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This week Brenda Buttner was joined by Tobin Smith; Eric Bolling; Pat Dorset; Matt McCall and David Goodfriend.
U.S. Keeps Spending as Other Nations Cut Costs
Eric Bolling, Fox Business Network: U.S. states want another $23 billion on top of the $150 billion they were requesting a couple weeks ago. These jobs bills keep costing us billions upon billions. In the meantime, we're helping bailout Greece and the European Union. Our country is already broke. We need to stop spending and do things like cut taxes, and help create real, long-term jobs.
David Goodfriend, radio talk show host: If you're trying to get your car out of a muddy rut, you lay your foot down on the accelerator and try to get the car out of there. It's the same concept in terms of getting our economy out of the worst recession since the great depression. We have to gun the car to get it out of this rut. If we continue this pace of job growth we saw over these past four months for the rest of the year, we'll have created more jobs than we did in the prior eight years combined. This spending is helping get our economy back on the right track.
Tobin Smith, NBT Media: We've finally come to a point where the business cycle is kicking in. We're finally beginning to see the economy recover on its own. But just when the economy starts to pick up, we start having these major issues over in Europe. Greece is showing us that if we actually do spend huge sums of money and continue plunging into higher levels of debt, our interest rates are going to go crazy. If interest rates skyrocket, then we really have to worry about the long-term condition of the economy, because the engine of growth is going to seize up. Let the business cycle do what it normally does.
Matt McCall, Penn Financial Group: I agree that the government should do a little bit of spending during a recession. But, our economy is recovering, things are getting better, and now it's time to stop the spending. If we do not stop now, we will turn into Spain, Ireland or Italy in short enough time. And suddenly, we'll be faced with the day where we have to pay the piper, and everything is going to blow up.
Pat Dorsey, Morningstar.com: What we have to do is have the political courage to change the debate from cheap political points around spending now, and whether stimulus is good or bad, and really focus-in on the difficult stuff like Social Security, Medicare, Medicaid, etc. —the costs of which are massive financial burdens to the country. There are only a few lone voices in Congress willing to talk about this. Let's have the courage to change the debate and talk about these real issues.
Report: Some Job Seekers Reject Offers, Stay on Unemployment
Matt McCall: This is ridiculous. If you can get free money to sit on your behind, and not go out and look for work, what are you going to do? Sit on your behind and not look for work. That's not what this country was built on. This country is built on innovation, and getting out there when times are tough. In Michigan, you make up to $387 week on unemployment. If you make $12 an hour landscaping, you make $350 after taxes. Where's the incentive to go out and get a job?
David Goodfriend: I think this is a made up problem and a made up story, with no hard data to back it up. We know that less than 7 percent of the unemployed are there voluntarily. So what's that mean? The vast majority of the unemployed wants a job and is hoping to find one. Of course there will be some who prefer collecting an unemployment check, but the American workforce as a whole is different than that. There's just a good collective work ethic.
Tobin Smith: A major study actually led by Larry Summers looked back at decades of unemployment data in the U.S. and found unemployment insurance causes the unemployed to stay out of a job longer. The data on this is clear. We find that people hold off on looking for work until the last week of the unemployment check. And this obviously keeps unemployment levels high.
Pat Dorsey: Receiving unemployment benefits for ninety-nine weeks seems a little excessive.
Eric Bolling: Touching off the numbers Matt raised, it really comes to the point where it just makes financial sense to stay home rather than looking for work. How can 99 weeks of unemployment insurance not be an incentive? Of course it is. People have every reason to wait for the 99th week to go out and try and find a job.
Spending Cuts to Solve California's $20 Billion Budget Gap?
Eric Bolling: Illegals in California should have been the first cut they looked at. California has 13 percent unemployment. There are about 4 to 5 million employed illegal immigrants in the state. If you get them out of the country, you open up 4 to 5 million jobs and get them off the unemployment dolls. And of course, the state would not have to worry about providing services like health care to illegals either — that'd save a tremendous amount of money.
David Goodfriend: We can't forget the tax revenue that comes from income and payroll taxes that illegal immigrants actually pay in California. Historically look at any economy that has welcomed an influx of immigration. You bring people into the lower economic strata and that allows everyone to move upwards.
