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 past week's Bulls & Bears: Gary B. Smith, Exemplar Capital; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research; Pat Dorsey, Morningstar.com; Eric Bolling, FOX Business News, and Marc Lamont Hill, Ph.D., Temple University.
Trading Pit: McCain v$ Obama: Which one would slash gas prices?
Gary B. Smith: Neither is great, but Obama is the greater of two evils. His idea of bringing down prices is to tax the oil companies. Oil companies need to increase oil output, not pay more taxes.
Marc Lamont-Hill, Ph. D.: Obama will lower gas prices in the long run. He wants to decrease America's demand for oil and create alternative fuels.
Tobin Smith: America isn't the only big consumer of oil, so the U.S. can't solve all the problems. McCain won't let chaos happen in Middle East — unlike Obama, who wants troops out of Iraq in 16 months. That's when you'll see $250 per barrel oil.
Eric Bolling: Gary B. is right; a windfall profit tax on oil companies is a bad idea.
Scott Bleier: Oil is a supply issue. McCain would drill and be more pragmatic.
Pat Dorsey: Obama's windfall tax is ludicrous. However, his supporting alternative energy is good. McCain has not been open to that idea.
Massive Food Fallout in the Midwest: Higher Food Prices Across America?
Eric Bolling: Due to all this massive flooding and loss of crops, we are going to see higher food prices.
Gary B. Smith: Wheat was a crop that was flooded out in 1993. Prices were actually lower from 1992 to 1993.
Tobin Smith: The world is competing for all this stuff unlike 1993. With all this ethanol gone, it's going to add to gas prices. No one's figured that one out yet!
Pat Dorsey: This is going to impact food prices. Corn is very important in food markets.
Scott Bleier: Double whammy because speculators are making prices go higher, too. But it will fix itself.
Stock Exchange: Pat's $ouvenir $tock$
Gary B's Gift: Canadian Natural (CNQ)
Toby's Gift: Constellation Brands (STZ)
Scott's Gift: Mylan (MYL)
Eric's Gift: Knoll (KNL)
Eric: Rotten tomatoes won't spoil Heinz! "HNZ" up 30 percent in one year!
Gary B: S&P wont hit March lows! "SPY" up 15 percent by end of '08.
Tobin: Scrap metal is in! Metalico (MEA) up 50 percent by end of '08.
Pat: Fun in the sun = fun in your wallet! "STP" up 100 percent in 3 years.
Scott: Commodities are dead! "DEE" up 25 percent by Labor Day.
On Saturday, June 14th, 2008, Neil Cavuto was joined by Ben Stein, "How to Ruin the United States of America" author; Charles Payne, wstreet.com; Dagen McDowell, FOX Business Network; Adam Lashinsky, Fortune Magazine; Tanya Acker, Democratic strategist; and Bracken Hendricks, "Apollo's Fire" author.
Bottom Line: 'President' Obama = Guaranteed Middle Class Tax Hike?
Neil Cavuto: The tax man cometh -- but which one? Barack Obama pitching a middle class tax cut this week. John McCain warning it'll be the biggest tax hike on Americans since World War II. Who's right? Charles, if Obama wins the White House, will the middle class win or lose?
Charles Payne: The middle class will lose. Although, we're not sure who the middle class is for Barack Obama. Seems like every week it gets lower and lower with the Democratic nominee… maybe $200,000 a year. Maybe $100,000 a year. Certainly, a family making $100,000 a year is going to be big losers.
Neil Cavuto: Tanya, your candidate, when he first started running, he generally referred to anyone earning more than $1 million as rich. Now, with this plan to rescind the top tax rate back to its old rate… that's affecting anyone making more than $200,000. That's a big drop. What happened?
Tanya Acker: It's a big drop. I think the number is $250,000.
Neil Cavuto: $200,000 for individuals and $250,000 for couples…
Tanya Acker: Correct. And what Senator Obama would do would be to roll back the Bush tax cuts, which frankly, right now the country can't afford. I don't want to get into a long recitation of the reasons, but with a war that's costing us $12 billion a month and with the economy, we simply can't afford it. It's not about class warfare as those on the right like to suggest. It's simply about what the country can and can't afford.
