tv The Kudlow Report CNBC December 4, 2013 7:00pm-8:01pm EST
added to the s&p, but watch this group, twitter, yelp, linked in, google, they're ready to run. i think google is the cheapest of the stocks i mentioned. there's always a bull market somewhere and i promise to find it for you right here at "mad money." i'm jim cramer. see you tomorrow. president obama argued today that income inequality is the definie ining challenge of our . sorry, mr. president, the defining challenge of our time is to restore strong economic growth. in other words, the rising tide lifts all boats. we don't need redistribution tax hikes, we don't need state run health care, more spending, lower the incentive barriers and bring us growth. here's another big problem for president obama, the millennials are abandoning him and obama care in droves. a new poll shows plunging
support from young people. because the obama care website is in such bad shape, the government now has offered to bail out insurance company profit and losses, and in a possible second bailout, provide the insurers with guest estimates of health care subsidies. this whole story has gone haywire. all right? all of this and more coming up on "the kudlow report" beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we're live here at 7:00 p.m. eastern, 4:00 pacific. president obama tries everything we can to get the attention away from the obama care, anything. today he went back to his old stand by, the rich. for more on the president's remarks about, quote, income inequality, end quote, let's bring in nbc's own steve handelsman. steve. >> reporter: larry, thanks.
this was president obama trying to refocus on helping the middle class that he said relative to the rich was in a long, slow slide from the 1970s and seemed to be doing better when housing and wall street got super hot six years ago. >> when the music stopped and the crisis hit, millions of families were stripped of whatever cushion they had left, and the result is an economy that's become profoundly unequal. >> mr. obama in professor mode had stats. america's top 10% now earn half of all u.s. income, up he said from 1/3. ceos he said used to make 20 to 30 times what workers do, now he said make 273 times more and the top 1% of americans who have net worts now 288 times what a typical u.s. family has. >> that is a dangerous and growing inequality and lack of upward mobility that has
jeopardized middle class america's basic bargain, that if you work hard, you have a chance to get ahead. >> reporter: he wants at least a higher minimum wage and an extension of emergency unemployment benefits. the president said when budget talks get going obama care will not be on the table because, he said, his plan is ending one of america's worst inequities, unequal access to health care. larry. >> thanks very much, steve handelsman. we appreciate it. i'm going to say it again with all due respect to mr. president, growing income inequality is not the greatest challenge of our time. we need strong economic growth. that's the biggest challenge. i need a rising tide to lift all boats and help all-americans without these class warfare divisions. so let's talk. joining us now is former chief economist for vice president biden, jared bernstein.
he's at the center of budget and policies. jim pazakukas is with the american institute and cnbc. jimmy p., what about income inequality. there's a lot of studies out there and they show in the last 20 or 30 years that hasn't happened. that's not true. it's a bogus issue. >> i don't want to have study versus counter study. income inequality, the top 90% and 10% have increased. a lot of disputes about how high inequality has gone. the president fears all of the statistics about income inequality. there is no evidence that, a, income inequality hurts income and, b, there's no evidence that income inequality has led to the middle class stagnation. you don't have to look at the studies. there's a country that's been running the obama playbook for
20 years. it's tough to fire people. that country is called japan. how has their economy done the past 20 years, terrible. that's the obamanomics there. >> what do you think of jim p.'s challenge? >> i think that the issue that you're missing there was really at the heart of his presentation and, again, there's very strong evidence for this, is it's not so much that inequality hurts growth, although there were references of that in terms of financial bubbles. by the way, there's good research that connects the lack of oversight and the financial problems that we had. what he was talking about was a connection between high income inequality, stagnant incomes for the middle class and diminished opportunity, diminished opportunity. that's what you have left out. that's essential because, look, the three of us will all agree that we in america don't push
