washington post associate editor bob bob woodward recounts congress and the obama administration's attempts to restore the u.s. economy over the last three-and-a-half years. look for these titles in bookstores this coming week and watch for the authors in the near future on booktv and on booktv.org. >> up next on booktv, former north chicago superintendent of schools patricia pickles presents her thoughts on how to improve the american educational systemment -- system. [applause] >> first, i thank the business leaders for allowing me to share my visit -- vision in education. i also want to recognize some of the groups or organizations that i provide service and support, aka, alpha capita alpha -- kappa alpha, the urban league and the urban league guild, and the national association for the mentally ill. thank you for being here. i am patricia pickles, the author of "are you in a pickle? : lessons along the way, student performance and achievement gaps." i am the first college graduate from if my immediate family. when i was in high school, i was tracked into general classes, i was tracked o

. >> should note that nancy pelosi has denied bob woodward's accounts. bob woodward one of the most respected reporters in the country. how significant is be a ad like that? >> first of all i would underscore that nancy pelosi has been out pushing back on the facts of the ad her words speak powerfully. the last thing that matters is that mitt romney hit the mute button on 47% of americans saying he didn't care about their vote. he didn't need them to win this election and sending a signal saying that as president, he wouldn't be out there fighting for them. we're going to keep going out talking to voters, we were in wisconsin yesterday, 18,000 people showed up in milwaukee in the rain. we'll keep on our message of economic growth and prosperity for the middle class. the romney campaign has their ad strategist talking about what's important. >> the president will be in new york monday and tuesday for the u.n. assembly. republicans have been questioning why he has no private meetings scheduled with foreign leaders. why not? >> anyone who has been around the na

bob woodward, legendary bob woodward of watergate fame of course. the price of politics" he will be here at the top of the next hour to talk about it. i memessed my latest column, republicans having a bad case of buyer's remorse. check it out at billpressshow.com. we've been talking about the latest impact event i guess to impact the romney campaign which is a release of this video by mother jones where mitt romney is saying that about half of americans are free loading, no taxpaying good for nothing bums. it sounds like. i'm putting it into my own words. what's it do to the campaign which is already reeling with internal dissent according to our good friends at politico. we asked ginger gibson. report politico reporter for politico joining us on our news line. hi ginger, how are you? >> good morning. thanks for having me. >> bill: before we get to the latest this video politico reporting over the weekend that there's some rumbling inside of the romney campaign that maybe they need a little shake-up because they're not doing so well. what's going on?

bob woodward. "the price of politics." the great bob woodward. >>> when we return, let me finish with who's who? the man who's running for president without ever saying anything. ask tom dewey. he didn't quite make it to the white house, did he? he didn't say anything, either. multi-policy discount. paperless discount. paid-in-full discount. [yawning] homeowner's discount. safe driver discount. chipmunk family reunion. someone stole the nuts. squirrel jail. justice! countless discounts. now that's progressive. call or click today. >>> so "let me finish" tonight with this. mitt romney is fretting his hour upon the stage. he served his time getting there running and losing. running and saying what he had to say. signing the documents of admission the right had placed before him. he was when asked to cite his strongest character trait, resolute. resolute, yes, but toward what? some trouble makers in los angeles put out a preview of an anti-islamic movie. it goes viral. gets translated into arabic, hits the high re cairo streets and embassy. does romney decry the anti-islamic movie? no, he had nothi

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bob woodward. "the price of politics." the great bob woodward. >>> when we return, let me finish with who's who? for president without ever saying anything. ask tom dewey. he didn't quite make it to the white house, did he? he didn't say anything, either. those little things still get you. for you, life's about her. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than fou

this book the price of politics by bob woodward which will be out tomorrow, in it bob woodward says essentiallyhat president obama and particularly house speaker john boehner and house republicans really punted on tough decisions that would have put the american economy on better economic, better fiscal footing. and today when jay carney the president carney was asked, i defended president obama, not a surprise, saying he really helped overt a calamity which would have been a default if the debt ceiling had not been increased. here's what he said about. >> he was absolutely committed as commander in chief to preventing a default by the united states for the first time in its history on its obligations. a default which would have led to serious economic kofrconsequs both in this country and around the world, a default which sadly some elements in congress, republicans in particular, all republicans, notably in the house of representatives, seems to rely wliish the prospect of g about. >> ultimately the brand bargain if a that president obama and speaker boehner were attempting fell apart and the

sign up at rid-x.com. >>> a new book by journalist bob woodward is offeri a fly >>> a new book by journalist bobring a fly on the wall perspective of one of the nation's biggest financial crises. >> how much would you pay to be a fly on the wall? a behind-the-scenes look at the president and speaker of the house on spending cuts. jonathan carl has an exclusive first look. >> reporter: the president and the speaker, the talks were secret, and woodward said the stakes higher than anybody realize at the time. >> you talk about it essentially as 44 days that were the financial equivalent of the cuban missile crisis? >> so serious they couldn't tell the world how bad it was at the time. >> reporter: in "the price of politics," published on september 11, bob woodward gives a blow by blow account of the effort to reach a so-called grand bargain. spending cuts and tax increases to cut the deficit. the deal was tantalizingly close but broke down near the end when woodward says the president asked boehner to agree to more tax increases. for boehner, that was a deal breaker. he wasn't going to get a damn d

bob woodward. "the price of politics" is the book. another bobrd book, another best seller, presumably, the one and only, thank you for being here today. >>> up next, what americans need to know about the rising conflict in the middle east. stay with us. rogaine? well, i'll admit it. i was skeptical at first. but after awhile even my girlfriend noticed a difference. [ male announcer ] rogaine is proven to help stop hair loss. and for 85% of guys, it regrew hair. save up to 42% now at rogaine.com. to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone's ready with the know how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready. at devry.edu/knowhow. ♪ droid does. and does it launch apps by voice while learning your voice ? launch cab4me. droid does. keep left at the fork. d

bob will -- bob woodward will be joining us september 17. let's go to our independent line, good morning. caller: good morning. congress is filled with weasels, professional politicians, who is number one priority is to get reelected. they want to play santa claus and constantly give things to their constituents. that is why we are where we are at. professional media people are the ones that let them get away with ridiculous things and doing these ridiculous activities and never asking them how they will pay for it. host: regardless of who was in the white house and to was in the senate, both parties need to work on this, will that? -- will they? caller: congress only does something when there is a crisis and that's what it will take. we continually print money and pretend everything is fine and give everything to everybody and we are headed off the cliff. we will go to the republican line, good morning. caller: good morning. they talk about the debt crisis and our budget. do they ever talk about paying back china tax when do we start paying back what we owe? we will go off a fiscal cliff and it is pretty scary and we're watching obama and by and say not to worry about it. hope and change -- i hope to see what happens with more hope and change. host: you concede this photograph from inside the white house. mitch mcconnell and check looby. this is a meeting that took place inside the cabinet room. they remember that inside friday afternoon the have a news conference which he came into the conference for an agreement he thought he had but failed. the president wanted additional taxes. the republican speaker said that was not possible. bobl be with us on monday morning to take your calls on his next book. vivian is on the phone. everything is being held up by the congress. they are not try to let anything go right. they said they want obama to fail. if this stuff as again, it is all because of the republican congressman. they want anything to go through. it is up to the republicans. thank you. host: john lason is the chair back from the convention in dealing with enough issues. the entitlement programs and a big program. medicare. democrats expected. i understand the affordable care act keeps it solvent for the first term. going out for the, when will we see an independent plan? host: additional 80 years. under the romney plan and will be a change as we know it by 2016. i think president clinton outlined that well. i want to dwell on this for a moment. i think not only as it relates to medicare but also medicaid. what that means to senior citizens who are medicare reliant who are also impacted by the severe medicaid cut

