• With: Ben Stein, Gerri Willis, Charlie Gasparino, 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.

     

    AMOUNT OF PERSONAL INCOME FROM GOVERNMENT AID AT RECORD HIGH

    Ben Stein: I'm very worried about it indeed, not a good situation, we have a large number of people, dependent on government handouts and people are deprived of the psychological and emotional benefits of work and people who don't feel tied in connection to this because they're working and earning a paycheck and having that kind of self-respect. Another large group of people who are living off profits and feeling they're being battened upon. A society where people are working is a good kind of society and it's very worrisome, and to have people working. Of course, is lot of this is natural and sounds like the population is aging and getting benefits from social security, and other forms of non-wage income, but we want a lot more people working and more of the national income coming from work.

    Gerri Willis: It's a dependency cycle, once you're dependent on the handout you tend to want more and more and you vote that way and you're voting in your best interest. 18.3 percent of Americans depend on handouts that are 2.3 trillion dollars and $7400 per household and guess what here, and Ben you alluded to this, the big wave of baby boomers isn't coming through and when that happens it will pick up more.

    Charlie Gasparino: We should point out a lot of this is a function of the lousy timing and I tend not to fault people, average people for the failure of Obamanomics to put people to work, and we should point out though that in the old days, there was a stigma attached to the welfare and my mom was on welfare when she was a kid and grew up in a housing project. It was an embarrassment. You do wonder though if it's an embarrassment now to stay on unemployment for 99 weeks.

    Adam Lashinsky: I think we should be careful about confusing cause and effect here as Charlie said, we should not be surprised where the trend is going given what's going on in the country and two things, we have high unemployment, we know that, and you can blame Obamanomics but you might want to look at the complete collapse of the housing market for a big variety of reasons. We aren't recovered from that yet. There is a huge portion of the economy that was getting from that, and from the housing economy, which collapsed.

    CALLS GROWING FOR FED TO HIKE INTEREST RATES TO LOWER PRICES

    Gerri Willis: It's definitely a problem. If you don't buy gas or go to the grocery store maybe you don't see it, but if you're anybody else, you'll see oil up year over year and grocery store prices up 3 to 4 percent, orange juice is up, bread is up, potatoes are up, and it's time to take away the punch bowl. You remember that conversation from the dot-com boom, interest rates have been at 0 percent for two years, and it's too long and just like Charlie said the only people making money off this are Wall Street traders.

    Ben Stein: It's fascinating. My father was Chairman of the Council of Economics, he would say, that's anecdotal evidence, it doesn't mean a thing. We have very complicated fiscal measurements to prove when you're wrong. But when he retired and went to do the grocery shopping, he said holly cow, I can't believe how expensive it is and that how I feel about it too, when I go to the grocery store, I leave in a state of shock, but I'm not sure raising rates will do it. Its demand from China that's pulling up prices of commodities and it's the total phony baloney ethanol stuff putting up the price of gasoline and food. I'm not sure raising rates will do it although I think we'll soon need to raise rates and when that happens, look out gold.

    Charlie Gasparino: They're going up and that's the scary thing about the economy and obviously there's a degree of inflation here and if it doesn't come out in some things, like housing prices aren't going up, unfortunately. However, it's occurring in everything else and we're going to get higher rates and that's where I agree with Ben on this, our economy has been dependent over the last years, once again it's a failure of Obamanomics in stimulating the economy. All we've done is keep the interest rates at zero.

    Adam Lashinsky: That would be the hope. People certainly do feel fantastic if they're fortunate enough to have big investments in the stock market over the last year. You're right that's one way that it's helped. It certainly helped U.S. manufacturing to have a weak dollar. It's not a small thing. I mean, Charlie got at this a moment ago. Housing prices aren't up, for example, and so when economists like Ben's father talk about the macro numbers, these are some of the things they're getting at. There are prices on the one hand and inflation on the other and factors with egg prices going up or gas prices going up that may not last. Can you imagine the impact on the housing market? If we had higher interest rates over the last couple of years.

    SOME HIGH-RISK AREAS REQUIRE NEW HOMES TO HAVE 'SAFE ROOM'

    Ben Stein: I think it's very, very necessary and frankly a good idea in whatever part of the country you're in to have a good sturdy constructed part of the house in case of a bad, dangerous, severe weather. Obviously, there are some people who can't afford it. If we're talking with about stretching the payments over 30 years maybe they can afford it. Gosh, this is a terrible, terrible tragedy and let's try to make sure it never happens again.

    Gerri Willis: That's the way it always is. The median price of a house in this part of the country is $159,000, if you think folks can afford additional $10,000 for a safe house, it's out of reach. People are making decision how they're going to be safe. Go to somebody's house with a basement in that kind of a situation. And the reality is for a lot of people and I've been in a tornado before. You often don't get a lot of warning. So you may not have time to get to the safe house, it could happen in the middle of the night without you're even knowing. For a lot of people this might not be a solution.

    Charlie Gasparino: It's absurd; you're basically mandating higher prices on homes. I will say this my dad was a construction worker and he was bemoaning for years about how lousy new homes were constructed out of sheet rock, out of paper, out of wood. He was an iron worker and believed in plaster and metal. And that's a problem with a lot of these homes are boxes, and they don't build them as well as they used to.

    Adam Lashinsky: This is an important wonky topic in that building codes are not new and in industrialized society like ours, we make important decisions, if you live in an earthquake zone the building code has to be to a certain level. All buildings have fired codes and wiring codes and the economic decision is, will requiring this save enough lives and is it a good economic investment? And probably where it will fall down is that it doesn't make sense to put a $8500 safe room in every single new home, and that's how the analysis needs to go. This isn't about, you know, a nanny state or requiring two people to do things that they can't afford. Remember, everyone has to have safe wiring and we've made that decision already.

    STOCK PICKS: FUNDS TO BUY IN MAY

    Adam Lashinsky: ING LARGE CAP GROWTH (IEOPX)

    Ben Stein: VANGUARD TOTAL STOCK (VTI)