bankable 21 ceos from macy's reported a number that was really good and sent the stock up after hours. i like macy's. just for you right here this administration today here and now declares unconditional war on poverty in america. and i urge this congress and all americans to join with me in that effort. >> my friends, some years ago, the federal government declared war on poverty, and poverty won. >> all right. this marks the 50th anniversary of the night president johnson declared war on poverty. you also just heard president reagan say 25 years later that poverty won. we have spent $21 trillion in

this war. nothing really seems to work. we will take a closer look at why the number of americans living in poverty hasn't budged. also tonight, we have this developing bombshell of a story right here in new jersey. new evidence directly links a massive traffic shutdown on the george washington bridge to governor chris christie's top aides. now the questions are getting more serious. did christie know about this and will this become a scandal that undoes his chances to run for the white house? and a new book by former defense secretary robert gates also causing a political and foreign policy sensation. what's the book tell us about president obama, hillary clinton and some other key players that we need to know about? after all the sacrifice, are we actually losing in afghanistan and iraq? oh, my gosh. all those stories and much more coming up on "the kudlow report" beginning right now.

good evening, everyone. i'm larry kudlow. this is "the kudlow report." we are here live, 7:00 p.m. eastern, 4:00 p.m. pacific. okay. 50 years ago tonight, president lyndon johnson declared a government war on poverty, yet in the past two generations, the poverty rate has moved very little, dropping from 19% to 15%, where it has remained now for three consecutive years. get this. the number of americans living below the poverty line has hit a record high during the obama presidency. let me get this straight. the big government solution, spending trillions on social welfare programs, seems to have done very little to combat poverty. surprise, surprise. all right. perhaps my old boss, president ronald reagan summed it up best in his 1988 state of the union. take a listen. >> some years ago, the federal government declared war on poverty, and poverty won. federal welfare programs have created a massive social

problem. with the best of intentions, government created a poverty trap that wreaks havoc on the very support system the poor need most to lift themselves out of poverty, the family. dependency has become the one enduring heirloom passed from one generation to the next of too many fragmented families. >> don't get me wrong. the poverty question, the issue of ameliorating poverty is a very important issue, very important issue. but my question is whether family breakup isn't the biggest poverty driver of our time, and it cannot be solved by just throwing more money at it, all right? here's mike konzal, roosevelt institute fellow and author of "three lessons for liberals today." we bring in robert rector, author of this "wall street journal" op-ed, how the war on poverty was lost and cnbc contributor jim petrakukis of

the american enterprise institute. we have an all-star cast. jimmy, let me begin with you. is it fair to say the war on poverty has been lost? >> that depends how you define it. if you're asking whether people who are poor are materially richer today than they were 50 years ago, then yeah, they are. and on that basis it's been a tremendous success. but i think an equally important question to ask, are they richer in hope, are they richer in opportunity, are they richer in family life, are they richer in civic society, and i think on those grounds, it's been a tremendous failure. >> all right. tremendous failure. mike, i'll go to you. what's your response to that? because again, i think the things jimmy is getting at are things that i'm raising. family breakup and other personal values type issues that kind of go to the root of who we are, what we think, what's in our heart and what's in our mind, it's not really more spending. >> let's distinguish a few things. one is if you look at census numbers that incorporate food stamps, a lot of tax code stuff, poverty has fallen quite a bit.

it's fallen quite a bit for people with children in particular. that's taken a lot of stress off children who live in poverty, which is a huge health consequence. so things like food stamps, eitc which evolved through -- >> earned income tax credit. >> have done quite a bit to actually reduce the level of poverty. i want to distinguish between things like poverty and old age, social security, you are talking about 60% rates before the war on poverty, now it's down to 10%. so there are real substantial victories. a lot of things people found problematic, things like community action, like aid to family and children, what we call welfare, has largely disappeared or been wound down or been removed to the states. the core stuff that remains is a really efficient way to deliver money to poor people to keep their standards of living up. >> you think, mike, you think democrats should take a victory lap around newark, new jersey? >> well, i mean, i actually do think that there are things here -- >> enough? >> things like earned income tax credit, like food stamps, are doing quite a bit to help people. i think that should be acknowledged and embraced.