you mention the bob woodward book. bob woodward has interviews with john boehner and the president. the debt ceiling debate just fell flat. america is hanging in the balance about the amount of -- while these guys fight about the amount of taxes and spending. here we are one year later at the same stalemate waiting for this fiscal cliff. apple has been a very successful company and a big product that -- and it makes products that people want. apple is sitting on $40 billion of cash. much of that money is overseas. that money is not coming back here unless there is an environment that is favorable to apple. i do not know where apple is spending its money in the u.s. i can tell you that -- that is one of those companies -- if they brought the money back to the u.s., they could be a bigger contributor to this economy. apple is a proud american company. look ons not forget -- the other side of your iphone, says "made in china." host: this is jon on our republican line. caller: hello. host: hi. caller: it is and not to talk to -- it is an honor to talk to you. i watch cnbc. i have a quest

at 8:00 eastern on and c-span3 >> now, "the price of politics," and bob woodward on washington journal. it is about 55 minutes. host: bobhe author of "the price of politics." what is the story you're trying to tell here? guest: the daily reporting is exceptionally good or the long pieces capture a lot but we run by history and we do not know what really happened and i have the luxury of time and can dig back in and this is an examination of what obama and the congress have done for this period -- for 3 1/2 years, from the beginning of the administration to the summer. host: what is the central part of this story? guest: the drama is this affects everyone. get control of the spending instead of -- we are on a binge now, a spending binge. we cannot keep borrowing all of this money. it describes in painful detail the meetings and phone calls and the internal discussions. a lot of discussion inside the white house. you see what they are doing. last summer on the effort to get congress to increase the authorization for spending and borrowing. the president has a private meeting with his senior staff. it is called by the peop

>> nowa a conversation with paul surprise winner, bob woodward, on his latest book "the price of politics." this program is about 55 minutes. host: bob woodward is the author of "the price of politics." have written about 12 books now. what is the story you're trying to tell here? host: 1 of the things that happens is that we run by history. -- guest: the daily reporting is exceptionally good or the long pieces capture a lot but we run by history and we do not know what really happened and i have the luxury of time and can dig back in and this is an examination of what obama and the congress have done for this period -- for 3 1/2 years, from the beginning of the administration to the summer. host: what is the central part of this story? guest: the drama is this affects everyone. get control of the spending instead of -- we are on a binge now, a spending binge. we cannot keep borrowing all of this money. it describes in painful detail the meetings and phone calls and the internal discussions. a lot of discussion inside the white house. you see what they are doing. last summer on the effort to get congress to increase the authorization

>> i spoke with bob woodward, associate editor and author of a new book "the price of politics." bob woodward, welcome. >> thank you. >> you obtained this videotape of mitt romney talking about 47%. anything questionable of a journalist getting hold of a politician getting something and recording it? >> no, just the on sit. it's a big scoop and one of the big campaign stories of the year. everyone calls it a secretly -- you know, it's on open forum to a certain extent. it's a fundraiser, anyone can be there. maybe it was a waiter. maybe it was somebody who paid the 50 thou for the dinner. >> you're saying -- >> no one in the world has an expectation of privacy. it doesn't exist anymore. >> i think princess kate learned that as well. but if this tape was given to a lib rat magazine, "mother jones" and jimmy cart 'eers grandson is part of it, did look to the outside world ke it's part of a hit job. >> no because it's authentic. they said, you know, this is what it is and its authenticity is the question. and, again, it -- over the decades you and i have known each other, it's one of th