Neil Cavuto: Ben Stein, you drew an intriguing distinction with me this week. You were for raising taxes on the upper income, but you did not identify those in the $200,000 - $250,000 club as the rich. You identified those as in the $2 million club as rich and those were the ones you would raise taxes on?
Ben Stein: I don't think a person or a family with $250,000 is rich, especially in the big cities. In a small town, yes, they'd be rich. But in New York, Chicago, San Francisco, Phoenix, LA, Dallas… those people are not rich. To treat them as if they were rich is ridiculous! We have an awful lot of people in American earning $2 million a year and up. Let's give them a substantial surcharge. We could raise an awful lot of money that way. They won't miss it! If you're that rich, you won't miss it. If your taxes are raised another $100,000 you'll still be rich. How many BMWs can you drive? How many country clubs can you belong to? How many yachts can you have? Let's raise the taxes on the genuinely rich.
Neil Cavuto: Alright. And by the way, that's just one book for Ben.
Ben Stein: Ha! That's all my books.
Dagen McDowell: I just want to point out that the Bush tax cuts are set to expire in 2010. That was Congress's doing. We keep talking about tax hikes. But, the tax cuts are going to expire. The next president won't need to do anything because taxes will be going up in 2010 anyway. You look back at the 1990s. It's not like we lived through a Great Depression in the 90s when tax rates were higher.
Neil Cavuto: The issue now, going forward, is that when you've been used to a tax rate at a certain level then all of a sudden it unwinds… it's not a tax hike, but to most people it feels like one. What do you think the fallout would be if we hiked the taxes on the upper income?
Adam Lashinsky: I don't know that it's for us to decide who's rich. It's up to tax policy planners to decide how much revenue they can raise. If enough revenue can be raised by only increasing the taxes on people who make at least $2 million a year, then that's fine. But, that's not what Senator Obama has decided to do. There was a non-partisan study out last week that said Obama's tax plan would skew income gains more toward lower and middle income people than Senator McCain's plan. That's one data point. One of the more controversial things Obama's thinking about doing is raising the dividend tax. That clearly, is a way of getting richer people. I say controversial because that's going to hit Wall Street where it really hurts.
Neil Cavuto: Tanya, I want to get your help on this. Regardless of your views of whether or not it's wise to hike taxes on the rich… I know you're for doing that… but to be clear, we had Bill Clinton's former Treasury Secretary on not too long ago… he, like you, was for raising taxes on the rich. But he said to not do it in a slow down or recession. So if we are in a slow down, or as your candidate would say, a depression, is it wise to hike taxes in that environment?
Tanya Acker: I think we have to be careful about that. But let me go back to one quick point. I'm not for suggesting that anyone who makes more than $250,000 is rich. What we call them is not relevant. I go back to Adam's point, which is who is in the best position to help the government raise the revenue it needs to raise? In terms of whether or not we need to roll back Bush's tax cuts in the middle of a recession… I'd point out that this recession is hitting everybody, not just the people making $250,000 and above. It's hitting people who make less than $250,000 even harder! So, in order to provide them some sort of relief, Obama intends on providing them with, for instance, a $1,000 tax cut by providing a universal mortgage credit of 10 percent for families making under $50,000… as well as eliminating the income tax for seniors.
Charles Payne: Tanya, may I interrupt you for one minute? You said the government needs this money. But how can you say it needs this money when it's really just going to take it out of one pocket and redistribute it. It's not going to government coffers.
Adam Lashinsky: That is not what she's saying!
Charles Payne: That's the first thing she said! And Adam? You called it income! It's not income. If we take an extra $1 million from Neil and give it to other people, that's not income.
Tanya Acker: Calm down.
Neil Cavuto: Why are you taking a $1 million from me?
Tanya Acker: That was an explosive tirade! It seems like I'm trying to rob you. I'm really not.
Charles Payne: There are people who EARN their money.
Tanya Acker: Hang on. I think that the people who are making less than $250,000 a year are working and earning money, too. Let me be clear about my point. We are in the middle of a war. No president in the history of the United States of America has ever cut taxes during a war. This war is draining our coffers. So on the one hand, we do need to think about clearing up this budget deficit which has gotten out of control. Now, secondly, it may not worry you that people who are making $250,000 are struggling, but it worries me and it worries a lot of other people, too.
