live from new york, where business never sleeps, this is "squawk box." good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we have a big morning ahead. gop presidential candidate ted cruz will join us for an hour to talk jobs, the economy, taxes, trade, the banks, and much, much more. that's all coming up at 8:00 a.m. eastern time. in the meantime, let's get a check on the u.s. equity futures. markets eked out a gain. that was the third day in a row of gains. the futures are just slightly lower with the dow futures down by about nine points. it has been a big week of gains for the markets. overnight in asia, china releasing first quarter gdp numbers. the country posting its slowest pace of economic growth in seven years, but the 6.7% figure was in line with forecasts. we'll have much more on china in a minute. you can see the chinese markets

closed relatively flat. nikkei was down by about 0.3%. in europe, it looks like things are modestly weaker. the dax is down by about 0.3%. the ftse looks flat. >> let's get you through some of the top stories this morning. we have citigroup expected to report at 8:00 a.m. eastern time. analysts looking for the bank to post earnings of $1.03 per share on revenues of $17.5 billion. citi has already said investment banking fell during the quarter. worth watching. the bank could give us a better snapshot of the global economy than some of its peers. more than half of citi's revenues coming from outside the u.s. citi was the only bank to make it through the living will process. probably questions on that conference call about that as well. we're also watching oil prices ahead of this week's highly anticipated producer meeting in doha. ministers from the biggest opec and non-opec countries debate

the next steps in a production freeze. but russia's finance minister telling cnbc it wouldn't have that much of an impact. >> translator: we see in conditions in the slowing down of the world economic growths, the accumulation of oil reserves by producers. there's no serious grounds for talking about increasing oil prices. >> let's show you oil prices at this hour. wti crude sitting at 40.96 right about now. also, a little bit of corporate news. exchange operator bats global markets pricing its ipo at $19 a share, the top of its expected range. shares are expected to begin trading today on its own exchange. the company is hoping this goes better than its last attempt to go public back in march 2012. you might remember technical malfunctions affected trading of bats' own stock. they say they've been aggressively testing its auction system to make sure it can

handle the volume today. >> were you up late watching the debate? i think you'd have a little more bounce in your step today. april 15th and all. >> very exciting. >> were you up late? >> i was watching bernie and hillary take brooklyn. >> we played the beastie boys. >> "no sleep 'til brooklyn." >> just hearing a couple thoughts this morning. it's almost as if bernie thinks there's this big pool of money that exists. it's a big pool. then you got these entities like general electric grabbing. you got verizon grabbing. you have rich people grabbing from this pool. it's a zero-sum game. no concept of wealth creation and of actually adding to jobs, creating jobs, creating an economy that generates that. no conception of that. he was mayor of burlington. that's his ente world.

burlington, vermont. that's his entire world view. honeymoon in the soviet union. >> he plans to raise taxes by about $15 trillion over the next ten years. he would also be looking at expenditures that are $16 trillion to $24 trillion. >> he beats the republican candidates, like all of them, 52 to 32. he beats the republicans more than -- >> there was a fox news poll yesterday that showed they thought he was the most trustworthy one to be president. >> where are we? i did see something last night. they were asking people name as many avengers as you can. then name as many presidents. former presidents. these people were getting five and six avengers. when it came to presidents, one person said grover washington, who's a saxophonist.

then he said thomas edison. they couldn't come up with anyone other than obama and washington. i swear to god. >> i would be better with the presidents and terrible with the avengers. >> same with me. >> i don't know if i can name a single avenger. >> okay. let's look at a couple thoughts, then i'll talk about something. democratic presidential candidates hillary clinton and senator bernie sanders squared off in a cnn debate thursday night in brooklyn, new york. with next week's new york primary hanging in the balance, this was the ninth and according to this the most contentious. sanders questioned clinton's experience and judgment. here's how she responded. >> talk about judgment and talk about the kinds of problems he had answering questions about even his core issue, breaking up the banks. when asked, he could not explain

how that would be done. >> later, sanders responded to clinton's claim that she stood up to the banks when she served as senator from new york. >> secretary clinton called them out. oh, my goodness. they must have been really crushed by this. and was that before or after you received huge sums of money by giving speaking engagements behind them? so they must have been very, very upset. >> we will get more highlights. got that to look forward to later this hour. one of the reasons -- i'm trying to drum up some twitter followers today. >> you are. >> what is a fake twitter account? how does that even work? >> so there's a lot of inactive users, some of which are bots,

these sort of made-up accounts. some of which are truly users who went on twitter and unfortunately for jack dorsey just basically stopped using twitter. >> okay. i don't have enough fake or real twitter followers, so i retweeted -- >> that's because you keep blocking people. >> i do block people. in fact, i think most days i have a net negative for people that follow me versus people i block. but this time i tweeted out this picture of me. i'm with president reagan, who was a president. i don't know whether you remember. >> i heard about him. >> he was a president. he has this great quote about independence day versus april 15th and which party likes which. i tweeted that out again. if you want to see it -- >> oh, you want me to go? >> i'm trying to generate some followers. >> the reason you're doing that is because today is a special day. it's april 15th. >> although you have until monday. have you sent in that supplemental fair and equal check you usually send in after you've paid your normal taxes to

get to the actual amount? to get it up to 90% or whatever. when do you send that one? >> i send my regular check in very proudly. i send my taxes in quarterly, actually. >> even the patriotic millionaires, i don't think, the sanctimonious, smug people, i don't think they send free money. they just pay -- >> you're going to find a lot of friends on twitter today. >> yeah, i enjoy the blocking. >> just remember this. reagan did not cut the budget. he raised it. >> you mean taxes. >> both, actually. raised taxes and government spending. >> to say he raised taxes is functionally true, but in a lot of ways -- >> functionally true. >> it is. everyone raises taxes in some respect at some point. but he brought down capital gains. we were at 70% at one time, marginal rate. brought it down to 28 or whatever. >> but he was not an austerity

president. think about all the money that was spent on defense. >> you mean to end the cold war. and to tear down that wall. >> if you look at government spending during reagan's presidency, you would not say there was less spending. there was more spending. just putting it out there. >> why don't we look overseas at another government this morning. there's new news out of china today. china posting its slowest economic growth rate since 2009, but there are some signs of a debt-fueled recovery and factofactory activity, and household spending. eunice, good morning. or evening there. >> good morning, becky. china delivered a decent economic report card for the first quarter. gdp came smack in line with expectations at 6.7%. that's well within the range the government has targeted for the year. this was the weakest quarterly growth we've seen since 2009, but there were signs of

stabilization towards the end of the quarter. the march data came in better than expected. retail sales held steady. the industrial output figure surprised a lot of people here because it came in almost a full percentage point higher than estimates at 6.8%. fai also improved. this is all feeding into the confidence that has been building over the last month. we've seen a bit of a housing recovery. also, the volatility in the currency as well as capital outflows has been calming down a bit. the export figures we saw this week for march were surprisingly strong. so that's all been positive news, that there could be some momentum. the big question is whether or not the growth is sustainable beyond a couple of quarters. most economists here have been talking about how they believe this recovery is mainly stimulus driven. it's lending, construction. it's not companies that are much more efficient or market reforms. also, the bigger picture environment is that the demand

picture is looking pretty weak, both at home and overseas. finally, the chinese government has been talking about how they're pledging cuts to industrial overcapacity. that's seen as a way to put even more downward pressure on the economy towards the latter part of the year. so i think at best, most people think that this is going to be short lived, but they're hoping it's not going to crash in any way, of course. >> eunice, thank you. also out today, china's beige book on the first quarter survey. joining us now, china beige book international president leland miller. good to have you. >> thank you. >> we had a very smart economist on yesterday. we talked about both cyclical releveraging versus a long-term structural deleveraging. he says at this point we're back

in kind of a releveraging environment where near term things might improve. i was surprised to see that the gdp in china was the lowest we've seen. is it a bottoming process now, or is there more slowness to come? >> yeah, we don't agree with that at all. >> agree with what? >> well, what you said that she said. this is a temporary blip or you're hitting a bottom. we're at the beginning of a long-term structural slowdown. that doesn't mean the next several months -- >> that's what she said. but in the near term, she thinks it probably has bottomed, that they're releveraging at this point and we're putting in the lows on the gdp numbers. but long term, they've got 1.2 billion or 1.3 billion that are going to be on facebook. so they've got some things to do in the way -- whether you own private property, whether you're able to say what you want, whether you're able to go to

tiananmen square without worrying about it. but have we hit bottom near term? >> i don't like to say we've hit bottom. i like to think we're on a continual slide. the chinese government has stopped their reform process and decided to ease off the gas and slow down reform, slow down restructuring. >> that's what releveraging means? >> it means they're taking more debt and putting off their problems for longer. >> so it just means they're spurring on the economy. >> well, tomato, tomato. >> one of the things we're seeing across data is they haven't been spending for a while. they're borrowing much less than they have been each and every quarter. now we finally have a hiring problem. the last two quarters we've seen job growth take a major hit after two to three years of stability. if you have firms that don't want to the hire, you're going to have a hard time goosing growth no matter what you're

doing. >> interesting. so the reforms you're talking about are purely business related. you're not talking about societal or becoming less repressive. >> here i'm talking about the structural reforms from an economic perspective. >> the jobs picture in china, are there -- is there overcapacity everywhere in all the industrial -- >> pretty much everywhere. >> the problem is that is state overcapacity. what we're seeing in our numbers are state firms are not combatting this. you hear they're saying they're going to combat. and lay off people and do all these great things. it hasn't happened. private firms are doing these things. this is painful for growth, but it's good for china. but it should not be considered a bottom. this is the beginning of a long, torturous process. >> i'm starting to see what you're saying. so if they don't close factories

that are not necessary, if they don't lay off the people, if they just releverage by throwing money at projects, that's not addressing reform. >> and that's the chinese way. that's what they been doing for decades now. >> is there a slow way to do it? you don't expect to see them turning into a capitalist nation overnight. these thuings usually come in grades of change. >> no, there is right now. when you have an opportunity -- stimulus is dying in china. fiscal stimulus is an open question. what they should do is use what stimulus ability they have left to cushion the pain of reform and push it along. a lot of people think, well, they're just waiting until xi jinping gets more people in 2017, then they'll start reform. well, putting it off and putting it off, this is not good for china. >> can you tell anything about the global economy based on

what's happening in china? the united states, we have our own domestic issues. china has their own. for some reason, not only as a socialist winning in most polls in the united states, we don't charge to lend money anymore. we pay people to lend money. things seem upside down. what's -- is china part of that problem? >> well, from a political standpoint, the chinese don't have the ability to blow off steam by tossing bums out and bringing in the next guy and tossing him out. you have a buildup of pressure against the party in order to do something more dramatic. sometimes that means pulling back on reform and not being as aggressive. >> as a smart guy that happens to follow china, i'm trying to figure out what's wrong with the global economy. can you explain why growth is so slow and why we can't seem to get out of our own way? we have negative interest rates in many parts of the world? >> too much supply, not enough

demand. >> is it a demographic thing? >> probably, but those are the things that are going to kill us slowly over time. >> we're all getting killed slowly over time. this is killing us faster slowly over time? >> something like that. for all the dangers, it is actually something china is looking at very happily, i think. if you have an environment that's going to zero and below globally and all the sudden these yields on these risky chinese investments start looking better. people are misunderstanding what a lower interest rate in china means. it could be a very good thing for the chinese economic transition. >> okay, leland. thank you. >> nice to see you, sir. >> it's somewhere over 50, andrew, you start realizing we're all terminal. you're immortal, i know. >> when you say 50, i'm thinking 50% tax rate. >> you are. >> he's pretty sensible about

this. >> i'm a risk -- i live like a risk manager thinking about all the worst things that could happen at every moment. becky knows. in every aspect of my life. thank you. it's good to see you. coming up, the dow will start the final trading session of the week at its highest level since last july. if you were a risk manager, you wouldn't have realized that one. we're going to talk strategy next. at 8:00 a.m. eastern, our special guest today will be snav senator ted cruz. we're going to talk about the economy, his tax plan, china t and a lot more. back in just a moment. sor richa. you are called the father of behavioral economics. i've been called a lot of things. i have read all of your books.

