just what we were afraid of. so many upgrades at intel the last few days, little reminiscent of best buy. look into buy some you. i'm jim cramer. i'll see you tomorrow. \s. a movement is growing to block an obamacare insurance company bailout. is that wise? is the individual mandate dead because the irs can't collect the fine. plus cybersay the obamacare is vulnerable to hacking as it was three months ago. we have all the latest on all the obamacare news today. and what do the top business leaders say we need for real economic growth? at&t chief randall stephenson speaking for the business roundtable has written a brilliant editorial about growth, growth, growth. here's the problem, is any of it possible with barack obama in

the white house? mr. stevenson is about to join us live this evening. president and mrs. obama hold a special event to call for making it easier for people to go to college. really? shouldn't we make college cheaper and competency based? you know 44% of recent college graduates are working in jobs that don't even require a degree? this sounds like a job for the "the kudlow report" youth summit. two real live college students will be here to debate the proposition. all those stories and much more in "the kudlow report", beginning right now. good evening, everyone. i'm larry kudlow. this is "the kudlow report." we are living k p.m. eastern, 4:00 p.m. pacific. the top story tonight, three months into the obamacarrollout and enrollment looks dismal. too many old and sick with not

enough young invince ables to finance the system. but not to fear. the bailout training may already be in motion. however, one of our distinguished guests says arch-bailout obamacare legislation could backfire. here wes with health policy experts. oldbert roy and grace marie. it was so interesting, i had to tweet it today. you think we should keep the bailout. why? >> the taxpayers are on the hook either way, larry. one of the things that's going to happen if they get rid of this so-called bailout money is the premiums will go up. what happens? taxpayers are on the hook for the subsidies in those premiums. whenever republicans get involved in starting to fool with the hardwiring of the financing of this law, then they're going to be on the hook for the consequences. so if premiums go up next year,

whose fault will it be? the republicans' fault? why would they want to get themselves in that position? >> just to be clear, there's two forms here. there's the reinsurance fund, which actually comes from the insurance companies themselves. so it's not exactly fair to call that a bailout, though it could go beyond the fund. and secondly, is the risk corridor, which means their losses would be covered directly by taxpayer dollars. now, ovik, on to you. do you agree with what grace marie is saying? if republicans fiddle with this, if they should get this removed, they'll wind up getting blamed for he among out primeius increases? >> i do agree that's a risk, but that's a political argument. i would make the policy argument. it's not a insurance bailout if the government is messing up -- the insurers are just trying to do their job and cover the customers coming to the excha e exchange. it's the government messing

things up. it's the government that's botched the enrollment. it's the government regulations and provisions in the law that are requiring the insurers to take on these sick and old patients. >> i think grace marie makes a good point, regarding the issue of premiums, some are saying, okay, the insurance companies are raising premiums to cover the new mandates and so forth, and maybe to cover kanzle and write new policies, but they won't do it again next year, because even though the demographics don't look good, they know there's government money behind them. the take it away and you'll have massive insurance premium increases the year after that. is that logic correct? some people are saying insurance companies are chilled out because of bailout. >> that's partially true, but not entirely the risk corridors only last for three years. at that point it's cut or fish, or whatever the expression -- i'm sorry.

but the point is the transitional -- you'll have to have a transitional period. you have all they people coming into the market. if they hadn't had a risk corridor, the insurers would never have participated in the exchanges, because they would have had said this is too risky. they have to have some mechanism like this for the transition, but over time as insurers get a better feel for who is actually enrolling, they can price the products accordingly and eventually the risk corridors go away and people will be on their own. >> i think that argues to your point to some extent. some observers have noted that the part d medicare drug bill was put through, that had government backing behind it for the first couple years, and whenever you have these experiments and transitions, the only way to do it is to have government backing. marco rubio and others say no, it sounds like another bang bailout. that's as i see the politics of it. >> i think that's crazy.

