market is bad. i say the fault is not in the stars it's in yourself. but we'll learn a little bit more later on. i like to say there's always a bull market somewhere. and i promise to try to find it despite the economists right here on good evening i'm michelle caruso-cabrera in tonight for larry kudlow. this is "the kudlow report". shock trend hitting the nation. cancer clinics turning patients away because they can't afford to treat them. we'll talk to one doctor who has had to tell his patients to go elsewhere. north korea continues to make provocative moves today d deploying missiles to the coast. is there a favorite group of insiders in washington who get wind of a major regulatory decision before the rest of us

do and then profit from it? of course. and a troubling incident from earlier this week proves once again we'll look what it will take to make the markets more open and fair. "the kudlow report" starts right now. first up tonight cancer clinics across the country have begun turning away thousands of medicare patients. they are blaming the sequester budget cuts. my next guest decided his clinic wouldn't see one-third of its 16,000 medicare patients who need these drugs. here's chief executive of north shore hematology in new york. can you explain really simply how it is that you have to tell one-third of your medicare patient whose need these cancer drugs that they can't be serviced by you medically any more? >> well, we certainly aren't going to abandon them. what our discussion with the patients has been and it's been

ongoing since we found out about these cuts is that while we'll continue to care for them as their physicians we won't be able to treat them with the chemotherapy agents in our office and have to write orders for it home to receive it in a local hospital. >> why is that? >> the way the reimbursement for the chemotherapy drugs is computated, the sequester cuts on about a third of them have put the reimbursement for medicare under water and we just can't -- >> can i translate that into you buy the drug, you're supposed to get paid back by the government but they don't pay you enough in order to recover the total cost, is that correct? >> 100%. >> there are a lot of skeptics out there that looked at this. right now you get paid and we have to go into a little bit of detail. you're supposed to get paid 106% of the cost, the average cost of the drug and now

to roughly 104% of the drug. it sounds like you're still getting paid more than the actual cost of the drug. >> it does but there's a couple of variables. first and foremost we don't purchase that drug for that cost. that cost known as asp is known what goes through a middleman who is the districtor. >> asp is the average sales price. >> correct. the typical purchase price of the drug is somewhere around 102 to 103%. you have to add on top of that the manufacturers typically once or twice a year have a price increase. it takes medicare about six no, sir catch up with that. so if you have a price increase of 2%, which happens against once or twice a year, you're purchasing the drug for 102 pores to 103% and a 2% cut you're all of a sudden in the red for a purchase of about 30%

oncology drugs. >> can we put this in a broader context. the mission of health care reform was to limit the amount of government spending on health care in the united states. we know when they made cuts in the budget they cut medicare and that's where the cuts were going to come from. to you does this seem the tip of the iceberg. what will you do when the government decides to spend overall spend less. >> the irony of the situation is this will increase costs significantly. if you look at what the change in the asp reimbursement will do in terms of cms cost this year it's about a $400 million savings for medicare. unfortunately if you look at the data that's been published, it looks as though you're going to have a shift of care to hospital with a net increase in the cost of cancer drugs of about $2 billion. so this sequester cut is going

to cost about $1.6 billion more. that doesn't save money at least in terms of my math. >> i don't understand. your paying more than the average sale price so that this is -- i understand that there's an average, right. so some people pay above average and some people pay below average. that's how you get to the average. yours is a large practice. i thought you can do both buying and get around this by being below average sales price and get reimbursed more. >> no, i wish that were the case. the reality of it is for the most part even being a large practice our cost is not very different from a practice of one or two oncologists. there's a fixed price. then the distributor and we have a very efficient process in this country for distribution of chemo drugs. the distribution costs 1% to 2%. that's not taken into consideration when you look at reimbursement. that comes off the top also. you again take into consideration the cost increases

of these drugs which occur like clock work, and medicare being six months behind their adjustment of reimbursement, it's very hard to stay ahead of the curve. >> what have your patients been saying in response? >> they are very upset. again, we've been in contact with them since day one. so they have been our partners in this. we sent out 16,000 letters to our medicare patients so they knew what the situation was going to be and what choices we had to make and we invited it home to discuss it with us and help us with this. >> we just got a statement from medicare. we wanted to let you know. they said there's nothing any specific authority that would exempt part b drugs from the effects of sequester. if you don't understand washington bureaucrat speak let me translate that for everyone. there's nothing there they are willing to do for you basically, doctor. are you surprised by that? >> i'm not. first and foremost it's discretionary how it's applied

