>> bank of america, intel, caterpillar, nordic american tanker, what's going on? i'm jim cramer, i'll see you tomorrow! >> president obama takes his economic message on the road to north carolina where he touted rising unemployment benefits, but republican governor pat mccreery has cut jobless benefits and unemployment has nose dived. governor mccrory is about to join us live to give us the real story. also guess what? the markets seem to finally be getting it. good news is good news, damn it. yesterday's retail sales, today's bank of america and apple stories, plus a positive fed. as i said, good news is good news. we are joined by chris lawford and patrick kennedy who have

written a new book on what it takes to solve addiction. the lives of at least 23 million americans are at stake. all those stories and much more are coming up on the kudlow report right now. >> good evening, i'm larry kudlow. this is the kudlow report. we've live today. president obama reiterated his call for congress to renew long term unemployment benefits. the president said he's going to move on without legislators wherever possible. >> more than ever now president obama needs to change the subject from obama care and to try to position his democrats in this election year as the champions of working class voters. that's why he went to north

carolina, to push his plan for what he calls hubs in 45 locations. the first would be at north carolina state. it would work on digital manufacturing techniques to create high tech jobs and deal with the problem of unemployment. >> we can't wait for congress to solve it. where i can act on my own without congress i'm going to do so. today i'm here to act, to help make raleigh-durham and america a magnate for good high tech jobs that a growing middle class requires and it's going to continue to keep this country on the cutting edge. >> congress would have to fund the entire program of hubs but president obama is using $200 million in existing funds to get it started without congress. democrat kay haguen of north carolina says this first program, larry, would mean, could mean, 1,000 new jobs. back to you. >> oh, heck. kay haguen wasn't even there

today. she was running from obama because he was there. 1,000 jobs my tukus. we will see. steve, you're terrific. thank you. while speaking in north carolina president obama also took time to criticize the state for its employment situation, while at the same time he's calling on congress to extend long-term jobless benefits. apparently mr. obama missed the memo. north carolina did exactly the opposite, it lowered unemployment benefits this last summer and look at this, the unemployment rate has plunged. clearly incentives matter, mr. president. let's discuss this. here we have north carolina republican governor pat mccrory. welcome to the kudlow report. we appreciate it, sir. >> thank you, larry. it's great to be on your show. >> as i understand it, you took down the unemployment benefits or you gradually reduced them and you actually met with greater success. i guess if you provide an

incentive to work, more people will work. tell us about your plan, because i don't think president obama understands it. >> well, my first goal was to pay off our debt. when i came into office about a year ago last week, north carolina businesses owed the federal government $2.5 billion for unemployment compensation. i mean, we were living off of a credit card and, in fact, we were only paying the interest on the debt with no principle whatsoever. we were having to increase taxes just to pay that interest on this $2.5 billion that we owed the federal government. one decision i had to make is we got to cut up the credit card that we owed to the federal government. the other thing was we had the 10th highest unemployment compensation in the country. that was putting us in this debt and i needed to encourage people to get on private sector payrolls, not stay on unemployment. so we made a very difficult

decision and one of my predictions when i made this decision with my cabinet and the legislature was we would start seeing unemployment drop in the november, december time period and it has. we've had one of the largest drops in the united states. >> you basically didn't want to go back to uncle sam because if you went back for more unemployment benefits you would be deeper in debt and also, do you believe in the incentive? in other words, we have had these unemployment benefits now for five years. i think we have had nine, ten, this would be the 11th pass at it. it really doesn't seem to have worked very much, maybe some places better than others, but the point i'm asking you is, are you selling the incentive effect? if people know that they've got to go out and get a job and the benefits are shrinking, they will go out, work harder, look harder and if need be take a lower wage but getting back to work? >> employers told me time and time again throughout north

carolina that some people were turning down open jobs because of continued unemployment extensions. no doubt. i got that feedback time and time again, constantly. it was becoming discouraging in some job markets for people especially entering entry level jobs. that was unfair to the employers and taxpayers of the north carolina. we had to stop that practice. we also, frankly, had to be competitive with our neighboring states. south carolina, virginia and tennessee's unemployment composition was much lower than north carolina. i was losing the unemployment or the employment wars to my neighboring state, and now we're not only catching them, we might exceed them pretty soon in creating jobs for north carolina. >> did president obama consult with you about this so-called manufacturing hub in raleigh? >> he consulted with north carolina state university about

