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.
LET ALL BUSH TAX CUTS EXPIRE TO HELP FIX THE ECONOMY?
JIM LACAMP: Anybody who thinks this is a good idea hasn't studied our economic history, doesn't care about jobs, and certainly doesn't care about poor and middle-income Americans. Look, if you undo the Bush tax code, what you're going to do is you're going to raise taxes on lower-income Americans, raise taxes on middle-income Americans, re-implement AMT for middle class and upper middle class Americans. You're going to discourage job creation by raising capital gains taxes. At the same time, we have expiring tax credits for depreciation and business expenses. So you're going to take that business creation model, that capital investment, which is the single biggest determinant of new job creation and you're going to eliminate that too. This is the worst idea I've seen out of politicians and I thought they'd run out of all of the bad ideas they had.
JONATHAN HOENIG: I think it's the philosophy Cheryl that's changed. I mean, how can less force, you know taxes are force right? It's government's force redistributing your own money to the political class, to the investments, the entitlements. So how can less freedom create wealth? I just don't know how that's possible, and I'll tell you a 50 percent tax hike or 20 percent tax hike, I think what needs to change is that notion that government spending creates wealth and it's the size, the scope of government that needs to change, not the taxes. We get taxed enough already. It's the government that needs to do the changing, not the private, wealth-producing part of this economy.
SALLY KOHN: Right, somebody who made his wealth, earned his wealth, and at the same time understands how society, how government, and how the structures of our common community helped him create that wealth, and understands and is willing to give back. Look, everyone who thinks keeping these tax breaks is a good idea must have amnesia. They disproportionately benefit the wealthiest of the wealthy of the wealthy, who incidentally haven't since having these tax breaks, created jobs. So if this is the way to stimulate our economy, if this is the way to create jobs, why don't we have them?
TRACY BYRNES: Well actually Cheryl, I read that line; I read it like three times this notion that taking the Bush tax cuts away is going to take away the class warfare. Honestly, he's creating more class warfare. First of all, all the people that sit at his little Bloomberg terminals are probably the people he's talking to right now. Those are the people he's hurting; he's hurting the customers; the people that he pays his bills with. He is creating more of a mess and you know what? He's not going to create jobs by taking away the Bush tax cuts; bottom line.
WAYNE ROGERS: Well he's saying something that's politically feasible, but I take issue with what you said earlier Sally. When you're talking about the Bush tax cuts you know favor the wealthy, they did not. In 1980 the top one percent paying taxes paid only 19 percent of the total taxes. By 2004, after the Bush tax cuts, the top one percent paid 36 percent of all of the taxes. So your facts are wrong. You shake your head, but you go read your facts. You happen to be wrong about that. In fact the top 10 percent who pay 44 percent, in 2004, they paid as much as 68 percent. So it did not favor the rich people. It cost the rich people, and by the way it produced more revenue in those times. I'm not saying they were great, the Bush tax cuts as a whole, but you've got to get your facts straight before you make that argument.
APPLE NOW TRAINING MANAGERS ON HOW TO DEAL WITH UNIONS
TRACY BYRNES: I mean look, this is the most profitable company we've seen in decades and they're deciding to put money towards educating their managers about unions. Look, that takes away from technological development, from product development, sales force, anything needed to run a business. Not this nonsense on how to pander to the unions. Cheryl, this could actually really set the stage going forward. We're seeing the unions trying to take a stand again, and Apple clearly is stepping up to it.
WAYNE ROGERS: Well I don't think so in the following sense, if there is a grievance there and the company is not addressing it, then there is a reason for a union. I mean people are not going to organize just to organize I don't think. I know back in July, Pasadena City College launched a union-sponsored course called Troublemakers School. Now the name speaks for itself. If they're just making trouble that's one thing, but if there's a real grievance than probably there's a reason for a union. If there's not, they shouldn't of course.
SALLY KOHN: Just to be clear, that's not the only reason we have unions in this country. We have unions because they set all kinds of working standards, wage standards, benefit standards, and the fact of the matter is unions like corporations to be successful and unions like corporations to be profitable. What they want is for some of that profit, some of those benefits to also be enjoyed by the workers who created those profits in the first place. The fact that in our country we've seen productivity rise and rise and rise steadily; we've seen CEO's salaries and profits rise and rise and yet the wages for working people have been stagnant. What is wrong with wanting working people at Apple to get paid better?
