest levels since march of 2008. it did little to boost the markets. the s&p and dow on track for the biggest weekly drop since december. there's been data suggesting the retail investor is starting to get back into the stock market. does that mean, with all due respect, it's already too late? here now is dr. bob frolic and chief investment officer at harris private bank. bob, great to see you. i'll start with you. right? you know, you hate to say this, but the retail investor does often tend to make timing mistakes. let's put it nicely. and as we've had a big run-up and people are starting to get in, should we view that as a negative sign for the equity market? >> i wouldn't, brian. because if we step back and take
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a broader perspective, if we look over the last five years, the unbelievable flow into the bond funds, i think that rotation is going to be very positive for stocks. if you look at net flows in the bond mutual funds, last five years, a positive $900 billion going into bonds and negative $300 billion coming out of stock funds, that's a $1.2 trillion differential. i think we're very, very early in this cycle and we know not all that money's going to rotate out of bonds into stocks but fundamentally, i think that creates a great base. i think it'll be way too early to get out at this point. >> jack, do you agree? >> you know, i respect bob quite a bit, but i tend to disagree. i think we're still in this roller coaster market, we put 1450 target on the s&p this year, we're getting close. certainly little toothpaste left in the tube, but just as retail's getting in here, it's getting closer to the end than the beginning.
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>> you don't agree with the goldman sachs note famously out this week suggesting that equities are the greatest buying opportunity now relative to bonds and at any time in a generation? >> no, i didn't -- i didn't buy their argument last year when they thought emerging markets were a great deal either, thankfully. so no, i think that there may be secular opportunities, i do think stocks relative to bonds are table pondingly cheap, but i think stocks relative to the economy are slightly cheap to somewhere between cheap and fair value. so i think that, you know, if we hit our 1450 number sometime before mid year, my sense is, i prefer to declare victory and probably move into what i'll call lower volatility equity or lower beta equity, certainly not bonds. >> so jack's not completely saying avoid the stock market altogether, he's saying be careful and don't get too risky. how far on the risk spectrum for stocks should your clients be -- should you be buying the 50
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multiple stocks and saying let it ride? or go with the safe blue chips? >> i still think it's always prudent to have dividend-paying stocks as part of that portfolio. i'm not all the way out there in left field, but i certainly would be great overweight stocks. i look at all the cash sitting on corporate balance sheets, brian, and that's where i think jack and i differ. i think that $2.2 trillion is going to go in motion a lot this year. i think we're going to have an uptick in m & a activity, capital spending, dividend increases, and goodness gracious, maybe they'll do something crazy like hire a few employees. you put that together, this market has a lot, lot to go yet. >> wouldn't that be something if companies took that cash and profit and hired more people? >> crazy idea, man. >> it's insane. i always knew. bob and jack, thank you very much. >> thank you. next tonight, the l.a. coroner's office breaking its silence on the death of whitney houston.
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and american airlines making a very big move today. we'll tell you what that is when we are back in two minutes. ♪ ( whirring and crackling sounds ) man: assembly lines that fix themselves. the most innovative companies are doing things they never could before,
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by building on the cisco intelligent network. pandora rocks the big board. 3q i remember the day my doctor told me i have an irregular heartbeat, and that it put me at 5-times greater risk of a stroke. i was worried. i worried about my wife, and my family. bill has the most common type of atrial fibrillation, or afib. it's not caused by a heart valve problem. he was taking warfarin, but i've put him on pradaxa instead. in a clinical trial, pradaxa 150 mgs reduced stroke risk 35% more than warfarin without the need for regular blood tests. i sure was glad to hear that. pradaxa can cause serious, sometimes fatal, bleeding. don't take pradaxa if you have abnormal bleeding, and seek immediate medical care for unexpected signs of bleeding, like unusual bruising. pradaxa may increase your bleeding risk if you're 75 or older,
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have a bleeding condition like stomach ulcers, or take aspirin, nsaids, or bloodthinners, or if you have kidney problems, especially if you take certain medicines. tell your doctor about all medicines you take, any planned medical or dental procedures, and don't stop taking pradaxa without your doctor's approval, as stopping may increase your stroke risk. other side effects include indigestion, stomach pain, upset, or burning. pradaxa is progress. if you have afib not caused by a heart valve problem, ask your doctor if you can reduce your risk of stroke with pradaxa. all all right. welcome back, let's get you up to speed on other headlines coming into the cnbc headquarters. bertha coombs in the newsroom. good evening, bertha. >> good evening, brian. cocaine killed whitney houston. that's what the l.a. coroner says in a report released moments ago. the official cause of death for
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the 48-year-old superstar was an accidental drowning in a bathtub, but chronic cocaine use was a major contributing factor. shares of nike flat after hours, the company posting higher quarterly profits earning $560 million. shares up up in a year. and american airlines wants to ground existing labor contracts. american says it can't move forward without new labor deals. an aide of mitt romney said the candidate would shake up the message after the primaries like an etch-o-sketch. today, shares of the maker of the classic toy ohio arts jumped more than 200%. the stock, though, is thinly traded on the pink sheets. but a big day nonetheless. big two days, actually. it jumped yesterday. and brian, that etch-a-sketch was trending all day on twitter. >> and that stock of ohio art yesterday thinly traded surged, as well, with no volume. $8 million market cap, right?
