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Bulls & Bears
This week Brenda was joined by: Gary B. Smith, Exemplar Capital managing partner; Eric Bolling, FOX Business Network; Tobin Smith, ChangeWave Research editor; Pat Dorsey, Morningstar.com, and Brad Woodhouse, Americans United for Change.
Will Stimulus Get Out-of-Work Americans Working Again?
Tobin Smith, Changewave Research: The stimulus package will only keep government and union employees working. But it will not create jobs. I can't tell you how many people ask me if our leaders have lost their minds. President Obama is trying to play the same tune we played in the 1930's during the depression to save the economy. And it didn't work.
Brad Woodhouse, Americans United for Change: Of course the basic point of a stimulus is to spend money. The government has to be the one to spend it. Construction jobs, such as building schools or repairing roads, are private sector jobs. It's government money going into the private sector. That's the type of stimulus we need right now. Tax cuts are not the only answer.
Eric Bolling, FOX Business Network: We've heard the "house is on fire" analogy from Democrats a hundred times—just throw water on it. It doesn't matter where you throw the water. This stimulus package just throws money everywhere, without any real rhyme or reason. If you want to spur consumer spending, you have to give consumers an incentive to do so. That will create jobs and spark the economy.
Gary B. Smith, Exemplar Capital: I think the stimulus package will create some jobs. My problem with it is that it's not in an efficient or effective way. Most of these jobs are temporary. When Milwaukee builds its new tennis courts, what next? Squash and racquetball courts? At minimum Congress should be focused on cutting corporate and small business taxes.
Unions Push to Ban Secret Ballots; Good or Bad for Weak Economy?
Eric Bolling: Banning secret union ballots is the worst idea. The majority of Americans are against unions. You know why? Because they don't work, they don't help the economy.
Brad Woodhouse: Unions built the middle class. No one is getting rid of the secret ballot. It's restricting an employer's ability to have complete control over any union elections. This legislation doesn't get rid of the secret ballot—it gives workers the choice of whether they want to have a secret ballot election. Unions aren't the problem; it's that wages continue to be driven down.
Gary B. Smith: Every time a union takes over an industry, be it textile, steel, airlines, etc., the industry tends to fold or become ineffective. Getting rid of secret ballots not only makes it easier for a union to form, but far easier for workers to feel intimidated at work. If unions were really such a great thing, they wouldn't have trouble forming these days.
Tobin Smith: Six states in the U.S. have recently built automobile plants that are making money, hiring thousands of American workers. Michigan has required autoworkers to be in a union, and the state has lost hundreds of thousands of jobs as a result. Michigan is a prime example of why unions don't work.
Stocks Soar Despite Bad News: Sign Better Days Are Near?
Gary B. Smith: It was a great week for the market. But in reality, we're still in the trading range we've been at for the last few months.
Eric Bolling: Traders realize there is some sort of economic package from Congress about to come their way, and that will send stocks higher. Like it or not, it'll be good for the stock indexes.
Pat Dorsey, Morningstar.com: Wall Street is very positive about new TARP money and an economic stimulus package. This is all an expectations game about what will happen in the future. The nasty unemployment numbers released this past Friday weren't a shocker, and corporate earnings for 2009 are probably going to be very poor. But once we get over these hurdles, people's expectations are so low there is no place to go but higher.
Tobin Smith: I think we may be starting to see a trough in terms of consumer spending. If we begin to see more corporate spending, we really are at an economic trough and it's time to buy stocks.