ultimately we want to see things like better job growth, better growth overall, we want to see things like strong communities, but you know, in terms of abolishing want in old age is a huge accomplishment. >> i get that. robert, let me go to you. if you look at the long-term charts, the long-term charts, you have a drop in the poverty rate from the late '50s i guess to the mid '60s or thereabouts, then it just seems to fluctuate with the business cycle. recessions and recoveries. there's not much change, you know, they redefined it and that's fine but there still isn't much change. you're arguing i think, let's see, 100 million people receive aid. that troubles me, government benefit society we're living on government benefits, that troubles me, but, but to get to mike's point, what about marriage penalties? what about, you know, if you work and you marry, single mothers marrying a father who's working, it doesn't pay. after you lose government benefits and after you pay your

taxes, as you and others have written, you only keep 30%. so are the cards stacked against families? that's what i'm asking. >> it absolutely is. to judge the war on poverty you have to go back and say what was johnson's original goal. johnson said he didn't want to just cure the symptoms of poverty, he wanted to remove the causes. he said this would actually eliminate the dole. he said he was going to make people prosperous and self-sufficient without government assistance. in terms of that goal, the war on poverty has been an absolute catastrophe and people have considerably less capacity for self-sufficiency, self-support and prosperity than they did when the war began. in particular because when the war on poverty started, 6% of american children were born outside of marriage. today the number is 42%. in low income communities it's often over 75%. those children will be in official poverty, they will be dependent on government. the capacity of those communities to support

themselves is dramatically worse because for 50 years, the welfare state has deliberately penalized marriage, has treated fathers as irrelevant or as problems, and has pushed them out of the home. also it penalizes work. >> let me just read this. i think this came from your op-ed piece. in 1963, 6% of children were born out of wedlock. today, 41% of children are born out of wedlock. that is a staggering number. as many people have observed, if you're born out of wedlock, and you grow up with a single parent, you can almost predict if not poverty, then near poverty. four times likely to be in poverty, three times likely to be in jail, and 50% that you will be poor as an adult. mike, this is the stuff that really bothers me. i don't see this -- i mean, we should change the incentives for being married, i think robert rector is exactly right, but we know how important family

breakup is and i don't know why politicians and the president don't talk about that. >> a lot of politicians do in fact talk about this. but i think if you're looking at the programs that were largely thought of to encourage this kind of behavior they have largely moved off the radar. we still have issues with income traps and poverty traps and really high marginal tax rates -- >> that's the key. high marginal -- i mean, if the family situation wasn't bad enough, the tax code is skewed against families or against moving into work, if you're married. that's crazy. >> right. so there are ways we can try to assuage that and people are trying to do that. you can think of different types of tax law, refundable tax credits and whatnot. there are ways to continue to try to build the family out in this way. there are senators proposing a refundable tax credit for children to be expanded, you know, that would do a lot, provide a lot of support to families. that wouldn't necessarily get these same problematic incentives -- >> jimmy p, let me just ask you. where do you think we should go now? it's very interesting.

the president talks about poverty but he talks about it in terms of income inequality and i just don't get that, jimmy. i mean, penalizing successful people doesn't seem to me to reduce the poverty rate, if that's the deal. you've got paul ryan giving a speech next week on poverty. you've got marco rubio, senator rubio i believe today, i haven't read the speech, but he gave one today. where should we be going on this? >> i actually think marco rubio had a pretty good speech today, had a couple good ideas, one of which is to take a lot of these anti-poverty programs, not cut them, but move them to the states, where you can let the 50 states try to innovate, try to make better programs, not have it all done at the federal level, not cutting the money by any means, but just seeing if they can innovate more. he talked about a subsidy so work pays better and makes it more attractive for people to get jobs, to get off welfare, get off the dole and move into the work force. i think at the center of all these ideas is the idea that we want people to have jobs, we

want people that -- work is important. being out there, adding value, earn success. that's extremely important to a human being. as well as raising the standard of living for the very poor. >> i mean, robert rector, that sort of brings me to the other point. we need faster economic growth. particularly in the past 15 years or so. i'll go back to the bush years, right on through from 2000 to now, our economy has barely grown, i think less than 2% per annum. the jobs recoveries in both cases have been terrible. i for the life of me don't understand why the president goes around saying we need to tax rich people, because they're hurting the poor, or they're hurting the middle class. i don't understand that, robert. it's successful people that can create jobs and that whole conversation to me is convoluted. >> yes, you're right about that, but you're even more right about the basic cause of child poverty in the u.s. today is the collapse of marriage. and we, in fact, will not even

