i'm not a billion dollars richer today, but i was going to take a picture of everybody with my instagram. >> i love the issue that you can -- >> have you ever used? >> no. it makes it look retro? >> i'll take a picture of you and we'll post it online right you now. >> i have the wruinkles to look retro, too. >> and we'll give it a bit -- we'll show it in a moment. but in the meantime, we'll get to the news. >> did you see the journal just had a good take on how many instagrams we've been spending at the federal government. did you read it? >> we're only 38 seconds in to the show. s . >> but you brought up

instragram. you have your buffett rule coming up. you couldn't sleep last might. >> a lot to talk about including the start of the earnings season likely to dominate the conversation. s&p 500 profits expected to show the slowest growth in three years. some analysts are suggesting that a weak season could create an excuse for selling. thompson reuters reporting first quarter earnings expected to be 3.2%, that number falling to 1.8% if apple is excluded. the bulls not starting the week with an upper hand. yesterday stocks experienced their worst four day drop in four months, the dow closing before 13,000 yesterday for the first time since march 12th, blue chip average also closing before its 50 day moving average for the first time since december. so that's -- >> death cross. >> didn't hurt us last time. >> like one of the worst indicators. >> we had one three months ago

that did nothing. >> was it a death cross or golden cross? one way or the other, people look at it -- there's not a lot to it. >> what i was thinking, either ---so either the market or the economy does very well, so we say no qe-3 and that's bad for the market, or the market does -- or the market doesn't do well and then there will be qe-3. >> we're in that sweet spot where things have disappointed but not bad enough to put the qe raid back on. >> but we're headed back to the idea that maybe the fed comes back. last week we were no more fed. but now -- >> minutes came out and they said maybe they won't do anything. but the real tell is back in march. that organic bond run over and that lasted all of about ten days. >> a replay of last year the

summer swoon and year before. and then you throw in gas prices in the mix. >> did you see corn? >> where you you corn? >> corn's going up. not a good situation. also this morning -- by the way -- >> you're looking at corn? >> shockingly. i don't normally look at corn. >> do you have my picture? >> i have your picture. >> do i look retro? >> does that look retro to you? we'll tweet it. >> looks fat-tro. >> it doesn't look retro? >> no. >> so this camera adds ten pounds, too. >> no, it has a little bit around the edges. easier with landscapes. >> let's talk about breaking news out of washington. >> i'm not happy with this picture. >> you're fat. >> i'll get to and i monday j r

today is the day. >> that's right, the white house putting out this report, the but buffett rule. just at the top of this hour. we'll see the president later on today down in florida making the case for the buffett rule and this is something that we are going to see throughout the course of this year, which is i need not remind you a campaign year across the country. the president making the case that this is just about tax fairness. let me bring up some of the statistics buried inside the report. the white house team saying on a conference call for reporters agreed in a this is simple willy a matter of making sure that the rich pay their fair share. they have not been doing that so far. and starting with some of the stats that they put out just yesterday, in 2009, they say 22,000 households making $1 million a year paid less than

15% in income taxes and 14$1470 households making $1 million a year paid no federal income taxes at all. and if 200 in 2008, one this th of the highest paid americans paid less than 15% in income tau taxes. all of this designed to make the case that would make those earnings north of a million dollars a year pay at least 30% on their income taxes. the senate likely to have some votes on this, but don't expect to go anywhere. this is really a campaign season argument from the white house. >> it's not going miles per hour and it doesn't raise much money or do much for the deficit. >> yeah, it's been scored at about $47 billion over ten years. so a drop in the bucket. >> that's less than 1% of $6.4 billion. >> but i have no problem with

doing this. i just think we need to think about the old discussion about what dividend and capital gains rate do we want that helps us with growth, we want growth in the economy, and so we want the maximum that we can get, but we don't want to hurt growth. because we are talking about mostly dividends and capital gains. there's carried interest. some of those people probably pay that low rate because of carried interest. and that's one group of people that we put over here. there are people that made the money in their career, got old, paid taxes on it, ordinary income, and now have dividends and capital gains income. so you just need to decide how we want to tax that and how to do it. but i understand -- the word tax fairness, that rubs me the wrong way because who is deciding what's fair and what's not. >> republicans make the criticism that this is nothing but class wear fair and they say wouldn't be effective over the long run. but clearly obama thinks there's

a political argument to be won here. but that's why it's no coincidence we'll see him in florida today making this case. and pay attention to the last presidential election, florida turns out to be important from time to it time. >> but look at every speech in the past six months has had sort of some similarities to this argument. >> and over at the campaign, they like the contrast with obama versus mitt romney, the guy who paid an effective rate north of 14% on his income and who the the white house and its allies have been hitting somebody who has a swiss bank account. >> and that's his name now. mitt swiss bank account romney. >> i think we have it if we could put it up on the screen. we have a quote from yesterday, i think you you might have been on this phone call with durbin, this is dick durbin saying i asked warren buffett in a meeting we had recently, have you ever had a swiss bank account. he said no, there are plenty of

good banks in the united states. he went on to say so i started asking people, why do you have a swiss bank account. one, you believe the swiss franc is a stronger currency than the u.s. dollar. and that is apparently the decision the romney family made during the bush presidency. went on to say, secondly, you want to conceal something. you want to hide something. why would you have a swiss bank account instead of one in the united states. i don't know if we have the next piece of it. i would like to ask the press to really press these questions. the obvious questions. when is the last time a presidential candidate for the united states had a swiss bank account? i think the answer is never. i think that's probably right. >> yeah i, that's a huge vulnerability in the romney campaign. swiss bank accounts politically don't register. people don't like the idea of a candidate having a swiss bank account. it seems quisquirrelly, the rom

campaign insists he paid all the relevant taxes on the amounts in those accounts. >> did they explain why he pursued the swiss bank account? >> no, his financial adviser said they decided to close it down after a couple years because it might raise questions. but i don't think they gave a really thorough and in-depth explanation as to why he had it there in the first place other than just diversifying his assets. >> although there are a lot of wealthy people that have swiss bank accounts. why do they have them? >> typically as some form of a tax shelter. >> the things that are so untoward that -- you're implying that they're evading taxes, not just avoiding taxes. >> that's why can a lot of people use swiss bank accounts. >> a lot of wealthy people do a lot of things. there's tax shelters, limited partnerships in the day men islands, swiss bank accounts. when you get to a certain amount of money, and you are well on your way to getting there with

your books and your movies and everything else -- if i had known we were allowed to get huffington "post" and put five full screens up quoting the "post," would i have put one from grudge where durbin was talking about the torontos and saying either you have to pay and get our cafe standards up to where we're not burning this much gasoline or you're going to die. you're going to possibly be in a tornado if you don't get on board with the carbon footprint. this is also the same guy that said take your money out of any bank that has any problems, take a run on bank of america, take your money out, suggesting a run on the back. he's also the guy that gave us price fixing if credit card fees which i know you think is ridiculous. >> yes, we're together on that. kumbaya on the credit card is you. >> nothing that comes out of his mouth at this points surprises me. but the stuff you had there was not that bad.

but i do like that you quoted the huff post. and tim armstrong is happy that you quoted them. when did you build these five foot -- this is last night you were working on this? >> with the help of the producers. we knew we were having this this segment, we thought it would be nice to read from what happened during the phone call. >> did minute thank you, can did axelrod help you or thank you for-will- >> i'm getting e-mails and tweets from the white house as we speak. >> the white house did want to bring up the swiss bank account, call it swiss bank account romney, they certainly got a pretty good rationing of it on the show today. >> fair and balanced. >> yeah, like the huffington "post." got it. >> i apologize, aimapologize. >> we have the full screens ready to go again. are you on next hour? >> i could be. just waiting for the conference call at 8:00.

>> we have new viewers at 7:00 that we need to bring up to speed. >> i'll go back to my desk and do seven or eight more full screens. >> would do you that? maybe a picture of the station wagon that carried the dog on top with the diarrhea coming out of the back and all that. thank you. if you would. gail collins quotes -- all right. >> and in other news this morning, china's returning to an export led trade surplus last month. the $5.4 billion surplus blew past expectations of a deficit. exports grew faster than expected. exports to the u.s. were a bright spot, although exfors to the eu declined not a huge surprise there. but of course the concern is about what china's import figures showed. they grew much less than expected, only about 5% year on year, highlighting concerns about the pace of a slowdown in domestic command from the most important marginal consumer. and the bank of japan meanwhile keeping its key interest rate steady as expected for the 25th straight year or something. markets already factoring in monetary easing at the boj's

next meeting. finance minister saying he expects to take appropriate steps to support the economy. and back in the u.s., a few reports to watch. the nifb small business survey the out at 7:30 eastern and we'll have the news first courtesy of an interview. and then at 10:00, wholesale trade and my favorite job openings in labor turnover survey. jolts. a slow move aing survey, but it packs a punch. >> makes me nervous. >> are you in the control room, anna? how late are you up? like the previous -- how late can i send you things? when were you -- >> i don't know. i sent that in late afternoon. >> oh, late afternoon. durbin had already -- >> yeah, maybe 5:00, 6:00, 7:00. >> but if you see something at night, you'll wake people. how late, ann, what time do you go to bed? >> midnight. okay. i just want to know when i need

my stuff in for the next morning. all right. we have stuff with bernanke. says the central bank is working to address the regulatory failures that were exposed by the 2008 financial crisis. >> it's not funny. >> you're laughing. >> at something else. >> he cautions new risks will emerge and in a speech last night, he argued that banks need to have more capital on hand in order to ensure the financial system is stable. best thing would have been normal lending standards. wouldn't that have done it? >> what are you talking about? >> financial crisis. >> oh, normal lending standards prior to the crisis. >> normal lend williing standar would have made all the difference in the world. addresses, income, down payments, all those normal things. instead we have 2800 pages including tdurbin thing.

