tv Squawk Box CNBC May 8, 2012 6:00am-9:00am EDT
up to speed on the stories that you need to be following this morning. facebook begins day two of its road show. this time in boston. but beantown based investors should not expect to see hark zuckerberg. fans did get a quick glimpse of him yesterday in new york.ark zuckerberg. fans did get a quick glimpse of him yesterday in new york.mark zuckerberg. fans did get a quick glimpse of him yesterday in new york. he arrived in his signature hoodie. facebook executives are splitting up to tackle the remaining eight days on the road. bank of america will begin mailing out 200,000 letters offering certain customers mortgage principal reductions. all part of a $25 billion settlement reached between the government and the nation's largest mortgage services over robo signing. borrowers could get as much as mortgage balances. and mcdonald's reporting monthly
sales. analysts says likely rose 4.2%. meantime u.s. comps are seen rises by 4.about about8%. >> corporate headlines on the squawk news wires. the treasury department is trimming its ownership stake in aig to 61% from 70%. the government expected to receive another $750 million by offering additional shares. meantime the government accountability office reports that u.s. taxpayers could make a profit of more than $15.2 billion from the aig bailout. mood diddy's is weighing the possible downgrades of 17 financial institutions, including morgan stanley.
elsewhere, yahoo! ceo scott thompson is apologizing to employees after being accused of padding his resume. the company's board convened yesterday to address aspects of an internal review. thompson wrote i want you to know how deeply i regret how this issue has affected the company and all of you. we have all been working hard to move the company forward and this has had the opposite effect and for that i take full responsibility and i want to apologize. >> a few stocks to watch. let's start with the after the bell movers. dendreon a first quarter loss, but still expects modest sequential growth in its key drug for prostate cancer. it's a vaccine. and the company's only of a proved product. electronic arts in line with estimates, but lost 400,000
subscribers of star wars, the old republic. the company's been relying on the new game for growth. wynn resorts fell short of stemts. failed to make up for flagging las vegas revenue. they received approval to build a new casino in china. and toshiba effects a 45% jump this profits this year. robust demand for its flash memory chips used in apple iphones. let's check on the markets this morning. we have what you will you would call kind of a surprising session yesterday, although we'll extend some of those losses. we got all the way back even though the world ended over the weekend people thought in terms of what was happening in trance and greece and germany. more conjecture today on when
the possibility of greece actually leaving the euro is back on the table. people think maybe it is. but that's what we're looking at on a percentage abobasis. lost 29 points on the dow yesterday. >> if i had asked you, you would have thought it would be a blood bath p. >> we had a bad week in anticipation. people knew sarkozy was history. shall people were thinking he mitt pull it out. i don't think an incumbent has lost this years. >> i think the french side was largely factored in. >> and i apologize, we have been mispronouncing mr. hollande's name. we were doing holland. there was a little bit of
francois holland going on. >> is that from the frogs dictating how we speak? >> you always give me the ne nevada/nevada. >> that's because it's in thisd holland. you will feel pre-to go hofree go hollande. you have their politics, hair quest for fairness and social safety net. so you go ahead. jump actual tofull force into h. >> and then he also has to say paris. >> do you know who does that? francois hollande is what i'll to. you know who drives me up the wall? well, you do. but in addition to you with his
pretentious perfect proceed muns yags of all foreign -- al wleks fing are a beck. we have does he a question, and then if the contestants don't know the answer, sometimes he's like -- it's really -- ♪ he's in-sufferable in terms of his pronunciation. i'll be the anti-trebek. >> joe is trying to get an invitation to jeopardy. >> oh, yeah that's me. not only that, because he knows the answers, because they're given to him, he starts thinking he knows the answers. he does. he thinks he knows every answer and he doesn't. he probably would lose. >> i actually think he would know -- >> in-sufferable. >> scott wapner once called me pre-enissues on the air because i happened to pronounce one of the trefrnl gufrench guys famil
correctly. >> we kid around with sarkozy. >> and every time we nevada -- >> it's never been nevada. ask anyone. >> and it was never holland. >> it is holland. that's the difference between a euro procenunciation and just knowing how to say a state in your own country. that's the difference. let's look at the -- and that's sad because its -- >> i'm going to take andrew's side on this one. >> nevada. >> no, on the hollande. >> you're not american either. >> i'm a foreigner. >> from a country populated by people that were thrown out. >> sorry, that was australia. >> that's right. all right p let. let's look at the ten year note. i can't wait to hear you -- he'll be there for a while, five years or whatever it is. >> are you going to say it as holland for the next five
yearses? >> absolutely. anyway, there's the dollar board this morning. or that's the it ten year note. 1.84. there's the euro at 1.30. hoping for 1.20 by july. and take a look -- 1.20 looks a lot nicer on the conversion about if ire headed over. and we had been between 1640 and 1680 and we're below the range. the next level about you look could be down below 1600 at some point about if it breaks through that support level you saw to the left. will is perfe will is perfect for you. is it ross -- >> how should we do that? >> he's a britt. >> ross standing by this london with lots of red behind you,
sir. do the pronunciation for us if you could. >> you're close at least. >> joe, you are a -- three days in paris, you know there's a bit of that you will forever be french. >> i'm going back. doesn't mean i have to start speaking with a french accent. >> we have to say hollande here because if we said hole holland, everybody would think we were talking about the dutch soccer team. >> and when you talk to the french they don't understand you, do you speak louder? >> oh, yeah, i do that. while i'm putting ketchup on my french fries. >> dobier is the only they think you need in a cafe. >> i guess if you say holland they'll laugh at you. >> we'll sort that out. and as andrew rightly pointed
out, we didn't have the reaction yesterday, and today we are. 7:2 decliningers drought outpacing the advantagcers. mainly down to hsbc, underlying profit 6.8 billion. global bank and markets helping out. stock up 1%. it was down around 1.5% before those numbers came out. cost cuts as well doing fairly well at hsbc, doing better on that front. cost efficiencies improving 55.5. e xetra dax down about a percent. and french market is now reacting to the news over the weekend more than it was yesterday. up 1.6. today down 1.9% as we focus on mr. hollande. aex down a quarter of a percent. stocks in europe, kpn, carlos
slim offering around 4$4.2 billion for a 28% stake. haven't said whether they've agreed him to allow him to take that stake. wkpn t kchl but kp this. the outperformer. italy still capped below 5.5%. ten year french yields have gone lower this morning. 2.78 is where we stand. spanish yields slightly higher, spanish government saying considering plans for bank today, former director stepping down as chairman. german bund yields just off the -- credit we nudged near the record lows. just offer that at the moment. so stocks are down after yesterday's surprising us with a
finish on the up side. back to you. >> thank you, ross. in other headlines making news this morning, google's self driven cars soon to be appearing on nevada roads. >> thank you. >> the state's dmv approved the first autonomous vehicle license. officials rode along on test drives on highways and local streets and even the vegas strip. the cars rely on video cameras, lasers and database of information collected are from manually driven cars to help navigate it. we talked with warren buffett yesterday about what happens if these google driven cars take over the roads. geico. auto departmentsaccidents. you looked at me like i had never lost -- >> there will never be another accident. it will all be all machines.
>> when you think about human error and about drunk drivers and about people who are tweeting and they're on their phone and driving at the same time, telling their kids to shut up in the back and then and you have machine who is like laser focused on nothing but the road. >> i guess you've winever seen o 1. do you remember what happened to those guys? >> there were car accidents in -- remember tom cruise in the movie -- >> yeah, i remember that in the future where he's -- >> minority report. and there were car accidents. >> might stand corrected. but you have lots going on. >> i'm sorry, dave, i'm afraid i can't do that. >> h is before i, a is before b, l is before -- and hal was the computer on the spaceship. >> i never saw that. i apologize. i'm sorry. >> this is not an american movie either. >> give me a little credit because here i'm with you.
>> andrew, my man. >> yewe're together on will one. >> did you ever see paulity towers? >> now you're showing off because that was a british -- >> yeah, are way back. . >> i do know what it is, but if me, it was all about benny hill. coming up -- >> where's the music. >> no, it was ridiculous. did you ever watch that? >> i did not. >> he love their t and a. >> there's the music. >> you're so excited. >> high dad used to religiously watch that every single week. can you imagine? >> the crew around here is all happy. anyway, coming up, squawk fan favorite blows in are there chicago.
trader john brady tells us what he's watching before the opening bell. plus the ceo of dreyfuss oversees 400 billion, first, sports news. the rangers beating the capitals in overtime last night. it's been an exciting series. they take a 3-2 lead in the eastern conference semifinals. meanwhile the fee thiks coyotes beat the predators to reach the conference finals for the first time in tran chiz history. franchise history.
