we had this kind of great quarter. let's not be greedy but i do like the set up for the rest of 2012. there's always a bull market somewhere. i'm jim cramer and i will see you monday! is the economy better than people think? if so, who gets the credit? good evening, i am larry kudlow. we have a massive stock market rahal erik the best quarter in over ten years, the dow up 8%, the s&p pops 12%, nasdaq surged nearly 19%. it's a sign the economy may well be better than you think. and if you buy into that, next question, who deserves political credit? well, we're going to get both sides plus the president once again on the campaign trail. what else is new. he's bashing oil. what else is new. but finally maybe on the right

side for a change president obama will enforce iranian oil sanction. today was the deadline, he's going ahead and he believes oil markets can handle it. but here's the big question -- is there going to be a worldwide coordinated injection of strategic petroleum reserves? rumors of this are everywhere. we'll get the truth. that could temporarily knock down prices. and of course who could give up trying to win $640 million? we can't. we're going to cover that, too. first up this evening is the economy better off than you think? if so, who deserves the political credit? first up, i think the economy is better. it ain't fabulous but the glass is half full and the pessimists are wrong. jobs are rising, so is consumer confidence and spending. nu numbers out for both of those are very good. that is the key business. that's why stocks have been

rallying these past month. on the other side, unemployment too high, income's too low, gas prices a problem and there is no recovery in home prices. all right. so i call it a 2 1/2% to 3% economy. it ought to be 5%. just a moment i'll hear from my panel on who gets the credit or blame. but first up, here's who mitt romney blames on the campaign trail. please take a listen. >> president obama did not cause the recession, but he most certainly failed to lead the recovery. on the issue of jobs he failed. but on one goal he succeeded. that was to raise energy prices. all in all president obama prolonged the recession and slowed the recovery. president obama's economic strategy is a bust. >> tough stuff. but if the economy is a bit stronger than we think, who gets the political credit? and is romney's race for the white house at risk in a better economy? let's talk to matthew o'brien,

associate editor of "the atlantic," mark simone and first of all, is the economy better than you think? >> during the bush years if it happened, they'd scream it was wall street benefit, not main street. jobs are still not there. could you hit rock bottom and start to slowly creep up. we shouldn't be doing that three years later. you have dodd-frank hanging over everybody's head, health care problems -- >> health regulations, obamacare. let's be specific. >> you have to wonder about his competence. he's a lawyer, if he doesn't know about his own expertise, how is he in business? >> a, is the economy better? b who gets the credit? >> the economy is definitely approving. >> you agree with me?

>> we agree. >> go ahead. >> initial claims are at four-year lows, auto sales four-year highs -- >> stocks. >> stocks have rebounded. >> right. >> but if you look at the numbers for fourth quarter gdp, they have an alternative measure gdi. that came in yesterday at 4.4%. economists think that's a better measure -- >> and do you give obama credit for the recovery that you are describing and in a moment jimmy p. is going to undescribe. but do you give obama credit? that's what i want to know. >> course. it's important to know where we were coming from. the first six months after lehman failed, the industrial output was matching great depression. if you look at 1929 versus 2008, they were the same. it's important to know where we were coming from. >> do you give obama any credit? >> we had this tremendous

downturn so we should get this powerful snap back. we haven't gotten it. we've gotten the worst economic recovery in modern u.s. history. >> do you -- >> i agree it is growing off a low level. it is growing. but listen up, what's unemployment? is it 8? i think it's more like 15 if you count underemployment. three of the last four months, incomes are down. real disposable i come is down three of the past four months. i don't know what you call that but i don't call it a boom. >> those income numbers are a little phony. let's not get too much in the weeds. can republicans take any credit for the improving economy for the last year or the last six months? they say, all right, they say -- let me road test this. john boehner would say they stopped obama from doing more bad stuff. they stopped higher taxes and they stopped even more

