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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Tobin Smith, ChangeWave Research editor; Eric Bolling, Independent Trader; Sascha Burns, Democratic strategist.
Trading Pit: President Bush's $145 Billion Economy Boost: Will It Boost GOP Candidates?
South Carolina and Nevada: big stakes, big battles in the race for the White House. But someone here says the final race won't be that close at all, because the president's plan to jumpstart the economy will decide who moves into the oval office! But will it boost the Democrat's or Republican's chances?
Eric Bolling: It's the right time for President Bush's $145 billion stimulus package and the GOP benefits! It injects stimulation right into the consumer who will go out and spend. It will stimulate growth and create jobs, which is great for the economy and great for the GOP!
Tobin Smith: These stimulus packages do not work!
Gary B. Smith: This plan right now is drawing to the point that economy is not in good shape right now, which isn't good for either party!
Sascha Burns: The Democrats are the ones that came up with the idea of an economic stimulus package in the first place. President Bush is going to need the Democratic Congress to get this plan through, because President Bush is a lame duck right now. "It took a Clinton to clean up after a Bush last time, and we may see that happen again."
Scott Bleier: It's not the government's job to give people money! The government needs to take our money to make us safe, strong and prosperous!
Pat Dorsey: It doesn't help either party! Both sides have an incentive to get something done right now with respects to the economy.
McCain's "Wage Insurance" Plan: Good or Bad For Free Market?
Lose your job and still get paid—and we're not talking typical unemployment! John McCain's plan has Uncle Sam paying the difference for those getting retrained for a new job. His wage insurance plan may sound appealing to folks suffering from high unemployment in South Carolina today, but is this a bad idea for the nation's job market?
Gary B. Smith: It's horrible for the job market! Sometimes industries die and sometime they grow. Unfortunately workers get caught in the middle. You can't have a 100 percent national employment policy, which is essentially what this plan would be. It will really damage our economy!
Sascha Burns: Wage insurance is a great idea! It's about the everyday hard working Americans. It provides a safety net for workers to retrain for new jobs and gives them the opportunity to get back into the workforce.
Eric Bolling: This is a horrendous idea! Instead we should be promoting productivity and incentivizing workers to do better, not giving them a handout.
Are you heading for the mattress with your money? Forget that — yes, the market's scary, but that doesn't mean you have to stash your cash. Our guys are here to put your mind at ease — their "worry-free" stocks in the Stock X-Change.
Gary B Smith: Exxon Mobil (XOM)
Pat Dorsey: Realty Income (O)
Eric Bolling: Procter & Gamble (PG)
Scott Bleier: Wal-Mart (WMT)
Tobin Smith: Direxion 10-Year Note Bull (DXKLX)
Gary B Smith's prediction: Fed puts a bottom in the market! "SPY" up 20 percent for rest of '08
Tobin Smith's prediction: Popcorn lung won't "pop" ConAgra! CAG up 25 percent
Pat Dorsey's prediction: Tech Is Not Dead! "ACN" up 50 percent in 2 years
Scott Bleier's prediction: Get Active With Interactive! "IACI" Up 50 percent In 2008
Eric Bolling's prediction: Platinum Is The Next Heavy Metal! Buy "AAUK"
Cavuto on Business
On Saturday, Jan 19, 2007, Neil Cavuto was joined by Charles Payne, wstreet.com; Tracy Byrnes, FOX Business Network; Adam Lashinsky, Fortune Magazine; Pat Powell, The Powell Financial Group; and Mike Norman, Contrarian Update Founder.
Bottom Line: Would the Economy Be Better Without a Stimulus Package?
Neil Cavuto: President Bush out with a monster plan to juice up the economy. But, would the best plan be nothing at all? Let's get the "Bottom Line."
Mike Norman: I think we should do something. I don't think we're in a recession yet. I think the potential is there. The economy is leveraged. There's a lot of debt. We've had problems in the credit markets and at big banks. I think if we look back at what the President is proposing and what he did back in 2001 with the rebates, we saw an immediate boost to personal consumption and spending; both were up about 7 percent in one quarter.
Neil Cavuto: It was his longer-term tax cuts that did that. This idea of rebates and quick checks to people in demeaning…
Mike Norman: They're not demeaning. Look, if you're looking for a quick stimulus to the economy, that's how you're going to get it. The tax cuts didn't kick in until late 2003 / 2004 and they affected business investment, not spending.
