Neil was joined by Jack Welch, former GE Chairman; Ben Stein, author of Yes, You Can Time The Market!; Jim Rogers, author of Adventure Capitalist; Gregg Hymowitz, founder of Entrust Capital; and Gary Kaltbaum, president of Kaltbaum & Associates.

More for Your Money

Neil Cavuto: bin Laden (search) and his lieutenant calling for more violence against America. And the market did not like hearing from Usama. Stocks took a big hit as soon as that tape hit the airwaves last Wednesday. Jack, should investors and America still be worried about Al Qaeda?

Jack Welch: Terrorism is with us and will be a way of life for us. Usama is just a symbol of what's out there. I don't think investors should be more worried with the new video that has come out. You might get a daily blip in the market, but I don't think it changes any fundamentals. We have to win the war on terrorism.

Gregg Hymowitz: And if we're going to win the war on terrorism we have to fight the terrorists. I think a mistake we've been making is that we've been fighting states and not the organizations of these terrorists. And I think if you do that then you don't have to spend $4 billion a month rebuilding the states you destroy.

Ben Stein: I think Hamas is going to try and compete with Al Qaeda and Usama to try and even be more terrorist. I agree, we have to win this war, but we need a much bigger defense establishment. Whatever it takes, if it takes bigger tax cuts or bigger deficits.

Neil Cavuto: You'd repeal the tax cuts to up the ante on the war on terror?

Ben Stein: If the choice were to have inadequate military establishment or repeal the tax cut, I'd repeal the tax cut.

Jim Rogers: Even if Usama bin Laden is dead or alive, it doesn't matter, they are recruiting a lot more people to come and attack us in Iraq. And they're coming from all over.

Neil Cavuto: The fact of the matter is there are hiccups when these new videotapes come out. What would happen if all of a sudden these tapes stopped and we had proof that Usama bin Laden were dead?

Jack Welch: The biggest concern is complacency. We had forgotten somewhat until this new tape came out again. But this is something that fundamentally changed the long-term all over the world.

Ben Stein: We have a billion militant Muslims who are mad at us. It's up to us to protect ourselves. Nations create their own security. If we defend ourselves I think the markets would be very secure.

Gregg Hymowitz: But it's not just psychological. I'm sure terrorists have cost General Electric hundreds of millions of dollars in changing the way they do business. Terrorists activity really has an effect on economic stability.

Jack Welch: But they'll be a lot more after Usama. If we find him and he's dead, they'll be another one right after him. Maybe ten more Usamas.

Neil Cavuto: Assuming al Qaeda is still a front burner issue, Gregg what do you do?

Gregg Hymowitz: I think if there is going to be another attack we can all agree that treasuries are the place to be. Possibly gold. I don't know if you can invest long-term based on terror, but defense is one area that would continue to get government money if there is another attack. One company we like and own is Boeing (BA). It may take two years for the commercial aircraft business to come back but as the defense spending goes up it's always a good play.

Ben Stein: I love the Fidelity Short-term Bond fund (FSHBX) as part of a very diverse portfolio. I own it.

Neil Cavuto: Even in the face of interest rates going up?

Ben Stein: It's a short-term fund. It yields a little more than a money market account.

Neil Cavuto: Assuming the Fed won't do anything.

Ben Stein: I think they're going to eventually start raising rates. But this is a short-term bond fund.

Jim Rogers: In the environment you outlined, I would certainly be defensive. I would sell or sell short the market. Or I would buy commodities like orange juice and coffee. I own them both.

Neil Cavuto: You're saying these commodities are going to run up? How do you buy that stuff?

Jim Rogers: Call up your broker. It's very easy to do. And yes they should go higher.

Neil Cavuto: Jack Welch, you've heard that strategy that we have to keep terror as part of the investment strategy. Do you agree with that?

Jack Welch: Absolutely. Terror is in our life and it's going to be in our kid's life. It's not going to be solved overnight.

Bring Back the Draft?

Neil Cavuto: Would bringing back the draft be the best way to fix Iraq and protect America and our Economy? Ben, if we need more troops to fight the war on terror, should we consider it before giving United Nations troops control of Iraq?

Ben Stein: I absolutely think we should at least consider it. We do not have a big enough military establishment. My first choice would be to raise the pay of the military to a decent livable level and attract more troops that way. But if that doesn't work, we have to consider bringing back the draft. The United Nations is never going to save us. They are not our friends.

