good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin. joe will join us tomorrow. >> i'm sitting in his chair. >> we haven't done a lot like this. we had "three's company" music. >> that's actually pretty good. blond, brunette. >> no, no, wait a second. you're going to get yourself in a whole lot of trouble. >> stop there. i always loved john ritter though. >> me too. i will agree with you on that. >> john ritter, by the way, we'll get to the news. he -- he had a colapoba, a

misshaken eye. in mat over weeks is what they're saying at this point. leaders are trying to thing of ways to push field prices down. global supply outages are running at more than a million barrels a day. and we even been watching what prices have been doing at the pump obviously. this is putting pressure on people. this could help justify strategic reserves. it is putting a little bit of pressure on stocks a that point. down by about 1% for those wti crude numbers. 106.28. but, guys, we've been watching what's been happening at the pump. it continues to climb. it was up 11 or 12 cent over the last two weeks. national averages nearing $4 a gallon. >> yeah. looking at it up here on the aaa website. people have it at 3.93 or something. 3.91 now. so maybe it's come off a little bit. but there are many states including new york that have it over $4 a gallon. >> chicago is highest in the neigh. it's something like $4.50.

obviously it's starting to put a little bit of a debt in the consumer's ability to spinld. >> the natgas on the opposite end of the spectrum. >> tanking, yeah. >> you can see the divergence. in other new this morning, fed chair ben bernanke -- this this is not from this morning. this is from last night for those of with you who got to see the abc news report. he's washing against complacency in policy making as the outlook brightens. take a listen. >> the recent news has been good, but i think we need to be cautious and make sure this is sustainle. we haven't quite yet got to the point where we can be completely confident that we're on a track to full recovery. >> when asked whether the fed was considering further action to stimulate growth, bernanke said that the central bank would take no option off the table but did not suggest a further round that bond buys was imminent. we're going to have more on the economy and the fed later this morning when steve liesman unveils the finding of the new

cnbc all-american economic survey at 7:30 eastern. i got a sneak peek and it's interesting stuff. >> did you run into steve in the makeup room? >> i cannot say. i cannot say. >> wait a second. how did you get this? >> you actually probably got it too and didn't realize it in an e-mail that you might have gotten, not from steve -- >> uh-oh. >> -- but in our special edition of "morning money." >> oh, i've got it right here. >> as for one economic calendar, one report to watch. february durable goods orders, we're going to hear about them. so we'll keep an eye on that. >> wait. i'm still flipping through because i read this thing. >> it's in there. >> all right. i'll take your word for it. we eat get more of it but i guess that's a him where you can get a preview of it. by the way, we should get to the top of today's corporate headlines. senior executives within goldman sachs have talked about sfliting the role of ceo and chairman.

reuters says under a restructuring gary cohn would take the role of president and coo and michael evans would be advice chairman and lloyd blankfein would be chairman and ceo. after goldman agreed toal ter its board structure. very specifically they agreed to appoint a independent director who would be in charge of the performance and i'm not sure where these stories continue to come from. >> the important part of impacting this story is for the idea that for the past six months and longer, they're reporting on this idea that there was a plan which would have elevated gary cohn and mike evans. >> but i thought it got knocked down earlier. >> here's an issue. goldman sachs put out a statement last night saying none of this was under consideration. >> okay. the >> there's two sides of this. i don't know.

>> we've been hearing these rumblings. actually you can trace there all the way back to last year but we heard the rumblings start to pick up again over the last month or so. >> they've had plenty of time. it's been going on for months. there's been plenty of time to bat against this, so the times is -- >> yeah. it just -- i don't know -- like usually you can kind of follow back and fix out what republican happ really happened if you look back. this one confuses me. >> everybody knows goldman has been under enormous pressure. >> sure. >> there's been pressure to do something. it's not clear, by the way, whether they would have won in this a vote. >> in a vote. >> at all. >> in a proxy vote. i doult they would have. >> and that then raises the question if you were goldman, were you really sitting around, contingency planning this, or were you saying they're never going to win anyway, but you know what, we'll throw them a bone and make somebody the lead director? >> although that raises the question.

if gold man put out this press release saying this report, i guess, in reuters is not accurate, that this was never set up this way. that's what i can't figure out, who's the one who instigating it. >> who's the one instigating? >> who's talking to some reporter somewhere? >> it's people talk. >> all right. >> people talk. >> all right. again, to me, the largest issue is there a success plan. to me, even these reports suggest that -- i mean people have been thinking about that. remember -- what was her name who wrote for "fortune" who came on. >> bethany. >> she thought he was going to be out of his job by the end of the year. i tang the other side of that trade. we'll see what happens. >> okay. let's get to washington news today. the house financial services committee is holding a meeting. they plan to tell lawmakers that she desperately sought fund transfers to try and cover the customer account shortfalls in the final hours before the

firm's collapse, but according to prepared tesk, christine slowinski says the banks would not execute them. she said she only learneded on the morning of the bankruptcy that that sentiment was real. they passed it late yesterday postponing bonuses. let's get a check on the markets. after yesterday's market tisht where you did see a little bit of a pullback, dow was down by a little over 40 points, this morning you're going to see green arrows across the bofrmd dow futures up by 16 points. obviously we're going to be watching a few data points. at 8:30 we'll be getting durable goods orders and you do have an action coming up later this afternoon. if you take a look right now at

the ten-year, we did see it falling do 2.81%. this morning it's yielding one basis point higher. looking right now at 220. and as i mentioned, we do have an auction coming up today for five-year notes. it's going to be 35 billion of them and that comes up at 1:00 p.m. today. let's take a look. at this point you see it's down across the board. dollar/yen at 82.95. euro at this point at 1.3339. gold prices right now are actually trading a little lower to $1,675, 10 cents an ounce. >> and there is some news out of washington this morning. the white house -- not the white house, the house voting overwhelmingly to pass a bill to boost small business growth. the legislation was passed by the senate last week and now goes to the president for his signature. the bill would make it easier for small companies to raise capital and launch ipos. financial watchdogs have warned the legislation could erode

investor protections. we've heard a lot about boiler rooms but the senate added provisions last week, and a new report suggests that the proposed rule crackdown on trading and ininvesting by banks could cause gasoline and natural gas prices and electricity to rise. daniel is one of the authors. he aims to gain the rule's impact on energy companies and markets. the study says the exemption from market making should be broadened. >> we talked about the higher prices at the burn and it is making its way into the campaign as well. there's a new reuter's poll that suggests that more than two-thirds of the americans disapprove of the way the president is handling high gasoline prices. get this. they don't blame him for the high prices but it's a little boift a mix. they recognize he may not have absolute control on day-to-day

basis. the most common reason cited by voters, the most common rising was company greed. i guess they're blaming big oil for all of this. more than a quarter of responders said a range of factors were equally to blame including politicians, companies that dominate oil reserves and environmentalists who want to limit oil exploration. a lot of fingers being pointed in a lot of different directions. obvious let's getting to the point where they're going to be looking at it as a part of the election as well. they're trying to figure out if they can push down prices. let's get to the global economy. italian prime minister mario monti is not worried about troubles in in spain spreading to the rest of europe. the further down placed comments spread over the weekend suggesting that it could reignite the eurozone debt crisis, that is something a lot of people are keeping an eye on at this point.

let's get to the global markets report right now. ross westgate is standing by in london. how are market watch irs in europe buying into these comments at this point. do they believe what he is saying now or what he was saying over the weekend? >> yeah. it's at that point. we have seen yields on italian. there was a pretty good auction of italian t-bills. they're in the early six months. sentiment toward italy still okay. sban is the one that's going to remain in the headlights. here we are ahead of the u.s. open, and after perking up earlier this morning, we have seen stocks, although the futures are pointing up in the united states. european stocks are down, 73. after some losses yesterday, we're adding to it right now during the european session. ftse down around 25 points -- sorry, 12 points, a quarter of a percent low. the ftse interestingly enough is

up, being led higher by the state fed's company finmeccanica going through a restructuring process. euro/dollar, we hit that one-month high, just a little bit steady today, 1.3334. the yen is stronger across the board. euro and dollar back again. sterling has been weaker today. we did get a negative revision downward for the fourth quarter gdp, minus a quarter, the economy not quite as strong or worse than we thought it was. it will was already in negative territory of course. we talked about the auction today. there you go. spanish yields, despite the discussions about spain actually have come down again. so 5.29%. remember we hit 5.55 toward the end of last week and friday. and bund yields down, below 1.9%. i think where we stand at the

moment, of course, on discussions about spain is we'll have to see what happens with him. there is a feeling he overplayed his hand in being so bullish about effective will i saying to the rest of the eu, we're not going to meet your deficit targets instead of monti who does a lot more in negotiations behind the scenes. back to you. >> thanks very much. is there a point, ross, where there's another test for this is or is there a kind of wait-and-see thing? >> i think in investors' minds, they've taken a lot of pressure off in the short term. they've got french elections that are going to be the next big test to see if that changes the political landscape. they're now scheduled for may 6. if we're going to come back to spain and bailouts for more bailouts for portugal and ireland, we're talking really toward the end of the year. think there's a sense in investors' minds for now that there are no short-term issues to get over. certainly no terms -- no

short-termishes in terms of funding. the french elections are probably the next big thing that might change the politics. >> all right. we'll take what we can get for now. ross, thanks very much. and we'll see you tomorrow. right now let's get to the u.s. economy. maury harris joins us from new york. he is a chief economist at ubs research. we're trying to figure out if the gains we've seen are for real or if they're temporary. ben bernanke said this week he believes they are temporary and we have to be vigilant, but you tend to thing there's something real going on here, correct. >> i think the most important thing that's going on that is real is that what bernanke and the fed did earlier with the qe, pumped a tremendous amount of reserves into the banking system, and they started easing standards and lending more money in the second half of last year. that's a very powerful leading indicator, which suggests what

we're seeing now had something to do with earlier policy and is not simply because of warm winter weather. >> but we do know that jobs tend to pick up with some of that warmer weather. are you willing to discount any of it? >> you discount some of it. maybe $50,000 a month. but our experience with the relationship between easing bank lending standards and what happens to jobs says that you should have been around $200,000 a month, and so you're close eer to a quarter of a million a month, and that extra quarter of a million a month is probably, you know -- a quarter of a million, that extra 50,000 is probably the weather. >> all right. if we are really seeing some serious green shoots at this point, what is the risk factor in terms of an early frost? is it higher gas prices? >> well, higher gas prices are clearly the number one risk. compared to last year, we're about as high as we were. the difference between last year

