Jack Keane: Iran does not want to go to war with the United States

This is a rush transcript from "Your World," June 14, 2019. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: Fox on top of two foreign crises with the potential to explode into a big old mess.

Iran first, and officials now saying Iranian gunboats have surrounded one of those stricken oil tankers in the Gulf of Oman. And guess what? They're refusing to let it leave.

Then there's Hong Kong, where we could be headed for a repeat of those violent demonstrations, another big one reportedly being planned for this weekend.

And we are watching all of it, and why Wall Street so far doesn't seem to be concerned by any of it. Weird.

Welcome, everybody. I'm Neil Cavuto. Welcome to "Your World."

President Trump says the attacks on those oil tankers have Iran written all over it

To Jennifer Griffin on how the Pentagon is dealing with it.

Hey, Jennifer.

JENNIFER GRIFFIN, NATIONAL SECURITY CORRESPONDENT: Hey, Neil.

Well, we have just learned that Iran tried to shoot down an American drone on two separate occasions in recent days. U.S. officials also tell me four tugboats contracted to pull the Norwegian-owned tanker, one of the two tankers damaged in an attack Thursday, have been prevented from doing so by Iranian gunboats that have surrounded the stricken tanker.

At first, the Iranians put out a press release saying they rescued all 44 of the sailors on these two disabled tankers. U.S. officials now tell us one of the two tanker crews were in fact detained by the Iranians early Thursday morning after first being rescued by another merchant vessel.

One of the crew members spoke earlier today on Iranian state TV.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): I am from Russia. The service was excellent. They have hosted us really well. Everything is fine.

(END VIDEO CLIP)

GRIFFIN: Only 23 are president in this video. The U.S. Navy says it rescued the other 21 sailors from the other oil tanker that was attacked.

Important to remember those 23 sailors detained by Iran have now been held for nearly two days against their will. U.S. Central Command released this photo showing what it says is an unexploded mine attached to the whole of one of the tankers attacked outside the Persian Gulf Thursday.

This video also released by the U.S. military shows what it claims is proof of Iran's involvement in the attacks. Officials say this Iranian Islamic Revolutionary Guard boat later removed that unexploded mine from the hull.

Iran denies it played any role in the attacks. U.S. officials say all 21 sailors from the Japanese-owned tanker were rescued by the American guided missile destroyer Bainbridge and have been treated and returned to their ship and are preparing to tow the stricken vessel back to port.

Iranian vessels remain lurking nearby the damage hull. Officials say the unexploded mine removed from the tanker is the same type of mine, Neil, used to attack four oil tankers last month in the same area -- Neil.

CAVUTO: It sounds, Jennifer, that they have no doubt that this is Iran and its fingerprints are all over it. Is that generally now the case, that there's no one debating that?

GRIFFIN: That's certainly what Pentagon officials and U.S. CENTCOM officials and senior Defense officials that we have spoken to are saying, and we have heard the same from the administration. You heard Secretary Pompeo state it outright yesterday from the State Department.

CAVUTO: Right.

GRIFFIN: But we hear the same from U.S. military officials.

CAVUTO: All right, as usual, great reporting, Jennifer. Have a good weekend -- or try to -- Jennifer Griffin on all of these developments.

Meanwhile, presidential candidate Bernie Sanders says that the Gulf of Oman attack shouldn't be used for a pretext to go to war with Iran. He might be getting a little ahead of himself right now.

But let's get the read from General Jack Keane.

General, if it's unequivocal proof, and they say it is, then what?

JACK KEANE, SENIOR STRATEGIC ANALYST: Well, first of all, we need to share the intelligence with our allies in the region, with the Europeans and also with the Japanese.

And we should form a coalition of support against what's taken place. The Iranians are clearly disrupting the major oil artery in the world here, much as they did once before in the late 1980s. And it didn't end well for them under the Reagan administration because of the actions they took.

But I think that's step one. Step two, Neil, is U.S. begins to escort ships with coalition partners through the Persian Gulf. The Iranians will likely escalate. And they will put mines out there, as they did in the late 1980s.

What Reagan did under those circumstances is this. In 1987, we took a Kuwaiti tanker, and we re-flagged under U.S. flag, hoping it would have more protection, ran it through the Persian Gulf. The Iranians attacked it. Reagan directed military action against two Iranian oil platforms that were destroyed in the Rostam field.

In 1988, U.S. escorts are bringing ships through the Persian Gulf. A U.S. frigate is hit by an Iranian mine. Reagan directed military action against the Revolutionary Guard. Navy staging bases destroyed many of their vessels and also destroyed two more oil platforms.

That crisis ended with that action. That I think is sort of the path that we're on. There's other options that the military may have based on what the Iranians are doing. But I think that's sort of the direction we're heading, Neil.

CAVUTO: You know what I wonder about, General, a lot is that how easily this can go to extremes, and what Iran would be thinking to push it to extremes, especially now, where this time you have the -- pretty much the entire Arab League saying something's got to be done, and they're fingering one of their own to say with them?

KEANE: Well, here's a couple of denominators that we should really keep in mind.

