crisis. it ends with a job crisis. it began with a housing crisis they alone didn't cause, it ends with a housing crisis they didn't correct. >> it is thursday, august 30, 2012. clock is ticking towards november as "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen. andrew ross sorkin is on vacation. we're following to number of stories including reaction to paul ryan's speech last night. we're still watching isaac. that storm soaking the gulf coast. and it is forecast to become a tropical depression by tonight. scott cohen and brian shactman will bring us reports. before we get to those two

stories a few other headlines. first up barclays selecting antony jenkins as its new ceo. he's currently running the firm's retail and business banking unit. today's announcement comes just hours after barclays is under investigation by the uk serious fraud office over payments made to the bank's biggest shareholder during the 2008 capital raising. more from ross westgate in a few minutes. u.s. retailers will be reporting august sales this morning. costco is first out of the gate coming in with better than expected same store sales. fed officials and leading economists are gathering in jackson hole, wyoming. chairman ben bernanke will deliver a widely anticipated speech tomorrow morning. for weeks the market has been speculating whether or not he'll use the address to pave the way for another round of monetary stimulus. steve liesman will join us live from jackson hole. back to the political story. john harwood joins us from the

rnc in tampa. hey, john, my man. did you get a chance to see yourself on that other -- i don't know whether you were able to look at it. you look good. >> reporter: i was. i didn't have much to say. >> which i like. normally that's not the case. i want to talk to you at the end of your report, i don't know where you're going to go. one of the great things that ever happened to me is somebody gave for notice the obama campaign so i get these emails from michelle, i get them from john kerry, i got one this morning from david axelrod that i want to talk to you about. dave and i go way back. but at the end of what you had to talk about, i want to reference it, if you don't mind. but go ahead. >> reporter: let me talk about the speech a little bit. paul ryan hit a home run for his ticket last night. it was a speech that was both highly partisan, highly

ideological and a party that is overwhelmingly dominated by conservatives that message went over very well both in his prescription what ought to to be done now but in his indictment of president obama he made a point of referencing the attack ads that obama has been throwing, linked that to president obama's view of government and said he's wasting his money. here's paul ryan. >> i have never seen opponents so silent about their record. and so desperate to keep their power. they've run out of ideas. their moment came and went. fear and division is all they've got left. with all their attack ads, the president is just throwing away money. and he's pretty experienced at that. [ laughter ] >> now paul ryan went straight at the medicarissue, said he

and republicans are going win that argument with democrats, accused the president of cutting medicare to finance his obama care health care program and he said that that fight is not over because republicans are going to come out on top in the end. >> the president has declared that the debate over government controlled health care is over. that will come as news to the millions of americans who elect mitt romney so we can repeal obama care. the irony is that paul ryan had a very vigorous condemnation of obama care so there's no room in a free country for regulations, mandates and fines that are contained in that legislation. mitt romney put him on the republican ticket and passed a similar set of regulations, mandates and fines in the state of massachusetts and dealing with those contradictions will be one of those.

>> you're probably right. people that dislike obama care are not even thinking about massachusetts necessarily because they don't live there or whatever. >> reporter: that is a triumph for mitt romney the early in the primary campaign they were thinking about it. tim pawlenty was attacking him about it. >> we go way back. have you heard of yesterday's news tomorrow. i'm like a day behind. i was able to watch all of the -- nothing new for me. i was able to watch all the stuff from the night before when i got home yesterday. i hadn't seen arthur davis. i saw him interviewed by a competing network but i didn't see his speech. his speech had a quality to it that i was, i was blown away by. but he talked about obama care also and this is what i got from david axelrod this morning. joe, judging from the number of

times i said think it week you would think repealing obama care on day one is the most urgent goal of the republican party and the number one reason to elect romney. ill like to know what's noble about making it harder for people to get health care. please send it $5. blah, blah, blah. my point is normally a party doesn't talk about something that over and over again that it doesn't think is a winning issue and the "journal" has an interesting piece today. liberals and reporters they dine with. still can't bring themselves to believe that their historic achievement is so unpopular. when we were going through this i talked to you over and over and over again about how people didn't want to do this, didn't like it, didn't like the way it was rammed down their throats and you said basically to paraphrase you the american people don't know what's good for them or haven't looked at the law. >> reporter: don't know what's

good for them. >> arthur davis, he was saying that it's a sixth of the economy without a single republican vote on something this big normally you try to do it like rahm emanuel wanted to do it, do it in a way to get 70 votes in the senate. do it in a way where as a country we decide to make this move. what happened in 2010 and the tea party and if obama loses in 2012 it's going to be because of the way that that was handled and because of obama care. that's why republicans are just hammering it home and i'm going say i told you so if it happens. i'm telling you i told you so before it happened i'm telling you i told you so. >> reporter: that's a fair point. if he loses -- >> i even gave you raspberries at the end and that was totally natural. that came from deep down. >> reporter: look, the health care law, of course, has not

fully taken effect so nobody knows how in practice whether it would aid a, work as policy and b, be popular but republicans have very effectively campaigned against it and you could turn out to be right on that. i will say that there are two elements to the bipartisan point that you were making. one is that republicans as a matter of political strategy chose to do all out opposition to president obama on health care and secondly they did that against an idea that was fundamentally hatched by conservatives. >> some of it was there, i know. i left that out. >> reporter: the heritage foundation. social politics. innovators on the right. the fact that they posed it is a reflection of their strategy and also how far the party has shifted to the right. the ryan nomination elevation to the ticket is a reflection of the way that polarization has

changed relations between the two parties. they are so not a middle ground any more and it is republicans -- there are more conservatives than liberals in the country so a more intense center of gravity on the right within the republican party than on the left in the democratic party. >> the "journal's" thrust is because it was a new entitlement it brought into focus all the entitlements that we already are one water on. we already will have trouble keeping our promises on these other entitlements. by doing obama care it brought to the fore this whole discussion and maybe even, you know, they said that christie talked too much about eat your spinach, eat your spinach but maybe it ushered a time where the country says i don't want to be told i can have everything. >> part of ryan's speech last night was look medicare is in real trouble. it helped his grandmother and mother and he wants to make sure he shores the program up.

>> we can't afford the promises we made before. you can't have people contributing $150,000 and using $450,000 as they get close to end of life or whatever it is. >> reporter: but the challenge, joe and becky for republicans is to be able to persuade voters, swing voters that they do believe in the program and want to save it. remember it was democrats who started medicare over conservative opposition. they never want this program. that is the goodwill that the democrats are counting on to help them in the argument. >> republicans have effectively said look, the 700 or 800 billion in cuts for obama care takes effect immediately. >> ryan's budget does too. >> if you're 55 and under doesn't affect you at all or 55 and over. >> reporter: which, by the way, joe as we discussed --

>> one is to bolster medicare. other is to pay for obama care. now people -- >> reporter: not to bolster medicare. it's to shrink the role of government. that's the goal. >> reporter: trying to reduce u.s. doesn't deficit. >> so you can don't have medicare in some form. at this point it's unsustainable. >> reporter: there are two ends to the sustainability question. one is what goes in and the other is what comes in. there's clearly a fundamental disagreement between republicans and democrats over whether it is politically possible and economically wise to get more tax revenue from people at the top. if you get more tax revenue from people at the top, or people -- everybody for that matter, people in the middle -- you don't have to cut benefits as much and that's where the fight is. >> at that lot of it isn't

around the entitlements picture. you talk to someone who is warren buffett, a democrat who supports the president, a rich family can make promises that they can't keep up. you talk to bowles he'll say this is the hardest part of the budget to keep under control. he says you need to find ways to raise revenue. that's what -- there's a whole. >> reporter: that's right. remember, that paul ryan voted, he served on the commission, he voted against the commission. >> because it assumed obama care stayed in. we've asked him that. that's why edit. >> reporter: it had revenues in it. >> that's not what he told us pep said he did it because it assumed obama care stays in effect and he wants to repeal that. >> reporter: bowles didn't have

authority to repeat obama care. >> bowles set it aside because it was a problem too hard to fight. >> it didn't do enough. >> simpson-bowles said they took that part out because it was an issue that needed to be resolved outside of the commission. >> reporter: that's the weak points of the speech. spectacular speech. splarlly delivered with real conviction and a lot of positive aspects. what paul ryan does is end up accusing the president ignoring the results of the commission that he voted against and had paul ryan voted for the commission, there would have bean better prospect of getting something done with that than the fact that he didn't because he is the intellectual leader of the party. >> also, john, they say that a lot of people, when ryan was selected, they were wringing their hands, even some republicans and a lot of reporters and they say you know who you are. are they talk being to you? what did you say when ryan --

did you -- >> i thought it was the people in his party. >> reporter: what do you mean. >> he's referring to -- >> i'm changing hat they are saying to pretend that you were the person that they were talking about here. they thought he -- do you remember, obama himself said was really surprised. >> reporter: i was too. >> they always say the most important, you go all the way back to, i don't think dan quayle, that narrative we have of him now main stream media narrative base. even back then they tarnished 41's first decision of picking quayle. mccain the most important thing is to pick the right guy for vice president, so this is the first decision. this you have to say was a pretty good one. is the jury still out on biden or what did we decide on that? >> reporter: i ran had to beth myers who ran the selection

process for romney and i said look, congratulations. >> i was wrong this was a good pick? >> reporter: i said i think ryan's speech tonight justified your process because of the way he formed. now, still the question is going to be is paul ryan, what gets him over the finish line, my suspicion is that ultimately after democrats have punched back and litigated this, they still come out ahead in this fight and obama wins. that's why you have elections and we'll find out and he took it on very squarely last night. >> we'll see. we were both alive in carter/reagan. people had the same feeling then and then carter won six states. six. time for the global markets report. bye, john. ross westgate is standing by in london. kelly evans asked me whether we were treating you right. here we go back 15 years in this

young upstart, you know, do we not -- how close -- how long has she known you? to be asking that question. >> well, you know, i'm missing kelly. she's doing a good job on "squawk on the street". >> you always say the right thing. we may not scene her back because we like her there. >> yeah. that's a fight. >> we need to clone her. >> yeah. that's a good idea. that is a good idea. talking about cloning we'll get into barclays in just a second. ahead of the u.s. open we're weighted to the down side by around a ray shove 7-3 on the dow jones stoxx 600. barclays, yes we know who the new chief executive will be and it's this gentleman here, antony jenkins who has been running the

retail and business part of the bank. now barclays stock down 1.5% but does not necessarily have to do with mr. jenkins appointment. he was the favorite to take over if it was going an inside pick. crucially he's had nothing to go the investment bank business. so, we understand here at cnbc what he'll do is launch a root and brand review of bar chris. he'll stabilize the bank then this root and branch review and then try to restore trust in the bank. wants to examine the cultures and practices. we understand the chairman elect, dave walker who is not taking over until november has been involved in the process because it's very important that new chairman and new ceo have established a working relationship. politically we understand this has been approved by both the treasury and bank of england. interventions which were crucial in bob diamond leaving barclays as well. this is interesting.

pay package 1.7 million pounds. 250% salary enhancement inducement compare that to bob diamond who got around a 18 million pound package. so for politicians it's a safe pair of hands. whether he knows,000 navigate his way around the investment bank will be something people will say maybe that's where the down side of the appointment is. you're not fwantd the investment bank but do you know your way around it. so those question marks will remain. stock is down, we have a serious fraud investigation. barclays never got government help because it got funding from qatar. investigation into payments to advisors on that deal. not about individual so much as it is from the banks. barclays today front and center. back to you. >> ross, thank you very much. joe and i were talking about how we haven't seen you over here in a little too long. when is your next visit?