Neil Cavuto: Pat Powell, here's my view on this, and I love Mike because he's brilliant, but if the President of the United States is offering $150 billion stimulus to an economy with 5 percent unemployment and 3 percent growth, sure things will change. But, what do we do when we get to 8 percent unemployment or a 21 percent prime rate?
Pat Powell: I know, but here's the shock: I absolutely, 100 percent agree with Mike Norman. I know, unbelievable.
Neil Cavuto: Can we cut her mic, guys?
Pat Powell: It's unbelievable to me as well.
Neil Cavuto: Pat! Even at these levels?
Pat Powell: I know, but we are in a deteriorating economy. What we're trying to do is head it off at the pass before 5 percent becomes 6 percent and 6 percent becomes 7 percent.
Neil Cavuto: You're doing it now and it's a slippery slope.
Charles Payne: Here's the problem, Neil: We've become very soft as a country. This is not "Grapes of Wrath" kinds of stuff we're going through. But, unfortunately the psyche of the average American is if we lose 1000 soldiers, it's too many. I'm not putting it down, but the rest of the world is going through a lot more than we are right now. It's survival of the fittest! We're fracturing our ability to cope with any sort of stress.
Neil Cavuto: Tracy Byrnes, the message you're sending people is "when times get a little tough, we'll cover you."
Tracy Byrnes: It has everything to do with the fact that we're in an election, Neil.
Neil Cavuto: Hey, wait a minute! This is an election year?!
Tracy Byrnes: Whodda thunk it? This market is like Groundhog's Day. If you look at it over the last couple of days… it starts up, it moves high, then one of those big wigs starts to talk about fiscal policy and the market comes crashing down.
Neil Cavuto: Adam Lashinsky, this week, we've had more than $1 billion in fiscal stimulus proposals… from the presidential candidates to the President himself. The markets tanked. What does that tell you?
Adam Lashinsky: Yeah, you're double and quadruple counting on some of that… but your point is absolutely right. I think every time one of those big shots stands up and says we need to do something to help the economy, it reminds investors that there's something wrong with the economy! You made an excellent point earlier…
Neil Cavuto: I did?
Adam Lashinsky: You did! Your point was that rebates are demeaning. But, people want to be demeaned. They say, "Help me!" They want to be helped. But the stimulus packages won't do anything for the economy, they don't typically work, and they don't take the place of policy. By the way, the President contradicted himself on Friday; he said things are good but we have to do something about it. That tells you he's playing politics.
Mike Norman: Adam, it was the same President who took the lead in 2001 and in 2003 by enacting the very policy measures he's proposing right now.
Neil Cavuto: And now he's repudiating!
Mike Norman: Listen. With a $150 billion stimulus, you're talking 1 percent of GDP. That's a tiny stimulus.
Neil Cavuto: Mike, that's what the liberals say about spending on a government program. "Well, it's only .5 percent"
Mike Norman: Are you saying let's wait?
Neil Cavuto: I'm saying you are nuts. That's what I'm saying.
Mike Norman: You're saying, "Let's wait till we get to 8 percent, 10 percent unemployment and then let's do something." You know what kind of economic pain we'd have to go through to get there?
Neil Cavuto: Why is it the government's role to inject itself in a slow down? You're setting a dangerous precedent.
Mike Norman: It's not setting a precedent. We could go back to the New Deal if you want.
Pat Powell: The reason is because we don't want the pain of 2 million people who really messed up with their sub-prime mortgages to sink 300 million people. And that is the government's role… to consider the welfare of all of us.
Neil Cavuto: It is not the government's role! Listen to me! This is the end of the world if you're all getting your way.
Neil Cavuto: Seriously guys. You're telling me that the 2 million people who did something dumb with their mortgage… you're going to say to them, "Look. We're going to bail you out and everything will be ok." And you're telling me you're doing it to help the others and the values of their homes? I think it's a slippery slope.
Charles Payne: I agree 1000 percent that it is a slippery slope, but unfortunately at this stage, it must be done. The die has been cast.
Neil Cavuto: Uncast it!
