This war. Nothing really seems to work. We will take a closer look at why the number of americans living in poverty hasnt budged. Also tonight, we have this developing bombshell of a story right here in new jersey. New evidence directly links a massive traffic shutdown on the George Washington bridge to governor Chris Christies top aides. Now the questions are getting more serious. Did christie know about this and will this become a scandal that undoes his chances to run for the white house . And a new book by former defense secretary robert gates also causing a political and Foreign Policy sensation. Whats the book tell us about president obama, Hillary Clinton and some other key players that we need to know about . After all the sacrifice, are we actually losing in afghanistan and iraq . Oh, my gosh. All those stories and much more coming up on the kudlow report beginning right now. Good evening, everyone. Im larry kudlow. This is the kudlow report. We are here live, 7 00 p. M. Eastern, 4 00 p. M. Pacific. Okay. 50 years ago tonight, president Lyndon Johnson declared a government war on poverty, yet in the past two generations, the poverty rate has moved very little, dropping from 19 to 15 , where it has remained now for three consecutive years. Get this. The number of americans living below the poverty line has hit a record high during the obama presidency. Let me get this straight. The Big Government solution, spending trillions on social welfare programs, seems to have done very little to combat poverty. Surprise, surprise. All right. Perhaps my old boss, president Ronald Reagan summed it up best in his 1988 state of the union. Take a listen. Some years ago, the federal government declared war on poverty, and poverty won. Federal welfare programs have created a massive social problem. With the best of intentions, government created a poverty trap that wreaks havoc on the very support system the poor need most to lift themselves out of poverty, the family. Dependency has become the one enduring heirloom passed from one generation to the next of too many fragmented families. Dont get me wrong. The poverty question, the issue of ameliorating poverty is a very important issue, very important issue. But my question is whether family breakup isnt the biggest poverty driver of our time, and it cannot be solved by just throwing more money at it, all right . Heres mike konzal, Roosevelt Institute fellow and author of three lessons for liberals today. We bring in Robert Rector, author of this wall street journal oped, how the war on poverty was lost and cnbc contributor jim petrakukis of the American Enterprise institute. We have an allstar cast. Jimmy, let me begin with you. Is it fair to say the war on poverty has been lost . That depends how you define it. If youre asking whether people who are poor are materially richer today than they were 50 years ago, then yeah, they are. And on that basis its been a tremendous success. But i think an equally important question to ask, are they richer in hope, are they richer in opportunity, are they richer in family life, are they richer in civic society, and i think on those grounds, its been a tremendous failure. All right. Tremendous failure. Mike, ill go to you. Whats your response to that . Because again, i think the things jimmy is getting at are things that im raising. Family breakup and other personal values type issues that kind of go to the root of who we are, what we think, whats in our heart and whats in our mind, its not really more spending. Lets distinguish a few things. One is if you look at census numbers that incorporate food stamps, a lot of tax code stuff, poverty has fallen quite a bit. Its fallen quite a bit for people with children in particular. Thats taken a lot of stress off children who live in poverty, which is a huge health consequence. So things like food stamps, eitc which evolved through earned income tax credit. Have done quite a bit to actually reduce the level of poverty. I want to distinguish between things like poverty and old age, social security, you are talking about 60 rates before the war on poverty, now its down to 10 . So there are real substantial victories. A lot of things people found problematic, things Like Community action, like aid to family and children, what we call welfare, has largely disappeared or been wound down or been removed to the states. The core stuff that remains is a really efficient way to deliver money to poor people to keep their standards of living up. You think, mike, you think democrats should take a victory lap around newark, new jersey . Well, i mean, i actually do think that there are things here enough . Things like earned income tax credit, like food stamps, are doing quite a bit to help people. I think that should be acknowledged and embraced. Ultimately we want to see things like better job growth, better growth overall, we want to see things like strong communities, but you know, in terms of abolishing want in old age is a huge accomplishment. I get that. Robert, let me go to you. If you look at the longterm charts, the longterm charts, you have a drop in the poverty rate from the late 50s i guess to the mid 60s or thereabouts, then it just seems to fluctuate with the business cycle. Recessions and recoveries. Theres not much change, you know, they redefined it and thats fine but there still isnt much change. Youre arguing i think, lets see, 100 Million People receive aid. That troubles me, government benefit society were living on government benefits, that troubles me, but, but to get to mikes point, what about marriage penalties . What about, you know, if you work and you