you. i'm jim cramer and i'll see you tomorrow. good evening, everyone. i'm joe kernen and this is "the kudlow report." larry's under the weather and i'm filling in. i've got the shirt, the suit, p pinstriping even the cuff links and the tie. the dow finishes at 52-week high today after a european leader signals progress in the greek bailout agreement. we came oh, so close, with dow closing at 12,950. so when will we hit 13,000 and beyond? here with us, chief investment officer, famous for his piece in the journal. "fast money" contradicter and steve cortez founder of veracruz and author of "against the nerd." i'm sorry. i'm sorry. >> "against the herd." >> this teleprompt sir far away. sorry, steve.

all right. boy, that's embarrassing. let me start with you. i can't tell whether yew bullish, overly bullish or -- over bought or is it the early stage of a nice move maybe up above 13,000 and beyond? >> first, one thing on the table. i ak pro-nerd. all right? >> that's what i was saying. really. why i made that point. i don't like excluding anyone. i think it was directed at brian kelly, which i don't think is very nice. >> hey, listen, i'll take whatever i can get. >> right. >> so, to be perfectly honest, i talked about 30% at the beginning of the year. now i backed it up, too, i was actually talking about it in october. i already got about 25%. >> right. >> aren't we due after 10 or 11 years and with rates at 2%, and with stocks, some stocks, quality stocks yielding 4% trading at 11 times earnings, can't we do a big number for once or will something hold us back? >> we're certainly entitled. a situation, what you say.

look at any rational historical kparter, the level of forward earnings high. level of interest rates so low. we could get the s&p 500 back to where it was last year in april, where are it topped out a while. to return to that level of valuation. about 35% higher than we are now. that's how much earnings have grown, interest rates have fallen. we're due. take some of those end the world threats off the table, like the european threat, coming off the table. all of a sudden investors one by one are coming to their senses looking at the same arithmetic. it's not so bad. >> people don't believe it can happen. >> that's why it keeps going. when everyone believes it, that's when you sell. >> '94, '95, '96, three of these year, 30% plus each year and people -- i hope again in my lifetime we see that. you talk to people about it, they look at me like i'm smoking something, if i say 30%. it's been done before, brian

kelly. i know you're not with me on this. >> no. i think we can melt up. you print enough money, asset prices can go as high as you want. >> that's cynical. we built the base. conversations of flush. it's always morning in america. >> corporations are flush but not spending it on anything. >> that doesn't mean they never will spend on anything, once they get demand. >> where's the demand coming from? you have austerity throughout the world. you have most of the world's economy slowing down. so you have a slow growth environment nap doesn't mean that stocks can't go up. it means nominal term, stock prices -- >> i don't like what you're saying. steve cortez, let me talk to you. i don't like -- you're not making me happy, brian. i got three people -- three people i can talk to. sigh can go on to the next one. steve, tell me something that makes me happy. >> joe, make you a little happy, then i might make you sad. first i believe absolutely it's mourning in america and the economy is resilient and strong.

however, i believe the international overhangs are p persisting and perhaps getting worse. look at trade data out of asia all week long, terrible numbers out of china. bad numbers out of singapore. unlike don, i do not believe the european situation to any degree is yet solved. i think we're going to have another weekend of headline risk and carrying on into next week for that reason i'm very long on the u.s. dollar. the united states does better than the rest of the world, but the way to play it at this point after this kind of 100 point zp rally in 2012, the way to play it from here, i think, be long u.s. relative to the rest of the world. >> brian, on a series note, something from doug cass. i don't know if you heard of a triple dome house or something? >> he sent me -- >> yes. >> a position of a chart that, that really scared me, because it looks like -- with all the stuff we've worried about with 2012 and the unrest and the

mayan crap and all that, i mean, i'm worried whether with europe, listen to soros, it could get out of hand or something. i mean, that chart looks like this could be, setting up, like an extended -- >> yeah. throw in a couple eliot wave warnings, the devil's bottom of 666 no longer existing and we go throughit. looking for a european position for now is contained. greece coming to a resolution. buoyed the stock market. however, i will agree with steve cortez in that we're looking through months, six months down the road. i don't think you'll have the economic growth they're talking about. in greece, by 2013, economic growth. that have been in a five-year depression and talking about ten years more. i think it's highly optimistic that by the end of the year the stock market will be as brilliant at it is now. >> i did love your piece today, don. i think we can tear -- i think