to drugs. the fixed cost of the drug should be left out of this equation. if they wanted to apply that 2% sequestration decrease to the 6% that would not be completely unreasonable and that's within their discretion. but the fixed price of the drug makes no sense whatsoever why you would apply it. i'm very disappointed to hear this. >> i'm not surprised, but it sounds like they are going to leave you guys to try to figure out exactly what you're going to do. doctor, thanks so much for joining us. >> thank you for having me. >> all right. what has our president done about this? let's bring in our experts. owner and partner at enrad medical associates. howard dean. ed rogers veteran republican strategist and former bush 41 deputy assistant. governor dean your thoughts? >> this is very complicated.

historically oncologists have not been able to charge that much under medicare so they made their money on drugs. if you cutback the drugs they don't make as much money. cms has been trying to get the administration of drugs to not be a profit center for oncologists any more. the real problem here is how we reimburse medicare. we should not be reimbursing medicare by treatment or by procedure or drugs we ought to be reimbursing medicare with a fixed price per patient per year. >> doctor, do you agree? >> not necessarily. what we're seeing is not limited to oncology. we're seeing this problem of cut reimbursements going through every specialty, some specialties that's overrepresented like radiology, cardiology and my estimation of all of this is the goal of the administration through cms is to shunt care away from the private

outpatient provider like the oncologist we just spoke to and towards the hospital which makes no sense whatsoever. why? because the hospitals get paid far more, $6,500 per treatment for patients for oncology than the private outpatient facility would. you ask yourself request would they want to do that? they want to command and control the distribution of care. they don't want mom and pop doctors out in the community not going by the playbook and as long as people are going to have to go to hospitals for their care there's a better chance their electronic health record and so on and so forth the administration can control what they are doing. >> part of what needs to be assessed whether this is the obama administration's treatment come true. they have put the word out do not try to mitigate any of the negative impacts associated with the sequester cuts. i don't think the doctors have risen up en masse and collaborating to harm cancer patients but some of the sequester cuts will ring out inefficiencies. that will take some time.

some sequester cuts are not well thought out, haven't been thought through and there will need to be a fix. but everybody should be skeptical about any of the initial problems associated with the sequester and whether or not they are what obama wants in the first place and that's for victims to start manifesting themselves and the weakest among us to start complaining about these draconian cuts. >> you're in accordance with governor dean. >> i agree with him. >> this is not muc ado about nothing and i don't think the president wants to inflict pain on the american people. i agree with the doctor to some extent. these hospitals will be an accountable care organization. the only way you're ever going to get health care and costs under control is not by having regulations, where i agree with mr. rogers, it's by having simply pay by the patient instead of pay by the procedure. in order to do that you have to

have vertically integrated which is why they are interested push portion towards a hospital and away from private specialists. >> doesn't it violate the whole spirit of if you like your plan you can keep it. if you like your doctor you can use him. things won't change under health care reform? they are changing. >> they are changing already. >> medicare has to change. look, the mistake that paul ryan made of not that medicare doesn't need to be changed it clearly does. the costs are way out of control. the mistake he made he's trying to switch the risk from the government to the patients. that's never going network. you switch the risk from the goment providers and let the providers make decisions the. >> nothing that's happened today is not on account of paul ryan. his budget, his plan, his policies have never been enacted into law. what's happening now is 100% of obama policy. sister of republican policies. >> and the effect of this on

patients. patients will have fewer options in going to the doctor if the internal payment advisory board goes forth they will have real declarations in terms of what they can do. in addition as employers drop their employees from their insurances, you're going to see a lot of people hurt against their will into the state exchanges which will wind up being a glorified medicaid and only in the states that have state exchanges. >> doctors and hospitals won't like it but we can't continue the system it is. health care costs are over three times the rate of inflation for 30 years in a row. that's not sustainable. we have to change the system. a lot of people don't like it. >> if you do like your plan you can't keep it and if you do like your doctor you can't keep him. thank you. >> here's write line up with the republicans. if you want your plan you want to keep it pay for it. nothing is free. we have to stop everything is free stuff. >> governor dean thanks so much

