workers. "the kudlow report" is moments away. >> two right out of the chute ideas here. we have to get something again. everyone is pressuring merkel. then the market will go down further if the supreme court does not throw out obamacare. if they throw it out you will see a rally led by the retailers in part because gasoline is down anyway. that will be fuel, fuel, fuel for another retail rally. understand i don't like finances or tech. there is always a bull market somewhere. i promise to find it for you. i'm jim cramer. see you monday! hey, tyler. you're up. what are you looking at tonight? >> jimmy, thank you very much. we'll see on monday. it's been a rough week. it could get even rougher in the week coming up. i'm tyler mathisen in for larry kudlow. uh'm happy to be joined by john

bachelor who promises he'll teach me to tie a bow tie on the show tonight. >> absolutely. >> larry is recuperating and will be back monday. our top story, wall street whipsawed and the bears are battling like these two brawling bears in florida. the roller coaster ride sent investors into hiding for the week. we were down just 1% for all of that. if you thought this week was ulcer inducing. next week could be worse. wall street and for politicians. markets, the economy and politics. the three keys. we have your battle plan to protect your money and maybe make it grow. also tonight as president obama accuses mitt romney of outsourcing jobs, bun deposits are asking is president obama running against the gdp and not the gop? first we begin with stocks ending the week on a high note, rebounding from the second biggest one-day sell-off this year. if you think you needed

dramamine this week, next week could be even more -- fun, it says right here. seema mody and brian shaktman have it covered for us. seema a? >> it was a volatile week with jamie dimon's testimony on tuesday. the fomc meeting on wednesday and economic data points on thursday, not to mention moody's downgrading credit ratings of 15 global banks. today some good news from our friends on the other side of the pond. health stocks closed in the green. the european central bank said it would take steps. the finance minister of spain said the government would ask for aid for troubled banks. today's gains lifted the nasdaq back into the black for the week. tech stocks led the gains, technology being the best performing s&p sector for the week. the nasdaq closing higher, better than 1%. concerns about a global slow down did weigh on commodities throughout the week.

commodities for the most part recovered after yesterday's steep slide. traders telling me short covering. oil bouncing off of the eight-month low. crude futures getting a lift as well. that's a wrap of how markets fared this week. we have an important week ahead. investors are bracing for it. brian shactman has the details. >> the most newsworthy item. it will be fascinating to watch how health care stocks trade on the back of that potentially historic decision. the fear that the heads of state meeting in brussels won't come to an a agreement. we have important data including numbers for new and pen pending home sells and first quarter gdp. how much of a slow down are we dealing with? we'll know more next week. back to you.

>> thank you very much. let's turn to our investors breaking down their battle plans for the next week. jim iorio and jim le camp join us. welcome to you both. john batchelor will play with us in a minute and join in. jim lecamp, let me ask you about obamacare. we expect a decision as early as monday or it may be later in the week. what do you expect and how should i position my holdings, particularly in health care, hospitals, drugs with that in mind? >> i agree with what jim cramer said. if they say this is unconstitutional i think you will get a short-term rally in the markets led by the health care stocks, particularly pharmaceuticals rallying recently. they continue the rally. if the supreme court says it is constitutional, i think it adds to pressures and concerns on the market and the market sells off.

we are postured defensively here. if the ecb doesn't come with a ba zoo ka that could be a bigger risk. investors need to be cautious here. >> does it seem the ecb and the european ministers, mostly they hold summits? >> i think that right now the question is do we all work for the central bankers? that's what i want to address to guests tonight. is this global governance at last? is it one world? the central bankers in charge? you say we have down side, a correction in the markets. fine. aren't we all just living and dying for what the central banks do? aren't we all counting on the fact that there is a bernanke put and we won't go lower than, say, 5% down from here? >> of course we are. if we look at the economic data there is nothing to get excited about in that. so yesterday we saw reluctance for the bernanke fed to expand the balance sheets and pump money in.