for equal outcomes but we do believe there ought to be some equality of opportunity. when inequality gets too high, opportunity gets squashed. >> that's wrong. i know that's the president's line that income has been stagnated for 40 years. that is, a, completely wrong. a more accurate number, incomes have gone up ft. meadian family 40 or 50% since the late 1970s. as far as income ability goes, income ability is in the top 20% could be better. there has not been a substantial change in u.s. economic mobility over the past 50 years. >> jared, i want to make one other point, by the way. this is not just an economics issue. in places where the president said today people have less of a chance at the low end of the ladder, okay. i want to include the cultural issues here. family breakup. family breakup. marriage breakup. no role models. no discipline. in other words, i'm not sure
that raising the minimum wage is going to help deep seeded cultural problems in our cities and elsewhere, and that's part of my disappointment with president obama because i think he is jerry rigging a case that is not there to be made. >> look, first of all, i'm in total agreement that raising the minimum wage isn't going to solve all our cultural problems. what it will do is give a bit of a boost to low wage workers. jimmy and i have a big disagreement on the facts. there is some evidence of diminished mobility. there's very strong evidence of a stagnant middle class income. to be arguing about that -- jimmy, wait a second. >> oh, come on. >> if you two want to go off in your fantasy land, please. >> they're not going to -- they're not going to disrespect the opinion by trying to shut us up. >> i'm talking about well-established research by the congressional budget office, by the census bureau. >> that's what i'm talking about, too. >> yeah, well, look. the president will be fact checked, i'm sure, in the
washington post. >> and by me. >> if that comes up wrong -- >> gentlemen, gentlemen, i don't want to get too deep in numbers. i want to put this out there. some studies have shown that the middle class has diminished, okay, but that diminution is the higher levels, not the lower levels. the 18% drop in the middle class, this is over this multi-decade period that jimmy p is talking about, okay? but it turns out that moving up into the higher classes. so it just doesn't make sense. >> we'll show you numbers on the current economics in just a minute. >> go ahead. >> sorry. you just have to look at the numbers that he was citing in the speech today that are widely accepted by academics who are all over this. the likelihood that someone in the bottom of the income scale will get to the middle or the top over their lifetime, very low. the likelihood that someone in
the top will stay there, very high. if you compare that to europe and scandinavia, it's lower. >> jimmy, do you disagree with what i just said? >> in the bottom 20%, mobility could be better. comparing us to these niche economies is not -- >> jimmy, you've cited the berkhauser study. see the other side of the study, too. if you go back three decades, go to the 1970s argument that obama makes, the bottom quintile went up 32%. now that doesn't mean they've reached nirvana. that doesn't mean the social mobility is all that we would want it to be. i would argue because of this. don't tell me they haven't gone up. of course they have gone up. the data is very clear. >> one last point. >> the middle quintile has gone up by about 1/3. hang on.
i want you to hear -- hang on. i want you to hear a different perspective. take a time-out, catch our breath, including me. the president said something today that really stood out. here's what we say. >> when the music stops and the crisis hit, millions of families were stripped of whatever cushion they had left and the result is an economy that's become profoundly unequal. >> all right. so, we asked our own wealth expert here at cnbc, robert frank. we asked him to check that for us. did the poor really take a bigger hit during the financial crisis? robert, what have you got? >> thanks, larry. well, president obama said in his speech today that rising inequality is hurting the economy. he said inequality leaves the average family with less to spend be which hurts consumption while more concentrated wealth is less likely to result in consumer spending. now the problem with this is that inequality today is lower than it was when the economy was much stronger. if you look at the two biggest
spikes in inequality over the past 20 years, both came during economic booms. the first was in '99 and 2000. the second was 2006 to 2007. in fact, the top 1% had more in 2007 when unemployment was only 4.5% than they do today. that's because the wealthy lost more in the crisis than the rest of america. average incomes fell 12% during the crisis but incomes for the 1%, they fell three times as much. now this is not to say, larry, that inequality is not a problem and it has been growing since 2009 with all of that easy money from the fed, but in the past inequality has been a by-product of rising stock markets and not a direct cause of recessions or unemployment. back to you. >> that is exactly right. thank you very much, robert. i want to say this. when a lot of these measurements are measured, the quintiles, they do not, they do not count the stock market wealth that
