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Bulls & Bears
This week, Brenda Buttner was joined by Gary B. Smith of TheChartman.com, Tobin Smith of ChangeWave Research, Pat Dorsey of Morningstar.com, Todd Wilemon of NYSE Euronext, and Democratic strategist Sarah Flowers.
President Obama Says His $900 Billion Health Plan Won't Add to Deficit; Is That Possible?
Gary B. Smith, TheChartman.com: It’s not going to be a dime; it’s going to be a dollar. Health care will not cost $900 billion, but $9 trillion. For example, Medicare costs almost ten times as much as anticipated. Veteran’s Hospitals serve half the people it once did, but at twice the original budget. The Post Office - which has a monopoly - lost $9 billion this year. Anyone who thinks Health care will cost less than ten times the proposed amount is living in another world.
Sarah Flowers, Democratic strategist: Here are some facts about Health care: President Obama will not sign a bill that adds to the deficit. Reform will create more efficiency, by getting people out of the E.R.s and seeing primary care physicians instead. Also, there will be a new cash flow from the expiration of the Bush tax cuts. Right now, there is no incentive for insurance companies to cut costs.
Todd Wilemon, NYSE Euronext: Remember, the proposed plan would not go into effect until 2013. Why not start to squeeze out inefficiencies now to see if the President can truly cut waste in the Health care system? If he is successful, he will have gained credibility with the American people on his vision for reform.
Tobin Smith, ChangeWave Research: Studies have shown that we could take 7-8 percent out of Medicare and Medicaid by mandating proscriptive work on our paying system. If we taxed benefits, like compensation, we could drop utilization by 10 percent.
Pat Dorsey, Morningstar.com: This is being looked at the wrong way. Cost savings must come first, but not as the way to get to increased coverage. Until we can align the prices of health care with the actual costs of the services, coverage must come second. The cost curve is unsustainable the way it is currently.
New White House Manufacturing "Czar": Job Creator or Killer?
Tobin Smith, ChangeWave Research: No, Ron Bloom is not the guy to create jobs. Five different studies have shown that the job structure here costs 25-30 percent more than in other parts of the world, forcing jobs overseas.
Sarah Flowers, Democratic strategist: Ron Bloom has worked both for Fortune 500 companies and labor unions, and has a history of bringing both parties to the table to work together. We are a bit disparaging in the way we talk about labor unions. These are the groups fighting for better pay for workers, especially women who make $11,000 more on average than their non-union counterparts.
Gary B. Smith, TheChartman.com: Across the board, union companies have lower profitability and less efficient use of resources when compared to non-union companies. From 1973 to 2006, almost every manufacturing job lost came from a union company. Maybe this is the greatest union guy in the world, but unions cannot compete with their non-union rivals.
Todd Wilemon, NYSE Euronext: Unions are an anachronism. At the start of the 20th century, we needed them for collective bargaining. The problem now is the union work rules—making workers inflexible, unresponsive, and unproductive. With union pay contracts, workers have lost their incentive to work harder and perform better.
Pat Dorsey, Morningstar.com: It is difficult to say whether unions are bad or good. However, there has been a shift in the job base of our country from manufacturing jobs to service jobs and that will happen regardless of whether Ron Bloom or Mother Theresa is in the White House. We are still retaining high value manufacturing jobs in this country, it’s the low value manufacturing jobs that are going overseas; and quite frankly, they should.
Dow Soars 45 percent From Financial Meltdown Low: What's Next?
Tobin Smith, ChangeWave Research: We are going up, but we’re still not back to where we were on September 14th of last year. Part of the recovery is from the realization that we are no longer heading into the second Great Depression. The other reason is because money market accounts are only giving people .25 percent in interest, which is driving people to invest in the stock market in hopes of getting a better return.
Gary B. Smith, TheChartman.com: President Obama has said time and time again that he is a big proponent of capitalism, but his actions say that he is almost the enemy of capitalism - and thus, the enemy of Wall St. While he will say that we are all in this together, his true message will be that we are lucky the government bailed us out. The consumer is now starting to put money into the market.
