tv The Kudlow Report CNBC September 17, 2012 7:00pm-8:00pm EDT
seconds away on "the kudlow report," is the party over for profit? is obama going to flood the oil market with strategic to bring prices down even more? why doesn't mitt romney just run a straight up tax cutting supply side campaign? get it on, mitt, just do it. "the kudlow report" adjustment moments away. i always like to say there's a bull market somewhere. i promise to find it for you somewhere. i'm jim cramer and i'll see you tomorrow. hey larry what do you have for us? >> the question is how bad are the profit reports going to be? we'll cover it later in the show. good evening i'm larry kudlow, this is the kudlow report. a discord in the romney campaign. the former governor went at it against president obama. two major election speeches. to me it still felt the same old same old. romney was supposed to break new ground but he didn't. take a listen.
>> the president, i'm convinced, has put us on a road to greece. i'll put us back on the road to a stronger america. >> nothing new there. president obama in cincinnati, well he says he's going to compromise. almost. listen to this. >> look, i want to work with them to reduce the deficit. i've said, you know, if the republicans need more love, they want me to walk the dog or wash their car, i'm happy to do it. but i refuse to ask middle class families to pay over $2,000 more so that millionaires and billionaires can pay less. >> all right. he'll do everything but acknowledge the facts about middle class tax cuts so i didn't hear a compromise there. meanwhile is the whole romney campaign imploding? some say it is. but i remember regan going through something similar and coming out smelling like a rose. president says you didn't build that business. he may be right pap new study however shows that no one is
building any businesses at all. a total collapse in start ups. bad for the economy. our top story tonight, campaign with 50 days to go, what's going to get romney on track? today the "wall street journal" published this story, romney's tax plan fails to gain a foot hold. romney was in los angeles talking to the u.s. hispanic chamber of commerce, obama campaigning in battleground ohio. cnbc eamon javers joins us now with some of the details. good evening. >> reporter: campaigning in ohio today president barack obama told voters there about the federal government about the wto complaint against the chinese government. the president saying chinese subsidy for the auto industry will hurt american workers. >> these are subsidies that hurt american men and people on the assembly lines in ohio, michigan and across the midwest. >> reporter: mitt romney spent part of his day today pushing against media reports that his
campaign is in disarray including in this interview he conducted earlier today with telemundo. >> i've got a terrific campaign. my senior campaign people work extraordinarily well together. i work well with them. our campaign is doing well. >> reporter: but you could see some strategy in the romney campaign. injecting more specifics of spending cuts that he would like to see into a standard stump speech. take a listen. >> i'm going to put the federal government on track to a balanced budget by eliminating programs. eliminating programs that are not absolutely essential. and also cutting subsidies for things like amtrak and corporation for public broadcasting and the legal services corporation. >> so, larry while those are not new thing, mitt romney has said that he would like to cut, they are things that conservatives have had on a wish list of cuts for a long time so clearly this is a speech intended to rally
the base and there are a lot of folks out there suggesting this might be a rally the base election that we're looking at is going into november. >> eamon javers, he's got to do more. this is my own opinion, he's got to do more if he wants to get conservatives but if he wants to get independents that's a key point. anyway many thanks. look while i'm still waiting for more specifics on taxes take a look at some of these off beat but very important economic indicators that could have a major impact on the election outcome and i want to highlight one in particular. one in particular, don't tell me this thing is not going to run. hold on, there we go. we'll switch now. all right. here we go. we got it right. retail gasoline prices. up 108% insurance president obama took office. up 108%. this is probably with gasoline what $3.90, aaa average right now it may go to 4%$4 a gallon.
this itself i'm calling it an indicator. it will be mainstream and going to damage, i think, it could, i won't say well, it could damage the president's re-election. now let me look at a second one. cpi food prices. they are not up as nearly as much but up 7% since the president was elected. the question here is whether this is going to hurt or not. i don't think it's near as bad as gasoline prices but food prices are rising and ben bernanke destroys the dollar with his new pump pricing policy we'll see food prices rising more. finally home prices. now most of the bad home price decline did occur before obama was inaugurated. i'll give him that. however, we're still down quite a bit from where it was, let's see it's off 11.5%, not the worst thing, total decline is about 35%. my point is this. we look at a lot of indicators, we talk about employment, unemployment, what have you.
