vanguard global index great. >> and thought about reits, come back? >> i'm not sure the tax rate is going to be on it. that is dark cloud. >> neil: to say something of dividends. >> we know they are going to be treated harder than they ever have. >> neil: i want to thank you all. more business news, david asman is on the network for all numbers and all things crunching ♪ ♪ >> from tax payer bailouts to big time payouts. government report showing fannie mae and freddie mac employees are receiving more than $200,000 in compensation. this is taxpayer money.

the agency say this is necessary to stay competitive. the in f that is the case is small price to pay that bailouts are waste of money. i'm david asman and let's go focus in in with steve forbes and rich and elizabeth mcdonald and john tandy. is this proof that bailouts don't work? >> what it is proof, you shouldn't have the government in the business in the first place. that is how they got bloated. government guarantee and that is why they can pay these outrageous salaries. if private companies, they would be allowed to go out of business. no bailouts, let the markets work. let these guys, either liquidate them or privatize them. dave: top 90 employees at fannie and freddie, that is lot of money?

>> i'm not going to support that kind of salary to anybody working in the government but i'm not sure it's indicative of a problem of the problem of bailouts. i have real issues with the direction that fannie and freddie have taken. you have half. mortgage debt under the control of these two organizations. had we let them go down the drain, anybody that owns a home would not have been happy with the financial result of letting these things go down. bailout may have been ugly but unfortunately it was absolutely necessary. >> the bailout is still ongoing. these organizations are taking hundreds of billions of dollars from taxpayers. just to remind people what fannie mae and freddie mac do, they buy up all the mortgages and then package them in mortgage backed security and sell them to federal reserve board in order to buy them. its government operation? >> yeah, it's an example, i'll give my liberal friends credit.

they had good intentions when fdr started it in 1938 and in the '90s, bill clinton wanted to see more lower income people to become homeowners. they couldn't pay the loans. you could see something in a boom time and bad time it doesn't work. so here we have the government guaranteeing private banks making bad loans. it was formula that was destined to go down. we should liquidate fannie mae and freddie mac at some point. >> whenever the government keeps control of these things, everything from salaries to everything else gets out of control? >> well, to me, rich nailed it in a sense it's a larger question why is government in the business of propping up home ownership. it gets us in trump. the organizations have gone in and out of quasi governmental status and there is not a lot of

accountability. if the organizations were the books of the u.s. government it would make us look like greece tomorrow. instead, they are in like netherland so stuff like this happens. >> we're beginning to look like greece right now. but some things have improved. prices have gone up but that is supply and demand issue. supply is way down so delinquency rights are still very high. >> this is biggest government stimulus program of all. people forget, this stimulus, five trillion bucks. the president is rallying about fat cat bay but they were exempt from dodd-frank. they basically dominate the mark 90% of the mortgage market. they've got government backing. they don't have to compete. they don't have to out perform.

they make more money than the government overseer, that is doing their job. you have directors there making millions of dollars. we should have reined them in long time ago. >> there was a ignite named franklin rains, he made $90 million back during his reign and they gave out $45 million in bonuses. these organizations have a bad history. >> they got a bad history. we have always known that. they were never real based on market forces. if they were, they wouldn't be paid, they would be fired by now. we have to liquidate them. i'll point out what rick said about letting home prices fall. the purpose of fannie and freddie, if you accept their existence is to make housing affordable, we had a chance to do that and rick is calling for

them to prop up the home prices. >> they do exist. steve, the point is that bailouts continue to make sure that they do exist and maybe they shouldn't. that is problem with bailouts. they keep in place that which we should get rid of? >> that's right and let the capital be redeployed. in terms of packaging mortgages there are plenty of companies that can do that job. if banks know they can't throw it off to the government when times get good, they will be a little more careful. it wrecks discipline in the marketplace. >> i know the treasuryly will say we have been paid back in the bailouts. the fact is you are always saying, the big banks and mismanage things, you are right. when the government bails them out instead they should let them go bankrupt, correct?

>> is there a question there? they took a turn back in the 90s >> hold on, let's broaden. my point is that bailouts make things continue that maybe shouldn't continue. like for example these huge banks like citi that are too big right? >> you have to be practically about this. what would have happened to all of us if we had not bailed out some of these institutions. yes, it is troubling. >> we would have had better economic growth than anemic growth we're seeing. but these guys are not paid to wind down fannie mae and freddie mac, they are being paid to keep the status quo which is for lawyers, half billion dollars in legal fees to defend corrupt people at fannie mae and freddie

mac who engage in accounting fraud. >> that is absolutely right. they are in self-preservation business. i want to point out something that obvious, if you were to start large financial institutions today that were tied to the mortgage market and you wanted to hire really good people, would you base yourself in washington, d.c. and virginia? no, you wouldn't. we need these big salaries because we need to recruit top talent. go to manhattan. >> that is the point. if bailouts maintain the government centered focus to our economy? >> yes, and it's sucking the% whole economy and we're getting two or 3 percent growth. there are $200,000 jobs in north dakota in the oil field. i would tip into paying to move the bankers to north dakota.

>> by the way, on bailouts in terms of banks, there are established procedures, if you have good collateral, you get a short term loan and get over the cash crisis. that is what they should have done in 20078 instead of putting in equity capital. >> neil: coming up next. >> kick the can road down the road for too long. >> we're not going to be able to solve it by kicking the can down the road and doing all the gimmicks in the past. they say they don't wanted to kick the can but steve forbes that is exactly what washington should do. this is flip side. you do not want to miss.

