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In Donald Trump's America, working families get tax relief, millions of new jobs created, wages go up, small businesses thrive, the American dream achievable -- change that makes America great again.
Donald Trump for president.
DONALD TRUMP (R), PRESIDENTIAL NOMINEE: I am Donald Trump and I approve this message.
(END VIDEO CLIP)
BARTIROMO: Ok Lee -- what grade do you give this Trump ad?
CARTER: So I give it a B minus. Now, it's not going to hurt him but it certainly doesn't stand out from other political ads in my opinion. I think that his ad on national security that was out last week was much, much more effective. I think the fear in most places plays much better. I think he had an opportunity here that was just frankly missed.
So, in my opinion, he could have used some kind of policy that stands out that would have people talking. In this way I think it's just a very solid, well, he's going to create jobs, better economy. But there's nothing that like people are going to have conversations about in it. I think it just sort of --
BARTIROMO: And she said so many things that he could have used in the ad, like we're going to, you know, cut every coal job or I'm going to add on Obamacare or I'm going to add on to Dodd-Frank. Those are the kinds of things which would resonate with people, right? He didn't use anything she said.
MCDOWELL: But that's the -- just to my question -- do you define as a candidate at this point in the election cycle? Do you run those ads? Do you define yourself or do you attack, attack, attack? Because last week it was about attacking one another in the most vicious ways -- you know, even in the ads --
CARTER: Yes.
MCDOWELL: That KKK ad. That was insane.
CARTER: You know, this is an equal split attack and providing a vision. And so it becomes -- it's a little bit like a whiplash, right. But I think you're right. If he was going to use some fear tactics in the beginning, which is what he did here, he could have been more specific. He could have used her words against her.
She could have done a lot of things that make you question her more than he did her. This lack of specificity -- which is, you know, a criticism of Donald Trump in general.
BARTIROMO: Let's look at Clinton's ad right now. This is the latest from Hillary Clinton.
(BEGIN VIDEO CLIP)
TRUMP: You're living in poverty, your schools are no good, you have no jobs. Look at my African American over here
UNIDENTIFIED FEMALE: Trump Management was charged with discriminating against African Americans and breaking federal law.
TRUMP: I have a great relationship with the blacks. I've always had a great relationship with the blacks.
What the hell do you have to lose?
HILLARY CLINTON (D), PRESIDENTIAL NOMINEE: I'm Hillary Clinton and I approve this message.
(END VIDEO CLIP)
BARTIROMO: So interesting. She did what he didn't do. She used his words against him. What's your grade?
CARTER: That's right. This one I give an A minus.
BARTIROMO: Ok.
CARTER: I actually think it's a very effective ad. And I think one of the things that happened is we forget all of the things that have happened up to this point and so we have a really short memory. We keep going on to the next thing. And so what she's done very effectively is just reminded us of those moments.
You know the news cycle just moves so fast that you forget and this is like she's going to just nail him one after another and remind us of the things that make you not want to give Donald Trump the benefit of the doubt. I think it was a really smart ad.
BRENBERG: And you know, it's interesting you pointed out he went negative and positive at the same time in his ad. She clearly saves one set of ads for negative, the other for positive. Which of those two is more effective? I mean, do they both have merits? How do you make the choice between them?
CARTER: I think they both have merits. I hate -- everybody says they hate the attack ad but when you're trying to get to Election Day, you're trying to give people a reason not to push that button or pull that lever, or however it is that you vote in your state. And it can be really effective even though we hate them.
Now, the question is and I think Hillary Clinton has very effectively gone on the offensive here, she's attacking Donald Trump, she's trying to bait him. We were talking earlier about some of her attacks where the attack ad might not that be effective but it's just like bait in front of Donald Trump. And I think he has done a good job for the last ten days of not taking the bait. Very, very, you know, different Donald Trump than we have seen before.
MCDOWELL: How critical are the debates? "The New York Times" actually has a really interesting piece today about debate prep and how the Clinton campaign is doing research to try and needle Trump during the debates, even talking to the ghost writer from "Art of the Deal".
And then Trump on the other hand, this is "The New York Times reporting, says that he did not want to take part at least so far in mocked debates with a Clinton stand-in. And it's just interesting how because they both see the critical importance of these debates coming up in terms of defining themselves and one another.
CARTER: I think after the first debate, it's going to be one the most critical moments in the campaign so far. And I think that he should be preparing. I mean he has not been in this one-on-one dynamic. We were talking about that.