One, Iran doesn't want to go to a major war with the United States. So that's the denominator one. Will they escalate to try to take the pressure off of them that the United States has imposed on them by getting the international community to tell the United States, back off the Iranians, we got to get that oil flowing on that major artery in the Persian Gulf?

The Trump administration is not going to do it. But the Iranians are going to still keep trying that, because they're in a desperate situation, Neil. But all that said, you can take measured, limited military action to enforce diplomacy without the provocation of going to war.

And it's a false choice when people say, well, if you pull the trigger, no matter how limited and how measured, it is, it's a warlike act and, therefore, you are going to war with Iran.

That's the same choice Obama gave us with 150,000 troops in Syria as one option, meant major war, or do nothing as the other option. Doing nothing here is not in the United States' national interests.

CAVUTO: All right.

KEANE: A stable oil flow through the Persian Gulf is in our interests.

CAVUTO: Thank you, General, very, very much. We will see what happens.

Now to the other crisis. And that is Hong Kong, the scene of more protests today over China's growing influence and slapping down some punishments, including extradition orders, that could affect everyone there and foreigners even visiting there, nothing, of course, of the scale of the violence that we saw in recent days, when thousands of demonstrators clashed with Hong Kong police, another massive rally planned for the weekend.

Charles McDermid joins us now in Hong Kong by phone. He is with The South China morning post.

Charles, how are things looking there right now?

CHARLES MCDERMID, SOUTH CHINA MORNING POST: Hey, Neil.

It's a city on edge. I don't -- I don't know how else to put it. I mean, this is a city that's openly preparing for more. You have protests promised for this weekend. We have all been through a week of a lot of turmoil. And this isn't going away.

This is something that, as you -- as I saw -- as I heard you mention, I mean, this is about what Beijing is doing and what what's going to the future of Hong Kong, I mean, what's going to happen to the autonomy of this place.

Is this -- people aren't laying down for this. I have never seen anything like a million people in the streets. And that's what we saw this last weekend.

(CROSSTALK)

CAVUTO: I'm sorry, Charles.

MCDERMID: Yes, sir.

CAVUTO: Have they been urged not to go into the streets? I mean, we will think back to Tiananmen Square, when, weeks before the government crackdown, they were being told, all right, clear out, clear out, and they weren't clearing out. And finally the government took measures into its own hands. Is anything like that going on?

MCDERMID: Well, I'm glad you mentioned Tiananmen, because that's when this really started on June 4. It was a record turnout for the Tiananmen commemoration.

And since that time, what's brought people into the streets is the extradition agreement. And this is something that they want to pass, that the government wants to pass here. And what people are worried about is that, if they have any dissent, they're just going to go to China, they're going to be extradited there, and they won't have any voice.

And what they're worried about is this lack of autonomy, again, another blow to what Hong Kong has as an autonomous place.

CAVUTO: Now, the government there is shut down or the offices involved in this and this extradition matter is presently shut down not to agitate things. But is there any sense that the government will pull that back, that the extradition thing was a bad idea? What are you hearing?

MCDERMID: Yes.

No, that's great. I mean, that is what we're hearing. But we have to -- we have to wait and see. Major figures, major figures close to Carrie Lam, who is the chief executive here, have said this is a bad idea. Let's just slow down a little bit . The Catholic Church and said, let's slow down.

I mean, all of the labor unions have said this, the teachers union, I mean, the social workers union. A lot of people are saying, hey, let's slow down on this.

But we don't know what's going to happen. And let's take it from the other perspective. What if Beijing, through Carrie Lam, what if, what if they do slow down? Then every time that people get into the streets, they just pull back on everything.

So you're in a stalemate here. You're in a real standoff. And it's intense.

CAVUTO: Listen, be safe yourself, Charles. Thank you very much for the update.

Hopefully, cooler, more peaceful heads prevail this weekend, Charles McDermid of the South China Morning Post in the middle of it all.

It could be an interesting weekend, at that.

By the way, we are all over this tomorrow morning on "Cavuto Live" starting at 10:00 a.m. Eastern time. We will have FOX Business Network's Connell McShane, who has been following these protests all week long. He will be joining us live, other guests looking at all of this and the implications if things do get out of hand. Hopefully, it won't come to that.

Now, despite all these tensions going on down there, stocks are still kind of holding up here, but a new warning could be shaking all this up everywhere.

We will tell you about that after this.

(COMMERCIAL BREAK)

CAVUTO: You know, investors are the darndest folks, right?

You would think in a week when global hot spots were certainly heating up, stocks would be cooling down, at least a little, then this coming with a new report from the brokerage giant Morgan Stanley saying that business conditions are now at their lowest level since the financial crisis.

So how to make sense of all of this and the markets' surprising resilience through all of this?

We have got market watcher Gary B. Smith, The Heritage Foundation's Lieutenant Colonel Dakota Wood.

Gary, this doesn't make sense to me, but you have reminded oftentimes the market zigged when it looks like they should zag. They were doing a lot of digging. Why?

GARY B. SMITH, CONTRIBUTOR: Yes.

I think the market is -- it took the oil crisis, we will call it, the attack on the tankers, in stride because it knows that we're in a different energy economy that we were even five, 10 years ago.

As far as trade, the other big one, tariffs with China and Mexico, they seem to -- at least Mexico is off the table and China seems have stabilized. There's no new news, if you will.

