♪ ♪ larry: hello, folks, and well to "kudlow." i'm larry kudlow. a day five of

the horrific, bar baric, hamas-iran invasion of israel. israel is regrouping with their air defenses, soon to be haunched ground attack -- launched. weaver trying to get with hold of mike tobin with on the ground. he's on the gaza border. as soon as we can, we will plug him right in. meanwhile on the show, senator eric schmidt will be here to tell us why the administration is still in deep denial about the role of iran, and. >> just -- in just a second the great harvard law professor alan dershowitz is going to the tell us why hard harvard loves hamas, or maybe they don't. but first, a worth of -- word of congratulations, winning a tight race over another great friend and distinguished conservative, jim jordan. mr. jordan has now declared support for scalise and is whipping other members into the scalise camp. hopefully the republican conference will be completely united and move the nomination

to the house floor and get the 217 votes necessary. a couple more words about steve scalise, whom i have known for many, many years. he is a brave soul who was shot on a baseball field a few years ago, managed to recover and won the admiration of everybody on both sides of the aisle. if right now he is ahead of schedule in his winning battle to defeat cancer. he's a strong conservative, he was an excellent whip, end excellent majority leader, former head of the conservative republican study committee, and he was a principal organizer of h.r. 1, the first republican house-passed bill last winter, hugely important as it will unlock the fossil fuel spigots that joe biden's radicalling green new deal attempts to shut down. h.r. 1 was also an important permitting reform bill. it would unleash oil and gas production, bring down gasoline prices and help restore america's energy dominance that

biden has so badly undermined. then majority if leader and a heat and then-speaker kevin mccarthy unveiled h.r. 1 on this show in part because it was probably my biggest pet cause. and i think it still is. comes from louisiana, you can bet steve scalise will keep the heat on and press forward to fight biden's climate change and restore a balanced approach to energy using our god given resources and technology advances to power future economic growth forward. anybody that knows steve scalise, by the way, really likes him. donald trump backed jim jordan, but trump is also a great admirer or and friend of steve scalise, and mr. jim jordan, an old personal friend, he will continue to do a terrific job as judiciary chair in the biden investigations and in pursuit of an end to the who to-tiered justice system -- two-tiered jus

jus disthe department. they're song proponents of free speech, and they are supply-side tax cutters. they will work hard to limit the size and scope of the federal government, curb spending and deficits, roll back the anti-growth biden regulations. these guys are pro-business. they are not big government socialists. and the fact that mr. jordan is magnanimously working for a successful scalise speaker's vote attests to jim's patriotism and his strong character. as soon as he get a republican speaker onboard, look for a bipartisan resolution in support of israel. it's going to have to be some kind of supplemental spending bill to help our great ally, israel. and then the hard blocking and tackling. finish up the regular budget order appropriations process. liberal media keeps writing off the are republican house. they do it dozens of times. but i think those liberals are going to be wrong once again.

by the way, the republican house will also be israel's truly best friend through thick and thin. okay? some just a little appetizer by myself for mr. scalise and mr. jordan. all right. now, next question before the house, does harvard hate hamas? or maybe not. joining us is the great alan dershowitz, professor emeritus at harvard law school. and the author of "get trump: the threat to civil liberties, due process and our constitutional rule of law." and and also a great article, i saw it in the new york sun, a new reckoning is long due for -- overdue for american universities over the anti-semitism which of which their campuses are riddled. as your biggest fan, sir, thanks for coming on the show. what is it? i mean, i spent a prison term at princeton. i know you were a long time with

harvard is. larry summers is tour cows. -- furious. maybe we'll get to the quote. what is it about these schools, professor dershowitz? they have no context, they have no historical understanding. >> you're absolutely right. [audio difficulty] for woke progressive culture, but we're on the offense now just like israel. we turned against these. we got a law firm in new york to rescind is an a offer from the head of the nyu bar association who supported the rapists and the beheaders and the kidnappers at harvard. we've gotten lots and and lots of the groups to withdraw their support for hamas. and you know why? because a big hedge fund operator who graduated from harvard said he wanted the name of every single student who supported these beheadings and supported these abominations to be made public so that no wall

