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U.S. SPENDS $70K ON PAKISTANI AD DENOUNCING ANTI-ISLAM FILM
STEVE FORBES: Yes, cutoff or a partial cutoff. I'd only accept Libya, but Egypt and other countries, if you can't protect embassies, which are foreign soil, than you shouldn't be getting money, free money from us. It's very basic. You don't do your part; we're not going to do our part.
RICK UNGAR: Look, it is our money, but that isn't the issue. The issue is this; you can't make foreign policy in reaction to short-term events. What's happening there is awful. We all know it's awful and yes, I'll be the first to agree that those governments should have done a much better job at protecting our embassies, but we have to look out for our foreign policy interests and it does us absolutely no good to have this quick, Rand Paul reaction and start cutting them off and make our own situation worse.
ELIZABETH MACDONALD: We've done this with, for example, North Korea, South Africa. We've done it also cutting off the West Bank and the Gaza Strip in 2006. We've done it with Honduras in 2009 and also with the Sudan. I think the Muslim brotherhood is a long-term event and possible Al-Qaeda influences on these individuals. We don't know if the tax money is going toward our enemies and those enemies are killing our Americans overseas. Intelligence officials are telling me that they would support actually cutting off Pakistan as well and the cheapest way, the best way to do it is by getting U.S. companies to stop doing business with countries like Pakistan. That is the best way to cut off foreign aid as well too.
VICTORIA BARRET: Look, I think there is no doubt that some of this money is going to terrorists, but this money is not tracked. There's no accountability with foreign aid and it's a tragedy, but that's not a reason to stop spending. We need to spread democracy in the Middle East. If you pull back entirely now and cut off these billions in aid, you're going to see the real rise of Al-Qaeda and that would be a threat to our national security. So don't cut it off, but make it much more conditional instead of just taking these weak commitments from these government leaders, let's really hold them accountable.
JOHN TAMNY: Well I think of course we're going to have to demand accountability. The problem here is that there is a negative correlation between foreign aid and economic growth. There's no evidence that it works and when we think about trying to spread democracy in the Middle East I think that history's eventually going to show that democracy lead to tyranny there, but I think the biggest thing about foreign aid with these countries is there is no evidence that once we hand it over to them that they like us more. I think that what this past week shows is that they like us even less when we hand them over money.
RICH KARLGAARD: Well that's the problem. I look at this like the Cold War. I think this is going to take another 20 years to resolve in the Middle East. It's a generational problem and I think we'll win and I agree with Victoria that we have to be there. Really the argument we're having is that instead of having Reagan and Caspar Weinberger in there, we've got Obama and Secretary Clinton who are vacillating and weak. I think even Steve would support more foreign aid if we had a Reagan and a Cap Weinberger in there instead of the current crowd.
REPORT: U.S. DROPS TO 18TH PLACE IN ‘FREEST ECONOMIES' RANKINGS
STEVE FORBES: Well in addition to a sound dollar and a simple tax code David, we've got to reform the regulations in this country, which cost the economy $1.75 trillion a year; bigger than every other economy in the world except for the top five or six. We have things like the Army Corp. of Engineers harassing farmers with elastic definitions of wetlands, you have the FDA blocking critical drugs that have already been approved, but they won't allow the proper production of them and on and on it goes. You have those kinds of burdens people can't focus on real things like producing products and services other people want and need.
RICK UNGAR: You know what I want to focus on? How incredibly perverse this report was. You know who came out on top? The number one free economy supposedly is Hong Kong; a country where every square inch of land is owned by the Peoples Republic of China and leased-backed business at high rates, but my favorite was Singapore. Singapore is a country where companies that control 60 percent of their GDP have ownership by the Singapore government. Now in a segment we're going to get to really quickly, I think a few of you are going to be telling me how awful it is that our government still owns some of GM, but when Singapore owns these businesses it's a wonderful model for the economy.