Charles Payne: Let me jump in. You've been dominating here for a minute. You don't know what worries me!
Charles Payne: This is what worries me!
Tanya Acker: Stop yelling.
Charles Payne: Tanya, listen to me. We do not change the circumstances of America by taking the top level and lowering it down to the bottom level. Yes, let's raise the bottom higher, but let's not penalize the people at the top who earned that money.
Ben Stein: Can I make one other little point? Ms Acker mentioned we're in a recession. We're not in a recession. We're in a slowdown, but we're not in what is classically defined as a recession. There are obviously people suffering, but it simply isn't a recession.
Dagen McDowell: Ben, I love ya for saying that and pointing that out. Neil, to your point, I second that if the economy gets tougher than it is today, it's going to be tough to do anything in terms of hiking taxes on anybody.
Neil Cavuto: Tanya, that was my point with you. And I wasn't yelling it because Charles is the yeller here.
Neil Cavuto: In a slowdown, or however you want to define it, you don't want to hike taxes. We do know that when Bill Clinton hiked taxes on the upper income, the economy was coming out of its down turn. If there's such a thing has timing for raising taxes, that might have been it. I'm not sure this is the time.
Head to Head: Chuck Norris to Congress: Get off Your "Gas" and DRILL!
Neil Cavuto: The national average for a gallon of gas now well above $4… and that has Chuck Norris ticked off! He's telling Congress to get off their gas and start drilling for oil! But someone here says Chuck's the one that need a round-house kick in the gas. It's time to go "Head to Head." Bracken, you think Chuck's got it wrong?
Bracken Hendricks: Yes. This is a summer blockbuster season, but what Chuck's talking about is science fiction! The bottom line is we cannot drill or burn our way out of our current energy crisis. We need to invest and invent our way out of it.
Neil Cavuto: Can't we do all of the above?
Bracken Hendricks: Well, the thing is the oil companies are sitting on 10,000 leases and they're not even drilling. We have given the oil companies the right to drill on 32 million acres in the Outer Continental Shelf and they're only drilling on 20 percent of it.
Neil Cavuto: We just had a case in Illinois where they were trying to expand the refinery there and environmentalists wouldn't let them do it and stopped them every step of the way. All I'm saying is what's to stop us from doing everything? Explore, like what you're talking about, dig for more oil in the United States, and see what sticks? All I know is we are depending on people halfway across the world who can't stand us. I'd like to explore what's here first.
Bracken Hendricks: The problem is as long as we're dependent on oil, we're stuck relying on those un-Democratic and unstable countries. Oil's a global market. Forty percent of the world's oil comes from unstable and un-Democratic countries. Ninety-two percent of reserves are in those countries.
Neil Cavuto: That might be tough to explain to people who are looking at these gas prices. Ben Stein, what happens?
Ben Stein: What happens is the statistics the gentlemen threw out are plain misleading. There are very, very wonderful areas loaded with oil, right off the coast of my beloved Southern California, off the coast of my beloved south Florida. We know there's oil there. China can drill there, Cuba can drill there, Venezuela can drill there, but we can't because of our Congress. That's crazy! No other country in the world purposely imperils its national security by not relying on some resources. The environmentalists are not letting us drill and protect our national security.
Dagen McDowell: Ben, it's not just Congress-people. The Congress-people represent the people of their states. Folks along the coast of Florida and folks along the coast of California don't want drilling. Whether it's stupid or not.
Ben Stein: They're big babies. I live among them! They're big babies.
Ben Stein: They don't want to do anything that's at all difficult for them…
Neil Cavuto: The irony is that it wouldn't be difficult for them. You'd have to be in an 8-mile high building to even see these rigs.
Charles Payne: Just knowing the rigs existed would bother them so much. If Congress was sitting on a ton of food and our nation was starving, wouldn't there be a revolt to unlock the food?
Adam Lashinsky: It's just amusing to me. Our guest has given us facts but we chose to ignore the facts.
Ben Stein: We don't know that they're facts! He said them. That doesn't make them fact.
Adam Lashinsky: The reserves outside the US are far larger than the reserves inside the U.S.
