• With: John Tamny, Rich Karlgaard, Rick Ungar, Victoria Barret, Elizabeth MacDonald, Steve Forbes, Mike Ozanian

    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.

    IN FOCUS: Company proposing "term limits" for employees

    JOHN TAMNY: Well figure we are all term limited in a market economy but I actually like the idea. If failure is the greatest teacher, I think what a lot of individuals fear is success that will make them satisfied, such that they desire to achieve less. Anything that keeps workers focused on constantly pleasing their bosses I think is undeniably a good thing.

    RICH KARLGAARD: I am a huge fan of John but I think that this is just a silly idea because it allows for no flexibility. For instance, would you make Tom Brady and Eli Manning reapply after four to six years? In some jobs like sales, you want pretty quick feedback, six to twelve months you make a decision. In other jobs the fruits may pay out in ten or fifteen years. It takes away flexibility.

    RICK UNGAR: Surprisingly I think it may be an interesting experiment with some conditions. First of all, it is not really term limits. It is more in the nature of an employment contract that executives have. In term limits, you do not get to reapply. What does concern me a little bit about this idea is you could put a worker in danger of losing their health care benefits. That is something that has to be addressed. Nobody wants to find out over night that they no longer have health care benefits for their family. That is a concern. It is an interesting experiment, particularly in that industry where it is important that employees and casino guests do well together. I think it is worth a try.

    VICTORIA BARRET: This seems like a management gimmick that could easily backfire, where you could have a worker that is great for the first year, then for whatever reason, really loses their incentive to show up. Then what? You dangled this four to six year carrot out there and you do not have the management flexibility to say ‘Hey, we need to rethink your employment here.' So I am surprised that from a management point of view this would be attractive. I also think for workers, four to six years is a long time. I think there should always be incentive to do a good job. I think there should be more trust and flexibility in any work place, regardless of the industry.

    ELIZABETH MACDONALD: I do not think this stops a casino or a hotel from firing anybody after one year, or has them locked in after one year, or for years, or that six year time. I just do not think that is the way this is structured. You know, it is interesting the backlashes coming in the unionized hotel and casino industry, when tends to treat management like hot, molten evil. They feel like they are guaranteed a job for life when they are not. I think John is right; this will put the focus on service which is the real product the casino industry is selling. By the way, this is a new casino, these are new workers, it does not mean that older workers who were already there will be affected by this. It is just a way to get people productive.

    STEVE FORBES: Hey, if you have a good company, you have annual reviews anyway. This is not the public school system where you have tenure or college. So you are at their will. That is why some states like Indiana have gone to right-to-work, so you have that kind of flexibility. So you have the flexibility already, the question is, how good is management at exercising that flexibility? By the way, one part of the government that does it right is the military on the officers. After several years, if you do not get a promotion, you are out.

    Is Mitt Romney's win a win for capitalism?

    MIKE OZANIAN: Gingrich and Santorum were attacking Romney because of the profits he made while at Bain Capital, the private equity firm. Private equity is a very important cog in our financial system. Overall, through 77 companies, they invested $1.1 billion of investor's money. They had $2.5 billion of profits. Profits are good in a capitalistic society.

    RICH KARLGAARD: Nobody is arguing that, but I think what Mitt's comeback in Florida proved is that if you out span Newt Gingrich five to one, and you get Newt out of his game, you can beat him. Look, the big referendum on capitalism is going to occur in the November election and whether it is Mitt, or anybody else, they are going to have to come up with better arguments than they have come up with in this Republican primary to defend free enterprise or Obama is going to win reelection.

    STEVE FORBES: Two days ago I would have said unqualifiedly, yes [it is good if Mitt wins in Nevada], because in the Florida primary near the end he was starting to defend capitalism and defend his career. But then, as soon as Florida was over, he reverted to his liberal form by saying he is going to raise the minimum wage, which will destroy jobs. So, in the interest of the nation, I am going to send him, free of charge despite his $21 million income, a book I co-authored: "How Capitalism Will Save Us: Why Free People and Free Markets are the way to save America." Mitt take it to heart.

