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Dismal Jobs Report Renews Fears of Double-dip Recession
BRENDA BUTTNER: Taxes bearing down. Jobs way down. The unemployment rate stuck at 9.5 percent. 131,000 more jobs lost last month. Enough to renew fears that double-dip recession is ahead. Does it have to be?
ERIC BOLLING: The recovery is dead unless we cut our insanely high taxes. Corporate taxes here are as high as anywhere else in the world. The only rate higher than ours in the developed world is Japan and look at how great that's working out for them. Everywhere else in the world is below us. We need to cut taxes and make sure that jobs stay here, people spend here, and companies spend on equipment and hiring. Then maybe we'll have a recovery.
JONAS MAX FERRIS: President Obama cut taxes last year. They are already low and unemployment is still high. There comes a point where you're not going to be able to cut taxes to hire more people. The economy doesn't actually need these workers right now. Maybe naturally, without any intervention, in 3 or 4 years, the unemployment rate would drop. But if you want to artificially lower the unemployment rate to a level the economy doesn't need right now, you have to go out and hire people. The government can do it, but what they've been doing are not those kinds of programs. They're afraid to directly hire people.
GARY B. SMITH: When people talk about cutting taxes they're talking about the marginal tax rates, not about putting $200 in a person's check. That's not cutting taxes. There can only be a couple reasons why they won't cut taxes. The first is that the government would see less revenue, which by the way, wouldn't be a bad thing. But the fact is, when Reagan cut taxes, they saw more revenues. When Clinton got the Republicans to cut capital gains taxes, they saw more revenues. 13 studies have shown that when capital gains rates are cut, capital gains back to the government increases revenue. So the only other part is, can the government keep the money and then create jobs better than the private sector via tax cuts. We've seen with Obama that they haven't been able to budge the needle one iota. Unemployment has gone up and Friday's report was dismal. FDR tried the same thing by raising taxes and that didn't get us out of the depression. In fact it wasn't until FDR actually cut taxes that we saw unemployment start to dip. So, I can't see a logical reason other than the administration thinking they know better than the people what to do with the money, and so far, they haven't shown that they do.
TOBIN SMITH: In Ireland they cut corporate taxes to 15 percent. It worked really well for 25 years. How about we just eliminate the capital gains tax for the next two years for all entrepreneurs? We wouldn't know what to do with the growth, because as we all know, according to the Bureau of Labor Statistics, entrepreneurs created all of the new net jobs since 1985. All we would have is growth and people investing money in building new stuff, which puts people to work.
Could $26 Billion Bailout Hurt States More Than Help?
BRENDA BUTTNER: Speaker Pelosi and House Democrats speeding back to DC to pass a new $26 billion state bailout bill, just as states are finally starting to cut back. Toby, you say she's about to kill the one thing we need most.
TOBIN SMITH: Pelosi's plan is like a crack addict. Some states have started to kick the habit and now the government comes riding in on a white horse, taking money that they don't have and giving it to them. Come on. Get off the crack. These states can solve their problems. Their housing prices sky-rocketed and all these taxes when kaplooey. They are trying to live on reasonable terms. Don't keep feeding them the crack.
JONAS MAX FERRIS: The problem with these states is they don't run surpluses during good times so the minute things turn bad they have to act like a corporation immediately to make budget. The federal government doesn't want that to happen. They are trying to prevent it to some extent by subsidizing. They gave them $100 billion last year in the stimulus plan and $26 billion now to schools and Medicaid programs. In my opinion, they should also have to make cuts in the future when we are not in a recession to warrant this handout. But they're not doing that. However, I don't think we really want to see the cuts that would happen if they didn't get the money we're giving them.
ERIC BOLLING: Unions won't ever make cuts but Tobin hit the nail on the head. When you teach someone to use crack and then allow them to continue using it even when they are willing to cut off the addiction, to try austerity and to cut back, and you say, "Oh no no, take $26 billion more," they never get off of it. They'll never stop the spending.
GARY B. SMITH: There are states that are cutting back. Colorado is cutting back on its education expenses. Florida is raising its tuition across colleges and universities. In the LA public school system, the average cost per student is about $24,000. In private schools it's $8,500. So not only can they not stay within their budget, they're bloated across the board. There can be cuts made. There's plenty of fat. Even Washington D.C. is trying to cut the teachers out because they agree that if they want to get higher salaries, they have to cut. And as soon as the head of education started cutting, the unions said "no!"