>> you western there. >> wasn't here. when your coming back. >> longer four and i. let's talk to the powers that be. i think there's a sense that kelly and i maybe need to come and do a little bit of a gig there before the end the year. >> we're in favor of that. >> we'll welcome that. >> we will. >> have you been over to see him? >> no. you have, i know. >> have dessert together. designee picked you up and drove you around. >> i did. >> he's got little screens. my kids are going -- what are those screens. authors like sun screens. >> authors fun. yeah. >> he's cool. >> knees that whole town. people are waving to him. >> really? >> sir westgate. >> that's why joe had to go to paris quickly. >> do you know how to play strip

bill lards? >> oh, my goodness. >> i leave that to the royal family. they do that a lot better. >> or worse. >> can you imagine if there were phone cameras during the edward vii rein. can you imagine if cameras were around with members of the royal family in the last 500 years the kind of stuff we would be looking at. not prince harry naked alone there would be -- >> you sounding slightly wistful joe. >> ross, thank you. two live reports from the gulf coast on isaac's damage. stick around, "squawk box" will be right back.

welcome back, everybody. scott cohen and brian shactman are reporting again from louisiana. scott, let's start with you. what does it took like on the ground today? >> reporter: becky, we're in plaquemine parish which you've been hearing a blot. the flood wall separates one of the spillway misto the mississippi river over here from the surrounding neighborhood and the gate is closed as you can see some water seeping out. the issue is that it didn't entirely work because there was quite a bit of flooding as you can see from pictures shot yesterday. floodwaters up to roof tops and people had to be rescued, several dozen people and now they are trying to make sure that the water gets backwards

where it's supposed to go and that's an issue. they will take the dramatic step today, as soon as the conditions permit of cutting a hole into that flood protection system so that some of the stormwater can get back into the mississippi and they can ease some of the pressure on the levee on the other side. they did this before in hurricane gustav and do it again. that's part of the mess that this storm leaves in its wake, somewhat manageable we think. there's the broader picture we've been talking about all week long and that's the energy situation. on the way here to plaquemine parish we passed two major refineries. and near as we can tell they are fine, no floodwaters or anything like that. so, the hope is that they can get back up and running soon. that's a lot of capacity there. brian shactman has been looking at all of that. he's further west on refinery row.

brian, what your seeing? >> reporter: the only facility we reported that lost power is the third refinery in plaquemine parish, philip 66 refinery. good news. what you see behind me is the shell refinery. over 200,000 barrels a day is in operation at reduced rates. we don't know how it's operate ppg there are four refineries in the region that are operating at reduced rates. five according to the doe that are shut in, about a billion barrels plus a dave refining capacity. in terms gecof getting it restarted, see if there's any flooding, get the power started going. if it was orderly shut down some say they can get back up running in three days. more likely five to seven. that's the onshore refinery situation. offshore things are more opaque. winds are stronger still

offshore. got to 95% of all gulf oil production was shut in when this storm arrived. about 72% for natural gas. there have been no reports of major damage. of course it's a little more difficult to get out there and assess things. there's reports shell may try to do some fly overs today. other companies will take it more cautiously. joe and becky, yesterday was the largest spike in retail gas prices in 18 months and it's not an oil issue, it's a gas issue and the quicker these refineries can get back up and running the better it is for the american consumer. >> yeah, brian. that's for sure. you know what? i feel first thing this morning and i guess that one parish was the one that got hit hardest. everything out in new orleans did pretty well. coming up heading back to tampa and talking about expectations for mitt romney's big speech

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♪ i got more. one for you. because of your angel eyes i might play. you claim -- you know what in that david brooks piece that mitt romney said he was born in every swing state. the left thought that david brooks was serious about that instead of him using it as sort

of a parody. david brooks really nailed. so stupid. good morning. fi you claim oklahoma. >> texas, ohio. >> and new jersey. >> mr. you from california and from massachusetts. >> i'm from ohio. >> i'm from indiana. that's my one state. >> good morning. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick in for andrew ross sorkin is mack. you're setting yourself up when you stand so close. why were you in the shot? if you don't want to be on tv -- our top story is mitt romney is set to officially accept his party's nomination for

president. paul ryan made his pitch last night. >> you would think any president, whatever his party would make job creation and nothing else his first order of economic business. but this president didn't do that. instead we got a long divisive, all or nothing attempt to put the federal government in charge of health care. >> there he is a lot of buzz this morning about a mystery convention speaker tonight. much of the speculation is pointing to clint eastwood. you'll remember his appearance in that chrysler super bowl ad in halftime america. >> the last couple of regimes have been, are putting us deep in the hole and i don't know why it's so, it's such a basic thing. your parents always tell you,

when you don't have a dollar in your pocket you don't spend $2. that's a basic philosophy of life. but some people think you can just put it off and put it off and then they print money that means money in your pocket becomes devalued and it's not worth as much, and eventually it comes down to zero. >> that was him talking about bowles-simpson how we need to take the debate more seriously. i'm trade you one clint east d eastwood, george clooney, matt damien, cher, on and on. you can take the whole kit and ok caboodle and i'll trade all the blow hards for clint. still good to true. some say the mystery could be nancy reagan. it could be moving.

i've seen her recently. >> we talked about the potential for clint eastwood because the super bowl ad kicked off a whole controversy whether he was trying to make a political statement. >> he was mad the right got mad at him. i think he was mortified that the left was using him as look clint says this and for clinton -- you know clint is a republican. he was a mayor of carmel. for him to become the poster child for the left he wants to set the record straight. >> he got stunned it got turned into such an idea because this was something he cared about. so for him -- >> he wants to set the record straight. too good to be true. other people say it's a reagan hologram. >> no way. >> there was some disappointing

ones no ones. no, not her. some mystery guest. >> it's going to be something to watch for tonight. >> it will be. probably not steven spielbergberg. i think not. >> probably not. >> not matt damien. >> joining us from tampa is a man who might have a good idea, ben white. ben is the morning columnist and the wall street correspondent for politico. ben you have to be, the person who is sleeping the least. i saw emails you were sending out after 2:00 in the morning put urge column together. thank you for getting up early with us. i appreciate it. >> i'm always here for you. i never sleep for cnbc. you ask. joe, i thought you were the special speaker. >> you were up playing strip billards. >> our hotel is on strip row. >> really? florida is just -- i know. that's true. that's one of the benefits.

you're on that junket down there. >> wouldn't know anything about that. >> seize the day. >> what did you think of paul ryan's speech last night? >> i thought it was very good. i thought he electrified the place in a way a lot of speakers haven't outside of ann romney. there were some dull moments and they were fired up for paul ryan and the youthfulness and energy comes through. there's a lot of his response on things like medicare and government spending and balancing the budget, not afraid of those fights. they think they can win the arguments. people were fired up for that. people don't want to be afraid of engaging on these issues and ryan said i'm not atrade. this is what i worked my whole career on. i thought he did very well. a couple of almost there's where he might have trechd the fact a little bit on the 716 billion in medicare. the plant closing he talked about. few items you can quibble about.

getting people excited he did a great job. >> i know have a column out this morning or a story out this morning that takes a look at when we might be hearing more details because that has been one of the complaints is, you know, we hear all of this talk, you're talking about very serious issues, you want to bring the issues up but some details are lacking. you think that will happen sooner than late center. >> i think it's going to happen towards the debates. there's a romney advisor quoted in there, talking about the need to get into some specifics. the problem here is this, he said i'll cut marginal tax rates 20%. corporate tax rates 10% and not add to the deficit. his big issues are the economy, budget, balancing the budget, getting the finances straight and i think really slam home his credibility he needs to explain how he'll do that. >> you want to send us some questions or something?

>> oil be happy to do. >> saw the piece. >> can to be done but how? >> get rid of the mortgage deduction. >> we had someone yesterday say what are you, stupid? these people have a stake in the game we'll tell them before election we'll take away your deductions. >> yeah. he may not go into specifics. >> bad enough ryan -- trump came on and said to put out that budget ryan put out six months ago was idiocy. >> he was trying to be honest. >> that's the last thing you need. >> we don't give voters enough credit to realize there's a lot at stake. we can't go on spending at th i. they need to come out and say

this is what we need to do to get us here. >> you think the party will, ultimately those that want to give the details and romney himself is a a details guy. >> he's a spreadsheet guy. he loves paul ryan. they have a good rapport in general. they like to talk numbers. he's not going to go line by line but explain to people a little bit more how this is important, how they can offer big tax cuts and keep the budget balanced. when he talks about base broadening get more detail to that. i think you'll see that in the debates. you'll see that when they engage on these arguments. if you don't do that democrats do that tore you and say he'll do all these terrible thunder and cut these things you like. can't allow that to be an open book. he needs to say this is what i'll do. >> what's the democrats response if he does put out those details? >> the democrats response is

probably, he's going to cut all your medicare. he's going to take away your charitable deductions. whatever he does say they are going to point out these are popular things for the middle class and cut tax rates on the wealthy and to pay for those tax rates they will try to come up with how it's a tax cut. they will have a response on that. that's what the democrat response will be. >> you see how stubborn the polls are. how many hard core democrats are watching and when the democrats have all their guys coming out how about hard core republicans can stomach watching that and vice versa. this is all preaching to the choir. you're hoping out of that 8% you got left you're hoping 1% or 2%ing might watch part it. >> we're dealing with a very

small group of undecided voters. mitt romney will get his prime. it's on the networks in primetime. a lot of hype. not all that 8% watching. some will. he's got to deliver a message and his core message of lower taxes, less regulation, how he'll get the economy going again because people are frustrated with this economy. i don't think they are sure romney has the right answers and obviously he's been defined this whole time in the obama campaign a rich guy, a wall street gri. he has to push that back and say you can like me i'm a decent guy and nice guy and i'll find you jobs. oil make your life easier. very important for him to deliver that tonight. this is one of the few opportunities he'll get to talk to that small slice of undecided electorate. >> ben, thank you again for getting up early. >> coming up on "squawk box" what the markets need to hear from ben bernanke, this guy is

in jackson hole tomorrow. wow. i said it on the air.

