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On Saturday June 27, 2009 on "Bulls & Bears," Brenda Buttner was joined by Gary B. Smith, Pat Dorsey, Eric Bolling, Tobin Smith and Steve Leser.
Plan to ‘Exempt’ Unions From Health Benefits Tax: Giving Unions a Free Ride?
ERIC BOLLING: Of course they're going push for national health care — they're not going pay for it. Under the current proposal passed around the senate, the benefits the union members would receive wouldn’t be taxed. Everyone else will to pay for it. This plan could be anywhere between a trillion dollars, as the Obama administration tells us, $1.6 Trillion that some senators are talking, and up to $3.5 trillion that the GOP thinks might happen. Here's the issue, though. Let's say you exclude the unions from taxes on healthcare benefits. We're just going to drive everyone who has a choice right into the union membership. You're going push them right into union ranks so they don't pay taxes on their healthcare ranks.
STEVE LESER: Unions have been at the forefront for the national health care fight for the last 30 or 40 years. The real reason, by the way, that this tax benefit would be exempt to them is they've got these multiyear collective bargain agreements where they've already given up significant amounts of pay to get a good benefits package. If you take that away from them, now they're saying, we're going tax you, take even more pay away from these folks, and it's just not fair. They've already paid for this.
GARY B.: Look, there's always an agenda here, and Eric hit the nail on the head. This is a free ride for unions. Look, unions have been on the ropes for 10, 20 years now. Their membership is continuing to decline. Any competitive advantage they can get, whether it's a free ride on health care or unionizing new national health care workers is a boon for unions, and that's why they're out.
TOBIN SMITH: The real reason they want national health care because they have this gold-plated Cadillac health care plan. They know when the collective bargaining goes away that it's going to be taxed, and they have to have a plan “b”. National health care is the plan b, because they're going to say, we've seen this from a number of our people that are on the hill. The real agenda is to give the unions something to sell when their benefits do become taxable — because the difference between what they get and what everybody else gets is monumental.
PAT DORSEY: Private firms make that choice every day in choosing employment. There are employers that pay higher wages and don't have good benefits. There are employers — and I work for a company that has this kind of medium wages, but I have a pretty gold-plated health plan, frankly. And I made that choice when I chose the job with a firm that I work for right now. People make those choices all the time. And if we're going to tax "gold-plated health care plans" at other private, non-unionized companies, then they should be taxed the same way.
Report: Michael Jackson Was $400 Million In Debt; Did Money Advisers Ruin Him?
TOBIN SMITH: Clearly, not only was he taken advantage of, but how you can tell is that he had hedge funds lending money to him, and every time they would refinance it at a high rate, so he was getting ripped off. Number two, the advisors were getting paid fees to place that money there.
GARY B.: I think he bought the Beatles’ for like $47 million, $50 million, outbidding Paul McCartney. You know, that's basically a big part of the collateral that he used. I think he sold part of it to Sony, but probably worth in the billions now. I think it's just a simple case here of someone could have had just a simple cash flow statement. Look, this is how much you're taking in a month, this is how much you're spending, and just make sure the right hand column, the spending column, is less than the income column.
PAT DORSEY: People like that, they're not used to being told no. They're in that position of power, if you have that much wealth; you're not used to people saying no. You can't do that, because they've been able to do whatever they want. What the balance is between people giving him bad advice, taking advantage of high fees, and I'm sure there was some of that, and to some extent spending like a billionaire, when he's actually just a millionaire, I don't think we'll ever know.
ERIC BOLLING: Well, M.J. is to blame. Look, great artist, fantastic and great entertainer, financial dummy. He spent $20 to $30 million dollars per year more than he was taking in. Bottom line is he put his ex-wife at risk, he put his three children at risk, he put everyone who was bankrolling that new upcoming tour at risk, people who trusted him and believed in him. I got to tell you, great philanthropist, spent a lot of money in charities. The guy put money out there.
$500K a Year Government Pensions; Wasting Tax Payers Cash?
