WHEN: TODAY, FRIDAY, APRIL 29TH
WHERE: CNBC'S "SQUAWK BOX"
Following is an excerpt from the unofficial transcript of a CNBC EXCLUSIVE interview with Liberty Global Chairman John Malone. Following are links to the full interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000018770 and http://video.cnbc.com/gallery/?video=3000019224.
All excerpts must be sourced to CNBC.
QUINTANILLA: FROM A PERSONAL STANDPOINT, DO YOU THINK THAT HOLDING CASH IN THESE TIMES IS A TOXIC STRATEGY? YOU'RE THE LARGEST PRIVATE LANDOWNER IN THE COUNTRY. SHOULD EVERYONE WHO HAS THE OPPORTUNITY NOW GET INTO HARD ASSETS AND NOT IN THE DOLLAR?
MALONE: WELL, I GUESS IT -- YOU HAVE TO AT LEAST WORRY ABOUT INFLATION AND DEVALUATION. AND SO HARD ASSETS, COMMODITIES HAVE PERFORMED WELL. CERTAINLY LAND HAS BEEN A LONG-TERM ASSET VALUE, IF IT'S PRODUCTIVE AND PRODUCING COMMODITIES. GLOBAL COMMODITIES IN PARTICULAR. AND CERTAINLY GROWING YOUR BUSINESSES OUTSIDE THE U.S. PARTICULARLY WHERE YOU HAVE GOOD GROWTH RATES AND HARD CURRENCIES, YOU KNOW, IS VERY ATTRACTIVE. AN AWFUL LOT OF THESE EARNINGS REPORTS YOU'RE LOOKING AT STATED IN DOLLARS REALLY ARE REFLECTING JUST THE RELATIVE INCREASE IN VALUATION OF FOREIGN CURRENCIES RELATIVE TO THE U.S. DOLLAR. SO YOU KNOW AT SOME POINT ANALYSTS WILL START TO UNWIND THAT. YOU KNOW, WHEN YOU LOOK AT COMPANIES LIKE THE SODA COMPANIES OR THE CONSUMER PRODUCTS COMPANIES, 60, 70% OF THEIR REVENUES ARE OFFSHORE. AND THEY ARE BENEFITING FROM THIS DEVALUING DOLLAR. WHEN THEY STATE THEIR EARNINGS IN DOLLARS. SO, YOU GOT TO BE A LITTLE CAREFUL HERE IN TERMS OF WHAT YOUR METRIC IS WHEN YOU MEASURE FINANCIAL PERFORMANCE.
ZASLAV: JOHN, YOU'VE BEEN QUIETLY AGGRESSIVE ABOUT GROWING THE, YOUR CABLE PLATFORM OUTSIDE THE U.S. AND NOW THE SECOND BIGGEST CABLE OPERATOR IN THE WORLD BEHIND COMCAST AND THE NUMBER ONE OUTSIDE THE U.S. GERMANY IS A MARKET WHERE KABUL BW IS A TRANSACTION YOU'RE IN THE MIDDLE OF. TALK ABOUT YOUR STRATEGY OF GROWING THESE CABLE SYSTEMS OUTSIDE THE U.S. AND HOW IMPORTANT BROADBAND PHONE AND EVENTUALLY CELLULAR. I WAS DOWN IN CHILE ABOUT TWO WEEKS AGO, AND I VISITED VTR, JOHN'S OPERATION IN CHILE WHICH IS THE MAJORITY PROVIDER OF BROADBAND, PHONE AND CABLE. AND THEY'RE LAUNCHING THEIR OWN CELLULAR. SO THEY'RE GOING TO HAVE A QUADRUPLE. HOW DO YOU SEE YOUR GROWTH IN THE CABLE BUSINESS AS YOU LOOK AT ALL FOUR OF THOSE, PHONE, BROADBAND, CELLULAR AND TRADITIONAL CABLE?
