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Bulls & Bears
Should President Obama Use Bailout Bucks For More Stimulus or Pay Down Debt?
Eric Bolling, Fox Business Network: The TARP doesn't allow the government to spend the money on other things. TARP money is coming back to the government, and it should go back to the taxpayer. Pay the debt down. It in no way should go to politicians' pet projects. Originally, the government said the taxpayer was going to get money back. It's time for the government to hold on to their end of the bargain.
Ephren Taylor, Incoming Inc.: I think you can go to just about any American household and see that jobs are a troubled asset right now. They aren't there. A lot of corporations were able to make a ton of money off of TARP, but the average American hasn't seen anything from it. None of the TARP money has helped the average American.
Tobin Smith, ChangeWave Research: If you really want to help businesses and create jobs, give every small business a two-year moratorium on every dollar they invest to expand their business or create a new job. We'd have so many new jobs, the government wouldn't know what to do with the surplus. In some cases, the government has made money on its TARP investments and the last thing we should do it waste it on another jobs program.
Gary B. Smith, TheChartman.com: Only in America could you create a program like the stimulus where you miss your unemployment target number by 25 percent, then go back to the American people and say, "let's keep doing it!" We have to recall the Obama administration said unemployment would top out at 7.9 percent with the stimulus. It's at 10 percent. This is not trivial; we're talking about millions of jobs. The jobs the government says it has created are bogus at best. And now they want to take TARP funds and spend more on the same stuff. This is the height of lunacy.
Pat Dorsey, Morningstar.com: I think it's possible we see this become a kind of slush fund for lawmakers. As we know, economies heal themselves with time. Businesses regain confidence and reinvest. I think we're starting to see that happen. The long-term issue at hand that will not solve itself is the deficit. So taking those funds to pay down the deficit would make a lot of sense.
Should Congress Be Forced to Use Government-Run Care?
Gary B. Smith: Senator Chuck Grassley was the first to raise the hypocrisy of this issue, and it's beautiful. These congressmen are a bunch of hypocrites ordering Americans that this is the sort of health coverage they're going to have—but congressmen get to choose what sort of coverage they receive. Let them eat cake. We all know this public option is going to become a mandate before we know it.
Ephren Taylor: I think it's ridiculous we're making a big deal about this. I don't like the word "force" to begin with. People should have a choice. They should have an option. People and employers should be able to choose between public and private health care options. More choice is a good thing.
Eric Bolling: Senator Vitter came out and said that if we're passing a public option, all Congressional members need to be on it. Senator Grassley said that all Congressional staffers should have to enroll in the public option too. All of a sudden, Democrats begin backing away saying they don't want to enroll in a public option program. Nor do they want their staffs to. It's causing Democrats to start rethinking this whole thing.
Tobin Smith: Government workers on average right now are already earning higher pay than private sector workers, so why wouldn't they get cushy treatment? Everybody assumes this public option will be cheaper than what they already have. But when you start running numbers on it, it may end up being more expensive than the Cadillac plan currently in Congress. We can't be too hasty on passing this legislation.
Pat Dorsey: I think we need to go back to what this plan is called, a "public option"--as in it's an option. Congress should not be exempted from it, but at the same time not forced into it. That doesn't make sense either. There should be equal treatment for all.
Is President Obama's Green Jobs Plan the Fastest Fix for Our Job Market?
Tobin Smith: This plan is a clunker for the market. If you want to spend $750,000 to create one job, it's a fantastic idea. Spain has done this for the last eight years, and it cost them $750,000 per job when they added all the numbers up. And the worst part was that only about one-in-ten of those jobs lasted after the government removed its subsidies. This is an absolute recipe for disaster.
Ephren Taylor: We've certainly had issues when it comes to green job creation in the country. But it doesn't mean we shouldn't move forward and put these jobs in place. Long term, it will benefit our economy. We shouldn't just wait. We shouldn't just leave behind emerging industries that could have beneficial effects for our economy in the long term. Otherwise, other countries are going to take the lead on this stuff and leave us in the dust technologically.