what about gasoline price, food prices and what about housing prices? could they determine the election? let's bring in our distinguished guest, economics professor chicago school of business and former chairman of the council of economic advisors under president obama. and former director of the congressional budget office under president bush. all right. i'm going to give my pal austin the first whack at this. mostly gasoline prices. food is a little bit of a problem. housing remains a rob. mostly gasoline. how much is the president going to pay politically for this austin? >> you know, i think gas prices do affect consumer confidence and it's the kind of price that everyone sees when they drive down the street. i think you know that it's very misleading to choose what the gas prices were at the depths of the worst recession of our lifetime physician you just back the clock up three months, the price of gasoline under bush was actually higher than what it is
under obama. but i do think these events in the middle east has got to be a concern to the white house that it might lead to gas prices to start inching their way back up. >> what's your take on gas prices and just add to it in a political sense. these are indicators that we don't pay enough attention to. we got food prices rising and home prices falling. how much will go down to president obama's defeat? >> this is a problem for the president. one of the characteristics of this recovery is the absence of growth and disposable income. people talk about jobs but for those who have a job they are not seeing their purchasing power rise. when you get these spikes in gas price, increases in food prices they feel pinched and those are the independent voters that are going to be key to this election. so i think it's a problem for the president and i think it's something that, you know, the romney campaign needs to continue to remind people we have solutions to these problems. our tax reform can make the my grow.
allowing people to produce more domestic energy. won't change the gas price but it will give them the resources to pay those higher gas prices. >> austin, if mitt romney starts sticking it to president obama on gasoline prices, how do you reckon the president will react? >> i'm not sure. i think it's risky because you never know what will happen to gas prices. if gas prices start coming down then mitt romney will say oh, president obama was right all along? i think it's -- most people recognize that the price of gas in the short run like in the next 50 days has very little to do with what the president is saying, has much more to do with geopolitical uncertainty. >> look, i think the key here, austerity yin is not controlling gas prices.
the key is having an environment where people can afford gas when it goes up in price and benefit when it goes down. they need have some stake in domestic energy where they benefit from higher oil prices and natural gas prices and they need some income growth. that's what's been missing. >> don't disagree with that part. there's no question that consumer incomes have been hit pretty hard. now, personally, i don't think that proposing $5 trillion of tax cuts heavily geared towards high income people to be the only major specific going forward is going to put money in middle class people's pockets. >> let me ask you this. what does the president propose to in his second term one thing that we heard from him about how he's going to use the second term if he gets one. he's been silent. >> i completely disagree. he's talked about that we need to invest in the economic infrastructure of the country, restore manufacturing with continued focus on export
growth, continue the, extend the middle class part of the tax cuts to help ordinary americans. >> more of the same? more of the same? he's been saying this since 2007. i've been list ending you to say it since 2007. >> larry, i did know this was an explicitly political panel. i thought you wanted to know the impact of these factors. there's things doug and i can agree on. but to spout that romney's budget is superior when he'll blow a hole in the deficit is problematic. it doesn't make any sense. would we have done those tax cuts in the past they didn't work, didn't increase the growth rate and won't now. >> hang on. >> tell me where 5 trillion comes from. >> one second. >> i'll tell you where 5 trillion comes from. 1 trillion from abolish the amt, 1 billion from cutting the corporate rate, 1 trillion from cutting the corporate rates.
1 trillion from abolishing the estate tax and 1 trillion from the collective other tax cuts that he's proposed. >> and so you give no credit to base broadening no credit to anything else? >> i'm totally for base broadening. but you can't say i'll cut 5 trillion in taxes not propose any specifics and when people go add up all of the possible broadenings that you could have, they don't add up toni where near what he told them. >> hold on. >> let me ask another question. i want to go back to the democratic convention in the speech by bill clinton. who asked a very important question that may be asked again and again during the debate. let's list enbriefly to what president clinton asked. >> republican economic policies quadruple the national debt before i took office in the 12 years before i took office.
