tv The Kudlow Report CNBC July 23, 2013 7:00pm-8:01pm EDT
sun shines on apple for a day. i like to say there's always a bull market somewhere, i promise to try to find it for you right here president obama will make a key economic speech tomorrow. so will it be pro growth or tax the rich? are we talking tax reform or regulatory avalanche? new information in the irs scandal my finally show the policy directed against conservative groups came right from the top. has this story jumped the fence into the white house? and his holiness, pope francis, makes a major economic statement in brazil about the sanctity of work. amen. it turns out he's just as worried about youth unemployment and the dying tradition of working for a living as we're are. all those stories and much more
coming up on "the kudlow report," beginning right now. first up tonight, president obama kicks off his three-speech tour on jobs and the economy tomorrow at knox college in illinois. will the president put forward a pro growth plan for tax reform or more of the same, higher taxes, failed health care reform, wasteful government spending? let's talk. here now is jack bernstein, former chief economist to vice president biden and grover norquist, president of americans for tax reform. i begin with you, grover norquist. what do you expect the president to say? >> the president is going to say we should have the government spend more money on many different things and we should raise taxes to pay for it. and he will explain that this is pro growth. it is what he's done for the
last five years. >> jared, do you agree with that? >> no, unsurprisingly i don't. i think what the president is going to say is that while this economy has been growing, that growth has done an end run around the middle class and it's his job to think of a policy framework to reconnect middle class prosperity and economic growth. >> look, you've had a pick up in jobs growth but unfortunately gdp has fallen below 2%. jobs have done better. turns out most of them this year have been part-time jobs, not full-time jobs. it also turns out the median earnings for the middle class adjusted for inflation are down 4% since the recession ended. so when is the president going to get precise? when is he going to get specific about tax reform, about the keystone pipeline, for example, about even immigration reform, which i think can be pro-growth if it's done right? >> i don't think you're going to hear a lot of precision in terms of a policy set. in fact, the white house has
said we're not going to give a list of programs because we know that we'd run right into congress an gridlock. instead i think you're going to hear reference to areas of investment that really would help in the spirit of the comments i made earlier, investments in clean energy, investments in college affordability, manufacturing policy, those kinds of ideas. >> grover, let's talk investments. why not invest in corporate tax reform, which i think at this point in time could probably be the single most important pro-growth initiative? or, for example, why doesn't the president say in the speech tomorrow i'm calling off the epa dogs and we're not going to have a war against coal. maybe he should say you know what, i know there's a fiscal deadline coming up and we're going to have a debt ceiling to deal with and maybe we're going to deal with that by holding down spending. i want to hear some specifics, grover, i really do. >> well, you're not going to be happy with the specifics because, larry, he has a different view of how the world works than you do and i do.
he believes that those higher taxes do not discourage investment or growth. he has delayed and delayed the keystone pipeline. there are a million jobs the chamber of commerce has pointed out that have been delayed or killed because of regulatory burdens. they put seven pages -- stabbed seven pages high of regulations since the last regulation dropped conveniently after the 2012 election. he's proud of those. those kill jobs but he doesn't know that or he doesn't think it. on immigration, you asked about that, you know that in 2007 he was the one who killed immigration reform. he was the swing vote that stopped any sort of guest worker program and it was the poison pill that killed immigration reform. why do we think he's for it now when for two years in his presidency when he had super majorities in the house and senate he didn't lift a finger and when it did matter, he killed it in 2007. >> larry, let me jump in here.