now investors are in wait and see mode ahead of ben bernanke's speech at jackson hole. rebecca paterson made an effort to get here. we'll start with her, give her most of the time. rebecca, we keep having people in here and we say look sooner or later you're a prince and how is the euro 1.25 or wherever it is. >> there's two things going on here. the ecb expands its balance

sheet prince money i want cuts interest rates which it might do in a couple of weeks that reduces the yield on the euro, makes it less attractive. what's helping the euro right now, two things. you got one reduced tail risk fears, worries that greece, spain, italy blow up. as that fear is reduced capital goes in, buys european stocks. >> the dollar is not so dear. >> oil. don't forget oil as oil prices rise, oil producers want to diversify their reserves, diversify their revenues so they don't only own dollars. china today, merkel is in china. they are going to make an voechl investment, volkswagen will make an investment in china. it's not as simple as balance sheet or rate cuts. >> don't believe it's going one for one. >> i think you have to have some huge shock which we should hope

doesn't happen. >> we've heard from a lot of people the only way for europe to be saved is if the euro drops. that's the best thing to help economies to get exports moving and going. >> it would help. germany is slowing. third my is slowing. they would definitely benefit from a weaker euro. all the countries would benefit from a weaker your. at 1.20, 1.25 the euro isn't weak. a weaker euro would help but everybody wants weaker currency. >> joe, what's the low on the vix and you know the old expression never short a dull market. it's the summer. is it really a dull market that's ready to rip higher. >> it's a market where everyone is waiting. seems we're waiting for a lot. to be honest with the jackson hole speech a lot of the expectation down here is bernanke is not going to say a whole lot.

maybe a little bit of guidance. it's funny i see people covering more down side risk than waiting for upside because, you know, if you look at the vix is relatively low from where we've been it's gone from 14 1/2 to 17 in the last couple of weeks. the feeling is he can't say anything that's going to be very, very positive. seems hard to believe he'll come out and say we'll do qe3. maybe he'll give us a little guidance on the neck fmoc meeting. he's trapped in a little bit of a hole i guess that's ironic for jackson hole. >> don't forget that's just the first month. that's right now. you look at implied volatility for the s&p going out six months, 12 months it's normal instead of 14 or 17 it's 28 or 30. people aren't complacent they are positioning out for further in time. >> one other thing you have to throw in there, joe, besides the

election, all the numbers we've had for the last few weeks have been very confusing. one month consumer spending looks great, next month it looks down. you see numbers coming over from europe today. not the most positive with one employment the highest in the last seven months. people are looking for a clearer picture. overall i think a lot of the people in the market are afraid. >> is it ugly if the vicks goes from 14 to 28 and will it happen in an overnight fashion? >> i don't think it will. if we got a big disappointment from draghi or bernanke, we could move fast. >> becky, joe, thanks. >> have a good day. >> when we come back, hurricane isaac soaking the gulf coast. we have a live report from the ground right after this. ave ongs and interactive learning, plus, in-branch seminars at over 500 locations,

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welcome back, everybody. isaac downgraded to a tropical storm from a category 1 hurricane, leaving in its wake plenty of damage. joining us from new orleans this morning is kim quillan, business editor at "the times-picayune." what is your general of sense of what's happened and what's left? >> the worst of it is over. in the last two hours the winds and rains have died down noticeably, before a 36-plus hour period of very intense rains and winds so i'm thinking

today will be a day when people will finally come back out. they've been hunkered indoors at home since monday night, and they'll probably be coming out this morning and beginning to check things out and check out damage, so it's been a rough day and a half i guess down here. >> what about the power situation right now? >> right now, there are more than 500,000 people in south louisiana without power, most of the city of new orleans is without power, so that's going to be a key issue in terms of getting the city and the business community back up and running. >> where do you think if things come down in terms of some of the key industries there, maybe tourism if you look at that, what's the impact of something like this? >> tourism, we did have one convention cancel, the american political science association was to begin a 6,000 person convention in new orleans today. they did cancel a couple of nights ago. we have a big festival planned this weekend, southern decadence, that attracts tourists from around the

country, that's in question right now. however, most of the tourism infrastructure seems intact. there wasn't a lot of damage or flooding in the tourism district. >> that's certainly good news. >> yeah, that is. we're also going to be watching gulf oil production which has been primarily shut down, over 90% of the gulf's daily oil production has been sut shut in because of the storm. we'll watch the port of new orleans which has been shut down, its cargo operations shut down since monday night and also watching for the agricultural impact. the state was poised to have a great corn harvest this year and the farmers are worried about what the impact on their crop will be. >> the great news, though, is really you take a look at the levee system and this was seen as one of the first key tests of everything that's happened since katrina when it comes to the levees and it looks like they passed. >> right. the federal government spent about $14 billion improving the levee infrastructure in this area and it looks like that

money has worked. it's held. there was a small, there's a place down in plaquemines where water topped the levee early yesterday morning but it was a parish built levee, it was not part of the federal levee system, and it was a levee that had not been built high enough to qualify for federal, to be a part of that federal system. the federal system itself has held, so it's i think people are giving a sigh of relief this morning about that. >> that is a huge relief to hear. kim we wish you best of luck getting everything back going. >> thanks. still to come on "squawk box," atlanta's federal reserve president, dennis lockhart. the feds are waiting for ben bernanke to speak tomorrow but we'll see if lockhart gives us any hint of further monetary boosts today. first, though, let's welcome

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finding america's fiscal footing. >> together we can do this. we can get this country working again. we can get this economy growing again. >> reaction from former gop presidential candidate and governor jon huntsman. and wyoming senator dr. john bar ross sew on paul ryan's plan to get america back to work plus what mitt romney needs to do or show in tonight's showcase speech for the republican ticket. and confronting the crisis. we are keeping an eye on what fed chairman ben bernanke could be doing for the economy. steve liesman is in jackson hole with the preview. the second hour of "squawk box" begins right now.

♪ looking out at the road, rushing under my wheel ♪ ♪ looking back at the years going by like so many ♪ good morning everybody. welcome back to "squawk box" on cnbc. i'm becky quick along with joe kernen. andrew is on vacation this week. the future this is morning, they've been actually a little lower than we've seen all week long. we've seen minor moves. yesterday the dow was up by 4.5, this morning the futures indicated down by almost 50 points. we'll see what happens but we have numbers coming up later at 8:30, we're getting the jobless claims and that will be key for the markets. republican vice presidential candidate paul ryan officially accepting his nomination. in his speech last night he criticized president obama on issues like medicare, job creation and the national debt,

each time promising the romney-ryan ticket would have the solution. >> i accept the duty to help lead our nation out of a jobs crisis and back to prosperity, and i know we can do this. i accept the calling of my generation to give our children the america that was given to us with opportunity for the young and security for the old. and i know that we are ready. >> tonight is the final night of the convention with mitt romney officially accepting his party's nomination. john harwood joins from us tampa. good morning once again. >> reporter: good morning, becky. we talked in the last hour the ways in which paul ryan went after barack obama, it was forceful and sustained in that speech, very well received in the hall but one thing he did was something that chris christie, the keynote speaker

the other night, he was more effective in christie in also building up the guy who put him on the ticket. >> our nominee is sure ready. his whole life prepared him for this moment to meet serious chal nengz enings in a serious way. after four years of getting the run-around, america needs a turnaround and the man for the job is governor mitt romney. >> reporter: you also poked a little fun at mitt romney in a way that i think helped both him and romney as he accentuated the generational contrast between the two. he made a reference to music that i think a lot of younger voters may appreciate. >> we're a full generation apart, governor romney and i, and in some ways we're different. there are the songs on his ipod, which i've heard on the campaign bus -- and i've heard it on many

hotel elevators. [ laughter ] he actually urged me to play some of these songs at campaign rallies. i said "look, i hope it's not a dealbreaker mitt, but my play list starts with ac/dc and ends with zeppelin." >> reporter: i wonder if mitt has jackson brown, the one you bumped in on this segment. the one he didn't talk about was tax cuts, a key element of his political philosophy, romney proposed a 20% personal tax cut and 10% corporate tax cut. he said the ryan's speech would be a prelude to romney so maybe mitt romney will discuss those ideas tonight. >> we were talking about that with ben white in the last hour and he is of the opinion maybe we'll get some of the details but maybe not closer until the debate time. sounds like there's debate in

the party as to whether you want to put out a lot of the details because in the absence of it you get attacked by the democrats but if you put out the details you stand in a potentisition o r irritating people, or if you're worried about deductions it could put new a tough spot in a campaign. >> i'm talking about the idea of cutting taxes as a solution to the economic problems we face now. paul ryan didn't really talk about that last night and i would expect that mitt romney would do it, although some of the polling that we've taken for nbc and the "wall street journal" shows that the idea of cutting spending, which is what ryan emphasized last night, is much more popular than talking about further tax cuts. >> john thank you very much. we'll check back with you in the next hour, our john harwood. >> neither ipod has probably the japan droids.