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let's get back to the markets. joining us now is ed campbell, qma managing director. jason is also here, chief investment strategist. gentlemen, i'm going back to the same issue. i'm going to say joe and becky kind of called it because they kept saying the market was going to go up, as it seemed everyone else was saying it was going nowhere. is that right? >> i think it's probably going to go up really by default. i find myself bullish. essentially all the things that

we talked about before, in a world of negative interest rates, you know, what are your choices? you could see multiple expansion in a very small group of stocks. >> so it's not indiscriminate. >> i don't think it's quite indiscriminate. i also don't think there's enough earnings gains or economic growth. nominal gdp growth is still quite weak, which makes it unstable. so i think people are going to be continued to be attracted to the big uglies. the 50 largest stocks that could be seen as proxies for sovereign debt. >> did you coin t.i.n.a.? >> i did. >> there is no alternative. >> i have to say, i backed off that a little bit just because i think negative interest rates are such a bad idea. there is a chance there is no alternative. >> it's not happening in japan. >> but by the same token, i think the large cap equities are going to continue to rally.

>> ed, would you buy the 50 ugliest stocks. what did you call them? >> the big uglies. >> you like the big uglies? >> i don't know if i like the big uglies. i'd say we're reasonably constructive here. >> we've used the word constr t constructive. i don't even know what that means. >> i won't use that anymore. >> i'm curious what you think constructive is really supposed to mean. all the brokers call you up and say we're constructive on the market. cautiously optimistic? >> we've come a long way from where we were in february. global stocks have rallied 13%, 14%. i think earlier in the year we were pricing in too high a probability of a recession. we've now taken that out. i think that's appropriate. but i think it gets a lot tougher from here. as jason mentioned, corporate earnings are lousy. they're projected to come in on a year-over-year basis at

negative 7%. i think some of the things weighing on earnings like the dollar and oil will dissipate as we move into the latter part of the year. then you have another headwind from rising wages, which are going to cause a margin squeeze. so at the beginning of the year, i said 3% to 5% returns for the s&p 500. i think that's probably still a pretty good estimate of where we are. so that's not a great year by any standard. but it looks a lot better than where we were at the end of february. >> let me throw a different one at you. we're going to have ted cruz on in the 8:00 hour. we've had a couple different guests who say in an election year -- some people have said in an election year, things can be positive. others say it can get very, very negative, in part because of the uncertainty created around whatever conversation happens on taxes and fiscal reform. do you think that is -- which of those is right? >> i think it depends on how close it is and when you determine who the winner is. the one thing we've seen when we looked at it in the past, is

once the market figures it out, once there's an odds-on favor e favorite, the market figures out quickly who's going to win, if it seems likely. that starts to get priced in quickly, usually by september. you'll start to see the market actually start to rise into the election. >> we haven't had a contested convention in an awfully long time. >> this is my own opinion. in some ways, i'm worried as a republican about a fractured party and its impact on the market. i think the market will figure it out one way or the other. if you get into a situation where you're saying, well, now there may be a third party. it's going to be hard to mend these wounds. then you're in a different --

>> you're a worry wort. so man to man, that's out now. do we need to change? i guess mano a mano. give me the pc. you think you coined t.i.n.a. i remember george castanza -- >> i coined it for the market. >> never been used in that context before. >> the first time i've ever heard it was from jason. >> really? all right. margaret thatcher said something similar. >> they called margaret thatcher -- well, she continued to say there is no alternative as far as -- >> that was my fault. >> get the video. >> peter schiff thinks he made up roach motel for the fed. >> i'll take jason. >> i don't want any credit i don't deserve. >> it was the first time i heard it. >> i'm willing to share the

credit. >> i think jason did. >> i don't know. >> what's the harry truman quote? the great thing about credit. it's amazing what you can accomplish if you don't care who gets the credit. >> i don't care who gets the credit. >> who was he, one of the avengers? we had a conversation earlier. more people can name -- more millennials can name the avengers than former president. they came up with grover washington, thomas edison. >> i don't know if i could name one avenger. >> we were on the other end. this is a nerd fest on this side. >> i have no idea. >> they didn't even come up with jefferson or alexander hamilton. >> lincoln? >> all right. thank you, guys. >> you know, there is no alternative. >> one comment on the election, just to enthe segment. prediction markets are still 75%

hillary clinton. markets tend to not like uncertainty. clinton would represent continuity. so i think that would be an okay outcome as far as the markets are concerned. >> gee, thanks for adding that while we were already going to break. anyway, coming up, debating value of earnings estimates from analysts. yesterday, jamie dimon told us the only two numbers to really focus on. this year's number versus last year's. up next, we'll talk to christine short from estimize. as we head to break, here's a look at yesterday's s&p 500 winners and losers. turns romantc turns romantc why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction

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it is that time every day where we have the executive edge. first quarter earnings season is in full swing with citigroup out later this morning. big names like ibm, netflix, morgan stanley, and pepsi co. all set to report on monday. we've been debating the accuracy -- not really the accuracy, but the relevance or the whole system of comparing estimates to actual earnings, considering that companies can, you know, give analysts sort of a lower expectation and beat expectations. it seems to be a game. every quarter companies seem to beat expectations by about 70%.

so just in watching the show yesterday while we were talking about this, jpmorgan ceo jam ja dimon weighed in, e-mailing, there are only two important numbers, this year's number and last year's number. joining us now, christine short. it's like anything else. i'd like to know as many things as i can know. i'd like to know analyst estimates, where companies are guide, and make my own decision. i think it's simplisticing to say either you're growing or you're not. either you lost money last year, you made money this year. you use the whole picture, right? >> yeah, i mean, it's never going to happen. you're never going to get corporations to give us, you know, less information or more accurate information necessarily. i understand jamie's frustration. like you said, we play this earnings game every season. you just need to be aware of it. i think if companies start to give one number or less information, we're in an information hungry society. i think that's going to backfire on them. if you look at european companies that reasonable give

one to two forecast updates during the year, i think they really are punished for it. >> we have the same argument about the fed. transparency. they give us so much. it's like, go back, give us less. sorkin and becky, the other thing we talked about, there are some people that say extraordinary items, you either do gap or nongap. there's the shiller. they have a multiple based just on gap earnings. now, that isn't perfect either because there are years where there's something that isn't -- like, you can have a loss based on an accounting change. >> and it's nonrecurring. nongap is not perfect either. it's the metric we use. nongap can mean several different things. we had some issues in the past with banks where certain banks were taking out some items, other banks weren't. so you have to have a pretty solid methodology. i think the main issue is investors shouldn't be relying solely on corporate guidance or even analyst estimates.

you really need to do your own research and a little deeper digging and not just take that for face value. it does require some work on the investors' part as well. >> this is why investing is so much harder than it looks. >> but if you're trying to get public ownership as a company, you can't stop giving information. you're still going to be required to get those quarterly estimates out there to get people to buy your stock. it's just how it is. it doesn't matter if it's not perfectly accurate. you need to show you're being transparent. as jamie points out, it's really hard to predict quarterly earnings. it's not all on the fault of the companies. >> there's the environment you're operating in. >> right. and you don't have a crystal ball. with that said, we all know they lowball. they have no incentive to be overly optimistic. comes time to report, they beat, the stock pops, everyone is happy. it makes them look very good. and so we're all sort of aware of that at this point. if you don't beat and you really get punished --

>> by the way, the economy has been very difficult. i think a lot of people have been afraid to get out in front of that. even though things may be better for a few weeks, you pay be reluctant to say this is the new trend. every time something pops up, the rug gets yanked out from you should. >> adjusted for dollar. >> we've seen a lot of companies talk about the stronger dollar. >> one of the tweets yesterday is what does jamie dimon think of jpmorgan's analyst estimates? >> they did quite well. even our estimates. we crowd source, so it's not just the sell side. the sell side is a very small slice of the overall picture. we source from the buy side. >> who does a better job? >> nonprofessionals. the nonprofessionals on our site do better. here's why. they're selecting what they're

going to estimate on. they don't have 30 to 40 stocks they have to cover. how do you intimately know 40 stocks? you don't. so they pick the five names they know very well. students tend to be very accurate. they have a for visceral view on how these companies work. by crowd sources, our estimates tend to be more accurate than wall street 74% of the time for that reason. >> it's hard work. who said that? do your homework. harken back to the financial crisis where if something was aaa, they had some aig insurance or something. oh, it's aaa. if you looked at the credit worthiness of all these different names, you would have had a much better idea than relying on ratings back then too. >> you got to dig a little deeper. there's always calls for sell side analysts. you got to dig a little deeper.

don't just take analyst. they're paid to support corporate access. they don't have incentive to go against corporate guidance. they tend to tick their estimate up one cent, down one cent. >> speaking truth to power. >> great having you. >> thank you. >> and this is -- see, i'm getting a lot of tweets now. this is working beautifully. >> you asked for it. >> this speaks to me. there are really only two avengers. do you remember the old show? you don't even remember it. i watched that as a kid. i don't know who these new -- the avengers were this guy in a hat. you remember emma peel. >> not my thing. >> all right. this is someone -- see, you get twitter followers like yourself. >> yerks millennials. >> these are not -- yeah. >> they're throwing you shade. do you know what that is? that's a millennial will do. we'll throw you shade.