for joining us. there's yet another escalation by north korea today moving a missile from a possible, for a possible provocative off of the east coast. situation is starting to boil over. so why is president obama continuing to attend fundraisers? he already won. we'll debate that. then later something is rotten in washington. some investors got a very early heads up about a key obama care decision and they made a bundle. another form of crony capitalism exposed. can anything to be done about it? we'll take a closer look. don't forget free market capitalism not crony capitalism there's a huge difference. free market capitalism is the best path to prosperity. "the kudlow report" is coming right back.

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nuclear threats from north korea continue escalate today. the south korean defense minister said north korea moved a medium range mist to its earning coast in what officials think is preparation for a test fire. the u.s. state department will continue to take all necessary steps. should president obama be more involved? here now is former ambassador white house middle east adviser.

howard dean and ed rogers is on the set with me. what should we be doing about north korea >> we're doing what we should be doing on the diplomatic front secretary kerry is about to go to china. china is the most important destination for our diplomacy. number two he's reassured our south korean and japanese allies of american determination to confront any further provocations by north korea. three defensively the president has ordered through secretary of defense hagel the redeployment of advanced anti-missile systems both in guam as well as among our naval forces in the eastern pacific. so he's doing everything that any president should be doing at this point. >> to achieve what? >> well ultimately to cause kim jong-un to recalibrate his thinking about whether or not he can provoke the united states or south korea into some limited conflict that would advantage him and number two, to in effect

to de-escalate the rhetoric. it's critical we don't take the bait any more that kim jong-un and his regime is dishing out. >> some say president obama shouldn't have been fundraising out on the west coast while this is going on. what do you think about that? >> that's a cheap shot. the president is in regular touch whether you're a republican or democrat. all of us know the president is in close contact with the national security advisory and secretary of defense. what so supposed to do? let kim jong-un know that the president of the huns is so worried about what he's doing he's rushed back to sit 24/7 in a situation room. >> howard dean what do you think? >> that's political talk. no one believes that. i also agree with the visit to china. the chinese have the power if there is anybody who has the power to stop this and the leverage that we have here is not any leverage over north

korea. the leverage that we have and i'm sure secretary kerry is saying that we may have to help the japanese and other neighboring countries re-arm. that's the last thing the chinese want. if the chinese can't step one and stop this crazy rhetoric from north korea, and they have more power to do that than anybody else, then they are not going to like the neighborhood they live in because we will defend south korea and i think that's exactly what the president has said and that's what he's doing. >> are you a contrarian voice? >> you have a bipartisan panel. i give the president the benefit of doubt. there's reason he shouldn't be raising money in a crass way in southern california but being taunted into it by a crazy man in north korea is not a good reason. i think the president did about the right thing. there's a show of force. the regime in north korea is threatening suicide if they follow through on their threats the president's options are

limited since he's holding hostage, the hostage is south korea. i give the president the benefit of the doubt. >> ambassador, ed hits on a very good point. to carry out the threat is to commit suicide. in other words, if you think this is guy is ration enamel and ultimately i think so. he wants to stay in power. he wants to preserve power and stay alive he can't carry out the threat because to do so is to lose all your leverage and die. so are we just going to be at some impasse forever here? >> fortunately i agree with my good friends both the governor and ed and ed has been absolutely terrific on this as i've listened to him over the last few days as well as the governor. the most important thing here is to understand two things which are a little complicated michelle. one, there's a lot of theory, i just came back from china, i was in beijing for several weeks. it's important to understand that the chinese have come to the conclusion that part of the

reason why kim jong-un is throwing this temper tantrum is to scare the chinese into not abandoning north korea because the united states knows that north korea was pretty angry when china voted to agree for the first time to impose economic sanctions through the united nations against north korea after its recent test. that's number one. number two, this dynasty is determined to stay in power, to remain nuclear. he's making wild accusations at least according to the chinese that the united states is prepared to bomb north korea as a test run against iran's nuclear installations. >> can't believe the chinese believe him. thank you for that insight. that's very helpful. we appreciate it. we're saying good-bye to governor dean. great having you on. now there could be some very

good news for jeff skilling. also facebook unveils the facebook phone. sort of. those stories and more next. my mantra?

