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SLEW OF GOOD ECONOMIC REPORTS SPARKS HOPE A RECOVERY IS HERE
Gary B. Smith: I see the seeds of a recovery. I think it moves a little faster than [Toby] anticipates for a few reasons. The best number in there was retail employment - it's up. That means consumers are going to start spending more. Maybe an even bigger point, temporary hire was up. That doesn't sound great, but temporary hiring usually leads to permanent hiring. In fact, the signs point to us getting back to that 200,000 jobs increase per month that everyone seems to want. Household debt levels have been at their lowest levels they've been at in seventeen years. So, the consumer actually has room to expand and as the consumer expands, so goes the economy. I think there are good things ahead-more good things than bad things.
Tobin Smith: This is a slow, but sure recovery. This isn't 'happy days are here again.' Remember, 2002 through 2007 was basically a BS recovery. 40 percent of those jobs were in housing and mortgages. Those things are never going to happen again. 40 percent of all the profits that happened between '02 and '07 were financial services-we're never going to be that high again. So let's not take this great news and go wacky. On the other hand, we are not falling off a cliff.
Jonas Max Ferris: There's definitely a recovery here. The main difference is that this recovery has a huge potential to go wrong because of a lot of bad stuff. But, it actually is here and if something doesn't go wrong, it's not going to be the biggest recovery of all time. However, these consumers have been thrifty for years and you're seeing how that's ending now. There's a lot of pent up demand. You're seeing auto sales take off. We just saw holiday shopping be way better than anyone expected-both online and off line. There's a lot to drive the economy higher. Unfortunately there's this scary overhang where there could be something to derail it.
Jim LaCamp: We've got 64 percent participation rate in the labor force. That's way too small and it's the lowest number since 1984. We have 315,000 people that dropped out of the labor force. That's not acceptable. We're already in the fourth year of this recovery. Keep in mind, previous recoveries have shown jobs growth in the first two years. I'm not even worried about that. I'm not worried about the fact that consumer incomes have not kept up with consumer spending, so it's coming at the expense of savings. I'm not worried about expiring depreciation schedules and expense schedules. I'm worried about the credit crunch that is coming and the market is completely underestimated out of Europe that will impact credit across the globe.
Michael Norman: I don't think this is the makings of a recovery. I think it's ongoing. I think this has been happening since 2009. It's not a boom by any means. I think everyone would agree with that. In spite of everything-we had the debt ceiling debacle in the summer, all this negative news about Europe-and we see sequential growth. The second quarter was faster than the first. The third quarter was faster than the second. I think the economy looks like it's picking up momentum. We're starting to see a positive glimmer of hope in the housing market with pending sales really shooting up. And we are creating jobs. It's certainly not where we'd like to have it right now, but it's impressive to see the momentum in the growth despite everything that has happened so far. There are still minefields out there, no question about it. But, the economy here in the United States is growing a lot faster than the economy in Europe.
LAWMAKER CALLS FOR NO UNEMPLOYMENT BENEFITS UNLESS YOU VOLUNTEER
Gary B. Smith: I think this is brilliant. It's already been proven and shown in studies that the more a person gets unemployment, the longer they stayed unemployed. This is a good way to get them back doing something and building some self-esteem-help out the community. Now, the concern is they won't be able to find time to look for a job. The average unemployed person spends 40 minutes a day looking for a job, but they spend three hours a day watching TV. So, the time is there. I think it's a good idea. I think it should go national.
Tobin Smith: After the part of unemployment where you're employers pay in and you pay in, if you add another 70 weeks onto that, it's coming basically out of the general funds. We have 15 million kids in the United States that could use tutors. We have five to eight million homes that are owned by Freddie Mac and Fannie Mae that need to be helped and fixed. Let's have those people who are on the government dole after they've run out of their own money do some work.