double the debt in the eight years after i left. because it defied arithmetic. president obama's plan cut the debt. >> all right. he basically is asking a very tough question. now i don't know whether president obama is going to have a deficit reduction plan or not. i haven't heard one. what's your response? i don't think republicans have responded to clinton's argument that the gop doubled the debt before he came into office and doubled it again afterwards. what's your reaction to that? >> i think if you look back historically it was under republicans we saw efforts to control deficits, a deep concern about the state of fiscal affairs. they went at it repeatedly in the first bush administration. so, i don't think that's a fair reading of history. you know remember everyone always points to the '90s and say we got to do that again. to do that again you need a dot-com bubble. a second fall of the soviet union. you need a baby boom that's 15
years away from retirement. that's wishful thinking. >> austin the thought occurs to me mr. clinton asking that question which i think is a tough question, if president obama would have embraced simpson-bowles or bowles-simpson with a strong spending and deficit reduction plan he could have taken the advantage in this election but he hasn't done it yet, austin. why not? >> there's two.. i agree with what doug said. i don't think you can say hey let's go back to 1999 and have what we had then because there were a bunch of things that were not really sustainable or applicable to the right now. i think bowles-simpson most of the people who say we should just have done bowles-simpson oftentimes they haven't looked in detail in what's in bowl bowles-simpson. they are talking about raising the tax rate on capital gains.
top rates come down a little bit but the capital gains rate goes all the way to ordinary income, and bowles-simpson does raise taxes on the middle class. if the president explicitly done that republicans would not have met him and said hey that's a great starting point why don't we agree. they would have said -- >> doug you get the last word. >> i think it's right that not everyone would have loved that as the final product. it was the right starting point. it was the only vehicle that said we had a big problem. the problem is largely spending. all spending. if you want more revenue get serious about tax reform. >> got to leave it there. thank you austin, doug. coming up on kudlow, the party may be over for profits. front page of the "new york times" today. that is unless you're the golden apple. that stock hit 700 bucks for the first time ever. we go on the path to profits next. later on reports romney campaign is imploding. we'll do some truth squadding.
it tops $700 in after hours trading. meanwhile the dow closed down for the 14th time in the past 15 monday. nasdaq and s&p both down five. it may be good times for. all shareholders but the party could be over for corporate profits. front page story in the "new york times" warns that profits are going to decline in the third quarter and maybe in the fourth quarter as well. joining me now is the ceo of hedge high risk management and cnbc contributor. keith welcome. of all things out there are profits our biggest concern? >> huge issue. number one case for the bulls. going back to march before growth slowing began the bulls case was growth is back, earnings is great and stocks are cheap. now growth is slowing, earnings are under pressure and you don't really know what cheap is if you're using the wrong revenue and earnings numbers. revenues are slowing because gdp continues to slow. ben bernanke policy slows growth further because inflation slows growth and of course on the profit side inflation takes up
things like producer prices which were up 1.7%. >> but, do you think regarding bernanke now most people believe that bernanke put the bernanke pump priming is bullish for stocks and has been to some extent. i you know don't. do you think the dollar will collapse and do you think there's a significant inflation coming? >> the dollar has been collapsing. there's a game going that mitt romney hasn't called which is devalue the dollar and get the stock market up. in venezuela they did the same thing. chavez devalues the currency by 50%, best performing stock market in the world but nothing in venezuela is good. look what's happening with bernanke, the jockeying obama letting him do this and what's happening is the cost of living in this country is going up as median incomes are falling down. >> romney has criticized bernanke and has said, if i'm elected he's not going to get another term and he has criticized the dollar policy. but do i want to ask you, would you be a seller right now knowing that the fed is just
beginning its pump priming policy. they just started on friday. we'll do close to 500 billion on an annual basis. would you be a seller right now? >> it's a tough position because now we've melted up and everybody is in a positions to examination. you have to see what expectation have done. we're up 16% the stock market for the year-to-date. i think what ben bernanke has done is he's compressed equity returns three years of equity returns into the three months ahead of the election. if romney can't tie bernanke to obama, you can tie him to bush too but, again, a leader has to decide what is fiscal and monetary policy, barack obama has definitely empowered ben bernanke and that's the bernanke tax that you see at the gas pump that again mitt romney should tie to. >> does obama get any credit for the stock market rise through most of his term? >> absolutely. he has to. but he has to take the accountability of the dollar's decline. the u.s. dollar is down over 6%
since barack obama took office, the stock market is obviously up but the price of oil is up 160%. >> gasoline prices are up 108%. it may be an election issue. >> it will be. if you look at -- there's never been in a time by my books and never is a long time that the price national average of gasoline above four bucks has not slowed economic growth. i think ben bernanke will actually do and obama basically empowered him to do this is to perversely actually slow growth end further. >> despite qe3 do you think we could be heading for a recession. >> qe3 takes the chances of a recession up. when you report gdp you have to adjust for inflation. inflation is rising as growth is slowing. >> how rapid will inflation get? >> on a government reported basis the good news is you'll never have inflation. ben bernanke loves this. absolutely inflation expectations whether you look at
ten year break evens, speculation, future and options contracts are at all time highs for things like gold, coffee, oil, anything that you eat, consume or involve in your life and that's the big issue. he has basically perpetuated expectations whether stocks or oil, and that's what slows economic growth. >> would you be buying those mods? >> on pullbacks he's forced to you. understand that there's been three bubbles created by bernanke and greenspan. the internet bubble, real estate bubble and mow the commodity bubble. the commodity bubble whether it's mitt romney or barack obama it's going to be on their watch provided they keep bernanke in power. >> which may take several years to develop but you say buy the bubble before you sell. tricky. >> it's called trading. you have to risk manage it. can you invoke your inner hemingway and say this will happen very slowly and then bang happen all at once. that's what will happen when the commodity bubble busts.