The other thing is debating a woman, whether we like gender roles or not is a very different thing than standing up there next to Chris Christie. It's the bottom line it is. And he needs to understand how to do that.
I think that it's going to be -- all eyes are going to be on this debate, probably more so than we've ever seen before. And people are still changing their mind. We have seen in the polls that more than 50 percent of people have changed their minds of who they will support over the last six months.
And so we have weak support. When you have -- when you have likability numbers that are low, we've got a lot of people who traditionally would go Republican who aren't. If you look at the Catholic vote, Hillary Clinton has got that in the bag. That hasn't happened in years.
BARTIROMO: Is that right?
CARTER: And so I think one of the things that we really have to -- we should be really focused on is you can change people's minds in these debates. He could seem reasonable. He's got a picture of the things that a lot of people want. We want jobs. We want tax relief. We want a safer America. We want a stronger America. That's his message, that's the core of it.
Hillary Clinton's message is sort of garbled. But people don't really know -- when you think about polls, what is she all about.
(CROSSTALK)
CARTER: She's a policy wonk. So what is -- if you go on her Web site, you can see, she lists every policy starting with A -- Alzheimer's.
(CROSSTALK)
MCDOWELL: I laughed about that. It's like about the horse -- the hoof story. She has a policy about cracking down on treating horse hoofs with chemicals to change their gaits -- that's on the Web site.
CARTER: It's unbelievable.
BARTIROMO: So when that's all that stands out there, what do you stand for because it's too much stuff?
Real quick, this is a big primary day -- what are the races that we need to be focused on?
CARTER: Well, I think McCain is going to be a big -- you know, McCain -- it's a big statement on the establishment versus the underdog. I think it's a key indicator of how people are going to vote and what we are seeing is that the underdog has been over-indexing, like under-indexing in the polls. So he's only four points ahead. He's got -- he doesn't have it over the 50 percent mark. So I think there's a chance that McCain's seat is at risk.
I think Rubio is going to take it and I think Debbie Wasserman Schultz -- I think she's is going to underperform where she was. She's probably still going to take the race but I think that she's going to take a hit based on what just happened in the DNC and she should.
BARTIROMO: All right. We'll watch those races. Thank you -- Lee.
Back to school blues, meanwhile. The outrageous prices parents are expected to pay for everything from backpacks to head bands for their kids to go back to school this year. We are going to tally it up for you.
And then speaking of squeezes, like orange juice with your breakfast, well, it might be harder to come by. Why one of America's staple beverages is having a bit of a meltdown. That's next.
Stay with us.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back.
Congressional lawmakers launching an investigation into the price surge for EpiPens.
Here is Dagen with the story and the other headlines now -- Dagen.
MCDOWELL: Thank you -- Maria.
The House Oversight Committee sent a letter to the CEO of Mylan Pharmaceuticals requesting documents and internal communications about that EpiPen price hike. The lawmakers also asking Mylan executives to brief the committee by next Tuesday.
The price for the two-pack EpiPen has increased from $100 back in 2009 to about $600 this year. This comes as Mylan announced that it will release a generic version of the EpiPen that will cost about $300 for a pack of two. EpiPen generates annual sales of about a billion dollars.
The merger between Oreo maker Mondelez International and Hershey is off. Mondelez saying that it is no longer interested in pursuing a deal after Hershey refused its latest offer last week. That was the second offer since June. Mondelez saying because of recent shareholder development at Hershey there's no path forward to a deal. The news sent Hershey shares down more than 11 percent down in after hours trading and also this morning in premarket trading Mondelez up about 4 percent.
And the latest retailing trend suggests that the growing gap between the rich and poor is being seen at stores that students stock up for the start of the school year. Shoppers can buy $195 head band or a $572 Versace backpack on line or text. And then there's Dollar Tree which is selling $1 packs of tape, glue sticks and pencils. According to the National Retail Federation, parents expect to spend an average of $673 on electronics, clothes and notebooks this year. That's up from $630 bucks last year alone.
Maria.
BARTIROMO: Wow -- that is big numbers for back to school.
MCDOWELL: Yes. And they all start -- I got stuck behind school bus traffic yesterday. We are down in Virginia. Everybody is getting back to school.
BARTIROMO: Yes, they sure are.
MCDOWELL: We all cursed the school bus traffic. That road south, it's really bad because it's two-lane roads and you get stuck behind a school bus you're going to be an hour late to wherever you're going.
BARTIROMO: And it feels like the weather changes like that -- right. I mean all of a sudden you just start feeling fall in the air.
