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tv   The Kudlow Report  CNBC  May 21, 2012 7:00pm-8:00pm EDT

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record as a businessman. here we go again. federal circuit court judges heading to a hawaiian retreat, costing taxpayers a million dollars. what gives? and triple-digit gains on the dow as the nasdaq and the s&p also soar. but don't let it fool you. deflation may be headed our way. "the kudlow report" is just moments away. okay. europe is going to give us a couple days break, because it look likes homeium is springing up again. what is that? it means that somehow the germans are going to do something good. some sort of big bond bye? i don't know what they're going to do. i just want to be ready when they go back down again. i like to say there is always a bull market somewhere. i promise to try to find it just for you. see you tomorrow! brian sullivan is in for larry. >> the dow up 135. but some say deflation is not going away. good evening, everybody. i am brian sullivan in for larry tonight. and as you know, larry is not
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only a tv mega star, he is also one of the biggest names in talk radio. so while he is away, we have asked some of his big name radio colleagues to help out. from l.a., but nationally syndicated, dennis prager joining us. maybe he can help figure out what is wrong with my angels and albert pujols. but that's later, dennis, if ever on the show. your top story tonight, moments ago the president was questioned about the bane of his campaign, his attacks on private equity, as well as his attacks on mitt romney. take a listen. >> the main basis for him suggesting he can do a better job is his track record as the head of a private equity firm. and both the upsides and the downsides are worth examining. >> so question one this evening. why is team obama throwing everything at the wall to attack mitt romney and his business experience at bain capital? this week ace attack ad hits
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romney on american paper. but is it backfiring? even friend and democratic star newark mayor cory booker inadvertently told the truth. >> this kind of stuff is nauseating to me on both sides. it's nauseating to the american public. enough is enough. >> all right. well, dennis, our weekly debate between the top leaders of the rnc and dnc. also tonight, the big board making a comeback. the dow closing with triple-digit gains. the nasdaq by the way had its best day of the year. the s&p had its best day in two a months. but larry still thinks we're in a bit of a pickle. he believes there are two major threats that are not going away any time soon. the price of gold tells the first. what he considers deflationary pressures. the second is a tax trip we're about to fall over at the end of the year unless something is done and fast. i agree on the second. i disagree on the first. and we will discuss it there is a lot to do. but first, back to question one.
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just moments ago, president obama held a press conference talking about austerity versus stimulus abroad, as well as here at home. he also answered questions about his attack on private equity and bain capital. cnbc's john harwood joining us now live from washington with more. good evening, john. >> good evening, brian. the president wrapped up a weekend of diplomacy where he was dealing with things like the wind-down of the afghanistan war and what to do about the eurozone and that austerity versus growth debate. but his closing news conference today was dominated by the news on bain capital. the president rejected the criticism from the likes of cory booker that you just played and defended his attacks on bain capital, said he would continue talking about that, because they show that the preparation that mitt romney had at bain is simply not adequate for the job as president. >> if your main argument for how to grow the economy is i knew how to make a lot of money for
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investors, then you're missing what this job is about. it doesn't -- it doesn't mean you weren't good at private equity. my job is to take into account everybody, not just some. >> now mitt romney hit back harder after the president's news conference, said the president had failed to take moral responsibility for his failed policies. but of course the president spent part of that news conference talking about what he is trying to do right now to get global recovery under way and accelerated. and that has to do with the rebalancing that he wants to take place of that austerity versus growth debate at the g8. >> the good news was you saw a consensus across the board from newly elected president hollande to chancellor merkel to other members of the european community. that balanced approach is what
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is needed right now. >> now if the good news was that there was consensus, brian, the bad news was there wasn't a lot of concrete action. there are more meetings in europe as finance ministers try to move this ahead. but we still have a very difficult situation, not just with the economy here, but also in the eurozone, brian. >> that's right. john harwood, thank you very much. and it leads us right to our panel. david goodfriend, a former clinton white house official and co-host of left jab on sirius xm radio. stephen more, former bush white house political director sarah feagin. and joining us tonight for the entire hour is dennis prager, author of "still the best hope: why the world needs american values to triumph." i'll direct the first question to you. >> terrific. >> do you believe the president? is this not a fair attack on mitt romney? if he campaigns on jobs, why not go after him about his business and job creation record? >> yeah. i think he is completely okay to
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do so. the problem is if he does that, the romney campaign has the answer, which was given by the mayor of newark, a black american, an african-american, a friend of the president, and said that's good for the economy. it is good for union members. he even specified union people have their pension funds dependent on the ability of these people to make money. let the president say this all he wants. if the republicans know how to answer, they may well win. >> david, is this a smart strategy by the president? you can go after mitt romney being into 1%. you can go after this sort of obscure to most people of private equity. but i don't think the president wants others to come back at him on his job creation record. >> oh, look, the president took an economy that was losing 750,000 jobs a month and turned it into one adding two hundred,000 jobs a month. he'll talk than. i think to get to the question that was raised, the issue is not so much whether a return was