marry, single mothers marrying a father whos working, it doesnt pay. After you lose government benefits and after you pay your taxes, as you and others have written, you only keep 30 . So are the cards stacked against families . Thats what im asking. It absolutely is. To judge the war on poverty you have to go back and say what was johnsons original goal. Johnson said he didnt want to just cure the symptoms of poverty, he wanted to remove the causes. He said this would actually eliminate the dole. He said he was going to make people prosperous and selfsufficient without government assistance. In terms of that goal, the war on poverty has been an absolute catastrophe and people have considerably less capacity for selfsufficiency, selfsupport and prosperity than they did when the war began. In particular because when the war on poverty started, 6 of American Children were born outside of marriage. Today the number is 42 . In low income communities its often over 75 . Those children will be in official poverty, they will be dependent on government. The capacity of those communities to support themselves is dramatically worse because for 50 years, the welfare state has deliberately penalized marriage, has treated fathers as irrelevant or as problems, and has pushed them out of the home. Also it penalizes work. Let me just read this. I think this came from your oped piece. In 1963, 6 of children were born out of wedlock. Today, 41 of children are born out of wedlock. That is a staggering number. As many people have observed, if youre born out of wedlock, and you grow up with a single parent, you can almost predict if not poverty, then near poverty. Four times likely to be in poverty, three times likely to be in jail, and 50 that you will be poor as an adult. Mike, this is the stuff that really bothers me. I dont see this i mean, we should change the incentives for being married, i think Robert Rector is exactly right, but we know how important family breakup is and i dont know why politicians and the president dont talk about that. A lot of politicians do in fact talk about this. But i think if youre looking at the programs that were largely thought of to encourage this kind of behavior they have largely moved off the radar. We still have issues with income traps and poverty traps and really high marginal tax rates thats the key. High marginal i mean, if the family situation wasnt bad enough, the tax code is skewed against families or against moving into work, if youre married. Thats crazy. Right. So there are ways we can try to assuage that and people are trying to do that. You can think of different types of tax law, refundable tax credits and whatnot. There are ways to continue to try to build the family out in this way. There are senators proposing a refundable tax credit for children to be expanded, you know, that would do a lot, provide a lot of support to families. That wouldnt necessarily get these same problematic incentives jimmy p, let me just ask you. Where do you think we should go now . Its very interesting. The president talks about poverty but he talks about it in terms of income inequality and i just dont get that, jimmy. I mean, penalizing successful people doesnt seem to me to reduce the poverty rate, if thats the deal. Youve got paul ryan giving a speech next week on poverty. Youve got marco rubio, senator rubio i believe today, i havent read the speech, but he gave one today. Where should we be going on this . I actually think marco rubio had a pretty good speech today, had a couple good ideas, one of which is to take a lot of these antipoverty programs, not cut them, but move them to the states, where you can let the 50 states try to innovate, try to make better programs, not have it all done at the federal level, not cutting the money by any means, but just seeing if they can innovate more. He talked about a subsidy so work pays better and makes it more attractive for people to get jobs, to get off welfare, get off the dole and move into the work force. I think at the center of all these ideas is the idea that we want people to have jobs, we want people that work is important. Being out there, adding value, earn success. Thats extremely important to a human being. As well as raising the standard of living for the very poor. I mean, Robert Rector, that sort of brings me to the other point. We need faster Economic Growth. Particularly in the past 15 years or so. Ill go back to the bush years, right on through from 2000 to now, our economy has barely grown, i think less than 2 per annum. The jobs recoveries in both cases have been terrible. I for the life of me dont understand why the president goes around saying we need to tax rich people, because theyre hurting the poor, or theyre hurting the middle class. I dont understand that, robert. Its successful people that can create jobs and that whole conversation to me is convoluted. Yes, youre right about that, but youre even more right about the basic cause of Child Poverty in the u. S. Today is the collapse of marriage. And we, in fact, will not even discuss this as a nation, ever since Daniel Patrick moynihan tried to bring this up in 1964, the left has attacked anyone who discussed this topic. The simple fact of the matter is that marriage reduces the probability of Child Poverty, even holding a parents education level constant by 75 . Its actually more effective in terms of reducing Child Poverty than the mothers graduation from high school. [ speaking simultaneously ] lets point out the fact there has been a huge economic convulsion in that bottom 20 which has affected jobs and wages. I think families are incredibly