• With: Gary B. Smith, Tobin Smith, Jonas Max Ferris, Jehmu Greene, Ed Butowski

    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.

    PRESIDENT SAYS WE'RE DRILLING MORE AS $4 GAS HITS MORE STATES

    Gary B. Smith: Most of the increase on drilling came from land that's not under the federal per view. It's under private domain or under the states. The current administration cannot claim because of their actions they've increased drilling. Another important fact is that when George Bush took office we were reliant about 44 percent on foreign oil. Under his watch that dropped to about 32 percent. Under President Obama's watch, even with this increased drilling, it's gone back up to 40 percent. So, if we're doing all this great drilling then the fact is we're not drilling enough. Forget about drilling in national parks. If just drilled where we could drill now we would double the supply in a very short period of time.

    Tobin Smith: The facts are clear. We're drilling more on private land than we ever have from the year 2007 to this year. We're up about 55 percent. If you look at the federal lands, which hold about trillion barrels of oil, would give us oil independence for the next 200 years. With offshore drilling we had to make an 18-month ban before we figured out we could have solved the problem offshore in a lot of different ways than just banning. So, clearly the facts are, with a trillion dollars of barrels out there we're going after a small part because we're holding our supplies out of the market place.

    Jonas Max Ferris: It's only government-owned land where there's really any oil left because we drilled all the stuff out over the last one hundred years. If the government waits 50 years won't oil be about $1,000 a barrel? They can use all the proceeds to pay off the national debt. It doesn't seem like that's such a terrible idea. We've seen the net price of natural gas fall to ten-year lows because we've increased the drilling because of technological advantages and prices. The point is, if there's fuel to get we're going to get it if it's on private land. Exxon doesn't have some right to go drilling wherever they want. I can't build a condo in Yellowstone Park just because I want to have a condo there. That's government land. They bought it. They won it in wars. It's not ours to deploy as we see fit. It' whoever is in the government.

    Jehmu Greene: The reality is in the last three years we have opened up millions of acres for drilling across 23 states. This administration has also led to record numbers of oil rigs where it's 75 percent. I think anyone who looks at the facts will understand that this president does not control oil prices. At the end of the day it is driven by the uncertainty in Iran. It is driven by increased demand by China, Brazil and India. Anyone who tells you differently is lying.

    Ed Butowski: This is all economics .When oil prices started moving up the oil companies in the private lands started to put more resources there because they saw there was profit to be made and there was a lot of drilling they could do there. There's nothing going on in the federal land. In fact that drilling is down about 2 percent. Speaking to the all of the above strategy, that's absolutely ridiculous. The economics are not there. None of those strategies make sense. We have to let the free market be free, let drilling occur and we will bring prices down. Anyone who doesn't think that's the case really has to go back to economics 101. Increase the supply. It will meet the demand and we will start to see the equilibrium come down. Until you do that we will see higher oil prices.

    MORE COMPANIES HIRING IN RIGHT-TO-WORK STATES

    Gary B. Smith: Governor Daniels in Indiana has already noted that since they've gone to right-to-work interest in moving companies and jobs there has gone through the roof. So, right there the proof is clear. Unions are, by definition, a monopoly. Monopolies have higher taxes on the company than non-monopolies do. We know when we tax something we get less. That's exactly what happens when you have stupid things like minimum wage and unionization. The union employees get more, but there are less jobs to go around. The government always cracks down on monopolies, except when it's the case of unions. Then they want more of it. We need right-to-work in all fifty states in order to increase the employment rate.

    Tobin Smith: Right-to-work simply means I don't have to be forced to pay union dues. This is all about union dues and control. It is not about businesses and it's really not about the employees.

