good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew ross sorkin is off this weekend. we'll head to london for more of draghi's change of plans. first our top story this morning isaac. it's continuing to head for the northern gulf coast at this point. there have been significant storm surge and flood threats that are expected. energy companies have evacuated offshore oil rigs and shut down gulf coast refingeries. the region accounts for about a fourth of the nation's oil out put and 70% of the natural gas out put. let's turn to alex wallace who is standing by at the weather channel for the latest. >> tropical storm isaac still a tropical storm, the last advisory coming in from the national hurricane center. 70 mile-per-hour winds shy of that category 1 hurricane status and it may strengthen to that as

we work our way throughout the day. moving to the northwest at 12 miles per hour. a little over 200 miles south-southeast of biloxi, mississippi. we're already starting to feel some of the impacts there across the gulf coast in terms of those winds picking up a little bit, gusts getting up close to 30 mile-per-hour in new orleans. i've seen it get over 30 a while. 40 mile-per-hour sustained wind gusts. there's the center of circulation. you can already see on the radar some bands beginning to move on into the panhandle of florida. within those bands of rain where we see higher gusts streaming on through. doesn't look bad on the radar but within some of these individual cells that's where you get the stronger wind gusts. where is it going? let's show you the projected path. still offshore but, again, still has time to strengthen a bit. it may get to that category 1 status but the difference between a high end tropical

storm which it is now and low end hurricane not that much of a difference. sign terms of strengthening that's not the worry. the worry is going to be is that it will hang around for so long. end of the week just making its way up towards southern portions of arkansas. it's taking its time and with that dumping quite a bit of rain and gusty winds as well. flooding problems, power outages and storm surge. >> how long it will hang around is the big question. the levee system hasn't been tested. will this speed up or is this what we're face. >> looks like it will be slowing down and one of the reasons why is there's a big area of high pressure that's building in just to the north. so that's going to sort of act as a blocking mechanism and not allow to it speed on up. i want does look like we'll be dealing with this for quite a while. >> alex, thank you very much.

>> scott cohen is in new orleans. is that a plane flight from where you were yesterday, scott? the beach got -- you guys got bothered throwing a football. how did you get there? >> i got sun burned on the top of my head. we drove. we drove. which is only a couple of hours, about three hours from gulf shores, alabama to here. as we were following the track of the storm along with everyone else and as you can see it's relatively calm here on canal street now, enjoying the last few hours without a rain coat. though we had a little bit of a sprinkle this morning. we're on canal street the edge of the french quarter. french quarter is over there. lake pontchartrain is over there. mississippi river is there. is that little bit of deja vu for us from seven years ago. this area was under water during hurricane katrina the sight of a

lot of havoc. the water went down a few blocks that way. this. >> katrina as we've been saying all along other than in the timing. but i can tell you that people are taking things seriously even as a tropical storm, potentially on the verge of achurricane, they are taking things seriously fin way they may not have tone so seven years ago. coming in yesterday, yesterday evening on the drive from alabama we found gas stations out of gas and a particular texaco station we were at north and east of new orleans they sold out of gas within five hours of opening. good 48 hours before the bulk of the storm hits and people were already preparing as they continued to prepare throughout the gulf coast and particularly now in louisiana. take a look at the, again the projected path of the storm and the threats that we're dealing with. remember that the winds go

counterclockwise around a hurricane so, as you heard from alex wallace from the weather channel earlier this is a slow moving system means there's the potential that new orleans gets sustained amount of wind from the east. that's not good because it pushes water into lake pontchartrain and does test those levee, and we're looking again at a slow moving system. so there will be a test for a while. the fortunate thing is that it is likely now according to the forecasters to be category 1 storm, which they are kind of use to independent this part of the gulf coast when it makes landfall, probably late tonight early tomorrow morning and conditions all day long here we expect will continue to deteriorate. we're here and back to you. >> yeah. all right, scott. we are wishing everyone down there the best. hopefully this will be a far cry

from what happened seven years ago. obviously a big storm and watching the mayor of new orleans yesterday, they seem much more attuned to what's coming. >> can understand why. >> but hopefully they are in a much better place. in the next half hour we'll head back to the gulf coast and check with brian shactman who will talk more about the storm's impact on the energy industry and production and prices. have you gone to google today? >> new york i've been on twitter. not on google. what's there? >> don't know. will you go there? >> hold on one second. >> do they -- i mean i feel violated kind of. >> because there's no special picture? >> let's see. is that an advertisement for their thing? >> oh, wow. >> so it's okay for them to try to sell their new tablet -- >> on front page. >> on the front page. >> wow.

>> went to that and i went a couple of times to see if i was doing something wrong. >> never seen it. >> if you hit on it it takes to you a place to buy this stupid thing for $199. >> you're offended by an ad on front page? >> i'm deeply, deeply offended. >> were you offended when the "financial times" or other newspapers started to put ads -- >> google said they would to no harm. >> this harms you >> this harms me. google forever -- they had so many chances. >> got to find a way to monetize it. >> where's google. >> first ad -- >> they haven't monetized anything. they have a market cap of, what are they up to? >> is this the first ad you've ever clicked on in your life? >> yes. i only clicked on to it see if it was an ad. google has never ever put and had so many opportunities because it's such a -- everybody

goes to it. >> clean, beautiful. >> with the whole samsung thing now we realize how much apple hates google and google hates apple so now they are taking the glovers off. but they are using me and dragging me -- >> what about the newspapers putting ads on front page. i've got enused to that. i got used to ads on buses that trove me crazy at first. >> and as many commercials as we run. i didn't expect it. >> what's interesting you can't buy it. they are using it for their own thing. >> can't do it. baggie pants on today. what are in those pockets. after a storm delayed start to the republican convention it will move into full swing. official events begin at 2:00 p.m. eastern time. tonight will be highlighted by keynote speaker chris christie, the new jersey governor and ann

romney will also speak between 10:00 and 11:00 eastern time. john harwood is in tampa covering all the events. he joins us again there this morning and a lot happened overnight. the funny thing, john, i just hear -- all the reporters were there. and they just none of them had stories and they just were looking for anything, just jonesing for anything to write down. you were kind of relaxed. >> reporter: this is why we're at the convention. >> you always seem, you know, comfortable and you probably just went about your business and had a good day. >> reporter: good day, million live shots talking about nothing. talking about the nothing sandwich behind me in the tampa bay times forum. thankfully we'll get something going tonight. republicans will be mindful of what isaac is doing and whether or not the damage and the impact

of that storm is so great it really stucks oxygen away from the story that they want to tell about mitt romney. but, i think they feel reasonably confident that that's not going to ultimately, you know, destroy this event in terms of its ability to communicate with swing voters and get the base riled up. the most important event is mitt romney's speech. ann romney is important so is christie. christie has that feisty populace thing going. he'll take the fight to the democrats and ann romney will try to tell people why she loves mitt romney and why she should love him too because so far the polls show they don't. >> expectations are a little bit low for romney himself. i don't know whether they should be. he could surprise people. paul ryan is a little bit wonky. i don't know whether they are expecting it from him. they are expecting a lot from

chris christie. we'll see what happens with ann romney. i thought the "journal" had an interesting piece today, john and it was that reporters are very quick to do a double box with what's happening in new orleans along with the convention. >> they are doing it now. >> i know. >> you mainstream media guys are crazy. >> the "journal" pointing out one of these two guys either president, president obama or mitt romney will be president for the next four years. so this is a time -- >> reporter: that's true. >> we need -- there should be an opportunity for the country and for people to hear what mitt romney is proposing, and what the other side -- hopefully the reporter. >> reporter: i agree with that. >> reporter won't be talking about, you remember the last time there was a republican and a hurricane hit new orleans and you remember, now, compassion shown by that. i just hope there's not too much

of that which i've seen quite a bit of that even on the cover of the newspapers. hopefully we can separate the two as distinct. no one wants to be partying with party hats while there's a city under siege from a storm but, you know, you just would hope that there's some adults in the room which there normally aren't with you all and your friends of mainstream media. >> reporter: the anchor of the show that's been showing the split screen this morning, your show? >> physician heal thy self. >> reporter: i think voters understand that just as the presidency is a job when you got to juggle multiple things at once and deal with multiple things at the same time, the same thing is true of real life and i personally, i doubt that the hurricane is going to end up being so dominant it prevent

mitt romney from communicate. people have been following the storm. people are tired of the storm in a couple of days. >> john, we got to go. i want to quickly ask you, a lot of people are talking about that chris matthews/reince preibus bru-ha-ha yesterday. it's a vacuum down there, the convention didn't start. i know a lot of websites on both sides of the aisle were featuring that. did you pay much attention to that? >> reporter: i didn't see the original exchange. i hear some chatter among political people and television people. but, no, not an overwhelming amount. maybe people are used to chris being energized. >> the race card is -- when you throw it you should think long and hard about it and this whole welfare issue and what the president gave hhs, the discretion to do -- you know it was never bill clinton barely, he vetoed two of the reform acts

and then he finally signed one but a lot of people until hold them against that, a lot of liberals said it was the worst thing that he ever did. and the president himself, president obama has said he's not a big fan of some of the provisions of welfare reform, and there was something -- he did give hhs, the secretary the discretion to do the work requirements differently in each state. hopefully to free up the paper work constraints but it does give bureaucrats discretion to do things different. by bringing that up is that -- i mean to call that playing the race card just to bring up that move, is that fair do you think, john? >> reporter: well, welfare has always been with race that debate in this country because of, i mean race is the original divide in america and the perception among voters, among white voters that their tax money is going subsidize people

who aren't pulling their weight, is a powerful one. >> don't people think it's been a success? don't people want people to finally, to not be on welfare forever, to get back in the workforce and be productive. most people look at it as a successful reform of something that, right john? >> reporter: i think that's true. that's true. even some of the liberals who resisted it i think, believe it's work out a lot better than they thought it would. now that being said the fundamental point of this advertisement, it is founded on a grain of possible truth but isn't actually true. the obama is not seeking to have states gut the work requirement. he is giving them flexibility which they asked for including republican governors, and so you get a lot of debate about why are they putting anthony ad if it's fundamentally not true.

>> but then again there's a lot of nuance here. i looked into it. i read a lot of pieces on it. even political scientist, new york university said it doesn't obviously single-handedly cripple the work requirement but in his word it has opened the door to changes in welfare reform that could destroy it from within. another says you have to assume that bureaucrats, the intention is stated that it's not to change work requirements but gives bureaucrats the leeway to do just about anything they want to do. >> reporter: you can make the requirement it will result in anything. >> again -- >> reporter: remember governors including romney have sought flexibility from some of the restrictions of the law themselves. >> i'll ask trump about this. chris is mad about that

throwaway line about being born in mulch and don't need my birth certificate. his panties were so bunched up. the chill in the leg is long gone. >> john you don't think it was a throwaway line? >> reporter: no it was very purposeful on romney's part. >> even though we talked about this. i was at the correspondent's dinner. he played a part of the lion king where they held up the baby and said this was the tape from me when i was born. it was hilarious. for years it was talked about and it wasn't talked about in racial tones for years. i don't think. >> reporter: it was hum moorous. a purposeful joke. >> chris was mad about taking health care away resulted in some woman's death. he wasn't mad that, you know, all the facts that were incorrect how much jobs were loss when bain went in. none of that bothered him.