remember, the part d prescription drug benefit really relied on real competition. the insurers went into this market under one set of rules, and not only has the president changed them at every turn, but they didn't even -- the roll-out of the website was so botched that even a lot of people who would have liked to enroll haven't been able to. so the insurers are being penalized for something really they entered this market under a very different deal. >> okay. aavik, the individual mandate, i think it's unworkable. the irs really has no way to capture the mandates. year 3, 2.5% of income. irs has no power. they can't seize your assets or put a lien on your checking account. all they can do is badger you or

not give you a refund. under those circumstances, will people pay the penalties? >> yeah, they can take it out of your refund or your withholding, so you would have to structure the way you pay your taxes in a particular way to benefit from the fact that the irs can't put a lien on your assets. you certainly can do it, and that was the toothlessness of the individual mandate, those provisions were put in there, because the individual mandate was so controversial, and remember for some it's been delayed for a year. i think the individual mandate seasonal on people's radar right now, because it won't be enforced until you file your taxes in 2015 for the 2014 tax year. >> right. >> so that's when all that -- >> so in effect there is no individual mandate right now? >> people don't realize. >> you have to wait another saul year. >> and it's still a lot of money. 1% of your adjusted gross income is a real amount of money for

most people. if you're making $30,000, that's -- >> no, i agree. >> remember, that money accrues every year. that starts to become a pretty big chunk of change. i think people will start to get letters from the irs. it will probably be a letter say, do you know you owe this amount and we expect you to pay? they may not have a way to enforce it, but i think they'll expect people to voluntary fork it over. >> if there's no penalty, you might not open the letter. i'm being facetious, but i'm really not. i think a whole lot of people will gain the system. what about the security problem? there's a lot of talk. some consultants are saying this website is 100% insecure, hackers -- even internet programs can just get into this website. what's your take? >> it's a huge, huge problem. the house passed legislation last week, i believe, to really demand that the white house and the administration notify people

within two days if they think that their information has been breached. the president said he would veto that. but somebody said it's like they didn't build security into the system? it's like building a skyscraper and saying, oops, we forget to put in the electrical systems. so they can't add it on afterwards. >> but how much of this will detear people from signing up? >> i have friends who are uninsured who have told me the reason they aren't signing up for insurance on the exchange is they're worried about identity theft. privacy experts say it's the biggest violation of federal privacy laws in 40 years. this bill that was passed in congress, what was so hilarious was hhs complained, well, these regulations will be too burdensome and drive up our costs, so we shouldn't have more reg lace of hhs's conduct. well, it would be great if they understood that lesson about that -- >> how can they build a website that's not secure? i just don't understand it.

>> they were in a hurry. >> it's a basic elementary thing. >> it's something that people won't discover their information has been stolen until later, right? the things they worried about were the things that would hit the media first. can we have a front end that works? then we're worry about paying the insurers later, worry about privacy theft later. >> one word, yes or no. i want to go back to the beginning -- get rid of the obama care bailout, yes or no? >> no. >> it's not a bailout. it's just the taxpayers are going to be on the hook either way. >> two noes. very interesting. leave the bailout alone saying our distinguished experts. i'm going to get senator rubio to come on here. thank you grace marie and avik. what will it take to get real economic growth and real -- at&t ceo randall stevenson has just written a very clear,

simple, good list of priorities. growth, growth and growth, but it sniff it possible with president obama in the white house? and later in the show, we're about to reconvene the kudlow youth summit. we'll bring back two students to comment on the college affordable event at the white house today, where, by the way, there really was no beef in any of their proposals, but we'll ask our students what jobs do they think they're qualified for? is it worth it? there a taxpayer foot in the door? we'll see if colonel is worth what it used to. until this free market capitalism is the best past to prosperity. you know, i've got to think about where i stand on this bailout of insurance companies. i've got to think about that. i'm kudlow. we'll be right back. [ male announcer ] here's a question for you:

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at a company that's bringing media and technology together. next is every second of nbcuniversal's coverage 0f the 2014 olympic winter games. 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. growth growth growth, robust economic growth isn't a red or blue state issue, it's an american issue. mime next guest wrote a short list to achieve, fiscal stability, tax reform, expanded

trade, and fix or immigration system to create jobs in the united states. let's welcome the new chairman of the business roundtable, randall stevenson. he jest penned a fabulous "wall street journal" opinion piece called a business short list for growth. welcome to "the kudlow report." i loved reading your piece. i hereby nominate you for president of these united states, and one reason for that is your growth, but also you've never closed down any lanes on the george washington bridge, which is a second very important point. here's the delicate part. unfortunate a lot of great ideas, unfortunately president obama is focusing on inequality, focusing on the minimum wage on extending unemployment ben. your at logger heads with the president. what do you do? >> i wouldn't say i'm at loggerheads with the president, larry. as i make the rounds in washington, there are a lot of competing ideas about what we