bob. >> no, i've acknowledged that. >> bob woodward, thank you. the book the price of politics. we appreciate you being with us. next time we'd love to have you on the program back in new york of course. we have to give him a squawk book award. >> we should. >> if you have any comments or questions about anything we've been talking about here, e-mail us at squawk@cnbc.com and make sure you bring something sweet to the office this morning. it is international chocolate day. of course if white chocolate is more your speed, you'll have to wait until the 22nd. that is the day the national confectioners association has named in observance of that sweet. and in the next hour, we'll find out why phil purcell says breaking up isn't hard to do for big banks. plus what he blames for the financial crisis. here's the opinion of former wells fargo box on "squawk box" yesterday. >> this crisis was caused by about eight investment banks and 12 savings and loans. period. so 20 financial institutions caused this crisis. ls in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. >>> check out these live pictures coming into the newsroom. this is cairo and you can see the protesters standing outside the american embassy. this is spreading through other areas in the middle east including tunisia, as well. earlier today protesters storming the u.s. embassy in yemen. security forces fired shots. the embassy building at least in yemen appears not to have been preached. again these are live pictures of those protests continuing outside the u.s. embassy in cairo. we will continue with live coverage throughout the morning. so stay tuned. we're sitting on a bunch of shale gas. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪ oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. nave 50% on banners. >>> the iphone 5 is faster, lighter, thinner, 70% of apple's gross revenue. >> what can they come up with next? 2013 i think will be the year of the ipad. >> apple is going to cannibalize its own phone. >> a source of mine close to apple central have multiple announcements before the end of the year. >> the biggest stories in business on cnbc. >>> joining us onset is -- ♪ >> helena morris see from newton investment management. oversees $76 million in asset management. >> your daughter is a songwriter? >> yes, i suppose so. >> that's enough for us. >> helena, thanks for coming back in. great to see you. >> pleasure. >> since we last spoke with you, quite a bit of progress in europe in terms of trying to figure out how to deal with this massive problem. the german courts went ahead and signed off on this. draghi has this big plan. >> last time we talked about whether it was too little, too late. they have had some success over the little while showing more leadership, showing there is a possibility of more fiscal burden sharing. that's what the ecb's latest report is saying, they would stand as a back stop for the weaker countries. we've got a lot of work to do and it's going to be very painful, still, countries like spain are the ones to watch where you are seeing social unrest. tragedy on the human scale that's amazing in terms of the unemployment rate. i think there's a long way to go. in the meantime the financial markets are better. things are improving. >> do you think that we will continue to think that these games are so great? we look at it from our perspective and it seemed like it was moving at such an iceberg-type of pace on all these changes. there are still not serious solutions to all these things. the austerity is going to be preting damning if it's put back on these people again. is this a momentary lull or pause or is there light at the end of the tunnel? >> so far they're treating the symptoms, not the causes. there's talk more of a plan, a federation and so forth. ultimately the eurozone, as i described last time, is built as a flawed concept with monetary union and not having political union. that's a big, big step away. so far it's just still dancing on egg shells around those very difficult loss of sovereignty and the human sacrifices to get there. >> as someone who is managing a lot of money, $76 billion, how do you look at all the things happening there and try to figure out where to put your money? >> we have this theme attic approach to investing. it's not an excuse for not keeping up with events. it's just saying let's have roadmap to start with. deleveraging which is obviously what's behind all the working through of things in europe is a big theme for us, and it has made us quite cautious of the banks in europe, and we're prepared to sit out, brief rallies where there's still a long way to go before we can be confident that the future is more secure. >> so if you don't like those areas, what do you like when you look at some of these things? >> a lot of europe's problems are about adjusting the the fact that we have this global realignment of economic power and seeing a lot in the emerging economies as people are now calling them, perhaps overtaking some of the more developed markets. we've seen a lot in asia, a lot of beneficiaries also companiwise, sectorwise. i talked before about the health care sector. we are able to play and invest in areas where people will continue to consume, even if the economies aren't great? >> helena, we want to thank you for coming in. we hope to see you again soon. >> thanks, becky. >>> anti-american protesting breaking out in multiple parts of the middle east. what this all means for everything from the presidential election to the global market. stay tuned. ♪ [ male announcer ] how could switchgrass in argentina, change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 70% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. >>> framing the future of finance. former ceo phil purcell joins us. get his thoughts on banks, wall street regulation and the key of shareholders value. >>> the violence at home and the political fallout. >> i think president obama demonstrated a lack of clarity as to a lack of policy. >> governor romney has a tendency to shoot first and aim late sgler the intense debate on how america should lead. >>> the secret to apple's success. >> this is iphone 5. >> how ceo tim cook is keeping steve jobs' magic alive. the second hour of "squawk box" starts right now. >>> good morning and welcome to "squawk box." i'm andrew ross sorkin along with becky quick and joe kernen. looks like the cow will open 13 points higher, s&p higher, nasdaq off marginally on the other -- in the other direction. >> it has been amazing to see the market continue to climb even though it's awaiting the news from the federal reserve. it is a big decision day for the federal reserve. yesterday we closed at a 4 1/2 year high. steve leisman made the trip to washington for the news conference later today. steve, i guess the question is, will he or won't he? >> i mean the expectation is that he will, and he will do so into what is essentially a very charged political environment. i want to sort of walk you through what seems to be the decision-making process of the fed chairman here. let's begin with the minutes of the august meeting which essentially gave us a litmus test for whether or not at this meeting -- maybe some other meeting soon, but it certainly was taken by the market whether or not they would act. here is what it said. many members judged that additional monetary accommodation would likely be warranted fairly soon unless income information pointed to a, wait for it, here it is, substantial and sustainable strengthens in the pace of the economic recovery. so now let's take a look at the data. the data showed that the payroll averages including the revisions over the past two months have been $118,000. the unemployment rate ticked down by 0.1%. retail sales lackluster, business investment really down on the average. residential construction has been one of the bright spots with a down month and then an up month that did away with it. what are the expectations of the market. you would think they would be predictable. those expecting qe 3, we showed you yesterday, 90%, those expecting qe 3 in september, 77%. remember the fairly soon line from the minutes. and then those who say qe 3 would actually lower the unemployment rate, 36%. of course, the o help the econo. among them, the fed chairman. that may be what matters most. becky? >> leisman, a couple things, did qe2 work? >> i think it helped. you can see some increase in the stock market. >> but the consensus is qe1 helped, qe2, they're not sure. >> a little less. >> a lot of people say there's no reason to do this. you have the dual mandate. that's what these guys are thinking. whatnot. >> did you read george will this morning in "the washington post"? >> we don't get "the washington post" here. don't they have newspapers online? >> they're online, yeah. >> you need a subscription. >> if you had an ipad, you can get it that way, too. >> let me mail it to you. give me your address. >> it's the hair@cnbc -- no. you mentioned one other thing. you mentioned the participation rate helped. have you gone back to the peak in unemployment -- >> i've seen that work, yeah. >> what is it? if you held the participation rate steady. >> i see stuff like 11%. >> where we are right now if people had not left the workforce, we would be at 11%. >> right. the question is who do you not count. some of them would lead and some would be discouraged. what i wanted to say about george will is he went to talk to esther george of kansas city, richard fisher who i think we'll talk to next week from dallas. he talked to jim buller, basically said the central bank out there centrally planning, basically saying that the -- venturing into fiscal policy. i don't think what george will says is so important by itself. i think it's emblem mattic, if the fed acts today, i think the fed is going to become a major political issue in this campaign. >> it's not just that. congressman scott garrett is expected to speak later today and say the same thing, he's going to say they've gotten into this area of fiscal planning and that they shouldn't be doing that. of course, you can point back to congress and say they're doing it. >> my expectation, becky, it will move from our little world where we talk about should they or shouldn't they into the bigger world. if guys like george will are writing about it, and it's become a whole different conversation from what it is now. >> don't you tend to discount just about anything a person that just insists on wear ag bow tie says, just in general? >> joe, that's not a bad rule. that's not a bad rule of life. >> think of the people that have come on this network, over history, that have insisted on wearing bow ties. >> there's jim grant who you like. >> yeah, but he says things that are a little bit -- is that what my hair says? >> i don't think you're agreeing with your hair today. >> my hair is saying you have no idea what you're saying. >> that's not what you're saying. >> it's a good rule to live by. >> a lot of quick decisions in this world. if you can discount a whole bunch of people real farce, it would be helpful. >> the people who insist on wearing a y? what's the whole rationale behind that? >> what about guys with like 12-year-old haircuts? is that something you can discount. >> that's pretty funny, that i think you're alluding to me right now. this is a damn good haircut i have right now. >> i don't know. i've seen better. for ten years i've watched you. >> you got too much off on the sides. >> now you can insult me. >> not insulting you or the mud puppies. thank you. >> we will hear more from steve later this morning. by the way, be sure to tune in at 12:15 eastern. that's when we find out if the fed will initiative another round of this quantitative easing. brian sullivan is going to be joined by pimco's bill gross, bark clay's barry nap, invest co-'s ron sloan and steve leisman, the man himself. all will have instant analysis on this plus stock and bond reaction from rick santelli right here on cnbc. at 2:15 you the hear fed chairman ben bernanke, holding the news conference to explain the fed's latest news. we'll have that entire conference at 2:00 p.m. eastern. >>> latest reports say there were no casualties as protesters stormed the u.s. embassy in yemen. that's according to yemen's embassy in washington. witnesses say yemeni security forces fired shots as demonstrators who scaled the wall of the compound in the yemeni -- our embassy there. the embassy says order has since been restored. the bodies of ambassador chris stevens and three other americans killed in the benghazi consulate attack returning home to u.s. soil. last night the senate pass add resolution honoring the victims calling their deaths unacceptable and unjust find. meanwhile two navy warships are being positioned off libya's coast. president obama telling libya's president that the country must help the u.s. keep americans there safe. anti-american demonstrators have spread to tunisia and gaza. we will be joined by nbc's intrepid richard engel from cairo in a couple minutes. >>> at 8:35 eastern we eel talk about stability in the middle east with senator john mccain who was close with ambassador chris stevens. >>> apple shares bouncing around after ceo tim cook unveiled the iphone 5. thinner, lighter, features a bigger screen and made entirely of glass and aluminum. in the last hour of squawk, we spoke to brian marshal of isi group and asked him about the user experience. >> the actual product came in very similar to what we're expecting. when i touched the iphone 5, had it in my hands and got to play around with it, i was blown away. once you get it in your hands you'll feel much different than your iphone 4s and that will drive a lot of upgrade. >>> after a volatile day the stock riding in pre market trading. at 7:40 eastern we'll hear from jay elliot, the author of "the steve jobs way: i leadership for a new generation". >>> when we come back, phil purcell will join us for the remainder of the show as our guest host. that plus much more on the markets and what's going on in the middle east when we return. >>> it is faster, lighter, thinner, it is 70% of apple's gross revenue. >> what can they come up with next? >> 2013 i think will be the year of the ipad. >> you say apple is going to cannibalize its own product. >> no big dramatic bump up. 1%, some were expecting more. >> a source of mine close to apple said multiple >>> special guest joins us for the remainder of the show. i was giving him my dean witter pitch. phil purcell former chairman and ceo of morgan stanley, currently with continental standards. >> i have so much respect for financial advisors and retail brokers. yes, i would have stayed on the phone and given you a small account, very small, very small. >> well, that's fine. give me 10% of your trust. let me earn the other 90%? can i call you today or tomorrow. >> you were trained very well. >> your wife? what have you got to talk to her for? who wears the pants in this family? every excuse. phil, one thing just to bring it back to retail business. i remember in 1981, after we