Charles Payne: It can't be uncast. If the calvary doesn't come to the rescue…
Tracy Byrnes: What are they going to do? They're not going to put that money back into the market. If these people are in such dire straights, all they're going to do is put this money toward their mortgage payments and keep the creditors away for one more month.
Pat Powell: They're going to do a lot more than that. They're going to put it in their gas tanks, they're going to put it at the food store…
Tracy Byrnes: It's not like they're out buying iPods! They're going to spend for a month and then what? We're back at exactly where we started. It's a waste of money.
Mike Norman: Tracy, listen. The last rebate package was a $38 million package and resulted in more than $150 billion stimulus to the economy. There's a multiplier effect!
Neil Cavuto: That was coupled with lowering taxes!
Mike Norman: That came later.
Neil Cavuto: Adam, my point with you is if someone wants to go on a diet and lose weight, they can lose it very quickly by drinking only water for a few days. But, that doesn't address the longer-term solution that you have to cut back and exercise more. I've heard this is apparently the key to losing weight…
Neil Cavuto: My point is we haven't taught people the cut-back-and-exercise-more part. We're just telling them to take this "quick spending pill" and go.
Adam Lashinsky: We've heard many times about the moral hazard: When you reward bad behavior, you get bad behavior. Mike, all that needs to happen right now from the government is to make sure the banking system is sound. That's the Fed's job and it's doing it.
Mike Norman: Adam, maybe we don't need a stimulus, but if we have one now, it's good insurance for a growing economy.
Neil Cavuto: You just said we might not need stimulus!
Mike Norman: I think we do!
Neil Cavuto: Well, I think you're wrong. I'm the host.
Head to Head: Cloned Meat: Great for the Economy?
Neil Cavuto: The FDA ok-ing cloned meat. That means in no time, you could be drinking milk from a cloned cow or eating a hot dog from a cloned pig. Sounds gross! But, could it offer the nutrition our weak economy needs? It's time to go "Head to Head."
Pat Powell: I think anything that expands the food supply in a safe manner is a good thing.
Neil Cavuto: Ever see "Soylent Green?"
Pat Powell: I am so tired of the unofficial food police telling everyone else what they can and cannot do. If the FDA says we can have this, I think it's going to help the US and the world. We have too little food worldwide… which is why we have food inflation.
Neil Cavuto: Tracy, I didn't even know we had cloned Bessie. Now, we're eating her.
Tracy Byrnes: I think it's nasty! There's no way I'm serving cloned food to my kid. He's going to end up with a third eye!
Neil Cavuto: And you're not going to get a warning! There's nothing on the package that says "Oh, by the way… this is a copy of Bessie."
Tracy Byrnes: I'm not doing it! We waste so much food every year. I'm not sure we need more food, especially if I'm going to end up with a third arm.
Mike Norman: Take a look at food prices if you don't think we need more food. I mean, food prices are through the roof.
Neil Cavuto: So you're for it?
Mike Norman: I'm for it. The FDA says it's ok.
Neil Cavuto: You have changed. You say you like the government. You want to spend more on the government. They're cloning your food and adding chemicals to it and you still like the government. You are Hillary Clinton with pinstripes.
Mike Norman: And I'll vote for her too because she's going to put more stimulus into the economy!
Neil Cavuto: Can we take a close up look at Mike's forehead? Do you see a hammer and a sickle?
Neil Cavuto: Adam, what do you make of this?
Adam Lashinsky: Well, we're making light of it, but normally I do put great faith in the FDA. If they say it's ok and they've studied it, that's generally fine with me. But, in this instance, I disagree. I don't think this stuff is going to get out into the marketplace quickly. But, here's my take on forward thinking things, and I've seen it firsthand with some personal health issues: When they tell me they've got 10 – 15 years of data on this and it'll be just fine… I say, "You know what? I want 100 years of data before I'm satisfied enough to do it to my body." That's my thought on this.
Neil Cavuto: You know what's scary on this particular show? You and I have been in agreement too much.
Adam Lashinsky: We'll work on that. Don't worry, boss.
Neil Cavuto: There must be a full moon out there somewhere.
Neil Cavuto: Charles, the FDA is saying you're not going to know if you're buying cloned meat. Do you have a problem with that?
