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Larry Kudlow Interviews Republican Presidential Candidate, Rudy Giuliani, on Kudlow & Company (Transcript Included)

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DATE: August 13, 2007
NETWORK: CNBC
PROGRAM: "Kudlow & Company"
TIME: 5:00 PM ET

The following is the unofficial transcript of a CNBC interview with Republican Presidential Candidate, Rudy Giuliani, on CNBC's "Kudlow & Company" today at 5:00 PM ET. All references must be sourced to CNBC.

In the interview, Giuliani discusses the mortgage meltdown, the economy, the Iowa Straw Poll, healthcare, among other topics.

LARRY KUDLOW: THANK YOU. AMERICA'S MAYOR RUDY GUILIANI HE IS THE FRONT RUNNER FOR PRESIDENT WHAT MIGHT PRESIDENTIAL GUILIANIDO DIFFERENTLY CONCERNING THE SUBPRIME MORTGAGE PROBLEM AND ALL THE CREDIT JITTERS THAT YOU JUST HEARD BOB PISANI TALK ABOUT? RIPPLING THROUGH THE WORLD STOCK-MARKET? WELCOME BACK WE REALLY DO APPRECIATE IT. PRESIDENT BUSH WAS VERY EMPHATIC LAST WEEK DURING SOME ROUGH DAYS IN THE STOCK MARKET AND THE WORLD CREDIT MARKET. HE SAID NO DIRECT BAIL OUT, MAY BE SOME FHA MONEY BUT HE DOESN'T WANT THE WITH GOVERNMENT TO COME IN AND SOLVE THIS PROBLEM OF TO GET YOUR TAKE.

MAYOR GIULIANI: I WOULD DO BASICALLY WHAT THE PRESIDENT DID I WILL LOOK AT THE FUNDAMENTALS OF THE ECONOMY AND THE FUNDAMENTALS I BELIEVE MOST OF THEM ARE VERY STRONG. I WOULD SAY TO MYSELF THIS IS SOMETHING A MARKET PASS TO STRAIGHTEN OUT. AND IT WILL. AND NOT SUCCUMB TO THE TEMPTATION OF TRYING TO MANIPULATE IT TOO MUCH AND COME IN WITH A BAILOUT. IT SEEMS AT THIS POINT FUNDAMENTALS ARE VERY VERY STRONG. THEY ARE VIRTUALLY FULL EMPLOYMENT.

LARRY: YOU BUY INTO MY MAIN STREET STORY. I THINK THE MAIN STREET WILL BAIL-OUT WALL STREET.

MAYOR GIULIANI: IF THEY ARE NOT GOOD THAT IS WHAT THE PRESIDENT SHOULD WORK ON. I SET WAS VERY GOOD HE TALKED ABOUT LOWERING TAXES MAY BE TAKING A LOOK AT THE CORPORATE TAX RATE. I THINK IT WOULD BE REALLY IMPORTANT IF CONGRESS WOULD BUY INTO YOU REALLY WANT TO SEE A WAY TO DEAL AT LESS IS TO MAKING THE BUSH TAX CUTS PERMIT AND MAYBE EVEN LOOKING AT 2-3 YEARS AHEAD TO SOME MORE TAX CUTS MAY BE THE DEATH TAX, IT CAN'T HELP OUR ECONOMY SOME OF DEMOCRATIC CANDIDATES TALKING ABOUT THECAPITAL-GAINS TAX SOMEONE TO GO FROM 15 UP TWO, 20%, ONE WANTS TO GO FROM 15-28%. THE LAST TIME WE RAISED IT WE LOST $45 BILLION.

LARRY: CENTER FOR CLINICAL DATA CENTER CLINTON SAID SHE WANTS THE BUSH TAX CUTS TO EXPIRE SHE ALSO SAID LAST WEEK WITH DYLAN RATIGAN : SHE WOULD LIKE TO PUT $1 BILLION INTO STATE HOUSING FUNDS. THERE IS YOUR DIRECT BAILOUT IDEA WHAT DO YOU MAKE OF THAT QUESTION?