the stock market knows reluctance is different from not willing to do it at all. we saw oil implode and gold trade off heavily because they are not a protected class. if the stock market trades off in the 10 to 15 to 20% area the chairman will slow stimulus at it. to answer your question we are slaves to central banks and we'd love to be slaves to the economy but economic numbers do nothing but trend lower. >> mr. lacamp, do we work for central bankers? >> we do. markets are driven by policy, not market forces. they are driven by fiscal cliffs, by central bank proclamations, by false rumors coming out of the ecb. >> currency continually watered down. they continue to water it down so markets go up and we feel good about it. >> yeah. listen to what the fed did this weekend. they really screwed up here. they said we're going to do this operation twist through the end of the year. they're going to create uncertainty about what happens

after operation twist at the same time the fiscal cliff kicks in. do we want that uncertainty? >> we have to give a break here. the fed realizes what they are doing is probably going to have little economic effect. the only thing that can help is fiscal and policy changes. >> right. >> so all they have is rocks and stones left. they're going to throw them. they know they probably won't do any good. >> gentlemen -- >> we know there will be qe-3, ultimately. >> that's what i'm banking on. >> i love what you said about the idea -- >> ultimately there will be. >> jim lacamp. i'm not sure which one said it, but basically we are beholden to what bankers and policy makers do. >> absolutely. >> we have not been able to generate real growth without doing one of two things. that is debasing the currency or borrowing our way to a false prosperity. >> how do you invest under those circumstances? >> what's the question?

>> how do you invest under those circumstances? >> oh, remember every central banker in the world, not just us has to devalue their currency. you've got to put your money in stuff. big cap u.s. with good balance sheets to me is the world's tallest midget. >> every major country holds gold. that tells me that it's attractive. is it attractive to you with the watered down currency? >> it's very attractive as a currency and a store of value. ultimately you want resources but volatility stays with us. investors need to get used to trimming what they don't like and having the portfolio on rallies and nibbling at what they do like on sell-offs. these aren't going away. the only good news is that free markets fight back. when we see bond riots in spain and italy those are free market forces fighting back. ultimately they win because investor wills walk away. >> i think i heard him say he likes gold. >> he did.

>> i did. >> the two jims, thank you very much. john, i was at a conference this week. one of the most persuasive investors said he felt what you have to do right now is buy things that are scarce. he said gold was scarce. aggregates are scarce. tokyo real estate is scarce. that's where you make makeup in the low interest rate world. interesting point of view. >> risky assets? >> some. >> or low risk? >> some. >> i like cotton. >> all right. we have breaking news coming in to cnbc. google's chief executive larry page trying to reassure employees and investors that there is nothing seriously wrong with him. our technology correspondent jon fortt joins us with the fast moving details and news from the silicon valley. jon? >> we have verification that google employees have gotten an

e-mail from page saying there is nothing seriously wrong with his health that's been affected by this voice issue. he said he's going to continue to run the company. this afternoon i'm calling around trying to get this e-mail in hand. so many google employees are still at work. they are a little hesitant to e-mail out the internal e-mail which is interesting from a privacy perspective. he is trying to reassure inves tors. certainly employees. not clear why they haven't put it out for everyone. analysts. >> he did miss the company's annual shareholder meeting. i believe schmidt said he was not expected to be back in talking mode until sometime in mid july. jon fortt, thank you very much with the late news on larry page. programming note for monday.

larry will be back with exclusive interviews with dallas fed president richard fischer and pimco's neel kashkari. the political

welcome back. i'm tyler mathisen filling in for a convalescing larry kudlow who will be back on monday, his back fixed. what's the difference between outsource and offshoring? president obama attacks mitt romney over it. eamon has the details. >> the obama campaign woke up to what they must have seen as a big gift on the front page of the washington post. a story analyzing how bain capital and mitt romney were some of the early investors in companies that participated in the outsourcing of american jobs. in many cases overseas. the president speaking today to an audience in florida took full

political advantage of the story. take a listen. >> let me tell you, tampa. we do not need an outsourcing pioneer in the oval office. we need a president who will fight for american jobs and fight for american manufacturing. that's what they plan will do. that's why i'm running for a second term as president of the united states. >> this afternoon the romney campaign fighting back arguing against the very premise of the story in a statement saying this is a fundamentally flawed story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support u.s. exports. i was talking to the romney campaign. they told me tonight that the overseas jobs created by companies were designed to serve overseas customers, not customers in the u.s. nonetheless the obama campaign see this is as a political whipper for them in an era where people are so unsure about job security they held a conference