ordinary people have in their pension funds or their 401ks, including union members. many of those ignore the wealth effect. the rich, on the other hand, have more direct investments. i just want to say -- >> can i ask you something, larry? >> the income inequality numbers, they ignore a lot of things. they ignore taxes, they ignore the changing size of families, they ignore transfers, fringe benefits. they ignore everything other than market income. >> here's the thing. i guess there are arguments on both sides of these numbers. i think you guys have it wrong, but let me just ask you this. if i told you that the medium compensation or the median family income tracked productivity 1 for 1 from about the mid '40s to the mid '70s, and then it split off. i'm not saying that median fell but it grew much, much more slowly with productivity when it actually had tracked that
measure for decades, that median families doubled between mid '40s and mid '70s and has been essentially flat since then. do you disagree? do you dispute that? >> i disagree. here at aei we have the fed's former productivity expert who absolutely disagrees with that analysis. >> so you can always find someone who disagrees with something. >> i can always find the truth. >> that is a widely accepted fact. >> let me move on. >> this just is wrong. >> jimmy's point, jimmy's point, so much of this stuff from the two french socialists and other studies leaves out important fringe benefits, important retirement. they leave out the earned income tax credit, for example. these things are so -- >> you have to look at the report that says all of that stuff. >> we did. that looks much better. jared, let me ask you this. i listened to the president's so-called solution today. he wants to raise the minimum wage, right? he wants more infrastructure
spending. he wants to end tax loopholes. he wants more spending. can i just say how totally boring that is? that's all he ever says. the guy either needs, a, a new speech writer or, b, a new policy or preferably both because he can't keep standing up with the same four silly bullets and say that that is going to improve the american economy which is producing the worst economic recovery in the modern era. >> i wouldn't expect you to -- i wouldn't expect you to like three of those four, but the fact that he has consistently talked about lowering the corporate tax -- >> but he didn't talk about that today. >> he did. >> he just talked about closing loopholes. >> he's referencing his plan to lower the corporate rate and broaden the base. >> then why doesn't he -- why doesn't he ever talk the language of growth, not just to a supply sider like me but men and women and business. >> i can explain that. he's too busy talking about the pay differential between
american ceos and the average worker. when you talk about doesn't fit into that narrative of the day. >> in the context of -- quickly. i want to raise this, larry. you're all about growth and i am, too. the problem is that as the living centers of so many families have become disconnected from growth, the rising tide isn't lifting all boats, it's just lifting the yachts. you have to talk about disconnectedness. >> he doesn't have a growth. >> i want a rising tide to lift all boats. that was john f. kennedy's mantra. that was ronald regan's mantra. sometimes that was bill clinton's mantra. i want to hear that from mr. obama. he doesn't. he doesn't. he is trying. jared, i'm sorry, buddy, you know how much i respect you. >> same here. >> this president goes too much for redistribution. he just does. it's in his bones and he creates these divisions and today was the same old boring speech. i've got to tell you, either, a, get a new speech writer, b, get
a new policy, preferably both. this is not the last. jared bernstein, the best of the best, jimmy p., thank you, gentlemen. i'm kudlow. i'm calm noun. i'm better now. president obama hosted a big white house youth summit this afternoon, but guess who wasn't invited? you're about to meet the national chair of the college republicans who's going to tell us why she was stiffed and why millennials are deserting obama and obama care in droves. speaking of obama care, we have another raft of new problems with the health care law to report today. that includes what looks a bit like a bailout for the insurance companies. i don't like that if it's true. crony capitalism is not good. we'll look at it later on in the show. for now, please don't forget, free market capitalism is the best path to prosperity. just get rid of the tax and regulatory barriers to growth and we'll be all better off. "the kudlow report" is coming right back.