MAYOR GIULIANI: I THINK THAT IS VERY CONSISTENT SHE WAS TO AGREE THAT THE UNFETTERED FREE MARKET IS THE MOST DESTRUCTIVE FORCE IN AMERICA. SHE THINKS IT IS THE MOST DESTRUCTIVE FORCE? THAT HAS TO TELL HER IDEOLOGIES.

LARRY: DO YOU DISAGREE WITH THAT?

MAYOR GIULIANI: I SURE DO. FREE MARKET IS THE BEST THING WE HAVE GOING.

LARRY: WE SAW YOU SIX WEEKS AGO?

MAYOR GIULIANI: I THINK THAT IS THE BEST ANSWER TO MOVING PEOPLE OUT OF POVERTY. DEMOCRATS AND KNOCK PEOPLE INTO POVERTY THE WAY THEY TRY TO RIG RESULTS.

LARRY: WOULD YOU ELIMINATE SUBPRIME LOANS? A LOT OF DEMOCRATS WANT TO CLAMP DOWN ON A MORTGAGE BROKERS.

MAYOR GUILIANI: USUALLY WHAT THEY DO IS CLAMPDOWN, THAT's HOW WE GOT SARBANES OXLEY. SOME OF IT IS RIGHT THAN THEY OVERDID IT. WE ARE DRIVING IPOS OUT OF THE COUNTRY. YOU HAVE PEOPLE LIKE MIKE BLOOMBERG AND SCHUMER THREE BOARD ABOUT THE COMPETITIVE POSITION OF YORK WITH WHAT SARBANES OXLEY DID-- LET'S NOT DO THE SAME THING AGAIN. LET"S GET OURSELVES THROUGH THIS FIRST. LOOK AT WHAT MORE COULD BE REQUIRED. I THINK IT REQUIRES MORE TRANSPARENCY MORE INFORMATION. PEOPLE HAVE A RIGHT TO TAKE A RISK WITH THEIR MONEY. IT IS CALLED SUBPRIME FOR A REASON. IT IS SUBPRIME BECAUSE IT IS NOT PRIME.

LARRY: WHEN YOU GO OUT THERE AND CAMPAIGNED ARE PEOPLE TALKING ABOUT THE STOCK MARKET? ARE THEY TALKING ABOUT MORTGAGES AND HAVING TO GIVE UP THEIR HOMES?

MAYOR GIULIANI: I HAVE NOT HEARD THAT AT ALL. MAJOR CONCERNS ABOUT TERRORISM, HEALTH CARE, THE GASOLINE THAT PRICE WHEN IT WAS HIGHER BUT EVEN NOW, THOSE OF THE BASIC ONES YOU HEAR ABOUT MOST WHICH IS EDUCATION. I CANNOT HEARD MANY PEOPLE WITH JOB WORRIES EXCEPT IN A FEW SELECTED PARTS OF THE COUNTRY BECAUSE WE'RE ALMOST AT FULL EMPLOYMENT.

LARRY: THOMPSON AND STAFF KEEPS OPENING JOBS WITH CAMPAIGN MANAGERS I'M SORRY I DIDN'T WANT TO GO DOWN THAT ROAD

MAYOR GIULIANI: YOU HAVE TO TAKE RESPONSIBILITY FOR THE DECISIONS YOU MAKE. IF YOU INVEST IN SOMETHING RISKY, YOU GET A POSSIBLY GREATER RETURN. SO THE GREATER RISK FOR EVERYONE KNEW THAT SUBPRIME WAS RISKY. IF YOU PUT MONEY INTO THOSE MORTGAGES YOU KNEW YOU WERE AT GREATER RISK AND YOU SAW THE POSSIBILITY OF A GREATER RETURN THAT YOU HAVE TO LIVE WITH THE CONSEQUENCES.

