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.
UNION PRESSURE SPARKING FEARS OF MAJOR JOB LOSSES IN U.S.
MATT MCCALL: It's definitely not good news for our jobs because we're coming out of one of the worst recessions that we've seen in decades right now. We already have unemployment at 8.8 percent, which is historically very high. Now, suddenly, a company like Boeing wants to hire more workers - wants to employ Americans - and unions are stepping in and telling them no, they cannot go to South Carolina, they must hire union workers, they must do it in the state of Washington. When we're coming out of a recession, what do we need? We need jobs more than anything. And the government is stepping in - slash unions - and it's going to put a stop to this economy that is finally starting to turn around. So, coming out of a recession, we need jobs. Now they're saying, "You know what? Don't hire people." And what's going to happen Brenda, is that suddenly, we're going to go overseas. Boeing's going to say, "You know what? We don't want to hire union workers. We're going to take our business to Canada or Mexico where we can hire people."
JEHMU GREENE: I think finally, the companies that have been trampling all over the middle class are being held accountable. Yes, coming out of the recession we need jobs and that's why I think, first of all, you have to look at what this union said to their members. They gave them sound fiscal policy - sound fiscal advice - don't go out, spend your necessary money right now because the costs of all of these goods are going up. They gave them that advice and then they said, if you are going to spend that money, don't take it to states that basically want to wipe you off the face of the country.
TOBIN SMITH: First off, it does mean that there are choices. Remember that this 787 is built in 14 different countries, Jehmu. And they're choosing to do the final assembly - this second assembly - in South Carolina for one specific reason, because the economics make the best sense for both the workers and the company.
GARY B. SMITH: Well, I'm still going back to Jehmu's comment about how Boeing is trampling on the middle class. What about the middle class, if you will - people in South Carolina who wouldn't get a job here? Boeing's just trying to be the low-cost producer, if you will, and that works always directly against what unions want. Unions want higher wages; they're a monopoly. Here's what happens. Let me give you an example: because of union restrictions, the Postal Service now has to pay people - I kid you not - to remain idle. They're paying people just to sit there to do nothing, to the tune of $50 million a year. This is rampant across unions; that's why unions, Jehmu, kill industries like they killed steel, like they killed big auto, like they're killing airlines. And right now, what we're going to have is, if they have to go back to the NLRB and put that plant back in Washington, they'll slowly kill the aircraft manufacturing industry, and then you'll see what happens to the middle class and the lack of jobs.
JONAS MAX FERRIS: First of all, this is the government that's preventing them from doing this because they may have violated a law. But first of all, Boeing's jobs aren't all going abroad because their competitor, Airbus, has their own labor cost issues, being in Europe or wherever. It's not a Chinese company to compete against, so I don't think we have to worry about the jobs vanishing so soon. So as far as do they want to go to a lower-cost area in the south like some other manufacturers have? Sure. But ultimately, they're going to need people to build these planes. You're not going to hurt jobs. What you are going to hurt is the price of aircraft, which means the cost of flying is going to go up. So the consumer will get hurt, as they often do when unions raid wages, but I won't say the jobs are going to get destroyed.
PRESIDENT OBAMA'S TAX TALK SPARKING MIDDLE CLASS TAX HIKE CONCERNS
TOBIN SMITH: That little adjustment says, all of a sudden, forget about those millionaires and billionaires - let's take the average middle class household income and not only let's expand their Social Security costs, but we're going to...actually, if you take the amount of taxes people would be withheld for, that would be one of the largest tax increases you'd ever see because that's a dollar-for-dollar thing. It comes right off the top.
JONAS MAX FERRIS: Okay, it's class warfare, sure, but he's actually playing a populist game because the majority of people would rather see taxes go up particularly for the wealthy or the people at the higher end than to see cuts to Social Security. I mean, it's also class warfare to say, if you want to cut Social Security so you don't have to raise taxes...people get more in Social Security than they put in, so one solution, if you're not going to cut it [interrupted] We're going to get more out of it if they don't cut it. So you have to cut it or you have to raise taxes. It's one or the other.