important. Now you start to have a selfperpetuating doom loop between the breakdown of the family and huge economic challenges which is impossible to disentangle. We dont have to disentangle them to come up with good solutions. I would take great care i got to get out. I got to get out. For 50 years, it has pushed the fathers out of the home quite deliberately and thats why you have 75 of all the children that are in poverty are in single parent homes. Lets talk about economic changes, too. If there are economic changes here, to help solve marriage and family breakup, youve got to reduce any vestiges of the marriage penalty with respect to taxation. You just must. You are probably going to need some child tax credits, some additions there. You just have to do that. It may not be the most efficient thing in terms of a flat tax but youre just going to have to do that. Thats just the economic side. The family side, i dont know. Thats the most discouraging part. Anyway, thanks. Robert, jim, mike. Now, folks, the jobs picture. All right, starting to show proof of a real turnaround, at least for the middle class. That was the headline from the fed. Minutes released today and a key jobs report this morning. Thats good news for the economy and king dollar is rallying. Now, thats the key point. We will talk that over with our investment experts. Later in the show, its truly the hot story of the night. This is something. New evidence shows new jersey governor Chris Christies top aides orchestrating a George Washington bridge lane closing, traffic nightmare totally on purpose, according to these emails. The governor denies any knowledge of it. Is that credible . Whats this scandal going to do to his president ial dreams . Well get the full story for you in just a couple of minutes. For now, dont forget the free market capitalism is the best path to prosperity. Lets also take care of our families. Im kudlow. Well be right back. Mine was earned orbiting the moon in 1971. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. We are the thinkers. The job jugglers. The up allnighters. And the ones who turn ideas into action. Weve made our passions our lifes work. We strive for the moments where we can say, i did it we are entrepreneurs who started it all. With a signature. Legalzoom has helped start over 1 million businesses, turning dreamers into business owners. And were here to help start s. Turning dreamers into business owners. It took a lot of juggling to keep it all together. K. For some lowincome families, having Broadband Internet is a faraway dream. So we created internet essentials, americas largest lowcost internet adoption program. Having the internet at home means she has to go no further than the Kitchen Table to do her homework. Now, more than one million americans have been connected at home. It makes it so much better to do homework, when youre at home. Welcome to whats next. Comcastnbcuniversal. All right. Good news for the overall economy. Adp out with its jobs number that was quite strong, 238,000 private sector jobs last month was revised higher. We like that. The Federal Reserve minutes pointing towards signs of better Economic Growth and key to this segment, king dollar continues to rally. Very, very interesting. Now, i dont know why the dow dropped 70 points. Lets ask our ace investors. We welcome back jack barusian of index Financial Partners and welcome paul hickey. Paul, your latest report, i have been talking about this two nights on the air, because you know im a king dollar nut, your latest report says that a strong king dollar is great for stocks. All right. Now, so far in this dollar rally, not so much, but i want to ask you, are you sticking to your story . Oh, yeah, larry. If you look back historically, outside of the last cycle, looking back, the market equity market has done much better when you have the dollar in a bull market versus the dollar in a bear market. The returns are about three times greater during bull markets than they are during bear markets. All in all, this strong dollar, as youre saying, should be great for the equity market and Going Forward as long as we can keep this strength going. Let me just ask you as a followup. Most of this stock market rally cycle has had an inverse correlation. Stocks up, dollar down. Thats quite unusual. But thats how its worked. Thats the socalled risk on trade. Now, what youre saying is we can shift, we can shift to a stocks up, dollar up and i want to ask you, whens that going to start and why does that correlation replace the old correlation of the cheap dollar . Well, i mean, just look back to the 1990s. We saw a strong dollar in the latter half of the 90s and the equity market, i mean, that was one of the greatest periods in a generation. If you look at strong dollar Means Investment is coming into the u. S. And its going to go into dollar denominated assets which we have been calling for the past few years. If you look back, the dollar index actually bottomed in early 2009 and its been in a bit of a side ways trading range for the last four years. Again, you look back to the late 80s, early 90s, we saw a very similar pattern. The dollar was horrible in the late 80s, leveled off for about four to five years in the early 90s and then really picked up strength. The pattern right now, i mean, it seems to be following that pattern so as it continues to follow that pattern, thats a good baseline to work off of. Jack, what do you think of this . I think that inverse correlation has already stopped, larry. Look at whats happened last year. We saw the stock market up almost 30 . We did not see the dollar move against the