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granted to investors, as in the case of a union pension fund and invest in bain capital, but really, whether employment in ohio and florida and wisconsin and nevada and other swing states is going to improve under the likes of mitt romney. it's an employment question. and that really goes to this whole debate about austerity versus taxes as well. voters have to feel a benefit. if you're unemployed or your neighbor is unemployed, you're not happy until you have a job. so the question the president is posing is can mitt romney, who sliced jobs away from companies, really bring jobs back to the economy? that's a fair debate. and i do think it goes to the president's a benefit. because those folks in wisconsin and michigan and ohio are going to relate to the president and his arguments a lot more than they are going to be able to relate to mitt romney and his. >> sarah feagin, what do you think? smart strategy or low blow? >> well, i think it's a low flow. if you look at the totality of what bain capital has done in
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the u.s. economy, they have grown 80% of their businesses. they have added far more jobs than they ever had a cut, and they have contributed mightily to all these local economies. so the reason that you say the president going after mitt so aggressively on this is because it really is mitt's pathway to winning the presidency. voters consider him much more competent in running the economy, a better steward of the economy than the president. and the president's trying to take that back from mitt romney. >> steve, do you agree with that? >> yeah. i think it's a very tough argument for barack obama to say he knows how to create jobs when we've had the worst jobs recovery in 40 years. you know, we're still 4, 5 million jobs short of where we were prior to the recession. meanwhile, not every company that mitt romney and bain capital invested in created jobs. that's true. barack obama can point so some situations where they actually had to downsize the employment. but the overall picture of what
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mitt romney invested in was not just making a lot of money for investors, which he did, which is a good thing, but he also created tens if not hundreds of thousands of jobs in these new industries. and the question that it really comes down to which i would ask david is look, who do you want doing the investment? barack obama thinks should it be done by the energy department and private agencies when we have firms much better that create value for american workers and investors. >> you posed the question to me. let me answer this way. private sector job growth under the three and a half years of president obama has exceeded private sector job growth in the eight years of george w. bush. that's the metric. it's job growth. that's it. >> look, david. >> let me just finish the thought. >> sure. >> if i take your paradigm, we're talking about bain. let's face it. let's be honest with ourselves here. this is a political season and a political discussion. >> right. >> it's all symbolism, right?
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it's all symbolism. it's what the emotion is in the voter that is going to matter. >> i disagree. here is where i disagree with you. >> okay. >> i think barack obama really does believe that jobs come from government. that was the idea of the stimulus that was the idea behind all of these spending programs, solyndra. >> but excelled in his presidency. that's what you're missing. >> if barack obama wants to run on his record on jobs, that's good because it's the worst report for three years now. you want to run on that? >> i think the trend is going to kill it for mitt romney. i think the swing states, the nine states from now until election day, those nine states are going to decide this election. and you have to look at the unemployment rates in those states and the trends. mitt romney has to go to ohio, a must-win state for him and explain why he opposed the auto bailout which saved that state's manufacturing base there is no dispute about that. he has a tough argument to make
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here. >> the fact of the matter is that today voters consider mitt romney a better steward of the economy. it's one of the reasons you see mitt romney tied or leading the president right now is because in the central argument, which is jobs, mitt romney is the only candidate that we've had that has actually created them. >> i'll leave it. >> steve was right. >> i'll leave this to dennis. this is genius. it's like the argument over the buffett rule which everybody out there with a pen and a paper and a calculator knows. even if it's passed, it's not going to do anything. that's why i wrote we should pass it to get it off the plate. because it's the look over there type of marketing strategy. let's talk about bain. let's talk about a couple of percent of the deficit so that we can ignore the big issues. >> well, the big issue is europe. all i would say to the american people is this is the democratic party's utopia. this is what they dream to be. they would like to be like
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france. they would like to be like continental europe, western europe. this is the future. high unemployment with large government. >> yep. >> that's it. that's our future. choose. >> can i respond? i'm the only democrat on this panel. i have to respond to that. i worked for bill clinton, okay, the longest economic expansion in american history happened under a democrat. you want to look at what democrats have done to this country? you look at where job growth has been the greatest, where economic expansion has been the greatest. look, our economy is 70% based on consumption. when incomes are rising, our economy does better. that's what democrats are about. we're about real growth. you guys are about something else. and it ain't going to play. >>. [ overlapping dialog ] >> let me jump in here for a second, because we now know looking back, and agreed we had a surplus under clinton. >> right. >> but much of that was because tax receipts were inflated due to a fake economy that was due to the internet back then. everybody was making capital gains. >> i'm sorry, i'm sorry, i'm sorry.