need to do to get the economy growing, but i will tell you it come down to one basket simple equation, and that is if corporate american is not investing, they're not hiring, not growing. it's not a coincident that private invest as a gdp is at its lowest level since world war ii. we have to get corporate america investing again. so the ideas that we laid out in "wall street journal" are those things that we think are most relevant and could get america investing and growing again in the quickest way. >> once again i agree, particularly your point about private business investment. you're absolutely right. if you adjust it, i think it's lower and level today than back in 2000. but here again is my problem. the administration, the president sometimes talks about tax reform, but he wants it to be revenue-positive.

this gust muddled up in the whole issue, times he wants a tax rate, but wants to close loopholes to net out money for his spending plans. that's point number one. point number two, something you mentioned in your piece, profits that are overseas, mr. obama wants a rather heavy penalty tax on them. again you appear to be at loggerheads with the policies. >> again there are a lot of proposals on how to do tax reform. i would at least like to just get us talking about what is the right tax structure. i would suggest to you bringing preferences down, eliminating a lot of preferences in exchange for a lower rate is the right recipe. as you get the rate lower, then the incremental returns on investment are that much higher. at the end of the day the u.s. tax rates are at a completely uncompetitive level with the rest of the world. make no mistake, capital markets are very liquid, very, very

free, capital is flowing like water today. if we have tax rarity that are too high, the capital will not flow here. it will flow to competitive alternatives in other countries. >> absolutely. one point here, look, i think we need about a 25% corporate tax rate. that should be the highest, but my concern is it ought to be revenue neutral, like it was in 1986 when we did tax reform. the loopholes, as you call, the preferences should be closed, but it should have balance. whatever you save on the preferences should go into the lower tax rates. let me just lob this in. in the mid-2000s, there was a preference one time of 5.25% tax rate to bring the offshore money home. not 10, 15 or 20%, but only 5%. i think it worked. don't we need that now? >> of course we need it now. there's a lot of capital that would come home if the tax rates were reduced on the unrepatri e

unrepatriated earnings. i would also suggest, larry that if you got to a revenue neutral equation on bringing the tax rates down, we are all convinced, we know arithmetically that will result in more, because of the stimulation associated with it. >> i love that. i've got a guy, i think he's coming on next week, lawrence collokof. he's not a republican or a, but just did a piece for the brookings institute that said abolish the corporate tax all together, and he said the growth and jobs effects would basically finance the whole thing. i mean, you ought to talk to him. it's an amazing paper that he's written. >> i know his a slightly left of center, a democrat, not a reagan supply-sider like i am. anyway, let me move on. paul ryan probably saved the republican party from itself and he saved you, you got a deal so

we won't close the government for a couple years. so let me ask about immigration, tough, tough, tough. you know the debate. border security versus legalizing the immigrants who have been here. you want a deal. how do you get a deal? so far i don't see a deal. >> actually i think this is one area where there possibly might be a deal. in the world that we exist and we're competing in, we need more high-skilled labor. we're bringing in a lot of people from around the world, educating them n best universities, developing skills and we need this high-tech talent. we need more visas. we also need a visa mechanism for temporarily job work e. as i've roamed the has of congress and speak to people on both sides of the aisle, i hear nobody saying we ought to sent 11 million people home. we need a process, to allow the

people to find their way legally into the workforce. i believe there is an avenue here where we could make progress on immigration reform. i think it would be very important to getting economic growth going. >> i'm always been -- i'm a reagan guy, a jack kemp guy. i've always believed that, but mr. stephenson, the low-hanging fruit, the brainiacs, we need more visa, the foreign students that go to m.i.t. stay here. i think even we should let the kids of the illegals get the tax credits and let them stay here too, but i think you have a bloody battle on more visas for the low-wage workers and this whole trade-off between border security and legalization. >> but look, at the end of the day, if we put a process in

place where maybe they pay some kind of small fine, and then after a period of time get at the end of the line to be legally into the country, i think there is a process there that people could rally around and get their heads around. i do think this is critically important for our country and critically important for getting us growing. >> all right. great stuff, at&t chief randall stephenson and the business roundtable. i appreciate it, sir, and wish you all best of luck. >> thank you so much, larry. i appreciate it. the u.s. government has figured out just how those hackers broke into target's data, and the feds are now sharing that with the other big retailers jackie deangelis has more on this unusually big effort to beat back on online theft. she joins us with that and other big headlines next up on kudlow. ♪