discuss this as a nation, ever since daniel patrick moynihan tried to bring this up in 1964, the left has attacked anyone who discussed this topic. the simple fact of the matter is that marriage reduces the probability of child poverty, even holding a parent's education level constant by 75%. it's actually more effective in terms of reducing child poverty than the mother's graduation from high school. [ speaking simultaneously ] >> let's point out the fact there has been a huge economic convulsion in that bottom 20% which has affected jobs and wages. i think families are incredibly important. now you start to have a self-perpetuating doom loop between the breakdown of the family and huge economic challenges which is impossible to disentangle. we don't have to disentangle them to come up with good solutions. >> i would take great care -- i got to get out. i got to get out. >> -- for 50 years, it has pushed the fathers out of the home quite deliberately and

that's why you have 75% of all the children that are in poverty are in single parent homes. >> let's talk about economic changes, too. >> if there are economic changes here, to help solve marriage and family breakup, you've got to reduce any vestiges of the marriage penalty with respect to taxation. you just must. you are probably going to need some child tax credits, some additions there. you just have to do that. it may not be the most efficient thing in terms of a flat tax but you're just going to have to do that. that's just the economic side. the family side, i don't know. that's the most discouraging part. anyway, thanks. robert, jim, mike. now, folks, the jobs picture. all right, starting to show proof of a real turnaround, at least for the middle class. that was the headline from the fed. minutes released today and a key jobs report this morning. that's good news for the economy and king dollar is rallying. now, that's the key point. we will talk that over with our investment experts. later in the show, it's truly the hot story of the night. this is something.

new evidence shows new jersey governor chris christie's top aides orchestrating a george washington bridge lane closing, traffic nightmare totally on purpose, according to these e-mails. the governor denies any knowledge of it. is that credible? what's this scandal going to do to his presidential dreams? we'll get the full story for you in just a couple of minutes. for now, don't forget the free market capitalism is the best path to prosperity. let's also take care of our families. i'm kudlow. we'll be right back. mine was earned orbiting the moon in 1971. afghanistan, in 2009. on the u.s.s. saratoga in 1982. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.

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to do her homework. now, more than one million americans have been connected at home. it makes it so much better to do homework, when you're at home. welcome to what's next. comcastnbcuniversal. all right. good news for the overall economy. adp out with its jobs number that was quite strong, 238,000 private sector jobs last month was revised higher. we like that. the federal reserve minutes pointing towards signs of better economic growth and key to this segment, king dollar continues to rally. very, very interesting. now, i don't know why the dow dropped 70 points. let's ask our ace investors. we welcome back jack barusian of index financial partners and

welcome paul hickey. paul, your latest report, i have been talking about this two nights on the air, because you know i'm a king dollar nut, your latest report says that a strong king dollar is great for stocks. all right. now, so far in this dollar rally, not so much, but i want to ask you, are you sticking to your story? >> oh, yeah, larry. if you look back historically, outside of the last cycle, looking back, the market -- equity market has done much better when you have the dollar in a bull market versus the dollar in a bear market. the returns are about three times greater during bull markets than they are during bear markets. all in all, this strong dollar, as you're saying, should be great for the equity market and going forward as long as we can keep this strength going. >> let me just ask you as a follow-up. most of this stock market rally cycle has had an inverse correlation. stocks up, dollar down. that's quite unusual. but that's how it's worked. that's the so-called risk on trade.

now, what you're saying is we can shift, we can shift to a stocks up, dollar up and i want to ask you, when's that going to start and why does that correlation replace the old correlation of the cheap dollar? >> well, i mean, just look back to the 1990s. we saw a strong dollar in the latter half of the '90s and the equity market, i mean, that was one of the greatest periods in a generation. if you look at strong dollar means investment is coming into the u.s. and it's going to go into dollar denominated assets which we have been calling for the past few years. if you look back, the dollar index actually bottomed in early 2009 and it's been in a bit of a side ways trading range for the last four years. again, you look back to the late '80s, early '90s, we saw a very similar pattern. the dollar was horrible in the late '80s, leveled off for about four to five years in the early '90s and then really picked up strength. the pattern right now, i mean, it seems to be following that pattern so as it continues to