CAVUTO: Right.

SMITH: Despite what you're saying about what Morgan Stanley said about the economy, the economy is fairly robust in most people's eyes.

So people say, my gosh, if there's nothing wrong, it must be right. It's probably time to buy.

CAVUTO: We should explain. That Morgan Stanley report tracks services, manufacturing, hiring. It's sort of like an all-inclusive index that now is at its lowest point since the financial crisis, but there are other reports that go just the opposite direction.

Having said that, Colonel, I would like to get your thoughts on the collective read from many that they don't think this Iran thing is going to blow up into anything, obviously. They feel the same way, as Gary said, about China. They might be just looking at the half-full glass.

Your thoughts?

LT. COL. DAKOTA WOOD (RET.), U.S. MARINE CORPS: Well, I mean, there isn't any positioning by any of the major actors for a full-blown conflict.

So it kind of limits how bad things might get. I mean, as you had an earlier section there about potential strikes against Iran based on what they continue to do, we rippled Tomahawk cruise missiles into Syria when chemical munitions were used by Bashar al-Assad.

So you can have very limited responses in these very tense situations without escalating into full-blown war, and nobody is talking about anything like that vis-a-vis China. So I think it's limited in scope. All the cards are on the table. Folks have made their positions known. And as our other guest has talked about, the market has accounted for that.

So unless something really crazy happens, I think this is just the normal that we see on a day-to-day basis.

CAVUTO: If I could follow that up with you, Colonel, are you surprised that the Iranians, if this is true and they're behind these attacks, continue to do them, I mean, in the face of what seems like half our Naval fleet and flight -- fleet, I should say, is in the region?

They know what they must be tempting here, and they know the opposition they're getting this go-round from the entire Arab League, not a fan of what they're up to.

WOOD: Right, yes.

Folks, I mean, after two years, which is kind of crazy, they're still trying to understand President Trump. So, in previous administrations, a regime like Iran would behave very badly. The United States or other Western powers would make all kinds of blustery statements. But then usually you would cede something, and this administration isn't willing to cede things, right?

So if Iran is going to threaten international shipping, a major source of energy for much of the world, not so much for the United States anymore, we're going to stand our ground and tell them that that behavior is not acceptable. And I think people are understanding that position of the United States.

Why Iran continues down this path while they're the world sponsor of terrorism, fomenting war in Yemen, threatening to attack U.S. interests in Iraq, it's just a crazy regime. And so I think the administration is fully justified and it's on the proper path to hold this hard line.

CAVUTO: So the crazy expectations are built into that.

So, let me ask you about that, Gary, because it was a weird day, when gold was up and interest rates were down. And I don't quite get that.

SMITH: Yes, you and me both, Neil.

(LAUGHTER)

SMITH: I have to confess, the whole -- the market, the interest rates, gold -- normally, a flight to gold is saying, oh, my gosh, there's trouble out there. And then the interest rates come down, it's -- I cannot figure that part out that.

You throw in what's happening with the dollar, what's happening with the euro, it's up and down, that, to me, is -- I am as surprised at those moves as anyone else. That's why I tend to pull back and look at the market, though.

In my opinion, the stock market is more pure at this point.

CAVUTO: All right, gentlemen, I want to thank you both.

I can't make head nor tail of it. I'm comforted to know that sometimes you can't either, and you're the expert. So I appreciate that.

SMITH: Exactly.

WOOD: My pleasure.

CAVUTO: Gentlemen, thank you. Have a wonderful Father's Day.

In the meantime, she's got a plan for just about everything, and maybe that is why Elizabeth Warren is surging. But it could cost you.

We will explain.

(COMMERCIAL BREAK)

CAVUTO: Free college, wiping out all student debt, all for about $1.25 trillion. That is the plan that 2020 Democratic presidential candidate Massachusetts Senator Elizabeth Warren has ironed out.

Now, agree or disagree with her plans -- and this one's pretty exhaustive - - she is at least coming up with plans, quite detailed plans, at that.

And it is starting to resonate with voters. We're going to show you some revealing polls in just a second. But what could be going on here? Again, to a crowd that likes this, this is something that is sticking with them.

The Washington Examiner's Tiana Lowe. We have also got Democratic strategist David Burstein.

David, I think last time you and I were chatting, you were mentioning this, that this was something you wanted to see out of candidates. You were seeing it at the time in Elizabeth Warren. And now she's getting the bang for the research buck in the polls. What do you make of that?

DAVID BURSTEIN, DEMOCRATIC STRATEGIST: Look, I think this is a good example of a policy that actually solves real problems that are burning a hole in the pocketbooks of Americans.

We have a huge college debt problem in this country. And it is a huge drain on the earnings of people of my generation. Mayor Pete, who you have got up there right now, he himself has a huge amount of student loan debt. And this would be a one-time -- one-time thing that would have a huge impact on the lifetime earnings and potential of people who are not having families, who are delaying homeownership, all the things that we actually need to have a long-term vital economy that have proven to be quite important.

