Transcripts For CNBC The Kudlow Report 20121025

The fiscal cliff, we call on leon cooperman, chairman and ceo of omega advisers, one of the 40 businessmen behind the open letter, a critical choice for america advertisement that ran earlier this week in usa today. Lee, thank you for coming on. I appreciate it very much. I have to ask you, youve had a fabulously successful career. This has to be a tricky moment. You have an election in 12 days. You have an unsteady market with earnings dropping and so forth and so on. What is your advice to investors . How do we get through this between now and year end . Thank you, by the way, for having me on the show. I think the stock market presently is in a zone of fair valuation. So i wouldnt call myself aggressively bullish or bearish. We have been quite optimistic for the last three years. But the rise in the market from the lows of 09 has put the market now in a zone of fair value. Having said that, to your viewers i would say that i dont think theres a better alternative amongst Financial Assets than common stocks because i think the Federal Reserve has created an environment where when you look at the alternatives, theyre very unappealing. You can keep your money in cash because youre negative and youll earn zero. Keep your money in u. S. Government bonds which yield about 1. 7 or 1. 8 , adjust it for inflation and taxes, and that instrument doesnt long at 1. 7 and 1. 8 . So youre not a big seller . You know the issues as well as anybody else. You have a sluggish economy, housing may be doing a little bit better, but business is not investing right now. You have earnings way below what people expected. You have revenues way below. The stock market in the throes of a 3 correction. Even before we get to the electionyear politics and shenanigans, just right now, how long do you think this earnings correction in stocks will go on . Well, i think the main reason why we have moved into a zone of neutrality in our investment view is because we think the profit cycle is peaking. Having said that, basically the stock market is still relatively undemanding in its valuation. I dont want to sound like a statistician. To some extent, all of us in the stocks business has to be. But the p e averaged about 15 for the s p. In that same period, the u. S. Government is 1. 8 and the multiple in the market is about 14 or a little bit less. So were below the historical multiple at a time when Interest Rates are almost a quarter of their historical average. So the market is relatively undemanding in its valuation. Thats the result of people derisking and being very much mindful of what happened to them in 2008 and also some of the uncertainties you talked about, the election, et cetera. Lets go to those uncertainties. Youve written an open letter to president obama. You expressed your criticism of him. You call it divisive class warfare aimed at the successful people in business. You signed the letter today. Lee, let me ask you first, if obama is reelected, how does that impact your investment thinking . Well, i would think it would be a negative because basically it would be an amplecati catioa his policies. I respect him and the office of the presidency. But every bone in my body tells me we need a change in leadership. I wanted the president to do well when he was elected because if he did, the country would do well. Hes not improved on the situation and in my opinion, has made it more difficult. Theres a lot of suffering out there. And im sympathetic to that suffering. Im not a fat cat basically on the republican ticket. Im basically pro choice, pro gay rights, im for aggressive income tax structure, im a strong believer in the safety net for the disadvantaged. I think the carried interest for hedge funds and private equity is ridiculous, it should be eliminated. And i think romney should not have had a tax rate of 14 . But it was legal. And i would only point out that the president controlled congress and the executive branch of the government for two years. If he didnt like the tax structure, he could have changed it. And ive taken the giving pledge with Warren Buffett and bill gates. Im going to cycle back what ive made in 45 years. You accused the president specifically in this note of too much debt, overspending and overregulation. So i guess in view of your points i appreciate your other aspects on social policy and so forth. But just on the hard economic and Investment Strategy points, lee, if the president is reelected, is that a sell signal for investors, in your judgment . I dont think the stock market at the present value is discounting either a romney victory or an obama victory. I think the stock market is kind of, like i said, in a zone of neutrality. The country will do okay either way. I heard Warren Buffett this morning on cnbc and he said he thought the economy would move ahead under either president. But i think its a question of leadership, one is more confident in the policies to be pursued. I think mitt romney has been accomplished in everything hes tackled in his life. And i think he has the capacity to bring the country together, to bring the various selfinterest groups together to move us down the road. And the president has unfortunately been unable to do that. And i dont think we want to give him another four