and this year is that the economy has more momentum, the consumer confidence is looking better, the stock market is looking better. so a lot of other factors that affect the economy other than just gas prices are looking better now than think did a year ago when the higher gas prices were followed by a weaker economy. >> maury, it's kelly. if we keep adding jobs at the pace we've been adding, what do you guys think is the natural unemployment rate at this time? is it still in the 5 or do you see it higher? >> the so-called unaccelerating em ploit rate, we think it's closer to 7% than the 5.5% to 5.75% that the fed thinks. the reason is there's more structure in employment in the united states. there are not enough jobs for everybody, but for the openings

that have already shown up, we should have had lower unemployment. and this says that it's getting harder to match people with jobs, a factor that raises your natural rate of unemployment. i think it's almost 7% it's something that ben bernanke was talking about or earlier this week when he said there may be a need for the fed to do more. so do you agree? >> i don't think there's a need do more. they've done a tremendous amount already. the banks are sitting on a trillion and a half in excess reserves. the fed has said the effects of their policies onraites are how much they hold. >> that's a scary ondie. is there something that can be done or something we can live

with? 7% unemployment, that sounds kind of crazy. >> well, think there's a couple of factors that could brick it down over the next number of years. the number one thing is a better educational system that does a better job of tracking people to where the jobs are. >> what does that do to our gdp in the meantime. i mean can we live with the 7% unemployment? forget the individual nan's going to mean for so many individual families. >> we're at 8.3%. if we think full employment -- not full but the nonaccelerating rate of inflation unemployment is 7%. we have at least -- we have another two years before we have to worry about any real constraints on gdp growth. but if you're a bond investor, you worry about what happens two years down the road. >> yeah. and if you are looking at long-term fixes like fixing the education system, you're looking at fixes that are more than 2 years down the road. >> right.

something else that is certainly a possibility is that over time, we're going to start to get a recovery at home prices, and these home prices being under water for about 20% of the people who own their home who have -- and they have negative equity, that limits their ability and that problem is going gradually fade away over time. so in the longer run over a five-year period, perhaps we can bring down that so-called natural rate of unemployment. >> okay. maury, we want to thank you for your time this morning. coming up, we've got a live report from home depot. the retailer launching a big spring push today. with we've got the details. that's coming up next. and then later our news maker of the morning, famed corporate leader jack welch. he's going to talk business and politics at the top of the hour. "squawk" is coming back right after this.

welcome back to "squawk box." u.s. ek request ity futures are looking a little bit higher. making headline. a group led by former basketball great magic johnson has agreed to buy the people for $2 million. they were led by a banking firm. it would allow the team to be removed from bankruptcy court though it would first have to be

approved by the bank. now for our national forecast, jot williams joining us from the weather channel. >> good morning, everyone. we're keeping tabs on the frontal boundary. we have a little bit of rain and snow for the adirondacks, the white, the green mountains, and also showers and thunderstorms popping up later on this afternoon around new york city. toward the pacific northwest, seattle, moderate airport delays. san francisco, clouds and showers as well. not as chilly this morning as the same time yesterday. mid 40s, new york city, philadelphia, mid-50s around detroit. we're tracking precipitation on the move but dry air in place. the measure of moisture is limiting making its way to the ground in several location as i cross new england. in the meantime as we go across the new york area, showers and clouds mixing and isolated thunderstorms developing later

on this afternoon. in fact, we'll take you hour by hour and show you that forecast here. you can see scattered showers and thunderstorms around the buffalo area, and then later on as we track that system guard the new york city area, thunderstorms. mid-60s for you by 5:00. low 50s toward the boston area. we have that threat of severe weather from washington, d.c. to roanoke, toward the nashville area here. damaging winds and hail. and we can't rule out the possibility of an isolated tonig tornado. so we'll track it all for you. >> thank you very much. you know, christmas is long gone, but home depot is launching its black friday today. it's the new black friday. it's the spring black friday for a very important time for the retail. cnbc's courtney reagan is here and she joins us with more on this. this is an interesting concept. i never thought about black friday in the spring br. >> i know it is, but it's a

really good marketing tool. they did just as now moments ago it's spring black friday promotions will begin tomorrow and this year it's going to be a simultaneous nationwide rollout because of the milder winter that we've had. in years past home depot has done this promotion over the course of several months, region by region. as you mentioned, santa does come in the springtime as homeowners who have been putting off those projects all winter begin them around this time. but because of that warmer than normal winter, many of the home depot customers have begun from gutters to roofing to patio furniture. and according to global hunter securities, retail sales for home and garden and lawn improvement have improved year over year. the contracts for existing home sales are near two-year highs and that's a very bullish sign

for those smaller ticket home improve management projects. >> the homeowner wants to do something to improve the overall appearance and marketability and comfortable nature of living in the home that they have. the outdoor landscaping and lawn and garden, part of it will hold up pretty well because it's a lower ticket. we're a little bit concerned right now about the home remodel bigger ticket side of the story. >> there's a way to profit off this trade. armstrong, weyerhaeuser, and scotts miracle are some companies who have had a good run so far year to date. we've been having dryer than normal weather right now, andrew, which could be a bit of an issue for sales of some of these garden products that are behind me. so a lot of homeowners and also home improvement retailers watch that weather forecast very carefully. >> courtney, what does that earlier weather, the warmer weather that we've gotten, what does that do to their sales?

i mean does that pull the sales forward door they miss out on sales because homeowners weren't quite ready for the spring to be here? >> yeah. so far they've actually seen both home improvement retailers, they've seen some really nice sales earlier in the season. so like we mentioned, january and february, i receive some much better increases than what they have seen in years past. that being said, those sales trends have not decelerated and they expect them to continue to accelerat accelerate, remains to be seen if it actually happens. >> courtney, thank you so much. i don't know what you should go buy. >> thanks. >> i don't know what -- >> many all. >> geraniums. >> there's stuff -- >> too late for the tulips and daffodils. >> it's been a problem because it god warm and then cold. >> 31 degrees. >> i don't think there's any damage. i don't think it killed them yet. >> what doual it? what's that? >> orchid.

>> every orchid i ever buy dies. >> i'm not great at these things. so you'll be in charge. >> no, no. i would only hurt the orchid. coming up, the pictures from the futures picks in chicago. first, if you went to sleep early last night, you missed something extraordinary. mitt romney was on leno, but we have it here, take a quick look as we head to break. >> you don't always get every word just right, and so you have to give people a little bit of slack, i think. in this case, rick santorum's a good guy. he's running a good campaign. we have some differences in background and differences on some issues but basically a good guy. you know, i'm happy with him saying he'd like to be part of an administration with me. nothing wrong with that. if he's the vp, that's better.

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a little dale adele on a wednesday morning. coming back. apple is going to be e-mailing all buyers in australia to offer them a refund.

i bought an ipad but i'm here in u.s. after an australian watchdog accused the tech giant of one aspect of the product. he wants apple to make consumers aware that the third generation ipad cannot connect to an i-4 ceremony app due to connectability. >> this is only a problem in australia. >> right. the ipad comes with 4g which is fantastic if you don't have one. >> no one know as what all this 4g stuff is. >> i don't get it. >> he's got a columbia that explains 4g, not 4g, what all this terminology means. >> how much faster is it. >> do you have wi-fi at home? >> it is that fast. >> everywhere or -- >> it may be faster depending what came company is providing ichlt i could be in the back of my car or walking down the

sidewalk. it's as fast as being at home. there's no spinning -- >> that's pretty cool. >> sand thing. anyway, that's the story. but in australia, it doesn't work i wonder how many people would take them back because apple has so many peo love the product. >> it's not like they bought one when they could have bought another. if you buy the ipad and you can't connect it are they going to return it for that reason. >> unless you were upgrading one or two. i guess that would be the only people. >> let's check on the markets. joining us now, scott. good morning. we've seen positive signs. do you think we'll be able to extende extend these into the future? >> i think we'll try. we've had three years of hundreds of billions of dollars thrown at the economy, qe1, qe2, the threat of qe3.

what i get concerned about as well as the traders behind me when they show up, we're starting to get beat up at the gdp stick making us think 2% is good. the s&p 500 has gone up 22% in 80 days without any real significant pullback. we're starting to see signs, think, of running out of oxygen at these levels. >> it doesn't help. a lot of focus on spain and whether it might be next in line for sort of a troika bailout. are we seeing any signs of any kind of interbank stress, the kind of stuff we saw last year before this all came to the forefront. >> i think a good word for us is flabbergasted. we're still seeing these signs. what we did with greece a few weeks ago is upgrade them from an f to f-plus. that's still a failing grade. we've got other european countries in the cross-hairs and they another going go away and that situation arguably has

gotten worse since the greek debacle or whatever we thought we put the band-aid over back then. yes, that is a very serious situation, which isn't going to go away. it's still there. i think that we are -- we're flabbergasted because we can't believe that that fear index or vicks is hovering around the lows like it is. it's like the world is so complaisant, waiting for something to happen. >> we've also seen correlation fall, which has been an encouraging sign but it also means you have to look at what to trade and when you look at commodities for example, kind of to what you're saying, you're seeing oil at these heise when you're worrying about demand out of asia, europe. do you expect these commodity trades to start rolling over? i think they are a little bit already. you can't have $120 oil and 2% gdp or slow to know growth in the u.s. it's not going to work out that way unless we have some geopolitical issue on the forefront. all the folks out there, we had the headlines. in washington, high gas prices are good.

i don't know what that means. i mean it's like saying high health care costs are healthier. it's ridiculous. we've got a situation where some folks believe the economy is going to be better but ultimately why is 2% better? i mean with what we've down to this economy the last three years, you would have expected 5% to 6% gdp, not 2%. and some of these revisions are going down ward for the next quarter. be careful. i think it's going to hover around that $100 level. 100 bucks is probably where it's going sit. >> hey, scott, we were talking about unemployment earlier and the labor market, whether you buy into the new jobs, are they for real or last. we had maury harris telling us 7% is the new normal, this is what you might expect to see from here on out. what do you think? >> i think you can't tell. i think we can be -- got forbid

deflationary. you can see high unemployment and slo to no growth with higher prices going forward. i really do believe we're nowhere near where a lot of folks think we are. there's a citibank economic surprise index, which is really kind of difficult to get your head around, but we are continueually disappointing our expectations of what these financial and economic numbers are on a daily basis. arguably it says we're going to be heading into another recession in the third quarter. 7%, the new normal? that's horrible. so is 2% in gdp. we're limping along here and for some reason that's giving people a good feeling. i want people to slap themselves, put a cold towel on their face and wake up to reality. i don't know. you ask the folks where you live. is anybody better off than they were two years ago? i thank's a resounding no. >> and we should mention, too, durable goods were coming out at 8:30 will be a good one to watch for the concerns you express

there. scott, thanks so much. >> thank you. coming up, "squawk" goes shopping. we're going to talk the state of retail as we start the key spring season. but, first, if you haven't seen this already, you must. you remember the muppets, you remember greg smith and gold sax. hoopla. here is funny or die. a clip that -- i dodge know if you'll think this is funny or you'll die of laughter. take a listen. >> we represent the anti-money pet defamation link and we want to talk about goad man sax. >> we're not going the take it anymore. >> yeah. >> look. sure we call our clients muppets and sure we advise them against their own best interests to make us richer but does that make us bad guys? >> yes. yes, it does. >> potato, potato. if the americans didn't want us to get rich, why would they let us trick them into giving us all

