it's your move. good job at citigroup, letter c. there's always a bull market somewhere. i promise to find it here for you on . the new week has begun. so where exactly is that terrible gas spike that we have been talking about and what impact might it have on the u.s. economy? we are certainly going to let you know. nothing can derail this rally, not even oil's big jump. stocks at all-time highs. the nasdaq 100 up for a remarkable 14 sessions in a row. 19 america is that record. plus, england considering privatizing its post office. should we do the same? a question we want to hear from you. tweet me at sully cnbc. we'll discuss and debate all

show long. welcome to the "kudlow report," everybody. i'm brian sullivan in once again for larry. first up is the gas tank and your wallet. we have seen gas prices spike across parts, not all, parts of america the last couple of weeks. let's get a live report now. jane wells in north ridge, california. we all know californians hate to drive. so probably no impact of gas prices. that said, what are the impact of gas prices? >> reporter: actually what we're dealing with is prices on average that are 20 cents higher than they were a year ago and they will go up another the 20 cents probably in the next couple week. bla aaa says the average is $3.61 a gallon, but $3.31 down in south carolina, some of the cheapest in the country. in l.a., mostly over four bucks.

higher of course in honolulu but the highest, chicago. almost $4.30 in this picture. lundberg survey says the windy city has the highest price. morgan stanley says canadian flooding and refinery impacts down to texas 37. >> largest increase has been in the midwest, indiana, michigan. >> largest increase has been in the midwest, indiana, michigan. >> largest increase has been in the midwest, indiana, michigan. >> largest increase has been in the midwest, indiana, michigan. broth who were 30 crepts pents a week. that's par for the course in the spring. >> fairly bleak.week. that's par for the course in the spring. >> fairly bleak. gas prices will go higher nationally. >> it sucks but it is what it is. >> they will drive ten miles to save two pennies. which doesn't make sense, but a lot of people do that. >> how much are you spending a week on average? >> about 300 bucks a week. >> 300 bucks a week? >> yeah. i drive over 500 miles a week.

so this is a gas guzzler. >> reporter: now, even though gasoline has shot up, you can see it's coming off a dip. but as bad as this is, it's nothing like it was nine months ago when i reported on this very program prices were heading to $5 a gallon before our very eyes. watch. the gas here at this station is -- it's actually 18 cents higher since we were here nine hours ago. they're going to run out of regular in about 15 minutes. they expect to be out of everything an hour after that. i like wearing blue. but see, brian, it could be worse. it was worse. and what's going on right now, it's going to get a little worse. and then it will get better. back to you. >> jane wells, thank you very much for that report. and we will now let you bicycle home. joining us now, founding partner of gain capital and patrickgasb.

why is gas back to this level? >> it's the litany of reasons starting with the main focal point that everybody is aware of, egypt and the middle east situation. but now that there is oil involved, there has been outages, real outages in northern iraq, in libya, and the sanctions on iran i think people are ignoring as well keeping about a million barrels a day off the market. >> there is another reason, too. you know how we like to bash the wall street speculators? guess, what wall street is speculating on higher oil prices in a big way, are they not? >> yes, they are. and it's based on a lot of the shift in the fundamentals. where we've seen a very strong demand for crude oil. we're pushing more crude oil through u.s. refineries now than we have in six years. in fact the demand in the gulf coast is at an all-time high. wall street has recognized this over the past couple of months, we've seen a massive reallocation, funds coming out of the natural gas market going into crude oil.

and in fact since the start of the year, crude oil speculators, hedge funds, cpos, are holding five times as many barrels in the paper market than there is actually in tankage. and they have recognized that there is a growing concern with regard to supply and this is certainly indicative of the massive surge in the forward curve which is textbook concern with regard to hfr- >> but steven, what's the chicken and what's the egg? is wall street speculating because they know high oil prices are coming due to demand or are oil prices high because wall street is speculating? >> oil prices are high because of demand. as i've mentioned before. and then over the last couple of week, we've seen the largest two week drawdown in supplies in history over 20 million barrels. and we saw this massive push up. so wall street is jumping on the bandwagon. this is what wall street does.

