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Bulls & Bears
This past week’s Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Tobin Smith, ChangeWave Research editor; Scott Bleier, HybridInvestors.com president; Bob Froehlich, DWS Scudder chairman of investor strategy, and Laura Schwartz, White House Strategies principal.
Trading Pit: Is Rudy Giuliani Wall Street’s Candidate for President?
Is Rudy Giuliani Wall Street’s candidate for president?
Tobin: Wall Street is saying we need a mayor for president, not a senator. Rudy Giuliani knows how to get stuff done and what people want. Plus, he’s not afraid to make money and understands economic growth. Wall Street wants Rudy for the White House and in full disclosure; I am a contributor to Giuliani.
Laura: I wouldn’t count the Democrats out just yet in regards to creating a good economy and being liked by Wall Street. Democrats are going to be pro-growth and pro-business because they know that’s the only way to get the independent vote. Actually, many Democrats are fiscally conservative. It was the “Blue Dog Democrats,” those that are pro-growth and pro-business, that won in last November’s election. This is where the presidential campaign is going to go in 2008. In regards to Giuliani, his record is coming out more and more since he left office, and that is where voters will have some problems.
Gary B: Wall Street wants Rudy Giuliani as the CEO in charge. Just take a look at what he did in New York City: cut crime, balanced the budget, cut taxes, etc. I don’t think that the Democrats will be pro-growth and pro-business, like Laura says. Right now, Democrats are on the “let’s soak the rich” bandwagon to pay for all their programs. Giuliani is the GOP’s real trump card.
Bob: I don't think this election is about Wall Street. It's about Main Street. Main Street is what matters. Americans are mainly worried about saving and investing for retirement. And the political party that understands that will do well.
Pat: Being a great mayor does not necessarily make one a great President. The smart move for any candidate is to stay quiet and stay in the middle so that he can get people in the middle to support him. Once they state an opinion, it will annoy someone. Right now, we don’t really know what Giuliani thinks of Medicare, which is a longstanding issue in this country. The fact that he balanced the budget in New York City implies that he might be fiscally conservative. But we don’t know where he would be on foreign policy or free trade. His free trade policies will determine which way the economy goes in our globalized world.
Scott: All Main Street knows about Rudy Giuliani is what he did after 9/11. New Yorkers know all Rudy Giuliani did before 9/11. He took an ultra-socialist, union dominated, welfare city, and turned it into the richest city and tourist capital of the world. At the time, people didn’t like his policies. But the end result was great. He’s a fiscal conservative and a common sense type of leader. I think he will go a long way.
Wal-Mart: Cure for High Health Care Costs?
Does Wal-Mart have the cure for the high cost of health care in America? The company offers cheap prescription drugs and low cost clinics. Is the solution in private enterprise as some of the things Wal-Mart is trying?
Gary B: Yes. Health care is the most heavily regulated industry in our country. It should be more like a commodity, where people they know what they are getting when they pay. Then, if there’s a low cost producer on board like Wal-Mart, it’s a step in the right direction.
Tobin: Wal-Mart is a low cost producer, but that is only part of the equation. The bigger part is that those who buy health care need to have some stake in the deal. We go to the doctor and pay the bill without asking the price. It’s the only product we buy but don’t ask the price.
Scott: Wal-Mart has undercut the competition by price and it’s been very successful in this way. The medical community doesn’t want you to know the price. There are actually three sets of prices. If any other business had three sets of prices, they would go to jail. There has to be equal competition between hospitals, doctors, and medical companies. That would drive down the cost of health care.
Pat: Don’t get too excited about Wal-Mart. The $4 drug pricing is only on 300 of 1800 generic drugs. And those drugs start at $8, so it’s not a tremendous savings. The bigger point is that there is no transparency in health care pricing. It is the only good or service in which the payer and the consumer are different people. That’s the real issue. This is why we, as a nation, spend twice as much as any other nation on health care, yet our infant mortality rate and life expectancy stinks.
Bob: I like retail-based clinics. The root of the problem is price structure. Anything that we can do to fix this problem is a good thing. I agree with Gary B. Anything the government does, corporate America can do better. Anything corporate America does, Wal-Mart does best. They will lead us to the solution in this issue.
Laura: The fact that Democrats introduced the “Better Health Care Together” campaign with Wal-Mart really shows that Wal-Mart has its finger on the pulse of this issue. The solution is not employers covering insurance and pushing that onto laborers. However, it also can’t just be the government. There has to be a concerted effort. What Wal-Mart is doing is a helpful, but short-term solution. This is really not a long-term fix because for the long-term, we need to have universal coverage in a comprehensive way.