tv The Willis Report FOX Business February 13, 2013 9:00pm-10:00pm EST
they decide they are okay with that. >> nobody is forcing you into anything. >> we don't have to do a lot of things. you can start suing companies for a lot of reasons, or you can just understand. >> the reason they are not taking the money back your in it is because they are paying taxes on it. >> he says he's going to hire a few workers in this country. [talking over each other] [talking over each other] >> where will this all end up? >> i don't know where this one out. but again, investors need to focus on companies that do good.
it will have the capability regardless of how much is in the bank. >> the first dollar i earned was below minimum wage. >> apple seems to be listening more than they have in the past. >> and companies like that start on it was innovation over time. companies like microsoft, apple, intel, whose hedge fund. >> hello, everybody. tonight on "the willis report."y >> president obama hits the road tonight to ponromote all of his federal spending programs.night shou i >> nothing should increase the deficit by a single time.me.
also, the plan to hike the minimum wage to $9 per hour. ho. a boost to the economy, or a eco jobs killer. i will break it down.l presidens latest plan keep your money safe? "the willis report" is on the case. gerri: all of that and more coming up. but first, call him the magician in chief. president obama is proposing tens of billions of dollars in new spending. he says that won't cost us a dime. now, that really is magic. fresh off the state of the union speech, the president hit the road today to push his new economic agea that looks exactly like his old economic agenda. dozens of new federal spending
programs. from the federal education program, building homes in rundown neighborhoods all over the country. the estimates of this the cost her at least $130 billion. on top of what we already owe. who really knows? not even theresident. he has encountered it up. one thing we do know is that it is like pulling a rabbit out of a hat. with us now is tim huelskamp of kansas. also harvard economist. >> cut spending, not go the other way, as a result, we have 22.7 million americans without a job. the last thing they want to do is take more spenng in washington. gerri: the president says is not what cost this much.
>> you are a harvard economist. dozens of new programs have not added anything to the deficit? >> the president is proposing lots of new spending. and a lot more tax revenues. he says he he's going to do it by tax reform. why do people think that that means closing loopholes, broadening the base and lowering the rate simultaneously. what the president wants to do is get more loopholes and of course he will get some more revenue in. that way the overall package may not increase the deficit, but the spending does increase the deficit. gerri: i didn't hear you say all that. kristin, to you. you hen'tnteresting analysis. you said that it was devoid of
purpose. and you thought was the weakes job he could have turned in. explain? >> i just felt like it was a lot of platitudes and clichés - a lot of stuff that he would propose will never get through the cars in the first place. he made a big show of doingan assault weapons ban, which is supposed to be the highlight of his speech. of course, it would never get through the house, and it won't address the problem. most of the killings are done by semi automatic weapons, not by assault weapons. gerri: it was such an odd speech the construction was so strange. if he thought he wasn't going to get cooperation today, i will just handle it by executive order if i can'tdo what i want.
congressman, back to the money for a minute. i just can't get away from this topic. the president said it has gone up by to join ours, but it has gone up by six train always great to the democrats not know how to do mathematics? >> this president comes to cut the deficitnd he has added $6 trillion and he wants people to forget. but let me repeat, mr. president, there is no free lunch. there is no free money out there. the economic policies are failing, you can't spend money and grow the economy. but you have to keep trying. one thing to note is that these things can pass. he had his chance to pass them, and they didn't. it is about november of 2014, this was a campaign speech that i believe is devoid of purpose, except forne, that put nancy pelosi back as speaker of the house. gerri: okay, that's for another day to discuss. in the meantime, i want to get back to you, jeff.
the president said something interesting about -- well, i think he was referencing how he perceived the republicans point of view on what is going on right now. what needs to be done. here is the president on deficit reduction. >> let's be clear. deficit reduction alone is not an economic pln. a growing economy that creates good middle-class jobs -- that must be the northstar that guides our efforts. gerri: i think what he is saying is that the republican plan is stingy. it doesn't go far enough. it has no ision. deficit reduction is not an economic plan. how do you analyze it? >> first of all, we should focus not just on the deficit. we shoud focus heavily on spending and taxes. the president wants to spend a lot more. democrats want to spend a lot more. of course, that is going to increase the deficit. i misspoke a moment ago when i was trying to talk about that. there is just no way that his
plans add up. because he's talking about much higher spending. he's not going to get near the tax revenue that he thinks from the proposed increases. so it's just -- he's trying to spin it -- go ahead. gerri: i just think that this is sort of an implied criticism of the republicans. but their plan just has no vision. it's all about cutting. it's really unpopular. nobody is getting any extra dough. what do you make of that,? >> well, if that was an implication, i would agree with that. i don't think that the republicans have a grand vision, but neither does the president. both ofthem -- well, there are two sides of the same crime. one side is cut and the other things spend. it is implicit in what he said is that he is going to, as you said earlier, he is going to
make up taxes. i don't buy into the hysteria over the deficit. in the short term, i don't think that ww need to raise taxes again. gerri: congressman, what is the right economic plan? what would work? >> it should be about a vision. the vion is about growth and opportunity and freedom. i was in the house small business committee today. we had a hearing on obamacare. it has cost 50 jobs because he's not going to create new businesses. deregulation, higher taxes, the vision is get washington out of the way, big government out of the way. that is a real vision. he reduce the deficit and get the economy growing again. we have more revenues coming in. but the problem is president obama is spending more than what is coming in. gerri: so many problems.