People are delaying and they're changing their behavior because they're saddled with this kind of debt. So I think this is actually a very smart plan. I know -- I'm sure people will be critical of it, as they are with all big new policy proposals. But I give her a lot of credit for having put together this very thoughtfully and really addressing a real problem where it hurts for people.

CAVUTO: Well, Tiana, to that point, in more detail than some of her broad stroke competitors, who might now feel the pressure to be much more specific how they will pay for things.

Now, you can quibble with what she's talking about here and who she's targeting, largely the rich, the upper 2 percent on the college thing, but I'm wondering how Republicans respond to that. Obviously, they could do the thing of big government and the dangers of that, and you're going to pay for this, even though she's going to come back and say, no, no, no, actually, I'm saddling the rich with this.

How do you think all this goes down?

TIANA LOWE, THE WASHINGTON EXAMINER: Free cash is not a plan.

She says she has a plan for it. And too bad most of them are terrible. I mean, even if you look at her free public college plan, it's far less detailed than that proposed by Senator Bernie Sanders.

You see she's proposing this, and it's going to cost, what, $640 billion? That's more than our entire annual defense budget. And is it a one-time payment? Sure. But does it also give the go-ahead to colleges to continue to explode their bureaucracies?

In the last quarter-century, the amount of university bureaucrats in America has doubled. And is the quality of their degrees doubling? No, but we have -- we have created this pipeline. We have unfettered complete federal student loans, so universities know they can screw taxpayers, and they can screw students by jacking up prices.

And this is just giving them a green light to do so.

CAVUTO: All right, so you're not a fan.

So let me get, David, your read on this. Everything always seems predictable. Democrats rip Republicans for tax cuts that aren't paid for. You can make the same argument about some of these plans that aren't realistically paid for, not matter how you crunch the numbers on it.

So I'm wondering if it just depends on a game of math depending on your favored party.

BURSTEIN: Well, look, I mean, this is something that is a bipartisan issue. People who are Democrats and Republicans are dealing with this level of debt.

And I think Elizabeth Warren is making one of the stronger plays of any of the Democrats at really an authentic pitch to the people who were supportive of Trump, working-class voters in the middle of the country.

CAVUTO: But she's having the government, that is, i.e., taxpayers, pick up that entire tab?

BURSTEIN: Well, yes. Yes, but you know what?

This is -- I actually think -- to Tiana's point, I think this should be coupled with some kind of regulation, some ability to rein in the way that colleges have been doing this for some time. But, occasionally, we need to course-correct. And this bubble is pretty, pretty significant.

CAVUTO: Well, that's not in this. That's not in this.

And, Tiana, that's what worries me. I can see the appeal of it, no doubt, no doubt.

(CROSSTALK)

CAVUTO: But if you're going to correct behavior by paying off all the debt, aren't you begging more of that?

LOWE: Absolutely.

And there is actually a place where Liz Warren's sort of semi-nationalist, semi-trustbusting streak really could come into play, if she actually targeted the universities themselves. These universities, they're technically nonprofits, and lots of them are technically private, but they're still being spoon-fed federal funding at every course, and us taxpayers, we are directly subsidizing these bureaucracies through student loans.

If Liz Warren wants to start investigating these schools and what they are doing with our money, I am all for that. And I think that could be bipartisan.

CAVUTO: Well, she might. She might. And that might be a follow-up report. We will see.

I want to thank you both very, very much.

Still early in this process, but she's being rewarded for at least putting some details to hers.

All right, in the meantime, President Trump says Kellyanne won't be canned. Kellyanne Conway is staying.

What Valerie Jarrett, another long-term adviser to a different president, has to say about that.

(COMMERCIAL BREAK)

CAVUTO: So what will it take for you to stop using plastic bags?

I want you to meet the Canadian grocery store that will shame you with shameful stuff written on it. Now think twice. Paper is better after all?

(COMMERCIAL BREAK)

CAVUTO: President Trump today saying he will not be firing his counselor Kellyanne Conway, even though a watchdog group said he should.

Former senior adviser to President Obama Valerie Jarrett says he should as well. Take a look, when she was with me on my FOX Business show.

(BEGIN VIDEOTAPE)

VALERIE JARRETT, FORMER SENIOR PRESIDENTIAL ADVISER: Well, the Hatch Act is a clear law that prohibits people who are in the White House, in the administration from dabbling in politics while they're in the White House.

You can do whatever you want when you're on your own time, but from the White House, you are restricted from engaging in any political activity.

And we took that very seriously in the Obama White House, colored well within the lines, had regular ethics training to ensure that everybody appreciated what they could and could not say from the White House.

CAVUTO: So, but you would make a comment on people, right? I mean, you...

JARRETT: No, not a political one at all.

CAVUTO: Really?

JARRETT: No, not when you're in the White House, not when you're in the Briefing Room or on the -- or North Lawn, absolutely not.

CAVUTO: So, her comments -- and they recommend that she take a hike. You agree with that then?

JARRETT: Well, I think that's up to her boss. And my guess is he's not interested in what I have to say.

All I can tell you is what the Obama White House would have done. President Obama would have had zero tolerance for that.

CAVUTO: Would he have fired you?

JARRETT: I think, if I had -- had violated the Hatch Act, yes, he would have fired me.