Well, your grocery bill meanwhile may be shrinking due to falling commodities prices but why it may also make it harder to find your favorite breakfast foods. We have the story next.
Plus your dream vacation may be becoming more cost efficient. How one company is changing the way you can fly the friendly skies.
Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And then there are other commodities like frozen orange juice and gold. Of course, gold doesn't grow on trees like oranges.
Clear so far?
(END VIDEO CLIP)
BARTIROMO: That was a clip from "Trading Places", which looked t the frozen concentrated orange juice market. Today frozen concentrated orange juice is getting squeezed big-time out of consumers' homes and the commodities market as well. On a monthly basis, consumers drink 1.4 million gallons of frozen concentrated orange juice. But this pales in comparison to the 19.1 million gallons of fresh orange juice consumed.
Are the days of the frozen concentrated orange juice market numbered? I want to bring Roger Corrado right now. He's senior vice president at Ingalls and Snyder. And its good to see you -- Roger. Thanks so much for joining us.
ROGER CORRADO, INGALLS AND SNYDER: Thank you.
BARTIROMO: We have all of the breakfast items because orange juice at one point was all the rage and it's not anymore. How come?
CORRADO: Well, as I was discussing earlier, I mean orange juice kind of lost favor with all the diets, you know, the low-sugar diets and all that. I mean when Adkins came around the orange juice really lost a lot of its appeal. I mean, you know, everybody would always say including my mom, like have a glass of orange juice in the morning. It gives you the energy. Now with all the energy drinks out there as we were discussing or every other choice, it seems that orange juice is actually unhealthy choice and it's really, you know, you can see it in the market and the consumption as you just mentioned.
MCDOWELL: It would keep you from getting scurvy. That's a good thing.
But again, people -- even the orange juice drinkers have moved away from concentrated orange. It just has no market anymore.
CORRADO: Well, the concentrate -- not necessarily that you sell concentrate that you actually take home and mix yourself. I mean most of your orange juice if you look at the carton says "made from concentrate", you know. So that's really the mark -- it was made from concentrate.
Now, it seems everybody you know, and especially in the past, let's say, five years everything is fresh. You know, everything you get is fresh. You want fresh this, you want fresh that. So that's pretty much a lot to do with the concentrated orange juice. Whether it's in a container made from concentrate or you're actually still mixing it which I don't really know of anybody who does. I mean my mom is still alive but I don't think she even does it.
MCDOWELL: Let me give you a quick tip about frozen concentrated orange juice. It is a critical component of any one's diet because you make sherbet punch with it. You make punch with frozen concentrated orange juice, sprite and then sherbet.
CORRADO: So there's still a use for it is what you're telling me? Ok.
MCDOWELL: Absolutely.
BARTIROMO: I was going to say is there an alternative? Is there something that has taken the place? Because the truth is there is some truth to the fact that sugar is the enemy when it comes to, you know, your health and so there's sugar in concentrated orange juice. What has taken its place?
CORRADO: Well, you could say what has taken its place is probably a lot of these alternate drinks, you know. You see like anything from Gatorade to Powerade. Now Gatorade's been around as long, you know, in flavor as long as orange juice but it really now is promoted much better and all that.
You know, juice is basically -- all of our orange juice comes from Florida. I mean all the oranges in Florida converted into orange juice. California is where you get most of your fresh fruit. So you say what's taking its place are all these other choices, you know.
And believe it or not, are people drinking those for breakfast? I assume they are. They start the day with a Red Bull. Or they start the day with a Powerade or a Gatorade as opposed to, you know, what I would say even such a health glass of an orange juice, you know.
BARTIROMO: Let me switch gears and ask you about one of the stories in the "Journal". I'm so sorry Brian.
Number three story in the "Journal" this morning, the U.S. on track to post the longest stretch of falling food prices since 1960.
CORRADO: Yes, I saw it.
BARTIROMO: That's got to be good news for customers, obviously but its bad news for farmers and grocers.
CORRADO: Without a doubt.
BARTIROMO: What's behind this drop? I mean the price of a gallon of milk -- down 11 percent to a little over $3 compared to a year ago.
CORRADO: Right. I think it's just the whole culture now -- the way people are eating, you know, the smaller meals, the fad diets, everything from red meat to orange juice. We can mention everything, you know, look at that plate of sausage. I mean who's going to really eat that, you know, the butter and all that. It's kind of like it's --
BARTIROMO: I know some people who would eat it.
