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Democrat: Health Plan Will Create 10 Million Jobs; Is That Possible?
Eric Bolling, Twitter.com/EricBolling: There's no way this health care plan is going to create jobs — if anything, jobs will be lost. Seventy percent of America is employed by small businesses. Six million companies employ less than 50 people in the U.S. Thirty-four million people are in companies that will be on this health care bubble. These small businesses will have to pay this 8 percent fine if they don't provide health insurance. That could be enough to send them out of business. This could really turn into bad news for our economy.
Nancy Skinner, NancySkinnerLive.com: Small businesses already have to pay exorbitant fees to health insurance companies to provide coverage for their employees. It's very possible that paying fees or having employees enroll in a public option could save money for these small businesses. Instead they can employ more people, rather than having to give such a large chunk of earnings to insurance companies.
Tobin Smith:The idea here is that if small businesses don't have to pay fines for not giving health coverage to employees, the money they would save would create 10 million jobs. It's a ridiculous premise. And who would eat the expenses of covering these employees? The government. It'd be about another $126 billion the government would have to spend that'd drive up the deficit. These small businesses aren't going to use their savings to hire people. The more likely outcome is that they're going to build up cash reserves.
Mike Norman, Contrarian-Update.com: When the government invests in something, jobs are created, just as when the private sector invests in something. So it's possible several million jobs could be created in the health care industry. The question is, will the government raise taxes to pay for this? Keep in mind, investing in one sector the economy could simultaneously destroy another sector due to a rise in taxes.
Gary B. Smith, TheChartman.com: Look at what has happened already with the stimulus — a major government intervention in the economy. Not one blip in jobs. The government doesn't create jobs. It merely moves around and redistributes resources. When the private sector creates jobs, they actually use their own capital or borrow money from banks. When the government spends, they are borrowing from the American taxpayer. In the end, small businesses are going to be mandated to pay something for expanding health care. This money isn't just mysteriously going to go away. Due to these added costs, a lot of businesses will be hurt, and they'll end up shedding jobs, rather than creating them.
Build More Walmarts to Help Save U.S. Economy?
Gary B. Smith: Walmart is the greatest wealth generator maybe in our lifetimes. This issue has been studied over and over again. In California for example, every single city that opened a Walmart super-center saw an increase in retail revenues in all subsequent years. Regular families save thousands of dollars a year because of Walmart. People got jobs because of Walmart. And studies show small businesses actually grow when a Walmart comes into an area — they typically don't go out of business.
Nancy Skinner: The reason we're in this economic ditch is because of Walmart. American manufacturing shifted over to China and has cost our economy millions of jobs over the years. All our manufacturing jobs went to cheap, low-wage countries so we can buy it back at Walmart. Walmart shuts down Main Street, it doesn't help it.
Tobin Smith: If Walmart was in charge of the auto industry, we'd have the greatest auto industry in the world because Walmart is about innovation and delivering value. They do it better than anyone else. The real key is that Walmart expands the health care business they're in, such as selling pharmaceuticals 40 percent lower than the other guys. Walmart is starting to get into the health clinic business, and this could revolutionize health care.
Eric Bolling: There's a reason Walmart is the number one seller of groceries, toys, electronics, prescription drugs, etc. They're the cheapest! They create a massive amount of retail revenues and jobs creation, and as a result, large tax revenues. That not only creates, but expands jobs. You give low-cost products to consumers, what's wrong with that model for health care?
Mike Norman: The engine of growth in this economy was consumption and the existence of things people can afford to buy. This is the definition of our wealth. The reason Walmart can no longer be a savior to the American economy is because we're embracing economic policies that are the exact opposite of what its represents. We're now encouraging people to stop purchasing things, saving more and spending less.
Do Consumers Need Government Agency or Personal Responsibility?
Tobin Smith: Most human beings can deal with the daily responsibilities of life. We do not need gigantic amounts of regulation. But here's the exception, credit card rules should be on one piece of paper in 12-point type. But when the government went out and changed credit card laws, rates zoomed up, and credit companies cut customers. If that's the government's idea of consumer regulation, forget it.
Nancy Skinner: We absolutely have to take responsibility for our own lives and money. But things have developed to the point where credit card companies have become predatory. I can't go to some golden credit card company that’s going to charge me a fair rate of interest and not jack rates up for some crazy reason. When the average person is trying to do the right thing, it's important to have a consumer protection agency that ensures companies don't turn into predators.