had been through a really bad period and there were no broker-of-the-day calls. no one wanted to talk equities. everyone still investing in real estate. i wonder if today we look at the amount of interest in retail and we see it every day here. we're in a similar period even though the market is at -- almost at a high. we spent 12 years trading wide. >> the retail clients today feel very much like they did in '81. and everything is going in to fixed income. we've got billion dollar flows, mutual funds into fixed income. $500 billion out of equities last year and this year by the end of the year. they don't want anything to do with equities or risk assets, and then if you want to think about '81, you better think about '82. august 17th of '82. >> off to the races. >> everything took off and we had a -- basically an 18-year -- >> we did have a president named reagan come in at that point. >> we had a lot of good things happen. >> released the hostages the day he was inaugurated. so bizarre. i remember the broker's mantra, please let there be another bull market because i spent all the money i made in the last one. they've been praying for 12 years. some day -- will it happen do you think? >> absolutely it will happen. >> we went from 780 to 14,000. that would take us to 100,000. >> i don't think that will happen. we will have another bull equity market. i'm the other way. what i worry about today in terms of the markets is the fixed income market. to me the fixed income market feels like 1999 equity market. that is people think we're going to have 1.5% ten-year bond forever. >> the fed is expected to stay probably through the end of 2015. right now they're saying the end of 2014. today we're thinking they'll extend it for another year. >> yes. everybody is discounting that and counting on it. usually the market doesn't accommodate you. every time you get a total consensus and everyone is in agreement, at least while i've been watching markets, the market doesn't accommodate you. something happens and it changes. >> would it be an improving economy so the fed can take off that promise? >> i would love for that to be the catalyst, okay? i think if you ended up with stable tax policy where people could count on taxes in a stable regulatory environment where people really knew what they were going to be competing in, i think we'd have a good economy. this economy is -- it's still very resilient. we still have more innovation than anybody else. technology driving it. we'll be all right. >> i tell you where i am. i don't want to give up hope, but i kept going back to the way i felt in 1979 or 1980, and i never thought i could buy a house and we had 21% interest rates and inflation was 14%, unemployment was 11. we were hopeless. when you're in that period, it's hard to believe you ever come out of it. with all the problems we have here and now, it's a global world where people are ready to eat our lunch around the world. i feel the same way now. i'm not sure we do come out of it at this time. you think we'll be okay? it's morning in america. >> i don't know when it's going to happen. >> we've got no manufacturing -- if you don't create some stupid social thing i don't understand on the web, there's not even a way to be a entrepreneur anymore. is there? >> i disagree with that. i think that there is. >> i'm playing devil's advocate a little. we'll see. do you remember any period where you felt more disconsulate than this? >> '72-'73. >> that was bad. i was in high school. >> i've seen more bad times. '81 was very, very difficult. '80, '81 was difficult. there were periods, '87 with the market crash for a couple days we thought the world had ended. >> is wall street ready to participate in the next boom? there's no firms left, are there? >> sure there are. >> you want to break up the firms that are left or don't want to break them up? >> no. i don't want to break them up. i'm waiting for an opportunity to contradict the introduction. >> there you go. >> i'd go the other way in terms of is wall street ready. from 2007 to today, the banks have doubled their equity, measured by the fdic. they are immensely stronger than they were. not only did they double their equity, they have reduced leverage. so they have enormous capacity to lend money if businesses want to borrow it. so i think that they could be a big part of the catalyst to get the economy going. but they can't do it themselves. they can't force people to borrow money. the businesses have to decide if they want to do it. >> you made an argument, a compelling argument in the "wall street journal," early december, suggesting that the banks should break up because they'd therefore become more profitable. they'd be spun off the units independently. that was actually a better business model. no? did i misread it? >> you didn't misread it. the argument i tried to make and maybe i didn't make it well, is you've got tremendous differences in how banks or financial firms are valued today. if you look at a u.s. bank or a wells fargo, they're valued at 1.5 times book. if you look at the banks that have big investment banks and trading operations, you know, the bank of america, citi, pick one, they're valued at half to 60% of book. to me the shareholders, the g i guy getting cheated. the banks trading at half a book, they should consider spinning off some of the businesses that you know would sell at 1.5, 2.5, three times book. i'm advocating considering tax-free spinoffs if the shareholders are not being rewarded. used as an example, morgan stanley spun off discover card in 2007. discover card at the time was 17% of the value of morgan stanley. if you held on to your morgan stanley shares and discover card shares from then to now, discover card is worth quite bait more, 20, 25% more. that's tremendous shareholder value. if you look today at citi, they've got a credit card company three times as big as discover no matter how you look at it. if it was spun off, it would be $60 billion, if it traded the sa same as discover. citi only sells for $97 billion. so i just -- shareholders got punished -- shareholders of financial firms got punished big time 2008, 2009. a lot of them haven't come back. citi is still 90% down. b of a, 80%, 90% down. so my argument is those managements, those boards of directors, ought to get more shareholder oriented, they ought to be willing to do things that aren't comfortable and they ought to deliver -- >> but if they think this big super market approach is the right way and they think the market will eventually come around and reward them for that, if they say we're trying to be patient waiting until the market comes around to them, what would you say to them? >> i would say your shareholders have been patient for four years. >> enough is enough. >> there ought to be a shot clock. at some point you have to say we're willing to consider things we're uncomfortable with in the environment of all the synergies is different today than ten years ago. >> we'll talk more. we've got to take -- just to cover my butt, what do you think of the new iphone 5? >> i don't have one. >> any comments at all? think it's as good as the -- >> anyway, we'll have time to talk about that later, and facebook. >> a lot to talk to phil about. in the meantime, when we return, libya violence getting political. we'll hear from both sides of the aisle and the question of the morning, can tim cook make apple his own and keep the company growing in what he's called the post pc era. we'll speak to former apple employee who is steve jobs' top lieutenant. squawk is back after the break. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. but proven technologies allow natural gas producers to supply affordable, cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems... ... and protect land - by reducing our footprint and respecting wildlife. america's natural gas... domestic, abundant, clean energy to power our lives... that's smarter power today. oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners. >>> protesters are storming the u.s. embassy in yemen. witnesses say yemeni security forces fired shots as demonstrators scaled the wall of the compound. protests in the middle east continue over a controversial film. cnbc's richard engel joins us from outside the u.s. embassy in cairo. thanks for joining us. what can you tell us? >> reporter: good morning. i'm out now standing over tahrir square. in that far corner is a -- you can see an empty street. at the end of that street is the u.s. embassy there. the reason it's partly empty is egyptian security forces have been firing, and i suspect as we talk that you will see teargas coming from egyptian security forces, riot police, being fired out from in front of the u.s. embassy towards crowds of demonstrators who have been throwing the teargas back onto the embassy, throwing stones. this has been going on here for at least the last 12 hours. more demonstrations like this are expected to be even bigger tomorrow. today, however, a few country became involved with, as you mentioned, knows demonstrations taking place, violent clashes taking place in front and even inside the u.s. embassy in sana'a, yemen. that's a difficult development because the yemeni government doesn't even have control over the capital, let alone all of yemen. >> richard, you were there all along the way with the arab spring. maybe we didn't fire it quite as closely for the past six months or so. do we call this a real inflection point here? do we need a new moniker? what is it? the arab chill? what is this? >> reporter: i think the arab spring is dead. in this square you saw student demonstrators calling for an end to dictatorship, to mubarak's rule. the united states supported them, the united states intervened so the egyptian military wouldn't crush the demonstrators. now you're seeing an anti-american demonstration here, a small one, but still an anti-american one. tunisia, the same thing, there was already a small anti-american demonstration. in yemen, the united states played a key role to try to negotiate a settlement to help demonstrators there. now we're seeing anti-american assaults on the u.s. embassy. i'm not sure if it's an inflection point, but we're seeing a change in mood. the u.s. removed these leaders or assisted in the removal of these leaders and unleashed people who wanted democracy, but also unleashed a real deep pool of anti-americanism, anti-israeli sentiment, anti-zionism that's coming out now. >> richard, we knew at the very beginning this could be the eventual path for some of this. is it too soon to say it was a mistake to support the arab spring? >> reporter: that's -- it's probably still too soon to know that. it's hard to say that people in the middle east or anywhere don't deserve their rights but at the same time it was probably fool hearty to say that maintaining stability in the middle east, a region as sensitive as this was not a good thing. this region needs a lot of education. the people here were deliberately miseducated, undereducated by their leaders, taught and spoon fed conspiracy theories against israel and the united states, that the united states is against islam. as soon as the leaders who were strongmen who were removed, a lot of those conspiracy theories rose to the surface. i think education is certainly necessary. >> we had one of our reporters earlier, richard, make the point that moderate middle easterners can't compete when push comes to shove with extremists, the best of intentions -- by definition, when you're moderate, you're not willing to go that extra mile. i guess we shouldn't be surprised. it's hard to anticipate and hard to deal with. >> i think there was also an over estimation of the strength of the moderates. everyone at least in the west was looking at twitter and there seemed to be a flood of moderate voices from the middle east. a lot of the voices were people who lived in canada, australia and the united states, not really here so much. i think that props overrepresented the number of moderates, the number of people who seemed to want just what the united states wanted. that really was never the case. you can see now all the clouds of teargas. that's very close behind that mosque to where the u.s. embassy is. at least right now the egyptian government is acting. when the protests here began and demonstrators climbed over the embassy walls, it took a long time for this new egyptian government to do anything at all. so this, if anything, should be comforting to the united states which has been asking for more action to be taken to protect the embassy compound and the diplomats inside. >> it's not about this film. these are simmering feelings. >> reporter: of course it's not about this film. >> they've been going on for a while. you get the feeling that this is the beginning of something, this is a tinder box, or is this going to come and go quickly? >> reporter: i think people are always going to be unpleasantly surprised when they peel back the middle east, a region that -- i think because it was ruled by dictatorship for decades, the dictators used education, deliberately kept people ignorant, fed them conspiracy theories, fed them a 1984 world view of everything -- the world is against you. and when you remove these dictators, inevitably that mentality is going to come to the surface. i think we should not be surprised that there's going to be a lot of anti-american im, anti-israel sechbtment. that's going to be the real big one. this was almost nothing. this was triggered by a film that touched on people's sentiments, insulted the prophet muhammad. this is going to probably die down over the next few days unless something dramatically changes. but if there's a major confrontation over gaza, over israel, even over iran which will inevitably involve israel, then i think we'll see a tremendous division, and we're going to see how really differently people in this part of the world view themselves and view the region compared to the way the united states views it and the way perhaps the united states thought the people in this region really viewed it. >> and it happened the same week that we weren't -- we hadn't fully digested the netanyahu-obama administration development. when this happened -- if that goes sour -- >> i think i lost the -- >> we lost richard. we do appreciate his reporting as we always do. when we need to go somewhere, he's tlaulz. >> he's the man. >>> let's get you caught up on business headlines this morning. we have a very busy day. the federal reserve policymakers have a busy day ahead of them sells. the fed's latest rate decision and policy statement comes at 12:30 eastern. at 2:00 p.m. eastern the fed will issue the latest economic forecast for the fomc members. at 2:15 chairman ben bernanke will hold the important news conference. >>> realtytrac said just under 100,000 homes entered the foreclosure process. that's down 13% from a year ago. in judicial states like new york and florida, the court must approve any foreclosures. >>> tie beverage which is offering 7.2 billion for the rest. the offer, $4.5 billion for control