that's what the strong dollar coming back will do. >> many thanks. coming up, no end in sight to the protests in the muslim world. today the leader of the militant hezbollah group urges supporters in lebanon to keep up the protests. more on that plus the other breaking headlines up next. [ male announcer ] let's say you need to take care of legal matters.
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closed for normal business. we have more on that and all the latest breaking headlines coming into the cnbc newsroom. >> american citizens in lebanon and other countries are warned to stay away from protests and demonstrations today. elsewhere in the arab world, embassy in cairo was opened to americans but in khartoum the embassy was closed and family members were complying with an earlier odd to leave. the embassy in tunisia was closed but the state department described the situation there as calm. chicago kids will be out of class on tuesday despite the school system's attempt to get a restraining order putting teachers back in the classroom. the judge assigned to the case won't hold a hearing until wednesday, the eighth no school day in chicago. throughout lower manhattan demonstrators marched on the one year anniversary of the occupy movement. there have been more than 100 roasts from sit ins in bank lobbies and the like but generally a peaceful day, larry.
>> thank you very much. coming up next the 50 day countdown to the election. political pundits pummelling camp romney with talk of chaos, in fighting, scattered strategy. but is the romney campaign really falling apart? we'll ask our insider of the national review. that's up next. now, that's what i call a test drive. silverado! the most dependable, longest lasting, full-size pickups on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
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welcome back to "the kudlow report". i'm larry kudlow. in this half hour why did the price of oil flop around like a fish this afternoon. were traders thinking the government is about to start the pump in the strategic petroleum reserve. are we entering a drought of job creation. a new hudson institute study reports that start up companies just aren't creating new jobs. the obama administration is to blame. but first up, 50 days until election day and political pundits have already begun writing romney campaign post mortems. politico out with this scathing story how stumbled which details major in fighting. is the romney camp really
falling apart? here now is robert costa. he's spoken with several senior sources. have they fallen apart? >> a lot of people in the romney campaign are questioning the tactics. there's no boston massacre, stevens is safe, no satisfy shake ups. >> i told you during the convention that they weren't getting the job done. and that the convention speech was lousy. turns out they had two convention speeches commissioned by this guy stevens. they threw both of them out, famous speech writers and he sat down with romney and recrow their own thing. >> i hear that's accurate. no one is disputing that. there were a lot of questions, a lot of haggling going on. the problem now is stewart stevens wearing too many hats. speech maker. ad maker. top strategist. is he doing too much and has the campaign become fractured. >> there's another story here that said the campaign will
shift strategy from the status quo to change. i don't know what that means. i mean i know what taxes mean and cutting spending means and growing the economy and lower unemployment. but status queue versus change all of a sudden on the eve of the debates what's that about? >> it's not a big strategy shift. more of a reemphasis of romney's five point plan. larry you have been calling for a big policy campaign, big theme election but it won't be that in the final stretch. just a re-emphasis of what romney has already been saying. >> that's most regrettable. thanks very much. look, i just want to go back in history. ronald reagan did this. he had his troubles but he did it anyway. here's how romney can do it too. don't forget romney won by standing his ground, being himself, holding to his pro growth principles. yes in the reagan camp the last battle for the heart and mind of the reagan. they wanted to make him into a rockefeller republican but he fired his campaign manager john