they don't drive the market, they hop on and they make it worse. but just in natural gas, they got burned at the end of spring. they're going to get burned again because refinery demand, if it has not peaked in the u.s. already, it will in the next couple of weeks and they're sitting on a lot of length and demand is about to fall off going into september. for the consumer, that's a problem because oil prices have already moved up $13 a barrel. should they stay here, the rule of thumb is retail gas moves at two cents a gallon for every one dollar. so that's a 33 cent hit by labor day. the national average will push up to $3.90. markets in chicago, new york, san francisco, well above $4. happy labor day. >> patrick, we hear about the lag time between oil prices going up and gas prices going up. we have seen gas prices go up in parts of america. but sort of oddly not in others.

do you expect any kind of a super spike in gas prices anytime soon? >> well, we've really already seen a super spike in areas of the country. great lakes really battling it the worst. areas of chicago. 35r9 parts of michigan up 30 to 40 cents. saw another increase of about 20 cre cre cents a gallon today. it's a race. michigan already finishing the race and the rest of the country lagging behind. >> so is there anything consumers can do to protect themselves beside hoard gasoline? >> first of all, definitely get the gas buddy app because there a tremendous discrepancy right now. there are 30 and 40 cent price discrepancies on the street. >> which drives consumers insane because they're thinking why is this gas station at 30 cents

above that gas station. they're buying oil from a similar distributor. >> but still a different distribution chain and lot wlo got a load that morning, who is still pumping the older stuff from there. so gas stations that might have been higher priced and not getting customers are now all of a sudden lower priced because they had gasoline on hand. it's unbelievable. i've never seen a better time for this product to be highlighted. >> and by the way, patrick, nice shot from then anticipated and -- >> no connection. >> no plug. okay. there you go. >> none whatsoever. but i saw the app on "nightly news" with brian costello. and a good dollar difference. so this is one of the times where you're not driving ten miles to save two cents. >> so here is the question, patrick. there used to be four bucks a gallon was the break even point. now we know that's not the case.

americans are very adept at deals with new things. is is there a breaking point for the average american family, five buck, six bucks? >> there certainly is. five bucks is the next psychological breaking point. we've seen it in some rural stations or perhaps in california and isolated basis. but about not even chicago have we seen regular gas over $5 a gallon. so that is the next breaking point. how close are we? that's a discussion for another day. but for now i think that is the next point where you see demand start to crumble. >> and there are parts of america, hawaii, you can understand why prices are so high. they have to get the fuel there. but then there are certain areas like charleston, south carolina which is the lowest price but there is not a lot of fuel terminals necessarily near there. is there any rhyme or reason to gas pricing in your mind? >> well, you do have a state by state basis the taxing

information where of course taxes in south carolina will be much lower relative to illinois. illinois has the double whammy of a higher tax policy. and a significant amount of refinery downturns this spring and into summer. so we have a ton of oil. we just don't have the capacity to turn it into gasoline. so pliminneapolis, chicago, hav seen massive spikes. gasoline right now at $3.61, you know, what it's cheaper today than it was in 1981. adjusted for inflation. so at that point, we also have personal consumption expenditures. a lot more of other money was going to gasoline in '81 than it is today. so you put together that gasoline prices today especially at $3.6 is are not as dear as they were 30 years ago and less of our dollar goes towards

energy, demand is strong becaus they were 30 years ago and less of our dollar goes towards energy, demand is strong becaus they were 30 years ago and less of our dollar goes towards energy, demand is strong becaus they were 30 years ago and less of our dollar goes towards energy, demand is strong becausy were 30 years ago and less of our dollar goes towards energy, demand is strong because u.s. consumers can afford these prices. >> i agree people are complaining about high gas prices but they tweet out from their $100 a month smartphone. >> yeah, sure. >> thank you all very much. perhaps some of you noticed a pretty big change today at cnbc. our website. cnbc.com launched a brand new look today. it's a lot more visual. stories are ease why to find. video easier to load. basically everything about the new cnbc.com will make and you better human being, a better lover and better friend. log in anytime. but what a difference a weekend makes. investors make a huge u turn on boeing. guess how much money you would have made by now if you bought boeing shares at friday's lows? and later on, it is probably the

worst local news screw up p all time and that is saying something. a bay area news organization is the laughing stock of america because of a terrible on air mistake connected to the asiana airline crash. and now the folks at assistian asian in oig sgied to stu the station. >> and free market capitalism is the best path to prosperity. more of the "kudlow report" coming up. [ shapiro ] at legalzoom, you can take care of virtually

