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this. that's tonight on an all new "american greed." good evening everyone. i'm larry kudlow. this is "the kudlow report". our lead story tonight call it deficit dinner diplomacy. president obama has changed his strategy and now meeting with key republican senators and house members, finally a falling of the political ice and rolling up of the sleeves in washington. you know what? i say this is a very positive development. it's a good new strategy for the president and i give all the credit for it in the world. now, we'll see what it brings. speaking of positive, another record high close for the dow and key economic data points looking positive. the market rally is not all about ben bernanke's fed. both profits and economy are doing better than many expected. i'm playing this from the

optimistic side. there's no debate about the economic impact about america's booming energy sector. last two reported months we kicked saudi month in oil production. american ingenuity strikes again. first up this evening in search of the big budget grand bargain president obama is take agnew approach in dealing with the gop inviting them over for lunch and dinner and picking up the tab. john harwood joins us now with all the details on the new deficit dinner diplomacy as i call it. good evening, john. >> reporter: good evening. the grand bargain the president sought has been elusive. he tried one strategy. that didn't work. ep tried another strategy of going to the fub and hammering

republicans. that hasn't worked to his satisfaction. now he's got a third strategy which is to go one step down to some of the rank-and-file members and avoid attitudes like the one from this guy who you interviewed yesterdayer, house speaker john borne. >> if the president continues to insist on tax hikes we won't get very far. if the president doesn't believe we have a spending problem i don't know if we'll get very far. but i'm optimistic. >> reporter: what the president did he had paul ryan in for lunch along with chris van hollen. they all get along in a very cordial way. the house is very difficult because of how polarized it is by party and ideology. more promising for the prospects of a republican more likely to be in the senate. chris van hollen had a little bit of hope. >> it's not going to be a sense of always finding common ground

it's going to require hard compromises on all sides. the president has been prepared to do that. he wants to make sure republicans meet him halfway. >> reporter: best prospect for meeting him halfway will be in the senate. he took a half-dozen republican senators out to dinner last night. he's speaking to the whole republican caucus next thursday and speak to the democratic caucus, larry and, you know, i don't think anybody has an excess of optimism this will produce a break through but you got to try something. >> john, i mean really truly it is a new strategy. he's never -- he's never been this hands on before. >> reporter: what's new is that he's going to what the white house says is the caucus of common sense and he's trying to apply a little bit of the schmooze factor and get out of formal settings. that's why they went to the jefferson hotel for this dinner last night and he'll go up on

capitol hill, meet republicans where they are, not have them in the white house, make them feel they are talking on his turf. yes, it's a different approach. he'll continue to hit them publicly, but, you know, we've got to see whether the president can get republicans to bend on revenue. if so he's prepared to bend on entitlements. we'll see. >> the posh jefferson hotel. one of my favorite hangouts. so what exactly went on in that big dinner last night and why has the president changed his strategy? where is this story going? joining me on set this evening, keith boykin and we welcome congressman dave swiker, republican from arizona. and senator from nebraska. so what is driving this? how do you see this and where is this going? >> well, look.

we had a good dialogue. it's an opportunity to figure out how we come together to address our debt and deficit, which we need to do. so i hope the president continues to engage us for the good of the american people. >> is one of the key points that came up last evening is that the president wants to get rid of the sequester and put together a grand design? >> not really. we went through where we're at with the sequester right now. we made it clear we have to make these reductions and we're working to do it. the house pass ad continuing resolution. it's in the senate. we're working on it in a bipartisan way. we'll make these reductions in a more thoughtful way. what we focused on was a big deal to address the debt and deficit with entitlement reform and pro growth tax reform. >> did the president mention any entitlement reforms? i met with speaker boehner yesterday. we talked a lit about the so-called change, cpi, cost of

living adjustment. perhaps some means testing of medicare. much more has to be done. much more will be proposed by paul ryan when his budget comes out. did you or the president or anybody get more specific on entitlement reform >> we talked about entitlement reform. how we reform medicare and social security, to preserve those programs that keeps them basically the way they are for current seniors but for our younger generations, how do we make changes to make sure they are there in the future. we also talked about tax reform, and we have differences. we feel that revenue comes from economic growth. he is pushing for higher taxes. >> his definition of tax reform is different than your? >> it is. but look we've got a timeline here over the next four or five months as we go through addressing the sequester, which we're going to do by making reductions in the most thoughtful way important, i think we got a good process in the senate to do that now.

