don't forget to watch my interview tomorrow. he happens to be the u.s. attorney for the southern district of new york. i always like to say there's a bull market somewhere, and i promise to try to find it for you here on "mad money." i'm jim cramer and i'll see you tomorrow. l. the market stand still, in anticipation of ben bernanke's testimony on capitol hill tomorrow. what will he say? how will stocks react? this is your last chance to repair, she said with cable tv anchor forboding. we all know obama care desperately needs young people to sign up for the health insurance exchanges. there's one problem, web only insurance providers are still locked out of those exchanges. free market capitalism, is it really about to come to cuba? are we on the verge of a major policy change here in the united states? we're going to show you the signs questionable ones that something may be up in havana and washington.

all those stories and more coming up on the "kudlow report" starting right now. good evening, everyone, i'm michelle caruso-cabrera, larry will be back tomorrow night. dozens of earnings reports on tap. the rest of this week may be tense for the markets. josh lipton joins us now with the details. good evening, josh. we've got a lot coming up. >> that's right, michelle. stocks close with modest declines. the s&p 500 breaking an eight-day rally. that following mixed economic and earnings reports, the dow dropped 31 points. among the blue chips, coke, a laggard, matched expectations of 63 cents a share but missed on the top line. the company talking about unusually poor weather in the quarter. also, goldman sachs, reporting the company beats on the bottom

and top, but a well-known bank analyst did lower his rating on goldman from buy to outperform saying increased estimates aren't enough to justify the upside needed for a buy rating. on the economic front, home builder confidence jumps in july to its strongest level since january 2006. and the consumer price index gained .5% in june due to a gain in gasoline prices. we heard from kansas city president esther george. and, of course, speaking of central bankers, tomorrow all eyes on dr. ben bernanke, his semiannual testimony to congress, perhaps more insight into the direction of monetary policy, michelle. >> even more. >> even more. >> you've been talking since may, josh, don't move. we're going to keep going on this discussion. joining us onset are andy busch, author and publisher of the busch update. is there anything left to say, i wonder? because he's talked in may, he talked in june, talked in --

it's been on and on. and yet, the markets move dramatically every time he opens his mouth. don, what are you expecting in the next two days? >> i'm an advocate of a whole new economic philosophy. it's called fih, the fed irrelevancy hypothesis. i challenge anybody out there, do what i've done, look at the numbers. we've been doing large scale asset purchases, qe now for 4 1/2 years. it began in january 2009, we can look at the size of the fed balance sheet, we can look at when these programs began, when they ended. what we find is when these programs begin, they don't make interest rates go down like they say they will, they make them go up, and when the programs end, then weirdly interest rates go down. look at what's happened over the last year, the ten-year yield started rising last july. before qe-3, then during qe-3 and now at the end of qe-3. don't you get it? none of this matters. >> but andy, the markets are going to react like it matters,

right? >> yes, definitely. and i think for tomorrow and the next two days, you're going to look to see whether or not bernanke walks back a little of the easiness that he'd talked about. you know, qe forever, kind of what we got from the last time he spoke. it's interesting that -- to put this in the context the bank earnings because they've been so strong despite the backup of interest rates. so bernanke should feel a lot more comfortable saying higher interest rates are part of the game when we have an improving economy. and the concern it's going to hurt the banking sector or the consumer. >> josh, we've been trading near all-time highs, we pulled back today, but i would think the rise in the markets gives bernanke comfort in some way, right? because now it seems that maybe the market's finally gotten used to the idea that the fed isn't going to feed them sugar all the time. >> i think i agree with andy, tomorrow you'll hear bernanke strike a dovish tone. i think the message will be the same. he's going to say, listen, we'll taper if the economy develops in the way we project. meanwhile, he'll emphasize, rate hike is years away.

