they did it to paul volcker, did it to alan greenspan, '87, for better or for worse, from our perspective for worse, they challenged ben bernanke and his team a few years ago. i've got every bit of confidence she's going to realize that being chairman is, frankly, very different set of responsibilities than being a governor vice chairman where most of us get to chatter from the cheap seats, she's got to make the tough decisions. >> and yet, you've been concerned about qe and what the fed's doing. you've been concerned for some time. a lot of people think she is even more dovish than bernanke is. where does that get us? >> right. so it's easy to think on a hawkish dovish spectrum. and there's no question she believes in the efficacy of the fed's tools even more so than chairman bernanke. i don't think she's more dovish than ben. i think the biggest difference is in some sense that she really does believe very much in the models and in a model centric view of the economy. >> what does that mean? >> what it means is, when i look

i was writing a piece about this transition from paul volcker, i go all the way back to paul volcker,ntral banker of our time. he operated with discipline and rules, discipline and rules, okay? now i want to skip over to janet yellen, leave bernanke out for a second. does she have discipline? does she have rules? is it all going to be ad hoc? do we have any idea what she's going to be except maybe be dovish? >> i haven't seen any discipline or rules. but she's got equations and optimal control theory and too many textbooking. i think we need another volcker, somebody with spine who can turn off the money-printing press before a bad thing happens. that's partly what we're seeing just recently in the markets. we're going from gentle ben to the yellen fed and it's going to get even more quantitative easing. >> that's interesting. don, you think there's going to be more q.e. or less q.e.? i'm going to say in the next three to six months, just use that time. >> i think there's not going to be more. there's not going to increase the monthly purchases. but obviously if bernanke were still in

but before we break, the great e est central banker in my professional life time was paul volcker. he concurred inflation from 15% down to 2% or 3%. that was one of the greatest most heroic things i've ever seen. ronald reagan gave him the ground to stand by, by volcker used to look at commodities an gold. stay we me. we hit and stayed over 16,000 on the dow. that's next up. me. we hit and stayed over 16,000 on the dow. that's next up. i me. we hit and stayed over 16,000 on the dow. that's next up. th me. we hit and stayed over 16,000 on the dow. that's next up. th >>> welcome back to the "kudlow report". in this half hour, democrats pulled the trigger on the nuclear option. they voted to ed td to end the filibuster in favor of a 51 vote majority for judicial and executive appointsme poinpointm including the supreme court. the question is will this poison the waters for years to come. like senator obama warned in 2005. but now singing a different tune. the dow closed above the 16,000 mark for the first time ever, so let's toss it over to bob pi zasa pi zani for all the details. >>

to combat double digit inflation, the chairman of the federal reserve paul volcker briefly raised interest to the country's plunge into recession but of course its subsequent recovery. the historical average in the u.s. has been around 6%. thanks for being part of my program this week. i'll see you next week. stay tuned for "reliable sources." >>> for a week

to combat double digit inflation, the chairman of the federal reserve paul volcker briefly raised interestates to 20% in the early 1980s. this contributed to the country's plunge into recession but of course its subsequent recovery. the historical average in the u.s. has been around 6%. thanks for being part of my program this week. i'll see you next week. stay tuned for "reliable sources." >>> for a week amid growing doubts, cbs' "60 minutes" stood behind the interview of a security official that told of a harrowing experience during the attack in benghazi but on friday, laura logan admitted her story had fallen apart. >> well, you know, the most important thing to every person at "60 minutes" is the truth and today the truth is that we made a mistake. >> we'll look at what went wrong. the effort to expose the mistake, the implications for cbs news and the debate over what really happened in benghazi that night. and as details emerge about the relationship between miami dolphins player richie incognito and jonathan martin, we'll examine how the media has tackled the subject of bullying in