>> >> no, is that -- >> they diss you. >> that's a millennial phrase. >> i throw a lot of shade on them. >> yes, you throw shade left and right. throwing shade every which way. talk about some folks throwing shade. new york city's largest public pension is exiting all hedge fund investments. the board of the new york city employees' retirement system did vote. we talked about the potential yesterday to dump hedge funds after consultants told them they could reach their target investment with less risky funds. this flows similar moves in california and illinois. it does seem to be a trend we should be watching. also, new york's public advocate telling the board that hedges have underperformed, costing us millions. let them sell their summer homes and jets and return those fees to their investors. >> whoa, whoa. >> they're throwing some serious shade right there. unaudited data showed the

pension fund's exposure. that'll come down quick. >> when we return, breaking down the battle in brooklyn. hillary clinton and bernie sanders attacking each other's judgment and experience in last night's debate. john harwood has the details next. and later, ted cruz will join us for the 8:00 hour. stick around. we have much more to come today. right now as we head to a break, here is ted cruz taking a phone call from jimmy fallon as donald trump last night on "the tonight show." >> are you watching the democratic debate? >> nope. i'm watching "the princess bride" for the 843rd time. . >> inconceivable. you're missing some great stuff. they just nailed hillary for flip-flopping on trade. she was going back and forth, this way, that way, this way, that way. it was like watching her swipe a metro card at the subway.

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credit report with the swipe of a finger. getting to know you. getting to know all about you... get one-touch credit lock, plus your score and report at transunion.com. get in the know. welcome back. let's check out u.s. equity futures. europe is down. we're catching a bit of a cold. yesterday was expecting, waiting, waiting, waiting for another day like the previous two. or when was it? tuesday and wednesday were pretty good. >> yeah, tuesday and wednesday, right. no -- yeah, tuesday and wednesday. yesterday was thursday. today is friday. >> i just know it's tax day. the most wonderful time of the year. there we are down 26 on the dow jones, down 4 on the s&p 500. down almost 11 on the nasdaq. it was a battle in brooklyn last night. hillary clinton and bernie

sanders trying to win over votes ahead of next week's new york primary. john harwood joins us right how it with more. john, this sounded like it was a bit more contentious than the democratic debates we've seen in the past. >> reporter: it was, becky. it was similar to the previous democratic battles, pitting sanders' idealism against hillary clinton's pragmatism, but it was a little more new york raw. like in this exchange over bernie sanders' signature proposal for breaking up the big banks. >> if you go and read, which i hope all of you will before tuesday, senator sanders' long interview with the new york daily news, talk about judgment and talk about the kinds of problems he had answering questions about even his core issue, breaking up the banks. when asked, he could not explain how that would be done. >> let's talk about judgment. let's talk about super pacs and 501c4s. money which is completely undisclosed. where does the money come from?

do we really feel confident about a candidate saying that she's going to bring change in america when she is so dependent on big money interests? i don't think so. >> reporter: now, the challenge for bernie sanders is he's got to change this game. we've got a new poll out last evening from nbc which shows hillary clinton with a 17-point lead in new york. bernie sanders needs that not only to be wrong, not only to win new york, he needs to start winning new york and other states by big margins to overcome her delegate lead. we don't have any sign yet, guys, that he's going to be able to do that. >> when he pulled the punches on the e-mail stuff originally and said i'm sick of the damn e-mails, that made me think he was innnever going to get as na when senator clinton isn't around.

there's still something to that. big money, politicians, that's an old approach to criticizing someone. why doesn't he bring up the clinton foundation and donations from foreign entities when she was secretary of state? i think that would be too damaging in the general. i still think he kind of, you know, doesn't want to give -- doesn't want to be too nasty because it will be brought up when he's not the nominee. he's not going to be the nominee. he knows that. it's almost like he just likes to have this idealistic, yutopin view and be rushed by a bunch of millennials that think he's god. is he seriously trying to be the democratic nominee, john? >> reporter: we've discussed this before. i think he's stuck in a little bit of a no man's land. he does not have a realistic shot at this point of winning the democratic nomination. as to the strategic choice you mentioned, he's making the one that has the biggest potential

payoff in the democratic primary. it is true that if he went after her on e-mails and on clinton foundation, he could damage her in the general election, but i don't see the payoff for him in the democratic primary. those -- she remains fairly popular in the democratic primary, and that kind of attack, i don't think that would give him anything. i do think bernie sanders at the end of the day wants the left of center side to come together and win the election. he's been pretty clear about that. i don't think he's trying to do that stuff gratuitously. it's just not clear whether any of the attacks, including the -- you know, you gave the big speeches to goldman sachs. he had a funny, sarcastic line last night where hillary clinton said, i called the banks out for what they did. he said, oh, yeah, i bet they were crushed by that. was that before or after you got

a couple hundred grand to go speak with them. >> hey, john, we have ted cruz on in the 8:00 a.m. hour. i'll put you on the spot. what would be the big question you'd want to ask him? >> reporter: you know, ted cruz is in a situation a little bit similar to bernie sanders. he's got a deficit in delegates that's going to be difficult to make up. and ted cruz's challenge is that so many of the party establishment people who really can't stand donald trump who want another nominee don't like him at all. i guess the question is, is it really possible at this stage for him to do anything about that? people have talked about, well, he should apologize to mitch mcconnell for calling him a liar. you know, i'm not sure that would have any particular effect, either on primary voters or on the attitude of fellow republicans in washington, but that's a real barrier for him.

>> donald trump has an op-ed in the wall street journal today that says he has 2 million more votes in the primaries than ted cruz. that's a bigger deficit than hillary clinton versus bernie sanders. >> that's right. ted cruz, ted cruz like bernie sanders has been winning many of the smaller caucus oriented states as opposed to the large primaries. wisconsin was an exception. these new york numbers are very robust for donald trump. he's also leading in pennsylvania and maryland and the other states coming up the following week. so i do think that donald trump has this thing on his racket and if he can, as he staffs up, as he gets people with more experience and delegate selection on his team, he controls his fate much more than ted cruz's. ted cruz has to hope for something to happen. he's got to hope for a jordan spieth moment from donald trump which could happen. >> you got the never trump people that you said don't like

cruz very much and then you have the trump people so mad if it's not trump. that's the whole universe right there. the yin and yang of the election. we want to ask a lot about how he's is going to fix the entire planet in terms of growth because that's what we need. we have negative interest rates. >> he does have a tax plan which is pro growth. >> all right. see you later. when we come back a list of morning movers including viacom after a very new twist in the soap opera. and starting monday groundbreaking ideas and innovative start ups looking to change the world as we bring you live exclusive coverage in miami. follow us on air and join the conversation using #ea16.

stocks to watch today which is actually -- had cnbc first started stocks to watch. yahoo! modified its policies to specific senior executives will be paid severance if yahoo! sells substantially all of its operating business. >> what? >> disc sporting goods expressed

interest in buying it's rival sports authority which will be on sale in a bankruptcy auction. a california judge has ruled sumner redstone won't be deposed in a trial regarding his mental capacity. he owns voting stakes of roughly 80% in via cam. almost 7:00. 6:56. coming up. we'll take a break and then politics in focus. we have former rnc chairman michael steele is here to weigh in on the race. then ted cruz will join us for the 8:00 hour to talk about everything, taxes, economy, banking industry and much more. "squawk box" will be right back. ♪

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>> announcer: live from the beating heart of business, new york city, this is "squawk box". welcome back to "squawk box" everyone. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin and we're just one hour away from our special interview with presidential candidate ted cruz. we'll focus on issues that matter most to your money. trade, tax reform, job creation and state of the nation's economy. make sure you stick around for what will be a great "newshour" of television. let's check out futures. yesterday the futures -- stocks did hold on to gains. we saw some major advances in the previous two sessions. this morning you see a little bit of give back. dow futures are down.

still a very positive week for stocks overall. if you take a look at oil prices, oil this morning looks like it's trading down another 2%. $40.66. we have that doha meeting coming up but expectations are not high for a real deal to be cut. let's tell you what's going on in the headlines. we're an hour away from citigroup's quarterly earnings. the bank expected to earn $1.03 per share. mattel has struck a deal to buy polycom. per share value 13.65, 11% above yesterday's close. and bats ipo is priced at $19. high end of the expected range. first attempt you may remember back in 2012 was a failure for an exchange.

create a little bit of irony. >> technical glitches. >> let's talk politics. hillary clinton and bernie sanders battling it out in brooklyn last night vying for votes ahead of next week's new york primary. this was the ninth and most contentious debate. sanders questioned clinton experience and judgment. here's how she responded. >> talk about judgment and talk about the kinds of problems he had answering questions about even his core issue, breaking up the banks. when asked he could not explain how that would to be done. >> later sanders responded to clinton's claim she stood up to the banks when she served as senator from new york. >> secretary clinton called them out. oh, my goodness. they must have been really crushed by this. and was that before or after you received huge sums of money by

giving speaking engagements for them. they must have been very, very upset. >> joining us more with more on the race for the white house is former rnc chairman michael steele. he's a political analyst for msnbc. we were expecting howard dean but he overslept. he was up late watching the debate. michael thanks for being here. >> great to be here. >> let's talk first of what you thought about the debate last night. how did these two perform? >> it got personal and more up close than we've seen. certainly nothing what we've seen on the republican side. these two candidates are sick of each other. you're at a point where if you're bernie sanders you have to make your points land, they have to count. he missed some opportunities, i think, to come back, to really put her back on the heels a little bit, particularly on the whole wall street receiving money from wall street piece. but the reality of it is, i

think hillary showed with a 17 point lead three or four days out in the "new york post" that she held her own. she kept the discans to the point where she needed it. bernie was fighting up as usual. but he did so well. it was a good debate for him. >> you assume hillary clinton will be the nominee. >> yeah. i just don't see how that changes. nothing changed last night in that regard and when you look at this thing play itself out. what bernie is doing a couple of things. he's positioning to reposition the party. so that elizabeth warren and others of that mindset within the party that progressive ring really have a foot hold. >> pulling her more to the left. >> if he goes for the jugular does it make it harder for her to pull his supporters ultimately? >> that's a very interesting point because -- >> they go to ted or -- >> her supporters are much more inclined to embrace him than the

other way around. his supporters really don't like her. there's not this oh, okay in the end we'll come around hillary in november. that's an opening for someone like donald trump. how many times have we heard particularly in the latter end of this process where you have a bernie sanders voter go well i'm trying to decide between bernie and donald trump. >> the two candidates are pulling very similar voters. >> let's talk about what's happening in the republican party. donald trump has an op-ed in the "wall street journal" today. he makes some incredibly good points. he talks about how mr. cruz loses when people get to cast ballots. he's up by 2 million voters. voter disenfranchisement is 0 not just part of the cruz strategy it is the cruz strategy. >> the last part is the critical part. the first two parts are similar arguments that hillary make being i got 2 million more votes than bernie. i'm able to get the votes i need

when i need them. it's the last piece for him that's the deal breaker. if he goes into that convention and does a walk out with the nomination. >> you are talking donald trump. >> donald trump. if he goes in with hundred or fewer delegates necessary to win the nomination. it's hard for people to walk that back. we'll take those 1100 votes you have and give them to someone else. >> i've seen enough of these -- i don't think donald was peckin >> it's well written. >> you see fingerprints. donald was in charge. he hired the guy. they put their heads together and come up with this. that's what -- the point i made earlier. it's scary to think if he becomes a polished candidate because he's made great strides to almost 40% being just off the wall, say whatever come to mind. if you were to combine that with