it depends, not so much what he says but how the market interprets what he says. but the worry has been they're going to make that transition before the economy is ready. if the market fears that, you could see weakening. >> isn't the bottom line that the economy is getting better? or is it? in theory, that's what eventually moves stocks, right? when the real economy starts to get better. >> i don't believe there's evidence that the economy is getting better. its growth rate has been the same in 2013 that it was in '12, '11 and '10. >> a weak 2%. >> yeah, it's accumulating like silt on the bottom of a pond. but what we really need to see is an acceleration in that growth rate. that's something we've never had in this whole rotten so-called recovery. we're not seeing that. >> but is it good enough, andy, for the fed to take a little bit of the sugar out? >> i think what they're looking at as far as the federal reserve is concerned. i think what they're looking at primarily is the hit from the fiscal drag that's occurring and mainly is occurring in the

second end of the third quarter. we weather that, things will look a lot better going into 2014 and towards the end of this year, 2013. i think earnings will show that as you get towards the back end of the year. so to me, i think the fed is absolutely right. they need to get out of this quantitative easing, needed to stop it, they've got to slow it down. so from our market consensus, all built up around september, i don't expect that to change tomorrow. >> john, bottom line, would you buy stocks here or not? >> i wouldn't. and here's why. october 3rd, 2011, great bottom. great buying opportunity for stocks. second leg up in the bull market began that day. we're up 58%, 60% on the s&p 500, or that same time period, forward earnings for the s&p 500 are up only 9%. this has been nothing but a gigantic relief rally because the amount of risk in the world has gone down. >> how much does -- >> the earnings -- >> how much is left? >> none. we're done. >> we're done for the year? >> it's been a good year so far. don't get me wrong.

>> well, it's funny, it's like this is exactly what i tell my clients. 2013 is going to be a great year, the problem is, it already happened. >> it happened. it happened. >> what do you tell your clients? and if you're not buying stocks and they come to you in the near to intermediate term. you'd rather just sit in cash? >> no, not at all. when things come back into equal librium, when bond yields come back from the crazy lows, when stocks come back from the panic lows of two years ago, it's not that you want to get out of stocks, you want to have your normal allocation. so if normally you'd be 60/40 stocks/bonds, be normal. there's no incentives to take risk. at least not in this country. >> be normal. i would say, you know -- >> we could buy japanese stocks, there's the growth story. >> i would say the treasury, the ten-year treasury is going to trade 2.25% to 2.7%. 2.75% being the top. >> it's there right now, what's the future tense in that sentence? >> no, what i'm saying --

>> 25 basis points. >> i'm saying it's 50 basis points is a range. and as the bond improves -- the bond yields drop, stocks drop with it. >> before we go. >> and if they start to go up, then stocks -- >> you're heading down to d.c. tomorrow. >> right. >> you'll be meeting with paul ryan? >> that's right. >> why? >> paul -- i've got a group that meets the center for strategic tax reform, a group i've been meeting with for a number of years now. we have a lot of different speakers that come in. orrin hatch was with us last month. we'll be talking about tax reform and we'll be talking about the outlook for the budget. to me, tax reform is the lowest hanging fruit that really could propel us to much higher growth. the thing that just happened with baucus and hatch putting forward this proposal to have everybody in the senate, hey, bring forward all your tax cuts or tax expenditures that you want that you think are worthwhile, that fell really flat. >> yeah. >> so tax reform has fallen down a lot. i want to see where it's going from here. that's why i'll ask representative ryan and what he says going forward. >> all right. cool.

josh, thanks so much. you're going to come back with an update later on. andy and don, stick around, because we want to focus on another market that will be listening closely to ben bernanke. that's the housing market. will the recovery weather the rise in mortgage rates? and don't forget the kudlow creed, free market capitalism is the best path to prosperity. and speaking of that, is cuba really making major steps towards a free market economy? i just got back from cuba, i'm still trying to figure out if the casto government is serious about reforms. stay with us. ♪

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let's bring you a realty check. home builder sentiment rising to the highest level since january of 2006. those were the days. take a look at the bull run in the top home builder stocks. kb home, standard pacific surging more than 16% just this year. so what are the home builders thinking? let's ask. here now is steven paul executive vice president of mid-atlantic builders, andy busch, don luskan still here.