MALONE: WELL, AS YOU REMEMBER, DAVID, WHEN WE DID OUR SALE OF TCI TO AT&T, WE GOT OUT OF THE DOMESTIC CABLE BUSINESS. THAT ACTUALLY GAVE US PERMISSION TO GET INTO THE DOMESTIC SATELLITE BUSINESS. FOR AT LEAST A LITTLE WHILE, WE CONTROLLED, AND I WAS CHAIRMAN OF DIRECTV ON THE SATELLITE SIDE IN THE U.S.AND DURING THAT PERIOD OF COURSE, WE COULDN'T REENTER THE U.S. IN THE CABLE BUSINESS.BUT WE HAVE BEEN FOCUSING ON GROWING INTERNATIONALLY. AND IT'S THE SAME GAME. IT'S A QUESTION OF USING THE NEW TECHNOLOGIES TO EVOLVE THE PRODUCT OFFERINGS OF -- IN EUROPE IN PARTICULAR, DIGITAL TELEVISION WAS LAGGING.BROADBAND, INTERNET AND INTERNET TELEPHONY ACTUALLY WAS MORE ADVANCED THAN THE U.S. OUR OPERATIONS IN JAPAN WHICH WE SOLD A LITTLE OVER A YEAR AGO WAS VERY ADVANCED TECHNOLOGY. AND IN ALMOST ALL OF THESE MARKETS, WE'RE TRYING TO INTRODUCE ESSENTIALLY THE CONCEPT OF ANY VIDEO PRODUCT FROM ANYWHERE AND TRYING TO ADD TO IT THE BROADBAND WIRELESS COMPONENT. SO IT'S A QUESTION OF LOOKING BACKWARDS AT THE BUSINESS FROM THE CONSUMER'S PERSPECTIVE AND FIGURING OUT YOU KNOW, WHAT THE CONSUMER REALLY WANTS AND IS BUNDLING OF A SEAMLESS MULTIPLATFORM OFFERING WHAT THE CONSUMER WANTS. AND DAVID, JUST LIKE IN THE U.S., WE'VE BEEN TRYING TO DRIVES THE BUSINESS BY INVESTING IN PROGRAMMING SERVICES THAT ARE NICHY AND THAT SEEM TO ADD A LITTLE DIMENSION, INCREASE A LITTLE PENETRATION. BUT WHAT THE DEVELOPMENT OF THAT BUSINESS PARTICULARLY ACROSS NORTHERN EUROPE IS GOING VERY WELL. AND AS YOU SAY, THAT BUSINESS IS NOW ABOUT TWICE AS LARGE AS TCI WAS WHEN WE MERGED IT INTO AT&T IN 1989.
ZASLAV: AND THE INTERESTING THING ABOUT THAT BUSINESS THAT WE ARE SEEING YOU KNOW JOHN AND I TALK ABOUT THIS A LOT. THE EMERGING MIDDLE CLASS. YOU SEE THAT IN BRAZIL AND THROUGHOUT THE BRIC COUNTRIES. FOR US, WE'RE SEEING A LOT OF DISTRIBUTORS ARE PUTTING SMALLER PACKAGES TOGETHER THAT ARE MORE ATTAINABLE. SO IN MARKETS WE TALKED ABOUT BRAZIL, 20% PAY. JOHN'S GETTING INTO GERMANY WHERE THERE ISN'T A BIG PAY HERITAGE, BUT THE ABILITY TO KIND OF REINTRODUCE PAY TO IN GERMANY'S CASE THE MORE MATURE MARKET.IN A LOT OF THESE BRIC COUNTRIES THESE EMERGING MIDDLE CLASS, HOW BIG OF A PART OF YOUR STRATEGY IS THE EMERGING MIDDLE CLASS FOR GROWTH OF THE CABLE BUSINESS?