world currencies nearly that much. If anything, we saw a stable dollar, especially towards the second half of the year. So all of that is already in place. You know, this is growth. You know, despite what is coming out of d. C. , we are growing. In fact, you talk to a lot of people that are running corporations that were looking to hire at the beginning of the year, they were waiting for certainty. Well, they never got the certainty they were looking for, but they realized they could no longer function with skeleton crews so were starting to see exactly what we expected, and its not only happening here. Think about it. Its happening around the world. In fact, just yesterday, the imf Christine Lagarde came out and upped the forecast for Global Growth and downgraded maybe three months ago, so all of that is really starting to take shape and if we get a good number on friday and this adp number today is a precursor to what i think is going to be a very good number on friday. Its a blockbuster. I like using the adp number. It correlates well. Let me go back to this. We will have a lower trade deficit, lot of its because of the American Energy boom, the great American Energy boom. We dont have to import energy. We will wind up exporting energy. Thats good. The Federal Reserve becomes less and less easy and we are at the beginning of what i think is going to be a three, four, five year tightening cycle. The dollar will respond by going up, with the lower trade deficit and the feds change in policy. Thats the strong dollar. Now, that holds down inflation. Thats why king dollar is so valuable. That holds down oil prices. That holds down all manner of commodity prices, which is good for consumers and most companies. So it makes sense. The question is when does it materialize. Well, youre exactly right, larry. The adp number, you know, in previous session levels we were here, we had a big drop and are slowly working our way back to new highs. At the pace were going, we will hit a new high in adp private payrolls in may, then well see a new high in the nonpharm payrolls in june. The economy is picking up. Thats a very psychologically important thing here. With the economy picking up, we are going to need strength in the dollar because youre going to have inflationary factors at work and we need a strong dollar, like you said, to keep that low its absolutely crucial. Jack, ill let you take the final whack. Jack, just quickly, favorite investments, if you have a scenario where medium and longterm Interest Rates go up, which is my view, because or not because of the fed, i dont care, the economys going to drive medium and long rates up, the trade deficits coming down and the dollar goes up. Favorite investment, jack. Financials. Remember, if you get that spread and we start to see the low end and start to see a little bit of movement in that longer end, that is the spread that financials, especially these larger banks, make their money off of. I would be looking there. Dont look for, you know, a rate of say 3. 5 or 4 in the ten year to really destroy housing. It might slow it down a little bit but thats nothing. Remember, in the grand scheme of things, a 3. 5 or 4 ten year is still very, very low. Yeartodate, just looking at the tables, youre right, the kbw index, the bank index, is actually outperforming year to date in the young new year. Thank you, gentlemen. We appreciate it. Now, the costs are starting to add up for this brutal National Cold snap. We have that story and the other big headlines just ahead. Theres a saying around here, you stand behind what you say. Around here you dont make excuses. You make commitments. And when you cant live up to them, you own up, and make it right. Some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where its needed most. But i know youll still find it when you know where to look. Of the dusty basement at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment [ telephone rings ] [ shirley ] edward jones. This is shirley speaking. How may i help you . Oh hey, neill, how are you . How was the trip . [ male announcer ] with nearly 7 million investors. [ shirley ] hes right here. Hold on one sec. [ male announcer ]. Youd expect us to have a highly skilled call center. Kevin, neill holleys on line one. Ok, great. [ male announcer ] and we do. Its how edward jones makes sense of investing. Welcome back to the kudlow report. Im Morgan Brennan with this news alert. Today is the day of the big basketball game in north korea. Dennis rodman bringing a group of former nba players for a game on kim jonguns 31st birthday, but rodmans basketball diplomacy is being questioned by some here in america. Heres what senator john mccain had to say. I think hes an idiot, but hes a dangerous idiot because he gives good propaganda to arguably the most brutal, crazy man on earth. The worst of the brutal polar vortex is over, but people in the midwest and northeast are still trying to get back to normal. Airlines canceled 7,000 flights so far this week, causing billions of dollars of harm to the economy. According to some estimates. But good news, warmer weather is coming this weekend. Shares of macys are higher in afterhours trading. The company is laying off 2500 workers as part of a costcutting effort. Macys also raising its guidance for 2014 and 2015 in part due to savings from those job cuts. Listen to this. J. R. Smith of the knicks fined 50,000 for untying an opponents shoelace. They were lining up for a free throw and smith just bent over and untied Shawn Marions shoe. 50 grand may seem like a lot for a silly little prank but the nba says smith has quote, recurring instances