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it has certainly been a wild few days for beoeinboeing. phil lebeau has the latest. >> we are still likely a couple days away from investigators in britain giving us more clarity about what caused a fire on a 787 dreamliner. we know from investigators that they have ruled out the possibility of the plane's lithium ion battery having a direct link and they're focused on the emergency locater transmitter. that component is located towards the rear of the plane. it is manufactured in the dreamliner by honeywell.

honeywell tells us they have been invited to join in the fire investigation and we should stress that nobody is saying that this is where the fire started. they are simply looking into what role if any the transmitter played in the fire on friday. honeywell tells cnbc we've sent technical experts to assist with the investigation. however, at this time it is premature to speculate on the cause of the fire. we will continue to work closely with boeing and the ntsb and a wait the analysis and output of the investigation before drawing any conclusions. as take you a look at shares of done any well, keep in mind a spokesperson for the company says their elt products have been certified since 2005. they are used on a number of aircraft models and honeywell has not seen nor experienced a single reported issue with its elt product line. also want to show you shares of boeing which rallied throughout the day. and if you go back to friday's selloff when they hit 98.99 and all the way through the end of

today, they have come back more than 7%. increasingly there is a sense amongst investors that this issue with the 787 dreamliner fire is not one that shows a systemic manufacturing problem for boeing, but is more likely to be an isolated one time incident. again, investigators are not likely to make a final ruling on the cause of this fire at least for several days. that's the latest on the dreamliner fire express. back to you. >> and as phil just said, friday would have been a great day to buy boeing stock. it closed up almost 4% on news that the fire was not a result of the battery problems. boeing is still up more than 40% year to date. here now is aerospace analyst and consultant. ray, jim cramer today on "squawk on the street" said earlier the plane 787 may be made of carbon fiber, but the sfok appears to be built with teflon. is there anything that can slow down boeing shares?

>> there is also something that can slow down a company's shares. but the thing is boeing has a series of new products coming out that the customers desperate l desperately want. the 787 is not the only product out there. a lot of new products are coming online. so the local company whole comp based on the 787 but they are waiting for and demanding it. >> the 787 caught a break obviously with this issue not being related to the battery problem. boeing is a great american company, great american innov e innovat innovator. but do you believe the 787 problems are truly behind boeing, what if we do have another incident related to that battery? >> that's always a risk. the 787 is a product that is needed out there by airlines for its efficiency.

so even if something happened related to the battery, i think the product would still be in demand. boeing would get it fixed if it's that. but the thing is it appears that this problem is represented to something else, which is good, whichrecovered so rapidly. >> the book goes out at least search, eig sear search, eight years from now. so priced in. >> there is doubt on how quickly they can step up production.sea. so priced in. >> there is doubt on how quickly they can step up production.vse. so priced in. >> there is doubt on how quickly they can step up production.3se now. so priced in. >> there is doubt on how quickly they can step up production.so . >> there is doubt on how quickly they can step up production.now. so priced in. >> there is doubt on how quickly they can step up production.so . >> there is doubt on how quickly they can step up production. if demand picks up, boeing will increase its production. they are looking at the possibility of increasing proubs. if that's the case that could sharply increase revenues. >> and it would also sharply

increase job creation. something this country needs very badly. always a pleasure to get your time. >> thank you. >> a frank sister or maybe a few pranksters decided to make a tasteless joke out of the asiana crash and unfortunately for one major tv station, a local news team fell for it. but it's about to get worse. that story and more headlines just ahead. ♪ [ male announcer ] you wait all year for summer. ♪ this summer was definitely worth the wait.

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attorney general eric holder made a big announcement today in the zimmerman case. >> despite saturday night's not guilty verdict, eric holder said his department continues to investigate the case for possible civil rights charges. but one big hurdle is that the fbi has already concluded that zimmerman showed no signs of racial bias at any time in his life before the shooting of trayvon martin. senate leaders will meet tomorrow to decide the fate of the filibuster. harry reid says he's ready to employ the so-called nuclear option in order to get some of president obama's judicial nominees confirmed. that could park a major republican backlash and delay almost all other legislation in the senate. and asiana airlines says it will sue ktvu in the bay area. that station fwell for a prank and aired fake names of what was

supposedly the crew of the flight that crash landed. the report became an instant viral sensation making ktvu the object of national ridicule. the station has apologized, but asiana says the report has gee fam defamed the airline. that is the latest that we know so far. >> i'm going to say something i rarely talk about my own industry because i've made more mistakes than probably a lot of people on tv. about you for anybody out there that wants to get in to this business, we all are called talking heads.for anybody out t that wants to get in to this business, we all are called talking heads. if you don't read or write your own material, this is what happens. you have to know what's on the prompter. >> got to tknow your story. it's other thwnership, that's w is. >> and it was racist whoever made up those names.