then we go into the budget challenges figuring out how we get a house and senate budget resolution. that crates a real opportunity to get a big deal. the president needs to stay engaged and work with us to do that. >> just a couple before i bring our distinguished panel in, they want to ask some questions. did you raise tissue of keystone pipeline. you're from from north dakota. i know it's a key issue four. did you raise keystone? >> i didn't have to. i started talking about energy and what an incredible opportunity it is and he said to me, john, i know you want to get the keystone pipeline done and i said yes that's right. we need a timeline. we ned to get it done. he said okay which kind of didn't mean yes or no but he referred me to one of his energy advice divorce so i'm setting up a meeting to have that discussion. >> finally, just generally, you've been to a lot of meetings

with a lot of dignitaries. how was this tone? was it relaxed? on edge? how did you read the meeting? >> it was good. i think if you talked to any of the senators that were there it was remarkably good. and there was a real focus on look let's take these next four to five months, let's go at this hard and mr. president same engaged with us. don't go back on the campaign trail and criticize congress. let's get it done. >> what did he say to that? how did he react to that? >> so far he is going in the right direction. next week he'll meet with us. we'll see the proof will be in the pudding. >> we have distinguished house member. >> i have one question that you mentioned tax reform. and, look, we know the president wants more revenues. was there any sparkle in

anyone's eyes at that table about the idea of doing a broader lower rate tax reform package? >> we said specifically that's how we should do it. we all agree there should be revenue. the difference is we believe it comes with economic growth. if you do pro growth tax reform where you close loopholes and lower rates you'll get more revenue from economic growth where he's still pushing for about 600 billion in net higher taxes and that's a clear point of disagreement. >> keith, you want to ask the senator a question. >> two points. first about the changed cpi and the medicare means testing. president has already said he supports those things in the past. so the idea that he's talking about that now that's a concession he has already given? what are the republicans willing to concede? >> he's talking about both of those. we agree. we'll have to find a way to make changes in not only entitlement programs but as i said in how we do the tax reform. so, look, he's already gotten

600 billion in the fiscal cliff deal. he's already gotten additional tax revenues. now we need to figure out how to reduce spending and get economic growth. >> how big an obstacle is the revenue side going to be, senator? >> i think we can get there. i think just what i said, i think we're going to go through, get sequester done, in a more thoughtful way. bet bipartisanship i believe in the senate to do that, get it passed through congress. it will be hard to reconcile the house and senate verges of the budget and then we still have the debt ceiling, that will kraelt t create the bigger impetus. >> tax reform. i am particularly interested in corporate tax reform in fact it is my opinion humbly the single most important potential pro growth measure possible. lower the rates, broaden the base for both large and small

businesses. is that going anywhere in the house? >> look, i'm pathologically optimistic on that. i had a discussion with david camp on the floor of the house two days ago and he's a great guy. he does seem to be driving this. it may be the single most important thing that could come out over the next couple of months because it might be the one thing where the right and left could have a common vision that we need to grow the economy and you do it through tax cuts. >> the president said he supports lowering the corporate tax rates. what will the republicans bring to the table? >> first, a huge portion of our corporations are now are pass through entities, the llcs, the s corporations. the old days of we'll do corporate tax and everybody else is screwed. i'm sorry that world is different. we need something very broad based, lobbyist creating gimmicks need to leave the tax

code and lower those rates solely focus on economic growth because that's something that will create true revenue. >> i want to end with this question. are entitlements linked to tax reform? is this how this came out last night? >> i think you need both and that certainly is the objective. but i would comment to the other people who are visiting with you, i don't have all the names but i've been listening to their comments. when you looked, we've already provide additional tax revenue. the key now is to get the kind of tax reform to get the economy going. that's where we generate revenue. >> we'll leave it there. thank you very much. coming up later yet another new record for the dow, that's right and more positive economic data. i'm telling you folks more to this stock market rally than the fed easy money. i'm playing it on the optimistic side. guess what?

