DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.
NEW PROGRAM LETS PEOPLE TEST A JOB WHILE STILL COLLECTING UNEMPLOYMENT BENEFITS
Gary B. Smith: This is just another in a long line of goofy, government programs trying to get the economy started. Whenever I hear about companies getting money and, in this case, hiring temporary workers, the first thing I think of is fraud. If this goes through we can come back a year from now and count how many millions were fraudulently spent. The bigger issue is we, as a nation, started building cars. We sent men into space. We built canals. We built railroads. We didn't know how to do any of those things beforehand. Who took the risk? The manufactures, the companies and the corporations took the risk. If they failed it wasn't on the taxpayers' dime. This is a great example of just another way to transfer money from one to another without, supposedly, anyone taking any risks. It's goofy and it should be stopped.
Tobin Smith: We know from all the studies that are done that if you extend these benefits out to 99 weeks and have these bridges to somewhere that people will take it right to the end. We would have 1% less unemployment. "Creativity" is code for "let's try to help everyone we can and make life fair too."
Jonas Max Ferris: I like the idea of a training program, in theory. You can get student loans to go to a trade school to learn a skill. This is a subsidized internship for companies. It's actually a handout to corporate America. You're getting an employee for free that you can "train." There have already been a lot of scandals with interns in situations like that. And they still get unemployment. I will say it's better than collecting unemployment and no working at all. It still has some improvements. At the end of the day, it may raise unemployment because now you don't need to hire someone full time because you have these free interns that you're allowed to work. It would be better if the company just hired people that they need and the government had their own little program for recessions. I don't think this is such a good mix.
Scott Martin: The blueprint for Georgia is the problem here. If you talk to the businesses that got involved in this they spoke of all the human resources headaches that were created from inequality in the workplace. So, if you're looking at Georgia Works as the blueprint for what went on and why we should be doing this I think that's the wrong place to look.
Jehmu Greene: This smells like innovation. What better way to work off of best practices, lessons that have been learned in Georgia? There are parts of this program that have been done in other states. This is a test program. They're doing this in about ten states. This is about getting on top of the people who have been long-term unemployed. If we don't get on top of that it is going to destroy our economy. They get new skills from it and new references they are able to apply to it. There are many people in the private sector who appreciate this type of public/private partnership.
PRESIDENT CALLS FOR CRACKDOWN ON SPECULATORS OVER HIGH GAS PRICES
Gary B. Smith: It was mentioned earlier that this is illegal. This is what companies do to prevent costs from skyrocketing. Airlines, for example, hedge on the price of oil so if oil goes up, they're locked in at a lower price. They can pass on those savings to the consumer. I'm sure the President knows this, but the price of oil is based on two things: supply and demand. Maybe you get some short-term impact and then the speculators are crushed and then everything reverts back to normal. That's the way the market really works. That's the best way for consumers to take advantage.
Tobin Smith: In March, 2008 we were cracking down on the speculators because oil and gasoline prices had gone ballistic. What happened was you got speculators on the wrong side of the deal and the prices actually went up. They went from $1.00 to $1.40. The cure for high oil prices is high oil prices. We've already peaked. Come September and October we're going to be lower. Let the market work. When you try to mess with this we get upside down.
Jonas Max Ferris: I think there is manipulation in a lot of markets, particularly commodity markets. I think, in general, the increase demand for investment in oil has driven up the price. Let's set the price higher for people buying and selling, including airlines. My problem is I don't think the government can stop that really easily. It's one thing to say that it exists and it's another thing to somehow get it out. I think raising the marginal requirement wouldn't be a bad idea. When they did that in the precious metals market a few months ago, those metals fell in price because it was easier to leverage up. There are other ways to leverage without margin. You can borrow outside the markets. You can use options instead of futures. There's no great solution. Giving money to root it out is a waste of money.
Scott Martin: Free reign to make a profit is sometimes illegal in this country. Give me a break. Oil prices went to $150 and fell all the way to $30 in the recession. It's a supply and demand issue. Since the BP oil fire we've issued one or two permits to drill in the Gulf. Lindsay Lohan has been in more feature presentations since then. That's ridiculous.
Jehmu Greene: As great as the free market is it was never intended to be free reign to run roughshod over the American people. The American people expect the government to step in and stop the illegal manipulation. They expect the government to step in and stop the rigging of these markets. This is one step that is part of all of the above energy strategy that the President has been engaged in. The CFTC has been reigning this in for some time. It's not an overnight cure-all, but it's one step in the right direction.
MORE WORKERS SUING BOSSES FOR EXTRA WORK WITHOUT PAY
Gary B. Smith: I agree that sometimes salaried workers are taken advantage of. I can understand that and they're the people that are suing. Unfortunately, when supply exceeds demand, in this case the economy that we have, you're going to have companies that say now you're an hourly worker. If you don't like that, then you'll be fired and will be replaced by other workers. I see no net effect on the economy because both sides will adapt as long as the free market is allowed to work.
Tobin Smith: What business is it of the government coming in and regulating my company if people who work for me use their email off hours? Maybe they're using them because it's helping them get benefits. Some workers get paid bonuses based on productivity, or on sales, or on profits. Are you saying that I can't pay them a profit share because they used their phone? Put your big boy pants on here.
Jonas Max Ferris: One of the reasons companies do this is because the cost of adding a new person is so high, largely because of a lot of rules. You have to give them insurance and pay their social security match. If you're using someone extra, they're already on staff so it's only the extra marginal salary. If you don't have to pay them overtime it's a super deal. If it was illegal in a recession to use someone overtime without paying triple pay you would see the unemployment rate go down. Companies would then say it's cheaper to hire new workers. The fact that you can use people this way keeps the unemployment number high. On the other hand, the government would have to remove some restrictions when you hire.
Scott Martin: This is terrible for businesses and even worse on the part of the employees. People are upset because they have work and they have too much of it? The administration goes on TV and says we have all these people looking for jobs and businesses need to hire. Now employees are complaining because they have too much to do. That's unbelievable. They're suing the businesses too, which is unbelievable. That's going to kill the business probability and make businesses not want to hire.
Jehmu Greene: It's absolutely a violation to not pay overtime. It would be great if worker productivity was increasing and the record profits that companies are bringing in and the record salaries that CEOs are getting was transferred down to those workers. That's not happening. In the real world, the only thing that workers have to do is sue away until these companies and CEOs wake up and say you cannot take the benefit of worker productivity increasing and not pass that down in wages. Wages have stagnated and declined.
Gary B. Smith: McDonalds (MCD) 15% gain by September
Tobin Smith: Boeing (BA) up 25% by November
Jonas Max Ferris: iShares MSCI Italy Index (EWI) up 30% in one year
Scott Martin: ProShares Ultra Short Euro (EUO) 20% profit in one year