but the crash also defamed the airline. >> sure. very unfortunate. up next, incredible teflon nasdaq 100. it is on a 14 day iwinning streak. will ben bernanke finally put the brakes on? that's up next. vo: traveling you definitely end up meeting a lot more people but

a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours.

why do that as well as larry, but i'll try. welcome back to the "kudlow repor report". did the decision to delay the employer mandate in obamacare save any jobs or stop any businesses from cutting employee work hours in the latest day it seems to answer the question no. we'll ask some business owners what they're doing.it seems to answer the question no. we'll ask some business owners what they're doing. and are the british about to privatize their national mail service? and if so, why not? we'll discuss and debate. but first, let's talk about the economy. lackluster retail sales report was out this morning and we'll send it over to steve liesman for all the details. good evening to you, steve. >> thanks. very lackluster retail sales

report today with the government saying that the headline rose just 0.# #%. that's of that of what the street expected. and then take you out auto which is were the strong part of the report and retail sales rose just nothing. some of the discretionary things down 1%. all of this prompting economists on lower their gdp forecast. now look at a sub 1% gdp forecast for the second quarter. 0.9% is the average of eight economists that we looked at. before that, it had been just above 1%. so of the fast three quarter, two on track to be below 1%. the high 2.1%. ubs. but even they acknowledge numbers are runner weaker than

expected. moore beg morgan stanley the low. but the market seems to being looking through this. it appears they're look forward to the third quarter where stronger job growth seems to propel better income growth. >> steve liesman, thanks a lot. see you tomorrow. so not like the stock market hasn't had bad news to digest lately, but the rally rolls right on. in fact 14 straight uptrading sessions for the nasdaq 100 closed again with all-time highs. can we keep it going? and how? let's bring in the pros. here on set, chad is with us. and joe, here's what i want to talk to you about. i have to dig in on this point because i think you point a little bit of a discrepancy in your stuff and i want you to clarify for us. you're ratcheting down your gdp estimates.

you think growth will be weak than expected. yet you note that private sales should continue to rise. how do you square those two seeming discrepancies? >> on the trade side, we saw tremendous import growth. imports are part of consumption, they're part capital expenditures. so part of it is a widening of the trade deficit and then the other big piece of it is the government side. federal spending likely to be down again. we've had the two biggest drops in defense spending since the end of the korean war. so this is really the depressing top line growth. but just from looking at job growth, the economy certainly looks a lot better than the g it dp estimates which will get revised and ultimately we'll see numbers that will be stronger than what will print on the first gdp pass. >> so chad, joe is kind of doing this with his gdp thing. he's saying the numbers won't matter that much. because the reasons he gave. do you agree with joe? >> i believe joe is modestly

right. i think where we may differ is the second half of the year. i think that the growth trajectory will be subpar at best. and global growth is decelerate which go is also affect not only the u.s. economy, buts ea also earning ps. >> has in a made the u.s. the best house in a bad neighborhood? we're dealing with rising global tensions and it seems like traders and investors are seeing the u.s. the best market to invest in right now. >> it is the best market for the time being because looking at 1% to 2% kind of gdp here, look at the eurozone, negative 0.3%. but also keep in mind that the market rally has been liquidity drawn. we have had a wave of liquidity thrown at it courtesy of the federal reserve, bank of japan, the ecb. so you have valuations here but you have earnings in the economy here. and there has to be a fill-in of

that gap. if you don't get that over the period of time over the next six months, then you may have some adjustment. >> and you are perhaps pointing out the greatest question that i have about the economy right now. joe, what percentage of the stock market run of the job creation we've had, of the -- whatever it is has been because of the fed and how much of it is simply organic? >> i would say that the vast majority is the fundamentals. if you look at the returns of equities and profitability, they have matched almost one for one. you could argue of course that the fed is what has engineered profitability, but i don't think that's the case. because if you look at train sensitive sectors like housing, they bottomed address turned sharply higher well before qe-3. so if anything, the fed has probably hurt growth through sending the message that the economy is for the held any. but i do not this is a fed engineered rally. i believe it's a structural

