tv The Kudlow Report CNBC March 25, 2014 7:00pm-8:01pm EDT
i like the pricing, but you've got to watch me tomorrow morning for the interview. there's always a bull market somewhere, i promise to try to find it for you. i'm jim cramer and i'll see you tomorrow! tomorrow! consumer confidence, unexpectedly jumps in march. but we're going to show you why, unfortunately, confidence is nowhere near its historic peak in 2000 or even its second peak in ec2007. why is this recovery so substandard? also, gm under pressure. it still may be liable for civil and criminal charges in its massive ignition recall scandal. is this going to end up being the most costly auto lawsuit and fine of all time? and our special guest tonight, governor rick perry. you'll get a chance to judge for yourself whether he's now a presidential front-runner for 2016. all those stories and much more coming up on "the kudlow report" beginning right now.
welcome to "the kudlow report." i'm larry kudlow. it's 7:00 p.m. eastern and 4:00 pacific. we begin tonight with the gm recall crisis that's threatening to blow up into one of the most expensive lawsuits in the history of the auto industry. our own phil lebeau joins us now from chicago with the latest. good evening, phil. >> hey, larry. pressure is reallyla starting t mount on not only general motors but also regulators in washington to do something more about what'shi happened with regard to this gm recall crisis. the latest comes from a filing out of texas. an attorney down in texas has filed a motion with the u.s. district court asking the court to have general motors issue a recall ireport. he says the cars should not be driven because they could potentially hit a bump.y they say they can be driven as long as there's nothing weighing
down the key. these cars could be thrown into thent troublesome position if t car hits a bump. and that according to the attorney is what is the potential problem with people still driving these cars.pr >> if they're telling their customers, if you hit a bump in the i road, this could happen, even if you follow the instruction on the keychain, you know, there's not anyone i know that would put a family member in it at all. a >> meanwhile in washington, a senate bill has been introduced that i would make it necessary r early were with aing reports that come from automakers from the national traffic highway safety administration to make it public. that would force them toe repo deaths. there would be information available about awo potential problem. and finally, connecticut senator richard blumenthal wants compensation to be set up for victims who have been involved in this recall crisis. a fund is what he's proposing that would be set up, larry, that would take care of not only those who are owners of recalled
vehicles since gm came out of bankruptcy, but also before bankruptcy. nd he's calling on the department of justice to c set that fund. itth will be interesting whethe or not the department i of juste says yes, there's some grounds here to do that. because as we allat know, wheth or not general, motors should py for the liability of incidents before bankruptcy is a huge question. >> and who's going to decide that question?ho >> i think ultimately it's going to have to be a judge somewhere because as you know, bankruptcy law is pretty clear here. in civil cases, companies that go through bankruptcy, as general motors did, are not responsible for incidents that happened before the company went through bankruptcy. and that's what a lot of lawyers are saying. wait, listen. this is not fair because you've got some deaths, many accidents that happened in these vehicles before gm went through bankruptcy. that's bankruptcy law. in criminal cases, general motors, which is under a criminal investigation by the department of justice, would be liable for the actions of its employees before bankruptcy as well as after bankruptcy. so it's pretty clear on the
criminal side which the doj is investigating. it's on the civil side, larry, that a lot of people are looking at this and saying wait a second. gm is getting off the hook, not having to pay for these claims. >> look, i'm no expert on this, but just reading about it, phil, listening to your reports, some of these ignition switch problems can be traced back to 2003 models? >> right. >> the bailout was, what, 2009? do i have that right? >> right. >> how they worm out of that, something that occurred six years before the new gm emerged? >> well, a lot of people are asking that question. they're saying, look. did they know about this when they went through the bankruptcy process with the federal government? and if they did know about this, why didn't they disclose this? that's a gray area at this point. now, general motors so far hasn't said much, which is understand building given the fact that they're under a criminal investigation. but i suspect, larry, that as we have the criminal investigation unfold with the doj as well as the congressional hearings that we'll have next week with ceo mary barra as well as the
national highway traffic association. keep in mind, when you look at toyota which is the most relevant case that people are pointing to, it took four years before the doj finally said here's the deal. $1.2 billion fine for toyota which was just levied, you know, last week. >> and in terms of -- just final one -- in terms of the same process, would this conceivably be larger than the toyota story no matter how many years it takes to work out? >> yes. it could. when you look at the scale and the scope of the problem and you compare it with toyota, there's no doubt that it could be as large for general motors as it was for toyota. now, whether or not that happens over the next several months and years remains to be seen. but 1.2 billion, that's the benchmark that's out there, and i wouldn't be surprised if, when it's all said and done, general motors faces a fine of at least that much, potentially even more. >> many thanks. phil lebeau updating us on the gm story. thank you, phil. >> you bet.