Tobin Smith: I don't know how you ship out four million people. California has to focus on cutting the state benefits it gives out. If you stop the flow of illegal immigration, you tremendously reduce costs associated with Medicaid, food stamps, etc. The state could save over $12 billion right there. Some illegal immigrants may pay-in to the system, but they take up a disproportionate amount of the state services.
Matt McCall: What state is in the worst economic condition? California. What state has the largest illegal immigration problem? California. Put two and two together, and you can figure out what's going there. A vicious cycle is created when you have a disproportionate amount of illegal immigrants taking up the state's services, and not effectively paying a fair share.
Pat Dorsey: Immigration — legal and illegal — is the only thing preventing this country from having the same demographic disaster as every other developed nation like Germany and Japan. Immigration is saving us from these demographics issues.
Matt McCall: Offshore drilling ban continues! "LINE" strikes 40 percent profits in one year
Tobin Smith: 3D is here to stay! "LUX" pops 40 percent by January
Pat Dorsey: Underwater oil rig inspections! "DVR" cleans up 50 percent in 2 years
Eric Bolling: Tip to Eric Holder: Read the bill! "HPQ" prints 30 percent gains in 1 year
This week, Neil Cavuto was joined by Ben Stein; Dagen McDowell; Charles Payne and Adam Lashinsky.
Voters Rejecting Pro-Bailout Politicians Across the World
Charles Payne, WStreet.com: This is great news for voters and the taxpayer. I can hear the hooves of the horses coming, and the Calvary coming around the corner. People are finally saying enough already! All you guys in for these earmarks, all you who've voted for Obamacare or the bailouts, you're all done. You sank our future for short term gain. You think you had the support of voters? You don't.
Dagen McDowell, Fox Business Network: This anti-incumbent movement is what's going to save this country from becoming Greece, Portugal, or Spain. If voters send a message, and send people to Washington who will stop the spending and get our financial house in order, that direction could ultimately save the U.S.
Ben Stein, author, "Little Book of Bulletproof Investing": If this is a trend, it's a very dangerous and frightening one. Some of the bailouts were incredibly important. The bailout of the auto companies was vital. The bailout of big banks was vital, and we got most of our money back from TARP. The idea that all bailouts are bad is an extremely dangerous and foolish idea. Of course, the idea to cut spending in Washington is sensible. But where are you going to cut it? Even Reagan largely couldn't do it. If they can't, then they're going to raise taxes. I don't think this is a good omen.
Adam Lashinsky, editor-at-large, Fortune Magazine: I think voters are behaving irresponsibly. If you look at Gordon Brown, the former British Prime Minister, he was unpopular for a variety of reasons. But he did the right thing by bailing out the British banks — it saved the British economy. I guess it's good for democracy, but the people who come into office are going to have to face the same problems the incumbents have had, and will probably come up with the same solutions in many cases.
Stein: Arizona-Bashing Is Ultimate in Lying, Hypocrisy
Ben Stein: This is the height of hypocrisy. The United Nations is bashing the Arizona law — a group made up of cutthroats and genocidal tyrants. And they're judging Arizona on its immigration law — a law passed in a legal, law abiding, constitutional way. Arizona isn't going to just stop everyone on the street and ask if they have their papers. If someone is stopped or detained for another given infraction or crime, then they'll check a person's immigration status. There's nothing wrong with that.
Dagen McDowell: L.A. is a collection of lunatics who also happen to be broke. L.A. should be thankful for every dime and cent coming into that city. Boycotting Arizona doesn't serve anyone's interest. Tone and action are two different things. L.A. is going after the average citizens of Arizona, while this is a law passed by the legislature. If more and more cities or states boycott Arizona, it's going to be average workers who end up losing their jobs, and a good number of them are Hispanic.
Adam Lashinsky: This is a free country. People can come out and say what they want, or support what they want with their pocketbooks. I'm a big supporter of representative democracy. I like it when our represented leaders make a statement on our behalf. L.A.'s officials are saying it doesn't like how a neighboring state is behaving, so we're not doing business with them. If you don't like what they're saying on your behalf, fire them. Vote them out. I really like that process.