Eric Bolling: Green jobs are great for the administration. Why? You can't quantify them. It's tremendously difficult to figure out how many manufacturing jobs can specifically be designated as "green". But most green jobs are in research and technology. There's just little way to prove what kind and how many jobs you're creating.
Pat Dorsey: The only thing that will make a difference here is time. We don't need to spend more money on jobs. They're being created right now. The economy is healing, and we just have to wait. It's not the most politically fun thing to do. But if the market wants green jobs, then positions in that sector will grow and expand.
Gary B. Smith: If the government is going to spend money on anything, it should be on infrastructure. These days, you can't drive down the highway without hitting a pothole. Many current green jobs aren't even full-time positions. So why inject huge sums of money into a relatively undeveloped sector of the economy where the money will likely be wasted? We may as well just spend the money to create ditch digging jobs.
Predictions
Gary B. Smith: Look the part, like White House crashers! "TIF" up 30 percent by Valentine's Day!
Tobin Smith: Big buzz over Boston Beer's Utopias. "SAM" bubbles up 50 percent by July 4th
Pat Dorsey: Bank on United Bankshares! "UBSI" dispenses 50 percent in 2 years
Eric Bolling: Tiger may be broken, but Nike isn't! "NKE" drives up 30 percent in 1 year
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Cavuto on Business
House Bill Gives Government More Control Over 'Risky' Companies
Ben Stein, author, "How to Ruin the United States of America.": The economy thrives on certainty, predictability, and knowing the rules of the game. As the Wall Street Journal brilliantly put it, this is the "uncertainty economy" because business doesn't know what it is going to be hit with next, whether it's energy or payroll taxes or health care. This uncertainty is leaving businesses too scared to create jobs. Warren Buffett said it best: "To make money, the first rule is to not lose money." The government is losing jobs by frightening businesses.
Charles Payne, WStreet.com: I completely agree this bill gives the government more control over companies. Just look at the data. I'm convinced that this recovery would be so much further along if this government stopped demonizing businesses. This Jobs Summit for small businesses doesn't even have a small business there! This is why we're not recovering.
Adam Lashinsky, Editor-at-Large, Fortune Magazine: This administration has proven itself to be tone deaf in its public communications a handful of times. I completely disagree that we do not need to do anything with companies that are deemed "too big to fail." A year and a half after the financial institutions were bailed out, we still have companies like Wells Fargo that are "too big to fail." We need to address that.
Dagen McDowell, Fox Business Network: This is all about greater government interference. Whether it's this House Bill or health care or energy, Congress is pushing greater government interference in business. If the White House had spent the last nine months actually talking to business leaders, they would've been told to cut payroll taxes and give business owners a tax break to hire people. Instead they've been trying to rework industry and our economy.
White House to Execs: Help Country, Not Your Company
Dagen McDowell: I think it is offensive for White House adviser Larry Summers to say, "Think about what your institution should be called on to do, not in its own interest, but in the broader national interest." It's offensive to say that businesses do not care about their employees or even America as a whole just because they want to make money. Larry Summers is missing the fact that capitalism is about opportunity and freedom; the opportunity to have an idea, start your own business, and ultimately support your family and your community.
Charles Payne: We've heard this message time and time again and it is so offensive. I think Summers even resents the small business person wanting to have an extraordinary life. I'm also getting sick of this whole guilt trip… the idea that we have so much and that somehow we didn't earn it or that we don't deserve it.
Ben Stein: There are about four million people in the greater Washington D.C. area and I think Larry Summers is without question the smartest one. In this case, he's just putting out a propaganda line for the administration; he knows better than this. He knows what Adam Smith said: "The way prosperity comes is from the self-interest of the butcher, the baker, and the candlestick maker."
Adam Lashinsky: Larry Summers said absolutely nothing about it being evil to make money or to be a capitalist. Before that quote, he was talking about how people are always coming to Washington asking for something. He then went on to evoke John F. Kennedy and say that he wants to encourage businesses to think patriotically and to also think about your country. That seems very sound to me and he never told them not to make money for their shareholders.
