welcome to 2014. let's say there's always a bull market somewhere and i promise to find it for you right here at "mad money." it was a great 2013. but 2014 does start out badly, 1 drops on the dow, but i see it as a good opportunity, legalization of marijuana sales beginning in colorado, but most of the news stories are presenting it in a giddy fashion, there is time for a sober look. there are addiction issues that could do harm to the whole country and the economy. we'll have the discussion with congressman patrick kennedy and

others. then there is the uber left, tax the rich, and bill de blasio, after 20 years of prosperity and lower crime, de blasio looks to anti-business, anti-education reform. this is elizabeth warren stuff. we need more rudy giuliani and bloomberg. all this and much more coming up on "the kudlow report" beginning right now. good evening, everyone, i'm lawrence kudlow, happy new year to everybody. we're here live, first thing we need to do is get you updated on a big winter storm hitting the midwest and heading towards the east coast. and kevin tibbles joins us, live from chicago, good evening. >> reporter: hey, larry, my lips are still moving, but only

barely, i have to spit this out for you. there are parts of the midwest where it has been snowing nonstop. here alone, there are 1300 plows and trucks trying to keep the roads open. so far they're pretty successful. i have to tell you it is pretty hard to travel, it is chaos, hundreds of flights cancelled at o'hare. and as you know, that sort of thing happens on a sunny day at o'hare, so when something like that happens it really backs up things coast to coast, because almost everything goes out of o'hare when you fly across other parts of the country. everything i'm talking about is already heading in your direction, already flights are being cancelled in anticipation of this storm that is arriving overnight. schools in boston have announced that they will remain closed for a little longer over this holiday season. and then just to top it all off,

forecasters are saying another big chill will come. temperatures here in the chicago area on monday are not expected to get above minus eight degrees. that is fricking cold. >> that is fracking cold, kevin tibbles, you go on inside, we appreciate your report, happy new year to you. all right, stocks beginning the new year with kind of a big drop. good evening, sima. >> good evening, larry, and happy new year, a new year and new selloff, kicking off the first trading day of 2014 with a big drop, a decline for the dow, the s&p lost about 16 points, the nasdaq drops about a percent, we'll get to that in a second. first, look at the big news in the commodity space. wti crude moving lower, gold shares starting off the new year bright as metals begin to show

signs of new life. and will it last? that is the question, now thanks to the big move in gold, it was one of the best performing stocks on the s&p 500, posting a gain, but technology was one of the worst performing sectors, investors took a risk on the trading, shares moving lower on the analysts' concerns. take a look at apple shares, down 1.4%, back to the overall markets, this was a first-time stocks decline in the trading session of the year since 2008. and in 2008, larry, if i may remind you, we did end the year lower, back to you. >> yeah, okay, i hate these old wives' tales, i just hate them. if she is right, that i hate old wives's tales, i think this is a gift. a complete gift. all right, 2013, we saw a booming stock market, prices rose, consumer spending picked

up. all good stuff. all of these helpful signs continue to energy the economy, and all business in 2014. me, i'll say it again, i think today's correction is a welcome investment opportunity. let's ask some of our pros, i'm joined by wilbur ross, chairman and ceo of equity private company. we also welcome frank sorentino, chairman and ceo of connect one bank. let me begin with my friend, wilbur ross, having seen you last week for dinner, a great pleasure, happy new year to you. >> and to you, larry. >> we have a couple of good points, ism manufacturing coming out the beginning of the year, consumer confidence looking good, business construction coming out good. second half of 2013 looks to

have grown by three to 3 and a half percent, not bad, can it continue, wilbur? >> right, i think it probably will, and i think what some may think is a very odd forecast, i think the payments of long-term unemployment will actually result in less unemployment. i think an awful lot of people at the lower level of wages didn't feel that it was a good tradeoff, going off long-term unemployment. just to get those jobs. i think now that it runs out they will be applying for jobs. and there is a good chance that we'll see a very noticeable boost over the next few months in employment. >> well, i think that is a good point and great incentive-oriented point. and that could be very helpful for jobs and wages. at this point, from what you see in the -- you know, financial everything. all of your various businesses, do you think business in

