good night from new york. neil: it is time to tell our thoughts. welcome, i am neil cavuto. here's how bad the scandalous are getting. eric holder is investing himself. he is revealing how his justice department went about targeting ap and fox news reporters even though we now know it was eric holder himself okay targeting our collie, james rosen.

too much time has been wasted on stories that just don't add up with whistleblowers that are itching to talk. reportedly they are lining up. i asked a few questions.

if we are talking about the window,. makes sense to have people coming in, only interested in getting through what hapns in conducting them with a full and fast and impartial ivestigatio neil: we have talked to them on and off the record. it seems like ken starr wenton a witchhunt, exploring things that went way beyond and we

political witchhunt. >> when you say giving me independent counsel, you have the ability to do your own investigation. now you're giving up power the power and you have to sit back and wait for the result but i'm going to do my investigation. a special prosecutor is doing his or her in thing. the irs and the justice department. many are getting equally torque.about health and human services paper public health care law which could

be multiple prosecutor needs. would you see that ever happening? >> you would see that this starts with a club of documents. >> i could not en imagine mechanically. they fear that initially going after the irs,nd what happened, it will naturallylip into the justice department. it distil over with and unbending hit.

>> it would make sense to bring in one independent counsel to do one job at one time. if you really are not interested in the truth, but you are only interested in pointing fingers and saying, you are the right and the wrong, everyone decides in the sndbox. you feel good about the process and know that it it's really about thtruth and not aboutt3 politics. neil: you have multiple answers, but you do it so brilliantly.

neil: back to ben stein. who knew what and when. let's talk about this again. i'm sure that you have been peppered by questions by so many. i will be te latest to chat about this with you. what do you think? >> it is like watergate, very much. we have a president that his is caught with his pants down, doing all kinds of bad things in this adminnstration. there is fox nd a few internet sites, either way,,it doesn't matter. it is not going to cost him his job, he's not going to have to resign. neil: do think that that will

st? >> oh, absolutely. unless they turn up investigation. they will lay down the laws for obama. neil: this is what haens in government. you take big leagues. he gets to gigantic. >> this is notthat case. in this case, we knew that the cincinnati office was targeting political groups done a lot it

is known in dodd-frank in the white house. the irs is also targeting antiabortion rights. and they are ao pesteringnd harassing them and that is a big part of the story. you are never going to see that in "the new york times." never, never, never. neil: one thing i always wonder is after watergate. those who never again get to the uses,we are avenging on enemies. >> okay. neil: i'm thing that happen again. >> of course it will happen

agn. of course it will happen. the government is made up of very ordinary people with all the ordinary emotions at human beings have. many of the emotions are revenge. neil: barack obama doess't have to say or do anything. that in and of itself is an inevability. you think you're doing the president's bidding thout them telling you to. for all weknow, they are very close and these are smart enough things to figure out. we don't know what he is telling

him. mr. eric holder is a hyper rtisan guy. i am wondering as we had the secretary of the treasury, we shall see. neil: it is always good to have you, my friend. >> it is an honor, sir. neil: is the government giving a reason why it happened? are bureaucrats finally out of control? even some top democrats are gearing up. maybe you should start learning about that. then how abercrombie and fitch is pushing fothe same bottom.

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see your authorized mercedes-bz dealer for exceptional offers through mercedes-benz financial services. we're not in london, are we? no. why? apparently my debit card is. what? i know. don't worry, we have cancelled your old card. great. thank you. in addition to us monitoring your accounts for unusual activit you could also set up free account alerts. okay. [ female announcer ] at wells fargo we're working around the clock to help protect your money and financial information. here's your temporary card. welcome back. how was london? [ female announcer ] when people talk, great things happen.

neil: the scandals are stacking upike trains on an airpo runway. we have david have luh on this growing problem. as well as katie pavlich. td, what you think of this? >> are longtime you have big government propones saying that the government works for the people. we are seeing with scandals in government waythat the government is expensive and most importantly, it means that big government is y can't hold anyone accountable for bad decisions made in government. there is no reason why we need bloated federal government programs.