the hub. i'm a big proponent of manufacturing because if we continue to live on government jobs and service jobs, the long term economic model won't work in the united states or north carolina. i'm a big proponent of for example our tax reform that i initiated this year as governor is rewarding those companies that build things and make things and grow things and produce things. our economy cannot live off the service industry or government jobs alone and that's got to end. we got to get back to making things and competing against china. >> did you lower tax rates, individual and business tax rates? >> absolutely. it's one of the first things we did. it was -- we had one of the highest corporate tax rates and income tax rates in the southeast and north carolina was becoming noncompetitive. we're competitive again and we're growing jobs. we had one of the lowest drops in unemployment in the nation in the last two months, i think

partially due to these tough decisions that we were willing to make in the past year. we were in a crises in north carolina. we had the fifth highest unemployment rate in the country and that was unacceptable. now we're not even in the top 25. that's dramatic improvement. it was due to making some tough decisions. i have had a few protestors against it, but i'm in it for the long term and for people to get back on the job rolls in north carolina income. >> the state of the union message is coming up. we heard president obama yesterday at a brief press conference with his cabinet that no one is going to be left behind. he wants to be fair. governor, i think there is an inequality argument coming rather than a growth argument. i think this has become a national mean for the democratic party and i noticed kay haguen wasn't even there today so she may be running from obama's health care plan. up here in new york, mayor bill

de blasio wants to tax rich people in order to somehow make life fairer and create less inequality. senator elizabeth warren up in massachusetts has made the case. democrats have made the case. i believe obama is going to make the case. i call it the sandesta wing in honor of mayor de blasio. what's your expectation? inequality from obama or a growth message? are we going to have an opportunity from obama or is he going to have redistribution? >> i plan to set up a development office in new york. i think it's a great ground for me to steal business from new york and move down to north carolina where we'll have a lower income tax, a lower corporate tax and a better quality of life. i'm in the business of competing against my fellow governors and competing against the rest of the world. of course, my biggest issue

right now is dealing with the obama care national health care act where we were having issues with the current medical system, but we've only made it worse by trying other types of distribution. we've created a more serious problem by trying to correct a problem. it's a bad solution, and we better correct it fast because we still do not know the real ramifications of obama care on business and on also state government. >> that's got to be freezing long-term business decisions. it has to be. a great article in the "wall street journal" today by the president of at&t for the business round table. uncertainty is stopping businesses from making long-term investments. you've had a republican revolution in north carolina. governor, legislature, mitt romney carried the state. it sounds like you're selling the growth message and i want to

ask you if that's working, growth and opportunity. i think there is a contrast between that and this inequality leveling, equality of results message which i think is not the american tradition. equality of opportunity is the american tradition. where do you come out on it? >> i have got to encourage private sector investment and i've got counties in north carolina where the largest employer is government or a hospital. our economic model in the united states and in north carolina won't work if government is the largest employer. i have got to insent vies the private sector, unleash their resources and grow and invest. that's what our tax code is now doing. it's rewarding investment, rewarding productivity and rewarding making money. that money then is reinvested into our infrastructure, our education. growth is the best way out of a

recession, and i think that's my philosophy as governor and i have had to step on some toes in my first year in office to make this happen. i've had protestors like scott walker had protestors in wisconsin, not quite to that volume who were opposed to my decisions on medicaid reform and expansion. >> you should be honored. >> i had to think long term, not just short term until the next election. already the results are seeing benefits to people seeking jobs in north carolina. >> those protestors are on honor. they're a testimony to your effectiveness. they believe you're going to carry through with this reagan-esque incentive model. north carolina governor pat mccrory, congratulations, all the best of luck and thanks for helping us this evening. >> come visit us and invest in north carolina. >> actually my younger brother went to unc, chapel hill. let's switch gears and talk about the continued pummeling of

the banks. a man who knows banking better than anybody in this country, dick beauvais. he's about to join us to make his case. later on, stocks weren't feeling any punishment today. we saw the second straight day of triple digit gains. good economic news is behind this and i'll say it again, good news is good news, damn it. don't forget free market capitalism is the best path to prosperity. it's working in north carolina. that's what i just heard. i'm kudlow. we'll be right back. ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪ ♪ stacy's mom has got it goin' on ♪

