sake. my light bulbs. we were vigorous on this opposing new rules which the administration is rolling back. time's up for me at least. here we go. neil cavuto, it is yours. neil: thank thank you, stuart v. we have stocks up 210 points. on belief things are progressing smoothly on the trade front. you know every good word comes out of via the white house or china, tends to put up stocks, it could be a nasty tweet or it was the former. people are looking at the president's temperment, whether he will have to be on against, now that data is improving in china as ours seems to be going the other way. we'll get read from former defense secretary of united states jim mattis. he is coming up in just a few minutes. first the china service sector rebounding in august with a strongest read we've seen there more than three months. just as some of the data, not all of the data, shows that we

are slowing down, the manufacturing sector in this country contracting a little bit. to "the wall street journal"'s jillian melchior who follows this very closely. our own susan li as well. susan, one thing surprised folks with the china data, this was not something to be expected and we're seeing more and more data like that, less ominous than thought. now stronger than thought. >> reflation as well in the month of august. i love to remind people that china is no longer just a manufacturing hub. services like here in the u.s. account for more than 50% of the economy now. so it is not cheap factory floors. if you go to shanghai, beautiful skyscrapers, really fast train this is very positive, especially for an economy that saw the weakest growth in 2years. neil: one of the reasons why the futures was up. hang seng was up 4%. it owed itself as well to the talk that they will meet some of the protesters demands. we'll get into that in a second.

couldn't you flip it around, say better things look for china, less compelled they are to close a deal with donald trump? >> i think both of them need it. trump is running on economy. he has tax reform, deregulation. he is not in the same position that xi xinping is. xi xinping doesn't drive his legitimacy from consent of the governed, economic prosperity, delivering on the promise is only thing he has giving him legitimacy with his own people. it's a little bit more risky situation for him. what we've seen in the last month with the chinese economy that is something certainly got to keep him up at night. >> coming from hong kong, talking to some of the big money managers and big ceos what about china, is china okay? are they okay? it its slowing down. there are concerns that they will drag the rest of the world along with it? look what happened in 2008. they launched $650 billion in stimulus.

cut interest rates. they haven't done this time around. they don't feel like there is lot of panic with the consumer base still growing. neil: does that mean they sit tight? they feel no need to rush into a deal with a president they argue keeps bad-mouthing them? >> jillian knows china thinks in various long terms, right? i think that is the same this time around, they will wait it out, at least until 2020, to see if there is a new% to negotiate with. >> china can afford to take the long game. maybe xi can't. he concentrated power under him. he has discontent with other ruling elites. i would say that hong kong thing has been a definite threat to his legitimacy as well. got to be forward on economy. neil: this move made to mollify protesters take extradition order never to raise it again we're told, protesters want

other demands, is that a signal to china to get them to throw them a bone to stop protesting? >> i don't think that will be enough. that is what triggered protesters. since then protesters are galvanized and energized because they are angry about the level of police force used against them. they are angry about the arrests. we saw pro-democracy lawmakers hauled of and arrested. pro-democracy activists got 1100 arrests. insane at of tear gas and serious injuries. hong kong people feel like if they don't have basic democratic reforms. they feel like they're in a police state. you're already seeing encroachment on ability to peacefully protest. they would like the opportunity to elect the chief executive and lawmakers. neil: that has gone way beyond the extradition thing, susan? it is a host of other issues? >> this has been building since 2014. they had a chance, they missed their opportunity in 2014 to get

some sort of democratic vote in hong kong. neil: right. >> in 2014 we'll let you vote for city's leader. the pan democrats shoved -- i don't want to blame local politics but they blame local politicians for missing the vote in 2014. it is not just about democracy. it is now about rich versus poor. some of the biggest divides, income divides in the world by the way. when it is so expensive to live and own property in this city, i mean these young people graduating from college, they are afraid they can't find jobs, chinese main land individuals come in to take the jobs, even if they work hard they will never make enough money to own property. neil: they still have reason to protest? >> i think so. they have five -- they have one. neil: ladies thank you both very, very much. bring you up to speed what hong kong did to ease that restriction, both these fine reporters were pointing out, carrie lam, the chief executive there went ahead and ripped up

that extradition bill. she had tabled it before but apparently under chinese oversight here she took it out of the equation. no longer an issue, but to susan's point there are other issues protest remembers raising they want resolved. let's bring in china watcher, best-selling author gordon chang, on skype. gordon, the protesters are saying not enough. what else? >> certainly that's right, neil, because too little too late. carrie lam had a chance i think to actually settle this but that was some time ago. beijing of course did not letter. now demands have escalated. there are just as you heard, five demands which are now the four demands but also there has been a growing sentiment here people want independence. it is still a small group but nonetheless it didn't exist two or three years ago and now it has actually become a viable force. neil: let me ask you, gordon,

when push comes to shove, claudia rosette was here from "wall street journal," that china will revert to military power it prefers being than the economic power it is. if these protesters don't get that message, china will force that message, what do you think of that? >> i don't -- now i guess the sentiment in hong kong, i think it is right, that china will not formally deploy the peoples armed police or peoples liberation army to the streets of hong kong but people are saying, and this is also correct, that mixed in with the hong kong police force, in hong kong police uniforms, are police or troops from the mainland. so, some people say there are as many as 3,000. i don't know if that number is really that high but nonetheless, china is trying to work behind the scenes. the hong kong police force is not run by carrie lam or hong kong government. i think it is probably being controlled by beijing at this

moment. neil: all right. gordon, thank you very, very much. we will be asking the former defense secretary of the united states jim mattis who has a book out. he is on a book tour about the latest developments in china, what we should be aware of what we're not aware of. where all this goes. this is not just an economic issue over trade but wider ramifications about hong kong, how they're handling hong kong. he is up in a couple minutes. update on dorian and the storm surge coming with it. it is an interesting development here too, because it is spreading far and wide, now into the carolinas potentially. accuweather meteorologist joins us out of pennsylvania. what are we looking here? reporter: just like you said, neil, we're looking at the potential for this to bring impacts across the carolinas. already seeing it making a bit more movement compared to just a day ago where it was stalled across the bahamas. now moving northwestward here, north-northwest at nine

miles per hour. even at 9 mile-an-hour adjustment is helping the storm finally getting improvements in dry air on the southern side. the northern side where we keep the impacts intact across jacksonville, florida, for today. if you're out towards savannah, continuing to see bands press into south and north carolina as we move into the rest of next week. winds associated with the storm at 105 miles per hour. we could definitely see some gusts higher than that. still looking at hurricane warnings all the way into portions of north carolina. if you're in elizabeth city, myrtle beach, new bern, elizabeth city, listen to the local officials. it will continue into category 2 by friday morning and then get a little further out to sea as a category 1. in this time we are a bit close to the coast. storm surge, places like outer banks will be exponential especially in inland areas.

for savannah, georgia, tonight worst conditions for running three to four feet for storm surge. as i mentioned portions of north carolina, south carolina into thursday and as well into your friday we'll deal with impacts. neil: thank you very, very much. when we come back as promised, the guy they called mad dog, every time he heard that term used the defense secretary jim mattis didn't really like. he got mad about it. but not too bad. obviously had a very successful career. he has a very successful book but what he did in that book others didn't even think of doing, not trash the last guy he worked for, after this. you wouldn't accept an incomplete job