CAVUTO: You write about the day, the official change of power, on January 20, 2017. Obviously, that's an emotional day.

But I didn't realize there was some surprise that Melania brought a gift. I guess the protocol says, you don't bring a gift, right? She did. And it just surprised people, because I guess Michelle Obama didn't have something to give to her, right?

JARRETT: Yes, it was a bit of a surprise.

But, look, in the total scheme of things, it didn't matter.

(CROSSTALK)

CAVUTO: They seemed to get along the first time they met, right?

JARRETT: I think they were very gracious to one another, yes.

CAVUTO: Right. Right.

And before the actual meeting, shortly after the election, they seemed to get along. How did that go, when Barack Obama had a chance to meet with the guy who would succeed him? It looked tense, but then it seemed OK.

JARRETT: I think he tried to do just what President Bush had done for him, and what President Bush's team had done for all of us, and that is to have a smooth transition of power.

Part of the underlying pillar of our democracy is that elections have consequences, and that it's up to whoever's in office to assure that they do everything possible for the national security and the representation of our country to ensure that the successor can hit the ground running.

And so that's what we tried to do. And it's just what George Bush had done, President Bush had done for us.

CAVUTO: When you hear Joe Biden and a lot of the things he says, that he would bring civility back to the White House, but Americans can look and say, well, I would rather the employment rate going down, I would rather jobs, I would rather the market doing what it's doing...

JARRETT: Why should you have to choose?

We cut the unemployment rate in half, and President Obama was always civil. I think tone does start at the top. And I think part of what I'm looking for is someone who I won't have to turn off the television when the person is speaking and that my...

CAVUTO: Do you do that? When President Trump comes on the TV, you turn it off?

JARRETT: I turn off the TV quite often. It's not good for my blood pressure.

CAVUTO: But he's on TV a lot, right?

JARRETT: It's just -- it's -- I think -- I just -- I hunger for the for the days where we do have a calmer temperament, where we know that the person is really looking out for us for all of us, and not so focused on themselves, so, yes.

CAVUTO: All right, so you're not a fan. That's not a FOX alert. But that's fine.

JARRETT: No, that's not a FOX alert.

CAVUTO: The president is under some controversy today for saying to George Stephanopoulos that, if he had dirt on a foreign entity or from a foreign entity on an opponent, he would listen.

What did you think of that?

JARRETT: Well, I think, by his own FBI director's words, that's something that you're not supposed to do.

And why would we want anybody think -- putting their thumb on the scale for our election, right? So you have to ask yourself, well, why would they be giving you that information in the first place? Because they're trying to affect the outcome.

CAVUTO: But everyone wants dirt, right?

(CROSSTALK)

JARRETT: You want to win.

(CROSSTALK)

CAVUTO: I'm not saying you were involved or the administration was involved at the time on the dossier that was so controversial, that Democrats, Republicans do this. They just don't...

(CROSSTALK)

JARRETT: I don't think they do. I don't think they do.

If you -- from what I have been hearing and from what I experienced when I was in the White House, that if you were contacted by a foreign official, you should call the FBI, because they shouldn't be interfering with our election.

And why would we want them to? Why wouldn't we want to win on the merits? Why wouldn't we want to win because the American people voted for us?

CAVUTO: Fair enough.

Do you think then -- because I talk to many Democrats, Valerie, who say, we don't see him as the legitimate president. We don't -- he cheated to get there. The Russians put him in there. Do you feel that way?

JARRETT: I feel he's the president. I would prefer he were not. And I'm going to do everything I can to work in the next election.

But, look, I'm sure there are things that we still don't know. There's a lot of information out there. I think it's perfectly appropriate for the committees in Congress to be having hearings to try to make sure they have all the information.

The more transparency we have in government, the more confidence people have in their government.

CAVUTO: Real quickly as well, Joe Biden had that bracelet thing, he said, my best bud, Barack Obama, who has now not chosen sides in this race.

Do you know whether the president, the former president, was offended by that?

(LAUGHTER)

JARRETT: No, I can't imagine that he was. They are good buddies.

(CROSSTALK)

CAVUTO: All right, then does the president want him to win?

JARRETT: Vice President Biden asked him to not weigh in. And so I'm going to honor that request.

And, as I said, it's early. We have a long campaign ahead of us. And I hope everybody treats each other decently.

CAVUTO: Is the president, Barack Obama, hoping that Joe Biden gets the nomination?

JARRETT: I'm not going to get into what President Obama is thinking.

(LAUGHTER)

CAVUTO: I couldn't get it out of you.

JARRETT: You should invite him on the show, and maybe he will tell you that.

(LAUGHTER)

CAVUTO: All right, we will do just that.

(END VIDEOTAPE)

CAVUTO: All right, we shall see. Valerie Jarrett.

By the way, the full interview that deals with her entire book on the subject and her experience growing up in Iran and then coming to the United States, meeting Michelle Robinson, who would later become the first lady of the United States, Barack Obama, that long history, her eight years of working with the Obamas, the longest presidential adviser in history in our country, that entire interview is on our FOX Business Web site, FOXBusiness.com.

You can catch it for yourself, completely unedited there.

The impact of what she had to say -- after this.