>> now that we have this information we learned about, the amount of $50,000, i mean, this is part of big government. this is really about an administration that is not being transparent. a promise that they would be the most transparent administration in history. neil: let's say the administration didt have any directies to the white house. but this was some activity on the part of overzealous agents, maybe beyond the office involved. but that it is here, the dimensions speak to how big the irs has gotten and now the irs is taking control of enforcing the health care law. it shows it has gotten out of control. and that is the underlying problem. >> well, i do not agree wth the premise. we do not have a growing problem, but we have a growing problem. it is too big, it is too complicated. it becomes not a logical conversation about what we do

about it. the people against governmen want to get rid of it. that is not a particularlygood solution. >> before the irs agents take control of health care, let's get this under control. >> my only point is that ths isn't new, there are nt scandals piling up. >> you have the justice department,. >> they are behaving badly, they

ould speak to those in the firr. neil: katie, there is amultiple feeling going on here. >> yes, this is absolutey havi to do with big government and i want to push back that we want to get rid of government. the fact is they government does not work. we have seen this with the irs. we have seen this with obamacare. we have seen it with medicare, medicaid, every civil sector in the government. education. the fact is that big government is bad government. >> you are not describing government. >> you are not describing government, yes, i am. it is a new problem. >> okay, l's bng our next guest in.

we should slow down and get to the bottom of this. there will be subpoena powers that will occur if you report the facts. especially they dn't report having us. you think that big government is the perfect example and it is to blame for everything. we have a grievous problem. most of it is local government.

>> i am sick of democrats saying that it doesn't really matter. it doesn't matter. the irs is using all the power they have the fact is that the irs has a very powerful agency in the federal government. and it was specifically targeting groups for political purposes. and now the administration is saying i have to tell you that

this is how we feel. but having said a that, i think he gets back to the basic notion it is not my contract. but i think that that is built into a lot of this. @% i think that the bigger government gets a bigger institution and they are riiht for this. it is a very big drop in the bucket. >> i thought that wasa very effective video. neil: the one guy looked very much like this. >> it goes with a larger problem.

this includ not living long and not prospering. neil: okay, we will have you back in a little bit. would you pay twice as much to give this guy what he is demanding? we went out and asked people a simple question: how old is the oldest person you've known? we gave people a sticker and had them show us. we learned a lot of us have knownomeone who's livedell into the 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much

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neil: young young and restless and aprently hungry. very hungry. to hear mcdonald's tell us that millennial eat. those 19 years old to 34 years old really like to eat fast food. but they mix their cravings for social justice. if they think that you take advantage of your workers, they won't take advaantage of your sport you're a wal-mart or a

restaurant. mcdonald's is trying to get ahead of us. what do you think that your generation would pay more for a burger and go to a place that don't pay its workers enough to get paid $8.20 an hour and they wan$15. well, we had.5% unemployment right now. >> a lot of them make the case

and are somehow taken advantage of in that it's not fair or right. you say that they can discern some differences? >> well, i think so. i think when you have is, that, that is what drives people to your store. if you leave these protests, minimum wage, whatever they are protesting about, that is not social justice. me and us and consumers. a lot of folks will pay a little bit more, they think. a little bit more to make sure

that workers are treated well. i think that most people are not in a livable wag these numbers are at an all-time low. young millennialist don't like unions either. the reason why did they realize that they may end up like the hostess bakery unit, which ended up leaving all of their members unemployed at. >> the dirty little secret if you've never eaten there, that right? [laughter] neil: i like the plague along. michelle, it is so great to see you. have a great weekend. well, we already know. is this china's way of going to war without ever my mother made the best toffee in the world. it's delicious.

