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.
This past week's Bulls & Bears: Pat Dorsey, Morningstar.com director of stock research; Eric Bolling, FOX Business Network; Tobin Smith, ChangeWave Research; Bob Froehlich, DWS Scudder; and Marc Lamont Hill, Temple University.
Trading Pit: Dow Drops Below 11,000 for First Time Since July '06
The Dow falling below 11,000 for the first time in two years on Friday. Blue chips did close above that level, but all three major stock indices did close in bear market territory. So with all the red numbers, why does someone here think we've got a green light for plenty of green on the screen — a big market rally!
Bob Froehlich: The stage set for a big rally! When the Fed cuts rates, the market reacts, but it takes 12 to 18 months. The bulk of these rate cuts haven't worked their way into the economy. We're also about to see an inflection point in the dollar which will help us with the price of oil. The foundation is in place for a rally, and I think we're going to have a good second half of the year.
Tobin Smith: Nothing normal is going on here. We have much bigger issues to deal with in terms of the physical nature of the mortgage market, corporate bonds, default rates, and the recession. We do have a real recession in this country and exports are the only things holding us up. We've got to go down to 10,000 before we get to value, and we've got a long way to go to get there.
Gary B Smith: First, this is the kind of rhetoric you hear at a bottom with people saying "I just can't think of one reason why the market will go up!" Second, the market has never failed to react when the Fed has cut rates this many times. The market doesn't always react positively the next month, but it does eventually react. The market is holding up – we dipped below 11,000 and then shot back up again. It's telling us it wants to go up.
Eric Bolling: What matters is getting the price of oil down. If you get the price of oil down, everything can improve, but until we see a $100 barrel of oil, it's going to be tough going.
Pat Dorsey: Oil is a big part of the equation, but I will point to a couple of other things as well. On a shorter term basis, the volatility index, the measure of the amount of "fear" that's in the market, is getting back towards the same levels we saw this past month at the bottom of the market. For the short term, that's a pretty good sign. Longer term, markets do tend to look forward and discount things. We are in a recession, but stocks will start to move before the numbers show it. Things like unemployment and corporate profits are lagging indicators; they tell you where you were, but they don't tell you where you're going. The market will start to come back before all of those statistics start to look better.
'Pay or Play' Health Care: American Job Killer?
Play by offering health care to your employees...or pay the government to provide it. This is Barack Obama's health care plan for small businesses. Some think it's healthy idea, but it has others feeling sick!
Bob Froehlich: This isn't play or pay, it's pay, or pay even more. That concept is going to kill small businesses. Everyone knows we've got a health care problem, but we can't solve it on the backs of small businesses, especially in light of where we are in this economic cycle. If small businesses, the engine of economic and job growth, have to pick this plan up, they are just going to stop creating jobs. It's a horrible plan.
Tobin Smith: Look at Massachusetts – we can talk about ideas, but how about reality. A bill which required health care coverage in Massachusetts in 2006 has done three things. First, it's cut small business creation in half over the last twelve months. Second, rates have gone up, which means that the state has now instituted a cap with too many people on it. Third, their credit rating has gone down, resulting in increased interest rates and cost of capital, and decreased job creation. That's a heck of a plan for an economy.
Marc Lamont Hill: You can't balance the budget on small businesses; you have to support small businesses. Barack Obama's overall plan is to support small businesses. We can't look at the health care plan outside of his broader project, which is to enhance small businesses, give tax breaks, eliminate capital gains, and give all types of entitlements to small businesses to expand them. Also, he's saying that while we're going to force small businesses to pay for health care, it's going to be on a sliding scale. Businesses that have the most revenue can pay a little bit more, those that have less will pay less, and some will be exempt. We have to find a way to pay for something that will help everybody.
Gary B Smith: This is a tax on small businesses, pure and simple. It's the government saying that this is how the small business must operate. I don't see this as any different than saying small businesses must offer day care, three weeks of vacation, or anything else. Once you get the government telling any business, small or otherwise, how to operate, they tend to operate less efficiently. The government's role in the whole health care situation is probably just to get out of the way and let the market operate, instead of dictating what businesses must offer.
Stock X-Change: $tock$ to Pay for A-Rod's Divorce
Stocks to help A-Rod pay for his divorce and help you beat the bear market. Batter up in the Stock X-Change!
