Recap of Saturday, October 3


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Bulls & Bears

Nine Months In: Is This Now President Obama's Economy?

Eric Bolling, FOX Business Network: It isn't President Obama's economy this week because bad numbers came out. Every time good economic numbers come out, the administration says the stimulus package and its fiscal policies are working. When bad numbers come out, it's because of failed Bush administration policies. We've lost a lot of jobs, over three million since Barack Obama was sworn in. We have the lowest amount of total jobs in the economy since March of 2004. But apparently, it's still the fault of the Bush administration.

Julia Piscitelli, Democratic strategist: You have to look at the previous eight years of the Bush administration. You can't really judge this economy just going back to Barack Obama's inauguration. You have to look at what happened in the previous eight years of the Bush administration. You just cannot compare eight months with eight years. President Obama is trying to fix an economy he inherited.

Todd Wilemon, NYSE EuroNext: President Obama supported all four Bush budgets when he was a Senator. He supported the TARP program, the $787 billion stimulus for pork projects, a $410 billion omnibus spending bill, etc. Barack Obama supported many of the policies that got us to this point, so I don't see how he can't take a share of the blame. Every part of the employment report was bad, and it's not a good sign for the economy or the administration's policies.

Tobin Smith, ChangeWave Research: President Obama said that $787 billion in stimulus was the way to cure the economy as opposed to tax cuts or cutting capital gains taxes. He wanted to create new entitlement programs and put them on the government credit card. It became his economy when he put in place all his new relief programs and fiscal policies.

Matt McCall, Penn Financial Group: President Obama was in a win-win situation when he began his term. If the market got better, he could take credit for it, and if it got worse, he could blame it on the last eight years. The last two months, when there were signs the economy was improving, he took credit for it. Now, with these bad September economic numbers, it's the Bush administration's fault. The previous two months, he kept claiming the stimulus was working, jobs were being created, when only a relatively small percentage of the stimulus money has actually been spent. It is President Obama's economy from here on in.

State "Public Option" Plan; Will It Ruin Quality Care?

Tobin Smith: This will close the door on quality care across the country. Every state that has tried to implement some form of a successful public option plan has failed. Look at Maine. In 2004, the state passed this big health care reform bill to bring health care to everyone in the state. In almost six years, it has brought health care to only 3,000 people. 139,000 are not covered. These programs just go upside-down almost immediately and in the end shut off more people than they help out.

Julia Piscitelli: Public option plans haven't worked in states yet. It has been tried in various forms in different states, which isn't a bad idea because the plans can be better tailored for a state's particular needs and constituency. Politically, a federal health care reform bill won't get passed without some form of a public option. My question to everyone who opposes a public option is, what's your plan? Should we just keep the country's health care system as-is?

Matt McCall: If a public option doesn't work in one state, multiply that by 50 to get an idea of what will happen under a federal public option plan. Just imagine if 50 states are each trying to implement their own policies with New York doing one thing, California another thing, etc.

Eric Bolling: If there are 50 individual state public options supported by the federal government, where's that money going to come from? Taxpayer dollars. What's the difference if you center a public option in Washington, DC or split it up between 50 states? You won't be able to get insurance plans across state lines, such as if you live in Maine where insurance is more expensive than say, New Jersey. That's one of the major problems with health insurance right now--you can't buy across state lines and state public options would only make this problem worse.

Todd Wilemon: You can see how states handle health care, because Medicaid is run by the states with its costs split with the federal government. And it's run terribly, as are the other two major government entitlement programs--Social Security and Medicare. About 40 percent of doctors don't accept Medicaid patients now. "Romney-care" in Massachusetts is way over budget with huge wait periods to receive care.

Former Obama Adviser Wants National Sales Tax: Do We Need It?

Tobin Smith: If we wanted Europe, we'd live in Europe. After national sales taxes were implemented in Europe, income taxes actually went up since the sales tax wasn't hitting everyone equally. Government spending exploded because they had this new stream of revenue.

Julia Piscitelli: It's a pretty fair tax on the middle class. If you have to tax, you should be doing it fairly.