of unsportsmanlike conduct. Larry . Nba is right. This is all part of this character building idea, where we need so much more of it. We were talking about families earlier in the show, and by the way, Dennis Rodman is an idiot. No, i take that back. Dennis rodman is a subidiot. Thats what he is. John mccain is right. Its worse than that but not for family television. Morgan, thank you very, very much. Now, its become the hottest political story in america. New evidence shows governor Chris Christies top staff deliberately stalled traffic on the George Washington bridge just to lash out at the mayor of fort lee, new jersey. The mayor of fort lee is about to join us. Well have a full report on this whole story. But first, listen to what the mayor of fort lee just told me about who he thinks the governor should apologize to. Calls are going to be made. Call the families that waited two to three times longer for an ambulance to arrive while their loved one was clutching their chest because of chest pains. Call the thousands of parents that couldnt get their kids to school on time for the first day of school and the three or four days thereafter. You know, call, call those people that had to deal and endure this. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Bulldog the red tags mean the red tags mean save up to 40 on clearance mattresses. Get up to 300 off serta, posturepedic, even tempurpedic. Puppy i found a red tag hahaha bulldog mattress discounters year end Clearance Sale ends soon. At a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. Welcome back to the kudlow report. Lets get into this growing scandal involving new jersey governor Chris Christie, one of his top aides accused of purposely causing traffic problems to damage the mayor of fort lee, new jersey, despite the fact that christies going to have an impending landslide. Everybody knew that. Lets bring in eamon javers, who will explain this whole thing, timeline and all. Good evening. Good evening. This was a low level political scandal in new jersey until today, and thats when the bergen record newspaper in new jersey obtained emails and Text Messages back and forth between and among christie aides and christie appointees that appeared to suggest that those aides and appointees arranged for a massive traffic jam in fort lee, new jersey by closing down some of the lanes on the George Washington bridge between new jersey and new york city, doing that deliberately apparently out of some kind of political feud with the mayor of fort lee, new jersey. Take a look at the emails in question. You will get a sense of just what were talking about. Starting with this one just before the incident in which christie aide Bridget Ann Kelly emails Port Authority executive david wildstein, time for some traffic problems in fort lee. He responds got it. Next, after the incident has already occurred, an unknown sender sends a text message saying is it wrong that im smiling . Wildstein responds no. And finally, after some concern about School Children who were stuck in traffic trying to get to school in their buses for hours, one person sent a text message saying i feel badly about the kids, i guess. Wildstein responds they are the children of buono voters. Thats a reference to the governors Democratic Political opponent. Now, the governor was asked about this, the last time he spoke about this publicly. He offered kind of a sarcastic response. Take a listen. I work the cones, actually. Unknown to everybody, i was actually the guy out there. I was in overalls and a hat but i actually was the guy working the cones out there. You really are not serious with that question. So the governor there denying personal responsibility for this. Today, though, late in the day, the governor issuing a statement and here it is. The governor saying what ive seen today for the first time is unacceptable. I am outraged and deeply saddened to learn that not only was i misled by a member of my staff, but this completely inappropriate and unsanctioned conduct was made without my knowledge. One thing is clear, this type of behavior is unacceptable and i will not tolerate it, because the people of new jersey deserve better. So larry, the governor here clearly saying he had nothing to do with this, hes horrified to find out about it, and hes taking steps to fix the problem. But hes got a much bigger political problem on his hands today and there are some questions in washington now about what this means for his president ial ambitions in 2016. Yep, some people are asking about his entire political career. Eamon javers, great job. Thank you ever so much for that valuable information. Folks, earlier, i spoke to the mayor of fort lee, Mark Sokolich, and i asked him about he believes that Chris Christie didnt know about his staffs involvement until today. No, no, theres definitely i think some holes in that statement. I think, my recollection is that the governor had convened a meeting with his top staff not too long ago, and promptly after the meeting, proclaimed that, you know, no one on his staff knew about it. As a matter of fact, im not even on his radar, so why would they even be considering me. Im the idiot, remember. So you know, unless those two individuals were not in that meeting, then i think somebody somebody may have lied to him or lets say they were less than forthright as to their involvement and knowledge concerning the havoc and the utter unsafe condition that they intentionally visited upon my community during those days in september. All right. Now, lets bring in two star reporters. They have been covering this story from the getgo. They are