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neil: great thing about my job, whether you're on the right or left, republican or democrat, i say we're not red or blue, we follow the money. i've been following this gentleman's career for quite some time. you know him as mad dog. he hates that reference i learned that from the book. he has a book out right now, former secretary of defense of the united states, jim mattis. call sign, chaos, learning to lead. i started with that premise i'm

lucky to talk to people like him is that unlike almost every book that has come out of those who served this administration, if you're looking for dirt, looking for someone to trash the president of the united states, you will not find it here. maybe that depends on your point of view, if you like the president, great. if you don't, not so great but he, it isn't a holds barred interview in depth about many stages of how he views the world, from the earliest days when he first joined the marines and obviously finishing with his defense secretary days he submitted his resignation. with me right now, is secretary jim mattis. sir, good to have you. >> neil, thanks for having me here. neil: i did mention at the outset, mr. secretary, your refusal to trash the president. you referred very quickly at the outset to your experience. i think only reference after that is copying your two-page

resignation letter. why that approach? i'm sure your publisher, might be representatives here, what is he doing, we need dirt? >> neil, i come from the american west, there is a saying out there you ride for the brand and i swore an oath to uphold the constitution. the president is the president. we have only one president at a time. the french have a saying, a duty of reserve. when you leave an administration or a government over matters of policy, you state what they are, what those matters are, i did so with the president. he was straightforward with me. i was straightforward with him. then you owe a period of sigh helps as the president, secretary of state, secretary of defense carry on the duty of preserving and protecting this country. i'm not going to sit now what i considered to be the cheap seats having just left the administration and comment or make political assessments. neil: well you did say early on, i'm old-fashioned, i don't write about sitting presidents but you did write about a former one.

you didn't bash him but obviously barack obama relieved you of your duties as commander of centcom, central command but there i thought was very similar rationale for you leaving your post with donald trump. concerns that both men were taking troops away at a time you didn't think was necessary. president obama in iraq and president trump in syria. that was a common theme? >> neil, as you know, you serve at the pleasure of the president, whether you're a cabinet secretary or a general. those words have to mean something to you. when it is displeasure, when it is not to their satisfaction, i bear no rancor to president trump or president trump. the constitution makes very clear the authority. i believe in it. neil: he never called you about it. who told you were you were relieved? >> in the case of president obama, what happened the pentagon announced my replacement early, that i was

leaving the job early. neil: did you know that, that they were going to announce that? >> no, i did not, but it is not personal. even from my side, it was a strategic disagreement. it was not a political assessment. the u.s. military ranks the top year in, year out in public confidence of our institutions because we're not political. because we protect this democracy, not because we take political sides. and that is very, very important. president trump's record-breaking budget for the defense department last year achieved, i think 87% republican and democrat support. we wouldn't have that if the military was a politicized instrument. those of us who serve we have obligation to continue the george washington, george marshall tradition that the military stays apolitical. neil: again your reason for leaving the trump white house was that he was drawing down

troops, getting out of syria you thought too soon. the irony since then, either he is heeded what you warned about, just not doing it for the time-being. do you regret leaving then? >> i think issue is we have to have a strategic approach. it doesn't matter if it is a republican administration or democrat. i don't think we've had a sufficiently strategic approach for the last 15 years. that is not a statement about one party or the other. we have to decide what it is we stand for. just as importantly, what do we stand against, what we will not stand for. this town was attacked on 9/11, attacked by maniacs who thought they could murder innocent citizens from 91 countries and scare us. we didn't scare. we went after those people and guess who was there with us, troops from canada and uk, norway and germany, jordan, turkey, new zealand, australia. i can go on. neil: you mentioned allies, having good relations.

they're important, do you feel that is in peril given the acrimonious relationship? >> winston churchill put it well. he said only thing fighting with allies is fighting without allies. it is hard. there are times when tensions rise. the issues right now, for example, 2% is what everyone's committed to a nato to paying for the best defense in the world. the nato alliance, that has been an issue about paying their fair share going at least as far back that i have experienced, it is even deeper in history as president clinton, president bush, president obama. this is not a new issue. now our president today is pushing it very, very hard not like -- neil: you agree with him? >> i could not agree more strongly allies have to pay their fair share. they have parliament. they have their own politics. every nation's different. so we have to help them explain, to them, why it is necessary. but the western democracies have

to get their act together. they have to have a vat give. they have to know what they stand for and they have to stand together. neil: you mentioned president trump there when you submitted your resignation. he sped it up. you can go now. he since said when you left, i gave him a second chance, obviously referring to the moment that barack obama terminated you. any thoughts on that? >> well, it was, i was obligated not to just in a huff walk out the door. i needed to give him time. neil: were you in a huff? >> no, of course not. this is not personal to me. this is serving the country and it's a privilege to serve this country. it is an honor. i'm actually, i'm humbled by it. i took no part in the campaign. i had not met president trump before he interviewed me. so it was not something i every aspired to but when it was time to go i owed him a certain period to make an adjustment, find someone to take my place, it was completely for his call

to leave early. i bear him no ill will if that is what he thought best. neil: you did that. you leave. you talk about what is going on in the world today, obviously, very cognizant, you were there in the invasion of kuwait of course, later on, some incursions. the french president emmanuel macron proposing iran stick to the accord that the president ripped up, iran accord, offering them $15 billion as part of a bailout package to make them do that. what do you think? >> well i don't know all the details more than just what you've told me, what i have read here in the news. i think that anything that keeps iran from getting a nuclear weapon is in our best interests. neil: so was that deal originally constructed in our best interests? >> the deal was working. it was not a deal i was especially fond of when it was fine. i thought "the sun" down provisions were too soon.

neil: was it a mistake for the president to rip it up, start from scratch? >> i'm not willing to say that once i'm out -- neil: i understand. emmanuel macron the brits are saying, italians, germans, it was a mistake, at least you had a structure a blueprint. now you don't have that. >> it also worked, neil. we have to admit nuclear weapons program was not going forward by iran. and it was not a sufficient deal in the sense that the ballistic missile program was left basically unaddressed. so they could continue with the ballistic missile program. however i think right now the most important thing as we recognize the iranian regime does not speak for the iranian people. keep that very firmly in mind. neil: only game in town, right? >> well they are, but at the same time we know they sit on a very shaky foundation. so let's not do anything to get the people to rally around an unpopular regime. iran remains the single biggest

destablizing element in the middle east. neil: what about north korea, they seem to flaunting missile tests whatever they're doing. the president says they're not violating anything but it does make you wince a little bit. what are they up to? are they throwing it back in the president's face? the president has a very good relationship with kim jong-un. he is building on that, patient with that. are you? >> yeah i think, if we go back to when we were doing arms control, same subject but with russia, the soviet union days, what president reagan always called for was trust but verify. i think in light of north korea's background here i think we have to go with verify, then trust. neil: so they have done 10 i think, general, by last count of these tests, whether they're medium or short-range or whatever they're calling them, that is pretty provocative.

>> very worrisome, very worrisome. neil: if we're still talking about a beautiful relationship with kim jong-un, is the president, in a pickle here? >> well i think secretary pompeo has defined it pretty well as a continuing problem. neil: yeah. >> that it is one that we'll have to address. you know, god willing, it will be addressed diplomatically, we'll find a way forward. we'll have, we have awful lot of nations in the world concerned about it, and hopeful and supportive of solving this, but china is really the key country here. neil: you mentioned china, you mentioned what is going on. we have the trade back and forth. a lot of people don't think we'll get a trade deal. then this move in hong kong today to stop the extradition matter. some protesters aren't buying it as you know. secretary, they are saying we'll still protest. we'll do what we have to do. what do we do in response? how integral is how they're

treating hong kong to closing a deal, to you? >> i think it is even a broader issue than that but you used the right word, neil, it is integral. how will you take a country that treats its own citizens this way and have any misunderstanding how they intend to treat others? we generally treat our own people in any situation better than what we consider to be the other people, foreigners, or something like that. so china appears to try to dom ney the decisions of countries around its periphery and beyond and in their economic decisions, their diplomatic decisions, their security decisions. that is not in keeping with our view of the world where sovereignty and sovereign countries act in their own interests. we don't believe in bullies. we don't believe militarizing areas with freedom for all nations to travel through in the past. and when chinese president promises in the rose garden to president obama, that they would not militarize the spratly

islands, they turn around and militarize the spratly islands, we'll have to recognize -- i think the thing about the trump administration here is finally america under this administration looks more honestly at what china's actions are saying because for many, many years, we thought as they liberalize and economically get their economy going in a way that brings them more into the flow of nations trade, that there was going to be a political benefit, a liberalization there as well. we have seen quite the opposite, whether hong kong or out of western china with the uyghurs. neil: they keep lying. >> i believe this administration called it bluntly exactly that. neil: you know, the president also said of isis, switching gears a little bit, that it is defeated, they're on the run, they're gone. what do you think? >> well the intelligence community sees isis perhaps more broadly than how the president defined it for that.