follow that pattern, that's a good baseline to work off of. >> jack, what do you think of this? >> i think that inverse correlation has already stopped, larry. look at what's happened last year. we saw the stock market up almost 30%. we did not see the dollar move against the world currencies nearly that much. if anything, we saw a stable dollar, especially towards the second half of the year. so all of that is already in place. you know, this is growth. you know, despite what is coming out of d.c., we are growing. in fact, you talk to a lot of people that are running corporations that were looking to hire at the beginning of the year, they were waiting for certainty. well, they never got the certainty they were looking for, but they realized they could no longer function with skeleton crews so we're starting to see exactly what we expected, and it's not only happening here. think about it. it's happening around the world. in fact, just yesterday, the imf christine lagarde came out and upped the forecast for global growth and downgraded maybe three months ago, so all of that is really starting to take shape and if we get a good number on friday and this adp number today

is a precursor to what i think is going to be a very good number on friday. >> it's a blockbuster. i like using the adp number. it correlates well. let me go back to this. we will have a lower trade deficit, lot of it's because of the american energy boom, the great american energy boom. we don't have to import energy. we will wind up exporting energy. that's good. the federal reserve becomes less and less easy and we are at the beginning of what i think is going to be a three, four, five year tightening cycle. the dollar will respond by going up, with the lower trade deficit and the fed's change in policy. that's the strong dollar. now, that holds down inflation. that's why king dollar is so valuable. that holds down oil prices. that holds down all manner of commodity prices, which is good for consumers and most companies. so it makes sense. the question is when does it materialize. >> well, you're exactly right, larry. the adp number, you know, in previous session levels we were here, we had a big drop and are slowly working our way back to

new highs. at the pace we're going, we will hit a new high in adp private payrolls in may, then we'll see a new high in the non-pharm payrolls in june. the economy is picking up. that's a very psychologically important thing here. with the economy picking up, we are going to need strength in the dollar because you're going to have inflationary factors at work and we need a strong dollar, like you said, to keep that low -- >> it's absolutely crucial. jack, i'll let you take the final whack. jack, just quickly, favorite investments, if you have a scenario where medium and long-term interest rates go up, which is my view, because or not because of the fed, i don't care, the economy's going to drive medium and long rates up, the trade deficit's coming down and the dollar goes up. favorite investment, jack. >> financials. remember, if you get that spread and we start to see the low end and start to see a little bit of movement in that longer end, that is the spread that financials, especially these larger banks, make their money

off of. i would be looking there. don't look for, you know, a rate of say 3.5% or 4% in the ten year to really destroy housing. it might slow it down a little bit but that's nothing. remember, in the grand scheme of things, a 3.5% or 4% ten year is still very, very low. >> year-to-date, just looking at the tables, you're right, the kbw index, the bank index, is actually outperforming year to date in the young new year. thank you, gentlemen. we appreciate it. now, the costs are starting to add up for this brutal national cold snap. we have that story and the other big headlines just ahead. there's a saying around here, you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most.

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welcome back to "the kudlow report." i'm morgan brennan with this news alert. today is the day of the big basketball game in north korea. dennis rodman bringing a group of former nba players for a game on kim jong-un's 31st birthday, but rodman's basketball diplomacy is being questioned by some here in america. here's what senator john mccain had to say. i think he's an idiot, but he's a dangerous idiot because he gives good propaganda to arguably the most brutal, crazy man on earth. the worst of the brutal polar vortex is over, but people in the midwest and northeast are still trying to get back to normal. airlines canceled 7,000 flights so far this week, causing billions of dollars of harm to

the economy. according to some estimates. but good news, warmer weather is coming this weekend. shares of macy's are higher in after-hours trading. the company is laying off 2500 workers as part of a cost-cutting effort. macy's also raising its guidance for 2014 and 2015 in part due to savings from those job cuts. listen to this. j.r. smith of the knicks fined $50,000 for untying an opponent's shoelace. they were lining up for a free throw and smith just bent over and untied shawn marion's shoe. 50 grand may seem like a lot for a silly little prank but the nba says smith has quote, recurring instances of unsportsmanlike conduct. larry? >> nba is right. this is all part of this character building idea, where we need so much more of it. we were talking about families earlier in the show, and by the way, dennis rodman is an idiot. no, i take that back. dennis rodman is a sub-idiot. that's what he is.