years to move us in the wrong direction. What made this country great was everyone had the ability to achieve. Right. And now were going down a path where everybody has the ability to receive. And i think thats the wrong path for the country. We all have aspirational. We believe in exceptionalism. I want to give everybody an opportunity to achieve but i think its the old line, its worked over by believing it. If you give a man a fish, you fed him for a day. If you give that person teach him how to fish. Right, youve fed him for a lifetime. I love that, lee. I always have. Let me ask you this, theres another hurdle. If romney wins, you still have a Lame Duck Congress and you have the prospects of whatever, 400 billion, maybe 500 billion tax hike. That would weigh heavily on the economy. How do you get around that has an investor . Because basically there is no way that they will let the cliff hit. Everyones worried about it because the last round of debilitating discussions that sent the market down dramatically. I believe at the end of the day, these people in washington are not that irrational, are not that foolish. They wont put the country through that kind of problem. I think the cliff will go to something closer to 150 billion. It will be a drag on the economy. But it will be kicked down the road and we have to start dealing with the problems and im proromney because i think hes more likely to bring together the various factions to fashion a hell go across the aisle. Hell walk across the aisle. He said that in the debates. I think thats been a big reason why his polls have gone up. Lee cooperman, if kudlow gives you a romney reelection, a much milder fiscal cliff and some kind of bipartisan debt deal next year, if i give you all that because of my respect and affection for you, how high can the dow jones go in the next couple of years . First, i would thank you for that gift, a wonderful gift. I will prosper even more. I would say 1,555 minute s p. Make no mistake about it, no matter what is elected, we have wood to chop in this country. We cannot continue down this path of trilliondollar deficits year in and year out where the fed is buying the deficit, that the federal government is printding. Thats not going to wash down the road. We must have a change otherwise were going to go bankrupt and we will not be the same country. Lee cooperman, you are terrific. Thank you very much for your time. We appreciate it. Coming up on kudlow, the 12day countdown to the election. Is it all about ohio . Folks, i have to tell you, im thinking mitt could sweep the entire midwest. And im going to try to show you how. Later in the show, experts warning the entire east coast that got slammed by sandy. Full details coming up. And dont forget, free market capitalism is the best path to prosperity. You heard it from distinguished veteran investor Lee Cooperman who wants to see some changes and so do i. The kudlow report will be right back. [ male announcer ] how do you trade . With scottrader streaming quotes, any way you want. Fully customize it for your trading process from thought to trade, on every screen. And all in real time. Which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. Try our easytouse scottrader streaming quotes. Its another reason more investors are saying. [ all ] im with scottrade. We need to make sure that ohio is able to send a message loud and clear, we want real change, we want big change, were ready. This is our time. I need your help. Were going to win on november 6th. Thank you, ohio. Lets take back america. Conventional wisdom has the road to the white house going through ohio. But ohio is just one of many states that i believe romney is actually going to sweep. But should the unthinkable happen and president obama actually wins ohio, there are still ways for romney to get to pennsylvania avenue. So lets talk. Here now is the director of Suffolk Universitys Political Research center and bill whalen of Stanford Universitys hoover institute. Dave, let me begin with you. Whats the path for romney if he doesnt win ohio, in brief, whats he have to do . Well, he has to win colorado, nevada, wisconsin. And then either iowa or New Hampshire. Ohio is really key for him. And i think he has a shot to win it. In our poll that we released on monday, we have it 4747. I look at that this is my little rant before i get to bill whalen. 4747, thats an incumbent president well below 50. That is bad, very bad. That means hes a loser. Youve already given romney florida, virginia and north carolina. I follow your work very closely. Now, im saying i want to get bill to weigh in. Im saying when you look at all these midwestern states which are tossups, ohio, iowa, pennsylvania, michigan, wisconsin. Theyre all basically tossups and the president is below 50 . Therefore, bill whalen, i think romney is going to sweep all those midwestern states and blow this thing right out of the water and can grab as much as 330 electoral votes. Whats your take on that . Could romney actually do that . Im more bullish on romney winning but im a little bearish on getting to 330. I think high 280s to low 300s is more like it. You have a storm going up the atlantic seaboard. Romneys had one surge in the last three weeks which has made him competitive to ahead in several battleground states. The question is does he have a second surge come the final weekend of the election. What happened in 1980, reagan had one surge after the debate but then he had a gigantic surge the final weekend. Reagan upon 50. 