he is telling you things that are directly contrary to what a lot of people feel that are much more positive than what a lot of people feel. that means this stock is going higher. perhaps dramatically higher. so stop worrying about the government overhang. i think that you heard -- and if you read between the lines, he's telling you, do not worry about the government selling stock. i think he's going to find it all. promise just for you. right here, "mad money," i'm jim cramer. see you tomorrow. >> hey, larry, happy monday. what are you following today? >> all right, jimmy, a great stock machlett rally and obama care goes to the supremes. this is "the kudlow report." supreme court hears the most important case of our generation. obama care and its massive federal overreach and it's a private behavior and the economy, it could change the entire structure of the american system. in just a moment, an exclusive interview with texas attorney greg abbot who filed the suit at

the center of all and then a tough senate debate. with health care stocks leading, the dow up 161, up 55 on the nas. the s&p up 19. was it obama care or was it bernanke hinting on easy money. also, this evening, rick santorum, fresh off a win in louisiana, he takes on the mainstream media. he said mitt romney, the worst republican to run against barack obama on the issue of health care. new york times asked if romney was the worst republican. take a listen. >> quit distorting our words. if i see it, it's bull [bleep]. come on, man. what are you doing? >> all right, tonight is the mainstream media on the attack against rick santorum. the public is demanding a president explains this comment to out going russian president. take a listen.

>> yes, that's not what i'm alleging. >> i understand. >> well, republicans and voters want to know what else is on obama's agenda after the election. that's an interesting topic. but, first up this evening, the supreme court concludes its first day of arguments on obama care. nbc's pete williams joins us now with the very latest. good evening, pete, what can you tell us? >> we're through the underbrush. the question is can the supreme court hear this case? could the lawsuit be filed now. here's why it's an issue. 150 years ago, congress said you cannot challenge a federal tax before it goes into effect. the rule is pay now, sue later and try to get your money back. that arises in this context because if uh you tonality buy health insurance, you pay it to the irs based on your income. so the question was is it a tax? and if it is, does that mean the court can't hear this case? after listening to the justices today, larry, it seems pretty

clear that none of them think this is a show stopper. they either think that the law doesn't work that way or they think that the law is not a tax. now, the justice department, the obama administration finds itself with a very nuanced argument that did come up today. what the government is saying is it's not a tax for the purpose of that 150-year-old federal law called the antiinjunction act. but, tomorrow, they're going to be arguing that not only did they have the power to pass this under the commerce clause power, but also under the general taxing power. now, that didn't go down too well with one of the justices. today, you're arguing that the penalty is not a tax. tomorrow you'll be back arguing that the penalty is a tax. has the court ever argued that the tax is for the purposes of the taxing power under the constitution is not a tax under the anti-injunction act? >> now, what the lawyer for the

government said is that there have been some cases that slice at that thinly. that for the purposes of the antiinjunction act, the precise words in the law make a difference. but when you're looking at the congress' broad taxing aauthority, they doubt. don't. so we'll see how that flies. but i must say in fairness, the government's main argument will be that congress had the power to do this under the commerce clause, the power "to regulate commerce." >> well, pete, let me just ask you, i know all eyes are turned on justice kennedy who is kind of the swing guy here. i know that. but ginsburg made fun. is that significant? >> reporter: i don't think so. frankly, you have to assume the four liberal justices will support this. i think you have to assume that clarence thomas, on the powerble vote, will vote against it. but i'm not so sure. i think the rest of them may potentially be in play because they've written decisions that

interpret the commerce clause power very broadly. and, frankly, i think that is the main event. and we'll see what happens tomorrow. >> including the marijuana decision? >> that's right. you're absolutely right. that's case in which a woman was growing marijuana plant ins her backyard. she wasn't selling them to anyone else. the dea came and took them away. and the justice came and said that congress has the power to basically regulate anything that individuals are doing when they were all aggregated together they were to have some nationwide effect. that's a very broad view of the commerce clause's power. >> all right, we will see. many thanks to pete williams. joining us now, texas attorney general greg abbot. texas is one of the original 13 states to challenge the constitutionality of obama care. this exclusive interview. gentlemen, thank you very much for this. can i just review for a second? how can obama care not be a tax on monday but be a tax on tuesday? okay, i'm not a lawyer. i'm not a constitutional