jeffrey maier and come up over to you. all of the programs that the president wants to put into place. if we had to spend that much money again to stimulate the economy, would work we might. >> i dont tink it would because the programs in question along with a whole range of existing programs actually reduce t efficiency of productivity of the economy. they requir taxes to be raised in the future due be paid. backwards.k it is exactly what we need to be doing is cutting spending and keeping taxes low of what the president wants you and what about all of this class warfare? we heard it last night. listen to this. >> we should do what leaders in both parties havarti suggested. we should save hundreds of billions of dollars by getting
rid of tax loopholes and deductions fromhe well-connected. gerri: well-off, well-connected. i've heard it all before. do these guys ever get tired of just knocking on the rich? the rich and wealthy? what you say we might. >> i think it's finn to expect the very welthy to not have all the loopholes that they have. i don't see that as class warfare. gerri: but i'm talking about the rhetoric. >> the republicans have agreed with what he said. they agreed that we can close some of those loopholes. you know, i just have never really seen this as class warfare. gerri: congressman, why can't the rich pay more. the rich should pay more. well-connected, well-to-do. >> well, that is a description
of all of his major donors. you know, that is a description of warren buffett who is about a billion dollars behind on taxes. a description of the treasury secretary who hid money in the cayman islands for himself and citigroup and had a million dollar bonus of years ago. those are the well-to-do ones that americans look at. gerri: let's talk about that then. jeffrey myron, should jack lew from the treasury? >> you know, the president is going to pick someone who shares his policy vision. every president is entitled to that. gerri: what about someone with experience? >> lotz had experience and d a miserable job. i mean, it's the president's pick. at the end of the day, i completely dagree on policy. but he should have whatever person he wants. that's up to him. gerri: this will be hard to put
away. this is something that could talk him throughout his tme in office if he does become the treasury secretary. what do you say? >> in all, everyone has a short memory in washington. i doubt that will dog him. but i think that -- i think that it's hard to match his rhetoric with other people like that. but he is constantly deriding other people who have a cayman island account. and yes, he has somebody that he talks about. >> some rules for some people. different rules for other people. gerri: it was a fascinating speech brought interesting analysis today. congressman, thank you for coming on. a little economic insight from jeff and kristin. thank you both for helping tonight. >> thank you. gerri: a lot more still to come. including the president signed his 147th executive order.
it may do more harm than good when it comes to cybersecurity. and that's. >> we know that our economy is stronger when we reward an honest day's work with honest wages. gerri: president obama pushing for a higher minimum wage. i will break down how his latest plan is just another job killer from this white house. and we will get one small business owners take. stay wt us. today is gonna be an important day for us. you ready?