1 of the popular vote in 1980. And he won 90 of the Electoral College because all these midwestern states tumbled to him. Right. The first debate was a blowout for romney. The second and third debates, its possible president obama won on little technical points, although it was very close. Look at these polls coming in. The Washington Post abc poll today, for the first time theyve switched to likely voters for the first time, romney gets his 50 . I believe obamas 47 . That tells me obamas going to lose, david. Hes going to lose. And all those midwestern states are given the same message. If obama cant get to 50 in the next couple of days as the last independent undecided split, they are going to split against the incumbent. Thats how it works. This election is virtually over already, david. Thats my point. Larry, im going to have to side with bill on this one. Im a little bit more you have to look at the numbers here. And youre also assuming that barack obama needs 50 . And he doesnt need 50 to win. And the reason he doesnt and Suffolk University is the only university that lists all of the candidates on these respective ballots is he could get 49. 5 or 49 and win in colorado. There are 17 president ial candidates in colorado. There are 12 candidates listed on the florida ballot. Seven candidates on the ohio ballot. So youre talking about states like pennsylvania, wisconsin, michigan, where Barack Obamas teetering under 50 , 49. 5 . That could be good enough in most of these states to win but most of these states are tied like 4747, 4847. Ill grant you what you said. Youre the expert. Im just saying, to some extent the handwriting is now being written on the wall. Those debate which is introduced mitt romney to the whole country as a president ial leadershiptype guy, stable, a lot of good ideas, a guy that can go across the aisle and solve the problems that president obama has had four years to solve and cant, even now he hasnt paid any attention to the fiscal cliff. Bill whalen, that stuff has taken a toll. And i just see romney not losing ground in the polls after the debates but still gaining ground. Isnt there a message there . This again is why we get back to the concept of the surge in the final weekend. What is the president doing right now . Waving around a job plan which is his warmedover leftovers. Surrogates are out there talking about Birth Control for women. Trying to tie mitt romney to a senate race in indiana. These arent the positive actions of a positive incumbent. By the way, talking about getting romney to 270 electoral votes, that scenario takes him to 269. But he only needs 269 electoral votes to win because in a 269269 tie, it goes to the house and the house will be all republican. I did not know that. David, did you know that . Yes. Bill whalen is such a smart guy. Hes so smart. You knew that, too . He is indeed. Im an admirer of his work and his political experience through the years. But im not one of those people who would be easily giving nevada to mitt romney. If you look at the core growing county, its clarke county. In 1996, it was 50 of the total vote. In 2008, its gone up ten points to 67 . That one county, las vegas county, could be 70 of the statewide vote in nevada. And its rich with core constituency for barack obama. I agree with that. Im pessimistic about nevada. Much more optimistic about colorado. But to close the loop, given what you know now, you were the first guy to give him florida, virginia and north carolina. Given what you know now, is mitt romney the leader in this race today right now . I think if you look if you add to those three states ohio and New Hampshire and in both of our suffolk polls, we have the race dead even in both states at 47, you mentioned the ballot test number at 47, that gets him to 270. But im not willing to just willynilly give michigan, pennsylvania, wisconsin, nevada i think those are potentially they could stay blue based on the ballot test numbers. Now, as in polling, pollings a snapshot, everything can change. And if that happens, and obama were to drop, then obviously well be watching very carefully. David and bill, thank you, gentlemen. I appreciate it very much. Up next on kudlow, Hurricane Sandy takes aim at the east coast with meteorologists saying its likely to cause 1 billion in damages. The full story on that and all the breaking headlines coming in to cnbc next. This is america. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Bp has paid overthe people of bp twentythreeitment to the gulf. Billion dollars to help those affected and to cover cleanup costs. Today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. And bps also committed to america. We support nearly 250,000 jobs and invest more here than anywhere else. Were working to fuel america for generations to come. Our commitment has never been stronger. Is now within your grasp with the etrade 360 investing dashboard. Etrade 360 is the worlds first investing homepage that shows you where all your investments are and what theyre doing with free streaming quotes, news, analysis and even your trade ticket. Everything exactly the way you want it, all on one page. Transform your investing with the etrade 360 investing dashboard. The northeast is beginning to batten down the hatches for Hurricane Sandy and thats expensive. Seema mody joins us now with the first estimates of the storm cost. Good evening, seema. Good evening, larry. The estimates begin at a billion dollars and head north from there. Based on the cost of irene at the same time last year when power was out in new england. We get the latest on the storm now from Bryan Norcross at the weather channel. Whats the latest . This hurricane is in the bahamas now. And it is heading north. And the big concern, i think its going to dominate your lives starting this weekend there in the new york city area and all of the northeast. Lets take a look at this graphic here. Theres the hurricane moving north through the bahamas. It bends offshore but over the weekend, its affecting the carolinas with pretty good winds right along the coast. And then early next week, it bends in to the northeast. We have never had a storm come out of the topics and bend in like that. So the thinking is that somewhere from props the delaware bay area, south jersey area north, this is going to drive water all along the beaches. And this has the potential to cause tremendous damage along the coastline and the whole scenario we had with irene in new york city and the transportation problems and the power potential problems and all of that could be played out in this storm. It is not certain yet that it will be as strong as the computers are indicating. But right now, they are indicating an extremely strong storm with winds extending all the way to new england, coming ashore either on monday late in the day or early on tuesday. A lot more to talk about here on this. Thanks so much, bryan. Well see a lot of you over the next several days. Mindful of the damage that happened last halloween and the potential for a frankenstorm, utilities and local governments across the northeast are putting crews on standby to deal with fallen trees and damage to power lines and making plans for shelter. Power companies are asking employees to cancel planned vacation. Halloween used to be just a pretend scary, not last year. Probably not this year either. Seema mody, thanks very much for the report. Coming up on kudlow, leon panetta, defense secretary, he continues the white house coverup over benghazi and he tries today to worm his way out of protecting our people in the consulate. That story up next. [ male announcer ] how do you engineer a true automotive breakthrough . You give it bold new styling, unsurpassed luxury and nearly 1,000 improvements. Introducing the redesigned 2013 glk. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Welcome back to the kudlow report. Im larry kudlow. In this half hour, how bad is europe . American companies are laying off their euro workers and closing down their euro plants. Worldwide Exchange Host kelly evans is going to join me in a little bit. Another group of ceos now trying to pressure washington to fix the fiscal cliff and keep us out of bankruptcy. But i see a lot of talk and no action from the ceos and the politicians. But first up, defense secretary leon panetta now joins the obama coverup of benghazi. Take a listen. Basic principle is that you dont deploy forces into harms way without knowing whats going on, without having some realtime information about whats taking place. This happened within a few hours. And it was really over before we had the opportunity to really know what was happening. Respectfully, i think thats just a lot of nonsense and hooey. Last night, we learned and reported of another email that said they were still under attack and holed up for at least six more hours. And panetta had realtime information much earlier than that. If he had acted immediately, we could have sent fighter jets, commandos to protect our consulate, the navy base is not far away. So this burns me up. Lets talk. Cnbc contributor David Goodfriend is with us, former Clinton White house official. Ben webber, republican strategist and mitt romney senior adviser. And emmynominated actress janine turner, founder of constituting america. We wait for janine to get strapped in. Ben webber, i want to go to you, i know that governor romney has stayed away from this issue, at least during the debate. I dont know what hes saying on the campaign trail. But we no from report, we know that panetta was in an Oval Office Meeting with the president and the Vice President at 5 00 p. M. On 9 11. We know that. We also know those emails came in as you well know at 4 05, 4 59, 6 07 and later on in the evening, another email said that they were still fighting it out six hours later. I dont understand how we didnt send ach weapons, help and assets help as we could. I do not get it, ben. Id like your opinion because i think panetta is covering his behind because its part of a political coverup. Larry, i think that youre probably right. Whats emerging is a picture of the administration basically watching this happen and doing nothing about it. We had assets in the neighborhood an hour away in italy, as you point out, we could have done something about it. There was email traffic within the administration. There was advance warning. Why we did nothing about