Neil Cavuto: Well, let's start making them larger in the U.S.
Adam Lashinsky: I say drill. I'm fine with drilling off the coast of California. Many of the people who live in the state that Ben and I live in don't agree. The question is would it have a big impact? Do we even have the refining capacity for that oil?
Neil Cavuto: I'm fine with drilling the heads of the environmentalists who prevent us from doing this thing. Bracken, no offense to you, but why do we always make this an "either or" game?
Bracken Hendricks: Look, we could be drilling right now if the oil companies wanted to invest. They're choosing to keep the supply tight. And they're choosing to do it because it keep their profits high.
Ben Stein: That is nonsense.
Dagen McDowell: I have to get in here. I agree with Neil. Why not look at all your options? In this conversation, we're solely focused on supply. But, you have to come up with more supply, but you have to do something with the demand!
Neil Cavuto: Bracken, we've tried to criticize and say everything you're saying is dumb, so here's your chance to respond.
Bracken Hendricks: Great. America's economic competitors, Europe and Japan, have achieved fuel economy of 40 miles a gallon. American fuel economy is 25 miles a gallon. Some people look at this and they see it as a crisis, but it's also an opportunity.
Neil Cavuto: Bracken, I'm saying we have to conserve more. We have to balance things more. We have to look at coal and nuclear more and oil more. You can't pick and choose like it's a special menu.
Bracken Hendricks: The president said we're addicted to oil and we have to work to get off of it.
More for Your Money: 'Incredible' Stocks!
Neil Cavuto: Get ready to unleash the beast! "The Incredible Hulk" opening across the country this weekend. True to form, we found a money angle -- let's get "More for Your Money."
Adam Lashinsky: USEC (USU)
Ben Stein: PowerShares DB Commodity Index Tracking Fund (DBC)
*Ben owns shares of this stock
Charles Payne: Quanta Services (PWR)
FOX on the Spot!
Dagen McDowell: Big bank goes belly up; Dow drops nearly 1K by fall
Charles Payne: Buy "GS"; up 45 percent in '09. And Ben still owes me dinner!
Ben Stein: Inflation is real! You really need to save MORE for retirement
Adam Lashinsky: Toyota's plug-in car revs up "PCG" in 2010!
Neil Cavuto: Congress is pathetic! Gas grandstanding continues
In Focus: Could Barack Obama's Windfall Profit Tax on Oil Companies Lead to $8 Gas?
Elizabeth MacDonald, FOX Business Network: Yes. I wish these elected officials and presidential contenders would start cracking an economics book instead of just a newspaper. It's absurd what Obama is saying. By the way, oil companies don't set the prices for oil; the markets do. And check this out: companies always pass along the taxes. They never pay the taxes themselves; they pass along the taxes to the consumers. When, in the 80's, we tried to do a windfall profits tax there was less drilling and more dependence on foreign oil – the direct opposite of what it intended to do.
Mark Tatge, Forbes contributing editor: This is nonsense. The oil companies, Exxon specifically, made $11.7 billion in the first quarter. That equates to about $1,300 a second. This is not a market economy, this is a monopolistic economy controlled by the oil companies. They are like the robber barons of the last century. They need to be either broken up, or we need to tax them, take that money, and redistribute that money for synthetic fuels and hybrids. Let's get with the program here.
Steve Forbes, editor-in-chief: Let's get a real program. The private oil companies like Exxon Mobil control about 5-10 percent of the world's reserves; 90 percent of the reserves are government or semi-government owned. When you put a tax on something, you get less of it. As Elizabeth said, that's what happened in the 1980's and late 70's. As for monopoly and monopoly prices, why after 130 years did these dummies in the oil industry finally figure out how to manipulate oil prices? Mark should do a little research. We read these same stories in the 1970s, parking tankers offshore to raise the price, oil went from $3 to $40 a barrel, then it crashed when the dollar stabilized.
Mike Maiello, associate editor: We're taxing working families to pay for subsidies and tax breaks for big oil, and you have to look at who can afford what. Right now, working families can't afford the gas they need to get to work. That's a problem, and Exxon can afford to help out. Given the years and decades of subsidies and public help the oil companies have received, they should be happy to give something back.