Gary Kaltbaum: We do need to build up the military better but I don't know if bringing back the draft is the answer. I don't think it will happen. If it did, it would be a disaster for our country, market and economy. As far as the United Nations, they're wishy-washy and I don't know if I trust them. And in terms of France and Germany, I don't know if I'd ask them out to dinner anytime soon. But we definitely need to do something here.

Gregg Hymowitz: I think military studies will show that enlisted members are much better soldiers than draftees. We have to increase the military budget, but it's also important where we do it. We need more ears on the ground. We need better intelligence. We need more information, the CIA. That's where we need to get more people involved.

Jim Rogers: Even the English have said our intelligence is hopeless. But Ben is right. We do need to raise the pay of the military and we need to attract more people. We certainly don't need the U.N. because that would just confuse it and make more chaos.

Jack Welch: We don't need a draft. There's other ways to attract more people to the military. A draft would be divisive in this country. We'd have all the problems we had years ago with Vietnam if we bring back the draft.

Neil Cavuto: If we had one, what would be the outcome for the markets?

Jack Welch: I don't know the answer to that. I don't think it would be positive. I think it would cause uncertainty and markets hate uncertainty.

Gregg Hymowitz: Jack, do you think we need to go it alone in Iraq? Or should we bring in the United Nations in here in a major way?

Jack Welch: Never bring the United Nations in. They do not have our interest at heart.

Jim Rogers: We need to get out now.

Ben Stein: We can't get out now. There'd be so much more chaos than there is now if we got out. And that would be even worse for the market.

Gary Kaltbaum: Don't forget. The military has done a great job. We've won. What's happening now is fractious events that are happening. We freed millions of people. They now have the ability to speak their mind without having their tongues cut off or women being raped.

Head to Head

Neil Cavuto: War, a sluggish jobs market, and a drop in consumer confidence -- all adding up to a drop in President Bush's approval rating. So what's a leader to do when the going gets tough? To find out -- instead of going head to head this week, we go inside Jack Welch's head. Jack, do you have any advice for the president?

Jack Welch: First off, being a politician is a lot tougher than being a CEO. A CEO can take real brutal actions to get a company righted, while it's more difficult for the president with Congress and the other checks and balances in play. But a leader, whether a CEO or a politician, has to communicate a clear plan and be out front. He has to communicate and articulate ad nausea.

Neil Cavuto: Is the president doing that?

Jack Welch: I think he took a step forward Sunday night where he laid out the $87 billion. He put the reality out on the table but he's got to do a lot more of that. He's got to say what it's going to look like when it's all done. And he can't worry about appeasing every constituent.

Neil Cavuto: When you took over General Electric you told your troops, 'Look, we're in big trouble. It's not going to be easy turning this ship around.' I don't see that to the same degree out of this president.

Jack Welch: It is harder for a politician. But he did come up with that $87 billion number and people thought it was going to cause all kinds of trouble, but it didn't.

Neil Cavuto: If you were him, would you have done that thing on the aircraft carrier saying operations have ceased?

Jack Welch: That's hindsight. In the euphoria of a victory people do all kinds of things. It was a great moment for America. Our kids have won. I think it was a great idea at the time.

Neil Cavuto: Would it make a difference if he said, 'I didn't appreciate the enormity of policing and keeping the peace in Iraq.' Or is it understood and you know, give the guy a break. He's trying to seize on an important military initiatives ever.

Jack Welch: You're talking about style now. I would've done that. That's what you do in a company. You say exactly what you think the reality is.

Neil Cavuto: Will he get through this?

Jack Welch: I believe the economy is in for a real recovery. Everything I hear is contrary to what I read. I hear people that have come back from Iraq say positive things are going on there. The President's goal is to remained focused and to know what his mission is. He has to be relentless in telling the American people what to do and what we're going to have to do.

FOX on the Spot

Jack Welch: Economy grows more than expected in the second half of the year. Job growth begins in fourth quarter.

Gregg Hymowitz: More job losses! And sell retail stocks! They get hit as refinancing dries up and debt grows.

Ben Stein: Stocks tread water 'til next year.

Jim Rogers: Gold falls from seven-year highs. Don't sell or buy now. Buying opportunities come in a few months.

Gary Kaltbaum: Money scandal forces out Dick Grasso as chairman of NYSE.

Neil Cavuto: Don't dismiss Howard Dean. Republicans are dismissing the Democratic presidential candidate, but I've been researching the guy, and he's fairly pragmatic and very pugnacious. And if the President Bush's folks think he's a pushover, remember the Carter folks "dreamed" about Ronald Reagan in 1980; and remember what happened there.