these two guys, scott walker -- can they corral that raw charisma. >> manford brings some respectability. there's a reason donald trump brought him in. i watched donald trump last night at the republican gala here in the city and it was interesting because at the ginger did his like 15 minute rift on building buildings here. then he turned his head down reading text. he never does that. you begin to see now, he's seeing himself in the role and doing the disciplined things you need to do. >> we've been searching for an establishment republican. someone who -- you were the chairman of the rnc. >> i was not an establishment

republican. >> you're it. you're it for today. are you never trump or will you vote for trump? >> i'll vote for the nominee. if trump is my nominee i'll fight for him to beat hillary. you either want hillary clinton as president or you don't. >> that's not what the establishment is saying. >> there you go. >> that's your position. >> who would you like to see win the nomination in your party? >> you know i've not picked a horse in this for a very good reason because of the work i do. i try to keep my head clear of that. do a clean analysis. look at the qualifications of everybody on deck. i think the most underrated candidate left standing is john kasich. i think john kasich despite what people say -- >> is he even really left standing? >> that's the attitude and the view that i think underestimates what could happen downstream. you're seeing him sitting in the second chair right now in new york. he's in the second chair in places like maryland. he could do very well in a state

like pennsylvania. the point is he done have a clear path to 1237. that number doesn't work for him. what does work for him is to amass the delegates he needs and to go into that convention hall as the other two at the top cruz and trump go at it, be the guy who everyone turns to and go okay this will work. >> you just pointed out the disenfranchisement. ted cruz has a much better claim to say that look if it's not donald it should be me. >> so he's a better claim only because he's closer to donald trump. >> again the voter disenfranchisement if you're worried about that. if you're worried donald trump doesn't get that, if you give it to someone who has won one state. his own state. >> the most likely guy and even harwood said it the ball is on the racquet for donald trump. >> i'm not discounting that. if donald trump goes in there short 200 plus delegates, then

it's a whole different ball game. >> there's 27 places. if you want a majority in all -- >> based on congressional districts. >> there are 95 delegates. >> add that on and then add pennsylvania. he starts getting on the roll. >> i'm there with you. at the end of the day you need 1237. >> would he say yes as vice president. >> i don't see that as a reality. >> rubio or scott walker >> i don't know. i don't think -- i don't think that would be the way donald trump goes. he'll look to somebody who was on the stage with him. he'll look out beyond that. >> we got cruz on in the 8:00 hour. anything you haven't heard from him that you want to know? >> no. >> no? >> no. ted cruz has been making his argument and he's been doing an

effective job of making a principle conservative argument. the problem he has is two fold. one is, he's got cynics backing him. so the american people saying people back you who say they don't like you so why should i back you. that makes it harder for him to climb up the hill against donald trump. that's the reality of it. the second thing is the way he communicates sometimes, people kind of walk away feeling a little bit disconnected. if he can close that gap with some of the voters out there he can do better in places like the northeast which right now does not look strong for him. >> michael, thank you so much for joining us. a reminder to stay right here on "squawk box" for our special one hour event with presidential candidate senator ted cruz. that starts at 8:00 a.m. eastern just about 48 minutes way. coming up, the dow jones industrial average ending yesterday's session at its highest level since july of last

year. we'll find if earnings are on the move and bulls are in control. we'll talk trade, china, politics and more with the president and ceo of the national association of manufacturers jay timmons. "squawk box" will be right back. with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

the dow sitting at levels not seen since july of last year investors have turned their focus to earnings. still watching oil prices. check out the futures down about 25 this morning. we got weakness in europe also. i don't know what their problem is. joining us now is senior investment strategist at bank of america. i know, dan, i can't help but look. let's look at a one year chart. pretty good looking reverse head and shoulders. people have written in the shoulders don't have to be perfect. you can have lower lows and lower highs but if you do make a nice -- maybe it's time. are fundamentals matching up? look at that. it's not perfect. we haven't got into new highs yet. but that can look like a reverse head and shoulders if we go from here, couldn't it? >> it looks like a monster.

>> a monster head and shoulders, the technical term. if you look at what's happened in the last couple of months we're staring down the barrel of a gun. macro levels were hitting their worst levels since the crisis. the data has turned and things are looking better. right now although this earnings season everybody that comes on your show talks about how this is the worst earnings season since the crisis, but this is the trough. you'll see earnings get better from here. i think the problem is, i think with the 14% rally we had in the markets a lot is priced in. >> three months ago the first quarter estimate for gdp was 3%. 2.7%. >> yep. >> now it's zero. are you telling me you said economic things have improved. what's improved. now we're looking at a zero or possible negative first quarter. things have slowed. >> so they have slowed.

>> first quarter gdp data slowed but it's not just about gdp. look at the trajectory and a lot of improvement in the macro data. part of the reason the gdp is solo. january and february were horrible. look at the move into march you saw -- ism is back up above 50 and any orders are strong. >> retail sales stunk for march. >> retail sales is weak. but for the s&p earnings we're more focused on business spending and exports and that's the stuff that's improved. the dollar has gone from being up 16% basically last year. >> dollar and oil have come under control. it's frustrating. leading economic indicators include stock prices. stock prices went up in march and part of april. so it's almost coincidence. things are getting better in your view and stocks going up. >> a lot is riced in. what's interesting about this earnings season because the improvement of the data was back ended weighted.

it wasn't until march and april you see things improve. commentary will be interesting to hear. you won't see it in the numbers. we think earnings will be down 4% or 6%. the commentary you'll get more glimmers of hope. things are improving. maybe not fully include in their guidance because they like to sand bag things. >> you watched yesterday? that's what we talked about yesterday. sand bag. >> the percentage has gotten higher because guidance. you'll get in term of the commentary you hear they will say last three weeks of the quarter things were good and there's momentum into april. i think that's the kind of commentary that maybe gets the market to grind higher. again i think as we look out to the rest of the year there's a lot to be worried about. valueiations are at 11 month highs. looking at the calendar you have the possible fed hike in june. you have the eu referendum

coming a few weeks after that. political uncertainty coming in to play. there's a lot. we think there will be a lot more volatility and i would expect to see at least 5%, 10% pull backs. so you want to fade in the near term. >> fade. shade or fade. if you miss the expectations, if you maid the expectation then you throw some shade. how about that? >> i don't know. i can't fake it. so then you haven't even talked about something that scares me and that is germany is at 15 basis points right now. you got a refugee problem and they have a terrorism problem. and, you know, for that -- those are the black swans. you gave me enough to worry about without any of that stuff going wrong and that stuff can go wrong at any time. >> i don't know use people hate

to invest in the u.s. investors, based on what we see investors have been understanding weight in the u.s. for 14 months. people pile money in europe that they hadn't had the rally like the u.s. had. one of the biggest issues we're worried about is credit. credit has gone up a lot in the lower quality areas of the market. record areas of high yield leverage and whatnot. if you're worried about credit, europe is way worse off than the u.s.. i don't understand this hatred of the u.s. in favor of europe. >> u.s. needs europe and needs china. they need us. we need them. that's the scary thing about twitter. i hate that first tweet shots fired in some european city and unclear -- you just dread because you have paris followed by belgium and that's not going to help the then recover at all.

>> absolutely. on fleek. >> how do you spell that? >> f-l-e-e-k. >> that's not a word. >> that's what they say. >> how old your dan? your 30? >> i'm 36. >> is that a millennial. >> i'm at the cusp of being a millennial. i never heard the word. >> do you live with your paint. >> do you have a bun. >> peopler with the man bun. >> anyway, work with me. you're not. how do you know this? you hang out with them. >> you're on fleek. >> i'm on fleek. like that word. >> i'll work on fleek.

coming up crude prices under pressure this morning. big weekend for producers when they meet in doha and could set the stage for some monday morning volatility. >> how do you figure out -- >> all these praises. you could be a goat, greatest of all time. i'll going to call you a goat. >> i'm an old goat. dan you'll join us to discuss the importance of this weekend's meet up and what it means for oil prices. >> announcer: now for today's aflac trivia question. what is the longest-running broadway musical. the answer when "squawk box" continues. i help pay the doctor, ain't that enough for you? there's things major medical doesn't do. aflac! pays cash so we don't have to fret. something families should get!

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phone they hear please cut off your left arm. he elaborated on twitter after negative feedback amc would designate certain auditoriums an text friendly. we bring you live coverage from the emerge conference in miami. join the conversation usin using #ea16. >> when we come back what investors should take away from this weekend's meeting of oil producers in doha. can the oil glut be dined. we'll bring you new results from cnbc's oil survey. ted cruz will join us at 8:00 a.m. as we head to a break take a look at u.s. equity futures. dow futures down, s&p down and nasdaq down.

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among the stories that are front and center at this hour,

we're throwing shade, on fleek. >> not on fleek. >> we got some economic, key economic data to tell you about wrapping up the week. the latest futures on industrial production expected to post a small decline. and then at 10:00 the mid-april consumer sentiment from the university of chicago expected to register an increase. we should tell you that dick's sporting goods interested in buying sports authority. part of the company's bankruptcy. am i a creditor? >> get in and use it. >> i have to check it out. it's diesel emission scandal weighs on volkswagen. it report ad drop in marsalis. it's 16th monthly drop in 18

months. i thought netflix, that you just turn on netflix and watch. >> nope. it means you're -- >> you're on fleek. you're on fleek. anyway. cnbc's exclusive oil survey polls analyst traders in major energy funds to get the latest pulse on energy fundamentals, pricing and strategy and new results are now out just ahead of sunday's crucial producer meeting in doha. you got your plane tickets? >> no, i don't have my plane tickets but i'm still blushing about the conversation about fleek and try to focus on the results. our survey revealing, joe, there's little consensus on what will happen in to haddoha. half of our participants said there's less than a 50% chance of this freeze agreement

happening. some think something could happen but don't know what. so that's why this risk premium on oil. is a freeze enough? do we get a freeze? a cut? a cut isn't likely. 60% polled said a freeze is enough to support oil prices over $40 a barrel because it shows producers are getting serious about some sort of cooperation. now barclays is out that outcome isn't as important as the commentary. that could concern some shorts in this trade. a lot of short covering has happened in the last few things. one thing everybody agreed on saudi arabia is the swing country. no question. it has the most influence. then russia, iran and venezuela. implications far more important even than oil prices as they impact regional stability. tense negotiations yes. have side deals been cut in an advance? maybe. we just have to wait and see.