street firm makes the mistake of hiring think of them. or think law firm. or any law firm. can you imagine a law firm saying to a jewish client, oh, by the way, the woman who is going to be the representing you, she believes it's okay to lynch and rape jews. would you like her to represent you? of course not. the first amendment allows these bigots to express their bigoted views, but they also allow us to respond to them. and one way of responding to them is by exposure: the marketplace of ideas requires transparency. so we want the name of every single student and fact faculty member who supported these barbarities, and we want to make them public, and we want to make sure every potential employer knows who they're hiring. larry: boy, that's great. that is a great story. i know there's been some backing and forthing, claudine gay is the president of harvard. out of the gate very, very slowly. i think we have a quote. let me see, do we have a quote

for her? the delayed harvard leadership statement fails to meet the needs of the moment. why can't we find anything -- oh, this is larry summers, i think. all right, this was summers. the delayed harvard -- come on, let's get it up on -- there we go. all right. the producers aren't helping me here. here, as the events of recent days continue to reverb rate, let there be no doubt that i confirm the terrorist atrocities perpetrated by hamas. okay, that was her statement, the president of harvard. it took a while to get it out, alan dershowitz. are you okay with that? should she have acted sooner? as a longtime harvard professor, maybe among the most distinguished people ever to serve harvard, what do you think? >> between larry and i, we served harvard for over 100 years, and i think it's it's not immodest to the say we were part of harvard's end ration for excellence. and now -- reputation. and now the the president of harvard, too little, too late.

she has still refused to condemn the student groups. she doesn't want the woke people to protest. she's just been made president. she wants to take the safe way out. that's the true of most university administrators today. they refuse to condemn students. just imagine if there were a club at harvard called the ku klux klan club, and it advocated the lynching of african-americans. would president gay remain silent are about that? would she rephase to condemn? the same -- refuse to condemn? the same standards have to be applied to these groups. and you know one of the groups that supported this, this beheading was amnesty international at harvard. they've now withdrawn their support as the result of pressure. but there were so many groups, feminist groups, gay groups, other groups who were part of that's what called intersectionality which is one of the most bigoted anti-semitic

academic groups around. but it basically sends messages to people saying if you want to be a good progressive, woke person, you have to the hate israel, and you have to love hamas. we're not going to stand for that anymore. exposure with, as justice brandeis once said, is the best, best remedy. sunlight is the best disinfectant. so let's get sun sunlight on all the people who have lent their names and the good maim of harvard to these barbarities. larry: let me put up, if i can can get the producers -- i want to read larry summers' -- i've known larry summers over 40 years. let's get this up. come on, summers, summers, summers. here, this is larry summers. the delayed harvard leadership statement fails to meet the needs of the moment. why can't we find anything approaching the moral clarity of harvard's statements after george floyd's death or russia's invasion of ukraine when terrorists kill, rape or take hostage hundreds of israelis

attending a music festival. why can't we give reassurance that the university stands squarely against hamas terror, frightens students when 35 groups of their fellow students appear to be blaming all the violence on israel. i wanted the read it, i know you agree with it. i agree with it. just because my regard for larry summers. larry summers is democrat, i'm republican, but he's making enormous sense as he often does. he's a brilliant guy. he's like you, mr. dershowitz. it's a matter of character. you've got to be square on both sides of the aisle. so, you know, i look down the list, harvard law school, columbia, berkeley, myu, yale -- nyu, yale. i didn't see princeon on the list, but i'm afraid to keep looking. you know, if the president's -- presidents of these universities don't step up, who will? that's my question. i mean, if they don't, who will? >> well, faculty members are stepping up. stephen pinker, a few other of

my colleagues are stepping up. but, you know, it's not only universities. black lives matter in chicago basically issue ised a statement that says that jewish lives don't matter. not only don't we care about jewish lives, we're going to glorify the hamas parasailors when who went into a music festival, they were primarily people from the left are, people who support the two-state solution, people who want peace. but for these barbaric people, it doesn't matter what kind of a jew you are. if you're a je witnesser, if you're -- jew, if you're in israel, you deserve to have your children murdered. benjamin netanyahu just a few minutes ago described what happened in a room with a whole bunch of jewish children. apparently tires were lit on fire, and they were sent into the room to incinerate these children. if that doesn't remind you of the the holocaust, nothing, nothing does. and what we're seeing is neo-nazi fascists and and