now, the gm bailout is always going to be a part of president obama's legacy. what about his overall record in history? that's something i asked texas governor rick perry. here's what he said. >> i think the president is missing an opportunity. open up the xl pipeline, send the message to federal lands to be opened up to allow for the expiration, safely, thoughtfully, creating massive amounts of jobs. this president actually could have a good legacy when he leaves in two years. >> all right. you can see my full interview with governor rick perry in just a few moments. we're going to talk about energy, obamacare and what he would do to respond to vladimir putin in the ukraine. speaking of president obama, he held a key news conference in the netherlands today on the ukraine situation. and cnbc's own john harwood joins us now with the details. good evening says, john. >> reporter: good evening. the president's been in europe trying to rally international support to counter russia's seizure of the crimea from ukraine. now, the president rejected
charges at that news conference that he had misread vladimir putin's intention, saying he cares about actions, not intentions. he also rejected the charge which has circulated in recent days that his 2012 opponent, mitt romney, had been right to say that russia was the number one geopolitical foe of the united states. here's the president. >> america's got a whole lot of challenges. russia is a regional power that is threatening some of its immediate neighbors, not out of strength, but out of weakness. they don't pose the number one national security threat to the united states. i continue to be much more concerned when it comes to our security with the prospect of a nuclear weapon going off in manhattan. >> now, as for the somewhat broader sanctions or the somewhat limited sanctions that
he has imposed so far, the president said those could be expanded to broader sectoral sanctions on energy, on financial institutions if russia goes further into the ukraine. many of his partners are not eager to go there. but the united states senate and the house of representatives are moving to give the president additional flexible, larry, because there's progress on a bipartisan bill that would have aid to ukraine, a billion dollars in loan guarantees, and new sanctions and flexibility for additional sanctions for the president, should passed by the end of this week, larry. >> john, i was surprised -- actually, two things surprised me on this. number one, his reference to a nuclear bomb going off in manhattan. all right, is he talking about terrorism? is he saying terrorism is the number one threat, not russia? >> yes. and i will say, in fairness to mitt romney, his response was a little off point to what romney said. romney said geopolitical foe. that's not the same thing as an
individual threat. nevertheless, the president has faced a lot of people coming out and saying hey, mitt romney was right, and he was determined to back that down and not acknowledge any sort of flip-flop in his position. >> i'll leave it there. john harwood, thanks very much. we appreciate it. a lot of economic data coming into the market today. but the real question for me remains, why are we still experiencing such a substandard recovery? two of "the kudlow report's" all-time best experts set to tackle that question. for now, don't forget free market capitalism is the best path to prosperity. "the kudlow report" will be right back. stay with us, please. larry, you've been one of the very best shows on television. i consider being interviewed by you a privilege. your interviews have always been very insightful and very good. >> free market capitalism is the path to prosperity. larry kudlow, thank you for those great words. you're a true american patriot.
