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.
This Weekend, October 27: The Week That Was and the Week Ahead
Bulls & Bears gives you the information you need to become a smarter investor.
This week Brenda is joined by:
• Gary B. Smith, Exemplar Capital managing partner
• Pat Dorsey, Morningstar.com director of stock research
• Tobin Smith, ChangeWave Research editor
• Scott Bleier, HybridInvestors.com president
• John “Bradshaw” Layfield, WWE superstar and Northeast Securities senior vice president
Recap of Last Weekend, October 20: Don’t Panic! Profit From Stock Selloff!
This past week’s Bulls & Bears:
• Gary B. Smith, Exemplar Capital managing partner
• Pat Dorsey, Morningstar.com director of stock research
• Scott Bleier, HybridInvestors.com president
• Tobin Smith, ChangeWave Research editor
• Bob Olstein, The Olstein Funds president
• Marc Lamont Hill, Temple University professor
Stocks take a dive 20 years to the day of "Black Monday"… The day the Dow had it's worst crash ever. But as then, a frightening fall may be just what Wall Street needs -will stocks soar?
TOBIN: Bull markets are higher highs and higher lows. If you look at the bottom here, technology stocks are still in the green, so this progression is still going on. You want to be buying these strong technology stocks. But if we do get this pull back, it’s natural; it’s what bull markets do.
SCOTT: The financial stocks that have lead this market for five years are acting horribly. Technology stocks have taken over the market leadership. We haven’t made a higher high; we’ve technically made a double top. There is earnings deceleration, which means earnings are going down, and that is not a good thing for the bull market.
PAT: The big run the past several years have been risky financials, lots of sub-prime mortgaging, and some very small banks, which are still kind of expensive. But the big banks, the blue chips, the Wachovia’s and Wells Fargo’s, they’ve been stiff for three or four years, and are very cheap right now. My shopping list is out right now. The only wildcard is consumer spending; we have good employment numbers, good wage growth on one hand, and a negative housing market on the other hand. It’s a wildcard, it’s out there, it’s nothing to panic about but it is something to watch.
BOB: We’ve been buying (unsuccessfully) in the last couple of weeks. But we’re finding values in the financials. In the consumer discretionary we’re concerned about consumer spending. It’s in the prices of the stocks. If you look at the market, interest rates are significantly lower than they’ve been in the past six or seven years. Stocks are cheap and we’re looking for bargains.
GARY B.: We’re going lower across the board. The Dow has been the one that has been selling off; in fact it will probably go a little lower. It has a head start on the NASDAQ. If you are a trader you sell short and take advantage of the decline. But cash is the place to be right now.
Dems' Health Care Bill Fails: Victory For Free Markets?
TOBIN: It’s fantastic! We can’t solve the health care problem in this country by giving it away!
MARC: It was certainly a victory for the free market. The problem is whenever the free market wins, everyday people lose in regards to health care in particular. In this instance you are now going to see millions of American’s being denied health care. Health Care is a human right!
GARY B.: There is no free market in medical care. You can’t even cross state lines to get insurance. If the government were to unshackle this even further, then you’d have the free market allowed to work.
BOB: The Democrats are going to try to get it through in the next administration. The only way they are going to get it through is they are going to try and cut back spending on the Iraqi War. I’m no expert on this, but I prefer the free market.
An Exclusive FOX 50 Lightning Round! 5 Stocks from our brand new index. Names creating plenty of thunder! (If you want to watch what each had to say about his stocks, click here.)
Gary B’s Prediction:
Ellen's "Doggie" Rant = PETM up 20% by end of '07.
SuperBug Testing: Mandatory! CPHD doubles by end of '08
Pfizer's loss is MannKind's Gain: MNKD doubles in 2 years
Get the Lead Out! Hasbro (HAS) up 30% by Dec.