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college of republicans and that because her application to attend was rejected. i am shocked, shocked at this. so, we had to ask her to come on the show. here now is alex smith, national chair of the college republicans. alex, thank you for coming on. i appreciate it. >> thanks, larry. >> let me just ask you, when you applied to this gala white house event, did the application ask you what political party you belonged to? >> it did not, but my e-mail address gave away that i worked for the college republican national committee. >> okay. but if you had gotten around that, you think you would have had a better chance of getting invited or are these all just campaign workers? >> you know, i think my theory on this is that the president has nothing left to give young people so he can't have diverse voices in the audience because there's no room for a genuine discussion on this issue. >> let's go to this issue now. you have a new poll out by the harvard school of politics. >> yes. >> it's a nasty poll. obama's approval rating for people 18 to 29, young people,
18 to 29, his approval rating is down to 41%, which, by the way, tracks it for all people. on obama care his approval rating, alex, is 34%. now those are real low numbers from a major obama constituency, the so called millennium young people. why is his approval plunging? >> i think it's pure sticker shock. i think that younger voters, when they're able to see the exchanges, when they're able to see the plans are seeing that their premiums have gone up nearly 200% and they just can't afford it. this is a generation that has more educational, personal and national debt than any other generation in history so they're just doing a cost calculation and saying it's not worth it. >> is some of this, by the way, your generation is better at computers and technology than my generation sure is. i'm a baby boom guy. is it because the website was so bad, so poorly designed and the president kind of lied about it? is that part of the issue here? just like uncool website? >> well, i don't think the
president did himself any favors when he compared it to websites that millennials use every day like kayak and other websites where younger voters typically are because those websites work. those websites are clean. the interface doesn't crash and i think that it certainly didn't help from a cosmetic standpoint the president's argument that health care would be beneficial to everyone and would be working on time. >> all right. alex, another question. i'm trying to understand this whole issue. i mean, the guy's just got real bad numbers among one of his key constituencies which tells me there's great political change going on out there. did his falsehoods, in other words, going out there for several years and saying if you like your insurance you can keep it, if you like the doctor, you can keep it. turns out that is simply not the case. did those falsehoods hurt him among young people who like to be close to as pure as the driven snow? were they offended by that? >> without a doubt. this is a generation that especially values authenticity,
and the president did not display that when he told the american people if they liked their plan they could keep it. if they liked their doctor they could keep it. that's sort of the next wave of disappointments coming in this whole health care rollout. young people recognize that. they understand when they've been lied to, and unfortunately this president did so when he told people that they could keep their plans. now we see younger voters, a lot of whom are in college and have these so-called junk plans through their colleges or universities getting thrown off of them. >> yeah. i think a lot of young people i've talked to were just offended by what i'm politely calling falsehoods. i think that really killed the guy. i think the whole operations killed the guy. alex smith, i would invite you if there's a republican conference, i would love to have you. i'm grateful and thankful that you came on our program. >> thank you, larry. >> all best of luck. you're welcome. check this out. according to the federal reserve, this was a big thing for the nice economic boost.
cnbc's seema mody will talk about a nice economic indicator next up on "kudlow." [ male announcer ] here's a question for you. if every u.s. home replaced one light bulb with a compact fluorescent bulb, the energy saved could light how many homes? 1 million? 2 million? 3 million? the answer is... 3 million homes. by 2030, investments in energy efficiency could help americans save $300 billion each year. take the energy quiz.