i understand why housing stocks would be doing so well. interest rates have been low forever and now we have seen some slow improvements in employment. are you worried now that we started to see interest rates rise? >> it's a concern. the people that are out there buying right now are people who are just being able to come back in the market after being either -- they lost their home to foreclosures or lost their job and it's been challenging. people have gotten used to this very low rate even though we would consider 5% to 6% normal. >> i know, right? you see it rise to, you know, you can get something for like 4.2% right now. and yet, it looks expensive compared to what you could have gotten six months ago. are you optimistic or pessimistic right now? >> i'm cautiously optimistic. >> what does that mean? >> the economy's still fragile for us. we're seeing market demand at the lower price points for either town homes or attached products but i do a lot of single family move up purchases

and building. and our buyers are struggling to come up with down payments. the interest rates are rising, so it's taking more and more of them out of the market each day. the underwriting rules and regulations have gotten tighter. and our costs of construction are rising so our prices are having to go up to cover that. so we're concerned this uptick is a little too fast too quick. >> there's been a lot of consolidation within this industry. the big buyers, the big, big guys coming in and buying guys like you. have you thought about selling out because they've got more capital? >> i don't think i have a choice. no one would want to buy us. and we do have to compete with those large public builders. >> well, it's interesting. there's been just last year in 2012, there was $8.1 billion worth of debt issued by the top ten largest builders. and they're on a buying spree, they're buying a lot of the smaller companies, i think that's a great point. why can they do that? because they can issue debt, because they're publicly traded. they survived the crisis and can

scoop up a lot of the competition and that's what they're doing now. if you have access to the capital markets, that's a definite plan of attack for you in the home building business. >> what do you think of the home building sector right now? or just the housing market? >> hey, i love the housing market. after three desperate years of trying to sell my gigantic white elephant house in california and i finally did and i discovered the secret, have facebook go public. i sold my house to a newly minted facebook millionaire while she still was one. that's the secret. >> well, if you don't have that option, what do you do? and i interrupted you earlier, what were you going to say? >> well, the value in buying a building company is in their land position. it's all about controlling the marketplace and having as many positions as possible. and that's what the public is trying to do. and there's a real shortage of developed lots that have been dormant, you know, developers went bankrupt, others just pulled in their horns and moth balled their projects and you don't see a lot of dirt coming

out of the ground. a lot of developers saying they can't get the retail value for their lots yet and they're holding off. so there's a shortage and the publics have to do high volume to turn their dollars, they need to secure that land position. >> one of the bst things that's happened in the housing market is the dramatic rise in prices. that's the greatest thing. i would say there's a dearth of building going on. the peak at 1.28 million starts, we dropped to 306, now we're back to 480. and there's still much higher demand there. that's what's driving. >> what about the rising interest rates? can't get in there anymore. >> i would say that's somewhat of a problem. i'm sure it is, and i don't mean to dismiss it. but when you see prices going up at 12%, a clip on a year-over-year basis, you know things are hot and people are going to build more stocks. >> that's misleading because prices fell 40%, 50% off the peak. so they're going up 12% off of a low number of course it's going to look good. >> i totally understand that, but new household formation is

up, there's a lot of positives happening in the housing market. i know you're aware of it. that's why you're cautiously optimistic. that's a good thing. we want to continue to see. >> i'm hearing more cautious than optimistic. >> are you struggling to get land? did you have some? or are you now -- >> we have enough to carry us through and new positions that will be coming online later this year and next year. and what we're doing, actually, to alleviate my concerns, going into more town home product where there's more buyers. think of it this way, you had a single family home, all this equity, you lost that home to a foreclosure or short sale. you have no more wealth. and now three years later, you're able to get back in the market, your credit's been clean, you have no money. what are you going to be able to buy? you're going to buy more of a starter home, town home, something like that. that's where the market's been going to. and that's what we see going forward. >> all right. well, i'm going to leave it there. i think i'm still optimistic that your struggle is to have enough land which is a different struggle than what we were talking about a couple of years

ago. mr. paul, good luck. >> thank you. >> thank you to you, andy, as well and also to you, don. >> thank you. troops capture and arrest one of that country's biggest druglords. in fact, he may be responsible for the murders of hundreds of people. we're going to talk about it with the former u.s. antidrug czar next. (announcer) at scottrade, our clients trade and invest

