'Cost of Freedom': Get Physical and Work Out Profits; Strong CEOs, Strong Profits


Bulls & Bears

This week, Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Jonas Max Ferris and Kate Obenshain.

Companies Hoarding Record Amounts of Cash as Government Regulations Pile Up

Eric Bolling, host of FBN's "Money Rocks": Companies are sitting on the money and not hiring because the future looks shaky for them. Number one: There are obscene regulations on the books—2,300 pages of financial regulations are coming at them! Number two: confidence. They're not sure if the consumers are going to come back and buy the products they make. And number three: that whole cloud of cap-and-trade, health care and taxes. Those are all reasons why they'd rather sit on the cash than hire new employees.

Jonas Max Ferris, Maxfunds.com: Companies are sitting on cash because they can't sell stuff. Factories are running at very low levels, at about 70 percent. There is no demand for what they currently produce, at least not enough to warrant increasing production. Recently released numbers show that consumers are hoarding cash more than companies. CEOs have come out and badmouthed the Obama administration. The Verizon CEO is a classic example of that—he said it's a hostile environment. But he's talking about regulation, not government spending. Corporate America likes government spending because it means revenues. That money is being spent. People are buying stuff. When you give people tax cuts or extend unemployment, people go out and buy stuff. That's profit. It hurts the economy long run, but they don't care about what happens in 20 years with the deficit. A corporation would like it if you borrowed money from China and gave everyone $1,000 to spend.

Kate Obenshain, Young America's Foundation: Corporations are terrified by the spending. The government can't increase the deficit by four times in this amount of time and expect businesses to be comfortable about their economic future. Businesses are unsure if any economic recovery can be sustained because of all of the government spending. They realize that they are going to be the ones stuck holding the bag when the government gets over its spending frenzy. They want to see some commitment from the government to creating jobs in the private sector—to getting these ridiculous regulations and the threat of tax cuts out of the way—so that they can be unleashed to start hiring people. They're not going to start hiring people until they know that the government's regulations are controlled and rolled back and they know that the government is going to stop spending these obscene amounts of money.

Tobin Smith, NBT Media: It's about confidence, and confidence comes from the ability to look 6, 12, 18 months down the road. With all due respect to our president, everything they have done has looked like community organization. As a small business person, if I was president (of course that couldn't happen), I would look with my bias. When I invest money, I look at what the rate of return will be on that money. Right now, I can't measure the rate of return, so I'm not going to spend. Also, 52 percent of Americans in the latest poll said the economy is not improving, it's getting worse. Clearly, there's a disconnect with the president.

Gary B. Smith, thechartman.com: It's starting to feel like we're going to rival Japan for our own "Lost Decade". Companies don't need the administration to be so pro-business. They just need a clear, understandable environment. Not only is the Obama administration bashing business at every chance they get, they're also picking out industries one over the other. I don't think Ford, for example, liked that the administration bailed out General Motors. They're probably thinking, wouldn't it have been great if GM had gone away or at least declared bankruptcy.

Union Pension Bailout Bill Gaining Steam in Congress

Gary B. Smith: I am absolutely not behind this bill. I would have sympathy for union members if they were on the same playing ground as private workers. But do you know that they get paid 1/3 more for similar jobs? Health care benefits are double what a private worker gets. If public union employees were paid the same as private workers, it would wipe out every state deficit across the country.

Jonas Max Ferris: First of all, hourly wages are higher for union workers than private sector workers because there are a lot of low level jobs in the private sector, like at Walmart and MacDonald's, and there aren't unions for those workers. Government jobs are higher-paying jobs. Wages would come down a little without unions, no question about that, but not enough to fix the problems in all of these states. Pensions in general are backed. There's a government program, PBHG, that is under-funded by about $25 billion. It probably will need a federal bailout, and that is a bailout of private sector pensions. If we're going to bailout private workers, unions should get the same.

Tobin Smith: If you look at the real numbers of the actual pensions that are under-funded, they're looking at 200 or 300 billion dollars, but that's not the scary one. The state, city and local unionized funds are $3.2 trillion dollars under-funded. When we start the bailout game we know how it works. One guy gets it, the other guy gets it, it's not fair. This is the original sin here, of trying to pick and choose who's screwed up pension fund should get the money and you know what, everybody's got a representative and everybody's got a senator and that means everybody would get a bailout.

