at $5. i continue to think the news flow is pretty good. i'm jim cramer. see you tomorrow! hey, larry, what's on your radar tonight? >> is it really morning in america? is america back as mr. obama says? i'm larry kudler. this is "the kudlow report." is it really morning in america. president obama is saying that trying to echo ronald reagan. and sizzling number two, can high gas prices be pinned on president obama? he says the charge doesn't pass the bull detector test. we'll put him through our own bull detector test this evening. plus just a handful of days before super tuesday. now mitt romney ahead of rick santorum by a whopping 16 points in the republican national pole from rasmussen. however, before we move on, i want to take an important moment to acknowledge some sad,

shocking news. andrew breitbart, a conservative media entrepreneur, a friend of the kudlow report, suddenly died overnight. he was a young 43. the whole thing is a tragedy and a great loss to the new journalism. i'm going to bring in ann coulter for just a second to talk about our friend who last appeared on this show just a few moments ago. take a listen to what andrew told me. >> can obama ever cut that union umbilical cord or is he stuck with it? >> he's absolutely stuck with it. first of all, the atmospherics could not be more horrible. it may not be seen on network news but the unions have been out there doing the violence and getting involved in racist rhetoric. this is the union's presidency. he is their proxy. >> all right. thanks very much. let's bring in syndicated columnist and great friend of andrew breitbart, as well as mine and the show, miss ann coulter. thank you for doing this. andrew breitbart was a trail

blazer. he was such a sizzler. i loved having him on the show. sometimes i'd dial him up and say, and drurks what's hot? and he'd really give me an earful. give me some of your thoughts on mr. breitbart. >> well, one thing i noticed today is how many people he was talking to on the phone every day and e-mailing. i mean, what an expansive group of friends. the man had more energy than 20 other people. he had his finger in everything, he knew everyone, he was a big part of the friends of abe, abe the conservative hollywood types out here, he was a big moving force for getting red eye, the late-night show on fox news. of course he did the anthony weiner pecker photo. he got that one out. he has those i think those who are somewhat demeaningly referring to him as a conservative blogger, he had big government, big hollywood, big media, a best selling author and

he had time for all his friends. he was larger than life. i can't believe i'm not going to see him burst into the green room or burst into the party where i was supposed to see him tomorrow night and start telling us all stories. >> so he helped start the drudge report with our -- >> and huffington post. >> although he kind of split later. huffington post went to the left. he sort of waged guerrilla warfare. the small guy in a way, he didn't have a lot of resources, he's up against all the mainstream media and he's busting these stories and he did run anthony weiner out of office. >> and shut down acorn. he got the congressional funding withdrawn, lots of the offices shut down but still i'm out in l.a., i've been talking to a lot of his friends today and what i remember most about him was just how hilariously funny he is. he would come bursting in and have 18 new hilarious stories

that would make you split your gut. >> and, ann, you know him much better than i do but i'm told by everybody he was a great husband, he was a great father. >> yes. i mean, we've obviously all been talking a lot about that. it's an awful thing to contemplate. he has a lovely wife and four adorable children and he was a very good family man. and, you know, if we can't imagine going into parties or green rooms without hearing that booming voice, it must be very quiet at the breitbart household tonight. boy, do my sympathies go out to susie. >> and my condolences. god bless, rest in peace. a very difficult story. ann, we'll see you later in the show. you're going to debate whether it is in fact obama's morning in america. we'll get to that later. let's now change gears, shift gears, change topics, do some stock market work. look, we had some important mixed economic data today but investors kept their eye on the positives. and get this, two data points -- car sales exploding in february

to 15.1 million. that is a huge number that came out as the day wore on. and, secondly, retail chain store sales rising almost 7%, another huge number. so i want to parse through all this. joining me now is the great ken hdner and we also have richard berg performing. ken, reading through your notes was really an eye opener to me today. i don't believe i've ever heard you or read you more bullish. can you tell us? >> well, we've just gotten through the big problem with europe. we're not going to have a meltdown. there's no real impediment to the accelerating growth in the u.s. economy. automobile sales are taking off and i think housing starts are going to move up very sharply. my index of -- that i get from isi showing the housing orders have spurted in the last two months to levels we haven't seen since '306. and we've been building homes at

half the rate of new household formation for the last five years. we're working through the sur applause. if housing starts got back to the low point in the last recession, they'd almost double. so that's going to ripple through the economy. you made reference to the retail sales numbers, well above expectations. the big issue is all the people that are buying bonds getting 2%, 3%, 5%, they're probably going to see significant losses in capital, which are going to offset any coupon they get and they ought to be moving money out of bonds into stocks. >> let me go to richard burke. i know you don't agree with ken, i want to get to geopolitical issues here. we do have rising gasoline prices and bernanke noted today that rising gasoline prices will hurt consumer spending and raise inflation.

