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GARY B. SMITH: Well, I'm going to go the opposite way on this one as you might imagine. You know just a few thoughts just on GM alone, you know he touts that as a success. GM is a job creator. They created fifteen thousand jobs in China since the bailout. They've cut thirty-one thousand jobs here. He likes to say that GM is number one. GM is number one because there's a little thing called a tsunami that affected Toyota. Toyota will son be back to number one shortly. You know the whole idea of targeting industries to save is silly. You know we didn't go out and save the railroads, we didn't go out and save the steel industry, we didn't go out and save the video rental industry. This is what happens when you have a free market in capitalism. Industry dies and that's good, so that money can go into building the next Apple or Google or whatever. The President clearly doesn't understand economics. This is a political ploy as usual.
JONAS MAX FERRIS: You know I didn't actually, look if we're in a crisis and it's a real depression and there's no capital and a business that would do okay but fails, you can make a case for the government and a lot of foreign governments that are keeping those businesses alive through the rough times, but to extend those sorts of benefits in support when it's not and they can borrow money from the private markets and raise money. That's where you're supporting losers and essentially giving money to buggy whip companies. And I will say for the record, you can't take a train without the government, They did sort of save commuter rail all over Amtrak everything, so it's not like there isn't a purpose for it and I think it was a new crisis. I just don't feel like there's a point for it now. If the government wants to direct it anywhere they should talk about maybe stopping foreign governments from supporting their industries so much and making it a competitive playing field and giving the support to our companies.
EVAN SEGAL: Of course, I think what we did with General Motors makes all the sense in the world. We saved over a million jobs and if we look at Detroit before and after it made a huge difference in terms of the impact. The companies are more streamlined and better able to compete on a global basis. More importantly the ideas that are out there really can help work hand in hand between govern and business has probably the only member on the panel that's run a manufacturing business, I know what it takes to be successful, and I think the ideas of having tax credits that will help us are indeed tax credits, capitol investment tax credits and workforce training can help manufacturing. It doesn't pick winners, it helps all manufacturing which is good for the country. It helps unemployment, lowers the deficit and helps the middle class.
JIM LACAMP: I don't know where he's getting his information. What are you talking about they don't pick winners? They picked Solyndra, and granted that wasn't a winner, but they've made a lot of bad decisions including Amtrak. I can't believe what I'm hearing hear! Look the government needs to get out of business.
TOBIN SMITH: Well, it's a very bad idea and I'll tell you why in a little bit. Let's stay with GM for a second. Using the Obama model, we spent we taxpayers went out and borrowed sixty thousand dollars a job to quote on quote save jobs. Where we have a very well established bankruptcy system, and granted I will say that in October of 2008 there maybe was not the deter in possession financing available and I can understand doing a lifeline, but we have fourteen different plants in the country that we're working fabulously well, making auto's, making money, making profit. There was one set of plants that weren't. GM the one's in Michigan, and the ones that are union law. They could've gone through a bankruptcy, a structured bankruptcy and brought new jobs to other parts of the country as well as survive and the idea that we would spend sixty thousand dollars of borrowed money to quote on quote save industries is ludacris and it flies, we're never going to borrow our way to prosperity.
Disastrous crop report sparks food, fuel price spike fears
JIM LACAMP: It's bad and it's worse than people think. As you said it goes in a lot of things. Corn goes in our gasoline now. It goes in our meat of course when we feed the cattle and the hogs that we eat. It goes all throughout the economy and it's not just corn prices, soybean prices a lot of food prices are up. Beyond that it doesn't stop there. We have education costs that are up, rents that are up, medical costs that are up, insurance that's up so consumers are getting hit really hard by inflation despite what the government statistics say and I think it's going to cramp retail sales to a further degree, they're already flat lining and guess what? Retail sales are a pre cursor to jobs. If you don't have people coming in the front door, you're not going to hire somebody to take care of them. So, I think it is going to have an impact on our economy in the second half.
GARY B.SMITH: I'm laughing because look, with all due respect to Jim my gosh it's like the prices are up across the board everything's going up. I look at the statistics and I see inflation, year versus year is now at 1.7 percent.