regulation. they even slowed spending down. they want to take credit for the improving economy. what do you think of that? >> they can take credit but that's a very -- >> a thin draw. >> if a president did nothing and the economy would bottom out and start to recover on its own, that's really what happened. >> and business probably deserves the most credit of all, isn't that fair? >> and this rally, if you want to credit somebody in washington, maybe this is the supreme court rally we're seeing. they're going to throw out obamacare, the job killing regulation -- >> but in fairness. >> i think that's a factor. >> the economy has been rising for five months, jobs have been rising the last five months. what about the role of business? what about the role of free enterprise? despite the obstacles in washington, which you fail to acknowledge but i'm going to acknowledge them for you in the health care regulations, the tax

threats, the epa threats, the obama bashing of successful rich people, the obama bashing of oil and gasoline, despite all those miscues on the economy, how much credit does business get? >> they deserve a lot. this has been a private sector-led recovery. under obama we've had more private sector job creation. >> you mean after spending stimulus here, couldn't create jobs? >> if you account for state cuts, there weent that much increase in spending. >> where did all that money go? it looks like obamacare is going down. what's his single achievement, an $800 billion spending package that didn't work. >> we have a health care plan that might get tossed out. we have a stimulus plan, i'm not sure how many jobs it created and we have a dodd-frank too big

to fail plan and big banks have gotten bigger and if you look at their funding advantage, it's still there. they're still too big to fail. so no stimulus. obama care might go e get tossed out. what did they do? >> do you give republicans any credit for stopping the bad stuff? serious yes. >> i actually do. if it hadn't been for for the republicans at least taking the house in 2010, we would have gotten nor $6 billion in stimulus. >> the economy is never as good as the administration claims it, is whatever administration. even this administration isn't claiming much and you had joe biden talking about a global tax now. corporations. how are they going to enforce that. >> is mitt romney being too pessimistic? in order, americans like

optimis optimists. mitt romney from that clib we showed was very dower, very pessimistic. do you think that's a good tactic tore him in. >> in a primary season -- you isn't he out with all these endorsements, babb a bush? isn't he now on a general election campaign? doesn't romney have to say here's what i do? >> he still has primary family no the south. he still needs to win this. the more he stays in the fight, the better for him. >> i think the message is things may be getting better but those how you -- that's how they would boost jobs and get the economy growing again. >> ifs sko-- if the job market

keeps getting better and stocks rally how much does that hurt obama and help romney? >> i think the fact that people will look at the huge national debt and think this recovery's phony, we're running a trillion dollar deficit and that's what it's going to be? >> all right. you buy and sell in the stock market. i'm very interested in your investment strategy. >> i'm buying right now. it has to do with apple and they're making a lot of money jove seas. >> i got to get out. mark, simon and jimmy. president obama says there's enough world oil to tough ahead. the beg question now, will there be a worldwide coordinated objection from owl the petroleum oil reserves.

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zvgts with with u.s. gas prices up 19% this year, president obama says there's enough oil in the market to move ahead with the tough sanctions on iran. john harwood joins us now with the details. good evening, john. >> good evening, larry. the administration's been balancing two considerations there. one is those high gas price us that mention. the other is the desire as a foreign policy matter to crack down on iran's nuclear program. but the administration under consideration that congress passed last year, "there currently appears to be sufficient supply of non-iranian oil to permit foreign countries to significantly reduce their import of iranian oil. now, that is a process that is a rolling process. the united states has exempted japan and some nations in the european union because they've already begun to reduce their supplies of iranian oil imports.

china, india, south korea, major consumers of iranian oil. the administration is talking with them to get them to reduce their oil to stave off sanctions. you talked about the release of strategic preserves. the u.s. did not play that card today. they've discussed it with the british and french. they're going to hold that card as long as they can and see how people react today. >> now let's turn to our team of experts. strategic petroleum reserves. there's stories from the ft and reuters, discussions with britain, france, the united states and others. will they play the strategic petroleum reserve card to deal

with iran but also to deal with, guess what, domestic political high gas price sfs. >> we certainly think the obama administration is willing to tap the sdr. democrats are more willing to deal with the price issue. we think obama is willing to use it. he used it in the case of the libyan disruption last year. we think if there's a dividend from doing it, he'll do it. >> do you have any scuttlebutt, trading, otherwise, people you talk to in washington about the strategic petroleum reserve where they might put barrels on the marked and knock down the prices? >> we get the sense that they're planning for it. we know they can jaw bone the market by openly flirting with the idea. the democratic leadership down in washington are pushing hard for it to happen. >> here's what i'm wondering,

