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.
WILL ANTI-CORPORATE PROTEST HAMMER JOB MARKET?
Gary B. Smith: I believe it will. The whole "Occupy Wall Street," when they're protesting, they are really protesting every one of us and the job-creating machine that we have. I took a look at some of the top 50 companies out there in terms of employees. Do you know what those companies are? They are companies like Wal-Mart, Safeway, Target, General Motors, Disney. Are these really evil companies? And even if you say that they are really talking about the banks, if you look at some of the banks in there - Wells Fargo, Citigroup or JP Morgan Chase - these banks alone employ 1 million people. There's always this notion that there are all these corporate fat cats. I can guarantee you, at Citibank, most of the people that work there, the two or three hundred thousand dollars, are tellers, security guards or back office people. Finally, when they denigrate this evil, corporate America, let's remember that the vast majority of people out there with 401K's and pension plans are invested in the AT&T's of the world, the Verizon's of the world and stuff like that. So, doing this not only hurts the job creation, it hurts everyone's pocket book.
Tobin Smith: Really, they should have resumes in their hands. If this issue was about employment, get a resume. Get out there and work. These small business people are the ones who do create a vast majority of the jobs in the United States. They have this backwards. They just have this backwards. They are protesting some thing, when the reality is, get your butt in line, get a resume, and you'll get a job. It takes a lot of work.
Jonas Max Ferris: First of all, they are occupying Wall Street. They are not occupying Arkansas. They are not mad at Wal-Mart. They are mad at the banks, which by the way, every panelist of this show was angry at the banks for getting the bailout. That's what their core thing is, which is actually the core argument that started the tea party movement. The only difference is they think they should get a bailout like the banks got and the tea party people think nobody should get a bailout. That's the only difference.
Todd Schoenberger: They have a right to protest, first of all. Number two, they are actually representing Joe Cue public, who is very frustrated right now. They are ill-informed, obviously. They don't understand what's taking place on Wall Street. They are probably targeting the wrong areas, but if anything going forward now, I can't blame these people. Unemployment is at 9 percent. It's destined to go into double digits. These people are angry, but they're shouting at the wrong group, obviously.
Stephane Fitch: There's no doubt that some of these protesters are confused about how some of these corporate policies work and how the economy works. But they have a few things right. There probably is a system that is rigged to help bosses and a lot of those people out there protesting are just not bosses and they're not going to be bosses. They don't want to be bosses. And they would like a bigger slice of the wealth. It's not going to change people's hiring plans. A lot of the companies they complain about employ an awful lot of people. But I don't think Wal-Mart is going to refuse to expand next year because it feels bad over some things that were said at these protests.
STEVE JOBS LEGACY: CREATING JOBS WITHOUT GOVERNMENT MONEY
Gary B. Smith: It's not only that government gets out of the way. It's that most of the great successes of this country, product-wise and service-wise, not only came from business people unfettered by the government, but ruthless business people. Look at Thomas Edison. He was a shrewd business person. Look at the Wright Brothers. At the start they were just business people. Look at Disney t hat wanted to create this huge thing to make money. People point to our defense industry as we have the greatest defense in the world. Why? Because we have ruthless contractors out there who are coming up with these innovative products so they can make millions of dollars. It has nothing to do with government mandates. That's why government needs to back off and let these entrepreneurial spirits rise.
Tobin Smith: The Silicon Valley really started with Apple and with Intel, etc. This started by having infrastructure for education; having infrastructure for a laissez faire, letting people take risks, allow for capital gains. All these infrastructure issues create this place where innovation can happen. But beyond that, get the hell out of the way and that was the message that Steve Jobs always had, which was that he thought different, he worked different. He was in an environment where they could create, he could fail, he could take risks and that's where prosperity comes from in this world.
Jonas Max Ferris: There are plenty of new companies as dynamic and fast growing-or faster growing-than Apple. Apples sales area from Macro was the government a couple years ago. And there's a government part of their site that's just government sales. The point is, should the government be making phones or owning phone companies? No. There's an infrastructure property of government. Without that in America we wouldn't even have this industry here. As long as our government is not in the phone business, it's a good thing. And they're not, so I don't see what the problem is.
Todd Schoenberger: His products worked. They were efficient and that's why the government ended up subsidizing those programs. Here was a man who was hungry. Here was a guy who actually grew up poor. He would have to take soda bottles to take the deposit money to go feed himself. He had government out of the way, but he had to take that innovation because he was hungry. Edison, the Wright Brothers, everybody that Gary B. was talking about, that's because people were hungry. In America people are not hungry anymore because the government is subsidizing them. That's the problem.
Stephane Fitch: I'm sorry, but the idea that Steve Jobs did all this without a dime of government money is a fairy tale. The government enforced his patents. The government subsidized the purchase of many of his computers for schools. He pushed especially hard for that. The government sued Microsoft. Apple benefited. States like Oregon and Washington offer very rich subsidies to semi-conductor companies. That benefits Apple. Steve Jobs is terrific and I love my ipad as much as anybody else, but he went to public school. He benefited enormously from government involvement.
AVERAGE 30-YEAR-FIXED MORTGAGE RATE FALLS BELOW 4 percent FOR THE FIRST TIME EVER
Gary B. Smith: It's not a question of the government getting out that will help the housing market. I think it will. It won't help it overnight. I agree with that. One of the reasons people can't get these mortgages is because on the flip side, the government has made reporting and capitalization so onerous on the banks that no one's willing, even if the rates are low, to take the risks out there. They need to back off of that and let the banks be a little bit more risky in who they approve.
Tobin Smith: The bigger point here is that we have jimmy jacked around with all these bailout deals and not allowed the free enterprise, the free market system to find a bottom. This price discovery modality, which is what free enterprise is, works when you don't have people bailing in and putting in the extra things-cash for clunkers and bonuses and stuff. The more we did that, the longer we extended the problem. By allowing the market to flush, to go through this system-unfortunately it's painful but that's what has to happen, that's when you're going to get a sound footing on your homes.
Jonas Max Ferris: We had a multi-decade bender in real estate. It's going to take a very long time of slow removal of the government. The only reason you can get a mortgage under 4 percent is because of the government because of numerous things they've done and continue to do. The latest thing-the federal reserve playing games with interest rates and buying the debt and the mortgage debt they're buying, Fannie and Freddie. Wall Street doesn't have this securitization machine anymore. There will be no 4 percent loans for anybody. Someday we'll get out of that and we can handle it. But right now it's holding up this creaky real estate thing that was falling apart.
Todd Schoenberger: This is actually excellent news. Baby steps. When you have the government stepping to the sidelines, this can only help the housing market and the housing sector right now. They need everything they can get and now, without intervention, we can get back to the free market and what we've been wanting.
Stephane Fitch: Let's get away from this notion that program was significant. It was a billion dollar program. This is a twenty trillion dollar market. Nothing is going to jump start the housing market. The best thing for it are those low rates and time. We have to let a little time pass. Let the market clear. It's ugly, but it has to happen.
PREDICTIONS
Gary B. Smith: Toll Brothers up 20 percent in one year
Tobin Smith: International Game Technology up 25 percent in one year
Jonas Max Ferris: Mylan Inc. up 20 percent in one year
Todd Schoenberger: Costco up 15 percent by February
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