tv Forbes on FOX FOX News January 15, 2011 11:00am-11:30am EST
they make great looking fast cars. >> ben, do you buy recovery? >> i buy it but agonizingly so. you know something? there has never been a recession that lasted forever. it's unlikely this one will either. >> used to talk about my moth mother-in-law. david asman is next on "forbes on fox." "forbes on fox." the leader on business news. captioned by closed captioning services, inc >> david: it's being called the worst wage drop in decades. maybe even since the great depression. a new report showing more than half of americans getting back to work are making a lot less than they used to. why is someone here saying that's great news for the economy? that's a forbes flip side. welcome, i'm david asman. here with the flipside, steve forbes, elizabeth macdonald, dennis neil, quentin hardy. dennis, how is workers making
less good? >> this sounds bad and will sound obnoxious for the first time for me. why lower leg is not something to be celebrated, nor needs to burst into fear or crisis. when wages are low, it's why the productivity grows in the u.s. among the highest in the world. when the wages are low. that keeps the prices down of products. that's why inflation has not been a problem. when wages are too high, that's when our u.s. car industry gets destroyed by japan and korea. that's when the airline industry has a problem. you have to take wages down. so let's not be so crisis ridden about this. we forget, there is a lot of stuff throughout that's cheaper than used to be. you be a footlong sub for $5. >> it may be bad news for the people, but good for the economy. >> the fact of the matter is when high qualified people takes low-paid jobs the economy is not doing what it
should be. this is the worse recovery from a severe recession in american history. the reasons are apparent. weak dollar, uncertainty about taxes. massive new regulations coming across healthcare. that's why we're not having the job creation we need and should have and normally would have. >> david: neil, who is right on this? steve or dennis? >> he is not addressing the issue. do we have a good labor market when wages are going down? it shows flexibility. would we be better off in detroit when the wage were going up and up and we put ourselves in bankruptcy? that's not the way it works. if we're paid too much we have to have an adjustment. we're finding there is slack in the economy. thank god in our economy wages can go down. the alternative would be france. >> although, emac, if you had someone making $150,000 before now working as a barrista at a starbucks for $8 an hour, they don't think they were making too much before. >> right. this is a dreadful trend. i'm sorry, but dennis lost me at the term with wages are
low. forgive me. neil lost me at wages being flexible. the idea being if you have low wages, it will create more jobs. if that was true, there would be zero unemployment now. we have soaring tuition and healthcare cost. we have soaring clothing cost and gas cost for the american family. it's a dreadful trend. so the thing is, here is what is key to watch. wall street and companies know that they have been enjoying record profit margins because of the slashing so much. you cannot have the same gdp growth of 2007 with 8 million less jobs. companies know they need to hire. >> david: so bill, are the low wages good or bad for the economy? >> dade, what we need is not low wages but flexible wages. that means when the demand slackens, your employer would be cutting your bonus check. he wouldn't be firing you. it would also mean we wouldn't have people unemployed, sitting at home, losing their job skills when we have less demand. >> david: how do you see it?
>> i think it's great that american people want to work and put idea that people won't take lower-paying jobs. clearly they do. my crazy haired friend there has to redo his thinking. lowest wages companies in the world are cambodia, bangladesh and vietnam. highest is switzland. where would you rather live? high wages doesn't mean it's bat. reverse the telescope. if people have less money, they have less they play and companies lower prices -- >> it's a market. you want a maximum wage instead of minimum wage? it's market deciding it. >> you don't a maximum wage either. the other issue here is regulations are hurting the companies and hiring. we have 160,000 regulations on the books right now, that businesses can't really find their way around it or through. that's really hamstringing the american economy. >> if you get more sensical about lowering regulation and taxes do you think we'll go back to up where we were? >> obviously.
productivity does not mean artificially slashing wages. of course we want flexibility in the labor market. the key thing is to allow entrepreneurs to take risks, allow businesses to expand. wages go up naturally. in terms of why we're having a pump recovery, again weak dollar, uncertainty about taxes. massive regulation about healthcare. that's why businesses aren't hiring. >> you taught me there is no such thing as wages are artificially going down. markets decide where wages go. >> markets take new jobs when they're unemployed because there is less demand. >> the heart of the economy is not working because the arteries are clogged, because of the weak dollar taxation, massive regulations coming along. look at what the federal communications did on the internet. >> david: you want in here, go ahead. >> i think steve's point works as long as you ignore recent history. financial engineering got us here. weak dollar was a subset of
that. we built too many houses and borrowed too much and built too much. we had overconsumption and now we have a risk of deflation. and the lower wages only feed in to that. >> david: mr. forbes? >> you could never have had a housing boom the way we had if the federal reserve hasn't printed the money to finance it. if you have a stable dollar, you don't get these bubbles. history shows that. >> neil weinberg? i don't want to debate bubbles. it's an important issue. you were talking about people in bangladesh weren't making money. that's how you start, pull yourself up by your fingernails. china didn't get where it is today starting out with swiss wages. what we need in the united states is moderate wages. >> we're not bangladesh. >> you're supposed to become japan. >> what is going on with japan? >> get rit of safety regulations. >> what is going on in japan is happening in the united states as well. this is scary for the american worker. 30% of the american workforce is temporary.