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once again, american airlnes and u.s. airways merger has been approved. creating the biggestirline in the world, it is expected tomorrow. the president last night called for an increase in the minimum wage. >> tonight, let's declare them in that in the wealthiest nation on earth, no one who works full-time should have to live in poverty. and let's raise the federal minimum wage to $9 per hour. gerri: by the way, that is a 24% increase in pay. that's from today's $7.25 per hour. the difference is this time he came across the cuntry make it happen. raising the minimum wage could be just about the worst thing that he can do for the jobs market. already we are more than 7.5 million and a half jobs
below the level where the president promised we would be when he took office. raising the minimum wage means employers whose businesses are struggling on the margin of getting rid of jobs. cutting workers. last minimum wage increase in 2000 and nine donad 300,000 jobs. it's all happening now like it happened happen before. the president said he would sleep until everyone who has a job once one has one. well, there will be some sleepless nights ahead. there are unintended consequences of the higher wage policy, but there is also the facthat the president inaccurately depicts the people on minimum wage. if you surmised from the president's description that minimum-wa workers were single mothers balancing a job at mcdonald's and caring for kids, you're probably wrog. nearly half of minimum-wage workers are people under 25 years of age. 69% work part-time. the true picture of the typical minimum-wage worker is a high
school or college student with a part-time job. they are balancing the demands of work and in academic life. do they deserve a 24%pay hike? i don't think so. also, according to heritage, people typically live in households with incomes two or more times the official poverty level who make minimum wage. they refer to those people as mom and dad. here's what the president doesn't understand he probably do. minimum-wage jobs are training positions. the employer contributes every@ bit as much in terms of teaching job skills and work habits and contributing as a worker contributes. the job market is full of people performing at different levels. they all don't get paid the same amount of money. that is fair, that is right, and that is good. by the way, two thirds of minimum-wage workers don't earn minimum wage after a year. they get a raise. finally, i believe the president is trying to play on our fears
about the economy and the future. behind his rhetoric is the idea that the private economy is not up to the task of providing good jobs with solid pay. the government ha to kissthem in the behind to make it happen and i disagree. i believe that is wrong. our work force is not dominated by minimum wage jobs. it is the exception far from the rule, just over 5 are paid the minimum wage. that is down from 13.5% in 1979. in a world in which 14 million of us are unemployed or underemployed, the minimum wage is far from the biggest problem facing america. we needa stronger economy to produce jobs for every level of worker. let's get on that insolvent. coming up next, much more on the minimum wage war. as i'm joined by a business owner and how this will affect his restaurant
i was listening to the speech at home last night and i heard the call for higher minimum wage. not just a little bit, but a 24% jump. what went through your mind? >> we are not opposed to giving more money, but to go up 24% is very high. the people that work, most of them work only two or three months and then they are gone to another place. gerri: what you are saying is that you are hiring a constant cycle of new employees that are coming in. tell us about that and what would mean if you had to boost the wage so much. >> well, there is a high rate of exchange. we actually train them at a certain minimum-wage. so that actually comes down to a bettermount. what happens is after they learn, to they go somewhere else. we are teaching them at $9 per hour. gerri: this is a training wage. i see some of the people who
come in at entry level. and it's clear to me that the employer is spending as ch time teaching as the ki are spending performing. am i wrong? >> no, you're actually right. in my business, there are not many college graduates. at this point, we are training them to become what they want to. a baker, a pizza man, a bartender, whatever position it may be at that point. we are looking to -- if he wants to raise it, it should be maybe $28.25, something like that. gerri: you are a fancy pants restaurant operator right here and the numbers are big here. what you are suggestg maybe too much. talk about with the national independent federation of businesses had to say. it said it would hurt workers and job creation and economic
growth. the growth that is critical that must come from the small business sector. are you going to cut jobs? would you haveo cut jobs if you went to a 9-dollar per hour minimum wage? >> i could not train anyone any more. if that was the case, it wouldn't be someone who was in high school. gerri: can you make your business operate that way? >> we can, but it would take some changes and it would be hard. gerri: what doou think the broader economic impacts. it is a broader problem in the economy. what i found is this is how high school students get a little extra money. how college students get a little extra mney. it's sort of changes t dynamics of how the economy works. >> well, anyone, if they are looking to get a career, if they
want to try it, which many college students do, at that point, people are still willing to try to be in the restaurant business. starting them in at minimum wage, which is going to be even higher. gerri: it will be very difficult. thank you so much for coming on. i hope you don't have to pay it. i think that will hurt a lot of people. >> i wouldn't mind the increase, but not going to $9 per hour. gerri: you are willing to give a little. thank you so much for coming on tonight. >> thank you for having the. gerri: should the federal minimum wage be hiked up to $9 per our agreement log onto rriwillis.com, but on the right-hand side of the screen. i will share the results. for some states, hiking the minimum wage up will not make much of a difference since they already are over the $7.25 mark.
