tv Bulls and Bears FOX Business July 7, 2013 8:00am-8:31am EDT
- he asked me right before school started. - no way! - hi. - hi. - ♪ shine, come on and let it shine ♪ ♪ light me up-- - hi. you in egypt. >> 6:00 a.m. easterntime. wake up, don't miss a minute of it. >> see you then. >> help wanted. we're starting to see those signs pop up again. the private sector starting to create more than 2,000 jobs last month. meanwhile, ule sam is handing out pink slips. are private jobs goingp because government jobs are going down? hi, everyone. i'm brenda butler. this is bulles and bears. let's get rightto it. private sector hiring because the federal government is finally cutting? >> well, look. brenda, government spending was
a run away train that everybody knew was threatening the econom all you have to do is start talking about it a little bit, maybe slow down the pace of t tt run away train and the private sector is going to respond. the private sector that we're at least talking about is new government cuts is a good thing. the government would lead us to believe that they take one of our dollars and run it through for a little bit. you're going to be far better off, everybody knows that. >> sasha, it's known as crowding out, which is that government spends money and it kind of pushes and crowds out private sector spending and hiring. do you buy that? >> no, i don't buy it. theob growth is in spite of the sequester related drag. it's not because of it. and what the numbers are about is there's been a continued
trend of growth. the numbers we have right now, april and may, the numbers were increased from what we thought they were. and they're the highest they've been since april '80. it's not out the ee zester. it's been a steady, steady trend. >> gary b., we have seen job growth of about 200,000 jobs created a month for the last few months. what do us about that? what is causing that? is that because the government is cutting? >> well, yes, i think that's a contributing factor. there have been quite a few studies showing that increased government spending does crowd out private spending. it's -- you know, first of all, more taxesave to go to fund the government and the government is in there doing jobs that private industry could do. number two is as the government shrinks,ou know, the private sector comes in and is enabled to grow. look, i think people ar opt
misteric that the public sector is shrinking because as jim pointed out, every dollar they spend, there's no multiplier. in fact, a lot of studies christine believes that for every dollar spent, you get 95 cents back to gdp. so i think this is a all a good ing. i think there's some cause and effect there. i'm just happy that the public sector is shrinking at this point. >> and you were referring to the former economic adviser president obama? >> yes, thank you. do you see a connection between private sector hiring and the government handing out pink slips? >> look, the connection is that if we were in a really strong economy with really low unemployment, not unemployment above 7%, yes, you could make the government is government is sucking up labor. you can't make that case today. it's not like they need to fire people so the private sector can find workers. it's not that tight out there. the economy is not that good. i wouldn't say that so far in this economy.
i will say the economy is strong enough to let the government shrink because it's been doing that for years now. if you don't like the government, this is good news and normally this would cause a rekegz in itself at the government, state, federal and local can't find people right away. we can handle that because there's firing in the private sector. >> john, do you buy that? >> i buy the first part of what jonas is saying. look, we are not reigning in government spending, guys. we went from borrowing 40 cents of every dollar to, what, 38 cents of every dorg and people are talking about how draconian this is. we're still 2.5 million jobs under the peak of what we were in november 2007. but the government has nothing to do at all with shell oil and west texas, the fastest growing city in america, all the way to north dakota. e government has nothing to do with natural gas being at lows so manufacturing now is mr economically feasible in t united states than it is elsewhere. the government has absolutely
nothing to do with that. these guys hate each other so bad up there that they get nothing done. when the next people don't get anything done, that's good. >> so it's the gridlock argunt, then? >> absolutely. >> the issue is not that they're hiring workers away from the private sector. that is not the issue. the issue is that the resources that normally should be where it's productive in the private sector are then misplaced and in the nonnuktive elements of the government. we're allocating our resources through the nonproductivearts of the economy. it's an issue of productivity. and stealing resources. >> okay. jonas, he was speaking to you. >> the government mostly is just moving money around. so to say that it doesn't have the multiplier of other spending or that it's moving resources out of apple by giving social security and medicare, i don't know, i don't see how it's that big of a drag on the economy
when the government spends money. and a lot of it gets spent through the private sector who hires ople, as well. it's a little less obvious. the government is the biggest consumer of oil. >> as far as the government -- they're not just moving money around. look at how much money we've lost from fannie mae and freddie mac anthe post office. >> look at the -- >> it's not productive. >> wa about the private sector loans? that was all bad use of capital. the government doesn't have a monopoly of bad use of capital. it happens through both public and private sector. >> i want to go back to something that he said the government is not responsible for the increase. but what the government can do, unfortunately, is slow things down. so, you know, you look at a lot of departments, whether it's homeland security or the irs, which is, you know, had workers
on furlough, they all act as kind of a tax on the productive part of th economy. so the less they do, the less people they have implementing these confounding rules and regulations, the less -- the better the private sector can work. so i think that, again, you see a shrinking of the public sector, you're going to see the private sector really tak off. >> sasha, wa do us about that? >> at the end of the day, somebody doesn't hire a new workers because of what the government is doing in terms of the sequester. they're hiring a new worker because the profit mgin that they're going to get out of it is worth more than the cost of the new employee. so it's not about the government. it's about the housing market doing better, consumer confidence up. >> so you think that that government can throw to any kind of level and it won't slow down the economy? >> there's no -- it's a really fferent argument than we're talking about.