>> reporter: call chris's publicity agent. >> he's been on. if he was on i would ask him. thanks, john. we'll see you later. you're great too. >> oh, boy. >> when we come back global investors have been buzzing about mario draghi's plan for jackson hole this weekend. many expected big news from the ecb president. many thought he would steal the headlines from ben bernanke. why is he not going and what does it tell us about the ecb change in plans. isaac is on the verge of becoming a hurricane. nearly half of the nation's energy output is in the eye of the storm. we'll find out what that could mean for price in the for energy industry when "squawk box" comes back. together with bank of america, they have access to more resources than ever before.

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welcome back. among the top global be market stories this morning, ecb president mario draghi will not attend the fed's annual jackson hole symposium this weekend as planned. the central banker citing a heavy workload. ross westgate is in london standing by with more. we love to hear the real -- if you were going to gossip about this, what would you say? you know, jackson hole in the summer time, even if you are busy, it's somewhere you should probably try to get to.

is he avoiding the tough scrutiny that he would get over here, do you think, ross? what's the story behind the story? >> it's very puzzling. i spoke to our ecb watcher and she described it as very odd. we can't remember between us any other jackson hole meeting where the ecb president hasn't been. trichet i don't think ever not go. we didn't focus on jackson hole the same way when he was president of the ex. no other board member from the ecb governing council is going. so mr. asmussen who has been supportive about this bond buying idea won't be going. what's interesting, weidmann, and of course thinks that bond buying would exceed the ecb's mandate is going to go. so, that whole thing is a very

interesting, sort of c conjuncture. i don't know what you make of that or the reasons they are not going. we got a little euro spike on the news. you have to make into that what you will. we can speculate what it means. heavy workload. he certainly has. if these plans are progressing in terms of spain in negotiations, potentially getting a bailout with ecb reaction but a lot of details network through. others might say he had to do it today, he wasn't going to go because he would have lost his deposit on his hotel room if there was a 24 or 48 hour cancellation. it's come on the back, by the way today of two auctions. not big auctions. but we had two auctions today for spain and italy. spanish t-bill yields, had three

month and six month t-bill yields down again this week. they were down last week. in italy, yields down sharply. they sold 3 billion jours. yields were down sharply. demand fairly solid. in the last few wakes the actual chat that we've had about this ecb action has managed to bring yields down although in spain on the ten year, in the cash market still just slugtly elevated slightly today. of course what's interesting is the weidmann is going to jackson hole. mr. adam posen who was in his last week as a member of the bank of england monetary policy committee joined me exclusively on "worldwide exchange" and said it was in their mandate. >> central bank's zwroin

eurozone is to provide monetary stability. buying and selling bonds is what they are supposed to do. that's what central banks do. >> so there we go. we think the ecb agrees. so dollar slightly stronger. it did get a little spike up from that draghi news. maybe the other thing is, joe, guys, maybe he couldn't spend the time to get on a jet and go hang out with steve. maybe that was the final decideder. >> art cashin wrote in a note and said this is something steve talked about, he can't go to bernanke's and if upstage him. it's like wearing a white to a wedding. don't upstage the bride. if you have news or say anything that makes news you're stepping on bernanke's toes with that too. >> what actually could he say? right? what more could he add.

>> right now the trading floor would look at every single word, how he said. they would parse it all out. >> didn't even to when. >> absolutely, becky. i'm agreeing with you. what is the poichbt him going, because he can add to anything to what he's laid out. it makes sense for him not to go. >> as a man you can wear white to a wedding? >> i don't think so. you're wear a white suit, white dress shirt you can wear. >> got to go. >> i've been to a wedding in the caribbean where you wear those white cream jackets. >> our coverage of isaac continues. the storm is near hurricane strength. bacteria on everything from oil to shipping next. you know why i sell tools? tools are uncomplicated.

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good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. andrew ross sorkin is coning to be on vacation today. our top story is isaac. it's now on the verge of becoming a hurricane, significant storm surge and flood threats to the northern gulf coast are expected and energy companies have evacuated those offshore oil rigs and shut down some of the refineries in the gulf. the region accounts for nearly a fourth of the nation's oil output and 7% of its nat gas output. brian shactman joins us live

from the port of new orleans with more. brian, good morning. >> reporter: good morning, joe. good to see you. obviously wind is picking up here. no rain as of yet. the storm is moving extremely slow. i want to point out to people that gas seems to be real concern across the petroleum industry. hit a five month high yesterday. in terms of shale, nat gas oil production over the last five years, absolutely exploded. just a lot more domestic production out there now and the gulf is still hugely important but that's changed the face of the domestic production and in terms of refining in this region, joe touched on it a little bit, there's about a dozen refiners, about 1.4 million barrels are shut in. less than 10% of total u.s. capacity. further west the storm moves that's more negative for the refining space. americans consume about 9 million barrels a day. you're looking at some people scrambling to fill up yesterday in this area. obviously a short term spike in

the price is unavoidable. anything else depends on what happens. there's a lot going on with pricing. you compare gas to where it was a year ago it's already high. we had the explosion in venezuela. focus is on gas more than oil. we talked so much about north dakota they are pumping out 600 barrels a day now. that wasn't happening when the bp spill happened. that's why the concern is more with gasoline. >> yeah. i was wondering, brian, 7% didn't surprise me on the nat gas because of the -- it's every where. everything has change over the last five years. well, everybody, you know, on the street, the man on the street should i expect gasoline prices go up just because there is a storm in the gulf. >> the answer is yes. >> somebody asked me that. >> wholesale gas prices were up. >> connect the dots.

>> it actually does make sense because refineries are shutting down too. not just the production. >> reporter: guys -- >> so quickly. yeah, brian. >> reporter: as you guys know the prices go up faster than they go down so, you're right what the storm does impacts what happens in the long term but obviously in the short term it's just on the fear trade. >> i guess someone yesterday said refiners have to assume what the replacement cost for the crude is -- i don't know. there's always a way to, where you cannot -- >> reporter: to get the price up. >> you can't prove gouging. >> reporter: they are saying the slower the storm moves the longer to start up. if you are taking out 1.4 million barrels a day and two to three weeks that's not nothing, that a crimp in the system in terms of supply. >> there's opportunity for gougers. there will be some way to say no that's what it was. >> we talked to the convenience

store guys it's not in their interests because they make more money on what you spend when you walk into the store than they do at the pump so sometimes they will take a loss at the pump. >> they are professional gougers on everything in the store. >> reporter: joe, i want to hear you say crack spread once today. >> crack spread. the instigator there is young quickie who thinks that's funny term. >> don't know what you're talking about. >> anyway, brian shactman -- with cohen i say he's down there on a junket. brian looks like he's working. >> that's true. brian, thank you. >> reporter: you're welcome. >> joining us right now with more on the impact of isaac the president and managing energy partner and kevin ferry. tony answer that question for us in terms of the refineries being

shut down. what does you want mean in terms of a price spike for gasoline prices? >> the situation can't be overstated because the u.s. refinery infrastructure right there in louisiana and the gulf coast en masse is a critical junctioning point. remember you have to make a huge distinction between crude production and refined product. you and i as consumers aren't that much concerned with crude until it's made into something valuable at the refinery level. even should the refineries by some miracle esdcape the wrath f this storm, you have to move it and hopefully there will be power available to push this product towards user markets. we can't console ourselves with the eagleford play in regards to how well off the u.s. is going

to be. it's really the making of that crude oil into something useful for us. >> let's talk real quickly about best case scenarios instead of worst case scenarios. if the storm turns out to be, you know, nothing near what people had been anticipating, if things slow down, obviously it's a slow moving storm, a lot of rain will be dropping on that. you do worry about floods. say we escape the worst of things and refineries can get opened up quickly and things don't move. what does that mean in terms of where prices go next week? >> i think that that likelihood of any serious drop off in the next week is not realistic. remember, you still have the venezuelan situation. i got a report this morning from caracas that some of those tanks are still burning. they afeel the u.s. refinery network over the past 72 hours for millions of gasoline,

500,000 barrels of diesel and they were turned down. >> you are bullish on prices and long on some of these prices because you think that's where it's head? >> it's very fair to say for the next two to four weeks these prices will be on the boil. remember, too, you have within the u.s. you have a serious problem mounting in california with the richmond refinery being shut. shell motiva in port author lost a major crude oil, 320,000 crude unit which won't be back in service until sometime after thanksgiving at the earliest. you have saint croix shuttered in. that was the big go to refinery. >> kevin, very glad you're here today. i want to ask you about bernanke not speaking -- i'm sorry about draghi not speaking on saturday at bernanke's conference. what does this mean and how does

it change how people are trying to figure out what the big news is this week? >> okay. i think it's all going to be very exciting. it's also going to flow from what you guys were just talking about because the jazz on the floor is going escalate around these themes of monetizing commodity shocks and so this is a big picture. this is what people, traders like to grab on to. you've already seen a summer that rotated around that theme with regard to food stuffs. i think it's is going to be jazzy week and i think that with regard to the fed and the ecb, you're trying to say well we don't want to steal your shoe. and so here's one thing that i would point out. yesterday from the dallas fed. you're going, i believe, see some push back or hear some push back from the chairman as opposed to what he could do as opposed to saying what the limitations of what he can do and that's going to put the ball back in the political arena

which is being frustrated by the weather now about what the role of the central bank can be and what the role of the government should be with regard to keeping things going. so, i expect it to be headline driven market and much of the volatility, maybe the net result isn't any different. nasdaq has been choppy for six days and we're in the same place. i would expect it to be very, very headline driven and a lot of air pockets in the market. >> you agree with tony that gas prices probably won't come back down any time soon regardless of what happens with the storm? >> well i think it gets sketchy. here in chicago we have a very tight refinery, a situation all the time. we were up 27 cents according to longburg before all this. i think again you have traders that are fed up with trying to game the bond market, the equity market has been easier to trade. now they are jazzing around

commodity moments and especially the idea that the fed may be in there monetizing those moments. so i expect to it be, you know, a hot last week of august and right into september. >> all right. kevin, tony, guys, thank you very much. >> we'll head back to the rnc in tampa. jobs and economy major themes at the convention. we'll talk about biowith a man who represents many of the nation's manufacturers. that's next. my name is adam frucci and i'm the editor of splitsider.com.

i love new technology, so when i heard that american express and twitter were teaming up, i was pretty interested. turns out you just sync your american express card securely to your twitter account, tweet specific hashtags, and you'll get offers on things you love. this totally changes the way i think about membership. saving money on the things you want. to me, that's the membership effect. nice boots! and every day since, two years ago, the people of bp made a commitment to the gulf. we've worked hard to keep it. bp has paid over twenty-three billion dollars to help people and businesses who were affected, and to cover cleanup costs. today, the beaches and gulf are open for everyone to enjoy -- and many areas are reporting their best tourism seasons in years.