>> how big the portion of the outstanding mortgages do you think -- >> don't you think it just started -- >> absolutely, but that piece of. >> if you had real normal th sing is an darts t lending is an darts ttandards h, it would not have happened. >> i agree. >> you mean it wouldn't have happened in the same way. >> you wonder if money was easy as it was and with china willing with all the surplus that they had and willing to come over and buy dollars even with no return on dollars, you wonder. >> interesting to watch now for areas doing unusually well like autos. you question to what extent they're being helped by the availability of the liquidity. >> you heard roche saying the fed has been even more we talk about pre-2000le a8 that they'vn more accommodative.

where is that now? >> and the problem is they can't funnel it. i'm sure if the fed could, they would funnel it all towards improving the housing market. >> maybe it's in the corn in the s&p. >> corn isn't miles per hour near its peak. >> i'll get to the price in a second. >> do you have a distillery going? >> no, it's more of my carb addiction. but i was just going to comment on bernanke, which is i don't think we got to it, but he's calling for more regulation on the money market business. and that's an industry he thinks actually has not been regulated properly. >> you hear more and more of this, fed extremely concerned about what's going to be the future of money market funds. a lot of push back from the industry obviously. >> they have not been touched in all of this. and if you remember the reserve bank and breaking of the

represents -- >> people think it's like an -- buck would have been broken a big time a couple years ago. and now you wonder it's overnight funds and a lot of european banks -- >> it's interesting they're so popular given how much they yield. probably because there might be not be a good alternative. >> it's inertia for me. i put it in when the rates were much better and the rates are nothing now and it just sits there. >> but what else do you do. >> being here at cnbc, there's very few things i actually can do. >> with your corn thing, we don't have time for an ethanol that whole ridiculous stance that the u.s. government has on ethanol at this point, is the reason you're having problems with your corn. >> corn costs are going up because of ethanol in. >> that's a fact.

>> part of it, although typically corn keys off -- well -- >> we could buy it much cheaper from brazil. but you can't get even republicans in iowa to -- grassley. i've asked him. >> he wants to pump the price of corn. >> he represents iowa p about i think we're going somewhere. >> coming up, we'll get ready for earnings season. is your portfolio ready? but first, speaking of opening day, the mets are off to a strong start. 4-0. moments after the mets daniel murphy ended the game with a walkoff hit last night, he got hit with a baseball i'm honored tradition. he got ambushed by an unidentified met. packing the old towel full of shaving cream as you can see right there. the end result of that shaving cream towel. squawk lk right back. [ male announcer ] you are a business pro.

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time for your national forecast. scott williams, good morning. >> good morning.

of course a lot of weather to talk about, but first we want to deal with the fire situation across over two dozen states. in the lower 48. but as we focus in lower here around the new york city area, we'll continue with the red flag warning after about 8:00 this morning, so gusty winds, dry conditions, that will allow for an additional fire danger for today. new york city, philadelphia toward parts of the mid-atlantic, still dealing with the tinder dry conditions and low relative humidity values and gusty winds. yesterday of course hose winds caused some airport delays across parts of the northeast and new england. right how winds out of the west at 8 miles an hour for you in new york city. as we focus in around the region this morning, temperatures in the upper 30s for you around buffalo. low 50s this morning in new york city, but when you factor in that wind, it feels a little colder to your body. hour by hour, we'll find clouds and showers toward interior sections of the northeast and new england. and then by later on this

afternoon, we're look at upper 50s, clouds for you in new york city, clouds, a few showers from boston to new york city, light precipitation, not expecting a washout whatsoever. as far as that overall perspecti perspective, the pacific northwest toward the arklatex, watch out for showers and thunderstorms. so boston, new york city, minor airport delays expected for you today. and we're looking at low 60s for highs in washington, d.c. near 80 degrees in it atlanta for your travel plans as we move toward the there is aredollar as expected will. 40s for the highs in minneapolis. 70 in nashville and toward the west coast, clouds and showers. temperatures in tucson today will top out in the low 90s. guys, that's a look at your forecast. back to you. >> thanks, scott. let's get a quick check on the u.s. markets -- i told you i'd screw it up. >> i said there's no way that

you could -- that's your natural way to say. >> but you said it 100 other ways. and people didn't know what was going on during the weather break. i was actually practicing how to say his name. and then here we are on live tv and i didn't. is he is a partner at douglas lane. good morning. thank you for being here this morning. yesterday was tough. it was not a good situation. >> yesterday wasn't as bad. you have a market that rises from last sokt pretoctober pret trade up, and they start extrapolating. our view is we're facing the same spring and last year we have the arab spring and the whole disaster in congress. this time if you look around,

everything was correlated. so the idea going forward for us is you have to pick your spots. and if you've got good secular growth, companies and sectors, you're going to do much better than the market because everybody is looking at the market, looking a -- >> so pick some spots for us. >> industrials. we talked about last time the auto sector. auto sector, secular growth, not just u.s., globally. companies are in great balance sheets. top line earnings growth. that will differentiate itself even if you see the s&p overall earnings being negative. >> you just said correlation is still the theme here, but in fact correlation has fallen to somewhere like five year lows. do you expect that to make a comeback in the months ahead, whether because of a selloff or just renewed global concerns? >> i think if you get a fundamental selloff, i think correlations stay low. macro, correlations start becoming closer because everybody is selling will --

>> how much do you worry about a macro selloff? do you think these earnings will be strong broadly speaking? >> i think earning s will be no great, but it will be specific to sectors. >> is the market itself out over -- >> i don't think so. but mob knows what will happen overs overseas. congress decides to go in to a tail spin again. those are factors i think the market is discountsing fast it's pot going to happen at this point. but what you want to look at is what are sectors that will have decelerated earnings. >> you like it tech stocks. >> you look at the googles of the word, you have secular growth that for the next three to five year, what '08 did to some of these companies was really let them get a lot of cash on hair balance sheets and grow. >> what's amazing, you you think about a company like instragram,

the company employs more than a dozen people, less than 20. and you and you can about other companies that size, the "new york times" company, something like that, how many people it employs. is this just because it's a unique example, but if you look at the tech sector that you're talking about, is there enough employment there to keep things going going forward? >> i think the employment will come as revenue starts rising. facebook is a special example. it will be interesting why you did it this deal before you go public because some people will look at the valuation and say -- >> google employs lots of people. but on a relative basis, it's a fundamentally different kind of business. >> it's much higher per revenue per person. and what then that's -- that's the part that we're getting in the country. so the next step is to we bring more jobs back and the auto sector or industrial sector as more jobs are coming back

because the other things, you don't want to be in the energy sector because you're getting decelerating earnings because of gas. >> and you don't like financials either. >> we're staying away from financials more because we still haven't seen the biggest fallout yet. it's been coming slowly, the housing market still hasn't stabilized, you still have writeoffs there. credit quality is not the greatest. yes, you have liquidity, but if you look at the spreads, it's pretty tiny. >> you would by gm and ford? >> ford, gm, johnson controls, delphi. >> you mentioned right before we started, banks. you said you have a lot of clients that have swiss bank accounts. so i want to know why they have the swiss bank accounts. >> well, these are global clients. to open accounts overseas now,

and you're a u.s. citizen, they'll require your social security number. >> and if you were advising a client, what would be the purpose in their mind or your mind -- >> of just having liquidity globally. just diversity. >> about if 2u6 00 mi00 million around -- >> it's hard to put it all in one place. >> isn't have to be a real sinister -- >> in the context of romney, it's the question. >> doesn't have to be a sinister office. >> in the context of anything that you open now as a u.s. citizen, you'll be required to give your information. >> ibm still has a few employees. >> exactly. >> will instragram ever be an ibm? i think these companies are fundamentally different in terms of they're a lot more profitable, maybe we should just all invest in them and not hope for a job. >> but then again, look at how many things they'll spawn.

>> that comes back to the tax base. somebody will make money on this and state of california will make a lot of money and so is the federal government. >> sarat, thanks for being here. >> we'd love hundreds of thousands of employees in the solar business, but sometimes you can't pick businesses which will flourish. you have to sort of let it happen. >> probably not a bad idea. >> go where the money is. >> always going there. >> no, but as much as we'd like wind and -- what a world we could have. >> the biggest sector in the s&p is a sector that is more profitable but seems to employ -- less labor intensive. >> a lot of labor intensive in gas. >> do you want to sing it me during the commercial break some sglim trying to think of which

happy song i could sing to you. i might dolike a swiss yodel. we have a technical analyst coming up. are you going to ask him about swiss bank accounts? >> absolutely. >> what are the technical underpinnings? all right. coming up, paint by the newspapers or invest by them, we'll set up earnings expectations later. and it's tuesday, you know who might have a swiss bank account, the donald. let's ask him. that is a good guy to ask why do rich people have swiss bank accounts. the donald dialing into squawk, we'll talk investing, economy and golf. first, though, a look the at yesterday's winners and losers. e numbers...

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the close and that officially kicks off earnings season. ceo of the call advisory group. we've been averaging double digit numbers. >> it's flat right now. expect earnings to reach about 3%, 3.5%. it's okay. >> year over year? >> year over year. we've had a pause in earnings, we've had about eight to nine quarters p double digit gains. we ended 2011 earning $95 per share. >> for me i can take the s&p and able to figure out -- >> what do you think we earned in 2000, 1999? about $50 a chair. >> and in '12? >> 118 -- sorry, no, $105. >> i was going to say.