Gary B. Smith: If you're sick of having companies like Walmart around giving you low prices, then yes, we should have a consumer protection agency. In the past though, these consumer protection groups are all over the place. But it can be good for the government to inform consumers about bad products. For example, awhile back when some peanuts were tainted with salmonella, the Centers for Disease Control came out and told everybody about this problem. And consumers stopped buying peanuts from the company suspected of having these tainted peanuts. Government is good at identifying problems after they've happened and allowing consumers to make better decisions for the future.
Mike Norman: There needs to be some balance in this. We already have a consumer protection agency. But the unintended consequence of these new credit card regulations is the exclusion of some segment of the population. If credit card companies can't raise rates or penalties, then they simply won't give out credit lines to people who don't have a solid credit history. I think this regulatory move by the government will turn out to be excessive.
Eric Bolling: Just enforce the laws that are already on the books, instead of creating a very powerful consumer protection agency. What we need more than anything is a Congressional protection agency.
Predictions
Gary B. Smith: Win gold with President Obama’s Nobel peace prize! "GLD" up 50 percent in 10 months.
Tobin Smith: Sniff out health care fraud! "VRSK" up 50 percent by April.
Mike Norman: China becomes number one economy. "GXC" triples by Oct. 2010.
Eric Bolling: Forget $500 for every baby; bet on "BYD" or 150 percent pop in one year.
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A Real Concern for Health Care Reform: Higher Taxes?
Charles Payne, WStreet.com: Health care reform is not going to hit the deficit, but it's going to hit all of us in the pocketbook. We're going to tax the medical device makers and the insurance companies, resulting in higher costs for consumers. Eventually all taxpayers will be subsidizing this program.
Dagen McDowell, Fox Business Network: Not one dime to the deficit? My name is Dolly Parton. The math in this bill is wrong, because a lot of it depends on the actions of Congress. For example, Congress will have to vote on Medicare cuts to physicians in 2011. When push comes to shove, Congress won't make these cuts in order to appease voters. I guarantee that in a year and a half, we will be talking about a value-added tax on every person in this country.
Al Lewis, Dow Jones Newswires: They said health care reform won't add one dime to the deficit, but never anything about two dimes! There is no way that they are going to be able to reform health care without increasing the deficit and taxes. Anything that Congress does seems to have this result. I would much rather see a more incremental approach to reform, instead of Congress trying to whip this all together in one bill.
Adam Lashinsky, Editor-at-Large, Fortune Magazine: Congress is doing its best in making an educated guess about the cost of reform. The president said he was going to raise taxes when he ran. Yes, it is a new tax—but it is also a new service. People are going to get something from that.
Pay "Czar" Pay Plan: Cut Cash Salaries, Up Stock Options
Charles Payne: We are going to see the rebirth of the 1990s. If most of the executives' compensation comes in the form of stock, they are going to go out and talk up their particular stock. What we should do is put the money in a lockbox which they can get at a later date after a proven record of performance.
Adam Lashinsky: The thing is, compensation consultants are very good at helping executives make a lot of money — no matter how you change the rules on them. They'll figure a way around any new pay rules put in place so executives can get their money sooner, rather than later.
Dagen McDowell: It's dangerous because these pay "czar" rules will apply to the firms that have taken the most government money. And these are the companies the American taxpayer has the biggest stake in. In 1993 there was a limit on executive pay that led to these stock options. It's likely they’ll figure out a new form of compensation to give executives high salaries.
Al Lewis: There is almost no force in the universe that can stop CEO pay. The government is not going to be able to stop it. Companies will figure out ways around these rules. The shareholders and institutions that invest in these companies are the only people that have any hope at regulating behavior and compensation packages.
Is D.C. Already Sneaking Through Stimulus II?
Dagen McDowell: They're calling it help, instead of spending or stimulus. In some states, people would get unemployment benefits for 99 weeks under a current Senate proposal. There is also talk of extending COBRA subsidies for another year. These two proposals alone would cost $100 billion. How this isn't stimulus, I don't know.
Charles Payne: None of this stuff is free. We're going to extend the first-time homebuyer plan, as well as giving the states $35 billion to help low-income people buy homes. That's on top of extensions of unemployment benefits. Where is all this money coming from? No one really has an answer.
Adam Lashinsky: The White House's position is that we should not have anymore stimulus. And we do not need anymore. The fact is that the current stimulus is going to take time. You can't just distribute an amount of money that huge overnight. The White House is prepared to let the original stimulus work over these coming months.
Al Lewis: Every new stimulus plan is proof that the last one didn't work. Why is this one going to be the magic bullet? Why aren't these programs creating more jobs? We're going to have a national debt that keeps ballooning until it can’t grow anymore; and then we're going to go through a historical reset like other nations have gone through in the past. It's going to be ugly.
Hidden Stock Winners!