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futures are looking at a weaker open with the dow implied to the down side by about 60 points. making headlines, amc entertainment is reportedly in talks to sell the company or a significant stake in to one of china's largest theater owners. "new york times" cites amc has been owned since 2004 by an investment group apollo. and to today's national forecast, jeff morrow joining us from the weather channel. >> good morning. yeah, we've got rain moving into the east. dry for the moment in new york, but that will change by this afternoon. some rain moving toward the east coast. we've got rain across the south land, dallas will have showers. they actually need the rain.
still in a drought situation there. much of the central plains drying out nicely and the west coast probably some of the best west in the entire country. so enjoy from l.a. all the way up to seattle. if you're worried about severe weather today, some isolated storms in the east, but i think south texas, it will be limited down on to will. not much of a tornado threat during the day today. back to you. >> and now to the markets. joining us ceo of mellon dreyfuss. and also john brady at rj o'brien. a couple of johns. but you won't hear the difference. what about the election of hollande? >> it has a d at the end. >> you don't need to pronounce the d. what about the election of hollande
hollande? you can believe -- we got a lot of the selloff. so today we're down again. p. >> the french government's been funding that economy and it's not going to go up much during hollande's reign. the reality is that's been the move and sarkozy actually -- >> he tried to do something. >> he did. >> this guy wants to go the opposite way. >> i think that's right, but i think the markets moderate and i think you'll see that. the reality is you have big problems there. >> there's a piece in the "journal" today that hollande -- you've started something. >> put the d in there. >> when the chips are down, expect tran expect france to keep its commitment. so is it in his best interests
to listen to -- you have to say angela for me. >> angela is over. angela. >> yeah, i think they have to. anybody knows that this will hod rate to the middle a little bit. always does. getting elect which had hollande did, but how you have to govern. governing is tough in this environment. the biggest picture is europe has big problems for the next decade. no matter what, this isn't going to change the picture. we own some things in northern europe, but you want to be very careful what you own there. i don't think it will have a huge knock on effect. >> i wonder how much changes france. part of the rob with sarkozy -- do i have to do everything french? he talked as if -- it was a style thing, it was his wife, his rich friends. but he didn't really effect any structural changes necessary to
bring them into the 21st century like germany. and this guy probably won't be able to do much, but won't take help down the socialist path either, but his style had been different. he'll talk about not liking rich service, he'll give lip service to the public sector. >> talking about not liking rich people is with us for a while. it's everywhere. having said that, you have to govern. it will be interesting to see the next round of elections in greece. so you go and right now you couldn't get a consensus on a ruling government because everybody went fringe. the reality is they'll hold these elections again and people realize the choice is we're still broke, we still have to work our way out of this, we need a solution. so you're probably going to get again move to the middle. >> can i just jump in, because the thing about hollande is he's essentially anti-austerity and he's advocating an approach that is both growth oriented. is that something that will work? some animal scissors said one of the reasons why the euro has not
suffered more than perhaps i'm expected is because maybe people are coming around to the idea that too much austerity was crippling. >> heart. there was a great article in the news yesterday that was saying just that. and the reality is it's probably a mixture. you can't totally choke it off. the good news is right now the whole world is easing and that will help spur growth. you do have to fix the systemic underlying problems that will a some growth internally. you can't choke it off because if you do, you're not going to get any relief on the debt crisis. >> and i think go c-- do all th guys marry tv -- >> she's proud of his ways. >> about will prench you go to that school to become a government official and their most successful people are
government officials and they get the row iftrophy wives. >> and this whole idea of growth coming hugh higher taxes and government spending in france -- >> be careful. >> how do you go from that to saying false things about higher taxes is what andrew wanted to say. >> the whole idea of taking tax rates from high levels to incredibly high levels and expecting growth seems a little bit farfetched. >> why? why conditions you take highcan you take higher taxes and hire more teachers? >> because at some points the which i can benefit is no longer there. we're a little different here. we think the real story is probably greece once again. the odds of another runoff election in the middle of june are probably elevated given events of the recent days. and greece leaving the euro, there was a bit of a strong vice
on sunday's vote and that is two-thirds voted against the troica. so the idea of greece still leaving the euro is very much there. >> but how realistic is there. the cost of leaving the eurozone is too great to -- it youth weighs the benefits. >> the costs are greatest for germany. but right now, germany seems to be the one in control given the finances that havele ro rolled the ecb. i think there will be peripheral countries that may join greece. the question becomes the increase in tension. but i think there will be an effort gradually where the effort will be made to keep poor europe together and tell's probably try to recalculate the
relationship. >> would germany ever blink because it matters so much to them? they're in this as much as everybody else. >> i think the german population is already blinking and i think will probably blink a year from most of. >> they finance stuff to greece and sell hatheir manufacturing >> she's politically wounded. but this really can't allow itself to break up. if you look he die magics of europe, if you go out ten years from thousanow, you wouldn't ha european country in the top ten gdp in the world. they can't afford that. and you also think about there are still people who remember landlords. we don't remember that here. i was this brussels recently talking to one of the german ministers and he said we remember land wars. when you have all this built up, it will create a situation where a lot of us don't want the tension. i think it's ht best interests of the europeans to find a way
out. it may not include greece, but it's not that important to the economy. >> if about it was the deutsche mark, how much more expensive would it be? how much more expensive would germany's currency be? they wouldn't be the export machine that they are. >> i defer to john. he's better at currencies than i am. but it would be more expensive. >> china and germany have benefited from artificially low exchange rates. >> deutsche mark probably behaves similar to the singapore dollar and swiss franc have behaved. so given the tight monetary policy, mark would trade much stronger against the dollar. >> i know decoupling is a dirty word, but nonetheless, at what point does the u.s. look so good-bye comparison -- i hoe we have our own fiscal and bunch the area issues going on, but when you look at europe and various emerging markets slowing down, to what extent will people put their money here because
it's a so-called safe haven is this. >> my belief is probably on wednesday november 7th, if that's a change in policy with this government, united states government specifically, i think you'll see capital flows increase to the united states. there will be a capital flow here naturally, that will speed itself up and expedite about in fact there's a change this government. >> i think you have to look at good companies especially those paying hivedividends. >> okay. guy, thank you. getting some support about that guy alex trebek. like when a player gets something wrong, have you ever looked at -- i would be afraid to say something wrong. some of the looks you get from him. he scolds people. but he knows the answers. they give him the answers.
in a doesn't allow being to look down on people that don't know the answers and to practice the pronunciation. coming up, from spocks to ca stocks to commodities. why the market isn't accurately accounting for oil market demand. that and more. but first yesterday's winners and losers. tdd# 1-800-345-2550 let's talk about fees.
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oil prices are sliding, but our next guest says the markets aren't accurately accounting for general demand. he's a former assistant thrg secretary. andy, great to have you on the show. this is big, the slide this oil. down over 5%. yet the saudis keep on pumping oil like it's going out of business. do we keep on going down from
here? >> i think it's much more dependent on geopolitical events. the market can account accurately on on any given day. what my point is that we're not accounting for the geopolitical chess map and how that can paekt us in terms of volatility. the saudis are the swing producer. i don't think we actually accounted to how much demand is drawn out of japan to relays the nuclear that's been taken off line. that's about 5%. an extra 500,000 barrels a day. so i think you're looking for summer volatility and when we're celebrating $3.79 gas prices, the decline is on to $3.79, the all-time record $3.81 p so i think we're a different plateau. >> so if we did account for all those things, where should the rice be? >> i think we're at the volatile edge. bottom line is we're stuck at 86 million barrels a day.
so anytime we press up against that with sufficient economic growth, we'll see that jet up from sort of the saudi clearing price of about 80 bucks a barrel for them to sort of keep their populations in check to are probably $140, $150. we test this level in this very proud range. eia own statistics would suggest they have no clue between a 200% swing on any given day where the price can go. >> what's your call on specul e speculator issue? the price of oil is going up. everyone is quick to point the finger at the speculators. when it's going down, no one says thinking about speculators. >> it's one of the washington originated terms that is overhyped. will a speculator on the way up and on the way down. there's a winner, a loser in every transaction. so you're always speculating to engage in a transaction. people are trying to build that into the surplus price because they need a boogeyman that
supplants lack of leadership out of washington. it doesn't really account for the lack of a long term plan with about what to do to get us out of the leverage being held over us because we won't use our own natural resources. >> our favorite thing is if it's 10% of any market, what about the fed and ten year notes. how much of the bond market are they in now? they would have to write that rule in a way that allowed the fed to not be subject to the size limits, right? >> the irony is that about if you keep going down this track of how to regulate something that you really haven't specified to some degree, you could simply push it into very few large players trading on the markets who control the largest amount of reserves and everything. could you push us into a market
with too much power from too big of players rather than a diversified market with many participants. >> an didd >> andy, great to have you you on the show. coming up, he worked with hit romney as a part per at bain. now ed conrad said everything you've been told is wrong. he'll join us live in just a minute to tell us why. tonl, tomorrow, the disrupters. .young innovators changing the world are technology. our series incontinues with the kout fou kou founders of rock melt.
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a new book is defending the super rich. new york magazine times is the magazine i remember. but the proceed filing the author. he wrote the book undefended consequences, why everything you've been told about the economy is wrong. the author joins us now. he's also a former partner at bain capital where he worked side would i side with mitt romney p. you have an excellent new book and it does defend the 1%. make your case, sir. >> 0.1% i would say.