it remains a great mystery. I dont think, larry, that its going to be litigated in this campaign, though, because this campaigns going to end up being a referendum on the disastrous obama economy. As soon as the election is over, watch Congressional Republicans demand an accounting from this administration on what is rapidly emerging as a genuine scandal. Janine, i have to bring you in on this, from the great state of texas. Janine, we had significant military assets as vin weber said an hour away. To me, it is criminal that panetta and the joint chiefs didnt rapid deploy those assets and get them to the consulate of benghazi. In an hour, they could have had fighter jets, run commandos in a couple of hours after that. How sit possible we did not defend the ambassador and all the support staff . How in this country, janine turner, is such a thing possible . I dont know how such a thing is possible. Its also amazing to me that its not a bigger deal and being covered in a way that watergate was. This is a benghazigate. I hope that it will be covered with the dignity that it deserves for the four lives that we lost. I dont know. Incompetency, they were afraid, paralyzed to make a mistake. Were they thinking about the election and that al qaeda is still alive, terrorism is still alive . Whatever the excuse is, its unexcisable. Its one thing when the cia and our wonderful military is doing a great job, to sit back and say, yeah, okay, go ahead and get bin laden. But its another thing when he has to make a real decision on the spot and obviously president obama didnt make it. David, you can laugh and giggle as much as you want. But im telling you, this is a major mistake. It is going to be investigated after the election as it must be, as vin weber suggested, by democrats and republicans alike. And it sends the worst possible signal of american weakness to the middle east and to groups and terrorist groups that hate us all around the world. We should have had military assets in there pronto, as soon as they learned it on 9 11, in that Oval Office Meeting, david. Larry, my conservative friends might like to think this is watergate. But when things are unfolding very quickly, its not always easy to know whats really going on on the ground. And to my mind, the really important question here is about how information was collected. Its probably better to let the relevant government body dos their work i have. Those are not my words. Those are Condoleezza Rices words today on fox news to her interviewer, greta van sustern. Condoleezza rice said it and shes right. And today, colin powell endorsed the president of the united states. You argue with them. All you conservatives who want to make this i will argue with them. What i dont understand sand what i think a majority of americans as this story unfolds on the public stage will never understand ened i want to ask about the Mainstream Media, too how we could not have taken actions to defend the people in benghazi. We had plenty of information. Im sorry. Theres a lot of voices out there, vin, that are very modest, dovish voices. I dont like that one bit. This is a scandal. Davids trying his best to cover it up. But its not going to be covered up. I would make this point as well. While all the administration officials, susan rice and everybody else were saying, oh, this was the tape, it was the riot, not everybody was fooled. Congressman mike rogers was asked almost immediately and he said, this looks to me like a terrorist attack. This is when all the Administration People were saying that there was no evidence of terrorism. They couldnt prove it. Why did mike rogers see immediately that it looked like a terrorist attack and the administration couldnt see it . This was not something that was unobvious to the average person in possession of intelligence information. This is something that was denied by this administration and we havent had a good explanation of why yet. Janine turner Condoleezza Rice, Condoleezza Rice. Janine turner, i want to go to a separate but related subject, that is the lousy Mainstream Media coverage of this whole story, including in the last 48 hours over these emails. Janine, are the Mainstream Media in the tank for obama . Are they swallowing this phony video and spontaneous protest thing hook, line and sinker . They hardly reported it yesterday and the day before. Are they just going to go along with everything obama wants to get him reelected . I think they do just want to get him reelected so theyre staying silent on it. Can you imagine if this were reversed and a republican had did this, they would be all over it. And theyre not. Wheres the bob woodward and people out there investigating whats really going on from the liberal press . Theyre just not doing it. Theyre putting it on page eight and nine in the New York Times, barely touching it in the news. Theyd rather talk about the pop culture. They should be grilling him. They should be. The Mainstream Media should be grilling every single obama surrogate, i mean grilling them and theyre not doing it. And one of the reasons why is because the Bigger Picture to this is this will take away our freedoms. We are in danger here. Our liberties are in danger. And the freedom of the press is going to go away. Larry, i would like to join your criticism of