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welcome back. i'm jackie deangelis with breaking news from google. the company coming out with the latest outside the box project. making a smart contact blend to help people with diabetes the it's a sensor system so small it could be embedded in the lens and is designed to measure the glucose content of the wearer's tears, google saying it's still in the early days and there's more work to do on the device, but could be a noninvasive way to diabetics to monitor blood sugar levels and keep them in check. in a confidential 16-page

technical bulletin, the government outlining steps to help retailers identify malicious software like the one that slipped by target's antivirus software. the judge overseeing detroit's bankruptcy deal rejecting a deal. it would have ended interest rate swaps that have already cost the city $200 million. judge steven rhodes saying he won't let detroit continue to enter into deals, bad deals. hershey's and 3-d systems teaming up to create a chock lal printer. instead of using plastic, you put chocolate in. whatever you print can comes in a chocolate shape. >> can you eat it? >> you probably could. thanks very much, jackie. i'm about to call the kudlow youth summit back into session tonight. the key topic today seems to be

this. president obama's call to make education more accessible. shouldn't the focus be on making it worth it? we're going to ask our two ace college students if they think getting more kids into higher education is really the answer. please stay with us on "the kudlow report." we'll be right back. this was the hardest decision i've ever had to make. jim, i adore the pool at your hotel. anna, your hotels have wondrous waffle bars. ryan, your hotel's robes are fabulous. i have 12 of them! 12? shhhh, i'm worth it... what i'm trying to say is, it's so hard to pick just one of you, so i'm choosing all of you with hotels.com. a loyalty program that requires no loyalty. earn free nights worldwide with hotels.com

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whatever happened to a rising tide that lifts all boats? i want growth, not redistribution. we'll have a live debate in just a few moments. stocks fell a bit today after some corporate profit reports might have disappointed investors. and president obama hosted a meeting at the white house today with business leaders and college presidents. the stated goal -- expanding college opportunity. is there a plan beyond throwing more taxpayer money at the problem? cnbc's own john harwood has the

details of that meeting. good even, john. >> good evening, larry. this was a plan that the president outlined today that did not involve taxpayer money. one of the things we'll hear from the president all year is i may not be able to get what i want from congress, but i've got a pen and a phone. he used the phone to convene this college summit to press one of the elements of his income inequality agenda, and that's expanding access to higher education. >> college is not the only path to success. we've got to make sure that more americans of all age are getting the skills they need to access the jobs that are out there right now, but more than ever, a college degree is the surest path to a stable middle-class life. >> so what he was talking about were not things, larry that government could do, but highlighting best practices that some colleges are already undertaking and encourages others to adopt, things like

helping high school students figure out the right colleges to apply, trying to remedy some of the gap in terms of s.a.t. preparation between people who can pay for tutors and people who can't. that sort of thing. so these are things -- there are investments the president wants to make using the government, but he's not getting those out of the congress. the preschool program, for example, is not funded in this budget deal, but he's going to try to do what he can without the congress, larry. >> i hear you. many thanks, john harwood. who better to ask than aural own summit. we welcome back anki ball, and president of the nyu college republicans. first of all is college worth it? nyu is a great school, probably 50, 60 grand a year, i don't know the numbers. a new york fed study just showed

that 44% -- 44% of the college graduates are in jobs that don't require a degree. now. that kind of undermines the whole story. >> it really does. i'd like to tell you a little story. about a month ago i was in a bookstore, 86th street. i overheard two female employees, one in her late 20s, one in mid 40s, talking about how they had graduate degrees, yet they were still working the same minimum wage job at the bookstore. >> so what's your reaction to that? >> you know, it depends. there's a lot of utility to a college degree nowadays. a college degree is still the surest pathway to middle-class economic security. there are a lot of jobs, and it depends on the kind of college and the mix of liberal articles as well as vocational. both parts are really important in making sure that a college degree is still the pathway to a

really good middle-class job. now, i can understand that there are cases such as this bookstore example, but that's few and far between. >> 44%, that's not few and far between. that's from the new york fed. i'm not opposed to college, i want to make that very clear. i went to college, grad school, i got a degree. that's not the issue form the issue is, is it right for everybody? that's what i'm getting at. the kind of money you have to pay, is it right for everybody in there's a new term out there, competency-based college, where you take specific classes that teach the specific skills for specific jobs. okay? it's not a trade school. you can't do this inside a liberal arts college. why not? why not have that? engineers are in great demand in this country. why shouldn't we do that? education people are in great demand? >> i 100% agree. let me ask a question.