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version ofwarfare going forward. it is interesting, genral, nay they have won so much without so much as one physical alteation. >> yeah, you know, it goesto the great chinese military theorists sun su whose principle of war is to win by not fighting. the chinese have been disciples of the art of war for 3,000 years. it's not new, it's just done with computers rather than their traditional forms of espionage. look, the chinese want two things. number on, they want military secrets, and umber tw they want intellectual property they can use to gain economic vantage and to gain weapons buildig advantage without having to invest in technology. as far as chinese are ncerned, this makes perectceps. they kn they will not go to war in the united states over an island in the south china sea, but in a way, at least to the

chinese mind set, they really already are at war with us. neil: they discovered as well that money talks. we, as a country in their debt, we're always op defense. nevernipped the fact that guys like you they need us as much, if not more than we need them. we buy their junk as it is. we are always on defense. they know that. they have our number; right? >> what's interesting is i was in china a few years ago, and one of the things they found interesting was the method reagan used to take down the soviet union, and the pla's senior leadership said we ar so fascinated with the genius of the american people in their ability to defat the soviet union deflecting spending and beating them at their own game, fascinating, andgy, and we what you see, what, now, ten

years on it's a physical manifestation of thoughts they d since the beginning of the 1990s, neil. neil: general, you're far more well adversed in military history than i'll be. usually, you come to blows. when there's a change in power, there'sa military shall feel or altercation or war. i just cannot imagine this country going quietly into the night or then a new power emerging, and we just sort of wimply fall by the side, but could it be that way? >> well, you know, nuclear weapons changed everything. neil: true. >> it led the world into a new era where you defeat the united states one of two ways, terrorism, and you can use war in the shadows, you can use economic warfare, soft warfare, defeat your opponents by forcing him to spend himself or stealing a secret and beating him at his own technological game, but both

of ese are done bloodlessly. when they got nuclear weapons, big scale warfare is off the table, but that does not mean our confrontation with china is any easier in the future, neil. neil: amazing, general, thank you. >> thank you, nei. neil: meanwhile, -lo, please, say it ain't so. u are stunning, and you don't have to say a thing, but did you hear about the ceo of abercromb abercrombie and fitch? you will never shop at that store again. again.

neil: abercrombie be serious,

the guy whose stores are nope for chiz -- chic led models saying arger people shouldn't shop there, and shoppers of all sizes saying, you know where you can go? he overred a semiapologizes, revenue down, outlooks work. should he be blitz out on his ass? >> i understand he's trying to defend the brand, putting a size 12 brand in the mouth. it's one thing to taet specific customers, but another to exclude them. >> you know, really the mistake made was saying what she was thinking and pay traps of the store e thinking he just put to words what a lot of folks think. you don't look like the models, then you don't go in there. >> neil, yyeah, buti mean, you proved it's posible to be obese and successful -- neil: i'm not obese, right now i'm angry, young man, but

continue the train of thought. >> abf has a brand. we ant to look like the models in the magazines and whatnot, but they have to be not just cool, but approachable. most people are heavier than the 70-pound waist in the catalog and alienate customers, i think, is ire representable damming to the brand. neil: staingthe obvious, i mean, supposed t be hip and cool and everybody apired to that, but what they did is just hurt the bran by appearing like the elitist ?oots they are, and even among the core audience; right? >> well, i think so. you know, what's ironic to me, is, yes, we have a problem with chronic obesity in the country, adjusting insurance mortality tables to airline seats. there was a missed oportunity here. he could have said, let's take it and hel merica get healthy to do this together. i don't know how to put the spin

on it, i'm not a pr expert, but he didn't get council on this. neil: he did not. >> showing up in the sock. neil: indeed. >> roadway tailers doing well, but his stock in the late 1990s. neil: you two a thin, and who is the idiot who came up with "morbidly obese," anyway, issue two, a retail ceo who gets it and wants to get to the bottom of it. sear's new boss says stop blaming the economy for poor sales, but to look in the miror, work your butts off, and turn the sales around. >> that is taking speedometer -- responsibility for one's action. a lot ofthe political leaders, neil, the ceo of sears gets it, not just talking about taking responsibility, but putting money wherehis mouth is owning the majority share of the company's share. he's putting not justthe reputation on the line, but the money as well. that's lled taking responsibility. neil: keih, it's not moving the