they're supported by students. would you want to sit next to a student in harvard law school who you knew would be prepared to behead your children if he had the opportunity to do so? you know, this has has to be exposed 678 and the schools -- exposed. and the schools have to know what they're doing. and today many of these universities are failing in their mission. now, the students are fighting back. you know what they're doing? they're not taking humanities because they know what it is, it's being used for propaganda. what they're doing is s.t.e.m., science, technology, engineering and math. they're majoring in mixes, they're going -- economics, they're going to the hard sciences. they don't want to be propagandized by these radical idealogues on the hard left. we need a reckoning just like we had a reckoning after george floyd. george floyd was one man loaded with narcotics and alcohol who contributed, obviously, to his own death even hoe he cheerily was -- though he clearly was

murdered, and the people who murdered him had to be held accountable. one man caused a major reckoning of how universities deal with race. i think that 1200 innocent jewish people in israel and the way universities have dealt with that ought to cause a reckoning. and i won't rest this that reckoning occurs at yale where i went the law school, at harvard where i taught for 50 years, at the city university of new york which won't allow me to speak. do you know harvard won't how me to speak about israel? they will allow think anti-israel, hamas supporter to speak, but they will not allow me or other pro-israel supporters to have a platform on the campus. larry: a taxpayer-funded university. professor dershowitz, one more thing. in congress this -- i want to play some tape, this a rashida tlaib woman who is completely on the wrong side and is in denial of all the realities you just spoke about. our own hillary vaughn, chased

her down. listen to this, professor. hang on a second. >> reporter: -- these terrorists have cut off babies' heads and burned children alive. do you support israel's right to defend themselves against -- [inaudible] you can't comment if about hamas terrorists chopping off babies' heads? [background sounds] congresswoman, do you have a comment on hamas terrorists chopping off babies' heads? you have nothing to say about hamas terrorists chopping off babies' heads? do you condone what ma -- hamas if has done, chopping off babies' heads, burning children alive, raping women in the streets? [background sounds] you have no no comment about children's heads being chopped off?

congressman, why do you have a palestinian flag outside your office if you do not condone what hamas has done to israel? do israeli lives not matter to you? larry: i mean, we've got -- she won't even comment on chopping off babies' heads, children's heads, and she has a palestinian flag hanging outside her office. a u.s. congresswoman. i mean, i think it -- i don't deny her right to have her opinions. i don't think you do either, professor. but i think there's a certain point of just basic inhumanitarianism that we have to get past in this country. there has to be a conversation. right now there's no conversation. this woman is an extremist. she's a bad apple, in my opinion. that's just my editorial opinion. but, you know, it just goeses to show no dialogue, no discussion, no acknowledging of the reality that you have just been

describing. alan, i'll give you the last word on this. >> we have to have a single standard. would she have refused to comment if there were a member of congress who supported lynching of african-americans, as some did back in the 1910s and 1920s. this is the same. these are are lynching. more israelis were lynched in one day than african-americans were lynched in any 10-year period in history, and we have to think of these as lynchings, and we have to ask people who justifiably always oppose lynchings and would oppose them today how they can remain silent in the face of this. shame on you, congresswoman. alex: professor dershowitz, we appreciate your time and your view toint -- view point, sir. thank you very much. all right, folks, got a lot cooking tonight. as i said in my opening riff, it looks like steve scalise is the gop's next pick for house speaker. we're going to talk about it with congressman kevin hearn next up on "kudlow."

thanks again to professor dershowitz for some moral clarity and clear explanation. ♪ ♪ fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso! one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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larry: coming back home, steve scalise is going to be the

republicans' next pick for house speaker. our own hillary vaughn live on capitol hill with details. hillary, i just want to say how much i loved watching you chase down rashida tlaib. and we showed it to professor dershowitz who had very good thing -- i mean, nice going, hillary vaughn. >> reporter: thank you, larry, i really appreciate that. we try to talk to everyone here on capitol hill, and sometimes we don't always get answers, but sometimes the non-answer ends up being the story. but what is the story right now on the house side is that in a closed door caucus meeting congressman steve scalise, the pick from the majority of conservatives to be their guy, to be the next speaker of the house. in a 113-99 vote is, 113 for scalise, 99 vet ises for congressman jim -- votes for congressman jim jordan. and a is lease got the most votes behind closed doors, but that's not enough to secure the speakership on the house floor. everything is on hold right now, republicans not going to vote just yet. scalise, in the meantime,

