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.
GREEN CAR COMPANY FISKER GETS LOANS AND BUILDS OVERSEAS
TRACY BYRNES: I think the investment in private companies is a fiasco, Cheryl. The whole thing is encouraging enterprise that never happens in the end. Look what happened here; we sent jobs overseas. Now look, the president of Fisker has come out and said I'm in the business of making money. I'm going to go where the money is. So he's doing the right thing for his company. He's not doing the right thing with our tax dollars, unfortunately; which is why he shouldn't have them in the first place.
WAYNE ROGERS: It's not just the fact that this is happening, it's the process itself. The process allows the congress to be bribed if you will. All the lobbyists get in on this because all of these people are bringing money in. For example, with the Solyndra situation you had George Kaiser who had made something like 16 trips to the White House, or a range of those things in the weeks before that guarantee went through. The congress is being bribed in all of these cases by somebody else in order to do this and they are producing jobs not in the United States, but overseas. Who decides who gets the money? That's the key. That's where the secret is.
REGINA CALCATERRA: Well it partially happened. One of the reasons why the Fisker CEO said he actually had to go overseas is that we just don't have a plant built here to address the issues of technology related to this 90 thousand dollar car that, clearly I don't know who is going to buy, but what they did do is take 20 million dollars to buy an old GM plant in Wilmington, Delaware, and set aside one hundred and seventy five million for renovation which is now going to occur, and that plant is going to open up in late 2012. So hopefully some of those cars can come back here, but again what is being repeated is that you don't have clear controls over where is the money going and how much is being invested overseas and how much is being invested here, and that happens on every level of government. I mean, you had it in prior administrations when we had no big contracts to the pentagon and Time just came out with a report saying that a billion dollars was wasted. So we need to have more quality controls in place if we're going to invest in businesses.
JONATHAN HOENIG: Exactly, Cheryl I have very clear controls over my own money, but then again I didn't give half a billion to Solyndra; I didn't give half a billion to Fisker, to your point Regina, to buy a 90 thousand dollar car that will probably have a very limited market. I think that's what's so insidious, so abhorrent about the administration's whole green energy fallacy is that these products, these companies wouldn't exist if not for the subsidies. So, they're evading reality, they're throwing money down the drain, and it's another half a billion dollars gone seemingly, almost every week these days.
JOHN LAYFIELD: Yeah or perhaps Wayne. I think Wayne could probably buy the company right now he's been so successful lately in his life. You do have a very small market here. Larry Summers, who's never met a person who didn't hate him, while he was part of the administration, was very famous for walking out of meetings saying there are no grownups here, nobody's in charge, and Bill Clinton would never allow this. That is at the root of this problem. Wayne is right about lobbyists. They're simply buying the grants and loans from this government. There is not a business person in this entire administration and when you go to them and say hey we can make energy from the sun, they go oh hey the sun's free. That's the problem we have now; no grownups in charge.
RON PAUL'S PLAN TO CUT $1 TRILLION: CUT GOVERNMENT AGENCIES
JONATHAN HOENIG: Government spent $3.8 trillion last year. We don't need a little tweak, we need to slash and burn and what Representative Paul's program does is just that. We've come to think of this bloated government as something normal, but it's really not. Housing and Urban Development was a product of the 1960s; the Energy Department, which he wants to get rid of, was a product of the 1970s. We should slash and burn, return to the constitution and put this country back on the course for economic prosperity.
WAYNE ROGERS: Well I am amused by Jonathan's ideological approach, but the practical side of that is that those five agencies employ 235 thousand people. They have a budget of one hundred and seventy five billion dollars among them all. It's unrealistic they think the congress is not going to take away its own access to the lobby money by destroying these agencies. They're just not going to do it. Can you cut them down? Yes, that would be a much more logical and realistic plan if you could do that.
REGINA CALCATERRA: Actually he wants to do a lot more because this is an 11 page document that he has here, so it's not just eliminating those five agencies. It also substantially reduces funding for free school programs for impoverished kids. It substantially reduces for food stamps and it wholeheartedly eliminates the community policing program, which was put in place in the 1990s, which led to a substantial decrease in crime nationwide. So you look at what programs he's looking to cut here, and they're going to be cut in low to middle income, and while he's doing this he also says he wants to extend the Bush tax cuts, he wants to repeal all taxes on investment income on estates, and like you said, he wants to repeal wholeheartedly without even looking at the merits related to some of the issues, Dodd Frank and Sarbanes Oxley, and those two laws were put into place because of bad actors on Wall Street.
