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    Bulls & Bears

    On Saturday August 8, 2009, Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Pat Dorsey and Nancy Skinner.

    Jobless Rate Drops to 9.4 Percent: Time to Stop Government Spending?

    Gary B. Smith, TheChartman.com: I'm actually going to applaud the Obama administration. Here's why: Because of their ineptitude they haven't managed to get about 90 percent of the stimulus money distributed. Thus, they have not managed to damage the economy. In fact, lo and behold, the economy has bounced back on its own. So I say take the other $670 billion of stimulus we haven't spent and give it back to the American people! But of course they don't want to do that - but the stimulus should stop immediately.

    Nancy Skinner, radio talk show host: I don't get it — the stimulus is finally working so we should stop distributing the money? Here's the analogy: We take a dying patient; we give him antibiotics; we give him IV fluids, and all of a sudden the fever starts to break. So why would we pull all of those things out and replace them with a cigarette and whisky bottle? It's just starting to work! We still have 9.4 percent unemployment. The rest of the stimulus is designated for shovel ready projects. Here in Michigan they announced $1 billion for new battery and car technology. It's just starting to work, so let it!

    Eric Bolling, FOX Business Network: We haven't even talked about the $72 billion of TARP that banks haven't used. We're talking $800 billion that's sitting there with no real purpose. To touch on Nancy's point, we did not give the economy penicillin in the form of stimulus. We didn't give it antibiotics — we gave it a band-aid and aspirin and said call us tomorrow. Stop spending all this money and send it back to the taxpayer! If we don't, we may just inflate ourselves into another recession.

    Tobin Smith, ChangeWave Research: The big news out of these unemployment numbers is that we only added 7,000 government jobs. That was the most startling number. If we stop spending money on just these new entitlement programs, that would be fabulous. We should be spending money on actual capital projects and things that will actually raise economic productivity. What we should stop supporting are state budgets and new projects and initiatives that are simply transfers of wealth.

    Pat Dorsey, Morningstar.com: The economy is recovering slowly. The government is about the only entity spending money right now. The consumer savings rate is still heading pretty far north. CEO confidence is still pretty low. You're not seeing a lot of corporate spending out of businesses. But I think it's reasonable to say that the economy may be recovering faster than one would have thought back in March. People start to think that maybe we should put the brakes on all this spending. But I think that stopping things cold right now does not seem to be the right answer with 9.4 percent unemployment and an economy that still, unfortunately, only has one engine right now, which is government spending.

    Clunkers for Guzzlers: "Green" Program Backfiring?

    Eric Bolling: This "green program" is not so green. You can buy a Hummer; you can buy one of those big Tahoes, or a Suburban. For starters, cash for clunkers should have been applied to American cars only. But think about all of the carbon you're emitting when you crush these cars and shipping away their remains. By the way, a dirty little secret of this program was that a lot of these cars aren't being smashed. They're actually turning up on the road again in other places in this country going purely against the rules of the program.

    Nancy Skinner: So far, the average increase in fuel efficiency is 10 miles per gallon — a 61 percent increase. I agree with Eric Bolling that they should have been all-American, but the Southern senators had to get the foreign companies in. Even with the foreign sales, 50 percent of the cars being sold under cash for clunkers are made in the United States. This program is indeed green. We're getting rid of old, polluting cars. These newer cars are going to have longer life spans, fuel efficiency, and better technology across the board. It's absolute genius.

    Tobin Smith: This program is nothing more than giving $4,500 to rich guys to go and turn their car in. From a green standpoint, the only thing green is the money coming out of my checkbook going to dealers for cars that may or may not have sold. The U.S. government is counting cars one way, while websites like Edmunds.com count them another way. This program is fabulous as long as you want to believe a big fat lie.

    Pat Dorsey: The far bigger impact of cash for clunkers is on a dealer's bottom line and Detroit's bottom line. Any environmental benefits, frankly, are just chump-change because the real goal of the program was basically to give another bailout to Detroit and auto workers. This is a cyclical industry and when consumers aren't buying, they aren't buying. We all knew that when the program was first starting up.

    Gary B. Smith: One study shows that even if this program is 100 percent successful, the reduction in carbon emissions will be about .001 percent. That's also presuming people don't drive any less. But of course they are going to drive more. People are going to get out and go, "Wow! I've got this great new Ford Focus that gets 30 miles per gallon — I can drive a little bit more!" What's going to happen is that carbon emissions are not going to come anywhere near a reduction. In fact, this program might even increase the carbon footprint.

    President Obama's Poll Numbers Drop, Stocks Pop: Is There a Connection?

    Tobin Smith: The fact is: Stocks do better when a president's approval rating goes under 50 percent. This happened with President Reagan and President Bush. When President Bush's ratings were declining, the market was going up. President Bush's approval ratings peaked when the market was having a very rough time. There's a lot of stuff behind all this, but let's not argue the facts.

    Gary B. Smith: I think part of this is that people are thinking that there might not be this huge new expanse of government size and power. President Obama's approval ratings go down and more and more people embrace small government and capitalism. This is a historic trend. Markets move up if a president's approval rating dips below 50. So maybe this is an Obama rally.

    Eric Bolling: These two things are absolutely correlated. Regardless of who's in office, when nothing happens in Congress, Wall Street likes it. If a president's approval drops below 50 percent, stock return is over 9 percent. When their approval rating is above 65 percent, the return on stocks is about 2.6 percent.