• With: Charles Payne, Charlie Gasparino, Dagen McDowell, Ben Stein, Adam Lashinsky

    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.

     

    OIL AND GAS PRICES SOARING AS PRODUCTION TAKES A HIT

    CHARLES PAYNE: You talk about deflecting blame. First of all, let's start with the drilling - the Gulf moratorium. Not only is drilling down in the Gulf, but it's going to be down for at least until 2016, maybe even longer. But there's so many reasons that the President should be looking in the mirror. Let's start with debt deficits, let's talk about the Fed printing money, let's talk about all these other things. It's so disingenuous for him to break out this speculator thing again, and it might be bad this early in the campaign. I know that he's in full campaign mode, us vs. them, evil businesses, evil speculators -- I've got your back. But it's the President and his policies that are driving up the price of oil and gas.

    CHARLIE GASPARINO: There is no doubt that there is some criminality on the edges of this thing. No doubt in my mind. I'm sure there's price gouging, you know. Who knows? There's stuff going on based on the fact that it's spiked. That said, does it merit a congressional commission? Is this a national issue? There are 50 state attorney generals. There are how many US attorneys in each state? We have two just in this area right here - three in this area, one in New Jersey for the Southern district and in the Eastern district. There's lots of law enforcement out there that would love to nail one of these guys, and I'm sure they're going to nail them. The question is, is Obama demagoging this issue? And I think you have to say yes. That doesn't mean there's not going to be some crime around the edges.

    DAGEN MCDOWELL: He has to be very careful that he can't demonize oil company executives again because it's going to fly back in his face, because production coming off shore in our country is coming down, because prices are so high, and because he needs these oil companies to discover oil. I talked to the president of Shell oil and these numbers just really put a cap- [interrupted] This president is actually going out there and trying to find oil in this country. They spent $3.5 billion in five years in the Arctic areas of Alaska trying to drill, and they still don't have permission.

    BEN STEIN: Well, okay, let me give you three points very quickly: 13 percent drop in the Gulf - that's a tiny drop in the bucket of world oil production; it would not affect world oil prices at all. Second, there's not one tea cup less oil in world inventories right now than there was a year ago, so there's no shortage of oil. Third, there is obviously speculation driving this price. There's no real shortage so it has to be speculation about a future shortage, but I don't think that's true. That is not criminal - there's speculation that's driving up the price and the speculation is, to some extent, based on fear. That's not criminal. But there is no real shortage at this point; it is the speculators driving up oil.

    ADAM LASHINSKY: Well, I agree. I mean, the President is demagoging this issue because that's what Presidents do when people get upset when gas prices go up. Charlie's right. You know, law enforcement can handle this just fine. Now, for Charles to say that the president is driving up the price of oil and gas - that's simply preposterous, Charles. There's a few issues going on in the world right now that are driving up-- [interrupted] You're overstating cause and effect here. The crisis in the Middle East, demand from China and India, the demand from a recovering world economy...these are some the reasons why the price of oil is up.

    GOVERNMENT PLANNING TO SELL SHARES OF GM DESPITE LOSS

    DAGEN MCDOWELL: Well, it's certainly going to be less than what we need to break even, right? It's $53 a share and it's trading about $31 a share right now as the break-even. The problem is, when you are Uncle Sam, you cannot be a patient investor. This is not a financial decision, clearly, it's a political one. Because the White House wants to be out from under this albatross before 2012 arrives. They do not want it - and this is just my take on it - they do not want this to be a campaign issue. They want to be done with it and it will be less of a headache, even if the American taxpayer eats a loss on it than having that thing hanging around their neck when they're on the campaign trail.

    BEN STEIN: Well, I think the government has to sell if they want it off the books. They have to sell, this is the price, and they can't make up a new price. Look, it wasn't done as a money-making investment in the first place; it's not a money-making speculation. It was done to rescue the domestic car and truck industry and as such, it was an enormous success. It's sliding a little bit from its offering price, but as a matter of fact, the sales of GM are doing extremely well, and they're rehiring people and reopening plants. I think it's a huge success so far. Time will tell, but so far, it's a huge success and I have no problem with it whatsoever.

    CHARLES PAYNE: I agree with Ben in the sense that this was an economic decision, but I believe all of the administration's policies aren't driven by economics. They try to address them around economics periodically, like solar and wind and all and this kind of stuff. None of it is driven by economics; it's all driven by ideology. And in this case they gave GM to the unions. It was a pay back. For the taxpayers it would have been better off if the government would have cut a check, just a direct check to all of these people that they're hiring back - all 2000 of them. If you take a 20 billion dollar loss and you create 2000 jobs - listen, we would have cut them all a check for $1 million and called it even.

    ADAM LASHINSKY: We know for a fact that this was a success because GM is a solvent going concern right now. I think the government ought to keep it on the books for a very long time to make sure that it gets a profit, but it doesn't really matter. It's relatively small.

    CHARLIE GASPARINO: Let's realize politically, we bailed out the banks during the same We should also point out that the government had common stock in Citigroup which it got paid. This is a funny thing. I have problem with bailing out and I'm going to sound like an elitist New Yorker...here's the thing, you might say that we need banks, so we need to bail them out. If we didn't have Citigroup, if we didn't have the big banks, the financial system would have been flushed down, it would have been a huge problem. You know, DEFCON 5 levels or whatever. The problem is, when you start saving companies that sell stuff - remember, Citigroup can make money if you keep interest rates at zero, because they just borrow at zero and buy at treasury bond, and then can come out of insolvency. GM has to produce something that people have to buy. The long-term value of keeping your money in that company is very, very risky.

    CALLS GROWING TO PRIVATIZE AIR TRAFFIC CONTROLLERS

    CHARLES PAYNE: Absolutely. By the way, the 7th guy caught sleeping. How crazy that one? On the newspaper the week before you see, golly, they're cracking down! People are getting caught napping on the job, wake me up when it's over. But listen, private company, no union cover, they would have been fired, and that's a great incentive.

    DAGEN MCDOWELL: You know what would happen? You would see exactly what happened after 9/11. You would have one accident if it was privatized, and boom, it gets nationalized, which is exactly what we did with security at the airports - that it was private and they weren't protecting us. It was an issue of national security and we nationalized it.

    BEN STEIN: I hate to break this to you, but people fall asleep on the job in the private sector, too. Not of course, at Fox, but in general. In general, people are known to fall asleep in every situation. I agree, they should be fired. But the idea that, if you privatize them they're suddenly going to be having amphetamines pumped into their system all night and day, that isn't true.

    ADAM LASHINSKY: There are certain things you don't want to privatize and this is one of them. This is bad enough. The last thing we want is a company trying to make its number next quarter and thinking with that kind of mentality. We're not going to privatize the army or the FDA or the police and we're not going to privatize air traffic controllers.

    "ALTERNATIVE INVESTMENTS"

    BEN STEIN: POWERSHARES DB (DBC)

    CHARLES PAYNE: iSHARES MSCI MEXICO (EWW)

    ADAM LASHINSKY: NUVEEN EQUITY (JPZ)