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On Saturday July, 18, 2009, Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Pat Dorsey, Joe Battipaglia and Mike Papantonio.
Does Government Run Health Care = Socialist States of America?
GARY B. SMITH: I can understand the government wanting to offer health insurance as an alternative even though they have not managed any health business so far. But this cram-down forced mandate that everyone must have health insurance and sign on to public or private is absolutely ridiculous.
MIKE PAPANTONIO: The American Department of Veterans' Affairs has been a socialized system for decades. They have 150 medical centers and 40 nursing homes, employ 55,000 nurses and 14,000 doctors. Taxpayers pay for that. And you know what? This might be a big shock to you but the truth is Germany, France, Italy, Spain the U.K., Canada, all have the same system that we use for the American Department of Veterans' Affairs. That is working.
JOE BATTIPAGLIA: Socialist nations have had had compact with the people and the sacrifice they have made is for legitimate growth, legitimate entrepreneurship. Now you are turning what could be a privilege into an obligation. You are forcing employers to behave in a way to bend to the government and forcing individuals to sign on for health care whether they want it or not and that is influencing behavior beyond anything and makes government influence greater it society.
PAT DORSEY: Well, one of the big issues we have in this country is we pay too much and get too little. We pay more for health care as a percentage of G.D.P. And our outcomes stink. If you look at the data, the larger the proportion of health care spending that is public and relative to private the less the country spends on health care as a percentage of G.D.P. Those are the facts.
TOBIN SMITH: Mike's point is fabulous for the Veterans' Administration because that is a closed situation. Those are doctors that are on salary. But what he is really telling us is what the Obama agenda is, because this is just the first step. If the Veterans' Administration is your best example of how government health care should be, what you are saying is you want a single payer system that all physicians are paid a salary and that plan is not only socialist, it is probably inconceivable how bad that would be.
15 States Report 10 Percent-Plus Jobless Rate: Is Stimulus Failing?
TOBIN: Obviously it is failing. When the entire assumption in the plan has been proven to be wrong, the plan doesn't work. The great shock would be if they actually admitted it, which politicians wouldn't.
MIKE: Every economist who had a comment about the stimulus plan, whether for or against, all said that the economy that Obama inherited was going to see job losses for a long time. At this point only 15 percent of the stimulus is on the street. Some states are saying they are seeing great returns.
JOE: I think it is absolutely ridiculous. This is not the first stimulus, but the second stimulus. The first was when unemployment is 8.4 percent. Now we are at 10 percent and going higher. This is not a spending plan to get real jobs that last the private sector has to be 'incentivized' to employ capital and form business and hire workers.
GARY B.: Obama came in and said unemployment wouldn't go higher than 8 percent and that we have tens of thousands of shovel-ready projects ready to go and states and cities I will hold you accountable. Yet for all of these police officers and firearms men that Mike says are hired. It is stimulating the unemployment rate.
PAT: It is very hard to measure and I think it is hard to make the case it increased unemployment, but I think it is hard to make the case that it dramatically decreased unemployment. It's just that not much of the money has been dispersed.
Walmart's New 'Green' Push; Proof Government Should Butt Out!
TOBIN: The biggest retailer and capitalist in the U.S. uses the free market and customers to give them feedback in this thing called a democracy and we don't have to have anybody pass a law to get us to behave the way we like. That is why cap and trade is such a crock. This is capitalism. Let it work.
MIKE: I do love Walmart. It doesn't have anything to do with the economy but they have brilliant advertising agencies working for them trying to fix an image problem.
GARY B.: I don't think Walmart cares quite frankly about the image problem. I think they care to the extent that it cuts into their profit. I think Walmart sees it as a chance to make more money. They are giving the customer what they think the customer wants and it will increase market share.
JOE.: I didn't coin this phrase, but 'green washing' is what's going on here; it's the ultimate form of corporate propaganda. Look what they are doing to the environment. This could backfire. First the government will go after them on the pollution side, but companies will reprise merchandise, perhaps not do business with Walmart because they are being put in the wrong light and who said these standards are the right standards? Now, we are going to have legal fights over what's green and not green.