you've really demonstrated to the american audience for nine years that the thing that defines us from all others is our free market. >> larry, the adventure continues. what you're doing next is going to be fantastic. listen, you've been fantastic in my life. at thanksgiving, we thank the good lord, we thank larry kudlow, and not always in that order. best of luck. [ male announcer ] how can power consumption in china,
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lots of economic data came out today. consumer confidence on the upside. case-schiller home prices very strong. although new home sales declined. but i've asked it on this show many times before, and i'm going to ask it again. why is this such a substandard recovery, and in particular, is it because team obama has consciously fought true free market supply side policies? here now, old friends of the show, dean baker, center for economic policy and research, co-director and dougie
holz-ekin. i hope you can see this chart because what we've got today, we've got the highest consumer service number in the post-recession period, all right? so that's good. but it's nowheres near what we got back in 2007. and as you can see, the king of the hill, the top for consumer confidence goes all the way back to year 2000. now, we are so far from that right now. you could call year 2000 clinton, that's fine. you can call 2007 bush, that's fine. you can call 2014 obama. that's fine. the point i'm making is, we've had a steady drop in consumer confidence. it isn't even a cyclical drop, doug. and that troubles me. why are we having so many problems with consumer confidence? >> larry, before i answer that question, let me voice join those who congratulate you on a great run, and thank you for your steadfast adherence to free market capitalism as a way to
prosperity. >> thank you. >> i really do appreciate it. >> thank you. >> i think what you're seeing is exactly that. we're seeing a mismatch between the problems people recognize on the ground and the kinds of policies that are being put out there to solve them. what's being put out is old thinking. it's top-down, born in washington, one size fits all, stimulus, health care, and that's not how economies grow. and people know that they need to have an open economy. they know they're interconnected. they know it's about the future and starting things up. and we're not seeing start-ups. we're not seeing the confidence that we can look past this problem over the horizon to success. and that's what's going on with the confidence numbers. >> i mean, dean, it troubles me that there's so much pessimism. now, confidence is rising in a cyclical basis. but again, it's so far from that 2000 peak, one wonders if we'll ever get back. i have to think some of this has to do with the very mediocre job
performance, and that's true during the bush years just as it's been true during the obama recovery years. why that is, i don't know. but i don't think we've really recovered in the job market. is that part of the problem? >> well, there's actually a more simple explanation, but let me also extend my good wishes. i'll miss you, larry. you're starting to convince me about free market capitalism. i don't know what i'll do now. anyhow, good luck in your future endeavors. getting back to the issue, you look at 2000, you want to call that clinton, 2007, call that bush. i call them bubble. we had a stock bubble in 2007. people were really happy. we had a huge housing bubble back in 2007. people were really happy. but that wasn't the real world. if we actually look at what people are doing, if we look at how much they're spending, consumption's at a near record high as a share of gdp. so regardless of what people tell, you know, the surveyors, they're actually spending money. the reason why we aren't back to, you know, the peaks that we were in 2000 and 2007 is we
don't have a bubble which to my mind is a good thing. we need to replace that with something else. my explanation, i'd have larger budget deficits. you don't like that. i'd say get the trade deficit down. if it was close to balanced, we'd be back at pretty much full employment. no real mysteries here in my book. >> doug, no, i don't want more -- i don't want more government spending. i would like to abolish the corporate income tax altogether. i this i that wounk that would d wages. we had ed lazere on. he talked about something that was on the front page of idb today. people are being hired 180,000 a month, that's historically rather lower for a recovery, but hours worked are falling. and somehow i hear, dean, on the bubble story, but i don't know. i don't think consumers can anticipate bubbles any better than policymakers. i mean, something, doug, there's something going on here, and i'm not sure what it is except we don't have a lot of happy
campers in the economy. >> the weather. >> i want to agree with dean. i understand the timing there, but remember, what also came with the bubbles was the innovation. you know, it was a dotcom bubble. new things started up. there was a path to the future that wasn't stuck in the policies of the past. the same was true in 2007. people thought they could see the future. that's what they want to see again. we're not going to get that unless we get serious and have some fresh thinking about what can get out of the way and let people start up some new companies. that's where the jobs typically come from. build a little dynamism into the labor market. and when that happens, then we're going to see the employers extend hours. we're going to see the employers raise wages. and that has been the missing ingredient in this recovery. yeah, there haven't been jobs, and that's been a problem for a decade. but for those with who have had jobs, we haven't seen real wages rising. the hours haven't been there. the wages haven't been there, and we need to get back to that. >> dean, you probably won't agree, but i also think consumers are as conscious about regulatory problems.
they know that companies are worried. obamacare is a deterrent to hiring. maybe they love the minimum wage -- >> maybe they're actually spending. i'm not looking at what they're saying. they're actually spending at very high rates. we have no reason to expect them to spend any more than they're doing. the savings rate -- the only time the savings rate has been lower was at the peak of the bubble in 2000, at the peek of the peak of the bubble in 2005, 2006 and 2007. people were spending based on fictitious wealth. the same with the housing bubble. again, you can look at the data. it's very clear on this. >> all right. doug, i'll give you the last word. on consumer spending, i mean, yeah, dean is right, they're spending, but growth of consumer spending is 2.5% on average. the growth of the economy. >> right. >> i mean, where's the 4% to 5% gdp growth? where's the 4% to 5% consumer spending? where's the 10% to 15% long-term business investment spending? that's where -- that's what i'm looking for. >> i think that's exactly right.