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big beat the street earnings report today from bank of america, helped push the entistk market higher but is the government waging war against banks including potentially $50 billion in fines? is that going to hold the economy back from a true recovery. here to discuss this is dick beauvais. nobody knows the banking business better than dick. dick, welcome back to the program. let me get your quick take. bank of america beat everybody's expectations. that was pretty good. is this a big come back for the b of a?

>> it certainly is a big come back but the b of a earnings are not as great as they appear. the company had a $1.9 billion reduction in its tax payments and it reduced its reserves by $2 billion so that's $3.9 billion that one would not argue is continuing earnings and therefore while i think bank of america is my favorite stock and while i think the company is coming back very strongly, i would not argue that this was a great quarter. >> wells fargo seemed to have a good quarter. jpmorgan made some money if you take out the various one-time charges including government fines. do you like any of those names, dick? >> i think that in each case what we saw is an increase in loan volume for the first time. wells fargo is an interesting way to explain it. in the last four years their revenues went down virtually every year. in 2013 they made $4.5 billion less in revenue, but their

earnings went up 20% every year in the last four years. so all of the earnings that these banks are reporting in this period have come from reducing their loan losses. what is interesting and exciting about the banks right now is that it looks for the first time in four years that 2014 they're actually going to make a lot more loans and they're going to do it at wider margins and their earnings are going to go up for the right reasons. >> business loans? business industrial, even small bank loans, are they going to make those productivity loans? >> yes. that's the greatest growth in lending for the last 18 months and that will remain the case for the next 18 to 24 months. there is a lot of opportunity to make loans to businesses at the present time and these banks are jumping on it. >> let's go back. we have a couple more minutes here. $50 billion in fines, that's what some people in the government say they want out of

the top five or six or seven banks. jpmorgan $13 billion. this was part of the tax plan that obama never got if you ask me. the money is going to mortgage ho holders who don't need it anymore. is there a war an banks and that has the impact been of washington's overregulation and attacks? >> there definitely is a war on banks but it's a war an the concept of too big to fail. the government made a decision that we should shrink our biggest banks. they're passing regulations and they're suing them and the government is going after them. the problem is it's not hurting the banks. the banks will make more money in 2013 than they've made in their history. it's hurting the american public. right now it's very difficult to get a mortgage if you are a

middle income household. you simply can't get one if you are low income. there is no more free checking. there is a reduction in the credit cards to the american public. the increase in laws related to regulation of banking has resulted in no one being willing to open a small bank in the united states for the last three years. i can go on and on. >> this regulation is not just rhetoric. people have talked about dodd frank and all the regulators, the fed, the controller, the currency of the fdic. you're saying the regulatory people are met for cally standing over the shoulders of the bank people and stopping them from offering traditional banking services, lending services, credit card services. that can't be a good thing. is that what you're saying? >> that's exactly right. in other words, what happened is that the cost of this regulation

has passed to the consumer and to small businesses. a simple example. there was a thought under the legislation that they were going to empower small banks and weaken big banks. the fact is that every 21 hours for the last 27 years we've lost one small bank in the united states. that's 11,200. no one, as i said, wants to open a small bank. if you look at small businesses, we've seen the economy grow since 2008. we've seen bank assets grow but loans to small businesses if the fdic numbers are correct have gone down. so the net effect is what we're doing is we're so overregulating the system that the money which is being created by the fed is not getting to the private sector. perfect example -- >> never circulated. all those reserves never really circulated through the normal bank credit channels. you're dead right. that's one of the most amazing things about this whole quantitative easing.

dick, i got to go. you have a new book out. i want to have you on the radio show so we can have some quality long time to walk through all of these key issues. thanks for helping us this evening. dick beauvais. this is a huge week for apple. it's about to launch its iphone in china with china mobile. morgan brennan is going to look at how apple shares closed today and much more. she's next up at kudlow. you make a great team.