>> the book doesn't really defend anything. it's a prescription for how to get the economy to grow faster and one is that we have to reward risk taking that in the long run innovation is what drives the economy, it's driven the u.s. economy. it hasn't driven europe or japan's economy and we see the effect of that. i make the argument that's good it to the middle class and the working poor and it's been far more beneficial here than in europe and japan. >> so make the case or respond to this. you hear so oftenequality is ac problem, that we have not raised -- or for all the things that we've raised in terms of our economy, the inequality unto itself has been a failure. you disagree with that. >> sure. tell me why it is not good for our economy or the middle class to have our talented workers in the united states segly more productive than europe's and japan's. i don't understand the argument.
it can't make that argument, so they have to make another argument, which is you'll have too much political power and we'll use that against the middle class. it seems to me that we gained political power in the 1980s and hei theen and we've used it successfully. >> what do you make about the arguments of upward mobility, that it's harder to move up today than it used to be? the average american can't move up the ladder as fast as he or she could have say 30, 40 years ago. >> a lot of people lnt been educated 3040 years ago, so educate opened up knenormous opportunities and you saw a he reshuffling of the economy p today most of the people who want education can get access to education.
so i think you'll find over time as education grows more efficient, you'll see it being perhaps harder and harder to move up and down the wage gap. >> let's go through some of the other prescriptions. if you were to ranrank them one two, lee three to fix the count. >> one of the short run prescriptions is if we keep attacking the banks, we'll have a decade of lousy growth and that we need to put that money back to work. >> when you say attack the bank, you mean the federal reserve, the public, congress at being takes the banks, what? >> i believe a lot -- well, in 1929 and in 1990 about japan, they had pretty much the same situation that we have came. and they suffered ten years of slow growth and high unemployment as a result. and i believe it
dyi misdiagnosis of the financial crisis. if you look at securitization, investors were putting up homeowner down payments even though people had a belief that banks were making reckless loans. from the bank's perspective, they said whether a 20% down payment protects me or outside investors subordinated protects me, either way i'm protected from a 20% drop in real estate prices. we had a 30% drop and all the institutional money came flooding out of the bank. we now woke up today and recognized that's a lot of withdrawal risk. a lot more risk than we recognize in 2007. until we take steps to fix that, we will have slow growth and high unemployment. >> and when i was reading the magazine article, you were advocating creating a government program that guarantees to bail out the banks if they ever do physical another run which i thought was in the current climate of occupy wall street
controversial. it says to the banks do what you want because your government supports you. >> it certainly does create moral hazard. what i say is the government is already making implicit guarantees. we saw them made explicit in the financial crisis. we can retend that they're not making guarantees or we can accept up to the fact that they are and we can start charging the banks for the guarantees that we make. we'll have moral hazard, but don't kid yourselves, we already have moral hazard. we need to charge the banks for garn guarantees that were made. and we have to increase visibility. we have to understand what risk you're taking and sell some of the insurance to the about public so we can get a public price. and we also need to tincrease capital adequacy because the
banks had better suffer every nickle of losses on their loans. but we don't want to it take responsible for withdrawals. because if we do that, we'll have ten years of high unemployment and slow growth. >> you're in wfor lower taxes as the board. >> we're at 15% of gdp in taxes and we're spending 25%. i don't think how we're lowering taxes from here. what i would say is reducing government spending is a lot better than significantly raising taxes as a way to close the gap because we all know where those tax increases will come from. they will key from successful risk takers and that will dampen down risk taking. and it will reduce the accumulation of equity and we all know what's really underwriting risk. i made the argument that cut government can depend churs is better for the middle class than raising taxes. >> will you ever get used to a question of you defend the 1%.
make your case. i mean, will you ever get over that red herring? that's the way it's going to be. it's incredible to me that the most successful people in the -- i don't know why occupy wall street hates you. i don't. they don't know you. they hate the person they don't though. you know what i mean? >> you're right, joe. in 20 years time, oh, you're the guy who defended the 1%. >> hopefully we'll all be down in the 99% by then is my hope. this will be no 1%. we've tried before with not great success, and the other thing is you're a partner with rom a romney. there is a target on your back this big. no one will accept your book as a partner of hit romney. >> the book does make the argument that talented people have a moral responsibility to -- >> we had arrest hur broothur b
two hour, and he will make the case for -- not the ross sparity case for capitalism, but the moral case for capitalism. and it's the way that what our foreareas said, pursuit of life, liberty and pursuit of happiness that's the only system that allows to you do it. >> i always think it's funny -- >> i'm laughing every day. it's hilarious. >> everyone wants to make the argument that innovation and success doesn't drive our economy. >> it's not working. sitting there receiving government handouts. >> and we have to leave it will. the book unintended consequences. congratulations on it. appreciate you being here. >> thank you for having me. still to come, it's 5:00 somewhere, so we've hired our own bartenders to mix a few drinks.
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breakfast? >> a mimosa, the traditional breakfast drink. >> can i borrow this? i might need that. this is pretty strong. >> this is officially chairs, right? >> let's talk about what's in the papers. >> i wanted to come along and talk about the so-called apology that the ceo of yahoo! issued yesterday to his employees where he said i'm sorry about how this is issued, surrounding the misstatement of his academic degree, he said he's sorry to the employees and the company on how it affected him but he does not deny the misdoing. he does not explain his position. there is no explanation on why yahoo! misstated his academic degree in the filings. it just feels like the worst apology ever. >> do you think he gets to keep the job? >> i think that's up for debate. >> let him keep the job because they need him right now and
somebody on the board is going to get thrown under the bus. that's what's going to happen. >> it came out that people said yahoo!'s stock didn't move. that was my comment. does it really matter who's running yahoo! at this point. >> because it's such a mess in. >> it's such a mess. does at that really matter. >> the question is who would want this job. >> whether he's got a computer science degree, i don't know if he can fix it either way. >> it all about trust and credibility and whether or not you've got the best person for the job. >> if he was a football coach, he'd be gone and there would be a new guy. >> are you guys going to join me on the drinks in. >> i'm not going to join you on the drinks. >> kathie lee and hoda, come on! >> and it's wine. >> this is what i want everyone to look at. this is every day. >> what's that? >> it's not a belt.
it's a wrap around suit, what do you want. >> we'll check in on what's going on in the market. stay tuned. ♪ uned. [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪ ask your financial professional how lincoln financial can help you take charge of your future. ♪
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winning the fight for free enterprise. aei president and author arthur brooks putting it all on the line as our guest host. >> the donald's back in business. trump's here to weight in on the economy, politics and the buffett rule. >> and raising the bar. what bacardi's doing that has investors talking. the second hour of "squawk box" starts right now. ♪ feeling hot, hot, hot
good morning. welcome to "squawk box" here on cnbc. the bar is open this morning. i'm not joking about that. we're going to get to it in a bit. becky is back tomorrow. scott thompson apologizing to employees over issues involving his resumé. he said he's going to fully cooperate with a board investigation looking into the matter. and print is casting a vote to protest the last of linkage between corporate performance and executive pay. and taxpayers could wind up with a $15. 1 billion profit on the bailout of aig.
let's take a look quick at the futz. the dow looks like it would open down 66 points, nasdaq off about 18 points, s&p 500 also off about 9 points. we are headed now into day two of the facebook ipo road show. yesterday mark zuckerberg pitching more than 500 potential investors in new york, wearing that hoodie. now they're moving to boston. that's where we find kayla this morning. >> about 200 investors are expected to pack into the room behind me for a breakfast meeting. they are not only investors from boston, but also because of investors who weren't able to get into the meeting yesterday. today's meeting will be front lined by coo cheryl samburg as
well as cfe david ebbersman. but not mark zuckerburg. we don't know whether they're taking a break from a grueling day of about six meetings yesterday. there's a group lunch in palo alto on friday and hopefully they'll make it to that because a lot of silicon valley investors will want to see his face. a lot of the big money managers are here that manage retirement funds. it needs to woo the state stree streets, the fidelities, the wellingtons of the world. >> do you have a favorite drink? >> i do like a good blood' mary. >> what about the vodka, the
rum? what's your drink of choice? >> i'm a southern girl. i do like southern comfort. >> my wife is a producer. her idea is to have the guy design a drink called the squawker -- >> i like that. >> you tweeted that already. >> do you design drinks? >> i do design drinks. >> are these real cocktails are or are they mocktails? >> no, they're real drinks. >> andrew -- >> consider me a lightweight. there's something in here. i'm not joking. >> he's stopped slurring. >> you tweeted it. >> someone wrote back, a financial adviser said when i said what do you think will be in the squawk and the person said adderall, xanax and a beta
blocker. >> what do you want in it? >> a little vodka and grapefruit juice. it's a breakfast drink. >> depends what you want to do with it. people who want to get hammered order a long island iced tea because they put everything into it. i would want a lon island iced tea. >> maybe you do want to get hammered. >> i've been looking forward to this ever since i read a book called "the battle." arthur brooks is the president of the american enterprise institute. it a think tank. he does a lot of thinking, i can tell you that. author of "the road to freedom," one of my picks for entry into the "squawk box" book club.
we're going to do that a little bit later. arthur, it great to see you. >> good to see you. >> i don't want to summarize too much what your thoughts are but one of the things you say is conservatives will lose the battle with liberals if they only focus on the prosperity that is obviously been engendered by the capitalist system, a free market system. >> that's right. it's an incredible thing. >> it's true. >> it's the system that makes us richest, we all know that. >> i've been having this discussion back and forth, we had buffett on yesterday. there are people that will tell you that the system has not worked for the past 30 years. i've had people tell me that straight faced, that it's left people behind. i think it's the greatest 30 years mankind has ever seen in all respects, life expectancy,
gadgets. how many people -- there's an 80% decline in people who live on less than $1 year. >> an 80% decline in poverty. so you ask why this s that? is it because of of the united nations? u.s. global foreign aid? no because of globalization, free trade, entrepreneurship and the free trade system. it's the only way to lift people up by the billions as opposed to by the thousands. >> how about in this country the average income or average gdp. has it just been the 1% that have benefited over the past 30 years? >> no. as a matter of fact you find very little income inequality, if you take the 1% out and look at the 99%, the much heroic 99%. >> virtuous 99%. >> exactly. if you take out the
entrepreneurial class, you see the other 99% hasn't changed much in inequality. government services have increased and all the things you don't count in the income statistics. if up just look at raw, pretax income, you're going to see more inquality. you get rid of all that and equality is not a big issue. we're wasting our time talking about income and equality. all that's doing is just wasting our time so we can't help people who really need help. >> when you read books about history and people suggest that income inequality lead to massive social problems, that's not an issue now? >> no, what leads to that is lack of mobility. >> would you argue that upward mobility as as available as it used to be? >> we have a problem now.