MCDOWELL: A lot of this though is an excess supply of all of these food products whether it's in the dairy business, meats, grains because demand from China and other countries has fallen because the dollar has been strong.
CORRADO: Without a doubt.
(CROSSTALK)
CORRADO: That hurts significantly, you know, when you look at other countries and you see the demand has fallen. That's just, you know, like a lot of our food commodities which I've traded throughout my career -- coffee, sugar, cocoa. I call them the breakfast commodities but you have seen them falling also.
The participation isn't there as the trade and the consumption isn't there from the consumer so the Journal is right on with the story this morning saying these are all down like I think they said 50 percent in the past year or so. I mean, you know, it's supply and demand just like oil, you know, when oil gets to $20, $30 level everybody is, you know -- what do they mention -- the supply, the demand. And it's the same thing in the food business.
BRENBERG: This is really helpful -- I mean we talk about consumers not getting a raise for over a decade or more. I mean these falling food prices, falling oil prices have been really helpful for your average person. You know, producers are sort of saying, this is a real problem but consumers are cheering it. They love paying lower prices.
CORRADO: Well, it couldn't come at a better time, you know, for the economy and everything. You know, you see the struggles and you know, the reflection of let's say the DOW isn't a reflection of the economy as you guys always mentioned. You know, it's the truth.
And you'd say like, you are giving the consumers a break but in the same token, you know, you do have a lot of farmers that are going to start struggling. So for every good story there's that underlying bad story that follows it.
BARTIROMO: And it all works together when you look at the economy in the Federal Reserve. I mean you don't see the kind of inflation that would warrant interest rates to move higher. That's one issue.
CORRADO: Well, you know, that's a debatable issue every day. It's the same thing. You know, the market doesn't at these levels think about raising the rates, at what point are we going to get there? You know, I mean --
BARTIROMO: I guess there is some inflation when it comes to wages, right - - I mean that's where there's some inflation but food is down.
CORRADO: Food is down. You know, farmers are hurting, the land -- just as an example in orange juice, most of the land that was growing oranges is now being converted into real estate because that's where the value is. So your farmers who had a lot of real estate in Florida are converting and building homes and condominiums on it because that's what makes sense.
CARTER: It's so interesting too the trends and the way people consume food. People want local. People want not big brands, you want your local small brands. And I don't -- that makes it really tough for farmers. Like the quantity that they can produce now is so much --
And think about it like, you know, have you seen so many farmers markets? I mean I live in Hoboken. Let's say we walk in Hoboken every Saturday, every Tuesday, every Wednesday there's a farmers market. My son goes to school at Xavier Manhattan down in Union Square to the farmers' market.
BARTIROMO: I love farmers' markets.
CORRADO: Let's think about -- but years ago there were no farmers' market. There was no fresh farmers' market. Everybody shopped in the food stores - - right.
MCDOWELL: But people say I only eat local and then they eat a doritos taco two days a week.
BRENBERG: Made locally.
BARTIROMO: What do they buy at home?
CARTER: That's the question. There's a lot of people who are doing that whole local things. And the big company -- it's like a David and Goliath thing -- I see it all the time with my clients. How do you get somebody to want to have Tropicana when you can go get fresh squeeze at a farmers' market?
(CROSSTALK)
CORRADO: Did you really have the inventory, let's say, when you were growing up that your parents had in the refrigerator? No. My son lives with two roommates. I look in the refrigerator and there's three things in there. So everybody is buying stuff on their way home, you know. It's the truth.
(CROSSTALK)
BARTIROMO: People are still eating pancakes and waffles though right. We are good there.
Roger -- good to see you sir. Thank you so much.
CORRADO: Thank you. Thanks.
BARTIROMO: Roger Corrado joining us there.
Checking the health of Obamacare meanwhile -- why the administration is trying to perform triage on the Affordable Care Act and how it could impact your healthcare costs.
Then we are -- are we on the brink of another financial crisis? We'll discuss why some experts have very serious fears about the state of the U.S. economy. Stay with us on that.
Back in a minute.
(COMMERCIAL BREAK)
BARTIROMO: Good morning; welcome back, everybody. I am Maria Bartiromo. it is Tuesday. Your top stories right now, 7:30 a.m. on the East Coast: (HEADLINES) (MARKET HEADLINES).
First though, our top story of the morning and that is, Apple getting slapped with a $14.5 billion tax bill by European Union Antitrust Regulators. They say the technology giant was getting illegal tax breaks from Ireland; Apple says it will appeal this decision.