Todd Wilemon, NYSE Euronext: We are going sideways. Maybe a pullback over the next five weeks and a small jump in late October or early November that will take us through the summer.
Pat Dorsey, Morningstar.com: It is true that we are not heading for a financial Armageddon, but the market is priced at a stronger recovery than we are likely to have. The consumer is still not spending and the savings rate is continuing to increase. They are cutting back on credit, meaning there is less money to spend. We’re going to have to pause for a minute because it’s going to take a while for consumers to start spending.
Gary B: "No Lie"... Joe Wilson outburst helps "GOOG" jump 50 percent in 2 years
Todd: Airlines about to takeoff! "IYT" flies 40 percent in 6 months
Pat: Life science co's back to life! "TMO" rises 50 percent by December 2010
Tobin: America loves soda even w/ a tax! "PEP" pops 30 percent by November
Cavuto on Business
Host Neil Cavuto was joined by Ben Stein, author of "How to Ruin the USA"; Charles Payne, wstreet.com; Dagen McDowell, FOX Business Network host; Adam Lashinsky, Fortune magazine.
You Play in Gov't Health Care, You'll Pay for Gov't Health Care?
Charles Payne: First off, the reality is nothing is free and that is why the plan, when explained in simplistic and cheery terms, elicits so much anger. Small businesses are going to be fined and have to lay people off while individuals are going to have to pay no matter what. It's completely different than auto insurance where someone is driving a multi-ton vehicle around and could harm others even because death…no matter how many Big Macs I might eat I will not kill anyone else unless I fell on them. Fees and fines means a lot of people are going to pay into this plan that is being touted as something to relieve financial strains.
Ben Stein: Government is wildly inefficient at everything it does. It will be in medicine too. President Obama is not leveling with the people about the cost of the plan, where the money will come from, how much interference with medicine there will be, and totally lying about whether he will cut back on Medicare.
Adam Lashinsky: It is irresponsible to use the expression "government run health care." The president dealt with that Wednesday night. It's also illogical to ask "Are you still going to have to pay?" We (and our employers and our local governments and our doctors) pay right now for insurance and "un-reimbursed" care. How would paying a government-sponsored private insurance exchange-associated company be any different?
America Stood Together After 9/11... Where Are We Now?
Charles Payne: Our country is coming apart at the seams. There is a serious effort to completely change America from its capitalistic roots, religious roots and rough individualism roots. But a light bulb has gone off and ordinary folks are fighting back. What began as politics of envy has morphed into a battle for the soul of America. It's almost as if there is a not so silent civil war between elites and the ordinary. Americans united after 9-11 now were are drifting further and further apart.
Adam Lashinsky: Unfortunately we're at a low point, standing together-wise. On the upside, there is broad consensus on foreign policy, with President Obama supporting President Bush's strategy in Iraq and Afghanistan. On domestic policy, our behavior as a nation has been reprehensible.
Ben Stein: We have really moved backwards, from fighting terrorists to worrying about their rights and apologizing to terrorist regimes. Disturbing.
9/11 and Financial Crisis: "Money" Predictions Are Meaningless?
Dagen McDowell: It is pure fantasy to think the government can project budgets and deficits 10 years in the future.
Charles Payne: Even without seminal events, government estimates are simply too sanguine and some would even say too disingenuous. The unfunded liabilities from social security and Medicare are just two examples. Look at Medicare Part D designed to subsidize the cost of prescription drugs; now it's a debt generator. Most people know better and it has nothing to do with the party in power but the fact government is designed to waste money, spread money, and push come to shove print money.
Ben Stein: What are amazing are all the global warming forecasts we have for the next 10 years. We can't even predict the weather two days in advance. How can we predict the weather 10 years down the road?