JONATHAN HOENIG: Cheryl, unions have destroyed every company which they've been intimately involved; every industry. Whether it's the auto industry, the airline industry; the history very much speaks for itself, but Sally I do agree with you to one extent, shake your head all you want my dear, people can form unions all they want, the fact of the matter is Apple would be foolish, in my opinion, to hire any unions and negotiate with any union. They've crushed every industry and I'll tell you, could Richard Trumka honestly come up with this? Absolutely not. We need to keep the unions out and get government out as well.
JIM LACAMP: We're sitting at 16 percent underemployment, which is people working part-time instead of full-time, or people that have given up looking for jobs. Look, in the tech industry you have to be very careful about setting up long term contracts with unions. This industry changes very, very rapidly and you have to stay ahead of the curve. I mean Steve Jobs always talked about cannibalizing his own products. He talked about the process of creative destruction where you're coming out with one new product that outdates the other. If you have a workforce that demands long term contracts and is going to stifle that company at all, then the tech industry is really going to get hurt by it, and I would say too, maybe we have to look the other way; maybe even lower what the minimum wage is. We have too many people not working. The last thing we need to worry about is more unions right now.
PEOPLE UNDERWATER ON THE HOMES LEAVING US WITH THE TAB?
JONATHAN HOENIG: Yeah, well there used to be a stigma Cheryl, associate with bankruptcy, defaulting on a mortgage, but in our culture now, sees the lender as evil, and of course our own president has painted those not paying their mortgages as somehow being responsible, yet the lenders; the Goldman Sachs, the JP Morgans are the evil fat cats. It's a real shame that walking away from an obligation is now seen as somehow just and it's not.
WAYNE ROGERS: I don't think it's a question of fair or not fair, it's a question of what the market is going to tell you. If you walk away and you can make money by walking away, you're going to walk away. I disagree to a certain extent with what Jonathan said, because credit was made rampantly easy by people like Maxine Waters and Barney Frank who don't have the vaguest understanding of a free market system, and here's a headline for example of the New York Times in 1999, which says that in effect, Fannie Mae raises credit to aid mortgage lending. In other words Fannie Mae and Freddie Mac made it so easy and relaxed. They were the beginners of the sub-prime mortgage crisis and it belongs directly to the federal government.
TRACY BYRNES: Or are people sitting on their hands saying I'm not going to pay my bill on time and become delinquent because that's the only way I can qualify for these stupid government programs? Look, I can't stand the notion that economic decisions have overridden moral and personal responsibility. I would take on 10 jobs before I would ever miss a mortgage payment, and yet it's cool cocktail conversation right now. We have created a society of slackers, all because of these stupid programs out there.
SALLY KOHN: No, I mean first of all there aren't jobs for people to be going and getting. Part of the reason foreclosure rate is so high is because people don't have jobs, but look if you want to talk about slackers, look, it wasn't Fannie and Freddie that caused this problem, it was Wall Street that indeed inflated the housing market, bet against it, and they were allowed to walk away, but homeowners aren't?
JIM LACAMP: There's a 50 percent people, in this country right now that are effectively under water, which means they're either underwater on their mortgages, or, if they sold their house, they wouldn't have enough equity left to buy a new house. We've got a very, very serious problem in the housing market and the banks are going to get hurt, and what that means is new lending is going to get hurt, and it's going to penalize those who are out there trying to buy a house right now. This is something that the administration is just casually encouraged and it's walking away from legal contracts. It's a very devastating thing to happen to our economy.
WHAT DO I NEED TO KNOW?
TRACY BYRNES: As if this Penn State story isn't horrific enough, Cheryl, with all the litigations coming down the pike, it's a state school. That means state funds could go towards these legal fees. Awful.
WAYNE ROGERS: Well, I like a company called Protective Life Insurance Company. Their earnings have been up; it trades at about six times earnings. I've owned in the past, I own it now and I've added to my position.
JIM LACAMP: It's a risky market; new driven, but Australia's easing, Brazil's easing, China's easing, the U.S. is easing, England is easing, so that's going to spell good things for gold moving forward.
JONATHAN HOENIG: Well you know Cheryl, I was doing a little research the other day, and realized boy, the consumer is extremely strong these days. Honestly, McDonalds, a lot of the consumer-oriented stocks are doing well. Bud is the best brand in the business. Booze never goes out of style, in fact, I think people are probably drinking more given all the economic uncertainty. So check out Bud. I don't own it, but might buy it next week.