MALONE: WELL, OF COURSE, IT'S HUGE IN LATIN AMERICA. IN WESTERN EUROPE, YOU KNOW, I THINK GENERALLY THE MIDDLE CLASS IS STRUGGLING AS IT IS HERE JUST WITH GLOBAL INFLATION. AS YOU GO FURTHER EAST IN EUROPE, YOU'RE COUNTING ON A RISE OF THE STANDARD OF LIVING, AND YOU KNOW, JUST AS IN THE CASE OF DISCOVERY BECAUSE IT'S EASIER FOR DISCOVERY FOR A PROGRAMMER TO EXPLORE NEW MARKETS THAN IT IS FOR A CAPITAL INTENSIVE CABLE OPERATOR. SO YOU KNOW, WE FEEL OUR WAY INTO CHINA. WE FEEL OUR WAY INTO PLACES LIKE TURKEY, INTO AFRICA WITH MODEST CAPITAL INVESTMENTS AND WAITING FOR THE MIDDLE CLASS TO ARISE. BUT IN A BUSINESS, FOR INSTANCE, LIKE QVC WHICH IS, AS YOU KNOW, A VIDEO RETAIL BUSINESS OR AN ELECTRONIC RETAILING BUSINESS, WE LOOK VERY, VERY STRONGLY AT COUNTRIES LIKE CHINA AND INDIA AND BRAZIL AS GREAT OPPORTUNITIES TO SERVICE THE RISING MIDDLE CLASS IN THOSE MARKETS.
KERNEN: OKAY. I WANT TO GO BACK TO -- I JUST CONNECTED SOME DOTS HERE. VERY DISTURBING.BUT THERE'S LIGHT AT THE END OF THIS TUNNEL TOO, JOHN.HOUSING, I'M LOOKING AT SOME OF YOUR COMMENTS. THREE TO FIVE YEARS BEFORE WE REALLY COME OUT OF THIS. THAT'S GOING TO CONTINUE TO HAVE A NEGATIVE INFLUENCE ON UNEMPLOYMENT WHICH IS GOING TO CONTINUE TO KEEP THE FED DOING WHAT IT'S DOING WHICH IS GOING TO CONTINUE TO DEVALUE THE DOLLAR WHICH SCARES ME BECAUSE I DON'T SEE ANY WAY OUT. YOU SAY THE U.S. STILL HAS PHENOMENAL ADVANTAGES IN TERMS OF CONSUMERS AND ENORMOUS SCALE AND THAT ALL THESE PROBLEMS ARE FIXABLE IN TERMS OF LEADERSHIP. BUT HOW OPTIMISTIC ARE YOU THAT WE'RE GOING TO BE ABLE TO DO THAT, GET THE RIGHT TYPE OF LEADERSHIP, TO FOR EXAMPLE, YOU POINT OUT CATERPILLAR. GREAT REPORT TODAY.THEY'RE NOT GOING TO BUILD FACTORIES IN PEORIA WITH THE WAY THE TAX SYSTEM IS AT THIS POINT. WE NEED TO FIX THESE FUNDAMENTALS THROUGH LEADERSHIP.WHAT ARE THE CHANCES THAT HAPPENS?
MALONE: THERE ARE A FEW SIMPLE THINGS THAT COULD BE DONE THAT BOTH PARTIES SHOULD BE ABLE TO AGREE ON THAT WOULD BE SIMULATIVE TO THE ECONOMY. I MEAN, THERE ARE TWO THINGS I SEE JUST LOOKING AROUND. ONE IS THE ABILITY TO REPATRIATE CASH ON BALANCE SHEETS OF U.S. COMPANIES WITH SOME KIND OF A REINVESTMENT IN THE U.S., TAX ABATEMENT WOULD BE VERY SIMULATIVE TO BOTH JOB CREATION AND GROWTH IN THE U.S. AND THE SECOND THING I REALLY SEE, AND I THINK IT'S ENDEMIC ACROSS THE COUNTRY IS THE COMMUNITY BANKING SYSTEM. WE ALL TALK ABOUT THE HEALTH OF THE BIG BANKS THAT THE FED DOES BUSINESS WITH ALL THE TIME. THOSE BIG BANKS ARE IN PRETTY GOOD SHAPE BUT IF YOU LOOK AT COMMUNITY BANKS AROUND THE COUNTRY AND THAT'S WHERE ESSENTIALLY