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>> yeah. >> you can buy that company. >> yeah, i suppose anybody could buy that company pretty easily. not me. but i'm sure it's pocket change for you, right? >> yeah, if i'm in larry's pocket. sure. bertha, thank you very much. up next on the "kudlow report," speaking of etch-a-sketch, check out what rick santorum had to say today. >> let's stay with what we have instead of taking a risk of what may be the etch-a-sketch candidate for the future. >> santorum would rather have president obama as president than mitt romney? what does ron paul have to say about that? what about the gop budget? what about pipeline politics? we will ask congressman ron paul coming up next. [ male announcer ] the next generation of lexus
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and welcome back to the "kudlow report." i am brian sullivan in for larry tonight and tomorrow. i'm sorry. well, we're going to get to our exclusive interview with republican presidential candidate ron paul in just a moment. but first, we've got a news alert. some bipartisan harmony on the hill. it is shocking, but it is true, and cnbc's own eamon javers joining us. did i read that right. bipartisan harmony? is that accurate?
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>> it's a brief burst of bipartisanship, brian. >> easy for you to say. >> not really. but look, as you know, it's an election year, that's a rare thing. but in washington today, we did have a couple of bills actually gain some traction in the united states senate. let me walk you through exactly what happened. starting with the jobs act, that's the bill that was in the senate today. it passed by 73-26 today. it's sort of a grab bag of different proposals, but here are a couple of things it would do. it would make ipos easier for companies, eases financial fraud regulation, allows crowd funding for up to 2,000 investors, and it moves now back to the house for a final vote. it's got to go back to the house before it can go to the president. one bill that will go to the president is the stock act. that one we've been covering for a while here on cnbc. that is the measure that would make it illegal for members of congress to engage in insider trading, also their staff, the provisions would expand the bribery laws.
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those provisions were dropped. the provisions for greater exposure were also dropped in terms of the firms downtown that engaged in political intelligence for hedge funds. they will not have to register now. the bill will go to the president's desk now. not so good for the transportation bill. that one has stalled. it authorizes $109 billion in spending over two years. but the majority leader eric cantor says we are just out of money. so what they're doing instead, brian, is just a three-month extension of the highway money that looks like that's what they'll do here. and sort of kick the can down the road and figure out what they can do in terms of highway funding going forward. the progress here in washington rare in an election year. >> the can only be kicked until the funds run out. >> as you know, the infrastructure is crucial to the country. a lot of companies depend on the highways. >> you have obviously driven in
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new jersey recently. >> yeah, exactly. >> thank you, eamon javers. here now republican presidential candidate ron paul, congressman from texas. congressman paul, good to chat with you again. i want to start off by talking about budgets because eamon just talked about being out of money. paul ryan submitting a budget. you're critical of that even though it's coming from a prominent member of the gop, what is your beef with paul ryan's budget? >> well, it's slightly better than what the democrats are doing. and those are the only two choices, that helps a little bit. i'm not satisfied with it because it doesn't cut that much. i want to balance the budget, i think spending is a problem. but i don't think that budget reflects a concern about spending because it doesn't even talk about close to balancing the budget for 30 years. doesn't really cut any agencies of government. and it adds actually to the militarism and the military spending, and i don't think that's a fair attempt or concern about how serious our problem is. i think we're continuing the same progress. i think this is, you know, more
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talk. and i think in budgets in terms of only one year. the first year is the only thing that counts. they talk about, you know, $2 trillion or $3 trillion from cuts of proposed increases ten years out. why should this be pumped up as if we're really doing something? i think the crisis is much worse. i think we're in a debt crisis and you can't solve a debt crisis by more spending and not paying attention to the debt. >> is paul ryan's budget doa anyway? many have latched on to the fact that the tax rates is going to significantly lower tax rates for people who are on the upper bracket and therefore this is already being painted as a gigantic tax break for the upper class and for the wealthy. >> well, i'm for all tax breaks for everybody. so that part of the bill, i would support because you need cut taxes. but it doesn't mean a whole lot if you're not serious about cutting spending. if you cut taxes and you
