Recap of Saturday, May 5
{{#rendered}} {{/rendered}}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.
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
{{#rendered}} {{/rendered}}This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; John "Bradshaw" Layfield, Northeast Securities senior vice president; Adam Lashinsky, Fortune Magazine senior writer; Kevin Kerr, Resource Trader Alert editor and author of "A Maniac Commodity Trader's Guide to Making a Fortune", and Chris Kofinis, WakeUpWalMart.com communications director.
Trading Pit: Which Party Does Wall Street Want in the White House?
Thursday's GOP debate means now we've heard from all the current presidential candidates on both sides of the aisle. So which party would be better for Wall Street and the economy?
{{#rendered}} {{/rendered}}John "Bradshaw" Layfield: Wall Street wants the GOP because it wants more of the same. This economy is doing fantastic! There are three things that can hurt this economy: healthcare, taxes, and energy. The Democrats so far have shown that they want more government healthcare, want to repeal the tax cuts, and still aren't going to help the energy policy. There's no doubt about it, Wall Street wants the GOP!
Adam Lashinsky: Wall Street smashed through records when Bill Clinton, the last Democratic President, was in office. Let's get real here, the market is interested capital gains tax cut. I predict that a Democratic Congress and a Democratic President will extend the capital gains tax cuts. Wall Street also cares about Sarbanes-Oxley, which was passed by a Republican Congress and a Republican President.
Gary B. Smith: I think the one candidate everyone should vote for is the libertarian, Congressman Ron Paul, R-Texas. But let's face it, that's not going to happen, so the lesser of two evils are going to be the Republicans. If you want a Mommy and Daddy state—where you give the government all your money and they spend it to take care of you—vote for the Democrats. If you want to be self-sufficient, have lower taxes, more money to spend as you choose, then vote for the Republicans. Consumer spending makes up two-thirds of our economy. If consumers have a higher tax burden, the economy is going to slow done.
{{#rendered}} {{/rendered}}Pat Dorsey: Campaign rhetoric and political reality are very different things. Candidates can make all the promises they want on the campaign trail. But once in Washington, DC, if there's a hostel Congress, things can turn out very differently. Over the past sixty-seventy years there isn't a single thread of evidence that the market performs better or worse under either party. It's completely inconclusive.
Kevin Kerr: I agree with Gary B. The bottom line is that the market is going to like it better if a Republican President is elected. We've seen in the past what happens when things change.
Scott Bleier: Forget about ancient history; forget about the Clinton regime, let's talk about the here and the now. Which party wants capital formation and investment? The Democrats want to raise taxes, want to appeal lies, and want to penalize business. Democrats penalize investments and investors. The GOP doesn't want to do that. They want to stimulate investment, which may be helping the rich, but the rich are the ones that create jobs in this country.
{{#rendered}} {{/rendered}}Wal-Mart Critics Finally Going Too Far?
Human Rights Watch, a group fighting the tragedy in Darfur, is now going after Wal-Mart.
A recent report from Human Rights Watch slams Wal-Mart, attacking the retail giant for what it calls worker abuse. Has the movement against Wal-Mart gone too far?
John "Bradshaw" Layfield: This is ridiculous and almost laughable! There is killing and destruction in Rwanda and Darfur! This is why these lunatic groups don't have any creditability whatsoever. They are attacking a company that has created more jobs than any company in the history of this country. They have lowered food inflation by one percent and have done more for the poor in this country than the government could ever do. These groups are targeting Wal-Mart because over unionization. Just because this retailer makes a lot of money and is a good company, groups want to attack them. It is completely contrary to what America stands for.
{{#rendered}} {{/rendered}}Chris Kofinis: Human Rights Watch is an incredibly prestigious organization. This is not just a business or political issue. This group sees this as a human rights issue and did in depth analysis. Human Rights Watch found that Wal-Mart does not pay its workers a decent wage, does not provide corporate health care, and does not allow collective rights. These are American values!?!? Wal-Mart pays its workers less than the poverty level. Over fifty percent of its workers don't have health care, and that's why this is a human rights issue.