john mccain is right. it's worse than that but not for family television. morgan, thank you very, very much. now, it's become the hottest political story in america. new evidence shows governor chris christie's top staff deliberately stalled traffic on the george washington bridge just to lash out at the mayor of fort lee, new jersey. the mayor of fort lee is about to join us. we'll have a full report on this whole story. but first, listen to what the mayor of fort lee just told me about who he thinks the governor should apologize to. >> calls are going to be made. call the families that waited two to three times longer for an ambulance to arrive while their loved one was clutching their chest because of chest pains. call the thousands of parents that couldn't get their kids to school on time for the first day of school and the three or four days thereafter. you know, call, call those people that had to deal and endure this. that it's given me time toabout reflect on some of life'seen biggest questions.

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it's connecting over one million low-income americans to broadband internet at home. it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal. welcome back to "the kudlow report." let's get into this growing scandal involving new jersey governor chris christie, one of his top aides accused of purposely causing traffic problems to damage the mayor of fort lee, new jersey, despite the fact that christie's going to have an impending landslide. everybody knew that. let's bring in eamon javers, who

will explain this whole thing, timeline and all. good evening. >> good evening. this was a low level political scandal in new jersey until today, and that's when the bergen record newspaper in new jersey obtained e-mails and text messages back and forth between and among christie aides and christie appointees that appeared to suggest that those aides and appointees arranged for a massive traffic jam in fort lee, new jersey by closing down some of the lanes on the george washington bridge between new jersey and new york city, doing that deliberately apparently out of some kind of political feud with the mayor of fort lee, new jersey. take a look at the e-mails in question. you will get a sense of just what we're talking about. starting with this one just before the incident in which christie aide bridget ann kelly e-mails port authority executive david wildstein, time for some traffic problems in fort lee. he responds got it. next, after the incident has already occurred, an unknown sender sends a text message saying is it wrong that i'm smiling? wildstein responds no.

and finally, after some concern about school children who were stuck in traffic trying to get to school in their buses for hours, one person sent a text message saying i feel badly about the kids, i guess. wildstein responds they are the children of buono voters. that's a reference to the governor's democratic political opponent. now, the governor was asked about this, the last time he spoke about this publicly. he offered kind of a sarcastic response. take a listen. >> i work the cones, actually. unknown to everybody, i was actually the guy out there. i was in overalls and a hat but i actually was the guy working the cones out there. you really are not serious with that question. >> so the governor there denying personal responsibility for this. today, though, late in the day, the governor issuing a statement and here it is. the governor saying what i've seen today for the first time is unacceptable. i am outraged and deeply saddened to learn that not only was i misled by a member of my

staff, but this completely inappropriate and unsanctioned conduct was made without my knowledge. one thing is clear, this type of behavior is unacceptable and i will not tolerate it, because the people of new jersey deserve better. so larry, the governor here clearly saying he had nothing to do with this, he's horrified to find out about it, and he's taking steps to fix the problem. but he's got a much bigger political problem on his hands today and there are some questions in washington now about what this means for his presidential ambitions in 2016. >> yep, some people are asking about his entire political career. eamon javers, great job. thank you ever so much for that valuable information. folks, earlier, i spoke to the mayor of fort lee, mark sokolich, and i asked him about he believes that chris christie didn't know about his staff's involvement until today. >> no, no, there's definitely i think some holes in that statement. i think, my recollection is that the governor had convened a meeting with his top staff not too long ago, and promptly after the meeting, proclaimed that,

you know, no one on his staff knew about it. as a matter of fact, i'm not even on his radar, so why would they even be considering me. i'm the idiot, remember. so you know, unless those two individuals were not in that meeting, then i think somebody -- somebody may have lied to him or let's say they were less than forthright as to their involvement and knowledge concerning the havoc and the utter unsafe condition that they intentionally visited upon my community during those days in september. >> all right. now, let's bring in two star reporters. they have been covering this story from the get-go. they are going to give us the inside scoop. we welcome darryl ishua, senior political reporter for the new jersey star-ledger, matt arco, political reporter for politicker, if i have that right. what do you make of this denial? this is barack obama type stuff. i didn't know about the irs, i didn't know about the websites, you know. this is almost, almost a nondenial denial because it's so