call this morning to hammer away at this. we can expect to see more of that as the campaign goes on. >> thank you very much. obama is clearly laying out the battle plan against mitt romney. what about his battle plan for the lack luster economy? we've said it before and will say it again. this election is all about the economy. especially if this summer stall becomes a fall freeze. in fact, one might say this 2012 race isn't president obama versus the gop. it's obama versus the gdp. let's ask our guests. here now the jared bernstein, former chief economist for vice president joe biden. steve malanga. manhattan institute senior fellow and author of "shakedown, the continuing conspiracy against the american taxpayer" and small business owner jim gartland, author of "the practical guide to exceptional living.

jared, you work for the obama administration. is he running against the gdp and not the gop? >> look, i think every president incumbent running for a second term is looking back over his shoulder, probably less gdp than at unemployment. that doesn't sound as clever as gdp versus gop. unemployment is important, obviously income growth is important. and, sure, the rate of growth in the economy is a critical variable. i think the president can correctly point out that when he took office gdp was cratering at an 8% rate. that's the rate at which gdp was declining in the last quarter of 2008. starting in the third quarter of 2009 gdp began to increase. it's up 7% real since then. about a trillion dollars higher. believe me, you will hear the numbers in coming weeks if you haven't already. >> steve, the public thinks jobs matter.

joblessness, the employment number. is the public right to focus on such a small part of the metrics of the economy? not the gdp but just jobs? >> well, i think they are right. first of all, that is the thing you look to turn around first. first of all, it is the human element. yes, we can talk about how the value of productivity and added value and that ultimately comes down to human value. the real human value is people out of work. when when you want the economy going in the right direction you don't just want a bump in gdp. you want to see people going back to work. >> jared, we have five unemployment numbers until the election. is the public right to focus on the unemployment numbers and measure the president's performance on the basis of whether we are going higher or lower? >> you know, i think the public probably doesn't pay nearly as much attention to the numbers as we think we do. what matters to the public is how the economy feels to them in their neighborhood, in their community. if people are experiencing the

economy, even getting a little bit better, that helps. if they experience stagnation, that doesn't. an unemployment rate moving from 8.5 to 8.3 to 8.2 to 8.0 feels better than one that's stuck. >> we have had disappointments the last few months. it's a trend that's ugly. if that trend continues is the public right to make it part of the campaign? >> i think if that trend continues it's tough on the incumbent because it's precisely the kind of stagnation i mentioned. the incumbent needs momentum. the absence of momentum is challenging for him. >> jim garland, let me turn to you to ask whether the obama administration, its policies and the probability of some sort of health care reform, we'll find out on monday. has it made it easier or harder for you to do business, easier or harder for you to hire workers? >> it made it harder and it will be a lot harder in 2014 when the

mandates kick in for small businesses. my company has 70 employees. when that kicks in we are right at the 50 fte, full-time equivalent threshold. that's when we find out if we have to provide coverage for everybody. are they going to fall under the individual mandates. >> do you provide coverage now? >> we do. >> would you be tempted to go ahead and pay fines even if they tipped over into the 50 plus where it would cover you. would you consider doing that? >> it depends on what the cost is. say i had 40 employees i was providing health care coverage for, it's $2,000 to $3,000 an employee. if i pay the fine because it was less expensive am i ride writhing an $80,000 check at the beginning of the year? these are the uncertainties a small business owner is paying for now. >> health care is one of the uncertainty.

dodd frank, whether we'll see europe stabilize. there are a lot of uncertainties. does the market respond to those uncertainties or is this a political game and it's not actually in the economics? >> do you mean the stock market? >> yes. >> the stock market responds but the stock market can turn around like this. the economy can't. jared used the correct word talking momentum. all the signs are that momentum is slowing down, going in the wrong direction. if the economy is a battleship, president obama has to have it turn around before he can gather speed. >> there was a great point. we have five more unemployment numbers before the election. do americans know what the gdp is? i'm sure they know what unemployment is. >> it's a matter of how they feel the economy on the ground is working for them and their lives. if congress wants to do something helpful, fix the fiscal cliff. compromise and get it behind us. >> thank you very much.

