steals money and spends it on jets, helicopters and love. rock the cradle tonight. there is always a bull market somewhere and i'll president reagan -- president obama tells europe to break free from russian energy depend espn. but dependence. but will he step up for europe like president reagan did in the 1980s? the jury is still very much in doubt. and speaking of the '80s, america won the cold war because we flexed our economic muscles with supply side free market policy. art laffer believes we have got to do the same thing today. and also this evening we're joined by yet another governor leading the way with free market policies, wisconsin's scott walker will join us live. all those stories and much more coming up on the "kudlow report"

beginning right now. good evening, everyone. i'm larry kudlow. i have reagan on my mind tonight. anyway, we're live here at 7:00 p.m. eastern and 4:00 p.m. pacific. in a sweeping speech today, president obama urged european allies to stand with the u.s. and do more to isolate russia after its annexation of crimea. john harwood joins us with all the details. good evening, john. >> larry, as you know, one of the challenges that president obama and the united states have faced in rallying opposition to russia's seizure of crimea has been europe o's dependence on russia for energy. so the president made the argument they need to seek new sources. >> energy is obviously a central focus of our efforts and we have

to consider very strongly. this entire event i think is pointed to the need for europe to look at how it can further diversify its energy sources. >> but in a speech later in the day, president obama argued that in the meantime, the sanctions imposed so far are working, are imposing a cost, can be increased. and ultimately will be successful. >> together we have isolated russia politically. suspending it from the g-8 nations. and down grading our bilateral ties. together, we are imposing costs through sanctions that have left a mark on russia and those accountable for its actions. and if the russian leadership stays on its current course, together we will ensure this isolation deepens. with time, so long as we remain united, the russian people will recognize that they cannot

achieve the security, prosperity and the status that they seek through brute force. >> but of course the problem is that neither president obama nor anyone else can say when those sanctions are ultimately going to achieve their goal. and even the president held out little hope at all of reversing russia's seizure of crimea. >> all right. many thankthanks, john harwood. my next guest says right now the u.s. remains essentially powerless. politically, economically, and militarily in order to curb putin's provocations. call it deja vu to the late 1970s. he writes the only way to chaget the balance of power is to change economic policies like reagan today. here now former reagan adviser and my dear friend, art laffer. art, i read your article this morning. jumped out of my chair because i think it has so much truth to it. i got to be honest with you, i put it on twitter.

i know i shouldn't have, but i want the whole world to read what you wrote. you don't think militarily we have a chance, you don't think sanctions will work. where should we be going to deal with the russian threat? >> the problem that obama's speech had was he was blaming everyone else except he us. our economic weakness emboldened putin to move. and we weren't aware that he would move. my goodness. with the change in government in ukraine there pro russian to anti-russian, and crimea's historic relations with russia, it's a natural that putin would move there. ukraine has all those lines going through. yet obama blames every else except himself. our economy is weak. our military has been dissipated dramatically in wars all over the world. and now we don't have the ability to stand up to putin and to stop him from doing this. and it's our problem as milton

friedman used to say, i have met the enemy and it is us. >> reagan used to always say that a strong economy at home gave us tremendous national security abroad. and for among other reasons, the strong economy at home with supply side market oriented policies on flatter taxes and deregulation and better money and so forth, all that produced revenues with which we were able to build up our defenses. >> of course. >> now, that's the basic story here. this looks like the reverse. we are not employing market oriented policies. we don't have the revenues flowing in. we are slashing or mi ining our. putin is no dummy. he's like an evil fox. >> he is. this is the first shoe to drop. let's hope it's not a milipede,

only a september speed, because there are a lot of shoes to drop. a country must have a strong economy and you cannot have a strong economy if you pay people who don't work and tax people who do work. our redistribution economics has ruined the economy and the health of this country. and the more we go -- the higher we raise the minimum wage, the more we preclude people from, w working over time, the bigger the tax increases, the worst the u.s. will be. for the last 5 1/2 year, we have not had any growth other than population growth and at that rate, we'll have a lot of problems in the global economy. and this is only the first of many. >> bad economics leads to bad national security. >> it sure does. >> actually, art, i got to be fair on this. it goes back much longer than just under obama. >> it's w., as well. you're right. >> since 2001. >> clinton was the last. >> we've been growing at less

than 2%, 1.8% per year in terms of real gdp. this is your calculation. you say we've lost $3.3 trillion of output. >> true. >> which is unbelievable -- >> every single year. >> i want to add to that, american defense spending is now dropping below 3%. >> amazing. >> all right. this is not good. the reagan/clinton boom of the '80s and '90s is gone. so what has to be done here? because you're talking about ending russian adventurism and maybe chinesed adventurism and maybe syrian adventurism if we still see us as weak economically. >> we have to put in a low rate flat tax. we got to get spending restraint. we need a sound money.