>> 2013, 118. so you're talking about a 9% for 2012 and about a 12% for 2013. forget 2013, but 2012, about 9.5%. >> is corporate america flush now? >> yes. >> so why are they still -- we heard hiring would pick up when demand -- is demand still not there? >> 3.5% revenue growth, although flat on the about the line, 3.5% up on the up side. i still think there's a bad market perception out wilthere. >> what do you mean a bad market -- >> people still think there's going to be like some c cataclysmic event and congress will screw things up. although we had a nice rally, i think people are still a little wary. >> but if they needed to hire

employees to satisfy their customers, wouldn't they do it? they wouldn't say i'm worried about something happening. >> they want to get away with doing less. it's all about the profit margin. >> i was just going to ask, which is more important, earning, revenue growth, profit margins? >> i think it's more what they'll say going forward. everybody understands they're taking a pause in earnings. next quarter we're expecting 8%. i'd like to see how that number trends. i think with a moves going forward is more important than anything what happens right now. >> of course, but is it going to be more important to say to companies are they seeing more profit margin squeeze than we expected, or is it top line growth? >> i would say both is important. because i think you have to show both or look out below. like seriously, i think we've had such a run up in a lot of

these stocks, the expectations are pretty high. if you're not going to at least meet analysts expectations on the bottom line and you're not going to meet on the revenue side, you're going to take a hit here. >> it looks like companies have lowered the bar for themselves, and this could turn out to surprise you. >> i don't think we'll have an up side surprise here. i don't think we'll have a negative earnings period. does that translate in to stock market gains? i think we need some sort of impetus. we're this this kiin it kind of malaise. a nice eminice earnings pop wou definitely -- >> earnings won't matter about bernanke winks one way or the other. >> i think the macro language is a big component. earnings can only take you so far. you look at it from a valuation perspective, we're trading at 12 1/2 times forward earnings.

ten year average about 14.9%. i told you what the earnings number is for the last 12 years where the markets have been essentially flat, but the s&p is expected to earn double what it did back then. so it tells you if you're -- >> you're saying the market is cheap, but if we don't hit that # 05 figure we could be closer to historical valuations. >> true, but i really do think expectations have ratcheted down. i actually think we might hit double digits for the full year with a lot more strength in the second half of the year. >> thank you. >> we'll take a quick break. kevin ferry will join us from the futures pits with a look at what traders want to see. zap technology.

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kevin ferry joins us from the cme. does this risk off period continue? >> good morning. in-t i think the first thing is yesterday could have been a lot worse. and so i think that not just the fact that the markets were disjunked on an opening base, but the technicals really broke down on friday on some of these charts. and yet yesterday turned out to be kind of a sleepy catch up

rebalancing day. so i think that has to be viewed somewhat positively. >> also extremely low volume yesterday. do you think perhaps that picks up? >> it should pick up from where it was. but i think that the low volume story is probably here to say. and so i think that if a general sense, the thing that people will be watching today is the big story coming into this has been, oh, china's going to slow. you look at the numbers last night, still brings back what happens in the united states is still going to be the big dictator of how the markets hold in. >> you mean so the china figures weren't a game changer, they keep the backdrop the same? >> i think it puts the highlight that whatever slow down is taking place there is taking place already. domestic consumption there is still spotty development. and so they swung back to a surplus rather rapidly. and so i think that that just shows that there's too much

focus that whatever problem's going to happen, we are used to pointing somewhere else, whether it's europe, a slow down -- >> but is it strong must have to keep moving the global economy forward? >> that's the key. so i think right now you've probably got just enough to do that. and so just like your other guests were saying, i think what traders are recognizing that maybe analysts aren't is that this is a monetary thing. so these markets are much more elastic. and so those movements around with a might be great earnings, what might usually look like a good valuation market is going to still be a very elastic relationship. so i think it's an important session and it has to be watched. right now, it's going okay. but we have to come out of this session a little bit positive i think or the tone deteriorates. >> you heard it from him. kevin, thanks so much. coming up at the top of the hour, we've got larry lindsey. he was president bush's right hand man on the economy. how he'll be advising squawk

when we return. up next, soaring gas prices driving consumers mad. what will you be paying at the pump this summer? and are these prices here to stay? we find out right after the break. ♪

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we're back on this tuesday morning. a new poll out this morning showing 90% of u.s. consumers believe that gas looline pricese going to rise over the next six months. the university of austin finding significant report for more delaware drilling. the founding director of the university, served as the undersecretary during the george bush administration. ray, thank you for being with us. >> thank you, andrew. >> let's talk about the results and put them in context in terms

of the presidential race, if you will. how important are oil prices going to be to the race according to the survey? >> i think that the public is very concerned about the price of gasoline. that's what they say every day at the pump and it will play out in the politics i think of the election. the real issue is the long-term within, not the short-term fluctuations. i think you're seeing the public understanding that at the poll. and they are going to be very interested of oil, gas and other energy sources within the united states. >> one of the sources that caused my eyes, only 62% of aware of the fracking but 42% who are familiar with the

practice support it versus 32% who are opposed. how do you make sense of that? >> i think it's a new technology and i think people are still getting used to it. here in texas we're used to drilling. we know how to regulate it, we know how to make it safe and environmentally secure pup s. you see a higher proportion of texans who favor this new natural gas. it has to be taken in perspective. this new approach is not just natural gas, it's also oil. we'll see a huge increase in production in coming years as a consequence of the enough technology. this is good news for the united states. >> in thinking about the survey results and i don't know if you ask this question, when 90% say they think the cost of gasoline will go up over the next six months, do they say what price they think it's going to go to? >> no. what's interesting about the

poll is we've done it twice now and in the last six months the number of respondents who are concerned about increasing prices has jumped by almost 20%. i think there's a realization in the public that prices are going to go up and they don't like it. >> ray, is it possible the public didn't get the latest from t from the epa that they had to backtrack on those findings and say never mind? what stands with the public is the water was contaminated because the epa said it was. when it backtracks, do they hear us? >> i think they hear. >> then why are they negative? >> i think there's a positive action toward natural gas from hydraulic fracturing. new york is much more negative than they are in pennsylvania.

part of that is due to the public reaction over water, but it's positive in ohio, it's positive in pennsylvania, very positive in texas and colorado. this is a wonderful new resource for the united states. and we're coming to terms with its environmental consequences. i think you'll see that as the public gains more confidence in our ability to regulate these wonderful new sources that support will continue to increase. >> how far off are we towards true energy independence? do you see that in your lifetime? >> when i was in doe, which began in 2002 and people talked to me about energy independence, i laughed at them. i said the best we could do is energy security. i was wrong. i think energy independence now is a feasible alternative, a feasible program for both the united states, canada and mexico. in fact, if you group the three

together, energy independence is possible and desirable for north american. >> in how long? >> my guess is we're talking about ten years. >> that's it? >> a lot depends on the keystone pipeline and depends on lab racial with our neighbors north and south. but i think we've got it in sight. >> ray, thanks for joining us this morning. >> appreciate you having me. >> you might think texas but as you -- austin might as well be ann arbor. >> it is. >> brooklyn. >> my sister lived there for a while. it reminded me of brooklyn. >> plus, it is trump tuesday. the donald will be in, checking in with his take on politics. >> everybody week he says something almost that takes us somewhere. >> he makes the news every tuesday.

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politics of policy. former economic adviser to president george w. bush larry lindsey joins us to discuss the nation's fiscal challenges and the president decks election. >> then it's trump tuesday. trump gets the truth out as he speaks out on jobs and the economy. >> plus the bears are out on wall street. >> oh, no. we woke up the mama. >> adam parker tells us what's on top for today's trade. and breaking news on the state of the economy as the second hour of "squawk box" begins right now.

good morning. welcome to "squawk box" here on cnbc. becky is off today. she's back tomorrow. here are your morning headlines. the white house pushing its case for the so-called buffett rule. newly issued report says taxes for top u.s. earners have fallen significantly since 1995. president obama plans to continue his push today for higher taxes on people who make more than $1 million a year in a florida speech. we'll hear more about that later. >> major u.s. wireless carriers stepping up efforts to prevent phone theft. they plan to announce a database that will contain identifiers to prevent reactivating stolen or

lost phones. and tony plans to report a $6.4 billion loss. that would be the largest annual loss ever and double prior estimates that comes day after reports that sony is planning to cut 10,000 jobs or 6% of its workforce globally. you wonder whether he's cleaning us, howard stringer's moves, new ceo, get everything behind you so you can say you're starting fresh. take a look, it's a marginal issue but we are going to open slightly lower. >> you also wonder if we had howard on was it six months do you think? we didn't know it was going to be quite this ugly, did we? >> we did not know it was going to be this ugly. >> or they're throwing in the kitchen sink. >> shares reacted pretty positively to the news.

>> he didn't really intimate there was going to be a loss that size. >> i didn't think he knew there wasn't going to be a loss that side. i didn't think he knew he wouldn't be in the job right now. >> joining us is larry lindsey, former director of the national economic council under george w. bush. he was chief economic bush to president bush during the 2000 campaign. before that he served as a federal reserve governor. i was just struck, larry, as i am often, i love watching the media as well as i don't really want to be part of it but unfortunately sometimes i am. but the power of the incumbent is amazing because there are newscasts leading with the proposition of the buffett rule with all the bullet points of the president wanting to us say, no chance of going anywhere and

if it did go somewhere, no chance in changing the deficit in ten years. the white house decided this is the message they wanted to put out today. >> i saw on another network a fairly substance-free discussion of. >> what was the network? was it related to us? >> no. >> that cuts out msnbc. you're talking about cnn then. >> look, i want. >> to pay their fair share of taxes. >> what does that mean? >> well, pick a number. i'm sympathetic. >> when you start talking tax fairness, it's in the eye of the beholder. if it's not a mayor tock racy, what's fair to you is not fair so someone else. >> the issue that was not discussed is this will do nothing to promote tax fairness.

