This is a rush transcript from "Your World," January 21, 2016. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: Of course, we're watching and we will keep an eye on two separate events, of course, Donald Trump in Las Vegas. We will see if he makes any reference to Ted Cruz, Ted Cruz in Manchester, New Hampshire.
What is so shocking about this is, these guys used to be known for not even laying a glove on each other. While all the accusations and ranting and raving against certainly Donald Trump were going on, Ted Cruz stood back, and when it came to the criticisms of Ted Cruz, Donald Trump stood back.
What does former GE CEO Jack Welch make of that and all of these crosscurrents? I don't know.
Good to see you.
JACK WELCH, FORMER CHAIRMAN & CEO, GENERAL ELECTRIC: It's part of a good battle. And we're narrowing it down to two and...
CAVUTO: You think it's going to be one of those two?
WELCH: Well, right now, it looks that way. And I don't see anybody gaping real momentum yet. We have got three elections coming up pretty quickly. And we will see if some momentum changes.
But, right now, this is a two-person race.
CAVUTO: It's interesting, Jack. You were way ahead of the so-called Cruz phenomenon. You were interested and eying him when he was nowhere in the polls, I think even before he formally entered the race.
But you saw something then. And it got my attention, because, for want of a better term, you might be deemed an establishment kind of guy. So what were you seeing in him early on? And I assume you still see it.
WELCH: There are couple of things I really like about Ted Cruz.
One, he does what he says he's going to do, whether it be on ObamaCare and shutting the government down, or doing another -- he says it, and he does it. The second thing I really like about him -- and I would like you to think about this, Neil, because I think people don't recognize the value of an insider-outsider combination coming into a job.
He knows what he doesn't like. I go out -- I was an insider outside 35 years ago when I got the job at GE. Our approval ratings of my team and I were 25 percent. Now, we didn't have to win the election. We got appointed. When we retired 20 years later, we had over 95 percent approval. But we went in there, we cleaned the place out. Of course he's going to...
CAVUTO: But they were nervous with you. You were this kid.
WELCH: And they were Bob Doles, and there were all these guys out there, the establishment, if you will, telling my predecessor, don't pick this wild man. OK? This is nuts.
So, if you ran a popularity contest, Ted Cruz, he is calling him a cartel. He's calling...
CAVUTO: If he became president, what Donald Trump is saying, you have to go to these people, you have to work with those people.
WELCH: If you're the boss, you can make things happen.
CAVUTO: It's different in Washington, Jack.
WELCH: No, they will all line up. They will all line up.
I will guarantee you that establishment will be behind him like ducks.
CAVUTO: Really? Really? Because the Bob Dole line and it goes off with the Donald Trump line, they hate him, you don't buy that?
WELCH: They might not like him getting the job. It ruins their game.
CAVUTO: Right. Yes. Yes.
WELCH: They have a nice game there. They have stayed for 25, 30 years. They pass things to each other. He's going to upset them.
CAVUTO: Do you think he will absorb all these blows? Because one thing that happened -- and we noticed it post the FBN debate -- and that whether it's the issue, whether he is a natural-born citizen, whatever Donald Trump is doing has at least stalled Cruz's rise in Iowa.
Now, polls are, as you often remind me, fleeting. But what do you make of that, that Trump is succeeding in planting seeds of doubt?
WELCH: Trump is a masterful politician. Let's face it. He's a great campaigner.
CAVUTO: What kind of president do you think he would be, if it got that far?
WELCH: Look, here's my view.
We had Jimmy Carter, and we couldn't bring the country back a little bit at a time after that disaster. Now we have got a guy that is twice as bad as Jimmy Carter ever thought of being, and we can't...
CAVUTO: You're talking about Barack Obama.
CAVUTO: See, all this time, I thought you liked him. No, go ahead.
WELCH: We can't nudge this thing back, Neil.
You don't want to -- we got to get this country back. And Ted Cruz -- Donald Trump is a great guy. He's a great negotiator.
CAVUTO: Are you surprised how well he is doing?
CAVUTO: What do you think it is?
WELCH: I think he is articulate in these debates. I think he says things that a lot of people are thinking.
WELCH: I think he might even be underpolling, because I know a lot of people, oh, I would never vote for him, I would never vote for him.
CAVUTO: Absolutely. No, I agree with you on that.
WELCH: But I think, when they go in the booth, they will vote for him.
I think he could be -- we will learn a lot in these first couple of votes. If he outpolls the -- if he out -- gets the votes more than the polls were, we're going to -- then he has got the whole...
CAVUTO: I talk to a number of Democratic operatives, and they always tell me, Neil, this is a dream come true for us. Donald Trump, Ted Cruz, hello?
What do you say? They used to say that about Ronald Reagan.
WELCH: And I think the biggest thing the Republicans have to worry about is, Hillary might get yanked and old Joe might ride in on a white horse, because she is so vulnerable.
CAVUTO: Do you get a sense, though, from any of this that it's going to get crazy, or that Republicans are going to rip themselves up here, arrive in Cleveland without a nominee, and it could be a protracted -- ballot after ballot?
WELCH: No, I don't think -- same people will come on board.
Look, I think that there's no question that with the environmentalists and all these people, with immigration, the Democrats have lost some of their natural constituency in the Midwest and unions. And I think that's going to be a different vote.