what's your take? >> my take first of all is bernanke has been signaling for a while now this economy is not improving the way it appears to be and unemployment is not improving the way it neems to be. the denominator is shrinking. >> what do you mean by that? what do you mean the denominator is shrinking and enumerateor is thr growing? >> fewer people in the workforce and giving up hope. it appears unemployment is less than it really is. >> don't you think there's a better than even chance that ken heebner knows the economy better than ben bernanke? >> do i think that? i don't think that. >> give me one bearish case here. >> you have a lousy ecosystem. if the u.s. was a private company, do you like the management, the board of directors, do you like the

balance sheet and the trends? major issues. europe has the same problem. europe hasn't fixed the problem, they've delayed it. they've got liquidity now but they still haven't fixed the problem. you're staring at a major debt overhang. what happens when you have a major debt overhang? economies tend to shrink. that's what happened with japan. >> to some sense the united states could be on the edge of bankruptcy with entitlements. ken, you like the cyclicals and the banks. can you give us some names, ken? >> i don't want to give individual -- first of all, i'm a big admirer of ben bernanke and i think he's done a brilliant job. i just doesn't agree with him on the economy at this point, that's all. getting to the banks, though, when these -- we've had a big consolidation. the top five banks have about half the deposits and they have power to raise prices and very products. sure they've got a head wind with regulatory, but they have

other things they can do. and basically you're going to see loan demand grow and investment banks are not going to go back to profitability they had in '07 and '08 but rising stock prices are going to be a big benefit to all their business. and cyclical companies are going to be the beneficiaries of this turn in the stock market. >> does that include industrials, energy, materials and so forth? >> all of it. what you don't want to own is the defensive stocks that everybody's been buying because they were afraid of the market. people that didn't like the market but had to own stocks would buy utilities, would buy health care stocks, anything that wouldn't go down if the economy got worse. all that money -- and that's going to create a big surge in the cyclical stocks. >> or it may not. you may have some -- >> richard, hang on, hang on. i want to bring in one of the issues that we have to work through. let's talk to sharon epperson. she was following today's oil spike and rumors of a saudi

pipeline explosion. this is the stuff that can derail bull markets. what actually happened? >> well, what actually happened is we know how much geopolitical risk is in the oil market and we saw a huge surge in prices right after about 3 p.m. eastern time today. this is after we heard a report from one source, an iranian source, about an oil pipeline explosion in saudi arabia. we have personally spoken to assady industry officials, this a completely false report but at the time the market didn't know that, traders bid the price up and we saw crude prices serge by $6, wto oil prices were over $110 a barrel and up about $4. now when you look at the price in after hour tradings after about an hour into the electronics section for this evening, we're where we were when oil prices closed at 2:30. >> so this was a rumor? >> it was iranian press tv's web site, a lot of traders were circulating it. there was a picture that arab

digest had had taken. that was circulating around trading desks. but industry officials tell me it was completely unsubstanti e unsubstantiated and completely false. i think part of what also occurred was this came from iranian press and then people made a connection and so that is another factor that was driving up prices. we saw commodities across the board hit highs after that happened. >> your message to traders tomorrow is keep your powder dry? >> keep your powder dry and look at these reports. we were saying this was just one source, make sure you're well sourced. it's geopolitical risk. any time you see a headline about saudi arabia, traders are paying attention to it. >>. >> is this an issue you fret about or is it more fundamental? >> it's both. we are being intellectually dishonest with the problems in europe and problems in the united states.