RICH KARLGAARD: Yeah we are and to answer Rick, he has problems with this one particular study but it's validated, this phenomenon of the U.S. falling in competitiveness across the ideological spectrum Rick. So from Libertarians to Liberals like in the World Economic Forum, they're all seeing the same thing. Steve is exactly right. All business and growth happens on the margin. It's whether a business person is going to invest in the next factory or hire the next person and when collectively that doesn't happen, the economy stalls and we drop in our competitiveness and that's what's happening now because of all the confusion coming out of Washington.
MORGAN BRENNAN: Sure, I mean we can take a look at regulations and revamp some of those, but the truth of the matter is that I take this report and other reports that have just been mentioned MORGAN BRENNAN: with a grain of salt. Again, today it all comes down to methodology. The latest report released is actually only including data through 2010. A lot has happened in the U.S. since 2010 and to be completely honest, some of it not so good, but the truth of the matter is; A, we're coming out of one of the worst recessions in history. All of these reports make note of that and B; we wouldn't be seeing companies like Air Bus, Google and GE starting to onshore factories and onshore jobs.
MIKE OZANIAN: David, we don't need a study to tell us that the world has given our currency a big thumbs-down since the middle of 2009, the value of the U.S. dollar against a basket of our trading partners is down 13 percent and thank you our chief counterfeiter Timothy Geithner. If you look at the Reagan recovery and the Clinton recovery, the dollar was getting stronger because people had confidence in our economy and investing in it. That's not what they're doing now and that's why the dollar has plummeted.
VICTORIA BARRET: Rich was exactly right. Business growth comes down to a single individual making a risky decision and whether or not they're going to make it can often depend on how hard it is or the other factors and regulations and taxes certainly come into play, but to go back to these studies for an instance, you know the one Rich cited the World Economic Forum study, which I think is the most damaging. We've slipped in the last seven years from first place to fifth place and when you read why it's because we rank 50 in terms of Americans trusting their government. We rank 50th in our sense that the government will take an arms-length from business, so 50th? C'mon, we're the United States of America. These studies are worth talking about.
FORMER GM CEO: TIME FOR GOV'T TO GET OUT OF GM'S BUSINESS
STEVE FORBES: Well put aside the debate on bailouts. The question now becomes how long is the government going to stay involved? If it was going to get involved it should have been in and out. That's another debate, but Whitacre is absolutely right. The markets should decide the future of General Motors, not the government. They'll say, well the government will take a loss on it; the taxpayers have already taken a loss on it. The government's running a deficit of over a trillion dollars a year. Get out of GM. Let the market decide whether GM prospers or goes broke again.
RICK UNGAR: You know what I think this proves? This proves that Ed Whitacre loved to see the value of his own shares go up in GM. Look, who doesn't want to see a 25 percent owner in a company taken out at bottom prices like this? If they want us out they can get us out. Pay us a premium like you would anybody else who owns 25 percent of your company, but don't ask us to take this kind of a haircut just because you want to make your own shares make more money.
MIKE OZANIAN: That's right and the President owes the American people a public apology. He should be embarrassed by what he did. He went in and he saved a handful of jobs at the automaker. This was political so he could get votes in Ohio, but at the great expense of the economy at large he debased bond-holders and he really reduced the confidence in our economy and our markets; very bad move. He owes us an apology.
JOHN TAMNY: Of course the government should get out but they're not going to because it would be politically impossible to admit the disaster that this bailout was and it's got to be stressed that bailouts is a misnomer. They're an asphyxiation of companies. Once you take government money as GM does, you're not in the business of profit anymore. You're serving politicians who don't care about profits. So the government should get out, but it can't politically.
ELIZABETH MACDONALD: GM could buy back those shares. It's got $30 billion on the balance sheet. It owes taxpayers $27 billion. We're propping up GM long enough to reelect the president. This was always a faith-based initiative. GM was tin can on the "just married" card of the TARP program, which is bailing out the banks.
HOUSING COMEBACK STOCKS
ELIZABETH MACDONALD: Weyerhaeuser (WY)
MORGAN BRENNAN: Sherwin-Williams (SHW)