we can show you the europe supply side. >> thank you. >> revolution. that depressed me, though, because it just seems like they are finally getting religion over there, and they didn't get religion until all this happened and we're over here sort of fiddling in the things that work, the structural changes we need with the labor market, et cetera. we're still headed the other way because we haven't had that day of reckoning. is it depressing from that point of view? >> i can arg confidence even europe can be a growth story. economics and investing, all important action takes place at the margin. about change. europe changing tore the better. it will chloe. china, put on an air of freedom, look what they've done. we are still the freest large country in the world but moving in the wrong direction. look how it is crippling our growth. putting ourselves at risk at being marginalized not just

against asia but europe, for goodness sakes. >> the nerd talk. okay. >> it's steve cortez. question. i disagree. i think the only place to invest right now is the united states. i agree with you in terms of your article in that, yes, europe is tinkering at the margins, but they still have systemic problems particularly in the periphery, even in germany keeping them from growing. my question to you would be -- >> germany had better growth than the united states over the last five years. starting from a false premise. >> didn't last year. over five years. not last year. the last quarter, entire eurozone declined. more important that gdp data, financial markets. >> the cycle lasted, germany peaked later, trough the earlier, has had more growth since the bottom, went to peak output sooner. >> my question -- >> unemployment rate, can we please have a 5.5% unemployment rate? >> steve, the last word. sorry. three hours in the morning. giving me, what are these? what is this.

time cues? wrap this? anything to finish up with, steve? >> my point, i think markets of generally correct and forward looking. the united states was by far the strongest equity market. china down 20% raft last year. the united states flat. outperformed germany four year. markets are intelligent in this regard and projecting protectly forward, innovation of growth comes from here, not europe certainly not china. >> god bless america. >> yeah. >> exactly. exceptionalism. brian kelly and really sar torely slend ed -- you get the in other words. you have w cuff links? reagan cuff links? i don't think you do. >> i have cuff links. >> not reagan? >> i've got card yier cuff link >> i'm the nerd with no cuff links. coming up, president obama out on the campaign trail today pledging enhanced financing for

u.s. exporters. is the president just stoking these trade tensions jand don't forget larry's motto, such a great motto. free market capitalism is the best, really, the only path to sustained prosperity. "the kudlow report" coming right back. [ male announcer ] if you believe the mayan calendar, on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire, td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans?

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a potential debt bomb on the horizon. cnbc's rick santelli took matter into his own hands with the help of comedy legend gallagher. a mallet and a few unsuspecting watermelons. take a listen. >> congress, it's easier to smash stuff than you think. smash some deficits! smash some deficits! smash some deficits! smash some deficits! >> he was mad. rick santelli joins us now live, and watermelon-free. i would never -- you know what? you are the--the shark is not jumpable with you. it could never happen, because you who you are. that's crazy. why is gallagher there? how did this work?

>> about four years ago i met g gallagher at a function. we hit it off. i went to a couple shows. i heard he was in town and threw it out there. three years since that crazy week in february, where we came off the tarp, went into the recovery, the stimulus, we had a housing bailout. then you and i had a little fun on february 19th, on the 23rd the president said he was going to cut the deficit in half and his first term, and i thought, how can we, in a light-hearted way, in front of a three-day weekend just accentuate these deficits keep growing? i thought, hey, stick a couple trillion dollar can on top of a water millen and get the king smasher to show us how to do it. >> we just had leskin on. >> wonderful piece today. >> do you buy that? depressing to think we're behind the curve on doing the structural things we need, supply-side wise for growth

policies. they're ahead of us over there? >> i loved your discussion with the boys, before, because i was both happy and depressed by it. depressed for just the reasons you said. here, don's writing a story about how they are able to hire because they are now allowed to fire. they've made change, and they're going into the kind of laugher mode. back in this country, unfortunate yly we are had a crisis trying to throw the capitalist baby out with the bath water and it's a bad idea. i agree with the structure about europe and we need to keep pressing our political class to realize that we're over regulated. we're under employed. we freed to let market forces do its thing. get the animals spirits back. right, joe? >> i don't flow. did anyone raise an eyebrow yelled at by jared bernstein? a metaphor? president obama's at the union