we need free trade. and we need minimal regulations and the government should get the hell out of the way and let the private sector produce what it can just the way it did under reagan. if we allow the pipelines in, we could bring the price of oil way down just like we between in di '80s. and russia gets 70% of foreign exchange you wering exchange earnings from oil and natural gas. so they would be forced to stop its -- >> so let's stay with this point about natural gas. we are going to be energy independent. governor perry was on last night talking about that last night. mostly natural gas. steve moore will come on. they're trying to put this birds as endangered species to take away land to drill and frac on. we did it on the radio last

night. steve is coming on in a few moments. that kind of stuff plays right into russia's happennd. if we drill, produce, frac and export, we'll undermine russia. they will have nothing left. >> yes. that's true. >> so that has to be part of the solution here. >> that's exactly what rr reaga did. he undid all the policies. we had a huge surge in supply of oil and natural gas, we had reductions in the demand for energy. and the price of oil went from $32 a barrel down to $10 a barrel. and that crushed russia and with our strong economy, they didn't have a chance. >> the moral of the story, let's get this right, because you're the only guy really saying this, it's not about putting troops on the ground. it's not even about economic and banking sanctions. the moral of the story is economic strength breeds national security strength which stops the putins of the world.

that is the moral of your story. >> exactly. it's the charles atlas cartoons, if you remember the weak link on the beach getting the sachbd kicks in his face. you got to quick drinking, quick smoking, go to the gym and then maybe you'll strong enough to handle the bully. but we have to give it time to come back. >> you are the best. >> it's an honor to be with you, sir. >> i'll see you soon. thanks, art. speaking of old friends, we're about to talk about it will take to get economic growth here at home. we have two much tof the stalwa the kudlow report over all these many years. robert reich and steven moore will once again go toe to toe. and later on, governor scott walker knows about spurring economic growth. he'll join us live to talk about his state's comeback and his big tax cut to produce growth and balance the budget. don't forget, free market capitalism is the best path to

prosperity. it will solve guys like putin if we just use it. i'm kudlow. i'm kudlow. these days, everything your business does is done on the internet. and tomorrow you'll deveno more. that's what comcast business was built for. slow dsl from the phone company was built for stuff like this. sign up for internet and voice and find out how to get four weeks of tomorrow ready internet for free. and you'll be ready for tomorrow too. comcast business. built for business. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly

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>> the which i economy tip to the crawl slowly. but to be fair, i want to be fair, the economy has been crawling for nearly 15 years. we welcome back robert reich and steve moore. they have been arguing for over ten years. >> and we're getting nowhere. >> and they still can't find any common ground. and we're going to propose counseling. >> there is common ground. mr. it is a pleasure to see both of you back together. let's start age over beauty. robert reich, really it has been 15 years. you probably heard what art laffer said. it's hurting us in a number of areas. why complaint than't this econo

track? >> i think one of the biggest problems is that we've had widening inequality and the middle class is under great stress, great duress. it's been shrinking. median household incomes have been going down adjusted for inflation. it's hard to have enough demand when you have that many people who are struggling. and so much of the income and wealth going to the very top. >> steve, your response. >> well, first of all, i calculated that robert reich and i have done your show about 300 times over the last ten years. and he has learned nothing. >> no, wait a minute. >> no, i'm only teasing you. look, i actually think robert reich is exactly right. but what you're talking about is symptoms, not the disease. you're exactly right, the middle class is shrinking. they're really struggling. you're right. middle incomes have not risen. but this is the symptom. bob, what you haven't explained is why this is happening. and i believe it's because we have moved away from the kind of -- the policies of ronald