guess which team that's highest payroll in all of baseball. you said new york yankees you would be wrong. we'll go to spring training to arizona for the correct answer. please don't forget free market capitalism is the best path to prosperity. i'm kudlow. we'll be right back. so if you have a flat tire, dead battery, need a tow or lock your keys in the car, geico's emergency roadside assistance is there 24/7. oh dear, i got a flat tire. hmmm. uh... yeah, can you find a take where it's a bit more dramatic on that last line, yeah? yeah i got it right here. someone help me!!! i have a flat tire!!! well it's good... good for me. what do you think? geico. fifteen minutes could save you fifteen percent or more on car insurance.

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baseball is coming and the question now are the l.a. dodgers new new york yankees. in fact as the center of baseball gravity moved from the east coast to the west coast and are these big california payrolls going produce world series victories? cnbc brian schactman joins us now. he's in glendale. what's your take? tell us what's going on? >> reporter: i'll start with the dodgers. in terms of wins and losses who knows if they will supplant the yankees. in terms of money they already have. where is the money coming from? they have mark walter who is affiliated with guggenheim

partners. they want to win. they are willing to spend to do it. and i talked to the gm on this trip and basically asked him how different is it to run a baseball business now that he's flush with cash? >> to think about any player that can help our club instead of being restrictive and looking at a salary figure and thinking we have no chance to go there. now we can make a baseball decision. >> reporter: they are not alone out 0 here. the san francisco giants were ahead of them in standings won two out of three last world series. anaheim angels spent money on josh hamilton. they spent 77 million on another pitcher. oakland as won 94 games. the shift of power has gone to the west coast where the red sox lost 93 games last year, the yankees even though they had a good season last year are trimming payroll. the balance of power has

certainly shifted in the world of baseball. >> giants two out of three world series, lot lower payroll don't they? >> reporter: they dothan the dodgers. they spend money. they are not against spending money but they do it within the league average. they are in thor third but still spend money. the point that the dodger made is they never should have been at 95 billion. they should have been spending like boston and philly. they had to make some big deals last year. they won't stay above 200 all the way through but obviously they are willing to spend. >> my big guest problem i'm a die-hard yankee fan. you know what's going on. a-rod won't be there. teixeira won't be there. derek jeter may not be there. looks like a disaster. >> reporter: tomorrow there might be an announcement. reports are they may announce

that mario will thereabout. they need to get young again. the yankees may not be champion worthy for a couple of years. >> brian shactman we all want to get young again. thanks very much for your report out there on the west coast. >> we're back here. congressman schweikert you're from arizona. is brian right? >> i hope so. nice have the diamond backs. as lock as they are playing cactus league spring training i'm happy. >> do you think that the power in the sport, not just the payroll but the power, playing power, the marketing poerks the television power, has that stuff really moved away from boston, new york and philadelphia? >> but there's a reality there and being someone that pays attention to it, the marketing

power, you believe in selling the cable package, enhanced packages. is there enough to sort of cash flow that can come from the entire country to support these types of packages. >> don't think there is. >> we're about to find out. >> the l.a. angels, l.a. dodgers, they are hot wires. >> live in miami and in miami they just fleeced the city of miami to build this huge stadium and they are taking the team and pulling it apart. i think people are upset about some of that. you need good teams that are cost efficient. oakland was the most cost next team. >> folks now here's a question, who else in the world could be a few votes away from winning a national election just a week before getting slapped with a one year prison sentence. okay? only in italy and only silvio berlusconi. by the way i think he should have been up on a morals charge.

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♪ more big changes under way at facebook. we have more on that and all the latest breaking news in business and financial headlines. >> good evening. that's right.

facebook getting another big face lift. ceo mark zuckerberg said users new fees will be redesigned to show photos more than written text. experts say using larger pictures and more video is a better platform rtis facebook did close up by 4% in today's trade. two weeks ago he almost won the italian national elections. today he's been slapped with a one year prison sentence. a court in milan sentenced former prime minister silvio berlusconi today to a year behind bars for publishing transcripts of secretly recorded telephone conversations. silvio berlusconi will appeal the sentence along with another conviction he received last year for tax fraud. newly elected senator elizabeth warren let loose with a public rant at a senate hearing. she's outraged that individuals were not being prosecuted even when the bank they worked for had been found to be laundering money for drug dealers and terrorist organizations. listen to this.