general, which is profitable, will invest for the long-term? because that is a huge job creator. and long-term businesses, that has kind of been missing over the fast five-year so-called recovery cycle. >> well, it has, and i think that was largely due to the pyramiding uncertainties. but i think there is a limit on how long we can postpone capital expenditures. for example, yesterday i was with a fellow who builds factories for the automotive industry. he has not been very busy in the last few years in the u.s. now he says he is getting a whole new influx of orders. and i don't think it is just automotive. even though that is a big sector, in general, american companies have been under-spending a little bit in their domestic side. and therefore, it will start to increase their level of investment. >> now, before i get to my pal, frank sorentino, they had the

resource s and the cash flow, better than anyone, as you know, and they talk about obama care putting a drag on the work, the tax on regulatory barriers. can business look past that or does that stop the kind of comeback we're looking for? >> well, those are problems, and they will continue to be problems. it seems businesses are getting a little bit better. at some point you really do have to begin with capital spending. and given the tremendously liquidity, i think it comes in 2014. >> all right, frank, what is your take? you seem very optimistic. >> we're very optimistic, we're seeing home constructions start, and definitely, they will open their pocketbooks in 2014. look, if the consumers are

spending, people are buying houses and cars, i don't want to say unprecedented, but in the past couple of years. then businesses will have to increase their production. >> let me dig down deep, you run a successful community bank, have been for years. are you saying long demand, we're not really seeing it much nationwide. sometimes it pops up, then it kind of eases back down. are you seeing the kind of loan demand that suggests a little more risk-taking and a little more activity? >> so i think in the small business world across the country, i think we're seeing the business demand, companies are much more confident than what we see here today, and they're willing to hire and spend and plan and buy new technology. they're willing to do all the things that they were hesitant to do in the past couple of years. >> all right, jim, i hope you hear us, our expert, the two reasonably optimistic people. today's stock market correction. i thought it was a gift.

i want to see a couple more of these gifts. these are new year's gifts. because then they just buy it, take it out. >> i do think you buy on the big down days. but i think there are a couple more down days to come. we could have a little more correction. but i sat in this chair in 2012, we have to come at some point, the moment we say forget it, there is never going to be a correction is when it comes. one universal truth in trading, over the last few weeks we've seen so many people prepare for higher rates, almost discounting the possibility that the rates could shoot lower first. i think rates do go a little bit lower, the stocks go a little lower, too, i'm equally optimistic about the economy as both wilbur and frank, i think it will be a great year in 2014 for the economy. it is just not the right time

yet to buy stocks but i think it will be soon. >> and wilbur, what is your take on the stocks, i think the fed has been a big factor on the stocks, too. but i think the fed will spend the next three or four or five years taking the punch bowl away, however gradually or slowly that will be the fed strategy. in your judgment, what is the outlook for the stock market in that context that the fed will be less loose, ending -- >> well, i think they will and should take this some more, i frankly think that rather than the runoff cut they just did with $10 billion, i think they would be better off announcing a very gradual taper on the pre-determined basis. maybe something as mild as $5 billion a month for 17 months, and get it off there. markets can adjust to facts. it is very hard to adjust when

you don't know whether the next shot will be 20 billion taper, zero billion taper, or even more. i think the uncertainty has a lot of value. >> i wonder sometimes, wilbur, kind of a crazy thought, higher interest rates, loan rates are going up in my opinion, about 100 points in the next year as the fed does less. i don't agree with jim on that point. but suppose short rates went up. in other words, you had an overwhelming signal that the fed was going to allow the market to adjust rates up as the economy recovers. would people get off the fence and do their borrowing and take the extra activity step? >> as we said before, both of us, this was highly liquid for the most point. and big companies did a record amount of borrowing, a trillion,