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you had minority unemployment at its historic low point. and you had growth to even the terms of investment. >> david -- >> we can discuss the difference between cyclical and structural deficits. that's a legitimate debate. but to offhand say that didn't count is just wrong. >> here is the problem, david. >> david, barack obama -- >> when president bush. >> barack obama isn't running for president. bill clinton isn't running for president. barack obama is. look, you're right. bill clinton had a very good economic record. the problem is that barack obama has the worst economic record in 40 years. when you say how good the employment picture is, just look at the surveys. americans know the real unemployment rate in country is closer to 10 to 12%. there are no jocks. people are dropping out of the labor force. we have a $1.42 trillion deficit. that the kind of record that you as a clintonite are proud of? >> i think -- i'm going to say this again. i think that when you're digging out of a hole like we are now, the trend is what matters. and in fact, let's ask this
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audience, cnbc's audience. in a recent pew charitable trust poll, investors in this country overwhelmingly supported president obama and his performance. why? because the stock market doubled on his watch. the stock market doubled on his watch. >> look what has happened in the last few months. it's giving it a lot of it away. >> the last word. the last word to sara fagen. we should pass the rule to get it off the table. it eliminates a political hurriedle that we talk way too much about given its size on the deficit. do you agree? >> i have to go with larry on this one, brian. this is the president using political rhetoric to try to score a point. the reality is if you want to reform the tax code in this country, you to look at comprehensive reform. moving to a flatter system, where everybody is paying in. and, you know, when you look at the wealthy in this country who
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pay by far a significant portion of the taxes, when you look at it in totality, they're carrying the load right now. >> all right. thanks to david, steve, sara, thank you. dennis prager will stay with us for the entire hour. great balls of fire dancing. remember the las vegas lavish spending scandal? apparently the ninth circuit court does not. they're planning a million dollar junket to hawaii on the taxpayer dime. dennis has that, next. almost every day i walk into the office and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station, despite the fact that they see me driving to work every day. i fill the volt up once every -- maybe once every couple of months. and that feels absolutely wonderful.
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welcome back to "the kudlow report." i'm dennis prager filling in for larry. government spending gone wild again. despite the fallout from the gsa's lavish conference spending, you remember that, there is news tonight that the ninth circuit court is now scheduled to take what could be a million dollar trip on the taxpayers. not dime, but million. here now is iowa republican senator chuck grassley, the ranking member on the senate judiciary committee. senator grassley, good to be with you. >> thank you, dean. >> so let me ask you here. the problem with the ninth circuit court going to hawaii is
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what? >> well, first of all, judge gibbons, the chairwoman of the budget committee of the judicial conference has warned a lot of judges you got to be careful how you spend your money because they're already laying people off. they've had their budget cut 5% because of the recent fiscal problems. so then we have this ninth circuit going to maui in hawaii to have a conference. we think it's going to cost about a million dollars. we've sent a letter asking a lot of questions so we can get more detail. but you would think that there could be easier ways to have a conference, and particularly with social networking being a way of communication, that that medium could be used and save the taxpayers a lot of money. but this is a conference that is not just about legal things. if you read their agenda, there is a heck of a lot of stuff about just recreation as well.
