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a simpler way to ship. call or go online now to get started. tonight on "the kudlow report," paul krugman says big government saved us from a second big depression. is he right, is he right for the wrong reason or glad-out wrong? plus, new bull market or summer rally correction?? and is the town hall stick up health care on americans, is it astro turf or concerned citizens, trying to save america? and eric pelosi and the interior democratic congress. 550 million bucks. that's why republicans are smiling. fasten your seat belts, everybody. "the kudlow report" begins right now. of. .

i'm larry kudlow. welcome back to the kudlow report, where we believe free market capitalism is the path to prosperity. there is a lot of talk of big government savoring america, or from a health care meltdown according to president obama. well, i really don't think big government saves us from anything. at the end of the day, economic freedom, market competition, and free enterprise are the greatest engines for growth. we'll have these debates tonight on big government and health h care, but i want to weigh in on the new bull market and the new economic recovery. the single-greatest source of stimulus, for both the bull market and the recovery in the economy is profit. profits are the mother's milk of stock, business, and the economy. and if the positive profit story continues, as i believe it will, then investors are going to be just fine with stocks, and the american consumer and work force

are going to be just fine with economic recovery. now, the big role of pushing banking system, i applaud that. but the self-correcting actions of business, and families that always drives this economy, as long as we permit them to drive it.. i'm not optimistic as we're borrowing and spending millions of dollars. i'm not even optimistic as the fed front-loaded to new cash into the financial system. i am an optimist, because right now we are still a market-driven economy. and if we protect that mission, we are just going to be fine, thank you very much. that's my take. first up on "the kudlow report" is it the new bull market or a summer rally correction? let's quo right to cnbc's scott wapner. he has the full reports from earnings central. >> thanks, larry. a pull back on wall street, the story of the day as we take a look at the market. but what do you expect after the markets were up for four

consecutive weeks, and the profit-takers were out in full force today? yes, idea, they were. take a look at what they sold today, because technology was weak today, retailers, transports were certainly among the weak, and now we turn our attention to the fed, the big meeting starts tomorrow. i told you what some of the profit-takers were. so take a look at the stocks in those individual sectors did. let's start with the retailers, because things like bed, bad and beyond and costco, a whopping three quarter of a percent. the airlines and rail, american airlines among the weakest. continental, and union pacific. how about mcdonald's? they weren't selling this one, they were buying it, because sa same-store sales were better than expected. 3.4% in july. mcdonald's closing up 1.75%. much of it had to do with research in motion. downgraded today, mostly a valuation fall, but certainly

cut into big cap technology stocks. research in motion down just about 6%, apple and microsoft falling. finally the other story of the dye with price line, the ceo was on the call this morning for good reason because they had a better than expected earnings report. >> i interviewed him on "the call." >>. >> what's most interesting i thought today was the surprising pick up in summer leisure travel. 52-westbound high today for the stock. the stock up 100% year-to-date. and it was up a double digit percentage point as we look at the screen here, 150 bucks, up another 14.. >> you know, i forgot to ask if this improvement in summer leisure travel was driven by all those jets that house speaker nancy pelosi is ordering up. i forgot to ask. >> you have to bring it up next time. >> i know, next time. you don't want to go there, i don't want to go there. >> the market is certainly going forward, and i know you're going to pay attention to the dollar, right? the dollar was strong today. that trend is going to continue. what does it mean for

commodities and material stocks? >> just a second. last point -- a lot of times we hear the nasdaq talking tech. tell me this r.i.m. story knocks down tech today. does it carry over into tomorrow? >> hard to see.. even though people say the market is overbought, and people say technology is overbought. the nasdaq is up 45% or so off the lows, so we have to see what happens. a positive effect, larry. >> scott, thank you very much. let's dive in with our speed trader, a.j. kinhan with 20 years of experience on this trading floor. of think or swim.. i love that. look, if the dow closed over 9300 today, the s&p closed over 1000, i just want to ask you this question. it has to do with my call on the new bull market a couple of weeks ago. why can't we go strayed to 1150

on the s&p, and why can't we go straight to 10,500 on the dow? that's a bold idea. of i don't know, includes what percent pullback? who cares. we run on this on the strength of better property. >> traditionally, we haven't done anything like that. as we look at how the market is, for everything overall, we're seeing people buying brex overall. when you hear about the feds staying higher and things like this. but the interesting thing is, larry, to your point, people are buying protection on the up side, as well as the down side. they didn't listen to you a few weeks ago on this new bull market. and a lot of people sold the s&p 500 at that 950, 960 level, so now they're buying things in order to define their risk. so they can finally get out. >> i throw that out there, because everybody is talking about either a pullback of a couple percent or a full-fledged whatever, 10 to 15% correction. and by the by, i understand that pullbacks and corrections can be very healthy.y.