parent who don't have a good relationship with their kids say we're going to have quality time now. the politicians are yelling at the capital market people, job creators and say you will now create jobs. we don't have a healthy system, we don't have a healthy balance sheet. and in my opinion until we get some of those things resolved, until we have a clear rule on taxes, until we know what the rules will be on dodd frank, i don't want to play. >> let me ask you this -- >> o i don't want to be down 25% because something happened. >> these problems have been overhanging the market but the market has been hot as a pistol. in other words, you heard ken's view. i tend to agree with him. i think the economy is more optimist being. we're not out of the woods. y have long-term problems on tactics and regime change and fiscal policy. why has the market done so well since early october? >> we had the same thing in '07 and '08.

i was on cnbc three years ago saying there are storm cloud out there. why is the stock market rallying? let's stop rallying. i'm willing to forego the 5% gain i might lose. i don't think there's a 25% gain on the table but i think you're staring at a potential 25% correction. >> 25% correction? >> the ecosystem is so, so bad. >> ken, i'm going to give you the last word. a 25% correction, ken. >> i can see nothing that would produce that. corporate profits have been growing strongly and they're going to keep growing strongly. this market's at 12 times when it's going to be earning at the end of the year. so with respect to the geopolitical risk, i will admit if something really goes wrong in the middle east and gasoline goes to $10, all bets are off. but bear something in mind, both the israelis and iranians have been making inflammatory statements for the last six months and there's a lot of expectation of middle eastern conflict already in the oil price.

you know, if things just calm down a bit with the verbal exchanges, the oil price may well go down. it's not clear to me this oil price reflects the current supply/demand situation. >> sharon, you heard what ken says. you're shaking your head yes. >> i agree with that. there's so much rhetoric built into the market. most say $15 to $20 built into the oil market is based on geopolitical risk. you see how quickly when news comes out that says this is unsubstantiated, we saw a $6 move and a $6 move back in brent crude in the matter of a couple hours. >> thank you very much. we appreciate it. coming up, he this ben bernanke in the hot seat on the him once again today. what is his real message? our friend randy kroszner will translate the whole story for us. we'll be right back.

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congressional testimony, what is ben bernanke's real message? here is former federal reserve governor randy kroszner, professor of economics.

there's a lot of confusion on wall street. mr. bernanke sounded somewhat gloomy about the did your ability of the economy. he seemed to play up the risks. now, i want to ask you today we got some blockbuster numbers. car sales up 15.1 million in february, a blowout number. chain stores from retailers up almost 7% year on year. so what is it, up or down? >> well, i think what ben is saying is don't pop the champagne corks quite yet. it depends what you look at. we've had some weaker numbers that have come out recently, some of the recent consumption numbers overall haven't been that strong, the durable good numbers, firm inventment not that strong, labor market numbers have been pretty strong. i think it's uncertain and i think that's the message that ben's been giving for a while. we're not quite sure whether the economy is going to sustain itself. >> all right. so he defended heartily his zero

interest rate policy out through 2014. he defended it heartily. people on wall street are saying, i'm not sure where they get this, that qe3 is off the table. >> the market reaction is so kwong they thought qe3 would be off the table and suddenly he took it oft table. i think what the chairman said is we're going to watch to see how the data evolve. it uncertain. we're hopeful things are going to come back. we've had some false starts before in 2010 and 2011 when it seemed like the economy was coming back and the job market was improving and things stalled. they're there, ready to provide support if something goes off the cliff but i don't think there's any foundation for it right now. >> so nothing's completely off the table, nothing's completely

off the table. they are where they are at zero interest rates. we have a lot of liquidity. that's not going to change. help me out on this one. in the testimony i think in response to some question, mr. bernanke did say that banks should be careful that all of the bonds they own someday may lose value when the fed returns to normalcy and starts raising interest rates. and saying to the banks you ought to start hedging your bets. treasuries closed at 203. why do you reckon the federal was talking about banks hedging their bond debts? >> as you can see the fed chairman defended saying he was going to keep interest rates low for two to three years but he said be ready because at some point when the interest rate goes up, they probably will go up fairly rapidly. >> kevin worsh was on the show

last night. he expressed -- i'm not sure what the right word is but he's not completely happy with 2014 zero interest rates so he expressed some hostility toward that if that's the right word. he said the fed doesn't have that kind of visibility and shouldn't go out that far and shouldn't mislead on the economy. >> the crystal ball get awfully cloudy when you go out that far. it's hard to make a credible commitment over a three-year horizon. i would -- i'm thinking to the end mid 2013 as they talked about over the summer. there's some visibility out to there. i think after late 2014, much tougher. i can see what the chairman is trying to dork trying to give some comfort to the markets that the interest rates will stay low for a while. i'm not sure i would have been as comfortable as the chairman was for going that far. >> can i summarize and check me