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android phones called home. it would allow use towers access their facebook content like pictures and messages from their phones home screen. facebook has been under pressure to get more advertising on mobile devices but analysts are not convinced that home is really a game changer. enron's jeff skilling could get an early release from prison. he's serving a 24 year sentence for his role in the fraud at enron but his lawyers are trying to work out a deal with the justice department to get him out early. a why said his sentence was too harsh but so far resentencing has never happened. movie critic roger ebert died today at the age of 70 after a long battle with cancer. he stayed busy reviewing more than 300 movies last year. he's best known for his work with partner gene siskel on television. two thumbs up for roger ebert. very sad when i heard that. >> he justified movies as a high

brow kind of thing. >> de. the other thing he had this horrible battle with cancer, thyroid and throat cancer. he found his voice on twitter. i followed him. somebody today on facebook wrote on his page, i didn't agree with you with any of the movies. but i never missed your column because i loved the way you wrote. >> and he was brand. movie reviews there's him and everybody else. >> right. he stood out. nobody else has that impact. >> nobody else has that footprint. >> his brand will continue. 15th year of his movie festival coming up in a couple of weeks. >> thank you. now, what do you call it when some investors get early notification of a major policy shift from washington that would be profitable and everybody else is left out in the cold. is an unusual case of crony

capitalism or the reality of an unfair system. our quest for more open and fair markets continues when we take a close look at a fishy deal involving a key obama decision this week. that's next.

welcome back to "the kudlow report". i'm michelle caruso-cabrera in

tonight for larry kudlow. in this half hour stocks closed higher as japan will print a lot more yen but now we're focused on tomorrow's big jobs report from march here in the united states. speaking of jobs, fast food employees going on strike in new york city today. they want 100% raise. double the pay to work at mcdonald's when millions of americans are out of work. first up new evidence suggesting washington insiders are involved in insider trading. stocks of health care companies shot up before a key announcement that they were going to get paid more from medicare. when the news broke the stocks rallied more. those who got in early made a lot of money. eamon javers joins us now with the sordid details. >> reporter: what a coincidence. the timing of this story comes at the same time the government accountability office the gao here in washington released a new report on what's called the political intelligence industry and it's those firms that mine washington agencies, congress,

all of the federal government apparatus here for details that they can then feed to traders on wall street to get ahead of the announcements of major information. let me bring the highlights. gao finding that no laws or ethics rules specifically govern the sale of information by these political intelligence firms but they also said the disclosure of material nonpublic governmental information could be insider trading and they said members of congress could use the speech or debate privilege of the united states constitution as a defense here. now the story that was broken in the "wall street journal" this morning was of a firm called height securities which got information in advance in a change of medicare payment policy on monday, released that information to its clients monday before the close of trading and you just saw the chart there. a lot of activity in some of those health care insurance stocks right before the close at the end of the day on monday. you can see the pops. that activity driven the report

says by this disclosure by height securities of information it had found out about what was going on at cms, the entity that deals with medicare and medicaid here in washington. a complicated story. we reached out to height for their comment. they have not gotten back to us in order to respond to the story. >> i'm so confused. we've seen people prosecuted and attacked by investigators because they ran firms that were good about getting technology information out of technology companies. right. that somehow is illegal. but this isn't. >> reporter: the gao reports hits that nail on the head. they said it's very difficult to determine where the legal line is here because what, for example, is political intelligence gathering for a hedge fund versus what's journalism. what i do all day is try to get information out of congress. >> we don't pay you nearly as much. >> reporter: that is certainly true. but we're doing that all day long. is that journalism, are we informing investors, is that

trading activity. what is that? >> thank you. here now is information clinton white house aide david goodfriend and with me on set ed butowski and ed rogers. david goodfriend what do you think? >> insider trading is insider trading. it undermines markets when people use nonpublic information to execute a trade. whether you're the tipper or tippee if there's an inside trade it kills free market. it should be illegal. now your reporter made an excellent point which is here in washington people hire folks like me i'm a lawyer lobbyist. i walk around congress all day. i talk to government agencies all day. they want to know what's going on inside. at what point does that information become insider information that's not public? i would argue that something like the release of the department of labor unemployment statistics, or the producer price index, or these types of