reagan that larry and i worked for, you worked for bill clinton, the policies of clinton. we've moved away from those pro-growth tax reduction, fiscal responsibility, anti-regulation kind of policies that allowed the private sector to create the kind of jobs and wealth that make the middle class better off. >> bill clinton, i'm very proud to be part of the clinton administration, clinton raised taxes. but the other point, and i think it's important to keep in mind that globalization and technological change really hit big in the late '70s, early 1980s. and instead of investing more in education and infrastructure and job training, making our workforce and our infrastructure world class, second to none, we did just the opposite. and we deregulated wall street. and bill clinton and the clinton administration was part of that deregulation. i'm taking some blame here. but the too wbig to fail banks n

wall street, degree of corporate welfare, that's really what's happened. >> you know, i think george w. bush deserves some blame for this, too. i think under the bush administration, a lot of these entitlement programs were expanded. the eligibility was lifted. there was some regulation under bush. i mean, steve, i was talking to art laffer about this. weakness at home in the economy is creating weakness abroad with the whole putin story. so you were talking last night on john bachelor radio with us, you've got the weird rare birds that are going to be used to stop oil fracking on, what, millions of acres of land in the southwest. there is a story today, national labor relations board is now allowing colleges, they used northwest football team to unionize. for what? to get paid, to pay union dues? there is so much intervention going on in this economy, not to

speak of obamacare. no wonder we're not growing. >> i think bob reich is wrong about this. we have spent trillions of dollars over the last 7 or 8 years on shovel ready projects. it really hasn't worked to create the kind of jobs. i would make the case to you, bob reich, and i want your response, we do need infrastructure in this country. you know what we need? we need pipelines, kind of infrastructure to get our energy resources all over the world. it's the way to break the back of the russians in terms of that are aggression. we could build a vibrant middle class with these energy resources. we're talking about unionized jobs that pay $80,000, $90,000, $100,000 a reyear. aren't you for that. >> i'm for all forms of infrastructure. we may have different cost/benefit analyses. but let me say something.

you two understand something that has happened in the american economy that you're not giving obama or the democrats any credit for at all and that is the extra ordinary explosion on the stock market. the stock market has never been doing well enough. i don't know why republicans --ky just say this? you two, i really -- i like you guys. i respect you guys. i think you're out of your gourd sometimes, but i really like both of you. but why is it the republicans who have been the biggest bep fesh areas of this have a ordinary boom in the stock market are not willing to give obama and the obama administration any credit at all? >> let me give you an answer. you're right, the stock market has been on a boom. but you know what, it hachsn't trickled down to the mid class. >> i'm the first one to say that. exactly. >> the rich, the people at the very top 2%, they're making the gains, but bob, we put in place your program of tax increases on the rich, of increases in

regulations on the financial institutions, of big spending programs. and the middle class has not benefitted. you just said it yourself, they lost $2,000 of income. >> i can't believe we've now come after 300 appearances to the point where you steven moore are complaining about the middle class not getting enough trickle down from the wealthy. >> i'm a middle class guy myself. >> we got to get out of here. >> larry, this has been a true, true pleasure. >> it has. >> too often on television there are people who don't like each other and bark against each other. you know, we debate, but i -- and epg you guys, too, we respect each other, we like each other. there needs to be more of this. >> i've actually learned some stuff from you, bob. >> i have also from you. >> you're great colleagues. we will see each other again after the show is completed. i want to thank you again, my good friend robert reich and my

brother, steve moore. bob reich's film is called in-equal for all. it's available now. let's move on. he stood up to the public sector y unions, cut taxes. now his state is seeing real economic growth. scott walker will talk to us about that and national issues like what is wrong with obamacare. and we had just yet another enrollment delay. >> last night brought us yet another delay of obamacare. another dead line made meaningless. you know, he hasn't put enough loopholes into the law already, but the administration is now resort to go an honor system to enforce it. what the hell is this, a joke? ?

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larry, i'm proud to be one of the few who can say i was here for your earliest appearances on cnbc and watched your transmission to media comment at a time tore. we'll let the viewers decide if that's an upgrade. you've always been a calm and gracious voice, always making us think and always, always speaking up for free market capitalism. we're lucky and our viewers are lucky that you're sticking around and we'll get to hear more from you during the trading day. so tell me again, what is the best path to prosperity?