Infrastructure Boost Means A Boost For MBI: Stock Up 33%
On Saturday, October 20, 2007, Neil Cavuto was joined by Ben Stein, “The Real Stars…” author; Charles Payne, wstreet.com; Tracy Byrnes, FOX Business Network; Adam Lashinsky, Fortune Magazine; and Kirsten Powers, Democratic Strategist.
Bottom Line – Who is the Real Con$ervative?
Neil Cavuto: Will the real conservative please stand up? GOP presidential frontrunners fighting over who the real conservative candidate is. But, does Wall Street already know?
GOP Candidate Soundbites:
Fred Thompson: "I am the consistent conservative."
Rudy Giuliani: "We have more support among social conservatives than any other Republican."
Mitt Romney : "You have to have a candidate who appeals to the base of the Republican Party."
Tracy, a true conservative loves low taxes and low spending. Those are two things Wall Street seems to love. So who’s Wall Street voting for in this fight?
Tracy Byrnes: Well, it’s interesting. I would think Thompson. He’s for cutting corporate taxes. He supports free trade. But, what’s interesting is you interviewed some of the smartest minds on Wall Street and not one of them said Thompson.
Neil Cavuto: Oh, you caught my interviews on the FOX Business Network?
Tracy Byrnes: Boone Pickens, Meg Whitman, they all teetered between Giuliani and Romney. And then you have Huntsman saying Romney is his guy. And Wilbur Ross saying Giuliani’s his guy. No one said Thompson.
Ben Stein: Ben, this is interesting, they all said we could more than live with the top three candidates on the right, even though I think Mitt Romney is the only one who would sign this no tax pledge or whatever it’s called. Nevertheless, they all said, “Look, if we’re on the right, any one of these guys is fine by us.” Is that the prevailing view?
Ben Stein: I don’t even know what the right means any more. But, the right used to mean, and it’s supposed to mean, balancing the budget. None of the Republican candidates give a darn about balancing the budget. So I’m not sure any of them are conservative. They all seem to think they’re going go magically solve problems by cutting taxes… What? Iran invades Saudia Arabia. Better cut taxes! There’s something askew here. I’m a fan of Giuliani.
Charles Payne: It’s interesting. Giuliani said it at the top. He says he’s a social conservative. We have two things: A fiscal and social conservative. If we’re talking about social conservatives, Thompson would get the nod. Fiscally, and I think this is what Wall Street is looking for because a lot of Republicans on Wall Street have already abandoned the Republican Party and started supporting Hillary because President Bush just kept spending and spending and spending and nobody from the Party stood up to him…
Neil Cavuto: Well, you could have it the other way around: Congress kept spending and he didn’t stop it.
Charles Payne: Well, he didn’t do anything to stop it. I think after 9/11 everyone understood why we had to spend. But as the years went on, we got sorta confused. Fiscally, I think Giuliani and Romney can fight it out. But, socially, they both have bent to appease constituents and that gets them in trouble with the social conservatives.
Neil Cavuto: Kirsten, as a Democratic strategist of some note, the choices are Giuliani, Thompson, Romney… where do you go?
Kirsten Powers: Among the Republicans, they’re all saying what people want to hear.
Neil Cavuto: Well, thank goodness the Democrats aren’t doing that!
Kirsten Powers: They’re all going to say things. It’s just a matter of what they’re going to do. President Bush did not veto a single spending bill from the Republicans. If you look at the money Wall Street is giving candidates, it’s pretty evenly split. The top two candidates are Hillary and Giuliani. But, Romney’s up there. Thompson’s pretty low, but he’s pretty new to the race.
Neil Cavuto: Adam Lashinsky, how’s this going to play out?
Adam Lashinsky: Well, when I look at these candidates, I don’t really see a conservative among them. I have no idea where Romney stands; he flip-flops so often. Giuliani isn’t a conservative and you know he’s not because he has to say it so often. Thompson was an actor longer than he was a politician.
Neil Cavuto: What’s wrong with saying something? I keep telling people I’m a credible anchor… I keep saying it. What’s wrong with doing it?
Adam Lashinsky: Neil, you ARE a credible anchor! It doesn’t matter if you say it, you get out and do it.