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the advisory group annual conference group kicks off today. dana telsey, good morning. >> good morning. thank you for having me. >> it's a perfect time to have you. with consumer confidence falling yesterday, gasoline prices continuing climb, how is is that playing out in the retail industry at this point? are you seeing any signs of a

pullback in spending? >> so far we're not. we started yesterday. today's a big day. there's over 890 companies here and the feedback so far is business is good. easter sells is good. who are the standouts a that point, those who are really hanging in there? >> so far we receive companies like macy's on the department store side, they're working. limited with victoria secret also doing very well. we're seeing transformation be a big theme. and yesterday dick hain, the ceo urban outfitters here talking about the transformation they're undergoing in their business. luxury goods, testifyny, coach, they're also outperforming and tourism certainly helping that. >> you know gasoline prices can push consumers and at some point rein in their spending. earlier we talked with someone

that suggested that $5 is the new $4. what do you thing? >> i think that's right. $5 is the new $4. we came out with a study and we're finding over the past three years three different retailers we abouted, there's been shown an increase in correlati correlation. adult specialty retailers, discounters and warehouse groups, luxury goods are less impacted but the qsr is the quick serve restaurants along with teen retailers and supermarkets, those are most impacted by the rise in gas prices. >> i read your numbers. it looks like for every 25 kreptss the price increases it costs the consumer $150. if the gasoline prices are up two bucks, that's $1,200 a year. that could put a squeeze on retailers down the road. is the rate of the increase what bothers you more or is it the actual level? >> the rate of the increase. as it keeps going up.

thing the rate of the increase is what makes people a little more cautious. what it could do, online spending, mobile spending is a new growth driver and we could see sales turn more to that channel. >> dana, thank you very much. we wish you luck with the conference and thank you for joining us. >> thank you. thank you for having me. >> coming up, the power of habits. that's coming up next. and then at the top of the hour, a man who need nos introduction, but i'll do it anyway. jack. we won't tell you his last name. you know who he is. he's our guest host, so stay tuned.

. ♪ now being without you ♪ takes a lot of getting used to ♪ >> back on a wednesday morning. studies show that habits shape more than 50% of our daily decisions. in the new book "power of habit," the author takes a look at how individuals and companies can profit by understanding and tweaking their routines. charles is a good friend of mine and joins us now. it's a fantastic book. >> thank you so much. >> we all want to know how to rewire ourselves. how do we do it? >> in the last decade the understanding of science and neurology has been transformed. what we learned is that every habit has three components.

there's a cue, ah-ha about it and then a reward. most people focus on behavior. if you play with the queue and the reward you can change your habit. >> as somebody who does an early routine. you can schedule my schedule or routine. i know where i have to be every minute, every step of the way. how do you change a routine? >> if you want to change the routine. what's amazing you're exactly right. our brains are programmed to take any pattern and make it into ah-ha about it because it allows us to think about other things while we're doing something complicated. >> 40% of our life is based on these routine? >> exactly. that's how we can back the car out of driveway and think about the meeting coming up. >> a lot of companies are taking this advantage of habits and

routines. >> that's right. we had an excerpt, target can predict which customers are preg based on what they are buying. alcoa has focused on trending worker habits. >> it was interesting because people initially reacted to that n negatively. >> one guy actually told me he ran out of this meeting where he said worker safety was a priority. he must have done a ton of drugs. all his clients said sell alcoa immediately. worse financial decision he

made. >> if you're a ceo and watching this. besides running out and getting the book immediately what can they do immediately if they want to change one little habit. which habit do you attack. the thing that i was going after that you want to change isn't necessarily the thing you have to change. >> that's right. some habits are known as key stone habits. they have a power to set off a chain reaction of other shifts. good ceos are thinking about this. they are thinking how their employees automatically react to things. for other ceos this is something that, you're having jack welch on later. you have to be cognizant of habits in your organization. you have to design them on purpose if not they will design on their own. >> there's an competent in which companies can exploit these habits. it's a wake up call to us that, companies may use those to their advantage. >> that's exactly right. >> what does target do when they

figure out you're preg. >> this is really interesting. >> like a discount to get baby products. >> at first they would send you stuff that say come buy formula and diapers. they had an din when a father walked into target and clutching these coupons and my daughter is a teenager you sent her these baby things. are you encouraging her to get preg. the father said it turns out you're right i owe you and apology she's due in august. >> i don't owe you any apology. at that point that's why it's creepy and invasive. is there a backlash? when i was pregnant i couldn't figure out why i got this. >> target came up with this way of camouflaging how much they knew about you. >> oh, good. >> when you looked at the diaper ads a number of them were next to ads for wine glasses or lawn

m mowers or super bowl stuff. if they can slip in the right queue at the right time you'll go in and buy diapers. >> you look svelte these days. you lost ten pounds or more. >> right. >> in part because you changed an interesting habit. >> so we have a great cafeteria at the "new york times." i used to governorry afternoon to get a cookie. it was a terrible habit. i sat down with my psychologist how do i change my cookie habit. define the quei and the reward. the reward was when i went up to the cafeteria i got to talk to people like andrew. i could gossip about the "new york times." i reformed the habit. i stand up at 3:30. look around the newsroom.

i go over to andy. go back to my desk no more cookie urge. >> charles, thamnk you for comig in. >> thank you for having me. >> jack welch is today's guest host. we'll find out what he thinks about the power of habits. we'll ask him about business, economy. nothing is off the table. stick around, we'll be right back.

i'll be happy to go out and get you some weakness tissues. straight from the gut. >> if you need a pass i'll be happy to go out and get you some

tissues. >> i'm not crying in front of jack welch. >> jack welch is here for the next two hours to weigh in on the health care debate, the economy and the election. >> the balancing act in congress. oklahoma senator tom colburn with an austerity plan to end america's deficit dilemma. >> hiring our heroes. we're live from the "uss intrepid" as america's biggest employers find ways to get americans back to the job. second hour of "squawk box" starts right now. ♪ only in america good morning and welcome to "squawk box" here on cnbc on this wednesday moaning. i'm andrew ross sorkin along with becky quick and kelly evans today. joe is off. tyco international merging its flow control business with

pentair. a $94 million minority interest. nokia will start to sell its new range of smart phones in china. it will use microsoft windows software and sold through china's telecom. france reportedly in contact with britain and the u.s. on a possible release of strategic oil stocks in a matter of weeks. global oil supply is running at more than a million barrels a day. take a look at futures at the moment. green arrows across the board. dow would open about 24 points higher. our guest host today is jack welch, the founder of the jack welch management institute at strayer university. jack so great to have you here. >> great to be here. >> how is everything going? >> i think pretty darn well, but

not as good as i thought it might be. >> really? what have you been seeing? >> when i was here six months ago i was telling you we were ready for a take off in september. and it did go. in january when i was here i thought we were going to be stronger. in the last couple of days i've spent a lot of time with a lot of businesses and it's sort of mixed. the growth rate continues, but the short cycle business is being impacted by credit, and being impacted by gasoline prices, food, distribution businesses, chemical business. on the other hand, the longer cycle businesses where companies have a lot of money, nonresident construction, multifamily housing is pretty good. but it's not taking off. we're sort of relatively strong but not booming. >> is bernanke right when he comes out -- >> he was pretty cautious.

i'm normally a little bit to one extreme or the other. i'm a little shaken about not knowing where this is going. i'm nowhere near as positive as i was in january that we're at the takeoff point. >> go ahead. >> just curious given the uncertainty in some of these factors what does whether health care is struck down or not how does it mean for business? >> businesses will celebrate. i don't think it will have an enormous impact over the next six months if it's struck down in june, i don't think it will change the game. it will have a political impact one way or the other. >> what do you think it does? i've been trying to figure that out myself. is this a situation that fires up the base for whichever side loses and end up taking the white house. >> it fires up the base

whichever side loses, i think that's true. but whether or not it's enough to change the shape of the election is another thing. >> what do you think the health care solution should be as a ceo. for business broadly in terms of what will make this country take off in the economy, what would you want to see? >> you want to see a plan that would take care of these people, uninsured clearly, but you want to do it in some way like you do with a pool for bad drivers where you have a little tax on everyone to sort of put it over there. you open up lines across states. you stop this state by state insurance. this is not helpful to anybody. >> would you be for raising the payroll tax in toward help the fund the cost for people who couldn't afford >> you may have an insurance rider that may have more cost in it to take care of this pool.