going to give us the inside scoop. We welcome darryl ishua, senior political reporter for the new jersey starledger, matt arco, political reporter for politicker, if i have that right. What do you make of this denial . This is barack obama type stuff. I didnt know about the irs, i didnt know about the websites, you know. This is almost, almost a nondenial denial because its so vague but he says unacceptable, i didnt know about it. Is it going to pass muster . Its interesting where it is now. When everything began, he said you know, i sat down with my administration, i sat down with everybody and i said who was involved in this, tell me what you know now, were told that he let everybody go when was that . When was that . This was weeks ago. This was during the press conferences. He said, you know, i was told by sources that he let everybody leave the room, said come back in half an hour, tell me what you know. Apparently no one said anything to him. And now, now this has come out. The news came out today and it is kind of explosive. And as far as his statement today, no, i mean, i think folks still have a lot more questions. I dont think that thats where its going to end. Darryl, i will be honest with you. Im a guy who likes Chris Christie. I have interviewed him, one of the smartest interviews ive ever had, frankly, in this job. And my hope is that he could penetrate the blue states because i would like to see a conservative majority in the senate, okay . No big surprise. Im kudlow. Im a reagan guy. But this thing is really maybe off the charts. What i want to ask you is this. He is a very a guy who tightly controls his operation. I think we know that. So were talking about, among other people involved, in this lane closing of the George Washington bridge, bill steppian, his campaign manager, and Bridget Anne Kelly was his deputy chief of staff. So two people very close to Chris Christie. Again, i ask you, with a guy who controls things pretty darned well, is this story credible that he wouldnt know what his top staff is doing . You know, ill say yes because hes not the kind of guy who is going to get up and say that in front of a crowd of state and national reporters. Say what . Say i didnt know anything, i knew none of this. I asked my staff, they knew none of this, haha, i was working the cones. If he knew this kind of email was out there and this was going to implicate him, hes not doing that. And texts. And texts. Hes a smart, savvy politician. Hes not going to stand up there and say those things knowing that this bomb is going to drop on him a month later. Also, lets just add to it. Okay, fair enough. David wildstein and bill barone, his appointees to the port of new york Port Authority of new york and new jersey, theyre involved in this too. Barone is an old friend of christies. Again, is it credible . That christie denial, that is. Again, its going to have to see where it goes. Certainly, democrats in the state house are going to say no, its not credible. But again, i agree with darryl, you know, i dont think that he would come out publicly and he said it at press conferences multiple times, that you know, if he knew this stuff was simmering, i dont think that he would make those statements. So you two, its very interesting, you too hardbitten professional reporters are basically buying christies statement of denial. You feel that thats enough to stem the tide against him. Thats a different issue, i think. I dont know that it stems the tide against him because theres two things at play here. Number one, one of the things people have said is hes created this atmosphere in his administration where people felt comfortable doing this. Where a staffer would feel comfortable creating traffic or whatever it is she said in fort lee as payback to Mark Sokolich for whatever perceived slight. So i think it goes beyond that. Whether he actually picked up a phone or he knew about it, he created that atmosphere, and the second thing at play is, democrats have been trying for four years, sometimes successfully, sometimes not, to create this narrative of christie as bully. This plays right into it. This is everything, this is a gold mine for these guys, who can say look at this guy, you know, somebody disagrees with him and the next thing you know, you got traffic backed up for miles in this town. Do you want this guy as president. I think thats the narrative that they have been building all along and this just plays into it. This is a home run. I agree with you. At least thats the threat. I wont make a judgment on the thing because we dont know but im just saying, even if you have people on your staff, your senior staff, who pull pranks like this, and this is really a prank, i got caught in a twohour traffic jam getting up here one night, even if you hire those kinds of people, thats not good for your judgment, people would judge you as a governor or president. After all, its the top of the line that runs the operation. I think thats a problem. Ill give you the last word. Thats the case democrats are trying to make, that he fostered this sort of mentality in his administration. He hires people, he brings people in who are very close to him and they kind of act as an extension of him so whether or not he has to tell someone directly hey, do this, democrats are saying that is somewhat implied that they just know this is what their boss would like. We will see. Well see if there are any more emails or texts that come out. If he gets mentioned in something, who knows. Gentlemen, thank you. Darryl, matt, we appreciate it. We have a lot more to talk about this story. Larry sabatow will join us on Chris Christies political future and who wins if this scandal continues to blow up. Please stay with us. A lot more Chris Christie. Tough story. [ male announcer ] start the engine. And shift through all eight speeds of a transmission connected to more standard horsepower than its german competitors. And that is the moment that driving the lexus gs will shift your perception. This is the pursuit of perfection. Those little Cialis Tadalafil for daily use helps you be Ready Anytime the moment is right. Cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like 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 free 30tablet trial. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. All right. Welcome back to the kudlow report. We will stay with this story. Who could bridge gate scandal sink Chris Christies president ial ambitions and maybe more . With former defense secretary bob gates book, by the way, the tellall book, will that hurt Hillary Clinton in 2016 . Two disparate but related stories. Lets check in with our great friend, renowned political analyst, larry sabatow, director of the university of Virginia Center for politics. Larry, whats the kennedy book . I love the kennedy book. Whats the title . The kennedy half century. There you go. I appreciate your mentioning it. No, no, no, its my pleasure. Im a great jfk fan. Im a great sabatow fan. Its a great book. Let me ask you about the Chris Christie story. I just learned something during the break from one of our reporter friends. Apparently christies guy at the Port Authority of new york and new jersey is going to have to testify, has been subpoenaed by the new Jersey Assembly and may have to testify under oath and then the deputy chief of staff, bridget kelly, likewise is probably going to be subpoenaed. If they testify under oath, then that may make this denial by mr. Christie more tenuous, who knows. I have no idea. I dont know what the facts are, at least with respect to christie, but you know, larry, i think everybody shares your sense of outrage. This is vile, stupid, insane, vindictive, you run out of adjectives, and really, you have to ask what in the world was Chris Christie doing with people like this in his employ. He picked them. This is going to damage his president ial candidacy seriously, and who knows, it could go further than that. But every opponent hes got, larry, is going to use this in television ads, even if in the end its validated that he did not personally know about what was going on at the time. You know, its a funny thing. Christie has a brand, a solid brand, you know. Hes not an ordinary politician. Hes a truth teller. Hes an honest guy and so forth and so on. All of a sudden, this brand gets bes besmirched and it isnt only governor christie, its the people around him. What he said today had an obamalike feeling about it where obama was asked about the irs, said he didnt know. Obama was asked about benghazi, said he didnt know. Obama was asked about the Terrible Health care website, he said he didnt know. Chris christie is not a guy who usually answers like that, and this statement, however, is an answer like that. Hes basically saying i didnt know. If he didnt know, why didnt you know because these are staff people, including his campaign manager, who were right next to him. Precisely, larry. Lets remember, this didnt happen in a vacuum. He was in the middle of a campaign that he very much wanted to win big. I hate to bring it up because i think president nixon has been bashed too much, but you know, this is very nixonian. It wasnt just nixon, it was the people around him that he had appointed who shared his paranoia. Nixon should never have been involved in watergate. There was no need for watergate. He was headed for a 61 landslide. Chris christie had no need for this. He was headed for a 60 landslide. But nonetheless, because of the people they are and the people they surrounded themselves with, they got it. You know, im just going to say, of course i got to cover this story as tough as i can. Im a guy who looks at christie very favorably up to now. Im a guy that felt that christie, who i regard as a fiscal conservative, could go into the blue states and make a case for the republicans, because i want to see big changes in washington. But i got to cover this story. And youre right, eventually ultimately, the executive is blamed for their senior staff. Ultimately thats really the truth. Theres no way of getting around that. Absolutely. Look, too often, we have let president s off the hook by letting them say i had no idea because as you suggested, the right followup is why didnt you know. Youre in charge. These people follow your instructions and they probably follow your values and standards, and that may be the problem. Look, like you, i see lots of positive things about Chris Christie, and politically, the Republican Party needs somebody who talks blue, like christie does. But people, ive had several people say to me something very interesting. The governor of new jersey has a lot of power, but a president has far more power. Do you want someone who surrounds himself with people who will abuse the public trust and the offices they hold. All right. Well, he is innocent until Proven Guilty and we will see how this plays out regarding what he knew, what he didnt know, what the subpoenas prove, and if they have to testify under oath, how thats going to work out. So we will see. Anyway, larry, thank you ever so much, as always. Now, folks, time for the other big political potboiler of the night. The new book by former defense secretary bob gates criticizes president obamas lack of conviction in the afghan