Charles Payne: I think it's kind of scary to think and assume the law is going to be implemented in some racist manner. I don't know what is says about this country. The idea the UN wants to weigh in on this law is ridiculous. I think their ultimate goal of the UN is to see America as we know it disintegrate. So I don't give a lot of weight to what they say.
Panic Buying Sends Gold Spiking to Record Highs
Adam Lashinsky: We know we have massive budget deficits in the U.S., and that will lead to inflation. When that hits, gold is a good buy. It doesn't matter if we have Democrats or Republicans running Congress or the White House — we're going to have higher taxes in this country. There's just no way around it. When this all hits, gold's value will go up considerably.
Charles Payne: This goes way beyond taxes. China and India just bought up a ton of gold over the last couple of months. A lot of people are seeing Western economies fall off a cliff. Gold is a way to hedge against a decline in Western economies.
Dagen McDowell: We should hope for a mega bubble in gold. The U.S. has the largest gold reserves in the world — 8,000 tons. We could pay off our debt with it! A mega bubble would greatly help that cause. Fear is going into gold and U.S. treasuries. The problem with that is it lowers interest rates, makes it easier for us to borrow, and puts off our day of reckoning.
Ben Stein: I don't think you can predict a whole lot in terms of commodity bubbles. Commodities don't predict a whole lot. Our budget deficit probably means we'll have inflation. But Japan has been running up deficits for a decade and has no inflation. I remember buying gold in the late 1970s at a price peak, and it plummeted and stayed low for two decades.
Charles Payne: Fluor Corporation (FLR)
Adam Lashinsky: iShares Tips Bond (TIP)
Ben Stein: SPDR S&P 500 (SPY)
On Saturday, May 15, 2010, David Asman was joined by Steve Forbes, Rich Karlgaard, Neil Weinberg, Stephane Fitch, Quentin Hardy, Victoria Barret, Elizabeth MacDonald, Kym McNicholas, and Dr. Cynara Coomer.
In Focus: Will President Obama's Push to Speed Up Hiring of Federal Employees Bring the Economic Recovery to a Halt?
DAVID ASMAN: Hire government workers faster. That's the order from the boss. President Obama telling federal agencies this week to speed up the hiring process. But the Forbes boss says this will slam the brakes on the economic recovery.
Steve, this will kill the economic recovery?
STEVE FORBES: You don't grow an economy by growing a bureaucracy, especially a bureaucracy that pays more for similar work than the private sector. This is just growing a bureaucracy and getting Democratic voters in for November — call it "cash for flunkies." It's not a way to get economic growth.
VICTORIA BARRET: We have to give Obama some due credit here. He's talking about making what's been described as a 19th century hiring process in our government agencies more efficient—making it move more quickly. Applications fall through the cracks all the time now. Applicants have to write essays instead of just handing in resumes and cover letters. This is about efficiency and it's good! It will save taxpayers money. He's not talking about increasing overall jobs in this particular instance, and I applaud the efficiency.
RICH KARLGAARD: What Obama is deathly afraid of is a shellacking in November. If the elections were held right now, the Republicans would take the House and the Democrats would lose at least 8 seats in the Senate. Get as many people on the payroll as possible, bring unemployment down so it's less of an issue in November, and create more Democratic voters. What's to lose?
STEPHANE FITCH: This is going to bring us better talent. Think of the chump who sits for 200 days, goes through all that essay writing, interviews with all of those federal bureaucrats, and actually accepts a job! This will get us better people and that's what we need.
ELIZABETH MACDONALD: Government workers earn 21 percent more than private workers, and we have 850,000 people who could be paid at market rates right now in the executive branch. You'd save $28 billion over 5 years. My favorite part of this is that the IMF is telling the sickest patient in the EU -— Greece —- that if it wants a loan it's going to have to get out of health care, out of transportation, and out of energy. In other words, get the state out of the marketplace in order to save money.
QUENTIN HARDY: Yes, it's better to improve efficiency. Look, Obama has taken flack for the spending rate and the rate at which the stimulus was paid out — maybe he learned something. Maybe he learned about hiring faster. We talk about running government more like a business, and in business you hire people fast and efficiently. This is faster and more efficient.