PAT: They are responding to what consumers want. If you want more green stuff and they will pay what Walmart will give them. Proctor & Gamble and Colgate are rolling out green products and people are paying more.
Predictions
TOBIN'S PREDICTION: Fat flack won't hurt Delta! "DAL" soars 50 percent by December
JOE'S PREDICTION: Click Oracle for a tech boost! "ORCL" gets a 30 percent gain in 1 year
PAT'S PREDICTION: Robotic surgery is the future! "ISRG" Up 50 percent in 2 years
GARY B'S PREDICTION: No jolt for new Starbucks store! "MCD" gets a 20 percent kick by '10
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This week, Neil Cavuto was joined by Charles Payne, Dagen McDowell, Adam Lashinsky and Kristin Bentz.
Nancy Pelosi Hints Tax Cuts Not Needed to Pay for Health Care... Really?
Charles Payne: We should be scared. What I'm really starting to feel here is that first of all we know that the brunt of this is going to hurt small businesses. I think the subplot here is that Nancy Pelosi and Barack Obama really want to dissuade people from being ultra-successful, because that's exactly what this type of stuff will do. Its like "make a certain amount of money" but if you make more than $350 thousand, more than $1 million, that's a little too much and you should put it back in the communal pot because that's exactly what she's talking about: a communal pot of our money.
Dagen McDowell: She opened the Kimono, frankly, and she said what her fellow Democrats don't want her to say -- and it's what they plan to do. Taxes aren't going to go up to pay for health care; they're going to go up period because this government is spending twice what it's taking in tax revenue and in order to shrink the $2 trillion deficit, they are going to raise taxes. I will admit right here that I was dead wrong. I said, "the highest tax rate isn't going to go up above the Clinton era levels," but oh yes it is. Under this plan it's going to go up ten percentage points just at the federal level. If you factor in state taxes, you're looking at about 60 percent of your income is being taken from the government if you live in some states in this country.
Adam Lashinsky: Well we should put a slightly finer point on this 50 percent figure that you're throwing around, Neil, and it's funny because Dagen was looking at you when she said "you" and she meant "you" everybody, but in fact it's people who make a lot of money only, who make a real lot of money, who will be in that tax bracket. Not everybody. And as far as the comment that Nancy Pelosi made, I read it as a business journalist. It's not at all unusual for a company that's doing a major project to raise, let's just pick a random number, $600 million. Turns out they only needed $400 million dollars to complete the project. What are they going to do with the other $200 million? They're going to pay down debt. They're going to use it for other purposes.
Kristin Bentz: You absolutely should be worried about it. It's like when I was in college and I would ask my dad for money for books and then I would go on a vacation. But you know, he got wise to it after a while, and that's what's going to happen here. The American people are getting wiser and wiser the more and more that we're taxed.
Car Czar 2 Is a Union Guy; Is That Good or Bad?
Charles Payne: Absolutely not. You know what's interesting is the management there is not going to help a lot because when the management starts coming out and saying, "we're going to rebuild the company, this is a 'new' company, we're going to make fuel efficient cars," I'm like, you're regurgitating a line that just doesn't work. It doesn't follow what Americans want right now. Essentially what we're seeing though is that these companies are going to be run really in a non-profit sort of way and as long as they have the cover of the government and unlimited access to our taxpayer dollars, that's fine. But, when it comes to competing in a real world, I don't see how they can ever be truly independently publicly run corporations, so heavily stacked toward unions.
Adam Lashinsky: Well, I'll choose to be optimistic here. First of all Ron Bloom is not a union guy. He's a career investment banker. And as far as my optimism, the key fact that we have to remember is that these two companies, GM and Chrysler, took billions and billions of dollars off of their balance sheet. That's going to help them be more competitive. They have professional managers. The auto task force's job is to keep and eye on our investment for us.