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>> welcome back to the kudlow report. i'm morgan brennan with this news alert. the nlrb is suing walmart in 14 states accusing it of workers rights violations. workers claim they were fired for protesting. 41 stay they were threatened or disciplined over these protests. walmart saying it believes it acted law flee and is looking forward to airing the facts of the case. meanwhile apple will finally start selling iphones in china this week. cnbc scored a rare interview with apple ceo tim cook. he called the deal a watershed moment for the tech giants. china mobile has an estimated 600 million customers which will be a huge market. apple will refund at least $32.5 million to settle complaints about kids using their parents' phones to buy things in apps. apple agreed to pay $100 million

in a settlement about the same issue. the stock up two percent today in reaction to the china mobile news. new jersey governor chris christie is a huge bruce springsteen fan but he may not have liked the boss' performance last night on jimmy fallon ♪ some day governor, i don't know when this will all end ♪ ♪ but until then you're killing the working man who is stuck in a fort lee traffic jam ♪ >> larry, what can you say when they close down the toll booth of glory to use fallen's words. >> did i hear that right, christie is killing the working man because he stopped the toll booths? what was the second line, he's stuck in the middle of a traffic jam? christie loves springsteen.

he's going to see that and start crying. we'll have to evaluate christie. he may need emotional help. the bulls on wall street. we are positive for the year on the s&p. better economic news is the reason for that. we're going to talk to one bullish economist and two of our best investor experts and i'm going to ask them again if they agree good news is good news, damn it. we'll be right back on kudlow. [ tires screech ]

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welcome back to the kudlow report. i'm larry kudlow. more good economic news today, a quick roundup. new york's manufacturing data increased from 12.5 in january to 2.25 december. we had a spade of good earnings also helped by good news. so is the 2014 economy going to pick up steam? that's a key point. here now is morgan stanley's senior analyst. you were talking about reagan trickle down. i'm not sure what you mean by that. he was a tax cutter and deregulator. obama is a tax hiker and reregulator. what are you trying to tell me about the economy? >> when i read the minutes from

the december open market committee, they pointed to we have had these wealth gains and in 2014 we expect those to translate to a stronger labor market and stronger income. so in a sense, it's trickle down not from cutting taxes and benefitting the economy that way and creating jobs across the spectrum but a trickle down in that you've had these wealth gains that have been benefitting the upper income groups and we see them spending like crazy and responding to that. when will that translate to stronger production to meet that demand? >> i'm especially interested, first of all, a lot of people are invested. it's funny, the middle class benefits enormously from the high stock market. the school teachers, the cops and firemen are in the pension funds. corporate people are in the 401(k) and so forth. it's not countdown in the income numbers. what i want to know is at the top, those investors who are more liquid, will they make

long-term business investments? i don't see that. it's the single part of the economy that worried me. i'm constructive on the economy but i don't see the job creation until they start building new factories and plants and warehouse warehous warehouses. >> that's the question. what we're seeing in the hard data, the manufacturing sector is telling us we've got stronger cap ex plans six months ahead, the ism data which tends to l d lead shipments of capital goods so we have real hard data on the economy telling us there is stronger business investment ahead. the data is coming in on q4 and we have a strong base going into 2014. >> if you get stronger business

investors long term, the old-fashioned kind, that's the difference between 190,000 jobs a month which is peanuts or 350,000 jobs a month which would be serious. will we get that? are you sitting here saying you're going to get the investment and the big upturn in job creation? >> we've been co lessing around that 200,000 mark for net job growth each month and i agree, that's not enough. businesses are going to ramp up hiring to get us closer to translating to something meaningful where we have consumer spending across the spectrum. it's going to be difficult to get that unless we maintain a favorable business environment. if we do get indications, strong indications of stronger aggregate demand so the businesses will start spending -- >> a lot of uncertainty out there. >> there is a lot of uncertainty. >> stevenson who runs for at&t

speaking for the business journal. we p don't know what's going to happen to tax reform. a lot of cash is overseas. they need a lighter tax burden. that's very important. there is stuff cool stuff. energy is a great story. do you agree with that? >> yes. continues to be a bright spot. >> it's a job creator and makes the economy more competitive. it's lowering the trade deficit, helps the dollar, does a lot of great things. so that's a big plus. i think the rise of social media as as a technological advance is a big plus for the economy. do you agree? >> technological advances is something that our economy is built on. we can talk about how technology has done away with jobs in certain sectors, but then we always brispring up with technoy in other ways that create jobs. we're nothing if not te technologically innovative.