mr. buffett is a good friend of the program, a nice guy, very generous guy. he put himself out for his name so let's look at him, starting with berkshire hathaway. it's a tax dodge. it's set up as an insurance company, using insurance company reserve rules to allow it to acquire all of these assets. so that's why they don't have to pay a dividend because they have the best internal tax-free buildup system you could have. it is a tax shelter. mr. buffett gets his earnings from selling those shares but he gets to give them away. now, if you give them away, you don't have to report the capital gain as income and you get a deduction for it. so the buffalo rule is going to do nothing to berkshire hathaway, it's going to do nothing to mr. buffett's charitable deduction system, which allows him to pay little taxes. it will affect a few hundred

other people. there are about 400,000 people making more than $1 million. i would be surprised if 2% of those people are actually affected by what's being proposed today. it raises nothing in revenue yet we're leading with it as a big issue. it's really a substance-free kind of campaign. what bothers me is the country needs to talk substance now. >> you wrote a column about buffett and the irs -- >> with the airplanes. >> but they were doing all they could within the law to avoid taxes -- >> do you think it fair to call berkshire hartaway or any of these companies tax dodgers? >> they are tax minimizers. >> that's the point. >> the problem here when we discuss it as an issue is what's

being proposed by the president does nothing to those people. if you believe in tax fair nishs we shouldn't be talking about the buffett rule. >> just call it what it is, it's an election ploy. these people are all acting within the law. they have the right to minimize the taxes. >> i think you would be arguing the opposite that, it is within the law for the companies to do that. >> it is but the problem is the law. the problem is the law, right? i think people should pay their fair share of taxes. i think it's wrong that people pay as little taxes as they do. that doesn't work for the integrity of america or for the integrity of the tax system. >> isn't that what president obama is trying to do? even though it may take some time there's a process at play here so then they can lower the

rate? >> the talking point of the week, the buffett rule, does nothing to affect those issues. nothing. it will not improve tax fairness in america. >> do you think it will improve the perception of tax fairness in america, which oddly enough may be just as important or least what the president is trying to pursue as actually effective tax fairness if you will? >> i think that -- we'll talk to paul ryan later on today. i think the ryan budget does more to promote tax fairness than the buffett rule does. i would be more aggressive than ryan is to make sure everyone pays the minimum amount of taxes but the buffett rule does nothing. >> would you eliminate charitable deductions after a certain point for the very wealthy? for people like mr. buffett? i'm curious. >> we're going to have these problems as long as we vin

come-based taxation. cash is a fact, taxes is an opinion. we need to change the basis of taxes. >> to what? >> i think we need a cash flow-based tax. it needs to be business oriented and have it collected at the point -- >> is there an existing system we can look to that does this? >> i think something like an ev evaluative tax. again, if we can't get there and we probably can't get right away, i would have a simple fix. let call it the not get piggy rule. everyone is allowed 50,000 of itemized deductions. that's it. that takes care of your question. middle-class people can pay their mortgage, give some money to charity. but when you give away most of your earnings, like mr. buffett,

he pays very little tax because he's giving away the money he's earned. that's great and i encourage it but if you really want to make sure people pay taxes, you have to do something like that. what the president is proposing is putting on another alternative minimum tax on tom -- top of of the existing minimum tax. >> i think in 2006 there are more nonprofits than for-profit companies incorporated in the u.s. >> that very well could be. >> it's huge. people take advantage of that. >> and i'm all for charity but if you're really concerned about tax fairness, you have to put a limitation on things like at that. you have to make sure people say some amount of tax on most of their income. >> that's interesting. that definitely would be a -- that would be tough for -- you can raise -- there would be no more buildings, medical centers

named after -- >> no, no -- >> dr. -- >> the carnegies were build before there was an income tax and income tax deduction. to ge the money, the charity would have to put the guy's name on the building. that's what you would get instead of having it be subsidized by the taxpayer. >> which wasn't good anyway at this point. >> we're going to continue this conversation. it is a fascinating one. i'm sure we'll talk more about the buffett rule. >> you have questions on anything you lear on squawk today, including the buffett rule, send us an e-mail or you can reach us by twitter. and adam parker, chief equity

partner is doing the walk -- i don't want to call it the walk of shape. he's going to tell us why he's bearish and what concerns him about the economy. that's after the break right here on "squawk." >> look who's talking on cnbc, big names and big surprises. catch a rare and exclusive nt ith american ceo charney. it's trump tuesday and paul ryan talking jobs and the economy. all day today. cnbc. capitalize on it.

. we're back. our next guest says you can't count out a recession next year. adam parker, chief u.s. equity strategist of morgan stanley joins us now. the wall street journal called you the most accurate forecaster. >> he went out on the limb and was the bearish guy. >> now you're sticking with this bearish tune. >> last year, the year before where people got a little excited in the spring and then by fall the whole mindset regime changed. >> what's going on? why is this pattern recurring? >> my main call -- our mean call

at morgan stanley is not about the earnings so much but about the multiple you pay for the earnings. it impacted by a few things but it growth, the volatility of growth and thistreme rate environment. the rates are extreme. it's hard to change it quickly. >> is there something about the calendar year? if you look at 2010, 2011 and some of the things we're seeing in 2012 it is remarkable. >> we haven't looked at an economy that's unfettered by unconventional policy for more than a few months in three years. my main call is why should you pay a higher multiple for earnings when we have incredible fiscal stimulus, unbelievable accommodative fiscal policy -- >> you mean those extreme measures that got us to this point are going away? >> at some point you have to

unwind it. >> there's a monetary cliff with easing and -- people think we're at that self-sustaining point and reality sets in, people try to back away. >> we get better housing, better jobs. you think liquidity there, you're happy. three months later you're -- >> you do have competitive places to put your money. if you don't buy dividend yielding stocks at 4.5%, as the rates move back up, why would it become more attractive to buy stocks? this is as good as it's going to get. >> i like the dividend yielding stocks. i think it makes sense. >> if you don't buy them now, why would you buy them at 4? >> i'm with you. that strategy. >> people don't think it's going to stay at 2. >> it's hard to go buy high

yielding stocks. in order to make a lot of money when you're managing money, you -- >> you need a 30% rally in three, four month. >> when the clients call you, you tell them to do what? >> we want to be defensively positioned as the year unfolds, health care or select means that it can really deliver on the growth side. >> did you get killed on that call in the first quarter? >> we have a portfolio, people can track it, it underperformed by about 80 basis points in the first quarter, underperformed last year. we should have been positioned more. i like the analogy from this week, nobody who has ever won the par three tournament has gone on to win the masters. by the year end we'll see where we are. >> what was the outliar? the 250 we were getting in jobs or the 120 we were getting in jobs? >> 2% gdp, don't get too excited

when things get really weak like last fall, don't extrapolate into a horrible recession and if things get really strong -- >> but now you're saying recession. >> i'm not saying recession. you guys were. >> did we put those words in your mouth? >> i apologize. >> what are we saying? >> we're saying it's likely going to roll over. things like weather being positive pull thing p through some things into january. >> dow 15,000, the adam cover would have said what? >> our year end target for the end is -- >> did you hear that mr. 30%? >> what? >> our year end targets for the s&p is 1167. we think there's real down side. >> oh, man. from october on we already said i'm out. i'm out. i'm out. i already had my 30. >> the calendar year call

suddenly became a four-month call. >> what do you call it -- >> you're at 12,929 and you're taking a victory lap? >> oh no. >> you'll be back when we hit 11 -- >> we are about to get alcoa -- >> we're not there yet. >> we're at 1,400 now. don't take a victory lap. >> oh, i'm not. i'm criticizing your victory lap. >> i wanted to quickly fit this in. we have alcoa reporting after the bell. even though expectations are lower for this earnings season, how does this shake out and what does it mean for hitting that price target? >> i think the earnings are going to be fine. expectations aren't that high. i think as you look out till next year, the bottom estimates the analysts have a are for 119 earnings -- >> for 2013? oh, gosh. >> year end price target, that

silly exercise, i'm in my office in december '11, time thinking what 2013 earnings are going to be and how you'll feel about them in 2012. >> so you think it's going to be fine this quarter but -- >> it's going to be fine. but as the year unfold, you have less tail wind from currency and commodity, less ability to drive out labor cost. it's harder to get a margin expansions that huge. explain why we have a huge fiscal cliff yet analysts are betting 13% earnings growth when 80, 90% of the companies are supposed to have margin expansion at that time. so this isn't all about the market is going to nosedive in the next week. it's more about why should you pay more for earnings --

>> but it's a go-away strategy? >> i can see that happening. >> now you're making faces. no? >> i like when it's 1,400. >> i like it when there's a healthy amount of skepticism. >> one person doesn't make a healthy amount of skepticism. >> adam, i'm going to call you adam the bear. when you become bullish, let us know, we'll have you back. >> coming up, it's trump tuesday. billionaire and entrepreneur donald trump on the masters, real estate, gas prices and commit all ahead on "squawk box." >> time now for today's aflac trivia question. on this day in 1984 what song by paul mccartney and michael jackson reached number one on

the billboard hot 100 list? the answer when "squawk box" continues. aflac! quack! like medical bills they don't pay for? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!! [ thlurp! ] aflac! [ male announcer ] help your family stay afloat at aflac.com. plegh! a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it and tailors it across all the right points, automating all the right actions,

to bring all the right results. [ whirring and beeping ] it's the at&t network -- doing more with data to help business do more for customers. ♪ to help business do more for customers. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. on this day in 1984, what song by paul mccartney and

michael jackson reached number one on the billboard hot 100 list? the answer: "say, say, say." >> aflac! >> i can't say i know that song. no comment. california's $2 billion citrus industry is under attack. the culprit? a small bug that feeds on fruit and carries a disease that kills citrus treed. -- trees. a 93-mile area is already under quarantine, no fruits are allowed in or out for the next two years. the bug carries a disease that kills the tree's vascular system. that's terrible. >> it is terrible. if you have comments or questions about anything you see here on "squawk," send us an e-mail. you can follow us on twitter @squawkcnbc is the

handle. coming up, how small business owners are feeling about the stay of the economy when "squawk" returns. coming up, a man who needs little introduction. billionaire donald trump join us us for another edition of "trump tuesday." politics and business collide right here on "squawk box." duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. omnipotent of opportunity. you know how to mix business... with business. 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 could get used to this.

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breaks news. the march business optimism index is out and we have the results. the index was at 92.5% in march. that's down 2 points and that was the first drop after six months. 22% of respondents say weak sales are their top problem. plans for capital expenditures declined, though job creation remained a bright spot. joining us is the chief economist at the national federation of independence. bill, good morning. was this headline as week as the numbers suggested?