sears on the day of the new hampshire primary, which by the way reagan won in a landslide and never looked back. reagan brought in bill casey to run the campaign. reagan brought back in ed meece. reagan then ran as he, reagan wanted to run. a tax cutting, government shrinking, deregulating conservative, strong on defense. he went up against a weak incumbent named jimmy carter and won in a landslide and after asking americans if they were better off than they had been four years before most folks said no and voted for reagan. so for me the moral of the story is this. mitt romney needs to run as a supply cider. reforming government, shrinking government, getting debt down, protecting the dollar, job growth creating guy. put his brilliant business career to work in order to make the deal of the century to grow the economy and keep america out
of bankruptcy. that should be romney's message. do not pull any punches. stop all this internal infighting. just flesh it out and to for it governor romney. you can do it. now let's bring in our guests to have a discussion of my strategy. here now is robert shrum and dick army. why doesn't mitt romney understand that clear supply side growth policies win elections. why doesn't mitt romney get that and why don't his advisors get that? >> well, i don't know. i've been telling the republicans for some time, when we're like us we within, when we're like them we lose. i've been watching a little bit about what's going on with the romney campaign. if he makes bigger and better use of ed gilliespie he can get
there. he ought to emphasize his organizational skills. he's fixed broken businesses. he fixed a broken olympics. he can fix this broken government. and he can make congress do their job. and shift the balance of power back to a working congress that's effective and an executive branch that practices responsible restraint of the authorities that are placed in its hands. >> bob, i know you're not for romney. i get that. i want to ask you when you look at this weird race and it's getting stranger and stranger. why doesn't romney use his organizational skills, i call it his dale making skills, stick to his principles and just run. in other words i know you think that will lose but given the romney position he's got that -- that's all he's got. it's too late to start changing stripes. why doesn't he just go for it? >> obviously i disagree with you
guys in terms of some of the thing you are saying but agree with you both that he needs a narrative, it needs be a coherent narrative. it has to be rooted in who he was. and this campaign has been curiously on the back foot ever since he secured the nomination. they lost the summer. they let barack obama define and the obama campaign define romney. they lost the convention. the notion that you're scrambling to write an acceptance speech a few hours before you give it is crazy in modern american politics and they lost last week. i mean, when they kind of blew it on this libya thing. they need somebody -- >> it's hard for me to imagine, bob, how could have they lost last week? i know they did but it amazes me. problem didn't demonstrate once been in a whole new venue of international policy his wholly inadequate skills last week on
foreign policy. >> i totally disagree with that. i think he came across as cool, in command and did a good job. but why did romney lose so much? because in the middle of a mess like this, when american lives are at stake and you know this, you don't go out and attack the president of the united states and say that he's somehow or another sympathizes with terrorists. that's how he lost it. if you handed that statement to ronald reagan, if you handed that statement to george bush or go, h.w. bush, i think they would have looked at you and said you know you have a new job in this campaign. why don't you answer the phones because it was ill-advised. it was a mistake. today they announced they are is going to have a whole bunch of specifics. they have ed gillespie on the phone and i think he's terrific. >> i think he lost the support of the liberal press and the liberal media which he never had anyway. >> dick, you would not have advised him to make that
statement at that time in the middle the violence. >> how could you comment on what everybody in america was talking about. a president whose foreign policy is -- it was embarrassing. >> hang on. one at a time. >> the fact that it offended the liberal press probably -- >> it offended americans. >> it offended americans. president of the united states doesn't sympathize with terrorists. nobody was more critical of george bush than i was. i would never have said something like this. dick armey you were talking about thereby ral press. pollstering, let's talk about this. the best pollster in 2008 was pew and scott rasmussen, tied for first. now it's very interesting. there are a lot of polls out that show in battleground states particularly ohio, virginia and florida, romney is falling five, six, seven eight points behind.