>> beyond the pool is there anything you want to see done to lower health care costs for companies. that's one of the overriding concerns. ceos say somehow take this off of my books. >> coerce doing a pretty good job, for example, in the companies i've been talking to in the last couple of days they've been talking about programs they have in place. rewards for nonsmokers. all kind of different health care programs. their costs are really being contained somewhat. still growing, but the curve is been over their efforts to put health things into the game. so i don't think that's the issue. if you haven't, a lot of companies will say hey 2,000 bucks? i'll take it. >> that's what i worry about. >> or i'll give you a raise. i'll give you 5,000 because it's costing me 10 to take care of you. good luck. >> the public numbers at this point, the expectation for numbers of employers that will dump their employees into this public plan if there is one

that's there, the public numbers to this point have been 5% to 7%. larry lindsay said there's a new survey out. >> 11 to 15 million. >> he said it's more like 30% and even more with the employers who under the penalties and rewards. >> there was a study out which was quite high. but i don't think anybody really knows. when you make that tradeoff, once you give compensation you got to pay taxes on it, no longer deductible like it is on health care so in dollars you're trading now are tougher dollars, 50 cent dollars. 2,000 fine, give somebody $5,000 raise. there will be some trading. some clear trading. why wouldn't you? >> right. >> here they are. >> can we go back to the economy and some of the stuff you're seeing there. you say some of the issues that have been credit and gasoline

prices. it credit for consumers? >> no question that credit remains tight. tighter than you like. regulators are coming out of your ears on everything you do. so that will be there. the thing that surprised me was that the fourth quarter takeoff didn't go into the first quarter on the short cycle part of the businesses. gasoline prices, you can't have this jump and not think it affects the pocketbook, whether it be the restaurant business, whether it be consumer durable spending. it's a factor. you can't take that much more money out of the wallet and think it won't affect short cycle businesses. on the other hand, businesses are loaded with cash. and they are spending, and capital expenditures are strong. >> i wonder if this isn't a cautionary sign. there's a reason that cash so

high and companies are keeping it close to the vest. >> acquisitions are coming. the bush tax cuts, enormous drag. if i'm back here in three months that's what we'll be talking about. we'll be having all this crisis about the debt, the tax cuts, we're going to go right back into the same game again. >> what happens? we talked about this yesterday with one of our guests, just the idea if you get to the end, i think at this point a lot of people are assuming there will be a fix and if there's not, if there's not a fix for the bush tax cuts, that's a pretty high, pretty heavy load. >> who gets the senate, who gets the house. who is the president. for us to predict this without knowing that variable, you're in some trouble. >> no matter what happens you'll only have about a month and a

half to figure out what to do. >> you'll know how severe it will be. you'll get a good bet on how severe it will be. it's a huge drag. >> what is the biggest concern you look at as a business leader right now with all the businesses you focus on. >> well, i think ultimate demand. no question is this demand going to be sapped away by uncertainty over taxes, uncertainty over gas prices, and that's not so uncertain. that's happening every day when you go to the pump. >> wonder too when we talk about companies with high cash, apple comes to mind, as somebody who managed a huge conglomerate should consumers be concerned about apple's huge size. >> you have to be concerned when you got a technology with everybody tying it and whether you miss a cycle or you miss a

step. apple won't have a gradual decline if they get zip. on the other hand their success continues to marvel everybody and they keep upping the game. question is can they broaden the lead and get the patent dominance and position dominance so large that that bump will occur. in technology from the beginning of time we've had cycles. >> up invest in technology stocks? >> no, i'm not smart enough. >> don't think we've ever asked you this question. what do you do with your money? >> i invest in pretty cautiously. about half in fixed income. and half in bets i make. >> in bets you make. >> not wild bets. i have a little bit that i play with on bets that are wild. >> got it. >> any wild bets you want to

tell bus. >> not that are worth anything. people might think they are worth something. >> you talk about apple and investors who look at this. and jack i think what strikes me is the amount of apple that is now in the nasdaq if you look at the nasdaq 100, the market capitalization is so big. if a drop comes it will be a shock not just to apple investors but broader investors too. is there any way to protect yourself from that >> apple is a story all unto itself. it's innovation at its best. it's widening the gap every day. it has done everything right. i mean, that doesn't happen forever. now, i don't know when to say it's not going to happen. and i'm not smart enough to predict when it will happen. apple is the perfect story right now whether you go into their retail behavior, innovation behavior, cost behavior and their execution. they don't get anywheres execut

getting the stuff out on time. >> the author of "power habits" he mentioned how important it is to watch your employees habits and trying to change behavior and help the company through that way. there's nobody better -- >> i would say that i didn't hear him, unfortunately, but i would say that i believe more than probably anybody going that blind polling of employee attitudes, employee perceptions and employee thinking was the most important thing i had in running the company. every six months we ran these surveys and 45,000 people and we

didn't ask them do you like the food, do you like the parking lot. we asked them are you feeling what we're saying, what your feeling we should do differently and we got incredible participation. it helps you run the company. >> did you make any changes that, you know, we may remember that came from those surveys? >> i would say without question, we changed. but not things. we changed the way we did our review, we changed the way we did compensation. how frequently we did it. a number of things based on what they want to participate in. >> we're going have a lot more from jack. we have a lot of questions to you. i want to get to this goldman sachs story on the front page which may have something to do with perceptions and surveys and what people think about inside companies. but in the meantime up next what happens when a soldier returns home from war? they find themselves on the unemployment line in an economy

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we're back. all this week we're honoring our veterans with a special initiative. hiring our heroes. we teamed up with the chamber of commerce to get our vets back network. brian sullivan is at the "intrepid" in new york city with a very special guest this morning and, brian? >> reporter: andrew, this is a great initiative. thank you very much. it's a little windy out here. great initiative. in fact, u.s. chamber of commerce and the partners for this organization, including nbc news hiring our heroes, see that sign they want to hire 500,000 people over the next three years. let's hope they can make that happen. one of the companies involved in this is capital one financial. john, good morning. thanks for braving the elements and coming out here.

tell us about capital one's part in hiring our heroes, hiring veterans. when you hire a veteran, what does he or she bring to capital one that may be part of the civilian population cannot. >> that's a great question. we've been hiring veterans at capital one since the very beginning. i myself am a navy veteran, our heave information officer is an air force veteran. we've got people working at all aspects of the business. we find that they bring incredible leadership skills, you know they know how to team and work towards a common goal, and not surprisingly they have an unbelievable initiative and resourcefulness to address any problem that might come up. >> reporter: you can brag. you were a navy brat. you moved all over the place growing up. my father was in the navy for ten years. when you look at the family orientation, you look at sort of what people have, their skill set, the way they were raised, i always choked i had two grades a and in trouble.

there's a discipline there. how does that translate to the corporate world? >> it translates incredibly well. i find when i reflect on whatever little success i've had it all goes back to the values i learned as part of the military family. and the skills and experience i acquired in my own experience in six years on active did you pi. >> reporter: you're very modest. capital one doing a good deed hiring veterans. huge jobs fair here. all kind of veterans. quick comment, if you could on the economy how does capital one see things? are things getting better for the economy? are you customers paying their bills on time a little more which is a positive indicator? >> we're still showing really good performance. i think we're set up well for growth. that's why we're here today. we're looking to hire vets. we're partnering here. >> reporter: no double dip recession? >> we're here to hire vets and grow the economy and grow the business, grow the economy. we're hiring vets. we're here to really support

this effort. we're committing $4.5 million over the next three years and with that goal you see it on the sign up there to hire 500,000 veterans and military spouses. >> reporter: doing good work. thank you, john very much and good luck at the hiring fair today. andrew, we tried to talk a little bit about the economy. the companies here doing great work. men and women that served in the armed forces, you know, recent grads have almost a double unemployment rate as civilian population as far as the workforce goes. so this is good work we're doing and we'll be here all day with the nbc news family, talking to companies. we got jamie diamond coming up later on this afternoon. should be a great day on the "uss intrepid." this is known as the fight one in the pacific during world war ii. >> brain, thanks so much. it is a very important effort, and good luck today.

quick programming note. the president and ceo tom donahue will be our special guest at 8:00 a.m. eastern time. >> it breaks out into two different crowds. when you talk about officers and leaders, there's a fight to get them. companies want them. we have an officer training program. we went after them and fought other companies to get our share. when you get some of the technicians that have been trained in electronics there's an opportunity for them. the challenge is and that's why this program is so good, the challenge is to get jobs for the grunts, the guys that have been in the military, in the infantry and other jobs that haven't been in a skilled job and we got to make it special are a that. we should. we have equal opportunity drives for every other class when you ought to be having one that's special for these people.

saving our lives. and they don't touch enough of the economy. so this is a wonderful program. this is really great to focus on them. >> it's important to remember that the military of today is not the military that it was 50, 75 years ago. when people are choosing to enroll, the demographics of who those grunt are as you call them, are different than what they used to be. it's an added challenge and add dimension. >> agree totally. we have to to discussion on them. we need a program and this program is right on. i think if we get companies coming, ge has a big program. jaime dimon has a big program. this is what we need to do. this is great stuff. >> we'll talk more and jack is our guest host. also a little later this morning we'll be speaking with senator tom coburn. he'll talk to bus deficit spending and the economy.

"squawk box" will be right back. >> time now for aflac's trivia question. on this day in 1970 what song busy monday and garfunkel reached number one on the billboard hot 100 list. the answer when cnbc continues.

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now the answer to today's aflac trivia question. on this day in 1970 what song by simon and garfunkel reached number one on the billboard hot 100 list. the answer, "bridge over troubled waters". still to come, cnbc all american survey, hiring the fed and much, much more. that's coming up next. >> still to come, a patriot against pork barrel projects pap defender against deficit spending. and critic of medicare. senator tom coburn talks these topics and much more right here on "squawk box". welcome back t

this wednesday morning. steve liesman joins us now with the results of a very special cnbc all american economic survey. >> is this our quarterly economic survey. we poll 836 people around the country to ask their attitudes

on key economic issues and i can report now that we have had a bump up in optimism. let's take a quick look right away here at the economic outlook and we're using, of course, our proprietary and award-winning technology to do so. take a look at where we were here at people saying it was worse 27% said no change but notice the change here in those who are saying it was the same. went down from 43% to 31%. it went inthose saying it's better. 36% now saying they expect the economy to improve. a significant bump up. why do we get that bump? ? when we look at key metrics, what do people expect for their home prices. home prices are a key to all economic attitudes across spectrum. take a look back in march, 22% thought their home prices would

increase. june 15%. now you can see it's come back. 22%. nice bump. don't get too excited because back in '07 that number was out here at around 50% expecting home prices to increase. you'll see the same thing at our next chart. people who expect their wages to go up, what percent, what kind of raise will they get? back in march 2% and then again bump down as we had that in november, comes back up, 2.3%. that is a four year high. again not too excited. before the recession it was out here at 4%. i'll come back to that in just a little bit. let's go over to the next spot here and take a look at some other data. people are optimistic about the future of the economy, not so about the current state. 88% believe the economy is fair or poor. that's down just a little bit from the november survey. then excellent and good still just barely in double digits, 11%. moving on, gas prices, a huge

issue here. high gas prices, everybody asks if they are concerned about it. we want to know how long will people last, will they change their behavior. those who think it will last less than a year 1%, one to two years, 33%. and greater than four years 30 puerto rico of the public believes high gas prices will last more than four years. why is that important? it may mean they will change their economic behavior in terms of spending. one more thing i want to show you here is the expected inflation. all of those high gas prices creep into the expectations for inflation. 6.6% was the average expected inflation back in march. it crept down as inflation crept down. now stant here, 4.8% not as bad as it was in march but higher than in november. i want to come back to this place right here and i'll show you. take the wide shot here. this is key how people think about their whole living

standard. remember we showed you here, people expect their wage gains, 2.3% is what they expect their wage gains to be. come over here to the other side and zoom in. 4.8% is where they expect inflation to be. people are still expecting their standard of living to decline. put together expected wage gains with expected inflation and you have an idea for what people think about their future. they still don't believe their wages will keep up with the cost of living. i'll be back, guys at 8:30 with a a look what this means politically, americans attitude on key economic issues and effect on president obama's attempt to get re-elected and you can read all about this on the web at cnbc.com. >> steve, that was fantastically interesting and i give you enormous credit for the graphics. it was like a hologram