    VICTORIA BARRET: That was impressive Steve. Look I agree with Rich that the real referendum comes in November and Mitt has to do a much better job of honestly defending his track record. I think most Americans are skeptical of LBOs, they do have a reputation for coming into companies and letting workers go which in this environment, is not a popular career to have had as someone running for office. He needs to defend it; he needs to sell us on why it is an integral part of capitalism.

    RICK UNGAR: First, can you feel the thrill running up my leg as I listen to these Republicans just hating on Mitt Romney. I mean this is a wonderful, wonderful day. Look, Mike is right in the sense that private equity is an important part of the system. Certainly, leverage buyout experts are an important part of the process. But, what they aren't, are traditional American-style capitalists and this is going to be a problem for Mitt Romney who has never built, who has never operated anything. What he knows how to do is go in, buy a company, load it up with debt and sell it off as soon as possible. Americans believe in building things, and taking risks, and if you success, getting the benefits from it.

    DENNIS KNEALE: Did you hear the description we just heard from Rick about Romney and what he did to companies? It is what Obama has done to our country. He loaded it up with debt, he ruined it. You know, the problem with the Romney victory in Florida and the problem with the Romney campaign in Nevada is I do not think he is defending capitalism enough. I think he moved ahead of Newt simply because he kept making the issue that; "Newt got $1.6 million from Fannie and Freddie," and also, "Newt is lobbying. How terrible!" I do not think there is anything wrong with lobbying. Fine he got paid; he did it, but defend capitalism more. It is our only hope!

    New report shows gas drilling still not at pre-oil spill levels

    ELIZABETH MACDONALD: Five dollar gas is coming. Because of demand from China, U.S. futures are pointing to rising gas prices. Also, basically you are seeing OPEC saying we do want high oil prices to sustain our decrepit economy. This is coming at a time when even Cuba, Mexico, the Bahamas, Russia, Canada are doing offshore drilling developments adjacent to our own borders, when we in the United States are instead subsidizing failed Solyndras of the world who are politically connected. I think the way we have to go, is to really open up for drilling.

    RICK UNGAR: Let's take two parts of this. Number one: Can you really blame the government for maybe taking its time after the worse environmental disaster in our country which was the Gulf oil spill. Putting that aside, the reality is we can increase drilling in the Gulf tenfold, and we still as a nation would not be producing enough oil to make a dent on gas prices. And if we did, by the way, OPEC would step in; bring down their production to keep control of the pricing. We have empirical evidence to show that unfortunately, even when we produce more oil, it just does not have a big impact on our gasoline prices.

    MIKE OZANIAN: I have to disagree with my brother Rick here. The Obama administration was even found in contempt of court last year by a federal judge for not lifting its moratorium on oil and gas production. It sat on the approval of 100 permits for expiration. It is destroying the exploration business and on top of that, you look at the oil we could have gotten from Canada through the Keystone pipeline. It is attacking it at the Gulf and north, on both ends.

    STEVE FORBES: Another factor, the most boring subject in the world so I will say it quickly so your ratings don't tank, and that is too much money printing by the Federal Reserve. We say this in the 70s and early 80s. In terms of the permits now, it will take two to three years to get the benefit of them. If this guy had done this three years ago we would have had more oil and gas and prices would have been a bit lower, despite Ben Bernanke.

    DENNIS KNEALE: Anyone who doubts that there could be a good effect on reducing oil prices by having more drilling, look at natural gas. Nat gas prices are plunging because supply is up. Remember something, prices react ahead of the actual supply change. If we start drilling more and we know more oil is coming online, the prices will kind of moderate, hold down because we know it is coming even if it not here yet.

    INFORMER

    January was the best month for stocks in 15 years. Historically, as goes January goes the year. So what will be the best performing stocks of 2012?

    ELIZABETH MACDONALD: Federated Strategic Value Dividend (SVAAX)

    DENNIS KNEALE: MERCK (MRK)