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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; Scott Bleier, HybridInvestors.com president; Patricia Powell, Powell Financial; Eric Bolling, Independent Trader; Gary Kaltbaum, Kaltbaum & Associates, and Marc Lamont Hill, Temple University.
Call it an oil shock! Crude hits a record high last week, gas spikes and stocks sink. Is it time for Congress to stop fighting about all this and start helping by cutting the 18.4 cents/gallon federal gas tax now?
Gary Kaltbaum: It is absolutely time to cut the gas tax. Here is the bottom line:
Consumers are already pinched with costs from falling home prices, with food prices rising, with all energy costs going up. Cutting the 18 cents a gallon tax totally adds up over an entire year.
Cutting this tax is a great way to start helping out consumers and the economy. It doesn't seem like Congress is using the money that well from the tax... which goes to fixing roads.
Eric Bolling: If anything, we should be raising the gas tax to we can cut demand for oil, which would force us to really get serious about creating alternative forms of energy,
Gary B. Smith: I wouldn't kill the tax, but I'd cut it just enough so that revenues from the tax pay for highways and bridges. Increasing taxes doesn't cut consumption all that much, and if it did -- and oil prices went down -- we'd just end up consuming more. Therefore, tax revenues are best left in the hands of the consumer.
Patricia Powell: Didn't anyone in congress ever take a course in economics? Instead of getting rid a this gas tax – which directly impacts the consumers, it wants to get rid of tax breaks for oil companies. Oil is an economic problem... we are experiencing higher and higher demand for a product that does not currently have expanding supply. The only thing the politicians can do with a higher tax is mess things up. If you want the price of energy to fall you want lots of competition. By reducing the profit incentive, Congress reduces the incentive to compete; less competition will drive the price of oil up even further. Bad idea for oil price and bad idea for capitalism and bad idea for America.
Scott Bleier: Don't kill this tax! Federal gas tax is under .19 a gallon and is used for transportation infrastructure. That money is of vital importance to keep the roads running. But 100 percent of that revenue is not used for the roads and should be…and anyway, gas prices seemingly go up .20 cents a gallon weekly! It's up .40 cents per gallon (wholesale) since February 7th! Also, the solution is not to tax big oil, but to transfer tax credits from highly profitable oil companies and moving them to alternative energy. There is nothing wrong with that especially considering how profitable oil companies are.
Michelle Obama's Money Message: Bad For the Economy?
Michelle Obama hitting the campaign trail for her husband, armed with a money message for Americans:
"Don't go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we're encouraging our young people to do that." (Michelle Obama from a speech in Zanesville, OH, on 2-28-08).
But what would happen to our economy if they listened to Barack's wife?
Gary B. Smith: Our economy would be...dead! There's nothing wrong with people doing what she asked, but one of the reasons we NEED social workers, as an example, is because people don't pursue work period. Basically, all her recommendations are on offshoot of the idea that "the nanny state" is good.
Marc Lamont Hill: What Michelle Obama is saying is that we need to start investing in human capital. And remember, all the successful businessmen and women in America had great teachers, so Michelle Obama's call for more teachers is a really good thing for our economy. And what we need to do is figure out a way to create incentives for people to go into these professions.
Stock X-Change: Pat Dorsey's Best Mutual Funds