Three Things Happening in D.C. That Could Push Gas to $5 a Gallon?
DAVID ASMAN: Oil prices dropping big time, but fears of $5.00 gas rising just in time for Memorial Day. Some say DC is cooking up three plans this week that will create the perfect petro storm: a push to hike taxes on oil, more calls to end offshore drilling, and the new climate change bill. So Lizzie, $5 gas?
ELIZABETH MACDONALD: I am worried about $5.00 gas. I'm mostly worried about the climate change bill and the higher taxes. I don't think Congress is going to enact a lock box for these taxes on oil. As for the offshore drilling, oil is a fungible market. If that shuts down you get supply elsewhere. But we can't bottleneck this with more government involvement in the way of oil pricing at a time when our economy is struggling.
NEIL WEINBERG: I think that anyone who's talking about $5.00 gas might be full of a little gas himself. Europe is going into some sort of recession and the dollar is getting very strong, which pushes down the price of oil. And if you look at the price for New York futures on the Mercantile Exchange, they are betting that next month it's going to be $2.17 a gallon. I don't see a problem here.
STEVE FORBES: The government is going to work to try to make these speculators wrong on $2.17 gasoline. They're raising taxes, limiting supply, and the Federal Reserve is printing more money, which means inflation, which means higher gas prices.
QUENTIN HARDY: If summer gas prices rocket up based on this offshore stuff, it's totally opportunistic. Oil prices should decline because the Chinese have been stockpiling and they're going to stop, and that means OPEC will overproduce. That's the big factor in gas prices. But let's ignore the coulda, woulda, shoulda and deal with some facts. We know that BP went in without the right wildlife permits. We know they ignored warning signs earlier in the day. We know they got workers off the rig and tried to get them to sign papers saying they signed nothing. We saw them blame each other in front of Congress and we saw them try to cap their liability before anything happens. And we've seen them miscalculate the amount lost by a factor of 10. I don't think government is the problem. I think greed is the problem. I'm for offshore drilling, but I think we need to go about it the right way.
RICH KARLGAARD: Consumers may well pay higher gas prices including $5.00 a gallon. They probably won't, but there's a real chance. If you go back to the summer of 2008 when gas went over $4.00, oil was $147 a barrel driven largely by fear. We're seeing fear in the financial markets today with gold over $1,200 an ounce. It hasn't yet hit oil but remember, what will drive oil up is not the supply and demand but fear, and all it's going to take is one match hitting the Middle East. That could happen this summer, and boom, gas goes to $5.00 a gallon.
Flipside: Government Should Make Everyone Take a DNA Test to Screen for Medical Risks
DAVID ASMAN: A new do-it-yourself DNA test creating quite the controversy. The test can detect diseases you're likely to get, or so they say. Walgreens was supposed to start selling the test kits this week, but put those plans on hold after the FDA said it wants to approve it. But why wait? The Forbes Flipside says Uncle Sam should force all Americans to take it now. Rich, you're making this argument?
RICH KARLGAARD: It doesn't sound like I'm a real civil libertarian here, but I think if you take money from the government and you are going to get free health care, you ought to throw your DNA into the database. That will help bring efficiencies and improvements. If you have a predisposition to diabetes, let's find out now, because that's a really expensive disease to treat once you have it.
CYNARA COOMER, MD: I couldn't disagree more with this viewpoint. The reality is that genetic testing is a very complex issue. We need to take this very carefully under the guidance of a geneticist and a doctor who can interpret the results. Testing for true genetic disorders is one thing, but testing for chronic diseases like diabetes, obesity and glaucoma involves environmental factors and genetic factors. Even if you are not genetically predisposed to these diseases, you could be predisposed to them based on your lifestyle, and we need to target those people as well. That may be a bigger issue than genetics.
NEIL WEINBERG: I'm not going to try to compete with actual knowledge here, but one thing I will say is that its very scary to think that the government is going to require people to hand over the genetic code for their own bodies. That is a really scary thing.
VICTORIA BARRET: This is science, but we can't completely pinpoint that, for example, when you're 40 years old you're going to get breast cancer. It is not that accurate. You end up giving people a lot of anxiety about things that they may or may not truly be at risk for. Rich is right, we should be encouraging good behavior if people are taking government dollars for health care, but we can do that without making everyone take a DNA test.
