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IS LOOMING 'TAX BOMB' HURTING CONSUMER CONFIDENCE?
TRACY BYRNES: I mean in a utopian world yes, Cheryl, but we know how these people work and unfortunately it's never going to happen. Look, the uncertainty is palpable these days. No one knows what to expect about anything. We have an anti-business administration throwing regulations at us left and right and over 60 taxes are potentially going to go up. Oh my God. Come the end of the year that is uncertainty like you can't imagine. How do you possibly plan?
JOHN LAYFIELD: No, because you wouldn't feel it right away. I think the American sentiment is one of the lowest it's been in years. You look at the labor participation rate and it's the lowest it's been in over three decades right now. People are worried about jobs. You've got to have a job before you either pay taxes, or get taxes raised on you, or anything else and that's what is worrying the people right now is the economy and they know this Congress is more worried about Ann Romney staying at home or President Obama's birth certificate than they are at getting something done with this economy. These guys are absolute buffoons and it is weighing on consumer sentiment.
JULIAN EPSTEIN: Well there are a lot of things Congress can do, but as a matter of fact, to Tracy's point, taxes are about 15 percent of the economy, about 15 percent of GDP, which is a historic low and the idea that people are worried about whether taxes are going to go up on people who are millionaires or people above 250 thousand I think is a little bit silly. You know it's true that there has been a dip in consumer confidence. Consumer confidence is way up from when Obama started his administration and two other indicators; the Reuters indicator and the Bloomberg indicator show that consumer confidence is actually up and I think John is right. The reason why people are concerned right now is because wages, middle-income wages have been stagnant for a decade, and until that changes, you're going to see confidence kind of at this stagnant phase. It's better than it was when Obama came in, but it's still problematic.
WAYNE ROGERS: Look at the jobless report that came out on Friday. It was a terrible report. That's one of the things that destroys confidence. You keep seeing the jobless rate going up as opposed to going down. All of the guys who advocate government spending; you've got to cut spending as well as the taxing. You can't just say oh we're going to let taxes go. If you don't cut the spending you're dead.
JONATHAN HOENIG: Right, I mean Cheryl how can you have much confidence in a big-spending government with a collectivist mentality and endless entitlement programs. That's exactly what you have and as you pointed out, it's not only hurting consumer confidence, but I think even more scarily it's hurting producer confidence. You know consumption is the end of the producing process. It's producers, it's the people who invest, who innovate, who take risks, who actually power the economy forward and as Tracy pointed out a lot of those are not millionaires and billionaires. They're just six packs with just a couple thousand dollars in a 401k or mutual fund and if they're making 50 thousand and are going to have to pay two thousand more in taxes that type of activity doesn't inspire confidence in anyone.
MOVE OVER 'CASH-FOR-CLUNKERS,' HERE COMES 'CASH-FOR REFRIGERATORS'
JONATHAN HOENIG: We need to crush this environmental movement Cheryl; this green ideology that loves the spotted owl but hates mankind. They're so intent on saving nature. Saving it for who? I mean nature has a value in how it benefits mankind and if a fridge or a solar panel or a Chevy Volt actually has a benefit, you know an economic benefit for someone, they're going to choose it on their own without government forcing them or using government dollars to force them to make those decisions.
WAYNE ROGERS: Yeah but as I understand it, I thought it was a combination with public utilities. That is to say, for example, Southern California Edison, or whoever it may be, these are the people who are cooperating doing it and it's coming out of the rates that people pay it. It's not necessarily coming out of the government's pocket.
JULIAN EPSTEIN: Well "Cash for Clunkers" was not an unsuccessful program. It was part of an effort to jump start the auto industry and it's actually worked. Ask anybody in Detroit. That's why the Democrats, and Obama in particular, are doing so well in Michigan and GM is the number one automaker now. As to Jonathan's point, you know Wayne is exactly right, there's very little expenditure of taxpayer dollars here. Ask Sears and the other retailers. They love this program because it helps promote sales. Utilities like it because it helps them meet their clean air obligations and in terms of what people are worried about; we're talking about PCP's, mercury, getting rid of things that are hazardous to the public health. So this is a very good program with minimal government expenditures.