scrambling to get enough support. congressman jim jordan though just now giving scalise a boost. he told fox he will vote for scalise. he offered to give a nominating speech for him and is encouraging the 99 mens that voted for him -- members that voted for him to switch to scalise. the house floor is in recess right now, we don't know what the time frame is. we do the know republicans don't want a repeat of the 15-round saga that it took to elect kevin mccarthy as speaker in janment . the idea being today the gop would hash out their beef in private instead of in public, but a rule that was pushed by congressman chip roy that would have effectively someone to get to 217 before a or floor vote did not pass, so there could be chaos on the floor again, and some members are loving it. congressman tom massey making the comment that the vote to elect mccarthy as speaker in january was a coronation. he's calling what's happening right now competition. but, larry, of course, a lot of

people are not loving airing all of this in public and, obviously, the potential that that this would be aired out on the house floor round after round as well. larry? if. larry: run, hillary, run. that's all i can say. throw your hat into the ring. hillary vaughn, everybody. for more, let's bring in oklahoma congressman kevin hearn, chair of the republican study committee. mr. hearn, thank you very much for your time. give me your read, kevin. give me your read. i mean, jim jordan, class act, coming out for steve scalise. apparently he's whipping for him. give me your best, your best read, ken. kevin. >> well, certainly both men are great friends of mine, both are great leaders. they spent the last week working, meeting with members of the conference, talking about what their vision going forward was. we had our meeting in closed door session today, no cell phones, and steve scalise are came out the largest majority vote getter which by conference rules we go to the floor now.

and steve is no stranger to whipping votes and to talking to fellow members about what needs to be done to get to 217. we're actively working to help him get there as many other members are as well. we think it's necessary we get our speakership back into the place it needs to be, get the republican party back in business and get our country back where it needs to be in leading the rest of the world. larry: i see that some of of the insurrectionists -- that's my word, not yours -- but some of the insurrectionists who will remain nameless but we all know who they are who stomped out mccarthy, i see they're backing scalise. i took some hope in that. the trick is to get this done in the next 24 hours, is it not, kevin? >> it is. and, certainly, that's what congressman ca scalise, speaker-elect scalise is doing right now. his team is reaching out to, obviously, no one likes to be, you know, didn't get their winner to cross the finish line, or but it's about reaching out now, bringing the conference together. what we know, there are a small

number of people that have expressed their concern about getting to the 217, and i know that the speaker-elect, scalise, is working on that right now as well as other people. and you heard congressman jordan being the professional that he is, the great congressman he is, the great leader he is, coming out, offering his ability to come out and bring the people together. there were 99 people in conference that supported him. and bringing those to the forefront to get speaker scalise many that chair so we can -- in that chair so we can move forward. larry: jim jordan is a great pate rat and a great man. so is steve scalise, for that matter. look what he's gone through. they shot him, here's winning his -- he's winning his battle against cancer. his h.r. 1 bill was a masterpiece. i'm hoping you all can get this done. kevin, i don't want to put you on the spot, but is there one particular issue that is hanging up a group of people that has to be resolved? >> well, i think the big issue

is our spending fight. we're seeing, you know, our federal deficits running over $2 trillion for the first time in american history we're borrowing more money that it's taking to actually run are our country. all of our discretionary spending, the money it takes to run the government on a day-to-day basis, we're borrowing 100 plus percent of that now which is insane. the folks that i think are holding out for this, they want to see a plan going forward. i can tell you that, you know, i've worked a lot on the budget since i've to been here9 with the republican study committee. i've worked on balancing the budgets, worked on a lot of policy around this spending idea, and, or you know, we get speaker-elect to become the speaker scalise, i'm going to be running for the majority leader position to, you know, shore up the policy side on that to get us where we need to go on balancing budgets, getting our appropriation bills done on time so that we're not doing this continuing resolution time and time again and seeing these huge omnibuses that keep driving our spending. harry, what we've done in the --

larry, what we've done in the last 10 years, we've had 9 omni buses and 38 c.r.s. it's not good for the american people or the economic security of our country going forward, and those are the gravest concerns of the people that are continuing the to hold out. they want to get answers on that. larry: well, i agree with you. and, kevin hen, we appreciate your -- kevin hearn, we appreciate your time. when you are famous and powerful majority leader, whatever, we hope you'll come back on the show. but we we appreciate you today, great information, thank you. >> thanks, larry. larry: coming up here on "kudlow," joe biden's iran appeasement has put at least an extra that $60 billion in iran's pockets. now, folks, exactly what do you think iran's doing with that money? take a guess. anyway, we're going to talk about it with distinguished senator eric schmitt from missouri. plus there may be more inflation than folks think. got real bad wholesale price inflation report today. former federal reserve governor

kevin warsh going to weigh in. please stick around with "kudlow." we'll be right back, straight) ahead. ♪is ♪ t our th erapists give their all each day, by helping those who need it most. we take great pride not just in the job our team does, but in them as people. our people. and while we're in the business of taking care of others... it's important our therapists know that with benefits from principal, they're taken care of too. (♪)