Charles Payne: Yeah, I have a problem with that. First of all for some people, it might be against their religion to eat this kind of stuff. I wonder where man is going with this. You mention "Soylent Green." I can think of a million and one other sci-fi movies that have touched on this. Also, I don't know that we need food. We pay some farmers to NOT plant food. The good thing is if it can create jobs, that's fine. Personally, I'd prefer to not have it.
Mike Norman: Look, you said it. It creates jobs, it creates industry. Both are very important to the economy if we want to stay competitive. It reminds me of when people were afraid to use microwaves because they thought the food was radioactive.
Charles Payne: Well, people were afraid of Frankenfoods… those big tomatoes and things like that. I know they eat them now, but still.
Tracy Byrnes: To Adam's point: This needs to be tested! A couple of years is not enough. I think we need generations!
Pat Powell: The FDA has tested. The European Union has also tested it. But, we should know if we're buying cloned meat. If you don't want to eat food that comes from a cloned cow, fine. It shouldn't be a mystery as to what you're buying.
Charles Payne: Like the hot dogs in New York City…
Neil Cavuto: That's all I'm saying. I don't know if I'm for or against this, but I do want a heads up if I'm about to eat a Bessie clone.
Tracy Byrnes: Absolutely! We have it now with organic food. Why not get a label on meat that's coming from an animal with 3 heads.
Neil Cavuto: They don't have 3 heads.
Tracy Byrnes: I don't know!
Adam Lashinsky: Look, the US agriculture industry is a great, thriving industry. There really is no food shortage in the world. There is a food delivery shortage. That's something that we could work on and it would be great for the US agriculture industry.
Pat Powell: That's not correct. There is a food shortage. In fact, the world food supply storage is at a 30 year low in relationship to population. We have food inflation in the US and all over the world. In China, pigs, which happen to be their staple food, are up 50 percent. There is a worldwide problem and it's driven by high oil prices and population.
Neil Cavuto: Charles is right. We actually pay farmers in this country to not grow crops.
Pat Powell: Well, that's a dumb idea.
Neil Cavuto: But, we wouldn't have these shortages if the bureaucrats would just get out of the way.
Mike Norman: We don't pay them that much.
Neil Cavuto: But the bottom line is we do, right? We incentivize it.
Mike Norman: We pay them like .003 percent or something like that.
Mike Norman: By the way, we are a huge food producing nation. We export a lot. Whatever that means.
Neil Cavuto: Well, if they can do this for napoleons or canolis… maybe, maybe we'll talk.
More For Your Money: Stock "Idol"!
Neil Cavuto: A couple of unknowns that could become an "American Idol." That's our theme to get you "More for Your Money" this week; unknown names our "judges" say will turn into "Stock Idols" for you!
Charles Payne: Mosaic (MOS )
Adam Lashinsky: Macquarie Infrastructure Co. Trust (MIC )
Pat Powell: Becton Dickinson (BDX )
Mike Norman: AmSurg Corp (AMSG )
FOX on the Spot!
Adam Lashinsky: McCain Wins SC; Buy United Tech (UTX )
Charles Payne: Spending-hawk McCain goes all the way!
Mike Norman: Giuliani's Still in the Race; Buy Vanguard Total Value (VTV )
Pat Powell: Bears are in Control; Make Money on MOO !
Tracy Byrnes: Remember "Members Only"? The '80s Jacket is Hot Again!
Neil Cavuto: Think. If 5 percent unemployment means you need $100 billion worth of stimulus, what if things get really bad? Do I hear $200 billion? $300 billion? If we need a rescue from a still pretty good economy, can you imagine what these bozos will come up with when it really is a bad economy? Beware of politicians bearing gifts my friend. You are the one paying for ‘em.
Forbes on FOX
In Focus: Money Issues or Social Issues: Which Will Decide This Election?
Rich Karlgaard, Publisher: Well, it's certainly turned to money in the past couple of weeks. Mitt Romney has kept his chances alive by winning the Michigan primary, by going after the economy and talking about that. But the whole time this economic populous in the Democratic Party and by Mike Huckabee in the Republican Party has been a dominate theme as we head in to an economic slow down.
