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DO TAXPAYERS "OWE" PUBLIC UNIONS ANYTHING?
STEVE FORBES: Everyone appreciates what policemen do, what firefighters do, what teachers should do; but, that's what they get paid for. The abuses are enormous, David, in terms of benefits, abuse of overtime, and pay is determined not by what the market will pay, but purely political muscle. So, it ends up that costs spin out of control.
RICK UNGAR: I don't think the Vice President was implying otherwise. Look, it's not always about dollars and cents. I think when he said "we owe them" he meant that we owe them that thanks that Steve was correctly talking about. Look, I owe each and every one of you for letting me sit here and have fun with you every Saturday morning. I don't think I owe any of you any money though. So you gotta stick to what he was talking about.
ELIZABETH MACDONALD: Here's the thing. Of course we don't begrudge the good teachers and the good firefighters and cops. By the way, the firemen and the cops were exempted in the Wisconsin battle, but the issue is the seat warmers and the clock watchers at the Board of Education and town supervisors, who get their own Cadillac's and their own parking spaces. I'm telling you, you could ride a bicycle down their office hallways and not hit anyone on any work day. That's the issue. Also, there is government bloat because of three bubbles we've had in this economy. Basically, the federal government is at the same size or even bigger before the recession hit.
VICTORIA BARRET: I think the unfortunate thing right now is that current firefighters, for example, are taking the heat for plans that have been enacted decades ago and pensions that have been collecting for decades. We saw a story out of San Jose where a firefighter was in line at a grocery store with a steak and someone else gave him a hard time saying, "Gee, nice that you can afford that steak with my money." We've gone too far! I think a fireman should be able to afford a steak for their family. But, it's the past pensions that need to be looked at, and that is happening right now in California-San Diego and San Jose are trying to address that. So we can't get confused, like oh hey we want these guys to do a good job, but the disconnect has been too great where you've got 90 percent of government workers getting nice full pensions, compared to 18 percent in the private sector.
RICH KARLGAARD: It is current realities. In California, the police departments are notorious for policemen loading their last three years of employment with all kinds of overtime to set the bar very high for their pension payments. They also do a lot of double dipping in a sneaky way: that is they retire then they take on a new job with a different title so that they can have two pensions. It's outrageous! There's a policeman in Fresno who made $250 thousand extra in overtime! How do you figure that?!
JOHN TAMNY: It's still happening and I think we're being entirely too soft on Vice President Bidden. This reminds us of something very basic-governments do not create jobs, instead they tax or borrow from the productive private sector to create jobs that pay more, that offer more benefits, offer more vacation. This thing about how we owe them, no, no! They should be thanking us, be very grateful to us taxpayers for giving off these tax revenues that allow them to live very nice lives at our expense, and, very often, for doing very little.
Boeing's CEO and head of Business roundtable is saying companies face more U.S. regulatory barriers than at any time in his long career. Is he right?
RICH KARLGAARD: It is grounding jobs, and it isn't just Boeing that was heckled by this administration for trying to open up a plant in South Carolina to make the 787 to compete in the global economy, it's every CEO across the board from small businesses to large. On the margin, and this is the really critical point to understand, on the margin they are not investing as much as possible, not hiring as much as possible, they're kind of in a soft employer strike is what we're seeing. Because of the uncertainty of all these regulations, I think it's taking two points off instead of having a four percent growth economy, we're having a two percent growth economy.
MIKE OZANIAN: A study by the Heritage Foundation points out that during President Obama's first three years, new regulations have imposed on average, $46B out of the economy each of those years. Five times as much as his predecessor cost with new regulations. People have to remember that it's not the number of regulations the administration imposes, it's how big an impact they have. Obama Care and Dod Frank are just two laws that together could impact over 30 percent of the economy.
RICK UNGAR: I am so not buying any of this. That Heritage study, by the way, also pointed out that it's very difficult to quantify what regulations do to save industry. Like the ones that got pushed through on getting rid of ecoli bacteria; that is going to save the meat industry a whole lot of money. Look, let's be realistic here. If you look at the cost of regulations over a generation of presidents, including this one, they all come out roughly the same. As a matter of fact, we see that through the end of this year, the Obama administration has five percent fewer regulations than the Bush administration. Did cost a little bit more, but if you adjust for inflation, they all work out roughly the same.