>> when they say something could be done that could be the framework for an agreement. that counts as something? >> right. there's an opec meeting in june. we could see some of this commentary come out. some sort of coordination leading to an effort. at that point tough to say right now. >> okay. stick around. for more on expectations, let's bring in dan yergin. you just heard this. do you agree with our assessment here at the table? >> i think the assessment was interesting because it was a split assessment. i'm in the camp that there will be some kind of loose agreement, doha is not one stop shopping. it's more like a bridge to the future to get to the stabilization. the thing you have to keep in mind the position of these countries. in 2014 opec revenues were about a trillion dollars. last year they were about half a trillion dollars. this year they are on track to

be down another 20%. these countries are under tremendous pressure. if they walkway with nothing from do has, it's going to be very costly for all of them and i think that's upper most in their mind. so some kind of loose agreement is probably the most likely outcome. >> jack, you mentioned this idea of side agreements. side agreements maybe. who is in cahoots? when they have these private side deals who is having those deals >> right now i think the key players are russia and saudi arabia. >> are they in cahoots together? >> they could be. the saudi arabia oil minister would deny. russia wants the market to believe they are having these conversations. you have the oil minister from saudi arabia coming out and saying a cut is not happening. >> that's right. nobody is going to cut. that's just off the table. but i think one of the striking things is this new sort of detant between russia and saudi

arabia this dialogue. a lot of trips back and forth. it has to do with the price of oil. has to do with the shifting geopolitics and nuclear agreement with iran. that's helped to strengthen this dialogue. the russians started the freeze conversation and when it was first on table people dismissed it. 15, 16 countries now are going to get-together and if they walk away with nothing, a lot of prestige will be left behind. >> we had a guest on the show earlier this week who came out and said that wti crude would be trading at $85 a barrel within the next year. said it was a no brainer. this year. by the end of this year. does that make sense to you or is that absolutely absurd and crazy? >> i think you would have to see some major political event. venezuela shut down as it was in 2002 for something like that to happen. at least in our view based on the fundamentals, kind of being

$40 to $50 range in the second half of the year. kind of already there now. which is why doha freezes like a bridge to get there. but just on the fundamentals when you look at the inventories there's going to be a lot of oil that has to seep out of those inventories. >> that's what our people said. 40 to 50 would be the range you see as we go the end of the year. some people were looking for 60 to 70. it won't happen. what will happen deal or no deal in doha we stay in this range of $30 to $45. freeze current at levels we're still producing. >> it can go down again? >> if they walk away -- it's interesting about their meeting in doha. something is happening here in washington, imf and world bank and concern about world growth. if you had a further slow down in world growth, perhaps plus no agreement then you see prices down. >> wouldn't you say, dan, that

there will be nowhere in the world where there's a negative-interest-rate if oil is at 35? >> i think that's right. i have to reflect on that. >> right? negative interest rates, what the hell is that? that is globe that really is struggling with generating any type of inflation or growth. >> right. that's one reason we haven't seen because interest rates are solo, we haven't seen the impact of low oil prices as a stimulus because there's not much room to cut interest rates. >> different world. it's a world where -- negative interest rates and $30 oil makes sense. negative interest rates and $85 oil doesn't make sense. >> we got to run. daniel thank you. jackie, thank you. go big red. when we return the state of u.s. manufacturing national association of manufacturers ceo

jay unttimmons will join us. in the meantime take a look at the futures at this hour. weaker this morning with the dow futures down by 25 points. still the markets are on tap for a strong week for stocks. s&p futures down by four points, dow by ten. ted cruz less than 30 minutes away. stick around. "squawk box" will be right back. over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks.

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welcome back. to the totally dope "squawk box". we're looking at futures. >> on fleek. >> we're on fleek as much as we can. this can get out of hand. >> my head will explode. >> markets throwing shade. >> no development in any movie too insignificant to cause a term that becomes used by the entire group of millennials. >> no different than any other generation that went before. >> the term yaz came from somebody seeing lady gaga walk out of a building and video. >> you're a goat. >> i am a goat. >> explain what goat is. >> greatest of all time. >> that's from l.l. cool j.

goat. now i know everything. i won't forget. more than 12 million men and women in the united states hold manufacturing jobs. they are key voting bloc in the presidential campaign that's taken on technology, trade and taxes. jay timmons is president of national association of manufacturers. jay, thanks for being with us. you know, the read we get in terms of manufacturing right now is that things are not great. it's been a difficult time. if you look over the last several quarters. would you agree with that? >> we've been facing a lot of headwinds and no doubt there's a lot of uncertainty. and frankly manufacturers are looking forward to candidates, talking about the policy platforms that they have to improve the manufacturing economy right here in the united states. >> so, when you listen to the cane, when you listen to the pitches they have what things do you think offer promises to your base? >> to be really frank about it, becky, what we hear, i think hat

the american people hear are a lot of talk about issues that are not related to growing a good business economy, growing a good manufacturing economy. focusing on issues or personalities that really have nothing to do with growing an economy. what we want to hear is we want to hear a discussion about tax policy, trade policy. we want to have a robust discussion about infrastructure investments. and many other policies that are related to manufacturing. frankly we're just not hearing it from the candidate in any significant way. >> we do hear a lot about trade from many candidates. donald trump has talked about what he'll do. >> we hear about trade in a negative way which is unfortunate. if you think about customers, people that you're trying to sell your products to, you think about 20 customers in the world, 19 of them live outside of the united states. we want to be able to access those customers and what the candidates are talking about

doing is really very draconian. they are talking about doing away with trade agreements and not, not taking care of the fundamentals of trade policy, like the he xm bank reauthoration which took a year to do and still in a very frustrated state in the senate. >> xm bank used to be a shoo-in. now both sides are looking at it askance. >> this populist rhetoric taking off is very destructive to who we are. the xm bank has been in existence for 80 years. it has done great work in helping to expand export markets for u.s. products all around the world. we're competing with 70 other countries who have banks of their own. and now we have politicians saying oh, we don't need this any more. that's preposterous.

we need candidates thinking rationally about the policies that are going to make us grow and thrive as a nation instead of this populace rhetoric that they get caught up. >> the populace rhetoric is there because of what's happened to the manufacturing industry. >> that's part it. >> since the peak of manufacturing jobs in 1979, i think we're down 37%. those jobs are gone. and that's something that american households feel across the country. >> first of all, they are not gone. they should be back. and why should they be back? they should be back if we were actually strong enough if we had the back bone. enough, if our policymakers had the back bone to actually adopt the policies that would allow manufacturing in this country to thrive. we talked about trade. we talked about the importance of trade agreements. we need to have tax policy that's going to incent investment in job creation in this country. we need to have a consistent investment strategy for infrastructure in this country. we need to make sure our health

care costs and other cost burdens to manufacturers and to businesses throughout the economy are lowered so that we incent businesses to invest here and kraeft businesses here. >> we've had the trade policies since the early '90s the trade policies have come. do you think it's more the tax problems that have created this -- >> tax policies are clearly a problem. we have the highest corporate tax rate in america. we have small manufacturers paying at the individual rates, some of the highest rates in the history of our country. taxes are draining the ability of businesses to invest in this country. but i wouldn't minimize the trade argument. because we have had trade agreements. but right now we're looking at the transpacific partnership where we have the potential to access markets throughout the asia-pacific region. if we don't set the rules of the game in the asia-pacific region china will. those are the facts.

that's the reality. we have to start paying attention to it. that's why we've come out with our 11-point program at the national association of manufacturers competing to win in a global economy. and we want our candidate, if they want to be a manufacturing candidate, then they need to take a look that document and start talking about these issues in a real and credible way. >> you say you don't like what you've heard from any of the five major candidates who are there but if you had to pick one, where would you lie >> i'm not saying that we don't like what we've heard at all. each candidate has talked about manufacturing. some have talked about it in a positive way. some have talked about it in a very negative way. there are some policy proposals that are worth considering. your next guest, your guest at 8:00 has some interesting tax proposals. but what happens in these contests so often is candidates get distracted with personalities and issues that are unrelated to the growth of an economy. a lot of times they start to

concussion on negative social issues that divide our country instead of uniting us around a common purpose of building our economy, strengthening our communities, and ensuring that america remains an exceptional nation because of our manufacturing base. and that's what we want to hear from the candidates. we want to hear a complete focus on what it will take to grow our economy and strengthen our manufacturing base. >> you said you liked ted cruz or thought his tax plans were interesting. you like the flat tax at 10%, you like the value added tax or you do not like those plans. >> i think it's important to have a discussion about our tax rates. again we have the highest tax rates in the world on the corporate side. we have high taxes on the individual side. all candidates acknowledge our tax rates and tax base and tax system is uncompetitive in a world economy and we need to have a discussion, a very thorough and robust discussion about what it takes to fix that. so i'm encouraged that some cane

are at least willing to have that discussion. >> jay, thank you for joining us today. >> thank you. great to be here. all right. did you read this? there's a gentleman who immigrated to this country and then worked on wall street but he just -- did you thread? >> i saw it. >> takes an immigrant like me to parse the poison that bernie sanders is peddling to nation's youth in this country. take someone who has experienced socialism's failure firsthand, first as a small child later as a young adult to see why sanders is succeeding because we elder, immigrant and native born alike have failed to teach our children and grandchildren about the economic history and false promises of socialism that infests our world and left millions of people worse off. i just -- more than any other factor, listening to bernie

sanders talk makes me crazy thinking he has 90% of these people under some type of skull that no nothing -- >> what happens if i told you that the republicans built bernie sanders. >> what if i told you barack obama built the current republicans? >> tit for tat. >> go back to george bush built obama. we can go back. you know where we end up? >> ted cruz at 8:00. in fact when we come back we have some stocks to watch. plus the great escape. a chimp making a dash for freedom in japan. even putting on a high wire act along the way. that story is next.

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♪ check it out everybody som video gone virtually. a chimp fled a stein northern japan and then tried to avoid capture by climbing an electrical pole. he was free for two hours before he was swhoot sedative arrow and fell into rescue blankets. he was unharmed and is recovering from the sedatives. he's not feeling at authenticate great today. let's take a look at some stocks to watch this morning. costco raised its quarrel dividend. and voice and video services company polycom being bought by

mobil technology company. the price is $2 billion in cash and stock. it's about 11% above polycom's thursday close. joous department of agriculture will be buying up to 30 million pounds of wild blueberries from the state of maine to help stabilize price. prices have dropped in 50% threatening the state's biggest industry. agency expected to pay up to $13 million to prop up the fruit. coming up the interview morning, republican presidential candidate ted cruz is here. for an hour. his plan to grow the economy if he were to win the white house straight ahead. joining us right after the break. we'll be right back.