scholar. i just want to debt your take. >> well, larry, it's great to be back with you. secondly, you point out and the justice pointed out earlier today for the bench that the obama administration is being hypocrite cal here by on monday calling something a tax -- or not a tax and then on tuesday, coming back in and calling it a tax. and if you go back to the opinion that was written in our favor when we won at the district court level, the federal district judge called it an alice in wonder land type argument. and i'll tell you what's going on here, larry. pure politics. when they passed this law, the very first draft of it called it a tax and then they changed it to a penalty because they knew if they imposed this tax, it would be a tax heavily on people who make less than $250,000 a year. there's no way congress could vote for that or that obama could uphold it. so they knew they had to recategorize it. that's exactly what it is. and it is one of the reasons why this law is going to be stricken down as unconstitutional. >> but what's your take on the

severability issue? this is very important. if the mandate is struck down, can the rest of the law stand on its own hind feet? or not? >> reporter: well, legally and practically. practically speaking, larry, it cannot. and the obama administration has admitted as much. and our lower court hearings, when they argue to the court that if the individual mandate is stricken down, the entire law should fall because the funding mechanism to prop up the law will no longer be in existence. so i think it's more like a theoretical issue because if we win on the individual mandate, obama care, in totality, will fall either legally or practically speaking. >> and the other issue out there is the medicaid issue, which i think you also participated in. the supremes are going to take a look at that. it doesn't seem like federal overreach is bad enough on the issue of personal behavior and personal freedom. now, they're going to mandate more eligibility and more costs for medicaid on the states. whatever happens in the tenth amendment. >> well, you're exactly right. for one, this is a mandate that

reaches everyone. it reaches individuals, it reaches taxpayers, it reaches employers and it reaches states. the last argument that we're making wednesday involves that medicated expansion program that coerces the states to expanding the medicaid programs even more mobilities the second biggest item involves spending. and states like texas can no longer afford to pay these bills and decreasing. >> huge stakes here. texas attorney greg abbot, thank you, sir, it's a great pleasure to see you again. all right, look, let me just give you my take. i've obviously not a constitutional lawyer. that's for sure. but i do see this whole issue first and foremost as a liberty and freedom issue.

the federal government does not have the power to coerce, compel or mandate personal behavior. not for food, homes u cars, stocks or businesses. the federal government cannot tell us how to behave. second, in economic terms, obama care's massive spending is antigrowth. it's a job's killer. in fact, the congressional budget office, cbl, has already estimated over the next decade, obama care could lead to 800,800,000 fewer jobs. that is just the tip of the iceberg. bad news on spending, taxing, regulating and economic growth. now, let's bring in former senate democratic leader. now, senior policy advisor at dla piper and our friend, oklahoma republican center and doctor, tom coburn. thank you, sir, appreciate it. now, look, are there no limits to federal power? are there no limits to the

commerce clause? is the tenth amendment now out the window? >> i don't think it's out the window. it's an effort to try to find the right balance. i heard some of your comments and i would say that we already have a mandate. the mandate we have now is a community mandate. every time you go into the hospital, every time you pay a premium, you're mandated it's going to cost you about a thousand dollars this year to pay for those who don't have coverage. and that mandate is one that we're struck with right now. so this isn't about a mandate. we're either going to require individual responsibility or we're going to require everybody else who currently has to pay for those who don't to continue to do so. that's first. secondly, you already have a mandate to pay for retirement insurance with social security and a mandate to pay for hospital insurance with medicare part a. so you have all kinds of requirements already regarding health, retirement, in and out of the private and public sectors. those are ones that are going to

have to be contended with just as well if you don't like this one. >> senator coburn, do you agree about the social security and medicare being exactly like the obama care mandate? >> well, i think he made the case for a while that the government shouldn't be involved in these areas in the first place. the people on social security today will receive $21 trillion back more in social security payments than they made. the average person receives three times what they paid in medicare. for over what they paid in medicare in about 350,000 versus 110,000 in. it's a great example why we shouldn't be in this business. the fact is, and senator dash has actually written on it. the problem with health care in america is it actually costs too much. and this bill doesn't do anything to help the cost. what it does is it actually makes it much worse. and what we ought to be doing is how can we make health care more affordable because a lot of people who can't afford