steve, jared and jim, we appreciate it. another programming note for monday when larry returns, marco rubio of florida will be his special guest. very interesting booking there. coming up next, the father of our country, george washington's 223-year-old copies of the constitution and the bill of rights went up for auction today and they went for a lot of money. the full details and the unlikely buyers -- maybe not so unlikely when we come back. tdd# 1-800-345-2550 let's talk about fees. tdd# 1-800-345-2550 there are atm fees. tdd# 1-800-345-2550 account service fees. tdd# 1-800-345-2550 and the most dreaded fees of all, hidden fees. tdd# 1-800-345-2550 at charles schwab, you won't pay fees on top of fees. tdd# 1-800-345-2550 no monthly account service fees. tdd# 1-800-345-2550 no hidden fees. tdd# 1-800-345-2550 and we rebate every atm fee. tdd# 1-800-345-2550 so talk to chuck

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general general motors issuing a big recall. seema mody joins us with more on that and the latest breaking headlines in the newsroom. >> let's get to it. engine fires are forcing general motors to recall 475,000 chevy cruzes. they have won back small car buyers from the model. no injuries have been reported from the fires. warren buffett's berkshire hathaway is buying the tribune herald in waco. and a winning bid of $9.8 million by the mount vernon ladies association, more than three times the presale estimate will bring george washington's

copy of the constitution and the acts of the first congress home to mount vernon. the book features the first president's handwritten notes pencilled in the margins. the association is opening a national library for the study of george washington next year. make sure not to miss it. >> $9.8 million. the nice ladies of mount vernon. >> a proud virginian. >> i am. >> and george washington was. >> spent many a school field trip going to mt. vernon. nice ladies in the powdered wigs that take you on the tours. i'm not sure these are the right ladies. >> they might be. >> seema, thank you very much. have a great weekend. >> thank you. >> up next, the latest threats from jobs to obamacare and the dreaded fiscal cliff. what the [ bleep ] happened to the great american comeback? monica crowley and howard dean face off when next when we

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tyler mathisen in tonight for larry who will be back on monday and john batchelor is with me for the hour. >> thank you. >> in this half hour, breaking news from syria where a turkish fighter jet has been shot down. not only does it have a geopolitical effect but the price of oil is fluctuating wildly because of it, in part. also tonight, what would it take to dismantle obstructionist teacher unions that some say are responsible for uneducated, unskilled workers? former d.c. schools chancellor michelle reed who fought unions in the nation's capital of all places joins us. first, today happens to be the 17th annual ugliest dog contest. no joke. we chose three recent contenders to help illustrate how ugly -- >> i haven't seen these dogs yet -- how ugly some of the threats dogging the economy are. we have anemic jobs. that's one ugly dog.

obamacare and what it might mean to job growth, number two. far and away in our view the ugliest threat of them all is the fiscal cliff. that looks like yoda from one of the george lucas movies. is it a wonder the great american comeback is losing the battle and missing in action? chew over that with our guests. cnbc contributor and former democratic presidential candidate and former vermont governor. not a former cnbc contributor. howard dean. welcome. monica crowley, former assistant to president nixon and author of the new book "what the [ bleep ] just happened, the happy warrior's guide to the great american comeback" and john batchelor is with us as well. we have laid out the three ugly dogs of the economy today. would you dispute any of them as

ugly dogs? >> all of them. there is job growth in the private sector. the problem is the republican governors cutting the hell out of the public jobs. that's what's causing unemployment rate to go up. jobs are growing. obama care will be a big plus for the economy. there are a lot of economists who said so. think about this. you had a small business owner on. he'll pay into the pot but not as much as it costs him. the mackenzie study was right. a lot of people will migrate out of employer-based health insurance into the exchanges. that will save small businesses a ton of money. i also disagree about the fiscal cliff. the big threat to american prosperity is the deficit. the deficit is out of control. it needs to be brought in. i don't blame obama for the deficit. big surprise. i blame reagan, bush and bush.