Matt McCall: We need consumers to spend right now. 47 percent of households will be zero federal income tax this year. A lot of households that would be hit by a national sales tax, paying more on everything from cereal, cars, whatever you want to buy.

Todd Wilemon: A national sales tax would be cruel to American families. It takes money out of their pockets. It'll give more money to the government and only strengthen it, while weakening the power of consumers. It would have a bad effect on the economy.

Eric Bolling: Absolutely everything would be hit by this tax. It'd be incredibly unfair to consumers, and really could do significant damage to our economy.


Tobin Smith: Letterman apology won't stop lawsuits! "PPD" pops 30 percent by 2010

Matt McCall: Starbucks instant coffee a hit! "SBUX" jolts up 50 percent by next year

Todd Wilemon: Climate bill spikes energy bills! "EXC" spikes up 30 percent in 1 year

Eric Bolling: No Olympics, no gov't-run care! Buy "AFL" for a 50 percent boost in 1 year

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Cavuto on Business

Huge Medicaid Fraud: Preview of Government-Run Health Care?

Charles Payne, I'm not surprised at all by this. The system is so huge and bewildering. Just imagine if another 47 million people are poured into a government option with health insurance. How could the government ever police waste, fraud, and abuse if it is failing so badly right now? As we add more people on, the amount of fraud and abuse will skyrocket.

Dagen McDowell, FOX Business Network: It's absolutely impossible to simultaneously cut fraud, save money, and then add tens of millions of people to a government health care roll. What I don't understand is why the government didn't start fighting fraud and saving money on health care expenditures years ago? Medicare, for example, is a trust that will run out of money in 2017. What are we waiting for? We don't need a total overhaul of the health care system to do this.

Adam Lashinsky, editor-at-large, Fortune Magazine: Waste, fraud and abuse is a part of doing any business. There's plenty of this in the private sector as well as the public sector. This report of Medicaid fraud is coming from a Government Accountability Office report. The whole point of it is to try and identify fraud and how to fix it. And it absolutely needs to be fixed. Now we know what the problems are, and how to fix them.

Gary Kaltbaum, Kaltbaum & Associates: This is all about accountability. Government has never been accountable to anything. They've spent like drunken sailors for decades. If there's this rampant fraud in Medicaid, and you can wipe out all this fraud from the system, why hasn't it been done already? It's because the government doesn't care, because it doesn't have to be profitable. Government can write as many checks as it wants. Nothing is really going to change here.

Is GM Already Regretting Doing Business With the Government?

Charles Payne: If a company comes to an investor saying their partner is the U.S. government, the investor will say no way. It's unfortunate that GM is finding this out the hard way. Another example was the government's attempt to buy distressed assets from financial companies with taxpayers taking all the risk. But that didn't work out either. The fact is, most people just don't want to get involved with the government, and with good reason.

Dagen McDowell: It could have been worse for the American taxpayer with this Penske deal. Lawmakers could have prevented the Penske deal from falling through by ordering GM to keep its Saturn arm alive in an effort to save jobs. It has lost money, but overall the fact Saturn is going away will be a good thing.

Gary Kaltbaum: Taxpayers really have no choice in getting involved with this. Penske wanted to go through with this deal. But Renault backed away from its side of the deal because it didn't like how it was evolving and having to deal with GM. The government just doesn't get it, and it shows just how bad it is at all this wheeling and dealing.

Adam Lashinsky: The Saturn deal fell through despite U.S. government support for GM. This is a time to get rid of Saturn which has been losing significant amounts of money. This is business, and it's not uncommon for deals to fall through. It happens all the time. I don't think Renault, or Penske, allowed this whole deal to fall through because they didn't want to deal with the government. The alternative for Saturn has always been for it to shut down.

Neil Sits Down With FBN's Don Imus

Click here to watch the interview

Best Stocks to Own for the Rest of the Year

Charles Payne: Dollar Tree (DLTR)

Adam Lashinsky, Marathon Oil (MRO)

Gary Kaltbaum: Apollo Group (APOL)

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Forbes on FOX

On Saturday, October 3, David Asman was joined by Steve Forbes, Bill Baldwin, Neil Weinberg, Mike Ozanian, Quentin Hardy, Jack Gage, Mike Maiello, and Elizabeth MacDonald.