on this -- >> all right. >> federal policy is accommodative, it's easy and there's no evidence of any significant changes coming? >> that's exactly right. if something goes terribly wrong, the fed will probably come in with some kind of support measure. but if the economy start to take off, it will start taking a little bit of a punch bowl away as the party is getting started. >> thanks you, randy, university of chicago business school, form are federal reserve board governor. >> next up, super tuesday right around the corner. rick santorum says mitt romney is flawed as a businessman and as a potential president. you'll hear from santorum next up.

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days away from super tuesday rick santorum says he might not be a better businessman but he'll make a better president than mitt romney. cnbc's bertha coombs joins us with more and other news alerts. good evening. >> good evening, larry. in an interview with john harwood, rick santorum says despite mitt romney's business background, he, santorum, is the better candidate to get the economy working. take a listen as to why. >> i think there are a lot of successful people in this country who connect amazingly well with the american people and have -- and one of the reasons they are successful is because they connect well.

i don't think that's the reason governor romney was successful is because he connected well with the american public. he was successful for other reasons. and it's hard sometimes to go from one sector or one area and transfer those skills into another area. and that's why you say, well, i have business experience, that makes me the best person. there are certain skills that business people have that are in fact helpful when it comes to being in a political leadership, but there are skills also that those who were involved in public life bring to the table that are also important skills to governing this country and i would just suggest that governor romney, like every candidate, has flaws. i do, he does and the question is, you know, who's the best person with the least amount of flaws and the most amount of strengths that can win this election and get this economy going after they win. >> meantime in the nation's mid

section, still reeling from deadly tornadoes, they are bracing for more. forecasters at our sister network says friday will bring more wicked weather across the mid section of the country. 12 people were killed in yesterday's tornadoes. and finally, at&t is effectively capping its data plans on 3g and 4g smart phones saying it's now going to charge penalties to data hogs. the company has been trying to manage capacity because of heavy consumption by apple iphones and ipads. i don't think i'm a data hog but i can't live without it, larry. >> i got one, too. many thanks. next up, president obama presenting a reelection message of optimism, even using the same thing word "america is back" that president reagan used. but is america really back? i think ann coulter is going to say those not yet happening and i think she's going to debate

keith up next on kudlow.

all right. welcome back to "the kudlow report," i'm larry kudlow. obama is betting an improved

economy will win him another four years in the white house. he's singing this reelection tune every chance he gets. "new york times" front page today, president obama offers theme of nation seeking a comeback. listen to what he's been saying over the past several weeks. >> the auto industry is back. our recovery is gaining speed and economy is getting stronger. >> i place my bet on the american worker! three years worker the american auto industry is back. >> america is back. >> anyone who tells you that america is in decline or that our influence has waned doesn't know what they're talking about. >> all right. but hangs on. this does sound awfully familiar. here's president reagan in his 1984 state of the union. >> i'm pleased to report that america is much improved. america is back standing tall, looking to the 80s with courage, confidence and hope. >> all right. but, you know, for this time around what about the weak

recovery and the explosion of deficits and debts and entitlements? ain't those problems? well, let's talk cnbc keith b k boykin and ann coulter. ann coulter, is america back? does obama have something to hang his hat on? >> i don't think the millions of unemployed people think america is back. he creeps citing the auto industry is back. well, no, they really aren't. gm's stock price is in the tank. they have a smaller market share than just a year ago. as mickey pointed out, you'd be doing well if the government gave you $80 billion short term, but it's not going to last long term when they won't switch the union rules. no, i mean, he's like a cheerleader cheering for a total loser football team that can't possibly win. you can say america's back. americans can come back. america can come back but not under his leadership.