Kate Obenshain: This is a classic example of the democrats trying to pay off the unions yet again. The union pension plans are notoriously ill managed. Basically, instead of paying into pension plans, the unions go for higher wages and better benefits. So they can get reelected to their leadership positions, this is an effort by the democrats in congress and some very liberal democrats pushing this bill that are trying to push through this so that taxpayers will get stuck holding the bag yet again. I guarantee you, if the democrats get it through, it will be disastrous.

Eric Bolling: They can't they've priced themselves out of the job market. Richard Trumka from the AFL-CIO says, give us more money and we'll ask for help, of course they'll ask for more money, guess who is a big donor to almost every democratic liberal cause on the planet, AFL-CIO. Did you hear Mr. Obama at the Chrysler plant almost giving a standing ovation to the union bosses in the front row, like they were rock stars. There's a lot of cronyism going back and forth.

Lawmakers Demanding Governments Cut Off Funds for Sanctuary Cities

Tobin Smith: If you look at the numbers, they're astounding; we're getting into the $150 billion over a five year period. For every illegal we're taking out of the cities, we're creating jobs for American citizens and it's insane; the federal government is an enabler to this conspiracy.

Gary B. Smith: I can understand there's a lot of emotions here and there's a lot of rhetoric, back and forth, but we're a nation of laws, whether we agree with the laws or not. This whole thing, we're going to withdraw the funding, is that in the law? Is that how the government operates? I don't think so. It's fine for the government as they're doing, to sue Arizona. Arizona has their right to do what they want under the law, but to withhold federal funding, I think that's wrong.

Eric Bolling: They're breaking the law, they should withhold all federal funding, the problem is they're going to open up more and enable more sanctuary cities, because you know why, at the end of the day, these are voters. When they provide amnesty, immigration reform, they're all going to be voters and guess who they're going to vote for? The Democrats or they're going to go ahead and look the other way.

Kate Obenshain: You're going to look at the politics of it, 73 percent Of Americans according to Rasmussen think we should cut off funding to sanctuary cities, although some immigrants are going to vote for the democrats because of this, I think it's a loser issue, both from the hypocrisy side to pursue Arizona because they have the temerity to try to enforce federal law and yet, to turn a blind eye to the cities that are flagrantly flouting the law. I think there's going to be a serious backlash against the Democrats.

Jonas Max Ferris: We have the sanctuary country. What is the difference if you're going to the city that way? Look, we have a long history in America of taking money away from regions and states and cities to get what we want. They've got the seat belt law passed and the 21 to drink law passed, that's how you get stuff done and I'm for that, the problem is the federal government here doesn't care about the sanctuary so why should they take money away from basically doing what they're doing, which is not a whole lot anyway. San Francisco is basically the same policy as the federal government.


Gary B. Smith: Fight fire with "FIRE"; stock ignites 30 percent profits by 2011

Jonas Max Ferris: "WBSN" cleans up 20 percent in 1 year from Goldman's new e-mail policy

Tobin Smith: $800k salary outrage sparks "RAX" up 30 percent by November elections

Eric Bolling: Just don't sit! "NKE" runs up 30 percent in 1 year

Cavuto on Business

This week, Neil Cavuto was Joined by Ben Stein, Charles Payne, Adam Lashinsky, Dagen McDowell and Vincent Curatola.

U.S. Bracing for Tax Hikes as Other Countries Cut Spending

Vincent Curatola, "Johnny Sack" from "The Sopranos": For a country that's had 40 some odd governments since World War Two, I think that finally we're seeing some smartness in Italy. I applaud them; it's great for a socialist country, and I'm happy their not raising taxes.

Dagen McDowell, Fox Business Network: Here is the big question mark for any business small and large: where are we going to stand five months from now? The country is facing potentially the largest tax hike in U.S history, confidence is shaken, businesses don't know who to believe and I've heard from CEO's — small and large — who don't where we stand in terms of taxes and regulation in this country.

Ben Stein, author "The Little Book of Bulletproof Investing": They (Washington) really are facing up to it by raising taxes The amount of waste in state, federal, and local government spending is almost beyond calculation. If we can get rid of that we could make enormous progress towards fiscal sanity in this country, but we don't seem to be able to get rid of it. So I think in that case the tax hikes will probably will go through. They probably will be a drag on the economy although we don't know for sure. We just don't know what works and what doesn't work in the economy anymore. The upper income taxpayer is in for a rough time and especially when it gets factored in the stock market price and the dividends taxed and that should take a huge hair cut off the entire stock market.