Neil Cavuto: I’m being facetious. But all the candidates are going to try to say I’m your guy…
Adam Lashinsky: Yeah, but if you look at their record, they haven’t behaved like they’re conservative. By the way, Meg Whitman and Mitt Romney worked together at Bain, so it’s no surprise she’s going to support him.
Neil Cavuto: That’s right. That’s a very good point.
Adam Lashinsky: I think McCain is the truest Reagan conservative.
Tracy Byrnes: To Ben’s point, the definition of a conservative is so different these days. Are you going to vote for someone who’s been remarried? Are you going to vote for someone who wore a dress? Down in the South, they’re not, which is why Giuliani has to come out often and say, “I am a conservative.”
Charles Payne: This is the last go-round for the real, right wing, religious conservatives. They aren’t going to be under attack from the Democrats if they lose, instead, they’ll be under attack by the moderates. A lot of people are saying the religious right hijacked the Republican Party.
Neil Cavuto: Ben, let me ask you. Is it your feeling that whoever gets the nomination on the Republican side or the Democrat side is going to run back to the middle?
Ben Stein: Well, they’re going to run back to the middle, but again, I don’t think anyone’s going to run back to what conservatism used to be. Conservatism got turned on its head by Ronald Reagan and George Bush. I’m not even sure what it means in terms of fiscal policy. I know what it means in terms of social policy. Nixon was the last Republican president who had a balanced budget!
Head to Head – Should You Work Longer to Save Social Security?
Neil Cavuto: The first of nearly 80 million baby boomers choosing to retire early this week… at the tender age of 62. Is it time to force Americans to work longer to save our nation’s retirement fund? Let’s go “Head to Head.”
Ben Stein: I think it’s a great idea! It’s good for them psychologically. It’s good for them physically. It’s good for them spiritually. It’s enormously good for the Social Security trust fund. There’s really no downside to it. If people want to retire early, that’s fine. But, I don’t see why the Social Security trust fund should have to support people who are perfectly vigorous and healthy, retiring at the young age of 62. Not good for anyone.
Neil Cavuto: As I get closer to that age, I think it’s a grand idea.
Charles Payne: Yeah, as I get older… 40’s the new 20, 50’s the new 20, 60s the new 20.
Charles Payne: You know what? People work and they have the right to retire. What I’m more worried about is pushing the retirement age up to 70 to meet the needs because we’re going to run out of money no matter what anyone says.
Neil Cavuto: Absolutely right.
Charles Payne: Unless we hike taxes, we’re going to run it out. We gotta figure something out.
Neil Cavuto: Eventually, we’re going to run out of Social Security money. I think someone said in 30 years it’s going to be a 1-to-1 relationship… where there’s one person is paying for one person’s retirement.
Kirsten Powers: Yeah, if they have to raise the age to 70, they have to raise it to 70 because then maybe we’ll have some pressure and political will to deal with the problem.
Neil Cavuto: It all depends on when you raise it. Let’s say you’re 62, and all of a sudden they switch it to 70…
Kirsten Powers: Well, this is a problem we keep kicking it down the field and we never deal with. This isn’t a surprise. I don’t think the Democrats have done a good job in dealing with this problem. I don’t think the Republican have either.
Neil Cavuto: Well, good for you. You’re right.
Kirsten Powers: I mean, we’ve been talking about this problem for as long as I can remember. And especially for people in my generation…
Neil Cavuto: Oh c’mon. You’re not going to need it for another 45 years.
Tracy Byrnes: Then, we need to change the work structure. As it is, people get pushed out when they turn 50… and they don’t have a job! We need a new structure of jobs for these people.
Neil Cavuto: Why are you looking at me?
Tracy Byrnes: Because I’m an aspiring anchor!
Tracy Byrnes: And also, just because you’re living longer doesn’t mean mentally you can run a company. I mean except for Jack Welch, there aren’t many people that age who are that astute.
