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

    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.

     

    New Signs Major Price Hikes Are Coming to America

    Dagen McDowell: Especially food installation, we have great concern in China and Brazil and you need to worry about the instability it creates in emerging nations, in particular, where a larger percentage of the people's income is taken up by food prices, but we should start to worry about it here in the United States. At least on the impact on our economy because you've got companies from Kellogg's, Sara Lee, Kraft, Pepsi, raising prices across the board and as more of our income gets sucked up by food crises that creates problems of our own.

    Ben Stein: Well, food prices and commodity prices are all on the rise. Food prices as Dagen pointed out dramatically. This leads to political instability and people blame their government when they shouldn't and inflation affects everyone and that's something we have to remember, in a recession, 10 percent of the people might get unemployed and a few percent might lose their houses, and that's way too many. But inflation hits every single person in every country and hits them very hard and it's going to be a real problem and it's being driven by super demand from China and major crop problems in China and major crop problems here and in Brazil and could lead to political instability and could be a giant problem for Mr. Obama.

    Charlie Gasparino: This is even worse than inflation, this is called stagflation, I'm old enough, I'm sure Ben is old enough, to remember the 1970s scare. This is what's scary about the situation and I wrote a column about this a couple of weeks ago, what causes stagflation, high unemployment and high prices and in the '70s in the U.S., a certain degree of political instability, a time in our country when people were questioning our future and whether we would remain a super power. Because there was an oil shock, what's causing it now in Egypt and maybe across the globe, and some people say even here. We have high unemployment and we're starting to see commodity prices rising and here is what Ben pointed to before. Immense amounts of demand from China and obviously, a slowdown in the economy.

    Adam Lashinsky: I think that's absolutely right and I don't want to minimize the thesis because I agree with it. This is going to be a global problem and when commodity prices spike, whatever commodity that is, it becomes a political problem very quickly, no matter what country you're talking about, remember our gas crisis from a few years ago, a political problem in the United States not like in Egypt, of course, and what I want to point out is that the spiking food prices in Egypt has been one of the causes of their unrest and maybe the catalyst, but hardly the only one. You know, if they didn't have a brutal regime, they might not have had the same outcome they had with these food prices spiking.

    President Obama Planning Short-Term Jobless Aid for States

    Charlie Gasparino: Absolutely, one of the things a lot of people feared with this crisis and state and local government, it's a crisis, it doesn't mean it's a catastrophe as some people suggest, it's not. They fear a bailout. This is it. We're seeing the beginnings of it. It's a bailout of the states, preventing the states and forcing them not to make the real tough decisions, which is to cut or to renegotiate contracts with unions and not to declare bankruptcy, because keep hearing this notion to declare bankruptcy, it's a dopey idea and you would be screwing your bondholders, you need them if you want to build a bridge in the future and it's basically preventing the states from dealing with what they have to deal with now, and putting it off for another five years.

    Dagen McDowell: It would waive the penalties and interest that these states have to pay on what they borrow for a two year period in order to shore up their finances and that's kicking the can down the road. Typical politics, typical Washington.

    Ben Stein: Well, that's one way of looking at it, but another way of looking at it is there are policemen, firefighters, prison guards, sheriff's, district attorneys who deserve to get paid and who work very, very hard and deserve to get their pay, deserve to get pensions which have within contracted for and there are people who are unemployed, and need there unemployment in order to stay alive and feed their families and I'm not quite sure this is as bad a gesture as you assume to think it is. There is some aspect of humanitarianism here and the question do we want to impose this burden on the future generation to bailout their parents and grandparents. As a grandparent soon to be, I'd say yes.

    Adam Lashinsky: The question is, are the states cutting? The answer is yes. When you look at what's going on in California, what's going on in Florida, what's going on in Illinois, the states are doing the cuts. I'm with Ben on this, are we bridging them to better times, we know the economy is recovering, and we know they're cutting.

    GM Bonuses for Hourly Workers Could Total Over $150 Million

    Dagen McDowell: Something's up here the with the rank and file workers, higher than required bonuses that are going to union workers and the big three or the used to be big three, are negotiating their contracts with the unions this year. So, don't you know, that these payments are meant to placate the unions in anticipation of that.

    Charlie Gasparino: It is outrageous, but, is it any different than what happened on Wall Street? My only caveat here and what gives me pause is the fact that Wall Street received an unprecedented bailout package in 2009 and even today when we have interest rates at zero that's essentially a bailout, Wall Street can print money that way. No other business has gotten that much money and paid themselves and denied being bailed out.

    Ben Stein: Well, wouldn't it be nice if we could all get a bonus paid out of thin air and essentially what's happening at GM, but their workers took some cuts and went through tough times and now the company are roaring back and maybe, maybe they should get some kind of bonus, I have to say I'm biased because my grandfather was an auto worker. It's an awful moral dilemma. We want them to feel rewarded and feel they didn't give up whatever they gave up, but we taxpayers are getting the short end of the stick, but then we taxpayers always get the short end of the stick.

    Adam Lashinsky: You're not thinking like a capitalist about this. As an investor it's not time for your bonus yet. Right now you want to keep your labor force happy and making good cars and then you'll get a return on investment down the road. Just trying to help you think this through as an investor.

    Stock Picks: Most Recent Buys

    Ben Stein: PowerShares DB (DBC)

    Adam Lashinsky: SPDR S&P Oil & Gas (XOP)