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maybe you didn't think this was possible, but the irs scandal is getting deeper. josh lipton has that story and more. >> thank you, michelle. the new allegations are coming from republican senator charles grassley. grassley says irs officials targeted political candidates for audits and separately private tax information of some political candidates as well as donors was made public. those revelations came to him in a letter from russell george, the inspector general overseeing the irs. and george presented evidence of these violations to the justice department, but the doj led by eric holder decided not to prosecute. in other news, detroit teetering on the brink of bankruptcy, governor rick snyder meeting today with the manager of the city. in talks with all the creditors trying to get them to agree to take a huge haircut. detroit could go into chapter 9, it would be the biggest u.s. city to do so. finally, a major player in the

mexican drug cartel has been caught. his name miguel angel trevino morales, captured in a town near the u.s. border. found with $2 million in cash on him. >> $2 million cash is like piles and piles of money. >> right. >> holy moly. thank you, josh. how big of a player in the mexican drug trade is this guy? joining us now is u.s. army general and nbc news military analyst general barry -- having a tough night, general. general barry mccaffrey, the former drug czar under president clinton. general, good to talk to you again. give us -- what's the scoop on this guy? is that really a big of a deal? >> yeah, i think so. he's one of the most brutal criminals on the face of the earth. probably has murdered literally hundreds of people. immigrants that were slaughtered because they wouldn't act as drug mules. police, soldiers, you name it. he's been in competition with

another cartel, the zetas to dominate the cross border traffic of drugs, extortion, you name it. he operates on both sides of the border. he's been instrumental in murder and drug-related crime in guatemala as well as the united states. so a real coup temporarily for the mexican democratic state. >> i was going to say temporary, as well. isn't it often the case that one of these guys gets caught and there's a number two ready to take his place? >> well, in this case, the speculation is the number two is a fairly weak fellow. his brother omar. my guess is it results in the other cartels crowding in on their market space. you know, michelle, one of the things -- you know a lot about mexico. this isn't a struggle over the drug trade, it's a struggle for the rule of law in mexico. and this new administration

which came into office wants to talk about jobs and the economy, doesn't want to talk about the drug war. there's a lot of extreme anxiety on the part of u.s. law enforcement in particular about how can you ignore a problem that threatens the existence of the state. so we'll have to see how this one plays out. but they've been following calderon, the last president who was extremely good. really a wonderful public servant, a courageous man. >> what would you say, though, general to the growing consensus in mexico. they think the drug problem is an american drug problem. wealthy countries are where many, many people use drugs and that they believe we should legalize drugs and that would reduce the crime and reduce their issues with drug violence. >> well, of course, anybody that rationally tries to guess

legalizing heroin, methamphetamines, cocaine, has a screw loose. if you're a parent, an employer, it makes no sense whatsoever. and, again, i don't actually think that is widely believed inside mexico. i think what is the case is their drug addiction rate is skyrocketing. they're in a country where the rule of law is challenged, 70,000 murders. >> yeah. >> police army, innocent bystanders, catholic cardinals of the church. >> oh, it's been brutal. that's for sure. i just -- i think they don't know where it ends and nor do we. general, so great to have you on tonight. we really appreciate it. >> good to be with you, michelle. >> general barry mccaffrey. now, guess what, we had compromise and agreement on capitol hill today. the filibuster is saved. what about obama care? that's a different story. you're about to hear from the pro obama ceo who says the

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

larry will be back tomorrow night. in this half hour, obama care needs young, healthy americans to sign up for those health insurance exchanges. and since young people use the internet for everything, wouldn't it make sense to allow web-based insurance providers into those exchanges? guess what, they're not. and one health insurance ceo who says that could kill obama care entirely is about to join us. and mixed signals from cuba, even washington, they're hard to read lately. the cuban government wants us to believe real economic changes happening there with a teeny bit more free market capitalism. is there any proof of it? i'm going to show you what looks different and also what looks agonizingly the same in that country. first, though, the filibuster lives. aren't you happy? senate leaders reached a deal this morning to avoid the so-called nuclear option. so aren't we all friends again on capitol hill. here now from washington are a pair of cnbc contributors, some of our favorites, former dnc chair howard dean and also sarah

fagan, political director and senior aide to george w. bush. good to have you here. governor dean, the filibuster was never going to go away, was it? members of congress love it too much. >> i actually think it was going to go away and that's where the republicans gave in. they kick the can down the road. they still have judicial nominees. there's still a good fight to be had which they postponed over the national labor relations board. so, you know, this is just another day in washington. another day and another fight. >> sarah, it always happens the same, right? the party that's not in power wants to try to get rid of the filibuster, you know, whoever has the control of the filibuster wants the other side to suck it up and live with it and those who can't want -- it depends who's in power, right? and it never changes. >> i think that's true. it's largely being used as a negotiating tool and we saw that here. reid didn't believe in this.