we've shared what we've learned with governments and across the industry so we can all produce energy more safely. i want you to know, there's another commitment bp takes just as seriously: our commitment to america. bp supports nearly two-hundred-fifty thousand jobs in communities across the country. we hired three thousand people just last year. bp invests more in america than in any other country. in fact, over the last five years, no other energy company has invested more in the us than bp. we're working to fuel america for generations to come. today, our commitment to the gulf, and to america, has never been stronger.

manufacturing will be one of

the topics that's front and center at this year's political convention. joining us is the president and ceo of the national association of manufacturers. and obviously we've been watching and paying very close attention to everything that's happening with jobs. how does the manufacturing picture fit in and what your hoping to hear at the republican national convention? >> well, good morning, becky. manufacturers are really hoping to hear an emphasis on policies that will create a sustained growth economy for this nation. not only here but in charlotte at the democratic convention. both parties have been focusing on administering. everybody in america is talking about the promise ever manufacturing to bring our economy roaring back and we really need to see our policymakers adopting policies that will do that. >> what are those policies? what specifically would you like to see? >> you know it's 20% more expense jennifer to manufacture in the united states than it is anywhere else in the world. that's because of our current policies that we've imposed on ourselves like taxes,

regulation, and what you've already been talking about energy policy and the importance of energy to manufacturing. we consume 30% of this nation's energy output. so affordable and reliable energy are critical components to manufacturing. by the way, i was going say 20% figure, becky does not include the cost of labor. these are just policies that we put on ourselves. >> jay, let's talk about energy. we had boone pickens on last week. you heard politicians say they would help the nation become energy independent. he's frustrated with his own attempts over the last four years. what would you specifically like to see in terms of an energy policy and what do you think of the two candidates, their plans to put forth? >> the most important thing for manufacturers is we have an all of the above approach. we take advantage of every type of energy production we can. so things like the keystone excel pipeline that was denied

by the obama administration earlier this year, those are things that are extraordinarily important for a sustained and reliable energy supply in this country. the shale gas revolution is vital to manufacturing's future. the romney campaign put out a very comprehensive and i think a very positive plan for energy production in the future. but we got to make sure that we, we're focused on not only fossils and also shale natural gas but nuclear alternatives and others, coal certainly is a very important part of our energy mix. >> which one of the parties has been more conducive towards trying focus on nuclear power? >> well, you know, we haven't seen much on nuclear power from anyone of reason because it is a very expensive form of energy production. at least initially. the initial investments. and then you have those types of issues that are out there. but we really have to realize

that shale while it's wonderful right now is not going to last forever. 30, 40 years from now we need other terms. every one much these forms of energy takes decades to get off the ground. all of the above is critical for energy production. then the tax policy and regulatory policies we've adopted in this country make us very noncompetitive with other countries around the world and we have to focus on those issues as well. >> you'll be at the democratic national convention next week? >> in charlotte. here in tampa this week talking about manufacturing. working with those folks who want to see manufacturing thrive. we'll be doing the same thing in charlotte next week. manufacturers from all over the country really believe that it's not about politics, it's about policies that will set our country on the right path and that's why the national association of manufacturers is at both conventions. >> gulf coast is bracing for

isaac. it's on the verge of hurricane strength. we'll find out how the gulf is preparing and how the storm could impact the entire nation. that's next.

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for everyone. tomorrow marks actually exactly seven years since hurricane katrina devastated the gulf coast. now, residents and businesses are bracing for another potential disaster. joining us is michael heck, president and ceo of greater new orleans, that is an economic

development alliance serving southeast l la. welcome, michael. and if anybody knows to the minute what to expect at this point it's probably you. what's the latest information you can give us, michael? >> the latest is we expect to feel the effects over the next few hours. it is much less in intensity than katrina and probably a big rain event. we are going to get wet. but the community here is much, much better prepared. magnitude better prepared than seven years ago. >> whenever i say anything, i have two kids that say take it back when i say anything like that. you just said it's likely to just be a big rain event. you have fingers crossed? you have enough confidence in that to say it without thinking you're tempting fate, michael? >> well, let's say i'm not knocking on wood and mother nature is always unpredictable but in terms of flood protection, we have $15 billion

better protection than last time. it's world class. it is essentially a 350-mile wall around the entire community and i think everybody is as comfortable as we could or should be right now. but of course, you watch this thing minute by minute and always expecting the best performance and really prepared as a community for the worst. >> what about some of the parishes that respect right in the main part of new orleans and there's a surge that people are worried about, right? >> well, yeah. for those who are on the low-lying areas, surge is always going to be the concern and talking about a surge of perhaps 8 to 12 feet. for those individuals and communities less heavily populated they probably need to be evacuating or thinking about getting to higher structures. that is true. >> for you, the risk to the energy infrastructure is just the period that it's shut down and maybe some pipeline damage? >> well, i think there's two

kinds of risk. the first is right now about 75% of the production in the gulf is shut down. 50% of the rigs evacuated. there's a temporary risk from that. long-term risk and concerned about if there's damage to the refineries. katrina damaged about -- took out about 20% of our refining capacity and that's what drove up oil and gas prices and caused the major financial impact so if we're able to get away without the flood damage to the refineries and we expect we can, then the impact to the energy sector should be minimal. >> how about the river? would a big rain event close down the port and the river? >> the port's doing really well. the port is closed far couple of days now but we don't expect a major economic impact for a couple of reasons. one, we expect the traffic is going to come online by the end of the week and, two, our cruise traffic the cruise left a few

days ago and the cruise are coming back in a few days. some saying the storm can ease some of the drought conditions affecting the middle of america. >> michael, good luck and god speed and i hope you're right. see? i think you have a pretty good idea because you wouldn't even say it. i mean, there are things that i just know that are -- we have our fingers crossed. fingers and toes. >> thank you. appreciate it. thank you so much. >> you're welcome. when we come back, our coverage continues from the gulf coast. we'll talk to a man who knows the gulf coast disasters very well. michael brown who was running fema when katrina hit. stay tuned. "squawk" will be right back. s a. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water.

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plus the latest business headlines and market moving stories as the second hour of "squawk box" begins right now. good morning, everybody. welcome to "squawk box" on cnbc. andrew is off this weekend. we have been looking at the futures and they have barely budged. the dow and s&p up slightly. there are slightly -- they're end kalted slightly higher

across the board. officials in new orleans are telling residents to get ready for isaac. the tropical storm is expected to make landfall late today. effects are starting to be felt on the gulf coast. there are hurricane warnings from morgan city, louisiana, to the florida-alabama state line and people in low-lying areas are told to leave. we'll have more in just a little bit. also, mitt romney's going to be arriving in tampa today for the republican national convention. his wife ann is set to speak tonight. there's no word on when he'll first walk in to the convention site. his big address is thursday night. mario draghi will not be attending the annual conference of central bankers in jackson hole this week. a spokesperson said he decided not to go because of a very heavy workload. traders have speculation about why he's not going. maybe he just doesn't want

markets reading in to his every word. >> the storm that's headed towards the gulf coast, marching towards it this morning, it could be upgraded to hurricane status this morning. let's get the latest from the weather channel's alex wallace. where are we now, alex? >> getting very, very close. still situated right now about 200 or so miles to the south-southeast of biloxi, mississippi, but moving in the general direction of new orleans and mississippi coast. moving to the northwest at 12 miles per hour. we should be getting another update in about an hour from the national hurricane center with another mix on it but we are starting to see signs here latter end of the loop looks like an eye-like feature. maybe a sign to be talking strengthening and seeing the impacts already showing up across the gulf coast in the form some of of the winds and close to 40 miles per hour. new orleans. sustained winds over 20 miles per hour. just going to see that worsening as the system gets closer and

closer. on the radar, it's showing up, the rain bands expanding well away from the center of the circulation and moving in to the coastal areas and within these rain showers, that's where we really see the winds gusting a bit and making the way over towards the biloxi area over the next half an hour or so. where is it heading? off to the north and the west. may strengthen a bit up to category 1 status. really the difference between that and where it is now, not all that different. the main story is it's slow to move and that is really going to lend itself to flooding potential. the rainfall amounts through thursday morning, could see rain in to parts of georgia but focusing on the gulf coastal areas. generally five to ten inches of rain in some of these locations. some spots locally could see before it's all said and done 20 inches of rain, guys. >> wow. alex, thank you very much. hoping that's not the case but prepared for it. for now more on the potential

impact of new orleans, let's get back to scott cohn there and can tell us what the city is doing to prepare. scott? >> reporter: thank you, becky. as you heard, the prospect now is that isaac could hit new orleans, could make landfall seven years to the day after hurricane katrina. the similarities pretty much end there. here's another big difference. a $14.6 billion transformation of new orleans levy system that failed so catastrophically in hurricane katrina. michael stack is monitoring and getting ready for the storm. tell me what's different and superior to the protection of seven years ago. >> it's a much different design system. the flood walls are much more robust. we have large barriers on the edges of the city to fight the storm surge identity there. we have the large gated structures to close as we need to.

we have bigger foundations on the levies and flow walls to withstand more forces and the system defend against the 100-year hurricane. >> reporter: this is potentially the first test of the fully constructed, completed system since it was put in to place and looking at potentially a category 1 storm. are there particular structures? do you feel ready? >> we're ready. we have emergency response plans to work with the state of louisiana to be able to close down the system. there's openings in the system, flood gates. drainage valves, things to do. we have been doing that since sunday. we'll finish that up this morning. the system will be closed up and ready to defend the surge as it comes in. >> reporter: we hear about a slow-moving system, the potential that you get a lot of easterly winds and pushes a lot of water, ultimately in to lake pontchartrain. that test the system, does it? is that a challenge to deal with with this particular system? >> the system is based on that

and we won't be near the design levels even on lake pontchartrain or the big barrier. we'll operate as we need to. we can hold back any effects of the storm. >> reporter: as we get to the final hours before landfall here, what are you working on? what are you concentrating on the most? >> so we are still closing up the system. we have construction closures where the contractor is finishing the final details. we'll close that up this morning. we have the barrier in the east and a barrier on the west to close. those are based on a certain water elevation. when we get the trigger points, we'll close those structures and ready to go. >> reporter: all right. mike stack, head of emergency management here in new orleans, as the levy system gets potentially a big test coming up and we'll be watching it along with everyone else. joe, back to you. >> thank you, scott cohn. emergency response and lessons learned of hurricane katrina are on the mind of many in the gulf

coast nearly seven years to the day and joining us now michael brown, former director of fema. mr. brown, it's greet see you this morning. thank you for joining us. >> good morning, joe. how are you? >> i'm very well, thank you. it's going to be seven years i guess. can you take us back and compare and contrast the differences you think in terms of where fema is today and where fema was back when you were director? >> oh, sure. i think there are three big differences but not fema. the bigger differences is as you were hearing on the report with the army corpse of engineers, there's a $15 billion investment by the taxpayers to improve the levy system and the flood control system around the city. now, i'm not convinced that isaac is going to turn in to the storm that will really test the design requirements of the levy and flood control system but this is a test for it to see if even though it may not test the limits let's see if the system