Gary B. Smith: I don't think Human Rights Watch clearly analyzed Wal-Mart. It took a couple isolated incidents from 2000 and 2003, all of which Wal-Mart disputes. This is a company that gives three hundred million dollars a year in charity! At a store opening about a year ago about twenty-five thousand people applied for six hundred jobs! Wal-Mart has a lower acceptance rate than Harvard! And that's the company you want to harm? It doesn't make any sense!
Stock X-Change
{{#rendered}} {{/rendered}}Welcome to the "Bulls & Bears" Cinco de Mayo Stock Fiesta!
If you want to watch what each had to say about his stock, click here.
Adam Lashinsky: Fomento Econmico Mexicano, S.A.B de C.V (FMX )
{{#rendered}} {{/rendered}}Gary B. Smith: Anheuser-Busch Companies (BUD )
John "Bradshaw" Layfield: Molson Coors (TAP )
Pat Dorsey: Constellation Brands (STZ )
{{#rendered}} {{/rendered}}Scott Bleier: Central European Distribution (CEDC )
Kevin Kerr: Corn Products International (CPO )
Predictions
{{#rendered}} {{/rendered}}Kevin's prediction: Bad hurricane season coming! Valero (VLO) up 25 percent by fall
Scott's prediction: The Dow has topped out! Falls 10 percent by September
Bradshaw's prediction: "Gold" on Wall Street: Goldman Sachs (GS ) up 40 percent
{{#rendered}} {{/rendered}}Pat's prediction: Crosstex (XTXI) is in my crosshairs! Up 30 percent in 1 year
Gary B's prediction: Print boosted by Dow Jones offer; NY Times (NYT ) Up 20 percent
Adam's prediction: Forget Microsoft/Yahoo! deal! Google (GOOG ) gains 25 percent
{{#rendered}} {{/rendered}}Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
On Saturday, May 5, Neil Cavuto was joined by Ben Stein, "Yes, You Can Get a Financial Life" author; Charles Payne, wstreet.com CEO; Laura Schwartz, Democratic Strategist; Tracy Byrnes, NY Post Business Writer; and Ann Coulter, "Godless" author.
{{#rendered}} {{/rendered}}Bottom Line: Sex and the CEO
Neil Cavuto: The so-called "DC Madam." If CEO's make the list, should shareholders care?
Ann Coulter: Well, I don't remember corporate law, since I slept through Corporations class at law school. But, it seems to me it ought to make some difference. I mean, what if the CEO were stealing from the cable company or cheating on his taxes. If the CEO is married, doesn't the marital contract count as an important contract that he's violating? I mean, it certainly says something about character and integrity. I would think it would bother some shareholders.
{{#rendered}} {{/rendered}}Ben Stein: Well, I've thought for a long time that prostitution should be legal among consenting adults. It doesn't bother me in the slightest. If they're using stockholder money to pay for the prostitutes, then it's a problem. But, if they're not looting the stockholders; if they're just going there for a sexual liaison, I don't see how it's a matter that affects the stockholders one bit. I think the laws against prostitution are so outdated and so unneeded at this point that it's a joke.
Neil Cavuto: And you had that same view of Bill Clinton when he was in office?
Ben Stein: If he had been having an affair with a prostitute, it wouldn't have bothered me in the slightest. My problem with Bill Clinton was that he was having sex while talking on the phone to a Congressional committee chairman and then he lied about it under oath. That was the problem.
{{#rendered}} {{/rendered}}Laura Schwartz: Sex and politics? Who's surprised by this any more? I really think the first wave of names will have little to no effect, but I as long as there's no real moral hypocrisy or policy influence or anything with minors, there will be no effect. The second wave will be more interesting. Let's say the lobbyists are on the list. Did they contract the services for someone else — a member of Congress, a member of a committee? If they find that it had an influence on policy, then that could make a difference. And also, did it happen on government or company time?
Neil Cavuto: A lot of this deals with imaginary sex. I don't know why you'd pay for that, but apparently people do. If you're a shareholder, and you find out that the guy who runs your favorite company is conducting these kinds of affairs, should he go?
Tracy Byrnes: No. You know, Susan B. Anthony said if you do what you're supposed to do in your public life, I don't care what you do in your private life. I think there's something to be said about that.
{{#rendered}} {{/rendered}}Neil Cavuto: She had an affair?