the president is quite right that the isis geographic caliphate has been destroyed and it was destroyed in no small measure thanks to what the american troops who, they are valiant what they did but especially our allies and i think the kurdish forces lost over 10,000 killed in action alone. 23,000 wounded. neil: but isis doesn't look gone to me? >> the idea of isis is not gone, the sleeper cells, they have gone underground, this is -- i'm from the american west, neil, some of the worst forest fires when you pulled the forest firefighting crews off early, they break back out. when president obama pulled troops out of iraq, the intelligence community said they will come back stronger than ever. that is exactly what happened. we don't want to repeat that. >> the shot not heard 'round the world, promising consequences for clear weapons. >> it is understandable, neil.

political leaders don't want wars generally. they want peace and prosperity. neil: but you have to answer to the political leaders? >> military leaders bring war's grim realities into the discussion. tough play the ball where it lies. neil: how did you play president trump saying i know more about isis than the generals do? i would have made a very good general. i'm pretty good at this stuff? >> well i don't make political assessments. i'm going to frustrate you here, neil. i'm not going to make political assessments. neil: do you think he would make a good general? he is very decisive? >> one thing that george washington and george marshall, general bradley taught all of us by their example, by their words, the military does not get into making political assessments. we're very fortunate in this country. we don't even think of the military stepping out, reversing an election that is not true in a lot of places. neil: you're right about that. there is a certain espirit decorps from others that led men

and women in that battle. former chief of staff kelly in that role in the administration. lost a son obviously in battle. >> yeah. neil: i'm wonder if you have a whole different perspective on that and being bellicose and exerting authority? >> yeah. i think we all are shaped by our for mitttive experiences. you're right, we've been shaped by a sobering experience. first time as a young officer, point one of your troops, point forward, they get up and go, you can't be anything humbled they're putting their life on the line. neil: i notice you, general, are the most reluctant to pull the trigger quite literally. i'm also reminded, you're voracious leader, you have thousands of books in your library. general kelly the same way. i think you argued who has more books. >> he more than me. neil: of the presidents those you worked for, who had that sense of history or that depth

or that reading or that knowledge base, book base, historical sense? >> well i certainly say that john f. kennedy had it. i didn't serve for him but when you look how he looked at the world, he really understood history, john f. kennedy did. another one who really understood it would be, would be president george bush in 1990, '91. neil: george bush, sr.? >> senior. he saw what we could not stand for the invasion of kuwait. neil: he did not continue into iraq? >> he woo not allow mission creep. he put the coalition for this. neil: at the time you wanted him to continue. >> i thought he did exactly the right thing, exactly the right thing t was obviously if you looked at it, if you took saddam hussein out, one of the biggest tyrants of all time, there was still going to be a vacuum.

in that vacuum in the middle east you could not expect something good to flow. neil: without talking politics, general, you do mention, the obama administration, working with joe biden, the vice president. he would joke with you about being centcom commander. you are only guy at centcom that took the job. you had a personal relationship, not a fan of his in general though. if he were to become president, would you feel safe, would this country be in good hands? >> i am not going to make a political assessment. neil: i thought if i asked it that way you would. >> that was cunning. neil: i thought maybe they worn you down. >> i would say what happened by that point, would i come back from centcom from being supreme allied commander in europe the decision was made basically to pull out. there may have been discussions. they were more the appearance of consultation than anything else. they were going to go. so i enter the discussion very

late at that point. neil: got it. >> i was, i was very convinced that by backing maliki, who had not won the majority of votes, by pulling our troops out, you would set us up as intelligence community accurately predicted we would have to come back in. neil: the president when he praises vladmir putin, even now, do you see vladmir putin as enemy of the united states? >> i do not think vladmir putin has one positive thought about the united states. neil: so would you praise him? >> i don't. i don't praise him. i was not elected by the american people so i don't presume to be speaking for the american people but no, i don't praise him one bit. neil: finally, john mccain, the comments the president made about john mccain in the campaign that he wasn't a hero, that i didn't like the guy, he always spoke his mind. you knew where he was coming from. what did you think of that back

and forth? >> i think what we need to do in this country we need to be hard on issues where we need to disagree but we don't need to be hard on each other. john mccain obviously was a friend. i had known him for many years. testified in front of his committee many times. he lit into me many times. always in the best interests of our country. it was never personal. we would shake hands afterwards, say, boy i really got you that time. always here on issues we didn't agree on, there weren't many, but there were some, there was no need to personalize it. we need to get back in this country to a fundamental friendliness, respecting each other, accepting that i may disagree 100% with you, but you may also be right. we need to get back to an open discussion, then going out and having dinner together, enjoying each other's company. we have to get away from these tribes that bring out bad comments about each other. neil: if we went out to dinner i

would have you pick up the tab. >> no reservations. neil: james mattis, chaos, riveting for the cheap shots it doesn't take. more after this.

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neil: all right. a couple, a few u.s. senators are coming back from having a meeting with the vice premier of china beijing. they are going to brief the president on all of this. edward lawrence in washington with more on all of the above. hey, edward. reporter: neil, two senators concluded the trip to china, steve daines from montana, david perdue from georgia went to beijing met with liu he, the vice premier among other meetings this is video of the meeting in beijing there. the senators encouraged the chinese to continue to negotiate with the u.s. when they get back both senator daines and perdue will brief the president on the trip what was said. before they left, both senators said they talked not only to

president donald trump but the top trade negotiators in the united states. the treasury secretary steve mnuchin and u.s. trade representative robert lighthizer. this was not part of the trade talks. this was a separate congressional trip. still in a statement senator perdue says senator daines and i traveled to china with one goal, to help reinforce president trump's efforts to level the playing field with our trading partners. we were there to emphasize that the president and his negotiating team have strong support from congress. senator daines added, that they met with top level chinese officials to fully support president trump's effort to level the playing field for american workers, farmers, ranchers and businesses. we must continue to hold china accountable. also today, the chinese filed their official complaint with the wto. this is the letter that was circulated among wto members. in this letter it says that the chinese want the wto to facilitate consultations, talking about the $300 billion

in chinese imports that are now under, that will be under a 15% tariff going up from 10% tariff, so 10% tariff. chinese want wto. officially a complaint was filed. they want their help, neil. neil: edward lawrence, thank you very much. dow up 200 points. we'll give you an update on dorian. still a monster of a storm. stay with us. ...all while helping you to and through retirement. can you help with these? we're more of the plan, invest and protect kind of help... voya. helping you to and through retirement. play it cool and escape heartburn fast with new tums chewy bites cooling sensation. ♪ tum tum tum tums

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♪ neil: the slow-moving storm we call dorian is continuing to make its way up the coast. right now just off the florida east coast, but extending moving on toward the carolinas. joe bastardi where this is going, what we can expect. what do you think, joseph? >> will brush cape romaine, north carolina, over cape fear, cape lookout, west of

cape hatteras, and out over the atlantic between duck, north carolina and cape hatteras. it will go up towards nantucket, martha's vineyard we all know where that is more than nantucket that will bring tropical storm conditions in those islands. washington, d.c. is left. tied water, virginia, six to 10:00 inches of rain. they may have hurricane force gusts. natural per one city or number one port we're most worried about is charleston. this is moving real slow as we all know. it is pushing water back in there. for a while this will be aimed at charleston. looks like it will go 15 to 30 miles southeast of charleston. it is such a close pass, it will probably break the tidal records set during hurricane matthew. so interesting storm, no doubt about that. neil: thank you my friend. joe bastardi, keeping a very

close eye on the storm that is among the slower moving that we've seen certainly in the last century. we'll keep an eye on it as well. the senator who wants mark zuckerberg prosecuted, if necessary to go to jail, after this.