>> it is. we're moving stuff by the reporter. other guys are faking it. we have a great team of people led by don jackson over in graphics and great team. we won a big award for this technology. >> i want to know how long before you're a hologram. >> how do you know i'm not now. this is cable television. >> if you touch him he's not there. our guest host has been and continues to be jack welch. jack, listening to what steve just had to say, had you been polled and i don't know, was he part of your survey >> almost certainly not. jack does not spend a whole lime of time when the surveyor calls. >> on inflation and on wage growth, you would have answered what? >> i would have answered wage growth about like steve had. and i would have been a little tougher on inflation because i think inflation as felt by a

typical home is tougher when you exclude energy and food, come on. i think inflation is going to be in the 5% range. >> what did you make of the gas number, price of oil. i thought that was very, very interesting, seven years out -- >> four years out. a third of the public think it will last. the significance of that is again people will change their behavior. if you believe gas prices are any shock short term you'll draw down savings to do it and you won change your lifestyle or experiencing habits. >> jack, you've seen that. >> without question. i'm seeing a slowdown because of people not drawing down their savings, pulling back at least in the restaurant business i see and other businesses a short cycle i see a slowdown from january to march. a little trickle down. i'm not talking about a negative growth. i'm talking about a slowdown.

>> it's amazing when you think about the actual expenditures on gasoline and the effect it has on the u.s. economy. one good thing is that per unit of gdp, we're using less hydro carbon. that's good. that's a long term trend. when gas prices spike the effect on confidence, the actual effect on spend is way outsized. i can't say this wrong. it's not wrong. it's what people do. but over time the best thing we can do is start bringing that down. the hydro carbon monlecule. >> we have warmer weather and natural gas at record loss. those two things have saved the day. this would be an lut disaster -- >> jack how do you see inflation at 5% you can have half your portfolio in fixed income. >> because i'm scared of what will happen. i have a hangover from -- people say half of a percent it's better than 30% decline in equities. >> guys, i'll give you this.

we'll have a chart coming up at 8:30 that will show you that people, when we ask them what their biggest worry is, cost of health care and cost of gas is, they are both equal. >> you're a romney man, jack. if steve's numbers are right what happens in the fall? >> the "new york times" keeping running pictures of obama standing in front of wells, that phoney stuff, running out on the front page with him standing in front of a well. he's never seen a well and he done like wells and you have him on the front page with a well. we're doing the lowest drilling we've ever done, that's for sure. and without question the problem is he doesn't like gas. he doesn't like hydro carbons. >> as the economy improves and

some of these numbers improve, how much more challenging does it make romney's argument that the economy sis improving. >> you still have 6 million people unemployed from the levels of 2008. 6 million people out there and their families feeling this pressure. >> i'm not giving this away. wait until you see the number at 8:00 when we ask people are you better off than you are four years ago. jack welch will look very smart. >> jack welch always looks very smart. perfect tease for what's coming up. steve i like the dots on your hands. >> the dots on my hands. that triggers -- it's amazing -- awarding winning 4d. >> it's these little sensors. it triggers a zone which creates a click of a mouse essentially. this is one of those things they just bought fours. do something with it.

it's cool stuff. >> steve will be back at 8:30 with that wonderful teasing and more from jack in just a moment. up next we have senator tom coburn, a republican from oklahoma and he'll be talking to us about deficit reduction. pork spending and the state of the economy. "squawk" will be right back. ♪ i'm making my money do more. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more. come see why more investors are saying...

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welcome back to "squawk box." among the headlines we're following this morning, some jetblue passengers have quite a story to tell. several of them had to tack tell captain after he came out of the cockpit on a flight and began screaming about a bomb on board. talking about al qaeda even and afghanistan. the airline described it as a medical situation. a co-pilot made an emergency landing in texas where the captain was then taken off the plane. pentair shares are getting a

pre-market pop. a move that will boost their earnings by 40 cents a share in 2013. mortgage applications fell almost 3% last week led by a drop in refinancing activity. application volume has now decline for seven consecutive weeks as interest rates have inched higher. >> i'm reading the "new york post" this morning. this is your captain freaking. this is one of these unbelievable stories and also somewhat heroic in that the other pilot, the co-pilot and people on board were able to manage what was ultimately a horrible situation. >> as somebody who flies a lot. >> i'm a scared flyer. >> this isn't helping. >> we have other news to get to this morning. the deficit showdown continues in congress this week over how best to balance the federal budget. senator tom coburn joins us now from washington. and it is great to see you, senator. >> good morning.

>> i wanted to start with a quote from your new book "the dead bomb" and you say, quote, we'll be greece in two years. and i want to understand why you believe that and given interest rates and where they are today, it's not necessarily clear that that would indicate we're headed in that direction so quickly. >> well, i think things continue right along as they are until they don't, andrew, and our interest rates are based on confidence that we, in fact, in washington will address the significant debt and deficit problems that we have. do you see any evidence of that? do you see anybody on the campaign trail or the president for that matter talking about the serious nature of what is in front of us? if you take total debt in this country, including private debt, public debt, state debt and federal debt, you know, we're at a level greater than what greece is as a comparison to the gdp.

so, right now everybody is calmed down because they think ecb has handled the greece situation. how many think it's kicked down the road? how many think portugal and spain and italy may not have a significant a problem especially going into a recession in europe and what does not look to be like a very healthy economy here in our country. so, failing to address that by both raising revenues and cutting spending is ignoring the very -- we're acting just like the politicians in greece. we're not addressing the issue. >> senator, how quickly do we have to do it and for example what do you think of paul ryan's plan which does take some time but does bend the curve? >> well, i think creating confidence that we're going to do the right thing is as important as doing the right thing. so in that respect, paul addresses it and has worked hard. he spent his whole life trying to get this under control in

congress. i would do it more quickly. but i can't criticize the fact that if you accomplish what he has put out, then we will send the signals which will restore the confidence. the other thing it will do is increase our gdp because you'll have some confidence in the long run, and some certainty on the capital that's sitting on the sideline that might actually be invested and start creating wealth and employment in this country. >> senator, it's kelly here. given that health care is such a big part of the deficit and our long term debt problem how are you gently do we need health reform? >> we need health reform. the shame with the care act is it didn't fix the problem. health care costs too much and we have these economic signals that don't check its rise in cost. you know, everybody in america thinks somebody else is paying for their health care. consequently no market forces are being applied to it.

ate large component but we're very inefficient with it. >> what is the plan, senator, if the affordable care act was not the right way to do it? >> there's lots of plans out there. richard burr and i put out one called the patient's choice act which actually gives everybody a baseline refundable tax credit which to buy health care. and with a higher deductible where you start paying attention to what you spend your money on. what we know is a lot of interesting things, is if you got a supplemental policy in medicare you spend 23% more money than somebody done and you have no difference in the outcome. your health. so why would -- when you stop having economic forces applied to health care what we do is we spend a whole lot more money on it with very little in return. >> jack welch is here, senator and he has a question for you. >> good morning, mr. welch. >> i was going ask you about this argument which may be

specious about the republicans falling into a trap. why are the republicans bringing up these issues before the election in terms of crashing after the deficit, what's going to be cut. the last time they did it they had pictures of paul ryan pushing old ladies off a cliff. are we falling into a trap that the obama administration set so that they don't talk about the real reforms that have to go on and we're going to be out there as the cutters of medicare and medicaid, et cetera? >> you know, i think america is really ready for an adult conversation on it, mr. welch. they can, they can hammer us. but the ethical and proper response is to address tissue. medicare won't last. in three or four years we can't borrow enough known fund the tremendous growth in medicare.

why would we continue to lie to the american people and say oh, you don't have to do a thing to medicare, elect us, we'll make sure when we know that's dishonest and untruthful. that doesn't mean we have to cut the benefits, what it means is we have to be smarter about how we apply medicare across the board. it can be done. but what you have is way too many politicians in washington wanting to play a political game and the consquens much that is the destruction of our country. it's not about winning the next election it's about whether we preserve this republic. it's time the grownups in washington say this is a real rob. they can through you and say it won't be. how many of you want to fix it and if we don't fix it what you're doing is actuallying markedly lowering the opportunities four children and grandchildren. do you want that? >> senator, are there grownups on the other side of the aisle

that will agree with you on this? >> yes. they will agree privately but won't speak publicly because of the discipline of the political teams in washington. and we need more people standing up and say hey these are real problems. if we can't discuss what the problems are how are we ever going solve them. >> senator, we have to leave it right there. thank you for the adult conversation. best of luck with the new book it's called "the dead bomb." >> when we come back cuba getting a special visit jo today. our chief international correspond michelle caruso-cabrera is there live. michelle? >> creating from havana. we'll tell you what the vatican thinks about the u.s. economic embargo against this country and why we may get a glimpse of fidel castro later today when "squawk box" comes back. ♪

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pope benedict is making a historic visit to cuba today. michelle caruso-cabrera now joins us live from havana. hey, michelle.

>> hey there. two pieces of news we want to tell you about. the director of the vatican press center said yesterday the pope's official position on the u.s. embargo against cuba is that the blockade hasn't solved any problems sean harmful to the people pap blog written by fidel castro, he writes that he'll meet with the pope later on today. we'll watch for video on that and see how the 86-year-old looks like. he had to step down due to old age and sickness several years ago. this is our last day here. a couple of observations i want to bring to you. in the last year u.s. tourists have now been allowed to come to cuba a lot more frequency due to loosening in the requirements. when they arrive what tourists will see when they are in old havana in government-run hotel us see a gorgeous city. like i said the other day to rival paris and london.

it's been fixed up by the cuban government. however, the vast majority of the country is actually quite dilapidated. need hundreds of home depots and lowe's. buildings that are completely in need of repair. total disrepair. common site, you see a lot of electrical panels abandoned. a lot were installed by general electric. very common site. let's roll that video. there you see all of these in nearly every building abandoned electrical panels that tourists love to take pictures of. the second observation, i told the first day that, you know, normally cnbc doesn't cover papal visits. we came here because we wanted to see the state of the economy. one. few times the cuban government let us in. we're not alone. yesterday they were forced to hold a news conference because

they were asked about economic data. we didn't get a lot of information out of this news conference. you see the vice council of ministers. he said look we have these economic reforms happening but let me tell you one thing. in the country side, for example, we're never going to allow farm towers selland because what would happen? the more productive farmers would become the wealthier farmers, they would be able to buy the land from the less productive farmers, the poorer farmers and that would lead to inequality and we don't want that. so that gives you a sense of the way they look at things and can you tell, jack, we'll look at the old ge building that was sized back in 1960. back then it was worth $5 million. >> fascinating. michelle, thanks so much. when we come back we'll have much more from jack welch. we'll talk politics with steny hoyer. and we have the state of business in america. chamber of commerce ceo tom donohue will talk about the u.s.