boeing plant? no one remembers? did anyone else think about that? >> listen, tell what you, you've got to hand president obama the courage badge, because, you know, after everything that's occurred with regard to unions and boeing, things like keystone -- >> carried him in on their shoulders. the union guys. >> you know, tell you what, i have nothing against unions. >> i don't either. >> for me, once again i continue to think, when it comes to union, let the private sector work these things out. we freed to keep the government's nose out of those interactions. the public sector, be careful. didn't think you should have government in bed with public unions. >> walking into a buzz saw here. many thanks to you, rick. >> joe, it's great. doing a great job. >> thank you. thank you. i'm channeling larry. i got the kudlow collection from men's warehouse. wearing it. i mentioned, president obama was out on the campaign trail again today, this time touring that

union-run boeing facility in washington state. the president announcing add new plan to boost manufacturing. sounded a bit like a campaign speech. take a listen. >> that does not mean that we've got to just sit there and settle for a lesser future. i don't accept that idea. you don't accept that idea. america's a place where we can always do something to create new jobs and new opportunities and new manufacturing and new security for the middle class and that's why i'm here today. that's our job. that's what we're going to do together. >> here's the question someone posed today. president obama's oels responsible for the decline and fall of the american economy as peter ferrara suggested in his "forbes" op-ed or are the president's policies actually improving the economy? here to debate, jared bernstein, former chief economist to vice president joe biden and the cato institute, jared, we're going to hear this nine months.

both sooitsides seizing the counterfactual. i hate that argument. wasn't for the uncertainty we'd be doing better, republicans say, and democrats saying without stimulus, no one can prove either and we'll just be talking to one another i. think you're right. kudos for the long day. must have gotten started many hours ago. >> i did. duty calls. >> hard working dude. let me tell you from experience that both sides should not waste their breath on that one, because people just don't do counterfactuals. i found that out the hard way. what people care about is whether the economy's getting worse or getting better. i don't think anyone -- by the way, i put larry kudlow on this. the economy is getting better. tick you through statistics. gdp, unemployment, payroll, corporate profits, the stock market. just read today the stock market up 60% over president obama.

i didn't know this. he's one of five presidents who can make that claim. corporate profits, highest on record as a share of national income going back to 1947. so i just think that that kind of decline -- that's not even credible. it's just wave the key, look over here. that argument is not going anywhere. >> dan, to get you started, i know people say this recession was worse and different than any other one, but after the deep '80 and '82 recessions a number moss of job -- 7, 8 gdp quarter? you can argue something's holding this back is right jink. >> i agree with jared. people don't do counterfactuals. going into an election with things appearing to get better although i think there's a strong case to be made he retarded the bounceback.

historically a very, very weak recovery. haven't gotten that strong 6%, 7% growth under reaganomics but that doesn't platter to people if they think things are moving in the right direction and if republicans can't offer a compelling alternative because they're too timid, maybe obama's it in game. the key thing, should america be doing better? obama's rhetoric at the boeing plant was good but his oels policies, high corporate tax rate. fourth highest capital gains in dividend taxation in the world when you factor in double tax ace according to ernst & young. theertz things we freed to fix if we really want middle class jobs. >> dan, interesting. i understand the administration, geithner announced the administration is coming out soon with a corporate fax reform proposal to bring down the rate and something i know you and others on this show have been calling for for a long time. look, the one thing i would object to in dan's wrap which i

actually thought was pretty reasonable is a, the assault on the president's policies, whose fingerprints are all over these improvements and, b, the idea somehow people think things are getting better. no. things are getting better. are they where they need to be, no? getting better? not a matter of people somehow, an illusion. they are getting better. >> they are getting better, but instead of continuing bush's policy of too much spending and another intervention what if obama did a clinton and reduced the burden of the government? the economy would be doing better. i'm not here to make a partisan point. i want obama to be like reagan or clinton, not bush. that's what he's been like so far. >> again, you make interesting points, and if you look at the president's budget, part of this is this budget control act. you're talking about over $2 trillion of spending cuts. i mean, he takes me out of my comfort zone on that stuff. i'd argue, just like with the

corporate tax thing, he's there. he's there. >> i hope he's there on the corporate tax thing. i'm holding my breath, on the spending side, you're using washington math. look at obama's budget, spending in 2022 will be $2 trillion higher than it is today. that's not a budget cut. >> i'm using cbo math, scoring, and in fact, that is just a reflection of whatever baseline you want to choose. >> the share of the economy -- >> rather use -- >> jared, try this on for size. >> sure. >> this is san unbelievable country and an unbelievable economy and i think even some democrats talk about american exceptionalism. you don't like to much, because -- >> i agree. >> we love the world, blah, blah. saw the pillars in germany when he spoke. we are exceptional here and supposed to do well leer. the market's supposed to go up. things can happen in spite of policies because we're a resilient people and an incredible economy.