whereas is ras muse enpolls for those states shows its dead even and overall while some polls show a bounce for obama after the convention, rasmussen shows that that race head-to-head nationwide is dead even and that the bounce was very temporary. dick armey why these polls are so crazy. are the polls biased. is rasmussen the best along with pew and he said it's a different race. completely head-to-head even. >> personally have never been guided by polls but do i think insofar as there's any validity to these polls it goes back to the point you made earlier, governor romney needs to assert himself in a strong confident way as reagan did. i mean it's not -- it's no longer necessary to tell america that president obama is not up to the job. we know that. what he needs to do now is tell
america in chapter and verse details how he is up to the job. and he hasn't really taken that step forward. i think some of the changes he's making, especially the addition of eddie gilliespie. >> lower tax rates, slinging government, deregulation, bob what should your man do right now? i'll tell you i know that obama looks like he's leading in the polls but i'm betting on rasmussen that says it's even. what do you think he should do? >> first i got to say the rasmussen has a sample right now and is waiting on samples to an electorate that's plus for or plus five republican. that electorate has not existed in this country at any time in modern history you keep smoking those rasmussen polls. the country will disagree with dick armey and will decide that barack obama stoup this job and
has done an extraordinary job under some of the adverse circumstances a president ever had. >> why is ben bernanke going out the bail out the economy the third straight time and describing the economy dismal. ben bernanke is disagreeing with you. >> you guys are so unhappy about what bernanke did you're trying to twist it and twist what he said. he said we have a recovery, moving ahead. he wants to see more job growth and he's is going to sustain the stimulus well into the period of time the jobs are growing. >> we got to leave it there. >> we'll see how far he can push that string. >> thank you very much. scott rasmussen, thank you very much. coming up, oil prices took a dive with market speculation that obama will release strategic supplies to lower prices at the pump. is this presidential politics at its worst? [ male announcer ] the 2013 smart comes with 8 airbags,
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the phone. john, what can you tell us about this? >> reporter: well this is a videotape, larry, that has mitt romney exhorting backers to support him because the people who don't pay income taxes won't vote for him, the republican candidate. now, of course, this is not correct because many of those people who pay no income taxes are elderly and romney is doing very well. but this is something that has the potential to become a major story in the campaign, what you have is the obama campaign and democrats quickly saying he's expressing contempt for those people who don't pay income taxes, expressing contempt for people in need. romney campaign put out a statement in response to this saying we're concerned for all americans, especially those dependent on government assistance and we'll see where this goes from here. >> you know, john, just quickly,
government dependency has been an issue. it is roughly half of the households in the united states are getting government funds of one kind or another. is this the trap that romney ran into? >> reporter: potentially, remember this has been part of the campaign debate for some time. rick perry put that issue front and center from the moment he announced his campaign last year. that has the potential for taking some of the edge off of the reaction if people see this as a familiar discussion ideologically, paul ryan has talked about this issue as well. the question is whether it becomes one of those moments like what happened to barack obama in 2008 when he was revealed to have said that people cling to guns and religion because of resentments against the rest of the country and that was embarrassing to obama. we'll see how romney with stands that. >> john harwood thank very much. the romney campaign issued this statement. mitt romney wants to help all
americans struggling in the obama economy. as the governor has made clear all year, so concerned about the growing number of people who are dependent on the federal government. including the record number of people who are on food stampls, nearly one in six americans in poverty and the 23 million americans who are struggling to find work. mitt romney's plan creates 12 million new jobs in four years and gross the economy and moves americans off of government dependency and into jobs. now, crude oil prices plunged more than four bucks just one minute this afternoon. rumor spread of a possible strategic petroleum reserve release. where did that rumor come from? my question is the white house playing politics ahead of the november election? let's go to my pal at the american enterprise institute. the price fell about five bucks. came back about half of the way. no confirmation from the white house. but this rumor keeps occurring, the strategic petroleum reserve,
get oil and gasoline prices down. do you hear it in sfwhaesh what does it mean? >> the administration has been talking about this. at one point they were going to do a joint thing with david cameron and the british government. it's like the fed. they talk about it enough and these rumor, they don't have to do it. listen, my father-in-law was a police detective for 30 years. he taught me about the means and motives. the administration has the means. they have the motive because gasoline prices have been rising and there's an amazing linkage between gasoline prizes and presidential approveat ratings. >> we talked about that. the international energy agency, though, has suggested strategic reserves if there's an attack by israel or iran. that's tissue, is it not? the israel, iranian story? >> certainly if that happens you don't want to open up those reserves now just because, you know, gas prices have gone up and that story is out there.
