Will Iran slam brakes on shaky US recovery?


Gas Prices Spike as Iran Makes New Threats on Key Oil Route

John Layfield: There's no doubt about it. I don't know why this is not getting bigger play. The Middle East has had some problems for so long that saber rattling is not a big deal; but this is the biggest dark cloud for this economy. No matter what happens in Europe it's going to take months for that to develop. Iran is now producing one million barrels of oil a day that it cannot sell on the market. They are going to run out of storage within the next few weeks. Something has to happen. They either need to shut these wells down, which they don't want to do, or give in to the sanctions, which they don't want to do, or do something stupid. If they do something stupid, or Israel decides to preempt them from doing something stupid, that could really take this economy right off the rails of the United States.

Wayne Rogers: Well, first of all, I don't think it's going to get more dangerous. I disagree with John a little bit. John, I think you've been up on that mountain too long up there. Welcome back. No, I don't think so. Iran pumps a little more than two million barrels a day, down from 3.8 million barrels a day. Most of that oil is going into tankers that they're anchoring offshore. That's what they use for storage over there. It's the threat of them doing something. It's not going to happen. It's just the threat of them doing this. It's not going to hurt the economy all of that time. Unless the guys who are dealing the oil, they can mess it up, but I'm not talking about them doing that.

Christian Dorsey: Well, you know John identified correctly all of the dangerous "what-if" scenarios here and that's speculative insight which is driving the price of rent crude which affects U.S. gas prices. There are so many "what-ifs" involved that this has become divorce from real market economics of supply and demand. If the worst comes to pass, then this has become a really big bad deal, but we are so far from that at this point. I wish the speculators would dial it down some at this point a little bit because we're used to Iran doing this. They did this six months ago, they did this four years ago.

Tracy Byrnes: Look at where gas prices are right now. They are so low! And, still we don't see consumers spending that extra money anywhere. We saw retail numbers of same store sales that were in the toilet. Consumer spending is down. We've seen this. You've got gas prices that are ratcheted up a little bit, that is not going to help this economy at all. It is the last thing that we need right now.

Jonathan Hoeing: I agree with that, but let's say Iran shut-off the streets completely, Cheryl. I mean, what hurt us in World War II wasn't a ban on imports of German sausage, it was German saber rattling. It was German military. I see Iran very much as a military threat, not so much an economic threat. I mean, if you want to lower the cost of crude here at home, God knows we're fighting the environmentalists who do their best to keep it higher. Taxes we've talked about are a big part of gas. So yes, Iran is part of it, but I'm more worried about their spiritual and financial assistance to militant Islam, which forget 9/11 or even USS Coal, there have been 51 attacks or attempted attacks on the U.S. from militant Islam in the last decade. I'm more worried about that than the 10 cents extra on the price of gas.

Unions Upset as Airbus brings Jobs to "Right-to-Work" State of Alabama

Jonathan Hoeing: Well, you know, rational people get it. In this case it is the Europeans. But, you know, rational people understand. There are no conflicts among them. Employers want to hire, employees want to work. Everyone wants to work together to create wealth. But, it's union, and specifically union force vis-à-vis the government gets in the way; most recently with the NLRB-arm of government and Boeing. So in right-to-work states, the right to work is really implicit and freedom, the right to life, but union force, again enacted by government, has no place. That's what needs to go.

Tracy Byrnes: The numbers show it, Cheryl. Companies don't want to have to come in and deal with all this. Unfortunately unions are getting really bad press recently, and that is the last thing you want when your company is starting off the ground and look, people are sick of being told what to do. More and more we're hearing about union dues being spent erroneously. Elizabeth MacDonald has been doing great work on that on the Fox Business Channel. We are hearing that they are not there for the people like they're supposed to be anymore. So, it makes perfect sense that Airbus would come in and say, "You know what, we don't want to deal with this."