first of all, the number being quoted in the newspapers, 800,000 per day come off the market from the iranian sanctions. is that a good number? >> it's low. >> so more comes off. >> absolutely. >> second, is the administration underestimating the threat that crude oil prices, european crude and texas crude, my jump as a result of this final sanctions decision? might prices go up? >> i think they will go up if the europeans decide not to buy it or if if the iranian's embargo it and say they're not selling it to anyone. when the obama administration announced they'd go ahead with sanctions, oil jumped about $1.50 a barrel. that is the market saying another step down the road, jump in prices. as it becomes more real, it goes up. >> do you think -- let's call it

a million barrels come off the mark because of rannian sanctions. will that raise the price? >> oh, i certainly think -- >> you're saying -- i think you want to look for when the eu embargo kicks off. that's july 1. i'm anticipating we'll see more price action when we see the really tough sanctions kick in. in june, the worst of the pain for the rannians the iranians may do something through raet rick. >> but they can't, what are they going to do? let me ask you this -- china, india, south koreaia, john harwood mentioned these countries. will they play ball, will they observe the sanctions? and where will they get oil? >> if you're the chinese, you can demand a significant discount for taking the product. so you get the product --

>> how about india? india is a pal. sou korea is our pal. we have good relations for them. if they observe the angss or fully stop -- >> they will cut back probably but they are going to fully stop taking the iranian product? absolutely not. >> or you know i'm a believer in free markets and they die just all the information. today's nount mens not a particularly k announcement not a surprise. >> that should have been an upward lift for these prices. the production trends favor much loper prices. the iraqis are pumping as much

as they did in 1979. huge amounts. the libyan oil situation, coming backline, their big huge refinery will be restored probably within the next pun month. >> if crude oil prices go down, can gasoline prices be far behind? >> no. >> are we seeing the peak in gasoline prices. >> during the past several years, i would expect them to go lower. we're seeing all the -- no. those fierce will ease, the prices will ease as well. >> appreciate the insight. next up on kudlow, it's all anybody is talking about. the mega millions jackpot. it now stands at $60 million. if you're tonight looking like -- we got some high f

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what do you see there? >> we are in the belly of the beast of megamillion mania. we'll show you, this is a scene playing out probably in stores across the country, certainly across the tristate year here in new york. people coming off their shifts, buying tickets and dreaming to get that jackpot. larry, i know you like a sure thing. an interesting finding by experts today. when the jackpot went up by 640, they figured out theoretically someone could be guaranteed to get the winning combination. you'd have to spend millions to get the combination and one would have to have access to all of the lottery supply of ink and paper. it would take four weeks to fill out all the bubbles. the odds of winning, 1 in 176 million. as edward r. murrow used to say, good night and good luck.

>> gus rosendale, when do the polls close for biography the tickets? >> they'll be selling them right up to the drawing at 11:00 tonight. >> my next guest says forget quick picks and turn to stocks. jeff cox has his eye on some small trades that could pay off even bigger. jeff joins me with his high flying stock picks for under $10. good evening, jeff. >> good evening. tonight we're going to play wall street megamillions. we have sixe tickers. each less than $10. the first ticker, regions financial. beautiful stock. i love these small and midcap bank stocks. they're looking good and low debt-to-equity ratio. second winning ticker tonight,

moody's gave them a good rating be sesqeuhanna financial. >> and aceto corp. and number four, ast, j outperformed by analysts. fifth winning ticker, ruby tuesday. nobody loves this stock. i love it. it trading at book value right now. its peer is trading at four times book value, recently upgraded to outperform.