Lawmakers Push for "War Tax" to Pay for Afghan Surge
Charles Payne: If there were an extra line on my return and I could pay more to support the troops, I would. But Washington's newfound concern about spending is a farce. This is just an excuse to get into our pockets again. There's no way long-term that tax revenue would only go to costs related to the war in Afghanistan.
Dagen McDowell: It sounds like a war tax is a Trojan Horse for a general tax. If revenues from a new tax truly went to pay for the war, and then went away, that would be fine. But we all know that it won't go away.
Adam Lashinsky: It's a little amusing that we are knocking Democrats in Congress for wanting to pay for a particular expenditure. We should pat them on the back and say, "Better late than never." The difference here is that you know there won't be an economic return on the war tax, whereas there could be a return on these tax cuts, so it sounds like we could be making a little sense here.
Ben Stein: It's correct to say that the prodigal son has returned. I think a war tax on very wealthy people is a great idea. There is no reason why we shouldn't pay for this war with a tax on wealthy people; that's how World War II was financed. We can't just escalate the war and not expect to sacrifice more for it.
"Stocks Summit"
Charles Payne: A123 Systems (AONE)
Adam Lashinsky: DB Commodity Index (DBC)
Ben Stein: Berkshire Hathaway (BRK.B)
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Forbes on Fox
On Saturday, December 5, 2009, David Asman was joined by Steve Forbes, Neil Weinberg, Mike Ozanian, Quentin Hardy, Victoria Barret, Mike Maiello, Evelyn Rusli, Kai Falkenberg, and Elizabeth MacDonald.
In Focus: Is It Time for the White House to Stop Listening to Unions for the Sake of the Job Market?
DAVID ASMAN: Ten percent -- America's unemployment rate making an unexpected drop. Some here says the best way for unemployment to keep dropping is for the president to stop listening to unions – and they have the job-creating evidence to prove it.
Steve, Mercedes just announced it will create 1000 nonunion jobs at plant in Alabama. The workers will be building the C-Class sedan.
STEVE FORBES: And you'll see those jobs are in the private sector. Private sector workers tend to stay away from the unions. In the private sector, union membership is about 8 percent, but in the government sector, where politicians can force union membership, it's about 40 percent. Unions want to spend, they want to tax. Look what they did to General Motors. Look what they did to Chrysler; they reduced its workforce effective by about 90 percent. And on the state level, look at how many states the unions are bankrupting. What more proof do you need?
MIKE MAIELLO: We need union and nonunion shops. I just don't see why you want to cut labor out of the discussion of job-creation. I look at the 19th century. That's when labor had no voice and we worked seven days a week, children worked in factories, and there was no minimum wage. Unions gave us a lot of great things – like weekends! Keep the unions in the conversation.
ELIZABETH MACDONALD: Speaking to Steve's example of GM – the company was losing $80 billion before the US taxpayer stepped in to rescue them. In 2007, it was losing $3 billion a month. What did the UAW do but call a worker strike against 80 plants in the country. Now, we see the UAW's membership is drastically down; it's been cut in half. That's what this got them.
QUENTIN HARDY: Mercedes is in Alabama because it's been there since 1993. Mercedes still makes 80 percent of its cars in western Europe, but it's only 60 percent of its market. Of course it's going to move to other countries. Alabama gave Mercedes millions of dollars in tax credits. One-point-eight percent of the financial sector is unionized. The financial sector just took us into the biggest hole you could imagine. I'm not sure unions are really responsible for the problem.
MIKE OZANIAN: If you want job creation, you don't bring the unions in; you bring small business owners in. Small businesses are responsible for more than 80 percent of the job growth in this country over the last 25 years. The national average on a state-by-state basis for union membership is 12.4 percent. Among the 10 states that have the lowest unemployment rates, none of them are above the national average in terms of union membership.
NEIL WEINBERG: I don't know that nonunion shops draw more jobs. I think as Mike said, we need a mix. To say we aren't going to talk to unions about job creation is absurd. Would you not talk to doctors about health care? Would you not talk to generals about the war in Afghanistan? Would you not talk to Tiger Woods about driving Escalades? I mean, this is crazy!