100 billion last year, mostly to lock in lower rates. so i think it's not going to be doing very much spending. the return on equity, it is still pretty low if you look at those interest rates. and so i just don't see that that is a great big deal. >> thank you, i agree with that. >> mortgage rates, are your mortgage rates going up? >> so they're goi up but still very low in historical standards. i mean, even if you were correct and be careful what you wish for, but even if you were right and rates went up 100 basis points, what would we have? 5%? attract the mortgage? >> i don't think it would negatively impact the economy, the economy is very strong and will continue to be that way for quite a while. >> all right, thank you very much. >> what it would do is help banks a lot. banks are very heavily leveraged to increases and rates.

so if you have more loan demand plus more increases in rates, it would be the best thing in the world for banks. >> buy bank stocks. >> buy bank stocks. >> everybody wants to buy bank stocks. okay, thank you, gentlemen. appreciate it now. we have 2 million obamacare sign-ups, i think that is woefully under the amount needed. we'll talk to two experts about the health care next. and legalized sale for marijuana in colorado. there is a lot of giddy coverage on this subject, i don't like that. i think it is time for a sober debate. is this really what we want for america and our economy? what are the addiction threats? and please don't forget that free market capital is the best for prosperity. but take it for me, 18-plus

years sober, we need sober people to make an economy, the sober report, coming back. please stay with us. [ male announcer ] when you wear dentures you may not know that your mouth is under attack, from food particles and bacteria. try fixodent. it helps create a food seal defense for a clean mouth and kills bacteria for fresh breath. ♪ fixodent, and forget it. we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours.

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report." so it is a new year, obamacare is here, and what we now know is how much we don't know. how many people actually enrolled? the policy cancellations, and who paid, and what will we do about the shrinking dr. networks. let's talk to the president of health policy and strategy associations. dr. scott gotlieb with the american enterprise institute. bob, let me go to you, first of all, what do you make of the so-called enrollment numbers? how many people have paid and how many young people have gone into this? does this story look better or worse to you? >> it is about as expected. about 2.1 million people have enrolled in obamacare by december 31st, that is an easy number, can be spun either way. we have about 21 million uninsured, 2 million is about 10% of the uninsured.

but it is worse than that, because many of those 2.1 million people are people who have their policies cancelled. now, we're not sure how many had theirs cancelled in january, many will be cancelled throughout 2014. but many were deferred until the end of the year. but we do know in california, 8,000 people lost their health insurance january one, and 200,000 lost their health insurance in the state of washington. about half of those people are subsidy eligible. so just washington state and california alone puts a pretty big dent in those numbers. so the bottom line here is something far less than 10% of the uninsured have so far bought obama care. and to make this work, we have to get about 70%. >> right, so scott gottlieb, can that plan survive with that kind of enrollment rate? >> well, if you look at the

state data level for the states who put out data for enrolling, it looks like a lot of people that enrolled are a lot less healthy than we planned on. it really suggests that not only is it a less healthy population that is buying up for a richer benefit, because they know they will likely tap the health insurance, but they are likely consumers who knocked off their health plan and will get obama care. if the uninsured were enrolling in obama care we would see more people opting for bronze level plans. and the state data shows that they are opting out for the bronze level plans. >> is the individual mandate going down, bob? they're not going to penalize -- the obamacare, white house, they're just going to keep extending deadlines until they get better numbers, whenever that is going to be. the thought occurs to me you know what? the whole individual mandate

will be thrown out the window. is that a dumb thought or is it possible? >> no, i think you're right, right now the mandate penalty is 1%, they can only penalize any tax reform you have. it is not really even enforceable. but in three years, the mandate penalty goes to 2 and a half percent of income. i think that the political outcry at that point, i mean, you're going to be saying to people you must buy a health insurance plan that costs about 10% of your after-tax income if you're middle class or working class. and then you're going to have to provide -- they're going to have to pay a deductible that averages $2600 for the silver plan, and $4300 for the bronze plan. and voters, consumers are going to say you mean i have to pay this much of a plan i really can't use and then tax me 2 and a half percent of my income? i think there will be an outcry.