TOBIN SMITH: General Motors went on for 10 years, and they just went bankrupt. In this case, these cities can't go bankrupt. We have to actually pass legislation that brings this to a sustainable number. You have to have the backbone to enforce t. It's time to do it now, because otherwise they're going to be like these cities in California and elsewhere that go totally bankrupt. These guys are going to get zero, which maybe they deserve.
GARY B.: The issue is for these people that already signed these agreements, went through these things, this is just the fruits of their labor. Whether you think it's outrageous or not, that's beside the point. A deal is a deal. They went to work for the government. They probably gave up a lot of other stuff in theory, and they got these hefty pensions. Now, for the future, the governments can decide we don't to want offer these great pensions and they have to weigh that against attracting good people or average people or whatever.
ERIC BOLLING: Let's use California as an example. The state’s pension plan lost 24 percent of the fund with bad stock picks. Now, they have a couple of choices. They can tax, but they already voted that down. They can fix the problem by deferring payments for these pensioner recipients. The problem is they don't want the deferred payment or they can try to wait the whole mess out and hope the market comes back.
STEVE LESER: I don't want to cut anything from a retiree that's 78 or 90 years old that's getting a pension. That's appalling. There are a very small percentage of people that are actually getting the big bucks. Most of them are firemen and police officers. They've got an extra benefit where they can get a higher pension, which I think is totally fine. I think it's appalling to try to take money away.
PAT DORSEY: Ultimately it comes back to the taxpayers, i.e., the voters, who have voted for these folks who put these in place for years and years and years, because this is not news, gang. This has been going on for a long time, these overgenerous benefits. So folks, if you don't like them, change your vote.
GARY B. SMITH: Cheap summer getaways! "CHH" up 20 percent by Labor Day
TOBIN SMITH: Taiwan TAKES OFF! "EWT" sparks 4O percent by February
PAT DORSEY: Health Care is hot! "GENZ" gets a 50 percent boost in 2 years
ERIC BOLLING: MJ memorabilia gives "EBAY" thrilling 30 percent jump by August 29
This past week, Neil Cavuto was joined by: Ben Stein, author of "How to Ruin the USA"; Charles Payne, WStreet.com; Dagan McDowell, FOX Business News and Adam Lashinsky, editor-at-large, Fortune Magazine.
Pork Gone Wild: Does D.C. Not Get It on Spending?
CHARLES PAYNE: We have to find legislators that really have the guts to not do this stuff, and if they do have the guts, they have to be rewarded and reelected. Some of this comes down to the American public, because it seems like we send law makers to Capitol Hill to go raid the joint, get what you can and come back home. That’s got to stop.
ADAM LASHINSKY: Pork is a bi-partisan subject. Politicians will not put themselves in jeopardy of not being re elected.
BEN STEIN: We have so many problems in this country: we have North Korea, we have Iran out of control and we have Pakistan. Here at home we are burning down the house. We are killing the goose that’s laying the golden eggs. This cap and trade thing is an absolute disaster. There’s no need for a new energy policy. We are about to kill the one part of the economy that every other part depends on and that is energy. That is the heartbeat of America. We’re killing it over fantasy ideology.
DAGEN MCDOWELL: What’s worse than what government is planning to do is what we’re not doing - and that is controlling the growth of Medicare, Medicaid and Social Security. Buried in the news in the past week was a projection from the Congressional Budget Office saying in 2018, just Medicaid and Medicare will consume as much of the economy as much as what the federal government spends today. We will be dropping things we are spending on the like defense and other discretionary programs.
'Car Czar' for Auto Workers; Is White House Favoring Unions?
CHARLES PAYNE: This is absolutely nuts. They want a redistribution of wealth to make corporate America weak. That’s what all of this is about, to bring down corporate America. Look at where our country has been over the last 40 or 50 years. Our economy has gone up and union participation has gone down. That’s the proper evolution and we shouldn’t touch that.