his comments going back to 2005 were always opposed to filibuster reform. he just wanted to get a deal done. i think, though, as we look to this next generation of senators, we're likely to see this go away. i do agree with governor dean. this is going to go away when ted cruz and rand paul and others are in charge of the senate, we're not going to have the filibuster the way it is today. >> why? >> well, because generationally, they're not going to sit and tolerate an nlrb which is now what we're going to experience under this deal that allows richard trumpka to put his hand-picked successor into the nlrb. in less than a month with no vetting. they're not going to allow that to occur. >> for those that don't know if nlrb is the national labor relations board. governor dean, do you agree with sarah? >> excuse me, do i what? did i what? >> do you agree with sarah? >> of course not, are you kidding? this is a deal -- we have to

have a functioning national labor relations board because there aren't enough people on it. i hardly believe he's going to pick the successor at the white house. you get this as sarah said, this happens when the majority -- >> she thinks the filibuster is going to go away. >> well, i think that's probably not entirely a bad thing, i just wish it would go away sooner rather than later while we have control. >> this deal ultimately, you know, was inevitable, but it wasn't good. i mean, as you said yourself, michelle, you know, with the nlrb, the national relation labor board really, you know, we see a white house putting forward nominees that are nothing more than a pay back to big labor. the last nominee who has just been withdrawn, we find out after he's been nominated that he is a target in a federal racketeering investigation. he was at the white house today supposedly, reported, reported i should note. and, you know, now the former

general counselor of the aflcio is about to be seated with less than a month on the nlrb. >> probably knows something about labor law, that's not all bad. >> yes -- it means that the aflcio is going to be making policy is what it means. >> i disagree with that. i think that the president's nominees were reasonable. there's no reason that rich cordray shouldn't have been, for example, appointed to the finance board. and, so, these things, i think what's happening is you're seeing -- >> you agree with that, sarah? that richard cordray has no reason not to be in charge of this new banking regulator th that -- i mean this is a man who i think loves regulation, would love to regulate the industry to death. >> wait a minute, michelle, isn't this the prerogative of the president of the united states to make appointments to regulate? if, you know, if you don't like that, then your recourse is to elect a different president and the republicans couldn't do that.

so i think the president has a right to nominate and have a appointed reasonable, qualified people. and you can't say richard cordray's not qualified. >> well, i don't think he should be there without an inspector general which is what we have today. where you have, you know, essentially government bureaucrats running amuck and creating all kinds of policy, you know, that is detrimental to business being able to operate and function, you know, without -- >> and an institution with no checks and balances. >> no checks and balances. >> in any form. >> what doesn't have checks and balances is the banking community. that's what doesn't have checks and balances. >> they've got the -- >> the most regulated industry in america. >> and before the crisis they did too. still don't have any deals on obama care and less than 90 days before, web-based insurers aren't being allowed to sign up uninsured americans. our next guest says that could be a fatal mistake.

we welcome gary lauer, one of the leaders of web-based health insurance sales. good to have you here. >> thanks so much, michelle, good to be here. >> october 1st, you're supposed to be able to go to an exchange run by your state or group of states in which you live in one of them and be able to buy the insurance that is deemed okay by health care reform. those -- >> yes, or go to exchange that's run by the federal government which is going to be the case in 36 states. >> okay. but they're all government run, right? >> absolutely. >> so if they were actually up and running on october 1st, wo you would you be put out of business? i mean, why would anybody go to your website? >> no, not at all. we had 20 million people come to us last year, over half of whom 18 to 24 years of age. >> next year is going to be different, right? when they actually go buy a certain kind of insurance. >> i think we'll see many if not more next year and that's why it's so critically important that those people who are eligible for subsidies, low-income people have a choice

of utilizing us as well as the government exchange. you know, this is all about getting balance on a lot of people into this insurance pool otherwise prices will go up. and when you have multiple ladders into a pool, you get more people into the pool than if you have one ladder. and the only thing i've been arguing hopefully constructively for some time is let's take the best of the private sector and the public sector, let's bring them together for the greater good of people, which is to get them quality health insurance. that's all this is about. the legislation says -- >> are you suggesting they should -- maybe they should subcontracted out to you in the first place to run them? >> well, what i'm suggesting is what they should do for subsidy eligible individuals which i believe the federal government is about to do, by the way and i'm really pleased with this, is allow a company like mine to be at an alternative or choice that someone has to get their mandate meeting health insurance. get it through us, get it through exchange, you choose where you want to get it. it's the same exchange at the same price. when people have choices, they're going to be many more