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continue the spending, then you're kidding yourself. so it's a spending problem. i think taxes are a consequence of the spending and i don't think republicans are very serious. i don't think the other candidates are serious. my proposal is you cut $1 trillion out of the budget the first year and balance it in three. they will not accept this idea that we're not the policemen of the world, but the american people have come around to this, american people want us home from afghanistan, different places. >> but congressman, is congressman ryan's budget doa in your view? is it done already? >> oh, i imagine it is because of the politics of the situation. the impossibility of making progress. as long as this country and the people endorse entitlement systems, the welfare state and the policemen of the world, it's not a budgetary problem, it's a concept of the role of government problem and that hasn't changed. both republicans and democrats endorsed in the leadership positions, both endorses principle that you really don't
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cut anything and you just pretend to count on several years out and that's why we're in this crisis. so, yes, they're not going to resolve this. they're going to argue and fuss about it for a long time to come. >> the president in cushing, oklahoma saying, listen, we just needed more time. he's going to try to fast-track from cushing through port arthur, texas. is this political grand standing because the administration is getting worried that gas prices might be their biggest problem come november? >> i think that's a pretty good assessment. but what bothers me most about this whole argument is why is it that we have so much power in government? and in the hands of the president? why should one person like the president be able to say, oh, well, we're going to have a pipeline. i think that's outrageous amount of power. if you do have that power and you have to assume that power, it should be used to enhance the marketplace and competition and allow things to progress. but to use it to boycott it and
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stop it for the benefit of maybe a certain group of special interests in the base of the democratic party, i think that's wrong. but i think there's way too much power. these kind of pipelines. we've been having pipelines in this country for hundreds of years. and they've been built before and there wasn't so much power. i think this environmentalism that takes over where you can't make any progress. and then too much power falls into the hand of the president. that's where our problem is, i believe. >> the "washington post" out with an article just a couple of hours ago citing a number of prominent republicans saying that rick santorum needs to quit the presidential race. do you agree? >> i don't agree that they have any business telling who should drop out or who shouldn't. i thought this was a democracy. >> the argument, though, does it damage the gop's chances longer term? >> how do they know that? why should they make that assumption? maybe a good debate is what we
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need. maybe we need more debate, maybe we need this to drag on a bit so people like myself who believe in the marketplace and sound money and the constitution a non-interventionist foreign policy, we need more debate, we don't need people closing us out and saying, oh, well, we've got our candidate right now and he's sort of a modified democrat and therefore we have to quit this debating business. i think that's terrible that you -- that other people tell independents to drop out of the race. i think we should have a debate. and continue the debate because we haven't solved our problems yet. >> fair enough, congressman. but rick santorum basically making fun of mitt romney's advise advisers, etch-a-sketch comment saying do we want that type of candidate almost implying that if it's not he or romney, then maybe obama would be best left to be reelected. that's the kind of damage some are saying doesn't need to be done because they're just kind of punching each other like
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robots. you're okay with that? >> no, what right does santorum have to be challenging romney for flip-flopping around? santorum is not exactly a conservative everybody looks at his voting record. i mean, he has voted for all of debt increases and increased department of education and he vo votes for planned parenthood. right now the media pumps him up, he's the ronald reagan alternative to mitt romney. he has no -- he hasn't earned the right to condemn romney because he's not conservative enough because he ought to be looking to his own record and explain why he's voted for so much big government. he votes for foreign aid and things like this. that doesn't mean -- that means he's not a conservative. he's a states conservative. >> in your view is he more conservative than romney? we have a guest coming up later on saying romney is too liberal. if you're saying santorum has done these things, do you think santorum is too liberal? >> well, obviously, he's for too
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much big government. it's the definition of conservative and liberals that need a little bit of adjusting. if you double the size of the department of education and george bush does it, that's called conservative, if you continue to fight wars, that's called conservative, if you increase military spending, that's called conservative. if you pass the patriot act and intrude into everyone's houses without a search warrant, that's called conservative. i just find it to believing in the constitution and a foreign policy where it's designed to defend this country and not to police the world. >> millions of people out there stuck in the middle. i completely agree with you, congressman ron paul. a pleasure as always, thank you. >> thank you. still to come, goldman sachs embarking on a muppet. [ leanne ] appliance park has been here since the early 50s.