ben bernanke clearly is not the kind of tough authoritarian we had from either paul volcker or mr., the real question i think the kind of elephant in the room, is qe working? is the policy of spending trillions of dollars to buy up bond from the market, is it working to improve the economy? isn't that the real question at heart of all this? >> that's correct. but i view qe entirely different way. jump in rates last may and june show the way the fedorged qe is working is simply incorrect. qe is working as announcement about the funds rate policy. it's like ernest money or like what economists call a commitment mechanism. as long as qe is in place, the fed won't be raising rates. so they have create ad problem for themselves because they realized that central bank can't continue forever buying 85 billion. a month. it is just not working as advertised. doing something different that has create ad trap for themselves. david: and jon, bill has been very eloquent in written arguments against qe, as being a panacea, cure-all for the economy. the clear point he makes which is indisputable,

dagen: he is really talking about when paul volcker hiked short-term interest rates.a couple of things, i was alive and look of adjustable-rate mortgages and went back to freddie mac data. adjustable-rate mortgages were not widely available in the 1970s, they just were not there. so the question is are we going to see massive inflation, would that be a bad thing in this case? if we see inflation, a general rise in the price level, it will mean the value of your properties going up and the value of your wages is going up. so it is a non-argument. the idea just inflation would go up, but nothing else would move is utter nonsense. connell: also this knee-jerk culture worth talking about is just because if you think the blowup and the crisis in '08 was because some of these mortgages that were risky, does that necessarily mean however many years later that everything in that category that is not a 30-year fixed everything to be ououtlawed or band. >> i think the real reason is people who bought houses they cannot afford. we heard about the ninja loans. no job, no down pay

i had lunch with paul volcker and i don't think even he would recognize the rule. jack lew is right, we need to get this thing finished. we need to get the rules written and we need institutions to understand exactly what they can and cannot be doing. but with morgan stanley, i think most of the large institutions have anticipated the state and are already complying with that. >> what do you think a successful bank will look like once the bank regulators are finished? >> there is no single business model. a lot of people look at the industry and look at it as we're ordering the same thing. we're not. there are custody banks, commercial banks, trading houses and so on. you know, what successful banks look like, it doesn't matter what business you're in. it's give your shareholders a return above the cost of capital. create an environment where employee committees feel like they're special and they're delivering something with enormous value. .morgan stanley has been around 77 years. the heart of our dna is living through various devicing activities and that's really

i mentioned paul volcker.his is worrisome, in the you can have a new person, janet yellen, taking over the federal reserve. if the economy and market keep gaining, the fed at the outset will have to come out and telegraph how and when is going to withdraw the stimulus. i can't imagine the first day when they actually hike interest rates after all these years for the market will process that. you have a compelling argument that there is a codependency right now. do you see any potential roadblocks in the senate confirmation process for janet yellen? people whoe will be ask tough questions. the tea party contingent is out there saying we cannot just be printing money. must be moreeserve vigilant about this kind of spending, and you need to browbeat congress more and exert your moral persuasion. i think they will give her a rough time. unanimity that she will be the next federal reserve chairman, and she's a very esteemed vice chair now, and she has been sabbatical with record simpatico with record low policy. a

satellite corp. 2013] >> paul ryan is from wisconsin, that state's kevin or says the idea of presidential nominees should -- governor says the idea of presidential nominees. volckered ryan.ndidacy of paul governor walker says none of those republicans have taken on big reforms. maryland governor and possible presidential candidate martin o'malley was in new hampshire. he was at an annual fundraiser in new democratic party hampshire, which traditionally hosts the first presidential primary. his comments are about a half hour. >> thank you so very, very much. it is really great to be with so many good friends in new hampshire. company of be in the so many good friends in new hampshire, but so many good friends who are marylanders who have come to new hampshire. [applause] governor haslam, shaheen -- thetor shaheen, speaker of house, senator minority leader sylvia larsen, chairman ray buckley, happy birthday, ray. [applause] chair fuller clark, second vice chair solomon, it is an honor to be with you here in the granite state. a place that is very special to me and very special to the people of our country. it is a bedrock staying in more in moren one -- state ways