insurance, they can't afford it because a third of everything we spend in health care doesn't help anybody. and most of that is because of government fiat and government regulations or lack of smart state government. >> see, senator dash, look. i'm sure you'll have a lot to response to this. but already, we know some results that the affordable health care act, the expense has gone from $900 billion to $1.8 trillion in round numbers. there's going to be substantial tax hikes next year and on into the future. so many businesses complain they can't afford it and the regulatory rules are going to deter them for making the extra hire. just on economic terms, much less personal freedom terms. i just don't like this thing. how do you react to the economic issues that i and senator coburn are raising? >> well, i think you raise -- senator coburn raised some very good points about cost. we've got to address what you and he have to acknowledge, however, is that if we do nothing, if we stay with the status quo, if we don't have the

pieces in place afforded us under the affordable care act, we aren't going to be able to deal with these problems in a meaningful way. i do disagree with the senator's characterization of the bill. we're going to have payment reform. we're going to have substantial delivery reform. we're going to try to find ways with which to ensure that we create greater efficiency through far greater transparency, far more coordination, far more effort on prevention, something that he knows a lot about. and all of those things are incorporated here in a way that will allow us, according to cbo, to provide a trillion in savings over a 20-year period of time. >> here's the question to that. what do you know that the government does effectively and efficiently now that you're claiming we're going to do through obama care. ? and there's no one thing we do efficiently or effectively. not one. >> i disagree with that, too, senator. i think we do a lot effectively through the medicare program. but i have to say. we don't do it efficiently or

effectively through the entire health care sector today. we've got to be a lot more efficient. 20% -- >> senator, i hear you. and i know you have a lot of experience, okay. i just want to raise this point. you talk a lot about medicare, fair enough. most people believe that the medicare system is on the road to bankruptcy. and so my concern here is that, in effect, obama care is third to the fourth power or to the rest of the health care economy. if the wasn't hasn't worked, why do you believe the other will? >> well, i think medicare has worked at least as well as what we've seen in the private sector. we're spending $8,500 for every man, woman and child in the country on taxes and premiums. that's twice as much as any other country spends in the world today. and we don't get anywhere near the results. we have a system-wide problem, not just a medicare problem. or a medicaid problem. we've got to fix the entire system. we can't be content simply to solve medicare or medicaid

because that's impossible. you can't isolate out those programs alone. we've got to look at costs. we've got to look at access. we've got to look at quality. and until we do that, system-wide, we're not going to solve this problem. >> senator cobu rexed n, regarding medicare and obama care and ensuring those who truly can't afford to be insured and dealing with the hospital emergency rooms and the whole rest of this complicated picture, senator, is not there a better way pro-market, pro-competition more private sector way? >> there's no question we could do it. the problem with health care, one of the reasons that we spend twice as much on health care is everybody else thinks somebody else is paying their bill, except for the person who doesn't have insurance. if you're on medicaid, you don't care what it costs. if you've got private insurance, you don't care. you think somebody else is paying the ball. markets aren't perfect. but we've not used markets to allocate a scarce resource. and what i would tell you is in the areas of medicare, in the

areas of medicaid, we have been our own worst enemy in trying to use a soviet-style system to manage it. why do you think doctors don't take the time to listen to medicare patients? because medicare pays only 60% of what it really costs to see that patient. so if you really want to have a patient get great care and listen to the patient and teach them about prevention, you've got to pay for it. medicare won't pay for any of that. so what we have is a system that ignores market reality. will not use markets to allocate resource and put it back on the individual to make the best choice for their life. >> gentlemen, thank you. i've got to leave it there. we appreciate. former senator tom, thank you. coming up, folks, wall street starts the week with a bang. the bernanke signals the feds accommodating the markets with a zero interest rate as far as the eye can see it. don't forget, free market capitalism, whether it's health care or anything else is the best path to prosperity. i'm larry kudlow.