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that's a lot but it's still less than the 150 billion he had been asking for. icahn says he likes apple's management and tim cook but thinks the company is sitting on too much cash. moving on. massachusetts senator elizabeth warren says she will not run for president in 2016. she held a press conference in boston today. warren's name had been floated among some on the left as the more liberal alternative to hillary clinton. the fed's big book came out today and the sox world series victory gave them a boost. hotels and restaurants exceeded their usual expectations. the red sox deserve a lot of credit according to the fed. you must be happy. you have jacoby ellsbury going from the red sox to the yankees. >> boy, am i happy. it's nice money. carl icahn may want to buy a piece of that. i'll say that's great. i think boston deserved it after what they went through with the
may marathon bombing. now just how bad is the obama care website even now? well, it's this bad. turns out the payments mechanism is so off that insurance companies suggest a bailout. i don't like the sound of that. we need to explore it next up on "kudlow report." ♪ hmm. mm-hmm. [ engine revs ] ♪ [ male announcer ] oh what fun it is to ride. get the mercedes-benz on your wish list at the winter event going on now -- but hurry, the offers end december 31st. [ santa ] ho, ho, ho! [ male announcer ] lease the 2014 ml350 for $599 a month at your local mercedes-benz dealer.
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welcome back live to "the kudlow report." i'm larry kudlow. the markets closed down for the fourth day in a row. economic news is pretty good. we'll talk about what this means for you and your portfolio. how in the world does senate democratic leader harry reid get away with this. we're going to have that gory story for you in just a couple minutes. now obama care is supposed to be working, okay? supposed to be working. but i want to know, what about the fact that millions of americans are going to be forced to find new doctors, the fact that insurers still aren't receiving accurate enrollment data, the fact that we haven't finished the payment system yet, the fact that there are security
risks and can be hacked into more than ever before. what exactly is working, mr. president? that's what i want to know about. and i've got some questions of my own about this insurance company relationship. let's go with dorian warren, columbia university professor. we welcome back bob luschefsky and scott got leeb who managed to survive a congressional hearing today and doesn't look any worse for wear. thank you very much, gentlemen. bob, let me go to you first. i've got some questions about this relationship now between the insurance companies and the government. you've got to help me. first of all, i am reading that with regard to the insurance renewals that president obama flip flopped on from cancellations to renewals, that somehow the government is going to cook up an idea, plan, where the government is going to share in the profits and losses of the insurance company over the next
three years. now i'm reading this and i need you to explain this because there's something about it that i don't like. >> well, it's one of these things, larry, if you had read the entire bill, you'd of found t. it's nothing new. it's in the legislation. it's called the reinsurance provisions. there's a tax out there that's going to collect $25 billion over the next three years. it's a tax on everyone who has health insurance pretty much, and that money goes into a pool that is paid to the insurance companies to reinsure them or help them sustain the losses that everybody expects we're going to have in obama care for the first three years. it's always been there. it's one of the things that went into the law to encourage insurance companies to actually provide the insurance. what you're hearing now is that the administration might actually tweak that. we don't know what that means. because of the way they've changed the risk pool. as you know, the insurance
companies thought that all of these canceled policyholders were going to go into the exchanges, it would make the loss situation look better for them. the president at the last minute jerked the rug out from under them on that. so they're talking about tweaking it. larry, this $25 billion reinsurance fund has been there from the beginning. it was in the bill. >> i have no doubt you're right, and i do recall this, but it just kind of sounds like to me, i don't know, the insurance companies met with the president, what, twice in the last couple weeks? i mean, it has a certain bailout feeling to it, and that's the part. dorian, let me ask you about this. the president flip flopped on the whole issue of the mandates and the cancellations and he got clobbered politically so he says, okay, go on ahead and renew. is this in addition to what bob is talking about? is this a new financial contribution? how does a government share in the profit and loss of the insurance company? that sounds very socialistic to me. >> no, it's ensuring that the