>> and the middle class family really gets crushed if they go into obamacare, if you make $90,000, you tap out the subsidies, you are not eligible, the after-tax income is about $70,000. if you go into the market and buy a plan you could spend $1500, about 20% of your after-tax income, maybe more in some states. so this really crushes people at the higher income band, and the middle class. >> i agree with scott. what i was pointing out is i'm talking about the people who get subsidies. >> right, right. >> the subsidized people will still pay 10% of their after-tax income, unless they're really low income. >> sure, a chunk of the population, those who are sick, we'll call it pre-existing conditions, the middle income people. seems to me a lot of other people are losers and are just not going to do it. upper income people, maybe they don't care. middle income people are going

to have a hard time. scott, i want to ask you one thing. you are talking about today, alarming similarities between medicaid and obamacare, can you just walk me quickly through this? this is a subject i want to talk about in future appearances, but right now, obamacare looks like medicaid? >> sure, we equate it to access, medicaid is really having problems even in some insured cases, they just can't get access to the care because providers are not taking the insurance. you will see the same thing in the obamacare, after all the operating margins of the plans are capped. they don't make more profits, if they make more profits they just have to rebate it. they're sending down provider reimbursement and offering the narrow networks. what will happen is people are going to have a rich benefit on paper but they're not going to be able to get access to the

actual care. this is a design element, the plan was designed to be this way. >> bob, last word on this, lower reimbursement rates for doctors, fewer health care providers. medicaid, oh, my gosh. this is -- i guess it is an intended consequence, i just don't think the general public got this. >> to reinforce scott's point again, mckinly just released a report, 70% of the silver plans are the narrow networks that are sort of medicaid-like. in fact, 40% of them are extremely narrow networks. only about a fourth of the hospitals that you would normally get employer network, we have had networks before, call i calling them high performance networks, where insurance contractors go out and get the contracts for cost and quality. this is different, what the

insurance companies did this time is create an insurance element and sent it out in the community. and who signed it and sent it back? the doctors and hospitals willing to take the lowest reimbursement. and that is what the subsidies are tied to the second lowest cost silver plan, well, which plan do you think that is? >> obama spz -- obamakaid, somebody coined that. thank you. and completely an italian company, all thanks to american taxpayers. more on the story and other key headlines just ahead.

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. welcome back to the kudlow report, i'm seema mody with a news report, there will not be a chrysler ipo, fiat is buying it instead's paying $6.5 billion for the company owned by the auto worker's health care union's trust. what was saved by taxpayers is now completely in the hands of a foreign company. in other news, all 52 passengers were rescued from a ship that had been trapped in antarctica, the ship is safe, they have plenty of supplies and several rescue attempts had to be called off due to wind and

snow that expedition's goal was to find more information on global warming, but they got caught themselves. >> no global warming, and the american taxpayers financed an italian car. >> those are the top stories. okay, many thanks, seema mody, appreciate it as always. now, let's look at the giddy way most of the news media seems to be covering the legalized marijuana sales in colorado today. >> starting on a high note in colorado, the first recreational marijuana stores in the u.s. opening this morning in denver. >> we're at a motel, we're going to hang out and get high. >> yeah, well, look, it is time for a sober conversation about this story. we'll have it next with experts including former congressman patrick kennedy. you don't want to miss this. this is very important on "kudlow." we'll be right back. i've ever had to make.n jim, i adore the pool at your hotel.

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than a million dollars on day one alone. >> we're at a hotel so we're just going to go hang out and get high. >> all right, those are examples of the marijuana story, are they joking about it or marveling about the sales figures? all right, fine, on most things i'm usually a free market free choice guy. but on this one, there are potentially serious addiction and mental health dangers here. many people will be unable to control a new habit like this, and could do great damage to themselves and the rest of society. so i would like a little sober analysis of legalizing pot. to discuss it, we welcome former congressman patrick kennedy, former house member from rhode island, and ceo of clean treatment centers. and danny danko, senior cult

cultivation editor at "high times" magazine. appreciate you being here, with god's grace, i'm 18 and a half years clean and sober. i still go to a lot of 12-step meetings. here is one of my issues. i hear, patrick, young people coming into the rooms saying they started on grass, harmless enough, and then go on, a gate way drug, any counselor will tell you it is a gateway drug, and they do harder stuff, cocaine, whatever. some people can control that, some can control alcohol, patrick, i'm not one of them. and i hope young kids getting high on marijuana now understand that. >> well, larry, i'm with you, i'm not one of those people either. i'm also in recovery. and i would say that some people dismiss the harm of marijuana because it doesn't have the kind of immediate destructive impact that maybe heroin or cocaine or some of these other drugs, even alcohol has.