because what we've got is an economy muddling along at 2% to 2.5%. the wage growth's been slow enough that yeah, they're spending wages but there's no real growth there. you need the spike in business durables, in investment. those are characterized by confidence that looks like 2007, confidence that looks like 2000, not like the confidence we have right now. >> we had some of it in the '80s, a lot in the '90s. i don't disagree about the bubbles, but somehow i don't think the bubbles explain everything, but i don't know. we'll revisit it. both of you, god bless. now, folks, the markets had a pretty good day. they bounced back after a bad friday and monday. will we really see any direction until first quarter profit reports come in next month? remember, profits, the mother's milk of the stock market. we are looking at your money next up. and don't forget, the full interview with texas governor rick perry. he was in fine form. it's coming up in just a few minutes. > and guess what? he thinks president obama has a relatively easy path to leaving a good legacy. all right. stay with us.
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you guys are among the earliest, as i recall. >> it's been seven years. >> to come on this crazy place, but we appreciate it we have. we love you. jeff, let me start with you. the market is sort of backing and sliding all year. what's it waiting for? >> i think it's waiting for profits. i think it's waiting for the profit report -- listen, over the last five years, all of the gains we've seen in the stock market have come during the earnings season. between earnings seasons have been zip -- >> no kidding. i didn't know that. >> nothing. >> the profits are really the mother's milk of stocks. >> you've been saying it. it is absolutely the truth. >> did you know that? >> i did know that, absolutely. >> faethat's fascinating. >> there's something else going on here, too. the ten-year treasury yield is really the key here. janet yellen has created a sense that the fed is going to manage this smoothly. but stocks are still reacting to what the federal reserve board does and watching the ten-year treasury very, very closely. and i think the dollar's going to be a key player moving forward as well, in a positive way, i might add. >> i know we shouldn't do this
on nighttime tv, but yield spreads are narrowing, flattening. doug wrote this up, the 10s to 5s and then i look 10s to 2s. they flatten by about 60 basis points. "a," that can't be great for banks even though banks have had a good run. but "b," does that have any economic significance? >> historically that would suggest a slower pace of economic growth. the truth is economic growth hasn't kept up with as wide as the yield curve has been. normally we'd expect to see 4% or 5% growth. we haven't gotten that. we can collapse a little bit and still see better growth. >> i don't see right now any particular political issues influencing the stock market. there's not going to be any tax bills. nears n we're going to wait till the election and see what happens. maybe republicans will take the senate. maybe they won't. i get that ukraine -- if russia militarily invades ukraine, all hell's going to break loose. >> sure. that's geopolitical, though.
>> but that's geopolitical. so do we just back and slide? i mean, what happens here? >> you're right and you're wrong. if you look at the history of midterm elections, the market always corrects in midterm elections, often pretty sharply. in fact, the average correction in a midterm election has been about 20%. i don't think we're going to get that this year as much as 20%. and the reason i don't is the market's looking forward to what they expect the result will be. and that is that the republicans do very, very well. and that that will bring about some positive market changes, maybe impact obamacare, lessen the damage that that's doing. maybe less red tape. leg regulations. i think we'll get some sort of pullback as that election uncertainty comes into play. i think it's not going to be as much as what we've seen in the past. >> we were looking at this confidence consumer chart, jeff. maybe we'll put it up again. i don't want to obsess about it. maybe i am. the stock market is running in some sense the same way. it had its biggest peak in 2000. a second peak in 2007.