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>> well, they claim, though, that the recreation is being paid for by the judges, not by taxpayer. >> it could be. i hope to get an answer to that. and that would be very good news. but it is still a very expensive place to go to have a judicial conference. >> well, let me play a little devil's advocate here. i'm one of the citizens and i'm a conservative republican. but i'm one of the citizens that thinks that you folks, like you senators for example are actually underpaid. maybe some perks in the office, and i'm not a big fan of the ninth circuit, believe me. but maybe some perks are okay. and a million dollar in a trillion dollar deficit isn't all that terrible. what do you say to that? >> well, a trillion dollars is terrible. and anything you can do to save some money, you ought to save it. and i think that we ought to be looking at better ways to hold conferences in less expensive places, and to do it. but even when you have other
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people that are watching the budget of all the judicial districts, you know, speaking for the judges themselves, when you have a trillion dollar deficit and we're under constraints here to spend less money, we're going to have across-the-board cuts next year, you just can't do business as usual. >> that's true. no, no, that's true, senator. and look, the truth is i'm glad that you're overseeing this. i just have a little sympathy for those of you in public life because you're not allowed to make money on lectures. you're not allowed to make money here and there. but i think your oversight is excellent. and i thank you. thank you, senator charles grassley of iowa. >> thank you. up next, big rebound for u.s. stocks after the year's worst week. the s&p has its best day in two months. the nasdaq's best day in five months, and a triple-digit rally for the dow. but don't dismiss that whiff of deflation that is still stinking up stocks. brian is back with our all star
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market panel after the news headlines. "the kudlow report" will be right back. i've been crisscrossing the gulf for the past two years now. i can tell you, down here, people measure commitment by what's getting done. i'm mike utsler, and it's my job to make sure we keep making progress in the gulf. the twenty billion dollars bp committed has helped fund economic and environmental recovery. another fourteen billion dollars has been spent on response and cleanup. long-term, bp's made a five hundred million dollar
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commitment to the gulf of mexico research initiative... to support ten years of independent scientific research on the environment. results will continue to be shared with the public. and we're making sure people know that the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons. the progress continues, but that doesn't mean our job is done. bp's still here, and we're still committed to seeing this through.
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i'm jon fortt at cnbc silicon valley with a news update. a jury has been seated in john gupta, charged with leaking information about the two companies to an insider trader. members of the jury include a freelance beauty consultant, a fourth grade teacher and a
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psychiatric nurse. comcast bright house and cox, fife of america's largest cable operators are allowing to aaccess each other's spots. announcing the bank was suspending its $15 billion share buyback program. recently released documents show that jon corzine received more than $8 million in cash and now worthless stock options in the months before his mf global brokerage collapsed. the supreme court has not yet ruled on obamacare, but the high court did rule that a man's children who are born through artificial insemination after his death cannot get social security survivor benefits. and finally tonight, mark zuckerberg got married over the weekend. but a british legal services reports that facebook was the cause of one-third all divorces last year. next, why is wall street defriending facebook? "the kudlow report" will be back in just a moment. ♪ ♪
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and welcome back to "the kudlow report." i am brian sullivan in for larry and radio host author and
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speaker dennis prager is joining us for the hour, as we begin our second half hour. he is one of obama's favorite supporters. so now why is newark mayor cory booker walking back about a comment he made about the president's attack nauseating? and if you thought facebook stock price had problems, have you seen general motors lately? it's 35% below its ipo price despite a spike in sales. is the supermarket saying it is still too high? first, what a market comeback today. stocks snap a six-day losing streak to pose their best trading in may. the nasdaq up 2 1/2%, which was stats keepers. its best day of the year. the s&p 500 also finished sharply higher. but to some it still doesn't shake that feeling that maybe more problems, deflation in europe, et cetera, are headed our way. let's discuss. joining us now, jonathan gault, chief strategist at ubf, and jim
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iuor iuorio. keith, i want to begin with you. late last week you made a call, saying i'm dipping in. i'm buying. maybe you got burned on friday. but you more than made up for it today most likely. is this a short-term pop or the beginning of something fresh and good for the summer? >> i think this is definitely a short-term pop. and primarily, it's a matter of where we go from here with not having a lot of upside. like 1330 for me, if you can close above that, that might be something that gets me excited. but the problem is the data. and the data comes back on wednesday. you're going to start to go to new home sales. if that disappoints, that would be a problem. i think the durable goods estimates are pretty high. and then finally, you the michigan consumer confidence number on friday. i think the estimates for that too high too. so into the long weekend, you know, my move from here would most definitely be to sale. >> jonathan, do you agree? >> we have a street high estimate for the s&p of 1475. but i think the next couple of
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months are going to be really sloppy. first of all we don't have a resolution on greece for about a month until we have elections. you don't have earnings for about another two months. so between now and then, i think the market is going to be sitting there and chewing on very little news. and the news we get is going to be negative. i think once we get through this patch, though, i think you're going to see a lot of support for the market. >> you know, jim, it's interesting, because most of the folks that we have talked to here on cnbc recently are in keith and jonathan's camps. look for a little bit of a lull to a downturn in through the summer. but that in the is fall, watch out. once we get clarity maybe on the presidential election, we get some clarity about health care with the supreme court, that we could be in for a nice rally heading into year end 2013. do you buy that? >> sure, i buy that. i mostly look in three different time frames, short, medium long. i definitely agree with keith and john. three to four days from the pop in europe. one of the things has to continue for the pop higher.