New Report Reveals Stimulus Dollars Spent on Wasteful Projects
BRENDA BUTTNER: Stimulus money being spent on this: research monkeys high on cocaine; studying the process of freezing rat sperm; video games for the elderly; and yoga therapy for menopausal hot flashes. Gary B., does this sound credible to you?
GARY B. SMITH: I have a couple more examples. I put together a list of my Top 5. $16 billion to help Boeing clean up an environmental mess it created in 2007. $89,000 to replace a new sidewalk in Oklahoma that leads to a ditch. $1.9 million for international ant research. $308 million for a joint clean energy program with BP. $554,000 for the foreign service to replace windows in a closed visitor center in Mt. Saint Helens. How anyone in the government can defend that is totally beyond me.
JONAS MAX FERRIS: I will defend this and I'll tell you why. On a dollar for dollar bases, these are probably creating jobs better than other stimulus programs. They have tangible job benefits. Also, these sub-million programs are not big things. They are not wasteful areas of government that need cutting.
TOBIN SMITH: I totally agree with Jonas. The $150,000 to study the Russian dinosaur eggs was a fabulous use of taxpayer money. The $185,000 to help Siberians learn how to lobby the American government? Not only are they ludicrous, but it takes us away from the real work.
ERIC BOLLING: The sad thing is that it's such wasteful spending. It's absolutely absurd how much money is being given to towns for things that you can't even imagine. And by the way, sometimes the money creates zero jobs, sometimes a tenth of a job, according to recovery.gov. It doesn't matter if it's just a little bit of money. It's wasteful.
TOBIN SMITH: Verisk Analytics (VRSK)
GARY B. SMITH: Target (TGT)
JONAS MAX FERRIS: Fidelity Select Automotive Port (FSA VX)
ERIC BOLLING: Monster World Wide (MWW)
Cavuto on Business
This week, Neil Cavuto was joined by Charles Payne, Gerri Willis, Dagen McDowell, and Adam Lashinsky.
D.C. Rushing to Spend, But Not to Cut Taxes
CHARLES PAYNE, WSTREET.COM: It's nuts, and it's getting worse. Obviously we know from Friday's jobs report the spending is not working. No one has political will to do the right thing and to stop spending. This latest spending bill is to help bailout the teachers' union, which helped elect the president and democrats in 2008. They have to pay these unions and this is how they're paying them.
GERRI WILLIS, FOX BUSINESS NETWORK: Members of the House don't want to get off vacation to come back and vote for this new $26 billion spending bill. They would much would rather be playing in Hawaii or goofing off. I've talked to some of the democratic legislators and they say it doesn't matter if you're taking money from the stimulus, it's still spending.
DAGEN MCDOWELL, FOX BUSINESS NETWORK: You know what's shocking, though? Is there's no appetite to ensure tax cuts in this country. There is no appetite among the democrats for that and that is the single thing that every CEO that I talk to says. They want to see some certainty from DC.. You can't raise taxes in this kind of job environment. They say we need to know where we stand on taxes if you want us to go out and hire. There lies the argument, why is spending so easy and cutting taxes so difficult? I think it's because with spending, they control it. They're in charge of who gets what. If you cut people's taxes, then you're putting the answers and the power in the hands of individuals and companies and liberal politicians don't like it.
ADAM LASHINSKY, FOX BUSINESS CONTRIBUTOR: It's interesting that Charles brings up a political will or political appetite. The president is demonstrating a difficult political situation here which is to let those tax cuts expire on only the highest earning Americans and Treasury Secretary Geithner laid out the case last week. It is a matter of political will because he knows if we extend it now, it will never go away. And that's a philosophical position. There are responsible people who say we have to look at the deficit now. People like Alan Greenspan, for example. The issue here is the top 2 percent of wage earners and by the way, I know Charles is going to say this just crushes small business. That's not really true.
CHARLES PAYNE: All of these spending programs by the way have come under fictitious names like shovel ready jobs and bailouts for states and unions. They're going to run out of names. They're going to run out of fake titles for these things because you know what: they have about $180 billion that they're short for the fiscal year 10/11. This is another $26 billion. Where are we going to get the rest of it? At some point, the tough decisions have to be made locally and nationally.