>> it isn't good-bye, but it is congratulations to you for nine superb years and congratulations to you and judy for being such wonderful human beings, such an example to all. and i wish you well and i hope to see you often. and i know you have many exciting things ahead. and all of us are so grateful for what you do and have done. >> just great to see you on tv all these years. you've been a mentor, somebody that i've looked up to for a very long period of time. all i can say is good luck, good trading, have a great retirement, my friend. cheers. >> larry, thanks for five great years of the kudlow report. i'm sorry your show is going away, but i'm happy you'll still be with us as a contribute tore. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa,

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wisconsin is proof positive that pro-growth reforms like reigning in public sector unions and cut taxes spur gloetd and balan growth and balance the budget p. scott walker signed a more than $500 million tax cut into law. if i'm not mistaken, that gives him $2 billion worth of tax cuts. so we're honored to be joined by a true friend of the show, governor scott walker.

he has a new book, unintimidated, a governor's story and nation's challenge. as always, welcome. thank you for coming back on the show. >> thank you, larry. thanks for having me and thanks for the great career you've had. we're pleased to honor your great program and we're glad you'll be sticking around as a contribute tor tricontribute cc. >> first i want to ask you about the delay. the president has broken a promise. the march 31st deadline has now been extended. there are so many loopholes in this thing. it's just like the renewal of the cancellations with loopholes and hardships. my first question is, is the individual mandate just dead, completely dead? >> well, at least it is through

this next election cycle. we've seen all along this is much more about politics than good public policy because his friends in the united states senate has a real chance of losing the majority because of obamacare. i think they're trying to push as much of it off into the future. but people just want us to fix the problem. they want us to fix the mess washington has created and the reality is for employers, day in and day out as i travel the state and i'm sure it's the same across the country, what employers are concerned about is the uncertainty. they don't know what is next, they don't know what the rules are, they don't know what will happen next and that has caused them pot to creates a many jobs and opportunities as we'd like to see them create. >> wisconsin is part of this now. you're a state-run exchange, but you are part of the obamacare system. i want to take you up on your offer. this thing has been postponed,spostponed, it's been delayed. i called for a three year moratorium several weeks ago.

what is your fix? >> well, just to be clear, we did continue do a state exchange. we deferred to the federal government because we thought it would be state in name only. but i think the larger context, the concern is the uncertainty it provides to employers. what i would do is instead put in place a patient centered plan that is not dependent on the federal nor the state government to run things, instead puts the patient back in charge. cut through the red tape, let pictur pictu patients be the one, give incentives whether you buy it yourself or through your employer, whether you use it for health savings account. let people have skin in the game. when they do, they will make better purchasing decisions about health care than anyone in the federal or state government is doing today. >> i love the tax piece right there. that's a really important reform. can we just get rid of all the mandat mandates? why should we be dictating m

mandates? >> let it be wide open. right now what is one of the few areas where the market decides is corrective eye surgery. it used to be available only to the have wealthy. today it is affordable just about for any american who wants to save up for it. it's an elective decision just like most health care decisions. if i want to go to a clinic instead of a hospital, if that's medically visible, i'll make that decision for me and my family because it's affordable and yet it provides me great quality health care. those are the kinds of decisions americans are up to. but right now we don't have a system that allows it. and going back to the old system isn't the answer. you need to go forward with a system that goes beyond bureaucracy. instead empower individual patients to be making decisions about their health care. >> all right. great stuff. let me go back to wisconsin. you've got yourself a balanced budget or a surplus. i believe you've cut taxes to the tune of $2 billion. just completed another $500

million tax cut. how is the state's economic growth, how is the unemployment doing and what else you got in mind out there? >> this is the third time we've cut taxes in total. more money in the hands of consumers and employers. that has helped us last year create the largest private sector, best private sector job growth since the 1990s. our employment straight down by some 3%. we've seen more people working, more employers hiring. and that deficit that we had three years ago, $3.6 billion, as you mentioned, is now nearly $1 billion in surplus. and instead of hoarding it in our state capital, we're putting it back in the hands of the people who earned it, because we think it allows them to recoup that and spend that to create more economic vitality, to have a true stimulus effect by employing more people and purchasing more products and that will help us grow future budget surpluses next year and beyond. >> i've been reading about this, and at least reported by the new