>> i think it was unfortunately. we had six months of good news in the index. we thought we might be on a run. looks like we're having a replay of last year. we had good numbers in january and february and then the economy tanked and we recovered from a low of 88 up to last month's reading, which was just about the same as february a year ago. now we're down. the general picture is we can't seem to get the index out of recession range, which means owners not optimist bik the future and they're not going to hire or spend or do anything other than what they need to to keep the status quo. >> we're showing categories that declined. job creation appeared to have shown some encouraging sign. what exactly do companies seem to be saying about hiring? >> we did, you know, looking back over our shoulder, we had a really pretty good job creation number. we asked them if they increased or decreased employment and by

how much. the average was the best we've seen since a year ago about this time. but didn't really show up in the government numbers. maybe because of the good weather we really hired people in january and february that we normally would have hired in march so when we added the seasonals the last few months looked good and in month didn't look so good, i don't know. but we didn't get a good jobs report, certainly worse than we expected even. but going forward we now had a 4-point decline in the net percent of owners who plan to create new jobs and job openings that are hard to fill, that lost a couple points. looking to the next three to six months, nothing looks very exciting. >> and this is consistent it seems with the theme that is emerging, which is that perhaps hiring got a bit ahead of growth projections. it's not credit availability that is an issue. very few cited that as an impediment to growth. >> only 3% said that was their

top business problem. their top three of course as you pointed out, weak sales 22%, taxes 20%, regulations and red tape 19%. that's are the issues for them. and nothing's really changed there i guess because nothing's going to happen in washington. so the outlook for getting improvement on any of those front is not too good. >> a step back in the small business optimism, falling 2 points. bill dunkelberg, thank you so much. >> it is tuesday so therefore it is trump use. donald trump joins us on the squawk line. you saw the playoff. did you watch every minute or it or do you have other stuff to do? >> pretty much every minute it. >> how about bubbia? >> i think he was absolutely great. >> how about the story, the pink driver, his father. he said i can't say i dreamed

about it because i never really thought it was possible. the sobbing. just adopted a little boy. i hate to look at things monetarily but does he have a future or what? >> well, he's got a great future and he's the longest hitter, just about the longest hitter and he's just a good player. i played with him a few years ago when he was very young and i said, man, does this guy hit it long. i played with him before anyone knew who he was. and he was great then. it's nice to see this happen. >> i mean, i can hook and slice a ball like him, not nearly as far. usually i'm not trying to do it, though, donald. that's a problem, right? >> that is a problem. his last shot -- a friend of mine was there yesterday and they stood over that spot and he said he doesn't understand how it's possible to have hit the green from where he was. >> it was a gap wedge, too. it's impossible to put any spin on a regular pitching wedge. that's unbelievable to be able to do that. >> well, he's very talented joe.

>> hey, donald, do you have a swiss bank account? have you ever had one? >> no, i don't have one actually. >> why do people have them? >> well, you have some people who have them for good reasons and then you have some people, as you probably have heard, there's a little rumor that use swiss bank accounts in order to avoid paying taxes. >> avoid or evade? >> both. >> one is against the law, one is not. >> i would say both. >> but if you are wealthy -- in your case i'm not saying if. so you are wealthy. how many wealthy people have swiss bank accounts where there's nothing sinister going on? >> i don't know too many that have swiss bank accounts period. but there are some and i guess they're international investors and i'm sure there's nothing wrong with it. but when i think of swiss bank accounts, usually i think of

something of on the sinister side. >> people are trying to make an issue of the fact that romney did have a swiss bank account. >> a lot of people do have them. they're international investors. so there's nothing wrong. some people have sinister motives. i would say most of them don't. >> where do you want to go? do you want to talk buffett rule? >> as you know, buffett is being sued, his companies, for not paying hundreds of millions of tax on netjet. it's wonderful to talk about everyone should pay more tax and kill the economy by the way but everyone should pay more time. in the meantime he wants to pay more tax but he's being sued for hundreds of millions of dollars. why doesn't he just write a check and drop the lawsuit. >> when he said to mcconnell, he said he'd match it and double

it? >> triple it. >> i think if he said -- he's able to say i'll go a thousand times what you paid. that might have been something worth doing because then mcconnell might have done a hundred thousand. >> i think it's a lot of pompous talk and it sounds wonderful but it doesn't play. what really doesn't play is he's in this massive litigation over hundreds of millions of dollars. why doesn't heap just pay the tax? >> i disagreed with you initially when you said ryan shouldn't have done that. paul's going to be later in the show. you thought people would take that budget, twist it and and use it as maybe not what it is and that's exactly what happened. i don't know if you saw that reasonable centrist, paul krugman, he's kind of right in the middle. he wrote about it yesterday. paul ryan, his name is being

dragged around. you were right about that. >> thank you, joe. when you say i was right, i'm right about a lot of things but you've never said that before. joe -- >> maybe paul ryan was right. so you put something forward that actually addresses some of these things and because it's going to be used by the other side and twisted around, so you think that's okay to be right on that, donald? >> it's not a question of putting it forward, it's a question of when. he put it forward right before the election. he should not have done it. it was obama's job to put it forward, not his. >> he got zero. >> it is catastrophic what he does. if they lose, it will be the single biggest reason why the republicans lost. the ryan plan. >> but what you're saying, donald, is that you should hide your real motive. >> i'm not saying anything. i'm saying put a plan out but don't do it before the election. >> all right, larry. go ahead, larry.

>> donald, that's what's happened for the last three years. under the senate democrats haven't passed a budget for three years. the president's budget doesn't get any support, even from his own party in the congress. so there's no other credible budget. don't you think ryan is doing the country a favor? >> he's not doing the republican party -- by the way, larry, you look well and you look thin. i'm very proud of you. you'll have to give me the secret. larry is my friend from airplanes. we ride airplanes together. >> we do. we do. >> and i have great respect for larry by the way. larry, i'm not saying anything. i'm on saying the democrats, who i know many of. elive i live in new york and i know many democrats. in fact, i've been criticized, he knows so many democrats. that's a good thing. people have to get along. rye want puts out this budget, which whether you like it or not, is catastrophic for an

election. right after the election, if they're smart they'll all get together and make a deal. there was a republican woman in buffalo one year ago who could not have lost the election, she was very popular, very attractive in every respect, could not have lost. ryan put out his budget. she embraced the budget and shy lost in a landslide. let me just tell you from the democratic side they are just salivating over the ryan budget. and i think the worst thing that a man that i have great confidence in and i think will be a terrific candidate and president, i think the worst thing he can do is strongly embrace that budget, if he wants to get elected. >> donald, i appreciate the strategy behind what you're suggesting but when it comes to the merits of paul ryan's plan, you think what? >> i i'm only saying this -- i'm saying whatever plan you put out after the election, to put out a plan where you're knocking medicare and to put out a plan

where you're knocking the hell out of medicaid and many other things just prior to the election and the president is sitting back very brilliantly watching this and laughing. you put it out after. paul ryan will go down -- this will be the single worst move in the republican party for many years. this is going to be catastrophic. and i will tell you one thing, if i were a republican, i wouldn't be putting it out right now. now, i'd put out a plan. i don't know if it would be that plan, i'd put out a plan right after the election because after the election you have a good chance of making a deal. but for him to embrace this and put it out -- let the president put out a plan. what is he doing? by the way, let the president put it out and as soon as he put it out, you're going to criticize that plan. butt president seems to be smarter and he's not putting out a plan so there's nothing you can criticize. >> if the republicans put one out that said we'll promise you all these things, you can have it all and it's going to be

great, you couldn't distinguish it from a democrat's budget. >> they shouldn't put out a plan at all right now, they have to wait till after the election. to put out this plan is madness. >> you couldn't distinguish yourself from the other side if you -- >> yes, you could. you could knock the hell out of the president's plan. he's not putting out a plan because you know why? frankly here, gets it. >> because if he put a a plan, it would be worse for him? >> the fantastic wheelchair scene will be played over and over times ten because what paul ryan has done. now, i like paul ryan and i'm not knocking anything about his plan. i'm just saying the timing of this plan is potentially catastrophic for the republicans. >> donald, as a realist, i'm not saying you're a cynic, i guess i'd call you a realist bei isred to be elected to do anything for the country. so if you do something with well intentions and you put this forward and you don't get elected because of it, it

doesn't do you much good, does it? >> it doesn't do you much good at all. i'm just saying perhaps paul ryan is a bright guy but he's not a good chess player. did you ever know people who aren't very bright or aren't very bright, they know or don't know how to play chess. this gentleman is not a good chess player. that's all i can tell you. >> anyone who is in politics, if you call someone a good politician, that's a pejorative thing. >> i'm worried that you're saying they talk out of both sides of their mouth. they sandbag -- >> andrew, i'm saying right now for them to be talking this way just prior to what will be a vicious, vicious -- the most vicious ever election and then to put out a plan where you're hitting medicare and medicaid and social security? >> don't you want them to be up front about -- >> they can do that and they'll lose. that's wonderful. let them do that and they'll

lose and the democrat will be laughing all the way to the bank. >> just shifting gears wheel il have time. is this a summer slowdown? does it have to do with energy prices? >> energy is really getting bad. there's plenty of it around. there's ships around the say that don't know where to dump their oil but because us pohopek prices stay high. i believe obama, i assume he's smart enough do this, i believe obama made a deal with the saudis to dump a lot of oil into the system. if gasoline goes to $5 a gallon, which it very welcome this summer for cars, obama is not going to win the election. he's just not going to win the election. >> where do you think unemployment -- if we get to 7.8, that was the number when he took office, 7.8. do you think he gets a round trip back town to where it was? >> it's a phony system. look at the last numbers. it went from 8.3 to 8.2 and we

had bad numbers. if the numbers are bad, how did it go down? it went down because a lot of people have given up looking for jobs so they don't consider them unemployed. so the numbers are totally phony numbers. your real number is probably 18% or 19%. some people, i don't know about larry, but some people say 21%. but every time somebody drops out, he's no longer in those numbers. look at this last week. it goes from 8.3 to 8.2 and i said how could that be possible, the numbers were terrible. so the numbers are fixed for politicians so politicians can get elected. that's all these numbers are. the unemployment is high, it's massive and other countries are making our product. >> did you trademark that? >> well, i have that -- trying. i mean, it a hell of a thing to get, i will say that. >> you're famous for "you're fired." you saw who good the ratings