that's what we should be paying attention o. when the president of the united states talks about inquality and unfairness, he's giving as you wrong deal. that's a pure election ploy. the real problem is mobility has slightly fallen. the bottom 20% is seeing their opportunities are going away. they would say it's because the upper 1% are stealing the money. that's nonsense. schools don't taech the bottom 20%, opportunities are being stripped away because the nanny state is substituting services for growing opportunities and we don't talk about real reality problems for people at the bottom. until we do those things, mobility will get worse and we'll have more social problems. >> i wonder whether it's tied in with the death of the american dream, or the deterioration of
the american dream, i'm moving forward, having an education, have a better life than my parents. a lot of that is being stripped away with the economy and housing market just bumping along here. people don't feel the same wealth as they used to. >> you almost always see more pessimism when you you go go through a financial crisis. a financial crisis last as lot longer than a depression. it takes five to ten years before optimism starts to come back. now, happiness at the family level has been restored. >> happiness based on what? what do people feel happy about. >> they feel happy about their family life, faith, family, community, all the stuff that really matter. they're less optomistic about their money and life chances. that's going to take more time to get back. we have to make sure government doesn't get in the way of restoring that optimism, which
currently it is. >> do you feel the financial and economic crisis made us reflect more on what matter, it actually turned us inward and made us feel okay, well, maybe if materialism hasn't worked here, my family is all i've got less? do you think it's improved it? >> no doubt that's the case for certain people. and when people do come out from hard times, they look back and say, yeah, i learned a lot, passed some tests and learned some lessons. on balance, nobody would say they like it. i talked to entrepreneurs, i talked about this the other day with chuck schwab. i said tell me about the early days of your success. no. he wants to talk about early on when he had to take a second mortgage to pay the payroll. >> let's talk about what seems to be the bifurcated american dreams. one is it seems like anybody can
become steve jobs or mark zuckerberg. the other is if i go to school, get a college education, i'll have a house in the suburb, two kids and a dog and i'm going to get job and go to work and retire. it's that second part of dream that people are insecure about today. >> that american dream is still real except in the bottom 20% of the income distribution. these are the people getting hammered. 8.3% unemployment. it's ridiculous. it's a scandal. it comes from misplaced priorities and we really can help people like this if we're willing to take on the tough issue of our time. the american dream for the top 80% really is coming back around. but we have an obligation to
look at the bottom 20%, too. >> we'll hopefully get to talk more about -- you can find people who make 50 grand a year, 500 grand a year, whatever it it is, it has nothing to do with money, it has to do with earned success. and the two types of fairness, there's fairness that try to stipulate outcome in an egalitarian society and there a's merit-based fairness. if you achieve something, it's through your own efforts. in this country you can still do that. i'm not convinced in southern european there's anything such as meritocracy. >> no, you're stuck. there's a great survey that asked what's your view of bill gates? they were asking the french and the americans. the americans basically said i hope my kid's the next bill
gates. the french basically said let's take his stuff and burn his house down. >> bono said something similar. in ireland you see a guy with a big house on the hill and you say i'm going to get that guy. in america you say i want a house like that. >> i have offered the staff all the way up to president -- a dollar a page just so we can talk. >> if you have any comments or questions about anything u see here on "squawk," you can e-mail us or follow us on twitter. and still to come, it is tuesday so it must be trump tuesday. topics include the buffett rule and the race for the white
great to have you on the show. you're a bundle of laughs. why so pessimistic? >> i'm not pessimistic. asset allocation models. we've all about taught the relationship between risk and reward. if you go back 30 years and look at the bond market and stock market, the bond markets produce a rate of return almost identical of that of the stock market at a third of level of risk. we throw out some of our asset allocation models. it put us in a different view of how to build portfolios the second thing that's taken place is obligations. we've got a huge amount of obligations. we've all talked about the debt and debt ceilings and those types of things but when you look and add to that, the unfunded liabilities that we had in medicare, medicaid and the
social security program, the debt that's being piled upon our population is extraordinary. and how we deal with that debt is going to be interesting. you know, the other conundrum that we are facing right here is the fact that never have we had so much debt at so little a cost. interest rates stay still very, very low. it seems very unusual you'd have that much debt at the same time -- >> let's just boil this down and keep it real simple. what does all that mean with what i do with my money today? >> you need to look at demographics, we're slow in our economy but the world growth has been extraordinary. we're looking at a population in a world of about 7.7 billion people, you can find in there's an opportunity to export to that level of growth, you've got a real, real big opportunity.
nd t >> which pick sector would you be investing in? fertilizer, farmland? >> we've done a great deal of things to enhance our productivity and agricultural community. farm income was up 28% last year, it was up 28% the year before. maybe the farmers will be the new doctors and lawyers of the world in terms of income. >> there isn't a bubble in farmland values as a result of that, randy? >> i don't think so. there is a situation now between the airable land cross the world and the population. in 1960 we're sitting at about 3 billion people, now we're just under 7 billion. that makes airable land about 1.2 acres per person. if we have that level of growth, we'll be at .53 in 20350.
anything productive it in the agricultural side of things will be very, very valuable. >> you have paraed down your equity allocation. what would you look to in the future? >> we like the ag business world, no question about that. but we're a little concerned about the consumer going forward, a little bit concerned about some of the health care areas. these things seem to have reached evaluations that were not particularly attractive. >> you think the economic recovery cycle has peaked? >> i think we're going to see a slowdown. i think the debt out there will weigh more heavily on the consumer and they'll have allocations designed for consumer disposable spending. >> randy, thank you up stories making headlines, including the smuttiest city in the country. >> smutty as in pollution or
smutty as kind of dirty? >> you mean smut, right? >> smutty. >> where do you think it is? >> i don't know. somewhere outside vegas maybe. >> jersey. >> what do you think smut is? >> the producer is being very helpful in giving us some hints here saying warmer, warmer, have to go south. >> i don't want to -- >> florida? >> australia. >> a bit later we'll pull up a stool at the squawk bar and i'm hurting. >> you had a couple of since. you're such a lightweight. you're a cheap date. >> this was my breakfast. >> and we'll give you the recipe for a squawker with the president of bacardi north america.
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mojito. >> you're being really generous. it was really only two. >> let get to some headlines for you this morning. >> how many fingers am i holding up? how many fingers? >> former presidential hopeful rick santorum is officially endorsing his former rival, asking his supporters to rally around mitt romney. he said while the two have had their differences, they both want president obama out of office. at the end of the e-mail, santorum promised more big news was in the works but he would not elaborate. and secretary of state hillary clinton is in new dehli meeting with high ranks officials. the u.s. wants india to cut oil imports from iran because of the nuclear program. and men's health magazine ranking the country's smuttiest cities.
y yes, they're ranking the most x-rated activities. and coming in number one, orlando, florida, ranked as one of the smuttiest cities. >> the smuttiest. second place is los angeles, sin city. >> and wilmington, delaware. >> i didn't know that. we go through when you go oun t -- on the eastern corridor. i guess an adult theme park is in orlando. >> when we come back, the read on small business. ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread
the nas -- national federation of independent business out. the group's optimism index gained would points. however, it only returned to 2011 levels. elsewhere, earnings played an important role in the overall increase. accounting for half the improvement in the index. in other headlines this morning,
thousands of homeowner may be getting male from bank of america. the bank has sent out letters to customers who may be eligible for mortgage principal reduction. the new effort is part of the recently announced nationwide mortgage settlement. the make ser targeting about 200,000 customers, so look at your mailbox. and the average cost for regular gas is now 3.79 per gallon, down 4 cents from the prior week. prices have fallen about 15 cents over the past five weeks. the dangers of texting while driving haven't discouraged drivers from doing it anyway. a third of young drivers responding to a consumer report. surveys say they admit it's dangerous but admit to texting behind the wheel regardless. and many say they have made a phone call without a headset or hands-free device. >> google cars.
>> you saw me text -- >> no, i didn't text. >> you texeted. >> i have a video. >> warren buffett expecting slower growth as consumers open their wallets and banks start lending again. >> it would be nicer if gdp with galloping at 4% or 5% but we've had completely a resuscitation of the viability of the banking system, we've had, you know, all cases except residential construction we have had the economy come back in a very significant way and month by month it gets better. >> joining us now, another billionaire who tends to make news, donald trump. donald consideration you see the screen where you are? i can't tell whether you have a monitor or not. >> yes, can i. >> that tie, that's a jay-z tie. >> i thought it was a trump tie from macy's.