(LAUGHTER)
Tracy Byrnes: Maybe! But she kept 'em private. What happened to being innocent until proven guilty? These guys, for all we know, just made a phone call. Or they called to have someone come, but never went through with it. You're calling me naïve, I know. But nevertheless, you don't know what happened. If the board members, CEOs, and politicians are doing what they're supposed to be doing, it's none of our business what they do on their off time.
{{#rendered}} {{/rendered}}Charles Payne: I agree. If someone's at the office fondling an intern, obviously, we care about that. But where does this go? If we say we have to evaluate someone's bedroom behavior as part of the requirements to being a CEO, what else will we do? I mean, do we check to make sure they're using condoms? Is that important? What did they do on the weekend? Did they go hang-gliding? Listen, at some point, we have to draw the line. I think that's one of reasons why some of our smarter people are afraid of politics right now. We're digging too deep and that's why some of the brightest and best won't even mess with politics right now.
Neil Cavuto: You know, this occurred the same week we had revelations about Lord Browne over at BP. He was carrying on a homosexual affair.
Ben Stein: But Neil, that was a matter of perjury.
{{#rendered}} {{/rendered}}Neil Cavuto: You're quite right. And then there was the issue of whether he was misappropriating company funds to carry on that relationship. But I am saying that BP was a very successful stock, a very successful company, and Browne was credited with doing a lot of that. Do you go after people for abhorrent personal behavior?
Ann Coulter: Well, you are all totally confirming to me that corporate America is completely soul-less.
Neil Cavuto: Not completely. Mostly.
{{#rendered}} {{/rendered}}Ann Coulter: On the proof matter, I think you are right. It's not only that they don't go through with it, which may be naïve, but who made the phone call? It could be their 14-year-old son. It could be someone visiting the office. You have to prove that. And on Ben's point, I disagree. I think prostitution should be illegal. But, I'm more concerned with adultery! The marriage contract is an important contract. I think it's more important than a contract with your cable company or the painter. And it shows a lot about character if a married man is hiring prostitutes.
Neil Cavuto: What if there's an adulterous affair with the painter?
Tracy Byrnes: Who are we to impose our morals on people? I mean, it's not our place to do that.
{{#rendered}} {{/rendered}}Ann Coulter: But we're talking about the shareholder, and I think that should matter.
Charles Payne: Let me ask you about political office. There are a lot of politicians who are divorced or had an affair. Would you support those politicians?
Ann Coulter: Well, it depends on the circumstances.
{{#rendered}} {{/rendered}}Charles Payne: You just drew a line in the sand.
Neil Cavuto: Who do you hold to a higher standard — politicians or businessmen?
Ann Coulter: That's a good question. I think businessmen are generally more moral than politicians. But, I would say the main thing that upsets me about or what irritates me about the "DC Madam" thing is ABC's plan to release only the names of Republicans on what Laura was saying about the "hypocrisy grounds." Well, that's like saying we're just going to release the names of Republicans because Democrats support adultery and immorality.
Laura Schwartz: This is not an attempt to say it's moral hypocrisy by Republicans. There is moral hypocrisy by Democrats, too. I'll tell ya what. It's going to be a very quiet weekend in Washington because the first person to throw a stone is going to have it hit them in the back.
Ann Coulter: I just say release them all or release none of them.
Neil Cavuto: You know, you're right on that. This slow-trickle thing is ridiculous. Ben Stein, you're a pretty savvy investor. You've made some brilliant calls on this show. Would any of those calls been altered if you knew that the chief executive of the company you were talking about was a philanderer?
Ben Stein: Not in the slightest. I wouldn't care one bit about it in terms of his responsibility to his stockholders. Nothing at all in the fiduciary duty laws calls for a CEO to refrain from visiting a prostitute. Unless he's using company money, it has nothing to do with fiduciary duty at all. And to Ann's point, she's brilliant as usual, but I say let him who is without sin among you cast the first stone.
Ann Coulter: That would be you, Ben.
Ben Stein: No, that wouldn't be me at all.
Head to Head: Old Media Alive and Well?