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one of the creators of that fine program was of course, himself, a goldman sachs client. the report is out that goldman sachs is now hunting for muppets, not kermit or miss piggy, but those who uses the term to disparage unwitting clients. hold on and listen to goldman sachs cfo during his 2010 congressional testimony. >> when you heard that your employees in these e-mails and looking at these deals said, god, what a [ bleep ] deal, what a piece of crap. when you hear your own employees or read about those in the e-mails, do you feel anything? >> i think that's very unfortunate. >> are you embarrassed? >> i'm very unfortunate -- i don't -- >> on e-mails -- >> i think it's very unfortunate for anyone to have said that in any form. >> all right. is this all goldman sachs damage control or just a big show
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that's going to end up nowhere? here now, cnbc's john carney. mr. carney, on our segments together, we will call them sully con carney, and you are a former corporate attorney. you think this is not a show, you think this is a big deal because the s.e.c. or other agencies get involved, they might find what? >> it is a big deal, brian. you have a very public accusation by an employee of goldman sachs that they regard their own clients, managing directors, not just little people at the firm, but big shots at the firm are calling their own clients muppets. that's the code word for idiot. that's not how goldman should be talking about clients. if i'm a client, do they think i'm a muppet? it's a very big deal and the s.e.c. has to be looking into this. believe me, they are looking into it. i haven't talked to anybody at the s.e.c. about this, but when they get this kind of information in the public, they start to look into it. >> john, you could not disagree
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more, right? you think this is a big show and government should stay out because people can say what they want? >> well, here's the thing, i think the real scandal, brian, is not goldman calling its clients muppets, it's big government advocates like senator levin in your clip treating u.s. citizens as muppets incapable of making their own decision. >> who are you referring to? you saying that clients shouldn't care? and if they don't like it, they should take their business elsewhere? >> exactly. that's the way the free market works. mr. smith in his column and i take this at face value said he didn't see anything illegal, so if goldman is misreading its clients, free market will solve this. the start-ups talked about in earlier segments will give other firms more opportunities to create, make it easier, for smaller firms to go public. it'll make it easier for greg smith if he wants to start a start-up to compete with goldman. >> i think john carney, what
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might be missing to your point, you know how this works, right? you don't want the government sniffing around your e-mails, right? there's always somebody that's going to say something stupid. >> right. and i don't even think this is an issue of big government, little government. i think if goldman is mistreating its clients that is the thing -- >> is calling -- is calling them names mistreating them? >> it's not calling them names, it's the thought pattern behind that. if they're thinking of their clients as idiots, why are they thinking that? it's because they think, oh, these are people we can take advantage of. that's the big danger here. is goldman breaking its promise to its clients and treating them as if they are idiots? that's not how goldman clients want to be perceived. i talked to goldman clients all the time and tell me one of the reasons they do business with them is because they're afraid of goldman. if i was doing business with someone else, goldman would try to assassinate me. that's a quote from one of my stories on cnbc.com.
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they say i do business with them because, yeah, they might want to rip my face off, at least they'll keep me alive. they have a client problem and they recognize this. this is why they're going on the hunt for the muppets right now. >> should the government, should the media just back off? because i always blame the media. >> no, i think it's a story, but it's a story about the marketplaces, it's a story about allegedly mistreating your customers. i mean, these were sophisticated investors. he says he dealt -- they're perfectly capable of looking after their own interests if there was no fraud involved and there was no illegal behavior. yes, the media can look at it as a business story, but the government so far should stay out based on it's not illegal to call your client a muppet. >> john, i appreciate it, john carney, by the way, nice plug for your website on cnbc.com, you're welcome on "street signs" 2:00 p.m. eastern on cnbc any time. great plug. and we all got it in. it's all right. coming up next, can the tea
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party get behind mitt? two members are with us tonight. answer the key question, will they support mitt romney? drum roll please. the answer coming up next. americans believe they should be in charge of their own future. how they'll live tomorrow. for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future.