for grover norquist to say president obama is ant anti-immigration reform just strains credulity. but here's the thing. do you, grover and larry, this is a reality check for you guys. do you really think that president obama going out to give a tax -- i'm sorry, going out to give a speech on middle class families should start out by saying here's how we're going to help middle class families, we're going to cut the corporate tax rate. i just want to see if you guys are even in the same ballpark. >> yes, yes, yes. i'm going to answer yes and i think he should call off the dogs about the war on coal. you know what? the war on coal is a gigantic tax hike for middle class people because the cost of electric power is going up so much. i think each should say i am a growth president. i think he should say i'm sorry but we don't have the resources to bail out detroit and they're going to have to do for themselves. >> but cutting -- >> if he doesn't get specific, jared, my friend, let me just tell you, if he doesn't get
specific, people are not going to take him seriously at a time when, as i said before, the jobs that are being created are mostly part-time jobs not full-time jobs. that's a direct result of obama care. and the gdp has come down to less than 2%. he's got to make some hey. if he doesn't, he's not going to be taken seriously. >> you and grover need to appreciate the fact that cutting taxes on wealthy people and corporations has never been shown to deliver the goods for middle class. it makes no sense for him to go there. >> grover, would you respond to that, please. >> it's silly, the united states has traditionally been a low-tax country because other countries have learned from our success under reagan, they've moved to lower taxes, particularly in corporations, and they're doing better than we are in many cases base they moved their tax rate lower -- >> i thought you said we're a
low-tax country. >> we were on the corporate rate back when it was at 35 and the rest of the world was at 50. but now it's not. we were or individual rates but obama and clinton brought that up significantly. we have doubled the corporate tax rate. canada -- >> we're one of the lowest tax countries in the oecd. if low taxes were a formula for job creation, they would have done much better in the bush years and they'd be doing better now. it's just not the right solution. >> i don't agree with that. by the way corporations don't pay taxes, individuals pay taxes. corporations just collect taxes. the other point he should make is now that he's waved the mandate for businesses on obama care to take another look at it, he should do the same thing for individuals. they don't have a verification system. premiums are going to skyrocket everywhere. these are things that affect the middle class, jared.
it's like median incomes affect the middle class because the jobs that are being created are part-time jobs, not full-time jobs. >> his first tax increase was on middle- middle-income people, average income $40,000 a year. it took him 16 days to break his promise he was only going to tack ritax rich people. >> let me talk to you about obama care. i said on your show, i was on the panel with you up in new jersey, that competition in these exchanges, which is where people who don't get health care through their job will come to get health coverage, that competition, kudlow-style competition, will cut the costs of premiums. you said won't happen. the evidence is rolling in very strongly to support my view. >> if there's true competition, absolutely because i believe in premarket competition. >> i know. >> but the problem you've got here and the reason the president should postpone the whole bloody thing for at least a year is there is no insurance
exchange infrastructure in over 30 states, there is no verification system for individual mandates and everybody is screaming bloody murder because middle-income people are going to have different doctors and different insurance plans with higher premiums. this is coming out left and right. >> the teamsters are going nuts! >> all of a sudden you and grover agree with the teamsters. >> they're being very sensible, the teamsters because they see their subsidies are gone. they're going to get dumbed into the exchanges and the exchanges don't exist. he's got a chance. he's got three speeches. he's got a chance to talk about energy, he's got a chance to talk about tax reform, to talk about fiscal deadlines coming up, he's got a chance to talk about obama care. these are the issues of the day. if he just gives this broad old statement i'm going to have more infrastructure and i'm going to spend more on teachers in california, it's not going to work.
>> i actually agree with you and i think you are going to hear education -- i think you are going to hear energy, implementing obama care. >> give me the keystone pipeline. that's a start right there with the keystone pipeline. >> i don't disagree. >> many thanks, jared bernstein and grover norquist. i think we settled the whole thing. >> investors waiting all day for the all--important apple earnings. and later in the show, detroit bankruptcy. the city's union slam emergency manager on pricey consulting fees. we'll have the first on cnbc response from mr. orr himself to the unions later in the show. and don't forget free market capitalism is always the best path to prosperity and that path right now is being littered and blocked by a highly flawed obama care system. i'm sorry to say that, but the whole thing should be put off and redone. i'm kudlow.
we'll be right back. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.
wi drive a ford fusion. who is healthier, you or your car? i would say my car. probably the car. cause as you get older you start breaking down. i love my car. i want to take care of it. i have a bad wheel - i must say. my car is running quite well. keep your car healthy with the works. $29.95 or less after $10 mail-in rebate at your participating ford dealer. so you gotta take care of yourself? yes you do. you gotta take care of your baby? oh yeah!