(LAUGHTER)
Flipside: America Needs a Debt Tax!
DAVID ASMAN: Forget a "war tax." What America really needs is a "debt tax" to help dig us out of our $12 trillion hole. It's a Flipside from Quentin Hardy.
QUENTIN HARDY: It's not pretty and it's not fun, but the problem and the solution are in the mirror. Look, I had a really nice Thanksgiving and I overate like crazy. And then I looked in the mirror and saw I had to get on the treadmill a little bit longer and say no to the pie. That's the way it is. I'm sorry. Now look, if you voted for the Republicans, you increased the debt. If you voted for Obama, you increased the debt. If you voted for most Congressmen, you probably wanted more than your fair share of the trough. The fact of the matter is we got ourselves into this. We need to pay it off. We don't want to pass it on to our grandchildren. [We need] a tax at the point of production, a VAT, dedicated to paying this monster down. Get it out of the way and improve our lives and save our children a ton of pain for which they will curse us.
STEVE FORBES: This doesn't even talk about the unfunded liabilities of Social Security, Medicare, and Medicaid. Seventy trillion dollars worth. And in terms of the debt, $200 billion a year which this tax would raise wouldn't even pay the interest on the debt. And you know Congress, whatever money they get, they spend. Moreover, it hurts the economy's growth which hurts assets values, which means the assets are going to go down, liabilities are going to stay the same, and we're worse off.
NEIL WEINBERG: In a perfect world, I'd love to agree with you, Steve, but the fact of the matter is there's no small-government party in Washington. Nobody has any fiscal discipline. And I just tend to be fuddy-duddy. I'm saying we need a tax because there's no discipline otherwise. We're never going to balance the budget… We need to cause pain. We need to cause pain on both sides of the aisle.
ELIZABETH MACDONALD: I know how to cause pain…
MIKE OZANIAN: I think Neil and Quentin need to study history. The Social Security tax. That was supposed to pay for Social Security. What happened? It's going bankrupt. They're spending the money on other things and stuffing Social Security with IOUs. We didn't even have an income tax, except to fund the war originally, and what happened? That money just ran out and we raised income taxes. It never works. You have to cut spending.
ELIZABETH MACDONALD: I've got a fix. I know how to cause pain. Make Congress be paid in Treasury Bills. No more cash because they keep voting themselves raises. Also, every lawyer who is working on health reform should recuse themselves because they will not pass tort reform. Also, term limits, a line-item veto, a balanced budget amendment, and make them meet every other year just like Texas does, for 140 days.
VICTORIA BARRET: I'm for the deficit reduction tax. And you know me. I'm not for taxes. But we have to be honest here. We complain about the deficit, we complain about the shrinking value of the dollar, but every year we elect people who get elected not by saying, "You know what? I'm NOT going to represent you in Washington. I'm NOT going to fight for more dollars to come to this area." Instead, we elect the people who say they're going to fight for us. We can't complain about how much they're spending while electing them to bring more money to our part of the country. Couple the debt tax with real spending cuts.
Flipside: Good News for Tiger: Cheating Is Good for Careers!
DAVID ASMAN: Tiger's a "cheeatah"! The golf superstar admitting he's veered off-course in his marriage. You'd think that would be bad news for his $500 million fortune. But, Forbes estimates Tiger will be a billionaire in just a few years! Now, THAT'S a Flipside!
VICTORIA BARRET: Let's all admit that golf just got more interesting. It's a pretty dull sport and it needed something like this. Sponsors aren't walking away from Tiger. Look at US Weekly. Every single week, it's not about great family living. It's about cheating. It's about affairs. It's about sensationalist stuff. It helps celebrities. Politicians, dicey. But with celebrities, it definitely helps them make more money down the road. I hate to say it, but it's true.
KAI FALKENBERG: In the political context, I can think of a few governors who probably wish they never cheated. You think about NJ governor McGreevey, NY governor Spitzer, SC governor Sanford. McGreevey ended up so poor he decided to become a priest.