impairment impairme impairment of balance sheets. >> i would say it's 50/50. >> so what is your gdp estimate then for the year? >> 2%. >> so organically we would only grow without 1 ben bernanke and his pile of cash. >> there has been a seepage of con susumption due in part beca of that.>> there has been a see consumption due in part because of that. now, i'm not saying that i'm wildly bearish. we've hit a fair market valuation and one wants to move up the quality spectrum and be a little bit more cautious. >> interest rates rising that of course could be a major headwind for the consumer. we're already seeing in the latest retail sales report that

the consumer is still being very cautious with spending. >> but you're bringing up a good point. but i wonder five years ago, 6% mortgages were gold. they were going to rescue the housing market. now 6% is seen as doom. the american consumer -- account american consumer handle that tick which is still historically low? >> it absolutely could if we get a self sustaining recovery. that is the fact here. so at 3.5% ham on the ten year wouldn't be a problem at all or 4.5%, but you need self sustaining recovery for that to occur. >> we want self sustaining recovery to take place, but the consumer is hoping for businesses to see a pick up in their productivity. but how can they see a pickup in growth if the consumer isn't spending. they're waiting for one another

to play catch up. >> rates are only around 2.55, 2.60 on the ten year. so it's not a rate story. it's been balance sheet effects. if rates were to go to 4% or 6%, that's going to be on the back of tighter monetary policy which is in direct response to a much lower employmeunemployment rate. no way the yields will go to the high level. there is too much carry in the market. so again rates will go up because the economy is healthy, not because they're just because they're going up because people are selling u.s. assets. the u.s. fortunately is not in a situation as some of those in peripheral europe. >> joe, listen. we've talked about higher rates many times on this network. and my point of view has been very simple and perhaps larry kudlow might disagree. but this is it. if 150 bucks a month which is the difference on a $300,000 mortgage between 3.5% and 4.5%,

if 150 buck as moopt will make it so you cannot afford a home, you cannot afford in a hothat h. >> but if you look at affordability, even with 100 basis point backup in mortgage rates, we're still well above historical averages and we could withstand another 200 basis point rise in mortgage rates. but even so, you still have high affordability. and banks might finally be starting to ease lending standards because the yield curve is steeper versus when the curve was very flat and the only people getting mortgages had very high fico scores. >> let's not forget we're spending less as a percentage of our take home pay on food than at anytime in modern american history. we have smartphone bills. tv bills. average price of a car is $31,000. the average size of a new home has gone up 60% since i was born in the early 1970s. and yet we talk about, oh, americans will be pinched by $4 gas.

perhaps we're just not living the right way. >> that may be true. but again, i would say on the housing side, home prices i think fundamentally look very attractive. and while certainly there is a lot of stress in the economy, we need to generate faster job growth. we just need to put things in the proper perspective and coming back to the stock market, valuations especially where rates are make stocks extraordinarily cheap. and typically equities don't peak in terms of the cycle until the next recession. and i still think that's some years away. >> stocks are fairly valued, so one should perhaps move up the quality of spectrum. >> what does that mean? sounds like a disclaimer. >> family value means that, okay, you're at right now -- >> to me i read that the market as a whole probably isn't going to go much higher. >> you had a good done payment on the first half of the year and you had a 10% correction, i wouldn't be surprised at this

point. there is opportunity within the system. for instance, technology, mega cap technology, good buys there. because the nasdaq 100, chad, which is the biggest 100 tech companies has gone up 14 days in a row. it hasn't happened since sinead o'connor had nothing compares to you as the number one hit back in april of 1990. that's a true stat. and yet you still think they have more room. >> forward looking estimates on the s&p about 14 1/2 times. technology, you look at that it's about 11, 12 times. and if you get a little kick in here of capital spending, which we're an tis it ticipating in td half of the year, then you can get a nice pop there. >> and definitely seen a resurgence in the technology sector. for a while the question was when will tech play catch up. and just last week the nasdaq beat the dow and s&p when take you a look at the year to date performance of the major indices. >> and we have to go, but your beat here, biotech, three of the

top five names of the nasdaq 100 this month have been biotech. >> a lot of biotech companies have been moving higher especially because of positive drug trials and promise for coming up with new treatments for diseases that currently don't have treatment. >> seema mody, thank you very much. chad, good discussion. joe, thank you for coming back on. appreciate it. >> my pleasure. well, despite what their ads say, the u.s. postal service is financially back stopped all the way by you, the american taxpayer. but can you believe that britain may actually be close to privatizing its mail? so why don't we look into this for america. that story promised delivered to you promptly next.