In Focus: Why the Rush for Health Care Reform?

David Asman: No rest for the tax and spenders! Senate Majority Leader Harry Reid canceling the October recess. It's an effort to rush through the massive health care bill. But someone here says the rush has nothing to do with your health and everything to do with key elections in two states.

Steve Forbes: They [Democrats] fear they might lose both election in Virginia and New Jersey. In 1993 when Clinton lost both New Jersey and Virginia and New York City with Rudy Giuliani, he never could get anything through that Congress even though he had majorities in the House and Senate. That's what they fear here. They also fear the more time people have to see the grizzly details of this bill, the more support it loses. That's why they want to rush it through. They don't want people to know what's in there.

Quentin Hardy: In New Jersey, Corzine is catching up because the crazy far-right candidate is draining off from the other far-right candidate and in Virginia the guy has lost like half his lead. He is probably going to win, but has lost half his lead in the past couple of months. Nonetheless, they are in a rush. That is a very true thing. There are about 1,147 different parts to this puzzle and there are some times when you want to go slow, but the fact is on health care you got to work it out in your first year otherwise people get caught up in considerations and heavy lobbying and fear mongering and you never close. It's been true with Medicare and we haven't been able to fix the problem.

Elizabeth MacDonald: It's quite stunning that key members of Congress have not read the bill and even the CBO is struggling to keep up with cost-estimating the bill because it's rapidly changing. Six-hundred amendments are thrown in. It took three days to just get over discussion on one key provision – whether you wait 72 hours before voting on an amendment, this will turn the Blue Dog Democrats' backbones into oatmeal if the Democrats lose Virginia and New Jersey. It didn't help much that we lost the Olympic bid for Chicago. The president also wasted a lot of political capital on that. His approval ratings are coming down. Remember the president asked for a vote before the August recess and that didn't happen. The key here is that the Blue Dog Democrats are starting to waver.

Mike Maiello: Well look, the Yellow Dog Democrats have been wavering on this for years and they have been hard to count on, but we're using the word rush. This issue came up when I was in high school. We have been debating health care in this country for more than a decade. Clinton got one shot at it. When he didn't get it, we never went back to discuss it again. This is not a rush; it's prudence.

Mike Ozanian: The race I am actually looking at is for the U.S. Senate in Arkansas where the incumbent Blanche Lincoln is a Democrat and she has totally embraced Obama's health care plan. She is getting pummeled by the guy running after her – a Republican, Kim Hendren, who is against Obamacare. That is a key race that is telling us a lot about how the more people find out about Obama's health care plan, the more they are against it.

Neil Weinberg: I can tell you that when you're talking about New Jersey, the great corrupt state in which I live, what people are really worried about here is property taxes. I think ultimately we need a bill here and what the Democrats are really afraid is that the Republicans are going to throw a lot of sand in the gears again. Namely, they're going to come up with things like these death panels and so on. It's very easy to be obstructionists but the fact of the matter is we're probably going to get very crummy legislation out of D.C., but at least if it helps to cover the 40 million people without insurance, it will be a marginal improvement.

Michael Moore's Anti-Capitialism Movie Premieres in the U.S. as Europeans Vote for Pro-Capitalist Politicians; Who Has It Right?

David Asman: Lights, camera, bash capitalism. Controversial filmmaker Michael Moore rolling out his anti-capitalism movie nationwide this weekend. He's the toast of the town with liberals in Los Angeles and in DC, and you'd think he'd be the toast of socialist Europe too, but they're falling back in love with capitalism over there by voting in tax-cutting politicians. So who's got it right?

Steve Forbes: Capitalism has got it right. When it's practiced, it works even with Michael Moore. There are a lot of people like "limousine liberals" who don't like capitalism. What is he doing with his many millions? Is he giving them away? No. He's buying stocks like Halliburton. So Michael Moore is an example of how capitalism works. It meets any need if there is a need out there or want out there. Capitalism provides if it's allowed to. George Bush didn't practice it with the dollar – cheapening the dollar. Get the rules right and capitalism works.