that's the same as what is going on. >> bill baldwin, isn't at it good thing that people are selecting paychecks instead of unemployment checks? >> i'd rather having them in their old jobs, collecting somewhat lower pay and maintaining their skills and being primed to come back with the economy comes back then collecting unemployment. >> good for my old boss, bill baldwin. for people who are lamenting the low wage thing, i want to know, what do you want to do to fix it? pass a law saying companies have to pay people more and hire other people cheaper? >> what happens if you don't fix it, off congress -- hang on a second. >> how do you fix it? >> more people on unemployment. >> how? >> hang on. get tong government dole. companies realize you can't get economic growth without workers. >> steve forbes? >> dennis, weak dollar, high taxes, massive regulationlation and uncertainty hurts economy. you understand that. then you know what the prescription is. >> david: last word from the boss. when we come back, public schools using your tax dollars
to give 11-year-olds drug tests. cashing in on the explosive money debate at the bottom of the hour. next right here, a new government website set to launch in just days in the name of consumer protection. why would it put those very consumers out of a job? we have the answers. [ female nouncer ] most women in america aren't getting the ccium they need. only yoplait original has twice the calcium of the leading yogurt. that's 50% of the daily value to help close the calcium gap, we're giving away a million free cups at yoplait dot com.
hi, everyone live from america's news headquarters, i'm jamie colby. a week after being shot in the head, congresswoman gabrielle giffords is defying all the odds. doctors are saying they could remove her breathing tube as early as today, and say it's another step in her stunning recovery. giffords reportedly able to track with her eyes and move both her arms and legs. they're keeping an eye out for pneumonia and blood clots. a manhunt is out for new jersey for a teen who cops say shot and killed a 27-year-old
police officer in lakewood. police are looking for this man. 19-year-old jamel who fired off three rounds execution style killing officer christopher mattloss in a traffic stop yesterday. more details coming up. i'm jamie colby. join me in the 1:00 p.m. eastern hour on america's news headquarters. >> david: a new government website set to launch in a few days citing major controversy. sa this will allow people to complain about any products. government says it will protect government. but business owners are right to fight this, why? >> it's a payoff to trial lawyers and way to get more lawsuits against them. in this information age, plenty of ways to get information about products. but the government will play politics and manipulate it.
look how they play it with toyota to bash that company. why give them more risk? trial lawyers get enough help from the government. they don't need this. >> david: we're welcoming morgan brennan and you start off with disagreeing with the boss. >> i do. thank you for having me. i do disagree with you. it's time the obama administration deliver us on the transparency promises it offered us in the campaign. i have to say this is going to lend some credibility to the product reviews that are floating around on the web. if i want to know that a lipstick contains high level of lead and will poison me over a long period of time i don't want to read about that and try to find credibility of that in an hippie dippy crunchy all-natural product on the web. it want to go to the government. >> david: who is more credit, the hippie-dippy websites or the government? >> that is not the question.
the question is why are we expanding record government? they pay for this insanity. a lot of great information out there. if i want to buy a car or read consumer report or auto magazines, if i want to buy a book or vitamin or a computer product, i'll read consumer reviews on amazon. these are credible sources. we don't need anything -- >> david: there are a lot of sources, emac. and a little bit of the nanny state in this idea. that is as we can't deal, we can't live our lives without the government. >> this nanny state is annoying. you're right. >> i agree with morgan. companies can neutralize the torque bar. they consider the torque bar, look, we complain and said the information was incorrect. they say you should have checked the website. you're wrong. it could naturalize the torque bar. republicans wanted a similar
website for doctor, hospital and insurance industry for consumer could get better health information. >> david: bottom line, good or bad or businesses? >> bad for business. i cast a vote for the hippy-dippy website. last thing we need is dysfunctional government website. they can't tell us what the job report is with accuracy. one week they say there are 130,000 jobless claims and two weeks later they revive it by 50,000. do you want that information on the website? i don't. >> bill baldwin, do you? >> i'd rather have the government dumping information on me, unsupported or somewhat useless complaints than telling me i can't buy the product. this is a good thing because it will take pressure off of more intrusive nanny state involvement and my freedoms. >> that is an interesting idea. steve, do you agree? >> bill is idealist. he thinks just because the government has a website it can be manipulated by trial lawyers and union, it means they won't ban products.