TRACY BYRNES: We have to stop borrowing from Peter to pay Paul. That's all we are doing. To call "Cash for Clunkers" successful is laughable. There are so many things wrong with "Cash for Clunkers" not to mention it totally killed the used car industry. So to do this again, to repeat the same mistakes over and over again is insane and it goes to show you our administration does not understand what works because all this is going to do at the end of the day is screw the refrigerator operator or producer people. The energy companies six months from now they're all going to be singing the blues because of what we're doing right now.
JOHN LAYFIELD: It's all about how the government does these things Cheryl. Look, when you have banned CFCs back in the 70s and 80s, the ozone layer was supposed to be gone in 50 years. It's now going to be completely replenished. Government can do certain things right. This is not how you do it. Look at what they did with the electric car; seventy-five hundred dollars per car subsidy. Only 10 percent of those cars were bought according to every survey because of that subsidy. Only 10 cars, 75 thousand dollars is what you spent to get one extra electric car bought is how the government runs things. They can't run anything. This is not the way to do it.
NEARLY HALF OF ALL PEOPLE IN AMERICA LIVE IN A HOUSEHOLD GETTING GOVERNMENT BENEFITS
WAYNE ROGERS: Yeah and it's crazy. It's got to stop. For example, you know Social Security was passed back in the 1930s. It was not indexed to life expectancy. Life expectancy at the turn of the last century was 47. It's now 77. This is crazy stuff. We've got to stop. We've got to bring it in. We've got to get Congress to bring it under control and they have not the guts to do it and the public has got to do something about it.
JOHN LAYFIELD: Yes because the underlying fundamentals are getting worse. Poverty is going up therefore food stamps are going up. Poverty goes up to 15 percent. Don't worry about food stamps; fix poverty and that fixes food stamps. When you talk about long-term unemployment benefits; fix jobs. That fixes long-term unemployment benefits. We are just giving out money so people don't protest in the streets, because politicians, their number one goal in life, is to get reelected not do something for this economy like they should be doing.
JULIAN EPSTEIN: It's actually a small piece. The bigger piece is health care and we're on a glide path to having entitlements and service on the debt take up 70 percent of the federal spending that we absolutely need reform. The problem is, about 70 percent of people that get entitlements are either disabled or seniors or near-seniors and so when you see for example, Obama administration tried to cut 400 million from the Medicaid/Medicare program and Republicans campaigned against him the last election cycle. We absolutely need reform. People that don't need to be getting entitlements shouldn't be getting it, but every time one party's tried to reform it, the other party has campaigned against them.
TRACY BYRNES: People go to their mailboxes looking for some sort of handout or incentive. Give me an incentive so I can squish my refrigerator now. I mean this is ridiculous. Almost half our population receives some sort of check from this government. They're not standing on their own two feet and the more checks we hand out, the more people are going to say heck, where's mine? And so as a result it's going to get worse before it gets better because no one has the spine to nip this thing in the bud.
JONATHAN HOENIG: Well there's nothing on entitlements in the Constitution Cheryl because the founders understood that if you wanted something from someone else you had to trade them for it. You don't just need it and expect society to fill in the bill and of course now who needs it? The poor, the elderly, General Motors, Solyndra, I mean whoever it's a long, long list. Of course you're expected to sacrifice. It's not charity. It's your moral duty to sacrifice for whoever is in need and that result; half the country on the government doll.
WHAT DO I NEED TO KNOW?
JOHN LAYFIELD: Make big bucks from falling oil prices with (SDRL)
WAYNE ROGERS: Protect yourself in down market with (CYS)
JONATHAN HOENIG: Not even a soda ban can take sweet profits away from (DPS)
TRACY BYRNES: WI recall vote decides tax fate for all Americans
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