people enrolled which is the objective of this law. >> here's what i still don't understand. if you have to buy something that's approved by the government, right? >> yes. yes. >> why wouldn't you go to the government-run health site and be sure about it? is that your competitive disadvantage? that's my point. >> no, i think -- i think it's like sending a package. do you want to just use the post office? or would you like to have dhl or fedex as an alternative, as well. >> yeah, but they're more expensive. they're more expensive, right? and -- >> well, even more -- what if they were all the same price yet the service or the quality or the experience was better at fedex rather than the post office. which would you use? this is just about giving people choices and really about giving low-income people choices. people who aren't getting subsidies can get their update mandated insurance. we're talking about giving the same choice to low-income people and we're talking about having more avenues for which people can get enrolled. if you look at government's record enrolling people in

medicaid, it's not a very good one. the state children's health insurance program is not very good. most people who get medicare don't get it through medicare.gov, which is the government exchange. >> why haven't the states included you? is it expensive? do they not want to pay you? >> well, no, they don't have to pay us. it doesn't cost them a thing. the states will save us money, there's no cost to enroll, we bear all the cost. we're dealing with a couple of things. they're all trying to start up these new businesses and it's difficult understandably, i know this, we've done this for almost 15 years. i think there's some ideology at work here, as well, that maybe government is going to be better or maybe we're going to be competitive with them and i don't agree with any of that. the objective here is not to -- >> -- to be competitive with them. >> well, i do, as well. but the objective here is not to build a great government exchange. the objective here is to get great enrollment. to get a lot of people who don't have quality health insurance enrolled. that's what we're all about, what we want to do and that's why i'm supportive of this and

that's why i'm so pleased with where we are at the federal government right now. i think we're going to come to agreement with them imminently and that's the messaging we're getting. with some of the states, it's a different issue. and i think they're making a big, big mistake. if i go back to the president's theme of the state of the union address, it was smart government. and smart government has taken the best of the private sector, somebody like my company and some others and bringing it together with the public sector so we can help people. >> i know you supported health care reform, but i want to point out to you, sir, that we talked a lot about making the deal with the devil. you wanted government to get very involved here and now you've got to beg them in order to be competitive. do you see what's happened here? >> i totally understand. i support the legislation now that it's past. here we are, i want to make it work. and yeah, i'm having to push on some of these government people. i'm pleased that you have interest in this because i think it's so critically important for people. this is a way to get expand coverage and save government money. >> great to have you on.

thank you. >> michelle, thank you. >> gary lauer. enrollment issues are hardly the only challenge for obama care. the department of health and human services released a video monday proclaiming that hhs is on schedule. despite the fact that key aspects of obama care like the employer mandate, income verification or anything but, they want to be delayed. and then there was this from the white house press secretary jay carney today. >> the data reflects there is not -- there is not support for the proposition that businesses are not hiring full-time employees because of the affordable care act. >> okay. so couple uses of double negatives there. what he was trying to say was there was no proof that employers aren't hiring because there is going to be higher costs related to health care. however, take a look at the survey released today by financial information companies sage work says otherwise the 300 accounting professionals they spoke to, 66% say companies are less likely to add staff in the

next 12 months because of obama care. we continue now with former vermont governor howard dean and sarah fagen. both are cnbc contributors. governor dean, is this going to lead to less hiring or no? >> i think it probably will not lead to less hiring. look, i think this is in the long run going to work. do i think there are going to be some delays? yes, i do. do i think they really are on schedule? i suspect not. when you're running an exchange for 30 odd states from the federal government because the republican governors didn't want to cooperate, you've got a big task ahead of you. but i do think this is mostly going to work. and i think -- i think the republicans are actually making a mistake trying to run against obama care for yet another election. i think by the time the 2014 election comes around, a lot more people are going to have insurance than they do and most of those people that get insurance that aren't insured now are going to have their insurance not dependent on their employment and that's going to make a very big difference. >> sarah, is this going to prevent hiring by companies? >> well, it already has. we shall in the june jobs report

