DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
Bulls & Bears
Brenda Buttner was joined by Eric Bolling, FOX Business Network; Tobin Smith, ChangeWave Research; Gary B. Smith, TheChartman.com; and Ron Ianieri, Ion Options.
Stocks Rally As "Tea Parties" Catch Fire; Coincidence?
Eric Bolling, FOX Business Network: It's not a coincidence. People are showing they love their tea parties and hate their big government. They certainly hate taxing and spending, and the market doesn't like it either. The market showed us that it'll be back on its feet again someday, and will truly rally as soon as President Barack Obama stops taxing and spending.
Ron Ianieri, Ion Options: These tea parties had nothing to do with the market rally, nothing, zero. We have to be realistic here. Bank and oil sector stocks have rallied, which means the market has rallied. We need to pull back and take a breather. I don't want individual investors being shown down the wrong road because they're being shown all this optimism when there might not be a real reason for it.
Gary B. Smith, TheChartman.com: These tea parties aren't silly, as most of the liberal media has tried to blow them off as. These are normal, average Americans and small business owners who are sick of this tax and spend culture. We're starting to see this bleed over to Wall Street with major financial firms wanting to give back TARP money. So I think the tea parties helped the market rally.
Tobin Smith: ChangeWave Research: People are showing their dedication to no spending. Maybe, just maybe, Congress is starting to understand that Americans have a backbone and are angry about all this new spending. I still think things are going to get worse before they get better, but more or less we're at a bottom. Once we get through the summer, things could really start to turn around.
New Push to Unionize Walmart; Threat to Job Market?
Tobin Smith: This unionization push is building a great case for Walmart to build their business outside the United States. You let Walmart get unionized, start thinking GM or Ford. Walmart would see the growth opportunity outside the U.S. It would have to cut staff to meet any likely union demands on wages, benefits, etc.
Leslie Marshall, Radio Talk Show Host: If you want to talk about unions, talk to the auto industry. Its failure was not from unionization, it was about scrapping quality for quantity. If Walmart employees want to unionize, they have that right to do it.
Ron Ianieri: I don't think Walmart unionizing is that bad an idea. Unions were created for the right reasons. Then their use started to decline when labor laws came into play. Look to Wall Street firms lately, with their constant greed, excesses, and reckless management. Unions do create checks and balances.
Gary B. Smith: Unions are great for people that are in the union at a particular company. But the fact is that they're monopolies. They raise wages for workers, which is fine for them, but it fundamentally harms the company. If a company pays artificially high wages to its workers, then the company can't hire as many people. Those costs get passed on to someone.
Eric Bolling: Unions should stay away from the 2.1 million workers at Walmart that get pays and benefits. The last thing Walmart needs is its own version of the UAW.
First-Time Tax Delinquents Soar; Proof "All" Tax Rates Are Too High?
Eric Bolling: When you combine a bad economy with a nanny state, it almost becomes legitimate for people to say they can't afford to pay their taxes and think they can take care of it later.
Leslie Marshall: People have been paying taxes for years. This doesn't have to do with Republicans or Democrats, this has to do with a bad economy. We know we have to pay our taxes, whether you're an individual or small business owner. Even if you can't pay in time, you can get an extension.
Tobin Smith: When you get into the numbers, small business people earned less money than normal and literally didn't have the cash to pay their own personal taxes. The tax bill came and they didn't have the money.
Gary B. Smith: People all over are feeling the pinch. People have seen that President Obama wants to redistribute wealth, and you're in the bull's eye if you make over $250,000. All of a sudden, there's disincentive for people to start earning money at higher levels while more and more people have trouble paying their taxes to begin with.
Gary B. Smith: High-speed train to nowhere! "HMC" doubles this year
Tobin Smith: Fight pollution with "JCI"! Up 30 percent by this fall
Ron Ianieri: Oil rises again! "SLB" up 40 percent by Dec.
Eric Bolling: Easing trading with Cuba creates easy stock trade! "VMC" up 50 percent in 1-year
Cavuto on Business
Politicians Mocking Tea Party Message; Will It Backfire?
Suzy Welch, author, "10-10-10": When you're looking at a movement like these tea parties, you're just trying to think about when you're going to get elected next, as many politicians do. They don't think about the America they're creating with these new policies or the long term. It's all about the next election. But movements always start at the fringe, and it's a huge mistake to belittle something like this. Throughout history, major movements don't just start as a gigantic wave. They start small and get bigger.