Neil Weinberg: The fact of the matter is we're going the other way. We're going more towards Socialism. But what really surprises me is how the dead-in-the-wall capitalists in this country think that the system is beyond reproach, as if Wall Street did nothing wrong, as if the liars and the liar loans didn't tell an untruth. And the fact of the matter is we have to be very critical about our own capitalistic system or were going to have increasingly difficult problems and an increasingly shift toward socialism.

Elizabeth MacDonald: You can reform capitalism. That's not calling an attack on capitalism. Capitalism does need to be reformed in this country. It's striking there are only two people behind bars from the credit bubble and the housing bubble bursting, the Bear Stearns hedge fund managers, when you had at least 1,500 bankers in the S&L crisis put behind bars. But I like how Michael Moore is holding up countries he likes – France, Japan, Canada, and Germany. They are all capitalist countries, so it's kind of ironic that he's holding up the same structures that he is criticizing.

Quentin Hardy: Socialism or capitalism – It's kind of ironic to be trying to reason this out this week when Ken Lewis, the head of Bank of America, a bank that still owes me $45 billion dollars that I loaned it last year, gets to retire with a mere $53 million dollars and everybody cries "poor mouth." Don't worry America! We haven't changed. We still look out for the fat cat.

Jack Gage: I hope so [that Europe can give us a lesson on capitalism]. There are those that say that history swings like a pendulum back and forth and that we're going the other way as Europe is moving towards capitalism and moving to the right with Angela Merkel as well as David Cameron looking like he is doing well in the U.K. polls. I think it's different. I think you should always be moving towards capitalism, which is the most efficient market mechanism for rewarding success and punishing failure. That's what we should be doing. We shouldn't be chopping off the heads of Wall Street CEOs to make an example of them, as we just did again with Ken Lewis.

Bill Baldwin: I do think we have to start owning up to capitalisms many failings. I'm talking about "crony capitalism." Now who are these cronies? These are the people who are politically connected and they get rich at the expense of the rest of us because they are politically connected. Examples are government employees, tort lawyers, and yes fat cat bankers who pull down $20 million that are ultimately paid for by taxpayers and I'm not talking about Ken Lewis. I'm talking about Fannie Mae.

Democrats Unveil "Climate" Bill Saying It'll Create Jobs, But Will It?

David Asman: The same week we found out 9.8 percent of Americans are out of work, Democrats in the Senate released their "Clean Energy Jobs and American Power Act." They say their global warming bill will help heat up job creation in the US, but Jack Gage says the Flipside is it'll actually melt down our job market.

Jack Gage: That's right David. Look, the people that are backing this bill, mostly people from the "left coast" like Henry Waxman, Barbara Boxer, people really advocating for this climate change bill are those who don't live near coal-producing states… places like Ohio, West Virginia, Michigan, where heavy industry uses traditional energy to employ its workers to make good. They're going to get hit hard as a result of this.

Mike Maiello: This will definitely help jobs. I think modernizing our electric infrastructure, our power infrastructure, and our industrial infrastructure can do nothing but create not only jobs but good jobs - jobs that people will actually want and make careers out of.

Mike Ozanian: There will be a few handfuls of companies like PSE&G that will benefit from this - some of them will be the big utilities. But by and large, the average working family will suffer. The Congressional Budget Office estimates that expenses for the typical family will go up by $175 - $3 trillion will be sucked out of the economy in just the first 2 years.

Bill Baldwin: I think this is going to create jobs and that's one of the bad things about clean energy. If all you do in moving from "fuel x" to "fuel y" is to have more people creating the fuel, you've made a bad move. Creating jobs is bad. Common sense says I only want to move from "fuel x" to "fuel y" if it takes more people, if I get some other good out of it like cleaner air which maybe we will get. Maybe not.

Steve Forbes: It's horrible for jobs. Each job you create, as Spain has demonstrated in studies there, you lose 2-3 jobs in what you destroy in the traditional sector. This is expensive energy replacing cheap energy. Even worse than $175, it will be more like $3,000 per family when this thing is done. It does nothing about creating new energy like nuclear energy, coal sequestration, things like doing new asphalt to get less heat from the streets – basic good stuff that works – doesn't cost a lot of money.