but that's not my poibtd. of i just can't figure out why now, why can't this baby just run? and what's all this rigmarole about -- buying puts or whatever they're doing, betting the vix is going to go up. how the heck do they know? how can they possibly know? this is just the bear sgguys trying the back door, if you ask me. >> they do have some reasons. one, directly to what you're talking about right now. i don't think that it's an accident you saw people buying up side calls and things like that, heading into august. a lot go on vacation in august. >> i agree. >> congress on vacation, even if they ride gulf stream jets, they ride out of town. they can't do any harm. >> i agree.. let me take that one step further for you, though.. what we're starting to see in september and october, people buying the puts, when congress gets back, we could have some trouble. >> pay down in october. october is like so far away, i'm

a day at a time guy. this is lickety-split.t. let me ask you. if the dollar firms up a little more, i mean the dollar is up four straight days, basically has 77, 79 on the index, i'm for king dollar.. i want a strong, reliable, stable american currency.y. that's my case. if the dollar gains a little more grounds, won't that hold down energy prices, both oil and gasoline retail? wouldn't that be terrific to have a little better dollar to know energy is down? >> i don't disagree with you on that, larry, but i think the dollar is a little range-bound here. i don't know if the dollar is necessarily broken out. >> whoa, look at this. j.j., stop the show, no sooner did we raise it on the show, "wall street journal" house leaders drop the funding for new executive debt! they just got put -- but you know what, the damage is still done politicly.y. we're going to deal with that in another segment.t. but j.j., what are the odds that

the green back will rise a little more. i'm not talking about a 30% or 40% move. i'm just saying a firm dollar holding down oil and retail gas prices. >> and i agree. state farm. and i would say that not quite. i still -- >> you're a dollar bear. >> i'm not a dollar bear, but i'm not a dollar bull. i think we're going to tighten the range for a little while, larry, and make toward the ends of the year. >> that's the long view of the dollar. the -- >> but the last few months, the last few weeks, yes, we're going to have a firmer dollar the next couple of weeks. >> i will take that. i think that's very positive from the standpoint of holding down energy prices. j.j., last one real quick. we got ourselves a fed meeting, and their formal meet something tomorrow, tuesday, they'll make an announcement on wednesday. is there a stock market threat to this fed meeting? >> i don't believe so, unless they say something that is so

incredibly unexpected. and let me -- say something crazy. outside of that, i don't think there is a stock market risk to this meeting. >> when do you think the fed will start raising the short terms fund rate is 50 basis point -- >> let's say two meetings away. >> december. that's fairly close at hand. that feds could be responsible to some extent for the dollar's firmness, shall say. >> well, what we say, they're bullish, they have the ability. >> but basically, the market has to be market-friendly. >> absolutely. >> so if they're market friendly and becoming more profitable, if the dollar is not as firm to hold down energy prices, then i say take it by the door, 10,500 on the dow, j.j. >> let's hope congress is business-friendly, larry. >> well, they're out of town. j.j., thank you ever so much. >> my pleasure. >> all right. so paul krugman does speak about

averting the second depression. and we'll talk with robert reich and casey mulligan. stay here. we are "the kudlow report." i don't know why i would turn bearish. i'm still riding the new bull market. it my surprise us for the duration of this month. i'm racing cross country in this small sidecar,

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all right. so here is one for the record books. breaking news. honest to goodness, folks. no sooner, but bingo, let me read you this. house leader says monday they will drop 550 million in funding for the purchase of air force passenger planes for the use of senior government officials and members of congress. they had dropped the whole thing. they were cowed into it.