TRACY BYRNES: There really are no merits to Sarbanes Oxley or Dodd Frank at this point we can't find any. Look, the bottom line is you can cut as much as you want, but you question where the money goes when you cut it. When they have that money back in their hands again, what the heck are they going to do with it? It's certainly not coming back to you or me. So the problem is that they don't know how to spend our money properly. Look, no one even knows what the Department of Interior does; for all we know they decorate, but at the end of the day, these agencies are out there and Wayne is right, they are not going to cut their own, and if they do, they're going to keep the money for themselves and do something stupid with it.
JOHN LAYFIELD: I would not get rid of the energy department, but look, when you have the average federal employee making one hundred and twenty six thousand dollars in Washington, D.C. those guys are not putting out fires and teaching kids. Those are bloated desk jobs that are overpaid right now and redundant in Washington, D.C., but when you take a trillion dollars out of this economy, look what happened to the UK when David Cameron did that with his new government. That will probably push us into some type of recession; however, our choices are not good. We can either take the short term pain or we can be Greece in 10 years. We've got to do this. As far as stimulating growth, you take a trillion dollars out it's going to hurt.
TAX BREAKS FOR HIRING CONVICTED FELONS?
JOHN LAYFIELD: I hate this. Look, if a guy has served time and served his sentence, he deserves the right to gainful employment, but he does not deserve the right to be put at the front of the list. You have a million soldiers who have come back from Iraq and Afghanistan who are unemployed right now, and to give a guy who's been a felon ahead of these guys with tax breaks, to me is an absolute travesty. Put these soldiers first if you're going to put somebody first.
WAYNE ROGERS: Absolutely not. Look, there's a fundamental thing here that the penal system has to do with resuscitating somebody's life, of bringing somebody back, of making good on them. They get a certain amount of time and then they're going to turn into a good citizen, no, the purpose of the penal system separate that person out from the peace loving members of the society so he doesn't destroy them again or get in the way. That is the purpose. Giving them jobs and all of that has no place at all in the penal system.
REGINA CALCATERRA: It is actually this program has been in place since 1996 and Newt Gingrich passed this law in the Republican Congress, and in 1996 when the law passed, it included six groups: ex-cons, veterans who are on food stamps, and now it did expand actually to 11 groups which includes veterans who are coming back who are unemployed and the priorities are broken down so that employers get a higher tax rate for hiring veterans than they do for ex-cons and the studies that were done by Wharton Business School, by the Pataki administration, the former governor here in New York state showed that most of the people that were hired were actually welfare recipients and veterans, not ex-cons.
TRACY BYRNES: Here's the problem because I hate this more than John Layfield hates this and the reason I do is because we are again using the tax code as a book of favors to try to come up with ways to get the economy going. That is not what you do with the tax code, and companies should hire people because they want to, because they need them to be productive, not because they get a big, fat tax credit, which by the way could eventually go away, and then what happens? Does the guy get fired again and we're back to unemployment? It is wrong to do it this way. Stay out; this is the overall theme here. The government needs to stay the heck out of the private sector.
JONATHAN HOENIG: No one has a right to a job; not a felon, or a Vet. Tracy's point I think is quite astute; the business person has to make their own informed judgment about who best improves their bottom line. The government's role, to Wayne's point, is to punish criminals not to act as a human resources department.
WHAT DO I NEED TO KNOW?
TRACY BYRNES: Santa isn't happy already, Cheryl. The holiday sales are expected to be down, we have less disposable income, the misery index is as high as it's been since Jimmy Carter, and the uncertainty in the air is palpable.
JOHN LAYFIELD: I'm down here in the great state right now where Nolan Ryan could run for king and get it. You've got the Texas Rangers against a great team from St. Louis. I say the Rangers win the World Series for the first time in their history. Buy Texas companies like Dell and elect Nolan Ryan king.
WAYNE ROGERS: I don't have a sports analogy to make like that. I like the broad market though and the small caps, so buy the ETF -- IWO.
JONATHAN HOENIG: I've been having some success in shipping Cheryl, despite all the unrest in Europe. TGH is Textainer container holdings. They own shipping containers worldwide. The stock pays a five percent dividend and trades below the market in terms of earnings expectations and I think it could continue to rise if shipping rates continue to rise as well. We own it in my fund.