Gary B Smith: The Bank Of New York Mellon (BK)
Pat Dorsey: Whole Foods (WFMI)
Tobin Smith: Petrohawk Energy Corp. (HK)
Bob Froehlich: Vulcan Materials Company (VMC)
Eric Bolling: True Religion (TRLG)
Gary B. Smith: Vegas baby! Play gambling comeback with "WYNN"; Up 30 percent in six months
Tobin Smith: Bad times are great for FTI consulting; "FCN" up 50 percent by next spring
Eric Bolling: Pawn shops are golden! EZCORP (EZPW) up 30 percent by end of '08
Bob Froehlich: As Iran test missiles soar, so does Raytheon! "RTN" up 25 percent in 12 months
Pat Dorsey: "Steel" some cash with POSCO! "PKX" up 30 percent in one year
On Saturday, July 12th, 2008, Dagen McDowell was joined Ben Stein, "How to Ruin the United States of America" author; Adam Lashinsky, Fortune Magazine; David Nelson, DC Nelson Asset Mgmt; Ben Ferguson, "The Ben Ferguson Show" Radio Host; Reta Lewis, Democratic Strategist; and Robert Shobani, Caspian Energy Consulting.
Bottom Line: Democrats Want Strategic Petroleum Reserve Tapped to Bring Down Gas Prices – Good or Bad Idea?
Dagen McDowell: The Democrats' new plan to bring prices down at the pump. House Speaker Nancy Pelosi telling the president to open the spigot to America's emergency oil stockpile. But, would that fuel a real emergency at the pump?
Ben Stein: It's called a Strategic Petroleum Reserve for a reason! It's in case there's war, in case there's a drastic natural disaster, and we can't import oil. It's not meant to be a market equilibrating mechanism. It's not meant to knock prices down. It's meant to protect the US in case of a military or natural disaster. The idea of tapping it which would have a tiny, tiny, tiny affect anyway is just ridiculous. We're talking about 80 million barrels a day consumption. It's tiny. It's a very bad idea.
Dagen McDowell: Robert – driving oil to a new record this week – worries about Iran. Isn't that a reason to keep reserves in our SPR?
Robert Shobani: Actually not. Historically, in 1991, President Bush Senior tapped into it and then after Katrina. What's happening is Wall Street's getting richer and Main Street is getting squeezed. Absolutely no reason why we can't tap in to the SPR. It won't have a significant price drop, but it will certainly help at the pump. Because when you look US consumption, we're consuming 10 million barrels a day. If we tap in to the SPR, I guarantee you prices at the pump will come down. Why? Because the rest of the world will take us seriously. The Saudi's, the rest of the world, will see we do care about oil.
Ben Stein: Will you sell me a call on that? You said you can guarantee it? What way? I don't see how it can possibly affect… how much can they take out? 50,000 barrels a day? 100,000 barrels a day in an 85 million barrel a day world consumption situation?
Robert Shobani: Ben, you're comparing apples and oranges.
Ben Stein: Really?
Robert Shobani: The SPR is the largest in the world, 700 million barrels. We can tap into it to help our economy. You're right the world consumption is around 85 million barrels a day.
Ben Stein: Well that's what sets the world price, sir.
Matt McCall: First of all, he said the rest of the world is going to take us seriously? The world will take us seriously when we start drilling for oil. This is a short term fix for a long term problem. Congress is side-stepping again. They need to actually think about this long term. Dipping into this now? This is for emergencies! And what's going on this week with Israel and Iran both right now testing? What happens when the Strait of Hormuz closes? Oil goes to $200 a barrel?
Dagen McDowell: Reta, it's worth pointing out that the head of OPEC said this week that if we loose Iran's oil. There's nothing we can do about it.
Reta Lewis: We are in the toughest economic time in this country we have ever been, and Americans know it.
Ben Stein: That isn't true! That's ridiculous! We have five and a half percent unemployment! We had 25 percent during the depression!
Reta Lewis: Listen! Americans, especially in rural America, are hurting. They want relief now! They're not going to take and tolerate our politicians sitting around. President Bush has it in his hands right now to release that oil right now!
Dagen McDowell: Let's point out Adam, supply disruption. That's why the SPR was set up. That is not what we have here.
Adam Lashinsky: Thank you for that opening, Dagen. First of all, with all due respect, there was a worse economic time in our history; it was called the Great Depression. It was a little bit tougher economic times, and I'm being sarcastic when I say a little bit. On the subject on supply, it's interesting to make passionate speeches about the SPR. The fact of the matter is we don't have a supply problem. Last week – a million addition barrels of oil were added to the supply. Americans are using slightly less gasoline then they were in five years. That's because the price is high due to high demand on the global market. And releasing just a little bit from the SPR will not change the price of gas in the U.S.