Dagen McDowell: Doesn't anybody see a nightmare in the making, the fact that the US government owns 60 percent of General Motors and then the UAW owns about 70.5 percent? I mean, it's going to make a week with your in-laws look like a love-inn compared to the nightmare that is in the making.
Kristin Bentz: It's more of the same. It's classic American government at its best that we would get someone in there that comes from the unions. It's ridiculous. If the whole industry wasn't in critical condition already it's certainly going to stay on life support. So, it's a bust in my opinion.
Strong Earnings Fuel Dow's Best Weekly Point Gain Since November; Will More Taxing and Spending Stop Wall Street Rally?
Kristin Bentz: Absolutely they should quit spending. We're finally taking a little breather. People are finally starting to get some good news with IBM beating and JP Morgan beating, and what are they going to come out with? Taxing us more? Come on.
Dagen McDowell: One thing that was worrisome this past week is that fact that the government backed away from a second bailout of CIT because their loans are going bad so quickly, even Uncle Sam didn't want to touch them. That's what was going on, and if the loans are going bad so quickly at CIT, it's bound to be happening at other lenders.
Charles Payne: Well here's the bottom line as far as the government. Keep your powder dry. There's something called the business cycle. We have gone through this before. Of course, sometimes it's harder than other times but the whole notion that we have fallen off this proverbial sort of cliff and we were never going to come out of this abyss, I think has really been nothing but a smoke screen to push through a whole bunch of programs that otherwise level headed people out there in congress and in the public would say, "wait a minute! Why do we have to have a $2or $3 trillion health bill done in four weeks? Why do we have to have Cap and Trade done in two weeks?" But when you remove that sort of fear, you can't get that stuff done.
Adam Lashinsky: You can have your cake and eat it too. I think now is a perfectly good time to give a pat on the back to the Bush Administration and the Obama Administration for having acted prudently. I've been a believer all along that Paulson did the right thing, that we were looking into the abyss, we haven't fallen into the abyss. That's one reason Wall Street is doing better. But it's obvious that all of the problems aren't worked out.
"Healthy" Stocks
Charles Payne: Baxter Int'l (BAX)
Adam Lashinsky: Walmart (WMT)
Kristin Bentz: Community Health Systems (CYH)
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Forbes on FOX
On Saturday, June 18, David Asman was joined by Steve Forbes, Elizabeth MacDonald, Neil Weinberg, John Rutledge, Quentin Hardy, Evelyn Rusli, Lacey Rose, Jack Gage, and Mike Maiello.
Flipside: Minimum Wage Hike Is Terrible for America
David Asman: Making money is bad?! Next week, the minimum wage will jump nearly 11 percent to $7.25 an hour. Jack Gage says the hike is terrible for workers and America!
Jack Gage: David, it's going to go from $6.65 an hour to $7.25 an hour. It's no rocket science to understand that a company employing ten employees at $6.65 an hour can only afford to employ nine at $7.25 an hour if they're not increasing spending and increasing their payrolls. By the way, they are looking to pass as part of the health care bill a 50 percent hike on payroll taxes for small businesses that don't offer health care insurance. This is really bad news for job creation. You're looking at 10 percent unemployment for minimum wage earners right off the top and some say this will cause a loss of 300,000 minimum wage jobs.
Quentin Hardy: In real terms the minimum wage has been higher than this every year except one between 1955 and 1983. That is multiple economic conditions. It made no overall difference. The average wage is at minimum wage or below in two industries: casino gambling and fast food. One is a drag on America in terms of the stupid tax of gambling. The other is contributing to our health problem. If these industries are blunted a bit, it will be a net benefit.
Steve Forbes: Most minimum wage earners are not the primary earner in the family, but a very small percentage. Most businesses that pay minimum wage are narrowly margined. Not only are you going to raise wages but you are going to put them out of business. If we could legislate prosperity, just pass a law and have Joe Biden do it.