i think that's also helping create a floor underneath oil prices because we don't know what will happen in the fall between israel and iran. >> of course i'm shore it was just a coincidence that that rumor happened just as oil was crossing $100 a barrel, being the dmz line. i'm sure it was a coincidence. >> listen, those round numbers $4 a gallon, $100 a barrel, people understand those and they understand those numbers in the white house as well. >> many thanks. we appreciate it. up next on kudlow, president obama says you didn't build your own business. well he may be right but for completely wrong and bad reason because no new businesses are starting up and that's a disaster for jobs and the economy. please stay with us. big splash . [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha! and those well grounded.
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all right. first a piece of breaking news now from the cato and phraser institutes. think tanks. u.s. is falling or is it failing in economic freedom. that's right. substantial drop to number 18 in the world economic freedom index. that puts us behind hong kong, singapore, canada and bahrain. that's tough stuff because we dropped way down on the world competitive list also as we reported last week. now, u.s. economic freedom is sinking so does the number of start ups in american job
creation. new study from the hudson institute shows start up jobs per capita down 22% from the bush and clinton years to president obama. has obama given up on a competitive usa? other is the chief economist from thud son institute author of this study. new start ups for people who continue to follow this stuff. new start ups and why they are so important? >> we did a report a few years ago, or i guess i did at the kaufman foundation that the obama administration embraced and mentioned in their economic report to the president new companies less than one year old create all the net new jobs in america. existing companies, larry whether two years old or 200, they are in the business of efficiency. they lose jobs. so we rely on that engine and obama has talked a lot about it. it's been a bipartisan issue. what i want to make a point in this report how they've performed. >> let's say brand new start ups have stopped or are there a few
trickles or how does this play out? >> so there's been a steady level of job creation at start ups of 3 million a year. steady eddie number. been going on since 1977 as far back as the data goes. recessions, booms, 3 million has always been reliable. as you showed in that graphic that number dropped significantly by a third in the last three years. >> just in the last three years it's dropped by a third? >> yes. >> why is that? in all seriousness, why is that? >> that's the next report. we couldn't really try to do everything in one report, just finding the fact that the numbers are down, but, larry, the real stunner in what i found, this is government data, that number got worse each year of the obama administration. 2011 was worse than 2010. this wasn't because of a recession or a predesjobs there's something structural that's inhibiting entrepreneurs in america. >> basically it has something to do with taking risks, something
to do with the economy and taxes and regulations, obama care. it's got to be somewhere in that neighborhood. >> yeah. there's a bipartisan consensus in town here among democrats, economists at least and republicans that occupational licensing is hurting the middle class. under obama the irs started to crack down on companies that are hiring american workers if they are contractors. they want them to get full employment benefits. that's got put a chilling effect because the irs isn't going to punish you if you hire a foreign worker why are they punishing you if you hire american workers. >> quickly an example of occupational license that would stop new start up and new jobs. >> a woman i talked to today gave me a hair cut. she's thinking of starting her own business can't do it because of the rrlt hurdles in virginia are so high. >> the red tape and the paper work will top people. that's expensive for them. they don't have a lot of time or enough money to hire lawyers.
>> that's right. >> is that right? now how is the outlook? is the outlook any better? any evidence that anything is improving? >> there's research, you know, again, taxes are a big deal for entrepreneurs. and the tax uncertainty issue has been looming for the last three years, no clarity there. so i don't think the outlook is good. i expect the numbers for 2012 will be probably worse once again. but, you know, i don't see this getting fixed until we get some stability. pull back the regulations. and stop harassing companies that hire american workers. >> thank you. that's it for tonight's show. let me say one more thing about this whole romney story. me, i say just go straight ahead governor romney. you have a plan to lower tax rates by 20%. talk about it. it's good tax reform. it's progrowth incentives.you h corporate tax rate. talk about it governor romney.
it's more growth, more competitive for the united states. you have a plan to shrink the government by $2 trillion in your first term if you get it. $2 trillion. talk about it. don't pull any punches. don't let your advisors talk you out of it. go straight ahead on lower taxes and lower spending. it's a good growth prescription for america that needs it. that's it for tonight's show. [ male announcer ] it's simple physics... a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day
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