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this is a special presentation of "squawk box". decision 2016. republican presidential hopeful ted cruz joins us in studio for the hour. taxes, spending, jobs and his plan to jump start the u.s. economy. china, trade, immigration and corporate inversions. the fed regulation and too big to fail. no topic is off the table.

as the final hour of "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box". >> welcome back to "squawk box" everybody. this is cnbc first in business worldwide. i'm becky quick along with concern ken and andrew ross sorkin and we're excited to have senator ted cruz in studio with us this morning. senator, thank you for being here. great to see you. >> good morning. >> we have a lot to talk about and get to plenty of topics. let's take a quick check on the markets. u.s. equity futures are weaker this morning but this comes after a couple of days of big gains. dow down by 31 points. s&p down by four, nasdaq off by 11. oil prices are weaker. they were down by 2%. you can see the decline of 2.25%. wti down by 92 cents ahead of

the doha meeting. >> quick corporate news. exchange operator bats global market pricing their ipo at $19. shares expected to begin trading today on its own exchange. the company hoping this goes better than last time. remember their attempt to go back in march of 2012, technical malfunctions and errors impacted trading of that stock on their own exchange. trades were eventually cancelled. they tested to make sure they can handle the volume. earnings out from citigroup, the bank earning $1.10 per share. seven cents above estimates. revenue of 17.6 billion was above fark despite a sizable drop in investment banking revenue. we'll keep an eye on that four. they passed their living will test, one of the only big banks to do so. yep. the new york primary is fast approaching, according to the

latest nbc/wall street journal poll donald trump leads with 54% followed in this particular instance by ohio governor john kasich at 21% and senator ted cruz at 18%. joining us now for the next hour, republican presidential candidate senator ted cruz. pleasure to have you in here, senator. welcome. >> joe, great to be back. >> growth around the world, economic growth. >> yep. >> almost cures all ills. cures the sentiment, feeling people aren't getting ahead, helps you pay down deficit. helps everything. we're in a weird world now. i check for you this morning. the german ten year is at 15 basis points. japan there are negative interest rates. so it's not just the anemic recovery in this country it's a global phenomenon that we've never seen the likes of and i don't cho,000 explain it. i wonder if you know how to explain the cause and cure? >> joe, you're preaching to the choir and i wish that more of

the presidential candidates would focus on growth. you're right. growth is foundational. my number one priority as president would be economic growth. every other problem we got, whether it's unemployment, the debt and deficit, whether it is strengthening and preserving social security and medicare or whether it is rebuilding our medicare and keeping us safe you got to have growth to make it work. we have been trapped in stagnation for the last seven years. if we don't turn that around nothing else gets fixed. and it's driven by a number of factors. historically since world war ii our economy has grown on average about 3.3% a year. and yet from 2008 to today it's averaged only 1.2% a year. if we stay at this level of stagnant growth 1% or 2% of gdp growth these problems are not solvable. that's why we need an economic agenda. my economic agenda is focused directly on growth. if you get back to historic

levels, 3%, 4%, 5% growth suddenly the federal budget numbers turn around dramatically. by far the biggest factor impacting. >> the reason i referenced germany and japan with negative interest rates is because it seems to be almost a global problem and you're not going to be president of japan. i don't know. >> i think that's a safe bet. >> or europe. but almost seems like -- and i for seven years argued a lot in our country self-inflicted, regulations, obamacare, taxes too high. but when people argue with me they say this is a global phenomenon that came -- or it's demographics, people are too old, not enough young people to pay for people ageing. there's something around the whole globe that makes growth more difficult. how do you fix that? >> there's a clear cause and effect if you look back through history. every time we have out of control spending and taxes and regulation, we get what we got

now. we get this stagnation. if you look at the previous four year period where gdp growth averaged less than 1% was 1978 to 1982. it was coming out of the jimmy carter administration. very similar policies. and if you look at how we fixed and in fact you can go back in 1920s with calvin coolidge he limited taxes and regulatory form. those are the two important leverages. in the 1960s john f. kennedy did the same thing. in the 1980s ronald reagan did the same thing. when we passed tax reform and regulatory form and reduced the burdens on small businesses -- and small businesses are critical. they are the catalyst. the result has been record shattering growth. we just need to do what works. >> can i make an argument to

you. when you look at reagan and i don't disagree. one piece was keynesian. it wasn't on infrastructure but on defense. that's a huge piece of this puzzle. >> but it wasn't the defense spending that jump started the economy. if you look at reagan, he came in, cut taxes, pulled regulations back. we were in the middle. i talked about that last four year period '78 to '82. you know what gdp growth was in '84. 7.2%. those are crazy numbers. those are numbers we see in developing economies that sadly most folks say we could never do that again. >> talk about living through reagan. you were a young man probably -- >> i was teenager. >> i was in the workforce. like someone flipped a switch in 1980. it really was. it was weird. the hostages came out. like someone flipped a switch.

as far as the defense spending we did get a peace dividend after the cold war ended from -- >> i'm just suggesting -- >> those are numbers showing that, indeed, you know, defense spending went up but all i remember is that -- >> but also the federal reserve was making some very big moves at that point. >> not compared to now. >> let me agree with you. i didn't focus directly, i didn't say the lever was spending. you're right. reagan went in. he wanted to cut spending. he never succeed. he slowed the rate of growth but congress never went along with him in cutting spending in any meaningful way. the two powerful levers is tax reform and regulatory reform. monetary policy as well matters enormously and we've had the fed, we've been on this roller coaster with the dollar where it's up and down. commodities go sky-high. go down.

sky-high. we have strong dollar. oil has plummeted. steel makers in pennsylvania see their price going down. farmers see their prices go down. on money we need monetary stability. >> part of what's happening is it's a much more global economy. you got a central bank that has to be very cognizant of what the ecb is doing, what the bank of japan is doing. if we raise our rates at a time when they are at negative interest rates that's going to make it much worse and go to exactly what you're talking about. >> i think monetary policy should not be targeting a strong there are or a weak dollar. >> they will claim they are not. >> the problem is the history of the fed has not been very good in terms of being smarter than the market. and i think trying to guess what's happening in the market, i think we're far better having a rules based monetary policy. ideally with some goal so you have a stable dollar. you know when you invest a dollar today you know that the

dollar will keep a consistent worth rather than fluctuate wildly. >> i guess my point and then back to joe ace point about the growth stagnation around the globe, what explains that? >> well some of it is many countries in the globe have followed the pattern of the united states of hammering small businesses with taxes and regulation and you end up with a spiral. that gives an -- >> might have led the way. i don't know if they followed. europe, they invented structural -- >> now bernie sanders tell us how wonderful sweden is. >> we've been talking about that today. the notion that there's this big sum of money and greedy corporations and greedy rich people pull out of that. they don't generate any of that wealth or growth or jobs or tax receipts, all they do is take. but 51% of the country is buying in to that. what have we done wrong? >> you're telling me you don't believe it when hillary clinton tells you businesses don't create jobs?

>> that's another one. or you didn't build this. i don't believe that either. >> the catalyst of our economy is small businesses. two-thirds of all new jobs come from small businesses. if you want to have the stagnation we have it's very simple. you do what we've done the last seven years. slam small businses with crushing taxes. yesterday i was in buffalo, new york. i met with charlie the butcher. he's got seven restaurant, by the way, an incredible sandwich. and i remember visiting with charlie. great example of a small businessman. he was talking about the effect of $15 wage here in new york state. he said listen i got seven restaurants. i want 20. i could have 20 but i can't afford at this regulation. how many jobs are you talking about if you added another 13 restaurants. he said 160 jobs. this was conversation i had with him just talking to him, that success replicated in small businesses all across the country and so if i'm president

my priorities will be lifting the tax burdens and lifting the regulatory burt reynolds so small businesses -- we can go from those seven charlie the butcher shops to 20 and that means -- the people who are benefiting. it benefits charlie. he's a ceo. he'll do better. what it really benefits is all the teenagers, all of the kids who are starting. it was interesting charlie told me we used to hire teenagers. we don't hire them any more. >> why >> because the labor costs are too high. we can't afford to take in an unskilled teenager. we hire more skilled workers. he was explaining that. i thought back to 1957. 1957 was when my father came from cuba. and at the time he was 18. he couldn't speak english. and the first job he got was washing dishes making 50 sense -- cents an hour. the reason he got that job is because he couldn't speak english. he started with that job making

50 cents an hour. then he learned english and then became a cook made 80 cents an hour. couple years later his next job teaching assistant and then hired at ibm as a computer programmer and went on the start his own small business. that journey, millions of americans have traveled that journey. if you don't get on that first running, washing dishes, your don't get the second job, the third job, the fourth job and what we're doing now is teenage kids like my dad who are not getting hired. >> two questions. should thereabout a minimum wage and if so what? then what do you do about all of the people who this is not the first running, it's become the last running? >> you know very few people in the marketplace for whom that's the case. if you look at minimum wage jobs they tend to be entry level positions. every time we raise the minimum wage, predictably what happens is a significant number of people lose their jobs and

almost always low-income. often teenagers, african-americans and hispanics. using my father as an example. if someone had come in and jacked up the minimum wage to $2 an hour, they would have fired my dad and bought a dishwasher. a point i make to people all the time, you have now all these democratic politicians offering higher minimum wages and as you know the first principle of economics is there's no such thing as a free lunch. if you jack up the minimum wage anyone who is just starting and can't produce that level of activity would lose their job. >> would do you away with the minimum wage >> minimum wage systematically hurts the most vulnerable. i think it's within the state constitution to have a minimum wage. i think it's bad policy. one observation i make to folks. i say, look, next time you go to a fast food restaurant and start ordering on an ipad you're seeing the minimum wage. a teenager got fired because as

you know in any business you got a trade off between capital and labor opinion you jack up the labor cost they decided it was cheaper to put capital in there, an ipad. >> isn't that a microcosm of the ultimate problem. technology will reduce so many of these jobs. >> we shouldn't accelerate it by having government mandate that low-income workers be priced out of the market and not get there. >> they tried that with max helped room. charlie the butcher, the plumber, you're on to something here i think. charlie the butcher this time around that might be the guy to keep bringing up. we're going to break. i wish in my mind that the united states could have changed the dynamic of the entire globe over the past seven years. there are other people that said the globe was so slow we couldn't do any better than 2%. i would like to think if we

didn't do 3, 3.5 -- we're big enough to have done it in the past. >> i think we really can and after we come back from break we can talk about how we can change it and change it dramatically going forward. >> senator cruz is with us for the hour. we'll slip in a quick commercial break. when we come back we'll talk about his tax plan, entitlement and tackling the u.s. deficit. stay tuned you're watching "squawk box" on cnbc, first in business worldwide actions speak louder.

something we'll show you. through small things, big things, and spur of the moment things.