we're close now. we've gotten pretty much back to the all-time highs in the stock market. but we haven't, you know, gone through it. and there just seems to be a link between the lackluster consumer confidence -- for you, stocks rally. i'm not saying that away. but it's just like something's missing here. we're not -- what is missing hooer? >> what's missing is the individual investor, i think. what we've seen is buybacks really be the big driver of this rally we've seen so far. individual investors only began to come back very late last year, tepidly stepping back into the markets. they've been boycotting stocks for almost five years now. that consumer confidence threshold, we've finally gotten to the point where they're starting to feel more confident again to put risks of money in the stock market. >> will they come in? >> i think they will. >> let me add one thing. >> sure. >> you mentioned janet yellen. are they worried about the fed, or are they worried about interest rates in >> i think individual investors are worried that we're in a dream world. that the federal reserve board has created this artificial complacency, and everybody looks around, and everybody feels
okay. and the stock market's done well. individuals, they don't feel that in their own pocket book. i mean, the average consumer hasn't done as well as investors have done or homeowners have done. so they look around at the economy, and they don't feel that confident. >> i don't see any exuberance. i don't see any rational or irrational exuberance. i've got to get out of here. >> individual investors, they're not that bullish. >> it's just an odd period of time. there's not enough optimism. >> a second wind. >> thank you so much for the last seven years. you've kept me around a long time and i really appreciate it. >> you're both great. folks, hang on. we've got the big interview with texas governor rick perry. it's up next on the show. i think he's starting to look more and more like a very serious contender for the white house in 2016. but i want you to watch and see for yourself. rick perry joins me here on the set next up on "kudlow." hi, larry, bob pisani here. thanks for having me in your
show for all these years. i'm not the kind of guy who looks backwards. i like to look forward, and i'm looking forward to seeing you more in the daytime right here on the floor of the new york exchange would you can give us the benefit of your knowledge on politics, but more importantly to me, the benefit of your knowledge on the markets and the global economy. oh, and one more thing. when you do come down here to see me, try not to dress so well. you know, i try with the pocket squares, but you always look a little more dapper than i do. it's tough competing against you, old friend. but it's never been boring. love you, larry. i've always had to keep my eye on her... but i didn't always watch out for myself. with so much noise about health care, i tuned it all out. with unitedhealthcare, i get information that matters... my individual health profile, not random statistics. they even reward me for addressing my health risks. so i'm doing fine... but she's still gonna give me a heart attack.
welcome back, everybody. i'm larry kudlow. we welcome an old friend again to the show, texas governor rick perry. ran for president in 2012. and many of us believe we i will run again. governor perry, as always, sir, thank you for coming. >> good to be with you, larry. thank you. >> i know you left the door open for president. i want to come back to that later. >> sure. >> i just want to talk about big pictures, though, that a prospective president might consider. there's a poll out today, one of the best pollsters in the country for investors, business daily. 65% of those polled believe that america is in decline. and inside the detail is that we have little global influence. they cited places like syria and ukraine and so forth. and you are well aware of what's going on. let me ask you this.
how would a president perry handle vladimir putin and the whole crimea, ukraine, business and in general putin's bad behavior? how might a president perry handle that? >> well, we're going to have a real hurdle -- a group of hurdles on our hands if this president continues to perform and send the messages that he's continuing to send from the standpoint of here's a red line, and then debating, backing up off that as we did in syria and then opening the door for allowing putin to come in and basically take credit for that action. so in libya, in egypt, in iran, we've seen this very feckless, muddled foreign policy. we're seeing the same thing. putin is clearly does not fear the united states. diplomatic policy comes in a lot of different forms. i will suggest to you, we have a
very powerful tool in the united states today. and i would recommend that the president use it now. and that is sitting down with our european allies and clearly telling them not to worry about russia cutting off their gas. we'll supply it. those lng plants that are coming online in texas and other places in the united states, clearly a powerful diplomatic tool that our allies who really don't know where we stand right now, would know without a doubt, we're going to protect not only the home front with energy, we're also going to be there for you from the standpoint of supporting any other nato activities that require to send a powerful message. >> you know, yesterday was the first time -- so interesting to me -- all these weeks of going through this crimea, ukraine, crisis, yesterday was the first time the president talked about natural gas. one additional permit for lng export terminal. you're the oil expert, but how many nat gas -- how many lng
terminals could we, should we be building in this country? >> we've probably got enough that are coming online, being built. i think there was one in oregon that was just permitted within the last few days. but the fact is, the message needs to be clear that we will -- when you look at canada, when you look at the united states and mexico, mexico is going to come on and be a major energy player, and sooner rather than later. >> even private investment. >> absolutely. mexico is going to be a very interesting place. there's going to be a lot of investment going on in mexico. i think the future of mexico is very bright. the north american region may have more oil and gas and energy resources than the whole of the middle east. so using that diplomatically is very important. and i think the president is missing an opportunity. open up the xl pipeline. send the message to the federal lands to be opened up to allow for the exploration, safely, thoughtfully, creating massive amounts of jobs. this president actually could have a good legacy when he