Neil Cavuto: Here I would use the Rupert Murdoch example… but that’s just me.
Adam Lashinsky: We’re also not talking about people who are running companies. We’re talking about people who are in the lower-half of the economy. The fact of the matter is Americans are living longer than they were when Social Security was first instituted. We have to make fixes to the program. This is one fix. It’ll put more money into the system. And as Ben pointed out, people are more vigorous than they were 40 years ago at retirement age.
Charles Payne: People are vigorous, but they don’t want to go to work. They want to go skiing. They want to go hiking. They don’t want to get decrepit.
Ben Stein: Maybe that’s you. I want to work, Charles. I like to work. Work is my pleasure.
Charles Payne: I like working, too. I work 80 – 100 hours every week. I worked one time for 10 years without a vacation. I love it!
Adam Lashinsky: We’re talking about the social safety net. So if you have the wherewithal to go skiing and you can afford it, that’s great. But, we’re talking about a big, difficult, government program and how to make it work.
Neil Cavuto: Ok, but let’s step back. First of all, two things: Charles, you need to get a life.
Neil Cavuto: Ben, they’re going to have to raise taxes right? I mean, Barack Obama was criticized for wanting to raise the Social Security tax income threshold to more than $100,000. Are we going to have to do something like that?
Ben Stein: We’re going to have to do something like that and we’re going to have to raise the age of retirement. We’re going to have to do a lot of fixes. The free lunch days are over, I’m afraid. It’s going to be hard cheese for some of us.
Neil Cavuto: Let’s say you get your wish and it’s a Democratic President with a Democratic Congress, what are they going to do about this issue?
Kirsten Powers: I don’t know what they’re going to do. But, something has to be done. And I hear some people don’t want to work and they want to go skiing… too bad! We don’t have the money to pay for it. And if we don’t have the money, people can’t be retiring.
Neil Cavuto: You know, there’s a lot the rich pay into that they don’t benefit from, food stamps for example. Will this be added to the list?
Ben Stein: I’d think so.
Kirsten Powers: I don’t know.
Adam Lashinsky: Probably.
Charles Payne: But, let’s not forget… we’re acting like the people we’re talking about didn’t put any money into the system…
Neil Cavuto: My point is… I feel for them. They put money into the system…
Charles Payne: I’d like to see them invested in the stock market beginning immediately.
Kirsten Powers: We’re not saying they aren’t going to get the money back. We’re saying they’re going to get it later.
Ben Stein: Charles, with all due respect… we, my wife and I, put roughly $100,000 every year into California with property taxes. We don’t have any kids in school. It’s standard for people to pay an awful lot of money in taxes and not get anything back… that’s standard.
Neil Cavuto: That’s a lot of money. Ben has a lot of money.
Tracy Byrnes: If you told my mother she had to work into her 70s and couldn’t see her grandchildren, she’d come and getcha.
More For Your Money – Be$t Funds for Your 401k
Neil Cavuto: Just before the break, we heard why banking on a Social Security check may not be the best financial decision. So, to help you get “More for Your Money” when you retire, our guys came up with a few funds for your retirement account.
Charles Payne: PowerShares WilderHill Clean Energy (PBW)
Ben Stein: iShares MSCI Emerging Markets Index (EEM)
*Ben owns shares of this ETF.
Adam Lashinsky: Vanguard Emerging Markets Stock Index (VEIEX)
*Adam owns shares of this ETF.
FOX on the Spot
Charles Payne: Employment Scare is Over; Job Market Improves, Buy MNST
Adam Lashinsky: Wal-Mart & eBay’s Price Cuts Good for Shoppers, Bad for Economy
Ben Stein: The Real Stars Are in Walter Reed, Not on Wall Street
Tracy Byrnes: Joe Torre Leaves Yanks; Goldman Sachs Leaves 'em Next!
Neil Cavuto: FOX Business Network is Here to Stay!
In Focus: Noble Prize Winners Gore and U.N.: Worst Thing for Economy and Global Markets?