DAGEN MCDOWELL: The problem is with the spending is that these are essentially permanent expansions of entitlement that you saw in this stimulus package and that's the problem with this $26 billion spending bill, it's essentially an extension in the increase of matching for Medicaid. That's the problem. These things are built in and they're not going to expire. Most states think that this will be extended. They're counting on it because they know that the government is run by a bunch of, well, morons.
GERRI WILLIS: There are big questions about whether this can continue. I think the state aid package could continue but you saw what happened on the small business package. They couldn't even get into agreement on that. I thought that would sail through no problem. So the devil is in the details.
Anger Grows as D.C. Dismisses Voters' Anti-Big Government Message
GERRI WILLIS: 71 percent of Missourians voted to reject the federal government's new health care mandate. They hate this legislation as so many Americans do -- 71 percent. That's pretty impressive. We'll see more states go down this referendum road and, of course, we just saw the Virginia circuit court judge say "there are constitutional grounds to object to this."
CHARLES PAYNE: I think ultimately it's going to take a Republican in the White House and a majority in congress. Even though this vote was mostly symbolic, I'd say it's akin to the guy who stood in front of that tank in Tiananmen Square, people are raising their voice against this government. That's all this really is. They don't like the way it was passed, the way it was sold to them and the way it's being lied about right now.
DAGEN MCDOWELL: They don't like the way the federal government is coming into the states and telling individuals and states how they have to behave. The states are completely burdened with mandates from the federal government. Whether it's health care coming up, whether it's labor, whether it's education, whether it's the environment. Good luck trying to run your own state. Good luck trying to keep taxes low in this environment. You're seeing the American people individual by individual stand up and say no to government out of Washington. You're seeing it represented at the local and state level by state attorneys general, by their governors and just by votes like this one. You watch change happen in D.C., period.
ADAM LASHINSKY: The law is complex. The provision that the good people of Missouri were voting on doesn't take effect until 2014. So there will be time while these regulations get written for people to have their say and, in fact, for people to vote out the congress and as Charles said, to vote in a new president and, of course, it could be changed. We could pass new legislation if that's what the people want. I think in the meantime, the President will have the opportunity to continue to try to sell this thing and maybe he'll fail, but i think he'll succeed and Charles it's a grievous injustice to compare this statement that the people of Missouri were making with the statement that the Chinese people made in 1989.
GERRI WILLIS: I don't think they do because they get promised one thing and something entirely else happens. We're told that the stimulus money is going to be used for one thing and then we're giving cocaine to monkeys in North Carolina. I mean, it's crazy out there.
ADAM LASHINSKY: What's so interesting about that is I actually think you're absolutely right. This is what the people are saying. And the funny thing is that in 2008, they said something different. They said they were tired of weak regulation, of financial markets that have run amok and put Barack Obama in the White House. The people are in fact confused. They're changing their mind very quickly.
GERRI WILLIS: They know what they want. There's no confusion. We were sold one set of ideas and they were not implemented. It was totally different. I think your comments are totally unfair.
New Bailout Worries Over Government Offering Low-Cost Home Loans
DAGEN MCDOWELL: We're still paying for the disaster created by Fannie Mae and Freddie Mac to begin with and we're creating the exact same kind of disaster once again with this government program offering home loans with little money down. You are going to hit the American taxpayer right where it hurts because Fannie and Freddie are involved in 90 percent of all mortgages made in this country today. We're on the hook for it. It's going to blow up in our faces because of the quality of loans that are being made and the folks in Washington understand zero about math.
GERRI WILLIS: This is exactly what got us into the great recession, the mortgage meltdown. We're starting to see signs of a second leg down in the housing market, I think. Foreclosure rates in areas you would never think of like McAllen, Texas, suburbs of Seattle and Baltimore are having big time foreclosure rates, 100 percent and more in these communities. I think we're having more trouble in the housing market.
CHARLES PAYNE: I don't think it's going to make much of a difference. If you look at the bulk of people falling behind on their mortgages are richer people. To me, that's the hypocrisy aspect of it. We've been told over and over again for the last two years that what the private sector did was reckless, that it was nefarious that they deliberately crushed the economy.
