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.
WORRIES GROW PLAN TO PUSH BACK FISCAL D-DAY WILL DELAY RECOVERY
GARY B. SMITH: Everyone should realize what unions are. Unions are a little monopoly within a company. Exercising monopoly money, they can raise the rates and wages for their employees to an unsustainable level. The employees have to pass those costs onto the consumer. Where have unions made an industry more competitive? I can think of examples where they haven't - airlines, steel and auto. If anyone can argue that they've made it more competitive - I'd stand up for unions, but I can't find those examples.
STEPHANIE FITCH: I don't believe that we'll see unions at fast food restaurants, but I actually wish we would. The fact is you can make these jobs more attractive to our twelve million unemployed. We've actually seen too little inflation over the last few years and that's why the fed has had to turn to these extreme measures to boost the economy, and fast food is too cheap. If anyone comes out of a McDonald's restaurant complaining about a high price then they've eaten too much.
JONAS MAX FERRIS: It will raise the prices for us and it would have to take off. We don't want to make the lowest of jobs in the economy more attractive. That's how you reverse the natural flow of wanting to work harder and climb. Do you get a pension for working at McDonald's? It doesn't make sense. The reason why they won't unionize is because it's transient work. The whole union concept is a career where you have a skill and you're going to be there for thirty years and accrue benefits. No one is going to pay dues at a job where they're going to be at for six months - it just doesn't make any sense. It would raise prices if it was to happen, but it's not going to happen.
LARRY GLAZER: It's the struggling families that rely on McDonald's, and they're addicted to the dollar menu. You've got a record number of families in this country that are on food stamps unfortunately, and the workers themselves would be victims. What we've seen in Europe we have much more unionization. We've seen McDonald's take their seven thousand restaurants and move towards automating them. The workers are going to suffer in this battle between big labor and big business. The workers and the consumers and that's not right. Not every job needs to be unionized in America.
TOBIN SMITH: The bigger issue here is that it is a New York issue. If you look at the overall economy in the overall states we are having states move to a right to work state where there is less unionization. This is a New York centric problem. They are doing themselves a disservice and if you look at the whole structure in Europe where McDonald's is very large, the hamburger is about a dollar more. That's really added labor costs.
UNIONS PUSHING FOR STRIKES AT MORE COMPANIES AFTER ELECTION
LARRY GLAZER: Given the choice between the loss of millions of jobs in a deep and severe recession or delaying a deal in hopes of getting meaningful spending cuts in Washington - the core of this problem is the kind of spending that would cut the $4 billion of additional debt that we're getting every day. That's how we fix the problem for the long term. That's how we get this country back on its feet.
GARY B.SMITH: I think you see it with the stock market. Everything is pretty much frozen. You cannot pick up a paper or look on the internet and see, "fiscal crisis." Everyone now is focused on it. I don't care if you're inside the beltway or outside the beltway, it does a couple things. If we don't get past this deadline people are going to view government more as inept as it is right now. Businesses freeze up because they're afraid of doing anything that is unknown and the individual freezes up. Who is going to be out there actively looking for work? We need to get something done as bad as it might be.
STEPHANE FITCH: If they kick this thing back a year, it really confirms the market's worst suspicions. We've got a congress that has absolutely no functionality whatsoever. Kicking it back a month or two and letting a new congress come in - I think the market could stomach that. I don't think the market would want to see us kick it back a year or two.
TOBIN SMITH: A trillion here, a trillion there - it starts to add up. We are the world's greatest can kickers. We're going to kick this can down the road, and it's politically the most workable. Is there a question about dysfunction in Washington? I think that's already priced into the markets. What's not priced into the markets is the stupidity that they're going to bring when this little down payment turns in a whole deal and then it's going to be held up.
JONAS MAX FERRIS: There is absolutely no good at this point in pushing along the current system and waiting to fix it later. No one wants higher taxes, but we're not in a deep recession right now where we are absolutely going to die if things start to change. In fact, the underlying real problem is the growing deficit on the path to Greece. It gets worse the more we kick the can away. That will become the overriding problem. A debt that we can't get out of and then our interest rates will go off the handle. That might not happen in the first two months next year, but it will eventually happen if we keep kicking down the can. We want to prove to the world that we have a solution. If it takes a few months to get there and we have higher taxes for a little while - then big deal. That's got to be the plan, not the same nonsense that we've been doing.
REPORT: NEW HEALTH CARE LAW FEE WILL DRIVE UP MEDICAL COSTS
LARRY GLAZER: Administrative costs in health care are already skyrocketing. This is just going to get past through to the consumer just like everything else. We already see skyrocketing health care costs. Fourteen percent is administrative, and it's just too much.
JONAS MAX FERRIS: The only given is that the country as a whole is going to spend more on health care because more people are going to have insurance one way or the other. The actual premiums I don't think will necessary change. Although there are plenty of things that will raise premiums - for example not allowing an insurance company to reject pre-existing conditions, there are also things that will lower your premium like forcing everyone to have health insurance because there are more people in the system and less people walking away from bills. Some of the premiums are paid for by a tax that is kicking in next year on capital gain for wealthy people. That's not a health care premium that's tax money going to subsidize premiums. So your premium won't go up, but overall we're spending more money as a nation.
STEPHANE FITCH: Looking at the cost of running these exchanges is incidental when you compare it to the cost of having fifty million Americans running around without health insurance. That is a very expensive proposition. That costs not just money, but lives. However, I'm going to acknowledge that there is a cost. I don't see why a state like Arizona should get off for free. If they're too blockheaded to run their own exchange then we should charge them a fee, and that is something that will be passed along. I think in net though you'll discover that this is a fee you won't notice.
GARY B. SMITH: When the government is involved, costs go up. Look at any construction problem in the federal government domain in the past two hundred years. The government gets involved when things get mucked up. They don't know how to run health care exchanges. If the price is kept down then supply is limited. You can either have low costs for health care or you can have high prices.
TOBIN SMITH: The 3.5 percent fee is nothing compared to not being able to medically underwrite. In this law they said that every insurance company can only underwrite by age, family and tobacco use. That's literally forcing a company to sell life insurance policies after someone has died. We can see premiums up 40 percent because that's what happened in New York when this was allowed.
TOBIN SMITH: (ALL)
STEPHANE FITCH: (MCD)
GARY B. SMITH: (AMZN)
LARRY GLAZER: (IDV)
JONAS MAX FERRIS: (APD)