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well well both cyclical and structural forces doubtlessly contributed to the increase of

long term unemployment. the continued weakness in aggregate demand is likely the predominant factor. consequently, the federal reserves accommodative monetary policies by providing support for the demand and for the recovery, should help, over time, to reduce longer-term unemployment as well. >> all right, keyword, accommodated. that was federal reserve head ben bernanke this morning. stocks bounced on bernanke's easy money talk, all three averages boosting more than one percent. the king didn't feel the love, how, it fell. who's going to win the foot race between the stock market rising and the dollar falling? let's bring in our market to have a whack at it. keith, the market's love the money message. it was zero interest rates, maybe a renewal of operation twist. who knows.

maybe, you know, sterilizing bond purchases. but i know you worry about the dollar, keith. so i'm setting up a foot race. dollar down, stocks up, can that last? >> well, as you introduced at the beginning of your show, larry, this is a completely politicized relation at this point. whoever is competing with obama wants the dollar up. if you look at what actually happened this morning, it was face nating from a global perspective. i got up this morning, the dollar was up 2.5%. ben bernanke hasn't said anything. the min the guy starts talking, the dollar starts to tick down, down, down, down. by the end of the day, the dollar was down .62% and everyone is running around cheering on some of the lowest volume numbers you eve ever seen saying everyone is fine again. obama gets it. if the dollar is down and the market is up, his approval ratings go up. sadly, that's where we are. >> sadly, that's where we are. all right, take a whack at the

bernanke story and, please, i don't want you to whack too hard. why do health care stocks as the supreme court is hearing this landmark case about obama care. health care stocks had a big rally. now, what do they know that the rest of the world, including the supreme court justice don't yet know? >> i know, that's the interesting thing as you look at the ten sectors. it was the leader of the pack today. interestingly, we really don't learn anything until tomorrow, necessarily. you know, an interesting trade there. but obviously, a sector that certainly hasn't flourished this year. so it could be just getting a bounce of one of the sectors, perhaps that hasn't played as well in 2012. but as far as bernanke goes, he's really on message with what he's been saying. we didn't get new information today, necessarily. i don't know if people were expecting him to say things look great. that certainly hasn't been his pattern. he's a student of the great depression and fears the most of being too soon in terms of tightening here. so i think he's on message here.

and i'm surprised that the market is taking this with such a celebration. >> keith, let me come back to you. there are a lot of powerful positives. the economy is pretty good. earnings are pretty good. they may be slower, but things are good. pending home sales were a little soft today, but the year-on-year growth rate was still in double dodges. there's a lot of positive stuff propelling the market. i guess my question to you is are you worried enough about the dollar to actually sell stocks or will you ride this rally out some more? >> yeah, today, for example, i started the day with 14 long positions. i closed the day with 10. it's pretty simple. if the dollar is going to be weak, that is not the long-term path to prosperity. it never has and it never will be. americans should get this. it eas's going to be five bucks the pump. if you want the market to go up from here braced on a dollar down strategy, that's basically what you're cheering for. never more than 5-4 has never done anything except slow growth in this country. and since 71% of the gdp in the

country is consumption, that's a huge problem. >> i'm going to step on my own line. i think gasoline prices are very close to a peak. now, i'm putting aside the ir iranian deboeckle. we had $150 a barrel back in 2008, oil prices at the pump, gasoline was about $4 a barrel. we don't have anything close to $150, art hogan. and it makes me wonder whether all the bad news hasn't been discounted yet in gasoline. >> it certainly feels like we've gotten to a point where we have a higher they shall hold for that price at the pump, for sure. i don't think it's $5, but i certainly think the $4 hasn't slowed down consumer spending. if you look at january/february thus far, we've seen a surprise to the upset. now, if we get back to the $140 level and we're $5 and change in

the somer time -- >> then we're completely screwed. >> you need a hundred. you need 90. don't forget, guys, last year, u.s. gdp growth slow today 0 menthe 63%. now we're debating as to whether or not that this matters to the consumer. >> keith, with all respect, i think it's the rate of change. and we didn't have the oil spike spiked. now it seems to be sputtering. you could hold that level the whole economy adjusts, assuming we're growing at 2.5-3%. that's what the assumption is. keith, i didn't really hear. you're not really a bear, are you my friend? you're kind of lightening up, but you're not really a bear? >> now, up at this level, i'm a bear. officially. >> and art hogan, you are officially a bull? >> i am a bull. and it sounds like keith turned his 14 positions on today. i think he's one of those bears that are kicking and screaming and staying in this market. i think the point that he made about the low volumes is the