works. i think it's going to so that's a huge difference. to me -- >> go ahead. i'm sorry. >> we to me, the two most important differences are mayor mitch landrieu and governor bobby jindal. both of those guys were in katrina. i mean, bobby was a congressman at the time and mitch was serving as lieutenant governor. and both of those saw the mistakes that their predecessors made by not doing the early kind of things that both mitch and bobby are doing. and by doing those early things, declaring an emergency, already starting to talk to their population about what they should or shouldn't do, about what they should expect or not expect, to me that makes the biggest difference than katrina and what we're seeing in isaac. >> looking at the 15 billion spent and looking at what needed to be done to the levies, to me i was struck by how vulnerable new orleans was to katrina and

then the idea that anyone could have made a huge difference. as if the response could have changed the outcome and the way that in a vacuum that entire event was sort of defined by the media. i mean, honestly think -- you know, and george bush and you and everybody else and a huge calamities, it wouldn't have mattered whether -- i just look at it now and wonder about whether it was fair the way everything was defined back then. >> joe, i can hear in your voice the same frustration that i was experiencing seven years ago and that as i watched this thing unfold now, the differences are stark. i think the media learned some lessons. the media learned lessons that, one, things don't always go as expected. i think, too, the difference is, for example, there's no call right now to have a shelter of last resort. you may recall that mayor nagael

used the super dome. we had a category 5. i think some of the things that created some of the pictures that we saw in the media, those things have gone away. those kinds of decisions aren't being made at state and local governments. but behind the scenes within the department of homeland security i think there's a subtle change, also. there was a question, frankly, of who was in charge. and i think we have now defined that and congress has said when there is a natural or man-made disaster and fema is responding, fema is in charge and so i think the chain of command is fixed. if you add on top of all of that the media's awareness that maybe they played in to some of the misinformation, too, i think makes a huge difference. putting all of that aside, i think the thing to remember about what's happened today is while we have a big storm, it's not a category 5 out in the

gulf. the trajectory of the storm has changed. this is going to be a major wind an probably a lot of localized flooding and some flooding. you recall not going to see other than it being the same day, the same landfall date, i think things are dramatically different on a whole set of levels. >> mr. brown, i realize this is not the same storm and as you mentioned other than the date being the same you are not going to see a repeat but based on the lessons learned, the changes that have been put in place, is it fair to say that we would not see a repeat of what happened in new orleans again on united states soil? >> well, i don't think you'd see a repeat of it. here's the thing we'll some point see a repeat of, whether it's an earthquake, another hurricane or something and that is despite the size of the federal government and the state like california or new york or for that matter florida, there will be a natural or man-made disaster where -- and this is why we prepare people to be on

your own for at least 72 hours. there is just not enough money. we could bilk the taxpayers of all of their wealth and we could not build a system to take care of everybody all at once. and i think that's a lesson that people are beginning -- i know craig fugate talks about it. i continue to talk about it around the world. you have to on an individual basis be ready to take care of yourself. the government can't take care of everybody. >> all right. michael brown, thank you. we appreciate your coming on today and sharing that with us. good luck. we'll see you later. thank you. >> thank you. up next, we'll head to tampa and get the latest of the republican national convention which seems to be back on track after a close call. at 7:30 this morning, billionaire donald trump will join us to talk business and politics. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things.

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married in to it. checking -- checking gasoline prices right now. tropical storm isaac shutting down 88% of u.s. offshore oil production. 88% of the offshore natural gas production. once ashore, the storm apparently could affect low-lying fuel refineries. you'll know actually if you heard what we were talking about

coming back from break, we'll phase it to trump the same way. the republican national convention kicks off tonight in tampa. that's where we find cnbc's john harwood, who is so comfortable in front of the stars and stripes, with the gray hair and everything, you look like you're ready to deliver a stump speech, though, john. >> reporter: joe, this is the greatest country that's ever existed on the face of this planet. i support that status for the united states. it's an exceptional -- american exceptionism is something i believe in. >> you know what? that wasn't just a speech, either, was it? >> reporter: it was not. it's true. >> that's something i've always wanted to hear from you. >> reporter: it's true. >> i appreciate that. >> it's increased by the election of mitt romney, isn't that true, john? >> know -- >> that's judd gregg. >> reporter: if you were the son

of an iwo jima marine, how could you believe anything else? >> that i didn't know. i'm the son of a guy that was in battle of the bulge and froze his feet and what did we do? >> reporter: we yak on tv. >> exactly. >> reporter: with a lot of courage. >> when a guy like neil armstrong passes, you know, i try to explain to my kids and the differences are pretty obvious. although we're not alone in being fat, cushy overpaid low lives, john. >> your kids will never see a person on the moon which is incredible when you think about it. i mean, for us, in our generation, going to the moon was an extraordinary thing for the nation to do and basically john kennedy sticking it in the face of the soviet union at the time. and now, that entire culture has somehow evaporated. where did that great leap

forward go to? >> i guess -- >> reporter: to twitter. >> yeah. the kardashians. today's heroes, celebrity heroes. anyway, john, we're off track a little but tell us what's the latest since we've seen you last? have you seen anyone walking around? >> reporter: no. >> it's early. >> reporter: we had a 35-second convention session. it was gavelled in and out with a moment of silence for those people in the path of the storm and tonight i think we get to the stuff that's significant which is in particular ann romney's speech. i know chris christie is the keynoter and popular, he's a potential presidential nominee in the republican party in the future but i think ann romney's speech may be more significant because the fate of this republican ticket rests in part on the ability of republicans to

make people and the ability of mitt romney to connect with people in a more engaging way than he has so far. you look at the nbc/"wall street journal" poll on the issues of likability, on understanding average people, he's getting thrashed by obama. he has some advantages but not as big as the personal advantages that obama has and i think ann romney, who's very popular and appealing figure, can help with that by talking a little bit about the mitt romney she knows and a chance to do that. not delayed and why they moved her from monday when the networks weren't planning to cover the monday sessions anyway apart from i sack and that high of a priority to be on network television to move her to tonight. we'll hear from her. >> what i was talking about when we came back from break with judd gregg and i was watching as i do a lot of different news last night and i heard one commentator who i won't out

again say that what romney has to do is he has to present himself, you know, i guess he has some shirts of costco, present himself as a normal guy. he's got to -- he's got a house i guess in lahoya with a garage with more than two cars or something and also got the wealth and this guy, classic, he said, how's he going to be able to overcome these negative images and come across and not such a negative way? it just made me think, okay. so we had john kerry that didn't even earn his money, he married in to the money and probably worth three or four times he and his wife what mitt romney is worth. i don't know what teresa heinz had. never was that brought up by the media in that last election with -- we never talked about that with john kerry. why not, john? >> reporter: well, i think we

did talk about it. >> no. like this? we have had six months. this is all we've talked about is that this guy is greedy and he made it on his own. he didn't even -- his dad was a governor and, you know, worked in the manufacturing industry. he didn't sit on the hands and there he did it himself and we still don't even respect that. the money he gives to charity. >> reporter: who doesn't respect it? i respect it. >> how does he overcome the negatives of this wealth, this greed that he has? >> reporter: i won't shadow box with another person on television that you're quoting. >> you know him. i'm sure he's nearby. >> reporter: i may but i don't know who he is. i don't know who you're referring to. look. i don't think the issue is how much money mitt romney has. i think the issue is mitt romney's ability to convince americans that he's got instincts like theirs. he understands what they're going through and use the skills and talents he has to make their

lives better. >> how was john kerry able? >> he didn't win. >> we never talked about whether he had the ability to, you know, to know what the average american is thinking. >> but i think that's what the republicans themselves are worrying about. >> reporter: is this a media criticism show? i don't understand. >> like -- >> reporter: why don't we talk about the campaign we're in? >> the whole revelation, wow. they never thought we didn't do that with john kerry. you wouldn't do that to a democrat. you don't need to. he's obviously compassionate. do you have anything to say here, senator gregg? >> i do, i do. i was enjoying the rant. the discussion, the discussion. well, you know, i would like to ask john this question. for me, you know, every election, the politician who's in it thinks it's the election of all time. natural narcissism of politicians but isn't this really a huge election for direction and definition of the country? if president obama's re-elected

we go down the path of the -- well, dependency state, the social welfare model of europe. if mitt romney's elected, we head down the path of -- >> no, no, no. there's no evidence of that, right, john? >> american exceptionalism. that's a bit of an exaggeration. but the individual over the state. this is going to lock us in place for a long time. how this election comes out, don't you think? this is not an election between -- it is not like bill clinton who's a pragmatist and george bush when's confronted with a terrorist event that changed the culture and changed his presidency. this is two individuals who are going to simply define our country for a long time because they have definite ways of the country to approach governing. >> reporter: you know, in theory that's true. and i understand the basis for what you're saying. i'm a little wary myself of

predictions of, you know, unbelievable, once in a generation stakes in an election because i think that all presidents ultimately being pragmatists. they're forced to the center and i think that my own guess is that the actual governing differences between what president obama would do if re-elected and mitt romney would do are significant but not huge. >> really? >> reporter: yes. and i think both of -- either one is going to have to strike some kind of a grand bargain and that the contours of that are known already. you know them very well. >> simpson-bowles? >> reporter: something like this. >> that's interesting. i tend to disagree. >> reporter: you're more pessimistic than i am. >> realistic. >> i think they have -- >> stark choices. starkly different visions. corporatism versus

individualism. >> reporter: remember how reagan compromised. >> but not core principles. and his core principles. >> reporter: he raised taxes. >> john, thank you very much. senator judd gregg, former senator, with us for the rest of the show. stick around. time now for today's aflac vif yeah question. what animal was the symbol of liberty in ancient rome? the answer when "squawk box" continues. aflac! ha! isn't major medical enough? huh! no! who's gonna help cover the holes in their plans? 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! at u.s. trust, our expertise extends well beyond

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now the answer to today's aflac trivia question. what animal was the symbol of liberty in ancient rome? the answer, the cat. >> aflac. all right. up next, the latest on hurricane katrina isaac and donnal trump on the republican convention. chances are, you're not made of money, so don't overpay for motorcycle insurance.