the fact is we have to deal with the deficit. if the fiscal cliff is the only way to deal with a deficit, we can do it. we have to do it. we've got to deal with the deficit. that cuts 4.5 trillion in spending. if that's what has to happen, i'm willing to take the risk. the economy is stronger than it was. we can do it. >> something tells me monica disagrees. >> george bush did it, monica. i heard the gov november of vermont say george bush did it. the last three years didn't happen. we are back to 2008. >> incredible how the left can't form a sentence without invoking president bush. we heard president reagan as if this presidency hasn't existed. we have had unprecedented spending, record breaking deficits and debt. anemic economic growth. staggeringly high unemployment. the jobs numbers are getting worse, not better. the problem is not more government workers. the solution is expansion of the private sector which was crushed by this administration with higher taxes, higher costs and

the burden of socialized medicine. add it together and you have the fog of uncertainty that's put a jack boot on the private sector. until these things are cleared up including the fiscal cliff with taxageddon coming. >> jack boots, taxageddon, we have it all here, governor dean. >> actually spending is not out of control. this president has the lowest spending -- >> by what measure? >> the average increase in federal spending. it's not spending. it's government revenues that are out of control. i agree with monica on the idea that we have to get the private sector going to stimulate the economy. we have added 4.5 million jobs since inauguration day. the president has done his job. i agree with monica that we have to stimulate the private sector.

i believe that the so-called taxageddon has to happen. neither party has any will to get the deficit dealt with. it has to be dealt with. there is a program and a ticking time bomb. we can with stand it and we need to get the deficit down. >> on the spending issue, this is the crushing element of big government. on the spending issue you have actually had a staggeringly high increase in government spending over the last three years. the spending blowout under obama, pelosi and reid is unprecedented. since the end of world war ii the amount of spending as a proportion of gdp has averaged 6%. obama has it at 25.2%. that's his baseline. to suggest this administration has not blown out the federal government in terms of spending is outrageous. >> governor, the last time i saw you, you were on a stage in iowa before the vote there in 2004. you were speaking of health care. i want to focus on one aspect of

what we are waiting for from the supreme court. in your opening remarks is that the supreme court will uphold obamacare. that's news to me if you have insight i'm ready for it. i have been given opposite information. will upholding obamacare grow jobs? will we have five good months of job growth between now and election day if the supreme court votes in favor of the administration? >> well, what i do think -- first of all, i don't think the two are necessarily connected in a five-month period. i think the court will overturn the individual mandate. that means nothing. it never should have been in the bill in the first place. it's a nice academic argument. we did a guaranteed issue and our insurance market didn't suffer. we don't have an individual mandate. the question is what else will they overturn? the truth is putting a lot of people on medicaid will help a lot of state governments who are now financing free care. in texas 25% of all texas

citizens have no health insurance. 22% of children have no health insurance. >> governor, i will stop you before we go to texas. you say the supreme court will overturn the public mandate. correct? >> the individual mandate. >> that's news to me, monica. that's a 5-4 for the republican position from congress. >> that's the conventional wisdom. they are at least going to strike out -- >> governor, won't that be a sensational headline this close to the election? >> the truth is i believe it will be good for obama. it's the most unpopular part of the bill. if that weren't in the bill most people favor keeping it. they like the individual stuff in it. if it goes away it's good for the president. >> the polls say the public is against health care. >> actually when you look underneath the numbers the public is against it. >> i'm looking on top of the numbers. >> but you have to look at the individual. >> senator schumer before this was passed said it would only

increase in popularity and the exact opposite has been the case. as the public has gotten to know what's in the bill, nancy pelosi said we have to pass it to see what's in it. >> if you took out the vinl mandate which probably is the least popular part that its popularity would rise. >> politically it puts the npt a box. then you have a mess. then they have to kick the entire thing back to congress and have them -- >> no, they don't. the individual mandate -- >> you cannot support the entire bill without the mandate. >> absolutely not true. that's inside the beltway nonsense put together by people who never had experience doing it. >> how do you pay for it without the mandate? >> you don't have to pay for anything. >> oh. you don't have to pay for anything? >> was the president wrong to sign this with that in the bill? >> he was wrong to push for the individual mandates. >> the mistake was made by congress in 2010? that's your position? >> no. the mistake was made when they wrote the bill and put the

individual mandate in the bill that was a mistake. it's not -- look, i have more experience in health care. >> yes. did you communicate to the white house that it was an error that would cause them trouble? >> i publically -- which excommunicated me from the white house for a while. i didn't think it was necessary. uh's bad politics and is not going to do things the people inside the beltway do. how do i know? we have a system of guaranteed issue and community rating. it is paid for because there are not many cheaters in america. >> let many me ask -- >> some, but not a lot. >> i want to talk quickly to monica about her book. you use the phrase happy warriors. you're talking about warriors in this case like margaret tlahatcr and romd reagan in the way roosevelt was a happy warrior. >> yes.