STEVE FORBES: This is a form of genetic totalitarianism. If the government gets the information, they'll decide who gets treatments, who goes to the front of the line, who goes to the back of the line. They'll say spending money on this person is hopeless, let him go. I don't worry about consumers. They'll misuse it, but government will misuse it and hurt our health, and then they'll use it to tell us what to eat, when to go to bed, those kinds of things. We're adults, but they haven't gotten that message yet.
Informer: Stocks Hotter Than the Miss USA Contestants
NEIL WEINBERG: Las Vegas Sands (LVS)
KYM MCNICHOLAS: Warnaco (WRC)
STEPHANE FITCH: Church & Dwight (CHD)
VICTORIA BARRET: Energizer (ENR)
Did European Union Bailout Set Stage for Bailouts of U.S. States?
Tracy Byrnes, Fox Business Network: We know that the President is supportive of this, he was on the phone with the German chancellor saying you got to get it done. We know $112 billion was originally put in TARP to save the bank — the states, excuse me. We also know that about 48 of our states have budget deficits, upwards of $44 billion. They're broke. It's not California, it's Illinois, New York, New Jersey, the states are in trouble.
Julian Epstein, Democratic strategist: It's good thing like with the Mexican bailout and TARP, these are bridge loans more than bailout and stabilizing a situation. With respect to the state, the Bush administration bailed states out in three occasions and they continue to support that aid for the state through Medicaid and Medicare reimbursement. So there isn't a real disagreement along the philosophical divide whether we should help the state. When you are in an economic downturn, if you don't provide money you are forced to raise taxes or cut employment and neither is good for economy —
Jonathan Hoenig, www.CapitalistPig.com: There is a huge anti-bailout wave, exploding all over the country. You can't deny it. It's exploding in places like California. California is now one of the top ten governments at risk for default. It wasn't Goldman Sachs that put them in that position. It was their own irresponsible behavior. And, of course, we'll see more bailouts, because the government is going to say, the president is going to say we're all in it together. If one goes down, we all go down. That's the collectivist notion that has them going out for the better —
Wayne Rogers, Wayne Rogers & Co: Once you commit to a bailout, of course you bail us out first. Crazy to think otherwise. Why would you bail out somebody else? Your reason to bail out the European nations is we're exporting to them and it will help us in the long run in a world economy, but you have to bail out, you have to take care of home first, you know.
Jonas Max Ferris, www.MaxFunds.com: The notion that it leads to the states — the states were already bailed out. They got money. It wasn't money they pay back to the government like bank bailouts. It's hand-outs. Anybody who bought a municipal bond in the last year knows there will be a government bailout of the state. You wouldn't buy a bond from California — California can't print money, just like Greece, and didn't get what they offer unless you thought there was a chance the federal government would step in. If we let Greece crumble, our dollar will skyrocket. It already is, but if it goes bananas, what will happen — people in California can't export to other countries.
John Layfield, www.nutritionmarket.com: Look, I don't care if Bush calls a bubonic plague or flood. I don't care what it is. You can blame Bush for everything you want but right now we are in a dilemma and we are bailing out the state. $144 Billion has gone to states out of the stimulus fund, $50 billion short this year. Another $180 billion is going next year. We are dealing with liquidity, not dealing with the solvency. Just like in Greece. The massive under-funding of pensions, the states are not paying in pension. They are robbing Peter to pay Paul and the states are absolutely bankrupt. There is not an answer by the administration or by anybody else dealing with this. They are going to try to bail them out but it's solvency, not liquidity.
White House's New Pro-Union Ruling: Best or Last Thing the Job Market Needs?
John Layfield: We're at 9.9 percent unemployment. Real unemployment is over 17 percent. One out of six Americans are unemployed and the Democrats are bragging about the economic stimulus package. I'm not sure I'd brag about one out of six people being unemployed. It's appropriate that "Robin Hood" came out this weekend because the redistribution of wealth never got better than with this administration. At the end, it was a fairy tale and Robin Hood was a thief. They want to make things equal but what they want is to unionize the south, so manufacturing in the south is as inefficient as manufacturing in the north. This is a job killer but it's good politics for Democrats.