leaves in two years, or he can have one of loss of jobs, loss of foreign policy, and loss of reputation. >> this is the texas model, the red state model, we'll go there. you've already started talking about it. you've been in california. you've been here in new york. you've been in connecticut. you've been in illinois. you're trying to bring people into texas. can the texas model be exported to washington, and can we make the washington, d.c., model the new texas model for the economy? >> well, i think there's a bigger issue. and the issue is do you believe that our founding fathers had the right vision when it comes to the tenth amendment? that washington's supposed to do a few things really well. like foreign policy. i tell people, you know, cogent foreign policy, and heck, deliver the mail on time. preferably on saturdays. but do you believe in that model? that the states are the ones that should be empowered, that the states should be given the
decisions about health care, about transportation infrastructure, about education policy? and the federal government do a few things. i really believe in that. and then let andrew cuomo and rick perry or greg abbott, the next governor of texas, let them compete out there amongst themselves. >> you have this massive obamacare. it's been a political disaster. it's a health care disaster. what specifically would you do? what would a president perry do? would you fix it? would you repeal it? there are some things in there that do poll pretty well. on the whole, though, the thing is kind of a disaster. how would you handle that? >> well, you have to work from the premise that one size doesn't fit all across this country. and washington, d.c., is incapable of putting a health care plan in place that will serve these 50 very different, very diverse states. so if that's your principle, if that's your premise that you're going to work from, you do away with obamacare. and then you basically cut the
strings from all of the red tape that comes from the health and human service agencies back to the state. i think you could compress substantially the amount of money that you send back to the states, save billions of dollars every year, and allow those states to implement the programs. we put personal responsibility programs in place. we put co-pays in place. we'd put a menu of issues out there. >> preexisting conditions, can you make the message, then, at the state level, if that be the case, that the republican party cares about sick people, that the republican party understands there's always been an insurance problem? >> absolutely. and we've done it in the state of texas. it's about access to health care. this isn't about forcing people to buy insurance. access to health care is the real issue here. >> i'm going to read your cpac speech. a little rebellion now and then is a good thing. now, i knew thomas jefferson, and i remember when he said that. but you're quoting thomas jefferson. is this the kind of rebellion you're talking about? >> yeah. look at what our founding fathers meant for the states to be laboratories of innovation,
to compete against it. it clearly says here are the enumerated items in the constitution the federal government is to take care of. everything else, states, that's your responsibility. i'm looking in there, it doesn't say anything about federalization of classrooms. it doesn't say anything about nationalization of health care in our constitution. those are state functions. and let the states -- listen, the president of the united states, three weeks ago, i think, we were at the white house with democrats and republicans. and we were talking about the health care bill. and he basically said, when asked about given more flexibility to the states, he basically said, i don't trust you to deliver health care to your citizens. >> wow. >> what a powerful message to democrats and republicans. these are men and women who have been elected by their own citizens, but we don't trust you. >> even though he's changed everything. he's practically done away with his own health care plan. let's go back to the presidential thing where we
began. you are saying you are leaving the door open, okay. is that still true? >> sure. >> you said that on this show, obviously. >> sure. and i've said that many times. i haven't made a decision. it's another ten months of being the governor of the state of texas. january of 2015. sometime in 2015, i'll sit down, make the decision and announce it. >> with a went wrong in 2012? >> oh, a host of things. but actually, 2011 was when the real issues started. i had major back surgery six weeks before the -- you've had that procedure done. >> i have. i have. >> and you know that -- >> 18 months, minimum, for you. >> six weeks is not quite enough time for you to heal up and be performing at a high level. it was a very humbling experience for me, larry. i will tell you that. i thought gosh, i've run for governor of texas four times. what could be harder than that? well, there is something harder than that. it's called running for the presidency of the united states. preparation is important. >> be prepared. >> yes, sir. >> can you make the case -- can you show a new image that the republican party is not just the
party of older white males? can you do that? can you do that nationally? >> absolutely. and i think the republican party can do that. this is about laying out a clear vision. it's what we do in the state of texas on a regular basis. we marry each other. mexico's our number one trading partner. we've been doing business. yes, we've got challenges. we've got a border that has to be secured. but they have a president who is changing the law to allow for the private exploration of energy in mexico. there is great potential there. i suggest that singularly may change the immigration debate as quickly and as powerfully as anything that happens out there. a lot of mexicans who have come here because of the allure of work are going to go home to better jobs and to be closer to family. and that substantively changes the immigration debate and how we deal with individuals who are
here i will loo llegally. >> we'll leave it there. governor rick perry of texas. as always, great stuff. many thanks. up next on "kudlow," an all-star panel waiting in the wings to react to what the governor just told us. howard dean, chris ruddy and terry jeffrey join us right after the break. i'm kudlow. please stay with us. on my journey across america, i've learned that when you ask someone in texas if they want "big" savings on car insurance, it's a bit like asking if they want a big hat... ...'scuse me... ...or a big steak... ...or big hair... i think we have our answer. geico. fifteen minutes could save you fifteen percent or more on car insurance.