Reta Lewis: Let me tell you something, Dagen. Those are all excuses they're using. The reason they are driving less is because they can't afford it! They can't afford it! You go down to rural America, places where I'm from, I've been down to Georgia, you got SUVs sitting on the side of the road. People want relief now. People are choosing whether to buy gas over food.
Dagen McDowell: Give me an estimate. At the very most, you release some oil from the SPR, it might bring down prices down, Ben.
Ben Stein: A tenth of a cent! Look, Mr. Lashinsky totally nailed this. We have more supply than we did a week ago. Why isn't the price falling?
Reta Lewis: We have seen immediate results in the first Bush term, first Bush and second Bush, and is President Clinton's. The prices did go down
Ben Stein: That was a different world, madam.
Matt McCall: I agree with Ben, it was a different situation. If you want something to be done, you go to Congress and force them to start drilling. Start thinking long term.
Dagen McDowell: Robert final word. Don't we need to be focusing on the demand side of the equation instead of the supply side to figure out a way to drive less?
Robert Shobani: Off-shore drilling is going to take at least 5 to 10 years to materialize. We don't even know what's under ground. There is an alternative, in addition to tapping in to the SPR for an immediate recovery. And, trust me, for the truck driver in Maryland, where I live a 10 cents difference makes a big difference.
Ben Stein: I said tenth of a cent.
Robert Shobani: Let me finish. There are, however, 2 trillion – with a T – barrels of oil shell in the US. Forget about drilling off-shore drilling. We have today the technology to bring to market, by 2011, 750 million barrels of crude to the market from out own sources from Colorado, Wyoming.
Dagen McDowell: We have to go. I want to point out, gas prices are up 30 cents a gallon since we announced we stopped filling the SPR up, by the way.
Head to Head: Should Companies Be in Business of Telling You How to Live?
Dagen McDowell: Get skinny or get fired! That's the new message from many bosses around the country. But should companies be in the business of keeping you healthy?
Matt McCall: No, I wouldn't, as a small business employer, if they're out of shape. I am paying health insurance for employees; obesity is the second largest killer. My healthcare costs go up. Health care costs a lot. If you are working for me, it's my right to tell you to stay in shape.
Ben Stein: But why isn't it your right to tell people, for example, to not be gay because the incidence of death from AIDS is much higher from being gay?
Matt McCall: You can't compare the two.
Ben Ferguson: I don't mind someone saying we're going to have a healthcare membership and you'll get a discount on your health insurance. But, when you start profiling people, and having them coming in for physicals and weigh ins. What you're basically doing is looking at your bottom line, saying, well "Tom doesn't work out, so I'm going to get rid of Tom and Patty costs me less money a year." This is profiling, and a classic example of what can ruin Corporate America.
Dagen McDowell: It maybe a thin line, but it's the bottom line for the companies. If they're paying the bills for your health insurance, don't they have a right to how well you are?
Adam Lashinsky: Yes, they do. If you think about it, over time companies large and small, have been suckers in that they've been paying for the majority of their employees' health insurance and they haven't been asking anything from employees in return. If you don't like what your company is asking you to do, you have every right to go work for yourself. The fact of the matter is they're footing the bill. Last point: this is good for shareholders. Healthy employees make for profitable companies.
David Nelson: I've got to step in here. We're forgetting about a little document called the Declaration of Independence. Among these rights are life, liberty and the pursuit of happiness and frankly an employer's job is to judge skills, job performance, and job ethic.
Dagen McDowell: You don't think that your health and how fit you are have any impact on that?
David Nelson: Dagen, let's ban you from Fox News because you're a woman and you might get pregnant??
Matt McCall: Tell me about this, you won't be happier when you are not in shape?
David Nelson: I know some happy fat people.
Ben Ferguson: There are some fat people that are happy. Do you hire me? Because of my weight and height, or do you hire me because I am good at I do?
Dagen McDowell: What about smoking, there are laws where a company can't hire you if you smoke?
Ben Stein: It makes sense to control some things, to give suggestions and advice and to put on nutrition snacks and to put out healthy snacks. Maybe they should do that. But to tell people to be a certain weight, that seems a bit strange.
Adam Lashinsky: I agree. But the relevant document is not the Declaration of Independence; it's the Bill of Rights. And I agree you can't violate the rights of your employees, but you don't have to pay for health insurance for them.