Adam Lashinsky, Fox Business contributor: The European countries are obviously starting from a socialist base and we're not. We're moving in that direction and they're moving in our direction, but these are very high tax and high cradle to grave environments. The major issue we're facing right now is to let the Bush tax cuts on the highest wage earners expire and I think we will allow it to expire; I also think that these people running businesses who make a lot of money in the United States are going to pay a little bit more taxes and are going to keep creating jobs.

Charles Payne, WStreet.com: Italy has high tax rates — look where Italy is... and we're headed in that direction. We need two things: government needs to stop spending and businesses and consumers need to spend. That's how we will create jobs, and here is the fundamental question. Will raising taxes at the beginning of the year create jobs or not? And the bottom line is no one could say that raising taxes, no matter who it's on, will create jobs. It simply will not happen and it's a pure fact. In the meantime, everyone's afraid.

FBN Uncovers New SEC Powers in Financial Regulation Law

Charles Payne: Listen, this is pure hypocrisy, no doubt about it. The White House at this point is saying, listen, we don't listen to courts. We don't listen to states. We don't listen to contract law. We don't listen to public opinion. It does not matter. This makes it official; we know more than you, so stop bothering us about the transparency thing.

Dagen McDowell: The promise of transparency was absolute fiction. This closes the doors on an agency that repeatedly has fallen down on the job and we, the American taxpayer, fund that puppy.

Ben Stein: All the SEC is saying is that certain things, which I believe are submitted to them in confidence, and which they are studying in confidence will not be made available. All the documents required to be disclosed under the '33 and '34 acts will still be available. They're not supposed to have to disclose anything they're studying unless there's some kind of public need to know. No government agency discloses he is every single thing it's studying. The Supreme Court doesn't disclose everything, the State Department doesn't and defense department doesn't. Nobody discloses everything. But I agree we want maximum transparency.

Adam Lashinsky: The problem the way this was written; it looks like it applies to everything that the SEC does. The language isn't good, they do have to be able to keep secrets, and they can't refuse all "Freedom of Information Act" requests. The concern they will be read and enforced as a blanket exemption.

Vince Curatola: Well, I never heard Speaker Pelosi say partial transparency and President Obama say partial transparency. What I'm concerned about is what's next? The FDIC, so they're not going to tell us if a bank is solvent where we keep our money if they're investigating something? It's ridiculous.

Report: Union Dues Used to Pay For Arizona Immigration Law Protests

Ben Stein: This is ridiculous... What does it have to do with unions? I'm a proud union member; I love my unions. How does protecting illegal aliens and keeping illegal aliens kicked out of the country benefit the union members? What are they doing here? Why are we devoting so much in the media to illegal aliens protesting in Phoenix and Los Angeles? If they want to protest, protest in their country, protest in Mexico, in El Salvador; this is the United States of America, the protests should be done by U.S. citizens not by citizens of foreign countries here illegally. Why are they worrying about them? They can protest in their countries.

Charles Payne: It's really crazy when you think about unions hiring nonunion workers, sort of like back in the day, right, when the big businesses used to hire the scabs and the wise guys to break knuckles and knees. There doing almost the same thing accept their paying them minimum wage. Michele Malkin brought up a great point in an article this week. The SEIU's membership is wondering why their dues are going up for this nonsense as well.

Dagen McDowell: If I was a union member who was opposed to this and my union dues were being paid to bus people to Arizona to protest something I didn't agree with, I would be mad and I would lay down in the road in front of that bus. To Ben's point the people who aren't even citizens of this country are protesting and in this countries illegally. What about the notion of somebody in California going to Arizona. This is a state law that's a state problem. Stay in your own state and worry about your own problem.

Adam Lashinsky: My understanding from the whole Tea Party episode was that people underestimated there were real emotions in the country there that others were fanning the flames of. There is discontent over this law, so it all evens out in my opinion. People say it's a state issue, and people should butt out of Arizona's issues. The justice department disagrees they say this is a federal issue a foreign policy issue that's going to get litigated in court and it's not so clean cut.

Vince Curatola: Go to Mexico and tell them: "listen I brought my whole family. I don't have health insurance; I don't have a place to live. I don't have anything to eat, they'll just turn you around and show you how to get back to Arizona." I have no sympathy.