REAL ESTATE HAS THE FINANCIAL WORLD UPSIDE DOWN. BUT THAT'S ALSO WHERE THE LOANS COME FROM FOR STARTUPS, FOR SMALL BUSINESS, FOR SMALL BUSINESS EXPANSION. SOME KIND OF AN INVESTMENT PROGRAM IN THE BALANCE SHEETS OF THE VIABLE COMMUNITY BANKS I THINK WOULD DO WONDERS FOR RESTIMULATING JOB CREATION AND SMALL BUSINESS FORMATION. AND THAT'S THE PIECE OF IT THAT'S MISSING. I THINK THE COMMUNITY BANKS LIVE IN FEAR EVERY DAY OF GETTING THAT 90 DAY LETTER FROM THE FDIC. AND THEY'RE NOT LOOKING TO PUT MORE ASSETS ON THEIR BOOKS. THEY'RE LOOKING TO SELL ASSETS, SHRINK AND HOPEFULLY SURVIVE. AND IF YOU REALLY LOOK AT THE CORE WEAKNESS IN LOCAL COMMUNITIES, I THINK IT'S THE COMMUNITY BANKING SYSTEM. MOST STARTUPS HISTORICALLY HAVE BEEN MONEY BORROWED FROM LOCAL BANKS, USUALLY SECURED BY HOME EQUITY. WELL, THERE'S NOT A LOT OF HOME EQUITY AND THERE'S NOT A LOT OF INCREMENTAL LENDING CAPACITY IN THESE COMMUNITY BANKS. I THINK THAT IS REALLY NUMBER ONE REASON WHY THE ECONOMY IS STALLED ON JOB FORMATION.
QUINTANILLA: JOHN, THAT SORT OF IMPLIES THAT THE PROBLEM IS IN CREDIT SUPPLY AS OPPOSED TO CREDIT DEMAND. AND I WONDER IF YOU THINK SMALL BUSINESS OWNERS LOOKING AT A GDP NUMBER OF 1-8 WONDERING WHETHER THIS SOFT PATCH IN Q1 IS GOING TO LAST FOR A WHILE, I WONDER IF YOU THINK THEY ARE REALLY HUNGRY TO EXPAND OR TAKE ON THAT LOAN?
MALONE: I HAVE SPOKEN TO ENDLESS OUT HERE, ENDLESS SMALL ENTREPRENEURS WHO WOULD LIKE TO ADD ANOTHER BARBER SHOP OR WHO WOULD LIKE TO ADD ANOTHER COFFEE SHOP OR WHO WOULD LIKE TO DO XY AND Z AND THEY CANNOT FIND THE CAPITAL. SEE, I THINK WHAT'S HAPPENING IS THE MEDIA IN NEW YORK SAYS LOAN DEMAND IS NOT STRONG. WELL, THEY'RE TALKING TO JAMIE DIMON. BECAUSE LARGE CORPORATIONS HAVE TONS OF DOLLARS. THEY HAVE ACCESS TO THE BOND MARKET, WHICH IS MORE ATTRACTIVE THAN THE BANK MARKET.YOU KNOW, LONG-TERM FIXED. BUT WHAT -- WHERE THE MONEY DOESN'T EXIST, WHERE THERE IS LOAN DEMAND BUT NO SUPPLY I THINK IS IN THE SMALL LOCAL COMMUNITIES THAT HAVE ALWAYS BEEN THE BULK OF JOB CREATORS. AND I'M HEARING THIS ALL THE TIME. I MEAN, I GET ENDLESS REQUESTS, AND I HAVE TO TELL PEOPLE LOOK, I'M NOT PERSONALLY A BANK AND I CAN'T SAY GRACE OVER YOU KNOW, THREE DOZEN SMALL LOANS TO FRIENDS OF FRIENDS OF FRIENDS. YOU KNOW WHAT I MEAN? SO WHAT I SEE IS I SEE TWO VISIONS OF AMERICA. YOU KNOW, WALL STREET, MAJOR CORPORATIONS FLUSH WITH CASH, AND A FEDERAL GOVERNMENT THAT CAN PRINT MONEY, YOU KNOW, ZIMBABWE-LIKE, FRANKLY, AND THEN I SEE A LOCAL COMMUNITY WITH COMMUNITY BANKS. I KNOW HERE IN COLORADO, TWO-THIRDS OF OUR COMMUNITY BANKS ARE UPSIDE DOWN.