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welcome back to "the kudlow report." i want to get some reaction from our seasoned veterans on the rick perry enter rinterview. howard dean, chris reddy, president and ceo of newsmax, soon to be launched newsmax tv. christopher, i want to go to you. were you looking at a president? do you think rick perry can make up for the mistakes of 2012? he seems very assured, seems much more knowledgeable. what's your take on perry? >> absolutely. first of all, americans are very forgiving. they'll judge him on his record. he did screw up by his own admission. there were apparently, as he said, some health issues, larry. i think rick perry has a great, tremendous record as governor of texas. but he also is a forward-thinking republican.
he reaches out. he's done a tremendous job there. so i think americans will gravitate to him, and i think he would be one of the front-runners. and i think the polling data shows that he is. >> howard dean, it may be an odd thing to say, but i think that -- i think governor perry is going to be one of the front-runners. i'm not making a choice. it's way too early for that. but i want to get your take on it. he's running on a platform of jobs and growth and texas as appear example of where to do business. the so-called red state republican model. i would guess, howard, you hate that model, but i think it's going to be very effective. >> well, we're going to get to the model first in a minute. first i just want to say, even though you and i don't agree on a lot of things, i think you're a terrific guy, and you've had a great show. i really appreciate being on one of the last ones you're going to do. >> thank you. >> thank you for all you've done. >> thank you, howard. i appreciate that. >> i think rick perry's got a problem. i think he did a good job on the interview on your show, but the fact is, he's talking about let the states do health care. 22% of his children in texas have no health care. 26% of his adults have no health
care. he has the highest graduation failure rate of any state in the entire country including places like mississippi. so he, in fact, does not have a record. and most of the jobs he's bringing to texas are lower-wage jobs. the average income in texas is actually lower than it is in vermont which i found to be shocking. this is a lot of political spin. but i don't think he's going to be elected president of the united states. >> howard, if things are so bad in texas, why is it that 1 million new taxpayers went to texas? 1 million new taxpayers went to florida, and 1.5 million taxpayers left the state of california? people can't pay for these services. they can't pay for big government. and they're voting with their feet. that's what the public is saying. >> i think there's a lot of growth going on all over the south. that's been going on for 20, 25 years. but you look at the creation of high-wage jobs, those are still going on in places like silicon valley. >> terry jeffrey, let me bring you in here. look, the governor perry
statistics for texas, they've created probably one-third -- almost one-third of all the new jobs in this country in the last ten years. the average wage from what i gather is above the minimum wage. substantially above the minimum wage. so terry, are you looking at a front-runner? i mean, there's scott walker. there's john kasich. there's a lot of people out there. the question is before the house tonight, has rick perry made a comeback? is he in the process of making a comeback? >> sure, you're looking at a serious viable candidate. by the way, i want to echo what governor dean said. congratulations for the great show. you've done a wonderful job, my friend. >> thank you, thank you. >> on the subject of governor perry, i think he's got an excellent message, larry. his idea of federalism. the federal government is limited to those powers enumerated in the constitution, the rest of things is a competition between the states. and his state is definitely beating my old home state of california. people out there talk about moving their businesses to
texas. they do it. they see their friends going there and succeeding. and the competition of freedom, rick perry's state is winning. jerry brown's state is losing. >> chris ruddy, governor didn't elaborate so much, but he did say people are going to move back to mexico because their economy is improving. but i think perry is sensitive. he gets 40% plus of the latino vote. i think he's sensitive to the immigration issue. and i think that's the direction he would move in. not all republicans agree with me. i don't think terry jeffrey agrees with me. but i think the gop cannot win without immigration reform, chris. >> i agree. i think that the republican party should become the party of immigration. we're the party of lincoln, the party of inclusion. we want legal immigration. and i think many of the illegals that are here, i think we want to have a situation where they pay taxes. i think that there should be some status, not necessarily citizenship, and i think rick perry gets it. that the future of the republican party is bringing
people in. so and jeb bush has a very similar sentiment, and i think he would be one of the potential front-runners as well. >> howard dean, again to you, perry. i think the guy wants to expand the party's base. i think he understands that this image of older white men can't win. that's why i think he's going to be big trouble for democrats. >> well, again, the problem is his record doesn't stand up. as i said, they have -- if you have 22% of your kids with no health insurance, that means you've chosen, as a public policy, not to make sure that kids have health insurance. i don't think that's going to fly. the texas legislature has made idiots of themselves in terms of what they've had to say about women and women's rights to make their own decisions about their personal lives. that's going to be a big issue. i don't think greg abbott's going to be the next governor of texas. i think wendy davis is going to come from behind and win that one because i think texas, people want something different, and they're going to get it. and i'll tell you one thing, texas is not such a red state.