Elizabeth MacDonald: The percentage of hourly paid workers at or below the minimum wage is at its lowest point since the data was first collected in 1979. Ireland and England have hiked the minimum wage and they did not see their economies crater. What we're talking about is helping college kids who are facing massive tuition costs trying to get their feet on the ground; why not give them help? I don't think it affects businesses. What effects businesses are regulations and all sorts of things the government puts on the backs of small businesses.
Evelyn Rusli: When it comes down to it for many small companies, a high minimum wage is actually a job killer. I'm all for people making more money. I'd rather have more jobs in the U.S. economy. Given the choice between a $6 wage or no job at all, I'd rather have a $6 wage.
Mike Maiello: I don't think it kills jobs. I think that if you're going to have a minimum wage you should have one that's meaningful. If you don't agree that you should have a certain amount of purchasing power, then abolish it entirely. If you abolish it entirely, just look at migrant farm workers. They're not protected.
In Focus: Does Government Need to Spend More to Avoid Bankruptcy?
David Asman: Vice President Joe Biden, the 2nd-most powerful man in the country, says America needs to spend money it doesn't have to avoid bankruptcy. This coming just days after President Obama admitted we're broke. Can creating more debt keep bankruptcy away?
Steve Forbes: Hey Joe, that's a good solution. If you're an alcoholic, take another drink. I think he's trying out for Comedy Central and he's going to get that job because he's only going to have one-term as vice president. If you don't have the money you can't spend it. You either borrow it, create it, or tax it, all of which are going to hurt the economy.
Mike Maiello: Joe Biden speaking to a group of senior citizens is a recipe for a garbled message. He shouldn't be saying spending. It's investment. That's the point. The only way out of our current situation is to grow our way out. GDP growth is the only way. There is no tax you can levy to pay for all of this and there is no spending cut that will take care of it. You've got to grow. If you've got to grow, you have to invest. JPMorgan and Goldman Sachs' earnings are proof. We spent tons of public money rehabilitating those companies and now they're making billions.
John Rutledge: Joe Biden is wrong. These guys are going to borrow $10 trillion over the next 10 years, plus the health care bill which is another trillion or two on top of that. They're going to quadruple debt as a share of GDP. They're driving us into bankruptcy. People are running away from the dollar around the world.
Quentin Hardy: These numbers create a net deficit. Obama and Biden show up at the end of the party and get blamed for the hangover. This is preposterous. Look at the kind of spending you've had for years; homeland security, our really sad war in Iraq, farm subsidies, and the Medicare drug bill. All those things make up the deficit. Obama's spending is 7 percent of GDP and, as Mike said, it's an investment and the fact is companies do it all the time. A company going into receivership will borrow more to restructure. This is borrowing to restructure and is not the kind of wasteful spending you've seen over the past several years.
Elizabeth MacDonald: Biden is effectively saying to the American people, pile into the back of my spaceship while I point it at the center of the sun. No one, not McCain or Obama, would have won the presidential election last fall if they told the truth. The debt that we're looking at is going to be three quarters the size of our country's GDP. This is beyond faith based economics. It's delusional.
Neil Weinberg: This is the worse form of politics. This is pure pandering on the part of Joe Biden but George Bush did it too. Back in 2003 he said we need to spend our way out of this problem. That was one of the things that started the whole housing boom and bust. There is no small government party left in Washington. There is no one protecting our pocket book. I agree with Steve. All the ways that we could potentially get our way out of this are bad. Except the one we are doing isn't just borrowing. It's stealing from our children.
Credit Card Companies Monitoring Your Spending Habits. Reports That Bargain Hunting Could Hurt Your Credit Score. Is That Fair?
David Asman: Talk about sticker shock. Some credit card companies might be playing big brother when monitoring what and where you buy things. A new report found that if credit card companies see that you're shopping at thrift stores all the time, they could change your credit rating and fees and reduce your credit line.
Lacey Rose: This is a bad message and it's really foolish policy. The best indicator of your risk profile is your credit history. As long as you are paying your bills on time, it should not matter what you're buying and where you're buying it.