hello, bill. they can do anything they want. >> steve, the drug industry has to deal with the f.d.a. that has a website saying we're denying patents or we have complaints about drugs. the markets have dealt with that. >> the f.d.a. process is supposedly scientific and less so under obama care. unless they pretend to have science to come up with the opinion. this is wide-open manipulation. >> david: morgan, we have seen how easily manipulated the government is with the special interest inside the beltway. >> why was this information not available on us on a government website before this? talk about the lobbyist and the money that will go into how this website is controlled. who is controlling -- >> david: that's not a bad question. why is it off the website? >> it's insane to talk about expanding the federal government at a time it occupies 25% of the g.d.p. and it's the number one issue -- >> how is this expanding the federal government when all it
is providing a vetting process? >> new agency, new payroll and everything. >> expand the federal government. one thing we haven't discussed it will add to costs. for companies to battle this, it will cost them money and that cost is passed to consumers. >> business is getting hit with the higher taxes and regulation. this is another thing they have to expense. >> this is a harmless venture. look at what happened with the crazy toyota claims. they were balderdash. they went on a government website, a forbes reporter said it's nonsense. reporters can figure out what is truth and not true. >> bill is right. >> toyota took a hit to its reputation and had to spend millions to fight this nonsense. why should the government aid and abet that? it's bad enough in the open market. >> we have the better business
bureau, and the own website of complaint. it's hardless. >> last word from emac. up next, remember this -- >> i don't know how they're going to be able to argue that extenting permanently the high-end tax cuts is good for the economy. >> the president should stick around for this one. new report showing that the tax cuts could already be helping the economy. that's next. ó
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not spend the extended bush tax cuts. but now they are spending and how. a new report says upper income shoppers splurging 45% more during christmas week. and now retailers, luxury ones like tiffany are upping their profit outlook for 2011. are the tax cuts helping the economy? >> sure they are. the president is living in a keynesian fantasy land. rebates are one-shot and cut in tax rate means you have more incentive so the rich is spending more. good for the economy. >> david: extenting the bush tax rate cut are good for the whole economy? >> wow, david! we started the segment with how the average people should work for less money and now we talk about how the ultra super wealthy, super duper rich guys should get more tax breaks because tiffanies did well at
christmas. this is not a tv studio. this is a parallel universe! back on planet earth, 30 years of bending forward and sideways for the rich have meant the average person is work i working harder for less. cut taxes for the poor in the middle class. there is more of them. they don't have the savings. they spend it. the rich are good at saving money. they will not recirculate it as much as other people. >> david: rich, less anybody think that the rich is getting away with stuff. it's top 60% of pay for personal taxes? >> that's true. i assume that quentin hardy likes the fact his 401(k) is rising in the last two years because what some people call hoarding and saving, other people call investing in the stock market. the reason we're ending 2011 with a high stock market, people feel optimistic. >> david: neil? >> last time i checked what
we're talking about here is what can we do to give a short-term stimulus to the economy? everybody knows the poor don't have as much money. they can't put it in the bank and leave it there. they go to wal-mart and spend. you can see this in the spending trends where the company like wal-mart see it on the first of the month when people are getting the checks. they go out and they're spending. people who don't have money spend all of it. if they spent all their money, they wouldn't be rich. >> david: but the bottom line is the overall economy better off as a result of the extending the bush tax rate cut? >> of course it is. you want decisions made on the economics, not politics. the more money in the private sector, that means that the economics is a determining factor in what happens to money whether it's spent, saved or invested. i think that's why president obama agreed all of a sudden he's for supply side economics. he realizes the big benefit. >> david: it's not just rich people buying things, but a lot of small businesses facing
the tax hikes who now are and maybe will be able to expand and hire more people. >> almost half the profit and small businesses have their profits, personal tax rates. this is also about investment. when you have more investment, you want have the well qualified people taking low paid jobs. there will be high paid jobs again. >> david: last word from steve forbes. coming up, this might make you mad. rising gas prices, but the informers say don't get mad, get even. with the stocks going up along with your energy bills. we'll give you names coming up. [ female announcer ] this is not a prescription.
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>> carbo ceramics, makes the stuff prop open the natural gas well. go for natural gas, not for oil. >> david: emac? >> it gives you indegestion. this is expensive. >> david: you are look south of the border. >> brazil! that's right, david. mmci brazil. etf. i-shares, it has petrobras in it -- >> david: that is the national oil company. >> yes. thank you for that. great companies in brazil. brazil is the talk of emerging markets, surging economy. it has combined economy. >> david: you like brazil, morgan? >> i do like brazil. but fund a study -- [ inaudible ] my energy trader friends who predict oil will go up to $120 a bafrl, a faster, more direct way to make mon