Quentin Hardy, Silicon Valley bureau chief: Corporate volunteerism probably won't be the first thing happening tomorrow. Obama is a smart guy with a lot of great ideas. This just happens to not be one of those. Barack, if you're watching, put down the bowl of Rice Krispies, and get a pencil. What is a windfall profit? I have no idea what it is. Here's what you can do: take away their subsidies and these depreciations and offshore subsidies, all these other things that they get; that's like getting revenue from the government, too, and that you can deploy.
Neil Weinberg, senior editor: I wouldn't call it a windfall profits tax. I call it an ill-gotten gains tax. These guys have been getting huge tax subsidies because they lobby their buddies on Capitol Hill, and they get all kinds of breaks. They have a windfall profit. This is money they are earning simply because the price of oil went up. They are not reinvesting it in finding more oil and doing anything with it but paying huge fat unfair pay to their top executives. That's where the money is going.
Flipside: Best Air Travel Fix, Nationalize All Airlines!
Neil Weinberg: Yes. This is the newest low: US Airways is going to start charging you for water. Water! We're not going to save the U.S. airline industry because it's a broken system. It's not a market system - it's just a system that just doesn't work. Instead of increasing prices, they are taking planes out of service – doesn't work for employees or anybody, so go to a cost plus system for now and get this thing into some semblance of a decent economy and industry under the umbrella of the government.
Jack Gage, associate editor: That's the worst idea. Look at railroads, look at the Russian airlines that are staying on. They're absolute disasters. Russia has half as many people as us, they have 5 percent as many passengers on the airlines last year and that's because the system does not work. Railroads in the U.S., Amtrak. When was the last time you had an experience with an on-time train? This is a big problem. You can't solve it by nationalizing it.
Mark Tatge: I agree. I think we have to take over the airline industry. I'm not saying it as a permanent solution. This is a temporary thing, a transition, similar to what happened to the S & L industry where failing airlines, airlines that are in bad condition, probably all the U.S. airlines except for Southwest, should be taken over. There should be bonds sold, a resolution-type trust corporation set up, and these airlines should be allowed to either improve or sold to foreign carriers.
Steve Forbes: We created that problem. When you have a five-fold increase in fuel, you're going to wreck any industry. Take the newspaper, print industry. If you have a five-fold increase in bushels of paper, you'd have red ink all over the place. The government created the problem by inflating the dollar, and if you go to LA now for $375, $400, $300 of that goes to fuel. So, that is a government created problem.
John Rutledge, Forbes contributor: I like Comrade Weinberg's plan because that way the airlines could be just as good as the post office or maybe the health care system or even the DMV if we do it at the state level. Airlines are terrible businesses. They already have owners: they are owned by the employees, whether they like it or not. They're capital intensive, they have no implemental cost, which means the load factor is the only thing that matters about whether or not they make money. Oil prices moving up and down takes the profits out. Airlines fail, but airplanes don't. If an airline fails on Friday, you repaint the tail and it's up on Monday with a new name. We don't need a government fund to solve this problem.
Would John McCain's Plan to Regulate CEO Pay Be Bad for All Jobs and Stocks?
Steve Forbes: Bad idea, because shareholders shouldn't have to be micromanaging companies. That's what they hire management for. If you really want to get a bust on CEO pay, remove poison pills so the shareholders can have a direct impact, and more directors are doing just that. In terms of talent, try going out and hiring a top flight CEO at a cheap price. That's why equity funds pay 5–10 times more for top rated talent when they take over companies.
Victoria Barret, associate editor: It depends on how you define high, and I think that a lot of executives are making way too much money. This isn't across the board, but we've seen really egregious examples of high executive pay, and I think boards which are determining executive pay aren't doing a good job, so why not let shareholders have a vote? This isn't about regulation; it's about shareholders having a vote. This week we found out there's really no link between pay and performance because you can make money when you're dead as an executive, these so-called golden coffins.