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♪ larry: so joe biden and company in complete denial about the role of iran in this horrific hamas if invasion, and they continue to appease iran. and now they continue to deny it. and at least, i don't know, $60 billion, maybe $70 billion in iran's pocket. so joining us now to talk about this is our friend senator eric schmitt from missouri. thank you, sir, as always, for coming on. let me just play you, before we dig into this, here's janet yellen in part of this denial story. take a listen to what she has to say, please. >> we have not in any way relaxed our sanctions on iranian oil, and we are -- we have sanctions on hamas, on

hezbollah. this is something we have been constantly looking at and using information that comes available to tighten sanctions. larry: you know, senator. >> schmidt, they haven't relaxed my sanctions. -- any sanctions. in the last couple of days, iran has gone from about 4 or 500 million barrels a day to 3 million barrels a day -- 4-500,000, i beg your pardon, to 3 million barrels a day, on the way to 4 million barrels a day. it's worth about $60 billion. their exports to china have gone from $7 billion to $30 billion, no relaxation there, and their foreign exchange reserves have gone from $4 billion to $70 billion worth? for a country that hasn't experiencedded -- where'd they get all this money, senator schmitt9? how'd that that happen? >> well, i think it also, larry,

highlights the importance of our national security objective here in the united states to be energy dominant. we were under president trump. under no circumstances should the united states of america be relying on any foreign power for oil. we just shouldn't do it. we certainly shouldn't be shrinking our strategic petroleum reserves which joe biden has done at historic levels. so on the energy side of this, you know, that's another big play. look at the tale of the tape, larry. this is not just, you know, the numbers that you cited or even the $6 billion that was paid as a ransom just, you know, last month -- on september 11th, mind you, talk about being tone deaf. t it's not just that $6 billion. you've also got this administration that, you know, reversed the trump policy, sent over $300 million to the palestinian authority when they came into office on top of the $400 million that barack obama sent in palettes of cash -- palates of cash to iran. there's yo -- palettes of cash to to -- wanted to deal with

iran in a way that is not in our interests or certainly not israel's either. larry: what's so troubling, senator, is i think they are still talking about a deal with iran. and i say that despite the horrific invasion of israel and the children's beheadings and the grandmother murders and all this stuff. they never mentioned, i read biden's speech yesterday, you know, i heard it, then i went back and read the copy. never mentioned the word iran. and they are in denial about helping iran as you heard janet yellen, the rest of the administration saying the same thing. money is not fungible. $6 billion, oh, heck, it's just going to go to doctors' bills, maybe obamacare subscriptions. i don't understand, they swapped out $10 billion from iraq, and the oil sales have gone up from $400 million -- 400,000 to 3-4

million barrels. huh? really? so i'm worried, i don't know what you hear on the diplomatic circuit that that they are still playing footsie with iran and doing everything they can to deny that that iran are was part of this hamas invasion. >> that is exactly right, larry. and you watch the language that president obama -- or president biden is withdrawing -- is using. no mention of iran. and you watch now how this plays out with the intelligence community, state department officials. they're not going to talk about iran. they are so invested in these bad deals that they've done with the number one state sponsor or of terrorism. they refuse to be sober and clear-eyed about this. and we talk a lot, larry, about, you know, iran being the number one state sponsor or -- of terrorism. here's that actually looks like, right? they send money, they send arms to hamas. hamas glides into a concert with innocent people, machine gunned