Charles Payne: Steelcase (SCS)
Adam Lashinsky: ABM Industries (ABM)
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Forbes on Fox
On Saturday, October 10, David Asman was joined by Rich Karlgaard, Neil Weinberg, Mike Ozanian, Quentin Hardy, Jack Gage, Kai Falkenberg, Mike Maiello, and Evelyn Rusli.
In Focus: The White House Forcing Unions on Workers Getting Stimulus Bucks. Is This Good or Bad for Job Market?
David Asman: Want to win a multi-million dollar contract from the government? Then join a union or pay union dues! That's what the White House is forcing non-union construction workers to do. Now, one construction company in the Northeast is fighting back. The president says his plan will create good paying jobs but someone here says it'll put more people out of work. Who's right?
Mike Ozanian: The president's plan is terrible, David. It would kill jobs because it kills productivity. Thirty-seven percent of federal workers belong to a union versus only eight percent for the private sector yet the private sector is five times more productive than the federal sector.
Quentin Hardy: The policemen and firemen are in unions and of course they just drink coffee and hangout in museums. Meanwhile the guys at Lehman and AIG and Bear are not in unions and they're really productive. No let's talk about what's really going on here. Under Clinton there was a rule about this for contracts of $5 million or more. Bush of course who liked to help the rich killed that rule. Obama has reinstated it at a level of $25 million. The rule is about standardizing the labor contracts and the government projects so you don't have work stoppages and worker breakups. It's actually more effective.
Evelyn Rusli: It hurts competition and you know I'm a fan of these stimulus infrastructure projects but compelling companies to pay off unions in order to play is just the wrong way to go about things. It wastes money. Now only 16 percent of construction workers in the United States actually belong to unions and yet they're forced to pay into the pension funds which they'll never see a benefit from unless they join the union.
Neil Weinberg: You might want the taxpayer to get the best deal but we also have standards for things like safety and health and so on. You know there is supposed to be a social contract in this country between a worker and his employer. We don't have to join unions and I'm not for forcing people to do so. The fact of the matter is maybe it's not such a bad thing to say that people working for the government have to provide a little health care, a little bit of pension benefits for their workers. I don't think that's such a bad thing to ask for.
Rich Karlgaard: Well it's bad for the economy. Look what we're doing is importing the Detroit automobile manufacturing model and putting it everywhere now into construction projects. We should be importing the Toyota and Nissan model that works much better in the United States where you have non union workers who are far more productive. And beyond the pay issues and pension fund issues, it's just worker flexibility. Union contracts tend to destroy flexibility.
Is the United States Losing its Prestige in the World? (First, we lost the Olympics, now reports are out saying that countries are looking into dumping U.S. dollar as the international currency.)
David Asman: The president winning the Nobel Peace Prize but is America losing something more important? This week a report that a bunch of countries held secret talks to dump the U.S. dollar. Some denying it's true. Now some folks warning that while President Obama is winning the prize, America is losing its real power in the world.
Rich Karlgaard: Well that's the awful truth of it. One measure of that is when you look at the stock market recovery since March, it’s up about 55 percent but denominated in euros it's up 20 percent. Denominated in gold it's flat. It's one of the worst performing markets in the world because of this weak dollar. I applaud Obama for getting the Nobel Prize whether he deserves it or not but the fact of the matter is he has declining influence in the world himself. He can't get Iran to go what he wants. He can't get North Korea to do what he wants. Meanwhile the dollar is falling through the basement.
Jack Gage: You can win all the political beauty pageants in the world but it doesn't do a lot for our currency. I think Rich is absolutely right in that U.S citizens have less purchasing power in the world as we debase our dollar to try and fund the deficits that Obama is running to increase government spending and welfare spending. The problem with what Obama is doing right now is that he is projecting Washington's image on the world. Washington is a mess. What we should be doing is using our entrepreneurs and our students studying abroad and U.S. business people as ambassadors. That projects the image of America we should be showing. That's alive and well.
Neil Weinberg: I think our prestige is going down. China is the largest creditor. As Rich said, our currency is hurting. Japan is the largest automaker. London is now the largest financial center. President Obama can have a lot of prestige but this doesn't translate into policy and that’s a real problem. I don’t think people are listening to us.
Mike Maiello: I think we are going up [in terms of our prestige] in the long term. But Rich is an equal opportunity critic here. He's been very fairly criticizing our weak dollar policy for the decade. Let's remember gold when Bush took office was at $250 an ounce. It increase five fold under his two terms and the dollar was debased over that time. Obama is repairing the damage there. The Nobel Prize is not a beauty pageant as Jack says. The bull work of America's prestige has always been the world's support of our agenda and the Nobel Prize was awarded because Obama has broad support from the international community. That'll pay off in the long run.