Victoria Barret, Associate Editor: Well, I think social issues still matter despite the fact that money is currently dominating the headlines. If you look at what happened to Huckabee in Iowa, he got nearly half of the Evangelical vote and 14 percent of the non-Evangelical vote. If you look at the other camp, the Oprah effect that Obama had, that wasn't because of money. Oprah's worth 1.4 billion dollars. She doesn't need a generous economic plan here. It's because she and Obama and Huckabee appeal to voters on another level. I think we can't discount the social issues in this election.
Elizabeth MacDonald, Fox Business Network: You look at the exit polls, money issues trump social issues this year, and even in some polls trumps national security. The real talk is the details of the plans that have to be offered up. You see Obama campaigning on hope and change. Yes, I hear what Victoria is saying, that it grabs the hearts and minds of people, but it would be nice to see the details of these plans. The idea that it's just social issues is nonsense. It's the economy this year with what's going on with the potential recession.
Quentin Hardy, Silicon Valley Bureau Chief: Well, for starters, it's very difficult to extract one from another. It often is social issues and why is that a bad thing? Look, unemployment insurance is a social issue, at the same time it makes people feel like there's some cushion and that helps revive animal spirits. That's good for the market. Equal rights are social issues, but they also broaden and deepen the market. Many times, social issues are also about economic defects that people should also consider. And, I think social issues are at the forefront because when times get touch character matters even more. Morality matters even more.
Steve Forbes, Giuliani National Campaign Co-Chair: Well, I think money issues are triumphing, and I think you see a distinction between the republican primary and the democratic primary. On the democrats' side there is no difference between the candidates so they have to go to more emotional issues. There is no substantive difference. On the republican side, you do see differences. I co-chair Rudy Giuliani's campaign. He's come out with a radical, very exciting tax cut, tax simplification plan. By contrast, Governor Huckabee has a 30 percent sales tax plan, so there are real differences, and I think that's why republicans have more substantive debates than the Democrats have right now.
John Rutledge, Forbes Contributor: I think there are huge differences in the economic plans, but I think this election, people are voting with their hearts out of anger. Their anger at the republicans and at President Bush over abandoning republican principles. Elective wars, disrespect for Constitutional liberties, compensation earmarks, corruption. Those are all the things that are in the headlines. That's why the change artists are winning the primaries. And, I think because of that, they are going to lose. Unfortunately, that means we're going to have some very bad economic polices. Ironically, only the weak economy is going to keep us from having tax increases.
Does Wall Street Need a CEO in the White House?
Neil Weinberg, Senior Editor: Americans don't vote for a candidate so much as they vote against the last guy. Right now, the last guy was very ideological. I think what Americans want and what Wall Street wants right now is someone who will solve problems. We had that with Bill Clinton, whether you liked him or not. Then we had an ideological guy. I think Wall Street right now would love to see somebody who solves problems. I hate to tell you this, Steve, but that would be either Mitt Romney, I suppose, or Barack Obama. They're the wonks.
Steve Forbes: There is not an H.R. department that would hire Barack Obama on the record he has, but hey, that's for the democrats to worry about. The best political CEO to get things done is Rudy Giuliani. He proved it in New York City. He cut spending, kept it below the rate of inflation, cut taxes even though the democrats dominated the city council 45 to 6. This is a guy who doesn't just have policies; he knows how to get things done. Mitt Romney has a miserable record compared to Rudy. Massachusetts lagged the national economy when he was governor. New York surged ahead of the national economy. So yes, you want a CEO who has the right policies and principles.
Quentin Hardy: This CEO as president cracks me up. We are currently under the rule of the first Harvard MBA president. Stock market's going down, most people haven't benefited. Rudy Giuliani, the man you just identified as dynamic, is a lifelong civil servant. He never had a job outside of government. That may be a good thing, but please don't tell me that CEOs are right to run the country.
Mike Ozanian, National Editor: I think Quentin is right about the fact we do not need a CEO, but he is wrong about Giuliani. Giuliani is definitely the best candidate because of his tax package. But, the reason we don't need a CEO is we need someone not so much to manage Washington, but we need someone with a very strong message to the American people. A message that can gain America's to support. That's what Rudy has. We need someone that can go like Reagan did and say forget about all the bologna coming out of congress and forget about this mess happening right now. Here is a long term plan for economic growth and that's what Rudy has.