. welcome back, everybody. the presidential candidates laying out their tax plans as the nation's debt inches closer towards $20 trillion. our special guest this hour is gop presidential candidate senator ted cruz. and, senator, we haven't touched on the taxes yet but this is a hugely important issue and your tax plan is fairly different from a lot of the others being proposed. you're looking at a flat tax and a vat. talk about that. >> today historically tax day. we got to monday. maybe a couple of days more. today is the day that tends focus the minds on the burden coming from the irs, the burden

coming from our taxes. my tax plan is simple. simple flat tax. for a typical family of four, first $36,000 you earn you pay nothing. zero income tax, zero payroll tax. nothing. above $36,000 you pay a simple flat tax of 10%. no longer is a hedge fund billionaire paying a lower effective tax rate than the secretary. everybody pays the exact same. no longer do you have differential rates between ordinary income. short term and long term cap gains doesn't matter. everything is 10%. people allocate capital based on where it's efficient rather than hat the tax laws say because the tax laws are neutral to everything. on the business side, on the business side we abolish the corporate income tax. we have the most punitive corporate income tax. abolish the obamacare tax. abolish the payroll tax which is

the single biggest tax most working americans pay and abolish the death tax on farm erosion, ranchers and small businesses and replace all of those with a simple 16% business flat tax and the effect is an incredible catalyst for job creation and wages going up and bringing jobs back to america. that's my priority. high priced jobs coming back to america, wages going up for everyone. >> as a taxpayer i love everything you just said but if you look at the different organizations that have scored this, looking at brookings, right leaning organizations, left leaning organization, and they come up with anywhere from $4 trillion to $16 trillion additional deficit adding up from all of these. what do you say? >> i suspected you might say that. i printed out a comparison of tax plans that was done by the tax foundation. tax foundation is a nonprofit.

>> listed as a little more right leaning. >> but it's nonprofit, nonpartisan and scores everybody's plans. if you look at at any time way they scored in terms of the cost. the static cost is $3.6 trillion. a lot of money. scoring is static, assuming that cutting taxes has no impact on the economy. that makes no sense. that's an ali in wonderland scoring. if you score it with dynamic scoring taking into effect what happens when you cut taxes, then the total cost of this plan is $768 billion. less than a trillion. if you contrast that, for example to donald trump's plan, donald's plan costs over $10 trillion. >> bernie sanders is off the charts. >> it is. and the difference is even though donald's is more than ten times as expensive as mine is, my tax plan produces more economic growth, 4.9 million new jobs. coming from this capital

investment increases 44%. one of the big reasons is that any business when you invest in capital it's immediately deductible. no longer do you have complicated de complicated depreciation tables. you make an expenditure you immediately capital squeeze it. then impact on after tax wages take home way. every income group sees a double digit increase in after tax pay. the average family in america under the cruz simple flat tax will take home $7600 more. that's real money that makes a difference for someone struggling to make ends meet. >> what do you say to the person a flat tax resultly regressive on the poor, right? and that it ultimately actually would exacerbate inequality not solve it. >> i would say number one, if you're concerned about income in

equality, we know what doesn't work. the obama-clinton approach. they talk about income in equality. it's increased dramatically in the last seven years. the top 1%, the millionaires and billionaires, today they have a higher share of our nation's income than any year since 1928, the year before the great depression and great stock crash. those who walk the corridors of power in washington have gotten fat and happy. the rich have done great under big government and the reason is simple. big business gets in bed with big government. if you have lobbyists and accountants and lawyer you can game the system. >> a lot of that is the fed policy. >> the fed has definitely contributed to it but it's also -- you know, it's also lob jig. let's take, for example, you were talking about big bank earnings at the top of the show. let's take dodd-frank. dodd-frank was sold to the american people as stopping too

big to fail. how has that worked out? the big banks have all gotten bigger. they are printing money. the people who got hammered is the little guys. small banks, financial institutions going out of business at a record pace. the point i make that's not accidental. that wasn't an unintended side effect. the lawyers and lobbyists for the giant banks were in the room with the democratic senators writing dodd-frank and here's the game washington plays. when they put a massive regulatory burden on everyone the big guys can absorb that cost. hire 100 more accountants and lawyers. but the little community banks their competition predictably gets driven out of business. my to discuss on the little guys. i want more and more small businesses, small community and by the way, there's a multiplier effect. because the giant banks by and large are not the key lend towers small businesses. little community banks lending to charlie the butcher.

and what that means when you drive community banks out of business you're also starving small business. >> jets your rivals say here you are in new york city trying to raise money from executives at the biggest banks. >> we'll take money from anyone. andrew i would love a check right now. $2700 go to ted cruz.org. >> touchet. >> the fed had to do what it's done because there was none of the growth initiatives ever instituted over the past seven years. just more regulation not less. there's been nothing done grease the skids for the private-sector. to stay at 1.5% we needed qe 1, 2, 3, zero interest rates to stay at 7.5% to conjure up animal spirits by raising asset values and rich people are the ones that get the asset value that accrue the benefits. one vicious circle.

you don't do what you need to do fiscally and then you're stuck with the only game in town. >> the problem with using monetary policy, it is a very ineffective way to juice the system because you create bubbles. so you're right. the fed has for those with assets has driven up stock price, driven up asset values. that's not built on anything real. not built on an increase in the intrinsic value of those assets just based on playing games with money which means a crash will be coming. it's far better if you want to drive up the economy and jobs it's far better to reduce the burdens on small businesses where you create more jobs than we're producing more. that's growth. i want asset values to go up because there's more production because it's worth more. >> your plan, andrew let's try to come up with a probability of getting something like that through. we can even do anything at the edges.

you're going get rid of everything -- what's the prospects of that happening in congress. >> challenging. >> how would you do it? >> let me point to a historical analog. getting this done is not easy. could i get this done in today's congress? not a chance. let's go back to the last time we had this kind of stagnation which is the late '70s and we passed major tax reform which produced incredible economic growth. 1981 reagan came into office and tip o'neill a democratic was speaker of the house. tip told reagan don't even bother to send your tax plan over. it was dead on arrival. those were the words tip said. tip said i got 20 democratic votes to kill it. remember we had a democratic house. now reagan didn't saunter down to capitol hill and poor tip a drink and use his legendary irish wit. that wouldn't have done it. tip wouldn't be persuaded by blarney.

>> it helped. they had a relationship. >> that's a wonderful thing. i'm very glad to have a drink with anybody. look i'm nearly half irish that makes me happy and i'm also have cuban so if we light a cigar not a bad mix. >> 3/8? >> half cuban, 3/8 irish, 3/8 italian. volatile mix. what reagan did instead is he took to the air waves and took the case to the american people. he took the case to the american people. if you want to turn around the economy we got cut taxes. we have to simplify the tax code. he made the case to the people. the switch boards lit up. millions of calls came in. tip saw his 20 votes become 19, 18, 17 and disappear and reagan passed a tax rate. he cut it to 28. if you suggested that in 1979. if i said andrew i'll cut the

top marginal rate from 70% to 28% and joe asked what are the chances of doing that you would say it's challenging. that would have been a polite euphemism. reagan under stood make the case to the people. >> we need to talk about a value add tax. democrats and republicans hate the idea for different reasons. coming up much more, we'll talk to the senator and we're also going to talk about china, trade, immigration, the banks. stay tune you're watching "squawk box" right here on cnbc, first in business worldwide. back in a moment. but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

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these are the hands, the hands that drive commerce, that build business across borders. these are the hands of pitney bowes, the craftsmen of commerce. ♪ ♪ don't stop me now ♪ don't stop me now welcome back to "squawk box" everyone. we have much more with republican presidential candidates ted cruz. first a quick round up of today's top stories. citigroup posting better than expected earnings and revenue. take a look at the shares. that stock up by better 2.25%. oil prices falling this morning ahead of a producer meeting in doha. on the agenda a production freeze. a lot of questions whether

anything will get accomplished. why we've seen a pull back in crude. and bats global markets pricing its ipo at $19 a share. shares are expected to trade today on its own exchange and the company is hoping it goes better than the last go around back in 2012 when technology motorcycle fu malfunctions impacted the stock. now back to our news maker of the morning met life shedding the too big to fail label in court this morning. gop presidential candidate ted cruz is spending the hour with us. we'll talk a lot about banks and wall street and all sorts of things. i want to start with this. you were prepared to shut the government down in 2013. and there are a lot of people on wall street and i know you're here and trying to raise some

money in the city who thought that was absolutely crazy. what do you tell them about your willingness to compromise and also your willingness to put what some people thought was the government's credit rating and everything else in the economy in jeopardy? >> well, look on the question of compromise, my approach is the same as reagan's. regan said what do you do if they offer you half a loaf. you take it and come back for more. i'm perfectly happy, i said this since the day i was elected to compromise with anyone. i'll compromise with martians if they are willing to sling the size of government and reduce the burdens on small businesses, willing to protect the bill of rights. what i don't support is compromise that goes backwards and makes the situation worse. i wrote a book last year called

"a time for truth." the opening chapter is entitle ed "mendanacity." they read it. it takes 15 minutes to read. not a very long chapter. their view is different. i simply describe what happened with the debt sealing and they are astonished how bad it is. here's the problem. you think about it. we now have a republican majority in the house. a republican majority in the senate. that got elected promising the people we'll stand up to these misguided policies from obama that had been hurting people for so long. and yet at every juncture, the batles identify had at every juncture they believe you can't stand up to obama. you pick your batles. i fought obamacare, amnesty and

the debt because i think those have the bang for the buck and leadership consistently says no, no we can't fight here. we can't fight here. we can't fight here. you mention ad shutdown. it's actually how leadership essentially capitulates. leadership said publicly we'll never ever allow the government to shut down under any circumstances. now, let's suppose you're playing poker. you're playing poker with me and i say if you ever raise me i will fold. how is the rest of that game going to go? you'll take every bit of my money because i told you what i'll do. here's what obama does on every single negotiation. republican leadership has told him if he just whispers the word shutdown republican leadership capitulates on everything. funds his illegal amnesty, fund his program to bring syrian refugees, muslim refugees after the fbi told us they couldn't vet them to make sure they

wouldn't terrorist. obama said shutdown and they said oh, no we can't do that. in any business deal another example you're buying my company and i tell you and drew i'll sell my company to you no matter what it doesn't matter the price. you'll offer an awfully low price. >> to the extent that we're in a city of deal makers on wall street here, your ability to make a deal or in this case not make a deal. >> look i spent my career before i was in the senate as usa supreme court litigator, representing the state of texas, representing fortune 500 companies before the federal court, before the u.s. supreme court and winning over and over and over again. winning landmark 5-4 victories in front of the u.s. supreme court. but to make a deal, you know, it's worth asking what is worth fighting for? let me give -- >> when you talk, though, playing poker, i think there are people on wall street and people who understand finances and worry about things this is more

like playing russian roulette. >> let me go the debt selling. the debt selling periodically congress raises the debt sealing and usually negotiation that accompanies that. the last time it came up, president obama demand ad clean debt ceiling. trillions of new debt with no spending reforms or experiencing cuts. it was an audacious ask but he does that. house leadership decided to give obama to go everything he wanted. they pass ad clean debt ceiling and overruled about 200 house republicans. house republican leadership plus all the democrats. then it goes to the senate. the week we took up the senate, the usual rules in the senate are that it takes 60 votes to take up a debt ceiling. but any rule in the senate can be changed by unanimous consent. the week we were going to take it up we go the tuesday lunch and republican leadership stands up and says, i'm asking every