QUINTANILLA: YEAH.
MALONE: AND IN NO POSITION TO ADD A SINGLE DOLLAR OF LENDING.SO YOU KNOW, THAT IS A TOUGH PROBLEM. AND I'M NOT REALLY SURE IT'S ON THE RADAR SCREEN IN WASHINGTON OR NEW YORK.
QUINTANILLA: YEAH.
MALONE: BUT I CAN TELL YOU OUT IN THE COUNTRYSIDE, IT'S ON THE RADAR SCREEN. UNTIL THAT CHANGES.
BREAK
KERNEN: HOW TO GET BACK TO WHAT WE WERE TALKING ABOUT. YOU KNOW, FAR BE IT FROM ME TO TAKE ANYTHING IN A POLITICAL DIRECTION, BUT I THINK THE OBAMA ADMINISTRATION WENT FROM WITH THE REPATRIATE REPATRIATION ISSUE FOR TAXES THEY WENT FROM DECIDING THEY WERE GOING TO TAX WHAT'S OUT THERE RIGHT NOW TO AT LEAST BACKING OFF ON THAT WHEN THEY FINALLY SPOKE TO BUSINESS PEOPLE AND THEY SAID MAYBE THAT'S NOT SUCH A GREAT IDEA.STILL A LONG WAY FROM SOME TYPE OF TAX HOLIDAY TO BRING IT BACK IN OR ACTUAL TAX REFORM.WHAT WILL NEEDS -- ARE YOU OPTIMISTIC THAT BETWEEN NOW AND 2012, THIS IS GOING TO BE SOMETHING THAT WE DEAL WITH?
MALONE: I'M NOT OPTIMISTIC, NO. I THINK THE POLITICAL SYSTEM, YOU KNOW, WHEN ELECTIONS ARE INVOLVED AND HUMAN EGOS ARE INVOLVED, UNFORTUNATELY, RE-ELECTION TAKES PRECEDENCE OVER THE LONG-TERM NEEDS OF THE COUNTRY. AND YOU KNOW, ONE LOOKS BACK AND SAYS, YOU KNOW, THE ONE INSTITUTION THAT AT LEAST WAS TO SOME DEGREE ISOLATED YOU KNOW, FROM THE POLITICS WAS THE FEDERAL RESERVE. HOPEFULLY THEY CAN STAY SOMEWHAT INDEPENDENT. YOU KNOW IN, MY DREAM OF DREAMS, WE WOULD TAKE SOCIAL SECURITY AND MEDICARE AND MAKE THEM THE LEGITIMATE RETIREMENT AND INSURANCE PROGRAMS RUN ACTUARIALLY THAT THEY SHOULD BE, TAKE THEM OUT OF POLITICS AND NOT CONFUSE WELFARE WITH INSURANCE OR RETIREMENT SAVINGS. THAT WOULD BE A WONDERFUL TRANSITION. BUT THE QUESTION IS, YOU KNOW, IS THERE THE POLITICAL WILL TO GO IN THAT DIRECTION AND YOU KNOW, I'M SKEPTICAL THAT THERE IS. AND SO I THINK FOR NEXT TWO YEARS, THE ONLY ADULT IN WASHINGTON WITH FREEDOM OF ACTION IS PROBABLY THE FEDERAL RESERVE. THEY'RE DOING WHAT THEY CAN TO KEEP THIS ECONOMY GOING. BUT IT'S -- IT'S TOUGH FOR THE FEDERAL RESERVE TO OFFSET WHAT IS A VERY SERIOUS FEDERAL DEFICIT PROBLEM.