needle yet for the store, but maybe that attitude will? >> well, i hope so. you know, i would have liked the statement better if he said the buck starts with me s let's lead by example, but, you know, that's neither here nor there. they have problemsith the real estate. i think the stock price reflects that. in this economy, i'm not sure -- i have lips today -- i don't know he'll get out of this. neil: do you think sears, the jcpenney problem, losing adentty, and workers, in general, many of them bitch and complain, but maybe that's the problem? people don't relate or understand maybe it's the tools, is it consumer products -- >> well, yeah. how do you take a company that's very old and has no identity, being everything to everybody for so long. it's not ma and pa kettle on the farm. this is the internet age everything available to

everybody 4/7. >> we were worried they would serve mr. ed on our plates. be more worry they seek rubs alcohol in the drinks. apparently, that was the case at some restaurants inclung a tgif's that reportedly swapped out scotch with rubbing alcohol. you have to be plowed not to notice that. what do you think of it >> >> well, i'm the most staunch defender of business, but what is this? watering down the wine, i mean this is fraud. when companies, they do the brand, neil. i'm not going to sing that b the audience knows it, andit is fraud, and, you know, it really not only hurts people in terms of the pocketbooks, but causes a great health risk as well, they get one drink, but it's dish water. terrible example and ruins reputation ofall businessmen when folks engage in this. neil: celt, first of all, it's

not as if rubbing alcohol is similar to scotch. it's not like -- not quite; right? >> right! neil: how do you feel about this? this is really defeat on a criminal scale here. >> not just deceit, but fraud, criminal activity, negligence, medical liability, but this speaks to me, are things really so bad in small business america or even middle business america that they are willingto sell their ethics down the road and do this voluntarily? i mean, i have to question the management and ownership here. the fact they claim they didn't know it was going on when margins showed it, they accunt for every bottle and every ounc of alcohol in a restaurant like that. stunned this is just coming to light. neil: what happened is as soon as we get word, the horse meat thing, and the meatballs are hor meat, and i just thought they old purpose --

furniture, but they have other problems that crop up; right? >> it comes from the deceit. however much mey bars think they saved in serving bad liquor instead of the good stuff, they more than pissed that away. that's not going t be replaced. lying is not just bad morally, but bad business. this is an example. neil: we have half price drinks with rubbing alcohol. you know. >> exactly. you'll be cleaner hen you finish. neil: brilliant line. dpies, thank you very muh. meanwhile, reuniting. hear about this? well, not these guys. these guys. who wins? who wins? what if i told you both copd makes it hard to breathe... but with advair, i'm breathing better. so now i can help make this a great block party. ♪ [ male announce ] advair is clinically proven to help significantly impve lung function.

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neil: lost weight, and now gaining clout. with democrats, the state of new jersey, 61% of whom like republican governor christie. with president obama visiting him again on tuesday to sort of take a post-sandy checcup, watch what they say cod push overnor christie into big re-election territory in a blue state, and maybe all the way to the white house. you know, it's interesting, bob, rather than distance himself from the president, the governor hasconsistently embraced the president. it might alienate conservatives within the pear, but he doesn't seem to care. what's this all about? >> right. no, i think ththat's right. this is kind of a little of payback by the president because when the president was up for re-election, christie and obama woed close o sandy relief, and now christie is up, and he's a big favorite to win re-election, and now obama is coming back up to see him. i do thinkit helps christi

big-time in the short term, and in the long term, republicans have to expand the map. they are hungry for a win, and, sure, this going to upset the base. it upset the be last year: christie handles questions deafly, and he thinks about the presidency, maybe it's not 20 # 16, could be, mybe 202, it's on he mind. neil: he argue that, you know, focused on new jersey, the reasone didn't run for president, last go around, he was not ready for that, and it all about new jersey, new jersey. i'm thinking that if he gets reeleed by anything approaching the margin, some of the polls indicate, that would be the digest victory for any governorin new jersey in history, let alone a republican in a ver, very blue state. he wod almost be impressing upon republicans who might not li him, lookkwhat i just did; right? >> yeah, that's right. that i can appal to democrat