the mainstream press. Im going to shock you here. Actually the big story that the Mainstream Media is missing is the fact that alleged fraudulent and criminal actions by a Company Called Strategic Allied consulting in florida, in virginia, across all of these swing states, so much so that the rnc has had to distance itself from this republican contractor, there is real voter fraud going on i dont have any problem with that, david. But youre blowing smoke. I dont have any problem with that. Youre blowing smoke on me on this particular issue. And i must say, with the greatest respect to Condoleezza Rice and with the greatest respect to general powell, the greatest respect, two friends of mine, with the greatest respect, i believe theyre wrong on this issue. And i think people have to stand up then as a former house member you were in the leadership i want so much for the gop and youll find democratic hawks, vin, i want bipartisan condemnation of how this would handled. I want republicans and democrats, vin, the democratic hawks are out there. I want condemnation of this. I dont think theres any doubt thats going to happen. But i have to say again its not going to happen before the election. Well, all right. Davids got to defend it now because were just days away from an election. As soon as this election is passed, youre going to find a virtual consensus that this is a disaster and a scandal. Take me out, janine. You had something to say . Yes, i do. Not the mention, i just believe its absolutely unamerican for president obama and his administration to go around saying that this was because of a tape, a videotape that someone did in america. We have freedom of speech here and its absolutely thats criminal in itself. Read the transcript. The president called it a terrorist attack. We did not protect the men and women on the spot with rapid deployment. I dont know how were going to live this down. David goodfriend, thank you. Vin weber, janine tuner, thank you all. Europes weak economy is wreaking havoc on u. S. Multinational companies and our stock market. So the question is, is the worst yet to come . Thats coming up next on the kudlow report. When you take a closer look. At the best schools in the world. You see they all have something very interesting in common. They have teachers. With a deeper knowledge of their subjects. As a result, their students achieve at a higher level. Lets develop more stars in education. Lets invest in our teachers. So they can inspire our students. Americans believe they should be in charge of their own future. How theyll live tomorrow. For more than 116 years, Ameriprise Financial has worked for their clients futures. Helping millions of americans retire on their terms. When they want. Where they want. Doing what they want. Ameriprise. The strength of a leader in retirement planning. The heart of 10,000 advisors working with you onetoone. Together for your future. \ earnings season in full swing and the reports are getting ugly. So whats to blame . Many major u. S. Multinational companies are fingerpointing the eurozones economic woes. Take caterpillar, 3m, ford, dupont, dow chemical, all identify europe as the weakest link in the Global Economic chain. The question is just how bad is business over in europe and how long is it going to stay bad . Noble better to tell us firsthand, londonbased, than cnbcs own kelly evans, host of worldwide exchange. Welcome back to the show. Larry, thanks. Great to be here. Its hard being five hours ahead of time. Now im back here in the u. S. We can talk europe. Its been a big trouble spot for a lot of these companies. I think that theres a big wakeup call here and i think its affecting the stock market. A lot of these multinationals who operate in europe are not only reporting earnings misses, which happens, but theyre reporting layoffs and production cutbacks. I want to ask you, are you getting wind of that in your reporting and how bad is it . First of all, it is bad. If you look at just the numbers coming out of europe, its clear theres no topline growth. Sales are down. A company like caterpillar, theyre down 1 . May want sound like the end of the world. Ibm down 9 . Whirlpool with europe, middle east combined, down 19 . Kimberly clark which says its going to stop selling or producing diapers, ford said theyre going to cut 18 of their european capacity and 5,700 jobs as well. If ythats layoffs upwards of 10,000 to 11,000 across europe. And these are european workers. And its bad for these companies for the u. S. Multinationals but its much worse for europe. Is it compounding the european woes . Of course because where did the woes ultimately start, if you take a country like spain, portugal or greece. Its about competitiveness. Debttogdp ratio has two factors. When the gdp is shrinking, thats when the debt starts to increase. Greece has gone from 180 to 120 debttogdp ratio. Because it cant possibly support the debt story. Exactly. As you look around, whether its britain or the continent, is there any hope . Are there any positive signs . Just today theres actually several. Just today we had the uk report that its economy expanded in the third quarter. It was a surprise. Gave people some sense how much . 