but as you and i know, the biggest enemy is denial. the insidiousness of marijuana as a drug is it will take you to the same place as alcohol, heroin, cocaine, just taking maybe longer. but you're still on a train to nowhere. and what i worry about as a nation is are we going to create a whole new generation of people who think that perception of harm towards marijuana is so reduced because of this notion that it is medical? and it is good for you. and now, it is legal. and you know, larry, we know the experience of tobacco, cigarettes, when there was a for-profit motive by the tobacco companies who did they go after? joe camel? they went after kids. and the same thing with the alcohol industry, larry, it is no secret that they look for new consum consumers. and if you see the million dollars they made today, just imagine what they're going to

start doing once they have a corporate interest. and i appreciate your caveat in the beginning about a free market guy. this is not about a free market. this is about more and more people, addicting who are going to be consumers. and it is really who is going to pay the price for it down the road layer, and higher hospitalization rates. >> let me get you, i think you run a string of clinics, i got sober up at hazelton, god love them all. i'm not a professional, i'm not a professional. i'm a recovering alcoholic and drug abuser. i'm not a professional. but as i said at the top, most of the young kids coming into the aa rooms, the 12 step rooms started on grass and went to bigger things. most counselors, you may disagree with this, but most professional counselors, people trained and educated in this

field regard marijuana, grass, as a gate opener, as a gate way to larger drugs. what is your take on this? i can't stop this, i don't want to stop it. all i'm saying is can we educate them and warn them that a lot of people wouldn't be able to control it. >> i think you're right, most counselors believe that marijuana is a gateway drug, ironically i believe it is because they overlook the legalization of alcohol and tobacco, which are truly gate way and cause the most damage in our society. if we were really concerned, we would ban cigarettes with more than 450,000 people dying annually from tobacco and nicotine. we don't do that, this is a society that we allow tobacco and other sort of freedoms we want to allow. is marijuana something we want to allow in our society? i argue pretty much everybody who wants to smoke marijuana can use it, or get it.

we criminalized it and in doing so we criminalize people who suffer from mental health issues and self-medicate with marijuana. we see people who used to be under psychiatric care in prisons with little psychiatric care. i would much rather see us legalize it, control the rates of the addictive substances such as thc in it. right now it is unregulated it. and the money, we don't always know where it is going. largely it seems to be more blood on our society than if we were to regulate it. >> all right, danny danko, i can't stop it. my intention is not to stop it, i'm powerless over that kind of thing. but what i'm interested in is the kind of thing, i'm going to call it educational warnings that we hear from common kennedy and i know you're an advocate of

legalization. what is your reaction to some of the things that we are saying? >> well, first of all i would like to applaud you guys on your sobriety. i would also say there is -- the vast majority of marijuana users are responsible users. and just as there is with alcohol, there are many people who use it very responsibly. so that is the one side, also, the prohibition of marijuana has not worked, people's homes are being raided. people are being killed. people's dogs are being shot. they're being separated from their families. they can't get jobs. they have trouble adopting children. there are all of these ancillary things that come with this drug war that are far more harmful than any usage of marijuana. and that is happening in states all over the country. so while we applaud colorado for coming up with a reasonable program, of taxing and regulating marijuana sales, making it tougher for children to get marijuana and making that