>> it was not a trump tie. i was going to ask if you could help him out. he loves that tie. could you send him a few? >> well, i would and he's a good man. i would love to. absolutely. >> that's kind of a preppie looking thing. that's okay in omaha. >> he's going prep. >> what do you make of the comments that you just heard mr. buffett make? >> well, i just got back from europe and there are certain places -- i go to turkey, as an example. you don't think necessarily of turkey but i'm in istanbul. they're at 12%, 10%, they think it going to be 14%, next year is booming. i go to the republic of georgia, now called the country of georgia, which is like a study by many, many countries on what you should be doing, it booming. and we look here and i think real gdp here is 1%, if that's. so we're going very, very slowly. and we're probably getting a little bit better but it's certainly probably the slowest
recovery since world war ii of recoveries. you know, not doing very well. i don't think optimism's great and perhaps we have to see what's going to happen with the presidential race. perhaps people are waiting to see what's going to happen. >> we have arthur brooks here. i don't know if you got a copy of this book yet, donald. but pick it up, "road to freedom," i love it. >> right. >> i wonder whether free enterprise is breaking out in some of these -- india, china, what you're talking about, we've already done and it gets harder and harder to make the same gains here. is that a reasonable argument, arthur? >> for sure. >> donald? >> donald, sounds like you were
in the republic of georgia, which is a case study of how to do things right. these are guys who elected libertarians to run their country. they believe in slashing taxes and regulation. they have the liest birth rate and quickest growing prosperity and greatest degree of population of the post-soviet world. let's learn something from these guys. >> you see that happen, the positive thing, and then you look at companies that go the other way, where you have the entrenched labor laws and big government, southern europe. yet we still have people who can't connect the dots between statism and free enterprise. they argue against free enterprise. why? >> it's interesting. a lot of people and a lot of the countries that are doing the best, they went to our system from years ago and we're going to their system it seems more and more. but you look at georgia, it's one of the most amazing things i've ever seen. they built an opera house in
like 15 months that makes lincoln center look second rate. it's unbelievable what they've done. they've built buildings and they're doing so well. they build 24 hours around the clock. we used to do that, too. we built the empire state building in less than 12 months. somehow they've created incentive and we continuously take incentive away in our country. >> what happened to the mojito? you're over there in a glow. >> no, no, i'm not in a glow. i'm trying to think this through. i'm trying to figure out the other issue, donald we were talking about, which is the upward mobility argument, this 1% versus everybody else and what arthur said trying to raise the 20% at the bottom and what we do about it. >> let me ask you this, i got to be right about this. i'm going to do this for you,
andrew. tax rates on wealthy individuals, donald, are at the lowest rates they've been in 50 years. what's wrong with raising those rates for people that are just going to hang on to their money anyway, and hiring teachers to help with the 20% that are being left behind in the country? why won't that work? >> joe, the biggest problem a lot of people seem to have is what happens with the money. i mean, there's a very terrible expression we use in business that i won't use but it's being thrown away, we'll use a nicer expression, being thrown away on things that are hopeless. you throw it into iraq. iraq is the second largest oil reserves in the world and we spent $1.4 billion -- we spend money like nobody's ever spent money. what do we have out of iraq? we've left, it gone, they have their oil, they're making a fortune, we get nothing. and by the way, it will be
turned over probably to iran depending on what's going to happen to iran. when we spend the kind of money we spend in iraq -- people are wondering what are we going to do with the money? they raise our taxes and then they take it and throw it away on one of their. follies because they are follies. we have to spend money in this country. when they talk about taxes and raising taxes and then spending money so foolishly all over the world, you know, as an example south korea. i have partners in south korea. we protect south korea. they're making a fortune. i just ordered 2,000 television sets. i can't buy them if they're made in this country because they don't make them in this country. they don't pay us anything. what do we do with our money? we're policing the world and they want to raise taxes. i will say it's very fragile. the economy is very fragile. so in terms of raising taxes, it's a very, very fragile economy.
what we do have to do is cut expenses. the problem is people don't see the cut in expenses. we're not cutting expenses. nobody sees the cut in expenses. so when we spend the money and we don't cut expenses, people are saying i don't want to pay more tax and that's understandable, joe. >> what's wrong with my idea, arthur? there's some people that -- historically some people i've heard robert reich wants to go back to eisenhower years. >> let's put something in context, which is to suggest corporations had higher tax rates in the 50s and 60s and it didn't slow us down. you could argue clearly that -- >> that was before a lot of globalization. >> before income taxes were higher for much of the last century and there were periods in which there was significant growth. the argument that somehow you lower taxes and you get this massive explosion growth, there's no a clear correlation? >> it actually is.
we go back to the 50s and 60s, everybody says it's great, we can tax people at an incredibly high rate because in those days we had 4% economic growth. we should have had 7% or 8% economic growth. developing countries around the world are growing at 7% or 8%. we should have been there in the 50s. >> after world war ii, baby boomers. >> we cut 2, 3 points off because of economic policies and we created more tax avoidance and more tax evasion. >> going back to the social safety net that was created in the 50s and 6 0s or not have s exist existed? >> it would have existed in a better way. i grew up relatively poor.
the great society of welfare programs stuck them in a permanent cycle of dependency. going toward reform, getting more people off welfare -- there's a new study out today that says people that came off of welfare because of welfare reform have about 10% low are rates of drug dependence. it's incredible how much this has happened people's lives. we've ruined people's lives and burned up money in the meantime. this whole idea you're going to spend less money. donald is right. we don't have a revenue problem in this country, we have a spending country. what i disagree with donald is i don't think we should spent m-- spend less on unusual, we should spend more on national security. >> your tax policy arthur and donald is to starve the beast, if you will?
>> first of all, i agree with arthur. i'm all for national security. i just think we have to spend it on the right national security. when we throw it away by the hundreds of billions of dollars and just throw it away, people really say what's going on? and it does make it much more difficult for people to want to pay for tax. good economy solves all of the problems we're talking about. good economy solves everything but we don't seem to have that economy. a friend of mine in the energy business, to get off the subject a little bit. we send so much coal to china. but we're not allowed to use coal anymore because you can't open up a new coal-fired plant. it's almost impossible. it probably is impossible to get an approval yet china is going wild with our coal. at what point do we get smart and say we have to compete and we have to win and we have to take it back from china and other countries? it's very, very difficult. it's a very, very difficult
place. we've become totally more a bound and bureaucratic. it's very difficult. >> and my question is completely off the subject. donald, in light of the facebook fever, i would like to know if this is a company you would invest in it. >> i would invest in it. i'm not a huge facebook person but everybody i know is involved with it. i would invest in it. they've also in the past come out and gone down but i think i would. i'd put a little flyer in facebook just on all the craziness that's going on. but everybody seems to be using facebook. >> you know, there's the feeling that facebook will rejuvenate the masses. apple has kind of like taken a side step at the moment and here along comes facebook with i believe a decent retail book and this might hopefully get people interested in the market again. is that just going too far? >> i think that's going too far but i think people are interested in investing in
facebook. i think it's going to be very successful. we'll see what happens and we'll see how far it goes. i have a lot of friends that want to buy in facebook. >> you've never a worn a hoodie, have you? >> a hoodie i'm not big on. i used to in hoodie. it made you look like a great athlete. >> do you think mark zuckerburg should have bought a suit? >> in his case it's not a great look but it's a great brand. >> donald, thanks for your time today. we'll talk to you next week. >> thank you very much. >> coming up in the next hour, herb kelleher on america's drive for energy independence. i love him. but when he gets a look at that bar, it's going to make his day. >> he's an irishman, right? >> he's a classic. and we got the ceos of two dow
components talking business. james mcnerney and -- >> i think the drink -- you're on the money with this. >> plus former new jersey senator and candidate bill bradley talks about his new book. box is where business and political leaders turn first. >> "squawk box" is shaking things up. we whip some drinks and talk the business of bacardi. things could get darm and stormy on the set. stay tuned to find out.
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[ male announcer ] sustainable solutions. fedex. solutions that matter. let's take a look at the futures if we could. we have some red arrows. we have concerns in europe. the dow looking lower, 41 points off, s&p would open up about 5 points off, nasdaq would also open off. crude, 97.17 is the number to keep your eye on. are you a brent person? >> i am a brent person. i think brent's a good global gauge. what is it down about five days in a row now? it's below 113 there.
i think the problem is of course we're worried about economic slowdown. it's down by over 5% month to date. >> a quick look at the ten-year there. looking to reify your mortgage -- >> i just reified my mortgage. got they said the lowest rates they have ever seen. i had to like sell my third child to like -- >> what do you? >> i got a ten year. i don't know how how long i'm going to be in the country for. i had to give an arm, a leg and my third child to get that rit rait -- rate. >> did you get your visa? >> i got my visa. i'm legit again. >> coming up, this is big, we're going to be bellying up to the squawk bar. i already made it over there and it's kind of a problem. we're going to be drinking with
we are back on a tuesday morning. it is only going to go downhill from here. >> or up hill. >> depending how you look at it. cuban bacardi rum is celebrating its 150-year birthday. joining us on the set is the regional president of north america for bacardi limited. good morning to you. >> good morning. >> i started with a mojito in the 6:00 hour. >> you did. that was a little early for my liking. >> what is this here? >> i don't know. justin, what do we have here? >> it's a bombay sapphire mateeny with a twist. >> are any of these the squawker? >> no, we haven't started on the squawker. >> the ingredients will be
released at the end of the show and we're going to, you know -- >> it's going to be a collaborative effort. >> but with bacardi. >> this is a team effort, we're going to work on the squawker together? >> yes. >> now all these are all bacardi deals? >> all of these are our brands. >> is this new, the grey goose stuff? >> we have a lot of innovation, our 150th anniversary. we're launching a number new brands this year, including gray goos cherry and we have a -- >> give us a sense of where you see the economy in terms of the consumer relative to drinks these days, both here in the u.s. and more about what's going on in europe. >> i think what's happening is generally people are slowing getting their confidence back and the key leading indicator for us is consumer confidence. are people feeling good about themselves, do they want the
affordable luxuries. we believe the sus a great market and it will continue to grow in our industry. >> is there more or less drinking going on in europe right now? >> in europe right now it's a little tough, especially in southern europe. our market is remarkably resilient. we're not seeing huge growth or massive decline either. >> how much do you target china and india and other emerging markets. >> a lot. our business is exploding in emerging markets. we have fantastic growth story in india where we started our company 12 years ago. >> what's what do they go for? what's the poison of their choice? >> i wouldn't say poison. their number one spirit premium is bacardi. we're very proud of it. >> i was going to ask what is the hot item, even in the u.s. for example now? >> the hot item is still grey
goose, especially the new flavor, cherry. bacardi and some of the new flavors are going well. we have a mixture of classic cocktails like dewers scotch and you see one there and new products. >> i'm sure the ladies will be happy to know you've got some low calorie products. are you compromising on taste or -- >> never compromise on taste. full taste, full delivery but only 95 calories a serving. we have a great ready-to-serve program with some new products launching, including a mojito and a daiquiri the 95 calories per serving. >> competing with bethany frankel. >> robert, we have to go. we wish you a happy birthday. real quick, what's the premium? how much do you make per bottle? >> we make a healthy margin.