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good news out of europe, probably too short a window for that to happen now. or maybe some dovish rhetoric coming out of the fed. and that's a very clear possibility. you saw the bouncing gold. and maybe that's a little bit of a precursor of that. going forward, the long-term that you talk about, i absolutely have no problem with the statement going higher towards the middle to end of the year. but that's mostly because i think that qe3 will be closer then than it is now. i'm not quite positive the economy is going to skyrocket. >> jim, before we go, it's not small, medium, large, it's tall, grande and venti. >> of course, i'm sorry. >> just remember that keith, you're 61% cash. what is it going to take to deploy some of that cash into u.s. equities? >> i think the strong dollar is definitely what gets me there look, a lot of things start in this country with growth. the only way to get growth back is to get the dollar up and the gas prices down. and that's actually the most bullish thing you could say has happened really in the last couple of months is deflating of the inflation. and again, if i see more of that, brian, i'm going to see
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more of what this economy is really about, which is u.s. consumption. >> i think you have the right point here, though, what we need is a growth agenda. i think right now the discussion in europe, if it's to become more keynesian, it doesn't address the underlying structural problems. and i think that's ultimately what is going to create growth over there for the long run. the same thing in the u.s. as we look towards the latter part of the year and this fiscal cliff discussion, i think we're going to have a serious conversation about jobs. >> john and keith, john and keith, of course, that's what we need. but let's talk what we're probably going to get. that's probably going to be lackluster economic data and more talk about qe3. keith, do you agree there is going to be talk on qe3? not saying we support it. >> i don't think it's in the cards pour the fed right now. i think what the fed has to focus on is if things go badly in europe, and it's really harder, they need dry powder to take care of a serious problem. and right now an economy, growing at 2 to 2 1/2% is not the kind of problem that needs to draw the fed in.
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if we have ultimately through this, then the fed can support it further if we have little bit of weakness. >> keith, doesn't europe have all the dry powder it needs? last time i checked, the bundesbank and the ecb had a printing press. i know greece is an absolute disaster. i said two years ago i thought they would default. they basically have already, although they may be headed for a harder default. i'm trying to figure out what people need as a reason to get into the u.s. equity market when they're staring at greece, they're staring at an election, they don't know what is going to happen. they're staring at health care, they don't know what is going to happen. be contrarian. give us one best reason to buy equities right now, even if you don't really feel it. what would it be if you had to make the case? >> i just gave it to you. strong dollar. strong dollar equals gas prices lower. >> you said what do you need? i just gave it to you. go back to the '80s. [ overlapping dialog ] >> let's let keith finish because i yelled at him. >> go back to 1983 to 1989 or 1993 to '99, u.s. dollar index
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was 15 to 30% higher. that's a lot different than what you see now. and in both those periods, the average price of oil was 18 to $22. that's your contrarian call taken. >> all right. so he said the dollar, jonathan, is key to everything. right? of course we know keith loves the king dollar. is the dollar important to you? >> the dollar is important for the right reasons. if the dollar is stronger because europe is melting down, that's not a good thing. and the dollar is stronger because we're promoting growth in the u.s., then i think obviously that's a very good thing, and it's a sign of confidence. it's a sign of u.s. efficiency. so how you get there is important as anything else. >> amen to you on that for both you guys. that's what we want. we still aren't talking -- i mean that's the perfect scenario, and i love it. >> promoting growth is like promoting a wet kleenex, guys. get it right. to have a strong dollar, you can't just promote growth. this isn't like an atv commercial. what you need to do is have fiscal and monetary policy that
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reflects a conservative currency. >> of course. the usa represents the best growth opportunity globally, which by the way it might very soon, considering what the alternatives are. but when the dollar starts to rally because of that, i'm all in. >> fair enough. i think we all agree. strong dollar, strong country, probably strong stock market. jonathan, keith, and jim, gentlemen all, thank you much. we'll see you soon. >> thanks. up next, nauseate. that is what obama's friend and backer cory booker calls his attack on private equity and bain capital. and president obama takes him to the woodshed over it. dennis prager is back with more on that segment, coming up. still to come, gm's stock still well below its price. was the bailout a bust, or will it make a comeback here? it's a little past halftime here on "kudlow." we're back after this.