Neil Cavuto: This week, Rupert Murdoch's News Corp, the parent of this network, stunned Wall Street with a $5 billion offer to take over Dow Jones, the publisher of The Wall Street Journal and Barron's. Dow Jones and other newspaper stocks soared on the news. Has the death of old media been greatly exaggerated?
Ben Stein: It's all a matter of price. At the right price, old media will still make money. I read a long essay about old media in Warren Buffett's letter to stockholders. He is very pessimistic about old media. I work for both Dow Jones and FOX. The difference is, and this may be how Mr. Murdoch is going to make all his money, is that FOX doesn't pay me; The Wall Street Journal and Barron's do.
(LAUGHTER)
Ben Stein: If he can put that business model in place, I think he'll make a lot of money with The Wall Street Journal.
Neil Cavuto: You were "Ben Who?" before you came here. You know, we had some sightings of you on some Visine commercials, but now you're a star.
Ben Stein: Clear Eyes! Clear Eyes!
Neil Cavuto: So what do you make of this? All of a sudden "old" is "new"?
Charles Payne: Well, it's new if you have a guy like Rupert Murdoch. We're talking about the FOX network. He has a chance to revive The Wall Street Journal in different ways. But the reality is old media has been on a death march for a long time. At the end of the day, newspapers are going to be owned by a bunch of people, mostly liberals who are billionaires who own a football team or a basketball team and need other ways to enjoy themselves and spout their views. It's going to be a personal pet project of people.
Neil Cavuto: This notion that we don't read. If that were the case, Ann Coulter would not be a rock star.
Charles Payne: We read online. And some people read books. Look at the numbers! Look at Google. Look at Yahoo!. Everyone's going online.
Neil Cavuto: But you're missing the appeal of this, right?
Ann Coulter: I think it's more about becoming more diverse. We'll always have a New York Times, a Wall Street Journal, but lots of people are going online. The papers that are going to suffer are all these little bush-league papers across America that have been imposing their Stalinist views on their poor little hometowns in Mississippi. Those papers are over. They're finished! You need reporters who have the money and support to go do a major investigative piece. If the small papers keep pushing an ideological agenda, people are going to stop paying for them and will head to the Internet.
Tracy Byrnes: Ad sales are down for newspapers. So advertisers aren't getting the eyeballs they want. So what the papers and magazines are starting to do, because the advertisers want to be online, is they're using their print publication to bring you to the web. Open a magazine, the second or third page tells you what's on the web.
Neil Cavuto: Dow Jones makes a lot of money off The Wall Street Journal on the Web.
Tracy Byrnes: Absolutely.
Neil Cavuto: So my point is, content is still key.
Laura Schwartz: And Rupert Murdoch has learned how to leverage good content while enjoying an integrated, cross-media platform and putting a non-traditional twist to television and radio. So bringing that to The Wall Street Journal is really going to infuse it.
Ben Stein: You see, what FOX knows how to do is to have the news running down one side of the screen and pictures of Anna Nicole's breasts on the other side of the screen. And that's what The Wall Street Journal has been lacking. The Wall Street Journal needs a centerfold, perhaps someone turned up by the "DC Madam".
Charles Payne: Ben, we have three centerfolds on the set today. I'm sorry you're not here to see it.
Neil Cavuto: Ben enjoying his final appearance on this show…
Will Rosie O'Donnell Be Rewarded for Bashing America?
(BEGIN VIDEOTAPE — from "The View" on May 1, 2007)
Rosie O'Donnell: Why do people enlist in the Army?
Ricki Lake: To get an education, and they're poor…
Rosie O'Donnell: Thank you!
Ricki Lake: … and that's the only way to get one.
Rosie O'Donnell: The vast majority... Yes, Elisabeth. It's true!
Elizabeth Hasselbeck: First of all, in the past year, the testing scores of our armed services have been higher than ever, so the education level…
Rosie O'Donnell: You are wrong. We have more convicted felons in the Army because we're allowing them to get through.
(END VIDEOTAPE)
Neil Cavuto: Rosie O'Donnell told the world "her view" of America and our military this week. Word has it she's a hot property and might land a huge TV deal when she leaves "The View" in June. Is Rosie being rewarded for bashing America? Ann Coulter?
Ann Coulter: Yes! She absolutely is.