KERNEN: WELL, I'M TRYING TO FIGURE OUT WHAT GOVERNMENT OR WASHINGTON COULD DO FOR THE NOT ONLY FOR WHAT WE JUST TALKED ABOUT WITH -- WE NEED TO THROW OUT THE 55,000 PAGES OR WHATEVER IT IS IN THE TAX -- I THINK IT'S 55,000 PAGES.I THINK I READ THAT IN THE TAX CODE.WE'RE NOT GOING DO THAT. WHAT ABOUT THE COMMUNITY BANKS? WHAT COULD WASHINGTON DO? WE SPENT, JOHN, WE SPENT $800 BILLION ON SOMETHING. I'M NOT SURE WHAT IT WAS. I THINK IT WAS, I DON'T KNOW, WHAT WAS IT? WE MAKE SURE THAT SOME OF THE PUBLIC EMPLOYEES GOT THEIR CHECKS?
QUINTANILLA: WE PAID OFF SOME BUDGETS SHORTFALLS.
KERNEN: WE COULD HAVE DONE -- HAVE YOU EVER SPOKEN TO ANYONE IN THE OBAMA ADMINISTRATION? HAVE THEY FLOWN DOWN TO TALK TO YOU ABOUT WHAT NEEDS TO BE DONE OR THAT YOU'RE A BUSINESSPERSON SO THEY DON'T REALLY WANT TO TALK TO YOU?
MALONE: NO, AND I'M ANTI-SOCIAL AND APOLITICAL.SO I DON'T TALK TO THEM OR HAVE THOSE DISCUSSIONS. I SPEND MOST OF MY TIME TRYING TO PROTECT MY WIFE'S MONEY BUT PUTTING IT IN AUSTRALIA AND CANADA. BUT NO, I REALLY DON'T PERSONALLY HAVE A DIALOGUE. I'VE SPOKEN TO YOU KNOW, GOVERNORS AND YOU KNOW, I KNOW SENATOR McCAIN REASONABLY WELL. AND I'VE HAD SOME DISCUSSIONS, BUT I TRY TO STAY OUT OF THAT. IT'S SORT OF NOT MY THING. YOU KNOW, IT SEEMS TO ME WHEN YOU LOOK AT THE BAILOUTS, THE BAILOUTS WERE GENERALLY QUITE SUCCESSFUL. THE GOVERNMENT'S BEEN PAID BACK.GENERALLY WITH A RETURN. SO IT'S PRETTY HARD REALLY TO CRITICIZE THAT PROGRAM AND IN FACT, AS SOMEBODY WHO HAD A COUPLE OF BILLION DOLLARS IN OUR CORPORATELY IN THE RESERVE FUND AND SAW THE PANIC OF GOING LIQUID EVEN THOUGH YOU HAVE PLENTY OF CASH, I DON'T THINK THE GOVERNMENT COULD HAVE DONE ANYTHING ELSE BUT THE BAILOUT. I THINK BERNANKE AND PAULSON DESERVE A LOT OF CREDIT FOR HAVING STEPPED UP AND DONE THAT. I REALLY THINK WE WOULD HAVE BEEN IN COMPLETE CHAOS IF THEY HADN'T HAVE DONE THAT. THE STIMULUS WAS SOMETHING COMPLETELY DIFFERENT AND UNFORTUNATELY, I THINK THE STIMULUS AT THE END OF THE DAY TURNED OUT TO BE A REWARD SLUSH FUND FOR A WHOLE BUNCH OF POLITICAL ALLIES. AND REALLY WAS NOT VERY EFFICIENTLY SPENT, YOU KNOW, IT MAY HAVE ADDED SOMETHING TO THE GDP, BUT NOTHING OF SUSTAINED VALUE. YOU KNOW, THE GOVERNMENT COULD CONSIDER SOME KIND OF A PREFERRED STOCK PURCHASE PROGRAM IN COMMUNITY BANKS THAT ARE VIABLE IN ORDER TO PUMP CAPITAL DEEPER INTO THE SYSTEM. BUT THAT'S A LOT OF WORK. AND RIGHT NOW, THEY'RE BASICALLY I THINK TAKING THE PHILOSOPHY OF WHACKING THE WEEDS IN THE HOPE THAT THE PLANTS WILL THEN SURVIVE AND SEE SOME SUN LIGHT. IT'S PROBABLY A GOOD PROGRAM IF YOU'VE GOT A LOT OF TIME TO WAIT, BUT IT DOESN'T DO ANYTHING IN THE SHORT RUN.