>> it's on yours? >> awol nation. >> our guest host former utah governor and presidential candidate jon huntsman. governor -- >> yjoe. >> how are you? >> i'm great. >> was the campaign taxing and hard? you look different. are you tan? you are babe-alicious today. >> i don't know how to take that, frankly. >> does he not? maybe you should have led into this. >> you look great. >> you are relaxed and probably good to be away from that grind. >> we're months out and comfortable reensconced in the private sector which is terrific, reconnecting with family and friends and i love all of that, but i miss the campaign trail. it was a terrific experience. >> you've lost some wrinkles and i don't know, you've gone backwards. you look great. first of all, you are not speaking, there was rumor you were going to be the surprise republican at the dnc convention. that's not you. >> i was sitting in annapolis, my son plays football for the

naval academy. i was sitting there after the practice and somebody called and said we just heard from a news organization you're speaking at the nc. i said what? apparently there was a blogger. >> bright blogger. >> news agency from "reliable sources" heard we were going to speak at the dnc. they want to hear from a pro-life, pro-guns, tax toting governor. >> was it the big photograph or anyway -- >> you know how these things work, somebody throws something out based on "reliable sources" and pretty soon it gets spun into the main stream press. >> okay you're not going to be there, but you're here. >> i'm here with you. >> not at tampa in the rnc. why not? >> this is mitt romney's convention. >> there's other former, some of the guys in the running. >> they are all part of the program and that's great. i was part of the program four years ago, and that was great by

me. >> are you backing romney, solid -- you're not a surrogate for the campaign. >> i'm not a surrogate. i'm happy to help if they'd like me to do anything at all. i was there four years ago working on the john mccain campaign. listen, i think he's got a great team together and i think his message is becoming crystal clear to the american people and tonight he has a great opportunity without the filters and the editors hanging on every sentence to square with the american people about who he is, where he comes from and how he's going to take us to the promised land. this is a great opportunity for mitt romney to speak to the heart. people don't remember the words but they remember how they felt when you spoke those words, and this is a chance for governor romney to move the audience. it's a huge deal. >> i like what you're saying here but when you spoke to some of the people about coming on today, one of the things you're worried about is florida and the ability of governor romney

actually candidate romney to carry florida given his vp selection. is that still a concern? do you doubt he can, and florida in your view could dictate the events, the outcome of the election and with the pick of paul -- >> i think it will. >> you think it will and with the pick of paul ryan you think that lessens that ticket's chance of carrying florida? >> it depends how the issues are teed up for the people in florida, given that very unique demographic. having campaigned in florida, let's face it, florida is an am amalcomation of five states? one. paul ryan has one of the most important messages when it comes to medicare. he should not shy away from it. the whole idea we go to a more defined contribution model for those under 55 years of age. >> makes sense. >> we are on the precipice of

fiscal disaster and for him to square with the american people, do you want to save medicare, this is it. >> noble, but do you lose votes because of it? >> i think a whole lot more people would than you might imagine and so far the polling would indicate that the seniors are not walking away from his message. i think many may have -- >> that's not going to affect a lot of the seniors. >> well it's a different demographic. this is our demographic. >> aren't you okay with it, becky? >> i realize that there are changes that have to come. the system is not going to survive when i'm there. >> it's a supplemental all or nothing? >> my concern is that you take the plan that's there and you say okay, we can't attack these ever-increasing costs so we'll give you a voucher, we will have a defined benefit on this, and that means eventually you have people who will wind up running through that benefit and running through the other side of it, and all you've done is placed the burden back on them. >> i think it's a disservice to call it a voucher.

it's a premium support model. >> a defined benefit model. >> you get something that you're able to take out to the marketplace. in today's marketplace i think it's an incomplete discussion. in tomorrow's marketplace with an expanded host of options from the insurance sector, more affordable, specific options and policies tailor oored to you. >> i understand it's not a complete discussion. i realize it's a discussion we need to be happening. i have questions about how it works. i think it's a discussion that has to take place and i realize the system is not going to survive as it stands right now. >> which is to say if you're going to save the budget on the spending side it's got to be medicare, got to be social security, got to be defense. >> i don't expect social security to be there for me to ever get to take anything out of it. >> that's an easier fix than medicare. social security can be tinkered with. move out eligibility, look at the underlying assumptions on inflation and a few other things on benefits. >> be nice to not demme gag it. they talk about raising it to 67

in 2037, and seniors go what, no, no way! it's like you're going to be 140. you're going to be 140 in 2037. >> 1935, social security came about, the average length of life was 67.8 years years. >> it was something like 65, right around the time you retired. >> that's something that maybe we can deal with, but then you got immigration and you got hispanics that are put off by these -- and i don't know whether you'da argue for the had core stance the republicans have. >> i wrote in the "wall street journal" we ought to see immigration as part of a growth plank so this whole conversation we're having politically ought to be not just on spending cuts but on how to you grow, how do you grow out of the problem we face today? as a governor the only way i got enough revenue to pay for teacher, roads and services was to expand the economy and bring in more revenue. that's what the country's got to do.

what are the growth planks? tax reform. phase out all the deductions which cost $1 trillion, $200 billion per year, they're nonsensical and impact maybe 7% of our population, faze them out, broaden the base and lower the rates. >> what are those deductions? from there's a health care deduction which costs 140 billion bucks a year, the fair home interest mortgage deduction which is probably 110 billion bucks a year, there's a charitable deduction which is probably 90 billion bucks a year, you start adding all of them up -- >> it's not 7% of the population that uses that, something like the home interest deduction, that's where when again talking earlier this morning, if you start saying these are middle class deductions that are popular, it's not 7%. >> when you have a conversation on trading off a lot of these deductions for a lower rate that would make this nation more competitive, i think you find at the end of the conversation people are willing to phase out, even over time, a lot of these

sacrosanct deductions for a lower rate that's going to make our nation -- >> you're talking about phasing out over time, not next year? >> the home interest deduction will have to be phased out over time. i didn't get this done my first year as governor but my second year as governor pretty much on the individual income side got it done. i went in saying i want zero deductions left. i want to take all of that and apply it toward a lower rate. i want to broaden the base and lower the rate. the same thing needs to happen on the business side and that is all the welfare needs to be flushed out of the system and take it down in the revenue neutral exercise which would be an attractive thing for businesses saying i think i'll reincorporate overseas, i'll keep more of my capital overseas because it doesn't want to be taxed again. it's anti-competitive and we need to look at growth as being the primary discussion that the republican party ought to be

having now about solving our problems. >> you know mila, did you know her? >> i met her as a young mayor when she was coming up. >> she's the real deal in. >> she's the real deal. >> did you see her speech? >> i saw a good part of it and read the commentary. >> a star is born. >> she is sincere. she's eloquent. she is who she appears to be, which is not always what you get in politics. >> right. >> i think she has a bright future. >> i agree. is there -- she's up for it's this election coming up in november. how is the polling right now? >> that's right, she's up against a guy named jim matheson. >> he's been in for a while. >> he's been in five or six terms, a very conservative democrat. the district, while just kind of reworked, is going to make it a very close election. in fact, jim matheson will be up probably by ten points or so but

i think it's going to be a nailbiter. >> we're playing zeppelin? >> for, yeah, i know, for paul ryan. >> "rage against the machine" that wasn't bad. >> we'll turn to the big easy where things have been uneasy, tropical storm isaac drenching the gulf coast, continuing its slow spin north. we're live in new orleans next with the latest. comments? questions? send them to@squawkcnbc on twitter. follow the show and look for updates from andrew, becky, joe and the "squawk" staff. "squawk box" on cnbc. and on twitter. you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes.

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welcome back, everybody. costco is reporting an august same-store sales increase of 6%, that was better than the street had been expecting. the street was looking for 4.5%, and yes we know august is not yet over, but the major chains are reporting those figures today. costco notes in its release the figures are for the four weeks that end august 26th. britain's barclays has a new boss, named anthony jenkins as the new chief executive, replacing bob dimon. dimon departed after the recent libor rigging scandal. a private equity consortium that included ryan seacrest

dropped out of bidding for dick clark productions. thomas lee and bain capital were seen as leading contenders to buy that firm. we've been keeping our eye on tropical storm isaac t is expected to weaken further as it heads north today. the former category 1 hurricane likely to become a tropical depression later today. but will still bring heavy rains and floods. scott cohn is in the area in plaquemines parish where the worst of the flooding took place. what you can tell us right now? >> reporter: some of the flooding is still developing. this is ten miles to the southeast of new orleans and a totally different picture than what we were looking at in the city of new orleans all week where the $14 billion upgrade flood system seems to have performed very well. out here it's a 14-foot levee and floodwall system that is run by the parish, and it is not doing the job exactly, because the water was flowing over the

top of the levee, the mississippi river is to my least and the water was coming over that and mixing with storm water in the neighborhoods, flooding severe, people rescued from their attics and rooftops, eerily on the seventh anniversary of hurricane katrina and just some of what we're dealing with in addition to extensive power outages. three-quarters of a million people in the louisiana area without power and we've seen a lot of that generally again outside of new orleans. we're still feeling some of the effects of now tropical storm isaac, still feeling sort of the back half of it and the heavy rains are going to condition up through northern louisiana and into arkansas as it becomes a tropical depression. it's been a slow, excruciating and wet march for this storm. >> scott, thank you very much. we appreciate all the reporting. scott cohn will be bringing us updates throughout the day.

when we come back, senator john barraso will join us live with his reaction to paul ryan's speech and what he expects to hear from mitt romney tonight. and here's a stock to watch, internet radio provider pandora hosting break even earnings after the bell taken expects current quarter revenue to come in better than expected, up 13%. we have more stocks to watch on the other side of this break. 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 and get a free 13-month e ibd™ subscription when you call 1-888-280-0149 now. optionsxpress by charles schwab.

welcome back. couple of stocks to watch this morning, sears, wow, you see, it's booted from the s&p 500. it is taken out, apparently booted, one of the original members of the index when it was created in 1957. it's being replaced by lyondellbasell industries, based in the netherlands. >> a well respected company. it's gone through some changes in its life. >> you know about this and tivo posting a 23 cent loss last

night, better than analysts expectations. revenues were in line at $54 million. if you have comments or questions about anything you see here on "squawk," e-mail us at squawk@cnbc.com. our guest host today governor huntsman has been talking about immigration. we'll come back to that discussion if you have thoughts or comments, send them in and we'll bring them up in the conversation. up next senator john barraso of wyoming will be joining us, we'll get his reaction to last night's speech from paul ryan and a preview of mitt romney's for tonight. 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.

