• With: Gerri Willis, Wayne Rogers, Joe Battipaglia, Jonathan Hoenig, Jonathan Hoenig



    Government shutdown plans revealing how to cut government costs forever

    GERRIS WILLIS: Look back at the last time the government went out of business back in 1995, just 5,000 Social Security workers stayed and did the business of the Social Security Administration; 61,000 stayed home. So that tells you there's a lot that could be cut out of that administration.

    WAYNE ROGERS: A lot of this stuff can be contracted privately. We know that they have privatized prison systems and in Scottsdale, Arizona where they privatized the fire departments, they had the lowest insurance rates in the country. There are all kinds of ways to privatize services that the government does, which are massively inefficient because there's no one deciding which jobs are necessary. Who makes that decision? The federal government deciding for themselves.

    JULIAN EPSTEIN: It's a blunt instrument when there are more effective instruments for cutting government spending. Let's get some historical perspective here. It was a Democratic President, President Clinton, who got the Federal Civilian Workforce under two million people, the lowest it had been since the Kennedy Administration. It was a Republican President, George Bush, who increased the Federal Civilian Workforce by 10 percent. Now, it's a Democratic President, President Obama who's freezing federal pay, freezing federal spending. The American Enterprise Institute this week came out and said if you furlough federal workers it's going to have a negative effect on the economy because of the job recession. So, let's try to get some perspective here. Yes, it's important to cut federal spending, yes it's important to cut the size of the federal bureaucracy. In the military there's something known as deficit hawks, which means the people that love to send other people to war but never want to go to war themselves. It's the same with the deficit - there are a lot of posers out there who want to find a way to cut federal spending, but you're not serious unless you step up to the plate and cut Medicare and Medicaid.

    JONATHAN HOENIG: The idea isn't to get the government to be more efficient by trimming around the edges, but to get the government to be smaller, and Social Security is a great place to start. This is a bureaucracy, Cheryl, that's just devoted to redistributing people's income. There's plenty that government is involved in -- health care, food regulation, transportation -- that should simply be cut across the board, to reduce the size and scope of government. Don't make these meaningless cuts at the edges.

    Wisconsin law requires teachers to instruct students about unions

    JOE BATTIPAGLIA: Wisconsin kids have trouble reading and writing but they sure can recite Wisconsin labor law. This is outrageous behavior and it pushes against the unions once again. And it also points out that when you have a Democrat-controlled assembly and a Democratic governor mischief can occur and it can happen with Republicans too. So, when they do this and put these laws in place you get unusual behavior and it's usually not to the benefit of the student.

    JULIAN EPSTEIN: Well, I think there's a big difference between education and indoctrination. I think so long as the state is observing that line and they are teaching about something that is sociologically, economically, and legally very important, which is the history of the labor unions and how they came about, and the important role they played in the economy ever since World War II, that's perfectly valid history. When they cross the line and say this is how it ought to be and we're going to take a position on political issues, then they've gone where they shouldn't go. So, I think it's a question of not stepping over the line.

    GERRI WILLIS: There are approved texts and the texts read to me as positive, as reinforcing the union, saying that the union is a good thing. Look, I'm all for education, all for accurate historical education. But think about this: we don't even teach kids how to balance a checkbook, there's not a first personal finance class in most classrooms across the country. Why are we going and teaching collective bargaining, it seems insane to me. There are so many basics that we teach so poorly. We need to get those basics taught. Personal finance would be a great place to go instead of the idiosyncrasies of labor law.

    JONATHAN HOENIG: I'm sure that they're required to do a whole section about industrialists' rights, right? I mean they do a whole thing about employer rights, how employers have the right to fire whoever they want even if they are in a union. Of course not, they don't have anything like that! My experience with academia from the best colleges all the way down to the high schools and the grammar schools is that there's a perverse anti-capitalist bias and of course because those schools aren't subject to a market economy -- they get the tax dollars no matter what happens -- and of course they use the unions as a means to protect their jobs. So, I think that unions and certainly those in academia tend to be very anti-capitalist and very pro-union and the loss sums it up.

    WAYNE ROGERS: I think Julian makes a good point when he notes the difference between education and indoctrination. The fact of the matter is that this law is mandatory, and that is what's wrong. If it were a choice I have nothing wrong with teaching the history of the union and the union movements, part of the U.S. history. But to make it mandatory, that is what's outrageous. That's like the government telling us, the people, as opposed to us, the people, telling the government what they should be teaching. That is what's wrong.

    President pushing for more "green" spending as solar company cuts jobs

    JONATHAN HOENIG: We've seen this before. We saw it just a few years ago with President Bush and his whole, big ethanol scam. All the people the industry hired got fired and all the plants they built were shut. You saw this in Japan, they spent $80B there in the last 6 years on green energy programs, all those tax dollars burnt up in flames. The President takes it as a given that we need to spend tax dollars on green energy but if it's going to work, it's got to work for economic purposes and not political purposes. This is money literally flushed down the drain.

    JULIAN EPSTEIN: It's going to take time. Look, it doesn't surprise me that one or two companies are laying off some jobs. The Council of Economic Advisers has put out a study that nobody has refuted that has shown the stimulus spending on green jobs would create as many as 800,000 jobs, nobody has refuted that. We're doing things in fuel cell technology, insulation, and the only people who would be opposed to really moving in a green direction would be the people who are best friends to folks like Qaddafi, who want us to stick with old, fossil fuels that are extremely wasteful.

    WAYNE ROGERS: The New York Times has reported that there are many more failures than there are successes here, and just losing these jobs and spending the money and having them go out of business may be one thing, but the fact of the matter is that two or three of these plants have folded up and moved to China of all places, because they can do it cheaper in China. Once again the free market is dominating this, the free market is telling you hey, if it's cheaper to do it over here that's where it's going to take place. And if you're spending U.S. tax dollars to do something that's inefficient, don't do it.

    GERRI WILLIS: Wayne's got it exactly right. Evergreen solar was a company that went into business with the help of taxpayer dollars in Massachusetts and not long later it folded up and took its money and jobs with it and the state was not able to recoup all of its investment. It was a tragedy for the people in that town. They lost all kinds of jobs and do we have solar panels there? No we don't.

    JOE BATTIPAGLIA: Absolutely, the government's gotten far away from fundamentally funding research in cooperation with industry. When they have commercial breakthroughs it could become a benefit for everybody. Instead, they want to make a political statement out of this to create jobs in industries that are being subsidized, which then means that unless the subsidies continue item for item you're not going to be able to have true breakthroughs. You're going to have miscommunication in the marketing pricing and you're going to have industries that get mispriced. So, for example, you go pursuing Ethanol and all of a sudden corn goes through the roof and it has implications for food. That's just one example where these subsidies for non-economic activities end up ruining the economy.

    What Do I Need to Know?

    GERRI WILLIS: Say goodbye to free checking thanks to financial regulation

    WAYNE ROGERS: Gerri is right! Financial regulations will also cripple small businesses

    JOE BATTIPAGLIA: Mideast unrest keeps spreading and Gold (GLD) climbs higher

    JONATHAN HOENIG: Invest in India's emerging market with (ICN)