independents something that mitt romney and mccain struggling with against barack obama, and i thk that the republican electors going through the evolution of figuring out where are we going, the bottom line is they want to win in 2016. they want to beat hillary clinton. who beats hr in 2016? republicans think christie could beat he. kneel bob, you're the first to educate me on the primaries, the one that had romney because he ran to the right, ran back to the middle, always in between and that's going to be a difficult process for someone like christie. what do you think of that? c-sp: . -- >> there is. there's going to be problems if he runs. the iowa caucus is difficult because a lot of the bases there, conservatives there, but i think people ote more on personality than policies, and if christie can deal with his weaknesses, and i remember years

back, peopl said you like collective bargaining, and he aggressively said, look, i love it, i love to get into the union and beat them at the table. it was a good argument to a supposed weakness, and christie's good at that. that's a skill that mitt romney really did not show a lot on the campaign trail. neil: he is personally appealing, might trump whatever political differences people have. he's his own guy. we'll see how that goes. >> likability so important, neil. neil: i built a career on it, bob. you're righthave a good weekend, thank you very much. >> thanks, nil. neil: what's the difference between lerner and a zombie? nothing, nothing at all, i am dead erious. ♪ thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with tha you're history. instead of looking behind... delta is looking beyond.

80 thousand of us investing billio... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. some of the most advanced driver systems ever made. stereoscopic vision... distronic plus braking... lane keeping and steering assist... eleven enhanced systems in all.

♪ twelve, counting your adrenaline system. the 2014 e-class. the most intelligent, exhilarating mercedes-benz ever made. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. we're not in london, are we? no. why? apparently my debit card is. what? i know. don't worry, we have cancelled yourld card. great. thank you. in addition to us monitoring your accounts for unusual activity, you could also set up free account alerts. okay. [ female announcer ] at wells fargo we're working around the clock to help protect your moy and financial information. here's your temporary card. welcome back. how was london? [ female announcer ] when people talk, great ings happen. neil: now you know, all the zombies, every single one of the zombies, they are government workers. the undead forever sucking off the alive and notso well.

lerner stepped down, but with full pay at the irs. i guess she's doing so as investigating all her government shenanigans targeting consertive groups, but what does it take to terminate, to fire, to get rid of anyone in the government? fcc guys too busy watching porn to chse bad guys stealing llions, bureaucrats in government agencies made up talking points on benghazi to geto the bottom of what happened in benghazi, no one fire see a pattern here that' over the top? that's what we have on whether any of this is remotely fair. katie? >> well, i'm laughin at the true nalogies about zombies and porn, but that's the government and the way it runs, and the fact is, this week with lerner, we learned that you cant fire government employees, and not only is she at the top of e pay scale within the government, but she also is an attorney, has

a protection of a union behind her, and we both knw, and everyone in the panel knows, that if she did this in the private sector, she would have been gone five days ago, and the government probably would have launched a probe to investigate her for discrimination in the private sector, but apparently that doesn't go on inside the vernment. neil: there is something called due process and i'll get into it here, we got, you know, we do have asystem in place to not, you know, throw someone ou on the butt ifthey have not been implicate having said that, though, there's many examples in the private sector where something happens under your watch, ignorance is a poor defense, and you're out, period. >> you're right, and, you know, the government should be more like businesses. many states are right-to-work states meaning the employer ad employee can leave the employment at any time, and we should see that in the government, neil, and, you know, the fact it happened under her

watch,othing happened to er, refused to testify, it's very concerning. neil: adam, what do you think of this, though, that sometimes we do have to make an example, do we not? if noone is leaving and no one has been so much as reprimended, it begs to question you don't want to heave out someone, and that breeds its own ill-will, doesn't it? >> sure. when they do something wrong, they should be fired. if they break the law, they should be prosecuted. we agree. if we want to have a policy conversatition and compare government and the corporate world hich is extremely difficult and, o, we don't want the government to run like a corporation in every instaps, but this comes down to an issue of level. i mean, people get fired in the government, or, you know, leave quickly under embarrassing situations. i think the general mcchrystal, general petraeus, think of various cabinet members over the years who stepped over the line and got fired.