you see the kids who apply, to, say, work on the show. do you think their education is at the same level as the education you saw when you got out of college? >> well, i don't know, i saw you asking that in the notes. i'm not sure. i've spoken at a bunch of schools, spoke at commencement exercises to a bunch of colleges. i'm not sure. here's what i think i think -- i think there's too much complaining. times are difficult, i get that, but i think there's too much complaining. i worry about the work ethic. i'm not pointing at you because you have a bad work ethic, but i worry. there's an old phrase -- we all must do the work that god wants you to do the work every day. i live by that creed. the work ethic is really important. i don't like the complaining. so i think that's out there. >> you know, i agree. i think that college is not for everyone sometimes, because if everyone had a college degree, there would be a lot of jobs that would not be occupied in the united states that are crucial to a functioning

economy. if you are going to be an excellent mechanic, you don't need to go to college, but if you are a fantastic mechanic, that's excellent, you are fulfilling yourself and really good at your work and contributing to the economy. >> a lot of people have said that's for community colleges, which are much less expensive and much more accessible. no? >> sure. i agree. community colleges are great ways to get into industry that is don't require a four-year degree. you can become a paralegal with two years. you you can become a medical assistant, all skills where you can go to college for cheaper, you get an education where you can directly apply the skills there into a workforce, a rewarding career that doesn't need a college degree, so sometimes they aren't exactly necessary, but they are still the path to middle-class economic security. >> what's your major. >> financial management. >> what do you want? >> i would like to work in the real estate industry. >> all right. the biggest jobs -- computer

science, electrical engineering, education, and health. that doesn't mean you can't get jobs in the real estate industry. i'm just saying these are the most practical ones. your major is what? economics? >> finance and management. >> okay. too early for you to start poking around for jobs? what year are you? >> i'm a junior. >> so a little early for you. how do you know that that's what you want to do? >> it's always interested me. as i studied new york and i want to say in new york city, because i think it's the greatest city in the world. i see that much of the new york city real estate is not affected as badly as other industries during business cycles, so i think it's a stable job. >> ankeet? >> i'm a economics and political science major. i want to go to law school and become an appellate lawyer. >> another lawyer. you think the country needs another lawyer? >> i think the country needs

good lawyers. >> that was a cheap shot. >> you think i can't bet a good lawyer? >> you can be whatever you want to be as long as you work hard. what do you think of the president saying the colleges should work with low-income people and prepare them. the theory is fine. i would like to believe that's possibility. i'm skeptical. first of all, i think the inner city schools are awful. i think the education they get is awful. i think the graduation rates are awful. i don't know how you change that exactly, unless you change the inner city school systems, but i don't know if going to college is right for them. why didn't the president talk about other things, community colleges, more specific trade schools. there's online colleges now, just -- they're much cheaper. you request follow along. why not? >> sure thing. >> let me tell you. my parents are immigrants. they came here, have worked so very hard for a solid middle-class background. a lot of my friends at columbia have gone to some of the best

prep schools in the country. i am very proud of my public public education at a public high school, but i would have loved the opportunity to go to one of the these prep schools. it applies only because i didn't know about the application process. i didn't have the parents who really knew about it. the same case apply toss inner city schools where these kids might know the opportunities that -- but you have a representative at elite universities going and showing what the kids can do with hard work and dedication. your hard work is going to win out. they are going to have a motivation to work in high school. they're not going to be stuck within this inner city fold of failures and low graduation rates. they'll have the motivation to go through. >> if they have the family and the parenting and the desire to do that. >> exactly. >> last question, john. real quick. it's so bloody expensive now, that's the other party. when we ask, is it worth it? it is so expensive, who is to blame for that? who is to blame in your opinion?