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a "squawk box" gut check. >> you can't have this jump and not think it affects the pocketbook. >> more from the master of management, jack welch. >> health care, the deficit and race for the politics. we'll talk politics with steny hoyer. >> business in america. the head of the u.s. chamber of commerce joins us to talk about the economy and jobs for veterans. third hour of "squawk box" begins right now. ♪ welcome back to "squawk box" here on cnbc. first in business worldwide. i'm becky quick along with andrew ross sorkin and kelly evans. joe is off but he'll be back tomorrow. our guest host is jack welch, he's the founder of jack welch institute at strayer university. let's look at the u.s. equities future.

those dow futures up by 23 points. this is coming after a slightly weaker day yesterday. >> and making headlines this morning, a jetblue flight was diverted after passengers had to restrain a pilot who was behaving erratically, running up and down the plane's ails. jetblue ceo on the "today" show earlier this morning. >> we had a medical situation. that's how we responded. clearly especially in today's media is real-time, so we know that it also became a security situation. so i think as we know less than 24 hours later it started medical but clearly more than that. >> fbi officials are investigating the incident. it's on the covers of all the papers this morning. "this is your captain freaking" was the "new york post." "jet ready to die." scary story. >> it is. we've been talking about that this morning. also been talking about the

situation in corporate headlines at goldman sachs. senior executives within goldman sachs have talked about splitting the roles of ceo and chairman. this is according to reuters. gary cohn would take the ceo role. lloyd blankfein would be left with the chairman role. the company will be bowing to pressure from the country's largest labor unions. it will go ahead with plans, the union is withdrawing from splitting the jobs. goldman is agreeing to appoint and independent lead director who would then be in charge of evaluating the ceo's performance. >> the goldman statement does say that the board of directors and senior management have not had any discussions or conducted contingency planning around splitting the roles of chairman and ceo. >> a lot of back and forth.

goldman saying this is not the case even though the stories have been out there. our guest host today is jack welch who is the founder of the jack welch management institute at strayer university, and, jack, when you look at the situation surrounding goldman over the last several years but specifically what's happened since that letter came out from an employee who quit very publicly in the "new york times" what's the lesson we should be taking away from this? >> well, becky, the greg smith reminded everyone once again not just goldman but everybody in corporate america you have to pay close attention to your culture as well as numbers. great culture deliver great numbers. great numbers don't deliver great cultures. when you measure people, for example, how far to have a set of behaviors, whether they be treat people like you would like to be treated yourself, treat customers you want to be treated, whether it be speed,

whether it be finding the best and promote them and get rewarded for that. you measure those values against the performance in numbers. and you put people on quadrants. one quadrant is the great culture, great numbers. onward and upward for these people. bad culture, bad news, bad numbers, easy get them out. third quadrant is good culture, tough numbers. give them another chance. they buy into what you're doing, they might have a family problem, give them a shot. the one that achilles companies is the horse's ass. that has cultural problems and good numbers. and the ceo says give me one more quarter. mary will get fixed. i've talked to her once. >> it sound like wall street. >> square the circle for me. the morning the op-ed came out,

there was a memo that became public. in that note he said they did surveys much like you did and the numbers were great numbers. he would say 89%, 90% are working for clients. how do you put those two things together and how do you deal with an employee who in this particular case had never said any of these things or made these things, these issues he had with the company not public but hadn't gone necessarily to a supervisor. >> this isn't about craig smith this is about craig smith's mismanagement and manager. you go in and look how is greg smith apraised. was he told of his shortcomings. was he getting one of those phoney satisfactory. if you don't have public hangs for bad durl in a company, you don't take people out and let them say oh, they went home to

spend more time with the family. >> love this point that you and suzy make. >> it's crazy that company after company says, andrew left. he wanted to spend more time with his new baby, et cetera. and andrew just robbed the place. not you, andrew, another andrew. but basically public hangings are teaching moments that every company has to do. if you don't do it, a teaching smomt worth 1,000 features. ceos can talk on the web all day about culture -- the employees know who the jerks are. every employee can name the jerks for you. >> is at any time lawyers that get in the way? >> no, it's just nonsense. it's cultural. people don't want to do it. if you want to lay out -- this is why mary left. mary left because mary was not gender blind. she wouldn't globalize the company. she wouldn't do this. she's a good person but she didn't fit our values.

every time somebody goes there's got to be a reason why they go. and if you want to build a culture and culture really counts. culture is what drives great results. >> you as the ceo of ge were a client of goldman sachs. back then you dealt with them since. you have friends over in ceo positions who deal with them. how do you look at goldman sachs. how do you look at the culture? >> smart. quick. responsive. look, when we get mad at goldman sachs and private equity, for example, and then we come time for an ipo, we didn't get the right treatment in a deal we thought the other guy got favored status, it comes time for the ipo. we've been mad at goldman sachs for three months. we better get goldman sachs. they are the smartest guys on the street. let's go with them. so goldman sachs is a winning

corporate team, that had a bad apple here or bad management above the apple. i'm not talking about lloyd, i'm talking about the person's manager. >> if you were the ceo of goldman how would you to change the narrative. there is this -- whether it's real or not that somehow goldman is not necessarily working for its clients that you necessarily believe they are. how do you change that perception out in there the public. >> you talk about it all the time. you measure your people. you really measure them and you take action on those that don't. there are people who did bad things there. obviously he didn't make it up. the rest of the people they got away with doing bad things. go in and hang those people. they got to be hung publicly. hang is a bad expression but that's what leadership is all about in teaching others what we'll tolerate and what we won't tolerate. no other way around that. if you're is going to build a

culture you have to measure that and people get promoted for having good culture and good numbers and people that have bad culture and good numbers get pitched out. and when you pitch out three or four people who are good producers, who are horse's asses and the game changes. i guarantee it. >> we'll have more from jack in just a moment. let's check back in washington. we have a special guest coming to us. we've been talking about how the republicans and democrats have been going back and forth with their budget proposals. joining us right now is the house minority whip steny hoyer. and, leader hoyer, thank you for joining us today. >> great to be with you. >> let's talk about the budget back and forth at this point. we have two competing plans. i know which plan you're in favor of. tell us what may happen between these two is this. >> frankly, first of all, we

need to observe that what the budget really does is set a number for expenditures and we did that some months ago. and we agreed on a figure after a long and tough negotiations and frankly the republican budget abandoned that agreement. it welched on the deal if you will. they offered a budget sway reprize of last year's. it savages medicare. turns the guarantee into a higher cost problematic benefit. we don't think that's what the american people want. secondly it makes again the tax disparities between our people even greater. it shifts resources from the middle class and poor to the wealthiest in america. gives 150,000 additional tax cuts to millionaires and doesn't say how you're going to pay for that, $10 trillion in additional tax cuts which clearly means you'll explode the deficit more.

they pretend they will cut out preference items. in that process they severely undermine investments in our future, investments in education, investments in research, investments in growing jobs, investment in infrastructure. clearly with the result of diminishing the quality of our society in the long run, and don't get to balance. that's why some of the most conservative republicans are opposed to their own budget, the republican budget. so what we're seeing in this budget process, unfortunately, is not real. it's not balanced. the package that we've offered is a balanced package p.m. it mirrors to a large degree the president's balanced budget that looks to cuts, looks to balance in terms of additional revenues. it does not deal with entitlements other than it maintains the guarantee, but it clearly we're going have to deal with entitlements in a bipartisan way and a long term way along the lines of bowles-simpson.

i think what you'll see today and tomorrow in the budget deinterstate a debate about a republican proposal that nobody including i can't believe any realistic republicans believe even if they control the congress would become law because of the actions that it takes that do not balance the budget, are not balance, savage the economy, undermine the middle class and put seniors at risk. >> this is a debate that's been raging back and forth for quite a while about whether you cut spending or whether you raise revenue to deal with the deficit problems. >> becky, let me say you got to do both. if there's an argument, if you're going to get from where we are now and that is deficits that are unsustainable, a debt unsustainable over the long time you have to pursue a bowles-simpson, name it what you will, balanced approach. you won't pretend you're simply going to get there by cutting

discretionary spending sway relatively small portion of the budget about 15% of the budget. you're going have to deal across the board. you can't deal with interest. you must pay your interest. we have to remain financially credit worthy as was put at risk last august one of the most irresponsible acts i've seen congress make. >> no deal out there looks like bowles-simpson. we're not going to get anything more than that before the election. >> people are talking about a simpson-bowles type of plan that they are offering. i haven't seen all the specifics. let me say this. we need to get very serious. republicans and democrats, the president, the congress to come together because the only way you're going to make tough decisions and they are tough decisions is to do so together. but eliminating medicare guarantees, putting seniors at risk, pretending to cut education assistance to our students so that they will be

able to compete in a global economy, savaging investments in research and infrastructure and health care, that's not -- the american people don't want that. wouldn't be good for our society and i don't think we'll go that route. >> speaking of the pressing need for this reform is it back to square one if is health care act is overturned? >> don't know whether it's back to square one. it depends of course on what the court says. if the court says the entire bill fails which i don't think they are going to do. frankly i think the discussion yesterday clearly indicated that at least two of the justices, justice roberts and justice kennedy have questions as to whether or not, in fact, this is needed or necessary or constitutional. so i don't think it's a done deal but if it's -- >> is there a plan b, congressman? >> well we'll be back to square one as you point out, is there a plan b? clearly the republicans have not

offered an alternative of any meaningful way to include within the ambit of those who have affordable quality health care. their plan had 30 million of the 140e million without health coverage covered. >> what would democrats do >> we'll have to go back and see how we can accomplish the objective to make sure americans that have availability of affordable health care. many parts of this plan are very popular, as you know. and having insurance companies not able to preclude from you getting insurance because of pre-existing condition, everybody that i've talked to thinks that's a good thing. having the ability of young people to say on their parents' policy until they get coverage themselves up to teenage of 26 very popular policy and bringing down the cost of seniors prescription drugs which has already been affected and will be phased out for the next eight years so they will be more available to seniors, very

popular provision. many of these parts of this bill are very popular with the public. the mandate clearly is controversial. but the mandate as all of you know was utilized and is a conservative republican idea in many respects. but it was utilized so that you spread the risk. the whole thing about insurance is spreading the risk. if you bring health care costs down you got to spread the risk among a greater number. that's what thaerlt bill does and frankly if you don't do that costs will escalate. >> congressman hoyer thank you very much for your time this morning. >> thank you very much. . >> coming up, thomas donohue is the voice of business. head of the u.s. chamber of commerce. chamber is partners with nbc to get veterans back to work. more results from our cnbc all america economic survey with some pretty surprising implications for president obama's re-election campaign. "squawk box" is coming back with that and a lot more after the