Christian Dorsey: Well, the governor also should have mentioned that in Airbus' case, they gave away almost $200 million in incentives and that follows up South Carolina giving Boeing almost $1 billion in incentives to come there. So, it's not just about these states being unfriendly towards unions, it's the amount of public dollars they're willing to give away to lure them there. Let's keep in mind that Airbus is a French company. It is fully unionized abroad. The reason they chose a so-called "right-to-work state" in the United States is because they're competing with Boeing, which chose South Carolina. So we have these companies competing on the low road, and certainly that's not a matter of good economic policy for the country. This is just what companies are doing to pad the bottom line.

Wayne Rogers: What Christian mentioned was the word "competition." As if competition is the key to this. There is competition for venues, where people want to work, where companies want to go and work, and where the environment is good for that. So, there's competition for those venues and states bid for that. Yes, they use public funds to get there, but if they get one thousand workers down there who are paying taxes that is a terrific thing. That is a big boost to that economy. So, not only is there competition for that, but there is competition for labor. We know that capitalism and we have competition for capital, there's competition for labor, it's going to go to the place where it produces the most for the least cost and that's a good thing! Jobs go overseas if it's cheaper to produce overseas; they're going to go overseas. If the overseas are coming here because it's cheaper to do here, it's going to happen here. And, that's good for the world economy.

John Layfield: There's a reason that they're offering, and they get something in return. Now, whether it is worth what they get in return is up to the individual state. You get one thousand jobs in return. I'm a total free-market guy. I believe that workers have the right to unionize, but I also believe on the other side that employers have the right to not hire union employees if they don't want to. I think it works both ways. We have a government that steps in that mandates how low you can pay people in workforce regulations. Unions are now becoming outdated and that's where you're seeing more money going where it is rewarded.

Cost of Mid-Atlantic Storms and Colorado Wildfires Soaring

John Layfield: Look at Florida right now. They're rainy day fund is pretty much depleted. They get hit by a hurricane and they are in a lot of trouble, but these people have chosen to live in a hurricane zone. Not to diminish any loss of life or property, it is a terrible and a tragic thing, but when you talk about using federal dollars to do this, this is something that under private insurance should be mandated for people who are going to be there. When you have an act of God or a rogue storm, that is something completely different than what happens year after year after year. These people have to take responsibility for what happens to their property as bad as that is.

Tracy Byrnes: This is a really tough call Cheryl, because Mother Nature strikes where ever the heck she wants. We had floods in New Jersey and people lost homes in places that you would have never have imagined. Unfortunately, I think that one of the things that we need to do as a nation is help people in these times of emergency. You live on the coast like John said, okay, you're choosing that. You're putting yourself in the line of fire, but there has got to be something for those people who are in the middle of nowhere, like Nashville, who happen to be underwater one day in the blink of an eye. We need to be able to help them somehow.

Wayne Rogers: You all make it sound like a black and white thing that the federal government is going to bail out everyone who's in a storm zone and they're not going to help the other people. That's crazy. You have private insurance to affect private people. You can buy an insurance policy from an insurance company, even if you're on the coast there are insurance pools that help to do this. There are states that help to do this and the federal government helps to do this. It is a fine system. It works very well. You don't need to go fixing something that doesn't need fixing. It works okay. Let the private people insure their private homes. Let the federal government insure the public property that gets destroyed. So leave it like it is.

Jonathan Hoeing: My heart goes out to all those affected by these terrible natural disasters. Unfortunately, I think in many cases, the government actually exacerbates them and makes them worse. Especially when it comes to the wildfires, for example, all that government-owned land if it was privatized, the private owner would have a much more vested interest to use slurry, which the environmentalists oppose, or actually cull the trees; essentially make it more safe. So, let the private market handle it and of course, people should voluntarily donate to people in need.

Christian Dorsey: So many of these natural disasters are so unexpected and come from no where and the fact that we have a civilized society where we're willing to pick up our neighbors and other communities when disaster strikes, to me, is a good thing. That doesn't absolve people of carrying private insurance to protect their livelihoods, but we must step in when disaster strikes.

What Do I Need To Know For Next Week?

Tracy Byrnes: TSA Wants to Check your Beverage

Wayne Rogers: The Price is Right for Cash America (CSH)

Jonathan Hoeing: Discount Shoppers will Boost Kohl's (KSS)

John Layfield: Invest in Our Kids at www.sevensummitsforkids.com