(COMMERCIAL BREAK)

CAVUTO: All right, talking to Valerie Jarrett, the former top adviser to President Barack Obama, she said something interesting about the fact, even though they spent eight years together, and Joe Biden was the president right-hand man, vice president, all that time, he is still -- that is, Barack Obama -- not singling him out as his pick.

That's probably not surprising, because there's so many Democrats running. But it got us thinking about whether Barack Obama is all together behind Joe Biden, or he's looking at others in the race.

Campus Reform's editor in chief, Lawrence Jones, with us, Democratic strategist Nathan Rubin, and the host of "Sincerely, Kat," among many things, on FOX Nation and here at FOX itself, Kat Timpf.

That is what struck me, Nathan, that I know the president has to be Switzerland right now. But then I was thinking of 2016, when he was apparently very influential in making sure or, I guess, urging by not run to challenge Hillary Clinton. What's the deal?

NATHAN RUBIN, DEMOCRATIC STRATEGIST: Well, I think when you look at just the nature of where we are as a country, if this was immediately after his term, he would have much more of a say.

It would be much more understandable for him to tip the scales, if you will. But we're now pretty far removed from his last day in office. And with so many candidates running in the Democratic field, I think it would be taken the wrong way if he were to tip the scales, with 24 or 25 -- are we up to 26 now Democratic candidates?

CAVUTO: I don't know. I can't keep track.

But, Lawrence, it is interesting. Obviously, he likes him. They're real close friends. But we are told that a lot of them, a lot of the Obama loyalists were a little ticked off with the friendship bracelet and all of that.

LAWRENCE JONES, CONTRIBUTOR: Yes.

I don't buy, not one second, that he had encouraged the president not to get involved in the race. I mean, the president...

(CROSSTALK)

KATHERINE TIMPF, CONTRIBUTOR: You can't fire me. I quit.

JONES: Right. Right. Don't endorse me. Don't give me the edge.

I mean, that's total nonsense right there.

CAVUTO: Right. That's right. I forget that's what he said.

JONES: Right.

Let's be clear, though. In 2016, the Obama camp encouraged him not to run. All right? He said that Hillary was the most qualified candidate in modern-day history, the person to run for president ever. That was his pitch to America. And he felt personally insulted that if anybody, especially in the black community, would go out and not support Hillary.

So does that sound like a guy that really wanted his vice president to run in that position? Look, most of what -- in most times, what happens is, the president wants the continuation of his legacy. He wants his vice president to continue that. Obama didn't do that.

And I think we got to think long and hard. If the guy that served as vice president for all these years, right, if the president didn't want him to be the candidate, should America want him to be the president of the United States right now?

CAVUTO: Well, we don't know, I mean, right now, what's going on.

But, Kat, what is interesting is that Biden's had sort of like a bumpy week or two here, reversing himself on the Hyde Amendment, which doesn't allow federal funding for most abortions. But China was once deemed two weeks ago not to be a competitive threat. Now it is a competitive threat. His whole regrets over handling Anita Hill.

He is flip-flopping a lot.

TIMPF: Yes, he certainly is flip-flopping a lot.

Some of them are just straight-up flip-flops, but a lot of them are reflective of how much further left the Democratic Party is moving. If you look at the people that are in leadership, yes, a lot of them still are very moderate, but you can't deny the influence that some of the more liberal people are having, because you can't have the positions that you would have had if you would have been running in earlier years.

CAVUTO: Well, Biden is feeling it, Nathan.

And that is I think what causes that. But if he does these extremes, can he come back to the middle?

RUBIN: Well, I'm not so sure these are going to be extremes. Maybe in a general election, some would be branded as such.

But he's really kind of coming to where the Democratic Party has been for a long time. Again, Congress is a lagging...

CAVUTO: Well, it wasn't his party.

RUBIN: Well, Congress...

(CROSSTALK)

JONES: He had been an elected official for over 40 years. If you don't know your political philosophy by then...

(CROSSTALK)

CAVUTO: But people evolve. People evolve.

Have you evolved on that stuff?

JONES: Evolve, or you cave because of political pressure.

(CROSSTALK)

JONES: For 48 hours, you changed your position. RUBIN: Well, hold on. I do want to push back on this, because we should commend our elected officials when they change their mind in light of new information.

I think that's...

(CROSSTALK)

JONES: Did he change his faith? Because he said...

(CROSSTALK)

CAVUTO: Before he was running for president, he wasn't changing those views.

TIMPF: Yes. You have to take a look at the timing a little bit, right?

I mean, if he had just come out and said, hey, I changed my mind while I'm hanging out by the pool...

CAVUTO: But to be fair, Kat, he wouldn't be the first candidate to do that.

TIMPF: No, it's what politicians do.

CAVUTO: But is it going to hurt him?

I guess what I'm asking you is, he's considered the most electable. He has the biggest lead ,although that is beginning to change in some states. Elizabeth Warren is soaring and all. I'm just wondering, what's your take on his so-called invincibility?

RUBIN: Sure.

So I think the people who were upset about Joe Biden not supporting -- or - - excuse me -- who was supporting the Hyde Amendment, he's not going to win those voters over now that he is against it.

CAVUTO: Right.

RUBIN: With that said, I don't think he's going to lose any voters because he is now against it.