government data releases, that's really insider information. >> if you get it. >> if you get it early and you beat the trade that's got to be illegal. but the sort of analysis that goes on about what's going to happen in the policy making realm, it would be next to impossible to draw a line of legality versus illegality. >> we have a lobbyist right here on set. did you tip off anybody about health care? >> not today. >> darn it. you missed the gravy train. >> i've bennifer letting around washington for information to iv plus years. the notion that you could mine the bureaucracy for tradeable intelligence on a reliable basis is horrifying to me. what's true in washington at 2:00 in the afternoon may not be true at 4:00 and what's true at one branch of the government may not be true in another branch of the government. that said having inappropriate nonpublic information is not right and it's protect and there's am different ways to

protect proprietary information classified information. the notion that some firms are going in there, ferreting information and having reliable tradeable information over time i don't believe it. >> so david is horrified what he said actually drives what i think about insider trading which milton freeman convinced me it should actually be legal because david you and eamon javers highlighted exactly how do you define it and when does it cross the line? it's hard to know. >> it's impossible. >>asymmetrical. >> it's bean while since i was in law school studying insider trading but as i recall you have to have a trade in order to have

the crime of -- >> exactly to my point which makes it asymmetrical to enforce. >> it's easier if we take the extreme example. suppose the ceo of a company knows that at 5:00 p.m. she's going to announce some major transaction. >> that's easy. >> extreme example isn't interesting and not relevant. >> let's start there. >> it's black and white. >> let's bring that to the government what you just describe, take the cms decision. >> medicare. >> they did a complete 180 on medicare. made a complete 180, okay. at some point that was a decision that the rest of the world did not know about. some people inside a room knew that was going happen. the rest of us didn't. now at another point the public found out about it. this company probably was picking up rumors around the agency that this was going to

happen but they were unconfirmed. nevertheless they decided to have people execute trades on that basis. >> is that criminal? is there criminal inseventh was there conspiracy? i don't think so. >> you actually trade. >> i was sitting back and listening to this. this is the perfect example of some people are more equal than others. washington has information, public policy, the people can trade on. he said a second ago that you have to have a trade. that's not true. you can pass information along and if a trade occurs you still could be, you know -- the trade has to occur. but you have any material nonpublic information that's real simple you trade on it and profit from it guess what? >> what's nonpublic? what does nonpublic mean? >> that's the big question. >> classified has a very well defined meaning. nonpublic i don't know what that is. >> i'll tell you something else that happens on the street.

there's a lot of rumors, things that people talk about that are not confirmed. you see stock prices start to move. i can't tell you how many stocks start moving based on rumors. >> where this gets people a lot of people have seen that "60 minute" story where people like nancy pelosi -- >> she should go to jail. that's horrible. >> maria, if i could add just one thing. i used to work in the white house and we would have these meetings in the west wing in the morning. when the days unemployment figures were discussed, they were not yet released. and i remember the chief of staff pointing to every single one of us, keep your mouths shut, nobody should know about this outside this room. >> but unemployment is not a security. >> i understand. but that's a clear cut example of something that will move markets, that is known to a

group of people inside the building before the rest of the market knows about it. if somebody were to trade based on that i would say nail them. nail them. >> that's a protected piece of information as well. >> that's nonpublic information. >> right. >> you have to trade a security. can't trade the unemployment rate. >> you can trade a spdr. the opposite happens sometimes. >> reinforce people's worst instincts and observations about washington that it's all about a nun bunch of insiders. at the end of the day i think this goes nowhere. i think the pursuit of this goes nowhere. >> exactly. >> can't nail to it the wall. >> michelle, i just want to get your name right this time. michelle, i do think the issue of members of congress trading on proprietary information is horrible and that should be illegal. >> absolutely. >> they just got to pass the law

against themselves. >> exactly. >> thanks david. now what happened to that big rally we were supposed to get when japan announced that big new stimulus program and are we about to get some bad news in the big jobs report tomorrow? we'll look at your money and these markets just ahead. [ male announcer ] there are people who find their own path. and never back down. who believe the american dream doesn't just happen, it's something you have to work for. ♪