its part are in here the sixth winning ticker in wall street megamillions is going to be ruth's hospitality group. they run the high end ruth's steakhouse, they had a 7.7% sales growth in the fourth quarter. they've got a $7 value meal for drinks and food that should drive sales even more. really good looking stock. >> all right. jeff cox, thank you very much. i don't know, looks better than just buying the lottery. i appreciate it. >> you can read jeff's full piece on cnbc.com. and look at some of the long shot stocks that have paid off already. bank of america, sears and netflix held the top spot of worst performers in their index but in 2012, each has recouped their losses and picked up. good stock picking is good

research and good analysis, too. coming up, pink slime. doesn't conjure up a good picture, does it? but we've been eating it forever. kansas's governor went to a beef plant to sample pink slime. we'll see if he can put the controversy to rest. ♪ [ boy ] looks like our work is done here. i'm heading home. vaaa vrooom! need some help, ma'am? grrrrrrr! [ in high voice ] oh thank you. these things are heavy. zzzzzzzz! [ male announcer ] built for work. and everything you work for. hey, honey. i'm glad you're home.

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welcome back to "the kudlow report." the beef industry and largest restaurant chains have been attacked over safe beef filler the activists call pink slime. officials say if consumers continue to reject this product the supply of beef could tighten and prices could go up. in a moment we'll hear from kansas governor sam brownback. he's trying to save the beef industry in his state from going under. first john yang has the story from a plant in nebraska. >> the beef industry calls it lean finely textured beef. the critics call it pink slime. governors in beef producing states aren't laughing.

>> this is a safe and reliable product. >> let's call this product what it is and let pink slime become a term of the past. >> they're fighting back, showing news cameras how the product is made from what's left over after butchering roasts and steaks. it's treated to kill bacteria. for more than two decades it's been in ground beef with little notice, about 850 million pounds a year. then on network tv celebrity chef jamie oliver launched a crusade. >> and basically we're taking a product that would be sold in the cheapest form for dogs and after this process we can give it to humans. >> people are very upset this is in 70% of our ground beef, up to 15% and it not labelled. >> the public outcry was heard. schools can choose not to serve

beef with the product and food chains have stopped selling it. three processing plans in texas, cans and iowa have stocked work, idling 650 employees. it actually makes ground beef leaner because the fat has been removed. >> americans have probably been eating it for a long time. it appears to be safe. >> all right. many thanks to john yang. let's get reaction from our very special guest, governor sam brownback, republican from kansas. he recently joined a coalition of governors to stand up for american agriculture. so you, governor perry, governor brand stet, you're in iowa to help save the beef industry. what's the story?

is it safe or not? >> it absolutely is safe. you've been eating it, i've been eating it for years. there has not been reported any single case of any sort of health issue with this product whatsoever. larry, when you buy a steak, you probably trim of edges of it a little bit and you miss a little meet mete on it and you throw that away. the industry found way to get that piece of meat back. as we were saying yesterday, it beef, dude. that's what this is is beef. >> let's pursue that. up got all these hollywood slebs, maybe they're lefties, maybe not. you've got social media. you've got bloggers. ammonia, sounds ugly. sittories acid, it sounds ugly. is it? >> it's not at all and it in a whole bunch of products. it in beer, it's in cheese. what it's used for here, larry, is to kill e. coli. that's what the ammonia is puffed on to the final product so there's not an e. coli

problem with it and that is a serious health issue and this has allowed to product to be safe and consumed safely for -- mcdonald's i guess is not using it, a whole bunch of schools are not using it. if what you say is right, have i no way to doubt and reon? i think we contact and ask them, just please, please, look at the actual facts of this case. this is a kwauld made product. it treated to prevent e. coli, which you don't want in this 20 years. we're trying to get people to actually acknowledge the facts. we hope, the purveyors, sell ger

of the product, you say now you're right. >> you're going to -- lean away, driving more people to buy that has higher fat content, which is not a good trend line for us. >> governor, what do the federal government, food safety inspectors say? have they issued a public statement? >> they have said this is a safe product and a safe process. that we toured yesterday. they are 24/7 when this plant is tro producing. it's a safe, whole some product. >> back from the great state of kansas, which is in the final four. thank you, governor. we appreciate it very much. >> thanks, larry. >> next up, mo joe in the market. s what a quarters it's been. and the naz especially in crude