Charles Payne, WStreet.com: The way politicians have handled the tea party movement—especially the White House—is a huge mistake. The President obviously has his own agenda. He's gone around the world, saying he'll listen to Chavez, Ahmadinejad, Putin, etc. Yet here are many Americans who feel they aren't being heard—that they're marginalized or ignored. This wasn't supposed to happen with this administration.
Ben Stein, author, "How to Ruin the United States of America": I don't think these protesters are overreacting. We do have way too much government spending going on. The question is, where do you cut it? The great majority of it is mandatory in terms of interest on the federal debt, or transfers such as social security and Medicare, not to mention the military. We can't cut those. Compared to the whole budget, discretionary spending is quite small and backed by powerful political constituencies. As Bruce Springsteen would call it, the government has become a suicide machine.
Adam Lashinsky, Fortune Magazine: When Americans get together in hundreds of locations by the thousands, that's never trivial. If they're upset, they're upset. They have ways to vent their frustrations other than protests, such as communicating with their elected officials. President Obama was listening. Already, he's starting to implement tax policy changes that he believes will benefit many Americans.
Dagen McDowell, FOX Business Network: FOX News' ratings the night of the protests is a testament to how interested this country is in what's going on. If people want spending to be cut and taxes to stay low, then take that passion to the voting booth. The federal government has shown no willingness to cut spending. If we want to cut spending and keep taxes low, it's going to mean sacrifice and I think enough people now are willing to make it.
President Obama's Push for "Green" Jobs; Will It Cost Twice as Many Jobs?
Charles Payne: A dirty little secret is that technological advancement kills jobs. In places like Detroit, I bet you robots killed more jobs than illegal immigrants. There will be a major building phase for all of this, and when it's all said and done, what happens to everyone who works in the oil or coal industries now? What will they do?
Suzy Welch: These environmental maniacs always say we'll create jobs by going green, as if this isn't an either/or question. Americans have to face the fact that that we have to choose jobs or the environment--we can't have both. But if Americans say they prefer to have a clean environment instead of jobs, so be it. That decision will be made in the voting booth.
Ben Stein: I think one of the great fantasies of the environmental movement is that it will protect our health. America pollutes, and we'll cut that by a modest amount. But there's a titanic amount of pollution coming out of India, Russia, China, Brazil, etc. It won't be cut it all, but rather grow every day. I don't see how it's meaningful to attack pollution in New Jersey or L.A. without truly attacking it worldwide.
Dagen McDowell: The most efficient thing for the economy is to let Americans consume the cheapest fossil fuel they can. These tax breaks for businesses aimed at reducing fossil fuel consumption just get abused by those who figure out the loopholes.
Adam Lashinsky: There's no disputing that technology eliminates jobs but it also creates a lot of jobs. The question is, are these jobs what we want to create? Oil and coal jobs will go away, the question is when? How hard should we be pushing now? It's a mistake to say certain green jobs are better. This is an instance where we should let the market decide.
Government Slow to Take Back Bank Bailout Bucks: Why?
Charles Payne: Forcing banks to hold onto their TARP funds let's the government tell them what to do. The government wants to control the purse strings, plain and simple, but it's a lot more than that. They get to set precedents on executive pay. They'd like to control pay across all industries, and it's much easier to do it with Wall Street firms now.
Dagen McDowell: The healthier banks do want to pay their share of TARP back. It's true that Washington wants to hold control over the banks, but also Washington is worried that these banks may have not taken all the medicine they need. There's a lot of concern about more write downs in the near future. What if the banks end up needing more money from the government?
Ben Stein: I think the banks are trying to give back the money so they don't have the treasury controlling executive pay. It has nothing to do with anything else. Executives just want to pay themselves a lot of money, without the government looking over their shoulder.
Suzy Welch: I think the banks don't want to loose their star performers. The banks very naturally want to get the government off their back. From the government's perspective, it's just seen a lot of chaos in the financial markets and it thinks it's too early for the money to be given back.
Adam Lashinsky: The bank stress tests are still going on, and the government does not want any major bank giving TARP money back until they're completed. The banks would love to give the TARP money back, but the government has done well to make sure the banks have adequate capital cushions before they do return the funds.