that the soft underbelly in employment is that the number of people who have part-time work but who want full-time work is going up. and i own a business, we have 135 employees. our health premiums went up 23% this year. it makes it much harder for people to hire workers when you're faced with those kind of costs and these insurers understand what's about to hit them. their costs are going way up, they're passing it along to business. >> governor, do we all understand such basic things like when something costs more, people buy less of it. in fact, it's constantly used as a reason why taxes should go up on liquor and cigarettes. one of the arguments is, well, people shouldn't use those anyways, if we make it more expensive, they won't use it. why isn't that same economic logic true that when labor costs more because of this added cost of you must provide insurance, a

certain kind, a certain amount that they're going to buy less employees? it's that simple. >> the kind of increase that sarah was talking about has been going on for 30 years. >> not that high, governor. >> sometimes it is. sometimes it is. and actually, a lot of the big rate increases we saw in california this year were -- >> but governor dean, there's a lot of businesses. i know you don't like it, but there's a lot of businesses that didn't provide health insurance because it was so expensive and now they're being forced to. show now their choice is have ten employees at this price or -- >> well, actually, as you know that mandate has been put off for a year for those -- for many of those businesses. the fact of the matter is -- >> it's a year later so it's less true that once it goes into effect it won't affect hiring? >> well, as you know, i didn't support either the individual mandate or the employer mandate. >> no, you wanted the whole enchila enchilada, the government running the whole thing. >> that would be my first choice. i don't think you need either to

make it work. i think if you give people choices as the ceo is saying, they will make smart choices. and the choices, if you subsidize their health insurance, they're going to buy the health insurance. i know, you know, you guys all keep yelling and carrying on about this health care system. it is going to work. there are going to be some significant problems, i think, getting it up and running, but i think it's going to work and a lot more people will have insurance and let's wait and see. the only people who are going to suffer are people living in states run by republican governors refusing to take medicaid money. their hospital systems will suffer because they won't get reimbursed for uncompensated care which they will in all of the states including some run by republicans like arizona. >> thank you. good to have you on. sarah fagen, thank you so much. free market capitalism, is it coming to cuba? sounds like that's what the cuban regime wants us to believe. that could lead to real change in our cuba policy. is it real? how much is there?

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tiny changes to allow small private sector to exist. and there are signs they may even encourage foreign investment. is cuba really on the verge of change? joining me now is ted hankin, president of the association for the study of the cuban economy. thanks for coming in. >> oh, great to be here. >> as you know, i was there last week, which is what prompted this segment. i want to roll some of the video we shot of a lot of the small businesses that are cropping up. the cuban government invited me. they invited business journalists, which was strange on its face. >> yeah. >> initially, right? and then when we were there, we were allowed to do what we wanted to do and they wanted to show us these small businesses. what should we read into this? >> well, i think it's a mixed message. i think, obviously, like any government, they want positive pr, positive spin, they want people around the world, especially potential investors, maybe people in europe who are thinking about sanctions, maybe people in the united states thinking about sanctions that

they're making changes. but at the same time, as you reported in your various articles. >> yep. >> it was crazy because you were looking for these things that supposedly the co-ops. >> yep. >> and there were nowhere to be found. >> new reform starting july 1st, workers in inefficient businesses like transportation, like the bussing sector which stinks, right? there's a special place in heaven for cubans who have to ride the bus. they want the workers to take them over and keep the profits for themselves if they run it more efficiently. >> right and there's a special place in hell for the people administering the services, right? that's why even raul castro, he's leading the charge at change making socialism work better. the question is, is that possible? can you change within the system and make it more efficient, more productive and give people jobs? but up until now what we've seen is this self-employment.

it's this little do it yourself stuff that's not very productive, that, you know -- >> 180 sectors like party clowns, horseshoers, contractors, restaurants, seamstresses, but not really big -- >> but professionals who the cuban government has trained. >> accountants, lawyers. >> who are the brain trust on the island. young people, especially, they're really being pulled abroad. being sucked out of cuba because there's not opportunity for them. and if raul castro cannot make the bet and convince them there's going to be a future for them to apply their skills, their professional qualifications and the island, but up until now, it's like, you know, two steps forward, one step back. >> if we were being used by pawns by the side that wants more change? >> well, for reporter, access is important for a reporter. so you go there and they can tell you the story they can tell you, but a good reporter digs around. >> i have to tell you, i don't want to say treated them poorly,