ADAM LASHINSKY: I want to point out to you that we are the government. I mean we the people screwed this up badly over the past, let's say, 40 years with bad policies like this. I think the only good thing here is the high credit requirement for these low money down loans, which i think will disqualify a lot of people from participating in this. If it creates a lot of jobs, then we'll be happy. By the way, that is the issue. There are well meaning people here who believe that this is a jobs creator because the housing industry is critical to creating jobs. And it ism but I happen to agree that this is bad policy.
GERRI WILLIS: People have been forced out of their homes. Foreclosure rates and the number of people in foreclosure rising to 2 million and 3 million. A lot of people have lost their homes. At some point, you have to say we can't do this again. We can't offer mortgages with only putting 3 percent down, 0 percent down. It doesn't work. Somebody has to make the tough call.
CHARLES PAYNE: I think we can have it that way. But if the private company wants to put up its money and lend it out to people, that's fine. But the problem is we've already given Fannie Mae and Freddie Mac around $90 billion and an unlimited amount of money. By the way, we the taxpayer are on the hook for all this is what bothers me. We push the private sector out of the business and now we want to do what we didn't allow them to do.
Takeover Takeoff Stocks: Names Ready To Take Off From Take Over News
CHARLES PAYNE: Potash Corp. (POT)
ADAM LASHINSKY: Symantec (SYMC)
Forbes on Fox
On Saturday, August 7, 2010, David Asman was joined by Steve Forbes, Rich Karlgaard, Bill Baldwin, Neil Weinberg, Victoria Barret, Kai Falkenberg, Mark Tatge, and Fox Business Network's Elizabeth MacDonald.
In Focus: Would Getting Rid of Secret Ballots Help Or Hurt The Job Market?
DAVID ASMAN: Forget the job losses we're seeing now. Someone here says a promise the president just made to unions is going to kill hundreds of thousands more. Hi everybody! I'm David Asman. Welcome to Forbes on Fox. Let's go "In Focus" with Steve Forbes, Lizzie MacDonald, Rich Karlgaard, Bill Baldwin, Neil Weinberg, and Mark Tatge.
The president just made a promise to the AFL-CIO to push the "Employee Free Choice Act." Steve, why would this hurt jobs?
STEVE FORBES: Well, put aside the fact that it's anti-democratic with no free elections -- that's good for Iran, North Korea, and perhaps Chicago but not for the rest of the country -- it also invites intimidation and coercion. But more importantly, David, it substantially raises costs on business beyond what the market can bear. It'll [reportedly] destroy at least 600,000 jobs. And we've done this before. We did it in 1937 and it got us a second depression. This stuff doesn't work.
NEIL WEINBERG: We don't want to do anything to hurt job growth, and obviously unions do a lot of bad things. If you look, for example, at the carpenters' union, they make the Bonanno [crime] family look like the Boy Scouts. But, all those sins aside, what we need in this country is a living wage. Steve's talking about costs going up. Well, why do they go up? Because companies are forced to give things like health care and pensions. And I have a hard time seeing a problem with that.
RICH KARLGAARD: Job growth is very important right now. Unemployment, as of the Friday figures, is still a big problem. Small businesses are really not stepping up to the mark and hiring. Why are they not? Because they look down the road and see union card check, higher taxes, and more onerous regulations. [Small businesses] will outsource and they will automate and they will temp every possible job that they can.
MARK TATGE: I think that's nonsense. The country is built on the back of the working man. And the working man, if you pay him a decent wage, he'll spend money. And if he spends money, that's going to create more jobs and it'll add to the prosperity of the economy. Right now, we have no jobs in this economy and we have 9.5 percent of the people unemployed. Unions are a good thing, they aren't a bad thing despite the fact that some business feel they're bad.
ELIZABETH MACDONALD: Secret ballots are as American as apple pie. You should have a right to a secret ballot for anything. And I don't understand why they're taking away the secret ballot and calling it the "Free Choice Act." Where does that come in? I don't see how it squares. Look, there's intimidation from employers, there's intimidation from unions; this is not the way to go. The National Restaurant Association is opposed to the Employee Free Choice Act. British Columbia tried it and they ditched it years ago. And by the way, the secret ballot came about during the Reconstruction to help freed slaves. We have to remember the history here and why we need a secret ballot for our workers.