of the company. heineken says it's studying the latest developments. >>> up next, the president and mitt romney responding to the situation in the middle east. we will hear from both sides of the aisle. with the president election now less than two months away. >>> let's continue our conversation with phil mur sell, president of continental investors. i wanted your view on morgan stanley today. in many ways the morgan stanley of today is starting to look oddly a bit like the phil purcell version of morgan stanley. >> i haven't stayed involved at all with morgan stanley. i've enjoyed my freedom in retirement. >> i say that in regard with being back with smith barney and the move towards having a big retail presence which is what dean witter was to some. >> yes, it was. while i'm not involved, i think that the actions that have been taken at morgan stanley recently are very positive for the shareholders. it hasn't been reflected in the price yet. >> you still own morgan stanley stock? >> i own some, not nearly as much as i used to. as morgan stanley leveraged up after i left and started to taking more risk, i decided i would take less risk and sell most of my shares which i did. but the direction the firm is going today in my opinion is the right direction. it's a difficult market. it's hard for everybody, not just morgan stanley. you guys follow all the investment banks. you know it's not easy today. less deals. europe is very hard at the same time i think what they did with the smith barney acquisition, it should be a rye turn rent. i applaud what they're doing. >> sound like you like james foreman. how would you ultimately judge john mack who took over the role after a very contentious ending? >> it's not my job to judge john mack. i don't think it's anybody's job to judge a ceo. to me the market judges ceos. you look at stock price and that's what you're trying to do, create shareholder value. to me the way to judge a ceo is look at the stock price while they're there, look at it two years after it. what you do lingers. you can't change things that fast. that's the market's judgment. that's what you're supposed to do. >> do you think we near a cyclical or secular decline when it comes to banking? when you hear people like james gorman or jamie dimon say this is cyclical, do you buy that? >> i do. i've been through enough cycles. everybody thinks they're going to go forever, whether going up or going down, and they never do. they always cycle. unless you're predicting that the global economy is going to continually decrease, then banks, whether they are investment banks, commercial banks, they're a very important part of the economy. they will rise up and perform for the good economy. >> even with all the new regulations that are trying to take risk out of the system which makes it, therefore, harder to make a big profit? >> i think the thing ma makes harder is having the good economy. the problem isn't that it increases your cost. the problem is that it pervades the economy and makes it much more difficult for the economy to grow. these institutions are economy dependent. >> but are you saying the regulations themselves against the banks are preventing the economy from recovering as quickly? >> no, i'm not saying that. i'm saying the -- first, some of the bank regulation has been really good. i talked earlier about what's happened to the balance sheet of our banks and our financial institutions. the regulators got right after the fact that we were undercapitalized. they made everybody reduce rev laj, made everybody raise capital. all that is very positive for banks and positive long-term for the economy. so it isn't like everything regulators or the legislatures have done is wrong. they corrected some things that the institutions did wrong, and that's positive. to me the things that are inhibiting the economy are much bigger than the regulations of banks and financial institutions. it's tax policy. it's regulatory policy. it's confidence in the direction of the country. you guys talk about the fiscal cliff all the time. that's crazy. how do you do business when you don't have any idea what's going to happen in january? >> it takes your mind off of europe imploding and china. other than that, things are going swimmingly. >> as long as all those things are out there, it's going to be a little harder -- >> we have people that are shocked the market goes up. how can it go up with all this bad news? it's almost like it climbs the wall of worry? anybody ever come up with that? >> you learned that in '82. >> right. i thought i just came up with that. maybe not. we'll slip in a quick break. >> when we come back, we'll be talking about the president and mitt romney responding to the situation in the middle east. we'll hear from both sides of the aisle as tensions rise. this is a live shot in cairo. that's where protests are again under way today. we'll talk presidential election and the situation in the middle east. squawk will be right back. needs a little help saving. for adding "& sons." for the dreamer, planning an early escape. for the mother of the bride. for whoever you are, for whatever you're trying to achieve, pnc has technology, guidance, and over 150 years of experience to help you get there. ♪ to help you get there. if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-800-836-8799. >>> welcome back everybody. let's take a look at the futures. we see futures up 15 points, after the markets closed at a 4 1/2 year high. a lot of people waiting to see what the sfed does. at 12:15 we'll get word on whether or not they're ex-tending quantitative easing. at 2:00 you'll see coverage beginning of the chairman's press conference following up with all that. in the meantime, also watching more violence in the middle east with protesters storming the u.s. embassy in yemen. the country's embassy says no casualties were reported yet. a hot button issue for presidential campaigns. mitt romney is saying the first response in attack to american diplomats was to sympathize with those who killed them. the president shot back last night. >> governor romney seems to have a tendency to shoot first and aim later. as president, one of the things i've learned is you can't do that, that it's important for you to make sure that the statements that you make are backed up by the facts and that you've thought through the ramifications before you make them. >> juliana glover is a republican strategist and founding partner of the ashcroft group. matt miller is a columnist for "the washington post" and a former clinton white house aide. welcome to both of you. >> sitting very close together. is this going to be okay. >> it will be okay. >> we will not come to blows. >> this is a pretty tricky situation. i've watched all kinds of coverage about what happened, when, how you go through all this. matt, why don't you go ahead and play off the president's remarks coming out of this? >> i think romney was trying to inject himself into the issue to try and get something to happen, to shake up what seemed to be a bad trajectory in the polls and i think it looked very unpresidential. i think the -- the reason i think he hurt himself as a lot of republican analysts also said yesterday, his strong point has been if you're worried about the economy and you're anxious, he looks like a plausible alternative. he's a credible man. when you see somebody trying too hard to inject themselves at a moment when american diplomats and people are dead, it just feels off. i think it's jarring and it's diminishing. >> matt, was that the first time you ever said he was a plausible candidate in terms of fixing the economy, to be able to say -- >> no, no. >> are you sure? >> no, not at all. he's a very credible individual. there's no question. >> you're going to regret that. we're going to keep that on a sound bite. >> just being honest. >> juliana, if you take a look at what's played out, there was the question of when, what was said and what happened. if you were advising, how would you have written the playbook on this? >> first off, there is some discomfort talking about this now. if you're an american walking the streets in cairo, it's a dangerous place to be. the statement released by the state department before the egyptian embassy walls were breached didn't read-rite. there was something clearly wrong with that. anybody who wlookd at that who had any familiarity with state department remarks or statements on behalf of america in defense of their sovereign territory and our beliefs and values, to be able to say something in effect to hurt people's feelings and to take that a step farther, and then once the romney campaign read that, their immediate response is outrage. i mean, this is ridiculous. >> the administration disv disavowed the same statement. >> exactly. the statement was over come by events when we learned the ambassador was killed. what is really at issue here is what's going on with the state department that they've got some rogue twitter operator in egypt who clearly we now know the state department told him not to move forward with this statement. he went ahead and did so. afterwards he continued to tweet about it. this is american speaking in the midst of a crisis in country. further, let's look today at this situation in yemen. it's really frightening. why are there no marine brigades outside that embassy? why are we continuing to put these people in harm's way? >> i think the more troubling issue, it's hard to know on the ground what embassy personnel in cairo who are probably afraid are trying to do to manage the situation. the real question is, the romney situation didn't look at that and say we're outraged. they said how can we make a political opportunity out of it? it's poor judgment. >> i don't agree that that's how they viewed this. >> come on? when the romney campaign plain, stewart -- how do we get into this news cycle and inject ourselves in a way that draws a contrast. that's what campaigns do. i think it was a poor judgment on his part and hurt the credibility that he otherwise has as somebody of stature. >> matt, as we get further away from the actual event, will there be some questions that we just heard about, the way yemen is being protected right now. it was on an anniversary of september 11th. with we were told we ramped up security at all of our embassies around the world. is there going to be questions as to whether we really were in a state of preparedness for this? >> i suppose there can always be questions i think. but the first line of defense for embassies abroad is the country is supposed to provide security. when we have embassies, the country is responsible for providing the security. >> talking about countries where there's governments that aren't really in control. >> i understand that. >> that changes the whole dynamic. we've seen it across the middle east. >> if you don't have a government in control of its people, all more reason to have more significant fort cases around their embassies. this is pretty much foreign policy 101. >> can romney then in your view, can he weigh in as a candidate? is it ever appropriate to weigh in on national defense or on foreign policy? >> of course. they'll be major debates on that. debates totally devoted to this. >> it was the timing and the optics -- >> it's the opportunism -- i think most people, maybe swing voters or undecided people will look at people and say here is a potentially plausible alternative if i'm happy and want to make a change, but you still want a presidential temperament saying i'm not looking just to score points at a time of obvious peril. >> the appeasement argument is going to be a big part of this election i think. i think that's where they felt we have an opportunity to press this -- the deferential stance that was supposed to help with us globally instead of being the big americans that come in and control everything, the one where we're much more standoffish. on the far right they'd say apologizing -- the chickens have come home to roost as reverent wright said. >> it's a troubling narrative of weakness and making statements that are -- can be perceived as miscues. >> what do you think mccain will say when we talk to him at 8:30? >> mccain is a defense of america hawk, as we all know. i don't know exactly what he's going to say. but i'm going to be watching. >> we don't either. juliana and matt, thank you both for coming in. we hope to see you again. >>> in the next hour, as we were talking about, senator john mccain will be speaking out on the floor of the sen nat. he'll be speaking with us in the next hour. yesterday he spoke out on the floor of the senate about the situation. he was a personal friend of ambassador stevens. senator mccain will be joining us live in the next hour. squawk will be right back. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪ up. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. we believe the more you know, the better you trade. so we have ongoing webinars and interactive learning, plus, in-branch seminars at over 500 locations, where our dedicated support teams help you know more so your money can do more. 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[ all ] i'm with scottrade. >>> countdown to qe 3. the fed expected to announce another round of easing. steve crawford will tell us what it means for the markets and if it will be enough to boost employment. >>> middle east violence turns political. >> they clearly sent mixed messages to the world. >> it's important for you to make sure that the statements that you make are backed up by the facts and that you've thought through the ramifications before you make them. >> we'll talk foreign policy and politics with senator john mccain. >>> and breaking economic data. we will get weekly jobless claims at 8:30 a.m. eastern. the third hour of "squawk box" begins right now. >>> welcome back to "squawk box" on cnbc. i'm joe kernan along with becky quick and andrew ross sorkin. our guest host this morning since 7 clong a.m., phil purcell, former chairman and ceo at morgan stanley. i guess my boss at dean witter. i had bobwas a good friend. >> you didn't know of him? >> later i learned. >> there was some legal issues, but that's neither here nor there. no, there weren't. that's a joke. i didn't have that many clients by then. u.s. equity futures are hour indicated up about seven points. in our headlines, becky, everybody is waiting for bernanke. >> all about the federal reserve. the fomc wrapping up the two-day meeting today. make sure to tune in at 12:15 to find out if the central bank will launch a round of quantitative easing. cnbc brings you the latest fed announcements on monetary policy, barclay's barry knapp and a lot more. at 2:15 eastern, the fed chairman, ben bernanke will be holding a press conference to try to explain the fed's latest move. we will have the entire news conference live with our coverage beginning at 2:00 p.m. eastern. the market yesterday closed at a 4 1/2 year high. apple shares bouncing around after the unveiling of the iphone 5. we hear it's thinner, lighter, made entirely