this is part of the town hall revolt we're going to talk about later on in the program. and i would say, score a blow for small government instead of big government, which leads us right into other next segment, the new bull market, and signs of pointing toward economic recovery. but's what's the reason for this turn around? today, we have a columnist from the "new york times," it's stimulus spending and big government that saves us from a second straight depression. some people may take exception to that. we have former labor secretary, robert reich, the author of "super capitalism," and economics professor casey mullig mulligan. i'm going to let casey have the beginning of this. what do you think of the professor krugman's idea that big government is taking it? >> i've been wondering since last fall when politicians

taking more and more of our tax dollars, spending $2500 a person, i was wondering, why? what do we have to do to stop th this, and then krug man says all we need to do is tell these guys, once we give them some kind of medal, then you put a statue out in front of the treasury, we can finally get on with stop taking the taxpayers' money. >> but paul krugman is basically saying it was the $800 million stimulus package. but his basic thrust was republicans are wrong because they're for small government and it's this big stimulus package that is turning the government around, casey. your thought?t? >> only 10% has been spent. i don't see how that's even possible, number one. number two, look what they're doing -- what they're going to do. when they do spending it, they're going to be wasting it, on areas that's not needed. construction workers and manufacturing workers are out of

work, and that stimulus won't be dime one on them. >> all right, what do you think about big government? >> i think a program basically gets it right, larry. the process of elimination. consumers are not going back to the males. exports are dead in the water. businesses are not investing. so if the materialation is slowing the economy, there is only going to be one reason for that, and that is the government is spending. remember, by the way, only about 1/3 of the stimulus package was direct expenditure for basically the kind of infrastructure. about a third went to state and local governments for such things as unemployment insurance, and the other third was for tax cuts. so, yes, it's getting out there. i am not one who believes that we are seeing a big turn-around by any stretch of the imagination. but i do think that the stimulus is sort of -- definitely helping. >> casey, i never understood

this, regarding this fiscal -- first of all, the head was the heavy gorilla, if you ask me, in healing the banking business. you may want to comment on that. but what about this? a lot of people argue that borrowing from peter to pay paul is just not going to stimulate anything. do you have a thought on that? >> well, even worse, it's going to drag it down and hold the economy longer than it needs to be held down. >> why is that? >> first of all, when you raise the money that damages the economy. people try to pay less taxes. they change their behavior, they're changing ways of doing business to avoid taxes. and then when the government turns around and spends it, that further damages the economy, as people try to reorganize themselves and stay eligible for more of the goodies and put their nose deeper in the trough and so on. so not only is the taxpayer money gone, but you do damage on both ends. >> so bob reich, are we paying people not to work? is that the thrust of this stimulus program? are we paying people not to

work? >> well, half a million people are unemployed right now, and about half have been unemployed for more than six months. i would not say that those people don't want to work.. i would say that those people would much rather be working, could do much better if they are working. no, we're not paying them not to work. i gather, right now in this debate, there are stages of whether you believe in you're a supply siders. i think supply siders have had certain arguments that are justife. why e we debating -- >> this is the same fraud coming from the other party. >> when the republicans called it they called it trickle down. you benefit one guy, he spends it, benefits another guy. democrats have their same old person. they're saying if i give an unemployment check to somebody who is not working, he's going to spend it and create more jobs. that's another version of the

trickle down fraud. >> i agree with you -- >> with due respect, i think there is something very important about unemployment insurance, and all of the other counsel certify counter cyclical conditions the government has used for years. of this economy is not great, obviously. this economy, i don't think, is turning around. but it would be terrible if there were not unemployment insurance and people didn't have at least some modicum of ability to spend and keep themselves, their families, and their neighborhoods, and everybody else going. i mean, this is a ridiculous argument. >> well, casey, are you against the safety net? i think that's what bob reich is really asking. >> i'm against the exploding safety net. the safety net has just gotten out of hand in this recession.n. we have always had an unemployme unemployment but for the last year-and-a-half, it's out of hand. you're not working, you can get six figures written off your

mortgage. that's just out of hand. >> but let me say -- follow up on that. >> with great due respect -- doctor mulligan, you know, people out there are hurting. this is not a big boondoggle. >> all right -- >> that is just not the case. >> let me assume, rob, that you are dead right, that people would rather work than not work. i assume people would rather work. now, with all this borrowing and debt accumulation, doesn't that mean higher tax rates on businesses, as well as the individual owners of businesses, which means they don't want to hire anybody new? in other words, today's borrowing is tomorrow's tax hike, bob reich. isn't that inhibit growth? -- relatively close, and relatively full capacity. i mean, if the economy starts growing again, visitors are going to want to invest and going to want to hire. of way you get the economy back growing again is you prime the

