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.
FEARS OF A SECOND GLOBAL FINANCIAL CRISIS
CHARLES PAYNE: I don't know that the stock market is not a predictor of things to come. It's not telling us that yes, they are coughing up blood and we're going to find out later. I agree, it might not be 2008, but this is the son of 2008. This is the same DNA. They're still doing some of that same mark to make believe accounting.
CHARLIE GASPARINO: We are not in 2008 levels. If we were at 2008 levels, Morgan Stanley would have been insolvent today and it's not. They were facing the biggest rumors. Their stock went down to December 2008 levels. Their credit default swaps. Their insurance policies blew out. I'm pretty sure it's not going to happen. I can never guarantee anything. But they withstood that. They have plenty of capital. There was a rumor that they were exposed to French banks. I spoke with James Gorman, the CEO of Morgan Stanley. He says net zero exposure to French Banks.
DAGEN MCDOWELL: I'm not worried about the U.S. banks at all. They're so much better funded, better capitalized than they were back in 2008. We're not in any danger of a liquidity crisis. The stocks are down. The stocks are tanking because the economy is in the tank. The European banks are a different story. Wouldn't they love to nationalize them? Let them.
BEN STEIN: Warren Buffet just put five billion, 2.5 billion of his own money, out of his own pocket into Bank of America securities. If he thinks it's solvent, if he thinks it's a worthwhile bet, I will put with him instead of with Moody's. I love and worship Warren Buffet. I know he got a sweetheart deal, but if he thought the bank was going to be insolvent or even if there was a remote chance, he would not have put his money there. He is a very smart guy. I would trust him ahead of Moody's any day of the week. The banks are well capitalized. We are in fine shape.
ADAM LASHINSKY: In a way, things are a far better than they were in 2008 for the American banks in particular. This is key. The capital levels are higher. That means that they're in a safer position. They are not in threat of going down-going down, by which I mean, dying. On the other hand, what we're seeing is these banks are trying to shore themselves up. Shore up their balance sheets, but their businesses are bad. Their earnings are going down. They're laying off workers. Because it's a weak economy.
PRESIDENT OBAMA CONTINUES TO PUSH FOR TAX HIKES ON THE RICH
CHARLES PAYNE: Now's not the time. There are a couple things. First of all, he talks billionaires, but we know he's talking about people making $250,000. That's the disingenuous part of it. But the message is, we've peaked as a country and now it's time to divvy up the spoils, if you will. This is it. We can no longer go higher. America is topped out. Now it's time to split up the money and see what happens from here.
CHARLES GASPARINO: I have no problem with Obama playing class warfare. That's what he's been doing. That's what you expect of him. Warren Buffet is a hypocrite. Let me just say it. He is a complete and total hypocrite. He makes most of his money on capital gains. He's talking about small businesses and people who are trying to make the billions that he made and just call it as it is. Warren Buffet is a hypocrite.
DAGEN MCDOWELL: What Buffet has been saying and what the President has been saying is largely untrue. That people, millionaires in this country, pay a tax rate, on average that is significantly higher than the average paid by people making, say $50-100,000. Period. It's more than double based on data from 2008. You just cannot say that. It might apply to Buffet and a few people out there in this country, but it's just simply not true.
BEN STEIN: My hero is one of the great geniuses of the American system. My hero is a man who has conferred incredible value upon hundreds of thousands if not millions of working people who have looked to him for their retirement funds and their way of life. I do agree that the rich should pay at least as much as the middle class, but I think that Dagen has nailed it. In fact, unless the rich are paying capital gains tax they are, in fact, already paying more. I am an upper income taxpayer and I don't notice that my taxes are particularly low. They are frighteningly high. Unfortunately, they have to be even higher to make up for the excess spending, but right now with the economy teetering, let's not have any changes. Let's keep it steady as she goes until things settle down a little bit.
ADAM LASHINSKY: I've coined a term called ‘the working rich.' The people you're referring to are the working rich. They get most of their income from ordinary income and they pay taxes on it, relatively high taxes compared to what Warren Buffet is talking about. The question is one of timing here. There are good aspects to our democracy and there are bad aspects to it. The good thing here would be if the President reacted when his commission had its suggestions on what to do with the deficit, which included tax reform, which included certain higher taxes, but he didn't. He kind of ignored it then and now we're in a campaign cycle. We do have things to do. We could raise taxes and it would be responsible. But I'm not going to disagree that the timing and the messaging is horrible.
GOVERNMENT PAID UP TO $601 MILLION TO DEAD PEOPLE
CHARLES PAYNE: First of all, in a way it's kind of good marketing. The President is pushing union membership and now he can say ‘listen, now you're going to get paid even after you're dead.' So, certainly, people might want to sign up to become union members. We're talking about demonizing household incomes $250,000 or more as the greedy rich and yet we can lose half a billion on Solyndra. We're about to fork over billions more to more solar companies and these kinds of things. The cavalier attitude is mind boggling, that they would say it's not a big deal, when it obviously is.
CHARLIE GASPARINO: Don't compare this to a company. I'm not saying they're perfect, because I used to work there. GE is a much better run organization than the federal government. I will guarantee that. They know much more about what's coming. We have so much of this and we're talking about even entertaining the notion of raising taxes. It's crazy. I'm not saying don't raise taxes. But look at this.
DAGEN MCDOWELL: The fact that this amount of money, $120 million a year, is a rounding error, given our budget deficit, is nauseating. But that's where we are in this country. When is it going to stop? Until you starve the beast. That's the only way that it will stop in terms of the mismanagement of taxpayer money. There was the story about the Justice Department audit with the eight dollar cups of coffee and the alleged sixteen dollar muffins. It doesn't matter. You can quibble about that, but it was still wasted money-millions of dollars-on ten conferences. How about the $19 billion dollars in state unemployment aid that was paid in error over the last three years? That's only ten percent of all unemployment aid.
BEN STEIN: There's a lot of waste in big organizations. There's a lot of waste in big organizations-private and public. It's very unfortunate that it happens. But it does happen. I just wonder if those $600 million in checks were cashed and if they were cashed by people who were alive and pretending they were somebody else, why isn't there some kind of criminal prosecution to those people. We seem to have an awful lot of criminal abuse of the federal government's money and very few people prosecuted. What is that all about?
ADAM LASHINSKY: To execute Ben's suggestion, Charles would almost certainly oppose funding the prosecutors to go after that money. He would say no more government spending. Ben is exactly right. Big organizations have waste. It's not good. It's the government that pointed this out.
CHARLES PAYNE: FOSSIL (FOSL)
BEN STEIN: HATTERAS FINANCIAL (HTS)
ADAM LASHINSKY: HEWLETT-PACKARD (HPQ)