most important part here. i think we've got low volumes and it's hard to be convinced either way. >> i will say this, i don't need to argue keith's position. if the dollar drops 5 or 10%, then we've got a bad situation and all the energy resources are going to explode. the prices go up and stocks probably will get slammed. i agree with that. why am i counting on a strong dollar? it's probably a triumph of hope over experience. keith, thank you very much. art hogan, great to see you again. programming folks, former federal reserve governor, larry meyer joins us tomorrow night. coming up this evening, crude oil, as i said, just above $107 a barrel. gasoline surging. gasoline up 30%. the demand is low, supply looks high and i'm going to say it again. are we closed to a peak? i believe we are. i'll try to explain my position. please stay with us. i'm not a bull. i'm -- yeah. i'm just don't think gasoline is going to be all that bad. that's my point.

news alert to tell you. news alert to tell you. just as the u.s. and russians battle in eastern europe, president obama underfire tonight for a discussion caught on an open mic. pay attention to what he tells out going president, out going russian president about hardlined policies against the russians. >> i have more flexibility. >> i have more flexibility. >> i understand.

>> in case you didn't quite hear it, "this is my last election after my election, i have more flexibility." what does that mean? house and senate republicans demanding an explanation for these remarks. senator john kyle? >> perhaps the president should shed that light on these negotiations with the american people before discussing them with the russians. >> and, late today, the the republican national committee released this web video asking what else is on obama's agenda after the election that he isn't telling you. the president will be on his way back, his open-mic tour ends tomorrow. that's very scary thought. anyway, crude oil trading just above $107 a barrel, sending gas prices sky high again. but demand is low. and there's an oil boom. so why is there so much pain at the pump? here to explain it all is cnbc's own brian shackman. good everyoning. >> thank you, larry.

it's a great question. no easy answers. so before you get into possible reasons, let's actually lay out what's happening. clearly, domestic production, as he said, is on the rise. it's up double digits as you can see. some say in eight years, the u.s. could produce 7-10 million barrels a day. a high end of that range is what saudi arabia puts out. already, the results are dramatic. the u.s. became an exporter for the first time in over 60 years. meanwhile demand has not followed suit. over the same period, gasoline has been weak and is definitely below what is in 2006. you see the number, 3399. up here, 3241. i'm not a math major, but it's pretty easy to say. they say it's cash and all credit cards at a hundred thousand stations. . we're $2.61 higher than a decade ago and only 21 cent from an

all-time high. that was when oil was at $1.37. global geopolitics, speculation, reduced refining capacity, et cetera. there doesn't seem to be one smoking gun-type reason for this disconnect. >> all right, now, our gasoline is surging almost 30% for the year alone. what's causing the pump to rise? my next guest sees three major reasons for the spike. let's go to hla-l executive with some skin in the game, president of lipow oil. andy, i know there's a million reasons here. if we're going to produce 7-10 million barrel a day and we know we have this fracking revolution going on, i'm just saying as a thought experiment, take iran out of the picture for a minute. why can't gasoline price at the pump actually be very close to peaking? >> well, they could be close to peaking.

but we've had eight refineries shut down in europe over the last six months. a lot of those are going to supply especially into the northeast. i see very tight supplies over the next couple of months. >> i get you. i hear you. i know you're correct. and the refinery problem is probably the single biggest reason why the gas prices keep rising. but is it possible? that is already in the market. there is a speculative element. investors and traders in the market bled. maybe that's already been discounted. and maybe we're close to a summer peak. it's all in the market. >> well, i think most of it is in the market and we're seeing a lot of the specklators start to lessen their positions. but the fact is as soon as we have a refinery problem in the northeast, those prices spike up because you look for the resupply and it's simply not there. >> all right. i get the refinery thing. and i think that has been a key factor. but if you go back to 2008, i've said this earlier and i'll say it again. you have closer to $150 barrel oil, the nationwide was close to $4, higher in some places.

we're nowheres near $150 on crude. nowheres near. and barring an iranian blow up, we're not going to get there. if crude oil is stabilizing, and i get the refinery back up and so forth, none the less, that all may be in the market. we could be surprised at a peak. >> well, the thing that you're looking at is wti cushioning oklahoma at $107. and what we're looking at is brent at $125. and we're still importing two-thirds of our oil. the big problem is in the mid continent, that oil is bottled up and we're using the virtual pipeline of rail, barge and trucks to move that oil down to the gulf coast. >> i totally agree. i totally agree. i'll make this other point. brend crude is leveling off, also, just as west texas. i think we're underestimating that signal. i understand the back up in the refinery problem. i get all of that. we don't have time to pursue it anymore.