John Rutledge: It will only pay you to drop dead in 2010 just before the estate tax goes up to 55 percent again. Other than that, I think these ideas are really dumb. The idea of having the government set the price of everything. Well, I suggest we have them set the price of journalists, too, and in fact maybe we should have everybody in America make $5 and we can all go to the beach. I don't like to see McCain doing this. McCain is pandering to the audience. He is a principled man. He should not stoop to class war. Shareholders already have the right to vote on CEO pay. You can put any resolution you want in a shareholder's meeting. It's the board's performance. They set CEO pay.
Lacey Rose, Forbes.com senior reporter: It's not about the government stepping here and setting pay. It's about empowering shareholders to regulate pay in the way the current system, which is largely filled with CEOs looking to scratch each other's backs, hasn't dealt effectively.
Mike Ozanian, national editor: I don't even understand what this conversation is all about. Shareholders already do vote on CEO pay every day when they buy and sell stocks. All the information is available in the 10ks and the filings. The last time we tried to regulate CEO pay was your favorite president, Bill Clinton. He wanted to put a limit of a million dollars for tax deductibility. What happened? We had a catastrophe. Everybody got $999,999 in cash and we had the whole option thing blow up.
Quentin Hardy: Well, Vicki, first you have to admit that death, as a positive career move is a wicked cool idea. Now, what I love about McCain's idea is you all got conned. Look at this. It's not like shareholders are some kind of broad democracy. If you have more shares, you have a bigger vote. Who is that? Overpaid fund managers and pension managers. They have high pay, too. They are going to ok these pay packages, it keeps theirs up. McCain is pulling the wool over people's eyes in a brilliant way, which is so great because it won't upset his millionaire wife or any of the lobbyist buddies.
Informer: Forbes Exclusive: Top Celebrity Stocks
Josh Lipton, Forbes.com staff writer: Celebrity pick: Tiger Woods
Stock pick: Nike (NKE)
Jack Gage: Celebrity pick: Jeff Gordon and Dale Earnhardt Jr.
Stock pick: General Motors (GM)
Victoria Barret: Celebrity pick: Oprah
Stock pick: Amazon.com (AMZN)
Mike Ozanian: Celebrity pick: David Beckham
Stock pick: PepsiCo (PEP)
Should Government Subsidize Gas to Cut Record High Prices?
Cliff Schect, Democratic strategist: I do. I think that it's an important idea, I think, look, you've got oil companies that are making, you know, 10 billion dollars a quarter, I think you easily could take some of that money and windfall taxes and you can help the American people. People we need consumers right now, look, we're losing jobs, our economy is hurting and I know out here in the middle of where the country where I am, Ohio, people are really hurting because of the gas prices and why not do something that would be compassionate, but smart for the economy?
Jonathan Hoening, CapitalistPig Asset Management: Encouraged consumption, exactly what you don't want. You don't want to encourage people to consume more than you can afford. In Taiwan and Indonesia, they subsidize it until the cost is so high and you can't afford it anymore and riots in the street break out.
Sascha Burns, Democratic Strategist: Well, look, you can call it a government subsidy or you change the name and call it a tax cut or a $600 check in the mail and all of a sudden, you have a lot of supporters on it. The truth is, well, perhaps
not ideal, the government does this all the time. On the other side, Bailing out Chrysler, bailing out the airline industry, the point is to protect the economy. Everyone's an increase at the pump, is a billion dollars out of overall spending and what we need right now is consumer spending to jump start the economy and that's what we're doing with these $600 checks in the mail. Now, people are spending them all on gas. So it's already happening.
Tracy Byrnes, Fox Business Network: Subsidizing gas is putting a band aid on a brain tumor. It makes no sense. Leave the government out of it, stop talking windfall profit taxes on taking money from the oil companies and doing their job and making money for shareholders. There's a bigger problem, much more than subsidize, giving people a buck on gas. The problem is going to get bigger.
Jonas Max Ferris, MaxFunds.com: A tax subsidy for gas is the biggest windfall to the oil industry I could possibly imagine. You're talking about the government giving money to the big oil so people can drive big cars, at a lower price.
That's the most absurd thing I've ever heard a democrat say.
Wayne Rogers, Rogers & Co: I find that both sides of this a little ridiculous. The government is already taxing gas at an enormous rate. They do not have to give a subsidy and turn around and have another bureaucrat I can group doing a subsidy, and taxes and subsidize with it, that's totally nuts. All they have to do is cut the federal tax on gasoline if they want a boost, that will help the oil prices a lot and then the federal government, who wastes all the money anyway, you talk about oil companies, it's the feds who are wasting the money. That's the dumbest thing I've ever heard in my life. Cut the federal tax…That's important.