>> energy is a great example is fracking. nobody in washington expected an energy revolution from horizontal drilling and fracking and it just happened. i don't think anybody saw the social media revolution coming. that's why i want government the stay the hell out. let the entrepreneurs run the economy. >> entrepreneurship flourishes in an environment of a weak labor recovery. you've got to get creative. >> what's your number for 2014? two, three, four percent growth? >> average gdp we're at 2.6. that's probably going to raise the base effect. >> last one, profits growth in 2014? profits are the mother's milk of stocks. without profits, bears like carol roth are going to be right. with profits bulls like b.k. and

me are going to be right. are we going to have them or not? >> profits growth will be key. the thing i look at is that productivity drives profits and productivity is still abysmal. so rates of productivity have got to grow. >> five percent, ten percent growth? >> i'm not sure exactly what we've got on the books right now. i will tell you from an economic standpoint when we're looking at the need for businesses to ramp up hiring in order to get to those rates of 250,000 or more, the first thing that our equity strategists point out is that when those businesses put in those higher business costs, it does impact earnings right off the bat. >> carol roth, you know what, ellen, sounds a bit like you. it's kind of hyped at the beginning but as the conversation continued she kind of modified her optimism. >> you're like a baby cub, very

cuddly. if you rank what could happen this year, the most likely scenario is that you have a year of single digit type of growth in the market, in profits. >> that ain't bad. >> but the second most likely scenario is a pull back. i don't think the second most likely scenario is that we have another gang busters year like last year. that's why i'm cautiously optimistic and why i talk about being protective and to thinking about the broader market to position your portfolio in a defensive way. i think that we will get some nice gains but the second most likely scenario is we have a pull back. >> i've told you before, buy and hold. all this managed stuff, it doesn't work. buy and hold or get the hell out. by the way, don't even look at bonds, right? >> right. >> the fed story is not good for bonds. >> don't look at bonds. there are a lot of companies that have great dividend yields on their stock so if you are

going to have a high quality name, why not take a stock with a great dividend. you and i agree on that, larry. >> thank heaven. >> i'd like for people to just be optimistic instead of cautiously optimistic. >> i'm holding all my index funds and i'm not allowed to talk about it on the air. i can't stand gold because i think -- i don't want to buy any bonds. where are you coming out on this? >> i think how i'm positioned is to be short bonds. i am actually short gold. i do think there is a chance in the next three to six months to buy gold again. if we get an economic recovery you have the potential to have an inflationary effect coming. we have over a trillion dollars sitting in excess reserves. if banks start lending out you're going to get that velocity going and that will lead to inflation and people will want to buy gold.

>> let me ask you this. a lot of people have waited for the great inflation which has not happened because we talked with dick beauvais and the money is not circulating partly because the banks are blocking it. if you believe in the inflation scenario, what are the inflation protection stocks? >> well, in the beginning some of the lower value wagss, something like sysco or intel where you get a three or four percent yield and they still haven't really caught up with the rest of the market here. they're still trading 11, 12 times earnings. ultimately inflation is going to erode earnings and if you get some kind of -- i doubt we get a run away but actually if you look back in history, t bills are your best investment in an inflationary environment. every couple months you can buy a new one. >> don't you think a consumer staple like pepsi or coke because those companies typically do well? >> the concern is their emerging

markets exposure. china is doing okay but at any moment that could cause a problem. >> that's an interesting point. we were talking last night to the chap from the heritage foundation and some of the bricks are really going the wrong way. brazil is heading back towards management, socialism and a bad currency. india likewise threw out their prime minister and gone in the wrong direction. china is so opaque no one knows what they're doing. i can't even believe the data. >> that's the risk. >> why invest in emerging markets if these big names are going in the wrong direction in terms of economic policy? stay home. >> i am short most of the emerging markets at this point in time but if they can actually figure this out and get through the taper and get through their inflation issues and through their current account problems, then the growth could be there.