Our Gang's Most Recent Buys

Charles Payne: JDS UNIPHASE (JDSU)



Forbes on Fox

On Saturday, July 31, 2010, David Asman was joined by Rich Karlgaard, Neil Weinberg, Mike Ozanian, Stephane Fitch, Quentin Hardy, Victoria Barret, Kai Falkenberg, and Elizabeth MacDonald.

Does Social Security Need to Be Reformed for the Sake of Our Economy? Or Are Times Too Tough to Reform It Now?

DAVID ASMAN: "You will kill our economic recovery if you try to fix Social Security." House Speaker Nancy Pelosi sending that message to the GOP and all of America this week. But some folks here are saying the Speaker has it backwards; economic security will suffer if you don't fix it. Who's got it right?

MIKE OZANIAN: Of course Nancy Pelosi would say that. Congress keeps raiding Social Security to feed its spending habit. We need to begin fixing Social Security immediately, but gradually. We do it by not forcing people who are just now entering into the work force to put money into their fund. Rather, we allow them to keep their money tax free and invest it themselves.

STEPHANE FITCH: You know, Mike is right in the long-run. He has got an interesting solution there, but just lousy timing here. Nancy is right. Right now, we need all hands on deck. Don't cut benefits to anybody. This is not a good subject to take on right now. I'm for drunken sailors spending right now. I say we tax no one and spend like crazy.

VICTORIA BARRET: We know that drunken sailors spending in Washington means higher taxes down the road. So if you do something to fix Social Security, and maybe it's not a drastic overhaul like the one that Mike is describing, but even minor tweaks could get us into better shape and you are sending a signal that "hey our tax burden can come down in the future." That will make Americans more confident.

RICH KARLGAARD: Well, I think that Nancy Pelosi might be right only that the priority right now, as Stephane said, is really getting the economy going. Certainly we have to get on it sooner rather than later. The problem is only going to get worse. If you talk to CEOs today, what they are expressing is a lack of confidence. A lot of this lack of confidence going forward is looking down the road and seeing these ballooning deficits. So, you know, she is right, but only narrowly right and only for the moment.

ELIZABETH MACDONALD: I do think you have to tackle it now. I apologize. Look, Congress has been talking about reforming Social Security practically every decade since it was launched in the 1930s. There are fixes to it, David, for future generations. Unfortunately, because this will create generational warfare between people getting sweet benefits right now, but you hike the retirement age and you index the benefit to CPI growth not wage growth. That's going to create a big fight because companies are telling people you have got to retire earlier or they are not going to get their benefits. The danger is if you reform Social Security, it's going to put duress on Medicare. People would turn to Medicare because they don't have Social Security benefits to help them through their daily lives.

QUENTIN HARDY: Very counter intuitive, David. Let's consider, in 2000 we had a massive surplus. We ran it right down. Didn't do a thing about Social Security. Clearly in good times, we don't seem to do it. Maybe if you did something in bad times, that would show a real will in resolve and when things got better you would stay the course. But what are you going to do in bad times? People don't really have a lot of savings in this country. They are gonna retire later because they are working harder. When they do, they won't have much. The only way that I could see that working would be through means testing. Somehow that's a third rail. People who already have a ton of money need to draw Social Security, too. I would say start with means testing. Maybe Nancy Pelosi could be for that.

In Focus: Should Taxpayers Be Worried or Excited About Their Investment in GM in Light of the $41,000 Electric Chevy Volt?

DAVID ASMAN: Critics calling it a "Volt jolt" to taxpayers. We're talking about GM's price tag for its new electric car. How does 41,000 bucks grab you for an electric engine that runs out of juice after just 40 miles?

RICH KARLGAARD: The Chevy Volt costs twice as much as buyers would be willing to pay for it and it proves that the government bailout is trying to engineer things that the marketplace wouldn't support. Now, this is a tragedy for Chevy because really, it's got some great products in the pipeline. We rented a Chevy Traverse earlier this week. Top of the line model for this SUV is about $37,000. I would love a 2011 Chevy Camaro with a Corvette engine. How about that? I can get that for about $41,000. Not this little claptrap. I mean, let's concentrate on what the market wants.

QUENTIN HARDY: Why should I care what The New York Times says? I think this thing is really smart. I mean, look, let's get a few facts on the table here. George Bush bailed out GM and saved a million jobs during the middle of a financial crisis. Losing a million jobs then would have been a disaster. GM is getting ready for an IPO again.