Informer: Stocks to Help You Get On the "Forbes 400" List

David Asman: Hot off the presses this week! The new Forbes 400 list revealing the stocks that helped get those billionaires on the list. Now our Informers reveal the names that'll help get your name in next year's issue.

Mike Ozanian: Wynn Resorts (WYNN)

Bill Baldwin: Chesapeake Energy (CHK)

Jack Gage: Oracle (ORCL)

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Cashin' In

States Now Looking to Protect You From "Get Insurance or Go to Jail Mandate": Class Warfare At Its Worst?

Jonathan Hoenig, CapitalistPig Asset Management: Yeah, I mean, sure, think about this. Either you are your brother's keeper or you're going to jail. This is class warfare at it's worst. It targets the productive non-needy members of society. This is the continued looting of productive people. They dress it up as a free market choice. Oh, you're making a choice. But you're forced to buy insurance. How is that even constitutional? It is not like they're regulating something that you have chosen to do. They're forcing you to do something you haven't chosen to do. If you happen to make too much money, then we're sending you off to the hoosegow. This is terribly wrong.

Nancy Skinner, Democratic strategist: First of all, let me say this -- it came out of the group of six, and reported at the behest of the insurance industry, so everyone has to buy insurance. I don't think it is going to make it through, but for the sake of argument, let's say instead of class warfare, what about personal responsibility? Because when you can afford health insurance and you choose not to, and then you go and put that off on someone else, you are essentially shoplifting. You are taking advantage of everyone else and the class, Jonathan, that benefits most from there is the upper class, because they're paying their premium and what is a 1,000 hidden tax for people essentially shoplifting?

Tracy Byrnes, FOX Business Network: How are they benefiting? They are about to go to prison if they're going to prison. Maybe Bernie Madoff will be my cell mate. This makes no sense. We need government to back the heck out. We need them to stop saying that I have to do anything other than feed my children and put a house over their head. That's my responsibility. If I choose to not have insurance and go broke and mortgage my home three times over because something catastrophic happens, that is my responsibility. That is my debt. I'm going to live in a refrigerator box, not you.

Wayne Rogers, Wayne Rogers & Co: I didn't realize I was living in Russia. I thought I was living in the gold old USA. The fact that somebody in a voluntary program can enforce this by putting you in jail by a threat, by coercion and all of those things as opposed to having an incentive plan where people voluntarily want to do this is an outrageous thing. It is the tyranny of the government again. We're slowly slipping into total fascism in this country. You got to be careful. You have to know that your Congressman is jeopardizing your own freedom.

Jonas Max Ferris, Well, to your class warfare point, go to any prison. It is 98 percent poor people, but if anything, there is class warfare the other way in prison. Anybody who owes the federal government money and doesn't pay it could face jail. It is called not paying federal obligation. States have no say in this, by the way, and this talk of states they might as well have a civil war because the federal government will have the final say. It is a federal obligation. Forget the reason why you didn't pay your health insurance thing. You go to jail when you don't pay it. Is it unfair that only wealthier people would have to go to jail? That is ridiculous, in my opinion, but this is the best part of the plan – you have to get it.

Longer School Days and Years: Smart or Dumb Idea for Families, Economy?

Tracy Byrnes: I hate this idea. Look, economy aside, the kids mentally need a break. You got to be a kid in this world. But let's talk about how fun the summer is and how much the economy benefits from it: summer camp and travel. We take vacations; we rent houses down the shore. So many businesses are reliant on the kids being off and coming down and having a great time. Look, that's the beauty of being a kid. Who wants to work 12 months a year?

Jonas Max Ferris: What about the school supply makers? Nobody talks about them, the pencils, you name it. The money will go from one arm to the other. The only benefit is that it lets people work longer because their kids are in school longer. It is bad for traffic. I can't stand to think of buses in rush hour. This will not make us smarter. In Finland, they kick kids out of school who are dumb. Here we have this no child left behind theory that everybody has got to go to school forever, when many not so smart kids should go to trade school and learn something at some age rather than making everybody have this mediocre classroom. That's the problems with schools.