the question is do we want to fire a snior level bureaucrat or want to ridicule a senior level state department person who may or may not have done anything wrong just because we're all upset about it, and i think the short answer is, no, and the same should be true, by the way -- neil: i disagree, adam. i think the short answer is yes. i'm not saying it's the top guy at any of the agencies, but more heads should roll under their respective watches that these things happens, and they might not be responsible, but when the st excuse is didn't know what the hell was going on, well, that warrants, i sorry, you're history. >> well, and the fact is we've seen that lerner siged off on notallowing these tea party groups applying for tax exempt status to get that. neil: to be fair, the letters with the signature do not mean she was targeting the groups, but it was dnied p on the phone: doesn't man she didn't know about it, and the argument is out the window, the idea she

knew these groups were applying for the tax exempt status saying she didn't know, that creates an often tis in the corporate world we hear the ce orhigher ups created a culture of atever. inside the irs, ty created a culture of intimidation and targeting of the groups. lerner did nothing to stop it. didn't show any remrse. neil: she should go? >> absotely. neil: i don't wantyou as my boss. i want adam with my boss because i would get away with murder with adam. >> yes, you would. neil: i guess where we get at with this is thats is tougher in government, the example east not withstanding that adam raised, but it is tougher in gvernment to see these guys go than it is in the corporateworld. now, there might be something to be saiof that, due process, all of the above, but i think it just makes those who think a scandal is brewing think more scandalously. >> well, two points here, neil. first, i think many of the examples adam mentioned, they were asked to resign and

resigned. i don't think they were fired. point tw is that the irs because of a law that passed in the late 1990s is able to fire employees and get out of theupon agreements, if they violate what they call the ten deadly sins, and the inspector general, the irs on the hill this week saying it could have hapened here. they -- even when they have the authority to fire people, to oor knowledge, they have nt yet. >> uh-huh. >> so i think your first point is a really interesting one getting to the difference between a political government official and a career government official, and it' a good thing for our country that we have a professional bureaucracy, nd now, before you jump over me, they are not perfect. i mean, they are deeply flawed, as we allare, but you have a bureaucracy that is protected from political whims. the reason why political people are not fired, the reason they resign, is that everybody undetands that the president always has their resignation letter on his deek so to speak

saying, guess what, i'm accepting your resignation, thank you as very much. that's calledded being firedded. we want the political people to be fired quickly. neil: i'm beginning to extend on that. >> buick roar sighs are protected? neil: when reagan threatened to fire the air traffic controllers at the time threatening to strike, he said, well, you can't do that, you're vital personnel. it says here you cannot go out on strike. they still threatened he threatened back saying, you do it, we'll fire you. they did. he fired them. there was wrnings. mr. president, there's a possibility there could be a lot of planes and passengers dying. he didn't care. none of that happed. they were fired, life went on. there was a consequence for an action that they knew there should be a consequee for it. >> that's how it should be. the culture in government, whether it's at a city level or in the washington,d.c. lev i that y move up, and u screw up. as you sew up, you move up.

it doesn't matter what responsibilities you have as long as you plead ignorance saying it was not your fault and point to another guy. you will not be fired. in the instance of us protecting bureaucracies from the political whims, the irs case was completely pitical. the entire targetingf t groups was based on plitics so to say they are protected somehow, -- >> no, no. >> the political whims, not true, and talk about firing employees, let's talk about the fact that hussein, the guy who shot up fort hood is still pulling a government aycheck. even though he killed americans on their bases. neil: adam? >> on the political topic, you're changing the subject. if they, you know, played politics and broke -- >> they did. neil: okay, you would fire them as well. in this case, it was blaant, clear, unadulterate fire. >> investigate it, find facts as soon as pock, and get rid of people.

>> it's just a matter of when among you guys, just how quickly you act. >> and at what level. >> we agree more than you think. neil: thank you, all. that'll do ♪ >> tom: here we are memorial day weekend the unofficial kickoff to summer but primarily a time to remember those that have fallen defending other freedoms. on this holiday we wanted to share some of our favorite interviews right here, right now >> tom: david stockman rose to prominence at the head of office management and budget in the reagan administration. he was worried then about the state of nation. but his worries had turned into indictment of our nation's leaders who for decades have been making mistakes to the point where