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now that i'm retiring they all have plans for me. i'm excited. president obama's doubling down on his attack against mitt romney's private sector
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experience. his campaign launching this new ad today attacks romney's record on jobs at bain capital. take a listen to the president at his news conference today. >> the president, as opposed to the head of a private equity firm, and your job is not simply to maximize profits. if your main argument for how to grow the economy is i knew how to make a lot of money for investors, then you're missing what this job is about. >> but will attacking private equity pay off for the president? or should he take some advice from his own surrogate, newark, new jersey, mayor cory booker. take a listen. >> bain capital's record. they've done a lot to support businesses, to grow businesses. this kind of stuff is nauseating
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to me on both sides. it's nauseating to the american public. enough is enough. stop attacking private equity. stop attacking jeremiah wright. this stuff has got to stop. >> booker tried walking back his comments today, but it's already out there. joining us now for a "kudlow" face-off, brad woodhouse, communications director at the democratic national committee, and sean spicer from the republican national committee. gentlemen, welcome. let me begin with you, brad. >> sure. >> here you have one of the most -- one of the most prominent democrats in the country, a black american mayor of newark saying that the ad is nauseating. how do you react to that? >> well, first of all, i would say a more prominent, a more prominent surrogate for this is the president himself. mayor booker is an outstanding mayor. he made a mistake. he recognized that. he agrees, as the president said today, that, look, if you have a resume that you're running for president on, that resume is
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going to be examined. i mean, mitt romney would have you believe that his record shouldn't be examined in running for president. his record is going to be examined, the good of it he is going to talk about. the bad of it, or what we think is the real record is what we're going to talk about. >> all right. >> it's absolutely fair game. >> all right. well, that would seem to be correct. so sean spicer, what's the problem with analyzing romney's bain experience? >> well, there isn't a problem. look at the totality of it. you take a company like staples, bright horizons, sports authority, steel dynamics, they created hundreds of -- over 100,000 jobs. i think when you look at what governor romney has said, he said when we went in, we looked at companies. we tried to make them successful. in some cases not all of them were able to succeed. a lot of them did, and a lot of them turned around and did very, very well both in terms of overall and in terms of job creation. but what i think is interesting is a, they don't want that talk
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about the totality of the record. but b, let's look at the president's own resume. let's look at job creation under this president. let's look at debt and deficit. let's look at loans, picking winners and losers like solyndra and green energy that has been an astronomical failure for the taxpayer and in terms of jobs. so i think that what you're seeing on the democratic side is they want to -- they want to attack free enterprise. they want to attack certain -- cherry pick certain pieces of a business. the bottom line is the president, mitt romney has years of private sector experience and has been successful at every turn. >> all right. so brad, what do you say to that, though, this argument that in fact the president or the democratic party really are attacking free enterprise. isn't it the task of a company like bain to make companies profitable so that its holders, the people who have it, like unions and others who have pension plans there make money? >> well, let me say this. no one is attacking free enterprise, heck, dennis. the free enterprise system in america is in a heck of a lot
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better shape than it was left to us by a republican president. but let me say this. they like to point out staples and sports authority and this other steel company where they were minority investors. heck, this steel dynamics, the county that steel dynamics is put more money into that company than bain capital did. but these other instances where they came in and took over the entire company, they came in and took over gst steel, they came in and took over ampad. they fired employees in the case of ampad, they hired them back at a lower salary. they hired them back at fewer benefits. they eventually fired them all together. and here is the issue, dennis. the american people understand why does it qualify you to be president that you walked away with $100 million while the employees walked away with nothing. they walked away with no job and no benefits. explain why that qualifies you to be president, and maybe you'll get there. what we're saying is we don't think it does. >> all right. let's get an answer. sean, why does this explain why