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welcome back to "squawk box," everyone. andrew has the week off. we've been watching the futures right now an they have barely budged. in fact, a little bit of a mixed picture. everything around the flat line and saw yesterday with the trading activity. by the way, yesterday was the lowest trading volume day of the year. obviously, it is the end of the

month and we're watching towards the end of the summer. we are also watching crude oil prices this morning jumping ahead of tropical storm isaac's arrival. crude oil prices up 65 cents. $96.12. we have 80% of the production shut down as the tropical storm makes the way to the gulf coast. our brian shactman at the port of new orleans. he joins us right now with a look at the storm's impact on the oil industry. brian, good morning, again. >> reporter: good morning, becky. thank you. might be closer to 90% now. at least 1 million barrels a day. i keep getting back to what i mentioned in the last hour. the landscape changed so much. north dakota doubled, tripling the production in the last couple of years but even with the area, this area is hugely important and the storm's path directly over a lot of operations, both in the drilling and the refining space. almost all of the production is currently shut and last night the state came out and said the

whole industry has to shut down. 344 operators and 31 different parishes and what does it mean to shut something in? in this industry, some of the things the state says to do, remove all of the product and fill the tanks with water. plug the wells and they have to notify the state when this is all completed. we spoke to a parish president saying people and equipment out of the area and people don't want to do it but realize they have to and, joe, the issue with this storm, of course, severity is important and almost the speed and moving at like 10 miles per hour and time is money and especially in the oil and gas space and the longer they stretch it out the more time it takes to get back up and running again and that's from the business perspective is their concern just as much as potential damage. >> i didn't know that. >> i didn't either. >> reporter: that's good. is that sarcasm? >> no. >> no, no!

are you kidding? i know what shutting in? no. it sounds like a complete pain. filling it with -- doesn't it? i mean, shutting -- >> how long does it take to get it started back up, brian? >> reporter: well, i mean, in terms of -- depends on where they are. deep water or what have you but it can take a week or two weeks back up to speed with the all clear. so when you talk about a million barrels plus a day, that's a lot of money, about -- i'm curious of bigger producers a month or so what that means for the quarterly results. it is definitely significant. >> who are the biggest producers that would be affected by this? >> down there? i mean, everybody's down here. obviously, exxonmobil, bp is still a major, major presence down here. believe it or not. they might be the biggest presence with offshore drilling. but all the major players are down here. >> all right. yeah. i was -- if i were to tell you, brian, it was a roughneck on an oil rig and i knew everything

you were talking about, if i tried to carry that off, do you think there's any way -- there's just no way. i couldn't. >> reporter: joe, you'd be surprised what human being can do. since i have you on the line, you have such great hair. can i do a quick aside? >> yes. >> reporter: i keep getting -- dries up on top and floaty. i don't know what to do. how do you keep it down? >> what kind of detergent when you wash it in the washing machine? just, you know, your run of the mill -- >> i use a softener and position it so that, you know, the softest part is in back where you're having that trouble. >> reporter: right. mine's not coming off. >> all right. good. good seeing you. the velcro is what itches. that's the dry part. thanks, brian. not many things to trump the donald and sometimes you can't beat mother nature. the delay of the gop convention. a big surprise, we'll have to wait. joining us on the squawk news

line is donald trump. mr. trump, it's good to -- i haven't heard you yet but it will be good to hear you. >> good morning. >> now i'm seeing that, i'm reading "the new york times" piece that when you have a 24 hours and you had all the stuff scheduled and nothing to do everybody gets to complain and i heard complaints. you know? it's barely raining. why did we have to delay this? was this a setback or will we -- six months from now not even remember that a day was canceled? >> it's unfortunate a day was canceled. weather forecasters like to hear themselves and get it wrong all the time, making a big deal so people watch television and watching and watching and watching and then find out like it's hardly even raining. i was going there on monday. we had a big deal planned for that evening and unfortunately that got canceled. i think it would have been very cool. i was in sarasota the previous night at a dinner. it was amazing, actually. and but i was going to tampa.

and, you know, you hear the weather forecasters. it was like the end of the world is coming and then go there and it's drizzling. it's ridiculous. i think they get it wrong on purpose and for ratings. they want people to watch them. >> you know what? that would be fine. if that's all it was is for -- i wish everything in the mainstream media did was for ratings, donald. unfortunately, i'm -- i think that's -- >> much of it is for ratings. >> that's fine. >> with which certain people get treated. >> it's ideological -- donald, it's the ideological prism of the elitist east coast that everything is viewed in that is much more debilitating in my opinion than ratings. we were just talking about it. you're a rich guy. you're filthy rich. i don't know whether that makes you feel like you're a bad person. us talking about how mitt romney, i heard it's a negative he's got more than a two-car

garage in la hoya and a big i.r.a. and a negative that he's got a couple of hundred million dollars and i don't remember hearing that about john kerry four years ago. i'm sorry, eight years ago. >> it's a different kind of wealth. mitt really worked and was very smart, did a great job. made a lot of money. created a lot of jobs. took care of a lot of families in terms of education and medical and everything else. you know, he doesn't talk about it very much and frankly there's something nice about that. he doesn't like to boast. he doesn't like to brag. there's something nice about that. it's an asset what he did and an asset and he doesn't like to boast or brag and something very nice about that. but it just -- when the dan's here, the obama administration points this out, they'll run with it, the media will run with it and carry the water and why we have seen for the last six months that's all we've talked about is how much money mitt romney has.

>> joe, the good news is if you look at the polls and what's starting to happen, they're even and now mitt's up on a couple of them that just came out. up by a point or two and slowly but surely it's starting to happen. people are seeing what's going on with the country and this administration. and mitt romney's starting to take the lead. so it will be very interesting. it's going to be a long 70 days but it's going to be a very interesting period of time. >> donald, what do you think the key is coming down to this election? i mean, we know it's going to come down to the wire. what do you think sways it one direction or the other? >> jobs. it's going to be jobs. it's going to be the economy. i think it's gasoline prices. you know? it's you watch them go up. beyond what you were just discussing in the gulf. prices have been going up very, very drastically. i'm seeing fives now. you look at gasoline with a five in front of it, that's pretty bad. if it goes up much more, i think you will have a revolution when it comes time to vote.

it's going to be very interesting but they're going up. we have nobody to protect us against opec. we have nobody. we have nobody that calls them that sees them, that talks to them and they got greedy before the election and that could, you know, they might lose their good friend barack obama. >> i was going to ask you a bunch of -- i don't know. i'm now finding out that everything's viewed now with racial overtones. are you familiar with the welfare, the provision that allows i guess the hhs -- >> yes. >> it allows them -- there's a piece by sanatorium in the journal today that simply points out to give more flexibility to the states to relax the work requirements for welfare. if you even bring that up at this point you are accused of somehow race baiting. did you see that? >> not only race baiting. i mean, if you say anything anything at all about obama, you're accused of being a

racist. bill clinton who i know very well and a terrific guy, accused of being a racist and the level of hatred to obama, they're working with him is incredible. that was a vicious campaign, what they did to hillary. they say the worst ever although this one is now super creceding because we had murder, felon brought up and bad words brought up. >> caused the guy's wife to die. none of that. i didn't see anyone complaining about any of that -- >> no, no. nobody complained about that. any time you say anything bad about obama, anything, you get called a racist. >> no one said -- i respect -- you shouldn't. no one said anything bad about "w" if you recall, donald. >> that's right. >> treated with kid gloves. thank you. we'll talk to you later, donald. we're waiting -- when is your surprise? >> they want to put it on in the next two days. i hope they have time to do it. it's going to be a lot of fun

and you weir a good senator, by the way. i'll tell you. a man of great common sense and intelligence and nice. it doesn't happen often. >> thank you. that's very kind of you to say. can i play on one of your golf courses then? >> any time you want. have a good time, senator. >> see you later. thank you, donald trump. coming up, bourbon street in new orleans, normally looks like this. but tropical storm isaac is ready to rain on the never-ending party and could cost the city millions in revenue from lost tourism. we'll speak to the city's chief marketing officer next. and then in the next hour, much more from the rnc convention in tampa. arianna huffington, daryl issa and orrin hatch will tell us what they expect to hear from the gop candidates. well with us, it's the same flat rate. same flat rate. boston. boise? same flat rate. alabama. alaska? with priority mail flat rate boxes from the postal service.

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the new orleans saints changing their practice and travel plans and heading for cincinnati. interesting. as tropical storm isaac headed for the gulf coast. interim coach joe vitt called off practice and meetings so players evacuate their family. they contacted the bengals and got approve to practice at the

stadium this afternoon. they're scheduled for final preseason game thursday in tennessee. seven years ago this week hurricane katrina hit new orleans and residents along the gulf coast are bracing for isaac. taking aim at the big easy right now. joining is the president and ceo of the new orleans tourism marketing corporation and, mark, thank you for being with us this morning. >> good morning. >> we realize that isaac is no katrina. the only comparison here is the timing the storm is coming and heading towards but tell us what it means for new orleans and how the city is preparing. >> new orleans is most resilient city and as we all know we have been through many of these storms, as cities along the gulf coast has over the last several decades, hundreds of years for that matter. we are better prepared than we have ever been. we picked up a lot of lessons of katrina. we have many more plans in place. the parish governments are all working together. yesterday, alone, everybody from

the white house to fema to the state government, local governments were all working together. they have been on phone calls and meetings over several days and plans in place and we're ready for this and we'll get through it and we'll be even better for it afterwards. >> what happens to tourism when you see a storm like this head that direction? >> well, you know, we ask our visitors to rely on their hotels and airline reservations and those contacts to make sure that they plan accordingly. we have visitors in town now, been in town for regular visits or meetings and conventions and those who are still with us will be handled with great hospitality at the hotels and we've had a couple of meetings, postponed or moved the meetings later in the month. we have another group still coming in, late tomorrow and in to thursday. and then this weekend, labor day weekend, we have a very large festival called southern decadence and it will have an economic impact of about $150 million on the city, so we expect that to go on as planned.

but i do want to stress the fact that the planning process under way here has been very robust and very strong under the leadership of our mayor mitch landrieu. >> what type of economic impact do you expect from the storm just in terms of visits put off, the people that decide not to come? >> monetarily it's hard to pinpoint right now but for instance today our airport is closed. obviously, the wipd speeds picking up so there's no airlines flying in. obviously, that will keep visitors from coming in and they should not be here, obviously, during the storm. so you 'll have some slowdown in regular retail and hotel/restaurant activity but hotels are actually operating now and so there will be visitor spending under way and some impact and we believe we'll get through this with little problem. >> what's happened to tourism since katrina? have you come back to the levels since before katrina? >> that's a good question.

before katrina, we were at a high level mark of 10 million viz to recalls to the city. since katrina, we have been making our way back, just last year 8.75 million viz to recalls to the city. we have a plan in place to reach 13.7 million visitors by the year 2018 which happens to be the tricentennial of the city of yurls. working with the boston consulting group in 2009 we planned as an industry to get our visitation back up and surpass where we were and also the visitor spending with it because if we achieve those goals we'll actually had 33,000 additional jobs to the economy so it's a jobs plan. it's a plan that we're trending in a good direction, upwards to that 13.7 million visitor goal so we'll get there and it's because everyone is working together. >> all right. mark, we want to thank you for your time this morning and best of luck there. >> thank you very much, becky.