CAVUTO: What about the president's comments, sleepy Joe and all that stuff?

JONES: Well, I believe that the president -- and Joe I think is smart for making this a general election type of race and not a primary race.

But there's going to be some accountability for his past policy positions.

(CROSSTALK)

CAVUTO: You don't think that comes back to hurt him? Hillary Clinton was acting that way, and she ignored...

(CROSSTALK)

RUBIN: Accountability for what? This president...

JONES: The crime bill.

RUBIN: Where's the accountability on this president, who is still separating families?

TIMPF: But we're not talking about that right now. I don't like the whataboutism. We're talking about Joe Biden specifically.

RUBIN: Oh, of course.

(CROSSTALK)

CAVUTO: You still think he's going to end up the nominee?

(CROSSTALK)

TIMPF: ... accountable for the crime bill. I agree with Lawrence.

RUBIN: I think right now Joe Biden is the favorite to win the nomination, but, again, there are candidates behind him that are surging.

The debates are going to be interesting.

JONES: Why won't he go on the airwaves? Why is this campaign insulating him? They don't want him to go out.

TIMPF: He is a gaffe machine.

JONES: Like or hate the president, but at least he will speak for himself. He doesn't hide behind the advisers.

CAVUTO: Or tweet. Or tweet.

JONES: And he will tweet.

(CROSSTALK)

CAVUTO: All right, guys, I wish we had more time. Blessedly, we do not.

(LAUGHTER)

CAVUTO: All right, in the meantime, more developments in the Dominican Republic situation, and now the FBI is involved and lots of others too -- after this.

(COMMERCIAL BREAK)

CAVUTO: She could be the seventh victim.

A Staten Island woman's death in the Dominican Republic is now being questioned.

FOX News' Steve Harrigan in Santo Domingo with the very latest.

Hey, Steve.

STEVE HARRIGAN, CORRESPONDENT: Neil, the seventh victim of this mysterious ailment that is killing American tourists here in the Dominican Republic is 53-year-old Leyla Cox from the Dominican Republic. She came here to celebrate her birthday on Sunday.

Instead, Monday morning, she was found dead in the resort. Authorities here are calling it a heart attack. We spoke with her son earlier today. He is baffled as to how a healthy 53-year-old woman, his mother, is suddenly dead from a heart attack. He's suspicious. He doesn't believe it. He says he's being pressured to form -- to carry out a cremation.

He doesn't want to do that. He's having a hard time getting the body back or even understanding what exactly happened. Here's Will Cox.

(BEGIN VIDEO CLIP)

WILL COX, SON OF LEYLA COX: They have done an autopsy. They haven't sent it to me. They sent me a police report. That was in Spanish, that I cannot read. I still don't know the exact details of my mother's death, and that's where I'm hitting a roadblock.

(END VIDEO CLIP)

HARRIGAN: Cox is now one of seven U.S. tourists to die in the Dominican Republic for unexplained reasons over the past several months.

In the meantime, police here have now detained nine suspects in the shooting of former Red Sox great David Ortiz. They have rounded up nine, but they still have a manhunt on for several more suspects, including Luis Rivas, known as the Surgeon. He is also suspected of carrying out violent crimes in the United States.

Ortiz, in the meantime, continues his recovery in Boston -- Neil, back to you.

CAVUTO: Thank you, Steve, Steve Harrigan.

Meanwhile, a grocery store is trying to shame people from using plastic bags. Well, forget the shaming. Should they just start banning?

Gen Hexed is next.

(COMMERCIAL BREAK)

CAVUTO: All right, the young and restless. And they're young and restless over this.

There is a recent survey from Zillow, the real estate folks, that shows 14 million millennials are now living with their parents, still living with them. That works out to about one in five of them. Is this just about living expenses? Something else going on?

"Your World" audio technician and author of "Blood in the Streets" Dion Baia with me. We have attorneys -- two attorneys -- I got to be super careful here -- Madison Gesiotto and Natalie Elisha Gold.

You know, what's interesting about it, Madison, is that those numbers over the last couple of years have been growing, in fact, at a pretty strong pace. What's going on.

MADISON GESIOTTO, CONSERVATIVE COMMENTATOR: Right.

And I think what's so interesting about that is that we're seeing the economy booming, but yet we're seeing these numbers growing. So I don't think it's strictly economical anymore, because for a while we saw these numbers, and they were starting to grow. And we said, oh, well, it's a terrible economy. And so people can't afford -- afford to go out and live on their own.

CAVUTO: Maybe they just like their parents.

GESIOTTO: I don't know about that. Let's not get carried away.

I love my parents, but I bought a home.

CAVUTO: OK.

NATALIE ELISHA GOLD, ATTORNEY: I think it's twofold.

It's really the student loan crisis, which has compounded. And now it's more acceptable to live at home until you get your second or third degree.

DION BAIA, FOX NEWS: Well, this was generations ago.

CAVUTO: Is that right, second or third degree? This is why we have a college debt problem.

ELISHA GOLD: That's the big problem.

(CROSSTALK)

BAIA: Generations ago, this was a regular thing. You would move in.

(CROSSTALK)

CAVUTO: Generations still live in the same house.