industry can still be strong in the midst of a major transformative policy change and it's creating fairness so that those insurance companies in terms of losing customers because the assumption was that some would go into medicaid or other, you know, government sponsored health insurance, it's ensuring that they don't lose so much of their bottom line to start to drop people and not be profitable. so it's actually, yes, it's social is stick but, you know, most business is social is stick in this country. we provide tax breaks. >> a lot of businesses don't have uncle sam over their shoulder making up for profits and/or losses. let's ask scott. scott, this isn't a bank bailout, is it? >> well, there's going to be a bank bailout of sorts. they're going to back stop the insurance companies pretty soon. they've announced that they were going to essentially back stop the insurance companies for any losses that they have because all of the back end parts of this website haven't been built yet. >> right. >> when people actually enroll,
they're not going to be able to pay the insurance companies the subsidies or premiums that they're due. the insurance companies might not honor the contracts, might not be paying the providers if they haven't been paid yet. what the federal government is going to do is pay them what they think they're due until they can get the back end portion figured out. >> this is the 834 payments mechanism -- >> right. >> -- which is all screwed up and bob has been warning us about for weeks and weeks and weeks. but, again, the subsidies are going to come in. dorian, i love that you're defending the insurance industry. this is terrific stuff. very ex-cathedra. >> most utility companies do this, right? they give us an estimated bill and then they come along and check the meters a couple times a year. this is the same thing. they're going to give the government an estimated bill and then we'll fact check and see. the obama administration will
fact check and see and make sure that what they've estimated is the true cost. >> i just don't understand this, bob. an estimated bill based on what? something like 1/3 of the people signing up here have not really signed up because there's no payment mechanisms. we're going to have guest estimates and the government is going to give the insurance company the money and the insurance company is going to hand over the subsidies to people who didn't sign up officially. this is a little "alice in wonderland" for me. >> you know how screwed up healthcare.gov was? well, they didn't fix the back end. it's so screwed up that the federal government, the obama administration, can't pay the insurance companies their share of the subsidy premium. people get subsidies to help buy insurance and the federal government provides those. the administration hasn't built that part of the administration yet. here we are, it's almost january 1. the back -- almost none of the back part of the system works.
they still can't transfer the enrollment records, the 834s accurately. as of monday they're making -- >> how can we go often? >> that's the key point, larry. >> they've opened up the front end and the back end. >> they never built this. >> scott, okay. i just don't understand how anybody -- how do you operate this kind of system? it's like a bowl of jello, for heavens sakes. nobody knows what it ought to be. nobody knows how much it's going to move around, but money is exchanging hands from the government through the insurance companies and now i guess it's going to get to the individuals. there's too much money washing going on here for my taste, scott gottleib. >> i think that's the key point. it's not that this isn't working or there's snafus in the code, they never rewrote it. they never built this out.
they were hoping to build it out this month. it turns out they had to rebuild the front end of this. they never got around to rebuilding the back end. now they have to pay the insurance companies what they think they're owed and claw back if they're paying too much. that should never have happened. >> we don't know. dorian, tell me again. are you satisfied with this? you're satisfied with this? >> we would be upset if insurance companies were not being paid. we would be having a different argument. so this is a fix, right? it's a temporary fix. give us your estimated bill like utility companies and then we will reconcile the true numbers from the estimated numbers. >> this was inevidenceable. >> bob, i just want to know. maybe i'm looking for conspiracies that don't exist, but the insurers met with whomever, in at least one if not two meetings in november. i want to know were deals on this worked out with respect to,
quote, sharing the profit and loss and with respect to, quote, the estimates for the payment of the subsidies? >> larry -- >> are those deals worked out in those meetings? where's congress? where's the oversight? where's the legislative oversight that's going to say this is okay, you know? that's the part that bothers me. it sounds like they're all going all spending taxpayer money. the insurance companies have their hands out. i'm not antiinsurance, but they have their hands out. the government has their wallet out. i want to know who's representing the taxpayers. >> there's no conspiracy. this is a chinese fire drill. that's what's going on here. they're not organized enough to have a conspiracy. i'm sorry. i mean, this is just a mess that they're trying to back their way out of as best they can. >> right. i like that. the chinese fire drill. >> i agree with you. there's nothing wrong with congressional oversight.