Ben Stein: S&P SPDRs (SPY)
Charles Payne: Salesforce.com (CRM)
Adam Lashinsky: Newmont Mining (NEM)
Forbes on FOX
On Saturday, September 12, 2009, David Asman was joined by Steve Forbes, Rich Karlgaard, Neil Weinberg, Mike Ozanian, Quentin Hardy, Mike Maiello, Jack Gage, and Elizabeth MacDonald.
David Asman: Right now, thousands of tea party protestors are gathering to march on our nation's capital. Maybe that's why President Obama is heading to Minnesota today to pump his $900 billion health care plan. Steve Forbes says everyone should be home watching this show to hear his solution for health care. It's simple! And even better, it won't cost one dime.
Steve Forbes: Let the consumers make the choice on health care insurance by shopping around the country till they find a price that's appealing to them.
David Asman: What's stopping them from doing it now?
Steve Forbes: Because right now the system is designed where if you get a savings, let's say you take a drug that is cheaper than the prescription, you don't get to keep the savings. The bureaucrats get it. The company gets it. The consumer, if they shopped smartly, would get the savings.
David Asman: Sounds good. What do you think of Steve's plan?
Elizabeth Macdonald: It's great, but it won't work and here's why: Price fixing! There is price fixing going on state by state between doctors, hospitals, insurers, and drug companies. Why is that happening? Because the states have a lock on which insurance companies can operate in their own states, and local politicians get a lot of money from the insurance lobby, and then the president didn't mention this problem, and that is how you deregulate the state's lock-hold on the market, on the health market, so how do you do that? Make it like the auto insurer's market! Price fixing cases are brought from Texas to California. Until you get serious about it, you won't have competition.
Neil Weinberg: The Forbes plan will work. When you go get a car or groceries, you care about the price. When you go to a doctor, you ask, "Well gee. How much is it going to cost me?" It's insane. It is the one sort of service that we don't worry about price.
David Asman: But we should.
Neil Weinberg: We should. It would discipline the market.
David Asman: Mike, what do you think of the Forbes plan?
Mike Maiello: When you go to buy a car, you aren't in pain. If I injure myself doing one of my myriad Herculean tasks at the gym, I want the doctor to fix me. I don't want to haggle about price. That is ridiculous! It is shopping under duress and it won't work.
Quentin Hardy: I think Steve was listening to the president on Wednesday, and both men make a lot of sense. The president talked about introducing government compensation in addition to all the insurance companies. What nobody is addressing here is the coupling with employment. Why is health insurance tied to employment in this country? That's why you don't get transparency. People don't see what they're paying for.
David Asman: So the individuals should be in charge. Both Quentin and Steve agree on that?
Mike Ozanian: Not really. What President Obama wants is a taxpayer-subsidized government plan. That's not any form of competition. That will crowd out the private sector. What you want to do is get the government out of health insurance altogether. If you look at eye surgery, that is the one area where care has improved and prices have dropped. Why? There is no government health insurance for it.
David Asman: American taxpayers will likely lose tens of billions of dollars on the auto bailout. That's the latest from the Congressional Oversight Panel. And Jack Gage says that is great?! Jack, explain.
Jack Gage: Look, the way I see it, the only way we're going to recoup the money we lent and gave to Detroit is if we cut down on the regulations that are choking these companies. It was a failure for the Obama administration to double-down after that. This is something that is going to take a long time to fix or we can cut our losses now and get government's hand out of the till and learn a valuable lesson that this kind of government intervention does not work.
David Asman: Is this going to be a great lesson, Steve?
Steve Forbes: No, because the government doesn't learn, otherwise we wouldn't have Fannie, Freddie, Medicare, and Penn Central in the 1970s when the government took over Conrail. The government had to lose a ton of money before it realized it could get it back in the private sector and deregulate the railroad industry. The government is slow at learning. You think our students have a hard time! In Washington, they never learn. It takes decades. Welfare reform? It took 60 years to get that.
David Asman: Quentin, you agreed with Steve on the last round. Do you agree with Steve on this one?
Quentin Hardy: I try.