>> it is sort of amazing the hurricane in the republican convention. we know because rick sanatorium told us that the lord is on our side and can't be him against republicans. obviously upset about something. >> your hair tweeted god didn't want the republicans to have a convention. >> maybe we didn't allow sarah palin to speak. >> could be. my hair, judd, my hair tweeted also he referred me to david brooks piece on romney. romney was a precocious and gifted child and uttered the first words i like to fire people at 14 months. made the first gaffe at 15 months and purchased the first nursery school at 24 months. highly leveraged. >> republican "the new york times" commentator. >> david brooks. a commentary. this is a parody but it's taken from capital serious editorials written by maureen dowd and frank bruni and compiled them in to what he has today. >> popular. >> david brooks, yeah.

coming up, more from guest host judd gregg. great lineup still to come in the next hour including darrell issa and orrin hatch live from the republican convention. this country was built by working people. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪

our guest host this morning, senator judd gregg, international adviser of goldman sachs. i have to read more of this. david brooks in "the new york times" editorial, he did the purpose of the convention is introduce romney to the real

world but found out a lot of stuff. >> read the last line. the party platform. >> romney's hit a family tradition. most cherished family member on the roof of the car. gail collins wrote that at least 150 times in the editorial. promises to bring the world together and make them feel inferior. he really -- >> got to get the platform right. >> the father owned a small auto body repair shop called american motors. miss mother called a small piece of land called brazil. how long were you -- you were in politics for 35 years. weren't you? >> just about. cathy says it was 35. it was 32. >> we've -- becky talked about lbj and goldwater. in a hat? >> showed -- one of the

campaigns, one of the campaign ads was -- >> from lbk. >> running kkk video basically saying that goldwater was a former member. >> there's the question of vitriol in campaigns. the difference today, however, i believe, the fundamental difference -- social media. a lot of people who are very much at the fringe and didn't have a forum to talk, you know, they come to town meetings maybe and shout. but those folks who are on the fringe now dominate social media and shout so loudly that really thoughtful and intelligent and often mainstream commentary or commentary reasonable on the conservative or liberal side is drowned out by the people that shout so loudly and dominate the social media space and i think undermined thoughtful discussion and dialogue during the campaigns. >> we never talked to you about

paul ryan and that pick. you know, we just had trump on. his contention a couple of months back was that paul ryan made a big mistake by coming out with a budget before the election and telling the american people the truth because if you want to get elected you can't tell the truth. you can't lead anymore. >> that's ridiculous. >> can you -- >> absolutely. >> if you -- suddenly you scare the seniors and allow them to -- >> people demagogue the issue under any scenario and what's important for people that take the time to vote and think about the responsibility of citizens to vote is tell them what you're going to do. be honest and straight with them. paul ryan, i think i was the first senator to endorse his proposal. i was ranking member on the budget committee at the time. i thought it was a great, great initiative. it took very significant steps down the road to getting the fiscal house in order and most americans understand we're

leaving the kids a country much less prosperous, the standard of living is lower and the safety as a nation is a lot less and the fact he stood up and put up a clear blueprint which is reasonable. the core idea is democratic. premium support. >> right. >> it was a democratic idea. >> clinton idea. >> came out of a think tank. so he's really i think done a great service to this debate which is he's elevated it to substance which is unusual in the context of what's happening generally. >> i think the american public more educated. >> very much so. you got a whole generation of retiring now that knows it's not fair doing to the next generation and would like to see ideas for how to fix it. >> a generation not expecting to see social security around. >> very worried about the money paying in. it's not being used well. >> we'll be back with more from guest host, former senator judd gregg. stick around. and every day since, we've worked hard to keep it. bp has paid over twenty-three billion dollars

to help people and businesses who were affected, and to cover cleanup costs. today, the beaches and gulf are open for everyone to enjoy -- and many areas are reporting their best tourism seasons in years. we've shared what we've learned with governments and across the industry so we can all produce energy more safely. i want you to know, there's another commitment bp takes just as seriously: our commitment to america. bp supports nearly two-hundred-fifty thousand jobs in communities across the country. we hired three thousand people just last year. bp invests more in america than in any other country. in fact, over the last five years, no other energy company has invested more in the us than bp. we're working to fuel america for generations to come. today, our commitment to the gulf, and to america, has never been stronger. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands

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a live report of emergency preparations in new orleans and the latest on the storm's track of the weather channel. plus, the port of new orleans halti inin ining operat. third hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc. first in business worldwide. andrew ross sorkin is on vacation this week. our guest host this morning is former senator judd gregg, an international adviser at goldman sachs and former senator and governor of new hampshire and cnbc contributor. we'll hear more while we watch what's happening at the rnc, too. joe? our top story this morning is isaac. the national hurricane center says winds are still sustained at 70 miles per hour. rainfall of up to 20 inches is

expected. the storm is likely to become a hurricane later today. emergency companies evacuated offshore oil rigs and shut down gulf coast refineries. the region accounts for nearly a fourth of the oil output identity country and 7% of the natural gas output. weather channel's paul good llo now. we keep hearing it's almost to a category 1 and still not yet. right, paul? >> reporter: yeah. not yet. again, people woke up this morning, they were expecting isaac to strengthen to a hurricane and pleased it's stale tropical storm. 8:00 advisory came out. tropical storm. very happy with that but you have to remember between -- word is now hurricane and just now 5 miles per hour. not a big difference and with the impacts whether it's a hurricane or if it remains a tropical storm packing wind and a large tropical storm and the impacts felt hundreds of miles away from the center. behind me is the gulf of mexico.

we are about a couple of hundred yards off of that. here's the thing. gulfport, the beach maybe knee deep or waist deep 100 yards offshore and this is usually a very gentle bathtub-like setting here on the gulf and seeing white caps in water that might be three or four feet deep and just a sign that shows how long isaac is churning in the gulf of mexico, the wind field it has. the wind creating the waves because we have barrier islands well offshore and taper the surf and when you have waves like that, easily three-foot breakers in three or four feet deep water, that's a sign of how strong and a large impact isaac has in the gulf of mexico. we know what happened in new orleans with katrina and the levies, when katrina road ashore, this is ground zero. where i'm standing, we had 29,

32-foot storm surge come through and devastate the coastal area and the homes here along beach boulevard in gulfport, mississippi. so, people here are definitely on edge. any time you have a hurricane or a tropical storm in the gulf of mexico. now, again, with isaac we don't expect a storm surge like that or a water level rise like that but the forecast for 6 to 12-foot storm surge and could do damage but also we could see perhaps a day and a half of rain so flooding could be well inland by a couple of hundred miles and people are prepared and waiting to see what isaac brings them here along the mississippi coast. back the you. >> exactly. we appreciate that report, paul goodloe. paul said, you know, you look out and stormy and something might be coming. we went on this -- down in georgia on a ghost walk and they tell a ghost story and in the gold days, 19th century, we had no idea. you look out and, wow, when's with the weather?

they sent ships out with a category 5 headed in like i forget 18 -- >> isaac's storm that hit galveston. >> no idea. >> that was isaac, too. i forgot. >> we take it for granted with the satellite shots of the huge storms and the old days, wow. kind of windy. >> our weather service -- >> farmer's almanac. >> cuba had a really good weather service and sent out -- >> isaac was the weatherman there. >> it was cuba that sent out the warnings and we didn't catch them. >> think of the days of -- >> great book. >> probably early 1900s we had no idea. >> rising tide, too. mississippi totally flooded. another good book. >> wait. a segue to mario draghi. worried about a storm in jackson hole and chickened out. mario draghi's speech this week at the conference had been widely anticipated but he's not coming. head of the european central bank calling off the trip to

wyoming citing a heavy workload. someone wrote in, european -- is that an oxymoron? plenty of central bankers still expected to attend and cnbc with a full lineup of the jackson hole conference. fed chairman ben bernanke to speak on friday but first philadelphia fed chairman and speaking to cnbc on thursday and then friday, david lipton, the highest ranking american at the imf. check the markets. u.s. equity futures very quiet. up indicated four points or so on the dow. >> yesterday, too. lightest trading volume day of the year. you can imagine -- >> nobody's here. >> people on vacation and focus on other things, what's happening at the convention, happening with the weather. >> our household, it's the fact our daughter's about to have a baby. >> we were going to talk about that. you were supposed to be a delegate. you chose to be here because -- >> well, it was an easy choice.

our daughter's having a baby. due today. she is due today. >> due today. >> my mother -- her mother and i are down here waiting in anticipation and caring for -- >> could be a week. >> her sister. >> right? >> it could be but i think our daughter prefer it to be today. >> she had kids already? >> she has one. >> one already. >> a 2-year-old. wonderful. >> going to be a busy household. >> will be fun. >> made the right choice. >> how many grand kids? this is how many? >> excuse me? this is our second. very exciting for us. >> awesome. >> oh yes. they change your life style. the great thing of a grandchild is takes your wife's attention totally focused on you since your kids left home to go to school or go off and -- careers. overwhelmed by the focus and then suddenly on the grandchild and you're back to just being an ordinary person. it's railroad nice. big improvement in life style for the grandfather. >> some people like the attention of their wife. >> of course, of course. you love it.

>> what are you saying? out of your hair now? >> an opportunity for her to move on and have other purposes in life than whether or not i go out and dig a hole for flowers. >> she was in your face? >> no, no. she was helpful in telling me things i should do. we work together in the garden. i dig the hole. she plants. >> fills the holes. okay. well, someone that did make the way to the convention, using the republican and democratic conventions for the nation's jobs crisis, joining us from tampa is arianna huffington. "the huffington post" partnered with many organizations, places like nbc news, microsoft and the rockefeller foundation to launch a bipartisan jobs initiative at the rnc and dnc conventions. and that is just the start. arianna, wonderful to see you this morning. >> great to see you. >> i'm reading your blogs and i know that you are frustrated by the idea that's there's so much

money spent on the convention and difficult to focus on the real issues. tell us about the frustration. >> here we are in town. in charlotte next week. this is a big show. but the truth is that there are still over 20 million people out of work. and there isn't a big emphasis on that. and so, what we're trying to do at both conventions is show what the private sector, not for profits, entrepreneurs can do to create jobs. we are bringing over 70 entrepreneurs to each convention and having an expo to show their start-ups and what they're doing and where the media can actually put some spotlight on what is working. and not just on what is not working. we have a pretty good job of covering what is not working but this is an opportunity to show that american spirit of creativity and ingenuity at work. >> what is working? what are some examples of that? >> well, what is working is take

the former jpmorgan honor list on a train trip in india and he decided to recreate it here and taking young kind of entrepreneurs to go in to areas like detroit or difficult other areas and bring their creativity and ingenuity and start businesses an doing a train trip across america which's used as a an inspiration of ideas. this is just one novel idea. he is going to be here in tampa talking about it. someone else was connecting people with a best health care providers. a lot of these new start-ups are using technology. a lot of our partners like microsoft, like starbucks, like the foundations are making promises. rockefeller foundation, for example, is committing a million dollars for the most innovative job creation idea.