STEVE FORBES: It's not just the so-called cost of regulations; it's what you don't see-things that are prevented. For example, the coal industry, natural gas industry, wants to export but they can't get the licenses to do so. That costs tens of billions. We've mentioned Dod Frank, Obama Care, a tsunami of regulations still to come. So, it's not an uncertainty that is the killer that doesn't show up in the actual cost. Just one more example, banks are now going to have to report to the IRS deposits made by non-resident people around the world's US banks. That comes to $3.7T. Democrats in Florida and Texas are saying that if that goes through, hundreds of billions of deposits leave our shores, and is going to make our economy even weaker.
ELIZABETH MACDONALD: Here's the issue, under the President in the first three years, 194 big rules costing the economy $100M or more, that's way more than under George W. Bush. So what we're talking about is Congress and the White House routinely outsourcing the fine print for these rules and these laws to the unelected bureaucracy, the government rules factory, in all of the federal agencies that is passing rules upon rules, worsening the financial heart attack that this economy has been hit with.
MORGAN BRENNAN: Regulations are one piece of a larger pie that is creating a lot of uncertainty, is arguably preventing more jobs from being created. I actually look at this from a location standpoint. If you want to know where the biggest economic growth is happening in this country and where most jobs have been created, just look at the cities where it is happening. They're all cities that have lose regulation policies. Texas is obviously the glaring example. Houston, last year, had an 8.6 percent economic growth rate. That rivals China! And, they're expected to create over 250,000 jobs over the next two years.
LAW STUDENTS SUING SCHOOLS FOR NO JOBS; DRIVING UP COSTS FOR EVERYONE?
KAI FALKENBERG: The problem is not that law schools are misleading students about job opportunities; it's that they are not training them effectively to be real-world lawyers. The problem with that is that they're not getting jobs because the law firms don't want to spend money training them to learn things that they should have learned in law school. If law schools wanted to provide real value to students, they would scrap the third year of law school all together, they would incorporate clinical training into the first two years, so that they graduate with skills that they can actually use; just like medical students do.
STEVE FORBES: If you really go to law school and you expect to have a job as soon as you graduate because the school guarantees it, then I have some bridges to know where to sell these supposedly "sophisticated students." The bottom line is that this whole thing is going to be fundamentally changed. Not by the lawsuit, but by the web, where you can get apps and things like that, do things that normally would have taken people before, paralegals. You're going to see a whole law industry arise in places like India, where you pay them $3000 or $4000 a year instead of $300,000 or $400,000 a year. So, what happened in the media industry is going to happen in the legal profession and has already started.
RICK UNGAR: Everybody is right today. Kai has got this exactly right. I went to law school and there wasn't anything in the brochure that I looked at that guaranteed me a job. But the last year and a half at law school is an absolute waste of time! It's only there to get my money because I could have passed the bar after a year or a year and a half. Take that time, if you're going to make me pay for it, and do exactly as Kai says, "Give me some practical application." She's absolutely right, but Steve is also right-law work is moving offshore to India everyday.
VICTORIA BARRET: There is a huge supply and demand mismatch here that has been building for several years. There were articles back in 2007 pointing this out. Lawyers graduating who aren't getting law jobs. It's also true that historically, lots of lawyers who graduate from law school don't become lawyers. It's a good education for other things. I agree with all of you, just like Rick agrees with all of you, but I don't think these schools are going to change in response, I think they are just going to hire more lawyers to deal with these lawsuits, and that pushes up the cost of law school.
MIKE OZANIAN: I think it's a great thing if we get a lot less tort lawyers! I think that would be great for the economy and the irony is that one of the Obama administration's donor groups-lawyers-is waking up to the real economy. The Obama economy stinks!
HEALTH CARE LAW VERDICT STOCKS
MORGAN: Humana Inc (HUM)
52-WEEK HIGH: $96.46
52-WEEK LOW: $65.20
EMAC: ON SET Johnson & Johnson (JNJ)
52-WEEK HIGH: $68.05
52-WEEK LOW: $59.08