David Nelson: Maybe we are debating two issues? One, should they have the right to do this? And second, do they pay for health insurance?
Ben Ferguson: The reality is, health care is costly for women, because they have babies. And what is the bottom line? I will hire men because of that. You don't hire people over 55 because they might have prostate cancer? That's ridiculous.
Ben Stein: Why is he looking at me when talking about all these diseases?
Ben Ferguson: You always make me feel young.
Ben Stein: I wonder why. I don't like the idea of telling others what to do. Human beings don't like to be pushed around, it's that simple. I don't believe they will allow to be pushed around.
More for Your Money: Stocks the Pros Own!
Dagen McDowell: Just as promised! Stocks so good our pros own them. Your bear market survival guide so you can get "More for Your Money."
Adam Lashinsky: Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
*Adam owns shares of this fund.
Matt McCall: NuVasive (NUVA)
*Matt owns shares of this stock.
Ben Stein: iShares MSCI Emerging Markets Index (EEM)
*Ben owns shares of this ETF.
David Nelson: Medtronic (MDT)
*David own shares of this stock.
FOX on the Spot
Ben Stein: Media's trying to talk us into a recession; ignore 'em!
David Nelson: Microsoft will buy Yahoo; YHOO jumps 30 percent by 2009!
Matt McCall: The "Boone Pickens Plan" blows "OTTR " up to 40 percent by 2010!
Ben Ferguson: Jesse Jackson era's over; Obama will rise above and lead
Adam Lashinsky: Now is the WRONG time to cash out your 401k
Dagen McDowell: Glimmers of hope in housing will help everyone!
In Focus: Who Is 'Real' Tax Cutter for Middle Class: Barack Obama or John Mccain?
Mike Ozanian, national editor: McCain all the way. Obama wants to cut taxes for the middle class, but he will kill them with tax increases in other areas such as payroll tax increases, dividend tax increases and capital gains tax increases. He will give with one hand, and like most liberals, take it all back with the other.
Neil Weinberg, senior editor: You know, McCain was against the Bush tax cuts before he was for them. I don't see how you can see McCain as the tax cutter. Obama is going to cut taxes, he's going to give a $4,000 tax credit for college, he's going to give a tax credit to senior citizens, and he's also going to have a larger $500 tax credit for people who are earning less than $155k.
Elizabeth MacDonald, FOX Business Network: Those are all fake tax cuts that Clinton came up with that didn't do much of anything. Obama wants to raise taxes, payroll taxes, dividend taxes and capital gains taxes on those who make $250,000 and above. He says this will help us keep up with India and China. Check this out, China and India both have corporate and personal income tax rates lower than here in the US. That hurts the middle class in terms of jobs.
Bill Baldwin, editor: I have a surprising answer here. I'm going to tell you about 2 good things with Obama's tax plan. The first one is he does not have any part of an idiotic gas tax holiday. We're talking about McCain there. And Obama's going to make tax filing less of a headache. The way he's going to do that is have the IRS automatically fill out returns for middle income tax filers. I have to admit that Neil is right. I think it's Obama. I'm not saying it's good for the economy, but it's good for the middle class.
Rich Karlgaard, publisher: You have to keep your eye on who employees most Americans. 50 percent of Americans are employed by small business. 80 percent of new jobs come from small business. Small business owners are right in the bull's eye target zone of Obama's tax hike, so it doesn't do you any good to have a tax cut if you don't have a job.
Quentin Hardy, Silicon Valley bureau chief: You will be shocked to find that both are lying, but the nature of the failure is kind of important. I think that McCain stands for a lot of things that really are in the rear view mirror. You can have a war and it won't run up a lot of money. Guess what? It does. You can have a stimulus and it'll work out everything and it'll be fine. The fact is there are some heavy bills to pay here and the cuts McCain is proposing simply won't work. Obama won't be able to cut taxes either. We're going to have to raise revenues possibly through greater enforcement of current tax laws, but you'll be able to expect that quicker from Obama than McCain.
Flipside: Fannie Mae and Freddie Mac Trouble: Good News for Home Prices!
Quentin Hardy: This is a necessary cataclysm. It was a real estate bubble that affected the stock market, it affected a lot of things. When there are manias, there is usually an unthinkable collapse and the government comes in to rescue and then you make a market again. If these things just twist in the wind the banks are going to freeze up and they're not going to grant mortgages to anybody. If the government steps up, then you'll start making a market again and that is absolutely necessary.