>> why is everybody so unhappy? >> everybody in america is depressed because the economic situation is bad. there is a sense that we don't have real leadership coming out of washington on either side. the natural sense of optimism in the frontier based society has evaporat evaporat evaporated. >> can you think of a happy warrior in american politics today? >> i would like to see more in mitt romney. he's getting there slowly. it's the idea of projecting confidence that america can be saved and that she's worth saving. we have all of the wars on our hands. we have an economic war. we have to deal with it. that's america. >> i'm looking at a happy warrior. >> you guys worked in radio together way back when. >> we did. we're colleagues. >> i owe my sbeer radio career to john. he's an old friend. >> we owe it all to larry

kudlow. her book is out now. the happy warrior's guide to the great american comeback. monica, thank you for being with us. governor dean, thank you as well. another programming note for monday when larry returns, once again republican senator marco rubio of florida is his guest. meanwhile tonight developing news in the middle east. reports that syria did shoot down a turkish war plane. will the situation escalate? what might it mean for the price of oil? "the kudlow report" will be back. stay in the moment sanya focus lolo, focus let's do this i am from baltimore south carolina... bloomington, california... austin, texas... we are all here to represent the country we love this is for everyone back home

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developing developing news in the middle east amid reports that syrian air defenses have shot down a turkish fighter jet somewhere along the turkey/syria border. the question tonight, could this incident trigger more aggressive international action against syria and what ramifications could it have on the oil markets? let's turn to our distinguished guest helema croft from barkra's capital. thanks for joining us. good to have you with us. >> of course. thank you. >> let's first talk about this incident off of or over syrian air space. what is the latest you are

hearing and how does this raise tensions in that area? >> the turkish governments say the syrian yans shot this plane down. was it done accidentally? what's the status of the crew? are they lost at sea? also important in terms of the turkish response. if the syrians don't play this well, if they don't seem apologetic enough over the incident it could escalate tensions with their neighbor. >> there is late news, i believe, john -- in fact the crew have been recovered. and syria has peacecally said we did it but we're not apologizing. >> no apology is significant. we are looking at a situation and we'll go to oil for several

weeks the price of oil has been declining and the presumption is the premium paid for the war scenario was taken out of oil. there was a bump at the end of the day. the prices are very low. we could be headed to $3 a gallon in the u.s. that's good news. do you think the tension over iran, over syria is now off for the summer? >> i'm concerned that the market has discounted the situation in iran. i'm surprised that the market seemingly believes the iranian nuclear issue is settled for the year. you look at the way they came out of the moscow meetings and there was no deal. there is no indication you will get a diplomatic resolution between what the iranians concede and what the americans and europeans are willing to concede. my concern is i don't see how we'll get out of the issue with an easy diplomatic outcome. i'm not sure the market priced it in. on syria, the market is complacent. they look at syria and say, not a big exporter.

all the syrian exports are off the market because of sanctions. it's not a big oil story. you run the risk of turkish intervention of a broader middle east conflict. if it happens i think out will be reflected in the oil price. the market now is complacent. >> my information is turkey in consulting with washington mentioned article five of the nato treaty. that's collective defense. it means we're moving it to the level of state to state confrontation. do you believe mr. putin and russia are ready to control the damascus regime and we are looking at a scenario not unlike the cold war with the u.s. calling moscow and working it out between the two super powers? >> well, moscow does not want any western intervention in syria. the russians know western intervention really shortens the shelf life of the ally assad. the russians, i think, will be working the issue hard trying to get the turks to stand down.