pump. i provide enough money so that people can at least begin to buy the things they need, business inventories can be reordered. that's the way the economy operates. >> that's the trille down fraud. and listen to what's really happening. we're being told that the laws of economics have been suspended. basically, until the recession is over, we can do whatever dumb policy we want, and provide a terrible incentive e and it's okay. right now, we can take away anybody's incentives any time we want and it won't matter. of i don't buy it for a second. >> wait a minute. how did we get out of this depression? casey? how do we get out of the recession. that's what mr. reich is asking. >> you're going to see -- i know he wants to see world war ii, and you're wrong. look at the data closely, world war ii didn't happen until pearl harbor, and we were doing quite well in early '41.

>> what about the self correcting forces of enter enter surprising capitalism? you have business making the necessary calls corrections, consumers are tightening their leverage, saving more, which i think is good. how how much of a role is good old free market, free enterprise, self correction? >> it's the -- the private sector created almost 60 million jobs from the so-called recession year. >> bob reich? >> we are more than a trillion below our economic capacity. we have a huge number of americans out of work. we have record numbers out of work for six months or more. this is exactly the time when the only player at the poker table -- there's only one, not consumers, not exports, not business investment, the only one left is government. >> government is -- >> not in terms of the forever, this is just right now. much. >> it will work in getting people back to work. >> casey mulligan, you first. is professor krugman right, big government saves us, yes or no?

>> no, big government made it worse. >> bob reich, yes or no? >> well, there has been no saving yet, but nothing has been saved because we're still in the woods. >> okay. robert reich, i appreciate it, casey mulligan, thank you for coming out. we hope to have you again. coming up, folks, is this the new bull market or is it as our next guest says, a summer rally correction? yes, i want to go to 10,500 on the dow. and i say by the by, every pullback is at terrific opportunity. you're watching "the kudlow report." nancy pelosi has backed off. no new jets. read my lips. no new gulf stream jets. that's from speaker pelosi. i would like to hear that. small government, if only for an evening, triumphs. we'll be right back.k. boss: so doing a nice job out there

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criticism this evening really just a few moments ago, the announcement came out that house leaders said they will drop the $550 million in funding to purchase the eight new air force jets. by the way, the defense department, the pentagon, did not want these jets. did not want them. this was the house acting on its own i mperial self. think about that. government, if only for one evening. first up, we have matt nesto taking a look at the hottest winners in the summer rally so far. hello, matt. >> thanks, larry. cit and aig are in the headlines, but dozens of stocks are beating them. trw at an 11-month high after rebounding 1100% or jen worth going from 80 cents to more than 8 bucks. and of ais budget is up 2800%, leading the russell 2000, on the

back of a million-dollar market cap again.n. in fact, no less than 20 other financials are beating aig back from the abyss, including fifth third, bank of america, hartford financial, and hunting ton bank. >> great stuff. thank you, matt. so is it a new bull market or is it a summer correction? let's go to our gurus and get quick, easy answers. we have a cnbc contributor, and ltl financial. you were writing about the life of the correction. i want to ask you the flip side. why can't we go right to s&p 1100? all of the forces are in play, because all of the bears wanted corrections. wouldn't this be the great time to see another unexpected surge? >> sure. i don't have a problem with that. but i think the problem is the tone of voice. because all you're talking about is a 10% rally. we've already had a 50% rally.

put that together, that means we've already had something like 4/5 of the action we're going to get. so fine, get another fifth, i don't have a problem with that, but it means we're closer to the end than the beginning.g. >> okay, so jeff, do we have to have a correction, or could this baby run for a little while? >> no, i don't think we have to have a correction. the forces that have gotten us here remain in place. look at credit conditions. the higher bond spreads are narrower than they were before lehman's collapsed. you look at retail sales, shipping rates, anything you want to look at, they have all shown dramatic improvement in this market. i think these gains are here to stay. >> don, nancy pelosi pulled back, read my lips, no new gulf stream. that's a political victory of sorts, don. >> it's a huge victory. and one of the reasons why stocks have had just about the best five-month performance they have had than in the last 500 years is because the obama administration, the march bottom in the s&p 500 and the dow have