yes, we should have congressional oversight on this. that's not the priority of the gop and congress. they're still talking about repealing the thing. their energy would be better spent on oversight of all of these. >> all right. it is a chinese fire drill. i think bob is right, that's a great phrase. the white house ought to use that. >> with all apologies to beijing. >> right. they would probably do it better than we are. there's something about this that isn't kosher. i'm not sure i have the real scope here. more is going to be revealed, that's all i know. when i saw the idea that the federal government is going to share in the profit and loss of insurance companies, that's new information to me. now you say it's been in the bill the whole time. you know more about it than i do. you know what, if i knew that, i would have been opposed to it then for heavens sakes. the insurance companies backed obama care, they backed it. they saw all the new customers coming back in. now that's not happening. now they want to be compensated
for it. i don't know, dorian, thank you. i'm amazed you backed the insurance companies. bob, thank you forex planing this. we appreciate it now. now, another big obama story of the day. ugly story. senate majority leader, harry reid, is exempting his staff. it is nothing but hypocrisy and we're going to talk to former senator kay bailey hudson about that. stay with us, i'm kudlow. [ paper rustles, outdoor sounds ] ♪ [ male announcer ] laura's heart attack didn't come with a warning. today her doctor has her on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack, be sure to talk to your doctor before you begin an aspirin regimen.
it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. now, another big obama story now, another big obama story politically the collapse of obama care has given the republican party a tremendous opportunity for next year's mid term election, but you know what? sometimes the republicans are their own worst enemies. let's welcome former republican senator from texas kay bailey hutch chin son. as always, great to see you. i wasn't necessarily referring to you, i was referring to the generic republicans, but here's a point. judiciary committee in the house yesterday reported on by dan millback from the washington post, whispering or spoken word about impeachment. we're going to impeach. i have to listen.
steve king, doug collins, blake farenhold, steve stockhold. they're talking about impeaching president obama because they don't like syria and they don't like obama care. i'm thinking that would be the nuttiest, dumbest idea at this point that's possible. what's your take? >> i think that diverts attention from the real issues that every american that has had insurance and that has had a letter from their insurance company canceling that insurance or the people who are really suffering, that's the need that we need to address. >> so you -- talking about it's a diversion that i think takes away from the real issues that americans are facing right now. >> i mean, an attempt to impeach president obama would be one of the great political gifts to the democratic party? >> i don't think that is going anywhere. i mean, it's so clear the senate
is controlled by democrats. it's dead in the water. i think that's talking about an issue that is diverting from what we ought to be talking about, which is helping people get through this horrendous situation with the health website, but beyond that, the actual care that they're going to get. i mean, that's what people are worried about. >> i agree. no, i agree. >> i think republicans are trying to fix it. they are trying to talk about the right thing. >> yeah. stay on message. that's all i'm saying, stay on message. believe me, the message -- there's a lot of message here. let me ask you another one. also an ugly story today. senator harry reid has decided to exempt a lot of his staff from the obama care insurance. all of the other leaders have gone along with it. they may not like it. mitch mcconnell has gone along with it, pelosi, john boehner. reid who said he would go along with it is exempting some of his
senior guys? what do you make of that? is that not hypocrite particular call? should that not be an issue? >> larry, if there's anything that makes the american people furious with leaders it's the feeling that they're going to get different treatment from what every other american is getting. you see it in every type of issue as if there are perks that make someone above the law or what everyone else is going through. and what i'd like to see is what harry reid has given to those leadership staff for everybody. i want everybody to be exempt because i want us to have -- to go back to having the choices that we had and the stability of a health insurance program that serves the needs of individual people. you cannot have a one size fits all government program in health care because people are different, thank goodness. >> all right. i agree. one of these days we have to come back on and talk republican party to win the senate, you