Jonas Max Ferris: Similar political unions exist to shift power from management. I don't work at a coal mine. But the relative to the profits people do argue could shift money from labor. If you have wages not going anywhere, it will steal the corporate profits, from the corporate America, and the companies, some of them with billions of dollars shifting them to wages. That's what it does.
Wayne Rogers: Jonas, in your logic, too, there is an assumption that there is profits there to be shared and many companies don't have the profit margins and don't have enough to do that. There is another thing that is going on here. Not only in them but the national labor relations board, Obama's appointees there are also stirring up problems for companies that are not going to, you know, tow the line as it comes to when the union demands come around. You can only afford to do — we are talking about it in Greece. Greece did the same thing and they paid off all the labor so politicians could get elected and look at the problems.
Tracy Byrnes: Look at what is happening in New Jersey. The teachers union is fighting back and the Governor is trying to change things and the teachers unions are saying we're not going to play ball. We're broke in New Jersey. Everyone needs to come to terms with the fact that the unions are part of the problem for what has brought this country down in the last couple of years.
Julian Epstein: Remember, this is not card check, which is what a lot of what corporate America is objected to. In the last ten years, eight under the Bush administration, working people saw the real income decline. What the rule basically says, it's not that radical, majority of voters working in a particular company or industry can decide whether or not they want to unionize. That's a basic legal right people have. Workers have a legal right to decide whether or not they want to unionize. It's a basic right by the Supreme Court.
Jonathan Hoenig: Employment has to be mutually beneficial, it has to be good for employees and employers. You want the government to get involved to help the working people, I guess that means union people. Not only a big smear on people who work and aren't in unions but gives an unnatural benefit to the tiny favored constituency; ie, labor unions. Why is that fair?
Democrats Planning on Spending $200 Billion Before Memorial Day?
Jonathan Hoenig: Take a look at pictures of Greece, Spain and Portugal where people are rioting because of the basket case economy of the entitlement states. Both parties are to blame here and a lot of spending that the GOP is arguing against they committed eight years ago. Spending and entitlement spending will kill the economy as it's killed the European economies and that's why it needs to stop here and now.
Julian Epstein: Again, as you point out, money for the troops in Afghanistan and money for doctors on Medicaid/Medicare and money for unemployment benefits, all things the Republicans historically support and they should support. The idea here is while you want to be able to pay for the programs, everybody would agree with that. When you have economic downturn, you don't do that and you go in the deficit spending because you want to pump money in the economy. The best way to pay for these things to get us back to positive economic —
Tracy Byrnes: I find that unfair. Everybody at home is making changes. I can't pump money I don't have into anything in my household. I don't have it.
Wayne Rogers: The history has been written for us. If you continue to do this, you will do it just like Jonathan said. The power to spend is the power to govern. As long as you have politicians that are passing out money and put off day of reckoning, it will come.
John Layfield: Define bankruptcy. That's when you can't pay your bills. We have unfunded liabilities we'll never pay from the social security, Medicaid and the state pension plan. We will not pay those, period. That is the definition of bankruptcy. This is criminal. They said this is pay as you go, unless it's an emergency. They're deeming everything an emergency. This is criminal. They got to quit spending.
What Do I Need to Know?
Tracy Byrnes: Two weeks ago, the boycotts didn't work in Arizona, and they're not working. We saw it in Worstster, Mass. Not working.
Wayne Rogers: The market is in disconnect from the real economy. Ford motor company (F) reported great earnings and they will continue to do so. I own it. I bought it at 11 and it's way above that.
John Layfield: The Celtics, Lakers, Betty White and our own Wayne Rogers are all classics. Buy a classic stock with a great dividend and Pfizer (PFE) is one of the best.
Jonas Max Ferris: Take Two Interactive (TTWO) Rock star game and Red Dead Redemption will be a super big hit. Get it now why while the getting is good.
Jonathan Hoenig: This is a safety deposit box key. One factor that is fueling gold to an all-time high is this collectivist notion that we're all in it together. It's prompting people to hide their wealth and pushing gold to higher highs and I like it.