4 , if i recall. That followed an earlier contraction. Theres been a lot of confusion over the data because the employment figures have been much stronger than the output figures. Maybe the economy isnt as weak as expected. Then flip over to europe where the macro situation is grim, theres a sense the stock market has priced a lot of this in. Euro stocks have been doing well, to be fair. Exactly. Because thats when you get this is an issue both for europe and for the u. S. If were not in a 20082009 period, what exactly are we in . Its a complicated question from an investing point of view. Its easy to rattle off the weakness were seeing in the talk of europe being through recession through the end of next year. But if you say whats the Investment Case . Does that mean you steer clear, stocks are priced in theyre exporting. The euro is pretty cheap. What about the better countries . You have germany, the netherlands, sweden, one of my favorites. The northern part of europe has an economic life. I dont know about the southern part. I was waiting to see if you were going to put france on that last. France is the pivot point. I wont. If hes going to raise taxes to 75 , forget about it. Hes a total socialist. Whats interesting about france is its been on the verge of no ones been quite sure whether they should consider part of the core or part of periphe periphery. If its not part of the core, if we cant rely on growth, if we cant rely on it, meaning its deficit projections to a certain extent or just needing more assistance to get spending going again which is capped because there isnt much desire to do the kinds of things that hollande is going, to raise taxes and revenue, bottom line is this, focus shifts to france. If france is vulnerable across the eurozone, it makes the eurozone more vulnerable, complicates relationships between france and germany when they need to negotiate with regards to continued efforts to we look forward to your reports. Theres plenty to discuss. Kelly evans, operating outside london. Used to be a regular on this set. Dont forget to catch her, worldwide exchange, its every weekday from 4 00 to 6 00 a. M. Up next this evening, more than 80 major ceos are pressuring congress to reduce the federal deficit with bipartisan reform. Some of them apparently really want to raise taxes, another lousy idea. Think of france. Its all next up on kudlow. In America Today were running out of a vital resource we need to compete on the global stage. What we need are people prepared for the careers of our new economy. By 2025 we could have 20 million jobs without enough College Graduates to fill them. Thats why at devry university, were teaming up with Companies Like cisco to help make sure everyones ready with the know how we need for a new tomorrow. [ male announcer ] make sure americas ready. Make sure youre ready. At devry. Edu knowhow. Whoever wins the election, i think they there will have to be a compromise. I think the other side is not going to go into a funk. People say Business Leaders should be more vocal. Look, were vocal. This is a complete distraction an important distraction at a time when the country doesnt need it. Lets get it done. Its going to get done. The American People wont stand for it not getting done. Big name ceos on cnbc this week saying, its time for both Political Parties to act on the fiscal cliff. Today at the new york stock exchange, more ceos rang the bell and joined in the call for action as part of the fix the debt campaign. Ceos from more than 80 major american corporations are pressuring congress to reduce the federal deficit with something called bipartisan reform. Lets talk about bipartisan reform. We have cnbc contributor and former auto czar steve ratner and steve ovlin. Former chairman of office depot and autozone. Bipartisan reform, on the budget deficit, and i guess the fiscal cliff, the top of the New York Times website today is playing this as, ceos want deficit reduction by raising taxes. Do you think thats the best way to go about this, steve . Well, i think what were trying to get in the Business Community and the community for Economic Development is attention from both sides of this critical issue. Were running over trilliondollar deficits every single year. We now from over 16 trillion in debt and it isnt easing up. We have to have reform here. We simply have to have a package that cuts spending and deals with tax reform. But thats not what they want. Its not just about raising rates. Its tax reform. Its tax reform. The issue right now is we have the highest Corporate Tax rates in the world. And so if we just simply raise tax rates, were going to make ourselves even more uncompetitive in the world. We have to have reform that raises more revenue with a progrowth policy. I like that part. Steve rattner, i want to go to you, these ceos everybodys against the fiscal cliff. They dont want tax hikes and they dont want spending cuts. If they dont want tax hikes and spending cut, theyre all a bunch of hypocrites as far as the long term is concerned. If these were true, i would agree with you. But i actually think the group of ceos who weve assembled want a balanced approach of spending cuts and of increased revenues, hopefully through tax reform. But revenues have to go up. Not as much as spending has to go down. Spending going down is going to bear the burden of this. But both have to happen. The ceos