were the other night. you have to love me because you're on nbc. >> i don't. >> the word himself but out of his mouth with the inphotonatii. >> you hire one people each year, right? >> i hire one person. louf got fired on sunday. it was a rather emotional time. >> you had some muscle there. he didn't get mad at you, right? >> fortunately not. you doesn't want lou too mad. he's a pretty strong guy. >> donald, what is the worst reaction you've got when you fired somebody? >> well, if you really think about it, when i fired joan rivers' daughter, she went crazy, melissa. now, some people would say she's a spoiled brat, others wouldn't. but i fired her and she went totally nuts, and i would say possibly of all of them -- i didn't fear exactly for my life but that was probably the most

emotional. it was crazy what happened. >> who is the craziest one on this year? >> well, we have a lot of them. we have a lot of them. but arsenio hall, we have lisa lampanelli. clay aiken is very, very solid, very strong, very solid. we have paul tuttle, sr. he's a tough cookie. we have miss universe, who is a great beauty and amazing beauty and turn us out to be very smart. >> the transgender, are you going to let her in? did you make a decision on that yet? >> i did. we went by the laws of canada and the laws of the united states. so she'll be participating in miss universe canada. are you in favor of that decision? >> i don't have a problem with it. i want everyone to be happy. >> i want everyone to be happy, too. so we let her into the contest. there's like 60 other people, some of whom are not thrilled. >> all right. well, we covered everything, i

think, with that last question. donald, we appreciate it. we'll see you next tuesday on the next trump tuesday. >> another delay on a drug to treat obesity. and still to come, budget committee chairman, congressman paul ryan joins us on the escalating budget in washington. "squawk box" will be right back. >> tomorrow on "squawk box," staples founder and the nhl playoffs. nhl commissioner gary bettman is our special guest. i absolutely love building locomotives. i knew i wanted to design locomotives from when i was very young. [ jahmil ] from the outside it looks like such a simple device. when you actually get down into the bare bones of it, there's so much technology that's submerged. [ rob ] my welds are a signature, i could tell my welds apart from anybody's.

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with xerox, you're ready for real business. . futures still pointed lower this morning. that's after yesterday's selloff. coming up we'll have a chat with congressman paul ryan. stay tuned. and later, healthy profits from investors. keeping investors happy since the company's ipo last april. gnc's ceo will join us in the next hour. "squawk box" is coming right back. what the world wants to know and share is here.

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welcome back to "squawk box" on this tuesday morning. our guest host today, larry lindsey. you're in town today working on something called the 4% project? >> yes, 4% growth project, sponsored by the bush library. >> is 4% a realistic growth rate? >> we should certainly try to get to 3 before we get to 4. that would be a good step. but, yes, after periods of important technological change and particularly policy reform eve hit spurts of 4%. if you want the unemployment rate down and budget balanced, you've really got to get growth up. >> you guys are studying mostly

tax ees today. >> today is taxes but there's studies on regulation. >> if there's one thing you could do on taxes to get you closer to that 4% number, it would be -- >> a border adjustable system. right now if you produce something in china and bring it here, you don't pay any taxes. produce it here, you pay a lot of taxes on it. if you want to level the playing field, we have to have something where taxes are equalizing when you cross the border. >> fair enough. in the meantime, joe, coming up in the next hour of "squawk," the budget charity -- read it together? okay. >> it's the man of the hour. >> paul ryan on why his budget plan is the best blueprint for america's future. the donald doesn't agree but we'll talk about that when "squawk" returns. it of trepidat, not quite knowing what the next phase was going to be, you know, because you been,

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you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. our squawk newsmaker of the morning, congress paul ryan joins us to defend his budget. he's been possibly mentioned as a possible running mate for mitt

romney. >> and he's a supporter of rights of union membership. >> they take so much money out of my paycheck. i don't know why you voted them in. >> don't look at he. i never got a vote. >> plus triple a tells us why gas prices could go back down ahead of the driving season. is it time to plan that summer road trip? >> well, up and at 'em. >> the third hour of "squawk box" begins right now. ♪

welcome back to "squawk box" here on cnbc, first in business world wide. i'm joe kernen along with andrew ross sorkin and kelly evans. becky quick is off today. larry, not much happening today, a little bit of a bounceback as we kick off earnings. are you still on instagrams? >> i need money, a billion dollars. 500 million they were worth. >> there's a point where so many people use things to constantly alter their perceptions and representations of reality. it's so easy to everyone to do

these days. >> i still don't think it worth $1 billion. we are kicking off earnings seasons today. alcoa kicking off after the bell. some analysts are suggesting a weak season could create an excuse for selling. that whole idea of sell in may and go away, thompson reuters reports first earnings growth expected to be 3.2%, that number falls to 1.8% if you exclude apple. the big apple. it's amazing how large a component that has been to this growth story. in other news today, the white house pushing its case for the so-called buffett rule. a newly issued report says taxes for top earners has fallen significantly since 1995. president obama will continue his push for taxes on those who

mike higher wages today in a speech in florida. >> beavis and butt head. >> the fda has delayed a decision on vivus's obesity drug and plans to vote on a provia for july 17th. that news is pressuring vivus shares. >> a quick check of global markets now. european markets are trading lower since friday's week jobs report in the u.s. the losses were compounded by the weaker than expected import numbers in china, which have always raised concerns a possible slowdown in chinese demand. >> ping is going to sell 5,000 pink drivers in honor of bubba

watson's masters win. the interest for pink drivers were extremely high 5% of the sales would go to bubba watson's charities. watson will join us today. bubba lost his father just after he was in a playoff in the pga. he's always been very emotional about his father who died at a pretty young age. he was bubba, sr. >> bay the way, worth noting, yesterday ping said they wouldn't be issuing. and then he said but of course they will. and of course they did. give the man some credit. >> we should give the man some credit. >> paul ryan has been making the rounds this morning. it's okay because he was on nbc's sister network of ours and i saw him on ms. if he appeared somewhere else, he wouldn't be on this morning.

while i'm at it, i don't know whether you wanted to share it with our viewing audience, larry, but after we had that conversation off camera and we heard again he's in a swing state today, president obama giving a speech on the buffett rule. no chance of it going anywhere. we know that. and also over ten years for the budget it does $47 million. it doesn't really help substantively for anything that we've got going. this is what we're going to see? this is what we've seen for six months and what we're going to see till the election, not really doing the job as president. the budget he introduced, that was a real budget? what was the number? >> well, it didn't get any votes. >> got zero votes in the house of representatives. it was drawn up by the majority leader of his own party. >> ethically you said the republicans should introduce a budget. don't you think the president should introduce a budget? >> absolutely.

>> what's going on? >> i talked to the white house. they should and they don't. maybe donald's right. maybe obama politically dethat strategically it's a better decision not to. >> he said he wanted to do it after the election but the democrats in the senate haven't passed a budget for three straight years. so when it after an election not after an election? if you're never going to do it for three years, at least ryan is stepping forward. >> let's get to him. he's here. leading policy maker teaming up with george bush institute to target taxes in america, congressman paul ryan, budget committee chairman, senior member of the house ways and means committee. i was looking for bruises. you are the current pinata of the left and the right. we just had trump on. trump is upset that you didn't wait till after the election to give the american people some of -- i think we have -- will you listen to this, congressman? here he is just a couple minutes

ago. >> i like paul ryan and i'm not knocking anything about his plan. i'm just saying the timing of this plan is potentially catastrophic for the republicans. >> so donald is cynical but maybe it is a realistic viewpoint. obama can lay in the weeds with a budget that got zero votes from either side and doesn't tell the american people any hard choices they have to make. so you tell them and grandma and grandpa think they're going to be out in the snow starving after they read your budget plan. was that a wise move? >> i think it's wise to be honest with the american people about the problems we have ahead of us. i think it's reasonable to put a plan on the table to avoid a debt crisis. i think the analysis is correct. the president has chosen to punt, not to lead on this most pressing issue of our generation, wait for the republicans to offer their plan, then attack. that's his method to political

success to the election. i think people are going to see through this. where i come from in a very swing area in america, in wisconsin, people want to be talked to like adults, they want the facts, the truth, they want ideas and solution. they don't want to be pandered to by children. i don't think that strategy of punting and attacking is going to work at the end of the day. we have a moral responsibility if we see a problem, fix it. isn't that why we're elected in the first place? >> paul kreuger's panties are all bunched up today. this was actually yesterday's story. and up know what, you're actually causing a fight between him and david brooks, who is sort of the "new york times" pseudo, quasi conservative. but you even got those two guys on the wrong end of this. have you ever been called a reactionary radical? >> well, i've got three certainties in my life now, joe.

i've got death, taxes and these kind of unhinged attacks from paul krugman. i think it's appropriatiproject these criticisms of you and put them on your adversary, political opponent. we have a debt crisis coming. we know why it's coming, we know when it's going to happen approximately and more importantly we know what we need to do to prevent a debt crisis. so let's do it. that's what we're trying to do. >> krugman says you have $4.6 trillion in and it's going to be -- you're going to cut tax toes that extent and he says you're going to close loopholes to make up for the lost revenue and you haven't identified any loopholes. >> krugman has different math obviously. we're not banking on the biggest tax increase in history kicking in in january. we're saying keep tax revenues where they are today, replace

this tax code with a better one, that is broader based, lower race. ask irskin bowles, he same thing and bring in the same revenue we're bringing in today. in our budget the revenue baseline goes up above the 40-year average. the problem, joe, is spending. spending is set to double, then triple over the course of this century. we have to deal with the spending. it's a spending driven debt crisis. we don't want to try to tax our way out of the problem. if we do, we'll shut down the economy and never close the gap on the deficit. let's get spending under control, do it in a gradual way so people can adjust accordingly, prevent people in or near retirement having any i disruption in their lives and get people back to work. >> he says 4.6 trillion is the revenue cost over the next decade of the tax cuts which go above and beyond making the bush

tax cuts permanent. that's from the nonpartisan tax policy center. >> that's because we repeal obamacare, which has lots of tax increases as well. we're saying we don't want all these new tax increases to kick in and keep tax revenues where they are. that's not cutting taxes, that's not raising taxes. so they're operating from a premise that they assume a 4.6 trillion increase will hit this economy and if we don't sign up for, it we cutting taxes. we're saying no to tax increases, keep our tax revenues approximately where they are and focus on getting these entitlement programs, the drivers of our debt, under control and that's why we're proposing these reforms. >> congressman, why not identify which loopholes you plan on closing? that's one of the central issues in all of this. >> because a budget resolution does not actually have legislation. a budget resolution is a resolution passed by congress.