>> what's a healthy margin? >> that's something i can't present. >> will it prevent a hangover? >> if you ask any great bartender like justin, the raw materials are important. >> the better the spirit, the better the distillant, you have less impurities. when you think about that -- >> we're coming back with a lot more squawk. r your trading proc- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. ortho weed b gon max. with a new continuous spray wand.
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he's the founder of southwest airlin airlines. herb kelleher is turning his attention to financial independence. >> and boeing chairman and ceo jim mcnerney and caterpillar's chairman join us. >> and former senator bill bradley says we can all do better. the third hour of squawk begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide.
i'm joe kernen along with mandy -- you're not becky quick. >> i'm not. >> and andrew ross sorkin. >> glad to you have here, arthur brooks. checking futures, that's much better than earlier. we're down 65 points at one point. yesterday after a pretty -- not a great beginning to the day, the market battled back, closed down 30 points but it almost got to even all day long. maybe it did get to even. mcdonald's is out with some -- >> sales? >> looks like you can see from the stock only europe i think -- that's the only one? i haven't looked at all that. >> what's that? >> maybe that makes sense. only europe was above
expectations. >> maybe they're migrating to the cheaper royale with cheese. it's not now called a quarter pounder because of, because of the metric system. there's no quarter pound. in europe maybe they don't have enough money to go to the fancy restaurants and bistros. >> maybe they're making premium drinks. >> they still want their french fries so they go to mcdonald's. >> yahoo! ceo apologizing for the controversy involving his resumé. he said he'll fully cooperate with a board investigation into the matter. it's an interesting story. also facebook beginning day two of its road show. this time it's in boston. but beantown based investors shouldn't expect to see ceo mark zuckerberg. fans did get a quick kblips gli
him yesterday as he arrived in new york. there you see him in his hoodie. >> but it was his best hoodie. >> look at the security and the paparazzi. an unbelievable situation. facebook executives are splitting up to tackle the remaining eight days on the road. coo cheryl samberg and the cfo will be fronting this thing this morning at the breakfast at boston's four seasons hotel. >> let's get a check on the european markets for you. spain is reportedly planning a state bailout of the country's third biggest bank by assets. the move is likely to involve the injection of billions of euros of public money into the troubled lender. european equities, you can see the ftse is slightly positive. the cac is only down by -- >> the what? >> the cac what?
>> it's french for 40. >> beautiful. >> joe. >> so we have some comedian that is constantly writing in here now. he says $2,000 for rum, only at an in-room bar at a hotel bar have i seen prices like that. that's funny, right? >> an in-room bar in orlando. >> smutty capital of the u.s. >> where a lot of other things are -- >> i don't think that you can get for 2,000 either. >> if you only had 2,000, which would go for, the special rum or the other? >> okay. here's a guy that is going to be perfect for this whole segment. the current oil boom in the united states has been hailed as a giant step towards energy independence but a new report says oil discovery isn't enough to ensure independence. joining us now with more, herb kelleher, co-founder of southwest. i was hoping you were instudio. have you seen we have a full bar
in understostudio today because bacardi's 150th anniversary? >> no, i didn't notice that but i'm glad you pointed it out. >> where are you and how quickly can you get here? >> it ought to be a rollicking interview. listen, i'll take one of those hyper space planes to get with you. >> i know you would. if there was a way to get here, you would. tell us about this report and have it make some sense for us. what do we need to do? >> well, what we need to do i think is to drastically reduce our consumption of oil in the united states of america. you understand there is no free market for oil. 90% of the world's reserves are controlled by countries or national oil companies. it's -- the price is set globally, not locally. i can give you some examples of that. recently west texas intermediate crude oil was at a relatively low price but did that reduce gasoline prices? no. instead they went up. so we've got to free ourselves
of that dependence on a resource that we don't control. now, this is not a -- excuse me. >> go ahead. >> this is not a criticism with respect to developing more oil within the united states because it does have substantial benefits. it reduces the trade deficit, it provides jobs in a job-starved economy and generates additional taxes for federal and state government, but that doesn't make us free from the standpoint of energy security because fundamentally the highest price anywhere in the world for oil is going to be the going price anywhere in the world. >> as you point out and we all know there really is no alternative right now as far as transportation goes. we can migrate to a lot of
alternatives, even cars, especially jets, which you're familiar with. so what do we do? do we try to do cafe standards where we trying to get 60 miles to the gallon? do we migrate the trucking fleet to natural gas? what's the answer? >> well, i think there are several answers. of course one of them is enhancing the cafe standards even further, which is in progress right now in washington. that's already producing substantial benefits. we've begun to electrify cars and i think that will improve and expand in the future, which of course is exceedingly beneficial. one of the values of it is that of course the refueling station, the grid, is already in place. in addition, unlike oil, natural gas prices are established locally and not globally and natural gas is rather
inexpensive as of the present time. i think if we could convert a substantial number of heavy, over-the-road trucks to natural gas that, would be exceedingly helpful. of course they go to truck stops for refueling. could you put the infrastructure in place at each one of those truck stops. but there's no question about it that it's a very serious problem for the united states. it's one we have to pay attention to and what we're particularly concerned about is that we don't want people to get euphoric about the recent increase in production and ignore the threats to our economy, to our military and to our foreign policy stances. >> you got an answer for this? >> well, i got a question more than an answer. you're talking and i understand this idea of wanting to lower our demand for energy as a matter of basic security and both economic security and national security but every economist will tell you that supply creates its own demand.
everybody learns that in their first semester of economics. supply creates its own demand. is it true the way a lot of people, particularly on the political left in america, are they right that to lower demand for energy around the world and exposing ourselves to these market, the best way to do is to squeeze the supply for energy, not let energy pipelines open up, to not let us drill, anymor? >> do you understand that question? >> i think that they're dead wrong. first of all, if you close down the pipelines across the world, you would have the biggest economic depression that anybody has ever encountered in the united states and globally, so you certainly don't want to do that. >> there's an attitude that we should not be spending money on hydrocarbon infrastructure. that is the attitude.
that had something to do with the thinking on the pipeline. >> there is. >> go ahead. >> yeah, there is that attitude in some corners and i kind of understand that in a way, but we think the opposite. we think the united states is better off the more on shore and offshore drilling we do, subject to safeguards opinion you can't ignore the fact that the united states is the largest consumer of oil in the world today and will be tomorrow and next year and the year after that. we're vulnerable. >> talking vulnerablity real quickly, how would you decrease price volatility? >> how would i what? >> decrease price vulnerability.
>> we decrease price vulnerability if we reduce our consumption. >> herb, i have to run. i was stuck in the omaha airport over the weekend reading "popular mechanics." there was a fascinating article about aviation and getting new fuel efficient airplanes. when do you think we're going to see this happen? >> we've been getting more fuel efficient airplanes for the last 40 years. as you know, aviation has no viable substitute for jet fuel, but i think since i've been in the business, we probably increased the fuel efficiency by about 50%. so the next generation of airplanes will be here within three or four years. so we constantly work on making airplanes more efficient, but of course you couldn't have an electrical airplane, you know. it might take five miles to take off. >> exactly. >> herb kelleher, thanks.
appreciate it. sorry you weren't here. >> we'll have bacardi send you a drink. >> enjoy the bacardi. wish i were with you. >> coming up, we'll get more from our guest host arthur brooks. still to come, we'll talk election year politics with former senator bill bradley. that's after the break. still ahead, the squawk ceo call goes blue chip. boeing chairman and coe jim mcnerney. and caterpillar's ceo will join us at 8:30 a.m. eastern. keep watching "squawk box."
welcome back to "squawk box." let's check out the shares of fossil. the maker of fashion accessories is cutting its fiscal 2012 guidance as european sales have come in weaker than expected. that's pulling back almost 30 points. discover communications earned 50 cents a share for the first quarter, 3 cents shy of expectations. it was hurt by, you saw the piece yesterday, losses. it was everywhere. oprah winfrey network. >> this is a tough one. >> you don't know what to do. >> and she has called it the
toughest thing she's ever done. there are people who say if it was the oprah channel, which is all oprah, it would be -- >> i wonder behind closed door, what are they plugged into this network? over $500 million? >> it's half and half, isn't it? but they're if for maybe i don't know what it cost to launch, $400, $500. >> some say 300 losses. >> but if it was 24 hours of oprah, it would probably be working. but it's not -- >> she would need a squawker to keep her going if she was going to keep her going 24/7. >> there are some funny ones. >> we'll compile a list. >> in the meantime arthur brooks has been with us as our guest host this morning, continuing the conversation. i wanted to talk to you about tax rates, corporate tax rates in particular. there was an interesting story in the "new york times" maybe two weeks ago on apple and its corporate tax rate. global rate was about 8.9%.