but every time we had a pministr in front of us, the questioning was aggressive. i was told by colleagues, no not the government, i wouldn't be invited back. and yet, i was told, yes, you will. i felt there was an internal conflict with the government. >> we saw this movie before. but before there was a different director, that was fidel. now we have raul, and i think this time although the changes are sufficient -- are significant, they're yet to be sufficient. and raul knows that and he's trying to push them in that direction. but he's got internal, people who are, you know, putting the brakes on, dragging their feet. it's one thing to declare a change of mentality, it's another to have a change of mentality. >> they kept saying these changes were for more socialism. if you suggested this was china 1980, no, absolutely not. socialism is here to stay. >> well, the question is, that message for the public, for the international, or for consumption or the hard liners? >> right. >> they need to placate so the hard liners are no more. >> we're going to have to wait

and find out. >> hopefully you'll get to go back. >> we'll see if i get invited back. thank you, ted. now we're a few hours away from cnbc's marquee event of the year. the delivering alpha conference. there are big names that will be at the conference, they'll news. we'll give you the viewers guide for what to be ready for and what you need to know. [ gasps ] these are sandra's "homemade" yummy, scrumptious bars. hmm? i just wanted you to eat more fiber. chewy, oatie, gooeyness... and fraudulence. i'm in deep, babe. you certainly are. [ male announcer ] fiber one. a friend under water is something completely different. i met a turtle friend today so,

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tomorrow's the big day.

the delivering alpha conference hosted by cnbc and institutional investor. some of the biggest names in business and politics will be there including treasury secretary jack lew. he'll speak at the conference and join "squawk box" for a rare interview tomorrow morning. and that is certainly not all. josh lipton is back with me to go over some of the exciting speakers we're going to hear from at delivering alpha. >> listen, we can start with your panel, you've got richard perry, perry capital. >> big deal guy. yep, the ceo of bridgewater. >> later in the day, david faber is going to ask jim chano for the best, most actionable ideas. someone that doesn't do a lot of press. long time investor with a lot of respect. also carl quintanilla talking to john paulson, housing, m&a and gold. and finally, of course, carl icahn talking to our own scott wapner, which is so great given the ongoing saga that is dell,

michelle. >> right, because he's so involved in that. for the viewers that don't know, he's involved in trying to shake up the situation at dell. in michael dell's takeover attempt. >> you've got the shareholder vote on thursday. michael dell, carl icahn forcibly opposed to it. it's so great the day before that scott is going to be talking and i'm sure carl giving us his views on the entire deal. >> delivering alpha. for the novice viewer who doesn't know what that means, that means delivering returns above the average, right? >> right. and these are some of -- what's remarkable is, some of the people you're going to see tomorrow, i think of a guy like pelt which is so great because a lot of these don't -- a lot of these men and women don't give a lot of interviews. this is your chance to hear from people not always out and about with the media. and giving you their best picks -- >> managing the harvard endowment, which is the biggest in the world, she rarely gives interviews, as well. she can have such a long-term interview because she doesn't

have to worry about redemptions. her investors will never take away her money. they may take her away, but the money will always be there is so she has a really long-term view. >> really. i'm excited to see how the markets may react to different sectors. >> we've seen individual stocks move for sure. josh, thanks so much. >> got it. >> all right. that's it for tonight's show. tune in tomorrow, we'll have the wrap-up from all the highlights of delivering alpha. larry's back tomorrow. good night. what do you drive? i drive a ford fusion. who is healthier, you or your car? i would say my car. probably the car. cause as you get older you start breaking down. i love my car. i want to take care of it. i have a bad wheel - i must say. my car is running quite well. keep your car healthy with the works. $29.95 or less after $10 mail-in rebate at your participating ford dealer. so you gotta take care of yourself? yes you do. you gotta take care of your baby? oh yeah! all your important legal matters in just minutes.

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[watch ticking] >> bradley birkenfeld spent most of the last decade living in switzerland helping wealthy americans hide their money. you'll hear how he did it and how he touched off an investigation that would shake 300 years of banking secrecy to the foundation of its underground vaults. how unusual is it for a swiss banker to come forward and say, "this is how it works"? >> it's never happened before in history. i'm the first one. [watch ticking] >> many of the deals that helped create the current financial crisis would have been illegal during most of the 20th century, in violation