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box." futures are looking right now still a little bit higher. that's after weakness out of europe. we'll keep an eye on that.

we're also watching shares of family dollar this morning. they earned $1.15 for its latest quarter. still analysts are concerned about rising inventory levels something we've seen at other retailers too. >> nbc universal is teaming up on a very important project with the u.s. chamber of commerce to support quote hiring our heroes. it's a nationwide grassroots initiative. already helped more than 9,000 veterans and military spouses find jobs. we've been talking about it all morning. joining us now is tom donohue, president and ceo of the u.s. chamber of commerce. it is a very important project. and i'm hoping you can speak to this and we talked about it with jack earlier. if you're a ceo watching this right now or head of a human resources department and thinking about how to hire veterans, what to do, the practical aspects of it, what should be the takeaway? >> the fundamental reality is that veterans are well trained, they know how to work in teams,

they got extraordinary skills and technology and big time leadership abilities and you want to get them. so, you can contact the chamber, we ran last year 100 hiring fares. that's how you bring together veterans and their families with companies that are looking to hire people. this year starting today on the intrepid with your partnership, we're going to run 400 hiring fares around this country and put people together and put people to work. >> how quickly can do you that? 500,000 people. i don't know that any one group of people can do this. what we've tried to do is take advantage of our extraordinary network around the country and run what will be four times the number of hiring fares. if do you that we'll basically put 40,000 spouses and veterans to work. that's a lot of people.

it's not 500,000. but there are a lot of other valuable programs going on. there are people that are getting jobs on their own. we can't do it all but we're trying to set an example for companies and military families, how they are going to get together and go to work. >> how much retraining is ultimately going to be involved? because one of the issues we talked about on the set earlier with jack is this idea that officer -- there are certain people with tremendous skills whether they are engineers or others but then there's the folks in the infantry and what needs to be done to get them work ready, if you will? >> well, we've spent a lot of time trying to help the veterans, the heroes work on their resumes and articulate to the companies what their skills really are. it's great to say you were an infantryman but have you explained what your leadership experience has been, have you

explained what you understand about logistics and supply chain management. that's what these people do. have you explained what their background in technology is? we think there's a lot closer match, all you have to do is to take the time to explore it. then, of course, american companies spend $36 billion a year retraining people for new jobs, new technology and new demand but it's easier to train somebody that has been trained before in other areas and somebody that has a leadership feeling and knows how to work on a team and that's why these people are being hired again and again. >> tom, it's kelly. while we've got you. if i could ask you something about the heart reform. supreme court looking that individual mandate whether it's constitutional. if it strikes this thing down, if heart reform is to be repealed or overhauled what does it mean for businesses? >> businesses were the original motivator, talking about trying to get a health reform bill that

made sense because the costs were going up and there was no way in sight and the ability to provide quality care was becoming more difficult. so, if by chance the court were to find this inappropriate and we had to start again, we still want to do many of the things that you've heard talked about. >> what do you want to keep and what would you prefer see go? >> well, the thing that most has to go is a system that drives the cost up to half again what we were spending before we even understand all the cost. the current bill has 158 new bureaucracies in it. what we need to do is to figure a legitimate way to get everybody covered so they get them out of the emergency room, what we need to do is find ways to deal with the medicare and medicaid costs in a way that balances who is paying for it,

how it's being done. there are a lot of good things in that bill. we want people to be covered, they shouldn't be denied coverage. on the other hand, it doesn't make sense for somebody to wait until they have a heart attack, cancer and three other diseases before they go to the hospital and say now cover me. we needal way to provide health care to all americans. >> have you heard a plan that would more meet what you're talking about? >> of course. we don't have to throw this whole plan out. there are a lot of useful things in it. we need to make it more in the private-sector, less driven by government bureaucracies, we need to face the reality that while we're doing this we'll have to deal with medicare and medicaid because that's the massive group of people that -- you know there are 10,000 people a day retiring. we're going to have to take a look at this. it need to be a private-public

partnership not a great big government bureaucracy. >> tom real quick while we have you. big debate going on in audit land. i don't know if this is sexy or boring for nerds, should companies rotate through their auditors or not? >> have a clear view about this. companies should rotate the audit partner so that there's a very clear opportunity every so many years to have a new look here. but if you force companies to change their auditor, remember there's only four major auditors to handle 17,000 companies. let's take walmart. you decide to force them to change their auditor. the first thing that happens the new auditor comes in, really doesn't understand, won't take all the work papers and there's going, just a year and a half to get up to speed and even then they won't have the skills to do it. we need to don't change the

audit partner to have regular checks on what's is going on but the idea of rotating four auditors doesn't work. >> tom, thanks so much. we got leave it there. our coverage continues all day from the intrepid. jamie dimon will be live at 2:00 p.m. on jpmorgan's hiring plans. check out hiring our heroes at cnbc.com including an op-ed on why ge believes in hiring vets. >> "squawk box" will be right back. i don't know... i forget. hello, neighbors. hey, scott... perfect timing. feeding your lawn need not be so difficult. get a load of this bad boy. sweet! this snap spreader system from scotts makes caring for your lawn snap-crackin' simple, guaranteed. just take the handy, no-mess bag, then snap, lock, and go. it's a new day for lawn care, feedings never been so easy. to see a demo of the snap spreader, go to scotts.com. feed your lawn. feed it!

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welcome back to "squawk box." we have durable goods, headline number up 2.2%. that is a bit lower than the 3 to 3.1 expected. last month's headline originally reported at minus 4%. upgraded just a bit to down only minus 3.6. take out transportation you're left up 1.6 which last time came out minus 3.2 which had a slight upgrade to down only 3%. let's look at a proxy for business capital spending in the form of capital goods orders,

nondefense, x aircraft up 1.2. less than expected. same pattern last month dismal minus 4.5, upgraded to minus 3.7. the after effect in the marketplace we're looking at 221.10. we're still looking at 221.10. these yields are higher than yesterday. lowest yield closed since the fed meeting on the 19. the dollar is rather flat. equities up 19 pre-opening futures in dow that was 37. so there is the market paying attention. back to you. let's go to steve liesman. i think he's got something to tell us about his survey. >> rick, unfortunately i don't think steve is ready for us just yet. i want to get more on this data. >> rick covered a lot of lights but i think it's important. usually in the first month of a

quarter we'll see a drop for whatever reason in these orders in the way that durable goods is doing. we saw that. we saw a big drop in january. this rebound in february is the kind of rebound that will put people at ease. this keeps sort of the weak economy, the 2%, one 2% trajectory for gdp all of that fully on the radar. >> steve is ready. the hologram that is steve. steve has some new data from cnbc all american economic survey. steve, is that the real steve or is that the hologram. >> the beauty of technology, andrew, is you'll never cho. we're looking at our cnbc all american economic survey, quarterly survey of 800 americans, a national poll done of americans all parts of the country, all income groups. looking at the challenges the president faces in his economic, bid to be re-elected and the key economic issues and the views of

the country. ronald reagan asked this, are you better off than you were four years ago. we asked the question too. i want to show you some data. back in 1992, there we go, 37% of the public said they were better off. what happened that year? president bush lost his re-election bid. 2000, 63% -- we can debate what happened in 2000. 2004, 42%. the president was re-elected. take a look here. 2008, just 34% answered yes and essentially the republicans lost the 2008 election. where is president obama now? jack welch was very interested. take a look. just 28%. now some people have pointed out well the financial crisis started four years ago before the president came in and so the question is how much is he to blame for all that's going on? we'll get rid of that and come back and take a look. who is to blame. survey of all adults 17% blame him for the recession that's up from when we asked this question

back in 2010. unemployment about even. you know he's had some improvement and that improvement in the unemployment rate has shine in the national numbers. take a look at the deficit. more americans blaming him. what's key about these issues if you break it down. independents would very much like the national average. let's go over to our next spot and take a look at some other things on the minds of americans. what's your biggest concern when it comes to cost? food, 9%. education, 11%. retirement 14%. this one here, health care costs, 28%. what are we missing here? you got it. gas prices. 28%. fascinating to me that gas prices and health care costs share the top spot as the number one concern when it comes to costs. we also asked americans what they thought about key economic political issues that are out there. how about the bush tax cuts? housing bailout. first the housing bailout.