down teenagers running away, burned people alive, behead babies. this is terrible, terrible stuff. and i don't know how any deamerican administration, any american president, think party it in this country could -- any party in this country could be a part of this. and understand this is what happens, money is fungible. the $6 billion they're you're releasing, they get to use somewhere else. and when we get back, when chuck schumer who went to china and we're not working this week to get our budget bills done which is what we should be doing because we've got about 10 working days before the next deadline, but instead of doing that, he's in china. what should happen is a bill should come on the senate floor to freeze the $6 billion is and make the democrats object to that. i can't believe that they would do it. ill hope that we could come together -- i would hope that we could come together, republicans and democrats, and say we do not want $6 billion going to the number one state sponsor or terrorism. we'll find out probably many in about a week, larry. larry: i'm with you on that one, for sure. senator, let me just ask you

though, you know, these economic and oil sanctions and business sanctions and banking sanctions, they're there on paper, but they are not being enforced. now, is there a way to get senate and/or house, you're going to have steve scalise hopefully as speaker of the house many a few days or a day. can you get, i mean, somebody has got to put these sanctions back into place. trump had a them in place. i mean, iran was doing 3, 400,000 barrels a day under trump. now they're moving up towards 4 million barrels a day. that's because of the sanctions. mitch mcconnell wrote a very good op-ed piece, i'll give credit where credit is due, in yesterday's "wall street journal" saying here's the sanctions that are in place. why aren't we enforcing them, senator schmitt? >> well, this is what happens, larry, when you have a chief executive officer or the executive branch of the commander in chief that isn't

interested in executing the law. this is exactly what's happening at the southern border. the president of the united states, i mean, the federal government does a lot of stuff it shouldn't do. securing our own border happens to be one of those things. we have allows in place. we should do more, by the way, but we have laws that could be executed by the president of the united states, he's not doing it. and and you're talking about sanctions, same deal. this is a lawless administration, larry. not only are they not doing the stuff they're supposed to do, that congress has actually directed them to do or that's a previous policy of the administration or previous administrations, they're doing things they're not allowed to do like trying to wipe away a trillion dollars worth of student loan department. i mean, this is a renegade administration that cares very little about what the law is or what the rules are. and i think that it's up to us in these moments right now to speak out about this and talk about how terrible this is and, hopefully, they have a course correct on this issue of iran. there's -- it's not, you know, the the first issue for us would be what is in the strategy

strategic interests of the united states. certainly, we have friends and allies that this impacted. you've got, you know, again, playing footsie with another iran nuclear deal and go soft on iran. we just can't allow that to happen. and so i think in the senate we've got to push hard. the the house, this has to be part of their agenda to continue to press back against an administration, again, that is not interested in enforcing the law whether on things related to foreign policy or our own border. larry: i'd like to see, i mean, this should be done. iran should become a pariah. again, they let -- the bidens let iran out of that cage. got to be put back into that cage. and the sooner we do that, the sooner israel will be helped and get rid of hamas. i mean, who do they think is financing hamas, calling the shots on hamas and probably hezbollah? anyway, senator eric schmitt, thank you, sir. we appreciate your time and your logic, as always. all right, folks, we're going to come here back on set, mundane domestic items like a whopping big wholesale price

inflation report today. we've got the great kevin warsh, former federal reserve governor and shepard family distinguished visiting fellow at the hoover institution. i didn't know about the shepard family thing. is that a new title? >> it's been around. they're pleased to get the attention with you, larry. larry: i'm happy to do that. kevin warsh, 0 .5 in sent, 0.7 in august, 0.6 in july. wholesale prices up 7.7% at an annual rate over the past 3 months. and, yes, it's food and emergency which may be excluded from the geniuses, but the fact is those are essentials. so what are you going to do here? this is a problem for the fed. >> so the same way just discussing early. >> on -- earlier on the show that america's confronting a war in two parts of the world, this europe and the middle east, the fed's confronting a war on both

of their parts too. growth is deteriorating not just around the world, so i think increasingly they have a growth problem. and they still have a big inflation problem. they've got two wars to fight. it's mostly because they dropped the ball a year and a half ago and let inflation get out of control. they still haven't brought it back to target. larry: you know, a couple things here. one is you wrote a good piece in the "wall street journal." we'll put it up on the full screen, a week or two back. the fed -- the treasury's selling too many bonds. now, the good news is the fed 's not buying them like they used to. the bad with news is market interest rates have gone up. they'sed back down a little bit recently, but the 10-year is 4.60, 4.70. so that's one point. the other one i want to say is the gdp now report from the atlanta fed says the third quarter's going to be 5-6% growth. so fed people look at that that and freak out, right? deep down in the heart of every fed economist is a hatred for