post." our own john harwood is reporting by phone. hello, john. what can you tell us? >> larry, over the last 48 hours or so, there has ban riding speculation about larry summers previously. people have been assuming that the front-runner is janet ye yellin. i have started picking up the idea, as ezra has, that larry is gaining in this process. i have could caution, nobody knows outside of a very small circle of people. if you don't hear it from obama directly, nobody can say for sure. >> john, if there were one thing that puts summers into the front-runnership, what might that one thing be in your opinion? >> well, it might be two things. one is, larry, is somebody who is by all accounts a brilliant economist. he's somebody who served president obama and president obama appreciated his service.
but he's also somebody who has got the respect having been treasury secretary in the clinton administration of financial markets and of central bankers around the world. and so if the president decides he needs somebody who can command -- who can lead both institutions in a real crisis, larry summers is somebody who would fit that bill. >> thanks very much, john harwood. we appreciate that. let's bring in our market analyst, peter costas president of empire executions, zane brown of lord abbott. it's having interesting, who is the real larry summers? in the clinton administration working under robert reuben in the treasury, summers was a hard dollar, king dollar guy who was more or less a fiscal conservative working under reuben. in the obama administration working in the white house, he became a very big spender and
big fiscal liberal. will the real summers please stand up. what do you think, peter? >> i think the administration really wants larry summers. he may be a great leader but there might not be that many followers. he may have a hard time with the federal open market committee. they may not really want this. i think they're more pushing towards janet yellen. >> i remember a guy who was very prickley, didn't have a million friends but was very effective. his name was paul volcker. i was in the reagan white house when volcker was slaying inflation. i'm just trying to figure out what he would stand for because he has different opinions between the clinton years and the obama years. >> yes. and i think that he will lean towards that leadership. my guess would be that he would lean towards what obama would put him in that position for. but i think that appointment
would be very controversial in the market if not among other members of the fomc. i recognize that you say that there have been other prickley leaders at the federal reserve, but certainly larry can be opinionated, he can be very strong willed. in a collegial environment, such as the fed, when you've not come up within that environment, i question whether or not that's the appropriate environment, not to mention the market reaction to that level of uncertainty. >> it might be pretty positive. i'm not taking a position one way or the other, it's way too soon for that. i'm just interested particularly in larry summers and the dollar because the dollar was really strong during the clinton years. lately the dollar has improved but we haven't seen a strong dollar in 12 years, 15 years. so i just wonder. let us move on. apple beat and earnings are slightly ahead of where eathey are. what's your take, peter costa? >> the stock went up 4%.
apple needs to come up with another game-changing product. they keep increasing or improving the products they already have. after a certain point there's no more -- there's nothing more can you bring to the table. they have to bring something new to the table. and i think that tim cook had mentioned something about bringing out something in september and october and bringing out new products in 2014. they need to bring something that's a game changer. and i think the market is going to be looking for it. up kn you know, the other side of that coin -- >> that will help. they sold a lot of iphones. >> that was a huge surprise. >> the tech sector has done some lousy. >> thompson reuters, earnings are 3% above where they thought they'd be, revenues flat but earnings slightly better. are you impressed with that? >> no. you look at what happened to earnings last year among s&p 500 companies, they were up closer to 5%. and over the last five years the earnings have been up about 7% better than expectations.
so, yes, you have earnings beat but they're by a much smaller margin than last year and the last five years. it's what you would expect with this growth, 2% or left, ss, ats stage of recovery. >> has the stock market already discounted a september tapering move, a slowdown in the bond market? >> i think it is. i think what we're dealing with is the earnings forecast, we're in the meat of the earnings season, people are looking at what the companies are talking about for the next quarter. a lot of those forecasts are looking better than they were for this quarter. so i do think that they're -- it's in the market. let's move forward. >> sounds like you're a buyer. >> yes, i am. i'm still bullish. i think still the market has
probably another 5% on the short term and 15% on the mid term. >> what is great. that's terrific speaking of my retirement account. >> has the market discounted -- >> not only the stock market but the bond market as well. everything else seems to be returning to normal in terms of that relationship and i think is further room on the equity markets as well. >> all right, very good. peter costa and zane brown, pretty optimistic this evening. >> now, the papal visit to brazil caused a true sensation. now he's using this visit as a platform to announce his economic message. the pope, it's all about the sanctity of work and his concerns for the young people who are unemployed. we have a live report from rio de janeiro just ahead on the "kudlow report." please stay with us. my mantra?