bob woodward's new blockbuster bombshell, president obama is to blame for last summer's failed debt deal. how and why? all coming up next. >>> welcome back to "the kudlow report." the explosive book hitting bookshelves today, bob price of politics" all suggests president obama is to blame for last year's failed debt negotiations. with the deal in hand, he relentlessly pushed for more tax increases. and listen to what he toin the interview with bob woodward. >> his best, $400 billion, he knew he wasn't to get a damn dime more out of him. >> woodward's book calls into question the president's leadership or lack thereof. let's talk. we have the filmmaker behind 2016, "obama's america" and author of the book, "obama's america," currently a number one "new york times" best-seller. in honor of your number oneness, i never thought of bob woodward as partisan anything, certainly partisan conservative but he gives a damning indictment of mr. obama's mishandling of the debt deal last year. what's your take on this? >> there are two ways to read obama's behavior, neither one is flattering to obama. obama is a bunkler, habitually pushes for tax increases, doesn't know how to close a deal. that's an obvious interpretation.

journalist bob woodward, who offers a behind-the-scenes glimpse at the sparring between congress and the white house over fiscal issues. i sat down with him yesterday. pulitzer prize winner bob woodward as written 17 books that look inside the white house, congress, and other branches of american government. he's back this month chronicling the failure of the president and congressional leaders last year to reach branbargain on how to attack the budget deficit and the debt. the book is called "the price of politics" and bob woodward joins us now. welcome. >> thank you. >> woodruff: so when you started working on this book, what was it that you wanted to capture? >> well, it's clear that the economy is the issue and impacts everyone. and leading up to a presidential-- this year, i mean, it's obvious that what happened and what-- you find when you do these books, the news coverage is excellent but it ru bhistory and u ha to go back and say, okay, let's get the meeting notes, it's get the documents, do the extensive interviews so you do a full excavation of what really happened. >> woodruff: what was it about that-- it was pretty much a six-week period that you mainly focus on