Steve Forbes, editor-in-chief: If Gore had his way, he would hurt the economy. This is a form of
Flipside: “Superbug” Will Save Lives and Boost Our Economy!
Mike Ozanian , National Editor: This disease is terrible and has killed a lot of people. Poor hospital hygiene allows far too many staph and bacterial infections to kill thousands of people a year, and it comes at huge costs. This issue will hopefully force hospitals to take preventative measures and improve their hygiene, so this could end up being a good thing. However, I think it has to be incentive based and there has to be monetary incentives in place. Right now, hospitals don’t have incentives to put procedures in place to stop these preventative infections and staph infections from killing thousands of people a year.
John Rutledge , Forbes Contributor: This is a huge issue, but it’s not a new one. MRSA has been around for a long time and it’s killing hundreds of thousands of Americans, including my mother. The reason why this issue is not talked about is because it mostly kills older people who spend their time in rehab facilities. Hospitals and doctors do not like to talk about it. The numbers are suppressed but there are now 18 states which force hospitals to reveal these numbers. We can solve this problem. They did it in Holland. They made it mandatory to wash their hands more often. And there are also some great investment ideas regarding clean healthcare which may get the boll rolling on this issue. If you shine the light on this disease and get the government involved, we can get rid of it. And all it takes is washing of the hands more frequently, cleaning the wires on the EKG machines in hospitals, things like that.
Steve Forbes, Editor-in-Chief: Can you imagine a restaurant or a resort with filth and lack of anti-infection measures? They would go out of business in a second. Hospitals and rehabilitation centers go on and stay open no matter. What we need is consumerism. The people need to control the money hospitals receive, and not third parties. The positive thing though is now more attention is brought on the issue of cleanliness in hospitals. Over 90,000 people die in hospitals a year from unnecessary infections and one of the reasons why is because of the way we finance the system. If we financially change the way hospitals treat the sick, we would save over 90,000 people a year, which is a good thing. We also will increase productivity in hospitals which is also good.
Elizabeth MacDonald, FOX Business Network: Does this control our economy? No. But, it does distract the brains we need to cure AIDS and fight cancer. I think when you have filthy hospitals like you do in Great Britain, where it is funded by the government, there is a greater risk for staph infection. Two things to remember is that you can pick it up in airports, in trains overseas. The other thing is that hospitals are not categorizing MRSA as a regular staph infection, which is making it harder to contain and control.
Victoria Barret, Associate Editor: It would be great to control these diseases. They are extremely preventative, which makes this issue so tragic. But is it a good opportunity for our economy? Look, it’s a great ways for companies to come in and create better hygiene in hospitals which would be great, but it doesn’t move the needle on our economy. It’s not producing a new product or increasing productivity, so it’s a great cause and will definitely get down the infection rate. But in terms of economy, I just don’t think MRSA has any effect on it. Also, we have all these security blankets around us and that’s how these dangerous bacterias and infections develop. But MRSA is something we can address and prevent and it’s a tragedy that so many people are dying from it.
Lea Goldman, Senior Editor: Obviously John’s story personalizes this issue and makes it hit home in a painful way. But this is not a threat to the workplace or national security. It’s a containable threat. And the upside of this is now the media is giving some attention to it, which can help stop this disease. But is it going to affect the economy? No. There’s a reason why they are calling this the Superbug. We are surrounded by anti-bacterial products; hand soap, Purell, things like that and that fosters germs and bacteria which can’t be treated. So it’s not an issue of carelessness in hospitals, it’s a culture of over prescribing medications.
In Focus: Housing Slump: Will it Decide Who Wins the White House?
Quentin Hardy:, Silicon Valley Bureau Chief: Well this is a kitchen table issue, plain and simple, and it’s one I’m already having with parents at my kid’s schools. Years ago people did mortgages and refinancing, all those fancy deals. You can say they were responsible but the reality is a year from now there are going to be many more “For Sale” signs on everyone’s block. Houses won’t be moving, and people will be feeling a tough bite from that new bankruptcy law the Republican Congress passed just as the housing took off.