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welcome back to "the kudlow report." the dow up 16 today, the nasdaq slightly higher. energy was higher but off for the week. jimmy says don't pin it on oil prices alone. >> tease what i keep thinking when this market goes down because oil is weak. with a couple of weeks before quarter's end, people started to equate the industrials with the oils. that's the moronic hedge fund linkage action we saw in 2008. you know how bad that year was. a sustainable across-the-board rally cannot be led by oil. it can't be even in the equation. otherwise you get the pattern of almost every company having troubling making the numbers. what should be happening?

we should have this week seen zing stocks going higher, not lower on the news of oil going down. i think there are still too many dopes who weren't wiped out by the last down turn who don't understand the cycle. caterpillar has a price of oil that is good for business and bad for business. cat does better when it's below 90. so when oil soars to 126, that's not good for cat. when it comes down, no matter how it comes down, that's good. second, if you listen to clorox, they would tell you the price of commodities made with oil don't come down like would you think they do when oil comes down. they stay high. but if oil really gets hammered, then and only then can they push for price concessions. we hear not to worry about the

shippers, they have shipper charges. it's not true. the cyclicals all do badly when oil goes higher. the only part of the energy complex that would be good if it wasn't higher was natural gas because there are very few beneficiaries of lower natural gas. not a single company i know said the decline is countable. but the decline in natural gas is horrific. almost every domestic gas and oil company is more to gas than oil. we were thought to be out of oil and we made nrl gas. >> the decline in natural gas has led to a slowing and then again the feds don't want to seem to use it.

president obama seems against it. back to you, larry. >> jimmy, i think you're actually right on this stuff. stocks near their biggest first quarter gain in more than a decade. dow gained 8%, s&p up 12, nasdaq surged nearly 19%. let's turn to our investment gurus. i want to fire bullish news at them and get their reaction. >> don, let's start with you. first of all, natural gas prices are plunging, okay? to me this is one of the most underrated but most important tax cut effects on the american economy and is therefore bullish. what's your take? >> it's terrific. it's bullish. the only thing that's bad about it is if prices go too low, it will take some of the edge off of this fantastic entrepreneurial explosion of

natural gas production in this country that ought to be making us the saudi arabia of natural gas. but there is some price below which it's not worth filing the impact statements it takes to think about drilling anymore. be careful what your wish for. >> i don't know, jim le camp. know natural gas prices will change our entire transportation system to natural gas where we'll have enough to produce, we'll be independent. for the messed of the economy, people living at home who use gas and electricity, for businesses it makes everybody wealthier, more income and more competitive. i think this natural gas tax cut is wildly bullish. >> if goes wrong that. if you look at the cost that come from high fool rises to around $14 balance. lower national gas prices to the overall country kmi have dropped

that down to about $5 billion. we've had an you're seeing a lot of plants, power plants, we play you lose interest for a while. this have some momentum. but if prices get too low and we don't do enough to encourage the use of arj gas that, will diminish some of the gains that we got. >> crude oil knew the -- if crude oil prices continue to drift lower, then cass polyethylene prices may peak and they may drif over. >> it's bullish. one of the most here serious thing is how about relationship

there is between mek growth. also, if you look at regardless of what is going on about at the -- it seems to be very tifl coordinated with prices. eight great missing. the one thing we know for sure about oil because of some kind of tragedy, if you wake up this morning and you find that the sell, then we in a whole new world of bird -- >>'s nothing more thorn than goes with that. that may be the wrong thing to do. a new side of the world, $75 may's slit butchish. jim? >> i don't think it's bull up

enough, larry. look what's happening next month. they have the opposition party. in april and in may we have french elections. that opposition party is in the league. they want to redo it the deal and then year maybe saying that -- this is what preceded real problems in greece. >> who cares. >> portugal's bigger. >> what's the worst thing that can happen? greece can -- >> no, no, i'm not worried about greece. >> they're done from 17%. don't worry, be happy. >> it's and you sustainable. they're going to need a buyout. if we had that many problem with little jeanne --

>> oh, please, move on. >> are you buying or selling right now? let ros. >> we've got a 72 weekday, low motion. come on, kalts have mine. i say buy the tip. >> you got season alitying s. and america overtakes japan but not for the right reasons. on sunday america becomes number one. it's not an april fool's joke. the highest corporate tax rate in the world. that ain't good. we'll talk about it some more when "the kudlow report" comes back. well, if we don't find an audience, all we'll ever do is rehearse. maybe you should try every door direct mail.