TOBIN SMITH: Well, it seems like groundhog's day, we've had this conversation before. There's a bigger issue which is when you're in the economic cycle, on the up part of the cycle then the quote on quote inflation higher prices from food and corn would be absorbed and would be passed along by the growth of other things. Higher incomes, higher job levels lower unemployment, but we're not at the point. The issue that's so critical is that because we're at this stall speed in the economy now this is adding another two bricks on sort of the camel's back here, and I am afraid that if you look at the everyday person, the middle class person who hasn't raised more money, not earning more money when you add another three or four percent that seventy percent of the economy just goes someplace else, it goes to oil.
EVAN SEGAL: Yeah, I think Brenda that this brings up a much bigger point which is when we have a natural disaster like this it really harkens back to the people that want to take a chainsaw to government spending. When you have a natural disaster the government provides a social safety net and we look at programs like the SNAP program, the food stamp program. If we didn't have it in a time like this millions of Americans would go hungry. If we didn't have the fora service there wouldn't be people to fight fires and save businesses, and so there are people who want to go and use a chainsaw and cut the federal budget and these discussions are going on in Congress right now against the agriculture budget. Now is not the time to use a chainsaw and cut these absolutely critical programs that so many Americans rely on in this kind of warfare to attack Americans.
JONAS MAX FERRIS: If it turns out that we're in this super cycle of heat for whatever reason and we have these for like the next five years, yeah there's going to be serious problems because it's not just prices going up because there's more demand like we see. That's what's going on in gasoline, that's not a bad thing because primarily the economy is turning around, but if you see the price of all foods going up because we can't grow food that's a crisis that would cause a recession but not the other one. I will say to offset these increases we've seen the highest wage growth this year for six months here than we've seen in 07 and so that average income going up exceeds how much more you're spending on gas and food even with the drought situation. So, as long as wages are going up with these prices it's really not an issue for the average person if wages were going down or flat this would be much harder on your budget, but if you're making more money than you were six months ago who cares if the cornflakes went up point percent break.
FMR labor secy Reich: Mandate a 3-week paid vacation to boost economy
JONAS MAX FERRIS: This is a tough one because it sounds ridiculous on the surface and I will say it will lower the unemployment rate cause you're going to have to fill these jobs of these people who are on paid leave, so in theory it would do that it's not the reason to do it though. The reason to do it maybe is some countries like Germany which are in very good financial shape compared to us right now have more paid vacation than we do. Other countries like Japan have even less paid vacations than we do and their economies have been in thirty year depressions at this point so it might work, we should try it for a few years in a period of high unemployment to see what happens and have it expire and then analyze the numbers and see what goes on.
GARY B. SMITH: Jonas must be part European. We want to be so much like Europe people said let's adopt another great European strategy of inefficiency. Look, for many reasons this is silly but first and foremost where's the money going to come from? People are always saying oh let's have them pay for four weeks vacation, like the money is just going to rain down from the trees, industries are going to voluntarily try to be less efficient than they are now it's just silly. None of these mandated hokey things from central planning ever work.
EVAN SEGAL: The point is it's the health and wellness of your employees. Healthier employees would have improved productivity and will impact your bottom line. So Reich is onto the idea which is we should care about our employees, care about their health and wellness and ultimately that is good for business. The idea of a three week vacation may not be the right tactic, but ultimately healthier employees are good for our business and for us to treat employees like cogs in a wheel this whole I didn't build it, it takes employees to build a company that's how a company is successful, it's the President but it's all the employees that make a company successful.
TOBIN SMITH: Well, it would put me out eighteen people times two. It would probably put me out two hundred and seventy five to three hundred and fifty thousand dollars cash money that would not be in my business number one. Number two, I don't know where this kumbaya economics comes from, but typically in a free market if people are not treated very well they'll go to another job. Well, guess what right now we're not in that position so there's a lot of things that we should, or would be nice to do but this is about twenty five on the list.
JIM LACAMP: Well, why don't we give them fifty two weeks paid vacation. I mean really let's take these six hundred checks that we gave them in two thousand and nine and given them three thousand dollar checks. If that's the math, if that's the way it works...look what this is going to do is take a small business and instead of hiring ten people, he's going to hire eight or it's going to take a slightly bigger business and he's going to say you know what if I open that plane to China I don't have to give them three...
JIM LACAMP: (RNF)
GARY B. SMITH: (AMZN)
JONAS MAX FERRIS: (ICLN)
TOBIN SMITH: (PHM)