it dwifs instructigives instruc committees to put all the details together. that's what the ways and means committee is to do. they'll have hearings all summer long to say who should get them, who should not. that's what dave camp is beginning to work on that same process. we want to do this in the light of day. we don't want to do this in some back room. we want to do this with a dialogue with the country to decide where is the best place to put tax policy. and i would simply say, andrew, if you take a look at all this class warfare rhetoric is the buzz these days. look at who gets all the tax expenditures? it's the people in the top two tax brackets. my point is if we take away the tax shelters, more of higher income earner's income is subject to taxation and we can use that to lower tax rates for everybody. let's not forget that 4/5 of

businesses in america file their taxes as individual, not as corporations. when you have their tax rate go up as high as 45%, which is scheduled to happen in january, you're going to kill economic growth and kill job creation. it's going to make the situation worse in our judgment. >> paul, this is larry lindsey. of the roughly 400,000 people who is heis over 4d million, do you know how many are affected by the buffett rule as opposed? >> 80% are pass-throughs last i knew. there's a changing definition of what the buffett rule is. we see all these different definitions of the buffett rule. if you're taking a look at the people in those top tax brackets, eight out of ten of them report small business income. >> they're paying -- on the last slide they had, just 5% of those

people pay 15% or less. 5%. >> right. >> you means effective tax rate. that's right. that's right. >> the buffett rule isn't going to affect a lot of people. >> no. >> it's a great talking point. >> it pays for about 6% of the president's proposed deficit spending. he's not using the buffett rule to -- he's using it to spend more money. if that was secret to economic success, we would have lend it by now. >> congressman, it seems the flaw what n what you're proposing is the assumption that by significantly cutting taxes, that alone won't -- if the economy is different than it was two or three decades ago and we're not going to get the growth we've seen in the past, will that not leave us with a gaping deficit? >> we're saying cut tax rates but not sacrifice revenues

because we're plugging loopholes. it is different than two, three decades ago. we're in global competition, an industrial economy. overseas, which where i come from means lake superior, the canadians just lowered their business tax rate to 15% and ours is going to go as high as 44.8% in january? i would argue the point is even more pronounced now in global competition. when we tax our job creators at much higher tax rates than our foreign competitors are taxing theirs, they win, we lose. we have to be mindful of international competition. 95% of the world's population is outside of this country. we have to make things, build things and export things if we want a high standard of living, a growing economy. when we go down this path with this class warfare rhetoric which leads to really high tax rates that hits these job creators, we're not going to be able to compete. you need a combination of economic growth and job creation along with spending discipline and entitlement reforms to get

this debt crisis under control. that's price siecisely what we' proposing to do. i want the country to have a choice. do you want the president's path of a path of debt and decline or get back to the american idea, the opportunity society with a strong safety net that is wired of getting back to work on the lines of self-sufficiency. this is going to be the most important election of our life times, no matter what general racial you come from. we feel we have a moral obligation, not to mention the law says we have to pass a budget, which the senate is ignoring. >> you just proved all of krugman's points. everything you talk about is all you're doing is trying to help corporations and businesses in this country. i just heard it very clearly that's what you're trying to do. you just made his case for him. you're not government -- you're not trying to help governor at all, just trying to help all these private companies. >> we just want people to go back to work. >> congressman, i know you got

to run. we've been talking about it all morning. do you have a swiss bank account? >> no. my account's at johnson bank in wisconsin. >> good to know. >> you and walker. what is it with you people out of wisconsin? the voltamore twins. >> if you want to be good at these jobs, you have to be willing to lose these jobs. be honest with these people so we can fix the state of our country. >> very interesting stuff indeed. >> coming up, his battle against unions won him the nickname of "dr. evil" from labor unions. rick berman's bill makes it easier to disband unions. he'll join us next. to get you into your car.

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a proposed employees rights act would give employees more rights themselves and take away

a large part of the union's control. joining us, rick berman who is running a $10 million campaign supporting the employee rights act. thank you for coming in. we appreciate it. these are private and public unions? >> private. >> just private. >> private sector union. it changes the national labor relations act which hasn't been changed since 1947 in any significant way. >> the nlrb has been working around the edges going the opposite way you're trying to take. >> they've been doing more than working and the edges. they've been taking a knife to the labor act and creating law where there isn't one. >> do they have defacto card check? you can unionize quickly now without telling the employer, right? >> in 2007, 2008 and 2009 a third of all union certifications were done by card check. the union comes in, gets at least 50% of the people to sign cards and then goes to the

employer, which is something they didn't used to do and goes to the employer and intim dates the player and saying we've got 50% of the cards if you don't voluntarily agree to recognize the union, you can think about boycotts, picketting, financial pressures on your board. so you get a lot of companies who will cave in because they just don't want that kind of grief. it used to be that once they got the cards, the employer could ask for an election, the union pretty much agreed to it. now they're trying to circumvent the labor board. >> that's the latest we saw -- >> it is the latest. >> craig becker was an appointment himself, right? >> yes. >> and his argument whether they were actually in recess when they were appointed. >> exactly. there's a court case to see whether or not those appointments were -- >> anything they decide might be open to a court case in the future because of the way they were -- that's neither here nor there. how would you change the charter of the nlrb?

what's your chances of success here? >> like any major issue, you're not going to introduce a bill which has been introduced by senator hatch and tim scott. but you do start a conversation inside. that's what this is doing, starting a conversation. one of the main features is to suggest after a union has been put in place, the people who are there and who didn't vote for the union let's say 20, 30, 40 years ago, they get another bite at the apple. so you've got unions today who have been in place since the 40s and the 50s and no one working in that particular union shop ever voted for the union. the actual numbers are 7% of people who are in private sector unions today voted for the union that they pay dues to. 93% never voted fortune. >> but you must know whether -- i think of union -- the whole idea of a union is they get some special things that nonunion guys don't get and it usually works out great fortunes. the criticism of the unions is

that people not in the union are left out in the cold. why would you think people in the union would vote to get out it have? >> there have been surveys and people do not want their job unionized. once you're in a union, the union rules apply to everybody. but there are lots of employees who understand that the union has put in work rules that have made the companies very unproductive. if you look at the ford contract before the meltdown of the auto industry, there were 18 pages on seniority as to where you moved when there was any sort of sl slowdown, people on a chess board moving through senior plants. in the general motors contract, the union had the company agree to which cars could be produced in which plants for how many years. if the company wanted to change that, they were going to have to negotiate with the union and pay a price for it. all of this is terribly unproductive and employees understand it and they're locked into these deals because getting

rid of the union is nearly impossible trying to get another vote. this law says every three years you're guaranteed another vote, just like you're guaranteed a revote on your congressman or your senator. >> isn't it really a matter of fairness? if you're going to have to pay $2,000 a year in union dues -- >> and you know which party that's headed to. what if you're a republican in a union? >> shouldn't you at least be allowed to vote? shouldn't you at least be allowed to vote and not have your grandfather voted in the union back in the 40s, why shouldn't you be guided by his decision? >> how many unions would be disbanded as a result of this? >> it would be at a local level and there's absolutely no way of telling. but the fact is today when unions do go to an election, they win two-thirds of all the elections they go to. you might suggest they lose a third. >> even if it was zero -- >> it's an opportunity out of fairness. >> it's a fairness issue. it's a fairness issue. >> or how about your money?

should your money go to a politician without your consent? >> if you're a republican in the union -- >> you're backing something that you're totally antithetical to. >> not all union guys are democrats. >> no, there are republicans. >> all their dues are headed to. >> 42% -- exit interviews says 42% of union members voted republicans but 95% of union money goes to democrats. >> exactly. >> this has nothing to do with the whole public union thing where you negotiate with your -- >> here's the most interesting stat of all. surveys show that 80% of union members are in favor of this law. 80% of union members of it because it gives the union member new authority, new power. when you try to take away collective bargaining, everyone gets upset. >> the 20% who are against it

say they're against it why? >> who knows. >> they might be leadership of the union. >> they're people who have a deal. it's a rigged game for some of them. >> thank you. appreciate it. >> coming up, triple a reassuring drivers that gas prices will move lower as we head into summer. other people have conflicting views on that. triple a's ceo will join us for the next half hour. "squawk box" returns after this. ♪ slow ride the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers. ♪ there'll be the usual presentations on research.

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. welcome back to "squawk box." among the stores we're following this morning, a new study says president obama's health care reform law could add $530 billion to the federal deficit. the study was done by george mason university research fellow. former economic adviser to president george w. bush, he's challenging the contention the law would help contain health care costs. and we're watching shares of supervalue this morning. they earned 38 cents a share for its fourth quarter. that's 3 cents above estimates and its projected fiscal earnings is above analyst estimates of just $1.19. >> thanks, kelly. coming up, we're continuing our ipo report card series.

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welcome back. shareholders are indeed living well with gnc. shares have more than doubled since march of 2011 when it had its ipo price of $16 a share. can you take a look at that chart right now and wish you had the time machine. this week we continue highlighting the hottest ipos of 2011 and 2012. joining us the president of gnc holdings joe fortunato. >> good morning. >> you should know you have a customer in myself and larry lindsey who drink as protein drink every morning.