JEHMU GREENE: First of all, the definition of "class warfare" is what has been happening to the gap between the haves and the have-nots over the past several decades and the explosion that happened in the last decade; that's true class warfare. I think we have to commend and applaud President Obama for finally saying enough is enough. Wasn't it just a few days ago that Alan Greenspan himself said, Look, the tax cuts for the wealthiest Americans - for the millionaires and billionaires - that is destroying the economy? That's a clear sign.
GARY B. SMITH: Exactly, Brenda. You know, you talk about playing the class warfare game. Really, there's going to be just two classes when it's all said and done: the people that are paying the taxes and then the other greater-than-50 percent of the people that are paying no taxes. This little adjustment that Obama's talking about effectively would raise the tax rates - the top marginal tax rates - from 57 to almost 65 percent, Jehmu. You know when we last had those rates? During the glorious '70s. I don't know if you remember back to the glorious '70s, when basically the economy and the stock market... [interrupted] We last had economy-killing tax rates back then in the '70s and the economy was dead for nearly 20 years. If Jehmu wants that kind of society, great. Then no one will be around to pay taxes.
MATT MCCALL: Well just going on Gary B.'s point very quickly, you talk about hitting the 68 percent - is what it will actually go up to, the marginal tax rate - they're the same people that are hiring the middle class. So if they have less money, that's less jobs out there. And from what I remember from Obama's campaign, we're not going to raise taxes on the middle class? This is directly raising taxes on the middle class.
NEW SIGNS ECONOMIC FEARS WILL FORCE CONSUMERS TO CUT BACK
MATT MCCALL: It does mean something, because if the consumer is concerned about the economy going forward, what are they going to do? They're going to tighten their belts, Brenda. That means less spending going into, you know, summer season, next thing you know it's back-to-school, next thing you know it's holiday season. Perception becomes reality, because if they perceive the economy not being strong, in their mind it is reality, so they're not going to spend money. Even though they may be making the same amount of money as last year and things may be okay in that family of five, they still will not spend. So this is very concerning to me that, if Americans think things are not good they're going to sit on their money. And again, this economy needs every dollar that it could use right now coming out of the consumer wallet.
JEHMU GREENE: Yeah, I do think it translates into less money being spent, and the connection between perception and reality is important - but first let's start with where we are. The worst of this recession is behind us. Last month, we added 200,000 jobs, the highest that we've seen since the recession started, the fastest pace in the last two months of job growth. And clearly a message that is against President Obama's focus on investing in the future, on investing in innovation, the message that we see coming from the Tea Party and the folks on the right, and lots of the jibber jabber that we have even from the fellows on this show are completely against those investments and what you have happening-- the reality is strong that we are digging our way out of this.
TOBIN SMITH: I'm in the survey business, and what you do is you look at what people do and not what they say to get the proof. What actually people are doing is we are spending more, we're over 2 percent up, intangible spending is up. What we're seeing is people react to gasoline and react to three wars going on. That's really what you're seeing.
JONAS: It could affect people's confidence. Right now, confidence in the economy is actually improving. This survey is more about confidence in the country, and people are turning very sour, Matt, because frankly, all the talk about cutting their benefits and raising taxes is making them sourpusses, but they actually are still confident about the economy. If it spills over, sure, you can have a self-fulfilling prophecy, you could have perception becoming reality, and they could spend less and that would cause a recession. That hasn't happened yet, so I don't want to get people panicked about it.
GARY B. SMITH: Intuitively it sounds correct, Brenda, but historically, I went back and looked at any kind of correlation between consumer sentiment and the GDP and there really is none. The only correlation you can make is between consumer sentiment and how the stock market's doing. When the stock market is booming, people are happy. When it's down, people are sad - otherwise, no correlation. I'm with Toby; people actually do differently than what they say.
MATT MCCALL: "POT" helps stop wildfires and spiking food prices from spreading
JONAS MAX FERRIS: Protect yourself from inflation! "TIP" spikes 5 percent in 1 year
TOBIN SMITH: Libya conflict has "AVAV" launching 25 percent profits in 1 year
GARY B. SMITH: Kindle replacing library cards! "AMZN" reads 25 percent gains in 1 year