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every little click, call or donation adds up to something big. has oats that can help lower cholesterol? and it tastes good? sure does! wow. it's the honey, it makes it taste so... well, would you look at the time... what's the rush? be happy. be healthy. the muu.s. might need a message from the uk. investors may determine the mail in england rather than have an up limited credit line with the u.s. treasury like the usp sflt. we're joined by matt women much who says we should take the post office out of government hands. i'll agree and disagree.much

who says we should take the post office out of government hands. i'll agree and disagree. i agree it's mismanaged. i will disagree and say a private company would not find the economic incentive to have offices in rural montana, in the back woods of alaska, whereas unprofitable as it is, they they have a right to have postal coverage. >> i don't see the right to postal coverage in the constitution. do you see the postal service mentioned that congress or the federal government can establish a postal service. >> with all due respect, anything created by ben franklin, i'm going to back a little bit. >> sure p b. the government doesn't need monopoly. royal mail end the monopoly six years ago. there is no reason why that the government should be running a business. >> but there are people by choice or necessity who have to live or want to live in certain

areas that would be completely unprofitable for any private organization to service mail to should they be left out in the cold probably literally. >> do you think amazon does not deliver passages to their house? are they left out of the cold of the other delivery systems? >> amazon will deliver if it's a profitable transaction only. if it's a moneney loser, i doub they would. >> show me where in the united states amazon doesn't send to. the postal service should are the opportunity fto decide whether they want to keep a physical location or not. they don't have that ability. congress has to micro manage this because everybody has a rural post office that they want to keep up in their district. that is not a way to run a business he is essentially a nonessential business of sending mail. >> this is a difficult position for me to be in defending the post office, but somebody has to. it is a mismanaged organization.

with the post office, would you change your view if they could be profitable? if they could deliver two bucks a stamp, whatever it would take, would you change your tune? >> i honestly don't care if the post office is profitable. what i care about is whether taxpayers have to pay for it. there is no reason for taxpayers to pay for the post office. you can make it more profitable by opening it up to competition and, yes, you can structure that competition in such a way where you can even say i want to make sure we have carriage to rural montana as part of it. the point is we have more than $500 billion. that's much better than a trillion -- >> the postmaster general got a p bonus that was a nice one. >> the federal government should be dealing with essential core businesses of -- >> and you don't agree that the delivery of key stuff that ben franklin laid out is essential? >> it is essential that that exists. it is not essential -- >> i have to get my restoration

hardware magazines. all eight that come at once. >> ooand i'm sure they will fige out a way to get that to you if there is not a government monopoly on the service. >> do what england is doing. sell shares to the public. let the stock market and its vin investors determine if this is truly a viable organization. that's what england is planning to do. because once you're a stock, you have nowhere to hide. your finances are out there. the stock price is out there and everyone knows how you're running your business. would you support that? >> much more than what we have now. europe has been leading the united states for the last two decade. we like to flatter ourselves and think that we're leading privatization in the world. it's not true and it hasn't been. it's not just the uk. it's germany, sweden, the netherlands. they have been privatizing their post systems customer like car companies and airplanes. so, yes, we should be going there and talking about this politically in a way that we

aren't. it's kind of a disgraceful what has happened. >> we are right now. >> thanks for that. >> by the way, usps if they wanted to go public, it's a again any stock, though, mail is available if they want to go on the nasdaq. there you go. what do you think? here are a few tweets. sergio says, yes, privatize. service a thing of the past. who sends regular mail anymore. my daughter from camp actually recently. delta waters road says congress won't let usps stop saturday delivery. no way they privatize. time will tell. all right. matt, why don't you stick around. we have a segment you might be interested after the break because at some of you know, some people hope that the decision to postpone the employer mandate in obamacare would save jobs and worker hours. your next guests say the exact opposite may be happening.