in about 2 weeks in most men. axiron is not for use in women or anyone younger than 18 or men with prostate or breast cancer. women, especially those who are or who may become pregnant and children should avoid contact where axiron is applied as unexpected signs of puberty in children or changes in body hair or increased acne in women may occur. report these symptoms to your doctor. tell your doctor about all medical conditions and medications. serious side effects could include increased risk of prostate cancer; worsening prostate symptoms; decreased sperm count; ankle, feet or body swelling; enlarged or painful breasts; problems breathing while sleeping; and blood clots in the legs. common side effects include skin redness or irritation where applied, increased red blood cell count, headache, diarrhea, vomiting, and increase in psa. ask your doctor about the only underarm low t treatment, axiron. (announcer) at scottrade, our cexactly how they want.t with scottrade's online banking, i get one view of my bank and brokerage accounts
with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. awarded five-stars from smartmoney magazine. . pope francis in brazil today for world youth day. he has a very important message, an economic message, for young people. nbc news's ann thompson is traveling with the pope. she joins us live from rio this evening. good evening, anne. >> good evening, larry. the pope's message about economic opportunities for young people has sort of gotten lost in the last 24 hours because of all the concern over his security. i'm sure you saw that wild ride through the streets of rio where he was absolutely mobbed by
people and security couldn't control the crowds. well, that happened after the pope arrived here in rio. and while he was on the plane to rio, he came back and talked to reporters about the economic challenges facing young people, both here in brazil and around the world. and he said something i think that a lot of people might be surprised at. first of all, he said that we are at risk of having a generation of people who have never worked. he said young people at this point in time are in crisis. and he said work is very important because work goes to dignity. and it gives people dignity to earn their own money. and he said we are at risk of throwing away young people in the same way that he said we have thrown away the aged because we are a throw-away culture. and that was the economic message that he had as we comes here to celebrate world youth day. larry? >> anne, i've never heard a pope
and i do tend to follow these things, i've never heard a pope speak in that direct way. i'm going to give you a quote from this plane from pope francis. "the world crisis is not treating young people well. we are running the risk of having a generation that doesn't work." and then as you said "from work comes a person's dignity." he is going to the very heart of it. he is communicating in a more direct way with young people than i've ever heard any pontiff before, anne. >> reporter: absolutely. i was down on copa cabana beach earlier with some of the young people who were here, some of the americans who have come. that message is really getting through to them. they feel this pope with his informal style and approachable manner is really trying to connect with them. and they are here, they say, to support him. but the issue of youth unemployment is very big here in brazil. it's over 20% in italy where the
vatican is based, it is 42%. in europe it is a very big problem. and it's one of the issues that world leaders are facing and it's an issue that the pope is taking on very directly. >> and it's a big issue here in the usa. anyway, many, many thanks, nbc's anne thompson reporting from rio. we appreciate it. >> now, folks, have we reached a jump defense moment from the irs scandal from the treasury to the white house? jump the fence. a highly appointed political appoint was in a meeting just two days before a major irs policy change. we're going to have the details on that story, what it means and much more just ahead on kudlow. vo: traveling you definitely end up meeting a lot more people but a friend under water is something completely different. i met a turtle friend today so, you don't get that very often.