>> when i first saw what obama said, i asked, who is going to pay for it? for schools like harvard, they can afford to subsidize lower-income students. 60% of the undergraduate is on financial aid. my question is how are small universities going to handle that? but i think just the general economy is to blame as well as. >> government loans, my biggest beef. the government is making subsidized loans, and then what happens is the schools jack up the tuition for the same amount. you're just climbing the staircase, spiraling upwards. that's got to stop. a trillion of student loans out there. >> a government subsidy is like taking money out of an american's back pockets. >> akeet ball, john from nyu, thank you, gentlemen. investors didn't seem to like everything that they heard from some of the big banks. we're going to take a quick look

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all right. markets, profit reports, and economic data, we're kind of mixed today. jobless claims fell, that's

good. home foreclosures fell, that's real good. the cpi rose, the philly fed manufacturing report was slightly better, and ben bernanke said the fed is watching vigilantly for signs of a bubble. dow was off 65 points, nasdaq up, the s&p down two. let's welcome ken policari. several missed today, a lot of people are telling me that's what brought the dow jones down. what do you make of it? >> what happened to the banks, they ran it up in after jpmorgan earnings, after wells fargo, it was good. goldman and citi, they just missed. they still reported a profit, but the whole financial, the sector had moved up. investors took the opportunity to take cash off the table,

because there's a sense that the market is kind of frothy. not bubbly, but we can't seem to get think 1850. this earnings seasons has just gotten started. they're mixed as beth. not seeing top-line revenue growth yet. they're still managing that through the cost side, right? >> year to day, the s&p is down 0.01%, and my manager has been, by the way, good news is good news. today's economic news was nothing to write home about, nothing spectacular. one thing i will say, though, the consumer price index, up 0.3%, and bernanke saying the fed is looking for bubbles. he singled out financial instability. those two things tell me that tapering is going to continue month after month after month, no question. >> i absolutely agree. i think it's here now and here to stay, unless you get

something that falls off the edge, i think they'll stick with the schedule. i don't think they'll increase the pace, i think they'll stake at this pay and we'll watch and see what happens, but i don't think they're changing their plan. >> professor jeremy siegel, a great friend of ours, was on the network today saying 18,000 to 18,500, this year, on the dow. kenny policari, is any such a thing possible. >> what is that possible? about 16 thousands -- that's about 15%. i would guess it's between 8 and 10%. it wouldn't necessarily be out of line if you get everything starting to fire on all cylinders, europe, asia. i think it's probably possible. the consays seems to be more an 8% to 12%. we're not that far off. >> do you see the animals spirits in the market right now? one of jeremy's points is retail, ordinary average main street people have not entered

the market yet. he's counting on them coming into the market and driving prices and multiples higher. where are they? >> i don't see the animal spirits yet, but it's an interesting conversation. i think that a lot of individuals play the market through the whole etf game. they're not necessarily in individual names, so therefore, i think they are more in the market than people realize. i like at my own conversation, my own portfolio, i don't know about yours. i own much more of the etf product -- >> i do, too. what are your favorites? >> i like industrials, infrastructures, and i like the banks. if the economy starts moving and rates start to normalize, i then banks will do well. i liked the foreclosure rate was down and realtytrac said demand is starting to pick up. so maybe the mortgage rate hike is already adjusted into the market? implts it's interesting. housing is the one area that i think is going to probably run

into trouble, because i don't think yet -- and rates are historically low by standards. i mean, the first one i mortgage was 14%. i laugh when we have this conversation. >> me too. >> i'll never forget it. now, you know, you're getting mortgages for 4.5%. they're historically low, but considering people are attuned to mortgages in the 3s for so long, right? so i think housing will stumble just a bit. i don't think it's going to weaken and crash. i just think it will stumble and churn right here. >> you think rates are going up? i do. >> i do. >> i think people come off the fence and buy. >> i do think -- >> and they're going to want to beat the higher prices. >> it's not easy to get a mortgage these days. listen, i put 50% down on the house i bought. it took me 4 1/2 months before they committed, and i put 50% down on this house. it was unbelievable. so people are -- other people are still running into that same

problem. it's just not easy to get a mortgage. >> we will see. ken policari, thank you very much. we appreciate it as always. everywhere you turn these days you hear the words "income inequality." democrats are hoping to use jell sis to win votes, but is income inequality such a problem in america? my take is -- growth solves all of this. we need a rising tide for everybody. now, the house held a hearing about that today, and we will debate some of the key points, next up on "the kudlow report." t the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i-95. ♪ this magic moment it is the story of where every great idea begins. and of those who believed they had the power to do more. dell is honored to be part of some of the world's great stories. that began much the same way ours did. in a little dorm room -- 2713. ♪ this magic moment ♪