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the affordable care act employer mandate has been delayed until 2015, but employers haven't been delaying their response. from the restaurant industry to colleges and university, more than 16,000 royemployees have h their hours cut. and that is just what has been publicly announced. joining us now from washington is president of the galen institute along with two individuals who have seen the

effects of affordable care act up close in pennsylvania. and matt welch continues to be with us. sean, as a business owner, you're the ones that are on the front line of this. what are you understanding about the changes to the mandate and what are you doing about the changes to the mandate? first off, in the short term, everyone still needs to realize that there is a lot of costly and burdensome aspects of the law that negatively affect me as a small business owner. we would be real happy if there was a repeal and replace. but i still have to worry about the health care law right now as it is. so i'm hopeful congress will make some changes now that they have more time. for example like change in the minimum hours from 30 to 40 hours per week as what qualifies for full-time employee. >> why do you want to see that

change? >> 40 hours is the american way and that's what we're used to for overtime laws and stuff like that. so i have employees that are full-timers right now and i have part-timers. and to have two different sets of understanding what a full-time employee is makes it difficult and what i think i'm doing is hurting my employees. some want to work more hours. but eventually i'm going to have to start making decisions on whether i want to give them those hours because it could put me into a very punitive stand point. >> grace, it's interesting because it kind of goes along the lines of the argument we've had with minimum wage. people say minimum wage, higher wage is a good thing. it's a good thing for the people who get to keep their jobs, right? you'll get more hours and more money. but it will be a barrier to people that are looking to get their foot in the door. >> exactly right. this is killing the jobs that people so desperately need. employers are scared to death to

hire another employee, especially another full-time employee, especially if they have 40, 45 employees because this could have huge financial consequences to them. what this health law is doing is redefining labor law to say that a full-time job is now 30 times a week. and if an employer has more than 50 employees working 32 hours a week, then they are subject to $2,000 and $3,000 per employee fines every year. for many businesses that really takes up their profit margin. so you're talking about the fines, not even providing the more expensive health insurance. they're not able to make ends meet as a result of this. >> clinton, you might be in that world. you're at duquesne university, but also at a community college. so you kind of have two employers. i doubt you're doing 40 hours a week for each them, though closely a hard worker. but you get my point. you're kind of stuck in the middle in some cases.

>> to a certain degree i am, but in the long run, i think it's probably convenient for people to blame the affordable care act. >> why do you say blame. blame it for what? >> well, just the idea that the affordable care act is convenient dare i say scapegoat for some of the things that are going on on just a humble purchaveyor of composition. but the idea that some of these firms and my employer especially, i can only speak for really my employer, but the idea that maybe we could -- it seeps like a convenient work around by my employer. >> that's crazy. it's much more can difficult to manage two or three part-time employees than one or two full-time employees.

it's. more cumbersome. much more expensive. much more training. employers would like to have 40 hour a week employees. but this law they neededly when this law passed in 2010, they started having to figure out how they will restructure their businesses, not because it's the right thing for their businesses, because they're forced to in order to continue to have any kind of margin at the all that will allow them to keep their doors open. it's not a scapegoat. >> incentives matter. and we have the social policy on the back of businesses. those businesses will respond to incentives. if you make it more expensive to ensure employees because the employee thinks that employees -- or employers should be in that business, then they will of course respond by hiring less people. if there are artificial thresholds like 50 employees. we had the chance to break stupid post war link between employment and health insurance. we didn't do that.

that was a mistake. >> all right. guys, great discussion. i'm sure larry will continue it. humble purveyor, thank you for coming on the show. we appreciate it. and that is it for tonight's show. catch me tomorrow on street signs. have a great night, everybody. clients are always learning more

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>> trash -- across the world, we're producing more of it than ever before, and there's no end in sight. in the united states alone, we make 250 million tons a year -- enough to cover the state of texas twice. for most people, this is where the story with their garbage ends. but this is where the story really begins. >> if it disappears, that's the end of it. and there's so much that happens from that point, it's fascinating. >> garbage -- it's being reborn in ways you never imagined. >> it's hard to believe that a plastic bottle is the same raw material source that goes into making a t-shirt, but it is. >> garbage -- it's an emer