Evelyn Rusli: I have to disagree. The pullback in prestige is a long term trend. There used to be a time when immigrants from around the world saw America as really the only way to have the American dream — the golden opportunity. That's why my parents immigrated decades ago. But now they are looking at the Chinese dream, the Indian dream — beyond the American dream. I have talked to families abroad who say I used to think I was going to send my kid to America but now I might send them to China instead.
Mike Ozanian: I still think the vast majority of people are still trying to come to the United States. I think my fellow capitalists here are way too pessimistic. Six out of the ten most valuable companies in the world are still U.S. corporations. Sixty-three percent of the excess reserves in the world are U.S. dollars. I'm still very optimistic.
Should Companies Lay Off "Single" Workers Before "Married" Workers?
David Asman: "I do" — two little words that could have saved your career. It's true. The unemployment rate for single workers is about twice as high as it is for married ones. But Jack Gage says when merits are the same, married people should be the ones to get the boot!
Jack Gage: This is going to get me in trouble. I think it's really important that when you're making an HR decision to look at what the company can get out of it. If you're asking someone to do more for less -- a single person is more likely to do that. They're a more flexible resource.
Kai Falkenberg: Look if I was an employer, I would can the single people first. They're the people on facebook trolling for dates while the married people are working.
Quentin Hardy: The clatter of this is ridiculous. You have to look twice at surveys. Single people tend to be younger. Younger people are losing jobs in the recession because they don’t have work experience as much. Married people tend to get jobs quicker because they an urgency about getting the paycheck in. I don’t really think employers favor it one way or another. They just like people with experience who are willing to work.
Neil Weinberg: I think if you look at married and unmarried people of the same age you still find that it's the unmarried people who are getting canned. The reason is they're not as responsible as us married people. They don't have as many responsibilities.
Evelyn Rusli: I have to disagree with Neil as a single person but I would fire the single person if only for the moral side of this argument. Because I think single people have more flexibility. If they want a job they can go outside of the local market. They can go abroad if they wanted to. So for the moral reasons I would probably keep the married person and fire the single person.
Informer: Stocks That Pay the Bills!
David Asman: We're back with the stocks that will put food on the table and some extra cash in your pockets.
Picks:
Mike Ozanian: Chipotle Mexican Grill (CMG)
Evelyn Rusli: Tessera Technologies (TSRA)
Jack Gage: Progress Energy (PGN)
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Speaker Nancy Pelosi Says National Sales Tax Won't Hit Middle Class: Is She Right?
Tracy Byrnes; Fox Business Network: This woman Pelosi has got Botox in her brain. This is going to smash the middle class. Why? Because wealthy people spend maybe about a third of their money on consumption. Middle class, lower class people, it is well over 80 percent. This is clearly a regressive tax at the end of the day. It is going to hit the middle class. The lower class. The constituents that the Obama administration swore they weren't going to touch way harder than wealthy people.
Christian Dorsey; Economic Policy Institute: Well, listen, the devil's in the details. And what we didn't hear from speaker Pelosi is what she meant to say. That consideration of a value added tax is part of an overall tax reform proposal; a tax reform idea. We can certainly all agree that our current tax system is a mess. It is completely Byzantine and complicated. If you don't have a professional accountant, you're probably not getting all you're entitled to. If you do have a professional accountant, you're probably cheating the system out of some of its resources. She's talking about putting a VAT (value added tax) in there as part of overall tax reform.
Jonathan Hoenig; Capitalistpig Asset Management: It would be a great replacement. As the progressive system stands now, people can skirt around the system. It's very difficult to understand. What it should do is replace this existing system. Let's not penalize one group. Let's treat everybody equally. If we dump the income tax, put in a flat tax or VAT tax. That's a great place to start.
Wayne Rogers; Wayne Rogers & Co.: What they should do is replace the income tax with a consumption tax. In other words, get rid of the income tax and replace it with a consumption tax. That's fine. It may or may not be regressive. As you say. It depends on how it's designed. But a consumption tax is much better than an income tax. By the way, it's worked in Europe for many years now.
Jonas Max Ferris; Maxfunds.com: Whether it's sales tax or VAT tax, which are a little different, a tax like that is good for people who pay a lot of income tax, bad for people who pay no income tax. It's neutral for the middle class. It's actually more of a punishment on the lower class who doesn’t pay income taxes at all and now are going to be essentially paying taxes through a heightened sales tax.
Mob Scamming Medicare: Preview of Government-Run Health Care?