Ben Stein: (laughing) I love that! I love that!
Ann Coulter: Well, I think anybody you put on TV is going to get some degree of following. And the main audience she needs to appeal to is the producers at one of the big three networks. And they have always put people who bash America on air.
Neil Cavuto: But she also gets ratings.
Ben Stein: I'm not a psychiatrist, although I look like one. I think Rosie is mentally ill. I think she's seriously unwell. This is just my opinion. I'm not a doctor. Unwell people who say really provocative things on TV tend to get an audience. What she said about the military is flatly wrong. The military gets a better class of people than she does. And what she said is outrageous! But, mentally ill people who say outrageous things on TV get people to watch!
Neil Cavuto: I'm thinking about that as I host this show.
(LAUGHTER)
Tracy Byrnes: Rosie blew it for herself. She has all these women who have been supporting her for all these years. And now, she alienated them by saying that their sons who are out there fighting for us are stupid, convicted criminals. So no matter what she does next, she's lost this whole group of people.
Neil Cavuto: Rosie has said some far-worse things. "The View's" rating went up close to 20 percent when Rosie came on. So there must be a ratings-appeal with the edginess.
Charles Payne: Listen. Rosie makes me sick. She's a repugnant person. The reality is that there's a lot of self-loathing and a lot of self-hating going on in this nation right now, and it's really sad and unfair to us as Americans. Rosie is feeding on that. This finger-pointing, saying we should act like foreigners is crazy. We're Americans! We don't take our cue from France. I don't like her. She's going to fizzle out.
Neil Cavuto: Ok, so you don't want the Rosie wallet. Laura, what's your sense on this idea that Rosie is tapping what might be an anti-administration wave?
Laura Schwartz: Well, you could say she's going with the polls.
Neil Cavuto: So if it swung back?
Laura Schwartz: Maybe she'd be a little quieter, but people see her as fearless and people find her compelling.
Charles Payne: Rosie and Bill Maher and those types of people are pushing the polls. They're not going with the polls. They're pushing the anti-American rhetoric.
Laura Schwartz: So it shows the amazing effect that someone like Rosie has. And that's why the networks see her as their hot ticket. Rosie will most likely have a syndicated show debuting in the fall of 2008, just a few months ahead of the election. She will put people in the hot seat, and not just Republicans. She's looking at the Democrats right now.
Neil Cavuto: It doesn't matter. I know executives. They're not Republican or Democrat. They're just bottom line. And with Rosie, the networks are seeing a lot of green.
FOX on the Spot
Laura Schwartz: Another D.C. sex scandal by the summer.
Ann Coulter: Mitt Romney exposed! He's "not" a conservative.
Ben Stein: Leaving Iraq will be a nightmare; worst to come!
Tracy Byrnes: "Spidey 3," "Transformers" both hits; buy Hasbro (HAS)
Charles Payne: Fed signals no rate hikes; buy TOL and KBH
Neil Cavuto: Beware a gov't bailout for subprime borrowers!
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
Flipside: "D.C. Madam" Le$$on: Legalize And Tax Prostitution!
John Rutledge, Forbes contributor: We should legalize it! Congress shouldn't regulate anything below your bellybutton. We should tax it too. If we taxed income taxes we'd collect another $20 billion from this deal. But better yet, tax the customer. The customer can pay excise taxes on this. Especially if the tax is based on what they think they delivered in satisfaction to the vender.
Elizabeth MacDonald, senior editor: We shouldn't legalize this. The marketing of women's bodies to generate tax revenue is abhorrent. Legalization of prostitution doesn't end the abuse, it just legalizes it. It also causes health care costs to soar.
Jim Michaels, editorial vice president: As a libertarian I have to say, it's an honest transaction. The prostitute charges money and the customer gets a service. That's better than we get from Congress.
Dennis Kneale, managing editor: You can't legalize it. Some things are better left unsaid. I don't think we want a marketing campaign in favor of prostitution. Let people do what they want in their private lives.
Quentin Hardy, Silicon Valley bureau chief: If you create a tax around this you'll create special interest. So we'll have a prostitute lobby. I've learned from interviews with prostitutes in Nevada that they see this as a health issue. Every 2 weeks they get a blood test. They're not getting beat up by their pimps. They have better health conditions than women on the streets. So having it out in the open is better for the employees.