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neil: all right. we are awaiting word from the president of the united states. he is talking to reporters we're told right now, so when that tape comes out, the pool spray as they like to call it we'll play it back for you. we do know a couple things he has been saying to reporters. he says iran wants to talk and make a deal. he will not drop sanctions on iran. this occurs on the same day french president emmanuel macron apparently offered iran $15 billion in a bailout package, one that was dismissed out of hand former secretary jim mattis on this very show, to get iran back to the deal, the one president trump ripped up, an one jim mattis made clear to me regrets ripping it up because it was structured deal. the back and forth goes on. president talking about meeting rouhani at the u.n. general assembly this month. he says anything is possible. to another guy for whom

anything is possible, he will cover the story, exhaustively so, today kicking off with all the attorneys general piling in on google. >> by the way you and trump. neil: idiot couldn't cover it, but what is going on with google? [inaudible]. >> we'll get into that later. neil: you can't get an irs audit. >> they're coming after me too. neil: please. >> "the washington post" wrote an interesting story today about, as many as 30 state attorneys general will launch a major crackdown on tech, in particular google. we were open pining who these, who these ags might be. we, we scoured our tech sources and it is kind of interesting the group. it is not, new york, what we understand, at least as of now, james usually at the forefront of sort of these things, california. the names we're hearing mississippi, utah, nebraska,

texas. texas we should point out is a, is a republican state ag but you know, interestingly enough at&t is located in texas and at&t considers -- neil: what is the issue with them? >> well they think they're basically antitrust violations, too big. but the political aspect here is with at&t is very interesting because they're all fighting over the same turf in terms of content and delivery of content. at&t views google as a competitor. the other interesting name is mississippi, just for the, just catches my eye because the mississippi ag's office has had a long record in being an activist ag. remember, they, mississippi ag, his name is michael moore, led crackdown on big tobacco. you remember the movie, the insider? he was part and parcel. this office does have a record and a history of cracking down on tech. so, we have calls out to all of

them. they have not denied it. it will be interesting to see exactly how this plays out. they're planning some big tech press conference according to "the washington post" next monday i believe it is of the those are names we're hearing. it is not -- neil: you were one of the first to report that the federal left, they were looking at, they're circling the wagons. >> in the beginning of the year, we reported, we were first to report, beginning of the year, bob barr, when he was getting announced as attorney general for the usa he would crack down on tech. i mean trump, i think what we have here is a battle of, this is so political and i think these companies, ags and the administration see so much voter angst at big tech right now, that they, that they see political capital in these investigations. that is a lot of what you're seeing here. if you own the stock, expect some turbulence, google, facebook, apple. speaking about facebook, some

congressman want to put -- neil: ron wyden, right? >> what is that all about? neil: i don't know. the guy should go to jail if he is invading the privacy of -- >> cavuto should go to jail if he did rob that bank over there. neil: in that case if i did. >> these people are crazy. it is so, this is, this is so stupid that these politicians are playing people like a fiddle. listen, tech, i'm sure steps over the line. it does a lot of good. it employs a lot of people. neil: you can't claim they're guilty before being charged. >> this is so political. and i'll tell you if you're a shareholder in any of these companies you have to worry about this. your stock is being targeted. okay? neil: i, well -- >> by the way, i was on vacation last week. neil: right. >> all right? and all, my twitter feed was lighting up. your friend cavuto this, your friend cavuto that.

neil: this is a family show. >> what did you do? neil: i don't know what you're talking about. you're a hater. >> i want you to know that i admire you so much. i'm just saying, you are, you are the reason why i came here. neil: i better be the reason why you stay here. >> well -- who knows. neil: dunkin' donuts. or starbucks with the pumpkin latte. >> i have no problem being a franchisee. neil: it's a good living. >> not a bad living. neil: you are the best, my friend. charlie gasparino. here is the good news. china and the u.s. are talking, set to continue talking. here is the bad news. china's economy is revving up. why would that be bad news? because there may be less inclined to want to do a deal, after this. i've always been excited for what's next.

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neil: all right. stocks are up across the board, optimism about china and a possible trade deal, at least they're not cursing at each other. we do want to update you on what's going on at the white house. some new channels have come on this tape of the president's playback of conversations he's having regarding a dorian update. we figure they are up to date on that. if you are interested about the federal approach to handling dorian, that's where it's happening. we will go into that tape when he starts taking questions from reporters, specifically on the issues that have already been telegraphed to us. he talks about iran, the overtures the french are making

to get them back to the negotiating table by way of a $15 billion emergency cash infusion to help them out, an opportunity for the president to respond to that, also to the ongoing back-and-forth on china. speaking of china, that's why we are waiting for that portion to replay that, they had some very good news on their services sector which continues to expand but now strongest rate in more than three months, just as our manufacturing sector is contracting. the reason why that could be an interesting development, it cuts both ways. it's obviously very good for china, but it could also mean here that they are less compelled to come to the negotiating table, the ultimate possible irony being that maybe we are going to ironically be in the position of needing a deal more than the chinese. that's a big leap here. most seem to think the fact the two sides are talking or planning to talk and that senators are coming back from beijing where they met with the vice premier of china, all that's to the good. it all seems to point the way to

progress on trade. that's why we are up about 214 points on the dow, and a lot of the stocks that would benefit from a trade deal are picking up steam, caterpillar, intel, micron technology. i believe they are all up in excess of 2%. those issues that again, benefit from all of this. let's get the read from the "wall street journal" editorial board member james freeman, and the "new york post" editorial page assistant brooke rogers. brooke, that kind of flip read on china, if it's doing well, things are improving, suddenly it's not so desperate for a deal, right? >> absolutely. i think that china has always been in a good place to negotiate, even better than the u.s. i think that these tariffs affect consumers and american businesses more than they affect china. so if you look at it, they have always been in the stronger position. neil: the president says just the opposite, they need a deal more than we need a deal, our economy's on fire. collectively it's still doing quite well but not as well as

thei theirs. might have come out of its funk. >> absolutely. it definitely benefits the president to say that we are -- neil: we say that a lot. >> it is his trade war. i think we have to see how the negotiations play out but at this point, the tariffs are affecting americans far more than the chinese. neil: i notice that while our overall trade deficit improved with china, it got worse. what to make of that? >> there's pain on both sides of it. the new data from china may be marginally less pressure on them but overall, it's got a big cost on both sides and even the tariffs, the decline in their currency, they are paying for a lot of those so far effectively because their manufacturers are accepting less in return for goods. but to me, if you want to look at a silver lining, hope for this trade fight getting resolved, i think the action on hong kong is encouraging because

we have seen really just a long discouraging trend from the chinese regime of sort of moving back toward old style communist tighter control of the economy, less openness, and this decision which i think has to be made in beijing to not violate the civil liberties of people in hong kong i think is very positive. neil: this was the extradition order, you know, they want to get you for a crime or anything and send you back to mainland china, that started the protest to begin with. chief executive carrie lam has indicated that that bill has been withdrawn and won't be redrawn. can we say redrawn? by the way, on this issue, it was something i spoke with former defense secretary jim mattis who has a book out on the china threat. here's what he had to say about that. >> america under this administration looks more honestly at what china's actions are saying because for many, many years, we thought as they liberalize and economically get

their economy going in a way that brings them more into the flow of nations trade that there was going to be a political benefit, a liberalization there as well. we have seen quite the opposite, whether it be hong kong or out of western china with the uighurs. neil: they keep lying. >> and i believe this administration has called it bluntly exactly that. neil: what happens if each side sticks to its plan and we don't get a deal by the election, then what? >> well, first of all, we promised about $25 billion in subsidies to farmers at this point. that's already a loss that we have to factor in. i think that those voters who may otherwise have gone to trump might be angry about that. we see a lot of protectionism on the other side as well. the left tends to, officially the far left tends to be more protectionist when it comes to trade policies so they may not see it as a viable alternative but i think people will be upset