LARRY: QUICK POLITICAL UP THE QUESTIONS WE JUST HAD THE IOWA STRAW POLL, YOU DIDN'T PLAY YOU DECIDED TO PULL OUT. GOVERNOR ROMNEY'S PULLED IT OUT PRETTY HANDSOMELY HE DID WE HE SAID HE WOULD DO. THEY SAID IT WAS THE MOST ORGANIZED CAMPAIGN THEY HAD EVER SEEN. HE HAS MOMENTUM DO YOU REGRET STAYING OUT?

MAYOR GIULIANI: NOT AT ALL. THE REALITY IS, WE DIDN'T GET STARTED EARLY ENOUGH TO REALLY MAKE A COMPETITIVE SHOWING THEIR AFTER WE WATCHED THE VOTE TURNOUT THAT TOOK PLACE IT WAS ONE OF THE LOWEST TURNOUTS EVER AND THE AMOUNT OF MONEY THAT THE CANDIDATES HAD TO SPEND IT DID NOT SEEM LIKE IT WOULD HAVE BEEN AWORTHWHILE INVESTMENT WE WANT TO FOCUS ON THE CAUCUS IN JANUARY. WE WANT TO PUT ALL OUR EMPHASIS INTO THAT SO IS A QUESTION OF USE OF RESOURCES. EVERY CAMPAIGN MAKES A DIFFERENT DECISION. OUR CAMPAIGN, MCCAIN, AT THOMPSON MADE THE DECISION NOT TO GO. I CONGRATULATE THE ONES THAT CAME IN FIRST AND SECOND AND THIRD, BUT I WOULD NOT HAVE WANTED TO SPEND THE MONEY OR AT LEAST ONE OF THEM DID I DO NOT THINK IT WAS WORTH IT.

LARRY: THE IOWA STRAW POLL AND CAUCUSES BEGAN IN 1979. THERE IS ONE REPUBLICAN CANDIDATE WHO WON THE STRAW POLL AND WENT ON TO WIN THE CAUCUSES. DO YOU KNOW WHO IS THAT?

MAYOR GIULIANI: ONLY ONE.

LARRY: THIS STRAW POLL HAS NEVER HAD ANY INDICATION OF ANY.

MAYOR GIULIANI: GEORGE BUSH.

LARRY: I THOUGHT I WOULD GET YOU ON THAT.

MAYOR GIULIANI: HE IS ALMOST AS GOOD ON POLITICAL TRIVIA AS YANKEE TRIVIA.

LARRY: A GREAT FRIEND OF YOURS HAS A NASTY COLUMN IN THE NEW YORK TIMES.

MAYOR GIULIANI: I THOUGHT MITT ROMNEY SHOULD BE VERY COMFORTABLE HE IS NOW IN THE CATEGORY OF FIGURING I'M NOT SURE WHICH ONE WILL BE THE REPUBLICAN NOMINEE SO I WILL BANK BOTH OF THEM.

LARRY: I JUST WANT YOU TO RESPOND TO THIS ONCE AGAIN THE WHOLE ISSUE OF TOXIC WASTE AND THE HEALTH THREAT DOWN AT THE 9/11 CYBER YOU SAID YOUR FIRST REACTION TO SOME OF THIS WAS NOT THE BEST. IT CLEAR IT UP.

MAYOR GIULIANI: WHAT I SAID I WAS DOWN THERE MORE THAN SOME PEOPLE. I SHOULD NOT HAVE SAID IT THAT WAY. I MEANT WHAT I WAS DOWN THERE IS THAT I WAS DOWN THERE THAN SOME OF MY STAFF. I WAS NOT SUGGESTING I WAS THERE MORE THAN ANYONE ELSE. THERE WERE PEOPLE THAT WERE THERE MORE OR LESS THAN ME. BUT SOME PEOPLE LESS THAN ME HAVE HAD ELVIS IS ALREADY. I THINK THEY SHOULD BE TAKEN CARE FOR ALL I AM VERY CONCERNED ABOUT ALL OF THEM BECAUSE I FEEL LIKE I AM ONE OF THEM. I WAS EXPOSED TO MANY OF THE SAME RISKS MAYBE NOT AS MUCH AS OTHERS BUT MORE THAN OTHERS BUT I FEEL AN EPIC THE FOR THEM. MY WHOLE VIEW IS PEOPLE WHO SHOULD BE TAKING CARE OF WHO WERE EXPOSED THEY ARE HEROES AND WORKED VERY HARD. I DON'T THINK ANYBODY DOESN'T THINK THIS WAS DANGEROUS. THEY SHOULD ALL BE TAKING CARE OF THE ONES WHO WERE THERE MORE THAN MEETS OR SAME OR LESS THAN ME.