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welcome back to "squawk box." in the headline this is morning, investors are waiting several key economic reports this morning. the labor department is out with its jobless claims, the weekly number that we see, that's about

an hour from now, it's an important number. economists looking for a slight drop to 370,000. also out this morning july figures for personal income and spending. economists see income rising 0.3%, with spending up 0.4%. and fewer foreclosure homes are being sold but at higher prices. the value of homes and some stage of foreclosure accounted for 23% of total sales during the second quarter and realty track says that compares to 19% a year ago, however, the raw number of foreclosure homes sold was down 22% from a year earlier. in that claims number, you know, we're back to a week from tomorrow? >> yeah, i know for the jobs number. >> it was a 31-day month, wasn't it? january, february, march, april. >> may, june, july. >> you do your knuckles? >> me, too. >> i always get confused, you go over and come back. i do two hands together. anyway, paul ryan telling his party and the nation that mitt

romney will make bold and difficult decisions and he's blaming president obama for the nation's current economic woes. >> and a presidency that began with such anticipation now comes to such a disappointing close. it began with a financial crisis. it ends with a job crisis. it began with a housing crisis they alone didn't cause, it ends with a housing crisis they didn't correct. >> joining us now is wyoming senator john barraso and senator, thank you for being here this morning. >> thank you, becky. >> we have talked to people who were in the room last night and they said there is no doubt that this electrified that room. this is exactly what the people who are there want to hear, and i guess the question is, do you think that this is a message that can pull in some of those independent voters that the campaign will need to be elected in november? >> oh, absolutely, and number

one is anyone who heard paul ryan last night knows that mitt romney made the right choice in this first major decision about who should be vice president of the united states. paul ryan was absolutely excellent, and when people think about the upcoming election, they think about what it means for themselves and their family and the future for their kids and for a better future, and this is the right team to do it. >> what do you think has been the most important points that they've put out to this point and what would you like to hear more of? >> you heard about opportunity for the young and security for the old, which is what paul ryan talked about last night but we're going to hear tonight from mitt romney who is going to show the american people that they can trust him, they can be comfortable with him, and confident in his leadership, and that's what we're looking for, is who can help us over the next four years really be our best individuals and for the better future for our country. that's what folks are focused on, their own lives in terms of their own jobs as well as the economy and the debt and the

spending, and a future for america, and they have two choices and the run mitt romney is the one that's going to lead to the prosperity and we've seen the failures of this obama administration, they've had four years, added $5 trillion to the debt and you know the numbers. we still have 23 million americans unemployed or underemployed. they've taken $700 billion away from our seniors on medicare, not to strengthen medicare but to pay for obama care and we have a debt of almost $16 trillion, that's not the right course for our country. >> explain that, senator, and this is joe kernen. you're from wyoming. what kind of doctor are you in wyoming? do you have to be like a country doctor, you got to drive? there's nobody living there i don't think except in the ski resorts. [ laughter ] do you have to drive like 40 miles to treat someone in their home with that little black bank? bag? >> as you know joe we have a half million wonderful folks in

wyoming. >> big state, senator. >> the equality state we balance our budget every year. >> i heard you guys when you were giving your delegates, but what you just said about medicare, that's the republican side, and that's the argument that they're both 00 billion plus in cuts. one says it's to bolster medicare, that's what the republicans say and they say that the 700 that the president's cutting just to pay for obama care, is there really a difference in the cuts to the average senior citizen? >> well, there's a big difference in terms of a senior's ability to actually get and to see a doctor. the president said if you like what you have, you can keep it. people all across the country know that's not the case. he promised $2,500 in lower premiums for families across the country. people have seen their premiums go up instead of down. this president has broken one promiless after another as they cram this health care law

through congress. >> is there a difference between the cuts? >> oh, yes. >> to the average senior they're both cutting medicare by $800 billion. >> there's a big difference with the president's independent payment advisory board, 15 unelected bureaucrats who are going to decide, which i really view as a rationing board, they're going to decide who can get care and what kind of care they can get. i think it will be harder for our seniors on medicare to get a doctor to treat them, to find a doctor, if their doctor retires, so we're going to see with the dramatic cuts that this president has made to medicare. >> what do republicans do with 800? >> the republican plan is a premium support plan, it's a budget that paul ryan put forward, it's one that i voted for, to strengthen medicare, because medicare as it is now, you don't touch it for anybody over the age of 55. we're talking about medicare so that the promise is there for the next generation so they can get the care that they need from

a doctor that they choose at a lower cost. >> john, jon huntsman here, good to be here with you. we've been to some hot spots together and i always enjoyed your company. let's go to november and let's just anticipate a romney administration. congress is going to play a critically important role in getting things done when you've got the early honeymoon and you can get some things through. if we're to grow as an economy what are the two most important things you as a collaborator on capitol hill in terms of sending the right signals to the marketplace that this country is ready to move forward again in. >> yes, governor, it's great to be with you again. obviously energy, american energy, which is part of our energy, security as well as our national security, that comes along with economic growth. if we're developing more energy sources in the united states, that helps people at home in terms of their quality of life and affordable energy and we're

not sending money overseas and there is actual increased tax revenue that comes into the government when we use u.s. energy supplies. we ought to immediately approve the keystone excel pipeline, bring that energy into the united states, but we have an opportunity to be a net energy exporter with what we have in terms of natural gas, in terms of uranium, oil, coal, all of those things, and we need it all but we ought to be focused on energy and the president's plan and his policies have been those that actually make energy more expensive, with his regulations that continue to come out of the epa, they're burdensome, they're expen expensive, time consuming. we need to make it easier and cheaper for the private sector to create jobs and a lot of that in congress is dismantling the regulations. >> what happened if the president is reelected, senator, what is the first order of business come november? >> well, the president will then lame duck session i think try to put a number of things through

because i think we're going to pick up senate seats in the republican party so he's going to try to work through an agenda, if he can reelected and try to get a lot done in what would be a busy lame duck session. >> what happens just with the fiscal cliff under either of those scenarios? we don't know what's going to happen in november but we know the fiscal cliff is coming. is there going to be a compromise reached to keep from us going over that? >> i've continued to support a grand bargain on these things that have been tried last year and it failed then. we need to prevent the fiscal cliff from occurring, that patty murray who runs the democrat senatorial committee said yes we ought to go over the fiscal cliff, they're threatening the economy with another recession because the democrats seem to be fixated on raising taxes, and i just think that's a terrible mistake. you shouldn't raise taxes on anyone at a time like this, becky, where this economy is in such a poor situation.

>> senator, we want to thank you very much for joining us today. >> it's crowded out there with all these bankers. those aren't the people you need in wyoming, are they? they're joksackson hole. >> if washington did things more like wyoming it would be a much better country. >> senator, thank you, and we will talk to you again soon. >> thanks, joe, thanks, becky. >> the population double, bernanke and all of those other, liesman. >> half a million. >> steve liesman is out there. >> we'll be hearing from steve later. >> awesome. coming up next, investors hoping for hints from bernanke and company on a possible qe3. we head out to jackson hole, wyoming, just talking about where the central bankers are, minus ecb chief mario draghi, who chickened out. he's a well connected former white house chief of staff under ronald ray dan, ken duberstein, will talk to us about winning the white house. der streaming quotes,

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activity, surprised to see it down that much. it could all change at 8:30 when we get the claims number and personal income and spending. >> miles from the convention and isaac is jackson hole, where fed chairman ben bernanke will be confronting the crisis facing the economy. steve liesman made his way to the grand tetons and he has some special guests on the way. we've been talking about you all morning long and what we can expect to hear. >> about the conference or my fishing, which one did you want to talk about? >> we did not mention it. you did yesterday. >> we did yesterday that, you know, that hopefully you do something cnbc related when you're out there, although you do fish with important people, too, right? >> i have done that, yes, in the past, and i hope to do it again now. it's part of the job, joe, like the combat pay, part of the job. >> exactly. >> wait -- >> we have an incredible -- go ahead, becky. >> somebody tweeted a. ic tour of you holding a huge

trout? i got to find this. >> see if you can find this, it's out on "squawk box" if you subscribe to it. >> if you really wanted good fishing he'd go to the other side of the teton range, to idaho around rigs where you can find the best fly fishing in the world. maybe this afternoon, steve. >> i'm not done yet, governor, we might get to idaho through the pass. let me tell you about the line-up, beginning at 8:05, jayson frankel from jpmorgan chase, we'll talk about mario draghi, why he isn't here and ben bernanke why he is here and what he might say and we have three fed presidents we'll be interviewing in the next two days. 8:30, dennis lockhart and charles plosser from philadelphia and tomorrow morning john williams of san francisco fed president first time we've done a television interview with him and david lipton, first deputy director of the international monetary fund he's going to be here and marty

feldste feldstein. lots of people who will figure out quantitative easing and figure out if ben bernanke will drop the signal everybody thinks may come tomorrow. >> what do you think, steve? >> well, i think it's really close. i don't think anybody knows. there's been a lot of commentary and i've been reading it all, everybody's been writing their best guess. we know the fed chairman is out there polling members about where they are, and i think it's very, very close right now. if i had to guess it's maybe 55/45 in favor of qe but i don't know how much you can go to the bank with that. lot of investors want to, because the august payroll report is really going to be decisive, in a way as you guys know, the growth numbers are the worst of all possible worlds for making policy, around 1.5% gdp we're going up to 1.7, maybe they'll reviews q2.

some of the forecasts to tfor t third quarter of north of 2%. that tells you the economy is still growing, not growing as fast as it ought to, to work our way out of the slack that's out there, especially when it comes to employment but is it enough to trigger additional quantitative easing? what bernanke does is dependent on what mario draghi does. if mario draghi can step forward with a big program it lessens the pressure on bernanke. >> the 1.7 didn't help and thought about you with the gdp revision, disappointing, whether you were back on the qe3 -- you were never really on it. you sort of were resigned that maybe it was coming and then you're back being right again, right, and now i don't know. you sound like you're wavering a little. can i just ask you -- >> flip-flopping around like a fish on the bank. >> is this like lean's lodge or are there enough rooms for all the people that are there? when you go up there to lean's

lodge with that debauchery that cotok puts together, 80 guys in 20 bunk beds. you have enough room in wyoming, should be enough space. >> plenty of room and space for everybody. >> when is lockhart on? >> 8:40, and joe i really appreciate your concern about that. it's touching. >> i just don't like when you're crowded and jammed into a hot, sweaty room with, you know, some nerdy central banker. who wants that? it's not good for anybody. puts you in a bad mood, puts us in a bad mood. >> plenty of room here in wyoming, joe. >> good. >> real quickly, we did hear from a guest yesterday that lockhart is probably the best person if you want the centrist view of what's happening there, right on the ground. >> absolutely. that's key, becky, you're right, we'll talk to him and gauge his temperature on qe, and that's going to really help us figure out where the center is. >> that's clearly ed asner holding that trout with the hat

down over his, all the way over his eyebrows, it's clearly, we don't have a shot of it but -- >> i just retweeted it. >> that's a sucker, that's not a trout. >> is that not a trout? >> looks like a sucker to me. >> was it a trout? >> looks like -- nice job, steve. that's got to at least be -- >> i appreciate that. >> go across to the range to some real fishing and find something in the four to five to eight pound range. >> i have witnesses, i know how big that trout was and you can't hurt me because i feel secure about my fishing abilities. >> and your trout. >> and my trout. >> still talking about your trout, okay. ken duberstein talks politics and the run for the white house when we come back. stick around. [ male announcer ] drive a car filled with

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big speeches tonight, mitt romney set to accept his party's nomination at the gop convention, et cetera, tonight. you know, we're waiting for that, but you throw clint into the mix and i dare say -- >> upstage? >> i don't know. if he is. i don't know. joining us, chairman and ceo of the duberstein group, ken duberstein. how are you? we have tonight, what did you think of ryan last night? >> i thought he was devastatingly effective. i think he was almost in the optimism and the reality

reaganesque without doing the sarah palin routine. i think he hit the ball out of the ball park. >> and tonight what does mitt romney need to do, do you think, and what are you expecting? are you expecting another home run? if ryan hit it out of the park he'd be glad to hit a double. it wouldn't be bad to hit a double. >> what mitt romney needs to do is three things, he needs to assure the american people that he's over that acceptability threshold, that they can see him in the bedroom in their kitchens, every night for four years. i think he has to lay out a plan for how he'll bring out the economy and jobs and the private sector and needs to do a contrast with president obama and the past four years. that's a tall order but i think he's up to it.