Stocks Our Gang Likes So Much They Just Bought 'Em
Charles Payne: American Superconductor (AMSC)
Adam Lashinsky: Vanguard High-Yield Corporate Fund (VWEXH)
Ben Stein: iShares MSCI EAFE (EFA)
Forbes on FOX
On Saturday, April 20, 2009, David Asman was joined by Steve Forbes, Neil Weinberg, Mike Ozanian, Quentin Hardy, Victoria Barret, Jack Gage, Mike Maiello, Evelyn Rusli, and Elizabeth MacDonald.
(BEGIN VIDEO CLIP)
President Obama: The severity of the recession will cause more job loss.
(END VIDEO CLIP)
David Asman: President Obama warning Americans to get ready for more pink slips in the private sector. But not in the government! Uncle Sam's hiring tens of thousands of new workers and the president says that's a good thing in a recession. But some here say that's a very bad thing for all of us in the long run. Who's right?
Steve Forbes: Hey, it's bad. If government jobs are the key to wealth, the Soviet Union would have won the Cold War and North Korea would be a world economic power today.
David Asman: It's not? Surprise, surprise.
Steve Forbes: Nukes yes. But nothing else. In terms of government jobs, where do they get the money for it? From the private sector. When you starve the private sector, you end up hurting everybody. The big thing they will push for is adding government workers for health care. That will be bad for everyone. Bad medicine for the health care industry, bad medicine for our future health.
David Asman: They suck all the rich blood from the private sector.
Mike Maiello: As I recall, when Steve didn't like the direction the economy was taking, he applied for a government job once. That's not just a joke. That gets to the great opportunity for the government to hire the best and brightest.
David Asman: Wait a minute. Which government job is he talking about?
Mike Maiello: The presidency…
David Asman: Just to remind folks, this guy ran for president. Your final point. Go ahead.
Mike Maiello: This means the government can hire really talented people who would otherwise be going for jobs in the private sector, but the private sector isn't hiring. That's great!
David Asman: Elizabeth, good or bad for the whole economy?
Elizabeth MacDonald: It's bad. I would throw in Sweden. You would wonder why Sweden is not a superpower if it's true this helps. The government has a monopoly. They are running record losses. What are we going to do? Why don't we hire – oh I know – why don't we hire Jack Abramoff as CEO of the United States Savings Bank of America and Randy Cunningham can be the Chairman and Jim McDougal can be the CFO. How about that?
David Asman: These are all people who got into corruption trouble… Quentin good or bad for the economy?
Quentin Hardy: I know the Cunningham – Abramoff years left us with massive debts. To show I'm worried about that, I brought along my son to thank him for paying for all this stuff.
(Quentin's son appears)
Quentin Hardy: Thanks a lot! You're the one who will get stuck with this.
Quentin's Son: You're welcome.
Quentin Hardy: The fact of the matter is we have very bad employment problems in this country right now. And no private sector is hiring. Government jobs, if they are short term, can be an important restart to the flywheel in the private sector.
David Asman: Victoria, without props… although we have nothing against props… good or bad for the whole economy, this expansion?
Victoria Barret: I can't top that. But, I will say, Quentin, that the problem is these jobs aren't temporary. Obama talked about creating three million new jobs in January, 20 percent of those going to the government. When you look at the stimulus plan, these are just filling existing government agencies. These are permanent jobs that will ultimately lead to higher taxes.
Forbes on FOX Debate
David Asman: The vultures are circling. Bankruptcy lawyers getting richer these days thanks to companies like Lehman Brothers. We just learned that law firms are reaping near-record profits – worth hundreds of millions of dollars on Lehman alone. And Mike Maiello thinks it is time for the government to cap lawyers' pay!
Mike Maiello: Right when I was having fun being angry at bankers and AIG traders, they have to make me angry at lawyers again who want to pick the bones clean of Lehman Brothers. It's ridiculous. There is nothing that justifies these salaries at all. It just needs to be stopped.
David Asman: If there is one phrase I have heard from you a million times, it's "kill all the lawyers." Why aren't you in favor of this?
Mike Ozanian: Just the tort lawyers, David.
Mike Ozanian: They are the economic terrorists. The bankruptcy lawyers, they get their pay set by the judges. The only adjustment I would like to make is I would like to see the creditors get paid first. That's what I would like to see happen.