>> huh! >> keith boykin, by any historical measurement, this is one of the weakest recoveries on record, which below the postwar average. the distinction with reagan, reagan was cutting tax rates and deregulating and not bailing out detroit. president obama has one of the largest tax hikes scheduled in his budget in the history of the earth. i don't see why people are going to buy into that. >> well, larry, i was listening to what ann said a moment ago. yes, there are millions of people who are unemployed but there were millions of people unemployed when ronald reagan said that in 1984. the unemployment rate was 8% then, it's 8.3% now. it's ton a trajectory going downwards. you can point to gm but gm is now the world's automaker, they had the most profitable year ever last year and at the same time this president has been very successful not on in creating jobs but also in dealing with foreign policy issues. he killed osama bin laden here,

took out gadhafi in libya. he's been remarkably successful. considering where we were three years ago, it's amazing he's been able to accomplish what he has. >> ann coulter, mitt romney says america's economy is in a weakened position. he won the michigan primary in a great comeback by cutting taxes, his announcement, and by saling that the bailouts are no good for america, ann. who is on the right track here? >> yes. i mean, clearly reagan is right and romney was right. they're different times. you can't compare things exactly on a parallel. great unemployment was 8.3 now. it was 7.6 when obama took office. in fact, the lowest unemployment the rate has been since obama has been president was the day he took office. and another way it's sort of hard to compare what candidates are proposing to ronald reagan

is that when reagan came in, what the highest tax rate was 70%? he took all the low hanging fruit on taxes. today the issue is government regulation, is government agencies, growing, growing. >> come on, ann -- >> we have bureaucracies that haven't been put in place. >> if it hasn't been put in place, how is it killing the economy, ann? the truth is we've had now 23 consecutive months of private sector job growth, 3.7 million new jobs. all the jobs that were lost in the obama administration, all of them pretty much were lost in the very first year because of the bush recession that he inherited. most of the recovery that's taken place has been because of his economic policies. so the idea that how he needs to follow reagan's path to get will, doesn't necessarily square with history. not to mention the fact that reagan cut taxes and he raised taxes. capital gains taxes are lower today than they were under ronald reagan. reagan cut taxes on capital gains and didn't increase them. >> but here's the problem i have, they are lower but no

thanks to president obama. >> he didn't raise them. >> income taxes are lower than they were for most -- >> no thanks to obama. keith -- >> yes, they are thanks to obama. how can you say -- how can you say that -- >> anybody's who's made -- hang on a second, keith. let's look at the obama budget, which is looking at the scorecard. he wants to raise the top tax rate to 45%, dividend tax rate tripled to 45%, capital gains tax he wants to raise $300 billion on business. these are different than reagan policies and that's why i'm having trouble with this idea that america is back if we tax the rich and tax businesses and continue on the road to bailouts. >> yes and, keith, i think you're missing my points. i'm saying you can't do an exact parallel policy by policy because the environment was different with reagan. i think -- >> i agree. >> right wingers have a tendency to go back too much to what

reagan was doing. overall the reagan philosophy of less government, more private sector is the correct philosophy. that's what leads to a booming economy. and then separately, that's why i think romney is the right guy for right now because the biggest problem facing america right now i think is not taxes, all due respect to you, larry kudlow but reagan hit the low hanging fruit. what has happened since reagan is an explosion of government regulation. look at that home depot guy saying i couldn't start home depot today. talk to any businessman and they say i couldn't do it today. >> i got to leave it there. to be continued. very interesting debate. america is back. at some point america will be back. that's my great hope. >> don't bet against america. >> you're right. >> keith, thank you, ann, thing you very much. >> georgia has most delegates up for grab on super tuesday. that's 76. we're going to talk with its

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to be credible in the race. >> with super tuesday five days away, newt gingrich staking out the future of his success in his home state. we have georgia republican governor nathan deal. he has endorsed newt for president. thank you very much for doing this. i want to just ask this question and i'm going to ask it as respectfully as i can. this is not aimed at you. if newt were not your home grown favorite son, if he were not your favorite son, would you be for romney or would you be for santorum? >> i would be for whoever the party nominates. i think that's the responsible place to be. but newt gingrich is the hometown boy for georgia. he represented our state for 20 years in the congress of the united states, he brought of us distinction of the speakership of the house of representatives and i know him on a personal basis. i believe he is the kind of leader that our country needs. >> what kind of message -- as i read in the papers and watch a little tv, he's talking about

$2.50 gasoline. is that a key issue in georgia? what are the key issues in georgia that's going to win it for newt? >> well, the key issues in georgia i think are the same that they are all over the country. and that is the economy. and of course energy independence is a huge part of the economy. rising gas prices, pofiously it affects states like ours where we have large numbers of our population that commute rather long distances to get to work. so i think he's on target when he says $2 to $2.50 a gallon gasoline is something that we should target. and he has proposed ways in which we will achieve that. i believe that is a message that resonates with everyone, not just georgiian as. >> president obama has taken a reaganesque approach, america is back. do you buy into that? is that a political issue? do you think president obama can turn that tide?