york son, you didn't cut the top tax rate. the top tax rate in wisconsin is still 7.75%. i believe the bracket is about $300,000 or $325,000. and that's kind of the new york style tax rate. and you only cut the bottom rate which was around $14,000 or $15,000 from 4.4% to 4%. you get a bigger bang, you get a better incentive if you cut those top rates and all the rates in between. why didn't you go there? >> i agree, but remember, this is the third time in less than a year we've cut taxes. we cut property taxes last fall, property and income taxes with this plan. about in my budget, we cut all income tax rates. for people paying income taxes here in the state right how going into april 15th, every income tax bracket went down. the number of brackets were reduced. so we cut taxes on every in ton

the state who owes income taxes for precisely that reason. why we added more was because we wap wanted to make sure we didn't leave anyone behind. my goal in going forward is to get closer to a flat tax, to reduce the income tax yet again for everyone who pace income taxes in our state. to be more aggressive in that regard as well as continue to cut the rates on property in our state which right now for a property tax player with our plan, they will actually see an outright reduction this december of over $100. that means property taxes in december of 2014 will literally be lower than they were in december of 2010. and that's a goal i want to continue on for the next four years. >> i hope you keep in mind that the you power of the incentive in that top rate is really huge. they won't go to wisconsin, they will go to florida or texas. we had governor rick perry on

last night. i think you know that. just friendly supply side advice. which is free so you can do with it as you will. last one, governor. you often and you stress this a lot, you regard yourself as a reformer. and you want to limit government. and you showed people how to limit the power of the unions, collective g collective bargaining and so forth. if you run for president, how would you tackle that reform agenda in washington? >> well, i think what we've shown in wisconsin is that it's not about austerity, it's about reform. if we just come in our state and cut things across the word, tbou cut your priorities and as well as other things that might not be that important. i think nationally we need that same sort of reform no matter who is running for president. i'd slash of marginal tax rates, go to a more flat tax. would bring the dollars back to

american, put it back in the american economy. replace obamacare with something that is patient centered. and then put more of the government back in the hands of the people at the state and local level in education, transportation, infrastructure, health care, all those things are better suited if those decisions are made by state and local officials, people closer to the american taxpayer. those are the sorts of things i think any reformer should be talking about going forward. >> all right. we'll leave it there. sounds pretty darn good. many thanks, wisconsin governor scott walker . all the best. last night it was rick perry. tonight scott walker. i'll ask the same question about mr. walker. did we just see and hear somebody who could be winning the presidency and be in the white house in 2016? our expert political panel will tackle that question and much more next up. whether there be a president scott walker?

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boykin, jim pethokoukis, and high buddy mark simone. gentlemen, welcome. mark, scott walker, what did you think? >> i'm a scott walker fan. i don't think he quite answered your question about that top tax bracket. he was great on obamacare. i think obama passed it, he got it done and he said just won't enforce it. he'll delay it forever. a nice box on your income tax, if you don't like it, you don't have to worry with it. everybody is happy. >> are you going to check off the box? >> yeah, it says if you have a hardship or you think you had a hardship or you might have a hardship, just check it off. >> or if the new york yankees win the pennant. keith, what did you think of governor walker? >> he sounds like a typical politician. he was strong on some of the issues. if you look down the line to 2016, i still don't think that he has what it takes to win over the conservative masses to win the republican party nomination. but for where he is right now in his state, he's good at spin.

his state had some of the worst job losses in the nation last year but you didn't hear that because he's trying to spin the story as well as he can. >> didn't his unemployment rate come down? >> it did come down. i think it will be tough for him to win over republicans. one thing republicans hate is tax cutting, union busting pro-life governors with a record -- they can't stand those guys. arm's length. so he doesn't have a chance. i don't know, who else? >> you put him next to a rand paul, scott walker doesn't stand up to the crowd in terms of the interest level from the conservatives. >> he is not going to dazzle you with his dancing talk. republicans are aware of his record. there is a guy who has been in country in the fight and they like that. >> and he has metrics, he can show what he's done. when you put a legislator in the executive branch, it doesn't work as we've seen. but the problem with scott walker, he's a nice reasonable sane common accepts guy.