matching funds for a competition of job creation ideas. the idea here, becky, is for us not just to be idle bystanders waiting for somebody in washington to come up with a magical solution. we are doubtful this is going to happen any time soon. we can activate that spirit of entrepreneurship that's so much part of the american dna. >> obviously, entrepreneurship is incredibly important. small businesses make up the bulk of the hiring when you look at job creation but to put it back in the political spectrum, when you look at when's being preached by the republicans, being preached by the democrats, what is the most important thing that you hear from these entrepreneurs that they would like or the help or assistance or what would they like if they got their dream wish list out of washington? >> well, first of all what they would like from us in the media is more attention because what they need is to scale what

they're doing. what they're doing now is very small and if we can put some spotlight on it, we can help them bring more funds, bring more people to accelerate what they're already doing. in terms of washington, obviously, tax credits would be very helpful. and of course, there are structural problems that we need to address. there's a skills gap. we have over 3 million job openings at the moment but we don't have the people with the appropriate skills or experience to fill these jobs. so that's why we are also partnering with educational institutions, especially community colleges to help them tailor their curriculum more towards the job openings already available. the point here is that we can all disagree about the role of government and of course we do and that's what this campaign is about but we can all along that the jobs crisis is so urgent that we cannot wait to settle the debate about the role of government before each one of us

does something to create jobs. even if it is for ourselves. or two other people. that can begin to make a difference and also change the narrative from despair to hope and the possibility that we can actually turn things around. >> i was wondering, you know, jobs really don't fall off a tree. they come because somebody's willing to take a risk, go out and make an investment, small businesses almost always are the creators of jobs and today you see a reticence of people to take a risk and make an investment because they don't know where the country is going in areas of regulatory burden. your point is to put jobs ahead of the government acting responsibly in the area of creating jobs but there's i think a good case to be made until we get a government that's responsible on the fiscal responsibilities you won't get risk taking, job creation in this country. >> we are seeing quite a lot of job creation in a small way and

that if you look back at the second world war and what was happening there that's a pretty uncertain future and tom bracco moderating our panels has chronicled that greatest generation that in the face of extreme uncertainty took action to make things better for themselves, their communities and their country. that's the spirit we want to revive here, the kind of bond-raising spirit that, of course, was so much part of what made it possible for us both to win the war and to rebuild the country. >> hey, it's joe and that was the greatest, i don't know, i don't know how much it cost but i needed that -- that's the most fattening stuff in the world. you know, you talk -- this is an argument about the role of government, how big it should be, how small it should be. and the converse of that, it's

also how we feel about business in this country, i think. and i look at your entrepreneurial record and what you've been able to do at "the huffington post." i don't know if you have aol in cash or stock. >> both, both. >> back to $32. tim armstrong, you have to love when's happening at aol. but sometimes when i read "the huffington post" i don't think your writers or editors have the right take on business and the positive thing that is a profit incentive brings to the table. in terms of the job creation that we're talking about. am i wrong in that? >> what are you reading? are you just reading about kim kardashi kardashian? you should go -- t those are pictures. i wasn't reading about her. those are pictures on "the huffington post" of her. you know what -- b.s. you know who i'm talking about. >> no, no, no. let me tell you what you should be reading. we have an entire section called

"opportunity." what is working. we partnered with linkedin and we have a thermometer that shows job creation, every day. what are the areas where there are job openings? we have an enormous amount of positive stories around business and job creation. and as i said, we may want more infrastructure spending than you want or conservatives may want. but the reality is that there's a lot we can do right now that's bipartisan. by putting the spotlight on what is working and helping those entrepreneurs scale their businesses. >> how much was stock? >> 25%. >> wow. yeah. seemed like a good deal at the time. back to $34 today almost. all right. >> and we're paying a dividend. >> we don't want the capital gains and dividend rate to go up, right? >> i don't know. i don't know. i don't know how arianna feels on that. you keep a lot less of that

dividend. >> and also, you know, here in tampa if you make it, we have the oasis to unplug and recharge. >> wow. >> and have some great baklava. >> thank you. >> thank you. >> we hope to see you on the set soon. >> maybe next week from the democratic convention, too. >> good. more from -- coming up from the rnc convention. up next, republican congressman issa and the next half hour senator orrin hatch what he expects to hear from mitt romney in tampa. dad's tablet... or lauren's smartphone... at&t has a plan built to help make families' lives easier. introducing at&t mobile share. one plan lets you share data on up to 10 devices with unlimited talk and text. add a tablet for only $10 per month. the more data you share, the more you save. at&t.

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turning back now to today's agenda at the republican national convention, we're joined by california congressman darrell issa. congressman, it's good to see you. what are you looking forward to most today? >> well, what i'm looking forward to the real start of the convention. the men and women in new orleans dealing with what we dealt with a day earlier and more. so we're recognizing that the storm really hasn't passed everyone but passed us and time to get to the business of really framing the debate for the romney-ryan team and i think that's wha lot of what we're dog

in small groups and this evening in a large group. >> who are you looking forward to tonight? >> well, i'm looking forward to all of our speakers. you know, we have compressed some of the speaking and people speaking quicker which both at republican and democratic conventions is one of the hardest parts is how do you keep people from doing that academy award thank you? we'll be closer and tighter with monday canceled. but of course, we are also televised the whole time, something that i think is important for people to understand is we're framing the debate for jobs and the economy. you had arianna huffington on a minute ago and we agree jobs in america, in the private sector, to create wealth personally and help us be able to afford our government is a big part of the message to hear here at the convention. >> congressman, if i made it real simple, i would say you

have 45-45 locked in on each side. 45 for obama. 45 for romney. you have the other ten. i'm not sure who they are and the republicans know how maybe to appeal to some of the subgroups we are talking about in that 10%. will that come out over the next three days? easy to preach to the choir. how do you get, you know, i don't know. minority groups, women. the people that you don't currently have or undecided. what will the message be to bring it, many a more inclusive republican party? >> i think the inclusive issues that the republicans have, like jobs and the economy, like private sector empowerment, these are what we believe in. and the other party will constantly tell you about things to scare you but are you more afraid that somehow the republican party isn't trustworthy on a great many issues? been around for a long time. that haven't changed.

or do you believe that we believe in private sector empowerment? we believe in the ability to get our economy going again and we'll make a change. my view is, you run against this president's failed record, $800 billion worth of stimulus and no jobs to show for it. those kinds of things is what we're saying we won't do. what we will do is, in fact, get the government off your back. work very, very hard to promote and get the economy going again. education is important. we think a skilled workforce from that and candidly we are a party with a record of doing what we say we're going to do, particularly when it comes to empowering the private sector and creating jobs and i think that's with we're running on as a party, not what the other party is saying about us that's not true. >> don't we have a unique message to deliver, especially to folks that just arrived in this country and participate in the american dream and an

opportunity to do that? not putting them in a situation to depend on the government for an opportunity. we'll give them an opportunity by empowering them to take advantage of that dream and we're not being very successful. >> the immigration policies of the republican -- on the platform are so strict and draconian that the people you talked about coming here to try to live the american dream can't get in here. >> joe, just the opposite. the policy is we should be bringing more people here who can contribute to the society in a very positive way whereas the democratic party says don't let them in and those people in that have talent. let's address the people here in a different way. >> congressman? >> well, you know, the point is exactly right. it's republicans that championed high-tech worker visas and protect jobs of recent immigrants and reform the guest worker program to make it work. yes, also republicans who want

to enforce the laws we have on the books an enhave a serious debate about whether it needs to be changed. but again, i think the point that it is perfectly made which is that it is the people voting are the people who have a right to be here and we have an obligation to make sure that they get their jobs so strong enforcement of the border is a republican platform but so is empowerment of immigrants and all of our citizens to have the kinds of jobs and education we all believe in. >> congressman issa, i don't know. we have to leave again. >> we should be able to ask him where are the guns? >> sadly mostly in mexico and killing mexicans. >> horrible. >> this is another issue of the president to run away from and that is he was going to be transparent and claimed executive privilege over criminal actions and a cover-up. >> all right. thank you. we appreciate it. we have a hard break coming up.

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welcome back to "squawk box," everyone. a airbus winning an order to triple the philippine fleet. they beat boeing to a deal despite u.s. support of manila. reportedly significant commercial and political pressure on the airline to secure a deal with boeing. no comment from the u.s. company or the state department at this time. today, governor romney will

officially become the next presidential candidate or representing the republican party. with more now from the convention, we are joined by utah senator orrin hatch. senator, welcome. and good morning. >> well, nice to be with you. i always watch you every morning. you do a great jb. >> thank you, senator. that is good to hear. i had already ranted a little bit myself. i admit it. about the dog on the car and the, you know, the stuff that we've talked about and then i happen the look at some of the recent comment that is you made and you referred to it as the meat grinder that is a presidential campaign and i asked judd gregg whether it was worse now and becky and i brought up in the lbj days with goldwater ran him at a kkk rally or something. it's all been hideously nasty and underhanded but that is

american politics, isn't it? >> well, i think in a lot of ways it is. it is a lot of fun, too. i think people enjoy it. you know, there comes a time when both sides, they have to get real. they have to talk about what this country needs, what they can do about it and, of course, how we'll pull out of the morass and mess we're in. i think romney's certainly been doing this. >> the other question i had, this is something that i'm sure that gets talked about. you are preaching to the choir with 45% of the country at probably this convention. people that agree with a lot of things that they're going to hear. and then the other 45% no matter what you do, they're going to be backing the president. the 10% that are up for grabs are some groups that aren't typically republican and that are hard for republicans to appeal to. i'm talking about women. you know that romney's down coming to women, minorities, hispanics. it's -- how do you become more inclusive with a platform that

doesn't seem quite as inclusive as the democratic platform? >> keep in mind, women throughout this country are concerned about their children, concerned about wages, concerned about a husband who can work. if they're a single woman, they have to work themselves. they're sunrised about getting paid well. they're concerned about an economy that will help them to raise their families and do what's right and they know they don't have that right now and unlikely to have it with president obama who really believes that government creates jobs and we all know that government, you know, can be helpful and certainly isn't the job manufacturing regime that really has to occur. that comes from a robust private sector and when the president continues to talk about taxing the rich, well, they're 940,000 small businesses that fit in that category and 70% of the jobs come. romney understands that. i know mitt very well. this is a fellow who's all business who really knows what he's doing, who we all know is a decent, honorable man, a good

family man, a wonderful wife and who basically is running not for himself but to try to get the country out of the mess it's in. >> senator, to joe's point, when you look at the polls it seems women overwhelmingly have much more support for president obama than mitt romney. what you said is true, where's the disconnect? >> i think that's going to change. look. when push comes to shove, women really are more concerned about families, about the economic life of their families, about morality and decent sy to raise their kids in and being able to afford bringing home food for their kids and so forth and same thing with hispanics. look. i was original author of the dream act and democrats messed that up and i have to say there are a lot of republicans who really, really believe that hispanics are basically hard workers. they're religious people. most of them are pro life.