ELIZABETH MACDONALD: I'm not sure I believe the Chevy Volt's mileage performance. I think that you have to have the cart behind the wheel and the Volt at the top of a hill. Getting back to GM, it has gotten $45 billion of taxpayer money on top of that $14.4 billion in other loans and grants to help develop cars like this. This is a $41,000 economy size car that doesn't fit the American family in it and the American family cannot afford. And you know, the thing is GM was told this would be a non-performer. GM said we will not make money off of this car for some time to come. The Obama GM task force said this car will not return profits to GM for some time to come as well.

STEPHANE FITCH: I can't believe the whining I'm hearing about this. I think I know why people are angry about the $41,000: Because you guys all want one. Here is my plan: I'm going to lease one of these babies. I'm going to lease one for $350 a month and then I'm plugging in this thing next to my desk at Forbes. Free commuting, baby. I'm going to enjoy this car. I think we all will once we get our hands on one.

NEIL WEINBERG: I think you only get 40 miles if you don't use the cigarette lighter. This is a game-changer because what we are doing is changing the auto industry from one which relies on market forces to decide what gets sold, to one where government subsidies will decide what gets sold. That's actually pretty sad. If we are going to use subsidies, why don't we charge all these subsidies to registered Democrats or people who hug trees, and let them pay for the whole thing instead of forcing those of us who believe in the market to subsidize.

Who's Moving in the Right Direction With Health Care Reform: the U.S. or the U.K.?

DAVID ASMAN: Great Britain knows all about national health care. So, when they say it's getting too expensive and they take power away from bureaucrats and they give it back to doctors, you think our politicians would take note. Well, think again. One-hundred-twenty-eight House Democrats trying instead to push through a new public option plan. Kai, you say those Democrats have it all wrong?

KAI FALKENBERG: They do have it wrong. Look, the U.K. has it right on two respects: One, cutting costs and two, letting doctors, not bureaucrats, make medical decisions. The U.S. is moving in the opposite direction. The U.K. is ahead of us in another respect: They have "loser payroll." They avoid spending hundreds of billions of dollars in defensive medicine. That's what Congress should be focusing on, not whether we need a public option.

QUENTIN HARDY: That's just crazy. My wife just landed in the U.K. to see late-stage care for her mom. They do a nice job. She spent the day before chasing down our American health insurance about claims that are 6 months old and still haven't been paid. The British system is better because national health care is locally-administered. Ours is totally distorted by big business.

MIKE OZANIAN: National health care is a disaster for innovation. Innovation is what improves the quality of care. The U.K. invented MRIs. The innovation of MRIs and the widespread use of them to really help people is now most prevalent in the United States. If you look at the 20 most valuable companies involved in biotech and involved in medical instruments, they are U.S. companies. Innovation is key. National health care kills innovation.

STEPHANE FITCH: I'm not so sure we know, but I certainly know all the innovation we have done here in U.S. medicine hasn't made us live longer or be healthier. I think, actually, the U.S. is on the right track. We are moving towards a system they have in Germany and Japan which is private hospitals, private doctors, and universal care. It works.

VICTORIA BARRET: Stephane, I don't know how you can say that our innovation hasn't made a difference. You can have a cheeseburger and take a pill, and it's all cool. That's innovation. I'm being a little glib here. We have come a long way in health care thanks to innovation that will decline under what this administration wants to do. We are taxing the very companies who have innovated for us and given us these healthy lives.

NEIL WEINBERG: In aggregate, we have a horrible health care system. It costs us twice as much as it costs our competitors. We have 40 million people who have no insurance right now. The problem is it is not the British system but a national system where the final consumer is not caring about the costs. Very interesting, David… this week reports that Americans are starting to use health care less. The reason is obvious: They are paying more out of their own pocket.

Informer: Strong CEOs Muscling Up Strong Profits for Investors

DAVID ASMAN: We're back with our Informers and CEOs so strong, their stocks are sure to make shareholders huge profits.