Joining us right now over phone is CATO Institute Senior Fellow Tax Policy Analyst Dan Mitchell. Dan, thanks so much for weighing in this morning.
DAN MITCHELL, SENIOR FELLOW AND TAX POLICY ANALYST, CATO INSTITUTE, via telephone: Glad to be on the show.
BARTIROMO: Look, if Ireland has a tax rate much lower than the U.S., and much lower than many other countries out there, is Apple doing anything wrong by operating there and getting better tax rates? What is your takeaway on this story?
MITCHELL: Apple is not doing anything wrong. Ireland not doing anything wrong. The European Commission taking so-called "state aid rules" and ruling that if a country doesn't tax a company as much as the bureaucrats in Brussels want it to be taxed, that somehow that is equivalent to giving it a subsidy or a handout. So I think this is really unprecedented. It's an attack on American multinationals, because they're the main target of this entire endeavor.
BARTIROMO: Yes, because of the multinationals go to Ireland to operate because tax situation is so much better there. So how is this going to play out? Will Apple be successful in its appeal?
MITCHELL: Well, Apple is going -- Ireland I think will have the primary role of appealing this decision, but the question is where do you appeal? The European Commission sort of set this up to be the judge, jury and executioner on these things. As I said before, this very strange ideology, if you don't tax enough, that's equivalent to a subsidy is really remarkable. If this should stand you can be sure other American companies: amazon, McDonald's and others are already under the gun, it's a tremendous money grab by European Commission.
BRIAN BRENBERG, PROFESSOR OF BUSINESS AND ECONOMICS, THE KING'S COLLEGE, off camera: Well, Dan, that's a good point and we know that there are so many companies, a lot of tech companies, a lot of pharma-companies that are in Ireland right now. Does this European Commission ruling affect them? Are they starting to make preparations to deal with this? The road ahead looks like they might be facing the same fate here?
MITCHELL: All of them have to be prepared because there is unquestionably an anti-Ireland -- anti-Irish tax system animus that is motivating the European Commission. What is ironic about this is if countries like, say France or Germany think that Apple is somehow diverting German source or French-source income to Ireland, they already have plenty of power through their transfer pricing rule - I don't want to sound all boring and gargony, but there's already he mechanisms in place that can handle this.
This is an unprecedented and amazingly destructive thing for the European Commission to be doing, in terms of international tax policy.
LEE CARTER, POLLSTER AND PARTNER, MASLANSKY AND PARTNERS: Do you think this becomes an argument for lower taxes here in the -- in the U.S.? Does this help people understand the benefits of a lower corporate tax rate?
MITCHELL: Well there is no question Ireland has benefited immensely by having a competitive corporate tax system, and, yes; the lesson is clear to the U.S., but it wouldn't matter if we brought corporate tax rate down to zero. This wouldn't stop the European Commission from going after U.S. multinationals. This is an area where the Treasury Department has actually been on the right side, fighting on behalf of (inaudible) and warning the Europeans, you know, not to do this sort of bold new effort, Brave New World of global taxation from a bunch of bureaucrats in Brussels who, oh, by the way, benefit from a preferential tax regime themselves.
BARTIROMO: Yes, I mean, it's interesting that this is okay with the U.S.; right? I mean, Apple getting, you know, getting lower taxes in Ireland, the U.S. is not getting upset about that. Meanwhile, they blocked the deal in pharmaceuticals between Pfizer and Allergan. They wouldn't allow that to go through. Is Apple getting special treatment here, from the U.S.?
MITCHELL: There's no question that the Treasury Department has gone through a lot of effort, probably because Apple is a major U.S. company; and it's not as if the U.S. Treasury Department has pure motives. They're worried that if the Europeans grab a bunch more cash from Apple, that will ultimately reduce how much money the U.S. Treasury can get from Apple. So we're really talking about a couple of jackals fighting over a carcass and I'm on the side of the carcass, not the jackals.
BARTIROMO: Wow! I think you said it right, this is a real money grab Dagen. I mean, they want the money.
MCDOWELL: Yes, it's a socialist society and they are desperately in need of money to fund all of the social welfare programs throughout Europe. How do you do it? You go after the money kingpin, and that would be Apple.
BARTIROMO: Right; more than $200 billion overseas. Dan, good to have you on the program, thanks so much.
MITCHELL: Thank you.
BARTIROMO: We appreciate it; Dan Mitchell. By the way, another big event, September 7th, Apple's got a big special event, I guess, about the Apple iPhone.
MCDOWELL: New iPhone without the headphone jack, apparently.