the envif the world. right? >> joe, listen, joe, what you're trying to do. >> you can't hold back. we're at 8.2%, growing 3 1/2 years into his election. >> with respect, joe, what you're trying to do, understandable, maybe even logic to it, but for better or worse, you know as well as i do, presidents get blamed when thing goes badly and credit when things go well. full stop, period, end of sentence. >> you're right. >> imagine how well america would be doing with hong kong policies? where the exceptioning would take off. >> where you have to go. a tough climb there, dan. >> guy, thanks. jared, i see you like every week. it's nice. either this show or somewhere else. >> morning, night. great hanging out. >> dan, thank you as well. next a late-breaking major development. in the linsanty strike. jeremy lin, printeding money for the team. how so? we'll check it out.

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>> good evening. a fire has broken out at the b.j. refinery in cherry point, washington. the largest refinery on the west coast. dark smoke could be seen for miles. so far, month reports of injuries. italian police reported a seizure of $6 trillion in fake t bonds hidden in metal crates. the scam stretches from hong kong to italy allegedly meant to swindle swiss banks. after it broke up, nyse euro is one makes the bid for the london metal exchange. the lne will review the bidding next week. and vetoing the same-sex marriage bill in new jersey by chris christie. he wants new jersey residents to vote on the measure. and blocked three blocks in downtown seattle hoping to build 3 million square feet of office space. online review site yelp filed for an ipo.

share price set on our around march 1st. yelp hopes to raise as much as $100 million. macy's plans to hire about 4,000 full-time employees this year. ceo terry lundgren says they're looking for more store managers and buyers. just in time for president's day, the folks at 24/7 wall street.com have done the plath. george washington was worth more than half a billion dollars in 2012 valuation. a standoff at new york knick game blacked out on the city the cable system. now msg owners the knicks and time warner cable call add truce. local fans can watch their any super star jeremy lin. msg stock jumped 3% on the news. late word into cnbc lin is asking for trademark protection for his name and for

linsanity. >> why not? coming up, why is mitt romney having a problem reaching conservatives. take a listen. >> i know conservatism because i have lived concernis iconservis. i was a severely conservative republican governor. >> look up severe. i guess it's okay. seems to have a negative connotation. i don't know. we'll debate mitt romney's severe conservative problem after the break. [ male announcer ] technology accelerates at a relentless pace. anything not moving forward... is moving backward. [ tires screech ] [ engine turns over, tires squeal ] introducing the 2013 gs,

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welcome back to "the kudlow report." i'm joe kernen in nor larry who is out sick tonight, and, yes, i'm in a completely different seat and completely different set. that's the kind of stuff we can do here on "the kudlow report." the santorum surge shows no signs ever slowing down. in the polling average, santorum 37, against a bailout, too. romney, 29. and now rick's closing the gap in arizona. the latest arizona numbers show mitt's early february lead

dramatically cut had been 24 points back on february 1st. now down to just 8. both states primaries only 11 days away. cnbc contributor robert kostis joins us now after speaking to rick santorum with the latest from the front-runner. good evening, robert. not really time to call santorum a front-runner. is it? >> it could be. rick santorum is an unabashed social conservative. at the michigan primary approaches he told me his real challenge right now is to convince conservatives he's not only one of them, but an economic conservative. he wants to focus on fiscal issues. especially as a controversy over foster, continues to be a firestorm. >> so feared. used to be a guest all the time on "squawk box." strange. if you say foster is that a pejorative in certain circles?