Obama's Minimum Wage Plan: Will It Help Or Hurt Jobs?
Jonathan Hoenig: I think it would hurt the economy and I think it violates people's rights. Wages aren't arbitrary, they're based on supply and demand. If Barack Obama wants to raise it, why not raise it to 40, or $100, raises the unemployment and hurts the unskilled workers and a lot of democrats want to advocate for.
Tracy Byrnes: Peel should not want to make minimum wage for the rest of their lives. It's a starting point, a jump start. Shouldn't matter what it is, your goal should be to make more money. Studies shown you increase minimum wage and teenagers drop out of school, make more money out of school and stay that way. It doesn't get people out of poverty like the democrats seem to think. To Jonathan's point, you increase payroll on little companies and they'll lay people off and hurts labor prices in the end.
Sascha Burns: Talking about hiking wages, a minimum wage worker makes $5.65 an hour so indexing it for inflation is the same thing as a cost of living adjustment. I mean, who among us would be content with not having our salaries rise?
Wayne Rogers: No, I don't think that, the problem is not whether you're raising the minimum wage, all of that, one of the things that's ancillary to this problem is driving jobs overseas. We have a big stink in politics about, oh, we're going to create jobs in America, create jobs in America and we don't want them running off shore and going overseas. The minimum wage every time you hike the wage as oppose today. Jonathan is right and the market place, there's a buyer and seller for services, if my job category is I get $5 an hour, as soon as that becomes unprofitable to the guy who's hiring me, he's
going it take that job and push it overseas.
Jonas Max Ferris: As an employer I would prefer the predictability of a CPI-based inflation versus the randomness of whoever is in office may raise $1 one year and the staff you've got to give a 20 percent raise to. Would have been a 2 or 3 percent raise, predictable and that's predictable you work for.
Midwest Disaster Lesson: We Need a Disaster Relief Fund?
Tracy Byrnes: I'm the last person to say the government should be involved in anything these days, but I tell you what, we need a method and a manner, a better method and manner of getting the money out to people and it's all in one place that might be the answer. Because between FEMA and insurance, these people are not getting the money fast enough and they're living under these horrific conditions for a really long time. So, maybe, and I understand that there are some states that are going to say you shouldn't have to put money into a fund if they don't have tornados and hurricanes and floods, but you know what, as a country, we should be able to help these people somehow.
Peter Schiff, President of EuroPacific Capital: I don't think the government should be involved in financial relief at all. People who suffer from this need to fund the repairs out of savings, using private insurance, if they don't have access to that, they can tap private charities, but there's a huge moral hazard here. When the government comes in and subsidizes people who suffer in these areas, they're prone to moved into the areas that have the national disasters and we end up having much bigger problems. People need to suffer the consequences. If they can't afford it, they need to live in areas that don't have disasters and can't tax people who live in other places.
Wayne Rogers: Well, the insurance companies, I think, I say I think, because I don't really know specifically, but the insurance companies do a relatively good job, that's why you have private insurance and if FEMA is an example of federal help in this area, it's a terrible thing then. But, I can't, there's got to be a way to help these people, it's got to be done, take it with cooperation with the private industry though.
Jonathan Hoenig: That's the same FEMA that bought the trailer trucks that ended up being poisonous or gift cards $2200 bucks, spent in strip clubs. Homes are private property and I have empathy for people who lose their homes, but responsibility with rebuilding the homes are up to those individuals. But the government is not a charity and this country, people open their checkbooks this time, and the insurance companies don't send tents and food in the next day. A lot of public property that's destroyed, which is, look, the government has to look out for roads and bridges things they built and shelter and food. The private property, as we get into debate about insurance.
Father's Day Stocks
Jonas Max Ferris: Pfizer (PFE)
Jonathan Hoenig: UltraShort Lehman 7-10 Year Treasury ETF (PST)
Peter Schiff: British Petroleum (BP)
Wayne Rogers: Oil Services HOLDRs (OIH)