if they don't see a positive improvement by the election. neil: you know what's interesting about this whole thing, who pays for these tariffs, we know it's americans, either american distributors, retailers, whether they pass that along to average american folks, that's their call and a lot of them try to absorb it. the latest wave of tariffs, that's going to be a little tougher to do, right? >> yeah. i think the history is that it's going to be pain that's shared by a lot of people. the owner of the business, the employees, the consumers, that tax has to be paid and it's going to be borne by the u.s. economy. i think if we are going to continue this chinese negotiation and we're not going to get that resolution that i think a lot of people are hoping for and waiting for, it's really critical i think that the president makes some progress on his other trade fights, in other words, ends them and go to zero tariffs wherever he can. if he wants us to dig in with a fight, for a fight with china, i

think to really encourage businesses to start investing again the way they haven't been lately so much, i think he's got to have some good news on some other trade deal. neil: all right. the president talking about this and other issues, on iran as well. let's dip into this. >> we thought this was going to be a direct -- originally this was going to be a direct hit into miami, and we would have been satisfied anyway. we need help on the border. the numbers are really good. i want to thank again the country of mexico. they have 25,000 soldiers right now protecting our border. and they have done a fantastic job so we appreciate that very much. mexico has never helped us on the border and they are now, 25,000 soldiers and you may want to talk about the numbers are down in half, i guess. you want to mention that? >> yeah, we're compiling the august numbers now. we will be releasing those early next week but we are looking at a reduction of over 50% from may to today, continued partnership

with mexico, i just got back, mr. president, from el salvador last week where we signed a new agreement to continue to work together on a regular migration so we are getting a lot of partnership from countries in the region and with your leadership and again, applying those resources at the border to enhance our security. >> the wall is being built. it's going up rapidly. i guess most of you have been able to see we're building very large sections of wall. it's a big factor was we just won the big supreme court case as you know and we have -- we're building in different sections, we're building different sections simultaneously and we think by the end of next year which will be sometime right after the election actually but we think we will have close to 500 miles of wall which will be complete. that will be what we wanted to do is about 500 miles. that will take care of all of the areas that we wanted including some of the marginal areas that we didn't necessarily need but we could have gotten it done, we were looking to do

about a 500 mile stretch. we should have it almost complete, if not complete, by the end of next year. reporter: -- members of congress about [ inaudible ]? >> yes, we have. reporter: can i ask what you told the members of congress? >> i didn't tell anything. secretary of defense spoke with members of congress and explained it to them and i think he felt very good about it. he feels it's a national security problem. i do, too. it is, when you have thousands of people trying to rush our country, i think that's national security. when you have drugs pouring into our country, i view that as national security. and we had very good conversations with various members of congress. reporter: if this storm keeps on track [ inaudible ]. what do you have in place to help them with its impact? >> we are very well prepared for that. last time, if you remember, when it hit mexico beach, we wiped

out a large, a large farm areas in not only florida but in alabama and georgia. what we did is we were able to help the farmers a lot. as you know, we sent aid to the farmers. they lost their crops, they lost, in some cases they lost almost everything. we were able to help them get back on their feet. we will be doing the same thing now. you will have probably some farms up along the coast and we will be able to go in, where secretary of agriculture, we have a lot of money because of the tariffs we have taken in. we have taken in tremendous, many millions of dollars of tariffs from china and we will have a lot of money to be helping our farmers along the coast, if they get hit. they may not get hit. there's a real chance that this could be the other way but there's also a chance it goes straight or it goes left. if it goes left, that's an even different subject. but our farmers will be helped. we are going to help our farmers. reporter: [ inaudible ]. >> it depends. it depends what you're talking

about. it depends who's hit, which state is hit. right now we don't know. we can predict a path but so far the predicting has been very tough with this particular hurricane. but we have a lot of -- we have taken in tens of billions of dollars in tariffs from china. prices have not gone up or they have gone up very little. china's paid for most of that and i say paid for all of it. china has now had the worst year they've had in 57 years. this is the worst year they've had in 57 years. and they want to make a deal. we'll see what happens. in the meantime we're taking a lot of money. we haven't taken ten cent is in from china. if you look back, they take from us, we never take from them. now we're taking from them. we'll see what happens. we have a lot of money to help our farmers. last year i gave the farmers $16 billion out of tariffs. the year before that, because they were targeted by china, the year before that i gave our farmers $12 billion. the way we figured that, i said how badly have our farmers been

hit by targeting from china and i was told they were hit to the tune of $16 billion, and i made up that 16 dollar for dollar to the farmers. so the farmers are extremely happy. they also know, they are warriors, they also know we have to do this with china. we can't let this go on. they were taking out $500 billion a year out of this country, including intellectual property theft which was rampant. so our farmers will be helped. nobody that we've done more for than our farmers. and they understand you have to win the war with -- this is a trade war, trade battle, you can call it anything you want, but -- and this should have been done by presidents before me, not just president obama. this should have been done by president bush and president clinton, this should have been done a long time ago. china has been absolutely the world trade organization has been a disaster for the united states. china has taken advantage of it

and us, and that's not happening anymore. but the farmers have been taken care of. $16 billion and $12 billion each year. okay? thank you. reporter: -- the united states of trying to infiltrate companies -- >> who is? who? reporter: huawei. do you have any comment on that? >> no. it's a national security concern. huawei is a big concern of our military, of our intelligence agencies, and we are not doing business with huawei. that will stop almost completely in a very short period of time and we'll see what happens with respect to china, but huawei has been not a player that we want to discuss, we want to talk about right now. we're not going to be doing business with huawei. we will do our own business. you know the old-fashioned way. we will do it from right within the united states which is what i have been saying for a long time. by the way, speaking of tariffs, there are no tariffs if you want to build or make these products in the united states. there are no tariffs whatsoever.

and people are coming back now to the united states. in large numbers. reporter: the senators went to china to meet with vice premier liu he. did you approve that meeting? >> i approved it, my people approved it. china asked for the meeting. they have a lot of respect for senator daines and senator perdue. so do i, they're friends of mine and great senators, doing a fantastic job. i knew about the meeting. i approved of the meeting. and all they did is say that we really have bipartisan support. if you look at it, and the support is very serious. we're not playing games. that was the message that was given by senator perdue and senator daines and was given very strongly. they absolutely had my permission. they also spoke to ambassador lighthizer and secretary mnuchin about the trip before they went there. reporter: [ inaudible ]. >> they told me the attitude of

china. basically they said china would like to do something. i know they would like to do something. look, they are having their worst year in, you know, many, many decades, as i said. they are having a supply chain that's being absolutely fractured and broken which is very bad for them. they have lost three million jobs. and the jobs are moving to vietnam and other places, including the united states, by the way. some people are just making the product here. but they are moving all over asia and some here, and you know, if i were china, i would want to make a deal. i can tell you they do want to make a deal. we will see if we can do a real deal, not a fake deal. like the fake media. a real deal. okay? what else? reporter: [ inaudible ]. >> well, again, i guess you would call it a british protectorate but i will do a lot. we just have a call. we're waiting for the call. they're having a lot of trouble

with the telephones over there as you can imagine from the prime minister, and we're helping a lot, and the admiral just said we are sending a lot of resources over there to help people on a humanitarian basis. but i would do that if we think it's appropriate. reporter: the prime minister on board [ inaudible ]. we couldn't access parts but we are working very closely with the commonwealth of the bahamas to help them understand the extent of the damage. >> they've got a situation in the bahamas like few have seen before. tough, tough thing. reporter: we know the actions taken against the irgc and quds forces dealing particularly with syria. there is some thought this may be part of a precursor to talks between you and president rouhani. what's your thinking on that? >> well, we will see what