QUINTANILLA: JOE MENTIONED TAX REFORM, JOHN. AND I WONDER THERE'S BEEN IN DEBATE OVER THE PAST COUPLE WEEKS ABOUT OKAY, MAYBE BUSINESS UNDERSTANDS THAT IN ORDER TO GET BROAD TAX REFORM, THEY MIGHT HAVE TO SACRIFICE TAX BREAKS, SUBSIDIES OF THE OIL INDUSTRY, FOR INSTANCE, THAT BENEFIT THEM INDIVIDUALLY. YOU KNOW A LOT OF BUSINESS LEADERS. IS THERE A FEELING AN THAT THEY COULD GIVE UP SOMETHING SMALL TO GET SOMETHING LARGE?
MALONE: WELL, IT'S MIXED.IF YOU'RE A DOMESTIC COMPANY THAT PRETTY WELL PAYS A FULL TAX LOAD, YOU'RE PERFECTLY WILLING TO GIVE UP SOME TAX BENEFITS TO GET THAT MARGINAL RATE DOWN. IF YOU'RE IN A FAVORED BUSINESS THAT HAS ALL KINDS OF SHELTER, YOU KNOW, YOU PROBABLY AREN'T VERY FLEXIBLE. AND UNFORTUNATELY, YOU KNOW, IT'S MUCH EASIER TO STOP THINGS IN WASHINGTON THAN IT IS TO MAKE THINGS HAPPEN. SO, YOU KNOW, A RELATIVELY SMALL MINORITY CAN PRETTY WELL STOP ANY KIND OF REFORM. SO IT TAKES REALLY AN OVERWHELMING PLURALITY I GUESS YOU'D SAY OF OPINION AND OR A CRISIS IN ORDER TO MAKE KIND OF CHANGES THAT ARE ULTIMATELY NEEDED.BUT CLEARLY A LOWER, FLATTER CORPORATE TAX THAT WAS COMPETITIVE WITH THE REST OF THE WORLD, YOU KNOW, WOULD BE VERY HELPFUL TO THE U.S. YOU KNOW, PERSONALLY I FAVOR FEDERAL CONSUMPTION TAX OF SOME KIND FOR THE BROAD BASE, AND THEN AN INCREMENTAL INCOME TAX FOR HIGHER INCOMES. TO ME, THAT WOULD BE MUCH MORE EFFICIENT TO FUND THE FEDERAL GOVERNMENT AND YOU KNOW, AND -- BUT I DON'T KNOW THAT ANY OF THOSE THINGS CAN BE IMPLEMENTED IN THE POLITICAL ATMOSPHERE THAT EXISTS.
KERNEN: SO NOBODY'S BEEN DOWN TO SEE YOU. THIS IS ALL I WANT TO SAY, JOHN THIS WHOLE INTERVIEW WILL NOW BE ON OUR WEBSITE, OUR CNBC WEBSITE AND EASILY ACCESSED BY PEOPLE IN WASHINGTON OR AT THE WHITE HOUSE. SO EVEN THOUGH YOU DIDN'T GO THERE AND NO ONE CAME DOWN TO SEE YOU, I THINK IT -- AT LEAST THERE'S SOME IDEAS HERE.BECAUSE YOU'RE LOOKING FOR LEADERSHIP. I'M WORRIED ABOUT BETWEEN NOW AND 2012 AND I SEE THE SAME THINGS IN THIS COUNTRY THAT YOU SEE IN TERMS OF ALL THE POTENTIAL, BUT IT'S NOT GOING TO HAPPEN UNLESS SOMETHING'S DONE.
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