growth. [laughter] >> -- larry: scratch 'em deep enough. >> so somehow they think the big spending that's come out of washington is somehow deflationary. when more workers are earning more money, that's inflationary and they've got to stop it. that's the central contradiction in central banking that needs to be fixed. first, the fed thinks that growth is too hot. chairman powell spoke a couple weeks ago at his press conference, there were too many people working, he needed to get the unemployment rate up. i think that's a misplaced sentence. it's true the economy is strong, but much of that growth in investment is because of government subsidies. it's not the kind of growth we can rely upon. and when we see the interest rate on 10-year yields are moving up, what that says, larry, is the markets are starting to set interest rates, the fed is not. and as interest rates go up for our government, what's happening? it's crowding out the kind of private investment that we need. is so if you're a recipient of the government's largess to build new solar panels, i suppose that's good for you.

but if you're the real private economy, your cost of funding is going up, and if your a real household, your cost of a mortgage is going up, and i think that's going to hit the economy -- larry: 30-year mortgage rates through 8% today. should the fed raise their fed funds target rate, kevin warsh? >> i don't think they should. they're stuck in a horrible situation, much of their own doing. i think what they're going to do is pause in november, i think they're going to pause in december and somehow pray that inflation gradually falls to 2%, but i think they're stuck in a very bad position, and i don't think they've got an easy way out of it most importantly because they're not setting interest rates anymore, markets are. larry: john taylor's going to be right. he's your colleague at hoover -- >> he's my colleague, my friend, my one-time mentor. larry: he taught all of us. this putzing around the fed is doing -- that's probably not the right word to use. don't pause, just go. they've got an inflation problem, go. >> so i think the war will give

them the excuse that they're looking for not to go. and if they go to 6%, my own judgment is they're going to do a lot of harm to the economy. they are in a terrible position, and it's not because of war, and it's not because of covid, it's because of the mistakes they have made. larry: it's tough to come back from those mistakes. kevin warsh, everybody. best of the best. >> thank you, larry. great to be here. larry: hoover institution, the shepard a -- who? one more time. i want to be fair. >> the shepard family distinguished visiting fellow. thank you, larry, for that kind introduction. larry: all right, folks. coming up, we're going to contrast joe biden's iranian appeasement with donald trump's toughness, all right? we have abraham accords negotiator alan bow lahr. feds should just move. get it over with and go to 6 president. kevin warsh is going to be the right, inflation is not conquered. we'll be right back. ♪ ♪ gobble gobble. i've seen bigger legs on a turkey!

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larry: all right. donald trump knew the difference between strength and weakness with iran who's behind all of this stuff is. i don't think mr. joining me now, allen bo lahr.

i'm short on time, and i apologize, but the difference between strength and weakness. give us a little hint. when you guys were negotiating with the abraham accords or in general, what was the difference? did we understand that? >> i think the key thing here, larry, is everybody think aboute agreement and how it comes. the truth is that people don't know the main factor in driving the abraham accords was one thing which is containment of iran. and how did we do it? first, we killed their number two guy. right? we took him out in iraq. they couldn't do anything. they shot a missile, it exploded, nothing happened. that was the single biggest thing that enabled a peace agreement. it was peace through strength. larry: and going beyond that, we, i mean, we enforced, the trump administration if enforced the sanctions. instead of 4 million barrels a day, oil was down to 3-400,000. correct me if i'm wrong, adam.

>> you're 100% correct. the data speaks for itself, and no amount of explaining can change that. when you release tens of billions of dollars, when you relax things, again, whether it's a specific official response or what happens, the oil data is very clear. you are empowering a roadway join. and that -- regime. and that's what drives something like this, what we see hamas did, which is really a proxy war between iran, the united states, israel and friendly arab countries. this is all iran-backed. larry: why does a janet yellen, who's a smart person, she's in denial about these sanctions. of course the sanctions have been lifted. or they've been relaxed. iran's come piledded almost $70 billion of foreign exchange reserves out of the blue. >> well, we're investors, larry. we know what we do, and we look at data here, and the data's very clear. this is no -- people are talking about the $6 billion, that's the tip of the iceberg, right? we're talking about tens and tens of billions of dollars over multiple years. and so at the end of the day,

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♪ larry: that's it for "cud row." thanks for watching, folks. ♪ (soldiers marching) - i am besieged by 1,000 or more mexicans under santa anna. (dramatic music) the enemy has demanded our surrender.