NEIL WEINBERG: Maybe it's a reflection of our society that we say, "You know – you can do what you want to do in that category and it's not really going to hurt you." Of course, you can go too far. For example, guys like John Edwards, who need votes to get their next job and are cheating on a sick wife. So you can go too far.
EVELYN RUSLI: Cheating is a negative here because even though it's great for reality TV show stars, I don't think Tiger wants to do that. Tiger will be a great golfer no matter what. But, I don't see sponsors running to Tiger to give him more endorsement deals.
STEVE FORBES: When you do something like what Tiger did – it's always about damage control and you always have to try to overcome it. Look at Bill Clinton in the second term. He would have reformed Social Security if he didn't get caught up in that Monica Lewinsky scandal. So yeah, he survived it, but it certainly did not help him from a historical perspective.
Informer: Job-Creating, Profit-Making Companies!
DAVID ASMAN: We're back! And our Informers say forget about the president's job summit and remember some job-creating, money-making names instead:
MIKE OZANIAN: AboveNet Inc. (ABVT)
EVELYN RUSLI: Nucor (NUE)
NEIL WEINBERG: Walmart (WMT)
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Cashin' In
Would the Job Market Be Better or Worse Now If We Had Spent the Rest of the Stimulus Money?
Tracy Byrnes, Fox Business Network: Wasn't that the reason they took the money from us, to create these 3 million jobs? Why are they sitting on 70 percent? Yeah, the market would be in a better place if they did what they said they were going to do, but this is what this administration does, it makes promises it doesn't keep.
Julia Piscitelli, PiscitelliStrategies.com: If this was spent too fast we could have been in a worse number. The number has stayed at 11,000 this month where people thought it would be 100,000. Some of these jobs were not ready. They made the available states needed to step up and get the construction jobs ready and available states needed to step up and get this money.
Wayne Rogers, Wayne Rogers & Co: I don't care what most economists say. If I listened to most economists, I would be bankrupt! Let me explain something. If it's not necessary to spend it, why spend it? Private industry are the people creating jobs. Most of states come from small business. 90 percent Come from small business. You don't necessarily need all this stimulus money up to a point. If you are at 10 percent and it is beginning to drop, let's see what happens.
Jonathan Hoenig, CapitalistPig Asset Management: Look at the money we have spent. We have paved a lot of roads and put solar panels on the top of community centers and put out social welfare benefits. Have we created wealth? No. The money that went to GM And AIG, after the stimulus, the jobs end, we saw this in cash for clunkers and everything else. Stop stimulating government and let the for-profit private sector operate. The government's efforts don't do that at all.
Jonas Max Ferris, MaxFunds.com: They're acting like this was an accident. They intentionally are delaying the way it is spent to lead to a long-term benefit. Everyone is saying they should have spent it. The tax breaks are a huge component. It is a quarter trillion in tax breaks. They could have given you a one-time check for $1,000, but that would have been used to pay off credit card debt. When you give them a $20 tax break per week for two years they are more likely to finance a new purchase. That's how people live with that finance mentality. The intention was to drag these tax breaks out for a long period of time. That's probably the best way to do it.
John Layfield, www.CustomMuscle.com: Look at this job number. 70,000 Jobs reported this past Friday still lost in construction and manufacturing. That was supposed to be used for 52,400 Jobs that increased were temporary, seasonal. People are misquoting John Maynard Keanes saying if we put government debt on it translates to jobs. It does only if you put it as stimulus. This has not been used as stimulus. We have lost almost 3.5 million jobs. We were promised 3 and a half million jobs, a 7 million job loss swing and it has gone to states as entitlements. This country can take 10 percent unemployment but not for long because the entitlements are too big and too much.
Government Run Health Care: Did We Just Get Proof It Does Not Lower Costs?
Jonathan Hoenig: Not true. What lowers cost care? What lowers cost for Amazon or Walmart? A competitive free market. Free means free from government. The estimates are spot on target. By expanding their involvement in health care, government is going to raise costs on those simply trying to buy it for themselves. That destroys the free market and that drives up health care costs for everybody just as it has for Medicare and Medicaid.