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he should be president? >> here is the funny thing, dennis. the one thing i have a similar question in terms of government. you look at an agency like gsa that wastes thousands of dollars, i mean millions of dollars of taxpayer money. where is the accountability? where is the leadership at the top? you look at noaa, who was trying to go out and hire magicians with taxpayer money where. is the accountability there? when you look at the leadership on this job in terms of running this government, running agencies, you see the agencies running amok. you see taxpayer money being used for companies like solyndra and other green energy companies that is just getting thrown out the window to political contributors and top bundlers for the obama campaign. so when you look at the totality of the two records, i would take mitt romney every day of the week. >> all right. gentlemen, we've got to leave it at that. i want to thank you, brad woodhouse and sean spicer, and let the american people decide. and i think they will wisely. up next, iran officially calling for the, quote, full
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annihilation of israel. this is the first time since 1939 one country has called for the destruction of another people. 10 what will president obama do about it? or will he let history repeat itself? "the kudlow report" will be right back. you want. fully customize it for your trading process -- 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. ♪ ♪ ♪
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well, on this network we have certainly been talking about facebook fading fast a lot. but have you seen general motors lately? stock is down 35% since its ipo
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back in late 2010. today officially said even though it is the third biggest super bowl advertiser, gm will not pay the $3.8 million for 30-second spot. it also just killed a $10 million facebook campaign. so was the president's investment of more than $100 billion of taxpayer moneys to bail out gm a bust? here now are two cnbc contributors, tony fratto, former white house deputy press secretary, and bob lutz, one of the smartest car guys in the planet. i'll begin with you, bob. listen. the camaro is hot. the volt is starting to come back a little bit. we're seeing car sales maybe top 15 million nationally this year. what the heck is wrong with gm's stock? >> you know, i can't explain it. i think investors are overly focused on the fact that gm is losing money in europe, like everybody else. and of course all of the equities are down. but the fact is that general motors is in spectacular shape.
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sales are great. expanding once again the world's largest car producer, and highly profitable. so if you look at the fundamentals, the fundamentals are fantastic. otherwise warren buffett wouldn't have just bought $10 million worth of shares. >> but tony, something is dragging the stock down. i mean, we still got a cost structure that is a concern. we've still got europe that is a concern. >> no question pensions and europe, and, you know, a lot of other costs. we had a company that came out with a relatively clean balance sheet, relatively clean out of the bankruptcy. but going forward, you have to remember, it's still a company that is still -- the largest shareholder is still the u.s. government with about 500 million shares out there. and, you know, there are questions about it is it a going concern going forward. did the bailout save it in the midst of the crisis? no question about it. but it didn't necessarily make it a going concern for the long run. and it's a big concern for investors today. >> bob, how would you answer or
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respond to bailout critics? >> well, i would say that any government, and in fact we now have george w. bush saying i started the bailout, and i handed it off to obama. and now we even have mitt romney saying i was really in favor of the bailout, and i suggested it to obama. and thank goodness he accepted my advice. look, when you've got something as big as the automobile industry failing for no direct fault of that industry, let's remember, the chapter 11s were triggered by the subprime mortgage meltdown and the sudden doubling of the price of fuel. any government in the world, conservative or social democrat, would have build a out its automobile industry because the alternative would have been absolutely catastrophic. so i think from a bipartisan standpoint, bailing out the two-car companies and with them all the suppliers was the right thing to do. >> bob, no question that i think
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just about any government would have done something to support the auto industry in that environment. the long-term question is will this pay off for the taxpayers who are the ultimate investors? >> of course it will. >> will it be a long time before we see gm's stock price get to a price where the taxpayer gets a return and the taxpayer could take a bath on this. >> well, look, all of the automotive stocks are down. many industrial stocks are down. facebook is way up. the fact is the investment community does not yet fully understand the value that is residing in general motors stock. ultimately it will be recognized because the company is doing fabulously well in china, latin america, the united states, record profitability. we've got a little problem to solve in europe. but that's on the way to solution. general motors is back -- >> bob, to be fair, can gm solve the europe problem? i mean are you going to lend greece money? >> well, that's not the problem i'm talking about.