Steve Forbes: If George Bush was a candidate that would be a real downer. But he’s not a candidate. But for the person who does win, yes, we do have some economic problems out there and one which is going to be bigger than housing will be the state of the dollar. But it’s going to be economic leadership. If people feel a candidate can deal with this economy, the crisis won’t derail Republicans, it will actually help them.
Lea Goldman: If this slump head into a full blown crash, voters are going to take that into the voting booth and they’re going to be looking for someone who is seasoned in turnarounds. They going to want someone with decisive leadership, which is not something Hillary is known for. And they’re going to look for a fiscal visionary, which is not Obama’s strong suit. I think this votes very well for the GOP.
Victoria Barret: I don’t think housing will be a big factor. I think a year from now the housing situation will have improved tremendously. If you look at the polls, less than a fifth of Americans think the government should do someone about the housing crisis. I think we understand that Bush can’t solve this problem with the markets. Markets are human and this sort of thing happens. So I don’t think it’s going to be a decisive issue when people check the box to vote.
Elizabeth MacDonald: Bankruptcy reform is not something only Republicans are concerned with. They know that bankruptcy leads to higher fees for consumers. But consumers and voters are smart. They know that politicians really can’t do anything about the housing crisis. And saying the housing crisis will be something that determines who wins the White House is like saying Laura Bush’s smoking is responsible for global warming. I think voters are more interested when it comes to healthcare issues and to jobs. And Hillary is an experienced leader and she has that power to lead.
Mike Ozanian: I don’t think the problem is with foreclosures. But I think 6 months from now the problem is going to be with the banks and other people who lend money because they are going to bear a big grunt of the problem with housing. If you look at Capital One, the credit card company, their foreclosures and problems with lending have increased because people haven’t been paying on time. I think the candidate that is going to benefit the most from this is Hillary because she is going to promise people a new home.
Companies Wiretapping Terror Suspects: Heroes or Villains?
Steve Forbes: This is an issue of cooperating with the government against terrorism. Imagine what would happen if another terrorist attack happened and it turned out the telecom company did not provide needed information on the terrorists. Come on, if the government asks for your help, you give them help. We’re in a war. We should set parameters on this issue. Don’t go after the companies, go after Congress and the government if you don’t think they are doing a well enough job in this fight against terror.
Neil Weinberg, Senior Editor: They’re villains. They’re stealing my privacy without a gun (reference to his newly released book “Stolen Without a Gun”). We pay them a lot of money and they should be standing up for us. I’m not saying they should go against the government if the law requires them to. But a perfect example is I had to make a call to the Middle East for a story I was doing the other day. I get anxiety just at the thought of the government listening in on my conversation. The issue here is freedom or security and as Benjamin Franklin said, those who give up either their freedom or security are going to end up with neither. I think that’s a big question we have to answer. Do we want the government going through all our phone calls?
Josh Lipton, Forbes.com Staff Writer: I think these phone companies are helping to protect Americans and they should be shielded from these lawsuits. The companies understand this technology and the government clearly believes they need their help. But the companies aren’t going to step up as readily if they think they’re going to face litigation costs and legal jeopardy. This isn’t a civil litigation matter, it’s a policy dispute between the executive and legislative branches. It deserves to be heard out by legislative compromise and not by lawyers or shareholders.
Quentin Hardy:: I think this sounds exactly like the phone companies saying, “Oh, we were just following orders.” Does that sound familiar to anyone out there? You saw what happened with the War on Terror, or whatever that means. What if there is a War on Abortion, or a War on Drugs or a War on Guns? And then they go and do it, how are you going to like it then? They should be in court contesting for our rights. The War on Terror has taken us into illegal detention and it has taken us into torture and Iraq for no good reason. We really don’t need to extend this by taking away more civil liberties. We can test these things in court, we have a great legal system in this country.