Lea Goldman, associate editor: The argument that the state benefits is bogus. Nevada hasn't collected soaring revenues from the bordellos.
In Focus: What Happened to Dems' Promise to Lower Gas Prices?
Mike Ozanian, senior editor: The Democrats lied. They know that gas prices are a function of refineries. We don't have enough of them in this country. Look at Iran, it has more oil than it can eat but it has higher gas prices because it doesn't have enough refineries.
Lea Goldman: You can fault the Dems for overselling that legislation would bring down the price of oil but they've done plenty. They're promoting more subsidies for alternative energy, fuel emissions and things like that. These are long-term legislative bills that will take time to effect gas prices.
Victoria Barret, associate editor: The Dems have historically voted against drilling offshore and building new refineries. They are in part to blame why we have high gas prices today. I think they are doing a better job of taking a long-term vision. They have put the environment on their agenda and on the public's radar and that's a good thing.
Quentin Hardy: It's been three or four months. You think lawmakers can change things overnight. It doesn't happen that way. Raising fuel efficiency standards takes a long time to kick in. It's profound, they should do it.
Jim Michaels: The market sets energy prices. Presidents, Prime Ministers and Kings haven't a damn thing to do with it. If the Democrats really wanted to put pressure on energy prices they'd open ANWR to drilling.
Mike Maiello, associate editor: The Democrats have in fact passed legislation that would bring gas and oil prices down. They passed a way out of Iraq. And Bush vetoed it. Want to know why you're paying such high gas prices? Well if you invade the second largest oil supplier in the world and cause a civil war, oil prices are going to go up.
"Pres Fred Thompson": Be$t Choice for Our Economy?
Elizabeth MacDonald: He's a tax-cutting fiscal conservative. Reaganites love him. He's also not Rudy/McRomney where voters already have voter fatigue. People are sick of seeing candidates beat up on each other already. He's a fresh face and he'll be tough on terrorism.
Jim Michaels: I never heard of him until a few months ago. All I know about him is that John McCain says that he has a good speaking voice. That's not enough to get me to support him. There are lots of candidates out there and they're on the record.
John Rutledge: I think our government has been pretending that they can establish order since 9/11. You might as well get a professional actor in the job. If Fred wants the job he'll get it. And he'll do a good job too. He's against taxes, he wants spending cuts and he's a deregulator.
Dennis Kneale: America is a sucker for actors in leadership roles; Arnold Schwarzenegger and Ronald Reagan are two examples. But we don't know what he'll do for the economy.
Mike Ozanian: I like this guy. I don't know him as well as the other candidates. But I get a sense he'd nuke Iran's nuclear capabilities in a New York second. And he has a great record on limiting government spending.
Informer: Nasdaq Beats Dow?
Cisco (CSCO)
Google (GOOG)
Yahoo (YHOO)
Microsoft (MSFT)
Bulls & Bears | Cavuto on Business | Forbes on FOX | Cashin' In
Our Cashin' In crew this week: Wayne Rogers, Wayne Rogers & Co; Jonathan Hoenig, CapitalistPig Asset Management; Jonas Max Ferris, MaxFunds.com; Meredith Whitney, CIBC World Markets; and Stuart Varney, FOX Business News.
Should "The Rich" Pay More Taxes Than They Do Now?
Most of the Democratic candidates say they'll hike taxes on the rich because they don't pay enough now. Should the rich pay more in taxes?
Wayne: I think that's an insane idea. The rich right now are paying over 35 percent of the taxes in the United States. Since we've had the tax cuts, we've had an increase in revenue for the federal government; the economy is growing at a 4 percent rate per year. The capital gains tax on corporations, which is 35 percent, probably should be lowered to 15 percent. That would unleash a wad of capital that could help the economy.
Jonathan: The rich are the ones who pay all the taxes as it is. The bottom half of wage earners pay virtually nothing, maybe 3 percent of taxes. The real issue is that the pragmatism of what works for the economy or what's moral. People's wealth is not a piggy bank for John Edwards to just pass out however he thinks. The poor really have no rights to the earnings of the rich. They've earned it and they have a right to spend it how they wish.