the des for romney is whether or not he comes across as in charge and likeable. we like to like our presidents, joe, and romney has to move up on that polling scale. >> i don't like to make things too simple, but let's say that you call one thing the politics of envy and the other the politics of aspiration or class warfare. we've seen that done before, seen that the rich people obviously need to pay a lot more and i'm not going to do anything to the bottom 50%. the benefits will accrue. will there come a time in this country where that message works and resonates? in the past a lot of the voters seem to be above that ploy. >> i think the american people are ready for tough medicine. they are concerned about the fiscal situation not just in america but here at home at the kitchen table and so whether they're willing to pay the price

on the spending side as well as so plugging some of the revenue loopholes, it needs serious conversation. the american people are prepared for it. we want our leaders to lead and not just kick the can down the field. we've had too much of that, and we need to get into the substance of having to change things in america. >> hey, ken, jon huntsman. you know a lot about how you make the machinery of government work so let's get beyond the pomp and pageantry of conventions and move forward into november. how do you organize a white house around the priorities that are so important for this economy right now, and then beyond that, how do you make the connection with capital hill so you can get stuff done. i go back to 1986, reagan with

tax reform and jack kemp. what do you think is the secret to success for romney administration post november? >> this is about governing and campaigning. if you go back to '81, jon, we only had 191 republicans in the house and ronald reagan governed and what you have to do is build it on trust and confidence. too many people worry about building consensus in washington. i think the job of president is building consensus in america and that's the way washington will follow. sure you need people on the other side of the aisle but if you lay out a bold program, and sell it to the american people, you will find some of those people, the other side of the aisle, who are really to rally behind you and put things together. i think they're awful close a

year ago, august. the trouble was, there was no confidence and no leadership coming out of the white house. i think john boehner and several people on the hill, including paul ryan were willing to go the extra step, in order for our system of government to work, you need presidential leadership, willingness of the president to start working with people, not at the end but at the beginning. >> thanks, ken duberstein, appreciate it. >> joe, we'll see you soon, thanks. we do have another big hour ahead with a special from jackson hole, wyoming. jacob frendel will be joining steve liesman and dennis lockhart at 8:30 eastern, after the jobless claims, an interview you can only get on cnbc. we'll be right back. it's a game changer. ♪

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countdown to the gop's main event. >> go ahead, make my day. >> before mitt romney's keynote at the rnc convention tonight we'll ask his senior campaign

adviser kevin madden. >> our news of the morning -- atlanta fed president dennis lockhart will join us from the jackson hole conference, first on cnbc. first breaking economic data, we have jobless claims and personal income and spending numbers due at 8:30 a.m. eastern, the third hour of "squawk box" begins right now. ♪ back in black, i hit the sack ♪ ♪ i've been too long and glad to be back ♪ ♪ let loose from the noose that's kept me hanging around ♪ welcome back to "squawk box" here on cnbc, first in business worldwide. ♪ i've got nine lives, cat's eyes ♪ >> paul ryan said his ipod list is ac/dc to zeppelin. >> who would have thought that mitt romney had muzak on his ipod. >> it's a shocker. >> i'm joe kernen along with becky quick. andrew ross sorkin is on vacation. guest host is former utah

governor jon huntsman. during the break we listened to all of our selections. >> kenny chesney. >> when ac/dc becomes muzak you know you're getting old. that would be me, too, not becky. >> i bet you "back in black" is probably muzak somewhere. ♪ >> at least in 1981, check the record i think 1981, ac/dc goes to muzak, you hear it in shopping malls you know you're getting old. >> what a great idea, muzak. >> when foo fighters, when that becomes muzak you know we're really, really getting old. >> that's close. you are happy. checking u.s. equity futures down. >> it is, requesting black in black" is in muzak. >> it is a classic. >> so is "hells bells." >> dow jones down 50 points,

last week of august didn't help the sell in may go away this year and we have the fiscal cliff and the election in europe but other than that we know exactly what's going to happen. congressman paul ryans awe were just talking about accepting the nomination to become the gop vice presidential candidate. in his speech he criticized president obama's record on the economy and the deficit. >> i have never seen opponents so silent about their record and so desperate to keep their po r power. they've run out of ideas. their moment came and went. fear and division is all they've got left. with all their attack ads, the president is just throwing away money, and he's pretty experienced at that. >> our guest host is jon huntsman, the speech paul ryan

delivered last night, what mitt romney needs to deliver tonight. last night paul ryan got the people who were in that auditorium really are in jitzed. energized. for november is it more important to energize your base or more important to go after independent voters? >> i thought paul ryan did a great job sewing up the base. he's not only brilliant guy when it comes to order but a great orat orator, too. and now you go beyond the convention to florida and that's a make or break state, ohio is probably critically important. republicans don't win without ohio so when you start looking at florida you say what are the sub groups i've got to begin appealing to? pretty soon you're down to the demographics that the republicans have to win. >> which are? >> we've lost them in recent years but we have to bring them back in, women voters, minority voters, the youth, those are three critically important areas and i would have to say that

there's a lot of give in each of the categories, the young people having spent time on college camp uses in the last few months young kids drifted away from president obama. they were captured four years ago. they need to be reenergized and the whole message about debt and the way in which their generation is shipwrecked unless we can deal with debt and jobs opportunity, they're not finding a lot of hope right now, that is an appealing message. they might not be republican, might not be democrat, they're part of the great center, the unaffiliated voters, they can be captured. >> college kids when you talk to them about debt and long-term initiatives, you think that's more appealing than hey, let me make sure you're paying less on your student loans? >> that's important but they glom on to certain issues that are topical and part of the history of their lives. when they look into the future they see a debt-to-gdp ratio in

this country that is 100%. they see fewer jobs for college graduates than ever before. there's a sense of hopelessness and despair. four years ago it was hope and change and right now it's despair. this demographic can be reached out and appealed to and paul ryan i think is a great deliverer of that message. >> that's part of what we were talking about today is -- >> the next generation. >> what message resonates. this has always been a third rail when you talk about the difficult decisions and tough love type of measures. i think people are ready to hear this today. >> if you can frame it in terms of what is coming down the turnpike and headed in their direction that their generation will be shipwrecked in terms of overall competitiveness, their ability to get back on their feet economically unless the following measures are taken with respect to medicare and social security and tax reform,

you get a lot of nods. it just has to be rolled out and explained in terms of ways that are directly applicable to their generation and what lies ahead. >> was there ever, you know, i think philosophically about a lot of this. was there ever a time in europe where they made that transition between where i want everything, i want to have it all and i want the government -- you know, they decided to go that route, at some point, where you can have everything, and the day of reckoning is finally coming. are we different here? isn't there a day in the future where we just throw in the towel and say gimme, gimme, from the government. dude, gimme health care. >> their dependency on government is measured by gdp. >> isn't it attractive? if it's attractive to 50% of the voters you'll keep winning. >> it feels good, you get covered, you get a program here and there, becomes 24% of your gdp that is spent on government expenditures. you're getting there, and when

your debt-to-gdp is where it is, you're a debt precipice. you can't compete. it becomes a national security issue not just an economic issue. that is what has to be put before the young people of this country. they get that part. they're taking the baton and running forward and the baton we're handing off to them is very problematic. >> a lot of young people i think want to, and that was the dan henninger piece, they're on the net, see the great applications, see things that they want, and you need money and a job to live in this world these days and not having a job might force them to become mature a lot quicker about things. >> this will be the issue of their generation. every generation has a big issue. this was the war in vietnam when we were growing up, and we were young kids watching it all play out. i think it is debt and i think it's -- >> joblessness. >> competitiveness and jobs as part of this generation. central bankers, and by the way, we do have to go, you

have -- becky's brain, already has 66 followers, not a physical characteristic, it's because of your grace and your balance and all of this other stuff this guy vot wrote. >> nice they picked that up. >> my hair and your brain. gathering for their annual conference in jackson hole this weekend, ben bernanke said to speak tomorrow. steve liesman is there. you've been demoted again, back down to just an economics reporter, not our chief economist, steve. >> i'm happy with that position, joe. >> it's a senior position. >> people can think what they want. it's a senior position, and i actually do fill both junior economics roles as well at the station but i have a guest here, a guy who is very, very senior, jacob fraen kphrenkel, chairman jpmorgan international.

thank you for joining us. >> thank you. >> and university of chicago professor. lot of the central bankers in office today were your students. that's good? >> excellent people. >> let's talk about one particular central banker, who is not here, mario draghi, president of the european central bank. why, in your opinion, didn't he come? >> well, as he said, his hands are full. >> right. >> and you know the real question is from a central banker's perspective, what is the upside of him coming here a few days before he needs to make decisions, a few days before the german court needs to make decisions. after all, his task is to ensure safe sailing rather than sound bites that will derail the serious discussion. >> what is it you expect mario draghi to do in the next month? >> i think that his strategy was set already and his strategy is, it will provide liquidity to the markets but they are also understanding and emphasizing

the real issue belongs to the government and if they belong to the governments, the governments must do a lot of things, including structural policies. europe is very uncompetitive and a lot of issues have to be put in place so it's really a question of the ecb says we will provide time but the governments must use the time. >> your analysis and you were two times governor of the bank of israel so you've been a central banker yourself. when you look at the eurozone, you don't think they belong together and we have some charts that you've put together here, for example, just looking at the unemployment rate disparities throughout europe, they don't belong, as you have been saying, in the same bed together. >> well, they may not belong to the same bed together because the tasks and the challenges are very different. you look at spain where unemployment is 25% and you look at germany with unemployment below 7%, you ask yourself, do the policymakers face the same

challenge? and it is about a wide range of other issues, competitiveness. >> we have another chart. >> you do. >> which looks at labor costs and that's a proxy for productivity. they're like in different kond nents essentially. >> the important point is that when the euro started, that number was calibrated to be equal across the countries. >> right. >> and look what happened within one decade, germany gained competitiveness, italy lost competitiveness, everyone else in between, do the challenges that face them are the same? one country is running large surplus in the payments, germany, it finances deficits of the periphery countries, do they belong to the same bed together? >> let me ask you this, what needs to happen from here? do they need to split up the eurozone in your opinion or perhaps a euro bond would bring them together? >> those are really the two directions but let's make sure that we understand that the euro bond has to be the outcome of