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i'm talking about the specific gm controllable problem which has to do with the german unions and german plants and so forth. >> right. >> i had lunch with dan akerson today, and i have the impression that the european problem is going to be solved. and it should have been solved 10 or 15 years ago, and it wasn't. but by god, in the next two years, it's going to be solved. >> i hope you're right on that. but you do have one other problem. if you're a gm investor, and you're holding equity and you bought at the ipo price, one thing you have out there is the federal government with these 500 million shares that is a -- there is going to be a seller, you know, going into any -- any profitability. so we need to see super strength in the gm share price to withstand the amount of -- the amount of supply of shares that the government is going to be putting in. they're not going to be shareholders forever. otherwise we're going to call it
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a nationalized car company. >> well, no. >> it's a good debate. we've got to leave there it. bob, i have a final question for you. can you get me a one-week test in the zl-1 camaro? that's a joke. i can't accept anything. i would get 100 speeding tickets and lose my job. but it's a nice thought. >> exactly. it would be worth it. >> i'll take you up on that too. >> tony you live in d.c. you probably drive a solar-powered scooter. >> i drive an american made jeep wrangler and love it. >> toledo, ohio. good man. tony. i'm sorry about your pirates. tony fratto and bob lutz, guys, thank you very much. before we go, let's bring back in dennis prager. it's just the most outrageous and most frightening story of the day, not getting a lot of play, but it needs to. here you go. listen to what a top iranian military commander said at a defense gathering in tehran. quote, the iranian nation is standing for its cause, and that is the full annihilation of israel. now earlier tonight, dennis, the
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senate agreed to sanctions about iran. mostly related to its nuclear program, not even these stupid and dangerous comments. how do we react to this? >> it's very important that the world realize, brian, that this is the first claim about annihilation, the first demand that extermination of a people take place since the holocaust. and it is not lost on the jews of israel, who have made the first coalition government since before the six-day war in 1967 when they launched the preemptive strike to stop being annihilated then by egypt, jordan. jordan joined later, but by egypt and syria. this is the biggest news item of the day. the fact that the media don't take it seriously boggles my mind. if the world had taken hitler seriously in '39, 59 million non-jews' lives and jews might have been saved. >> do you think it's isolating
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itself even from traditional allies like russia? >> it's impossible to know. putin cares about putin. it's impossible to know. i don't think it bothers him in the least morally, because he is an amoral man. i don't know what the west will do. i know israel knows that if people who say they want to destroy you have the weapons to do so, they will do it. and the notion that they fear being destroyed because america is so strong, even if america got involved, these people don't care if they die. communists wanted to live. even nazi wanted to live. but the people who run the islamic republic of iran are prepared to die in a nanosecond to destroy the jewish state. >> quickly, are economic sanction enough? >>. no obviously not. obviously not. look, i'm not calling for war. but you asked me a direct question. nothing is enough with these people. they are prepared to die if it kills the jewish state. this is what preoccupies them. and unfortunately, too many
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other muslims. >> dennis prager, thank you. it was a great pleasure to have you on the show. >> great to be with you. >> dennis is author of "still the best hope." you can catch him day daily nationally on his syndicated program. he is also a speaker all around the country that is it for tonight's show. i'm brian sullivan. thank you very much for watching "the kudlow report." we will see you tomorrow. mine was earned off vietnam in 1968. over the south pacific in 1943. i got mine in iraq, 2003. usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection, and because usaa's commitment to serve the military, veterans and their families is without equal. begin your legacy, get an auto insurance quote. usaa. we know what it means to serve.
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almost every day i walk into the office and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station, despite the fact that they see me driving to work every day. i fill the volt up once every -- maybe once every couple of months. and that feels absolutely wonderful. i'm hardly using gas, but it's there when i need it. anybody that thinks that this car doesn't have solid performance, hasn't driven it. there's no other car like this on the road. ♪
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