Victoria Barret, associate editor: Quentin's sentiment is right, we'd all like to think logically that's how things work. We could have said that after Bear Stearns. That felt like a massive crisis at the time. It made everybody on Wall Street scared, and you really have to think what could be next? It really breeds fear into investors.
Rich Karlgaard: It's the strength of the economy that matters. If we want to save the housing industry we really need a dynamic economy. I smile a little bit because whenever Quentin Hardy talks about the efficiency of markets I smell a rat because I think he wants the Dow to go down to 8,000 to usher in an Obama victory this fall.
Jack Gage, associate editor: There is up to a quarter of a trillion dollars in subprime and Alt-A mortgages on the balance sheet and both of those need to be addressed. Listen, can it affect housing prices positively? Absolutely. This is going to be something that plays out over the next couple of weeks and months, and mortgage rates could come back down if these guys do in fact recapitalize if that's the move the government takes. Rest assured, the U.S. government is not going to risk assuming all the debt from Fannie Mae and Freddie Mac.
John Rutledge, Forbes contributor: Home prices are still falling, but this has been a capital market story from the beginning, not a GDP or a mortgage payment story. The reason Fannie and Freddie are in trouble is because there's no market that will let them price those cash flow streams. The mortgage market is still frozen. The problem is liquidity. The Fed for all their talk has just been giving a transfusion. They take money from good banks and give it to bad banks. Bank reserves have not increased at all, and it's not making the situation better. I agree with Quentin. It's going to take something to jolt this out of its lethargy. It could be the Fed. I don't see that. It could be something from the administration, or oil prices, or the dollar. The real story here is Rich's point that Obama could win and tax rates would go up. That's a real killer.
Evelyn Rusli, Forbes.com anchor: Quentin is calling for a cataclysm event. If Fannie and Freddie were to fail, you'd eventually be able to build back the market, but from sticks and stones. It would cripple the market and it would cripple our economy. Just in the 1st quarter alone, Freddie and Fannie were responsible for buying 81 percent of all mortgage securities. They are absolutely critical in the recovery of this market.
Is Weak Economy Saving Marriages?
Josh Lipton, Forbes.com staff writer: A slowing economy is going to save marriages in this country. Rising unemployment, falling home prices, folks today know it's harder than ever to stay financially solvent. I'm not married, but I think people know that a smart solution is to stick together because two paychecks beat one.
Victoria Barret: I've got three years on Josh and to me it sounds like he says 'save' but it sounds like he's really means 'stuck.' It's a myth to think that the number one reason marriages dissolve is because of money. But the lack of money isn't going to keep people together either. That's not a good reason. People separate for complex reasons and they probably should.
Quentin Hardy: I think it makes people reconsider whether or not they do want to get divorced. When you're rich, life's a trip to Nordstrom's. You don't like this marriage, you get another. You have infinite choices. I've been married 21 years. Sometimes it's hard work and you stick it out. If it makes you stay in there, that's great.
John Rutledge: People running out of money isn't good for kids. It is good for gun sales and domestic violence though. This logic just escapes me. It's like saying if we cut off everybody's legs they'll stay home which would be good for marriages.
Bill Baldwin: I do not buy Josh's logic at all. I think with marriages, economic woes means strains, not gains. This has been proven by economists. Victoria is wrong. Studies prove it. It does matter. Big changes in money up or down can cause divorces.
Informer: Tech Stock $tars!
Mike Ozanian: Philips (PHG)
Evelyn Rusli: Oracle (ORCL)
Jack Gage: Garmin (GRMN)
Neil Weinberg: Sprint Nextel (S)
Would Obama's Plan to Tax the Rich Really Mean Tax Hikes For Almost Everyone?
Jonathan Hoenig, CapitalistPig Asset Management: Yeah, the fact is you will raise that tax. And those Americans that pay the tax, which is everyone, they will see the cap taken off, and percentage the same. Those up to 250, and see 100 percent increase of the social security piece.
Julia Piscitelli, Democratic strategist: I feel that Barack Obama is fair when he says it's fair to raise taxes on the people who make the most money. "The wall street journal" said that if you do that, they will pay less because they will move that around and can do that. What we need to look at, while Barack Obama is coming up with a reasonable tax plan. You have John McCain saying that we will balance the budget in four years. And his economist said that will be eight years, so he's either lying or not.