MIKE OZANIAN: Richard Gelfond, IMAX (IMAX)

NEIL WEINBERG: Jeffery Boyd, Priceline.com (PCLN)

STEPHANE FITCH: Mort Zuckerman, Boston Properties (BXP)

Cashin' In

Battle Over Extending Bush Tax Cuts for Rich Made "Illegal"

CHERYL CASONE: Forget about the battle over illegal immigration. Did you hear about the battle brewing over the law making it illegal to cut taxes on rich Americans? It's true. And someone here says, this class warfare tactic from the White House is a direct attack on what makes America great.

JOHN LAYFIELD: There's no doubt about it. I guess he spent his youth being locked in lockers by successful people. Since he has been out, he has declared war on success. Look, successful people are what built this country into such a great country. You listen to the populace rhetoric coming out of this administration. If you are successful as a business or as a person you will be fined. Call it taxes or whatever you want. Obama wants to level the playing field, but not like we want to—not by making the poor richer. He wants to make the rich poor. It's a redistribution of wealth, that's all it is.

MARK LEVINE: That's ridiculous. Look, the current tax code, put in place by Republicans, already practices class warfare. If you make $100,000 a year you may pay 40 percent in total taxes—income, federal, state, social security and all of that. If you make $100 million per year you pay 16 percent. Right now we currently have a massive transfer of wealth from middle class, hard working American citizens to only 2 percent of Americans who got the majority of the Bush tax cuts. It's time to make every American pay their fair share and that includes the rich.

TRACY BYRNES: It's all class warfare. 16 percent? What tax code are you looking at? The top rates are going to hit 40 percent. Throw in state taxes. Throw in the fact that many of the deductions are going away as well. The rich are carrying the brunt. The rich aren't really rich these days. $200,000 a year is not rich in certain parts of this country. He's coming down on the people that came over from the other side of the world to come to this great country to build companies and businesses. The reason America is great is because we are a land of opportunity that allows us to grow and keep the money we make.

JONATHAN HOENIG: Their whole economic philosophy is a redistribution of wealth. Go back and read the President's speeches from when he was a senator. He favors a progressive tax code. He always talks about the rich paying their fair share, whatever that is. He opposes any tax cut to people who don't need it. I will tell you, when people talk about the President as a Socialist, this is what they are referring to, that notion that the nation's wealth is his wealth to determine who gets it, who gets incentives, who gets a stimulus. That's that mind set and that's what's so Anti-American.

WAYNE ROGERS: I think the whole tax code has to be revisited. You can't say blanketly that the rich are not paying their fair shares. We know the rich people pay most of the taxes in this country. 70 percent of the federal government's revenue comes from rich people. You can't say that they are not paying their fair share. Also, a much fairer tax would be some sort of a consumption tax. That takes care of everybody. You don't have to worry about whether or not somebody is being played off, one against the other. The administration has always been this way, but it's not the administration so much as it's the Congress of the United States who doesn't have any idea about this.

Fears Mount Over New Bailouts as States Ask for More Cash

CHERYL CASONE: Get ready for more bailout protests. A new report this week shows two thirds of our state still going deep into future debt. Guess who may have to dig them out of their holes? You. The taxpayer. States got the lion's share of that $900 billion stimulus package, but should they get more?

TRACY BYRNES: Clearly no, but they're going to. There's an $84 billion fiscal shortfall for 2011 for all our states. Illinois is at the top of the list. You got Pennsylvania, Michigan, South Carolina. These guys are in dire straits. They are going to come marching to D.C. with their hands out. You know what? Unfortunately, we are going to give them money. We the taxpayer are going to end up bailing out states like California that are willing to spend $800,000 on a city manager in Bell, California. So that guy gets his money, but he takes it from my wallet.

MARK LEVINE: That's far too little. I don't know when the lion's share of $900 billion was $40 billion. That's less than 5 percent of the stimulus package. If you recall, the Democrats initial package was to give more than $80 billion and Republicans insisted on slashing that aid. Let's remember what caused this deficit. You have got structural deficit caused by shoveling all that money to the rich, wars unpaid for and things like that. And you have recession-caused deficits. Less people have money. They pay less in taxes and states pay more in unemployment aid. As the economy gets better, the states will need less money. They need it now. They can't print it, only the Feds can.

JOHN LAYFIELD: That's exactly what is sinking their buckets. Mark, I guess you get your numbers out of the sports page. They are very wrong. $140 billion went out with the stimulus and they're actually paying them $194 billion this year. They are going to be short about $180 billion next year. You have the states right now saying they are going to have to cut 500,000 jobs. It's more like 1 to 2 million jobs that will have to be cut because July 1st is the start of fiscal year. Obama does not want that to happen before midterms. This is politically motivating. Instead of telling the states, balance your budget like you have to by law, Obama is willing to break that law and say we're just going to give you money, and I will just borrow more from China.