it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours. that's me... i made you something. ♪ i made you something, too. ♪ see you next summer. ♪ [ male announcer ] get exceptional values on the highest quality cars at the summer of audi sales event. ♪
welcome back to "kudlow report." i'm larry kudlow. in this half hour, the detroit unions fired another shot against emergency manager kevyn orr today. they say he's benefiting from millions of dollars the city is playing in legal consulting fees. mr. orr is about to deliver a response to that first on cnbc. and speaking of detroit, are there really businesses and entrepreneurs who want to set up shop in that city? well, the answer is yes, especially if they were given
jack kemp-like incentives to do it. you're going to meet two entrepreneurs who are raring to go in detroit. but first up, one of president obama's two political appointees at the irs is coming under increased scrutiny in the targeting scandal. turns out chief council william wilkins met with the president just two days before his office gave new instructions on applications from tea party groups. just what does that mean? and has this scandal jumped the fence from treasury into the white house? let us begin by asking elian a johnson of "national review, who has been covering this story. eliana, april 23rd, 2012, mr. wilkins was in a meeting with 13 people and the president. is that true? and does anybody have any reckoning of what went on there? >> he was in a meeting with 12 other people, including him and the president. and two days later his office did provide guidance on tea party applications. however, we don't know whether
he personally was involved in drafting that guidance or was present at the meeting. >> seems pretty coincidental. wait, we know the president was at the meeting. >> we know the president was at the meeting. >> but wilkins comes out and coincidentally starts changing guidance on the conservative groups. >> his office two days later was involved in providing guidance, changing on tea party applications. we don't know whether he personally was involved. it's important to say that the irs has denied that he was involved in processing 501(c)(4) applications, the tea party applications. >> the irs denies a lot of things, they deny in front of committees, they deny under oath for god sakes. >> his office, consisting of 1,600 lawyers was certainly involved. they say wilkins didn't find out until this year, 2013. however, people from the
oversight committee's office say that their witnesses have indicated he knew in 2012. we just don't know when he got involved. >> of course he knew. any good bureaucrat would know that. >> douglas shulman just happened to be on the next day in the eisenhower executive building. interesting, wilkins on the 23rd, schulman on the 24th, both mucking around the white house complex. it may not prove anything directly but i find that circumstantially interesting. >> i don't think you want to make too much of the schulman meeting but there is a scandal here. you've seen the explanations change. look, when this first started, you saw the irs and even jay carney blaming this on two rogue agents in cincinnati or a handful of rogue agents. then it was, oh, you know, management, unnamed management
at more senior levels. then it was this is a scandal because liberal groups were also targeted. now you're seeing them go after the inspector general who issued the report in may because he won't admit that liberal groups were targeted. there is a scandal. we just don't know whether wilkins, obama's political appointee, was personally involved. >> and this guy is some kind of rock 'n' roll guy. i want to bring in the rest of the panel here. the question is has this irs thing really jumped the fence from treasury to the white house. we bring in democratic strategist keith boykin and welcome back republican strategist noel. noel, i wanted to begin with you. i know it's circumstantial but it just really sounds fishy to me. >> it's beyond fishy. and so much for transparency. it seems like we're the victims being spied upon by the nsa and et cetera. but the bottom line is 100% of
the tea party applications were halted and stalled and done nothing with. so basically this was happening in two elections have passed, it's been years. and another thing, as a fund-raiser, which is my background, i got to tell you, what's the one thing the tea paper groups were wanting to do? get a specific tax status to raise money, create awareness and do more good tea party works or whatever. so get what they did? they halted it. you can't do anything without that status. >> they shut them down. >> that's chicago-style pay-to-play politics going national and you know it is. >> all right, keith. >> i feel like i need a shower. i th discussion is so dirty and silly, i feel i shouldn't be here on television talking about it. i feel it appalling we're making these accusations. you're telling me the president sat in the white house with 13
people and conspired in this huge scandal? if he's going to be involved in a scandal, why does he have 12 people with him? that's not a way to hide a scandal. there is something called obama care, which is a huge regulatory issue that has to be implemented and the irs officials are deeply involved with this. so you're connecting dots that don't need to be connected. >> i said it was nothing specific. but i think circumstantially it is fishy. >> if we were telling you at the beginning of this that the irs did this to political enemies, i don't think a lot of people would -- >> did what? what did he do? >> held up the applications of tea party groups, which is really indisputable. >> name one single tea party group denied irs status. >> you know as well as i do under 6103, the irs rule, they can't name the names of the tea party groups of the applications