happens. they want to talk. they want to make a deal. iran is not the same country it was two and a half years ago. that, i can tell you. getting to be three years. hard to believe. i have been saying two and a half years and it's almost three years. getting very close. but iran is not the same country when i came into office, iran was absolutely a terrorist organization, from 14 to 18 sites of confliction and they were behind every one of them. now you're not hearing so much about that. we'll see what happens. look, iran is a country with tremendous potential. we're not looking for regime change. they have tremendous potential and i think they are going to want to take advantage of their potential. i really believe that. i think north korea's a country with tremendous potential. i think they are going to want to take advantage of it. so we'll see what happens. but iran has tremendous potential and i can't imagine

they are going to want to go through what they are going to have to go through if they want to do it the hard way. we'll see what happens. reporter: do you think president rouhani and macron will be at the u.n. assembly later this month, could it have potential -- >> i don't know. i very much appreciate president macron, his involvement, but we're not dealing through president macron. people are dealing with us directly. we don't have to go through another country. we have actually, we've had a lot of help, if we want it from japan. japan is one of their biggest, possibly their biggest buyer of oil. they have a big relationship. that's prime minister abe. so we don't need anybody to deal. we can deal directly if we want. but other countries are offering help. they would like to see it straightened out. but they also agree with me, we had a great g7 and they all agreed no nuclear weapons for iran. they all agree. no nuclear weapons for iran. reporter: the iranians have said

they don't want to talk to the u.s. until the u.s. rejoins the jcpoa. how do you square -- >> that's not their last statement, actually. but they did say it in a different forum. they said that until we do certain other things like drop sanctions and that's not happening. okay? that won't be happening. they didn't say quite the way you said it, but they said it with the same end result. that won't happen. reporter: is it possible there could be a meeting between you and rouhani? >> sure. anything's possible. they would like to be able to solve their problem. they got a big problem. they are getting killed financially. their inflation is at a number that few people have ever seen inflation at. it's a very sad situation. they could solve it very quickly. we could solve it in 24 hours. but we'll see what happens.

reporter: [ inaudible ]. >> i can only say this. when you hear they had their worst year in over half a century. this is the worst year they had that anybody can even remember, over 50 years, over half a century, i would think they want to solve the problem. people have no idea. you know, we've created tremendous wealth in this country, in our country, since have' been elected. well over $12 trillion. they lost probably $20 trillion. when i assumed office, had my opponent won, within two years in my opinion, maybe less, china would have been a bigger economy than the united states, would have been bigger. now we are-'re so far ahead, it take years to catch. if we have competent people sitting here they will never be able to catch. let me tell you, if i wanted to

do nothing with china, my stock market, our stock market would be 10,000 points higher than it is right now. but somebody had to do this. to me, this is much more important than the economy. somebody had to do this. we had to do it with china. had to be done. i'm not even talking about purely economically. i'm talking about in other ways also. it was out of control. they were out of control. so we'll see what happens. if they want to make a deal, they'll make a deal. if they don't want the make a deal, that's fine. i can tell you they're having one of the -- i guess the worst on record and they want to make a deal. if i were them i would want to make a deal, too, but we'll see what happens. okay? anything else? reporter: the situation in london with boris johnson. >> well, boris is a friend of mine. he's going at it, there's no question about it. he's in there. i watched him this morning. he's in there fighting. he knows how to win. boris knows how to win.

don't worry about him. he's going to be okay. he's also got, you know, they have a big stake in the bahamas. when you mention that, they have a very big stake in the bahamas. i know they have one ship on its way, had a hard time getting there with the weather but it's on its way. they have a lot of people over there. they have a big stake. okay? reporter: what was the rationale for rolling back the regulations on energy efficient light bulbs? >> we will give you a report of that. we are doing a report on all of that. but there's a very good rationale when you hear it. what's saved is not worth it. for the little they save and what people were going through, it is not worth it. and price was another thing. okay? same thing with cars. in california, they have a standard where the cars are going to have to be much more expensive and won't be as good. so we are giving an option to car companies to create a better car from less money, meaning less money to the consumer. so if the consumer can save $3,000 on a car and have a very

energy efficient car, but not energy efficient so that the car doesn't work well, which is happening, we are giving them a tremendous option if they want the option. we are giving it to the consumer but we are giving it to the car company to -- companies to pass along, and we'll see how that one works out. we are doing that, we are doing a lot of that. we want to make it good for the consumer. if we can build a less expensive car that's better, we like that. reporter: do you think this $2 billion in opioid [ inaudible ]? >> so we have done a great job with drugs, generally, but it's a tremendous worldwide problem. but we have done a very good job with opioids and getting fewer people to use them and prescribe them and we're about 17% down from a little more than a year ago. that's a big number, when you think 17%. but we're about 17% down and one

of the things we are doing is we're funding different projects where we come up with a painkiller that's not addictive. you have people go in a hospital with a broken arm, they come out, they're drug addicts after three days. the opioid stuff is bad. when they get used to it, once they get hooked it's a very hard thing to get off of. so we're down 17%. we are going to be doing a conference today, as you know, and we will talk a little about it but we have worked very very hard on opioids and all of the problems that they are causing, tremendous problems. okay? reporter: [ inaudible ]. >> okay? thank you. thank you, everybody. see you later. see you all later.

neil: all right. we have been monitoring that. lot of ground to cover here. i do want the make a couple things clear. when the president referred to the fact he had not come into office, china would be the dom na dominant world economic power, china is still growing three times the rate we are here so i don't know mathematically where he gets that. secondly, he was talking about taking good care of the farmers, i have been paying and helping them $16 billion this year, $14 billion last year. of course, he has not directly been helping them. you have. you pay those tariffs, whether you are footing that bill at the register or not, american retailers and american distributors that do business in china are. a lot of that is buffeted by the fact that china devalues its currency to make it difficult to pass all those costs along, but american distributors, those retailers, are responsible for paying that. so american entities pay those

tariffs, i.e., americans, i.e., you. that is something i just wanted to make very clear here. so when he's talking about the money he's getting from china, essentially what he's saying is it's money i'm getting from you. also on iran, he pooh-poohed this thought that the president of france asked iran for a bailout measure to get iran to honor the agreement, get back to the agreement. macron and other european leaders have been very keen on getting the president to revisit that deal that he ripped up, even his former defense secretary jim mattis who was here earlier in the last hour was telling me at least it was a construct of something. he avoided criticizing president trump directly, but said that that deal was the blueprint and means by which we could extract concessions from the iranians. without it right now, it's anything goes. just want to get all that out there. back with james freeman and brooke rogers. brooke, on the china thing first off, what he is saying, they are in tatters, we're not, they are

suffering, we're not, we have data we said at the outset that seems to indicate way too early to jim's point this is a big turn-around going on in china but things might have bottomed out there. services sector picking up, manufacturing sector picking up, while some of our numbers, not all but some, like manufacturing, turned south and lowest level in three years. what do you make of that? >> i think that he has a talent for pushing the same rhetoric over and over and over again. what he does is he kind of has this package thing he always says, we are doing great, they are declining, they will come to the negotiation table eventually, we just have to keep doing this. i think it sort of validates his approach but ultimately, as you said, we are seeing numbers where their economy is getting stronger, as you said, maybe too early to know for sure what the impetus is, but we have to watch and wait. i'm not sure if we can trust his

rhetoric at this point just because the numbers aren't showing what he's saying. neil: right. we are looking at the numbers here, folks. this isn't a red or blue call. we just look at the green, the data, to get a sense of the numbers. on that point, to follow up on what brooke said, one of the things that i didn't quite understand when the president made a reference to the chinese had clinton won, they would be the world's economic number one power, not us. but even allowing for their slower growth, and again, even allowing that they lie with some of their numbers in china, they are still growing at three times our rate. how would that mathematically have been possible? >> i don't think in two years they would have become the largest economy in the world but obviously, they have gone from nowhere to number two very quickly. and i think if we're wondering how long is he going to play this out, those comments would suggest that he's in this for a good deal, not just a deal, as he suggested. he was talking about how this is beyond economics. he talks a lot about the trade relationship.