vague but he says unacceptable, i didn't know about it. is it going to pass muster? >> it's interesting where it is now. when everything began, he said you know, i sat down with my administration, i sat down with everybody and i said who was involved in this, tell me what you know now, we're told that he let everybody go -- >> when was that? when was that? >> this was weeks ago. this was during the press conferences. he said, you know, i was told by sources that he let everybody leave the room, said come back in half an hour, tell me what you know. apparently no one said anything to him. and now, now this has come out. the news came out today and it is kind of explosive. and as far as his statement today, no, i mean, i think folks still have a lot more questions. i don't think that that's where it's going to end. >> darryl, i will be honest with you. i'm a guy who likes chris christie. i have interviewed him, one of the smartest interviews i've ever had, frankly, in this job. and my hope is that he could penetrate the blue states because i would like to see a conservative majority in the senate, okay? no big surprise. i'm kudlow.

i'm a reagan guy. but this thing is really maybe off the charts. what i want to ask you is this. he is a very -- a guy who tightly controls his operation. i think we know that. so we're talking about, among other people involved, in this lane closing of the george washington bridge, bill steppian, his campaign manager, and bridget anne kelly was his deputy chief of staff. so two people very close to chris christie. again, i ask you, with a guy who controls things pretty darned well, is this story credible that he wouldn't know what his top staff is doing? >> you know, i'll say yes because he's not the kind of guy who is going to get up and say that in front of a crowd of state and national reporters. >> say what? >> say i didn't know anything, i knew none of this. i asked my staff, they knew none of this, haha, i was working the cones. if he knew this kind of e-mail was out there and this was going to implicate him, he's not doing that. >> and texts. >> and texts. he's a smart, savvy politician.

he's not going to stand up there and say those things knowing that this bomb is going to drop on him a month later. >> also, let's just add to it. okay, fair enough. david wildstein and bill barone, his appointees to the port of new york -- port authority of new york and new jersey, they're involved in this too. barone is an old friend of christie's. again, is it credible? that christie denial, that is. >> again, it's going to have to see where it goes. certainly, democrats in the state house are going to say no, it's not credible. but again, i agree with darryl, you know, i don't think that he would come out publicly and he said it at press conferences multiple times, that you know, if he knew this stuff was simmering, i don't think that he would make those statements. >> so you two, it's very interesting, you too hard-bitten professional reporters are basically buying christie's statement of denial.

you feel that that's enough to stem the tide against him. >> that's a different issue, i think. i don't know that it stems the tide against him because there's two things at play here. number one, one of the things people have said is he's created this atmosphere in his administration where people felt comfortable doing this. where a staffer would feel comfortable creating traffic or whatever it is she said in fort lee as payback to mark sokolich for whatever perceived slight. so i think it goes beyond that. whether he actually picked up a phone or he knew about it, he created that atmosphere, and the second thing at play is, democrats have been trying for four years, sometimes successfully, sometimes not, to create this narrative of christie as bully. this plays right into it. this is everything, this is a gold mine for these guys, who can say look at this guy, you know, somebody disagrees with him and the next thing you know, you got traffic backed up for miles in this town. do you want this guy as president. i think that's the narrative that they have been building all along and this just plays into it. this is a home run. >> i agree with you. at least that's the threat. i won't make a judgment on the

thing because we don't know but i'm just saying, even if you have people on your staff, your senior staff, who pull pranks like this, and this is really a prank, i got caught in a two-hour traffic jam getting up here one night, even if you hire those kinds of people, that's not good for your judgment, people would judge you as a governor or president. after all, it's the top of the line that runs the operation. i think that's a problem. i'll give you the last word. >> that's the case democrats are trying to make, that he fostered this sort of mentality in his administration. he hires people, he brings people in who are very close to him and they kind of act as an extension of him so whether or not he has to tell someone directly hey, do this, democrats are saying that is somewhat implied that they just know this is what their boss would like. >> we will see. we'll see if there are any more e-mails or texts that come out. if he gets mentioned in something, who knows. gentlemen, thank you. darryl, matt, we appreciate it. we have a lot more to talk

about this story. larry sabatow will join us on chris christie's political future and who wins if this scandal continues to blow up. please stay with us. a lot more chris christie. tough story. [ male announcer ] start the engine... and shift through all eight speeds of a transmission connected to more standard horsepower than its german competitors. and that is the moment that driving the lexus gs will shift your perception. this is the pursuit of perfection. ♪ ♪