that were held up. >> will is not one single organization has been denied status. >> they testified over three years -- >> you're saying delays but not denied. >> for three years they haven't received their status. >> there were liberal groups that have been denied their status. progress texas, emerge america. >> the ratio is about 300-5 but i'll give that you. look, i worked in the office of management and budget year ago under reagan, which is a pretty nerdy play. the imb is even nerdier. wilkins, this guy was no tax accountant nerd. this guy was a rock 'n' roller. this is a guy who was a lobbyist for liberal groups, raising money for democratic candidates and defended reverend jeremiah wright in 2008 over political speech that could have cost wright's church their tax
exemption. it just doesn't sound like your basic nerdy irs tax account commissioner. that's what troubles me about this. >> it is what it is. look at -- obama surrounds himself with people -- look at eric holder. you have fast and furious. you have the benghazi scandal. >> you're throwing out things that have nothing to do with this. what does that have to do with the irs? answer that question. you can't answer that question. >> why is the irs held accountable for all? >> what does the irs have to do with benghazi? this is a preposterous scruggs. >> they want to act like the republican party is bringing up a bunch of b.s. and we're not. >> this story is not on any front page of any newspaper, including the wall street journal and "washington times" conservative newspapers because they know there is no story there. the irs -- the i.g. from the
treasury department, russell jordan, looked at this. there were 5,500 e-mails they looked at and found no evidence of any political involvement whatsoever. >> do you not find it odd that this general council for the irs is a guy who raised money for the democrats, defended reverend wright. i go back to this point and i acknowledge we have nothing concrete on this guy. i acknowledge that. i'm saying it's all kind of circumstantial. but this is not the kind of irs commissioner or general council -- >> he's not the commissioner, though. >> the council is even nerdier. >> do you find it odd -- >> the commissioner -- >> the irs commissioner who was in charge at the time was a bush appointee. is that not odd as well? >> he was a fast learner. >> he wasn't a fund-raiser. i don't know, eliana. we don't know about the lowest learner in sum, connections to everybody. we don't know if we can connect
the dot between her and mr. will comes. i'm just saying i find it interesting that wilkins is not the arch typical kind of -- >> you're making circumstantial allegations with no factual basis. this is beneath us i think to have this conversation. >> what we know is he was in a white house meet, not an omb meeting but a white house meeting -- >> so you don't think it's fishy, you don't think it smells weird -- >> just because somebody has a meeting and two days later there's a policy enacted doesn't mean there's a connection between the two. there's something called cause and effect. you've proven no causal relation in your accusations. these are wild, speculative stories that have no basis on the air. >> we don't need to speculate on this. >> where's the evidence? >> i brought every document, every interview transcribed.
>> where's the evidence? where's the evidence? >> the tea party groups were systematically delayed and held up when liberal groups by and not were not and lois lerner, because she was involved with it threw line agents under the bus. we don't know whether the president or chief council was involved. we don't know. the investigation will get there. >> we've had this discussion. what you're trying to do is make it into a bigger thing about the president of the united states and there is no evidence about that and that is shameful. >> i admit there's no concrete evidence. >> we have 12 people in a meeting with the president and somehow he's creating a scandal. that's a weird way to plan a scandal, with 12 other people around you? come on, larry, that doesn't make any sense. if you were plotting a scandal, would have 12 people around you? >> i might. it all depends on who they are. i got to get out of here.
noelle nikpour, thank you. earlier on nbc, a detroit manager went after kevyn orr over some pricey fees he's being paid by his law firm. stay right here. you make a great team. it's been that way since the day you met. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity.
do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. help the gulf when we made recover and learn the gulf, bp from what happened so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely.
our commitment has never been stronger. j.d. power and associates has ranked quicken loans highest in the nation in customer satisfaction... i say "family," because we've been blessed with this honor for 3 years in a row... rest assured we'll treat all of your mortgage needs with tender loving care. amazing client satisfaction: it's a quicken loans family value. call 800-quicken or go to quickenloans.com to experience it for yourself.