>> but we're talking about the flip side, though, as government strengths will the private sector grow. i make the argument that it does. >> and i'll make the argument that at this point the numbers we've seen from the shrinking, from the sequester, that it's so minimal it doesn't have anything to do with each other. >> john, what do you think? >> i'd say laying off cops and teachers in detroit has nothing to do with the bach formation in rth and south dakota. gary b. is 100% correct. government can hinder things. the monterrey shell was drilled in california california. that wipes out the california deficit. if we had a national energy plan, we could create millions of jobs knowing if a pipeline works or if a pipeline doesn't. we are the only developed country in the world not having one. that does hurt. >> jim, take him on. >> we've got a lot ofart-time workers in this jobs report. why is that? because of government mandate relating to obama care.
whether it's crowding out or re tape, they are not creating a big playing field for small businesses and that's why small businesses are not hiring. >> okay. two texans get the last word. thanks, guys. young americans getting restless. a new poll shows their trust in d.c. is fading, overall nsa snooping. why that could help support for big vernment in d.c. that's at the bottom of the hour. but up here first, employers may have dodged the health care law for another year, but you may not be so lucky. remember this? >> if you like your health care plan, you'll be able to keep
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caused that accident. delaying the employer mandate has some health care la critics rejoicing. but you may not want to do your happy dance just yet. another major health insurer says it will stop providing insurance for individuals in california. this time it's united healthcare. gary b. says this is another si sign. >> i didn't realize this. whoever put together obama care, it's genius, if you think about it. here is why. look, if you're a united healthcare or you're an etna, you have to take people with pre-existingness can. that means you have one of two choices. either you take those people and
then oh, my gosh, now your costs explode so you have to pass the premiums on to your healthy people or you say, forget it, i'm not going to do that. then what happens is one of two things. either those people say, oh, my gosh, there's less competition out there. my rates are goin to go up, anyway. or i run to a government health exchange. or they realize their premiums are gog to go through the roof, anyway, and they say i'm not going to pay these high premiums. what's going to happen? i go to a government-run health exchange. either way, the government wins in this case. you're going to see the its of all the nas, the blue cross blue shield, obama care win webs we can fight the at this point. >> boy, we have to mark this down. you said they're a geus. >> i did. sasha, companies are not just leaving california. it's washington, massachusetts, new york, new jersey. what do us is the reason for that? >> well, for one thing, it's the first time i'v ever agreed with gary b., so that's great. the reason is this is pure market competition.
if you're looking at, for example, ited healthcare in california, they hav2% of the individual policy market. they can't be competitive. the reason the people aren't leaving them is because they can't because no other insurer will take them, which is the whole point of what's going to happen under obama care. if you have three companies in california that have 87.% of that market, united is not leaving california. they're going to go into employer health care coverage because it's more profitable ere and then they're going to do individual in the states where they have a bigger market share. where they'll make more money. >> but, jim, doesn't this all spell government run health care to you? >> it does. the whole thing back fired. it doesn't make any sense. people aren't going to do to individual mandate because it's cheaper to pay the fine and walk into an emergency room and get treated that way. so when that happens, the whole idea was that everybody was going to be in health care so it was going to be cheaper for everybody. what's really going to happen is that nobody is going to be in heth care.
you have employers that are not takingn full time employees. you saw the jobs number. a whole lot of part-time jobs there. then you have people wit united health care leaving states. what does that do? it reduces the number of players, it drives up prices, making those businesses and those individuals elect a government health care. it feeds right into a socialist net. i think george orell or even franz costco would be very proud of this plan. >> are you surprised more insurance companies aren't throwing in the towel? >> yeah, because there's more customers. do think if the president is the king and could have done what he wanted, we would have had government health insurance takeover. chart health insurance stocks against the stock market over the last couple of years, including health insurance stocks, and they beat them because they happen they will have more customers.