>> the key to the santorum bucker, funneling cash into the super pac. now a liability. santorum acknowledged that on the campaign trail, tried to pivot yesterday to the detroit economic club focusing on entitlements and tax reform, on zeroing out the corporate tax for manufacturers. his closing message in michigan. don't forget it, he said. may have a lot of distractions in the press, try to be an economic conservative. >> thanks to robert. romney severely conservative. cpac comment. sounds like he's suffering from an acute disease. what he's suffering from is a severe disconnect with the thought leaders of the party he's hoping to represent. the "new york times" writes, conservative pundits find romney disengaged and say it's puzzling. but where is romney's response? is mitt tone deaf to the conservative media? here are now, c nbc contributor

and friend howard deen. head of the dnc? doctor? a gadfly? >> what? >> the american enterprise ins student, also joining us, mark simone, wabc radio talk show host. one thing i was heartened, bama, is there a method to this? >> absolutely. >> i've had issues with the romney campaign, too. they don't seem to -- i've tried to get them, look, this is cnbc. we celebrate free enterprise and capitalism pap great place to talk about your tax rate, p.e., find viewers willing to listen, and they don't seem to want to help -- they don't create favor with conservatives, why? >> doesn't speak the language. how severe conservatism came out. he's a fear conservatism. doesn't speak the language, or know how to talk about it. there's a method to this madness. he's holding back a lot of stuff.

that 59-point plan isn't the real plan. a brilliant three-point plan and doesn't want obama to triangulate it and take it from him. >> if he had shown his conservative hand, you're saying to win the primary, people in the general election would come back and say, look, you're a teabagger? >> not that conservative. >> an independent. you need to win the independents for this election. like a rope-a-dope. >> doesn't have to come up for a 5% flat tax. start by coming out with a tax plan that kind of looks like bowles-simpson, lower the rate. >> not a strategy? ineptitude here? >> listen, i find it mysterious. extremely mysterious something that obvious. come up with a more aggressive tax plan. haven't done it. supposed to roll it out. it's like the -- always being rolled out. next month, in two months. three months? >> doesn't want to make the mistakes bush senior made with

clinton. he beat him to t. you're sitting here laughing. >> saying you're expressing every thi empathy because you were head of the dnc. >> i don't think this is about whether romney is fiscally conservative. anyone would wunt romney. a manager know what's he's doing in business. nobody can deny that. his problem, social issues. a long history of a moderate to liberal position. that's killing him. santorum is no more socially conservatism than romney is. >> so many saying i couldn't vote for a big-time social conser conservati conservative. >> because of the social people. agree. they're flocking to santorum. >> killing romney. health care. looks to like like the president's health care plan. the campaign does not reach out to all the conservative opinionmakers. don't try to schmooze them at

all. finally came out with an economic plan, conservatives don't have a clear idea what a romney administration would do. not a clear idea of the governance and he has to make it clear. >> once he gets the nomination. he's neutralized all of you. >> like a secret plan to win the war. >> he loses michigan, the nomination is in jeopardy. >> back to reagan, bush won a lot of primaries. reagan came back. went back and forth. >> we knew his plan. slash tax rates. >> you got to thank him for coming up with tea party so people can tall people teabaggers. >> that's even worse, but -- so my question, once again, so we had gallup on this morning. the ceo of gallup saying his actual polling shows the president down, 44, 45, not 50. these polls aren't right and there weren't enough people. >> but the most important thing, ohio is always the barometer. >> where's that now? any idea? >> obama's behind everybody in

ohio. way behind. ten point behind in ohio. >> do you feel confident? can you peak too early? >> yes, you can peak too early. anybody, and -- whos under 50. i don't 45. certainly not at 50, is at risk. >> a tough election. >> i think we're going to win, but i certainly wouldn't be overconfident. >> where are you? >> summer's coming around. republicans will have a nominee. talking about the $4-plus gas. trillion dollar deficits as far as the eye can see and talk about the worst economic recovery since the great depression. they have a case to make. >> gotten a lot better. >> both sides of -- >> keep adding 50,000 -- >> i keep -- >> this is fall factually -- >> if he wants to make -- this is great. as good as it gets? >> the other thing, auto thing backfired. >> on republicans the last few days, right? >> the president looks at the

gm, all of these cars coming -- >> george w. bush started that bail joust the auto companies. >> like -- passing the -- ultimate passing -- >> didn't let then tafail but didn't grab it by the horns. >> when obama took office, price ever gas doubled. claim he inherited the bad economy. from what? fir three years into office? >> they say the auto industry would have died. ford wouldn't have. rick santorum said i'm from western pennsylvania. we let the steel companies go bankrupt. the steel industry is not gone. smaller. didn't have a -- >> didn't let them go bankrupt while the banks were collapsing, too. >> auto workers in tennessee, are they part of the u.s. auto industry? >> pretty sure they are. >> they would have gone bankrupt pap narrow way to look at it. >> hundreds of thousands of jobs. delphi, all the suppliers. >> ford said i think -- >> even ford would have gone