a michigan appeals court this afternoon halted challenges to detroit's bankruptcy filing. a federal court hearing is still scheduled for tomorrow morning. despite today's legal blow, however, state labor unions aren't going down without a fight. lobbing bitter accusations on cnbc today against detroit emergency manager kevyn orr and cnbc's own scott cohen joins us now from detroit with those details, including a first on cnbc response from kevyn orr. good evening, scott. >> reporter: good evening, larry. that michigan appeals court ruling puts the state challenges to the bankruptcy on hold for now but not necessarily permanently. nonetheless, as you said, it does play the matter now squarely in federal court and there the unions, who are against this bankruptcy because
of what it will do to their pensions, they plan to fight back hard. they say kevyn orr, the city emergency manager, has not been negotiating in good faith with them. that's a prerequisite under federal law for a bank sruptcy filing and they say for a city that's supposedly broke has been spending millions on consultants. some of them, the contracts increased within weeks of the bankruptcy filing. these are for services like audits and restructuring consulting, as well as $3.5 million to orr's former law form jones day, including about a quarter of a million dollars billed during one two-week period in march. >> if we're going to get this done right, we need the best people available. the very people making those criticisms announced a few weeks ago they developed a multi-million dollar war chest
themselves. >> that is kevyn orr's response to what what the union said that, this is not a city that is insolvent and spending freely on consultants, as you heard. orr says the consultants are needed to get the job done. as to negotiates in good faith, he says he tries to negotiate and the unions keep talking him to court. >> how much more good faith considering the time frame that i have and the options i have to deal with should i have when i'm being constantly slapped in the face with lawsuits? >> nonetheless, orr says he's continuing to negotiate with the unions and wants to set up a retiree's committee for representation in the bankruptcy process. that federal court hearing gets under way tomorrow at 10:00 tomorrow morning and we will be here. jones day, the former law form of kevyn orr, did not return our phone call for a comment. >> first of all, bringing in experts on these things is not at all unusual. i don't get that except it's mud
slinging. my understanding, orr offered the unions, as well as bond holders, a deal and they wouldn't take it. now i don't know whether it was 10 cents on the dollar, 20 cents on the dollar, they wouldn't take it. so i see the union position now as completely weak. in federal bankruptcy court, those contracts all get broken, don't they, scott? >> well, larry, there's some questions about that. the union disputes whether orr ever negotiated with them, ever met with them and offered them anything of substance. and there is this provision in the michigan constitution that protects pension benefits. they've run up against defeats on the state court level but they'll go back into federal court and try to get that somehow enforced. but as orr says, federal law trumps state law and he will try and get a stay from the federal bankruptcy judge that puts those
state challenges under wraps once and for all. >> that's the key. scott cohen, thanks very much for all of that. that's a heck of a report. now, let's stay with this detroit story. as you know, i started to call for jack kemp-like tax cut incentives for new businesses to come into detroit. this isn't just an academic discussion. you're about to meet two business leaders who are actually ready to get in and expand in detroit. that's right, next up on kudlow. ♪ "first day of my life" by bright eyes ♪ you're not just looking for a house. you're looking for a place for your life to happen. that's not much, you think. except it's 2% every year. go to e-trade and find out how much our advice and guidance costs. spoiler alert: it's low. it's guidance on your terms, not ours. e-trade. less for us. more for you.
all right. despite becoming the largest municipal bankruptcy in u.s. history, entrepreneurs say detroit is still open for business. i believe it's their optimism that could prove essential for the revitalization of the city. we bring in the founder and chairman of the detroit blight authority and we may get bill poulty in. bob, i'm rooting for you buddy. i am totally like totally. if you knew me, i'm an optimist and i think this thing can be solved. but you got bankruptcy, you got crime, you got taxes and you got blight. how do you track capital? how do you make progress on this? >> that's great. thanks for having me, larry.