pulled back from their ultimate status agenda. that is fantastic news. it shows democracy, no more rush to judgment. reasserting itself. but don't get carried away. yes, it's fantastic that the house leadership is not going to get these planes.. but remember why they're not? they're not because they shamed corporate executives who ought to have those planes into not having those planes. >> hey -- >> hang on. we may be celebrating prematurely. they're cutting the price tag from $550 million to $250 million.n. this news just dribbling in. i'm sorry. we have to find out the exact total story. we are trying to reach some people on the phone to help us out. so jeff, it's not an unambiguous victory. they're just pairing back now. i don't know what the numbers are, how many are in $220 million. at least it's only one plane for $220 million. that must be one heck of a plane.

>> the people have spoken. they have felt this. the number one issue for investors right now is the deficit right after the economy. that's what they're hearing in washington. no more spending.g. >> all right, gentlemen. stay with me. we're going to -- i want to get my friend on this summer correction. we'll try to find out more information on pelosi, no more fancy new jets coming up. and by the way, we're going to start to talk about this whole town hall tax revolt that's going on. again, big government. and see what's really behind that. is it fishy, or is it really truly grass roots america? this also involves miss pelosi, who said if you protest against big government spending in deficit, that makes you unamerican. huh? i don't get that. she is really going too far. but we'll talk about it. much "the kudlow report," will be right back. hi, may i help you?

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how you could start saving. ler. we're getting more news dribbling in on this revoting gulf stream, read my lips no new gulf streams, speaker pelosi who was shamed into this. but they're cutting back, folks. the original purchase was $550 million, and it has been cut to $220 million.

it was originally eight planes and now it's cut back to one gulf stream and three boeings. i guess somebody is going to ask -- no, i'll ask, why do we need any new planes at all during a time of unprecedented federal spending deficits in borrowing, which a substantial part of the country is in revolt over this? why don't they just use -- these house members, why don't they just use jet floats? fine by me. i want a victory for small government. back with our market experts. donlous kin, we may be celebrating prematurely. will they still buy gulf streams? >> i don't think it's going to matter. if you are going to cut back from eight to four, does that mean only democrats get them? >> that's the way this works, by the way. republicans don't get to fly the in planes. >> i know. it's not ranking. >> that's the deal. i want to get -- but in a sense, at this stage in the game with all of the money being spent and

borrowed, wouldn't it be better to have zero to two gulf streams? why not? why not have congress tighten their belt just this one time? >> i think it would show they're practicing what they're speech. i can remember carl levy getting appear plekic when they were talking about the orders for the debts for citigroup. >> wait a minute. jeff, let's do it right. first of all, they attacked rick wagoner for using his own company plane, remember that? and then they attacked all of the bankers for flying in on their jets and then they turn around and order -- let's call it procure, more jets. i'm sorry, you were saying there is a hypocrisy here, is that right? >> there seems to be a tone deaf you know, issue here in congress. and i'm not surprised. we're going into the mid-term elections next year. and i -- you know, a number of these senators were in had some tough races. i hesitate to go back to my

electorate and explain why i needed a new jet. >> don, let me go back to your correction call. maybe it's a political call, maybe not. why were you speaking of this in your smart money column? >> only because i don't want to get greedy here. we called the bottom today for our clients and had a 50% rally in five months. that's very nearly unprecedented in the last century. i just don't see any reason to overstay our welcome.e. and what we're looking at is another 10% or so. and all our technical work combines sentiment and valuation features, about 10% on the likely target on the up side. when you already have 50, really what's the point of playing for the next 10? i'm after big gain, and i don't see that on the table. >> what's your down side? what kind of correction are we talking about? tell me if this is wrong. i'm no technician. a correction is what, a 10% pullback or 15%? >> it can just be a sideways consolidation, too. it just means an interruption of the dominance. >> well, you've got 10% on the up side.

i guess that would be 10,500. i'm not saying i know this to happen. i'm just saying why couldn't it happen, if you have 10% on the up side and a sideways correction on the down side, i like those odds. >> well, i don't think sideways correction is necessarily your worst case. i'm just saying that's a possibility. we have a lot of unknowns out there still. no question about it. the recession is over. i think technical matters. but we still don't really understand what the shape of recovery is going to be. when congress comes back, there is a lot of mischief that can still be made here. we still have accusations that these protest eerses are god forbid organized. they're unamerican.. paul krugman says they're racist. so this is what we're up against, larry. so maybe the down side -- >> there is big political risk. what are your favorite investments right now? >> right now, i think taking a risk in the bond market, high-yield bonds look terrific.