the market rather than a decision to introduce a euro. after all, at the present time, the risks that each country in the eurozone have are different. the risk of portugal, of ireland, they are more risky as a sovereign than germany. now, a euro bond would mean that all of them can borrow at the same rate. indeed, we did have six or seven years during the previous years -- >> but the market is telling us now they should not be borrowing at the same rate. >> they are different risk class but the solution is not the introduction of paper. the solution is changing economic policy and structures so they end up being a similar risk class. >> fed chairman ben bernanke in the united states much anticipated speech. i don't know why it is every august something is happening that we need to know what ben bernanke thinks. it just turns out that it's august but do you expect quantitative easing to happen,

the federal reserve to decide on a third round of quantitative easing? >> maybe, but the real question is to ask what is the problem today in the u.s. economy? again, in a similar way like in euro europe, the provision of liquidity which the u.s. does not lack liquidity today but the provision of liquidity is intended to provide the bridge until the real stuff is taking hold. it has been a problem for years now, the real gorilla is not in the fed. the real gorilla is in the budget. we have a fundamental challenge in the budget, if you look down the road, the budget deficit and the debt of the u.s. are going to rise, and unless there is a serious attempt like the attempt that deals with entitlements, there will be a serious problem. now everyone knows that before the elections, it will not take place so that we are really playing for time but let's not leave an illusion that the fed

can provide the solution to the u.s. difficulties. the fed can ease some of the challenges, but the solution lies in washington, in congress, and that's where the solutions lies. >> jacob phrenkel, thank ycob fy much. we're going to put the same questions to the fed president at 8:who. >> quintanilla sent me something, counter intuitive, around the hedge fund community someone sent in for qe3, it would have to be big, if it was big, crude would go even higher, that would hurt gas prices right before the election, which would hurt obama, so ben, you figure being political doing qe3, if you want to be political and help the president he'd do qe3 but it could be counterproductive so maybe he delays doing is it. can you ask lockhart?

is there anything to that? >> i think you're wrong about the -- >> someone sent me this. >> in being political here, sorry, joe, i could ask jacob frenkel, if you don't mind. the effect of qe3 on commodities, it's been a factor pushing up inflation. >> it may or may not but i really want to address another issue. i really hope that the economic story, when he looks at this period, will not be able to detect that we are pre-election, the fed policy should notten guided by the question. >> should not be. but will it be? >> knowing ben bernanke and knowing many other governors, i am with the belief that it should not be, and hopefully will not be. it really is bad. the whole idea of independent central bank, the whole idea that economics is a process that is not a function of a date, but it's a function of a process, is precisely that the elections should not play any role.

that's why we have congress and that's why the fed should not go into the territory of congress and of budgets and of taxes and things of that type. >> jacob, thanks again. joe it's a good question, right to be brought up. most of the people we speak to say it's not a political decision but who knows, maybe that's why they defer for a couple of months qe3. that's why i've been on the fence. >> all right, steve and jacob frenkel, thanks. momentum is building at the gop convention to tonight's main event when clint eastwood, no, when mitt romney, sorry, will take the stage officially accepting the nomination. there's rumors clint could be there. we'll ask romney senior adviser kevin madden. coming up, dennis lockhart, atlanta's fed president, he's going to join us from the jackson hole policy conference.

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welcome back to "squawk box," tropical storm isaac expected to weaken as it moves further north. brian shactman joins us from louisiana. you have the sun coming up, easy

to see what happened from isaac there. could you tell us more about it? >> reporter: yeah, today will be a day of assessment, becky. the storm is about 120 miles north of where i am in noroco, louisiana, it's far away from us and our weather deteriorated in the last few minutes. in terms of refineries i have a shell refinery operating at reduced rates. there's four of those that are doing that, five are completely shut, on and off-shore, i'm told there are no major reports of damage, so today weather permitting will be a day of assessment and we'll get a sense of whether there will be three days for startup times for some operations or ten days plus, depend on flooding, damage and power. plaquemines damage the biggest story, active all day wrong with rescues, a levee overtopped, tremendous amount of flooding. scott cohn will have reports from that location, in terms of new orleans they largely avoided

major problems, water outages and downed trees were the biggest problems and seems the pumps and levees that the government spent $15 billion on held up well in their first big test. we did a ride-around with the national guard and not many people know they have 4,000 plus soldiers on the ground obviously different response than katrina in 2005. i can tell you guys, cop cars and humvees were all we saw on the road yesterday and they were everywhere. there was one reported fatality in this storm, but when you compare it like everyone else to katrina which had 1,800, it's a totally different story and totally different storm. >> brian, thank you very much. you've been putting in incredibly long hours and know you'll continue with the updates throughout the morning. brian shactman, in louisiana. joining us still governor jon huntsman.

always harping on that is santelli and also i think larry from time to time that every single thing that the government, the central government does at this point should be viewed through the prism of whether it's good for bad or job creation. i remember we had the epa, lisa jackson still there, she got so mad when i said, when you're thinking about anything with epa, do you always consider what the first and foremost what the effect will be on jobs and it was a sore point and i guess it would be for the epa because you can't always just think about that but in this environment we probably should. >> of course you can. >> you can. >> in every corner of government you want to be able to look at the policies you're promulgating and saying what is the impact on our xcompetitiveness, what is te impact on job creation and what is the impact on growth and if it doesn't speak to something positive that comes out of whatever decision you're trying to make, then it's a wrong decision. you need clean air and drirvnkae

water. >> kacalisthenics to tie the ep to the ten-year growth, they'll say it is growth. one growth to one person is one thing, growth to another person you get there a different way. that's the problem with politics, everybody has different ways to get to growth. >> it's got to be drilled through every corner of the bureaucracy. as governor and a lot of other governors have done the same thing, when we'd have cabinet meetings, every single end of the cabinet, even higher education, we would say what does it do for growth and what does it do for the prospects of our state. >> neil armstrong wasn't a big fan of government bureaucracy. when he talked about the 300,000 or 400,000 people that worked on nasa with him, he said they were so motivated, so excited, so into what they were doing that everything you ever heard about a bureaucracy fell by the wayside, i read that, it was amazin amazing. >> it was a mind-set change and the moon shot for our generation is how you tackle this in global

competitiveness, tax policy and it all comes back to home. >> much more still ahead. we have the numbers coming up at 8:30, much more with governor huntsman.

when we come back, we are just a few minutes away from jobless claims and personal income and spending numbers. u.s. equity future this is morning have been a little weaker, off the worst levels of the morning but right now the dow futures down by 33 points,

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welcome back to "squawk

box," everybody. we are just a few seconds away from the initial jobless claims, also personal income and spending numbers for july. we watch for these numbers closely, the jobless picture is incredibly important, given what's happening both on main street and on wall street right now, and in washington. jim is standing by at the cme in chicago. take us through the numbers. >> it's another disapointing number, the claims number at 374 from an expected 370, last week revised up two from an already disappointing 372. this is a big deal to me. remember the 12% rally since june 1st in the stock market reflected two things, one was data that was getting better and two is expectations for qe3. these are sometimes second tier numbers over the last week and a half but it's hard to argue they're not getting worse. the confidence number on wednesday was worse, this is somewhat of a big deal and i think it's probably time that we take, blow some of the foam off of the stock market to the tune of 5% or 6% to the downside

because the closer we get to the election the more people think qe3 is less likely because of the perceived political ramifications it may have. >> we were just having a discussion about if the fed got moved would it be good news or bad news? which side of the election would they be taking? that may take time propping up the economy if qe3 is out there. the more immediate reaction might be increase in gas prices and that's something americans vote on, too. >> i fully believe that people are getting sick of paying high prices for gas. that will be the overriding thing and if we do qe3, there's one it could be perceived as being too political and have a negative effect and it could also underline the fact that growth is not where we want it to be and things are sluggish. even if it initially was like wow, this is political, it could have the negative effect. >> i guess the other thing is what's the fed supposed to do? they're supposed to be apolitical. should they pay attention to the fact there's this election

taking place? if you want to be apolitical, you tune out the entire idea, this is what we're supposed to do as jobs. this is the numbers and how we step in. >> to me it seems impossible to be completely apolitical when one side is saying perhaps we'll fire all you guys which i personally don't think they're going to do at all but i think they're mostly apolitical. >> does a rising stock market, which you'd get from qe3 maybe, it us that help obama? >> no doubt. >> huh? it does? >> no doubt it helps obama. >> but wait a minute, okay, say romney's numbers, and you've seen, you know, obama is still at 55 on intrade but romney is up to like 43 or 44, if that moves on this convention at all, and the market starts going up, people will say it's because romney's doing better, even rising stock market you can look at either way. >> of course, but that fits into the equation to me that's definitely on the obama side and historically a rising stock market has done well for the

sitting president. that is unambiguously a positive for obama. >> we will had adam parker at morgan stanley, already wrote a piece that the reason the market's rallying is because it's sniffing out a romney win, yurio. you're wrong. >> great, great. i'd love to believe that. >> your jacket is ugly. your jacket is ugly and you're wrong. the lapels look stupid. >> i want to be on that side. >> you're lucky you're a contributor because you wouldn't be coming back. >> jim, well done getting those numbers out today. i know that's a tricky task. >> thank you, becky. >> at least you got that right. >> jim yurio who does good. >> he's on friday on "options action" and i know how to say his name. >> did i say it wrong? >> no, you didn't. they do the -- you know. >> it looks a little weird when you look at it in the prompter first time around. >> a lot of vowels.

steve liesman is here with our newsmaker of the morning, steve, take it away. >> thanks very much, becky. i'm here at the jackson hole, kansas city fed conference with the atlanta fed president, dennis lockhart. thanks for joining us. >> thank you, steve. >> i was describing in the last hour the economic data as the worst of all possible worlds for a policymaker. claims 374, not low, but not high, 400,000, doing like 1.7% on gdp, what's your take on the economy right now? >> you know, i think this is a really good time to take stock in a way and take stock with a longer term perspective, if you look at the economy, since the beginning of the recovery, a little over three years ago, essentially it's been growing at around 2%. for a while we might have thought, i might have thought that we were seeing something closer to 2.5% to 3% with then fall back into weaker growth, but it's now pretty clear it seems to me that the economy is

growing at 2%. that's very modest growth, and it's not the kind of growth that's likely to bring great progress and bringing down unemployment. inflation has been well behaved. in recent quarters, a little over the fed's target of 2%. >> does it have to, frontal assault on this question here, is it bad enough right now to warrant additional easing from the federal reserve? >> i think it's a close call really. if we were to see deterioration from this point, let's say a persistence of job growth numbers that were well below 100,000 a month, if we were to see that, or if we were to see signs of disinflation that could signal the onset of deflation, then there wouldn't be much of a question about policy, but now i think the policy question is how

much will you gain and of course what are the costs, short and longer term. >> when you look at which policy tools have been the most effective, let's divide this into two ideas. communications people maybe downgrade that but the idea of forecasting rates remain exceptionally low into 2014, has that a big effect on interest rates and the economy? >> i think it certainly has had a big effect on interest rates. it's kept interest rates relatively low, of course. there's been fluctuations, the ten-year treasury moved up and down, often because of safe haven flows that come in and out. but overall, when i talk to businesspeople, for example, they say they have never seen interest rates so low. that doesn't necessarily mean that it's a big incentive to borrow, and that's a little bit of the problem that we're dealing with. nonetheless, interest rates are at a very low level and they'll remain there for a while. >> i sat last night with a group

of businessmen from the jackson hole area here. there was a lot of skepticism of how good, what good additional fed easing could do. could you drive interest rates even lower? >> certainly rates could be lower and mortgage rates, for example, could edge down enough to qualify some more borrowers, some more homeowners. i don't think the level is the problem. that's the problem i hear when i talk to business people all the time. i think further stimulus, if we were to put that in place would have some positive effect. >> everybody wants to know, dennis, we had a conversation about this in the last hour, how are the politics going on right now, gop convention in full swing, how does that play inside the federal committee board room? >> you know -- >> you love this question, right? >> i love this question, because i can give you an absolutely straight, honest answer. it has no effect.