host: from bob woodward's new book, he recounts a conversation between the former verizon ceo and here is talking to valerie jarrett, according to bob woodward. guest: yeah. i have heard the same things. i have heard that the president likes to appear like he's getting input from the business community. he doesn't listen and act on that input. he has an ideology of the solutions that are needed for the economy. that's where he is focused rather than speaking to business people. "here's what we need to make sure we put more money into the economy." i think there is a division to the solutions to the way forward. i think the business community believes the need to create an environment that is favorable for business so that they will put their money to work in the economy. a key example is the tax on profits that they derive from overseas markets and bring back here. this is a big debate. they are taxed in the local market and bring the money back to the u.s.. there's a big movement by executives to eliminate that second tax said they could bring some money back into the u.s. rather than investing it in plants and people overseas. sma

bob woodward is in singapore with the details. good morning, bob. >> reporter: good morning, george. there's been so much infatuation about this couple again today, william and kate, as it has so many times. but this time, the topic really was about pregnancy. and that means, there's a whole, new round of frenzied speculation. it was at this dinner, with the president and prime minister of singapore, while william and the others raised their glasses of wine to toast the queen, kate politely passed on the wine to drink water instead. not once, but twice, which left many wondering if finally there's an heir in there. >> people do look at them and wonder if they are signs. people whispering, going, is she pregnant? >> reporter: of course, there's absolutely no evidence of this. kate, after all, is not a big alcohol drinker. but this topic just kept brewing today. william told one fan that he hoped to have two children. the first time he gave a specific number. >> very much, yeah. looking forward to them, you know, the offspring very much. >> reporter:

next, bob woodward discusses his new work, "the price of politics." host: bobis the author of "the price of politics." what is the story you're trying to tell here? guest: the daily reporting is exceptionally good or the long pieces capture a lot but we run by history and we do not know what really happened and i have the luxury of time and can dig back in and this is an examination of what obama and the congress have done for this period -- for 3 1/2 years, from the beginning of the administration to the summer. host: what is the central part of this story? guest: the drama is this affects everyone. get control of the spending instead of -- we are on a binge now, a spending binge. we cannot keep borrowing all of this money. it describes in painful detail the meetings and phone calls and the internal discussions. a lot of discussion inside the white house. you see what they are doing. last summer on the effort to get congress to increase the authorization for spending and borrowing. the president has a private meeting with his senior staff. it is called by the