Jonas: The very rich actually pay too much on their salary. I agree that wealth is under-taxed. The top 1 percent own 60 percent of corporate America. If you look at it that way, and you look at the trillion-dollar budget for the War on Terror, that's going to protect assets and lives, corporations, profits. Shouldn't they pay a bigger percentage of that because we are protecting their assets?
Stuart: If you look at the tax structure, half of the people in this country pay no federal income tax at all. That is a growing constituency. The system doesn't care if the rich pay more in taxes; they want the rich to pay more in taxes. We've reached a tipping point where serious reform of the tax structure is now impossible because the constituency that really wants reform is shrinking.
Meredith: Take a look at who suggested this. This is John Edwards who has been an ambulance-chasing lawyer and has made class-action suits against pharmaceutical companies, insurance companies, and hospitals. This ends up driving up aggregate costs for the people he claims he is representing. Raising taxes would stymie the leaders that run businesses from hiring and effectively hurting those he is trying to represent.
Best Way to Fix D.C.: More CEOs in Government?
John McCain in last Thursday's GOP presidential debate talked about bringing business leaders into government.
Meredith: John McCain is onto something here. The whole suggestion that we could remove long-time career politicians is fabulous. Any CEO is going to be better than Ted Kennedy. Some CEOs may get rave reviews and others may not. These leaders know what it takes to get stuff done and there's a real sense of accountability. The offset to that is that they may not play in the sandbox as well because they don't tolerate fools. At least we would have a shorter timetable and they know how to run a budget.
Wayne: CEOs aren't any different from anyone else. You'll get the same mix of good and bad. I don't think you can take a group as a whole and not know that there will be some rotten apples in the barrel. To the extent that those have risen to the top and have some area of expertise
Jonathan: CEOs are generally capable people. These are entrepreneurs, leaders, mostly capitalists. I would much rather see a CEO than a priest or evangelist, which I saw a lot of on stage last Thursday. I want a president to understand that the role isn't to grow the government. CEOs grow companies and the only one I got that sense from was Ron Paul. He understands that the constitution limits the scope of government. It's not an endorsement, but he did catch my eye.
Jonas: Some of the greatest leaders we've had have been CEOs, but I would also say that actors make better presidents than a lot of current politicians. Mike Bloomberg and Arnold Schwarzenegger are both great politicians.
Stuart: The president is the chief of the executive branch of government. That means executing and getting stuff done. I believe that Rudy Giuliani won the debate on Thursday night. He got things done as a prosecutor and got things done as mayor New York City. In terms of being electable, he moved to the center.
Soaring Gas Prices: Great News for the Economy?
Jonathan: It's great news for someone's economy. High gas prices are a sign of high demand. When I take a look at global economic trends, the fact that other stock markets and other currencies are doing so well tells me that at least some of the demand that is pushing prices up is not coming from the U.S. It's coming from China and the emerging economies. Those to me look a lot healthier than the U.S. right now.
Meredith: It's technically accurate that you have inflationary prices with commodities and that is indicative of a very growing global economy. A lot of the demand has come from outside the U.S. The reality is that it's less than 3 percent of the consumer wallet. It hasn't had any impact on consumer spending. Even if gas prices go up, it hasn't moved anything in the United States so much.
Wayne: It's bad for the economy. You see the rise in prices in asphalt in this country. Everything that is petroleum based. This is not good for the economy in the short-term. In the long-term however, it could move us toward alternative fuels.
Stuart: As the lone foreigner, let me say that you Americans don't realize how rich you are. We can afford $3 gasoline. Disposable income in America is huge and is much higher than anywhere else in the world. It's a sign of the extraordinary wealth of America.
Jonas: Do you all work for Exxon? It's a symptom of a strong economy. It's not a good symptom. The number one reason is a strong economy. If we are in a recession, you'll see $2 gas.
Best Bets: $inful $tocks
Click here to watch this segment in its entirety.
Jonathan: Morgans Hotel Group (MHGC) (Friday's Close: $23.04.)
Wayne: Wynn Resorts (WYNN) (Friday's Close: $102.52.)
Jonas: EarthLink (ELNK) (Friday's Close: $8.23.)