LARRY: THIS JOHN MCDONALD THE FIRE FIGHTERS ITS CHAIRMAN, NOT HAVE YOU BROKEN BREAD WITH HIM? HE JUST KEEPS FIRING SHOTS AT YOU.

MAYOR GIULIANI: THIS IS THE ORGANIZATION THAT SUPPORTED JOHN KERRY IN 2004. DATE MADE CHARGES ABOUT PRESIDENT BUSH NOT SUPPORTING FIREMEN AND TAKING MONEY AWAY AND I WENT AROUND THE COUNTRY O REFUTED AS A GOOD. I THINK THEY'RE PRETTY ANGRY AT ME FOR THAT. BUT THE SIMPLE FACT THAT FIRE FIGHTERS ARE MY HEROES AND THEY HAVE BEEN FROM THE TIME I WAS A KID. AS THE MAYOR I DID EVERYTHING I COULD FOR THEM. I GOT THEM HEAT SEEKING EQUIPMENT, I WAS THERE AT THE BEDSIDE OF EVERY SINGLE AND ONE THAT WAS INJURED BECAUSE MIGHT ALSO WAS A FIRE FIGHTER GROWING UP. I FELT I OWED IT TO THEM. I WAS IN THERE DOING ANYTHING SPECIAL I WAS DOING MY JOB.

LARRY: THE NEW YORK TIMES OR THE FIRE FIGHTERS, YOUR NUMBERS REMAIN HIGH.

MAYOR GIULIANI: IF MY NUMBERS REMAIN HIGH I WOULD IMAGINE THE DEMOCRATIC ORGANIZATIONS WILL CONTINUE TO ATTACK ME. THAT IS PART OF THE GAME. I KNOW THAT. I DON'T TAKE IT PERSONALLY I UNDERSTAND IT IS POLITICS.

LARRY: SPEAKING OF DEMOCRATIC ORGANIZATIONS A QUOTE FROM HILLARY CLINTON, RECENTLY I HAD NEVER ADVOCATED SOCIALIZED MEDICINE. THAT HAS BEEN RIGHT WING ATTACK ON THE 415 YEARS. AND QUOTE. I HAVE NEVER ADVOCATED SOCIALIZED MEDICINE.

MAYOR GIULIANI: HERE IS ANOTHER HILLARY CLINTON QUOTE SOME DECISIONS ARE SO IMPORTANT THAT PEOPLE CAN'T MAKE THEM THE GOVERNMENT HAS TO MAKE IT FOR THEM. THAT IS ONE THAT HILLARY CLINTON MADE THAT STATEMENT BACK IN 1995. YOU CAN CALL IT ANYTHING YOU WANT IF GOVERNMENT TAKES OVER HEALTH CARE THAT IS SOCIALIZED MEDICINE. THE MORE YOU MOVE PEOPLE AWAY FROM PRIVATE COVERAGE TOWARD GOVERNMENT COVERAGE, THE MORE WE'RE GETTING TOWARD SOCIALIZED MEDICINE WHICH IS THE KIND OF MEDICINE THEY HAVE BEEN COUNTRIES WHERE PEOPLE DON'T WANT TO USE THEIR MEDICAL SYSTEM WITH PAYING BRIBES.

LARRY: HOW DOES RUDY CARE DIFFER FROM HILLARY CARE?