♪ ♪ ♪ [ male announcer ] a full life measured in seats starts with the right ones early on. car crashes are the number one killer of children 1 through 13. learn how to prevent deaths and injuries by using the right car seat for your child's age and size.

asking folks to allow us to kick the can down the road further and that we don't want to do. >> what are we waiting for? what other information, is from a dove going to fly in with a message tied to his leg? >> one possible scenario, we kick the can down the road, sort of suspend everything for "x" number weeks or months. >> so they are warning not to kick the can but on the flip side, steve forbes said that is

what we should be doing. >> you don't poison the patient. you don't harm the patient. right now this economy is getting weak. we've seen higher taxes have done in europe and southern europe. france and germany about going into recession. japan is already in recession. why apply the poison here. you don't put it on taxes on the economy and why put poison in the patient. i don't get it. >> i'm not for tax hikes or anything, but if you kick the can voters are never going to be ready to reform or pay for entitlement reform. don't do entitlement reform. it took two years for reagan to do entitlement reform. sell by date is long past due on these measures to fix fiscal problems. the problem is we're in economic

era of falling expectations and that has to stop. >> if we kick the can for six months that gets us to midterm elections? >> yeah, but the flip side of the argument you can pass a lot of bad bills. nancy pelosi, let's pass the healthcare bill so we can see what is in it. the big thing that we need to concentrate on is getting back to 3% growth. this 2% growth, all of our fiscal problems are going to get worse. we only have a prayer of supplying more jobs, bringing down unemployment and braying down the deficit if we have 3% or greater. >> if we do it now, what both rich and steve are saying, the tempers at such a peak that we're bound to get a bad deal no matter what we get. >> i'm sympathetic to what steve is saying. you have complicated issues and it's hard to deal with them and we have days left.

you are getting closer and closer to the next election. you know what they will wait until the last minute again. they won't confront the serious issue. we need to get it rolling. >> john, rick is big compromiser here. >> steve is always right. [ laughter ] >> if that isn't something. >> it's also true the simple truth that is haste makes bad laws. it gives us tarp or dodd-frank. let's push this into 20 13 and hope they can't pass anything then. >> it is true those arrows back to clinton administration, market seems to do pretty well? >> john, you have something brown on your nose you might want to look at. [ laughter ] >> i'm in the awkward position

of agreeing, agreeing with rick and agreeing with nancy pelosi, that is hard for me to do. it's hard we do these things at the last minute, we don't make great decisions, but i don't have any faith it will be different in six months from now. we have stressful decisions will be made but i don't see it changing in this administration or congress. >> what will change, if we take your advice and kick it down six months, what is going to change? >> a lot is going to change in terms of how the economy is looking and around the world. a weakening economy. not since the 19 30s have so many governments raised taxes in the face of declining economy. it's putting more poison into the patient. republicans can do a lot of good proposals, companies have $1.7 trillion of cash over overseas. welcome home tax on that. bring in an extra $50-60 billion

revenue. a lot of positive things can be done instead of putting on taxes. france, italy, the united kingdom, even greece is raising its tax rates and it's not helping at all. growth rate is very low. thank you. bugging your bus with your own tax dollars. government says it's eefgs dropping for your own safety, folks, but it is just a costly invasion of your privacy?

wow. these are really good. you act surprised. aah! aah! practice makes perfect. announcer: you don't have to be perfect to be a perfect parent. there are thousands of teens in foster care who don't need perfection, they need you.

nothing private anymore. san francisco the latest city putting eavesdropping devices on public buses. department homeland security dishing out $6 million to the city by the bay so it can listen into the passengers and more towns are planning to do the same thing. and john hates the idea. why? >> its horrifying blast to the iron curtain world of the past where brutal governments snoop on people. we're not subjects of the federal government. they work for us. the idea they become angels so they can look over us is really scary thing. >> it's the worst of the past. big brother era and worst of the future with high technology. what do you think? >> please. come on. a lot of crime happens on buses. i think it's a great idea we have cameras in there. it's not like someone sitting in a dark room every camera in

every bus. we're going to use the footage and from a crime prevention point of view. >> what do you think good idea or bad idea? >> this is big brother on steroids. what is next, going to put video cameras in bedroom inside the house. this is just bad stuff. it's one thing you fu have probable cause. point another where you are under the watch of big brother. >> you are libertarian guy but high-tech kind of guy. whater do you fit in? >> i'm a small libertarian, so i don't share the outrage. i don't see the slippery slope. vicky is right. public transportation systems, subways in new york, recent incident in new york, it's kind of nice to be able to catch people that do that.

>> you have to balance the pros and cons. which wins out? >> i'm going for a piece of that christmas that john got for himself. steve forbes is right. we're overdoing it. we're going to become the instead of solving the problem. we need to chill out. >> i know, you painted a scenario of silliness, somebody staring at every action or word on the bus. when you are bothered, wondering who is listening in and if they are listening in? >> i'm glad someone is listening. what am i doing on bus. here is why -- >> how much liberty are you willing to give up to be secure. >> i know the story... in the bay area. they were able to track down the

other kids who beat him up because there was a camera in that bus. to me that is powerful story. >> go ahead. >> i mean how much liberty are we willing to give up to be secure? this is just so dangerous to rely on people to snoop on us. >> then don't take public transportation. that is the dividing line. we know that public transportation is a target. >> isn't eight slippery slope. you started in the streets with these cameras at traffic lights. now you are going buses, now next inside your house. >> hey, i got tagged for going 69 in a 55 because of a camera and i never stopped. but i was going 69. it was my problem. >> let's have the new libertarian? >> that argument doesn't wash. i do have to agree with those guys. it goes too far.

big difference between cameras and listening in. >> last word, the informer say santa claus rally is coming to town. names ready to fly, that is coming up next ♪ santa claus is coming to town ♪ ♪ santa claus is coming to town ♪ ♪ santa claus is coming to town ♪