Jonas Max Ferris: Unemployment is like an insurance policy. If you have insurance on your house and your house burns down, they won't say 'we're not going to give you a check unless you do some work for the community.' That wasn't the deal. You paid the premium. If you get the insurance, then you deserve the insurance money. If you want to have a different program, rather than extending the unemployment insurance, which is a works project type of a situation, then that's another story entirely. However, we extended unemployment insurance-right or wrong. You can't then make people volunteer. Not to mention we have 13 million people out of work. There's not enough community service for these people. That's billions of hours we're talking about.
Jim LaCamp: I think 24 hours a week of volunteer service is way too much. I think if you did ten hours a week and found something more productive for them to do, that would be okay. With twenty-four hours a week, you're going to have to spend a lot of time and a lot of gasoline just getting to these places. It's not as productive as it sounds. So, it's not the worst idea that we've seen. I think they'd be better off lowering the minimum wage and allow employers to drag some more people into the work force. But, it's not as bad as some of the other ideas we've heard.
Michael Norman: I do not think this is a good idea. If you want to give unemployment benefits for a fixed amount of time and then you tell people for a portion of that time, maybe a decent portion, you have to go do this volunteer work and you can't look for a job, that's a ridiculous thing. If you want to have a work-for-pay program, I'm all for government jobs guaranteed where somebody engages in productive activity for $8 an hour until they can get back into the private sector. But, doing something like this is totally ridiculous. This is the epitome of government waste.
LAWMAKERS PUSHING TO END CONGRESSIONAL PENSIONS
Gary B. Smith: The people that were already signed up for the pensions should get those pensions because that was their contract. I think this is for the new people brought on board. I'm not even saying get rid of the pensions. What I think is, if you look at the numbers, the compensation they get from pensions and annuities is almost double what the private sector gets. I think what people want is fairness. They don't want bloated fat cats to be working for the government. It's bad enough they're at the banks. Just bring them in line.
Tobin Smith: We shouldn't stop there because we can't afford the entire government pension plan system. 84 percent of government workers are covered by a defined benefit plan. 24 percent of the private sector is covered. Why is that? Because the private sector has to account for all the money that they owe and they couldn't afford it so they had to structurally change. Our U.S. government employees, in theory, were paid less, so they got a better pension. That's bogus because we got the points back and now most jobs in the public sector are getting paid.
Jonas Max Ferris: If you want to talk about giving smaller pensions to new government employees, that's one thing. They are talking about wiping out existing pensions or cutting them. That's absolutely absurd. That's not the worker's fault that he's been applying his whole life for a certain pension and now it's going to be taken away because of budget problems. It's not just unions and all that other stuff. They played a part in this, but these governments have tried to balance books, and so was GM, for years by pushing off pay to keep their current salaries low and now it's come to ruse. But, they would have probably had to pay more in those earlier years if there weren't these gravy pensions. So, it was done to balance city, state, and local budgets ten, twenty, thirty years ago. They wanted to further the pay because it made them look good at the time.
Jim LaCamp: You can't take people, promise something, then take it away from them. But, you have to stop it moving forward because the math is horrible. They are using some sort of Grecian formula to come up with the way that they can pay these senators and these congressmen these kinds of pensions. At any rate, the math is not there. There's no way that you can let somebody work for 30 years and then pay for them to live for the rest of their life, when they're living until 85. The math is not there. They have to stop it now. Congress, notably, who sets these rules, needs to get on the social security program, needs to get their kid out of private schools and stop running away with everybody's money.
Michael Norman: I don't know if anyone has noticed what's been going on in Greece and Europe where the cut all these people's pensions and guess what. Their debt went up. It doesn't work. What also doesn't work is when you reduce people's incomes. Guess what happens. Your economy shrinks. We've all been sitting here talking about how the economy is so weak. So, is that what you really want to do? Is that the solution? I say it isn't.
Gary B. Smith: Google has 25 percent gain in one year
Tobin Smith: Enbridge up 25 percent by April
Jonas Max Ferris: Monster has 30 percent profit in one year
Jim LaCamp: Gold has 40 percent profit in one year
Michael Norman: China has 30 percent gain in six months