many of them are people who just want a break and a chance to get ahead. and frankly, thinkty more they look at mitt romney and realize to create jobs and get us out of the morass we're in, i think the more they come along. we have been able to make a lot of headway with many people from all religious points of view, including evangelicals who realize if we continue to support the current administration we won't have the freedom of religion that we have enjoyed in this country and i believe that mitt brings a real dimension in every one of those areas and we are not going to give up on any of those groups, especially women and hispanics and evangelicals and others. let me tell you. mitt romney is the real thing. we saw that out there on the utah olympics. we were in trouble. there were allegations of fraud, mismanagement and criminal allegations. we brought him in. we were $400 million in debt. looked like the biggest eyesore

in olympic history. brought him in, he brought in top financial people. they turned that thing around and wound up with the best winter olympics in history and $100 million surplus to keep the venues alive. look at massachusetts. 3 billion bucks in the hole. turned that around. didn't raise taxes. balanced the budget every year. brought unemployment down from 5.6% i think to 4.7% and basically full employment with those that can't work and won't work and so forth. when you look at it, the man has been a success everywhere he's gone. that's what we need right now. i'm sorry to go on and on but i get wrapped up in how important he is. i know him personally very, very well. enknow ann, as well. and a number of his children. >> it's judd gregg. i know you watch cnbc. i came in to the gym around 6:30 in the morning, you were just leaving having been there for an hour and cnbc was on.

you had been watching it. but, you know, if the republican party takes over the senate and i think more than a reasonable likelihood they will, you'll be chairman of the financial committee. hugely important position almost as important as the chairman of the budget committee. an inside joke. >> i understand. >> what's going to happen with the tax code? major reform or are we going to be able to do something? what do you see happening with the tax code next year? >> well, first of all, i want to tell you. we miss you greatly. you were a great asset to the united states senate. i'm mad at you since for retiring. it is not a good thing. but yeah. we have got to do tax reform. we had the hatch-mcconnell bill that would have set aside 103 tax relief for one year and then with the desire to dedicate that year to tax reform. we have to go to a territorial

system. territorial system to bring a lot of money back to this country. and over a trillion dollars. and of course, our business industry sitting on $2 trillion more because they don't trust what's going on in washington. mitt romney will change that. as you know, we have to get some decent economics and the federal government isn't the last answer to everything which is what this administration really stands for. >> all right. senator hatch, thank you. we appreciate your time today and we'll be watching. >> great to be with you. take good care of my friend judd gregg. he's worth having around, i'll tell you. >> we will. >> thank you. >> he was talking about the salt lake city olympics and david brooks in "the new york times" wrote a parody about what his liberal colleagues have written about mitt romney and one of them was that this is -- i have to read it. after a successful stent at bain, romney lured away to run the winter olympics. the second most cause case

institution. >> after the senate. >> you have so tee david brooks today. i hope maureen dowd and gail collins and i should go on and on. i didn't start at "the washington post." gene robinson, check it out. anyway. >> when we come back, the port of new orleans halting cargo operations as the gulf coast prepares for arrival of tropical storm isaac. we'll talk to the port's president and ceo an the impact of the closure. you know why i sell tools? tools are uncomplicated. nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping's easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. no. come on. how about... a handshake. alright.

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tropical storm isaac approaching the gulf coast. let's get to cnbc's scott cohn joining us from new orleans. scott, we are seeing headlines that the president making an address about the storm isaac at 10:00 a.m. eastern time. >> reporter: that's right. so we'll be listening for that. a lot of preparation going on here. take a look, though. i want to show you. obviously not raining yet. our friends at the weather channel may be 15 minutes or so from the first bands here in new orleans. but if there's doubt about the storm coming, take a look at the clouds up there which are moving pretty fast coming in. the winds shifted a little bit. the winds now by my guess kind of out of the east as the storm approaching louisiana probably making landfall tonight or tomorrow morning, depending on how much it slows down.

and as i said, they're taking things very seriously here. in downtown new orleans, a lot of businesses have boarded up. put up sandbags. it's somewhat of a contrast to hurricane katrina, almost exactly seven years ago. even though this may be just a category 1 if that making landfall. that storm even though it's seven years ago, fresh in people's minds. now, this could be the first big test for the $14.6 billion upgrade really complete redesign of the levy system here in new orleans. you heard earlier on "squawk box" the head of emergency management for the army corps of engineers they're confident it's not close to the limits and feel good about that. starting to close some of the flood gates along the waterways here and a slightly different story outside the city of new orleans. to the south of here in

plaqueman's parish and they say they're bracing themselves. >> we have over a billion dollars yet to be built in south plaquemines and concerned about them for this event. >> reporter: plaquemines is also the site of a lot of the industry here, the petroleum industry. things like that. so that's important. now, the army corps of engineers tells us they're keeping a close eye on those levies, as well. one of the issues here on the louisiana coast is storm surge because the gulf is so shallow at the point the hurricane may come ashore and talking about six to 12-foot storm surge and bracing themselves for and the levies designed to withstand that. guys? >> okay, scott. flood gates, yeah. that's where the expression comes from. closing the floodgates down there and that's where we get it. right? opening the floodgates.

all right. well, we're wishing our thoughts with you down there. do we feel better about this? >> i think we definitely do. not one and the same. very clear about that. but a lot of -- expected. moving slowly. >> no matter -- the best-case scenario is still obviously concerning. coming up, we'll head down to new york stock exchange for the latest buzz from wall street.

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our guest host this morning is judd gregg, the former senator and governor of new hampshire. also international adviser at goldman sachs currently. judd, you look at when's happening from the international perspective. let's have you put on your international cap of goldman sachs. right now, when's the situation? what are the big concerns of europe and how do you think this whole thing plays out? >> badly. europe does not have the capacity to pay the debt it has. and how they get out from underneath that without breaking up the currency is not clear. they don't know how they're going to do it. you have to have a situation where country that is can't pay the debt back have the capacity to do something about that. denault an orderly way or inflate the currency and you can't do eat we are a unified

currency and can't expect northern europe to be able to support southern europe forever. and so i don't see a way out of this in the present scenario. certainly issuing bonds is something to dig the hole deeper. trying to kick the can down the road until the economy rises fast enough to pay the debt off and they're not going to see the economy rise fast enough because they've been borrowing for the standard of living just like here but their situation is egregious. some of the metrics are better than ours. deficit is better than ours overall and the accumulation of debt is better than ours but they don't have our unified economy. >> in "the journal" yesterday is a detailed look at spain where a lot of community efforts, helping people. there's barter going on. people do things for each other to pay back each other. everybody's sharing rides. >> but the standard of living is dropping precipitously. >> there's a huge public safety net in spain frayed because

there's no money for the public safety net so they have this beautiful, this grand public safety net and all these entitlements they were promised. but it's come to the point where there are -- there is no money to fund the public safety net. >> the next event is social unrest. dramatic proportions. >> it seemed like such a great idea to have the public safety net. >> as long as you're promising somebody else to pay for zblit. >> we can't ever take anything back. if you run out of money for the safety net, there's no safety net for anyone. >> that's right. you can't sustain a standard of living by borrowing. you have to do it through productivity. you have to have your economy growing at a rate that's able to increase people's standard of living. what they've done is basically not have their economy grow. they've basically borrowed to fill the hole and give their people a false sense of their standard of living. as that standard of living contracts you're going to see not only a mass i five fiscal e, i suspect you'll see major

social unrest and governments put under great stress and movement as you saw in france, ironically, you had a socialist government elected in the country where the tax rate is already 70% and people work 35 hours a week anyway. how do you socialize that government further? >> mario draghi said the ecb will stand behind this. your point about buying bonds -- >> i don't think the markets should. even if the ecb comes in and stands behind it which i don't think they'll be able to do because i don't think the germans will let them, they're still going to run out of the of money at some point. the ability to borrow requires a confidence in the currency. if the currency has substance behind it. >> the currency has been remarkably strong. around 1.25 for the euro given all this. >> currency is going to be par two or three years or broken up. there's no other way to deal with this type of situation than a default that causes

cataclysmic events. you've got to break the currency up in those countries. >> let's get down to the new york stock exchange. carl quintanilla. you are not@carl's necktie. >> the parody twitter accounts, i'm not responsible. you're not responsible for joe kernen's hair. >> i'm not. have you ever retweeted? >> sure, yeah. i'll give them some props. they were actually upset i gave the joke kernen's hair account a shout out yesterday. >> you know what? i've been following carl q's necktie for a long time. that account's been around a while. >> yeah. >> six months. >> your best feature? for me, it's the hair if f? for you it's the knot? >> you saw one about joe kernen's hair about whether

trump has one of his own? >> your necktie? >> no, no. does trump have a hair twitter account. >> i was going to ask him that. i decided i'm not going to do that. is there stock stuff to talk about? sfwl three big stories. you've done the big two, the weather and the rnc. kelly evans is onset. >> i just saw her. kelly evan's nose. that's all we're seeing now -- there she is. >> sorry. >> we'll also discuss draghi not going to jackson hole. >> you see what cashin said about that? >> wimp. >> is that what he said? >> no, no, no. that was joe. that was joe's hair saying that. >> what's so important? that's the question. also this report from goldman laying out the six things he thinks bernanke's going to say.

some are trying to argue this is kind of a win/win because fed gets to bat first. draghi can do cleanup later and look like he's focused. >> his european workload was too heavy. in august. the european workload in august, too heavy to come over here. kelly's exhausted. she actually has to work a couple of hours today. she's on the euro schedule now. >> that's very true. i knew that was what you were going to say about draghi in august. i had a feeling. it is funny, though. the way they phrased that i thought was kind of interesting. >> has he not been to jackson -- jackson hole -- >> the ecb president has not been. >> that's a great place in the summer. nicer than anywhere. thank you, carl. thank you, carl's necktie. thank you, kelly. see you guys and gals in a few minutes. when we come back we have final thoughts from our guest host today, former senator judd gregg. tomorrow on squawk box we'll

take you live to the gop convention in tampa. business and politics with staples co-founder thomas stemberg. harold hamm. and perspective from the democrats from former vermont governor howard dean. plus the latest on isaac's path to the gulf shore. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! strategies. chains. positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? open an account today. call 1-888-330-3137 now, and talk to one of our options specialists. optionsxpress by charles schwab.

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stock of the day. cyberonics. i guess it's a different company. that's not in the terminator? cyberdine systems. this is different. not the rise of the machines that did so much harm. this is the shares of an epilepsy treatment company. up beat outlook. tropical storm isaac is now near hurricane force. forecast from the national hurricane center shows that the storm has been barreling ashore late today or early tomorrow near southeastern louisiana. rain and tropical storm force winds are expected to spread into the gulf coast region in the coming hours bringing the threat of storm surge and flooding. president obama is going to be speaking on isaac coming up at 10:00 eastern this morning. we are hearing business updates

as well when it comes to the crops. good news, bad news scenario. winter wheat crop could actually be -- could be good news for those fall plantings to get some rain ahead of it. you've got the mature corn, soybeans and rice already weakened by the worst drought in over 50 years. it could suffer substantial losses from this as well. >> we've got a few minutes left. i say less than a minute. one side wants equal opportunity. guarantee that for everyone. the other side seems to want more guaranteeing outcome. more of a fair society guaranteed for people. my big problem is with republicans is that i'm not convinced -- or i need to be convinced that opportunity is guaranteed in terms of education and access to services and everything else. can republicans answer that in a way that is effective? >> i think we have to if we expect people to vote for us. >> education. >> education is critical to that. also an atmosphere where we empower people to go out and be successful and to take r