i think we're very close to a peak in gas prices. maybe the summer season has to be discounted. but we're not far from a peak. andy, thank you very much for joining my speculation. coming up on kudlow, the battle over obama care, historic hearings at the supreme court over unprecedented government overreach. high-court overterm, highest achievement or not? so up next, we continue this. ceo of universal health services, big hospital outfit, aaron miller squares off with ron johnson who is in the court today. i'm kudlow, we'll be right back. [ todd ] hello? hello todd. just calling to let you know i'm giving you the silent treatment. so you're calling to tell me you're giving me the silent treatment? ummm, yeah.

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we we continue our discussion about the historic show down over obama care. the focus of tomorrow's hearings will be the all important mandate and, yes, the fate of our economy hangs in the balance. let's bring in our guest. here now we welcome allen miller president of universal health services, one of the largest management companies in the world. and we welcome back ron johnson, republican from wisconsin, who is inside the courtroom for today's hearings. mr. miller, we all have great respects, sir. i regard this obama care as

doing violence to personal freedom and i worry about the tax and regulatory burden on the economy. i know you favor it, sir. please tell me why. >> i don't favor all of it. but we're talking about the mandate. and where we have 32 million americans who will have coverage out of the 50 that are uninsured, that's helpful for the providers. that's the provision that i think makes sense for us. >> well, just let me clarify. you just want that narrow slice? can that be done without the mandate? you have the pre-conditioned illnesses problem. all right, that's expensive for your emergency rooms. but is there a way to do that with constitutional limits without damaging the entire econo economy? >> i'm not a constitutional lawyer. i'd like to see the mandate pass. and i don't think that it works if the mandate doesn't pass. because, as you point out, preexisting conditions, it doesn't work if you have people

come in when they're ill and get insurance. unless you have a large pool. and that mandate gives a large pool to the whole country. >> senator johnson, among your many distinguished features, you're also in business as ceo of your large company. what's your reaction to mr. miller? >> i understand his narrow special interest. but, larry, you're right. this is all pressed on. and it's about forcing a wheat farmer, basically not allowing him to grow wheat to feed his family and his chickens and his cattle. that's what we're talking about. this will be the first time in our history where the federal government will force individuals to engaging commerce. it is a huge assault on our freedom. that's what obama care is all about.

see, mr. miller, that's the thing. the issue is that the legislators make the rules. we have to live by them. and we are not paid while we should be paid for medicare. we get 93 cents on a dollar of cost. we get 84, 85 cent on a dollar a cost. you can't exist that way. i wrote a book which talked about other things that could be done to help the system along. the system has got to be changed. >> larry, here's the problem. if this obama care law gets passed, or if it gets implemented,

implemented. >> now we're going to be dumping 25 million more people. basically what obama care does is it limits the supply and increases the demand. >> we don't make the rules. we have to live with them. we've got 2700 pages of obamacare and we're trying to figure out how in the world we can deal with it. >> in 12,300 more rules and regulations to date. >> i agree with you. but we don't make the rules. we don't have a vote. you do. and your associates do. there's a lot of other things that have to get done. >> senator johnson, isn't there a better way to do this? couldn't we put tax advantages?

couldn't we promote a really free market system where actually the private sector is the dispersing agent? >> the root cause is that we separated the consumer from the payment. back in the mid '40s, quite honestly. we've taken the free market out of the health care system. we should actually have tort reform. >> we've been talking about that for years. absolutely agree. >> that's what we need to do. >> absolutely. i agree with that. but the whole system needs a redo. you have these users that people pay for. fee-for-service. >> we need to get government out of health care.

care. >> i appreciate it very much. allen miller, thank you for helping us out. i just believe, sir, there is a better way an american can come up with it. all right, coming up, free market capitalism in cuba. [ artis brown ] america is facing some tough challenges right now. two of the most important are energy security and economic growth. north america actually has one of the largest oil reserves in the world. a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils

and that's a huge breakthrough. that's good for our country's energy security and our economy. and that's a huge breakthrough.