>> if you're caught with an ounce of cocaine the chances are good you're going to go jail. if it happens repeatedly you may go to jail for the rest of your life. but evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pay as fine and you go home and sleep in your own bed at night. >> you can feel her frustration in that sound bite. >> she's talking about hsbc. i want to ask you, republican congressman dave schweikert doesn't senator warren have a point >> typically when it comes to the good senator i find myself disagreeing. on this occasion i nod my head up an down. >> up don't disagree >> of course. >> we debated whether the whole bank should be indicted. such a thing is possible. it could go into bankruptcy court. what's your take on that >> there's a fear of going after the big banks, the whole too big

to fail phenomenon. this administration has been timid in going after banks but all the people who are responsible for the financial collapse. from the left progressive perspective there's a lot of criticism to go around. >> how did facebook stock do today? >> it closed up by 4%. they are trying to find new ways to enhance their mobile platform. the more ways they can bring users to their mobile platform the better they can do in advertising. >> sounds like they are succeeding. >> they are trying new takes on it. i'm sure you'll check it out larry tonight on facebook. >> i tweet. i have a lot of followers. bless them all. i can do one but not two. that's all i have time for. >> hear you. >> i'm glad facebook is doing well. up next on kudlow the stock rally continues the positive economic reports keep coming in.

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welcome back to "the kudlow report". so another day another record for the dow. s&p 500 hitting new highs. not everybody thinks this rally has real staying power. in fact "wall street journal report"ing today hedge fund bears are coming out of the wood work. i ask whether the economy might not be a little better than people think including profits maybe even tomorrow's jobs report. so let's talk. we have dave goldman, conrad, and steve weiss. conrad, i think the data at the margin are coming in better than people are saying including today's jobless claims which dropped the factory orders yesterday, the nondefense orders were huge. i think we have a chart to show how that has improved. if corporations will start

plowing profits in to investment that will create jobs. people under estimating the economy. >> i think you're right. we have an important report coming out tomorrow. we had a jobless claims reeding that's at the lowest level in five years. we have other strong reading from the ism survey that came out this week also. all the worries about the consumer i think some of it coming from some comments from big retailers earlier in the month. auto sales rose in february. the economy is doing okay and maybe a little bit better. >> i'm not political on this. i'm just looking at the numbers. i read your reports with breath interest. i don't think you agree with what conrad and i are saying. you're missing a better economy. this is economics not politics but not all is perfect but what's your take? defend yourself. >> i'm waiting for the verdict to come in, larry. you can explain the whole market

move on the basis of the cheapest leverage in history. dow is at an all time high but bond yields are at all time loss. that's never happened before. corporations can borrow barely at the rate of inflation to leverage up existing assets which means they don't have a whole lot of assets to put new assets on the ground. let me say this one thing. >> if you take oral out of the picture, investment picture is still extremely weak and the consumer has been doing better thain expected. >> what if all these profits -- you got to admit the balance sheets look great, okay. the profitability looks great. to me profits are the mother's milk of stock, profits are also the mother's milk of the economy because companies eventually invest some of their profits and that's how you create jobs. >> profits in the first quarter were actually down slightly in absolute terms.