if you strip out the rest of the globe -- i'm sorry, the rest of the globe on the u.s. rate, it wasn't much higher. so the question ultimately is when people say what should the rates be, what's the right effective tax rate to be competitive? i wonder even if you bring the rate down to 25%, how do you actually make it work? and be competitive. if that's really the goal. >> we have the highest corporate tax rates, marginal legal tax rates in the oecd countries. this we know for a fact. this increases incentive to do legal tax avoidance -- >> creative accounting. >> it rewards accountants and lawyers. that's a dead weight loss. when you talk about blended rates, too low. lower the rates, broaden the base, close the loopholes, don't
tax investment. >> hold on. on apple, if their global effective tax rate all in is 8.9%, if their rate if you exclude the u.s. is 4%, maybe 3.9%, someone will fact check me on that, how do you -- how do you actually come up with a rate that would actually ever work to bring more business back to the u.s. for a company like apple? >> well, look, apple's great and i'm glad apple's getting a nice low rate by avoiding the punitive, ridiculous tax code we've got in this country -- >> apple's not alone. especially tech companies. >> i'm worried about all the entrepreneurs sitting on the sidelines and all the business people that can't start because of the punitive environment. they don't have the resources of apple. it's easy to look at apple because it's a huge company. >> when warren buffett says taxes are not the problem, when there's a great investment out,
there i don't look at the tax rate, i buy it. there are people who believe that. >> i disagree. if you're going to look at the cost side of any company, you have to look at the regulatory environment, tax environment. most importantly is not the high marginal tax rate, it's the tax u uncertainty. what's driving people out of the markets is we don't know what the tax is going to be. >> how likely is it we're going to get serious form, as opposed to tweaking it here and there, how likely will it be? >> it's more likely than it will ever. the obama administration didn't take its own recommendation of the -- >> i would have taken --
>> lower rates, getting rid of investment taxes, that's the smart thing to do. the president had the opportunity of a generation to do radical reform. i actually think over the next five years we're going to see something more like real reform. people are fed up. the united states has become less competitive. it's costing us jobs, creating real misery. our tax system today is simply immoral. >> immoral. >> immoral. >> you would love to talk about crony capitalism. it's not a republican/democrat argue in this case. i mean, what's worse, the less infa -- left's infat uation with social services or the right's infatuation with corporate cronyism? >> it's practically all politicians. this is a left/right phenomenon. corporate cronyism is the
dependent wife of statism. you can't hand out favors and reward lobbyists in the same way. that's the big problem. >> we are going to slip in a break. we'll continue the conversation with arthur brooks. thank you for that. >> also coming up, we're going to be checking in with the blue chips this morning at 8:30 a.m. eastern. so in nine minutes and counting, we'll talk to the ceos of boeing and caterpillar. and then former senator bill bradley is here. >> coming up tomorrow, the disruptors. the young innovators changing the world of technology. we'll talk with the founder of rockmelt. don't miss tomorrow starting at 6:00 a.m. eastern. and hurtle us all into space.
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boeing ceo jim mcnerney is bullish on the economy but he said it needs to pick up momentum for momentum to pick up. he'll be in d.c. with our very phone phil lebeau. phil, what are you wanting to ask him? >> here he comes. >> we'll get phil in just a second. i think it's going to be very interesting what he's got to say on the economy. we've got caterpillar ceo as well. get their take. >> phil is tweeting. >> is boeing's ceo jim mcnerney worried that the economy is stalling? we're live with him next. >> we are going to be ready. >> you see how this works? >> i'm hip to twitter. i like he said is the economy stalling. >> you should retweet what he said. he has 5,759 tweeters.
>> i will -- >> how many followers do you have? don't be modest. >> closing in on about a thousand away from 400,000. >> 400,000 people. >> look at your bad self. >> all hanging on your every word there, andrew ross sorkin. >> are you on twitter? >> i am. >> you should do like a daily max maxim. >> you have done a few things recently as it's gotten closer to the book. >> are you a purely business tweeter? or are you off to the movies? >> occasionally. nobody wants to know if i'm eating a waffle at the mclean family restaurant. let's get back to phil lebeau. just to profits live tv, a little technical delay here.
>> i'm here to talk about the innovation conference. you being a dow come point, you see the world's economy unlike many other people. what's your take right now when you look at where the world's economy is? >> i see it like warren buffett saw it yesterday on squawk, which is those of us in the global economy, a normal recovery driven by global dynamics and global demand. i think for local businesses, real estate, construction it's a quagmire. so that the economy is not participating. you add it all up, it's pretty slow. normal for two-thirds, abnormal for one third. >> you said we need a nudge for the job component to kick in. do you see any signs we're going to see job growth cokick in or e we still in the same holding
pattern? >> i think they're kicking in. the question is is it fast enough to outreasun productivit. boeing hired a net 12,000 last year and there's globally deployed folks that have also have positive firing but it hasn't offset productivity or the third of commit that's not participating yet. >> what would you like to see for that nudge for the job component to kick in? >> i don't think it's any one thing, it's a lot of things. i think it's demand, which is beginning to come back. easing up a little on the regulatory side, solving some of the issues in d.c. that everybody is wrestling with to create some certainty on tax, fiscal issues and the regulatory side as i mentioned. i think that is a restraining element. i don't know whether it adds 1%,
1.5%. i know it makes a difference. >> in the past you have conveyed a message from time to time to president obama when you've had the chance to talk with him. if you were to sit down with him right now, what would you say in terms. what we need to have happen here in the united states to get this economy to continue to grow even faster? >> well, i think we need to pursue policies that encourage capital formation and growth. i think we need -- >> we're not getting that right now. >> we need to ease up on the regulatory environment where the regulators are more in partnership with the greatest economy in the world, rather than an adversarial relationship, as it is in some cases. i think -- and i think we need to resolve -- i think we need to go back to bowles-simpson, fiddling with it and decide. i think we need to lower the rate, remove loopholes and we'll get back there. >> heading into the election, do
you think we're flat lining? >> i'm an optimist. i look at an airplane like this and i know we can do stuff, not just us but everybody. so i am an optimist. i think it's taking too long but i think this is a very pragmatic country. i think we're going to come together. i think it's going to get resolved. it's silly to me that it takes an election before we have a serious discussion. we've wastes a couple of years. but we will get there and we will grow and america will remain a power house in this globe. >> you're here at the atlantic innovation conference. there's so much innovation you've put into this airplane, yet you believe you're just scratching the surface of that innovation and where it can go from here. where are you on that innovation curve, if you will? >> if you're talking about this massive, disruptive change, i think we're just at the
beginning. this -- the 707 started, the aluminum revolution, this starts the composite all-electronic revolutions that i think has a 40, 50, 60-year run. >> you're going to be talking about that at the conference. jim mcnerney joining us on a windy day. >> it does look windy. >> joining us from dubai is doug oberhelman, caterpillar ceo. a lot of times we've got you to say things that we've played the sound bites of weeks after you've been on, which is what i'm going to try to get to you do again. start off with just an appraisal of whether we've seen a little bit of a slowdown in your view in this country and then talk
about what it's like in china and europe. i'm going to let you just go. >> yeah, hi, guys. joe, it's always good to see you. i've been traveling in africa here for two weeks and i have to say things are positive here. it's been a lot of fun. i've called on customers in south africa, the middle east. it's a pretty good environment. in the u.s. things are going well for us. and certainly we could use more growth. i think we've all talked about that. there's uncertainty in the presidential election year that we'd like to see out of the way, but our business is recovering fairly nicely in the u.s., primarily due to replacement demand cycle for construction equipment. believe it or not, there are some jobs going on and the age of our fleet, all the construction equipment we've sold for the last ten years, we've been in replacement cycle the last 18 months or so and that's helping us. there is a recovery under way, as anemic and weak as it is.
>> is it because of what we went through a couple years ago? you pointed out and one of the things that many people point to the really big decisions by corporations like yours, the things that take ten years to effect, whether it be a factory or getting things up and running, what type of uncertainty are you looking to be solved in this next election? what's mostly standing in your way from expanding more than you are right now? >> well, this is the first time in all the recovery, certainly in my lifetime and really since the great depression, that the recovery has been so slow. and granted the recession in 2008 and 2009 was deep and housing is still on its back. housing peaked in '06. we noticed that two years and a and a half before the recession began. we can sure use some clarifying of the clouds, tax policy, reform, uncertainty around where the deficit's going. we see a global economy that's
pretty good. overall our business is pretty strong. we put out our outlook statement at the end of the first quarter that we should have another record year in 2012. but that's puts and takes all over the world and the u.s. needs to get going. certainly some clarifying things would help. the regulatory environment is a little tough. it's at this moment not all what we need to get the economy spur going and the catalyst we really are all after. i think with some of those things clearing up, we could see growth come back fairly well this year on into next. >> get back to where you're standing there, doug, i know you're wrapping up an africa trip, you've been to south africa as well. i went to dubai back in 2009 and it was just a landscape of cranes standing idle and the bubble had really burst back then, right? what's the status now and how much will the middle east buy and elsewhere and their infrastructure projects drive your growth? >> right now we see a lot of
those construction cranes and we've seen some idle and some going again. hi a wonderful dinner last night with our distributor here, one of our key partners in the middle east and beyond for that matter. we had almost 200 customers and virtually everyone was optimistic. dubai and the middle east is not back to the pre-2008 period but recovering and a lot of optimism here. i felt the same thing in south africa. i had the great pleasure of going into a diamond mind, open pit diamond mine. they can't get production up fast enough. so there's good news, there's mixed news all over the place but for the most part the middle east and africa is a good news story right now and i think will recover recovery well on into past 2012. >> doug, arthur brooks here from aei. quick question. you said the regulatory environment in the united states is really holding things back. if you had the president's ear this morning and you could ask him to do just one thing to make
the regulatory environment more congenial to your business, what would you ask him to do? >> i don't think the regulatory environment is the issue. it's one of them. and as you look around, and i've traveled the world, i've been on many continents this year already, and businesses and economies and governments are open for business at a lot of places. we have to be open for business in the united states. we have to have a tax policy that's consistent with business growth, regulations that are -- they don't have to be pro-business and go all the way around but we've got to have something more balanced than we've been. that uncertainty i think has just driven us all into a little bit of worry of where we're all going with this. so it's one of a complicated set of thing has we really need a different pro growth, pro future environment that is frankly a cloud over us right now. >> doug, you have delayed decisions on expansion? have you not hired people because of this?