and we like emerging market in the sectors for technology, industrials and material. >> >> great. technolo technology, industrials and material. if we appreciate another 5 or 6%, would you stay with commodities, materials and industrials? >> yeah, i think 5%, i think i would. i think we would still be in this race. still a big move in the dollar up or down, meaning 10%, i would be cautious on my investment strategy either way. big moves in the dollar and not good news here. j >> don, not the fed or the treasury, but maybe the market is producing king dollar. is that possible? >> i thought earlier he said the dollar was range-bound. in fact, it is precisely in the middle of its two-year range and i think that's where it's going to stay. >> all right. not bad. as long as it doesn't collapse.. >> absolutely. >> thank you ever so much. thank you for your aviation critique, as well. coming up, folks, health care

town hall protesters, unamerican? huh? that's what nancy pelosi said. was it astro turf or a real grass roots campaign against obama care and big government? we're going to debate that. first, let's check in with dennis kneale to see what he is working on. >> c. boone pickens, we got him. his alternative plan, is it good for america, or is it just good for it. boone pickens? is also, he says 85 for the bauer barrel for the market. >> by the way, king dollar will keep energy prices low, and that's good for consumers and businesses. think of it as a dollar tax cut. i'm larry cut low. we'll be right back.

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all right.. let me give you a nancy pelosi update. she apparently has pulled back because of all of the attacks on airplanes. instead of buying eight planes for $550 million, miss pelosi and the house leadership is now down to four planes for $220 million.n.

i think that's four planes too many, myself.f. why can't they just use jetblue, then they won't need any new planes? let's get an update on as a whole town hall revolt against big government and health care. let's get it from your cnbc washington correspondent john horowitz. john, how important is this pelosi pullback tonight on the airplanes? >> i think pelosi is reacting to the pressure. and certainly this is the wrong environment to be pressing that kind of a priority, and as she has clearly said to the -- >> but john, she is going -- in an op-ed piece today, she said this is an unamerican attack on health care. but is this about health care or is it deeper? this it seems deeper to me with this populous revolt going on. >> i think there are legitimate objections to the obama health care plan, and president obama himself acknowledged that today. but, you know, you have a mix in politics all the time.

while organized astro turf with genuine grass roots activity. and you see that on both sides. democrats and republicans both are out organizing their people, getting people to go to town halls, communicating via e-mails and other information to their members of congress. and you know, we're going to get a result out of that, out of the august recess. and tries to cry fall foul on the other when they go out of f the line. >> the recess has just begun, but the intensity and passion of these town hall meetings, how do you read it, is it a setback for president obama and house leadership? is it possible to make a call right now? >> i think it's a set back for, first of all, the bipartisan association, because anything that raises the partisan temperature that gets things active gavelized on both sides, making it difficult for democrats to make concessions

and republicans to make concessions. i think it's genuinely not helpful for barack obama to have the temperature turned up. he's trying to bring it down, which is why you saw him sort of tamp down the idea that this is was an unruly set of ops out there. he talked about it being a healthy debate around the country. and so i think at the end of the day, democrats still have strength in the house, and enough strength in the senate to move a bill. it is likely to become a more liberal bill, and a more democratic bill as those bipartisan negotiations go, and i think that's where we're headed for september. >> how can this become a liberal bill with this gulfstream embarrassment. that's worth 1,000 pages of think tank analysis. this is one of those moments. miss pelosi has gotten hurt here. doesn't this push thehe whole government effort back? >> i don't think -- wrote see a big spillover into the health care debate, per se. i think the plane debate is more about first congress and of course members of the public are

very upset with congress. but on health care, the reason to become a more liberal bill is they're not going to make the same deals, in my view, but they would have otherwise taken the bipartisan negotiation.w obama would rather do it bipartisan, but i think he's -- doing some things. >> an interesting point. not fairing with you on this, john. i'm very impressed with this town hall slash gulfstream, but need more evidence. thank you very much.. we'll stay with this. are the citizens revoting against government, is it a case of free speech or are they fishing speech? we're going to debate that, coming right back after this break. read my lips, no new gulfstreams. we may not have heard the last from speaker pelosi on getting rid of these airplanes. (announcer) take your time to find the right time with cialis for daily use... a clinically proven, low-dose tablet for erectile dysfunction you take every day