BAIA: Now you're going -- a lot of people of this age are going paycheck to paycheck, and then with the student loans, you are coming out of college $100,000, $150,000 in debt.

GESIOTTO: And incredible interest rates on those, 6, 7 percent for many folks.

BAIA: And if you live in a city like this, where it's very -- it's very high cost of living, it gets pretty tough.

(CROSSTALK)

CAVUTO: You're in your mother's basement.

BAIA: I am in my mother's basement, not my dad's.

(CROSSTALK)

ELISHA GOLD: And the big problem is that, if we don't fix this problem, there's going to be blood in the streets, to your book.

(CROSSTALK)

CAVUTO: Elizabeth Warren has a plan. Maybe she will help you out.

All right, I also want to follow up something else that's catching our attention. There is a grocery store in Canada that aims to shame customers into not using plastic bags by handing them out with embarrassing phrases on them like wart ointment and some things I can't repeat because this is a family show.

But, reportedly, people still wanted the bags. What I find odd about this, guys, is that I think that's obnoxious on the part of the grocery store.

BAIA: They're handing them out for free. And then they're trying to guilting you to take one. And then it's become like a collector's thing, where people are going in just to get these particular bags.

And if you're -- my grandmother's going in there, and she's getting an adult video store bag, it's just -- it's kind of embarrassing twofold.

CAVUTO: As if that's new in your...

(CROSSTALK)

(LAUGHTER)

CAVUTO: What do you think? Is it -- I know, paper, plastic, whatever. But if someone is trying to shame me into making a choice that I made?

GESIOTTO: Yes.

Well, first of all, it totally backfired on them, because we have so many people going in there now to get the bags because they think it's funny.

But for me and many other people, I think if we see that they're doing this, I'm just going to the next store. I'm not going in there. I travel a lot. I can't take a reusable bag with me everywhere.

(CROSSTALK)

CAVUTO: But, of course, what if it's already filled with stuff?

BAIA: You just turn it inside out first.

(CROSSTALK)

ELISHA GOLD: When you go to Whole Foods, and they charge you in Santa Monica, for example, and they charge you 10 cents a bag, I want to take my old bags and use them. But I forget sometimes.

(CROSSTALK)

BAIA: But it is a good idea to bring reusable bags. I'm completely in for that. But when they're giving free bags out, then they're guilting you, putting the whatever the heck they want on the side of that bag...

CAVUTO: Is it Costco you have to bring in your own box or something?

BAIA: Yes, they don't even give you...

(CROSSTALK)

BAIA: Yes. You can only use like one credit card there too.

CAVUTO: Wow.

All right, meanwhile, Father's Day is Sunday, as many of you know, I hope you know. Once again, dads are getting shortchanged. Americans are expected to spend about $16 billion on dad. But, on Mother's Day, the spending was more like $25 billion.

Why?

(LAUGHTER)

ELISHA GOLD: Well, moms just rock. And they do the best stuff.

No, but here's the real deal. When it comes to my husband, I don't know what he wants. We will take him on an experience. We will take him out for a dinner. But he's not going to say to me, I want this luxury watch.

BAIA: I'm sure every day he's telling you what he wants.

(CROSSTALK)

GESIOTTO: Dads are harder to buy for, Neil. They're harder to buy for.

CAVUTO: Oh, stop.

GESIOTTO: You can't go out and just get them flowers. I don't think you want flowers on Sunday. Happy Father's Day, by the way.

(CROSSTALK)

GESIOTTO: I'm still working on figure out what I'm getting my own dad. I have been worked up all week.

BAIA: I will take flowers.

(CROSSTALK)

CAVUTO: The moms obviously care about that stuff.

GESIOTTO: It's easier.

(CROSSTALK)

GESIOTTO: You can do jewelry. You can do clothes.

ELISHA GOLD: So many things.

GESIOTTO: Moms are easier to buy for than dads.

(CROSSTALK)

CAVUTO: So, you love your mom than your dad.

(CROSSTALK)

GESIOTTO: I love my mom equally.

BAIA: It goes a little more to -- the mom, it's more of an emotional -- mom, I'm doing this for you, the sentiment. The lady likes that more.

(CROSSTALK)

CAVUTO: I'm just wondering, maybe because dads tend to have this reputation of being more detached and all that.

BAIA: Hard.

CAVUTO: And you take it out on them, and then stick it to them on that.

ELISHA GOLD: You know what? I think it's because nine out of 10 women are going to survive the men, so we know we better be nicer to mom.

That is really what it comes down to.

(CROSSTALK)

BAIA: Geez. Well, why don't you give the dad the presents while they're here, then?

CAVUTO: All right, guys, I wish -- I wish we had more time. We don't.

But some news coming in here, that the Department of Justice is supporting not releasing the president's tax returns. Now, that was largely expected here, saying that it's an overreach on the part of Democrats who've been doing this simply for nothing more than political gain.

It's a back and forth. It won't stop.

We're going to be exploring this, by the way, a lot more, along with what's happening in Hong Kong and Iran with our live show tomorrow kicking off at 10:00 a.m.

But, again, the Justice Department saying no tax returns, not now, ain't happening.

Here's "The Five."

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