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ally bank. no nonsense. just people sense. so, the pope leaves mexico where he wowed the crowd by putting on a sombrero. he arrives as economic reforms are being put in place. is this the start of free market capitalism and the best path to prosperity in cuba? good evening, michelle. >> hey, there, larry. two changes have happened in cuba in the last year, which are pretty significant. they're not going to sound like a big deal to most americans. but, here, they are a big deal. first, the ability to buy and sell your home or car or the second one is there are 181 new

professions where you can be self employed. you can choose to do them on your own rather than having to work for the government. the ones that's most visible? restaura restauranture. >> there's stuff that they cannot get there. >> this will be the third trip in a year to help her brother. >> that was something we couldn't have. we were doing it before to have our own business. >> thanks to changes in law, he could have a license to operate his own business. miguel's restaurant was originally started by his

grandfather but was nationalized by the castro regime. now it's miguel's turn. >> you can see more tonight on cuba forbidden fortune 9:00 p.m. eastern time. it's a half hour special we put together. larry, i think cnbc will understand that entrepreneurship can be heartwarming and life changing. the question is how much does this really mean on a larger scale for the island? we have to see. >> well, michelle, look at. homes, cars, restaurants. that's not nothing. that's something. that opens it up. china started by allowing the farmers to allow plots of their own land. so this is something. >> you know, when you ask officials from the cuban government that very question, you see people on the outside, they say a ha, this is like china in the '80s. they say no, it's not. we are just perfecting the model.

they deny it outwardly. what they're saying behind closed doors, we don't know. we have to see whether there's an expansion or business for example. >> up next, holy cow. rick santorum explodes. is it enough trouble or is this just a mainstream media attack against rick santorum? who's right and who's wrong? we're going to cover it. stay with us on kudlow. ♪ where the sun never goes out ♪ ♪ and the sky is deep and blue ♪ ♪ won't you take me american flight 280 to miami is now ready for boarding. ♪ there with you fly without putting your life on pause. be yourself. nonstop. american airlines.

welcome back to the kudlow report. welcome back to the kudlow report. rick santorum adds louisiana to his account. take a listen. >> >> you said that mitt romney is the worst republican in the country. is that true? >> what speech did you listen to? stop lying. i said he was the worst republican to run on the issue of obama care. and that's what i was talking about. would you guys quit distorting what i'm saying? >> he fashioned the blueprint. i've been saying it in every speech. quit distorting our words. if i see it, it's bull [bleep]. come on, man? what are you doing? >> all right, here now is author and santorum supporter.

do you think he did it deliberately or is this a snafu? or what's it mean? this happens in the campaign all of the time. it's about romney care and saying that santorum is the best candidate to run. he said, look, i'm a salt of the earth candidate. he embraces his rough edge and he thinks that the exchange highlights his outsider appeal. >> all right, i like the language very much. but how far -- how far is rick santorum going to take this attack against mitt romney? i mean, in truth. and i wish rick santorum -- well, let me just say that. but by all accounts, it looks like romney is marching towards victory.

>> we've got 25 states left to go. it's halftime. >> santorum even acknowledged at breakfast that the delegate map doesn't look good. having a contested convention and then having a two-month campaign after the august convention. it's not halftime at all. >> so, what, rob? he drops out now? there is a path forward here and that's what he's taking. >> a precarious path. >> so let's just give up. >> no, he's fighting on, brad. >> the only thing i'll say, brad, is this. at some point, this story has to come together. i understand your loyalty to rick santorum. but at some point, romney is going to become the candidate and everyone is going to call us.

and rick santorum has his own future to worry about. you don't want the whole republican party getting angry at santorum because he keeps calling names. >> if romney loses against obama, that's the end of it. rick is in this to win it. >> i think santorum does have a room -- he has some space right now. i was with santorum today on the steps of the supreme court. he thinks because this thing is coming before those nine justices, he has a chance to reframe this debate. he's putting his whole case on health care. as larry pointed out, the party support is very tough. >> he was never supposed to make it this far. hillary hung in until june. this is a whole different race. >> i'll tell you what, i'd like to see a two-month race and let him spend the money of choice.

>> my dog could beat obama. >> you're both great. the beat goes on. you're getting tougher and tougher, both of you. congressman paul ryan joins us. that's it for this evening, cheryl, we'll see you tomorrow. how did we do it last time?

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