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k today. all right. read my lips. no new gulfstreams. are the democrats really on the run, now that house speaker nancy pelosi is backing off, although not entirely. they had $550 million and eight planes down to $220 million and four planes.. let us bring in mark walsh of air america and host of the sirius radio show, and columnist, amanda carpenter. amanda, good to see both of you, mark, pardon me, but it's a pleasure to see amanda back on the show. amanda, nancy pelosi backed off, but it wasn't quite the read my lips no new gulfstream.

>> i think it's interesting that the democrat in the senate, mchaskell sticking out her neck saying she was prepared to find a way to cut it with guys like john mccain, jack reid. so there was a bipartisan coalition in the senate who were saying that we are prepared to cut this out. and if you remember a few months ago, evan bye was going to lead a coalition of democrats to try to hold the president in on spending. so i think that effort didn't go anywhere, but there is still rumblings of it there. maybe we'll see some more efforts like that coming out of that chamber. >> mark walsh, i don't need a leading question, but i think you're going to agree with me. wasn't this a monumental blunder by the speaker for all of the airplanes, but where do we go from here? because the issue is not off the table. we're still talking about four planes. why not use jet blow? read my lips, favors come in 50, right? >> we don't need these new airplanes. if it amanda is right and you have grass roots from the town

hall crowd, this could be a disaster for democrats, or am i just missing the point? >> i don't think you're missing the point. but i think there is a feature you haven't covered, which is security. nancy pelosi signing is horrible, i agree. but frank con not was hung in front of his office. if that same guy had a couple small bottles of gin and goes up to congress and starts to hammer them, don't you think that congress people, both republicans and democrats, deserve some sense of security when they're traveling around the uds or globally? it's a security issue, larry. you're seeing people acting crazy.y. two people brought guns yesterday. >> this is a brilliant reply from mark, amanda, but i to ask you, from a taxpayer standpoint, why not hire a couple he security guards on jetblue? >> the i think is -- >> and by the way -- nice fry, mark. >> it's something that always comes up, always goes too far, and when it gets enough public

attention, they'll go back on it. a very sensitive issue for nancy pelosi, travel has been in question before, and so she backed off on it. >> and what's your take -- let me just move on quickly on this. miss pelosi is writing a piece today in "usa today" calling the town hall protests, which i guess they're aimed at the nationalized health care, but maybe aimed at big government, you tell me. but they're unamerican. now, what is your take on that, and how does this fit into the debate?? >> these town halls you're seeing from the grass roots is not about health care. i think it's about spending, and this revolt started last september with the t.a.r.p. and continues with the sales bill and now people -- the health care debate was the last straw. for nancy pelosi to call people unamerican i think is so disingenuous when you have an organization by the indians, and people coming -- with preprinted signs and don't say a peep.

when you look at what happened in florida with the cathy castter event, the sciu co sponsored that. and that contributed to some of the political tension going on there. >> mark, is this anti-american, unamerican business, as tree astro turf? does speaker pelosi have a more political ear than we thought? >> i'm not going to defend nancy pelosi on this broadcast. >> i'll give you full right. >> thank you. i will take issue with the way you characterized her editorial. she did not say those protesters were unamerican. what she said was the tactics was unamerican. there is a big difference. >> what are the tactics. >> the tactics are shouting down leaders. when piece people stand up and scream "this is america" to stop those people from preventing views, that's not the america i know. and the things they're shouting are factually untrue. they say people are going to be

put to death under 50ug9 nearby i can't. the obama health care plan is not being presented factually, and they're shouting down reasonable discourse. >> aman da, it's hard, fishy e-mails from the white house, there is a lot of censorship or would-be censorship going on here, isn't there?e? >> yes, i think the democrats have made a major mistake in labelling people with legitimate concerns with some sort of right-wing mobs. they stand at a town hall meeting and ask real questions. >> you guys are wonderful. amanda carpenter and mark walsh, thank you ever so much. and let me say, i think miss pelosi and the democrats are making mistake after mistake. he'll be back tomorrow. as per usual, we'll be right back this evening.