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 CALLS TO EXTEND TAX CUTS AS PRESIDENT PUSHES "TO DO" LIST
Gary B. Smith: I think we need to extend the tax cuts. We do need tax reform, but we're not going to immediately have tax reform. What is right in front of us are the tax cuts. That's going to cost us money and that's why the other part of the equation is government needs to cut spending. It needs to massively cut spending. I think government can provide great services. But, it really comes down to a philosophical issue. Who is the best manager of the money? Do we want the government spending money or do we want the private sector spending money? I think it's been proven that the private sector, given tax cuts people can count on, are great managers of money. They spend it more efficiently, more effectively and more targeted. That's what needs to be done. Just keep the money in the private sector.
Tobin Smith: You have to extend the Bush tax cuts right now for one simple reason. If you look at the flexibility in employment-we have not had it. People not feeling confident is part of it. The other part is if you pull the revenue out of the hands of these spending people and put it into the government, you would literally be at that tipping point and if you had higher gas prices and other things you could essentially be back in a recession with zero growth. That kills confidence more.
Jonas Max Ferris: If they don't do anything in government for several years we're going to get back on track of a balanced budget because taxes are going to go back up as they keep trying to do. There will also be spending cuts that will kick in if they don't do anything to defense, to Medicare, etc. That's all that we need now that we're not in a recession to start getting out of the hole we dug in the recession. It will happen by doing nothing. Not with a new ambitious list of spending and not by extending tax cuts another year while we're not in a recession.
John Tabacco: There's only one thing to do-extend those tax cuts. We've had presidents for decades-from Kennedy to Bush to Clinton-extending tax cuts, lowering tax rates and finding great economic prosperity for Americans. What we have now is a president who has done nothing more than deliver uncertainty to the American populous. When you deliver uncertainty, you deliver to the small businessmen the fear of the unknown. When you fear the unknown, when you don't know if your health care costs are going up, you don't know if your taxes are going up then there's no way in hell you're going to go out there and start hiring people. We have an employment problem right now and no one is going to start hiring. If President Obama doesn't want to go out there right now and say he's going to extend these tax cuts we need Congress to come and say they're going to do it and that will give some people a reason to at least think about hiring.
Chris Kofinis: The cost of extending the Bush cuts for another ten years would be about $2.5 trillion. We already extended it for two years and didn't have the economic boost that everyone expected or wanted. The reality is you don't want short-term tax cuts or long term tax cuts. What I think you want is tax reform. Just extending the Bush tax cuts would be reinforcing a bad and flogged policy. If you want to fix the economy and help create stability and certainty do real tax reform.
NEW REGULATION PUSH TAKING OFF AFTER JPMORGAN'S BAD BET
Gary B. Smith: I asked my wife if she heard that JP Morgan lost $2 billion and she said ‘yeah...so?' That's right. How is it going to affect her? How is it going to affect us? It's not. They run a business. They made a mistake. So what? Maybe it will cost the company and they go out of business. Fine. Can we live without JP Morgan? Yes. We're living without Lehman Brothers. AIG was on its last legs. It's not going to pull down the economy. They lost money. So what?
Tobin Smith: They have $380 billion of equity capital and they had a $2 billion risk. Last time I went to math school that was basically pennies on a whole bunch of dollars. They are in the risking business. They weren't risking any of the cds or borrowed money. This was their own equity capital. Stay the hell out of this. That's just insane. If it really boiled up because we overregulated then the prices go up for checking accounts, credit cards, everything else that we've been really careful about regulating. How has that worked out for the consumer?
Jonas Max Ferris: AIG had a lot of equity at one point and they gambled it all away. IndyMac bank had a lot of capital and their banker consumers didn't have to worry about that either. What happens is the government has to step in because, at the end of the day, retail banks that you walk into in Mom and Pop locations - when they gamble it away in some investment banking scheme then all of a sudden the government has to step in with taxpayer money, shore up everybody's account so they can relax and not worry about where their money is. You already have that there and that's the core problem. These regulations aren't going to work because these monsters of investment bank hedge funds, all wrapped up in one company, have this FDIC guarantee of the checking account and yet are allowed to gamble on the side. There's nothing wrong with gambling in the securities market. That's a free market, but don't combine it with a commercial bank where people have checking accounts.
John Tabacco: Any cure being prescribed by Washington is probably a bad thing. The way I look at it, the consumer is the one who is probably going to be the most hurt. This rule has been in effect already and we see already there has been a $2 billion loss. So, it hasn't helped. Adding on top of it won't help it any more. We don't need the legislators in Washington playing doctor. What we need them to do is stick to what the people want them to do. That's not adding regulations and costs to the consumer.
Chris Kofinis: It clearly raises a lot of anxiety when you see this loss. When it comes to Wall Street regulations is a lot of these rules haven't even been written yet. They are still going through the regulatory process, which I think adds to frustration both on the consumer protection side, as well as corporate America. They don't know what the rules are. So, I think you need to finish that process first and then access what kind of impact it's having or not having before we make sweeping judgments.
CONGRSSIONAL REPORT: TSA WASTING HUNDREDS OF MILLIONS OF DOLLARS
Gary B. Smith: Privatize the TSA. You would think the author of the bill that created the TSA would be a firm supporter. But, he says ‘the program has been hijacked by bureaucrats. It's become an army. They have spent $1 billion training workers. They have actually trained more workers than they have on the job. The saddest thing is they failed to detect a threat in the last ten years. Everything they do is reactive. Privatize it so someone's rear end is on the line.
Tobin Smith: It took the TSA ten years to get the pre-check. Private sector would have come a lot quicker. There would be incentives to have less people working, making better decisions about the insane things they do and they would have gotten the job done a lot faster.
Jonas Max Ferris: It was private. They nationalized it after September 11th. They took away the liability from the airlines and everyone else who screwed up on September 11th. Private industry works when they are liable for mistakes. You can't take that away. All these airlines would have been sued out of business if it were for the free market. A few years ago, this government decided to essentially go communist and take over a private industry and take away liability from private industries. It has to go back in that direction.
John Tabacco: I'm a free market capitalist and usually I'm all for the private sector over the public sector. Here, my only problem is the private sector looks at one thing - the bottom line. We're dealing with homeland security here. You don't want to be worried about the bottom line. What I think we need is better management. We need people who can look from the top down and ask what they're doing wrong. Maybe some returning war veterans should be getting hired by the TSA because they've already looked the enemy in the eye.
Chris Kofinis: Government needs to have a hand. I think there needs to be some sort of oversight role, but my preference would probably be to privatize it or at least have some sort of private/public partnership. There are too many examples of this agency not functioning. I don't think you can take government completely out of this. I think there has to be some sort of oversight rules to make sure that they're meeting certain standards.
Gary B. Smith: JP Morgan (JPM) gains 50 percent in one year
Tobin Smith: Capital One Financial Group (COF) up 25 percent in one year
Jonas Max Ferris: Zumiez Inc (ZUMZ) up 78 percent in five years
John Tabacco: General Mills (GIS) up 30 percent by September