but he's saying this is bigger than that and i think if he's saying until there's reform there, we do not want this economy with a communist regime on top of it becoming the largest economy in the world. i think that's a very reasonable goal and -- neil: how did they actually manage to build that trade surplus with us, in the latest month, with all this stuff going on? >> how did china manage to grow to where they are? neil: in the latest period, if this is supposed to wallop their bottom line and they ended up selling a lot more goods to us than we sold to them in the latest period, they are doing hunky-dory. >> well, i don't think they are doing hunky-dory. their growth is slower and of course, in terms of short-term numbers, you never are clear on exactly how well they're doing because they have a very active effort to turn the dials on their economy and given that it

is a dictatorship, they can affect ways in which the president can't, you know, he can criticize jay powell but you have more direct control in the chinese economy so i think over the long term, it's clear this is not a plus for them, it is imposing economic costs on both sides, and i think if you take away from that, this may take awhile, again, he's not looking for the quick deal he can tout. he's looking for a fundamental change in the relationship. i think that just underlines the need to improve trade opportunities elsewhere, because right now, with this china cloud, there is a reluctance of u.s. executives to invest. neil: it can affect a lot of ceo plans going forward. just a reminder, when it comes to the white house events here on fox business, we focus on those that are going to be directly related to you and your money and directly related to in this case, taxpayer dough and

trade dough and tariff dough. that's why we really focused on those remarks which the president was addressing the situation with china and the situation with iran. we're not oblivious to obviously the fallout on what the federal government is doing with regard to dorian handling hurricane dorian but we thought the news channel covered that very nicely, always does. we are focused on that, updating that as well, but we thought right now given what's going on at the corner of wall and broad, you want to get right to this other stuff. so we did. more after this. that's why, your cash automatically goes into a money market fund when you open a new account. and fidelity's rate is higher than e-trade's, td ameritrade's, even 10 times more than schwab's. plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. just another reminder of the value you'll only find at fidelity.

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getting increasingly concerned about it, his performance on the stump but at some of these debates who some have chastised him for being more of an onlooker than participant. democratic fund-raiser don peebles here as well as brooke rogers and jim freeman. let me ask you a little about that, this notion that he's not ready. look, he's 76 years old. you might have lost his fastball here. now they're getting concerned that he's not up to the job. that's not a widespread fear, it's not affected his overall poll numbers but it will. that's the gist i think of what he was saying. >> i think the gist, look, biden's up for the job. he's extremely experienced. he's been in government basically almost all of his adult life, from his early 30s on. i mean, he's also been through a lot. lost his wife and daughter, 30 some odd years ago, just lost his son. he had brain cancer, had surgery for that. so he's had a tough 76 years.

i mean, so -- neil: is it showing, though? all that and the age? >> george w. bush was in great shape, great health, but he was always stumbling over his words, too. didn't make him incompetent to run the country. so i don't think that's the case. i don't see another democrat being elected, those who are out here now, the only one who had a shot at it would have been booker. i think harris, people have to like you to vote for you and i think her likability is so low, that's why warren has picked up more steam because she's a little more likeable. neil: elizabeth warren is more likeable than kamala harris. >> yes, she is. neil: you agree with that? >> absolutely, yeah. i think warren has a very warm presence on screen and i think that looking at how she behaves in town halls, people connect with her, she grabs their hands and it's very personable. i think kamala -- neil: you're saying the same thing. >> absolutely. >> but you know, she does, to

brooke's point, there's an app for that, a paper and position for that, she does her homework, she's smart, and apparently that is where the attention of the party is moving right now, to her. what do you think? >> i think the warren/sanders extremism is not a general election strategy. i think there's also going to be a reckoning about warren's, even her current story on the long falsehood about native american status is really not believable. neil: so donald trump would raise it, pound it, be aggressive? >> yeah. i would like to say on vice president biden's behalf, he does seem at times to struggle for words but i think it's really unfair for non-doctors to make long distance diagnoses. i think it's probably annoying for people in the president's camp when this guy on cnn is

constantly doing this, inviting people who have no medical training to opine on -- neil: i think the one thing that came up, again, seeing him flub more than a few lines and the stream of consciousness, i just wonder if that extra scrutiny, democrats need it. you know what i mean? if that becomes the issue, even if it's maybe not as severe an issue but everyone is talking about, almost prompts more flubs, more confusion. doesn't it? >> i think also, you've got to think about joe biden was vice president for eight years. very insulated. no one engaged him except during the debates for the first presidential election, and obama's re-election, he had some debates. they were very controlled. it was one person. he's never been in a free-for-all like this, nor should he have been. i think he should have bypassed these debates. neil: it was a free-for-all in 2008 when he ran for president. >> but that was a short campaign. but look, i think at the end of

the day, trump has changed the standard for everyone. so i don't think stumbling on your words are going to be the -- i think if it's biden and trump, i think the president is in a lot of trouble. i think if it's elizabeth warren and trump, it's going to be socialism versus capitalism. capitalism is going to win because it's one of the pillars of our democracy. neil: i know, you reminded me, too, the polls are meaningless at this stage of the game but if you wanted to look at the polls just for the snapshot they are at this stage and you're looking at a very strong economy, maybe not as strong as it was, and a strong market, maybe not as strong as it was, but still within 2% or 3% of highs reached in july, they shouldn't be showing double digit gaps between the president and all the major democrats. they shouldn't be that bad. >> investor business daily which has the most accurate polling in 2016, put biden 12 points over

trump and warren, three. so of course, as i said before, it's really early. we shouldn't rely solely on these polls. but the fact that they are showing such a wide margin should be concerning to the president and i think may be an indicator he needs to change his tune. what that looks like, i'm not exactly sure. i think they are showing strong leads in the polls. neil: james? >> yeah, it's funny, in some ways if you look at our journal/nbc poll, people express more positive feelings toward him than they did in october 2016 before they elected him president. so it's all about the opponent. in 2016, his opponent was unacceptable to most of the count country. will that happen this time? i tend to think if it's a warren or sanders, yes. i think biden makes it a tougher matchup. neil: i'm old enough to remember, talk about aging and all that, when michael dukakis had a 24 point lead over george bush senior. things change, i grant you that, but how much do you think the economy will save the day for

this president? the hiccups lately notwithstanding? i'm not minimizing what's been happening in manufacturing and whathave you but collectively, it's still pretty strong. >> oh, we've got a very strong economy. we are as close to full employment as we have ever been in a very long time. and the president's style and the constant attacks of the liberal media, i mean, the distortion of -- and amplification of anything he does, and he plays into it, by the way, because he is who he is, he's a new york developer who is brash and aggressive. but i don't see any democrat other than biden, harris, potentially booker, beating him. booker is an extreme long shot, highly unlikely. and harris is not going to get the nomination. elizabeth warren will not beat donald trump. i could end up eating my words here but i don't see that happening. bernie sanders should never,

ever get to be president of the united states, yet alone a democratic nominee because he's not a democrat. he's a socialist slash communist. elizabeth warren is treading on that same line. america will reject them and hold their nose and vote for trump if they have to but they're not voting -- they will vote for democracy over socialism. neil: are you speaking as a democrat or someone just concerned that they are too far? >> by the way, before i'm anything, i'm an american. our democracy, one of the pillars of it is capitalism. without it, we become something totally different and we don't become america anymore. so the idea that we can rile up some people because we are telling them hey, this great economy isn't good enough and we can do better is pathetic. they're not going to win, that message is not going to be heard by enough people to get them the nomination, god willing, and certainly not the presidency. neil: are you running for mayor?