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stocks finished higher in a light tight tug-of-war trading session. while cheered bank of japan's new stimulus mess thursday. weekly jobless claims popped 28,000 last week, adjusted to 385,000. tomorrow's big jobs report, will it drive the markets to new highs or tank stocks? here now is john silvia wells fargo securities and john. what do you think will happen with the employment number tomorrow? americans going to get good news? >> i think there's going to be good news. it's 185,000 jobs. that's positive. i think that's, again, the total. private-sector will be 200,000. unemployment rate will stay around 7.7%. those are the headlines. i think the fundamental story overall, michelle, is that you

still have that good sustained momentum, we're not seeing a spring slow down in the overall economy that we had the last couple of years. i think when you look at the income number that are coming out from these employment numbers average hourly earnings continue to tick up. ate good story for the overall economy. >> did i see you shaking your head left to right. >> just cannot find any agreement with what you just said. i got to tell you, i think the economy is slowly getting worse and worse. i don't want to be the gloom and doomer but what you just said in things getting better i don't know what you guys are looking at wells fargo. >> about 185,000 jobs. >> let's subtract out the number of jobs we lost. >> we're still way behind. >> we have to have a net number of 200, 250,000 jobs net to start getting this economy going. we talk about the 185,000 that's a number, yeah, maybe it hits, maybe it doesn't hit but we have 5 million more people

unemployed. >> it's a tepid recovery, right? >> again, we've had -- this is our fourth year of economic growth between 2%, 2.5%. it's a very different economy than prior to, what we might call the great recession. >> does it have to be that way? >> i think in a way the way i look at it in terms of labor force growth, this is what you're getting. you're not -- >> what if we changed some policies in washington and cut taxes and started getting the economy going that way. to say we have to accept 1.5% to 2% growth in this country just isn't the case. we're doing that because of the policies out of washington. >> given the current policy framework this is what we'll get 2%, 2.5% growth. >> think it will be less than that. given what we have today it will be less. >> i want people to understand what supposedly is a huge deal that's happened in japan, the bank of japan -- the japanese economy has been dead, dead for

decades. right? and they are finally, some economists say finally going to print massive amounts of money in a quantity that they have just never ever done before. this is considered to be a massive game changer, some people believe for japan and their currency has been sinking and sinking which is what they want so that their cars will sell better overseas, et cetera. john, do you think this is a game changer? >> i don't think it's a game changer, quite frankly, michelle. i think it's a process where you may get a little more inflation but i don't fundamentally think you'll get that economy growing. like your last point. it will on average depreciate the yen relative to the dollar, for example. it will help the exporters. i don't think it will get that economy going. >> what do you do ed? do you avoid american carmakers because the japanese carmakers will have a big advantage. >> this is a hail mary. if you study japan and carl bass

does a great job at this. the country is insolvent. they are devaluing their currency. which means for them to go out and buy items right now it will cost them a oat more to buy items from our country and we're devaluing our currency so we know our exports to japan are going to suffer. and the rest of the world isn't doing well. you see their yen devalued which we're seeing right now they are doing that to help their exports. who has any money to buy anything? who has any money anywhere? tell me who has any money. >> it's not a means to promote economic growth. >> who has any money to buy any japanese goods. devalue your currency this is a hail mary that i don't think will work. >> john what's the bottom line. what advice are you giving to clients? >> i'm saying that the fed is pro growth. you've got to buy equities. i don't like the treasury market overall. i just see that the low interest

rates, the low inflation. this concept that inflation is low to me sounds very strange because interest rates are even lower. and so for me i think you have to be out of cash, have to be out of treasuries. you got to be participating in terms of buying equities especially global firms. >> ed, real quick. >> i agree. this idea that inflation is low is a joke because we know the cost living is going up dramatically. the only thing that hasn't changed is how the government calculates if affiliation. >> that's a procedural discussion. did president obama tip his hand on what his decision will be on the keystone pipeline. we'll tell you what he said and why some reporters said it was way more than just a hint. that's next.