David Asman: Neil, cap lawyers' pay?
Neil Weinberg: They are supposed to be officers of the court, but they are paid like pigs at the trough. I have a real problem with this. They are supposed to be doing a public service here. This isn't public service. This just enriching themselves. The only good news about it is, fortunately, it's not coming out of the public purse. It's coming out of the debtor's hide.
David Asman: When I said kill all the lawyers, I should have said present company excluded.
Kai Falkenberg: I have to defend my fellow lawyers. These lawyers are making peanuts compared to the bailed-out banks.
David Asman: Peanuts??
Kai Falkenberg: Hundreds of lawyers working thousands of hours on a highly complicated case.
David Asman: You're breaking my heart…
Neil Weinberg: Two wrongs make a right?
Kai Falkenberg: They deserve these fees. It's what the market will bear. The creditors are paying their lawyers the same amount.
David Asman: Hold on. I have to hear from Quentin on this. What do you think?
Quentin Hardy: Well Kai, hundreds of dollars an hour is peanuts when it's happening to people you went to school with. For everybody else, it's actually a lot of money. T would be wrong to go back on a stupid contract they cut. In the future, it might be smart to put this up to auction and have bonuses for finishing quickly and cheaply with the fewest number of problems twelve months down the line.
David Asman: I held Steve for last. Our late, dear, great friend Jim Michaels used to laugh whenever he said "kill all the lawyers." I assume you're in favor of capping lawyers' salaries?
Steve Forbes: I'm not in favor of the government capping anything. I wish they would cut them. These lawyers, if they negotiated something seriously at the beginning, we wouldn't have this problem today. Even though it's obscene, it's a fraction of what the friends of Tim Geithner are going to get from this toxic program they are trying to cook up with the banks. By the way, $975 an hour, that may be poor in some of the circles you travel in, Kai, but it still looks pretty rich.
David Asman: Cash-strapped Americans taking a break for mall shopping. Retail sales taking a nose-dive and personal savings shooting up as a result. Many folks say this is just what we need to get our nation's financial house back in order. But, Neil says we need to spend more and save less.
Neil Weinberg: Absolutely. Obviously in some cases, what is good for you is not good for the economy. Right now, we need people spending for the economy. The other thing that is such a good capitalist argument that I'm sure Steve will agree, is that if we don't start spending, the government will tax and spend for us. Might as well get going to the mall!
Jack Gage: I‘m going to take the opposite side of Neil here. It's very important to save right now. We are a sum-of-parts economy, where we have to shore up our individual balance sheets in order to get the economy healthy again and to enable future spending down the road when credit won't be as available, especially in the near-term, as it has in the past.
David Asman: I don't see any jewelry, Evelyn – time to get shopping?
Evelyn Rusli: Obviously, some people have thousands in credit card bills and they shouldn't be spending. But, some people have jobs and job security, as well as, revenue coming in… so they should be spending. I think it's become a sin to buy. That's just not right.
David Asman: Victoria has been spending, right?
Victoria Barret: I am single-handedly holding up the economy. Yes. The historical average of savings is close to 6 percent. 401(k) matching programs are going away. Pension funds are going away. People need to save, need to plan for the future. It hurts us in the short-term, but it's a thing we need to do for the long term. Neil, you're short-sighted.
Steve Forbes: Let's not focus on the consumer. Let's focus on the government. The government should be saving and spending less. If the government has sound money, low tax rates, the Fed gets the credit system moving again, saving and spending will take care of themselves. We don't need to tell people to do things.
David Asman: We're back! With the stock you should buy now and hold – so you can see your money grow for years to come.
Jack Gage: New Oriental Education (EDU )
Neil Weinberg: iShares Dow Jones U.S. Home Construction ETF (ITB )
Mike Ozanian: United Technologies (UTX )
Evelyn Rusli: Graftech (GTI )
Congress Coming Back From Recess: Better for Economy if They Stayed Home?
John Bradshaw Layfield, www.layfieldenergy.com: They should not only stay out of D.C., they should go to jail and stay there. These guys didn't see the financial crisis, it didn't see the housing crisis. They can't find billions of dollars with Bernie Madoff's scamming. They can find a few thousand dollars that Eliot Spitzer paid to a prostitute. These guys are absolutely worthless. In America, what we call stealing, they call pork. They are no help whatsoever to the economy. A.I.G., Point the finger at them while they are the ones taking donations. Stay away the country is better.