what you just said is we've got a tremendous amount of opportunity. when we came to start this business here in detroit, we really believe in what's happening. anybody like myself who wants to build a start up and create a company and wants to come join us, it's all about creating something from nothing. detroit is another example of that. that's why we want to be part of it. not only do we want to build a great company, we want to be part of turning the city around and we believe that's going to happen. >> bob marsh, what is the business and my other question is how do you attract capital from outside detroit? detroit is a place starved for capital. how do you bring capital in? >> the business is leveleleven. we work with businesses to create competition and leader
boards around whatever sales they can track. we're all about driving focus and energy within a sales organization. in terms of drawing capital, one thing is there's some nice capital right in detroit. so, i mean, we're part of a portfolio of companies backed by detroit venture partners and there is this incredible startup scene that's happening right now, these companies have been around for a little while. we're really one of many. but in addition to that, we are -- many of the companies part of this portfolio are drawing money from outside the state. but the good news is there is some capital to get these businesses going in detroit and that's what this is out. >> i don't know if you've followed the debate i've had on the air and in columns and so forth. i go back to the old jack kemp tax-free enterprise zone. would i make detroit a tax-free
enterprise zone. i might give their staff income tax breaks, give them regulatory and property tax breaks. the business property tax in detroit i believe is the worst in the country. i mean that, would give you a terrific example. i mean, you push the pencil and you push the numbers and it makes a hell of a lot of difference when you waive taxes. >> yeah, you are knknow, you're exactly right. we have to make an aggressive move. that's one of the things happening with the bankruptcy is a lot of people will be hurt by this, hurting pensions, et cetera, but an aggressive move is being made. the exemption is another wonderful idea. we're in detroit whether that's there or not. but overs course of the last several decades, you've got a lot of great companies in the suburbs of detroit. what an amazing way to draw them downtown. instead of saying, hey, that's a great idea as they sit on the outside, what a wonderful way to have them take action and get in the city, let alone the businesses that might draw from
the outside. it's a very trerrific and aggressive idea. >> it's a win-win. i'm told we have bill on the phone. of course i know your dad. talk to me about this blight effort. we were talking earlier with bob marsh. you have the whole city bankruptcy. you have a tremendous crime problem, you have the tax problems, among the highest of any city in the country. but you also have this blight problem which you are trying to tackle i take it. can you tell us more about that? >> my grandfather helped found america's largest home builder in detroit at the age of 18. we're taking that massive scale model to the 139 square miles of detroit affected by blight. >> now, i ask you the same question i asked bob marsh.
who supplies -- where does the capital come from? how do you attract investment? >> they asked for $2.5 billion and to fix the public safety issues, to clean up the city, we need to attack it with blight removal. we need to reinvest in the city, and keep up all the great things going on downtown. first we got to clean up the city and take a massive approach. the one we're applying is different, it's not a sporadic approach. we're trying to take it across the city, larry. >> i wish you all the luck in the world. it's a very noble effort. all i'm saying is my jack kemp tax-free enterprise zone idea would help all of you. you could suspend regulation, suspend taxes and get a lot more capital going into the city. many thanks to bob marsh and
bill pulte trying to rescue detroit. that's it for this evening's show. thanks for watching everybody. i'm larry kudlow. we will be back with more free markets tomorrow evening. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade. voted "best investment services company." why let erectile dysfunction get in your way?
talk to your doctor about viagra. ask if your heart is healthy enough for sex. do not take viagra if you take nitrates for chest pain; it may cause an unsafe drop in blood pressure. side effects include headache, flushing, upset stomach, and abnormal vision. to avoid long-term injury, seek immediate medical help for an erection lasting more than four hours. stop taking viagra and call your doctor right away, if you experience a sudden decrease or loss in vision or hearing. this is the age of taking action. viagra. talk to your doctor. this is the age of taking action. i'm gonna have to ask you to
power down your little word game. i think your friends will understand. oh...no, it's actually my geico app...see? ...i just uh paid my bill. did you really? from the plane? yeah, i can manage my policy, get roadside assistance, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly. ok, did she seriously just say that? geico. just a click away with our free mobile app.
[ticking] >> even though there's a total embargo in this country against any trade with iran, iran still gets high tech materials and components for a variety of weapons from right here in the u.s.a. this man set up a trading company in philadelphia. you are charged with trying to buy a centrifuge that could be used to make biological weapons, like anthrax. >> yes. that's what they say. >> do you know how much money you have? >> no. >> i mean, does 17 billion sound about right? he is the richest man in russia who just bought
IN COLLECTIONSCNBC Television Archive Television Archive News Search Service
Uploaded by TV Archive on