Elizabeth MacDonald: I do like the idea of a CEO in the White House because I think this government could use a board like they have at a company. An audit committee to control their out of control spending. If the SEC could get the real auditors to go out and look at the way the government runs the books, all these people would be in jail. With the spending so out of control and social security being run into a ditch and what you saw with what you saw with Bernanke testifying, the level of expertise about fiscal, tax and monetary policy could be fit up the left nostril of a very small bumblebee.
Lea Goldman, Senior Editor: You know what, I think it's interesting that Mike should invoke Ronald Reagan, the patron saint of the GOP who came from Hollywood. He didn't have an MBA. Most presidents have JDs. They are lawyers, not CEOs, not MBAs. You don't need a CEO. You need a leader, someone who is willing to broker some peace between republicans and democrats. Someone willing to tackle the sacred cows like the entitlements. Someone who is willing to push forth potentially unpopular fiscal policy. You don't need a CEO.
Debate: Is Now the Time to Talk About a Gas Tax?
Steve Forbes: No, and not in the next five years, either. It would only fuel our economic woes. First of all, we are a sprawling continental nation, not compact like, say, England. Therefore, raising transportation costs artificially are going to hurt individuals and they're going to hurt businesses. Why would we do that to ourselves? Instead, if we are concerned about energy, go all out on nuclear. Open up some of the areas for drilling in this country so we can be less dependent on the Middle East and elsewhere.
Victoria Barret: Well, I thought this was a good idea a year and a half ago. That's when we had strong economic growth and high gas prices, but it didn't look like gas prices were affecting the consumer. We're in a totally different period right now. Gas prices are high, not because of demand and supply necessarily, but because the dollar is so weak. That's a separate issue. I think the timing is wrong for a gas tax right now.
Quentin Hardy: Well, look, 40 cents over five years. It will probably take a year to get it passed. I just don't think this recession will last six years. I don't see a real impact against any recession. More to the point, taxes are used to change behavior. You do that all the time in all your tax structures. I don't see what's wrong with moving us off being more dependent upon a bunch of tyrannical regimes in the Middle East who are dirtying air with bad kinds of fuel while we wait for nuclear power or electric powered cars. We have to do something to change our behavior. I'm telling a fat man he has to go on a diet. Sorry, it's true.
Neil Weinberg: I don't think we should use the gas tax as a way for the government to grab more. But I think it wouldn't be a bad idea like Quentin was suggesting to use the gas tax for a little industrial policy. Let's face it, our tax system is so convoluted, it picks winners and it picks losers. This is a way for us to modify behavior. Right now, we don't want the dependence on Middle Eastern oil, we don't want greenhouse gases. If you believe in that, maybe it's not such a bad idea to shift part of our tax burden from where it is whether it's income or sales or anything else to gases. Let's shift some behavior here.
Rich Karlgaard: It's always a bad idea to raise taxes, but Quentin, it is a stupendously bad idea right now because the very people who are having trouble making their mortgage payments are commuting a long distance from their houses to work. It's a foolish idea and especially foolish now.
Informer: Stocks That Will Win Big in November
Mike Ozanian: Amphenol (APH)
Victoria Barret: Anheuser-Busch (BUD)
Lea Goldman: Cree (CREE)
John Rutledge: Johnson & Johnson (JNJ)
Our Cashin' In crew this week: Wayne Rogers, Wayne Rogers & Co; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; Dagen McDowell, Fox Business Network; Gary Kaltbaum; Kaltbaum & Associates; Peter Schiff, Euro Pacific Capital, and Dr. Marc Lamont Hill, Temple University.
Wall Street's Biggest Fear: A Democrat Winning the White House?
A new survey finds the top concern of financial advisors is a Dem winning in November. Do you agree with that?
Gary K.: There's a myriad of reasons why the markets in trouble but a definite component is the Dems winning the White House. The market is a forecaster of the future. Right now the chalk is for Democrats to have both houses of Congress and the White House. All they are talking about is business is bad. They want to raise taxes, grow government, take it out of the economy. That is a death knell for the economy as well as stock markets going forward.
Peter: Sure. I am a financial adviser myself. I certainly worry about what the Democrats might do when they have both the House and the presidency. I'm worried about higher taxes and more government spending, particularly taxes that undermine entrepreneurship. But the market has a lot to worry about. The market is going a lot lower for fundamental reasons. It would go lower even if Republicans were to retain the White House, which I doubt.