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thou shalt not regulate. we want to create what's called a global minimum tax because american taxpayers shouldn't be providing a larger

subsidy for investing abroad than investing at home. that was vice president bide i don't kno -- biden. on sunday america becomes number one corporate taxer in the world. that is no april fool's joke. and a "new york times" columnist is taughting an 80% top tax rate that he says will not harm the economy. huh? are we kidding here? you know my take on all that. but let's go to our distinguished panelist. we have dean baker. i'll start with you. are you going to tell me that 80% individual top tax rate would not damage the country

that edwardo porter wrote in the "new york times"? >> i know eduardo, he's a very good friend of mine. they didn't find any evidence. they looked for it. when dwight eisenhower, the radical socialist was president, the tax rate was 91% and the country did very well. >> no, no. you said the economy did well in the 50s, i completely disagree. this is important. under eisenhower with that 90% tax top rate that they want to bring back, during the 50s we had three recessions. that's how jack kennedy became president. he ran to get the economy moving again. i got to disagree with the history again. >> 3% average productivity growth. that was pretty good. >> all right, you go, you go.

80% top marginal tax rate. a nobel prize winner says that won't damage the economy. >> i think what dean is missing, even if you accept the fact that the economy did well in the 50s and i agree there were a lot of recessions. kennedy ran on "we can do better." if you have anything near 50, 6 0rks 70, 80% tax rate in the united states, you just see a sapping of all the capital out of the united states. it's interesting, larry, because this idea of a global tax rate, which is what vice president biden was talking about, i think countries like ireland would go crazy over that. they're the countries attracting all the capital. >> is ireland going to attack? it's doing great with its 10% tax rate. >> the reason joe biden wants a global tax rate is because of what larry said, on april 1, we become the country with the highest tax rate. even you, dean, would admit the fact that the united states will have the highest corporate tax rate in the world, that hurts

our competitiveness. will you agree with that? >> we have the highest tax rate, not the highest effective tax rates. we're middle or bottom. we have a lot of tax loopholes. we can talk about lowering rates and getting rid of loopholes -- >> no, i'm with you on that, let's get rid of all the green subsidies. >> you had a chance to vote on oil. you can't teak back the tack breaks for oil, who can you take it back from? >> i want to get rid of the ethanol subsidies, the wind subsidy, get rid of it all and get the rates down. we have the most inefficient tax system. high rates and we don't give back any revenue. >> does joe biden want a single rate for everyone in the world or is he going back to the obama reform which says american companies operating overseas

will have to pay for a minimum. what was this, two months ago. it's the same thing. >> just in case we forgot, joe biden reminded us what a bad idea it was. >> that may be but it's hard to be a fire storm if it's been ot the table at least two month. >> a lot of multi-national companies will no longer be american companies. they'll, irish or germany companies. >> that he all place games, though. >> y, but let's win the game but having the lowest -- it'sin unpatriotic. >> it's nefr happened before. >> amean, all these studs, dean, in all seriousness, study show the corporate tax is a more powerful growth weapon than the individual attacks. it sends a signal that we are ne

competitive. this was an i fool's joke. >> lk at the cry with the lowest tax rate. >> no, it's in recovery. i got to get out. we'll talk ireland next time. >> dean baker, steve moore, thank you very much. i stay tax rates low. thanks, we'll see you monday. >> next, it's the mother of all meltdowns. ♪ anything? no. ♪ how about now? nope. ♪ [ dog barking ] ♪ ♪ [ male announcer ] the chevy silverado. ♪ [ male announcer ] with best-in-class 4x4 available v8 fuel economy.

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