>> we're hiring in a big way. in fact, since the beginning of the recession, we're up at about 50% in employment and a lot of those are u.s. jobs. but when i go talk to our customers in the united states, and these are small contractors to large contractors, we have a global footprint and thankfully we have a huge global footprint and it's great. so while things are maybe a little slow in the u.s. one day, they're maybe booming in the middle east the next and we get to take advantage of all that. but our contractor base needs help, and they need road jobs, they need commercial construction, they need the housing industry to come back. i hear from them all the time about those kind of things that are in their way, permitting processes that take months, if not years, to approve. that just gets in the way of progress. right now we don't need at that. we need a kick start. >> you made the acquisition on
the mining space. what would you be looking at in terms of m&a going down the track? >> we had three great ones that came together with our prized emd, locomotive manufacturing business. i'm very happy, they all have bright futures. we're in the process of getting those integrated, making them highly efficient. i feel we're right on path, on budget, almost ahead of plan. i'm not going to comment where we're going to go beyond that, past that. >> the people at your company that you pay to think about china, what are they telling you as far as one year, three years, five years? that's going to be an incredible growth area but do they see problems on the horizon? >> i see -- we see more problems on the near term, joe, than we do on the horizon.
in almost every metric, dirt move per capita, construction equipment per capita, 1.3 billion people is the per capita part. china is underexcavated as we look over a 5, 10, 15, 20-year future. we're trying to balance a big demand in the short term we've seen in 2011 into 2012 of what will be a tremendously bright future at the horizon. i can't tell you if it's one, two or five years but it's going to be there and our plan is to be there with it as it grows. i'm very optimistic as all of our company is in the mid term. >> one last not. we're running a huge deficit, added $5 trillion and obviously the china have to fund our -- a lot of our deficit. so anything that we spend is not helping since we're 25% of gdp.
would you still think it would make sense -- help caterpillar, a big infrastructure deal, a big road deal, is, a tom friedman type thing, governor spending on infrastructure. we'd have to borrow obviously since we're borrowing everything. does that make sense foreign you and to hire people? you'd get more orders? is that the way to go? >> that's the way to go. i look at infrastructure two ways. number one, long-term competitiveness to our country, our manufacturing business in the united states. i live around the world. i'm here in the middle east, south africa. everybody is investing in infrastructure to get their goods to ports, be more efficient in their manufacturing. we're backing up. i have to say we've had more jokes at the dinner table in the last two weeks about our ports of entry, our airports and the tough condition they're in compared to many of the modern airports around the world. that's not a welcoming atmosphere for business. secondly, we've been campaigning
hard for a big jobs bill, an infrastructure bill, which in the past has spurred the economy on to come out of recessions early. i know it's a question of priorities. the country can't borrow half of what it spends but we need to get the economy going first and a long-term plan to control the deficit. that's the way to get after it in my opinion. >> doug, we appreciate it. we've had a little bit of a delay. that's why we talk and then stop and then you answer. if we try to talk, then weep me -- we mess things up. we appreciate it. thanks. >> coming up, bipartisanship is never easy in an election year but former senator bill bradley says it's more important than ever. he's going to join us next.
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and in a new book out today, former senator bradley says we should spend less on money and focus on politics. he's the author of "we can all do better." i second the motion, senator. we can all do better. we've been talking a lot today on the set about job creation and what we can do about getting the economy better. you have some ideas in this book. >> yeah, i do. jobs have to be created in the private sector primarily. corporations have $1.8 trillion on their books in terms of cash or other liquid assets. if 20% of that was used to hire people at the average salary of a little over $49,000 a year, unemployment would come down to 5%. so how do we actually get them to do that? they say the problem is confidence and a lack of demand. confidence you address but dealing with the deficit, and
you have to touch everything, social security, taxes, defense, health care. >> simpson-bowles for you? >> that's a great outline. it's a great outline. and once we get the deficit down, we'll have to borrow less from, say, the chinese. the chinese still have dollars. that's the time we can have a massive infrastructure program to do everything we've been postponing for two generations. and the chinese could help evened that by buying reconstruction bonds. that solves the demand problem. so you then find the $1.8 trillion coming off the books, hiring people because there would be greater demand and there would be certainty about the long-term fiscal health of the united states. that is the short and mid-term strategy to create jobs. in the long term i think we have to change the tax system. right now, for example, 40% of government revenues -- federal
revenues come from employment taxes, taxes on employment, social security, medicare, unemployment. if we replace those with taxes on materials, taxes on pollution, taxes on energy and efficienc efficiency, even a value added nonlabor tax, you would then be able to fund social security, medicare and unemployment for the long term with those taxes and reduce what it cost businesses to hire people. if you hire somebody, you've got a 15, 70% tax. >> senator, arthur brooks this year, and if you could just see the face he was making, i apologize for outing you. >> i understand the idea of the value-added tax. the consumption tax is the way to go. you don't want to go in the way of prublgtivety. when you tax energy, you're talking about getting in front of the economy. senator, do you agree that
taxing energy actually would have some supply side impacts and actually hurt the economy in terms of productivity? >> well, you know, any time you raise the price on anything, it has an effect. the question is do you want to raise the labor and hiring and have 22 million people looking for a job and 66 million americans one pay quacks away from financial catastrophe? or do you want to raise it on things? i would argue things. it would affect all businesses. all businesses have to pay these employment taxes! gnat tor, the plan you just laid out takes a while. even your medium term plan i would argue a five, ten-year if not longer strategy. what do you do today? >> today, what i would do is i would pass a law that gave any
company that hired an additional worker and didn't lay another one off a 30% tax credit up to $25,000 per worker. if we did that, and i'd limit it to $50 billion. if we did that, we'd get empl employerer responding because they were going tho to have to pay 70%, but the government paid 30% and not one dollar would be spent of federal money unless a job was created. that's what i think we should do now. >> senator. we have to leave it there. the book is "we can all do better." thank you for being here this morning. >> you bet. >> qh. next, down to the new york stock exchange where carl and melisa and -- >> carl. >> say it one more time. >> carl. >> honestly, i think john needs to have more cruelty.
i've been here for two years now here, guys. >> it's hard to follow your show every day. we're going to try to keep on top of mcdonalds, david and jim are at the ctia wireless conference. >> they're going to talk to a lot of the ceos and companies. maybe some inseethess on whether or not they're going to continue those subsidies. we're also going to keep on top of the the wynn resorts, these were all huge movers last night. >> save us a drink. i mean -- >> yeah, really. >> i started early and it didn't go well. >> what's early? 4:00 a.m.? >> it was a mojito.
>> i drank about that much of a mojito on an empty stomach. joe promised to hold my hair back. >> that's real friendship. >> okay, thanks, guys. >> coming up -- your hair is not long enough. but i've done that. >> some final thoughts from our guest host, arthur brooks of the american enterprise institute. "squawk box" is coming right back. >> announcer: tomorrow, our guest host will be doug gisiuouel. we'll talk markets with interview partner's cofounder steve crawford and induct the newest member of the cake club. . ...and 1,000 shades of grey duff & phelps finds
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juice, some fresh lime juice, some bacardi superior and very summery. very much like a modern day pina-colada. >> it sounds like there were three different kinds of rum, which is good. we don't want to waste it on -- >> we didn't put the $2,000 rum in there. >> were you supposed to drink it during the broadcast? >> because of personal freedom. our latest guest at fist,it will be hiting the shelves today. your last book, which was " -- >> is this the proudest moment of your life. ? >> it's fantastic. thank you. >> how is this different than the battle which is also a multidecade battle to try to preserve what our forefathers thought act this country? and that is limited government, small taxes, limited statism.
>> well, the battle said this is the culture war of our tiechl. it's about the cultural predicates of a free society. this book, it's coming out today, is how to win it. it's basically as a user's manual on how to beat statism and how to make the argument in 20 seconds or less. >> it's ear re footble. i have to memorize a lot of the basic tasks. >> and you're paying andrew a dollar a page to read it? >> that's an open offer. >> all viewers. >> not all viewers. >> that's actually more than i made to write it. all right. haunch very much. >> and, as i said, arthur brooks, many thanks for joining us this morning. >> okay. we'll make it over to the bar later.