that's the argument for emerging markets. i don't see it for 2014 and that's why i'm short. >> but when you look at global markets, if you look at the u.s. companies, 40% of their revenues are coming from overseas so we have to be attune to what's going on because it's going to impact all the companies that are based here in the u.s. >> you have japan recovering and europe recovering. let me ask you, due and vince foresee rising interest rates this year? i'm not talking about the fed funds rate. i'm talking about market driven medium and long-term, two year, five year, ten year treasury rates? are they going to go up this year? >> we see it as a slow grind upward. if you have an improving data you're going to have to have higher yields. it's a positive sign. it's higher yields for the right

reasons because it's coming from stronger growth within. >> ellen, thank you for coming here. as always carol roth and brian kelly, thank you. are you selling gold? >> i'm short gold. >> great call. gold falling, stocks rising. it's like nirvana. now, here's a question. which state has the most per capita millionaires in america? you might be surprised by the answer. or if you know anything about politics, maybe you won't be surprised. cnbc's wealth expert, robert frank, about to join us to solve this riddle. he's up next on kudlow. 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. but i know you'll still find it when you know where to look. how did edward jones get so big? let me just put this away. ♪ could you teach our kids that trick? [ male announcer ] by not acting that way. it's how edward jones makes sense of investing. a body at rest tends to stay at rest... while a body in motion tends to stay in motion. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain so your body can stay in motion. because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. plus, in clinical studies, celebrex is proven to improve daily physical function so moving is easier. celebrex can be taken with or without food. and it's not a narcotic.

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we have a personalized legal solution that's right for you. with easy step-by-step guidance, we're here to help you turn your dream into a reality. start your business today with legalzoom. welcome back to the kudlow report. so, which state has the most millionaires per capita? cnbc wealth editor robert frank has the list for us. good evening, robert. >> thanks, larry. the question is in which state are you most likely to run into a million air. here are the top five. coming in at number five it's a little cold but a little richer right now.

alaska with 18,000 millionaires but that was enough to be 6.75 percent of the population. coming in at number four, hawaii as if they don't already have enough great things. 33,000 people there are millionaires. that's 7.18 percent of the population. coming in at number three is the home of the hedge funds. 100,000 millionaires in connecticut. that's 7.3 percent of the population. coming in at number two where we are right now, new jersey, 240,000 millionaires in new jersey, nearly 7.5% of the population. coming in at the number one spot is maryland with 169,000 millionaires or 7.7% of the population. interesting here that three of the top ten states for per capita millionaires are all in the washington d.c. area. now washington also the capital of wealth. larry, back to you. >> thanks, robert frank.

that new jersey one threw me for a curveball. let us move on. at least 23 million americans have alcohol and drug addiction problems. former congressman patrick kennedy and christopher lawford have a if you book out that talks about addiction, obama care and let me add, a power greater than ourselves. that kept me sober for a long time. we will visit with them in just a moment. please stay with us. [ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedes-benz dealer for 1.99% financing during our certified pre-owned sales event through february 28th.

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report. so, substance abuse, one of the ten essential benefit categories that must be covered by qualified health plans under obama care. that's one. two, medicaid mandates that childless adults and others also get covered. the question is, will the federal government interfere with the 12-step recovery programs and why does everybody want medicare or obama care to pay for addiction services. there are issues on the addiction side and the government side. we have the cousins. patrick kennedy former representative of rhode island and christopher kennedy lawford, author of the new book, what addicts know, lessons to benefit everyone. what's the principle message of the book? >> the principle message of the book is basically that people who recover from this brain illness have more to give the world than just their physical sobriety. i grew up in a family where i