been quoting the book by bob woodward because they think it reveals the chaos within the administration and lack of planning for major events over the last 3 1/2 years. last night boblitics. here is what bob had to say about the impending doom of the united states of america running out of money. >> the kind of crisis that took the country's economy to the cliff, president obama, when i interviewed him for the book, said they were days away from having $5 billion in the u.s. treasury. that's it. now, that's half a day's federal spending. this was last year and they fixed it by postponing everything. no cut, no tax increases, no sensible alignment of the federal budget. so we are going to, in december or january, be back in the same mess and the federal government is going to be in the position where there is no congressional authorization to pay its bills. >> steve: the message of the woodward book really is that there is nobody really running washington, d.c also tells the story of how at one point, the congressional members were so frustrated that the president wasn't helping out that i think harry reid's chief of staff essentially took the president aside and le

sat down with bob woodward, the author, and said that president obama was, quote: moaning and groaning and whining and demanding during this phone call he had. then the president told bobthat's not true. i don't moan, i don't groan, i don't whine. i'm not desperate. i was very angry about how he had behaved. i mean, it is watching the sausage getting made, is it not, brad? >> it is. and the process is ugly. but if the president were a leader and he were somebody who even had control of his own members in the house and senate, the president would have been treated by an equal partner instead of somebody who was detached. and i think that's the lesson you learn out of the woodward book. megyn: why do politicians keep sitting down with bob woodward, dick? you tell me. they all sit down with him, and it doesn't work out quite the way they thought it was going to. >> it's like the moth and the flame, and maybe me and that camera. [laughter] they're attracted to it because it's bob woodward, you know? he's -- but let me just, i want to say one other thing, megyn, before we leave, and that is the president won. boehner can't control his own caucus, and by the way, the congres

joining us now, bob woodward, he's the author of the brand-new book entitled "the price of politics," and it's another excellent book as usual. bobks very much for writing the book and thanks for coming in. we'll talk about the book shortly. but let's talk a little bit about the breaking news really we're following. what happened in libya, four americans killed, including the u.s. ambassador. i want you to listen to what mitt romney said today followed by john kerry, who supports president obama, what he said. listen to these two clips. >> it's never too early for the united states government to condemn attacks on americans and to defend our values. the white house distanced itself last night from the statement, saying it wasn't cleared by washington. and that reflects the mixed signals they're sending to the world. >> to make those kinds of statements before you even know the facts, before families have even been notified, before things have played out is really not just inexperienced, it's irresponsible, it's callous, it's reckless, and i think he ought to apologize, and i don't think he knows what he's talking about, frankly.

bob woodward has one nearly every american journalism award one could have. bob that woodward had established himself as the best reporter of our time. he may be the best reporter of all time. from watergate in 1972 to high-level politics of today, he has been on the case, telling us not miss what we want to know, but what we need now. he is disarmingly polite. if he asks you a question, don't answer it. you will find yourself telling him everything that he knows and everything that your mother-in-law knows. he has co-authored more than a dozen books and he has been the number one best-selling nonfiction article for quite a while. his new role is how leaders clashed over the american economy. it clashed that is affecting us today. ladies and gentlemen, bob woodward. [applause] >> thank you. thanks. it's great to be here. i'm going to put myself on the clock so i don't talk too long, and then we have lots of times the questions. and i want to begin by recounting something that occurred about five or six years ago my wife and i were at an aging conference and how t

bob woodward just wrote this in his book. they did not want to face another debt ceiling. politicsputting first. cutting wasteful washington spending to replace these defense cuts. host: that was paul ryan on cbs. bob woodward will be our guest next week. what it means for members of congress on issues like sequestration. guest: they put together the super committee. we're ready to go and it was over. they slapped "super" on this committee and there was nothing super about it. this was the big grand scheme, to pick it up to his chosen group of people and it ended pretty quickly. italy will looking at the cuts -- suddenly we were looking at the cuts. no one seems to be happy with the defense cuts. there is a lot to mix together to combine into a megadeal. guest: it is interesting to see the pressure begins to grow in this town. it is almost there's been a collective dream where we wakeup and it is the last day of class and we have not studied are gone to class but we have a final, and it seems like there is a little bit of this going on with congress. this was a law that was duly passed and signed by the president. there is some speculation that some people were rooting for failure of the super comm

bob woodruff's -- i am totally blanking. i cannot believe this. bob woodward's book the price of politics. he has only written 19 books. you would think i memorized his name by now. he will be speaking at the kent d sally smith's book elizabeth the queen about queen elizabeth ii which came out in march of this year will be the final speaker tomorrow afternoon and then we will be joining her and you will be able to do a call in segment with her. this is booked tv's live coverage from the national book festival, twelfth annual national book festival in washington d.c.. if you happen to be in the area at, is not raining and silly gorgeous they come down and pick up your booktv book bag, the c-span bus is next door to where we are and we are handing out these book bags. hot pink for 2012 was chosen. you can add this to your collection and e-mail us at booktv@c-span.org and with your address and we will send you a book bag. we will take some calls for "georgf. kennan: an american life" -- george f. kennan. we will see what kind of questions you have for professor gad

bob woodward's new book, the price of politics, he recounts a conversation between former verizon ceo ivan seaton bird and valerie garrett from the white house. here he is talking to valerie garrett according to bobward. with all due respect, we will be here when you're gone. i am a perfect example of that he said. so you have to realize that this very progressive agenda on this once-in-a-lifetime moment for this man in this world can be last because guys like me can hunker down and wait you out. >> guest: yeah, i've heard the same things. you know, i've heard that at the end of the day the president likes to it here like he's getting input from the business community, but he definitely cinemax on the end of it because he has an ideology of the solution that are needed for this economy and that is really where his focus rather than speaking to business people, saying here's what the demand picture looks like. you know, here is what we need to ensure that we will put more money into the economy. you know, i think there is a real debate right now and division in this country about the solution to the way forward. i think the business community believes in terms of the way forward you need to create

bob woodward came out with a book that talks about the failure of getting a grand bargain which i was supportive of doing a grand bargain last year. the president failed to lead on that as bob woodward lace out in the beginning of the book. we need presidential leadership and not having it in the white house and not on capitol hill or overseas. host: $125 billion hit to the economy if it's not extended. guest: additional hits with raising taxes on the job creators across the country. they call it the fiscal cliff and why we are talking about a double-dip recession. i was debating howard dean, the former chairman of the democrat national committee just a week or so ago and he said he hopes we go over the fiscal cliff. senator murray says she wants us to go over the fiscal cliff. i want to find solutions. host: mike is a republican in north carolina. you are on the air. caller: good morning, senator. we hear so much about you guys, us, the republicans, being obstructionists and to a degree it is somewhat true but never hear the other side of that coin and how many bills has mr. boehner and the republican-held house sent over to the senate that senator reid has not even allowed to go t