>> i think that is a very difficult sell to the american people. i know here in our state, as i'm sure it is probably in most parts of the country, business people are very worried about what is going to happen to their businesses. they have the obamacare nightmare staring them in the face. they don't know what to expect in terms of the proposal for new taxes on them. and what our state and i think the entire country needs is consumer confidence but also some business confidence. businesses are not going to risk their capital unless they have some certainty about what the future is going to look like, and i think that is the greatest detriment to our economy rebounding is the uncertainty. proposals coming out of the white house are all over the board and it scares business people and it scares the american public. >> in that same vein, governor, would you rather have the republican nominees talk about economic growth policies, as you said, energy, taxes, regulations, or social issues? >> i believe it is economic

issues that are of most concern to most americans. they want to know whether or not they're going to have a job tomorrow, whether or not the future for their children is brighter than it appears to be at the present time. i think they're concerned about economic issues. now certainly social issues have always had a part in the political landscape, but i think in this kind of downturned economy, people want to know how are you going to make our lives better? how are you going to make sure we have certainty in employment? how are you going to make sure we can afford to make our mortgage payments and send our children to college? >> all right. thank you, governor deal. i'm very grateful. now we'll turn to the battleground state of ohio. to make the case of mitt romney, we're joined by ohio state auditor dave yost. thank you very much. is your man mitt romney out there pounding away on the kind of economic growth message that

governor nathan deal just talked about? >> i think he is. and more than that, i think he's got the experience both in the private sector and in the public sector to make that economy start moving again. >> is he connecting with the blue collar, middle-income workers? this was a big issue in michigan and santorum nearly beat him, though mitt came from behind. as you know, santorum has a powerful attempt to connect with the blue collars. can mitt romney? >> absolutely he can. and you know why? blue collar folks want the same thing that the rest of america wants, which is jobs, to get this economy going again. mitt romney has the experience to make that happen. it's one of the reasons that i've endorsed him. >> what about mitt's new tax plan? he has 20% tax cut. he combines that with spending cuts, entitlement reform and therefore deficit and debt reduction. does that message connect in ohio or does ohio want something

more specific to the blue collar middle class? >> well, i think his tax plan has a lot to offer people at all levels. remember, it's tax cuts for everybody who pays taxes. but beyond that, the real key here is nobody goes into the voting booth and says i wonder whose tax plan i like better. that's part of the formula, i suppose, of what people think about but at the end of the day they want to know they've got a president that stands the economy. mr. obama clearly doesn't. and is going to be able to get the economy moving again. that man is mitt romney. >> i ask you the same question, asked governor deal. do you want to see the republicans talk economic growth or do you want to see them talk socialish use? >> i don't think we have to choose. i think we can be for the things we believe in. i do know the thing that cuts across class lines, cuts across age groups, young and old, every

demographic, they want to get this economy moving again. i heard you ask about whether the economy is really picking up, whether the obama administration can sell that. when our national debt has risen to the same amount that our entire gross national product is, gross domestic product is, i don't think that that dog will hunt. >> that's what mr. obama is saying. he's saying the bailout of the car business, which affects ohio, that's getting detroit back, getting ohio back, getting manufacturing back and getting the economy back. i'll give you the last word. is it? >> more than 8% of my countrymen are still without jobs and the real number is even higher than that when you count the folks that have given up. that's not back in my world. that's not the morning in america that i remember from the 1980s. >> we'll leave it there, sir. ohio state auditor and romney

co-chair david yost. next up on kudlow, we go to $5 at the pump. can it be blamed on president obama? listen to this cut. >> if there's one thing i know about new hampshire, it that your political bull detector is pretty keen. it's pretty sharp. you know that we can't just drill our way to loper gas prices. >> well, we're going to put the president through our own bull detector next up on kudlow. in the works package, we change the oil we change the filter... tire rotation, suspension, we make suspension checks...