BILL BALDWIN: Hey look on the bright side, Liz, I think this could paradoxically help the economy. This is what's going to happen: Unions will start strong-arming people, that will backfire, unionization will go down, and the economy will be better. Let me prove this to you with some statistics. Why is the UAW a tiny fraction of what it used to be 50 years ago? It's not because they lost elections, it's because they won elections. That's what happened. They so much made Detroit un-economic that Honda and Nissan and Toyota came in and had a better deal for the economy and for the workers.
New Report Shows Obesity Worsens as Senate Approves School Lunch Takeover
DAVID ASMAN: You can't make this stuff up. A report out this week says Americans are getting more obese... despite all the expensive anti-obesity government programs. So what's the Senate do? It passes a new $4.5 billion dollar healthy school lunch plan. The White House says it'll help trim down our kids. But Rich -- you say this nanny state stuff doesn't work?
RICH KARLGAARD: It doesn't work. And $4.5 billion! Have we gotten to the point where $4.5 billion is so trivial that we're going to throw it away at this? I think the American taxpayer should be outraged that they're going to be asked to spend another $4.5 billion to elevate Michelle Obama to sainthood since she's the one who's driving this. It's ridiculous.
ELIZABETH MACDONALD: Americans don't like it when the government wastes $8.5 billion on the National School Lunch program that actually doubles the caloric intake and is making our children obese because agri-business has a lock on the contracts to feed our children. And that is what's going on. There's really bad food going through our nation's school system and into our children's bodies and that's what's making them very sick. So redo that $8.5 billion program to get healthier food into school programs.
STEVE FORBES: Oh, so instead of spending another $4.5 billion, how about getting rid of that $8.5 billion program and return control to the parents? Why don't parents go in and say "Change these menus! We're putting up the money for most of the schools"? Is the nanny program really working? Fat chance. The only ones who are going to get fat off this is the Washington army of consultants.
VICTORIA BARRET: Children don't always make great choices. And parents don't always make great choices. When I was little, my mother's idea of an indulgence was raisins. We had a very boring kitchen cabinet. So I would go to the neighbor's house and eat an entire bowl of Doritos, 6 Capri Sun treats, and half a box of licorice.
DAVID ASMAN: Steve just said "Smart kid!" I'm not sure if you heard that.
VICTORIA BARRET: I think in our schools we should enforce good health. And we gotta spend money to do it.
BILL BALDWIN: Federal school lunch. It sounds so virtuous! There's no question the beautiful couple in the White House and some of the people on the show today are very virtuous when it comes to their diets. But do you have the right to force that virtue on me? I've got a compromise for you, Victoria. Here's my deal: I'll give you a $1/pound tax on sugar and on high-fructose corn syrup. But, you gotta get the government out of my face. That means no more federal government involvement in either schools or lunches.
KAI FALKENBERG: You, as taxpayers, are contributing to the $150 billion a year we spend on health care-related costs because of obesity. If you look at the government action against smoking, it managed to decrease smoking by 20 percent over a couple of decades. It was very effective. Have you looked at the kind of food that we're serving in schools? I mean in Oklahoma they serve something called a "Frito Chili Pie." That's canned chili, on top of Fritos, with Cheese Whiz poured all over the top.
ELIZABETH MACDONALD: I think I'm going to be sick.
Flipside: Companies Should Stop Giving Political Donations
DAVID ASMAN: Target trying to get the bulls-eye off its back. The popular retailer stirring up trouble when it shelled out $150,000 to a political group. Turns out that group is backing a conservative candidate in the Minnesota governor's race. Now, some liberal shoppers are boycotting, and the CEO is apologizing. Mark, your "Flipside" solution is to ban all corporate political donations?
MARK TATGE: Exactly, I think corporations should not be in the business of giving shareholders' money to candidates. The system has become way too tilted toward the corporations and against the individual; they have an unlimited amount of money to donate to campaigns and drown-out the little guy. I say, ban political contributions from companies and PACs altogether.
STEVE FORBES: You gotta get the unions in the ban, as well.
MARK TATGE: I agree.
