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Bulls & Bears
This past week’s Bulls & Bears: Gary B. Smith, Exemplar Capital; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business News; Pat Dorsey, Morningstar.com, and Nancy Skinner, radio talk show host.
Good News on the Economy: Proof We Don't Need President Obama’s $3.6 Trillion Budget?
Gary B. Smith, Exemplar Capital: The administration hasn't gotten off to a good start with AIG, the bank bailouts, etc. Instead of spending $3.6 trillion, they should go the other way and cut the budget in half. That'd be best for everyone. But the administration has the idea that it knows how to plan the economy better than anyone, and they need $3.6 trillion to do it.
Nancy Skinner, radio talk show host: President Obama inherited this economy. This is a continuing operations budget for the federal government. But Obama is also laying the groundwork for long term fixes on energy and healthcare. It's an investment in our future. Businesses are now anticipating this budget and stimulus to help fix the economy.
Tobin Smith: Changewave Research: Massachusetts came up with the same plan that Obama is talking about for healthcare. But Massachusetts lost so much money they had to stop the program. The Obama healthcare plan should be taken off the table. That'll save about $1 trillion of money over time. Obama already began to step away from cap and trade because they realized it's not doable right now.
Eric Bolling, FOX Business Network: Obama is playing everything by the book. He has a high approval rating, so he can do more -- he can take more real-estate so to speak. But if he spends $3.6 trillion and you don't get growth, then you're in serious trouble -- especially if you can't get countries like China to keep buying up our debt.
Pat Dorsey, Morningstar.com: As we all know, the market discounts the future. The market is expecting a stimulus from the government to offset lagging private demand. If you stripped the budget of the stimulus package now, the market would fall due to expectations for a weaker economy.
President Rolls Out Auto Plan on Monday: Time to Let Detroit Fail?
Eric Bolling: Why do we have bankruptcy laws in the first place if you don't allow companies to go into bankruptcy? The auto companies aren't too big to fail; they're too stupid to survive. Let them go. We're only inhibiting innovation.
Nancy Skinner: As GM goes, so does the country. The auto companies are at the heart of our manufacturing base. These aren't grants, these are loans. Everyone -- bond holders, shareholders, workers -- are taking cuts to keep the companies in business. You want foreign car manufactures to take over the American car market?
Tobin Smith: There are numerous car plants in the U.S. which are making money right now -- and they're all in places other than Michigan or other unionized states. They are Japanese or German car companies, but the vast majority of revenues and economic activity happens here in the United States. The question is: How much of GM and Chrysler's troubles are marketing and manufacturing problems? None of these problems will be solved if they keep getting handouts.
Pat Dorsey: Bankruptcy is really the only option to get the auto companies into a potentially competitive position down the road. But it'd have to be prepackaged -- as in you come to the table ahead of bankruptcy and negotiate who's going to take how much pain on all sides. Letting the auto companies fail in a disorderly fashion would caused a lot of unnecessary economic pain.
Gary B. Smith: I used to live in Pennsylvania, and the same arguments were made then when steel making starting moving overseas. A lot of it did. And guess what? We're okay. Things worked out fine. The main problem is the marketing of these products, and the job just didn't get done. Like any unsuccessful business or industry, it needs to be allowed to fail.
Drug Test Americans Before They Get Welfare and Jobless Benefits?
Tobin Smith: Yes, it's time to start doing this. Many private companies already have employees take drug tests. But most importantly, it's our cash! If you want taxpayer money, you take the test. End of story.
Nancy Skinner: Are we drug testing every member of Wall Street, or every executive of AIG? People are losing their jobs in droves, and now you're humiliating them by making them prove they're not a drug addict?
Eric Bolling: Taxpayers should not be paying for people to continue their drug habits. Employers require it, insurers require it, why shouldn't the government? If you use drugs, you don't get paid.