MAYOR GIULIANI: A FREE MARKET SOLUTION A SOLUTION IN WHICH WE CHANGE THE PARADIGM FOR GOVERNMENT BIG EMPLOYER COVERAGE TO INDIVIDUAL COVERAGE. IF YOU WANT TO LOOK SOMEONE WHO RUNS THROUGH MY PHILOSOPHY, I THINK WE DO BETTER IN AMERICA GROWS WITH EACH GENERATION WE INCREASE THE AMOUNT OF CONTROL WEEK OF PEOPLE OVER THEIR OWN LIVES. IF YOUR HEALTH INSURANCE YOU SHOULD MAKE THE CHOICE WE SHOULD GIVE YOU ATTACKS DEDUCTION AND INCENTIVE TO GO BY EAT YOUR OWN. IT WILL FIT AMERICA AND THE ERA IN WHICH A YOUNG PERSON WILL WORK FOR 10 DIFFERENT EMPLOYERS IN THE NEXT 25 YEARS NOT THE ONE BIG EMPLOYER IT WOULD GIVE YOU AN OPPORTUNITY TO DEVELOP EQUITY ALONG THE WAY BECAUSE YOU CAN HAVE A HEALTH SAVINGS ACCOUNT IF YOU ALL SPEND IT WILL BE GROWING AND TAX-FREE.

LARRY: EVEN WITH THE TAX DEDUCTION, WHAT DO YOU DO WITH THE LOW INCOME PEOPLE? THAT IS THE QUESTION THAT POPS UP.

MAYOR GIULIANI: I WISH I HAD A LITTLE CHART. THE LOWEST -- POOR'S PEOPLE ARE NOT COVERED. FIRST OF ALL WE HAVE MEDICAID IT WAS THE PEOPLE WHO HAVE MONEY BUT NOT ENOUGH TO AFFORD IT SO YOU CREATE A PRIVATE MARKET TO DRIVE THE PRICE DOWN. WHAT I SAY IS HOW DO POOR PEOPLE EVENTUALLY ABLE TO AFFORD CELLPHONES? RADIOS? TELEVISION? BECAUSE THE PRICE HAS BEEN DRIVEN DOWN BY ALL THE PEOPLE WHO BUY THOSE THINGS TO A PRICE THAT THEY CAN AFFORD. THAT IS NOT HAPPENING IN THE HEALTH-CARE INSURANCE MARKET. IT IS MORE OF A GOVERNMENT DOMINATED MARKET WITHOUT THESE FORCES TO DRIVE PRICES DOWN. THAT IS THE WAY AND THIS IS THE THING THAT LIBERALS DO NOT WANT TO ACCEPT. THE MODEL THAT HILLARY CLINTON HAS AND BARACK OBAMA AND JOHN EDWARD IS INEVITABLY GOING TO INCREASE COST IT ALWAYS DOES. COVER MORE PEOPLE IN ONE PLAN, COVER MORE PEOPLE BY GOVERNMENT PRICES GO UP AND QUALITY GOES DOWNGRADED BIG MARKET QUALITY GOES UP PRICES GO DOWN.

LARRY: A BUNCH OF US HAVE LUNCH WITH KARL ROVE IT WAS A SMALL ROOM IN NEW YORK. KARL SAID THAT REPUBLICANS WHO WIN IN 2008 THAT PERSON HAS TO BE AN AGENT OF CHANGE. CAN YOU BE THE AGENT OF CHANGE?

MAYOR GIULIANI: I WAS MORE THAN ANY OTHER MAYOR IN RECENT MEMORY IN NEW YORK CITY I CHANGED A CITY NOBODY THOUGHT COULD BE CHANGED. I TOOK IT TO A CITY THAT WAS THEN A UNGOVERNABLE AND UNMANAGEABLE ACCORDING TO THE BEST URBAN RENAISSANCE ACCORDING TO TIME MAGAZINE.

LARRY: KARL HAS LEFT THE WHITE HOUSE WILL HE HELP YOU?

MAYOR GIULIANI: TO BACK I'M SURE IF I AM THE REPUBLICAN NOMINEE HE WOULD. HE IS A GREAT GUY AND A GOOD FRIEND. HE IS A VERY SMART MAN.

LARRY: RUDY GUILIANI THANK YOU FOR COMING BACK ON KUDLOW & COMPANY.



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