STEVE FORBES: Very good. But, the real-world fact is with government having so much power today, companies have to be involved in the political process. And so to blame contributions and blame lobbyists, is like blaming mosquitoes when you should be draining the swamp, David. It's the size of government that breeds the problem.
NEIL WEINBERG: Any entity that does not bleed and breathe should not be giving political contributions. You know, David, just to give you an indication, during financial reform, the financial services industry spent $1.3 billion lobbying. They hired 72 former members of Congress and 42 former Treasury officials. This just shows you how corrupt our system has become.
VICTORIA BARRET: I agree if you ban corporations from giving, you have to ban anything that isn't an individual, and that extremely changes our system. It might make Washington better, but you lose a voice in Washington. I think corporations deserve a voice in Washington. Washington needs to know what it takes to hire employees and that's the message that's not getting across now. It's either all or nothing, and I don't think we're ready for nothing.
KAI FALKENBERG: You can't be going to the stockholders every time you want to make a political contribution; you have to defer to the business judgment of the people running the company. What Neil and Mark are saying is unconstitutional. Not only do businesses deserve the right to make political contributions, that's freedom of speech; they have the right. We need to protect it and they should exercise it.
Informer: Stocks That Will Take Care of You in Retirement If Your Company Can't
DAVID ASMAN: New reports that companies aren't bringing back 401k matches yet. But have no fear; the informers are here with the stocks they say will take care of you long into your golden years:
NEIL WEINBERG: Pfizer (PFE)
BILL BALDWIN: Petrobras (PBR)
VICTORIA BARRET: Intuit (INTU)
Cut Government Debt by Forcing Public Employees to Work More Years
CHERYL CASONE: Some broke states now forcing some government employees to work more years before retiring and for good reason. The average public worker retires at age 59, and many with full benefits paid by you, the taxpayers. Most private workers can't call it quits until age 67 to get full Social Security benefits. Is it time to force all public employees to work as long as the rest of us to help cut our debt?
CHARLIE GASPARINO: It's kind of odd that a paper pusher in Albany gets to retire at age 53 while everyone else is retiring at age 67, and with full benefits. If you know people who work for state governments, they retire very early and they live large. Take cops and fireman out of the equation, but if you're a bureaucrat, you should retire like everybody else.
TARA DOWDELL: I don't disagree that all pubic employees and everyone should be sacrificing. But many states have already pushed back the retirement age for workers or are in the process of doing so. If you look at the state of New Jersey, they pushed the retirement age back 7 years and they still had a $10-$11 billion shortfall the following year, so its not enough. I think public workers have become a piñata. They are the low-hanging fruit that everyone picks on. We didn't get into this situation just because of public workers. We need to ask everyone to sacrifice—not just political villains.
JONATHAN HOENIG: If you look at state budgets, they are so bloated largely because of the huge entitlements afforded to these state workers. They get unsustainable benefits like the old-school GM guys used to. We need public workers but they should be limited to the proper role of governments. We have whole sections of the economy dominated by public workers who get benefits that just shouldn't fly.
TRACY BYRNES: Take policeman and fireman out of the equation because they are doing a really hard job, and the last thing you want is a 70 year old firefighter trying to save you from a burning house. But as Charlie said, there are people pushing paper in the department of health in these states and Tara, they are piñatas because it's there fault that half our states are going broke. These pensions are out of control, these states are out of control, and to add to it, these administrations borrow from these pensions and never pay them back. For all of these reasons, we are all suffering right now.
WAYNE ROGERS: The average retirement age right now, actuarially right now, is 77 years old. From 1900 to the turn of the century it was 49 years old, so it's increased enormously. Maybe all of this retirement should be indexed to that. But the most egregious cheating that goes on here is in the lat 2 or 3 years of these public employees employment. They put in enormous amounts of overtime, so when they retire, they do so on 80 percent of that last check. And it's a huge check and in many cases they get more money for not working than they were getting when they were working.
Will U.S. Companies Flee the Country When Taxes Go Up?
CHERYL CASONE: Taxes up, Americans out. More reports of people moving overseas. And Jonathan, you say businesses could be the next to do this and they could take jobs with them?