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if there's one thing i know about new hampshire, it's that your political bull detector is pretty keen. it's pretty sharp. you know that we can't just drill our way to lower gas prices. republicans are blaming president obama for spiking energy and gasoline prices. you know in some parts of the country gasoline may go to $5.

it's close to that in california already. however, president obama says, and i quote, that charge doesn't pass the political bull detector test. wow. so here to debate that and a new republican energy tax plan, joe bernstein and distinguished u.s. senator ron johnson, republican from wisconsin. mr. johnson, does president obama deserve the blame for the rising prices at the pump? >> well, larry, absolutely. a lot of people say president obama doesn't have an energy policy. he does have an energy policy. it's just a very bad one. you know, candidate obama said because of his cap and trade proposal electricity rates would necessarily skyrocket. we all know his energy secretary stated we need to figure out how to get u.s. gas prices up to the same level as europe. unfortunately, larry, they're figuring it out and we better not give him a second term so he

can get them all the way up there. when he entered office, gas was about $1.80 a gallon, now it's at $3.70. you're is at $8 a gallon. we better not get it up to those levels. >> today on the campaign trail president obama was a slamming oil and gas companies. he wants to tax them left here, wants to tack them right, $80 billion. it just doesn't sound like a friendly attitude toward a very important sector. >> he just wants to take away their subsidies, which at something like 140 million in profits last year, i'm not sure they really need. hello again, senator johnson. >> mr. bernstein. >> with respect, i don't want to you talk about what hasn't happened, cap and trade, i want to you talk about what has happened. in 2011 while this president was

on his watch, the u.s. produced more crude oil, domestic approa production -- >> excuse me, i let you speak. >> i'm sorry. >> the highest level of domestic crude production in eight years. in 2005 we used to import 57% of our crude, last year it was 45%. a huge decline. you know last year we were a net exporter of petroleum product. we have a ton of rigs working out there. this president has stregreat st cred on domestic production. this country sits on -- >> you're filibustering now. i can't let do you that. >> 2% to 3% of the global oil reserve. >> go ahead. >> i'm sorry. >> the only reason production is up in oil and gas is because it's up on private lands. on public lands where this president's policy is taking effect, production in both oil and natural gas is down.

another reason probably imports are down is because our economy is in terrible shape because of this president's policies. so, no, the president is trying to take credit for things other str administrations put in place -- >> i think your demand point is well taken. we've always done a ton more drilling on private land. you can't get away from the fact that domestic approaproduction up. >> not because of his policies, mr. bernstein. he's only granted one permit for drilling in the gulf. we basically have a de facto moratorium on the gulf. >> i strongly disagree. >> keystone xl pipeline. come on. this president is preventing us from using our domestic resources. >> can i just add into this on the keystone pipeline -- >> sure. >> one reason for higher oil prices but particularly high gasoline prices, there's a glut of oil coming from the dakotas down to curbing, oklahoma but there's no pipeline to get to the gulf coast to get refined

and then get it to the east and west coast. if this darn pipeline had been settled three years ago, we would not be in the fix we're in today, my friend jared bernstein. that's an analytic point. >> it is. >> that's what people are saying. we have a glut of oil but can't get it to the refiners. >> i don't disagree with you, larry. i think the reason gas prices are speaking is in part of the logistical problems you're mentioning. do you believe if he had made a different decision on keystone price tess pum many today would be any different? this is a reality check. i just want to hear your answer to that. >> it certainly would start putting pressure on cost when we realize we're going to actually take it seriously. he wouldn't allow to us drill in and war. he has produced a de facto moratorium in the gulf. >> i have to leave it there.

jared bernstein. >> there's no question in my mind if keystone had been built, particularly the lower half, if they had start thad from curbing, oklahoma down to the gulf coast three years eric we'd have had that refined oil and it would be going to the two coast and gasoline would be a lot cheaper, consumers would be stronger and america would be coming back faster moup about a little free market capitalism for america. i'm larry kud loyerry kudlow. we'll see you tomorrow night. [ click ] it's truck month! no. it's truck month! no. it's truck month! no. it's truck month! no. it's chevy truck month! definitely that one, boss. solid. let's try the other one again. ♪ chevy truck month ♪ no.

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