under, i think. really do. >> the president, speaking at boeing -- >> i already said that. i said that he brought him in on their shoulders. >> when he tried to close it down? >> hooray! >> union guys. not down at the south carolina plant. >> no, he wasn't. >> that's a ghost town. >> no. it's up and running. and the keystone is not going to help in the election? >> not gawk to make a difference. >> really? >> no. the keystone another republican blunder in my view. obama's looking for an ex-cruise flot to do keystone, didn't want to antagonize the environmentalists don't pass it, permits through in 60 days, about the on it in 60 days when you can't get them. the republican governor of nebraska didn't want the route. didn't could that in 60 days. gave them a reason to deep six it. >> see how much a mistake it was. >> if you can convince the american people keystone has anything to do with gas prices you deserve to win the election.

>> i want to add just one -- we're told the economy is in the -- if it's in the right direction and if unemployment is going the right way, that is enough to win all elections. does it ever come down to where a cross-section ever the people in this country decide ideal logically i don't want do go this way, i do want to go this way and some want to get back to less european style of government? could they vote that way even if the economy is goidoing really wale? >> four years from now -- >> when way do you want us to dough go? >> which is different than we've done. posing something different. proposing kind of a, inspired state managed kind of capitalism. we'll try that. just had a 30-year boom base and free markets, leg regulation and low taxes. president saying that was phony. >> can you count the people on the receiving end --

>> really interesting story. really interesting story out a couple days ago about all the people who want smaller government, depend on government. >> still sthag want it, but all the stuff coming in. >> i actually do think it comes back to basically, are you better off than you were four years ago? i don't think that people -- talking about average voters, not thought leaders. people really don't think whether we'll have a european-style this or a free market. >> might when they can look over to europe and -- >> ah, i don't -- i. think a lot of people. >> it's their pocketbook and how they're -- >> incomes of flat. >> a lot of people just have had it with the democrats and republicans. >> that's true. absolutely true. >> look for a great turnaround in this economy. >> you want to come back wednesday morning, i have three hours every morning. this is like -- all i'm doing is wrapping people. thank you. thank you. and you're always on, all the time. but we pay you to come on. >> millions. >> i own you. you know what you are. you're mine. >> idiot. >> right. thank you all. who gets credit?

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you may not have heard, congress quickly passes a tax payroll extension sending the bill to the white house for president obama's signature. for a country without a controlled deficit, is the continued payroll tax cut without spending cuts an economy killer? here is a democrat from new jersey and a republican from new york, who serves and the payroll tax cut conference along with i'll start with representative, along with some of the ui benefits that are going on and on and on, are you certain you can make the case this is the right track? >> i don't think there's any question. first of all, what we need with the economy is growth. the payroll tax cut puts money back in people's pockets, at least $1,000 for about 160 americans annually, the unemployment insurance, those people that get that will go out and spend it and, of course, with the doc fix, we had to do

that to make sure seniors and those on medicare continue to receive treatment. these all have an impact on the economy, will create growth and people will send tpend the mone. that's the best way to get out of debt. >> where is your thinking now, congressman on -- even democrats, larry sommers, alan krueger, they've done studies that indicate that you let the unemployment benefits go on too long and it does become, i don't know, kind of a -- something that makes people less likely to really look that hard for work. when do you draw the line? when does it become a permanent welfare entitlement and when do you say enough is enough? >> it isn't a permanent entitlement. there is an end point for unemployment benefits. >> could be self-defeating, though. could it not? to people when it takes that long, they almost -- >> i have to be honest. i see so many people try so hard

to find work. i really don't see people that aren't trying. the problem is there aren't enough jobs. >> what studies do you believe? >> only going by my own anecdote's evidence of the people sigh see. >> well, certainly the statistics show that the vigor of the jobs search and the success rate rises in the final two to four weeks. so we're balancing out a compassionate purpose, a pragmatic purpose in terms ever trying to make sure people don't end up in dire straits. >> it's stimulus. they spend the money -- >> well i don't know how stimulative is really is. extrapolate those arguments, if you really do have a malt politictive effect, we should all be on unemployment. i agree we frank. we need growth. the only way, take less from the american people, let them keep more in their pockets, can you, i've argued with others from your side the aisle, could the