uncle read a lot of books because he was sick a lot. the ethic in our family came from him which was basically people who achieve great things in the world overcome something great. you have 23 million people in recovery in the united states of america. they're marginalized and stigmatized. they have a lot to offer society. they ought to be welcomed back. >> patrick, let's just stay with that. it is doable with god's help and the help of the experts in the 12-step programs and whatever. it's doable. it's worthwhile, what chris is saying. in my experience, by the way, most people were willing to give me a second chance. god bless them. that's why i have this great job and i'm so grateful for it. getting sober, whatever it has to be, has to be the most important thing in your life just like it is in mine. is that true? do you feel that in your bones, in your soul? >> it took me a long time to

recognize that i had an intractable illness. it was that moment of clarity, one of chris's other books, where i came to the conclusion that i could no longer live my life this way. but i had to go through hell before i recognized. i lost all faith in myself and i thought i was never going to amount to anything. even though i was a member of congress at the time. i felt totally depleted. >> you reach a point where you absolutely surrender. i'm a 12-step guy. i'm going to assume you guys are, too. a lot of sobriety at this table which is great. i worry sometimes, chris or maybe i should ask patrick this because of your experience as a congressman. i'm not here to make an overall critique of obama care. we do that on other shows. regarding this addiction, this is part of the mandate, both for the individual mandate, the individual package as well as the medicaid package.

are you ever worried that whatever the government gets into they start to meddle and in particular i want to mention one thing on my mind, government programs that move into the spiritual or faith-based area, they prohibit the use of the word god and in my experience in the rooms of the 12-step programs, if you don't have any sense or faith in god, you're not going to make it. that worries me. should i be worried about that? >> no. because i would make a distinction between 12-step spiritual recovery and covering these illnesses which are chronic illnesses whether it's a primary diagnosis or a secondary one. you may also have diabetes or cardio vascular disease or cancer. and larry, if you want to save money, something you like to talk about, the way to save it is to invest in mental health care and prevention. as you and i both know, if you were to equate this to cancer,

it would have to be stage four cancer before anyone intervened. that's too costly. we wouldn't do it to a cancer patient. we shouldn't do that to someone with addiction. if it's a diabetic, you don't wait until you have to cut off your legs because you haven't treated your diabetes. that's the way addiction is treated today. we wait until the issues become so pathologyized. >> i agree with you about these other diseases, okay. let's go back to drugs and alcohol because that's the heart of it really. i'm worried about the medicaid piece in particular. it's completely government run. many people including myself think it's a second or third rate program. people don't get the best doctors. they don't get the best services. they're not going to be sent to the good treatment centers and i worry that the government is going to put structures on it so you can't practice the kind of spiritual recovery that is so

essential. >> there is treatment and then there is 12 steps. 12 steps is spiritual recovery, a fellowship. it's not treatment. you and i both understand it that way, but people need detox. they need meds. there is a medical piece to this. addiction costs us $120 billion a year in health care costs. $400 billion if you add criminal justice, the rest of it. it's hugely costly to us. to intervene in a meaningful way, if a doctor asked you a couple of questions during a routine physical, that will save maybe 15 to 20% of the people who are going to move down the road to chronic addiction from going there. there is enormous potential savings here with us getting into this early and significantly. >> what we don't know because these programs haven't really

gelled yet. we don't know, for example, let's take medicaid. a lot of patients are going to come through medicaid. that's going to be the biggest one. i talked to one expert today and she said there will be so much substance abuse through medicaid that the treatment centers are going to be overflowing. the other point i don't want you or you to stop private funds or treatment centers. i was locked up in hazelton for six months but the head of silver hill said to me would you come to our gala fundraising ball and tell your story and help us. i said i'd be happy to. i always say yes. i feel obligated because recovery has been to good to me. i don't want you to lose that and say the government will do everything and private citizens won't. >> i absolutely agree with you. >> there is a magic to that

help, helping your fellows where you were saved in the process. >> that is so right. that's totally right. it's as good for me as it is for them. patrick kennedy, chris lawford. that's it for tonight's show. tomorrow night we'll have randall stevenson, the ceo of at&t and his business economic round table growth plan. thanks for watching. i'm kudlow. we'll see you tomorrow. brace yourselves people. because this hotel has some amazing....

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