Neil Weinberg: The big brother aspect of this is the government telling private enterprise how they should run their business. Maybe the large credit card issuers know better than you do about how to figure out who has good credit and who has bad credit. Let these companies do their business. It's good business to let them follow and monitor you.
John Rutledge: It's a bad message and not illegal. They're jerks for doing it and I don't think it's smart. Credit ratings are not an exact science. I think it's important for people to save cash and I think smart people do that. The reason there that are no bank loans is that the stimulus plan has shut off bank lending. That's driving people to the thrift stores.
Quentin Hardy: Supermarkets track what you're doing and who you are with their club cards. Amazon.com tracks who you are. Forbes tracks who you are with their direct marketing lists. That's the nature of modern big business. You are tracked all the time. This is a surveillance economy and it's true all over the world. It's better here than in many places. The credit card companies are doing it like everyone else but not doing it well. It's a matter of what you're buying and a change in your spending habits.
Steve Forbes: Big brother has always been around but in this case credit card companies have the freedom to be nutty and crazy. They are going to overreact on the downside, just as they over-lent on the up side, and they are going to open themselves up to new competitors that will figure out how to do it better and not let emotions overtake them.
Informer: Stocks to Make You a Quick Buck Over the Next Few Months
David Asman: We're back! With the stocks ready to make you a quick buck over the next few months.
Evelyn Rusli: Wendy's/Arby's (WEN)
Jack Gage: Supervalue (SVU)
Neil Weinberg: Amerigroup (AGP)
John Rutledge: SPDR DB International Government Inflation-Protected Bond (WIP)
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
On Saturday, July 18, 2009, Terry Keenan was joined by Tracy Byrnes, Jonas Max Ferris, Cody Willard, Wayne Rogers, and Jonathan Hoenig.
Lawmakers Forcing Obama-care on Us: Force It on Them?
TERRY KEENAN: Democrats in Congress demanding a public option for government run health care for America. Now republicans in Congress are making their own demand. Lawmakers should have to enroll in the very plan they are pushing on you. So is it time Congress should be forced to take its own medicine.
WAYNE ROGERS: Not only is it no fair…what are they elitists? Do they think they are better than we are? Why should they be in a separate better plan, which we are paying for by the way, than their own constituency? It's outrageous what they're doing.
JONATHAN HOENIG: I don't want to force it on them. This country isn't based on force, it's based on freedom. The very notion of a public plan or option, that you are forced to participate in, well that's not an option at all. As soon as you make health care a right, you are forcing people to provide it. I think that's what we should be focusing on.
TRACY BYRNES: The worst thing is the surtax they are planning to use to pay for health care reform won't hit these congressional leaders, because their salaries probably cap out at $200,000. They'll figure out a way to push off the money another way. So they not only won't partake in the national health care, they won't have to pay for it either. It is one big hypocrisy.
CODY WILLARD: It's sort of that libertarian point that, hey, we shouldn't provide health care to anybody. We shouldn't have social safety nets at all in this country. Idiots like me. I broke my finger on Happy Hour weeks ago, hitting it with a hammer myself. I don't want welfare dollars to come to people like me that have moral hazard. There's no downside, no matter what I do someone is going to take care of me.
JONAS MAX FERRIS: Lawmakers passed food stamp legislation, but they don't live off food stamps either. People in government are rich. Their salaries alone make them part of the upper class, and most of them make more money than that. They shouldn't be on any government health care plan. Government health care plan should be for the poor, not for the upper middle class.
McDonald's Bolts From High Taxes in U.K.; Is America Next?
TERRY KEENAN: McDonald's packing up its European headquarters in London, and heading to Switzerland. Well why? Higher taxes in the U.K. Can we start to see that happening here in the U.S.A.?
JONATHAN HOENIG: The U.S. has the highest corporate tax rate in the developed world. We rank, I believe, 125th on the index of economic freedom and you know what capital is very mobile right now. People could push a button and send millions anywhere across the globe. We want to attract the productive profit seeking business. You don't do that by raising taxes and increasing regulation. Unfortunately that seems like the direction in which this administration wants to take this country.