money which used to go god know's where, now, pay taxes into education and other types of -- >> i hope that is right. i mean, congressman kennedy, do you think the criminal element will be taken out here? >> my worry is that we're not talking about the facts here. and both of your other guests should know that when you legalize something the rate of usage will skyrocket. and that is a fact, so this notion that there is nothing harmful in legalizing is just -- doesn't face the facts here. and the facts are, when you legalize, you say it is okay. more people are going to use. we're already seeing the surveys of the future. more of our teens are using marijuana. and it is because they don't perceive it as harmful. and because it is even more easy to access. so my point, larry, is you know when you have a larger population using it you're going to have larger adverse

consequences. and i think that is a big price to pay for some of the benefits that your guests say we're going to get from it. and so i would just say we really need to get the facts out there. there is a big disconnect between what the science tells us and what the public understanding of this drug is. >> right, and how it is being reported. no, those are great points. you know, my wish is that we get this educational information out that people, particularly the kids, understand what the addiction threats are. how easy it is to get hooked on this various gateway drugs that are tougher than marijuana, just so they know, just so they know. because a lot of people can't control any of this stuff. they ought to know that those threats exist. anyway, patrick kennedy, it is great to see you. i appreciate you very much. thank you, danny danko, i appreciate everybody's point of view very much. now, folks, we'll switch gears. house speaker john boehner is

reportedly ready to make a deal. i thought he wrote a sensational article about this. he will explain his argument next up on the kudlow report.

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they account for nearly 20% of all business owners, so could more immigration mean more jobs for americans? that was the focus of this wall street journal op-ed this week. and the vp of financial services forum and the co--author of the book "where the jobs are, entrepreneur entrepreneurs hit and the economy." i basically agree with you, john, my heart is with you, some of my conservative colleagues just do not agree and give me bloody hell for it. what do you say for the restrictionists who say liberalization, et cetera, will cost jobs? >> well, thank you for having me on, larry, i think some of our conservative friends have two problems with this issue. one is, and there are others who

explained this, the last run that we took at this issue in 1986, there were lots of assurances made regarding border security. so i think there is a healthy and understandable amount of skepticism on the part of a number of conservatives about those assurances this time around. frankly, i think a lot of conservatives and people in general, find it counterintuitive that more immigrants in the economy can somehow help. they view it as if there is a limited number of jobs in the u.s. economy, and if foreigners are taking some of those jobs then how can it mean more jobs for the public? as you know, the economy is not static -- >> they forget about the job creators that you're describing.

and let me ask you this -- just -- john boehner is talking about doing this thing, rather more piecemeal, as i understand it. he wants it to be for limited individuals. and it seems to me that the process of entrepreneur, why not go for the low-hanging fruit. what i call the braniacs, and the foreign students that go to m. i. t., and then we send them back to china or india. to me that is low-hanging fruit. we need the experts, they're the company creators. >> what we know from research, and we go into this in part from our piece and the chapter in the book on which the piece is based that immigrants tend to -- they have a higher likelihood of starting businesses. they're likely to be innovative. we mentioned that something like

that 75% of the patents awarded at research institutions last year involved in immigrants, the vast proportion of those patents involve spin technology. those are the kind of people, they need new businesses and creating jobs. i think where people run into difficulty is politically, not substantive. i think there is a broad consensus on capitol hill, on both sides of the aisle, that as you call them the braniacs, and that is a good term for them. that we want more of these people here. the problem is, to be perfectly candid, i think on the democratic side of the aisle they insist on comprehensive reform because they want to see the issues of border security and a pathway to citizenship included in reform. they can't de-couple the two issues. >> i wish we can, i don't think we're ready for a consensus on border security.

i don't think we're there. i think we'll have to go through at least one more election, maybe two. but i think the low-hanging fruit that you talk about, the power of immigrant entrepreneurship if i can call it that. and the kids that we send to our best schools, that is where we start. i think we have general agreement on that and that would really help the economy. john, we'll visit on this hot topic, and his book, available in all the amazon book stores. now, switching gears again, the new mayor of new york. i tell you, it is about as far left of a democrat that we've seen, anti-business, anti-cop, bill de blasio, is this the new real face of the democrats? we'll talk about the national implications, much less living in new york city. i'm kudlow. stay with us. >> today, we commit to a new progressive direction in new