Wayne Rogers, Rogers & Co: It's going to play, because it's a political scheme, and he wanted to get elected and to say that the rich will distribute to the poor. Everyone has done that for eons, and it's a populist scheme and I wouldn't expect otherwise. No one looks at the facts and Jonathan is right, that the rich bear an unequal part of the burden. Who is to say what is fair? Who is the person that makes that decision? Is god going to make that decision or the Democratic Party?
Jonas Max Ferris, MaxFunds.com: It's not as skewed as it sounds. I wish that Obama would say, let's raise tax — taxes on everyone. We are all paying too little in taxes, that's why there is a deficit every year.
Tracy Byrnes, FOX Business Network: First of all, the definition of rich, 100 grand is not rich, that gets you no place. And you work hard, you start to make money and do well, and then you are slammed and have to be this evil person and have to give everything back to the country. You know what? I worked hard. It's crazy.
Bring Back National 55 Mph Speed Limit to Fight High Gas Prices?
Jonathan Hoenig: People should be able to drive what they want. You need to cut productivity. The power of cars and prices, and this is limiting man's productivity. If he wants to bring gas prices down, cut the tax, not the consumption. We don't need to sacrifice, we talked about it for weeks, we have plenty of resources. Why limit the consumption?
Wayne Rogers: I don't think anything is wrong with this. Make you are limiting productivity by allowing people to use less gas, and to use something productive than an extra 10 miles per hours.
Tracy Byrnes: When a car hits 60, then it becomes inefficient. And what about air conditioning too? And we should focus more on fixing the problem, than the minimal things, and it's second to my freedom of speech to drive.
Jonas Max Ferris: My scooter goes 15, but I am for these rules. At the end of the day, we have to take rules to counter what is going on, the producers get together and limit reduction. And why not get together and limit consumption. If we did it earlier, and didn't get rid of this rule, we wouldn't have $4 gas, and we would moderate the consumption and help the economy.
Joe Battipaglia, Stifel Nicholaus: I would like to see this 55, and to go after alternative energies. And that's the democratic process, and Jonathan gave a great idea…let's go to 55, and let him speed, and that will save lives and gas, and balance the budget.
Privatize Skies to Boost Safety, Cut Fares?
Tracy Byrnes: We started this deregulation process, but we didn't actually finish it and that's the problem. We just need to finish it and get on with it. Deregulation is good for the passenger. If you look at the numbers, passengers have increased since deregulation began. Whether it's good for the company is another story, but it's clearly good for the passenger.
Joe Battipaglia: With deregulation, I think the skies of America are just going to get busier. You've got homeland security considerations, military considerations, and then private and commercial airline traffic? I think the government is in a position, with the investments to date, to do this right if they fund it properly. Although they haven't done it to this point, the word is out, and they've got to step up.
Jonathan Hoenig: In the first 25 years of flight there was no FAA, no pilot's license, and no aircraft control. It's only since the government got into the business of regulating air travel that innovation within the industry has stopped. I think we should certainly privatize; get rid of the FAA, privatize the airports, and let the free market actually have a shot bringing air travel into the next century.
Jonas Max Ferris: The government should get out of airline security, but the FAA? For all of the planes in the air we have so few mid-air collisions. I think this regulatory role is a role of the government and I don't really even see how you could begin privatize. Would airlines get together and pay some third party to do it? Are they then liable if a plane hits? I don't think AMR and Jet Blue, for example, would want that liability. And as far as cutting down air traffic. I think a $150 barrel of oil will do the job just fine.
Wayne Rogers: I'm at a loss as to what the difference is. Whether the government runs airline security, whether it's run by the airlines themselves, or whether it's run by some third party, you're going to have the same people doing the job. We have the same thing now when we talk about people who check us into the airport. The security people are the same people who were doing it before, they just have a different armband. I'm lost as to what difference it makes who runs it as long as it runs efficiently. We're talking about a safety problem — purely safety, air-traffic control — we're not talking about something that has to do with the economy. It's not who controls the system, it's having trained people to do the job right.
Tracy Breaks Down the Stocks!
In honor of Tracy's soon to be bestseller, "Break Down Your Money," Tracy is going to break down your stock picks! Let us know what you like and Tracy will give us her take.
JOE BATTAPAGLIA: Kraft (KFT)
JONAS MAX FERRIS: Fidelity Select Air Transportation (FSAIX)
JONATHAN HOENIG: WisdomTree Dreyfus South African Rand Fund (SZR)
WAYNE ROGERS: Central European Distribution (CEDC)