>> no. not right now. but anything's possible. >> after hearing that, i'm inspired. maybe we will have to discuss it. >> a new york city real estate developer named don will have a real tough time getting elected mayor. that's a little bit of a challenge. neil: that is very good. we will take a quick break. just letting you know, in case you thought the debt was localized to the federal government, now you know corporations have a lot of it. you know students have a lot of it. a trillion dollars plus in loan debt. they want it paid off. there's a lot of medical debt. heaven forbid, did you hear about this, the pope has a lot of debt. he's urging the vatican, this is the infallible one, saying get this under control. he's never wrong. after this. introducing the first of its kind lexus ux and ux f sport.

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neil: all right. the pope is at a holy war with debt. concerned that the vatican's spending is out of control, that it runs $80 million plus deficits and he is sending the word out here, get a handle on this. but if you are seeing a pattern with student loan debt, medical debt and corporate debt and of course, government debt at all levels, it's across the board. the former reagan economist art laffer. art, he wants by edict here, the vatican to say all right, we have a problem, we're going to fix it. he's been there for five or six years. he's not been able to fix it. that is another familiar theme when i look across the world at other entities that have the same problem. what's going to happen? >> isn't it lovely? just amazing. it shows the banal nature of all of us when it comes to money. if you remember, money is the root of all evil.

even for those who lock their eyes in the stars in search of higher purpose, it still comes down to dollars and cents and budgets and balances. my dad put it very beautifully, neil, a long time ago. he said those who have their eyes to the stars trip on the roots. the vatican is a perfect example. i mean, everyone has financial problems, including the vatican, including religious leaders, including murderers, including the whole range of human existence. finances are indiscriminate as to who they go after. neil: no one can seem to get a handle on this, if you think about it. all the levels of debt at all parts of society. i'm wondering what you make of the fact that they can't. >> you know, you -- >> well -- neil: we will get to you, art. >> sorry. neil: that's all right. brooke. >> the vatican has the same problem that the u.s. government does, overspending, it seems. i think it's indicative of a

human problem. i think maybe they can send rand paul over. i know he's a deficit hawk. but i think it's one of those things that people struggle with, it's a huge debt problem, huge medical debt problem, and hopefully the lord forgives people's debts. maybe they can underline that a little more. neil: you can argue about riches and artwork and i remember visiting the vatican, seeing all these beautiful oriental rugs lined up like soldiers along the pathway to the chapel. they have stuff they can sell if they needed it but they can't, they don't, they won't. if you've got assets you could deal with this right now, what do we say about all the other entities that don't and they try to hit up the rich or just ignore the problem all together and keep spending? >> you know t vatican of course is serving a higher purpose. so serving a higher purpose, the power of the dollar is not as

great i guess one could argue, the power to absolve debt but the reality is they serve a greater purpose. new york city -- neil: but you have to be aware that purpose comes with a cost. >> yeah, you do, but also, they can rely upon the world's tl philanthropic efforts to support the higher purpose. they need to make sure they spend their dollars based on serving that higher purpose and controlling spending to some degree. again, they should spend every dollar they take in. charities should spend every dollar that they take in for the purpose that they tell the parties that give money to them they are going to use it for. i think if they have to sell an asset, they should, because again, it's a higher purpose. neil: james? >> i think if you are going to continue that revenue stream and encourage people on sunday to put money in the collection plate, they really want to know that it's not funding a large

vatican bureaucracy to continue brooke's analogy to our own federal government, it was really hoped that this pope as an outsider was going to be the swamp drainer, if you will, that he was going to take on the vatican bureaucracy. neil: are you comparing pope francis to donald trump? [ speaking simultaneously ] >> your government doesn't have a higher purpose. it should, but the u.s. government has a broad purpose in cutting out the waste and the inefficiency is a different story. i mean, look, the vatican should, you know, get its finances in order but they can do that. also, they've had a lot of stress over the past two decades with the lawsuits around the globe. >> taxes are involuntary. donations to this church are involuntary. i think they have even more of a pressure, if you will, to demonstrate they are using the money wisely. >> in that theory, it only works

for the federal government. new york city taxes are voluntary but they are losing 300 people a week here right now, and -- neil: you are so running for mayor. >> no, i mean, they are running everybody out. don't move to new york city. they will tax you to death. neil: art, i would like to switch gears, if you don't mind, and talk a little about china. there was an interesting comment at the white house, that it's a good thing he was elected president because by now, china would be the biggest economic power on the planet. where did he get that? >> well, sure it would be a bigger power relative to us because frankly, we would be a lot weaker power. i mean, what he's done with the tax bills, what he's done with deregulation, even monetary policy, has really stimulated economic growth and we are performing extremely well, which would not have happened had he not been elected. it really wouldn't. we are outperforming europe. neil: they were growing at five times our rate and now are

growing at three times our rate, they still would be growing at a much faster rate than we are, right? >> yeah, but it's much easier to grow when you are way, way, way behind. it's much harder to grow when you are the leader. that's what's happening. touch on this growth rate just like japan's after world war ii, phenomenal growth rate. it was japan taking over the world, if you remember, then all of a sudden it stopped. this china thing is very much the same thing. they are catching up fast and have been for 49 years. neil: then you kind of liken, you liken -- [ speaking simultaneously ] >> that's going to taper off a lot. neil: all right. i think what he's saying -- >> my guess, it's going to go much lower over the next five or ten years than ours. >> look, by the way, i think the tariffs on china, they have a big effect on my business, real estate and construction, but -- it's a cost of the goods, of

building materials to produce the buildings. that's now run up between 10% and 25%. neil: the president says the chinese are paying that. >> well, they are paying it but it's costing us money, too. the real estate industry. but i think that probably is a sacrifice for the greater good because we want to have manufacturing in this country and in order to keep it in this country, we need to support our industries. so while we pay more for our goods and materials to buy them here, that money will go into providing higher paying jobs and more -- neil: you think this is a fight worth advantage the end will justify the pain. that's what he's saying. >> i think you can say that you make the sacrifice for the greater good. this next round of tariffs, part of it will go this month and part will go into effect in december, will likely affect lower and middle income people the most. i think that ultimately, they are the ones who have to decide whether or not the sacrifice is worth it. neil: it's your generation that will come up short as a result.

guys, i want to thank you all very much. art laffer, always a pleasure. we are up 172 points on the dow, not that far away from the fed minutes, latest meeting. more after this. . . i'm really into this car,

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neil: you know you mentioned president trump there when you submitted your resignation and, then he sped it up. you can go now. he has since said when you left that, well, i gave him a second chance, obviously referring to the moment that barack obama had terminated you. any thoughts on that? >> well, i was obligated not to just in a huff walk out the door. i needed to give him time. neil: were you in a huff? >> no of course, not. this is not personal to me. this is serving the country and it is a privilege to serve this country. it is an honor. i'm actually, i'm humbled by it. i took no part in the campaign. i had not met president trump before he interviewed me so it

was not something i ever aspired to. neil: all right. that was general jim mattis a little earlier. his book is out now reflecting on his two years plus serving as defense secretary of the united states. worries still concern him and concerns we as a superpower need to watch. he is watching our economic strength and military strength are inextricably intertwined, a point we'll expound on a little bit at 4:00 p.m. eastern time on "your world," we replay a big chunk of that interview. get reaction to what he said as well. that is coupling up couple hours. deirdre bolton filling in for charles payne. deirdre: i'm deirdre bolton in for charles payne. big news out of hong kong.

its leader withdrawing the china extradition bill, the last straw for protesters. we'll take you right now. jennifer schoenberger is standing by. she is is at the fed with the "beige book" report. jennifer, what stands out to you. reporter: manufacturing activity declined around most of the 12 federal reserve banks in august. there was a little bit of softening around the edges in a couple of districts. with the exception of four districts philly, chicago, new york, dallas we saw manufacturing decline across this country. manufacturers are grappling of course with trade uncertainty, tariffs and slowing global growth. some are choosing to cut cap-ex, some are not. it's a little bit of a mixed picture. in st. louis, production, new hires, new orders actually declined across the board for manufacturers. that is the first time they saw