ive spoken to, the ceos weve signed up as part of the committee to fix the debt understand that. Where is the spending cuts, Steve Rattner . Why dont they its all very vague. I dont expect the head of ge to go through a budget exercise like omb. I get that. But for example, i want them to say, we have to keep spending down to about 20 of gdp or even less. Id like him to say what steve oddlund is saying, when youre talking tax revenues, not talking about raising tax rates. But i dont hear. That makes me think these ceos like to do good and say good things but it will come to nothing. I hope youre wrong. I think youre wrong but time will tell. Our committee has not endorsed a specific plan but it has endorsed the general principals in Simpson Bowles that do include spending reductions and do include revenue increases in the con detection of tax reform. The key to this is to get the debttogdp ratio to stop going up. That is the key test in our minds of any successful package. I agree with you on that. 100 agree with you on that, debt to gdp. And i think the way to do that steve, i think we spend too much. I dont think were taxed too little. I do agree about tax reform. But i think we spend too much. What concerns me in these exercises is everybody starts talk about revenue before they Start Talking about spending. Further more, when you say 3 of spending cuts for every dollar hike in revenue, you never get it. You get 1 for 1 or you get no spending cuts and you get lots of revenue increases. Thats what seem to happen with these crazy deals. Thats why we have to be careful and make sure we have a balanced package. In the business world, you cant just say, we want sales to go up, therefore were going to hike prices up through the roof. Thats the equivalent when youre talking about rates. You have to have a balanced package in the private sector by putting in zifs. Same thing in the economy. Thats why the committee for Economic Development has led three of these kinds of endorsement campaigns. We need to have reform. Everything needs to be on the table. We need to look t it and reform this in a fundamental way to get this economy growing again and start creating jobs in this country. We have a 16 trillion pile of debt that we need to grow this economy into. Steve rattner, its funny, the debt doesnt bother me as much as the lousy growth and the economy. That to me is the absolute key. You and i may agree on some of this and disagree on others. But if this becomes a hunt for more taxes and the spending is always taking second place to socalled spending cuts, well flunk this again. We need serious spending cuts. I dont disagree with you. As i said, i think the package to fix the debt is behind would have far more coming from spending reductions than would come from revenue increases. But i dont believe i think its just math. I dont believe you can get the deficit down to that gdp ratio that we talked about without some revenue increases as well. I agree with you that growth is the most important thing. But the best thing we could do to achieve growth in this country, in my opinion, would be to provide business and consumers with some certainty, both as to the fiscal plans, as to the tax plans and as to whats going on in washington. I agree. We have to lower those tax rates. Incentive effects for lower individual and Corporate Tax rates offset by caps on the loopholes or elimination, thats the way to do it. Thats the progrowth way. Thats the exact way. Highest tax rates in the world from a corporate standpoint. 75 of the top individual payers are small businesses. We need to make our businesses competitive. Thank you, gentlemen. I appreciate it very much. Thats all we have for tonights show. Thanks for watching. Free market capitalism is the best path to prosperity. That includes spending reductions, spending reductions is part of it. If we want to improve our schools. What should we invest in . Maybe New Buildings . What about updated equipment . They can help, but recent research shows. Nothing transforms schools like investing in advanced teacher education. Lets build a strong foundation. Lets invest in our teachers so they can inspire our students. Lets solve this. Mike rowe here at a ford tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee. Affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Buy four select tires, get a 60 rebate. Use the Ford Service Credit credit card, get 60 more. Thats up to 120. Where did you get that sweater vest . Your ford dealer. Anncr every president inherits few have faced so many. Four years later. Our enemies have been brought to justice. Our heroes are coming home. Assembly lines are humming again. There are still challenges to meet. Children to educate. A middle class to rebuild. But the last thing we should do is turn back now. President obama im barack obama and. I approve this message. At legalzoom, weve created a better place to turn for your legal matters. Maybe you want to incorporate a business youd like to start. Or protect your family with a will or living trust. Legalzoom makes it easy with stepbystep help when completing your personalized document or you can even access an attorney to guide you along. With an a rating from the Better Business bureau legalzoom helps you get personalized and affordable legal protection