and tonight's top five, the states with the highest minimum wage. number five is a twoay tie between california and massachusetts. the minimum wage is $8 per hour, which could be a reason that california has 10% of employment. number four is nevada, connecticut, in illinois at $8 and 25 cents per hour. number three is vermont. the minimum wage is $8.60. he has a low unemployment rate, d number two is oregon. this state facing a .5% unemployment, pays its workers close to $9 an hour already. the number-one state with the highest minimum wage is washington. obama's plan is still not high enough for this state where the minimum wage is $9 and 1 cents per hour. washington would have to bump up their minimum-wage it would hurt
alabama, louisiana, missispp tennessee. they don't have that minimum wage, and they take their cues from washington. coming up, the administration sings the praises of lot. but a new report shows billions are in a hole. and president obama signing an executive order to strengthen cybersecurity. will it help, or is it government getting in the wake? answers will come up next. aw this is tragic man, investors just like you could lose tens of thousands of dollars on their 401(k) to hidden fees. thankfully e-trade has low cost investments and no hidden fees. but, you know, if you' still bent on blowing this fat stack of cash, there's a couple of ways you could do it. ♪ ♪
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that will strengthen our cyberdefenses by increasing information sharing and developing standards to protect our national security, our jobs and privacy. gerri: but is more red tape the way to wage war on cyberattacks? tuning out is the managing director at madigan economics and a visiting scholar from the american enterprise institute. welcome to the show, well, we probably don't even know the scope of all these cyberattacks. some 198. what would the president's executive order due to prevent that? >> well, not very much. what the president as done is -- it can really be called a press release. first of all, he said they are going to share information with the private ctor about the nature of cybattacks. you would think they would have been doing that anyway and we wouldn't need an executive order
to make that happen. secondly, they are going t create a committee under the department of commerce. anyone might wonder how well that will go on the face of it. but that will supposedly create some voluntary standards. there is another one on the department of homeland security that is designed to encourage the private sector to adopt these voluntary standards, which has a lot of people worried about how volunty standards will be. gerri: i have to tell you that it seems like a lot to do about nothing. is anyone against what the president and his executive order would do? >> well, i think the problem is, the senate is that congress was in the process of trying to address this issue in a legislative framework. with what the president has done is grab the ball once again out of the hands of congress. you have members on both sides trying to come together on a piece of legislation. they said to the president, they
said please don't take the ball out of our hands. let us legislate. you can do a lot of things you can do through an executive order. gerri: exactly. they really can't do anything that doesn't require legislation from congress. so they need work well within the laws that already exist. as you said, it's more like government a press release. but that doesn't mean there's not a threat out there. there is a serious threat, which i think you agree with that. what we need to be doing? >> welcome the problem is that the administration is talking a lot about the issue but not doing much. it is forming committees and regulating the private sector of the united states. what needs to realize is that we have a national security proem here. we have sovereign states, china, russia, iran, fostering, supporting and allowing were actually conducting
cyberespionage a $2 trillion per year, just in the intellectual property theft, just the kind of day-to-day cybersecurity staff. gerri: i have to ask you here. china. the china government trying to break into "thenew york times", trying to read stories online. how do we deal with that? remapped personal i think it's hilarious that in order to get the administrations attention, you have to attack "the new york times." the. gerri: i mean, you have the attention of the white house there. but, what you do? you know, some people have likened this to the oceans of the 19th and 20th centuries. it is the dominant medium by which we conduct commerce. what we need to do is get
serious about freeh comments, open commerce, on the internet. as the same kind of level of a prlem that we have always considered security on high seas. gerri: thank you for coming on today. we appreciate your time. it is a fascinating topic, and clearly we are not paying enough attention to. thank you so much. >> thank you for having me. gerri: when we come back, those free trades you hear advertised -- turns out they are not so free. next, the detailsn the new report showing just how much money we are losing on the big bailout. the boys used double miles from their capital one venture card to fly home for the big family reunion. you must be garth's father? hello.
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the. gerri: a fox business alert for you now. a number of banks, including citigroup, bank offamerica, jpmorgan, are reportedly holding more than $200 million in insurance money targeting struggling homeowners hit by hurricane sandy. many of those victims are using their homes as collateralon their mortgages and a process to protect homeowners from contractors trying to take advantage of them. neyork governor andrew coumo is planning a speedier process. at the end of the day, private insurance coanies are moving quicker to help hurricane sandy victims. peanut is only halfway done settling insurance claims filed by them. and also all the states affected by the storm. we will continue to follow that story. meanwhile, holy champagne. despite the rosy claim on the too big to fail bailouts, t.a.r.p. is far from over. the author of street talk joins
me now. it is great to have you here on the site to thank you. gerri: let's take a look at the numbers. treasury department said on january 23, they said what i thought was good news, t.a.r.p. is being wound down. much of this that has been disbursed has been collected. but you say reality ay be different? >> i think the reality is -- 80% of the money has very been repaid by march 11. in march of 2012, even more were retained. they can actually accelerate this down. but what they have done since then is work on auctioning the remaining states that they have in many banks. they have been able to do it becausthey are effectively looking at the payments and dividends that they had today. and they have said that we are in the black today. and we can do this without putting the taxpayer at risk.