Quentin Hardy: It is like the military. Is that a good expenditure? They keep blowing up all their toys and leaving dead bodies around, but you got to consider the alternative. When the Bush administration spent all this money, the world was spinning out of control. The banks were failing. People were running for the exits. They shored these companies up because what it would have meant if we went away. Would it cost more than the $23 billion they're going to lose. I think the damage would have been far greater.
Elizabeth Macdonald: Look at what is going on with the potential downgrading of the U.S. debt. It costs more to buy protection on US debt than to buy protection on McDonald's debt. The issue is how do you get these companies profitable? I don't know about Jack's idea. The problem is no-strings-attached money from TARP to these companies. The UAW has preferential treatment over bondholders. Will the bondholders eve lend to these companies again so they can become profitable? Probably not. Those are the real questions that need to be addressed.
David Asman: So Rich, could losing all these billions ever be good for the auto industry?
Rich Karlgaard: Well, look. I agree with Jack. But it's kind of a bank shot argument that I'm making. Congress may not learn. The Obama administration may not learn. But as Steve says, the American people are starting to learn what can go wrong with this administration. This is an example. I think the rally is the political center.
David Asman: So Neil, the American people will learn and maybe change their voting habits on this?
Neil Weinberg: I don't think so. I think the American people knew it was throwing money down the rat hole. It was the least bad choice at the time because the economy was spinning out of control. I don't think there is anything good here. We have invested in these auto companies. We're not going to learn a lesson. Government is not going to change its behaviors and our money is gone.
"Forbes on FOX" Debate
David Asman: So which bill in Congress will burn a hole through your wallet faster and deeper than health care? Rich Karlgaard says the global warming bill!
Rich Karlgaard: Well first my condolences to all of you who live on the east coast. I know you didn't have much of a summer. It was very cold. Nevertheless, we are pursuing this global warming folly. What the climate bill does is raise the cost of doing business in the United States because you can't have an economy without energy and the cost of energy is going up because of taxes on coal, natural gas, etcetera.
David Asman: So Steve, this global warming bill will end up costing more than health care, according to Rich?
Steve Forbes: And that's why Congress will have a hard time passing it. If it does pass, it will be repealed. With health care, they promise something from nothing. With climate change, you will notice that your gasoline will go up to $5 a gallon and your electricity bill will go up 100 percent. You can repeal those things faster than when the government takes over health care.
David Asman: So you can reverse the global warming thing but health care would be tougher to reverse?
Mike Ozanian: That's true, but if you are a high-income earner, the health care bill will kill you because your taxes will go way up. Cap and trade is a regressive tax. It will raise gasoline prices and energy prices. That will hurt low-income earners much more.
David Asman: So it is regressive… hurting the low-end of the scale more than the top end?
Jack Gage: That's the point. Health care will cost a trillion dollars over the first ten years. The energy reform bill will cost $2 trillion over eight years. They have big sticker prices. The health care bill has the wrecking ball effect in the out years as we get 10, 12, 14 years out, it will be impossible to repeal the tax once it gets in. The energy tax will hurt people on the low side of the income-specter and for people trying to do business in the United States, health care will hurt people trying to live in the United States.
Mike Maiello: Look, the health care bill, at the very least and with all my problems with it, extends Medicaid to more of the working poor and gives subsidies to more of the uninsured. The climate change bill is basically a tax on the health insurance bill… and on the very people it's trying to help. They can't trade in their car for a hybrid because they don't make enough money. It's a regressive tax.
David Asman: Those tea partiers marching in DC today hate wasteful spending. But, we think they'd love our Informers' companies… ones that don't waste money but make investors big bucks!
Neil Weinberg: Cohen & Steers (CNS)
Mike Ozanian: Ball Corp (BLL)
Mike Maiello: iShares Dow Jones U.S. Aerospace and Defense ETF (ITA)
Jack Gage: Family Dollar Stores (FDO)
Force Uninsured to Pay Their Own Medical Bills?