there's a lot wrong with this plan, but the poor health insurance companies is not one of them. they have a great business ahead of them. >> john, take it on. >> a lot wrong with this plan? there is no plan. there was no health care plan. there was just an insurance plan. at 30 million people to a broken system and this is what you get. the feds are going to have to red those. what you're going do see with all of this is that just like when they got to the banking dustry and they put all this regulation on it, $2 trillion of credit lines went out of a 5 trillion credit market. u're going to see etna, you're going to see united, surprise, surprise. a politician overpromised and underdelivered. >> gary b., you got 30 seconds. >> well, look what happens when the government gets involved in industry. they eventually crowd out all the private insurers and people. it happened with flood insurance, it happened with nornlgs. so you're going to see the government come in there and th're going to want to attract people to the nash exchanges,
>> sluicely no more. this makes me sick. i'm sorry about all the tragedy in egypt, but i feel worse the fact that detroit is in bankruptcy and 50% of minority kids in inner-cities don't graduate from high school. we just promised $7 billion to the continent of avenfrica to m ourselves feel better. we're going to give it to who? some dictator that's going to keep that money and it's not going to go where it's needed? we are spending billions overseas and we have millions here who need it. i think it's time to spend the money on americans. >> do we have any leverage to promote a peaceful and stable egypt if we cut off aid? >> no. and the military is the best friend we have over there, the most influential in the region. they need our money. we need them to be able to create a stable egypt, which helps to keep our strategic interests. so to turn them into adversaries when they've been our allies for years, for decades of
cooperating with our military, it's just crazy. you can't do something like that at the turn of a hat. >> gary b., i know you're shaking your head. >> well, i am because i never quite see the cause and effect. we go over there, we spend billions as john rightly points out. we go over there, we spend it on countries from, my gosh, russia until a year ago, iran, egypt, and wa do we get from it? it's a wrap shoot out there. it's like, well, we'll spend it. we hope things turn out. they at least the last 15, 20 years they never do. it's to our detriment. they hate us. let's reel it in a little bit. let's not spend the money on countries like egypt. and let's improve our hand here. >> jonas, is all aid equal? should we cut off some and keep something? >> yeah. it's nothing military. i ink we should have these allowance programs for all these countries that don't really like us. it gives you some wiggle room.
we can cut off the allowance. i think we should do that more, whether in this case we should cut off their allowance because officially we're supposed to because it's a coup. i don't know if that's the case. but whenever a country does something we don't like and they're on ourpayroll, we should cut the payroll for a little while to keep them in line. the alternative is sending troops in at $10 billion a month. so this is affordable. >> jim, how do you come out on this issue? >> well, the reality here, first on of all, we don't have the money to sendo egypt. we're pretty much a broke country. secondly, we have been sending them the money and, irdly, we can print the money. so i think we have to deal with the reality that we're in this mess. we've been giving them the money. the egyptian army has been an ally of ours. so i would say give them the money, but make sure that it's conditional upon them instituting a democratic process. and if they dot continue do that, then we take the money away. here in america, we have an energy boom going on. and soon that will translate
from the u.s. being dependent on the middle et and our interest in the middle east to them being more dependent on us and reliable customers. so i think that tus the tables in the long run. in the short run, i think this is a mess we're already in and have to dole with. >> thanks so much. thank you, guys, and thanks to sasha for joining us. well, you can't make this stuff up. more home made movies servicing from government workers all on your dime. too big time to get even and get all those dimes back and then some?
wh a shock. the middle east is in turmoil again. >> bull or bear on chevron? >> bear. global mpanies are too weak at $100 oil. >> gary b., your prediction >> not a shop. home shopping network is going mobile. up 25% by the end of the year. >> jim, he's a shopper. are you? bull or bea >> bear on evaluati. give me kre. local and regional pajs banks. it's time for the little guys to participate. >> what do you think about the banking sector? >> i do want like that stock. >> we're going to kp watching them on google's youtube and ey're going to benefit up 1r5%. >> did you watch them all, jonas? >> no. >> june, bull or bear or google? >> i love google, but not at this price. we can get it cheaper.
thanks for joining us. the cost of freedom, the number one business block on continue denieneal right now. neal, take it away. well, forget about this guy, all bent out of shape over the president. a lot of these guys and gals are getting pretty bent, too. hi, everyone. welcome. call it the youngnd the restless, but it's not the kind of soap opera the white house likes to watch. the government surveillance programs like those going on at the nsa are violating their privacy and they're not a bit happy about it. this as the president's approval ratings continue to fall to an all-time low. it trusted the government as breaking down. is that putting the brakes on any big kind of government agenda? l right, charles payne, what do you think?