and the question is will the economy expand, can the animal spirit carry the economy at a higher level. the fed is hoping against hope that the economy will pick up on its own and won't need this massive liquidity injection which has carried -- >> you say the fourth quarter or first quarter? >> fourth quarter with profits were slightly down. >> all right. steve weiss, are you one of these hedge fund guys? >> i'm bullish. today's bears are going to do one of two thing tomorrow. they will be bullish or retired. >> what is dave goldman missing? >> nobody is going to fire the starting pistol and say the economy is albert you can invest now. you have to anticipate it. here's what i see. i see baseball scores, basketball scores, i see what matters is how much money i've made in the market not what got

me there. liquidity is a good thing. i've seen corporate balance sheets or corporations with all time high margins with all time high cash and they can deploy that cash and use those margins to drive higher. i think you'll see a good number tomorrow maybe a very good number tomorrow. if it's not great tomorrow -- >> 160 is the consensus. >> yes. >> i take the over. >> 185, 190. >> i think, now, consensus forecast you're looking for a number that's worst than what we saw in the fourth quarter. fourth quarter is seeing 200,000 jobs. who knew that the labor market was creating 200,000 jobs per month. >> i know that the economy after a deep recession should have been growing at 4%, 5%. slow growing economy.

jobs have been slow until recently. if you're right let's say we reach that 200,000 level won't that boost incomes by consumers and get more spending? looks to me like the consumer right now is the weakest link in the chain. what happens? >> but even despite that the courtroom seems to be holding up okay. the forecasts -- we were worried about the consumer with the tax hikes that was going to hate wide swath of the consumer in the first quarter. and despite that the consumer still holding up okay and i think that the only thing on the positive side that's benefiting the consumer is a labor market doing better. granted we still have an elevated unemployment rate and 200,000 jobs a month is not enough but it's better than what people were looking for. >> what you're seeing going forward with restaurants and retailers they will hire employees at 30 hours or less to get under obama care. you don't need a big uptick in growth to get higher stock

prices because this massive cheap leverage out there will keep stock prices doing reasonably well even if the economy isn't doing well. >> i know the fed -- i'm not denying the power of the fed. i'm just saying there's more to the story than the fed. let's go to your corporate bonds. let's take a b aa investment grade corporate bonds. one reason why the price of that bond is high and interest rate on that bond is low because they are credit worthy. they are making money. they are profitable and good credit. it's not just the fed pushing buttons. >> the risk is under priced. get out of corporate bonds. stocks are better than corporate bond. >> i can buy into that. it's interesting to me -- i'm just going to put this on the table. i'm a reagan conservative. i have many conservative friends. many.

god please them. but too many people have been wrong about the stock market because they are not happy with president obama. you have to look at the numbers and you got to look at the market action. what you see it's not a perfect picture but it's not a bad picture either. sometimes you got to put the political lens aside and just look at what's coming in and i say what's coming in is better than we thought. >> what i see stocks that shouldn't go up such as steel and coal and iron ore because china is a mess. we won't hear about the 1.6 trillion in bad debts. i see good stocks going higher. there's a p and g stretched? yes. macy's a stretch? no. there's still values there but the mark to me is rational. we only had one day where the market was up more than 1%. >> i got to get out. i'm not saying the policies are perfect. i would like to make some changes.

all i'm saying is our mostly free market capitalist system organically because of its own genius is probably doing better than people think. that's my basic take. david goldman thank you. conrad we appreciate it. steve weiss as always. senator rand paul's marathon filibuster is over and it appears he finally got the answer from president obama that he wanted. we'll talk about using drones on american soil when we come back. living with moderate to severe rheumatoid arthritis

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i rise today to begin to filibuster john brennan's nomination for the cia. i will speak until i can no longer speak. >> all right. as it turns out senator rand paul can speak for nearly 13 hours. that's one for the history books. but it was the obama administration's hotly debated drone policy not really john brennan's nomination that kept rand paul going. in the wake of the politic attorney general eric holder sent this response and i quote does the president have the authority to use a weaponized drone kill an american not

engaged in combat on american soil? the answer to that question is no. end quote. that's what senator rand paul wanted. controversy is not over. neither is the political battle. joining me is kevin williamson. and keith boykin and congressman schweikert are back. i read your piece today in the national review stand with rand. there's a second part to this. if the u.s. is under attack this, is from the justice department, if the u.s. is under attack, if an imminent threat, president does have the authority to protect the country from that assault. do you disagree with that. does rand paul disagree with that? >> don't think so. there's a difference between a police sniper shooting someone who is holding a hostage and a police officer with a listing his pocket that he's allowed to shoot. we're not talking about killing

people in the heat of battle or an act of terrorism. what we're talking about is drawing up lists of american citizens who are green lit for assassination whether in the united states or anywhere else. >> rand paul stood up for liberty. one last question. let's go back to 9/11. let's go back to horrible 9/11. if al qaeda had landed, besides blowing up the world trade center if they had land landed brigades and troops wouldn't we have a right to use drones kill them because they are enemy combatants. it's the same principle as a crime in force. we're killing people at breakfast, drawing up lists of people including american citizens. we're not talking about killing them during battle.