trying to ensure that no western powers intervene and to keep the status quo. certainly washington will be calling moscow to try to work on the issue. frankly washington is showing no signs of wanting to intervene either. in that respect there is a potential for dialogue between moscow and washington. >> let's turn to the question of iran which is a much larger producer of oil and where mr. putin has gotten involved. what does putin and russian resurgence in the region mean to the price of oil three, six, 12 months from now? >>. >> that's their key ally. in the case of iran the russians were very concerned about having the talks seemingly produced an acceptable outcome not to end in

dards. at this point they will block u.n. action against iran. the russians will try to convince the iranians to maybe offer concessions. again, i don't see how this whole situation is going away. >> between now and election day, no war a? possible war? how do you call it? >> unlikely war. you can never rule out a blunder on the iranian side. >> the black swan can always y fly. >> absolutely. >> up next, american students cannot compete in this world. brand new poll numbers show americans in record numbers are fed up with kids who can't read, write and can't handle math. i know some of them. don't even ask about science. are we grooming a generation of idiots? with teacher unions in the way of change we'll ask former d.c. schools chancellor michelle reed. she's trying to change it.

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it's not a question of throwing more money at the problem. it's keeling with unionization. not teachers. we have great teachers in many places. we can't have this union super structure. look at indiana, wisconsin. the big story in the restructuring of mitch daniels and walker is education is getting more money and the

unions, people are dropping out of the unions. indiana is a story that if told across the country we would deal with the education problem. >> that was former g.e. chairman, as if he needs an introduction, jack welch. according to a recent poll only 29% of americans say they have a great deal or a lot of confidence in the u.s. education system. that's a historic low. who's to blame? how do we fix this threat to our economic strength and prosperity? with us now is the former chancellor of the washington, d.c. public spills michelle rhee, founder and ceo of students first. >> thanks for having me. >> far be it for me to quarrel with mr. welch. he was my boss's boss's boss. he tends to lay much, maybe most of the woes of american public education at the doorstep of the unions. is he right about that? >> i don't think there is any one cause for the problems we face in public education today.

there are, quite frankly, a lot of opportunities. i have gone to battle with the unions myself on a lot of issues. we recently, just as an example, saw some really historic legislation in connecticut. where the unions actually allotted this legislation and we think it is a good start as well. we recently sent a letter to the heads of the -- of both national teach rs union saying you like this legislation. we like it, too. let's move it in other states. >> what are teacher unions afraid of? >> a lot of them are afraid of change. change is hard. when you are talking about movinging away from a system based on seniority, tenure and moving toward a system based on

merit and effectiveness you will have people who don't know what that will look like and are scared by the change. at the end of the day those are changes we can no longer afford to have policies in place that ensures we lay off teachers by seniority without taking into account how good they are in the classroom. we can't afford to do that anymore. >> my chemical, ichelle, it's a meet you. you were much admired in washington. i'm very pleased to say that you are focusing on the unions is good. i want to focus outside the country. does the united states have a sense of how it's doing with regard to the education system in china or in france or in other parts of the world where we are in competition every day with the economy? >> i actually don't think that most americans understand how dire the situation is. i think that, you know, every year when the new results come

out that show that america is near the bottom for rankings for mathematics aptitude you don't hear people say, oh, my gosh, what's happening, we have to do something about it. the ironic thing is if you look at other sector, so, for example, the olympics are coming up. if america fell from number one in the medal count to number 26 there would be an absolute riot on our hands in this country. why don't we have the same kind of response when looking at the educational achievement levels of our kids? >> that's a great point. we seem to be getting our lunch eaten -- specifically in the math areas, sciences and engineering by other countries that have far exceeded our accomplishments. what can we do to turn it around, michelle? >> at the end of the day, we have to focus on three things. one, we have to focus on teacher quality. of all the in school factors

that exist the quality of teachers in front of our kids are the most important thing. the second thing is we have to focus on making sure all families have high quality school options for kids. >> michelle, thank you. we'll have you back soon. john batchelor, nice to have you. thanks to larry for letting me sit in this friday night. he's back on monday. have a great weekend. that will do it for tonight's show. larry has a great line-up including marco rubio on monday night. laces? really? slip-on's the way to go. more people do that, security would be like -- there's no charge for the bag. thanks. i know a quiet little place where we can get some work done. there's a three-prong plug. i have club passes. [ male announcer ] get the mileage card with special perks on united, like a free checked bag, united club passes, and priority boarding. thanks. ♪

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