but he'll get hit with a billion dollars of negative advertising. but he'll get hit with a billion dollars of negative advertising. they say if you don't like the sight of your own blood, don't run for president. >> during the recall stuff, they threw everything at him. called him every name imaginable. in fact they're still trying to sue him for campaign contributions. and he never faulted. >> romney is as tough as can be and he got hit with all the negative stuff and it does do damage. >> they were death threats. they threw everything possible at scott walker. and he won. they know that story and they respect it. >> and they don't like throwing shall be out in the middle of the term even if they don't agree with him so every issue. >> so if he's reelected, he'll surely run for president. >> i expect him to run for president. >> let me just ask you this,

though. democrats. i don't really understand the democrats right now. you got obamacare, a serious problem on your hands. you got the really a poor economy, poor jobs market. it's not catastrophe, but not winning any great -- all i read, and we're actually having axelrod on the show tomorrow night, but, look, what are they doing? are they giving policies? no. they're attack david koch on a daily basis, they're basically attack republican fund-raisrais without a message. most voters don't know who david koch is. what is the democratic point about the disaster called obamacare? >> well, a lot of questions in there, but i do think that the republican party has no message right now. i don't think it's the democrats that don't have the message. gop message seems to be everything obama does they are against, whether it's syria,

crimea or health care in obamacare. and i think when you talk about the democrats' message, largely it's been bottled up because the republicans who control the house. so you can't do anything about the minimum wage, they can't do anything about unemployment benefit extension, they can't do anything about just providing more economic opportunity and getting a jobs bill passed. so that is the message. the question is can yyou get a democratically controlled senate which seems unlikely. >> on this crimea/russia thing, i want to give him every opportunity to do the right thing because politics stop at the water's edge, that is my personal view. but the democrats are at be taking david koch. what about tom steyer who puts up $100 million for whatever windmills? george soros? in other words, i don't think that game ever works.

>> high advice if i was going to give advice to the president is stop proposing policies that when they're examined show huge job losses. minimum wage, cbo said huge job losses. obamacare, cbo said huge job losses. republicans may have bottled up some of the bad policy, but they control their own message. war on women? that's the uplifting hope and change message, that's where we are in 2014? >> except that the republicans promised remember when obamacare was passed it was doing to be this huge job killer and we've created 8 million private sector new jobs since then. >> first of all, don't anticipate my talking points. i don't do the part-time -- what i know is it's the weakest job recovery since the republic was founded. >> this is the first time we've had a recovery where we started cutting government spending. >> there are 4 million private

sector jobs short of where we were. 4 million private seg toctor. >> we lost so that job in the bush administration. we're just now catching up. >> larry, i blame reagan. >> you've had six years to come up with new talking points. >> and i remember back in 1992 when republicans were still blaming gem any carter for problems with the economy. >> carter's incompetence goes beyond space and time. >> so you can't mention the collapse there wfact there was an economy collapse -- >> in 30 seconds, can the republicans take advantage of this democratic void? >> absolutely. you know what would be a nice platform, go back to competent

management. a real executive who can run the government. >> like george w. bush, right. >> he had an unemployment of 4%. >> like scott walker. we just have to teach him about the top marginal tax rate. >> 24 republican governors that have pretty good records in their states. >> you may is been one of the original free market. the best of the best. now, unfortunately, another down day for the markets. but the reality is they have been standing still so far this whole year for the first quarter. and i'm going to ask what are they waiting for. talking about your money, two of our best investment experts next up on kudlow. ow. >> larry, 7:00 will never be the same without you, but thank you so much for the service you've provided to our country informing us and we'll look forward to seeing what else lies in your future. >> i want to thank you so much for putting me on it tv in the very early going. i learned so much from you from

the investment point of view, from the tv point of view. and you're one of the smartest investors and anchors that i know. so i want to wish you really well, lots of luck. >> larry, you're one of the most iconic names in business news and television. i spent my formative years watching you and the rest of the entire cnbc team and in you i'm lucky because i can rubble bows and share thoughts with you on a daily basis. congrats on one heck of a run for the kudlow report and i'll look forward to working with you more during the regular daylight hours and of course following you on twitter. #tcot. cheers. health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information and rewards for addressing my health risks. but she's still gonna give me a heart attack. that's health in numbers. unitedhealthcare.