Jonathan Hoenig: From what I understand the students will spend the extra time learning the lyrics to "mmm mmm mmm, Barack Hussein Obama. I don't know what that will do to help kids. Let's be frank. The public schools are disasters as it is. They are poorly run bureaucracies with terrible results. I don't think extending those contracts keeping kids in poor schools for longer periods of time will do anything than pour more money down the drain. We should be working towards privatizing schools and putting those decisions into the hands of parents instead of Barack Obama who is the expert in everything.

Wayne Rogers: I think this is all foolish. The Brookings Institute has got a lot of stats on. This we know from experience that when kids are in school, they are going to learn a lot more, and this whole business, this reasoning that you say that it is going to hurt the tourist industry, on that reason alone, you should say why go to school at all, let's have tourist industry 12 months out of the year. It's foolish. When kids go to school and take certain times off during the year, not all at once, at the end of the summer, it has proven to be much better. By the way, you have an investment of 100 percent in infrastructure, meaning buildings and land. What are you going to do, use them only 75 percent of the time? That's dumb, also!

Nancy Skinner: It is a no-brainer that we can't compete with the billions in china without education. If we're shipping all our jobs, manufacturing jobs over there, we have to be smarter. Every study proves more time in school, more math education, more science education is going to raise our intelligence levels and our quality of life. Every single study, period.

Outrage Alert: Congress Ups Its Spending While Americans Cut Back

Wayne Rogers: I call this the tyranny of the bureaucracy. Once again, I mean, I wonder whether we're living in a totalitarian government. They vote themselves increases when, in fact, two businesses that we're involved in, we had to make cuts as opposed to laying off people. We made the cuts instead of laying them off and in the second case, we froze salaries. The congress, on the other hand, says, oh, we got to have everything. We need more for the staff, more staff. What they ought to do is cut the staff and lower those costs and then they don't have to do so much. We don't have to have every law in the world passed. They ought to just enforce the ones they got.

Nancy Skinner: This is a rare display of bipartisanship. This bill passed 25-0 out of the committee. I got to say that much. I'm agreeing with the choir on this, I wouldn't use words like totalitarianism or tyranny, Wayne, but it's less than in past years but still, Nonetheless, I am appalled and I don't think you should add staff or consultants. If there's one thing, if they make the buildings more energy efficient and renovate them for long-term future savings, that's worth it. The rest of it, it is not the time.

Jonas Max Ferris: We had deflation last year of 2 percent. They should be spending less money and getting the same stuff. There needs to be caps. If you have a roof chance, it's if you have a roof collapse on the Capitol building, that's a different story. I have to say discretionary spending should not go up.

Tracy Byrnes: Like all the people that have been hired over the past year, all hires are government employees. It wouldn't surprise me that they need to pay them and make room for them and actually, it's down about 4 percent from last year overall, so they did do some cost cutting. Look, we want to keep a business going. This is what a business does and they keep hiring people around the clock. They have to figure out a way to put them somewhere and pay them.

Jonathan Hoenig: This is peanuts compared to the programs that our "hawk" Nancy wants to enact. The trillions in entitlement programs; a couple million bucks on postage; a new museum is basically nothing. The basic functions of government are limited, right? Protect me, protect my rights. Unless the money is going to the court, the police or to fight Islam, I don't know why they are doing anything at all.

What Do I Need To Know?

Tracy Byrnes: Many people are rethinking the way they live and cook. We are eating at home, growing our own vegetables, outside running, getting fresh air. We are healthier now because of it all. Take that health care reform. We don't need ya!

Jonas Max Ferris: She stole credit cards and charged lingerie and other items with that stolen credit card: It is Singapore. Anyway, a lot of credit card fraud software product which we use in our company for credit card processing. But (CYBS).

Wayne Rogers: Ben Bernanke testifying before the Congress touched on the two big to fail problem. Congress is taking note but not doing anything about it. We are just sowing the seeds for this crisis to happen again and that's exactly what's going to happen.

Jonathan Hoenig: One relationship I think you should know about, is the relationship that has been brewing for a long time, when stocks are up, the dollar is down. If you are worried about stocks falling, you might actually bet operate dollar. There's an ETF, (UUP), power shares dollar bull. This is the ironic safe as is going to go up.