WAYNE ROGERS: I think the feds should bail out the states. Most of the deficits are caused by Medicaid overrun. You can bail them out but you've got to tie strings to it. Everybody has to budget. Teenage kids are given an allowance and invariably blow it. Every time the states get into trouble, they have got to have some sort of a fiscal discipline to get out. Now, in this case I think the Feds should help bail them out, but they should tie strings to it so that going forward they are fiscally responsible.

JONHATHAN HOENIG: Wayne, you hit the nail on the head. States have amassed these huge, unbelievable deficits. It's not because of the police, not because of the courts, and it's not because of the proper functions of government. It's because of entitlement programs. Medicare and the benefits—that's where all this money is going. Illinois and California are among the top credits likely to default. It's not the police force that put them in that position, it was union and government and education entitlements.

Does the Arizona Ruling Encourage New Illegals to Come Look for Work?

CHERYL CASONE: Arizona law out. More illegals in. Now that one judge ruled states basically can't enforce our nation's immigration laws, there are new worries that more illegals will pour in looking for work. Is that bad for legal Americans who need a job right now?

JOHN LAYFIELD: You have legal Americans right now with 10 percent unemployment and about 17 percent real unemployment. They want a job. And for some reason this administration is catering more to illegals than they are to our own people. Make no mistake about it—this is not Arizona's problem. The federal government should be doing something about this problem and they are not because they are 100 percent spineless. They will not make a decision because they're worried about the Latino's vote in the next election and they are forcing it on Arizona. Yes, this is bad for our economy.

JONATHAN HOENIG: You want to see countries with no illegal immigration problem? They are all terrible economies. Immigrants and illegals, as you insist on calling them, are job creators. There is no set number of jobs that can be created, so if an employer is able to hire somebody at a lower rate, that wealth can be invested in new jobs and new wealth creation. I think what John is alluding to is the cost of the entitlement states. You know what? At least the illegal is productive. The welfare mom sits on her couch watching TV all day long.

WAYNE ROGERS: I'm just laughing at the fact that you know once you start a sentence with the word illegal, it's unlawful. Jonathan is of the opinion that we should now let all illegals into the country. That makes them illegal. That's crazy. Why not just say everybody who has murdered people—that's illegal, too, Jonathan. Do they create jobs? They murder people so they create other jobs. That means they are getting rid of somebody who is getting a job. Are you nuts? This is the problem. The federal government has to enforce a law that is on the books. If it's illegal, the federal government should enforce that law. It's as simple as that.

TRACY BYRNES: I think Jonathan's point is a decent one. We keep extending unemployment benefits. We are not giving people incentive to work. Unfortunately people from other countries are incentivised to come work here now. I think there is a safety issue to John's point. We have got to protect our people. People are coming in at night and killing Americans. What are we doing about it? Unfortunately, nothing.

MARK LEVINE: I'll give you another survey: 81 percent of Americans think there should be a path to citizenship. Pay a fine, pay back taxes, and become legal citizens. I was on this show twice before and I love being on this show. I always flash my Constitution. I was right then and I am right now. There is only a federal solution. If you don't like it, tell the Republicans in Congress to support the same bill they did in 2006.

What Do I Need to Know?

TRACY BYRNES: We found out this week that Goldman Sachs sent about $4.3 billion overseas to entities, hedge funds, and pensions. Everyone is outraged that that bailout money, our taxpayer money, is going overseas. You know where the outrage should go? To Washington. Stop handing out money without strings attached. To Wayne's point earlier, there should be reason to give money and there was none.

JOHN LAYFIELD: Interest rates are low and they are going to stay low for the foreseeable future. Europe and the United States are going to see very little growth. Invest in companies with good dividends if you want a good yield. Pfizer seems to be safe and gives you a good yield.

WAYNE ROGERS: I think the economy is coming back. When the economy comes back as well as it's going, Las Vegas will come back. I like Las Vegas Sands and LVS. I own that and I like Steve Wynn's operation.

JONATHAN HOENIG: International telecom is a sector that I'm invested in. IXP gives you broad exposure to a strong asset class with a good dividend as well.