DAGEN MCDOWELL: Look back at the history of Britain, when British government took over basically British Leyland. The unions held them up, and there were wildcat strikes in one year that sacrificed something like 32 million workers hours. People were walking out of the plants with spark plugs in their pockets and engines in the backs of their cars. Now that the government is going to own 60 percent of general motors, what do you think the union is going to be able to do? We’re just beginning to see how unions will take advantage of Uncle Sam and us.
BEN STEIN: All history is the history of class struggles, said Karl Marx, and we now have a new class in the White House, the class that is the intellectual and union power class. And they are going to give power to themselves. They do it through the means of czars as you call them. By the way, the idea of a czar, that appointing a czar is going to solve a problem, is simple-minded. The idea that if you have an incredibly difficult problem, then you appoint some human being to solve the problem, that the problem gets solved, is a joke; the fact you appoint someone to solve a problem doesn't mean it's solved. The problem is solved by 140 million Americans going to work each stay making the right decisions. It's not solved by czars. The fact that Obama thinks it is… is pathetic.
ADAM LASHINSKY: I think your strong point is the czar process is not a particularly democratic process. The president has a cabinet. We have federal agencies. These problems can be dealt with in the federal agencies, I agree. As to the point, in terms of organized labor, it has been in decline for years and years. The regulations and the laws have moved and the enforcement has moved against them. The pendulum is swinging in favor of them now. I don't think that's the end of the republic or the end of corporate America, by the way.
Nanny State Kickoff; This Week It's Tobacco, What's Next?
CHARLES PAYNE: There's no doubt about it we are headed towards the "Nanny State". You're talking about taxing sugary sodas, beer, wine, etc. By the way, all of these fall under the guise of a "sin tax". And then, you know, you've got municipalities that are already talking about, "let's not put a McDonald's in the black neighborhood because they're too fat". It's sort of insulting. People have a right to eat what they want to eat. I hate cigarette smoke, but if you want to smoke, have at it. But I think taking away our basic rights is crazy. This is the ultimate part.
BEN STEIN: They have to get the money from somewhere, from sin or whatever seems to be the popular place to get it. But the object is not to get the money. The object is to control other people. Charles is totally right. This administration is about controlling other people. They will control other people in every way they can. They'll control them through cap and trade. They'll control them through selective taxation. They'll control them through regulation. They'll control them through who they give money to bail out.
DAGEN MCDOWELL: I disagree with Ben on the point that I think the goal is not to raise money. But this is a long road that we could still roll down in terms of taxing anything that lawmakers think is unfit behavior. Look at just the soda tax - that's only about $50 billion over 10 years. That's nothing when you look at what this health care is going to cost us. Either this is a rouse or they're going to have to tax the Twinkies, the Twizzlers even more.
ADAM LASHINSKY: We're confusing two different issues, the soda tax and the alcohol tax and the cigarette tax for that matter. Sin taxes have been around forever. They are about raising money.
Best Stocks for the Second Half of 2009
ADAM LASHINSKY: Artisan Small Cap Value (ARTVX)
CHARLES PAYNE: Transocean (RIG)
Forbes on FOX
On Saturday, June 27, 2009, David Asman was joined with Steve Forbes, Rich Karlgaard, Bill Baldwin, Neil Weinberg, Mike Ozanian, Quentin Hardy, Jack Gage, John Rutledge, Elizabeth MacDonald, and Matt Miller.
In Focus: Saving Lives vs. Saving Money; Should You or the Government Decide?
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: At least we can let doctors know and your mom know that, you know what? Maybe this isn't going to help. Maybe you're better off not having the surgery, but taking the painkiller.
(END VIDEO CLIP)
DAVID ASMAN: Saving lives versus saving money. The most controversial statement President Obama’s ever made about national healthcare. Now is the President saying he wants government healthcare to make that call? Hi everyone, I’m David Asman. Welcome to Forbes on Fox. Let’s go "In Focus."