Dagen: Peter, I don't buy that for a minute that people are worried about a Dem being in the White House. Otherwise, how do you explain Hillary Clinton being the number one fundraiser from industries like commercial banking, securities, and investment and real estate? It doesn't make any sense. People would not be betting on her or Barack Obama if they were freaked out about what was going to happen in one of them won.
Jonathan: What worries me about the Democrats is that if you listen to them, their message is so explicitly socialist. I mean, at every opportunity they seem to have this contempt for capitalism, this relentless pursuit of collectivism and this total distrust for free markets. If you put all the politics aside, their goal is a national health care program. Their goal is environmentalism. They see bigger government in every element of public life. That has never been good for America and it has never been good for the market either.
Wayne: You can't blame the Democrats. Listen, the Republicans have been just as bad. The Republicans under Bush have gotten bigger government, big deficit.
During Bill Clinton's administration, the stock market went up. He was a Democrat. You think that this is all just Democrats? No, the Republicans are just as bad. They are doing just the same thing. They have expanded the government in all areas, and it's terrible.
Jonas: I don't think Bush's speech Friday was a model of small government and limited government hand in fixing the economy. If your investment advisor right now in 2008 is more worried about the Democrat getting in the White House than a recession, you need to find a new investment advisor. That is ridiculous. That is the big threat in the market, how bad it will get for the consumer, not who is going to be in the White House. That is an issue. But historically the market has done OK with Democrats in office. I don't know why because the policies aren't always for corporate America but that's the way it's been historically.
Cut Everyone's Taxes Now to Jumpstart the Economy?
With all the talk of an economic stimulus, would the best thing to do right now be to slash taxes?
Jonas: I like what I call intermediate term relief, which is a payroll tax cut for maybe six months to a year. The reason why is there are a lot of consumers who got overextended; they can't pay their credit cards, home loans, car loans. We got a short-term fix we need here with the economy weakening. One-time check will only lead to one-time spending.
Jonathan: There is so much uncertainty in the tax code as it is. No one knows what it is going to be from year to year. We don't need a change or a cut. We basically need to start over. The first step should be eliminating the notion that the rich should pay more simply because they have more.
Wayne: I think all you need to do is leave the Bush cuts in place. They were an enormous stimulus to the economy. They have done everything right. Already, you have got 65 percent of the people in the United States paying 1 percent of the tax. The top end of the people earning money in the United States pay most of the taxes, almost 90 percent of the taxes. So you can't keep "taxing the rich." What we need to do is cut the spending. That's the problem. It's not a tax situation. It's cutting the spending. Leave the Bush tax cuts in place. They have done a wonderful thing for the economy. Don't talk about changing.
Dagen: It looks like these tax rebates are a done deal, that it's going to happen. But a lot of people would like to see the Bush tax cuts made permanent on the backs of that. Now, the White House backed off that idea to get this through Congress, but ultimately people point back to 2001 and those rebates. Maybe that's why those rebate checks worked because you had tax cuts that followed.
Peter: The rebate checks are just a gimmick. Nobody would like to see more taxes than me, particularly my own taxes. If the government cuts taxes but simply prints the difference, they are not doing us any favors. They are simply substituting the inflation tax for the income tax. The last thing we need now is stimulus. Americans don't need to spend more money. That's how we got into this mess in the first place. We spent money we didn't have. We borrowed to do it. We need to be saving. If that brings on a recession, so be it.
Should the Government Be Able to Harvest Your Organs Without Your Consent?
In order to boost donations, the U.K. is considering a plan what would assume people consent to giving their organs unless they opt out. Is that a way to save lives or way over the line?
Jonathan: Organs shouldn't be taken without consent. Of course, this is the result of socialism and nationalized health care, that your medical care, in fact your body belong to the state, and everything is done, even if it's harvesting your organs, everything is done in the name of the public good. It's disgusting.
Marc: Doom and gloom aside, the reality is most Americans do want to donate their organs. 85 percent say they are willing to do it. Only 30 percent actually sign an organ donation card. That gap can be closed if we have a presumption you will give it. It's not that we are acting against the interest of the people. We're acting in the interest of the people who will do it.
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