is

. hundreds of new york city fast food workers took to the streets in protest today. they are demanding a pay raise. not just any raise. they want a raise of 107%. yes you heard that right, 107% raise. they want to make $15 an hour. still with us is david goodfriend and ed butowski and ed rogers. what do you think? >> i think it's over the top. it's too much. they robbed themselves of sincerity. we need 100%. not an incremental raise.

we want 100% raise and we've gone straight to a strike. nothing incremental. straight to a strike. it smacks of greed. smacks of overreaching. >> david goodfriend? >> the number sounds big when you say 107%. i ask myself this question. what has the minimum wage done relative to inflation? as it turns out the minimum wage in real dollars, the minimum wage in real dollars is lower than it was in the 1960s. >> that's a different argument. they are not making the minimum wage. >> two things to think about. inflation so we want to talk about real dollars and productivity. economic study was done that said what would happen to the minimum wage if you corrected for -- >> david i want to cut you off because they are not making minimum wage. >> but i agree with you that going back to that discussion about inflation. let's talk specifically about this. these people they work 40 hours a week. make about $1400 a month just to

get to new york city. most of these people can't afford to live in new york city pop take the subway in is $200 a month. just to get to work at $2.50 each way. they can't afford to live there but guess what? a lot of these people might have voted for the policies we have in place today and elections have consequences and those consequences are a real slow economy. what should we do? let's put them on commission. >> the more hamburgers you sell -- >> it does bring up a good point which sane good economy an employee has choice. they can leave. but obviously these people feel they have nowhere else to go. when the economy is booming you can say take this job and shove it. they can't do this right now. this is a symptom of an overall slow growth economy. >> that's right. i'll tell you something else to my colleague's point about people choosing public policy, the president has said we need to raise the minimum wage.

why is that? >> that's not what this is about. >> 70% based on consumption, walmart lobbied to raise the minimum wage. why? because their customers earn minimum wage. they want their customers to buy more. >> that's an argument worth having but not the argument taking place. >> the taxes in new york city are really high because we have a slow economy. we have, you know, wages are stagnant because of a slow economy. the answer isn't so much let's give them a raise because the government doesn't have the money. let's grow the economy. >> bigger pie. >> guys differenttopic. after years of delaying a decision president obama finally leaning towards approving the keystone pipeline maybe. that's the message reporters with the "new york times" say the president gave to donors in california last night although he didn't mention keystone specifically he did say the temperature of the planet is not something you think about quote when you're struggling to get by. now i don't read this and see the keystone is get ago proved

but the "new york times" thinks so and they are better reading his tea leaves than i'll ever be. >> the president would love not to approve it. he's hoping there's a break that somehow rationalizes his desire to pay homage to the global climate and not approve it. that's a dishonest position. that oil is coming out of there. it's coming to america or going to china. the president can now choose. there's no intellectually honest basis for him -- >> your point is canada will pump that oil. >> it's coming out. >> somebody will buy it. why shouldn't it come to us. >> to not approve this pipeline is dishonest. >> david? >> well i want to agree with my colleague in one respect. the oil will be coming out of that ground and going to canada or to the gulf. the problem the president has, i believe, is that he really did not do a good job on environmental issues in his

first term and the environmental community is quite pissed off to use the technical term. >> the only thing he ever talks about. >> they've chosen this as their battle. this is the battle. >> what he wants the environment to do -- >> he did an excellent job with the environment. he didn't do any drilling at all. he did a great job with the environment. >> i'm afraid the folks at the natural resources defense council, they disagree with you on that. they are not happy. they want more. therefore, the president is boxed in essentially by two of his key constituencies, labor and the environmental movement and it's not an easy position to be in. i think he did a great job. clean air standards and fuel efficiency standards. >> two people here say he'll approve it. what do you think? >> what day think? oh, lord, i tell you -- >> come on. come on. >> we have 20 seconds. >> i don't think he's going to approve it.

not this year. >> spoken like a real liberal. >> more dithering. >> this was a lot of fun. thanks so much. david goodfriend joining us. ed butowski with ed rogers. that's it nor tonight's show. follow me at twitter. i signed up a long time ago. there it is on your screen. there it is on your screen. have a great night. because i'm a pig driving a convertible? tail light's out.. fix it. digital insurance id cards. just a click away with the geico mobile app. but at xerox we've embraced a new role. working behind the scenes

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