know, and capture the mid term is big. has to persuade the country that their health plans would, in fact, help the sick, that would help the sick. i think that's a huge issue, senator. we don't have time for it tonight and i apologize. i think that's something i want to go back and revisit with you because i think that's a very important calling card. >> absolutely. >> does the gop have the compassion to help -- you know, this -- >> we need to have more affordable -- >> right. you're probably better off helping them. making it transparent but you probably ought to help them directly to convince the electorate that the gop is worthy of the kind of sweep that a lot of republicans see coming. >> we need a plan, you're right. >> kay bailey hutchison, thank you. >> always good to be with you. the markets kind of seesawed on that all day. didn't get up, didn't go down. our expert panel of investors are joining us. gee whiz, good news ought to be good news for heavens sakes. the american dream is of a better future,
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more economic news out today. markets went lower. the s&p 500 saw their fourth day of losses. blue chips dropped 25 points. the nasdaq eked out a small gain of less than a point. my simple question is why isn't good news just good news? here now are two very able and smart investment gurus. bob dahl is now chief equity manager and michael santoli from
yahoo! finance. i have a quick list. the adp private jobs boomed. 215,000. the trade deficit narrowed. new home sales were gangbusters. the ism services, little soft but still pretty good in the mid 50s. the fed beige book, pretty darn good. i'm not counting today's little -- this little three or four day thing, it's not a real question. why isn't good news good news? you look at these numbers and you could say to yourself, the economy is getting better. >> yeah, i think that in the end will be good news for the market, larry. in the meantime i think the market's saying, okay, if the news is good, maybe the fed tapers sooner rather than later. i'm not sure i like that so much. that's one explanation. i think another is, hey wait a minute, we're up a double digit percentage. we're up a lot in a short amount of time. we're discounting some good news. i'm tired. i'm going to take a rest. i think that's a bit what's
going on here. >> protect your gains, that's what you're saying. >> here here. >> let me ask you this. okay. so you're janet yellen. you're going to be janet yellen tonight. you're coming in. i know she's not going to run the place until january, but nonetheless, she's kind of coming in. guys like larry kudlow and others say she's the empress of the doves, queen of the doves. i would say a smart thing for you to do if you were janet yellen is cross us up completely, take this good news. let's say you get 200,000 new jobs and start to slow down bond purchases. start it sooner. the sooner they start it, the better off we're going to be and the sooner this is going to pass. what are the odds that yellen surprises everybody? >> i think the burden of proof is pretty high for the first reason you mentioned, above all, she's not running the show in december's meeting. but i do think that she's not very interested in any kind of gestures or in these tactical ploys to try to gain what the
market expects and do the opposite. eventually i do think she's going to have to have one of these moments where she says i need to have two-sided credibility. i need to show that i'm willing to listen to the data and go in either direction. i think the burden of proof is relatively high whether there is a change in december. not whether there's 200,000 jobs but if you get upward provisions from prior months, i think the market is going to think something is imminent if not december then one of the first meetings where yellen is running the show. >> i don't want to obsess about the fed but obviously it's a key player. i don't want to obsess about janet yellen, but i think she could outguess the market and outwitt the market. but here's my basic point, i think at the end of the day it's the economy and profits that will drive this stock market, all right? i think this fed business is overrated, has been for quite some time and i don't even know if it's having any impact anymore with all of these
reserves they're creating going into excess reserve. bob dahl, it's going to be about profits, about the economy. i want to know whether you're a bull or a bear on profits and the economy? >> i'm constructive, larry. the last 40% moveup in the stock market, as we look at it, 30 is pe, 10 is e. we need stronger revenue and earnings growth. consumers doing a little better, gas prices are down. we're getting less bad news out of europe. i think there's some signs of an improvement in corporate capital expenditures. china seems to have stabilized a bit. the sequestration head winds will be less in '14 than '13. you get marginally better growth and marginally better margins growth and earnings growth. >> i'll give you the last word. take me through this. is it going to be harder to grind out a stock market advance? i have 10 or 15 seconds? is that one of the themes, atsz
he going to be harder to grind it out? >> i think it's going to be bumpier if you do remove the perceived -- it will be interest rates. ten year treasury, 3.9 today. that's what the market has to absorb. >> thank you. appreciate t. sorry we didn't have more time to dig in. this is this evening's show. i'm larry kudlow. thanks for watching. i'm still a little skeptical about this whole insurance obama care story. we're going to follow this story as well as we can. we'll see you tomorrow night. ♪
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