CAVUTO: All right, we're taking a look, by the way, as Jack is speaking -- and we will keep an eye on it.
This is the freed U.S. Marine, Amir Hekmati, returning to the United States, to Michigan, I believe. We will keep an eye on that. He had been held captive for about four-and-a-half years, originally went to go to that neck of the woods in Iran to see his ailing grandmother. The Iranians felt that he was a spy, held him up in all of this.
The Iran agreement, of course, got him back here. Again, we're monitoring, but back with Jack Welch.
Bailouts became a very big theme at the debate, not the least of which because of what has been going on in the markets. A lot of people say it could be repeated, the financial meltdown then. No two crises are alike.
I asked Christie about it. I asked Cruz about it. I'm not going to replay the bites. To a man, they said, no, we don't rescue again.
But if a Bank of America were up on the wall, against the wall, or a Citigroup, do you think a president would let happen?
WELCH: I don't think the market fallout fear is something that's going to create that yet.
We still have a reasonably weak economy, but we have been saying that for a year.
CAVUTO: Right. Right. Maybe because it's so weak, it can sputter on a while.
WELCH: And I don't think the economy is falling off a cliff here.
CAVUTO: You don't?
WELCH: I think it's slow.
CAVUTO: You don't think this presages anything horrible or anything like that?
WELCH: I think it -- look, the market -- the assets were inflated. The economy isn't catching up with the assets that people hoped they would. Earnings are going to be weaker, but they're not disastrous. They're not disastrous.
CAVUTO: You're Hillary Clinton and you're looking at this market moving. Now, today, we were up and all that, but you know how it's been going, up one day, down the next.
CAVUTO: Yes, exactly. And we have lost a trillion bucks in market value.
Do you get a sense that Hillary Clinton figures, get this out of the way early, I don't need it happening in the fourth quarter, right?
WELCH: I think she is so scrambling day to day as to what is happening.
WELCH: I got a theory. You can laugh at this one. Do you think that Petraeus losing a stripe on his shoulder, do you think in any way that was teeing up something with her to let old Joe come riding in on the horse? Do you think that?
CAVUTO: Do you think -- in other words, that he would...
WELCH: Well, now they're taking -- if they take a stripe off of Petraeus, a star, if they do that, now you say, gee...
CAVUTO: They took it off for far lesser offense. That's what you're getting at.
WELCH: We got to do something to her.
WELCH: We have to -- not me. I just have to...
CAVUTO: What if the party's looking at, our only alternative then is this guy Sanders? And he is the guy who once advocated a 90 percent top tax rate? And they say he might win the nomination, but he is a sure loser.
Do you think they would try to bring in a Joe Biden?
WELCH: That's my two bit behind the...
CAVUTO: But it would too late to do that. Right? They would have to do it at the convention.
WELCH: Yes. But they can do that at the convention very easily.
CAVUTO: In this race, as it is, the way it's constructed now, you always hear that Wall Street financial types want a Republican, but many of them tell me Republicans have grabbed defeat from the jaws of victory so consistently, that they have serious doubts that anyone can pull this out.
WELCH: Well, that's true, because we picked middle-of-the-road players.
CAVUTO: Is that the reason why?
WELCH: Well, I actually believe, when Romney got fewer votes than McCain, fewer actual votes, you have got to say, a lot of people had to be staying home.
CAVUTO: So, they weren't jazzed.
WELCH: Hopefully, we're going to jazz them now.
Look, this convention -- I was with a guy this morning who has never been involved in politics at all. I'm sort of a two-bit junkie, a weak junkie, but I love it. He and I went at it for an hour. We had more fun. He said, Donald Trump has gotten me into this game.
CAVUTO: Is that right?
WELCH: Everywhere you turn...
CAVUTO: I do think there's something to what you say, Jack.
And I have raised this before, that I agree. I think Trump's support is understated, not the way that most conventional analysts see it, because, to your point, a lot of people who will never admit voting, I can kind of remember that. Even though they're very different gentlemen, very different time, those who were asked would you support Ronald Reagan and they said, former actor, this is a guy who thinks trees cause pollution, no, no, no.
Obviously, something changed. Now, there were a lot of other factors.
WELCH: But my guy is Cruz.
CAVUTO: I understand. I understand.
But when people say that this race could be compromised by, let say, a Trump winning, because he is alienating so many, Latinos, women, do you buy his claim? And I know you're a Cruz guy. Trump's claim is, yes, but I'm bringing far more in.
WELCH: That is a possibility.
But I think you got -- when you think about Trump, do you know where he's going to go to combat what we just had for eight years? Do you really know? You don't know. He's going to make deals. He is very good at it.
CAVUTO: So, what's wrong with that?
WELCH: Your deals may end up being nudging us back. I want to go back.
CAVUTO: You think Cruz would make more -- you just said in the beginning he is the inside-outside guy.
WELCH: Yes. So, he knows what is there.
CAVUTO: I see.
WELCH: He's not finding where the men's room is. He's not finding out who is here, who is there. He knows what to do.
And in private equity now, we look every time for a CEO who is a rebel, who has got ideas, and we would love put him in the job, an insider rather, than pulling an outsider, who would take six months to find...
CAVUTO: Well, I will say this. And you're a modest guy.
Early on, when you first raised his name, and a lot of people didn't know who he was, it got a lot of people's attention.
All right, Jack Welch, thank you very much.
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