Jonathan Hoenig, CapitalistPig Asset Management: Yeah, sure. Absolutely. I mean, make it mandatory for people to pay their own god dang bills. Health care is a commodity. That's what we do in this country. Pay your bills. Just like hamburgers or blue jeans or an iPod or a car or anything else, you are responsible for paying for the goods and services you consume. There is no right to free health care. I know that's shocker to many, certainly in this administration, but a moral society is one that says individuals have a responsibility for paying their bills, whether it's for a tuna fish, mortgage or anything else.
Wayne Rogers, Wayne Rogers and Co: Well, that's true, and Jonathan talked about a moral society. You know, in a moral society in small communities in the old days, the people who have a lot of money, charitable organizations took care of a lot of this. I don't think you should garnish people's wages. I think you can assess part of that, but if somebody is in a poverty level, they cannot pay. It's up to the community at large to, I think, underwrite that. I'm not saying you do that as a matter of right. It is not. Jonathan is correct. It is not a matter of right. It is a matter of choice. I think that in a responsible moral society, individuals have that same responsibility and so does the society to a certain extent.
Now, if some guy is making X dollars and he can afford it, you should take some of his wages to pay those bills, absolutely.
Jonas Max Ferris, MaxFunds.com: Wayne's worried about the poverty line. 48-some odd million people who don't have insurance, a lot are paying cable bills and running jet skis and choose not to have insurance. Let's take this one step further. You should be forced to get health insurance so you don't even have these huge bills that you get to walk away from. When you go to the emergency room, you choose not to have insurance and those bills get passed on to paying people. That's socialism, and the government has to force it, just like they force car insurance.
Tracy Byrnes, FOX Business Network: Wayne made a point about the poverty level. We have Medicaid in place to take care of a lot of that, Medicare and Medicaid. People who are wealthier, it is the same concept of saving for retirement. If I opt not to do that, that's my problem. Maybe I think I will strike it rich later. Maybe something is going to happen. My choice.
Same with medical insurance. If I don't want to dish it out every month, I run the risk of paying the bills if God forbid something happens. I don't think the government should force us to save for retirement, to pay for health insurance, to do anything. I work hard. I make the choices of what to do with my money.
John Layfield, www.layfieldenergy.com: I hate the socialist outlook that this administration has. I think they have overstepped their bounds grossly.
When you fire the CEO of General Motors, a publicly traded company you have overstepped your bounds in so many different ways. There are no wages to garnish. Wayne is right. I'm not for universal health care but you have a 13.2 percent poverty rate right now and 300 million people in the country and 40 million people who cannot pay the bills period. You keep saying 47 million people but the truth is we're talking about 40 million people who don't have the ability to pay. Somewhere we need to find a way to mitigate this expense and get them health insurance.
Give "Stimulus Tax Cut" to Stimulate Economy?
John Layfield: We haven't stimulated anything. We proposed or spent more money than this entire country's 220-year plus history an lost over 2 million jobs this year. Give this to small businesses. Small businesses and tax cuts. They employ over 50 percent of in the country. They lift people out of recessions. I'm a small business owner. I have been buying trucks, building Websites, hiring people all year long. Our government needs to give tax cuts to get these small businesses started. Help out the entrepreneurs which is how America was built.
Jonas Max Ferris: We should not spend it. We don't need that much more stimulus. We have reversed the course in the economy. It would be best to not borrow the money to keep interest rates low. To give another income tax cut, most small businesses are sole proprietors and if we're going to borrow money to give a tax cut? We should just not spend the stimulus money.
Tracy Byrnes: 64 percent of the jobs created over the last 15 years were from small businesses and the one thing that gets me the most about small businesses and why I'm an ally is financial regulation is coming down the pike. It costs a small business with a low amount of employees 15 percent more to institute these financial regulations. It happened with Sarbanes and Oxley. Their doors closed. I am supportive of small businesses, absolutely. Jonathan, the money is out there. The money is out there already. If you think -- let's say you're crazy. Let's say I propose to you, listen, 64 percent of all new jobs are created by white people. Will you create a tax free holiday for white people?