Wayne Rogers, Wayne Rogers & Co: Let them come back to work if you want to call it work. We elected them. It's our fault to a great extent. You can condemn them. Like john says, here you have got a guy like the senator from Connecticut. Chris Dodd. Take $102,000 from AIG. They didn't read any of the bills that they have passed. They panicked the AIG thing. You can't expect much from them. I mean, we're electing mediocre people.
Jonathan Hoenig, CapitalistPig Asset Management: We need a government. We need it desperately. They have to do the right things. It's not smart government. It's limited government. Protect my rights. Don't run a bank or automaker or credit card interest rates. This is not the role, the purpose of government. That's exactly what they seem dead set on doing. I think that's part of the reason the economy and the markets have been such a mess.
Jonas Max Ferris, MaxFunds.com: The market reportedly does better when they are out of session. My personal feeling is if you have a bad employer with a four-year contract, do you want them to come to work? You are paying them so you kind of want them to work even badly. That's a stupid analogy. In my opinion, they should be working harder. They get too many break as it is.
Is Government Trying to Create a Welfare State That Will Hurt All Americans; Rich and Poor?
Jonathan Hoenig: they were all there. Truly the rich, poor, democrat, republican, libertarian, Everyone came out. There was an amazing event. People see we can't afford our current entitlement state. They are scared to death about this unbelievable orgy of government spending they see coming down the pike.
Jonas Max Ferris: I don't agree with the protests. The bottom line is I don't think people like the solution. I don't think people are acknowledging the massive solutions are entitlements that they may get. The big problem here is we're not paying for things that we want. We have to pay for them with tax increases and cut stuff that we can't afford. It's a combo effort. No one wants to do either one. It's people on both sides.
Wayne Rogers: As we discussed earlier, none of them read it. That's even more outrageous. The thing that surprised me about all of this and I was curious to ask Jonathan is why is fox somehow blamed as a fomenting, evil influence here?
John Bradshaw Layfield: What this administration and this congress is trying to do, they are trying to make a level playing field but they are not trying to make the poor richer. They are trying to make the rich poorer. Jonathan is putting his money where his mouth is. He is being active just as George Soros did against President Bush in the last election.
United Airlines Charging Heavy Customers for 2 Seats: Should Healthy Fliers Get a Discount for Being Healthy?
Meme Roth, National Action Against Obesity: We're at the point now -- I don't think it, it's absolute. Obesity is the ruling majority. 36 percent Of us are obese, 34 percent of us overweight. The rest of us are subsidizing the obese. If you use two seats, pay for two seats. It's not that difficult.
Wayne Rogers: I think if you take that logic, you have to say if I can get two very thin people, they should be able to sit in one seat. On the other hand, I think Meme is right. If you're that obese, you should pay for it.
John Bradshaw Layfield: Go to Fedex, try to mail two packages. One twice the size, one twice the weight. It will cost you twice as much. That's the same thing with flying. I'm sorry if they are fat, obese. There is a health hazard. They are selling space on that airline. If they take up more than one seat, they have to pay for two.
Jonas Max Ferris: First of all, airlines, if they didn't turn into a commodity business, it wouldn't be down to this. They are not doing what you suggested. It should be a total weight situation. They charge you a certain amount if your bag is over 50 pounds. You could have two 40-pound bags, they don't charge. That doesn't make sense. They should do a total scale.
Jonathan Hoenig: There already is a fiscal incentive to be thin. I have been thin, I have been fat. You -- your health care costs are a lot lower when you're thin. Of course fat people -- thanks to people like Meme are social outcasts in this country. There is a real obvious fiscal incentive to being thin. My god if you're taking up two seats. If you took up two hotel rooms, you would pay for two hotel rooms.
Stocks to "Fatten Up" Your Portfolio
Jonas Max Ferris: International Speedway (ISCA ) -- Friday's Close $20.65
John Bradshaw Layfield: Walmart (WMT ) -- Friday's Close $50.20
Wayne Rogers: Webmd (WBMD ) -- Friday's Close $25.91
Jonathan Hoenig: Panasonic Corp. (PC ) -- Friday's Close $13.72