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123450 president obama back on the class war fare path, pushing liberal policies to narrow the gap between the richest 1% and the rest of america. will raising the minimum beige or extending unemployment benefits really reduce income inequality? here is roosevelt institute felto mike conzell, and scott testified before the economic committee today. scott, let me start with you. i want a rising tide to lift all boats. it's equal opportunity that i seek. not equality of results or enhave or jealousy. what did you tell the committee today? >> well, i told them a varies of what you want before the break. it's understandable that a lot of people these days are growing more worried about inequality. we've got a lot of skittishness

about the strength of the economy. there are too many people stuck in long-term unemployment. people are having a hard time entering the workforce, but you think back to the late 1990s, inequality was high and rising during the late 1990s. nobody cared. the reason was because we were experiencing strong growth at the middle and the bottom. i look at the evidence about the supposed harms that rising income inequality has inflicted on the economy, and it's just not is there. i think it's a resonant political frame for the president. i don't think it connects well to the actual policies he's talking about. >> mike, you know, one thing that bothers me is a lack of facts. if you put everything in the pot, you know, the income, the tax cuts, you've got to put in things like the earned income tax credits and food stamps, put it all in the pot. when president obama says for

three decades or whatever, going back to the late '70s, it's just not true. the lower have gone up 35, 40%. i know the upper quinntile has gone up. a lot of themselves have gone to the top 20%. what is wrong with that? what kind of facts is president obama looking at? he's got the story wrong, i think. two things that -- it is true, if you want to include low-wage income support. you have much less inequality, that's absolutely true. conservative responses through the ryan plan, which is to cut taxes on the rich and lower income for the poor. >> yeah, but we always had -- look, paul ryan, jack kemp protege, look, every tax cut the republicans have had. reagan had two of them, '81 and

'86. let me skip all the way to george w. bush. those tax cuts lowered marginal rates for everybody, mike, across the board. it's just not true. look at the facts. they all lowered rates for everybody. in fact, the middle and lower got a bigger relative reduction. i just want to get that out there. >> sure, absolutely, but that's not what we're talking about going forward with things like the ryan plan, the official platform of the gop right now. i don't think we're at the marginal rates that would increase some sort of effect. i don't think it's relevant in the 21st century with the rates we're talking about. separately, if you look at things like what the president is proposing, there's plenty of studies that say a minimum wage held up the lower end of the distribution, alleviating some of the gaps in inequality in lower half. i think other things like financial reform, people are worried that a lot of people at the tippy top are getting money off rents or being patent abuse

i think there's a genuine reform that would make the economy more productive. two points. we just had a gentleman on, the ceo of at&t, who desperately wants corporate tax reform. hell, i want to abolish the corporate tax altogether. i agree with lawrence kotlikof, it's the wage earners that would benefit the most. i think there's a problem with social mobility, but i think that's a family breakup problem, a -- you know, a one-person household problem. i don't think that's an economic problem. 25 seconds. what's your take? >> i think you're right about reducing corporate taxes and taxes on investments. i think it would pay for itself, increase economic growth, expand the pie. when we worry about the share of the pie that's going to the top, we lose sight of the fact that the size of the pie really

matters. on mobility, you know, i think it's a bigger problem, i guess. i think if you start at the bottom, you have only about a 3% chance of making it. so i think we need to worry about it. >> i i will. gentlemen, thank you. we appreciate it. that's it for tonight's show. thanks for watching. income inequality, i don't know, we just have to growth growth growth and good families. i'm kudlow. we'll be back tomorrow night. ♪

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[ music ] [ singing ] dirty dirty dirty >> in this episode of "american greed"... lou pearlman, legendary manager of boy bands like "'n sync" and the "backstreet boys," king of an entertainment empire... that crumbles. >> you're workin'-- workin' all the time. and to see nothing come out of it was just really hard for us. >> but pearlman makes history for another reason. >> making our lives a hell. >> he's the mastermind behind a $500 million scam. >> he was a calculating, manipulating scumbag. >> he wiped me out. [ music ]