Julia Piscitelli: You will also have tens of millions of Americans who have never been covered who will be covered. Those people won't be showing up in emergency rooms with sniffles if he had have actual coverage and actual care. Some people may have a rise of a small percentage on their premiums but this is not everybody and this is not how it's going to be in the long run.
Jonas Max Ferris: I was in an emergency room in Danbury, CT and there were people just getting regular care on a Monday at 7 PM. It is ridiculous. Doctors will tell you. It does go on. I don't know about the sniffles but these people were there and they weren't insured. Someone is picking up that bill. The CBO Notes that if you have a job and insurance your premiums could go down. I will say the reason the premiums are going up is government-mandated health insurance is good benefits that deople don't normally get. I don't want to call it a Cadillac plan but it has more benefits than people already get which is what I don't like about it.
Wayne Rogers: Who are you going to trust? You have to trust the office of congressional budget management – they say it is going up, then it is going up. It will cost more. We talked about small business. The heavyweight of this is going to fall on small businesses to pay this and they're the people who create jobs in the long run. I don't think this is going to work. You can never have -- and I have said this in any economic system, a provider on one hand, somebody who is accepting that service on the other hand and have a third party paying it in which the two people involved in the transaction don't know what the other one is doing. They don't know the cost. You get your bills paid by somebody, the government or an insurance company, it doesn't work.
John Layfield: They're raising costs on more people than they are insuring. Like Warren Buffett said last week, we're arguing over who will pay for it and we need to argue over cost. Tens of millions of people are dying everywhere. We are talking 5 to 10 percent of people. I want them covered but deal with fraud and tort reform and then health care.
Liberals Bashing President Obama: Is This Bad for Taxpayers?
Tracy Byrnes: Heck yeah. He has to get his Mo Joe back somehow. He will pad pockets and people will get money for pet projects so that everybody is back in their good graces and that indirectly costs us the taxpayer money.
Jonas Max Ferris: Come on, in Afghanistan, I'm sure that Michael Moore's opinion is we shouldn't be there, so that liberal agenda would save taxpayers' money. The public single payer plan could cost taxpayers more. The green agenda could cost taxpayers more but some could save money.
Jonathan Hoenig: We will see a great society's worth of experimental pet projects, like the environment, multiculturalism, mysticism funded with the idea of funding growth. That's where the President doesn't trust the private market to create wealth. So from his perspective, that's government's job.
Julia Piscitelli: They will be with moderates not liberals. John Kerry is not going anywhere. He is a liberal vote. Watch those moderates. That's who you need to look out for.
John Layfield: Senator Landrieu was just paid $300 million to vote for the health care bill! You got to be kidding me! This administration has imposed more debt than the 200 years that preceded them combined. None have ever run a small business and now they're in charge of the country.
What Do I Need To Know
Jonas Max Ferris: I'm recommending Electronic Arts (ERTS) that makes the Tiger Woods golf game. The video game business is the one endorsement company that will possibly benefit from this scandal. I cannot speak for Nike and everybody else.
John Layfield: According to a web poll bankers are having more affairs now so buy into something with unlimited data plans like Verizon (VZ) because apparently people are sending dirty messages everywhere.
Tracy Byrnes: Goldman Sachs employees are buying applying for gun permits because they are getting bonuses and are afraid of what the public reaction will be. This company is capitalistic. Leave them alone. Good for gun sales if you want to invest.
Wayne Rogers: I think that General Motors, if they had a choice, they should get Roger Penske to run that corporation. He is the best guy and smartest guy that has ever been in the automobile business. Meantime, my pick is Ford (F) in the meantime because I think Ford has done it, turned it around without all this stuff. The government can't pick executives anymore.
Jonathan Hoenig: I wouldn't buy Ford but I would buy Honda and Toyota. In the fund I like this week, (ITF), large cap Japanese stocks. The yen is dropping, Japanese stocks are busting out to new multi-month highs. It is off the radar screen that most people aren't aware that is doing well right now.
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