Jonathan Hoenig: A lot is created by big business as well. Part of the hassle of taxes is every year they rewrite the rules. Let's get a tax code devoid of regulations and put people's money back in the hands of the people who earn it.
Wayne Rogers: Why should you favor one group over another group? That's the point Jonathan is making. Why should it go to small business as opposed to somebody else. There is a better way to handle this. To John Layfield's point, you can give investment tax credits to small businesses. It's been done in the past, it can be done now. That's better than a stimulus. It could be a one-time shot. It could be a period over a certain period of time. Give them extended depreciation all of those kinds of things. There is no point in spending it. Jonas is right. You have allocated the money, tell Congress to give it back.
Force Obese Kids Into Government 'Fat Camps' to Save Health Care?
Jonas Max Ferris: They have to take harsh measures because they have a bad health care system. You have to cut spending in health care. We are going bankrupt whether it is public or private. Obesity is $1 or out of $10 spent, and there are not enough incentives to be thin with health insurance and the government is basically the organization that can force this.
Private insurance would probably charge people more if they were allowed to, to charge heavy people more. They can't do that, but we have to punish financially the obese and let them carry their own weight, so to say, to cut down overall health care costs.
Tracy Byrnes: But to do it to kids? I have tears in my eyes thinking about the poor little kid who gets a letter that says "Hey fatty, you got to go to camp." It breaks my heart. I can't believe they would consider doing this to society, let alone allowing the government to decide that my children's eating habits are inadequate.
John Layfield: Yeah, look, these kids, they're not going to get a letter in the mail. They're going to get an e-mail, because these big fat kids sit on the sofa, eat their chips, drink their drinks, play their video games. You got to do something with them. I'm tired of cuddling these kids and getting a bunch of big fat wimps in this country. Tell them to go outside and play something. It costs $147 billion for fat people and I'm sorry if it offends fat people out there, quit watching the show and get on a treadmill!
Jonathan Hoenig: That should be those individual's burdens, sure, all I eat are vitamins and salads for a reason. It's cheaper to be fit but to round up kids and sending them to a fat camp is sinister. National health care means a lot to them. Let them pay for it.
Wayne Rogers: I don't think the cost is really the fact. Ideologically speaking, you have to say individual responsibility. The individual has to be ultimately responsible for themselves. You can't ask the government to be responsible for whether you're fat or thin or everything else that goes on in your life. You have to take individual responsibility. That is your duty as a citizen. Citizenship in the United States should not be quote, unquote, free. You should take some responsibility.
What I Need to Know for Next Week
Tracy Byrnes: The girl scouts are being enlisted by department of homeland security, 3.4 Million girl scouts are now going to be able to get there preparedness badge and for all kinds of disasters, and natural, man made and unfortunately includes terrorist attacks and I don't think it is bad and bringing the girl scouts into the current century. We enlisted them during the war and Y2K. They handed out pamphlets. I just wish their uniforms would improve.
Wayne Rogers: This is a surprise, I wasn't a girl scout, either, and you need know the banks are not lending, and until they do watch out! Tim Geithner was asleep at the switch with the New York Fed and once again, they have refinanced all of the banks and banks have a lot of money and are not lending and that is the problem with slowing down in the economy. Banks are not lending!
Jonathan Hoenig: Sure we have been talking about gold on the show for years now and I know it is high, now at $1,000 an ounce, but go back to 1980 and adjust for inflation it has to be $2600 an ounce. SGOL, is a security which holds physical gold, as one part of a portfolio. Take a look at it.
Jonas Max Ferris: One of the best signs of the economy turned around is gas demand is climbing, which is amazing and I thought it would be declining and Valero (VLO) is a gas refiner. It is a good pick.
John Layfield: Roger Federer will blow the U.S. Open. He wears a lot of NIKE. The company can do well, especially with the weak dollar.