>> i'm a gold card member. >> we need to get joe aboard now. >> i need some fiber. >> we've hottest ipos. if you had a time machine works you have liked to have priced your ipo a little higher? >> looking back you could absolutely say that. but when you reflect on the typing of the marketplace, we went out in april 2011, ipos were really not in favor at that point in time. so i think in that market, you know, you always think you can get a little bit more but our opinion has always been go out in the market when the timing's right, the business was prime for it, we had laid out all the strategies, we were performing well and we knew that we had great expectations ahead and the market will always adjust the stock value to what your performance is. >> that begs the question. you've gone on this big run, right, huge run. you have reached the top? people say you go on a run this

quick, people think it's hard to keep going. >> it's always tough to hurdle these tough numbers. but we had double-digit growth, comparable store sales last year. we've had tremendous leverage on our retail business. all our businesses are performing extremely well so we're very pleased with that. we've laid the plans and strategies that are working in the past, have worked in 2011. our international expansion, our web business, our focus on existing international markets, the premium and dominant positions we have in the united states. we think we're positioned not only now for what we've already done but we are well positioned to continue to have good prognosis ahead. we have a lot of runway. >> how much do you worry about regulation? i ask the question only because so many of the products that you sell are not regulated by the fda or others. there have always been concerns

about some of these products. i, by the way, drink -- i don't know if it's working, this muscle milk stuff. a year or two ago they came out and consumer reports or something found it has lots of heavy metals in this that may not be good for me. you have hydroxycut and all these other drugs. how do you feel about this issue? >> we are one of the safest industries that exist. we've had rough 4,000 adverse event reports under the reporting system in the last four years. and if you look at the pharmaceutical industry, they've had 475,000 in just one year. if you look at this industry and say, sure, the regulatory environment always exists, we have many, many ways to control the industry, the fda has ways to control the industry, good manufacturing practices. we hope gnc leads the way. we believe we are the leader and the fda turns to use to control

the environment. but if you look from a safety factor, this is one of the safest industries. >> who do you consider your biggest competitors right now. >> i think you have vitamin shop and i look at competition that can come from everywhere. we have mass market, it's really not our consumer base. you have vitamin shop, who is a specialty store but really doesn't have a premium national brand or a global brand like we do. so i think we are, you know, leaps and bounds ahead of everybody else in many, many ways. >> joe, we got to go but before we do, i got to ask you, what do you -- what vitamins are you taking? what shakes are you drinking? >> i take about 15 different things so the list could be long. i don't know if you have enough time. but i do drink protein shakes when i work out and i take amino acids and daily multiple vitamin and vitamin d and vitamin c and

beta carotene and as you get older, you ask more. >> my question is if i go back on atkins, someone told me i need fiber. i can attest to that. >> why are you going back on atkins? because i'm fat and you lose it quick and you get to eat pork rinds. why can't i just go to walgreens to buy that? >> you can go to walgreens and buy that. our consumer is younger -- oh. that was like a dagger to the heart, joe. that's the first thing you came up with? >> our consumer skews younger. can you go to walgreens and get a single-commodity vitamin. those aren't our consumers. our consumers are lifestyle consumers. >> are you taking creotine? >> no, whey protein.

it will help you not build muscle mass but it will help you maintain muscle. i go back to our consumer. our consumer is a high-end premium consumer, very passionate, very lifestyle driven. >> younger, okay. >> he didn't even try to sell you. he said go ahead, go to walgreens, we have younger people coming to us. >> but you're not as old as me and i shop at gnc. >> joe, it's been great having you. congratulations on the success of that ipo. hope you keep that muscle mass up. >> thank you. >> coming up, summer driving season is rapidly approaching. could we see gas prices tick lower as we head into the summer? president and ceo of triple a will join us. why don't we get the guys from aa on? "squawk box" will be right back. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz.

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welcome back to "squawk." signs that fuel prices may soon start to recede. the latest triple a fuel gauge reports the average price of gasoline was flat from the week before. right now the average price is $3.93 a gallon. here to discuss this gas price landscape, bob darbelnet. good morning to you.

>> good morning. >> you're gambling. i know you're not a forecaster. your gamble is this summer we're going to see gas prices at the pump go lower? >> we're not gambling and we don't like to forecast the price of fuel but we do think the price will probably decline over the course of the summer. we have probably peaked or wear very close to peaking and the decline, as one might expect, will probably be gradual as opposed to precipitous. >> a quick question because the mix of fuel changes from winter to summer and this is one this evening that doesn't get enough attention but is partly responsible for the increase in fuel cost. can you explain to people what's happening and how much that's likely to contribute to prices staying at these or near these levels? >> the conversion is occurring and it does have an impact but it has a relatively minor impact. it relates to changing the manner in which fuel is refined for winter driving as opposed to summer driving. again, the impact that has on prices is minor. >> if had you to put it at cents on a gallon, what would you put

it on? >> i would suggest in the vicinity of a dime a gallon. maybe a little more but not much. >> are you seeing any demand destruction? >> we are seeing demand destruction. the consumption of gasoline in this country is down somewhere between 3% and 4% compared to last year. a few months ago the difference was on the order of 4% to 6%. so there is a decline in consumption and its primarily attributed to more fuel efficient vehicles. >> can we expect gas stations to lower prices as quickly? is there a reason why you might see stations more responsive? >> well, it's a function of what they're paying for the price of the fuel that they're selling. and, again, we anticipate the decline would be gradual. the only time we really saw a significant decline over a short period of time was back in 2008. you may recall that's when we had the most expensive gas we ever tracked at $4.11 on average

in july of 2008. by the end of that year it was down to $1.50. that's because the bottom fell out of the economy. the remedy for reducing the cost of gasoline might involve things none of us wants to deal with. >> bob, i don't know if you've addressed this year but is there a distinction we should be thinking about diesel? will diesel prices be fundamentally different? >> they're relatively close to the price of gas, there's about a 20 cent differential. part of it relates to the fact that almost every state taxes diesel at a higher rate than they tax gasoline. as we see the price of gasoline decline, we expect we will probably see the price of diesel decline but i doubt the gap will get much more significant than it is currently. >> wyoming has constantly had the lowest gas prices in the nation, something like $3.23 a

gallon. can you explain why ? >> can i try. part of that is because the gas being purchased in wyoming is coming from crude that is here in the u.s. and is selling at about $20 a barrel less than the crude that is used to refine most of the gas that's sold in chicago. if you think about that $20 differential in terms of the price of a barrel of fuel -- >> why is it just wyoming? there's no state that's even close to wyoming. i know they have lower taxes but it just seems interesting that this state is isolated as having significantly lower price. >> there are other states in that part of the country where the price of fuel is substantially less than it is in the most expensive state. that differential in the price of crude translates to about 50 cents difference in the price of a gallon of gas. if you add to that the tax in wyoming is half the rate of the

tax in chicago, you find another 30 cents. so now you're up to 80 cents of the difference explained. it probably costs less to deliver fuel to wyoming because it's coming from places that are closer to it. that contributes. and then it costs less to do business in wyoming in all likelihood than it does in chicago. if you think about the margins that are required to operate that gas station in chicago, they're higher. so you can probably explain pretty closely at least $1 out of that $1.15 difference. >> bob, we got to run. thank you so much. i'm curious, before you go, if i am a triple a member, where do i get the greatest discount with my membership? >> you can get it a lot of places, but if you're interested in gas prices, go to triple a.com or use one of our apps and we'll point you to the cheapest places in the neighborhood. >> i walked into that. i was hoping you would tell me i

could get a great rate at -- >> you can have jeeves look into it. >> bob, appreciate it very much this morning. >> jeeves has a triple a card i'll bet. >> i got to get one. >> my parents thought he really had a helicopter. >> he's either in the copter or the bentley. it's very difficult being the upper west side liberal he tries to paint me as. look at that look on his face. >> larry, it's such a stretch. no one buys into that. coming up, some stocks on the move this morning and a preview of this week's earnings report. we'll head done to the new york stock exchange next. "squawk box" coming right back. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements.

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welcome to the world leader in derivatives. welcome to superderivatives. welcome back to "squawk box" let's get back to the new york stock exchange. jim, what do you have for us? >> i don't know, i know europe was bad again, spain is terrible begin, italy is bad again. i know that it is just a retailer, but it is the beginning of retail season.

>> and alcoa not extremely important in terms of what's to come in the earnings season, but it gives you a good glimpse into some of the markets. >> yeah, it's building, construction, it's consumer electronics. they make the skin for the apple ipad, they don't like to talk about it because they're not supposed to. we have packaging, the new coke bottle. >> we'll talk about instagram and the guys, given the billion dollar evaluation, it's worth more than the "new york times." i'm sure you love that, right? >> joe loves that. >> that is some giggle. >> i have a picture, can they zoom in on this picture? we just instagramed ourselves,

but if we took enough pictures of ourselves, we might get some money for it. it's not working out very well. back off there, that's a little much -- >> carl, did you see i asked the gnc guy why i should go there to buy vitamins and fiber when i could go to walgreens, and he said you can go to walgreens, we have a younger demographic. >> does carl shop at gnc? >> carl is looking buff. >> i never seen jim at the drugstore -- >> you know do you american seratin spelled back wards -- >> okay, thank you so much for that. we'll see you in a couple minutes. you know what, carl compared to

you, kelly is -- -- he should know that, the difference it will haunt everyone. there will be someone younger than you some day. >> there already are. >> right there -- larry, my man -- me and you. >> you love the eisenhower years, right? 90% marginal tax rates. coming up we'll have final thoughts of our guest host. >> tomorrow on "squawk box" the chief economic advisor for president george bush. from 7:00 to 9:00 a.m. eastern from 7:00 to 9:00 a.m. eastern we'll talk jobs.rning, plus, in-branch seminars at over 500 locations,

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lindsey. we have seen this play out in the last two years like a spring-summer swoon. >> i think your guest earlier had it right. after a financial crisis it takes a long time for countries to repair themselves, especially if they don't get out of their way. if policy tries to hold everything static you don't get economic recovery. so i think we will be averaging 2%. we have a 3% quarter, we had a 2.2%, a 1%. that's the way it will go, we will be around 2% for a long time to come until we get policy under control and inside we want to go for growth. >> do you have an all bond portfolio? >> yeah, mostly in cash frankly. but i know i should get those high dividend yielding stocks,

that makes sense too. >> andrew, do we need policy to get it in a different policy for demand to come back following -- >> the question becomes is it a do nothing policy. it's a completely get out of the way policy and does it improve the cause or -- >> but eventually demand comes back, right? >> so policy doesn't matter? >> it takes a long time unless you let markets clear. right now we're not letting the housing market clear or labor markets, we're doing the opposite of what you should do to speed it up. >> how would it really feel to let everything clear -- >> you have people that want to do much more for housing -- >> we're putting politics first. we're putting