should the government bailout house? 53% say no. 34% say yes. i would say president obama is probably on the wrong side of that issue relative to where mitt romney is. then on ending the tax cuts on this one i guess the president is marginally on the right side. more concerned about the housing, got more opposition than ending the tax cut but still 50% say end the tax cuts. this is a great survey question we asked. what's the right tax rate. the average of all respondents corporations should pay 30%. shows earning 50 to 75,000, 17%. how about those making more than a million? 31%. fascinating. unfromtd american public comes up with a progressive tax rate and comes up with a number that's very similar to the one talked about right now which is the millionaires tax rate. one other thing. let's go back to this issue of who is to blame. how about, what we'll do right

now. start the bottom one. the green or gop members blaming democrats, blue is democrats blaming the gop. you get three things out of this thing. you get who is angrier. you get whose base is more motivated and finally you get a look at how partisan the country is. stoom in. blame for the financial crisis. 57% of democrats blame the gop, 49% of the gop blames the democrats. go on now to the recession. 59% of democrats blame the gop. 55% of gop blames the democrats. unemployment, you can see there the gop a little angrier, more motivated on unemployment issue. deficit issue. this shows how partisan is. we want to go back. again at who is to blame when it comes to this and who is to blame over here. let's look at blaming president

obama. slight rise there when it comes to, this standard or care versus november. over here democrats versus republicans. what you see here are highly partisan electorate and the key is to motivate each of their constituencies. back at 10:00 what americans say the best investment is. you'll be very surprised and read all about this on cnbc.com. wow. steve, very interesting stuff. jack, your take. quick takeaway. >> my takeaway is we're having a debate about centralization versus decentralization. you take three main major issues. you take banking, your take health and you take energy. this government wants to centralize. and these issues are causing real problems. obamacare is not going to ever

be cheaper. you talk about adding 40 million people to over capacity situation without available doctors and you think you're going to lower costs. it's not doable. the bag can't handle it. you take banking and you introduce the dodd-frank bill and you get just on the volcker, on the volcker rule this many agencies going for this many approvals. this is an economist chart. okay. >> we didn't poll on banking, we may do it. we have two more polls before the election. how motivated do you think the american people will be. republican candidates are out there on dodd-frank bill. we hate dodd-frank. one candidate said dodd should be put in jail. rick perry said that. how motivated is the public and how much of a winning circumstances it for the gop to

get up there and defend banks. >> losing issue. i wouldn't go there. you have plenty of other stuff. yeah. so now you're going to go to energy. there we're trying to centralize energy. we're trying to say we'll support this and we'll support that and not give leases and do other things. so you get this, it's basically a fundamental argument about central government control versus decentralization. that's what you're really arguing. you go to each of these three sectors that's the debate. that's why people -- the winning arguments are health care, as your poll said. and gasoline. >> i want to make one point which i recall the debate between mondale and reagan back in 1984. somebody said, the difference between republican and democrat, that was 5%. that's what the defense budget requested by reagan versus the one support by mondale. when you talk about central control you're talking about president obama has moved up

government percentage gdp 25% up from the norm of 20% a portion of which is essentially some of the automatic stabilizers like unemployment insurance that will go away. so probably we're having a 3% debate. >> don't agree. >> is this really for the future of the nation? >> no. that's not the argument. the argument is in these two sectors, health care >> right. >> government control. in energy, government control. you can -- five people in the epa, not a big expense can do all kinds of things on clean air -- >> this is where i get in trouble arguing with jack. the federal government controls federal lands on behalf of all the people and always has. since there was a federal parks program. the idea that there's more central control when it comes to drilling, i guess i push back you a little bit on that issue.

>> no. the argument, those is that federal lands are now allowing leases. and it's the lowest production of oil in 20 years on federal lands. that's a fact. and you can talk about all kind of other things. we had one offshore lease in 2011. one offshore. come on. in a crisis? if you were the candidate republican candidate you could lay these facts out and nail him on these facts. >> and you pointed out, back to your numbers, 28% or so concerned about health care, 28% on gas. >> winning issue. i was pushing back on jack on that issue. i don't think dodd-frank is. gas prices are a winning issue. health care, those has polled a little more down the middle as i tread last polls. it's like 41-41. the obama political advisorsing thought eventually it would become a winning issue. it has not. it hasn't decline.

not a big negative for them but isn't the positive they expected for the signature issue of the president. >> know we have to run. taxes? how important ultimately is that issue? >> think it's a big issue. it speaks to fairness. i'm fascinated that without being prompted the american public comes up with a progressive tax system. that just speaks to a cultural issue. there are issues about what the right tax rate is economically but this is a cultural decision that's made by the public and that 31% figure is the one talked about for the minimum tax on millionaires. there's some support on that. it will be interesting. i'm not sure that the bush tax cuts -- i'm not sure which way it breaks. i know how it breaks for our viewers and they are not wrong about that. i'm just saying for a wider public it's a bigger discussion. obama may have some winning points there on one side and maybe some losers on the other. >> steve, thank you very much. we'll be watching this throughout the day. >> i'll go home and the hologram

will be here the rest of the day. >> nice job, steve. that was great. >> when we come back we'll have much more from the mastermind of management jack welch. "squawk box" after a very quick break. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro.

welcome back, everybody. our guest host today is jack welch, founder of the jack welch financial institute at strayer institute. jack we talked about politics. we've not got quite as deep into things but we're in the middle of this election. where are things headed at this point if you had to stick your finger up in the wind? >> it could be -- if you look at 1980 there are a lot of parallels to 1980. the atmosphere in the economy. president carter was ahead by a number of points at this time versus reagan. at the end it all broke because of numbers like this for reagan. i think this election will be either very, very close with president obama winning, or be a blowout. >> it sound if republicans want romney in the white house they need a much weaker economy. >> i don't think so.

you can go through these things i just talked about, energization versus decentralization. do you want to have a president whose credibility on energy is just not there? i mean we're having distortions that are ridiculous. they get the "new york times" front page story. that's just one example of the distortion. the facts are secretary chu said what he wanted $8 oil. that was a policy of the administration. >> those things can co-exist. you can have decentralized energy -- >> now can't. >> but can you push people towards more -- there's nothing wrong with weaning americans off of hydro carbons. >> you can't stop providing hydrocarbons and end up with a result that's punishing to this society. you can't do that. can you say all of the above but all of the above was not

happening. they weren't -- >> jack, all of these are high level issues. >> gas lynn prices is a low level issue. >> but ultimately people vote with their wallet. and the question that i have is if you see the economy getting better and admittedly it's not where we all want it to be, does the voter sauts going in the right direction, even if i was a discouraged obama voter, am i going to get back on the wagon for one more try because i think we're going in the right place or do you say i give up. several months it almost seemed clear that obama voters were giving up. then it seemed the economy was getting better or feels like it is getting better. it feels like it's turned a little bit. >> the economy has turned a bit. the question is how strong. i don't think that will be enough. go through all these things. go through the rule of law. voter i.d. the supreme court rules in 2008 for indiana that voter i.d.,

which is the most logical thing, have a picture to get on a plane, get in a building and a poll comes out south carolina and texas i don't like your law. the rule of law they toss out the window. the auto bailout everybody forgets what they did to the rule of law on the auto bailout. >> would you argue that the auto bailout even if it wasn't executed properly was it necessary for the recovery we have today? >> no, you could have gone through a thing where government gave guarantees. i wrote a column on this. where government gave guarantees on warranties. if they give guarantee on financing, you get all the auto financing. the government could have done that without putting money in. and they didn't have to crash the creditors on their deal. they could have merged the two of them. they had a number of options, they didn't have to throw out the rule of law. >> jack you and suzy have a

column where you lay out some of the issues you find that mitt romney has. how does he get to a one issue that romney in my opinion has to face into, it's the mormon issue. it's part of the santorum surge whether you like it or not. i talked to ministers who run megachurches and they have questions about mormonism. and the mormon issue is below the surface. >> how would you address that? >> john kennedy and catholicism

in 2011 or '12, i would do a kennedy ñyrañ west virginia speech. what does mormonism mean, what does it mean as far as his governing is concerned? what are his views on church and state? how has his life been lived in that way? a real open, this is a terrific guy. he's got to talk about -- we can't keep saying why does santorum get all the evangelicals. >> i think he has to talk about seamus the dog things that have people worried. >> he has to talk about mormonism and talk about who he really is. authentic is a big deal, and he doesn't show it in many ways. >> whether or not the tipping factor, is it a leadership issue or an economic issue? >> i think it's centralization versus decentralization issue and you can call it private sector versus central government. you can do what you want. there are so many issues here

that lay out where the government is overreaching. constantly. you know, i gave you the 503 rule the last time i was here. i mean, to show you how crazy it is, the department of labor is demanding that contractors have 7% disabled people. they have 1.7 in the department of labor. they don't have 7%. this is central government ordering events on companies that they can't do themselves. now they've got a proposal now that companies because of equal opportunity issues can't do credit checks on prospective employees and can't do criminal backgrounds and do it in the federal government. they do credit checks and they do criminal background checks, so, i mean, it's crazy, the central government group is out there doing this stuff. >> you think physician heal thyself first?

>> for sure, but they don't want to. they've been waiting for the changes for so long and they're going to do it. >> if we go back and take a look at some of the numbers that steve just talked about, he talked about how only 28% of the people think they are better off than they were two years ago and when you ask that question over the last five or six presidential elections, that's the lowest we've seen. i guess in the end where do people put the blame, is that what's going to be part of the deciding factor, too? >> for sure. but that's not the -- if my view of the economy which is growth, but not booming growth and i think these numbers that rick talked about at 8:30 would support that idea, i'm not saying downturn or anything. if that's true and he's got these numbers and they're not going to look much different six months from now because you're going to have -- say you pick up

200,000 people a month, that's only another million, there's still 5 million and families are associated with them that aren't working based on the 2008 numbers. so, ñilook, i don't know -- who knows the answer to this. i certainly don't. i know what i want, and i would like a good economy and i don't think a good economy is enough for him. >> okay. we're going to take a very quick break right now. when we come back, we'll have more. our guest host jack welch is going to leave us with some parting shots. "squawk box" will be back after a very quick break. tomorrow, a guest host double play. at 7:00 a.m. eastern, applied materials chairman and ceo michael splinter will join us to talk tech and manufacturing. and at 8:00 a.m., we'll talk tech investments with elevation partners co-founder roger mcnamee. and the latest read on the economy from market master jeremy siegel, don't miss

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♪ when your chain of supply goes from here to shanghai, that's logistics. ♪ ♪ chips from here, boards from there track it all through the air, that's logistics. ♪ ♪ clearing customs like that hurry up no time flat that's logistics. ♪ ♪ all new technology ups brings to me, that's logistics. ♪ we're back with some final thoughts with our guest host jack welch who has been with us for the whole program. it's been terrific to have you. we haven't talked about your

school, how is it going? >> i was here recently when we made the acquisition, it's taken off. for the two years that we were going before, we had highest quarterly enrollment was 32 students in the first quarter with this new arrangement. we're over 70 which is a fantastic jump, so we'll have about 250 to 260 students in the coming semester. we'll have 21 fresh graduates. all of them employed. a good third of them with promotions while they were in school. >> how many of them now write you for advice now that they're in the workforce? >> several of them. >> yeah? >> yeah. i get significant number of e-mail questions. >> it's all online. >> all online. >> you teach a class weekly? >> i have a tape every week about what is the item of the week. greg smith was a tape. and why culture counts.

and all these different subjects are a -- that i'm able to grab. our job is to translate the activities of the week, jeremy lin was one. jeremy lin was who is on your bench, who are you not looking for? have you ever overlooked five stars because they weren't the right age, they didn't look right, they didn't dress right, whatever. have you looked at that? go look at your bench. >> what are you thinking about this week? >> i'm thinking about the candidates, what does a person look like before they get the job and how do they look -- how do they act after they get the job and trying to look at obama and romney and looking at my career and things like that, and when you pick the best salesman to be the best sales manager, the best salesman but can't mana h