Wayne Rogers: The mob recognizes — this is an ideal place for people who steal. Medicare is not very well controlled. It's totally out of control. And in fact, you know, in the new bill, at least as I saw it, tort reform, they didn't touch tort reform. That's another way they're going to steal. The lawyers are going to make a lot of money. Everybody in this new bill because of the complexity of the bill, they're unimaginable ways that people will be steal from this thing. And the mob in this case has just recognized an opportunity; they're going to take advantage of it.
Christian Dorsey: First it was death panels. Now we are talking about the mafia. What's next? Big foot? Medical insurance fraud is a big problem that is a huge problem in the private insurance industry. The biggest case of health care fraud in this country was just adjudicated in February. $154 Million stolen from the private health care system by private doctors and unscrupulous individuals.
Jonathan Hoenig: This goes on all the time with the government. It happened with TARP. It happened with cash for clunkers. People always say business is corrupt. It's corrupt when government gets into business. As Wayne accurately points out, the mob, any organized crime has a great opportunity to get in there and scam the system for a hell of a lot of money. And Medicare as it is accounts for 13 percent of the budget, we're talking about hundreds of millions of dollars in fraud every year.
Tracy Byrnes: The reason we're even talking about the mob is because it's so simple. They go down there, they take a homeless person's social security number, and wham. They have Medicare payments. It's genius. And no one is following them. No one is dragging them down. No one has done anything about this.
Jonas Max Ferris: They’ve been increasing regulations in this area for at least a decade and increasing the amount of fines and busts. A lot of busts haven't been the mob doing Medicare. I don't want to mention names, but it's publicly traded health care companies. Christian is right, private companies don't release their fraud data. So we don't know. Associations say it's about 3 percent of all health care spending. Unfortunately, when you increase health care insurance, whether it's government or private, you're going to increase fraud because where the money is, there's somebody to rip off. So that is a problem to be dealt with. The best way for the federal government to deal with it is to clamp down and make it as big a penalty.
Calorie Count Law Backfires: Proof Nanny State Won't Work?
Jonathan Hoenig: This is exactly what happens when the government gets involved in our eating habits. They were so dead wrong on their estimates about how healthier everyone would be if they passed these menu labeling laws. The New York City board of health estimated it would stop something like 150,000 people from becoming obese. They said they'd stop 30,000 cases of diabetes. As long as people are eating more now, that's not going to happen. But this is what happens when you restrict freedom. And when the government gets involved in telling you how you can run your business and what type of food you can have... it backfires.
Jonas Max Ferris: If I know that that muffin across the street has 550 calories which I did not know, my freedom is restricted? In fact, this is why the study is misinterpreted. This is useful information! If you're trying to diet, you can say, wow, that muffin has 550 calories. In recession, this was done in a poor area. This was also a way to see how I can get the most calories for a dollar, which is not what they thought. But that is a perfectly legitimate use. I've used to it determine what is the tastiest snack when I want a snack, because I know the high calorie one will be yummy.
Tracy Byrnes: To Jonas' point, these are low-income people trying to get the most for that $1.99 Special. Two donuts and a cup of coffee is a good deal. Jonas doesn't count because he can eat cookies all day long and not gain a pound. With all due respect to this survey, these numbers have just been up. They're just starting to get out there. There's a lot of people in the world that don't have a clue as to how many calories they should take in on a daily basis so they don't care.
Wayne Rogers: Why should the government have to inform them? Why can't people take responsibility for themselves? Why does everything in this society have to be served up by the government? Are we all morons? If we don't study, we can't read, we can't do any of those things. You got to take some responsibility for yourself in this society to do certain things.
What I Need to Know for Next Week:
Tracy Byrnes: Airlines are going to tack on $10 on tickets around the holidays, Thanksgiving, Christmas, New Years, even Memorial Day. They're going to slap a surcharge. Come on? Why the nickel and diming us? Just throw it in the ticket price.
Jonas Max Ferris: New York Times is reporting that Michael Vick might get a reality show on BET. They are owned by Viacom. That company sort of invented the reality show concept with MTV. I don't think this will put Viacom in the "doghouse." Hopefully this will kill the reality show concept. I don't think I'll be watching it as a dog owner.
Wayne Rogers: Apartments are getting more and more vacant. Rents are going lower. That will hurt a housing comeback. We got a long way to go in the housing crisis in both ways. Both the rental market and purchasing for home buyers.
Jonathan Hoenig: It was one year ago when Argentina nationalized $30 billion worth of private pension funds. I think one of the major things driving gold right now is that fear of wealth confiscation at a time which government spending is increasing. I think that's one of the main factors driving gold right now. The fear that government is going to come and take it out of your account.
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