Lea Goldman: It’s not as black and white as it seems. It’s an uncompromising position to put these companies in and to ask them to weigh how much executive privilege should be given. It was an uncompromising position. I don’t think they should be absolved of legal responsibility, but limit it to those 700 out of 30 million Verizon customers that were involved. That’s less than 10% of their customers, that’s nothing.
Informer: Stocks Spiking with Sky-High Oil Prices!
Victoria Barret: First Solar (FSLR )
Neil Weinberg: Honda (HMC )
John Rutledge: Australia ETF (EWA )
Josh Lipton: URS Corp (URS )
Our Cashin’ In crew this week: Wayne Rogers, Wayne Rogers & Co; Dagen McDowell, FOX Business Network; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; Price Headley, BigTrends.com; and Jack Thompson , Anti-violence activist
Clinton’s Tax The Rich Plan: Could It Hurt All Americans?
In an interview with the FOX Business Network, Sen. Hillary Clinton said she would hike taxes on the rich to help the middle class. Would her plan turn out to be a boom or bust for all Americans?
Jonathan: It wouldn’t work. It is immoral. The government’s job is not to protect the majority, but the minority, even if the minority is the rich, fat, white guy in the suburbs. The rich have no duty to provide for the poor. Hillary and the government have no right to redistribute money from those who have earned it and the parasites that haven’t.
Wayne: There are some facts here that Hillary doesn’t understand. She really just wants to get elected. She is trying to appeal to the majority of the people. The majority of the people in the United States pay less than 1% of all taxes. The top 10% of people pay 70% of all taxes. It’s already being distributed in a fair way.
Dagen: Sen. Clinton wouldn’t have to do anything. She could just let the President’s tax cuts expire in 2010. The real concern is what kind of state is the economy in if taxes go up for the wealthiest Americans? Can this economy handle it? It might be able to a few years from now, but not right now.
Jonathan: Let’s say the economy could handle it, would it be all right?
Dagen: Hillary said slightly raise, she didn’t say 50%. Let’s put it in perspective, Jonathan. The economy could handle it. A small increase could be ok and acceptable. A big one, however, would be depressing.
Jonas: We don’t have to hypothesize how bad it would be for the economy. We had that tax regime in place throughout most of the 1990’s. We had a top bracket of 39.6%, which is a lot higher than the current 33% and the economy was just fine. The reality is we can have higher taxes on rich people. I don’t care about the morality of it. I want to balance the budget, so that when all the baby boomers are retiring, we can afford it. The best way to do that is take half the money from cutting spending and half the money from raising taxes. That’s how you make deficits go away and why we had budget surpluses under President Clinton.
Wayne: Former Fed Chief Alan Greenspan, who spoke about irrational exuberance in 1995, actually lowered the interest rates and fed the boom. Therefore, we end up having a crash. Right now, we are seeing the results from Greenspan keeping interest rates low during a time he shouldn’t have. Now, we are paying for it.
Jonathan: You guys are missing the whole point. It is a morality argument. It doesn’t matter if it’s 30% or 20%. The rich earn their money and it is not Hillary’s to pass out to people who haven’t earned anything.
Jonas: Pretend you are the CFO of a company. It doesn’t have to do with morality. You just ask yourself, “What do the level of revenues and the level of expenditures have to be to balance the budget?”
Jonathan: You’re balancing it on the backs of those who have worked for their money. Do the rich have a responsibility to provide for the poor?
Jonas: They do not, but from an economic point of view what can the economy handle? They can afford to pay higher taxes.
Dagen: The budget deficit has been shrinking in the last 3 years significantly after President Bush’s tax cuts.
Jonas: The last time we had a surplus before Clinton was 1969.
Dagen: We’re not at a surplus yet, but we are shrinking the deficit. Politicians, both Republican and Democrat, live in fantasyland when they talk about cutting spending.
Brits Pulling Their Own Teeth! Could It Happen in America?
Would you pull your own teeth or superglue your crowns back on? It’s happening in England where national health care is scaring away dentists. There’s lot’s of talk about universal care here in the states. Is this what we would get?