gerri: it's almost $11 billion still. and we are years away where the banks were teetering on the brink. our most important financial institutions in the country. the possibility that you might go to the atm and not get any money out of it because they were in such bad shape. >> we do have a lot of money outstanding. the we are sitting on a 24 billion-dollar profit. the treasury is working towards this. they're a couple of billions of dollars held institutions. there's a good chance they could exit in e next year were directed at. they have also said that they are going to look to put about two thirds of this in the auction process this yer. so if you have somebody sitting out there, you really need to think about the fact that the amount that is out there today is actually less than the profit they are to have recorded. that is why their show starts
bvado with what they have done gerri: tell us about theuction process and what is going on there. >> they are running about seven days or things are so every time that they run an auction. they have investors bid on them. most of them have come out pretty big discounts. there has been 12 of them today. the average that we calculate is about 12%. the most recent one, the discount was about 35%. so it looks a lot higher, but when you get into the weeds there, you will getne institution, about half of the transaction, discount was 44.7%. so you have one institution that had some issues, they had not paid their dividends for quite some time. it really mucked up the numbers they are. gerri: there is always one bad player. >> just. gerri: nathan, and you were coming on. >> thank you. gerri: it's a tough topic, but you really shed light on it.
honesty in history in 1980, the nter olympics open in lake placid. ceated through the 24th of february, this was the time to village hosted the game. nearly 1100 athletes comped in 30 events. it cost $185 million back in 1980 to host the olympics. small change compared to today. the ussr took home 10 gold medals, germany took home nine meds, and the u.s. just took home six medals. it was one of the biggest upsets in olympic history, the u.s. went on to beat them in the finals and took on the goal. february 13, just 33 years ago today. still to come, my 2 cents more on waste, fraud and abuse on the department of homeland security.
newly merged airline. the company has been in bankruptcy, and an official announcement is expected tomorrow then the department of justice will have to approve that deal. we will continue to follow it. sorry, investors, there is no such thing as a free lunch, and that holds true for the too good to be true claims coming out of charles schwab. the ne guest says that the free etf trading is going to cost yo. chuck, welcome back to the show. chuck is from marketwatch. what i going on here? i thought everything was easy pc, no extra fees, and you are saying that that is not true? >> it might be if it happens with the etf that you want in the program. even then, we will have to see whether they wind up paying expenses. so if you get into a situation where a company says two charles schwab, we have to participate, a company, if they raise their
expense ratio to help make up for the money that they are getting from them, you're going to pay and higher expensess at some point, you have to figure that you are going to pay at. gerri: okay, so the promise of charles schwab's plan has to do with a pool of etf's thatthey can choose from. it is highly likely tha you -- the etf that you want owners not even in the screw? >> welcome you could get something close to it, or you could get it in a way that not is the way we think of the s&p 500. instead of getting the most popular etf, you could get the guggenheim s&p 500 pro rated fund. that you could get. but it is not the same at all. that is one roblem. well, instead of having a company like exxon be a big
chunk of this, it is less than a quarter of a percentage. it is an index fund that covers the same index, but it has a lot more exposure to mid-cap stocks in the s&p. gerri: idea what you are saying here. it's a little bit iffy. it is free right now. for a limited number of etf's. but maybe not for what you want to buy. those numbers, o they hold true with mutual funds? >> yes, they do. it is not revlutionary. you can do that now, i think the other thing that will happen, as it grows it will be better for consumers.
the but right now it is not there yet. it is not necessarily the funds that you want. the funds are very dimly traded. when etf is thinly traded, you may get the thin trade, but her execution, the price you are buying out, it may not be such a great price. when yourxecution is bad, that is where you have a cost that you can't even figure out. that is the bi issue. the etf that are paying to be in here, with the exception of charles hwab's own funds, they need to get money in. but because they are small, they are thinly traded, it means, okay, great, yu may give it back on the execution times two or three. they should, and come back more
often. >> would love to. gerri: thanks so much. have a great night. >> you too. gerri: there's a growing number of professionals leaving new york and the northeast headed south, and it's not just the sun sending them to states like florida, but it's taxes. we've covered this. the sunshine state has no state tax burden for residents making it a great place to do business, and, tomorrow, cheryl casone will be withmillionaires in miami for their take on why people, north easterns are calling it home. friday, fox business all day, complete coverage of the miami boat show. that will be fun, frieds, featuring 3,000f the newest boats on the water tomorrow on fox business daytime. we'll be right back with my two cents more and answer to the question of the day. should the federal minimum wage be hikd to nine bucks? all stations come over to mission a for a final go.
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