TRACY BYRNES: This is the United States of America. It is the place to be. People kill themselves across the oceans to get here. You aren't going to move your corporate headquarters because of the tax implications. When companies do a cost analysis, they will realize that it will cost more and they will lose more if they move out of the U.S.
WAYNE ROGERS: We already know about people who moved their headquarters to Bermuda and other places to escape taxes. All you got to do is look at California. People have moved out of the state due to the rising tax burden. We are one of the highest taxed places in the world and its going to continue that way. Businesses will run away.
CODY WILLARD: I don't necessarily believe companies pay a higher tax rate in the U.S., because corporations write all the policies so they have so many loop holes they don't pay the tax rate we think they pay. Fifteen months ago, we destroyed the premise of this country which is what kept people here, when we started bailing out Wall Street, bailing out and creating more hassles to private companies.
JONAS MAX FERRIS: You don't need low taxes to get companies to stay in a country; all you need is to have the lowest taxes. As long as our taxes are lower than other countries we are fine. We could have a 70 percent tax rate as long as everybody else has an 80 percent rate. We're going to be number one. That's all that matters.
New Plan to Make Uncle Sam Your Landlord: Bad News for Housing!
TERRY KEENAN: Uncle Sam could be America's new landlord. The government is now considering a plan allowing homeowners falling behind on their mortgage payments to become renters.
WAYNE ROGERS: It's not going to help the housing market one iota. We already have public housing in many ways, like section 9 housing. Those have been fairly successful in certain cases. The housing market is just going to have to work itself out in the next three or four years and that's the only thing that will save it.
JONAS MAX FERRIS: It's kind of like a big rent to own program. No one deserves it. The reality is that these homes are going to hit the market in foreclosure sales, which will drive everybody else's price down. We have to keep the houses off the market. The best way to do this is to help keep struggling homeowners in their houses and make them make payments.
CODY WILLARD: I am a renter. I've been responsible, I've been saving money. We shouldn't give welfare in order to stabilize housing. This whole idea that the government is now the largest landlord is bad. Every subsidy is an unfair tax on me, the renter and the saver, whether it's the $10,000 state of California credit for home buyers or it's the $8,000 federal government subsidy, or it's below market rates for people buying a home for mortgage payments or it's tax write offs on mortgage payments.
TRACY BYRNES: This is the stupidest idea yet. Let's talk about the moral issue here. We thought we had moral hazards before. Now you not only get to skip mortgage payments, you get to keep your house while not paying for it. The government needs to stay out of the housing market. Let it be and let is work itself out.
JONATHAN HOENIG: A mortgage is between a lender and a borrower. Reality exists. I don't care how much the President wants to sink into subsidies and other things (unless he wants to prop up my 401(k) and my baseball card collection). You have to let the market work.
What Do I Need To Know?
TERRY KEENAN: Time for what do I need to know for next week.
TRACY BYRNES: Divorce rates are dropping because the economy is in the
toilet. It is cheaper to stay together than get divorced. A couple's biggest asset is the home, which is under water, and their 401(k), which is under water. You are splitting nothing so it is more efficient to stay together.
JONATHAN HOENIG: El Nino is back and we will have more tropical storms. Buy iPath Dow Jones Softs Index (JJS), which is an exchange-traded-fund that holds commodities like cotton, coffee and sugar. If El Nino turns into a major event it could have a significant bullish impact on this ETF.
JONAS MAX FERRIS: CIT could prove to be the government's first official write-down loss in the TARP bailouts. Buy inflation adjusted bonds (TIP) to protect yourself. The big risk, and only risk, is the government can't make the payments.
CODY WILLARD: Stay away from financial stocks.
WAYNE ROGERS: You need to know what is happening with the health care
plan. Whatever comes out of the Congress will be, it will cost us a lot and Universal Health Services (UHS) will benefit from it.
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