Jonathan: National health care is socialized health care. People die all the time under socialized health care waiting for routine, simple, preventative procedures. If we get a system of socialized health care in this country, we’ll see lines similar to the bread lines in Communist Russia. The health care for the rich and poor will plummet and the quality of care would be significantly lower.
Price: There were situations in which 85% of Britons had to go back to private care because they couldn’t find public care since all the public care specialists had been sent away. This is what would happen here too.
Dagen: I’m not worried about true socialized medicine like Jonathan is. I’m not worried about lines at doctor’s offices if we get universal coverage, like all the candidates are talking about.
Wayne: A national or federalized health care system would be a big problem for our country. We do have a lot of very good health care at the local county and city level. People can go into certain clinics and hospitals and get free care. You can just walk in and walk out and not have to pay for it. It’s paid for by local taxes and done by local people. If we let the federal government in, it would cost ten times as much and be ten times less efficient.
Jonas: People would rather pull their own teeth, than pay out of pocket for medical care. It’s not like they don’t have dentists in England. You can go to a dentist; it’s just that these people do not want to pay for it.
Jonathan: Why do people bring their cars in to get fixed? That just doesn’t make sense at all. People are willing to pay for professional care. If you take the profit motive out of the business, there’s no incentive to provide any professional care. So, if you get a system of free health care, the demand goes up, the supply goes down, and no one gets care.
Dagen: So many people who have health insurance through work don’t sign up for it or take the maximum coverage. In terms of dental care, I’m waiting for Wal-Mart to get in it. Let Wal-Mart set up dental offices where you can go in for a cleaning. Jonathan, you touched on profit, that’s what could really raise the number of people that get dental care.
Outlawing Violent Video Games: Threat To Free Markets?
"Manhunt 2" is coming to a screen near you. It’s a new video game full of brutal killings. It’s so vicious the UK just banned it. Should we outlaw it too, or let the free markets decide?
Jack: This is one game that should be banned outright. It has been banned in the UK. We’ve got three layers of fraud going on right now in the video game industry with the Entertainment Software Rating Board (ESRB), which rates games in this country. This game magically went from an “Adults Only” rating to a “Mature” rating. This game will be sold to kids of all ages. The ESRB is owned by the industry and doesn’t play the entire game before giving a rating. We know from the FTC, that games are routinely sold to kids under age. My son did 2 stings on Target and Best Buy and was able to walk in to buy 2 “Mature” games.
Jonathan: Have you read the first amendment?
Jack: The children are a protected class in this country. You can’t sell pornography to children and you shouldn’t be able to sell these games to children.
Jonathan: The game isn’t sold to children, Jack.
Jack: It’s being sold online to children of all ages right now at Amazon.com and BestBuy.com and you don’t know that.
Jonathan: You are in favor of protecting free speech, but this is the one game we should ban. Yes, I believe in free speech, except for my list.
Jack: The FTC has shown that the industry cannot enforce its own age rating policy.
Jonathan: What about the parents?
Jack: Kids go to other kids homes. Plus, a kid can walk into Wal-Mart with no parent in sight and the clerk will sell the game to them. That’s not parental control.
Jonathan: Whose house is the kid bringing it back to? It’s not the game programmer’s fault. A lot of people play violent video games and a lot of people watch pornography. This doesn’t mean they go out and kill people. If I’m playing a video game, I don’t care how violent or distasteful you think it is, I’m not violating anyone else’s rights.
Jack: That sounds good, but the American Psychological Association found in its official findings that violent video games make adolescents and teens more aggressive. You can say what you want, but the science is on our side of the issue.
Best Bets: Comeback Ca$h
Price: Merrill Lynch (MER) (Friday’s Close: $66.26)
Jonas: Brunswick (BC) (Friday’s Close: $20.00)
Wayne: Nasdaq (NDAQ) (Friday’s Close: $40.00)
Jonathan: CurrencyShares Mexican Peso Trust (FXM) (Friday’s Close: $92.89)