STEVE FORBES: Hey — money is always going to triumph lives. We’ve seen that in socialized medicine in other countries. In Britain for example, if you’re above a certain age and need kidney dialysis, you’re not going to get it. In Holland and Asia, they have euthanasia. In this country, they are all going to point out, "Well in the last three months you spent this much. Why don’t you just take the painkiller and be done with it, and look at all that money we’ll save. "
ELIZABETH MacDONALD: I personally have seen doctors with their interns scribbling on clipboards testing out and trying new medical equipment on the poor who don’t have the families there to stop…resuscitation machines, all sorts of things. We know that fees for services have driven surgery rates up because you get paid on the amount of surgeries you do. This issue is do you want bureaucrats deciding the rules, who gets the money, who gets to be the beneficiaries of the money?
RICH KARLGAARD: What he’s indicating is government health care involves rationing. The thing that worries me most is when the government gets involved, it apportions things by political favors. See, we’re going to see certain political groups getting more healthcare favors than others.
QUENTIN HARDY: It may just be a bit of sensationalistic cherry-picking to say he was talking about the end of life here. Sounds to me he’s talking about many things the doctors will say. Don’t have the expensive procedure see if this will take care of itself. Most doctors I know will tell you a lot of procedures are unnecessary. If fact, last week we were talking about how many procedures are done to protect people from law suits.
JOHN RUTLEDGE: Healthcare means rationing. We do not want O or his appointed administrators deciding who gets medicine and when they get it. National healthcare is all about rationing. They’ve discovered that time is money. Dying while you’re standing in line costs nothing. So national healthcare is slow healthcare. Slow healthcare is no healthcare.
NEIL WEINBERG: The Republicans have a real problem here. We have a country with 50 million people who don’t have health insurance… which is a form of rationing. What we have to do here is scare people into saying we’re going to ration your healthcare. We’re going to make mom and dad die because we’re not going to give you care. The fact of the matter is there’s only so many dollars we can put into healthcare. If the government is going to offer a limited amount of support for people just like it does if you can’t afford your own lawyer, then your going to have to put a limit on it. I think that’s what Obama is saying.
Is Michael Jackson Worth More Now Than Ever?
DAVID ASMAN: He amassed fame and squandered fortune like no other entertainer in history. Right now, Michael Jackson might be worth more in death. His albums are dominating the best seller list on Amazon. Matt Miller, editor of the Forbes Celebrity List is here with more. Matt, the biggest asset Michael Jackson had were the rights to The Beatles songs, but it wasn’t a 100 percent of the rights was it?
MATT MILLER: It was 50 percent of the rights of The Beatles songs. He actually bought them and outbid Paul McCartney. The biggest asset he has is the SONY ATV partnership. It is rights to his own songs and rights to The Beatles songs along with a lot of other stuff. Reports on these are worth more than a billion dollars. The problem is his liability side is quite large. It’s estimated he has at least $500 million in debt. Michael Jackson had a spending problem that caused a liquidity problem.
STEVE FORBES: It’s happened to a lot of entertainers. You do create these entourages. You feel that it’s going to go on forever, and these incomes do not go on forever. He was very smart in realizing that songs do live forever and you can get royalties on an ongoing basis. In terms of his own spending, he assumed it was always going to be 1983, 1985 where piles of money come in. You sell a hundred million albums and you think it’s always going to happen. There’s no one to tell him, pull back. You’re in a new world.
Flipside: Pelosi and All Lawmakers Should Profit From Bills
DAVID ASMAN: Cleaning up on the "Clean Energy" bill? Questions about House Speaker Nancy Pelosi and her investment in a company that will benefit from the bill she is pushing. In fact, the company’s called Clean Energy Fuels.
STEVE FORBES: The key thing is to have true full disclosure that we don’t have today, especially on these earmarks. You don’t know what staffers or relatives are going to benefit from it so it just invites corruption. Right now, the only way to get money is if you already own a company that gives you dividends, so that invites another source of corruption. The best way to get rid of the corruption is give less power to the government.