we're talking about following them around and killing them. >> is that how you see snut. >> agree with what he can inventory is saying and agree with part of his piece. i think that you're kind of missing the point in this dialogue you two are having. in that i don't think that what rand paul did yesterday accomplished much of anything. i mean as a political stunt in order to help his 2016 prospects yes but in terms of any policy change nothing happened from the letter thatteric holder sent today than what he sent on monday. it was almost basically the same thing. the only thing he's saying the president doesn't have authority to have a drone attack against a american citizen without due process. it was a hypothetical. >> i'm someone that went and satin gallery last night for a few hours. so i was there watching this. i got to disagree with you. the fact of the matter with the adoption of new technologies

having a finely articulated what's the use and how does it fit into the constitutional construct is important. >> you have a two sentence statement from the attorney general that doesn't answer any questions. >> on the contrary it does. seriously, why was it so hard for eric holder and the white house to say we won't use this to kill americans on u.s. soil. >> the truth is they didn't say any such thing. it was a non-answer. i want says as long as you're not engaged in combat. president has sole and exclusive authority to determine who is a combatant. >> isn't there a common sense aspect to this? you quoted attorney andy mccarthy. you know whether someone is a combatant or not. you just know. >> feelings, just knowing does not necessarily fit with the law. >> that's why you need a law not a statement from the attorney

general. that does nothing. it accomplishes absolutely nothing. republicans are going to hold up the business of the united states senate on that and then go ahead and do it because eric holder issues a two sentence statement. >> larry, i have to say if we have a member of congress who says he trusts the government to act responsibly i'm going to reach over to him. it's not true. >> it drives me a little too distraction. if this were 2007, 2008, when the left was absolutely apopletic at the previous president. this president is i'm going to close guantanamo bay, oil stop -- >> we have a president now that may be engaging -- >> these are good points. this is for another segment. i do respect senator rand paul for his promodification liberty. i just think we kind of know

would know if they are enemy combatants. now we're going to go to the energy boom in america. it's for real. getting bigger by the day and now a major decision by the nation's freight train locomotive makers could be another game changer. free market capitalism at its best and that's next up.

the race is on for t world'scomotive

makers general electric and caterpillar to build natural gas trains. here's the president and ceo of ge transportation. thank you very much. just off the top of my head who will win this foot race you or cat? >> well, larry it's good to be with you and we're committed to the industry. we've been supporting our customer base. as you said, natural gas is a huge boom here in the economy. it's a huge opportunity. and at ge with the research and development and the concentrated efforts we have we'll lead and partner with our customers and we definitely want to win. >> how long will it take to make this conversion. let's focus on ge for a minute. you'll try to convert these railroad locomotives. are they ready are it? mr. buffet said they would do some experimental work on burlington by the end the year

or some such thing. is that the timetable >> yes. we've been watching this space for some time and so we've been working with our engineering group during the course of the last few years really to see the application of l and g, natural gas into our locomotive. we'll be releasing some demonstrations and pilots with pur burlington north and santa fe. we'll continue our development in 2014. then looking to really have retrofits available as well as new locomotives during the course of the next year. >> in terms of the consumer, businesses, small businesses who depend on these railroads and so forth and what they carry, what's the cost savings? in other words natural cass revolutionizing the american economy in a very good way, in fact we have a report coming out that we're actually now out producing the saudis even in oil and natural gas and so forth.