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report." we will stay with this story. who -- could bridge gate scandal sink chris christie's presidential ambitions and maybe more? with former defense secretary bob gates' book, by the way, the tell-all book, will that hurt hillary clinton in 2016? two disparate but related stories. let's check in with our great friend, renowned political analyst, larry sabatow, director of the university of virginia center for politics. larry, what's the kennedy book? i love the kennedy book. what's the title? >> the kennedy half century. >> there you go. >> i appreciate your mentioning it. >> no, no, no, it's my pleasure. i'm a great jfk fan. i'm a great sabatow fan. it's a great book. let me ask you about the chris christie story. i just learned something during the break from one of our reporter friends. apparently christie's guy at the port authority of new york and new jersey is going to have to testify, has been subpoenaed by the new jersey assembly and may have to testify under oath and then the deputy chief of staff, bridget kelly, likewise is probably going to be subpoenaed.

if they testify under oath, then that may make this denial by mr. christie more tenuous, who knows. >> i have no idea. i don't know what the facts are, at least with respect to christie, but you know, larry, i think everybody shares your sense of outrage. this is vile, stupid, insane, vindictive, you run out of adjectives, and really, you have to ask what in the world was chris christie doing with people like this in his employ. he picked them. this is going to damage his presidential candidacy seriously, and who knows, it could go further than that. but every opponent he's got, larry, is going to use this in television ads, even if in the end it's validated that he did not personally know about what was going on at the time. >> you know, it's a funny thing. christie has a brand, a solid

brand, you know. he's not an ordinary politician. he's a truth teller. he's an honest guy and so forth and so on. all of a sudden, this brand gets bes besmirched and it isn't only governor christie, it's the people around him. what he said today had an obama-like feeling about it where obama was asked about the irs, said he didn't know. obama was asked about benghazi, said he didn't know. obama was asked about the terrible health care website, he said he didn't know. chris christie is not a guy who usually answers like that, and this statement, however, is an answer like that. he's basically saying i didn't know. if he didn't know, why didn't you know because these are staff people, including his campaign manager, who were right next to him. >> precisely, larry. let's remember, this didn't happen in a vacuum. he was in the middle of a campaign that he very much wanted to win big. i hate to bring it up because i think president nixon has been bashed too much, but you know,

this is very nixonian. it wasn't just nixon, it was the people around him that he had appointed who shared his paranoia. nixon should never have been involved in watergate. there was no need for watergate. he was headed for a 61% landslide. chris christie had no need for this. he was headed for a 60% landslide. but nonetheless, because of the people they are and the people they surrounded themselves with, they got it. >> you know, i'm just going to say, of course i got to cover this story as tough as i can. i'm a guy who looks at christie very favorably up to now. i'm a guy that felt that christie, who i regard as a fiscal conservative, could go into the blue states and make a case for the republicans, because i want to see big changes in washington. but i got to cover this story. and you're right, eventually ultimately, the executive is blamed for their senior staff. ultimately that's really the truth. there's no way of getting around that. >> absolutely.

look, too often, we have let presidents off the hook by letting them say i had no idea because as you suggested, the right follow-up is why didn't you know. you're in charge. these people follow your instructions and they probably follow your values and standards, and that may be the problem. look, like you, i see lots of positive things about chris christie, and politically, the republican party needs somebody who talks blue, like christie does. but people, i've had several people say to me something very interesting. the governor of new jersey has a lot of power, but a president has far more power. do you want someone who surrounds himself with people who will abuse the public trust and the offices they hold. >> all right. well, he is innocent until proven guilty and we will see how this plays out regarding what he knew, what he didn't know, what the subpoenas prove, and if they have to testify under oath, how that's going to work out. so we will see. anyway, larry, thank you ever so much, as always. now, folks, time for the

other big political potboiler of the night. the new book by former defense secretary bob gates criticizes president obama's lack of conviction in the afghan surge. it rips joe biden's face off. it skewers the national security council and is even more hostile to congress. we will talk about what's got everybody so mad. robert gates run wild in a book that's going to be a bestseller. i'm kudlow. please stay with us.