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so new york city looks like it is entering a new liberal state. he talks about welfare spending,

anti-cops, to me, it is crazy stuff. the question is, is this a sign of things to come nationwide? are democrats going to continue to go further to the elizabeth warren left? we just had rudy giuliani and bloomberg, that model worked. why does he have to leave it? and anyway, my pal mark simone, talk show host. mark, does de blasio get anything about running a city this size and the prosperity and the low crime that has occurred under two republicans in the last 12 years, does he get any of that? >> not at all, i don't know if you saw the inaugural yesterday, which was supposed to be a solemn ceremony. it turned out to be awful. somebody said if these people had so little grace and wisdom, the chaplain says it is a plantation, we have to get the chains off.

harry belafonte said the crime is brought down only by increasing the prison population, which is not true. bloomberg brought it down by 27%, one spokesperson said it is not about individual success, but shared prosperity. if you can't even run that how are you going to run the city? >> all right, steve come back to some of the specific issues. he wants to raise taxes, but whatever, he wants to raise taxes, doesn't seem to like rich or successful people. he is going against stop-and-frisk, which is a great crime-fighting tactic, specifically unions, okay, there are all of these government union contracts coming due. it sounds to me like de blasio is going to give the store away, what is your take? >> well, he doesn't have a lot of money to give the store away. but i think even if he gives a little the store away, with the pressure the city has, pension costs going up by $7 billion in bloomberg years, there is not much room. i see this as an a -- analogy to

the dinkin years, he gave them -- almost immediately the city had a fiscal crisis on its hands. because the cost of workers in new york city is very high. and the issue of government is about paying workers, that is where all of this cost is, the government. >> but the taxes -- >> basically he is restricted, he can raise property taxes, you can raise a lot of money with the property taxes in new york city because you have all of the commercial properties in new york city. >> just great. >> let me ask you another thing, i'm watching a discussion, i'll come out and say it on channel one in new york city. all the participants are saying how de blasio is bringing in all of these seasoned professionals, he can't be that bad. so i looked up this woman, carmen farina who will be the school chancellor, she is anti-charter schools and doesn't want to close failed schools.

she is against merit pay, wants to throw more money at the situation, she is against meter pay. this is a complete reversal of the kind of positive reforms, especially charter schools. they're going to overturn that. >> she has one thing in common with bill de blasio, no management experience of any ki kind. i'm sure she is a fine teacher, but no management experience at all. we see what happens when you put somebody in governing who has no experience. take washington, obama care, the mess, you have somebody with no management experience and it becomes a disaster. i did see bill de blasio speak today at the police plaza, the swearing in of bill bratten, and he did not talk about the stop-and-frisk -- >> you know, mayors can get in the way of even the best police commissioners. steve, just got a second here

left. new york has prospered. we were just talking about brooklyn and queens, not just manhattan, brooklyn and queens is doing better, why would you want to break that model? >> what he doesn't understand, because the city is so successful, new york attracts good people because it offers them mass transit and subsidies. >> you're so right, we have to do much more of this. i'm sorry we ran out of time. that is it for kudlow, much more on this de blasio story. >> when they collaborate, they bring about an integrated cost effective model. >> our research shows there is stronger collaboration when there is a collaboration between the supply chain and the cfo. >> every dollar saved can be reinvested. >> the biggest benefit is the performance. >> exclusive stocks work, the

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>> narrator: in this episode of "american greed"... in the city of brotherly love, car wrecks are piling up. and auto-insurance policies are treated like atm machines. >> what a great way to make $5,000 just by going to the doctor's. >> narrator: it's a multimillion-dollar underground business, and everybody gets a piece of the action. >> the lawyers are in on it, the doctors are in on it, the body shops are in on it, the tow-truck operators are in on it. >> narrator: but when the outfit begins to crack, the game turns deadly. >> "pop! pop! pop! pop! pop! pop!" gunshots to the back of the head. looking directly at me. >> narrator: and the promise of easy money for the participants proves as phony as the car wrecks themselves.