surge. It rips joe bidens face off. It skewers the National Security council and is even more hostile to congress. We will talk about whats got everybody so mad. Robert gates run wild in a book thats going to be a bestseller. Im kudlow. Please stay with us. A new book out slamming president obamas leadership and lack of conviction in the afghan surge. The author, well, its president obamas former defense secretary, robert gates. Within the scathing new read, gates reveals obama and hillary opposed president bushs iraq surge way back then, largely for political reasons. Gates criticizes Vice President joe biden, saying and i quote, i think he has been wrong on nearly every major Foreign Policy and National Security issue over the past four decades, end quote. Lets get right to our distinguished guest. Steve bucci serves as Deputy Assistant secretary of defense at the pentagon under gates, and we bring back former nato supreme allied commander, general wesley clark. General clark, look, this is sort of a mixed bag, because gates has some good things to say about the president , including pulling the trigger on osama bin laden. But he also has some negative things that the president kind of gave up and lost support for the afghan mission. General clark, are we losing in afghanistan . Are we losing ground after all the sacrifices we have put together . Is that why obama is so anxious to get the heck out of there, and is it going to cost us dearly because of this . Well, i dont think we have ever had the full body of troops that we needed in afghanistan to do the job, even with the surge. We went into there under the Bush Administration and the idea was to do the minimum and focus on iraq. So we got started on the wrong foot. We just never had and its their country, so weve done a lot there. Its time to come home. As far as the president s conviction is concerned, look, when he surged those troops, he made the best decision from a host of bad alternatives, and frankly, im happy that he was thinking about it really, really hard. Hes not a High School Coach cheerleading a football team. Hes got serious responsibilities and hes got to be secondguessing himself. Thats the kind of leader you actually have to have at that level. No, i get that. Steve, let me go to you on this, get your quick take on gates and afghanistan. The other thing i want to add, steve, president obamas been criticized for not making a deal with malaki and the ruling group in iraq and were reading now that fallujah and ramadi, if im pronouncing that right, are under siege. We may have lost them. The local al qaedas are coming back. It breaks my heart because we put so much sacrifice into both afghanistan and iraq. Whether or not its Barack Obamas own problem or mistake, im not sure, but things look like theyre going the wrong direction, steve. I dont like that. Well, the president frankly put the Foreign Policy issues at a lower level of priority than the stuff hes really interested in which is the domestic policy. President s have to make riskbased decisions but in this case, by accepting risk and getting out real fast before the iraqis were ready and looking like were going to do the same thing in afghanistan, when you accept risk, sometimes you lose. In this case, in iraq, it looks like weve lost that bet and if it keeps going the way its going in afghanistan, i think well lose control there as well. Wes clark, another point that gates makes. The National Security council, apparently these guys, lot of them are political operatives and theyre calling up four star generals all the time to try to micromanage the war and events in the war and policy discussions. I have never heard of such a thing. Have you . Well, yeah, there is always conversations that go back and forth. Generally, when youre in the defense department, you try not to let those things happen, but thats the reason why a guy like Lieutenant General doug lute was over there, because he was familiar with the military and everybody is trying to do their job. Theyre all trying to be on the same team. You know, i think secretary gates obviously did a great job as secretary of defense, but you get a lot of frustrations in a position like that, and they come out in the book. It takes a long time when you come out of a high position in Public Office to unwind, put things in perspective and see it as it is. So what youre getting here is a really candid insight by a great public servant. Its not the only view. I get that. But steve bucci, just to stay on this point, gates complained about huge micromanagement in Foreign Policy coming out of the National Security staff. Wes clark is right, okay, i served in the white house, i understand how important the nse is. Thats for the leadership. Apparently these are middle level staffers calling up four star generals and gates actually told the generals either dont take the call or just refer it to me, and ill handle it. I mean, obama just didnt have much of a feel for the military. Isnt that really the bottom line . Ive just got 25 seconds. Yes. He really didnt have a feel for it, his people didnt. Gates said he had to remind the Vice President and tom donlon they werent in the chain of command and had no authority to give orders to those officers. Its a problem. Sorry we dont have more time. Thanks very much. Thats it for tonights show. I guess we will have to go and read gates book, figure this whole thing out and read all about Chris Christie. Im larry kudlow. Well be back tomorrow night with followups. If youve got copd like me. Hey breathings hard. Know the feeling . 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