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Bulls & Bears
This week Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Pat Dorsey and Julian Epstein.
Who Has It Right About the Direction of Our Economy: The White House or Wall Street?
Eric Bolling, Fox Business Network: 411,000 of these jobs came from the Census. That brings the total number of Census hires up to 564,000. That outpaces oil and gas sector jobs at about 166,000. Railways at about 215,000. And even outpaces residential construction jobs. There are more people knocking on doors than there are building them and putting them up. Not to mention, the House Ways and Means Committee said up to 96 percent of these Census jobs are going to disappear in the short term. This was a dismal jobs report.
Julian Epstein, Democratic strategist: On balance, this is a good report. You don't look at jobs numbers in a vacuum. You have to look at overall trends. A year ago, we were losing 700,000-plus jobs. Now we're gaining 400,000-plus jobs even if a lot of those were in the public sector. A gain of 400,000 per month is close to what Bush was doing in his best years. Before the stimulus went into effect, our GDP was a negative 6 percent per quarter. Now, it's positive 4 percent growth. Overall, we're seeing economic numbers that are very, very good. Had we not had a stimulus, we'd probably still be losing a million jobs per month.
Gary B. Smith: There's evidence a lot of these Census jobs were actually double counted. Uncle Sam has got some fuzzy math going on here. We can assume a lot of these Census jobs are inflated. Sure, we can look at the economic trends. But I like to go back to the Obama administration's initial push for the stimulus. They said unless we do stimulus, unemployment will rise about 9 percent. Now, we've been at almost 10 percent for months with stimulus. So I don't think this jobs report has a whole lot to be proud of in it.
Pat Dorsey, Morningstar.com: There may or may not be over-counting involved with these Census jobs. But I'm really not that worried about it. These jobs are going away anyway in the short term, so overall they don't matter all that much. What we should be looking at are the two measures of unemployment. There's a corporate survey and a household survey. The household survey is showing more positive trends. But frankly, no administration can actually control the economy as much as they'd like to, or say they can. The business cycle has to run its course, and that often takes more time than people like.
Tobin Smith, NBT Media: When the economy is turning, what you want to look at is the household employment survey. The government calls and asks if people are employed, or looking for work, starting a small business, etc. And the household survey does look positive. But the bigger picture is over the next three to six months, and the stimulus runs out. The private sector isn't going to be hiring, and that leads to poor economic prospects.
Growing Calls for U.S. Government to Take Over BP's Oil Cleanup Operations
Tobin Smith: It's time for the federal government to take over BP's Gulf operations. This is the equivalent of a nuclear disaster, and we wouldn't want the private company who caused the thing trying to fix it. The federal government has the ability to mobilize tens of thousands of people to do what needs to be done to fix and clean up this disaster. The problem is we could have made this decision 15 to 20 days ago. The federal government will spend every dime they have to fix this thing, which is something I don't think BP will do.
Gary B. Smith: I'm no fan of what anyone has done here. The government really showed its true medal with Katrina at all levels—and they completely blew it. The two disasters are not apples to apples, but if the government had the technology and wherewithal to solve this problem, they would have already taken over. But the Coast Guard admiral heading the operation even admitted we can't replace BP. The government just doesn't have the ability. And frankly, BP has far more to lose not solving the disaster than the government does. Unfortunately, BP is the best shot we have.
Julian Epstein: I don't think anybody believes BP has done a good job responding to this disaster. And unfortunately, I think President Obama has been disserved by his staff. It took the White House far too long to get engaged, and they should have assembled the military, the Coast Guard, and the proper experts much sooner. All the resources of the federal, state, and local governments have not been properly tapped in to. This is an international disaster. And frankly, it's hard for me to be supportive of the administration on this issue.
Eric Bolling: Forget BP and the government. BP should open its checkbook, and give it to Louisiana Governor Bobby Jindal. He can fix this problem, and he's shown that he's the only one who really has a clue. The federal government should see Governor Jindal has boots on the ground, knows what he's doing, and can get the right wheels in motion to try and prevent the effects of the oil hitting land as much as possible.
Pat Dorsey: What we should look at is that prior to this bill, oil companies had incentive to cut corners, and possibly cut costs in terms of safety. So now, what incentive does BP have not to clean this up as quickly as it possibly can? Why on earth would they want this to go on longer? BP has considerably more incentive to fix this disaster right now than the government does.
Group of Investors Urge Walmart to Stop Supporting Government Health Care
Eric Bolling: When Walmart signed that letter and sent it to the Obama administration saying they support health care, I was scratching my head. I knew then this was going to come around and bite them in the butt. Sure enough, a year later, this is biting them in the butt. This health care reform is going to be a huge new expense for the company. And that will be passed onto consumers.
Julian Epstein: Actually, I think the senior executives and board of companies have a better idea of what's good for their respective companies than shareholders or political pundits on TV. Their point of view is consistent with many businesses. Many businesses will save $3,000 on the average employee due to health care reforms. As a whole, health care reform is going to be good for business, and the executives at Walmart understand that.
Tobin Smith: I don't think Walmart prices are really going to be affected by this. But Walmart wants to become a major pharmaceutical and health care provider. Their support for health care reform legislation is a business decision. This is part of their strategy to tap into a new $100 or $200 billion dollar sub-market in the health care industry. And it's a brilliant move.
Pat Dorsey: In this case, the executives may know more than the shareholders. Walmart is focused on making money. They're not a charity. When Walmart went off the low-price message a few years ago and tried to compete with Target and the like, they got bit in the butt. Walmart sees this health care move as a major way to tap into a new, profitable market, and that's what is driving their decision.