there's a democratic mayor in houston. there are democrats in a lot of them in dallas, austin, which is where a lot of the jobs are going, is probably the left of silicon valley. so it's a very complicated, interesting state. >> but democrats -- i love -- i mean -- you may have a point in austin. you may have a point in austin. i'll grant you that. but i think texas democrats in houston and texas democrats in dallas would be republicans in every other state including vermont. that's what i think. seriously. >> you know what -- i sort of agree with howard and you, larry, that texas is changing. the country is changing. blue states are staying blue. and red states like florida and texas are becoming bluer on the way to becoming blue. the answer is not to become like the blue states, which all have low economic growth, where people are leaving. the tax base is fleeing. the answer is to take those very good states that are low tax states, improve them, and reach
out, figure out ways to cover people with insurance. howard keeps on saying 22% of the kids aren't covered in insurance. i think if you go into a lot of the blue states, you'll find a very high percentage of children aren't covered. >> that's actually not true. >> all i know is i think that the red state republican model of low tax and spend and regulate is going to be a very big issue in 2014. but especially 2016. howard dean, thank you, my friend. i appreciate it. >> thanks, larry. >> christopher ruddy, see you soon. terry jeffrey, thanks for everything. folks, this is a major day at the supreme court for obamacare. cnbc's hampton pearson is going to tell us how the oral arguments went down in the hobby lobby case. very, very important. next up on "kudlow."
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very serious challenge to obamacare coming before the supreme court today. the hobby lobby, a family-run small business in oklahoma, says its freedom of religion is being infringed upon because of the mandate requiring it to provide contraception in the health insurance plans for all its employees. hampton pearson joins us now with all the details. good ening. >> larry, this is the second major constitutional challenge to obamacare. there were demonstrators both for and against the two family-owned businesses that say covering certain birth control methods violates their rmgs beliefs. the oral argument inside the court focused on whether prof -
profit-making businesses have rights. the supreme court has never ruled on that before. the three women justices questioned whether a favorable business ruling would open the door to piecemeal challenges to things like blood transfusions or vaccinations based on religious grounds. justice anthony kennedy so often the likely swing vote once again he really challenged both sides, pointing out if the government's logic for fail, it's possible a corporation might be required to pay for abortions. but he also expressed concerns about the rights of female employees, if their employers, for example, might be conservative and order conservative dress based on their religious beliefs. chief justice roberts suggesting the courts could set limits for family-run businesses. look for a decision in june. court watchers point out we could be looking at several years of other kinds of challenges to obamacare. larry?
>> many thanks, hampton pearson. >> you got it. >> that's it for this evening's show. i'm on the religious liberties side of that one. tomorrow night i'll be joined by wisconsin governor scott walker and wisconsin senator ron johnson. i will hope you'll join us, too. much more on "the kudlow report." co: i've always found you don't know you need a hotel room until you're sure you do. bartender: thanks, captain obvious. co: which is what makes using the hotels.com mobile app so useful. i can book a nearby hotel room from wherever i am. or, i could not book a hotel room and put my cellphone back into my pocket as if nothing happened. hotels.com. i don't need it right now. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative.
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