JONATHAN HOENIG: People and businesses respond to taxes and regulations. Even in the last years, companies like Nabors Industries, Seagate, and Tyco have left this country for exactly those reasons. We want to be attracting business and investment. We don't do that with more taxes, more regulation, and more government control of the economy.
CHARLIE GASPARINO: Particularly now in this global economy, businesses are very portable. You can go from one place to another and open shop, and with the internet and technology, it's a piece of cake to move overseas into a lower-tax region.
TARA DOWDELL: It's interesting that they're threatening to go to Europe when Europe is actually raising taxes. If you look at the oil industry for instance, it pays about 20 percent less on average in taxes in the U.S. than it does in most of the developed world. So we can't exaggerate here. Of course we need to incentivize companies to stay in the U.S. but the reality is, once companies reach a certain size they always establish a presence overseas to expand into new markets.
TRACY BYRNES: We saw in our most recent earnings reports, most companies making money overseas aren't bring it back to the U.S. They're investing and keeping it overseas. Why? Because we tax on global income and that is really hard on American companies. They're not going to give up their American address. America is still the greatest place to be. But you're going to see more and more money staying out of our borders, invested overseas, and not coming back to create jobs.
WAYNE ROGERS: Right now, government spending is eating up 40 percent of GDP. That's expected to rise to 67 percent. That's unsustainable. 50 percent of the people in the U.S. pay 97 percent of the income taxes. That means that there are 47 percent of people who don't pay income taxes. You can not continue to do that. We're going to be just like Rome. We'll go right in the toilet because you're going to tax the productive people to pay the unproductive people who don't do anything. And eventually, I will go overseas, you will go overseas, everyone will go overseas, to get out of the country where you're being taxed to death.
U.S. Marshals Storing Body Scan Images Sparks Outrage
CHERYL CASONE: Outrage growing over those revealing body scans. U.S. Marshals admitting that they are storing tens of thousands of images instead of discarding them after a person is deemed not a security threat. Privacy groups are up in arms about it but security experts say it's a necessary evil to keep us all safe. Wayne, is our safety worth the invasion of our privacy?
WAYNE ROGERS: Absolutely not. This is another case of where you can't trust the federal government. The TSA announced that they would not store these body scans—that they would destroy them—and immediately they turned over 35,000 of them to U.S. Marshals. It's an outrage. It's an instance again of where you have elitists and bureaucrats running the government instead of a government of law. We have a government of people and not of law. It's outrageous and we have to stop it.
TRACY BYRNES: They should have said from the get-go that they were saving them, because we knew that they were. This doesn't bother me nearly as much as the 50,000 other egregious things our government does. People put everything about themselves on Facebook. You can go to Google Maps and practically watch me make coffee in my kitchen in the morning. There is no privacy in this world anymore and if this is going to save me and my kids and keep us save, there is no price tag on that.
CHARLIE GASPARINO: You do not have a constitutional privacy right to get on an airplane, so if they want to store these, that's fine, but it's kind of creepy.
TARA DOWDELL: This forced me to get back into the gym so I'm ready for my close-up. I'm fine with it.
JONATHAN HOENIG: They don't keep us safe! That is the problem here. Islamic terrorists hate Americans, not airplanes. You can scan everyone fully nude if you want. 9 years after September 11, we have Iran building nuclear weapons and a mosque being built at ground zero. Storing body scans doesn't make us safe.
What Do I Need to Know?
TRACY BYRNES: Treasury Secretary Timothy Geithner said this is not the time to cut taxes and extend the Bush tax cuts—that it's not the prescription we need. He's clearly still caught up in his turbo tax issues because he's not thinking. Of course it's what we need! You keep our taxes low, we spend money, we hire people.
CHARLIE GASPARINO: Neil Barofsky, the TARP watchdog, is doing a non-political investigation into the Shorebank bailout. The federal government gave money to bailout this ailing institution. No other institution like this would be bailed out. It has connections to the Obama administration. If he does his job, if no political pressure is applied, its going to be a great report.
WAYNE ROGERS: There's been a trend lately to worry about obesity everywhere in the country. Johns Hopkins has developed a very good program. It's owned by Medifast, a NYSE company. I like this stock (MED).
JONATHAN HOENIG: Beef prices are surging. Buy iPath Livestock (COW). It's up as all commodity prices rally in the heat.