    Jonas Max Ferris: In general, with lower labor costs you're going to consume more as the employer, which means you're going to hire more people. However, this is not the only factor here. A lot of these are jobs at existing factories that were put there because of these tax breaks and incentives that those states gave them beyond the lower labor costs to locate there in the first place. If all the states became right-to-work and all labor costs came down and unions disappeared-which they probably will anyway just looking at the long-term trend-that doesn't mean they're going to hire twice as many people all of a sudden. Right now the lower states are winning, but they're not going to win if all the states are right-to-work. They are only going to get the same amount of labor. While in general it can be good from a hiring point of view it's not going to magically solve all our labor problems in this country. Wages have been going down for about a decade adjusting for inflation more or less. We have high unemployment today-higher than we had a few years ago. So if lower labor costs were a magic bullet we should have lower unemployment rates today than we had four or five years ago and we do not.

    Jehmu Greene: Right-to-work states are bad for wages, so they're bad for workers. They are also bad for business and they kill people. They are less likely to have health care provided to their employees and accidents on the job are 53 percent higher in right-to-work states. If you look at the future of job growth in this country, high tech companies prefer states that have unions because the workers have better skills and there is less turnover. That's the future of where jobs are going to grow.

    Ed Butowksi: If I'm a CEO of a company I'm looking to see where I can get the best employment and the best people to work on my product for the least amount of money. They're shopping around and being smart. That's what CEO's job is. Their job is to find a way to make that company more efficient and more profitable. A union is a tax. There are so many layers of expenses involved with a union. I actually worked for a labor union when I was around 20-years old. I got paid $22 an hour for sweeping floors. I wasn't worth it, I'll tell you that.

    WHY MORTGAGE RATES MAY BE GOOD FOR HOUSING, ECONOMY

    Gary B. Smith: I agree with Jonas that if the mortgage rates go up, it's certainly not going to hurt the housing market. But I don't really think it's affecting the housing market right now. I think the hangover in the housing market is very simple. It's inventory and inventory's not moving because people don't feel confident about the future. I don't think until we get to 8 percent or 9 percent that mortgage rates really have an impact one way or the other.

    Tobin Smith: The issue is the affordability issue. Right now it is still significantly more affordable to buy a home than it is to rent a home because of the prices. The problem is the 80 percent of people who aren't Fannie Mae and Freddie Mac aren't able to get mortgages. There are people with 850 FICO scores that aren't getting mortgages. So, if we're worried about the housing don't worry about the interest rates, worry about the banks overreacting to this point and essentially only allowing 10 percent or 20 percent of the people to get mortgages. That's a fact and that's going to keep us down.

    Jonas Max Ferris: Obviously a higher mortgage payment would lead to less sales, you would think. Except if it's only a little higher. It does two things. One, it makes people think we've already hit bottom. They're not going to go any lower. I may as well go out and buy a house now. It would be good to spur buyers who have been basically standing by and renting, which is why rents are good but prices have still gone down. The other reason is if rates are going up because the economy's strong that means lower unemployment and people can buy a house. At the end of the day you'd rather have a 6 percent mortgage and 5 percent unemployment than a 3 percent mortgage rate and 20 percent unemployment. I'd rather see a stronger economy and slightly higher rates.

    Jehmu Greene: Good news on the economy is only met by being negativity if you want to sabotage the economy. At the end of the day it is a strong indicator that it's going to stop serial financers from continuing to do that. The reality is that this is a good sign. We're moving in the right direction.

    Ed Butowski: Interest rates are starting to move up on the 30-year mortgages for one reason-the panic we saw over in Europe had everyone coming into the United States and pushed rates significantly lower. We're just seeing a little bit of an adjustment back. Don't think for a moment that we're seeing a strong and good economy here. What we're seeing right now is some people exhaling for a moment in time.

    PREDICTIONS

    Gary B. Smith: Mastercard Incorporated (MA) up 30 percent in one year

    Tobin Smith: Molina Healthcare Inc (MOH) up 40 percent in one year

    Jonas Max Ferris: SPDR S&P Bank ETF (KBE) up 25 percent in one year

    Ed Butowski: Anadarko Petroleum Corporation (APC) up 30 percent in four months