republicans screw this whole payroll tax deal up? republicans are supposed to want to cut taxes. how did they suddenly get on the opposite end of that art and th art and then that two-month thing. if a p.r. person was in charge works it have gone this way? >> ask tsenate. we had a bill. a full year of payroll tax hol danchts frank's fault? is that what happened? >> hardly frank's fault. no. >> in the senate? >> it was in the senate that the bill failed. and we have had our challenges with the senate throughout the year, as you know. by the end of 2011 we had 30 bills sent to senate, only three had been acted on. and that's a problem. but we have wanted to provide the relief that americans need. we need to lift regulations. we need to relieve taxes. we need to activate our energy economy. we have sent bills to the senate consistently through last year

to do that and continue to do so now. >> congressman, should some of that have been passed by the senate, do you think? >> no. i mean i didn't like the original house republican bill, because a lot of the pay-for the were onerous. in this bill even i wasn't happy they were taking money from the pensions of federal workers and with the doc fix, a lot of that money comes from cuts to hospitals and nursing homes. this is not a perfect bill by any means. look, we will to come up way compromise. this will create growth. this will basically solve a lot of the concerns that we have right now about the economy, about doctors taking medicare, making sure people get their unemployment. so like anything else, we have republicans and democrats. one house democrat, one house republican. we're not going to get anything done until we work together and this is an example of when we work together. >> congressman and congresswoman, thank you for coming in on a friday night. and thank myself for coming here, too. >> and we do. >> while i'm talking.

anyway, thank you. gm ceo says that obama's posses rescued detroit. really? we'll ask former vice chairman bob lutz after the break. oh there's tons. french presses, espresso tampers, filters. it can get really complicated. not nearly as complicated as shipping it though. i mean shipping is a hassle. not with priority mail flat rate boxes from the postal service. if it fits it ships, anywhere in the country for a low flat rate. that is easy. best news i've heard all day! i'm soooo amped! i mean not amped. excited. well, sort of amped. really kind of in between.

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take a look at that chart. general motors, highest profit in 109 3w-year history. talk about cyclical. ford, no bailout. up nearly 20% year to date.

listen to what gm ceo dan akerson told cbs news yesterday. >> without the money, funding, to would have been very problematic. so at the risk of alienating a lot of potential customers i would say the obama administration did a good job. >> you see, bob, i kay cnbc. can president obama take credit? here is bob lutz, general motors vice chairman and author. you were on "squawk box" when the book came out and it did pretty good? didn't it? >> yes it did very well. thanks i. like your notes. walking a fine line. president obama should get some credit but bush started it? bush kind of -- i don't think he really knew thousand hahow to hd of punted, kicked the can count road is the kind of phrase we use for europe, but that's kind of what he did, you know?

>> yeah, but he recently made a statement that he was very proud of his role in setting the scene and starting the federal government bailout of the automobile business. so i think he started it. obama finished it. i think they both take some credit and i agree with dan akerson, it was a success. >> bob, you were a republican? >> who, me? yes. absolutely. i would call myself -- senator right republican. >> right. are romney and santorum on the wrong side of this? >> yes, they are, because i hate it when the conservative spokesmen fail to tell the whole truth. and romney can say, well, a private bailout would have been preferable. of course it vo have been and we tried that. but, hello, the banks were totally out of money. everybody was out of money, even the federal government was out of money, but the difference is, the federal government owned the

printing press. that was the only source of money in late 2008 and early 2009. >> but there might have been a ford, bob, and the entire industry would have shrunk. would ford have been able to stay afloat with the supplier ares, would they have been disrupted too much? ford would have gone under, too? >> yes. exactly. where ford was lucky was that they had a big problem in 2007, and they securitized the whole company and created a $35 billion cash pile. good for them. they bled $4 billion a quarter just like everybody else, but since they had $35 billion they were able to pull through. now, without a bailout, general motors and chrysler would have gone bankrupt. chapter 7. the suppliers would have, and the whole -- and with the suppliers bankrupt, ford would have gone down the drain, too. >> then you've got to give

credit to maybe some people were quibble with the details of the bailout, but you're unequivocally in support. appreciate your time today, too, bob. thanks. appreciate ton a friday night. i'm joe kernen. we are all off monday. great programming on president's day. larry's back on tuesday. that's it for tonight's show.

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