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and welcome back. last year, tea partiers were protesting against mitt romney in new hampshire. his own backyard. just today the front-runner made the rounds on capitol hill, working behind the scenes to make his case to jim demint and paul ryan. he seems to be saying that it is he and not ron paul, not rick santorum, that is the best tea party candidate. but is the tea party really ready to rally behind romney? here now is tea party activist tony katz and justin phillips of tea party nation. do you think the tea party can rally around mitt? >> i don't think it's a conversation of rally around mitt, it's the tea party making sure that obama doesn't get another four years. that's what you're going to see whenever a nominee is decided. it's about removing obama from
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office. >> justin, you think romney is essentially a liberal, too liberal for you to get behind. well, it's clear he's probably going to be the republican nominee, so what does the tea party do when it comes down to romney versus obama? >> well, you know, when it comes to election time, yeah, we'll probably hold our noses and vote, but guess what, the fight's not over yet. i'm holding out for a brokered or deadlocked convention to get somebody other than romney because we don't need to replace one liberal with another. >> who? santorum? you probably heard ron paul essentially say santorum is too liberal. >> well, you know, ron paul's entitled to his opinion, i like newt gingrich. i'm willing to consider a lot of other options. anybody but romney and then anybody but obama. >> okay, so if -- >> really, if romney gets the nomination, maybe the other tea partiers on the more conservative side will as he said it hold their noses and vote for mitt. >> well, of course, they're going to hold their nose and vote for mitt. you have to understand the tea
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party doesn't have a specific candidate. nobody fits the bill completely. that's why we're focused on senate races, keeping the house, control the senate, control of the house, and if mitt romney is the nominee and that's still an if, let's make sure we stick the conservative principles that allow him to stick to conservative principles. >> he is the tea party -- can we say the tea party? as you just implied, the tea party is hundreds of groups all over the country with different visions, different people. is it cohesive enough to even have the kind of impact you're talking about? >> of course. and to say anything otherwise is false. the tea party is fully prepared and fully actualized in feeding statism and ending the slide of big-government spending. if we have mitt romney, we're going to get a little bit better. but we understand we have an 80-year slog ahead of us, thank you, donald rumsfeld. 80 years, not one term, not one presidency. a lot of work ahead and we're totally prepared to do the work for the next 80 years. >> are you saying that mitt
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romney is a little bit better than barack obama, the keyword is a little bit. the tea party -- >> i didn't say -- >> that's their word, not mine. >> that's what i thought i heard you say. romney's policies are basically almost the same as obama's. he gives us obama care, cap and trade, tax increases. this is what he said as massachusetts governor. what makes us think he's going to do any different as president? this is why we've got to -- >> get the senate and the house. and i'm not saying romney's going to be the nominee, but of course you're going to hold your nose and vote for him. >> -- he's going to be the nominee! >> come on! >> romney is going to be the nominee! >> the senate isn't going to do it. >> justin, do you think -- justin -- gentlemen, let's dial it back for a second. the show's nearly over. we don't want to get worked up before the end. >> not me. >> i'm getting worked up. >> justin, do you think santorum should drop out and get behind
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romney for the better good of the gop? >> for the better good of the gop, i think rick santorum needs to stay in this race and mitt romney needs to drop out. >> mitt romney needs to drop out? >> for the better good of the gop, for the better good of the gop, the gop needs to drop out and allow conservatism take hold. if romney's the nominee, they will vote for him. if gingrich somehow gets more money and is the nominee, they will vote for him. that's the way it's going to go. about removing obama from office, get control of the senate, the house, the local municipalities and that's how you build a team of victory for many, many years to come. that's what it's about. the conservative control of the gop. not the control of the gop. >> we're going to get you back on because you know what i want to talk about, guys? is the millions of people in america in the middle. they're not far left they're not far right. >> yeah -- >> if we keep going more to the right and more to the left, where's the middle? where's the millions of people
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in the center? where do they go -- >> we'll talk about it another time. >> that's another segment -- next time larry's out, we'll have you both on, the three of us will go round and round because the middle is where it needs to be held. thank you, everybody. watch me on "street signs" tomorrow on cnbc, our talking points, what happens when the high-momentum stocks finally pop. three stocks may rise on that. thanks for watching. an airline has planes... and people. and the planes can seem the same so, it comes down to the people. because, bad weather the price of oil those are every airlines reality. and solutions won't come from 500 tons of metal and a paint job. they'll come from people. delta people.
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