DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Bulls & Bears | Cavuto on Business | Forbes on Fox | Cashin' In
Bulls & Bears
This week Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Pat Dorsey and Tara Dowdell.
Arizona Illegal Immigration Law; Helping or Hurting Jobs in America?
Eric Bolling, Fox Business Network: About 15 million people are out of work right now. And about 15 million illegal immigrants live in the country, many of them holding down a lot of jobs that Americans or legal immigrants could be holding. Illegal aliens hold down wages, sometimes under minimum wage. So construction, restaurants, etc. all have wages held artificially low. If you close this loophole for illegal aliens and employers have to pay minimum wage, wages will go up and stop being undercut.
Gary B. Smith, TheChartman.com: Illegal immigrants come in, and take jobs that the working class won't or can't take. What happens is that employers are able to stock those jobs. Overall, job growth gets enhanced. Look at a carpenter, for example, and their shop is able to expand because they have lower costs with entry level workers and expand the business. As a result of their expansion, they propagate other businesses. This low cost labor really ends up helping the economy.
Tobin Smith, NBT Media: Illegal immigration absolutely hurts the economy. This argument that illegal immigrants take the jobs Americans don't want has never been proved empirically. In Arizona, 18 to 28 year olds without high school educations, their unemployment rate is at about 25 percent or so. You take the illegal immigration problem out of the equation, they can take those jobs, and they won't be sending 40 percent of their income back to Mexico.
Pat Dorsey, Morningstar.com: Unemployment is high among younger people across the country, not just in states with illegal immigration problems. Also it's important to keep in mind this statistic of 15 million illegal aliens in the country doesn't mean they're all of working age—many of them aren't. So it's not like if we got rid of all illegal immigrants, suddenly every American out of work would get a job. On top of that, go back to a few years ago when unemployment was at 4 percent, there were just as many, if not more, illegal immigrants in the country. The problem is we don't have jobs, the construction industry and many others are in the toilet.
Tara Dowdell, Democratic strategist: This Arizona bill is already having a negative impact on the state's economy. Boycotts have begun, conventions have been cancelled. There were similar boycotts in the early 1990s when Arizona refused to recognize Martin Luther King Jr. birthday. One hundred-thirty conventions and $350 million were lost as a result. This bill will clearly negatively affect jobs in Arizona.
D.C.'s New Push to Ban Offshore Drilling; $5 Gas on the Way?
Eric Bolling: Washington's actions are going to drive gas up to $5 a gallon. Oil is already 40 percent higher than it was a year ago, and the White House putting in place this moratorium on any new drilling will only drive it higher. We need to focus on ways to drill more, not less—otherwise we'll all be paying for it at the pump.
Tara Dowdell: Gas always goes up this time of year. The larger issue is reducing our dependence on foreign oil. It's costing us too much already. We need to focus on developing clean, green, energy sources. The amount of money that's going to be spent and the environmental impact as a result of this oil rig disaster is tremendous, and it gives even more reason why we need to move away from oil as a main source of energy.
Tobin Smith: If environmentalists are talking about stopping production off-shore until we figure out what went wrong, we'll have much higher gas costs. At the margin, gas is a function of oil prices, and oil is the function of a two to three million dollar a day spread. If this spread goes away, it's going to go up.
Gary B. Smith: Prices for oil will rise over the summer. I don't think it'll be related to any restrictions on off-shore drilling. Even if you get rid of all off-shore rigs, you turn off access to 1.7 million barrels a day. We consume a lot more than that. Even if you restrict or cut back on off-shore drilling, that'll never send the cost of gas to $5 unless you literally shut down every off-shore rig there is and never let another one be built. But that will never be the case. In terms of clean or renewable energy sources, whenever you come up with one that is as cost effective as oil, you let me know.
Pat Dorsey: Things like ethanol would never be viable without subsidies. In terms of oil, it is a globally traded commodity. This will only affect global oil prices is if these decisions impacted global supply. If drilling off-shore in the U.S. was enough to directly affect global oil prices, then one month ago, when President Obama announced his decision to allow offshore drilling, oil prices would have gone down. They didn't. The market impact of this is nil.
Unions Call for Bank Reform: Does Big Labor Need Reforming?
Tobin Smith: It's time for unions to reform themselves. Their guys get compensated 40 percent to 50 percent higher wages than other people in the private sector. But they're the oppressed ones? Their $70-$80 wages at GM and Chrysler put them out of business. Unions have ruined company after company, industry after industry, and now they're starting to take down states like California. It's time for them to look in the mirror.
Tara Dowdell: Unions have made mistakes and certainly need some reforms. Last I checked, Lehman Brothers was not a union shop. It misled investors, made poor investments, etc. How many people lost money in their 401(k)s as a result of that?
Pat Dorsey: There's an interesting analogy between the financial system and unions. Financial companies took too much risk, borrowed too much money, and regulators refused to say no. Unions asked for too much money and benefits over the years, and voters and politicians refused to say no.