a new book out slamming president obama's leadership and lack of conviction in the afghan surge. the author, well, it's president obama's former defense secretary, robert gates. within the scathing new read, gates reveals obama and hillary opposed president bush's iraq surge way back then, largely for political reasons. gates criticizes vice president joe biden, saying and i quote, i think he has been wrong on nearly every major foreign policy and national security issue over the past four decades, end quote. let's get right to our distinguished guest. steve bucci serves as deputy assistant secretary of defense at the pentagon under gates, and we bring back former nato supreme allied commander, general wesley clark. general clark, look, this is sort of a mixed bag, because gates has some good things to say about the president, including pulling the trigger on osama bin laden. but he also has some negative things that the president kind

of gave up and lost support for the afghan mission. general clark, are we losing in afghanistan? are we losing ground after all the sacrifices we have put together? is that why obama is so anxious to get the heck out of there, and is it going to cost us dearly because of this? >> well, i don't think we have ever had the full body of troops that we needed in afghanistan to do the job, even with the surge. we went into there under the bush administration and the idea was to do the minimum and focus on iraq. so we got started on the wrong foot. we just never had -- and it's their country, so we've done a lot there. it's time to come home. as far as the president's conviction is concerned, look, when he surged those troops, he made the best decision from a host of bad alternatives, and frankly, i'm happy that he was thinking about it really, really hard. he's not a high school coach cheerleading a football team. he's got serious responsibilities and he's got to

be second-guessing himself. that's the kind of leader you actually have to have at that level. >> no, i get that. steve, let me go to you on this, get your quick take on gates and afghanistan. the other thing i want to add, steve, president obama's been criticized for not making a deal with malaki and the ruling group in iraq and we're reading now that fallujah and ramadi, if i'm pronouncing that right, are under siege. we may have lost them. the local al qaedas are coming back. it breaks my heart because we put so much sacrifice into both afghanistan and iraq. whether or not it's barack obama's own problem or mistake, i'm not sure, but things look like they're going the wrong direction, steve. i don't like that. >> well, the president frankly put the foreign policy issues at a lower level of priority than the stuff he's really interested in which is the domestic policy. presidents have to make risk-based decisions but in this

case, by accepting risk and getting out real fast before the iraqis were ready and looking like we're going to do the same thing in afghanistan, when you accept risk, sometimes you lose. in this case, in iraq, it looks like we've lost that bet and if it keeps going the way it's going in afghanistan, i think we'll lose control there as well. >> wes clark, another point that gates makes. the national security council, apparently these guys, lot of them are political operatives and they're calling up four star generals all the time to try to micromanage the war and events in the war and policy discussions. i have never heard of such a thing. have you? >> well, yeah, there is always conversations that go back and forth. generally, when you're in the defense department, you try not to let those things happen, but that's the reason why a guy like lieutenant general doug lute was over there, because he was familiar with the military and everybody is trying to do their job. they're all trying to be on the same team. you know, i think secretary gates obviously did a great job

as secretary of defense, but you get a lot of frustrations in a position like that, and they come out in the book. it takes a long time when you come out of a high position in public office to unwind, put things in perspective and see it as it is. so what you're getting here is a really candid insight by a great public servant. it's not the only view. >> i get that. but steve bucci, just to stay on this point, gates complained about huge micromanagement in foreign policy coming out of the national security staff. wes clark is right, okay, i served in the white house, i understand how important the nse is. that's for the leadership. apparently these are middle level staffers calling up four star generals and gates actually told the generals either don't take the call or just refer it to me, and i'll handle it. i mean, obama just didn't have much of a feel for the military. isn't that really the bottom line? i've just got 25 seconds. >> yes. he really didn't have a feel for it, his people didn't.

gates said he had to remind the vice president and tom donlon they weren't in the chain of command and had no authority to give orders to those officers. it's a problem. >> sorry we don't have more time. thanks very much. that's it for tonight's show. i guess we will have to go and read gates' book, figure this whole thing out and read all about chris christie. i'm larry kudlow. we'll be back tomorrow night with follow-ups. if you've got copd like me... ...hey breathing's hard. know the feeling? copd includes emphysema and chronic bronchitis. spiriva is a once-daily inhaled copd maintenance treatment that helps open my obstructed airways for a full 24 hours. spiriva helps me breathe easier. spiriva handihaler tiotropium bromide inhalation powder does not replace fast-acting inhalers for sudden symptoms. tell your doctor if you have kidney problems, glaucoma, trouble urinating, or an enlarged prostate. these may worsen with spiriva. discuss all medicines you take, even eye drops. stop taking spiriva and seek immediate medical help

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