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market slumped a bit today. but really the theme so far i think is moving sideways for the whole first quarter. and i want to know what investors are waiting for and how that will determine the next significant move. so let's talk, we bring in brian kelly and john rutledge. i will just say i've known john for a very long final. >> 38 years. >> 38 years. and john and i worked the numbers for the reagan economics -- >> that's right. >> during the transition. you're nice to come out here.

let me start with you. really the market has been sliding now it just about a month. why is that? >> well, i think if you actually -- the averages don't tell the whole story. look at underneath at some of these names even like a staples, something that has been down 26% year to date. there are names and stocks that are big companies that have gotten destroyed. so the average is going sideways showing this rotation. so people are getting out of the leaders and into old tech, into areas where they can get a dividend, where if there is some kind of capex cycle, they will be people that benefit from that and you get a good value. it's the only value out there. >> would you say the first quarter was a bear market or would you just say -- >> it depends -- it's a shift most likely. but i'll tell you, if you're in a lot of nasdaq stocks, it was a bear market. it was a crash for some of these. >> john, how do you see it? one of the things that disturbed me today was we had a report on

durable goods and inside that is business capex, business investment spending which was lousy. and it's been lousy. and that's bone of tone of the the economy's been lousy. maybe i'm obsessing about that. what is your take? >> it takes cash flow to make a business want to invest. and cash flow comes from raising your sales. but more than half of the earnings of the s&p are offshore an when you take the legs out from under the emerging markets, then you end up taking out a lot of the margin, a lot of the growth from the firms here in the u.s., as well. >> hodo you think the yelling a screaming at the fed is justified? what is the row of the fed le o the stock market? >> they printed $3 trillion of excess reserves. they earn a quarter percent interest. they could put the money to work for 5% to 10% about that big

banks are doing that and they're loaning money to hedge funds and private equity firms. little banks can't do it because little banks are burdened by the dodd-frank regulations so the lending behavior of the top 100 banks and the less than top 100 banks is in the opposite direction. unfortunately, the shawl banks loan money to small business which was is where jobs come from. so you have a booming private equity market and slumping jobs market at the same time. >> you were writing this morning there may be stimulus coming from china and europe if i read you correctly. >> yeah. so the market is kind of starting to price in that the ecb will do some type of qe. you're seeing some softening on the -- >> next week. >> i don't know if it will be as soon as next week. april is probably -- sorry, end of april and maybe june will be probably the earliest. >> china? >> and china, they have already done some stimulus. they have done a mini stimulus on the housing sector.

they're building out some stuff. they have a couple projects on the sidelines that they can bring. that's what's kept the chinese stock market up over the last couple days. whether or not it ultimately works, i'm not sure. but at least the market perception right now is that's a better place to be than the u.s.. >> john, you're a china expert. you taught there. can the united states market rally, can the u.s. economy rally without china? >> u.s. market can rally just as a result of the push of the reserves through loans into deposits and spending. that will take some time to happen. but it's happened not only in stock, but in real estate here, as well. but if you have emerging markets growing, and in you europe and japan growing a little bit, you'll get an even better market out of it. >> i got to get out. bull or bear right now in your gut? >> bull on the market, bear on intra sensitive stocks. >> how about yourself? >> longer term bear. right here i'd be buying stocks

because they have gotten so beat up. >> i think i'm a short term bear and long term bull. but what do i know? thank you ever so much. wonderful to see you. that's it for tonight's show. thanks for watching. tomorrow night a big lineup. wisconsin senator ron johnson and political duo david axelrod and a mary madeline. i'll be here, too. please join us. please join us. , impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. ♪ [ male announcer ] bob's heart attack didn't come with a warning. today his doctor has him on a bayer aspirin regimen to help reduce the risk of another one.

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if you've had a heart attack, be sure to talk to your doctor >> narrator: in this episode of "american greed"... he's a successful insurance broker. she's a vice president at a leading financial firm. >> she was making close to a quarter of a million dollars a year. they were living large. >> narrator: tina and joe caronna lived the good life, with a nice house and a collection of classic cars. but joe has one very dark secret. he's stealing money from clients to finance their fun. >> he preyed on people that were friends and family. he didn't prey on strangers. there was nobody he would not steal money from. >> narrator: how far will joe caronna go to keep his sins a secret? >> i started crying, and i said, "i don't want to believe this. please tell me he didn't do this to her. i don'nt t