one of you to consent, there were 45 of us at the time in the minority to unanimously consent to lower the threshold for harry reid to take up the debt ceiling from 60 votes 240 votes and our leadership said you have to agree to this. number one they said it will happen. hallelulia and we're scared of this issue. number, two if we do that the democrats that have votes to do it on their own we can all vote no and go home and tell our constituents we voted no. >> let me ask you too big to fail. donald trump says you're owned by goldman sachs. are you prepared to break up goldman sachs? >> i don't believe the government should be targeting anybody. i'll tell you if you look who goldman is supporting it ain't me. goldman is supporting hillary big time and in the republican field they are supporting

everybody else but me. the simple reality, donald has an interesting pattern of accusing other people of doing what he's doing. you know, he owes what north of $400 million in on the loose a dozen different banks. we don't know. because his report several loans are hundred millions or above. $400 million or more that he owes. of courser won't release his taxes, which is unprecedented, by the way. >> you ultimately say you're a supporter of wall street then people say that's a function of your wife or would you ultimately say -- at the same time you say you are not for the elites. >> let me answer that on principle. i am for the working men and women of this country. when i got elected to the senate just about every lobbyist was opposed. when i got there i sat down with them. listen if you're facing irrational regulations, if

you're facing government getting in the way of your increasing productivity you'll have no greater friends than i am in getting washington off your back. if you're looking forehand outs, if you're looking for subsidys or special deals i ain't your guy. when it comes to wall street listen wall street performs an important function providing capital for new enterprises, helping the economic system operate. that is important and valuable and there are wonderful people who work in the city, work in the financial sector. but it shouldn't be the case that wall street plays in a rigged casino heads i win, tails i win. where wall street can gamble with other people's money and the government bales them out if they lose. you know what the incentives are then go for it big time because everyone wants their private jet and if they lose the government bales them out. i think if you're taking risks you should bear the consequences of the risk and the taxpayer should be on the hook to bail

you out. >> could you be for wall street without having to do anything with your spouse probably. you could probably be against wall street without wanting to break up goldman sachs. there's things in the middle. >> they're things in the middle. >> the reason i pressed on that i actually don't like this vindictive style of politics you see from the clintons and you see from donald trump that you pick out someone and say we're going to use government to go punish this company. that's not what government should be. this is not -- you know, this is not a latin americian dictator saying okay you're disfavored. we should apply the rules fairly. if any company is seeking special government failures and my answer -- it's worth underscoring, let's go back to the beginning of these primaries. first state was iowa. i campaigned against the ethanol mandate in iowa. >> yes, you did. >> there were a lot of farmers

there. everyone said it was political suicide. >> so, you were only one. >> toichbs lie one. my opponent, donald trump promised to increase the ethanol mandate. when it came to cronyism and subsidys he wanted to do that. i want to give credit to the incredible people in iowa we won a landslide. i made a case to the corn farmers to the ethanol industry i'll lift the epa barriers that prevents them from expanding. i said you can expand your market more not through government handouts. >> we'll get to him. so that's where we're going to go, father of supply side economics, senator cruz is indeed our guest host because he booked this guy, called him up, begged him to come on. we'll get his take on proposals being pitched on the campaign trail when "squawk box" comes back.

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he's the father of supply side economics, art laffer has been a go to fiscal adviser to world leaders. he joins us now. art is chair mapp of laffer associates. art great to have you. thanks for coming on. we had a great discussion with senator cruz already about his tax plan. i don't know if you're watching but i'm sure you're familiar it. is dynamic scoring for real the other side tells me it's voodoo economics. >> the other side is wrong.

dynamic scoring is right way to do it. thank you for having me on. i did watch the other segment. i thought ted did a great job explaining how it works and what the dynamic would be except i think he underestimated the dynamics that would occur. if you look at his tax plan it makes reagan's tax plan look weak in the 1980s. i expect to see greater growth rate not only because obama is worse than jimmy carter because i think this tax plan is better than rb. takes the top rate down. you'll get more than that because our economy is relatively much worse off than it was than jimmy carter. >> i'll let senator answer in a second. there's an explanation or a narrative for why it didn't happen this time that i hear

from the left all the time and that's that previous recessions were caused by the fed raising rates after the economy had overheated. that causes a recession to come on. this one was a totally different animal and by definition, even though it was deep it was never is going to have the sharp rebound because it was a debt overhang that caused it. so you couldn't ask for anything better than 1.5% to 2%. >> when interest rates are too low which they have been under bernanke, you restrict supply. there's not been the flow of money into mortgage market low interest rates nobody will lend money for three years at 3.5% with a high-risk factor. therefore the housing market has stayed depressed for the last decade and it's because of the quantitative easing and the operation twists. it's because of that. we need markets to operate in a

money market for tint rate the market determined rate so you get the correct demand and the correct supply but too high rates and too low rates both of them kill the housing market. >> senator? >> well, art it's good to see you. thank you for joining us. saturday long time friend and indeed. i'll note that if you look at the object i agree with art that the numbers that were estimated, if anything underselling the gdp impact and my object, my object is a minimum of 5% gdp growth. jfk when he campaigned, he campaigned promising 5% gdp growth and he ended up producing 5% gdp growth. how? >> the tax revenues were higher. he went into surplus because of his economic growth. >> that's exactly right. wealthy ended up paying more. when you cut the tax rates the wealthy paid a higher percentage

of taxes. art tell us what would the impact be on the economy? what would the impact be on working men and women if we had four years or eight years of 5% gdp growth instead of the stagnant 1% or 2% now. >> it would be huge. the biggest driver of revenue is gopd growth. what very few people have talked about on your plan and if i may is the revenue impact on cities, counties, local districts and state budget wos be enormous as well and no one is even looking at that. the impact on income redistribution would be huge. john f. kennedy put it beautifully. you referred to kennedy and he was my hero. he said the best form of welfare is a good high paying job. creating those jobs will reduce inequality dramatically and lead to more prosperity. much higher revenue impact. you'll get higher growth rates than 5% and reduce inequality.

what's not to love in this plan. >> we're going to try to save some time for the end. larry kudlow and you go way back. larry likes trump's plan as well. is trump's plan -- >> i love trump's plan. >> i love trump's plan. i think it would be very pro growth. the two of them i believe are very pro growth supply side candidates and either one of them going into the presidency would be the most wonderful thing for america. my two favorite candidates are the final 2019 race and i just think of them are great. >> we'll leave it there. thank you. appreciate it. >> thank you very much. >> we'll slip in -- you brought him on. he hasn't endorsed you. sound like he endorsed one of you. final pitch, a pitch? final discussion from senator cruz when box comes back.

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our special guest this hour republican presidential candidate ted cruz.

i heard climate change, global warming, the biggest threat facing the united states right now. in fact, bigger than isis. i heard it was actually caused by -- or isis was also caused by global warming. you're on record saying the scientific evidence at this point is not consistent with the idea. i have some sympathy because i'm skeptical that a 1/11/100% is t gauge for the planets controlled temperature. are you still saying that? not being a denier would be a disquali disqualifier. >> you're skeptical. >> i'm totally skeptical. >> that's what a scientist is supposed to be.

you studied at mit. >> right. >> i'm the son of two scientists. if you look at global warming it's become, in effect, a religion rather than a science. for anyone at home who wants to see an interesting sclanch is google my name and the chairman of the sierra club. i asked him about the simple facts, the data and evidence. i think public policy should be based on data and evidence and not political theories and i asked him in particular what do you do about the fact that the satellite -- we have satellites in the atmosphere measuring the temperature in the atmosphere, the satellite has been showing in 18 years there's been no significant warming whatsoever. if you watch that exchange, you'll see that the president of the sierra club has no idea how to understand, doesn't even understand the basic facts. it was so bad that the

democratic ranking member senator kunz said it's not fair to ask him about this because this is not the topic of the hearing. i laughed and said his entire prepared testimony both written and oral is -- >> you don't know any of the science or facts yourself. you're relying on this 97% supposed consensus among all the scientists. >> it's one bogus study. >> is elon musk wasting his time? >> look it. i don't know. i do know this. i'm old enough to remember back in the 1970s when there were a bunch of left-winged scientists saying there was global cooling. then the evidence didn't -- let me finish this point. then the evidence didn't back it up. suddenly the theory transmorbified went from cooling to warming.

there's a conclusion they want control of your lives. now it's not global warming. that's not the chic way to put it. clie malmat change. >> what do you do in the automotive world and the energy world? >> let me start with the data. climate change is the perfect pseudo scientific theory with a politician because it can never be proven. whether it gets wetter or dryer, the climate's always changing and the solution is identical to their cooling and warming. it's massive government control over the economy and this isn't theory rhettic. >> i'm not going to try to debate the merits of this issue with you. as a function of the way you must think about it, what do you do about emissions controls and the way that the epa controls these issues? >> there's a perfectly legitimate way to kear the air and water clean.

every one of us breathes. we want our kids to drink and breathe. i'll tell you, carbon dioxide is not a pollute ant. even is emitting carbon dioxide right now. when we breathe out, we emit carbon dioxide. by the way, it's plant food. i chaired the subcommittee on science and space in the senate conference committee. a princeton ph.d. professor explained there have been periods in the world history with much higher carbon dioxide and it produced incredible green and plant growth and was incredibly beneficial and yet the left doesn't actually engage in facts that -- >> we had the sodastream ceo sitting where you. they carbonate beverages. i said you're deliberately carbonating bev ranges. his face dropped. he had no idea how to answer that. all i can tell you is it's been

labeled a pollutant. you see smokestacks with ballot soot co black soot coming out. >> the reason is to drive up the cost of living. if you're a single mom right now, it means your electricity is going up, gas is going up. it means the cost of living is going up dramatically and you can't afford it. i think should we keep the air and water clean, absolutely, but we should. be driving up costs on people who have been struggling and have been hurting so bad under the obama economy. >> senator, we only have a few seconds left and i hate to play speed round to get through but i'll throw a few words. the inversion and what the secretary's done. >> we're doing it entirely backward. massive taxes are driving companies overseas. in adeggs to my flat tax plan, i'm going appeal obama care and reign in the regulators. and in four years we're talking

about corporate inversions and we'll be talking about inversion of companies coming to america because the business environment so good and there are literally trillions of dollars of capital on the sidelines right now that if we have stability on taxes, if we lift the regulatory burdens, you can't force businesses to stay here as the treasury department is doing. you're creating businesses that want to be here and that will produce jobs and wanting to stay here. the taxes. they're getting their nose under a tax that can ever be increased. >> value added tax means different thing. in europe it's added as a sales tax on a product you're buying and critics have accused that. it's not a value added tax. it's not a sales tax at all. it ooh's business tax that applies uniformly across all businesses and one of the most

potent things of a flat tarks it's border adjustable which means all exports are tax-free and imports pay the 16% flat tax. that will brick millions of high-paying jobs back to america and it's a much better solution to donald trump's 40% tariff and will drive up costs for americans and start a trade war. my solution fixes the problem. >> thank you so much. >> time for "squawk on the street." we'll see you on monday. good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber with the premarket exchange. the stock is focused on three things. stock. inlienld and the opec meeting this morning. europe is ready to start their