NEIL WEINBERG: I think we should just take the temptation off the table. Tell these elected representatives if you want to serve the public trust you can’t be serving your own pocket at the same time. If you’re going to get into elected representative mode, you need to get rid of what you are invested in and put it in a blind trust so you’re not going to be thinking about what’s going to be benefiting you in the long run.
JACK GAGE: Generally I’m in favor of a profit motive, but you have to be careful of how you apply it. Certainly there should be a wall between politics and how you direct policy to benefit you financially. I think Pelosi, in terms of her problems, her biggest one was two years ago when her husband owned $17 million in Del Monte stock before she exempted American Samoans from being paid a higher minimum wage, and that passed nationally and that benefited Del Monte tremendously.
QUENTIN HARDY: I think it’s best to choose nothing instead of all. If we go in Steve’s way, we’ll have so much complexity involved with staffer’s holding, spouse’s holding, and personal holdings. Talking about the wages of American Samoans is just the beginning. Wouldn’t it be much simpler for every national politician to have it in a blind trust so they don’t know what they own for a while??
BILL BALDWIN: I think a blind trust is stupid. I think Nancy should sell lots of stocks. It will give her an incentive to fix the wrecked economy as long as it’s with full disclosure. Politicians should be participating in the economy; they should be required to own stock. They should know what it is and the voter’s should know what it is.
Informer: Steve’s Stock Leaders
David Asman: Power, Ambition, Glory. It’s Steve’s new great book – teaching CEOs and everyone else how to be great leaders. Now, he’s gonna teach you and the Informers how to pick great CEOs and their stocks. Here’s how it works. They pick their favorites and Steve tells ‘em what he thinks.
MIKE OZANIAN: Philip Morris (PM)
JACK GAGE: Johnson & Johnson (JNJ)
JOHN RUTLEDGE: iShares Singapore (EWS)
BILL BALDWIN: The New York Times Company (NYT)
Big Rush For $787 Billion in Stimulus, Where's Rush to Get Money Out?
John Bradshaw Layfield, www.custommuscle.com: This is the biggest load of bunk these guys have ever spun! This is insane! It’s not a slivertary. It would have to be increased to be a sliver. It is half of 1 percent that has been spent. They spent less money this week than they did last week, less money this month than they did last month, they didn’t "even vent Geitner" because they said, hey we got to rush this guy through, we got to rush healthcare through, we got to rush the fact that we’re going to cure cancer through. These guys are rushing everything through and doing absolutely nothing, zero. It is hurting jobs. Jobs acceleration is decreasing. Welfare is increasing for the first time since 1996.
Mike Norman, Founder of Pitbull Economics: Well it’s unfortunate that it seems that they’re pulling back the stimulus a little bit, but let’s look at a couple of things: First of all jobs are a lagging indicator. Jobs didn’t start declining until the economy was really, really in the skids, but if you look at the numbers, fourth quarter GDP was -6.3, first quarter now 5.5. You can equate a certain amount of jobs to the amount of economic growth and actually, things are starting to stabilize now, and even if you look at the weekly unemployment claims number, they’re starting to drop down. It takes time but it’s going to happen and much of the stimulus is still in front of us so when that hits the economy, you’re going to start to see an improvement in the job picture.
Tracy Byrnes, FOX Business Network: They’re not spending the money on shovel-ready projects like they said they wanted to. Last week they dish out $15.4 billion from the stimulus money. Of that $15B, $14B goes to the Department of Health and Human Services to distribute to the states for Medicaid payments. Medicaid doesn’t create jobs! Where is this money going? It is not doing what it’s supposed to be doing!
Wayne Rogers, Wayne Rogers & Co: It was ill-conceived in the first place. When you think about it, this thing runs over 1,071 pages in total. Nobody in the congress read it beforehand, and they passed it. I mean you’ve got to read the book before you write the book report. This is one of the dumbest things in the world! You’ve got a stupid congress elected by us. We must be stupid too because we elect them. I mean it’s just insane! And then they can’t even spend the money once they’ve done it. It’s crazy, it’s out of control! The whole thing is out of control!