politics simply do not come up. the fomc, in my experience, the fomc stays focused on simply what's good for the economy over the longer term, what's good for the country, and there is no discussion or minimal discussion of politics. >> ecb president mario draghi isn't here. is that a big deal? >> well, i think it's a signal that all hands are on deck in europe, and they're paying attention to their issues, which is important for our economy. the spillovers into the u.s. economy have not been severe but it certainly has contributed to the uncertainty that we're dealing with and the fact that they would actually stay home in august i think is a good thing. >> to the extent that the ecb acts, does that lessen the pressure on the federal reserve to act? >> you know, i see the two

policy spheres as really in many respects quite independent, you know, we focus on the domestic economy, what has to be done to try to get the domestic economy moving economy moving in the right direction. there's obvious interest in what they're doing and europe now is one of the elements that is i think having some effect because of uncertainty on the u.s. picture, but to go beyond that and say that we play off of europe in some way has certainly not been my experience. >> when you think about the costs and benefits of additional policy, and you said you could bring down rates a little bit, is it worth the costs that are out there, and what are those costs that you're worried about? >> i think the costs are speculative, that is to say we don't really know what the costs would be over the longer term, and the way i frame this in the past and i continue to believe that we could see some benefit,

but limited benefit for limited risk and i think manageable costs over the longer term. that's sort of the way i frame it at the moment. i'm not overly concerned with the longer term costs of more action, but at the same time, i see limited benefit from more action. >> dennis lockhart, atlanta president fed, thank you. >> thank you. >> back to you, we have a bunch of other great guests like dennis coming up over the next couple days. >> steve, that's an incredible interview. it's really fascinating to hear from fed president lockhart. one quick question. i know he doesn't have an ifb but maybe you could ask him this quickly. >> okay, sure. >> he first said when you asked him about politics, politics doesn't come up at the fomc, then he said there's minimal discussion. i know it's tricky to ignore that entire issue of what's happening with the national election, but could he give us

any examples of how politics comes up and how it's mentioned at the fomc? >> so becky quick, back in headquarters there, and when headquarters ask something i'm mandated to ask you, the question was politics you said comes up minimally in the meetings. >> politics. >> when it does come up, how does it come up? >> how does it come up. well, it might come up when someone simply points out that the press or the general public might perceive a policy issue in one action or another. >> so it's concern about the perception of that. does that then change policy at all? >> in my experience, no. i really have had five years attending fomc meetings and of course this year i'm a voting member, but in my experience, politics really has minimal effect on the discussion around

the table, the real discussion is simply the direction of the economy, the outlook for the economy, and how, what policy is appropriate for that outlook. >> dennis lockhart, thanks again. becky, great question. >> steve, great interview. thank you so much and our thanks to fed president lockhart as well. coming up later, more from former utah governor jon huntsman and preview of the main event, mitt romney takes the stage at the gop convention. up next we'll talk to his senior campaign viadviser kevin madden who looks like a romney. you'd have trouble picking, becky, on a blind date. summarye consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today

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tonight presidential hopeful mitt romney will close out the republican convention with a highly anticipated speech on how can he turn this country around. joining us with more is kevin madden, senior adviser to the romney campaign. how are you doing, kevin? >> good morning, i'm doing great. thanks for having me. >> we actually earlier said that if paul hit it out of the park last night, is a double good enough? this could be a grand slam tonight? >> yeah, i think in politics i think we're trying to run up the score, so i don't want to set expectations too high, but i think it will be good to see the governor hit a home run. i'm pretty confident that he will. i think he's very relaxed. he's got the speech he wants. he's got the message he wants to bring to the american people, so we feel pretty good about it. >> i know you've seen it written

that paul ryan made mitt romney better. it's kind of a complimentary thing or relaxed together or, i don't know, a yin and yang? i'm not sure what the heck it is. would you say that's true, having seen it evolve? >> i do. i worked up on capitol hill with congressman ryan. i've had an opportunity to travel with governor romney and congressman ryan, too. i think their resumes of course are very complimentary to each other. governor romney having worked for a long time in the private sector, not been in government as a career, and congressman ryan, he knows a lot -- >> uh-oh. >> okay, msnbc. somebody's controlling the switch. you think that's funny, griffin? are you back? oh, all right, someone moved -- okay, we're back. sorry, kevin. when we lost you, and i said, i was kidding around that msnbc

pulled the plug on you, but go ahead. >> well, i think that the pick of paul ryan i think what's most important for the people that are out there or haven't made up their mind i think they can look at it through the lens of how romney would govern. this is someone focused on n his career on big ideas and focused on reform. that's kind of what the american people want to see out of washington. they want to see people take on the big challenges. they want to see washington, the way it doesn't work right now, they want to see that changed. so congressman ryan offered a complimentary vision and i expect to hear more of that from governor romney tonight. >> kevin, can i trust you? >> you can, of course. >> will you be honest with me if i ask you a question? do you know who is on the docket tonight, do you know everybody who is on? >> who is on the docket? >> yes, to speak, who is the unknown speaker tonight? >> that i don't know.

that i do not know. >> oh -- >> there is a bliss and ignorance when you're in my job sometimes and you don't get involved with what the convention planners are doing. >> there are 17 different ways i can tell whether you're lying and so you're not going to make my day? i feel lucky. >> i'm not going to make your day. i have heard the rumor that it is clint eastwood but i could not confirm that for you and i'm always precise in what i tell you folks. >> he did not look down and to the left. i was watching for it. >> if clint shows up, we don't need to have the election. i think it's done at that point. >> i actually met him out in sun valley. i will tell you, it is very -- we had a fund-raiser in sun valley' tended. >> he already endorsed romney so it wouldn't be that big of a shock. >> he made our day back then. >> he made your day, made you feel lucky but that's always followed by "punk" and i'm afraid to say "punk." unfortunately, as i've said, i

have gone to bed at 8:30, i've seen all the earlier speeches, kevin, and were you there for all of them? >> right. >> i thought it was unbelievable and the lady from delaware was amazing, she's running for what attorney general or something, and then of course we've talked about mia love, too. but i haven't seen any of the big names so i got them all on dvr. >> you missed a fantastic speech last night from condi rice. condi rice brought the house down last night, incredible testimony to her journey through the republican party, some of the big differences that we have on things like national security, but also with just the world view that we have and the role of government and it was a great speech. it got incredible applause last night. >> is it your job to watch every minute of the dnc, which is coming up? do you have to watch it in. >> i'll probably watch a little bit of it but i'll be traveling a lot, so i'll probably just watch a little. after this week that i've had

with all the traveling that i've had with the governor, i'm going to be looking forward to a little bit of down time. i'll be watching a little bit of it so i can make sure i'm ready to make the arguments against. ready to make the arguments against the democrats and what i think is their essentially failed vision for where they want to take the country. >> i want one question for becky. just give me one deduction, one loophole that you'll close. just one. >> that's not my question. >> that would be something you'd like to know. >> i'd like to know. i'm not going to bring that up for a while. >> he will not tell you. >> kevin, what's the biggest challenge you face right now? because the polls have been deadlocked. and a lot of people say if the election were today, that president obama would be reelected. what's the biggest challenge you face and how do you plan on taking it on? >> yeah. well, i think the biggest challenge is right now -- what we're essentially fighting over right now, becky, is 8 to 10, some people might say 12% voters that haven't yet locked in.

they've been watching this process. and, you know, i think essentially they're judging it very harshly. that's what makes them undecided. they have yet to be persuaded. i think maybe some of them are very -- they have a very negative view of this entire process. the challenge for us, this is one of the things we hope to embrace over the next 68 days that we may have, is making sure those voters can feel much more optimistic about the direction of the country after they hear governor romney. that they can embrace essentially the vision that he has for the country. and that they can get excited about voting for him. >> kevin, if you do open up the flood gates with clint, i just want to let you know that the dnc, i just -- i just hit up hollywood obama supporters. and there are 13,900,000 results on google. you could theoretically have 13,900,000 second and third rate actor up there supporting obama. >> i would say 13 million democrat supporters who are

celebrities are only worth one clint eastwood as a republican supporter. this is clint eastwood. he's an american icon. >> he is. he is. all right. kevin madden, are you mitt romney? does he not look kind of like mitt? square jaw. the hair. that's a compliment. >> i have gray hair. >> you could be one of the subs. >> i'm only 40. >> you could be one of the subs. >> well, i -- >> you wish. see you later. thanks. when we come back, we have much more to come from our guest host today, former utah governor john huntsman. stick around. "squawk will "squawk" will be right back. >> tomorrow on squawk box we'll talk about the future of capitalism with arthur brooks. and our coverage of the jackson hole policy conference continues with david lipton, the highest ranking american at the imf. don't miss "squawk box" starting tomorrow at 6:00 a.m. eastern. in our dna. ld

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coming up, final thoughts are our guest host former utah govern eor jon huntsman. tonight, "crime inc.." carl quintanilla reports.

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the ultimate combination of the acdc and country things we've had going on all morning long. parting shots from guest host, jon huntsman. former utah governor and former ambassador to china. we heard from lockhart today. what do you think about qe-3? >> we're right to this critically important time in our economic history. you can't devalue pros terty. you can't bash your currency and expect exports to succeed longer term. everyone's going to follow suit. the fed has become a repair shop for broken fiscal policy. at some point you've got to say they can't do anymore. no more ritalin in the medicine cabinet. >> you don't think it would be effective? >> if you want to bash your curanly more than has been the case. if you want to continue to devalue and debase your standing in the world.