how much cheaper is natural gas is going this liquid natural gas than the diesel power? >> look i won't claim to be an expert in the economics of the price differential but i think if you look at what the oil companies are saying and you look at the spread between l and g and diesel cost they are looking at 50% cheaper and looking at that be the case for potentially the next ten years. so, that's really what we're looking at and we're analyzing and definitely a form of energy and fuel that can revolutionize the industry. >> when, if you can do it for locomotives when can you do it for cars? >> you know, we're not in the automobile industry, but i know several people are looking at it. i think c and g is used within cars and you got other forms of battery hybrids. the automotives will have to answer that question. >> when can you do it for the 18 wheeler trucks.

that's what boone pickens tells me. >> there's an application starting and i can tell you we're also in the mining industry and so we're looking at the off highway vehicles and looking at the application of l and g in the off highway vehicles as well. during the course of the next few years you'll see a number of different spaces that will be applying natural gas and trying it out. so i think you'll see is a lot. >> all part of the great american energy resolution. i'll tell you shale and fracturing is transforming this country. great stuff. we appreciate your time in coming on the show. many thanks. >> thanks very much, larry. bye-bye. >> natural gas boom also brings good news for the u.s. on the world stage. get this. in november and december the u.s. surpassed saudi arabia as the world's biggest fuel producer. we kicked saudi butt.

john, great to see you. as i understand this, all right, crude oil, gasoline, biofuels, we beat the saudis in november and we beat them again in december and it looks like a new trend. you b.u. it? >> i do buy it. we can keep doing it over and over and over again provide the industry has the access to the natural resources that they need. here we have a problem. on state and private land we're doing very well. on federal land we're going backwards not forwards. net production on federal lands is now down from four years ago and permits for federal land production is also down by some 50% from four years ago. that's not a good sign. >> okay. i agree with that. we'll get to that. i want to know this. if we continue to produce, let's use the private sources, let's use the private stourks shale, fracking and so forth. won't we stand a decent chance of busting up once and for all this opec price cartel.

isn't that what's going to happen here? >> absolutely provided, larry, one thing happens. we need the enablers to get natural gas into personal vehicles as an alternative competitive product. whether it's methanol, natural gas to gasoline we need the epa support and automotive industry support to use natural gas in personal cars. trains are great. trucks are great. but we got to get to personal car to really break opec's pricing cartel power. i'm hoping we can do that. >> dave schweikert , very important point the personal car will epa stand in the way? so far epa has been pretty good about fracking. they have been good about shale revolution. >> will the regulatory hurdles grow, stay where they are? i had some folks in my office

talk about doing distributive generation using natural gas. >> what does that mean? >> it means the small turbine electric generators that are very efficient and can be very small packages and one of the reasons for doing it? they were saying they were having such difficulty doing line sightings it might be easier to do one here, here and here in companies that have electrical shortages. there's a lot of dynamics moving here. our job is not to regulate them out of the growth. >> i don't think the obama administration is regulating them out of the growth. i was interested in him saying enablers stopping them. you can blame the administration for this. it has to be a cooperative effort. that's what the president has been trying to do. >> i got to go. i think they've been pretty good on the fracking. john, thank you. sorry to run out of time.

keith boykin, congressman schweikert. we covered a lot of ground. that's it for tonight's show. thanks very much. i'll tell tumor natural gas we can produce, the more we can get them into those automobiles the more we concerned the saudi dominance. i'm larry kudlow. tdd#: 1-800-345-2550 seems like etfs are everywhere these days. tdd#: 1-800-345-2550 but there is one source with a wealth of etf knowledge tdd#: 1-800-345-2550 all in one place. tdd#: 1-800-345-2550 introducing schwab etf onesource™. tdd#: 1-800-345-2550 it's one source with the most commission-free etfs. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 one source with etfs from leading providers tdd#: 1-800-345-2550 and extensive coverage of major asset classes... tdd#: 1-800-345-2550 all brought to you by one firm tdd#: 1-800-345-2550 with comprehensive education, tools and personal guidance tdd#: 1-800-345-2550 to help you find etfs that may be right for you. tdd#: 1-800-345-2550 schwab etf onesource-- tdd#: 1-800-345-2550 for the most tdd#: 1-800-345-2550 commission-free etfs, tdd#: 1-800-345-2550 you only need one source and one place.