Jonathan Hoenig, CapitalistPig Asset Management: I’m glad they haven’t spent the money. I’m hoping to get some of that back! After the 2000 bust there was a recovery without this massive intervention and stimulus. The truth is that capitalism and free markets work when you let them! I fear this government is going to push big spending plans regardless, though, of what the economy does. When the economy gets bigger, better or worse, this government is addicted to spending money!
Jonas Max Ferris, MaxFunds.com: The reason why they were spending more money before is because they were getting cash out just as helicopter money to elderly people and social security money. They can't fill potholes with cash and can’t spend it as quickly.
Barney Frank 'Rolling Dice' on Housing Crisis II?
Jonathan Hoenig: Absolutely this can lead to another crisis. Barney Frank loves to blame the free market but he’s creating another problem just as he helped create the first problem. Government caused this crisis. Barney Frank’s beloved Community Reinvestment Act, the low rates, all that intervention helped fuel the boom that ultimately led to the bust. Barney Frank is not a banker and he is compounding the problem by piling more shoddy mortgages on top of the first trash that caused the problem in the first place.
Mike Norman: Part of the problem was also that the Fed raised interest rates from 1 percent to 5.25 percent to try and fix a shortage of oil. I’m going to partially agree with Jonathan because we’ve had a policy in this country for over 70 years for universal home ownership. We deem that a public good, so if you want to get rid of these cycles, we have to change the policy. If we deem that a good public policy there are going to be laws or tax codes that foster home ownership.
Wayne Rogers: It is a good government policy. You do want people to have an investment in society. You do want them to own a home, but you want to do it in a free-market way that regulates that. The free market regulates that by competition. It doesn’t regulate by having the government come in and tell you what to do. Let’s stop this stuff right away. Let the free market operate and let people do what they can do best by buying homes that they can afford under laws that FDIC sets down for the banks.
Tracy Byrnes: If you said anything about Fanny and Freddy you would never accuse them of having too strict lending habits. That’s the reason we gave them $400 B back stop to begin with. The Fed was in buying mortgage backed securities to keep interest rates low on mortgages, that’s a decent way to get involved, but it should stay out of all the rules and regulations.
Jonas Max Ferris: Fanny and Freddy actually had stricter lending standards than the majority of earlier to fail private sector lenders. The loose lending across the board, government and private sector lending, was the cause of this crisis. However, loose lending, unfortunately, is needed to prevent the catastrophe which has already started that these sort of have stopped, which is a possibly percent70 decline in housing prices, which we could have if there wasn’t looser lending by the government.
John Bradshaw Layfield: It is very hard for low income people to get a mortgage these days. These banks got too big to fail and the mortgage securitization is slicing and dicing mortgages, exacerbating the problem The problem is the government. These banks, because of the CRA Act, had to put together sales forces to go out and lend money to people they knew did not have the ability to repay.
Government 'Forced' Savings Plan: Hold On to Your Paycheck?
Wayne Rogers: That is an outrageous idea. The government has already demonstrated they can’t save money, they can’t run a business, they can’t run their own government, it runs a muck. It is terrible!
Jonas Max Ferris: The bottom line is they’re diverting your money into savings. The government is not going to manage it, they’re just making you put money into your 401(k) or your IRA. This is a great idea, it doesn’t go far enough because this the only way to wean us off of social security is to force people to save their own money in their own account and have this when they retire.
Jonathan Hoenig: Is that really the role of government, to force us to do anything? Man must think in order to survive.
Tracy Byrnes: Indirectly it is. About 78 million people are going to end up without pensions now because companies are just not doing it anymore. All they are doing is outputting your money into an account. You can opt out and you can make your own investment choices with this money.
John Bradshaw Layfield: The more the government gets involved, the worst this is going to be.