daddy. >> clayton: if you're just waking up you might have missed. >> dave: logan pauline briggs, and hope she's sleeping, hi sweetheart if you're awake. >> more "fox & friends" tomorrow and go to the after the show, show. we'll learn if dave's changed any diapers. >> brenda: president obama praising the passage of the payroll tax cut, saying we need it to help pay for soaring gas prices, and this holiday weekend, they're out of sight all right. up more than 90% since he took office. now, someone here says, stop talking about it how high gas is and start doing something to bring it down. and hi, everyone, i'm brenda buttner, this is bulls and bears. let's get right to it. the bulls and bears this week, gary b smith, tobin smith. jonas max ferris along with bob and steve murphy.

bob, focus on lowering gas prices and not how to pay for high gas prices? >> that's the issue. my goodness, we're expending this because we're not addressing the real problem and the real problem is, there's a great psychological impact on the price of gasoline, every consumer understands it. it's not like the trade balance or something like that, they're trying to figure out is this important. it's extremely important because it's in our face every single week, and this is why we don't have a comprehensive energy policy. we have to focus on lowering the price of gasoline, it will have the single greatest influence on our economy, and extending the payroll tax cuts, they do nothing, all they do is sustain where we are now. lower the price of gasoline, are you kidding me? that's what will stimulate the economy. we're absolutely focusing on the wrong thing. >> gary b. don't people need the tax cut all the more because they have to face these higher gas prices? >> well, brenda, i would never argue of increasing taxes, i'm in favor of tax cut, in tax rates, yes, across the board,

i'm always in favor of lower taxes, but i think bob is wrong in one aspect. we do have a comprehensive energy policy. it's to put resources in unproductive areas like wind and solar and cut out the productive areas that would have, like oil. you know, the one good note. we're doing more drilling on u.s. soil than in the past 25 years, the reason, most of that drilling is it on private property. and the government property that, like anwr or off the coast still being restricted by the current administration, my gosh, if it's just simple economics, brenda, if we opened up those areas for drilling, we'd have a larger supply of oil, a larger supply of oil means a lower price of gasoline. >> brenda: steve, how to bring those gas prices down, do you agree? >> i think we're pointing the finger here at the wrong president about oil prices and gasoline prices. it's not, i'm not going to say president bush, it's president ahmadnejad.

the reason why the oil prices are spiking so badly right now is because of the crisis over iran moving towards developing nuclear weapons. and let's be realistic about it. it's going to get a lot worse. it's probably going to lead to a war. either involving the united states, israel, or both countries, and the gasoline prices are going to go up a lot more. now, if we're not going to have that situation totally wreck our economy, putting $1,000 as president obama points out, putting $1,000 a year in somebody's, in the family's pocket, making about 50,000 a year, that makes a lot of sense in terms of being able to attenuate the impact of the eventuality of gasoline prices spiking up to 200 $250 a barrel because it's iranian situation. >> all right be toby, you're shaking your head why? >> i mean, look at this logic. this is sort of like saying, you have a heart attack, but take this sugar pill. we're going to feel pretty good the next nine months. >> it's aspirin you're

supposed to take. >> can i make my own analogie analogies, now, we have a bigger issue here, and we know to gary b's point. we have enough oil in both anwar and on shore, that at the margin, prices, yes, are hit by the incertainty. but at the margin, it's the new oil that's coming on that's available and the amount of every day excess supply that would bring us down to the 85 and $75 price point and we can do it now in the united states and we have the shale oil revolution and we have the keystone pipeline that would actually bring another 2 million barrels and we could have 5 million extra barrels a day and trust me, i've been in the energy business a very long time, with that type of excess capacity, we would have $75 oil or lower, it would be profitable to bring out of the ground, but also have about $2.50 gasoline. >> i want to get back to this supply issue in just a minute. but jonas, you don't think it's because of supply disruption, you think it has something to do with demand? >> what i'd like to say

walking into the gas station and not experiencing the energy industry, but the actual-- >> oh. >> and the tax, the tax is the reason the-- we're all acting like, we need to have the tax break to pay for the high gas. the gas is high because of the tax break, which made the economy better. gas prices go up as the economy improves. the gas prices are about where the economy the last time the economy was strong a few years ago, was $4 a barrel, and because the economy improved, a sign that we're overstimulating the economy with too much stimulus spending and too low tax rate. >> i will say all the things you're talking about, middle east and anwr, if they let the tax cuts go away this year, you will see the price of gas go back to $3 a gallon because there will be a drag on the economy and people won't spend as much. you're a chicken before the egging this gas thing. it's a symptoms of the strong if not overheating economy from too much government stimulus and lower tax rate. >> brenda: i don't know who to

go to. >> dr. bob-- >> it's not overheating in chicago, come here and get a taste of reality. this is not an overheating economy. and my goodness, what we have to do is help stimulate the economy, not by having the government throw money at it, we have to address the issue. and toby and gary b are so spot on. it's drill, baby drill. we can solve this problem ourselves. just have the political will to do what's right. and to do what's right. take the energy in your own power, your own control, drill and bring the price down, that will stimulate the economy, and we won't need these extended benefits. >> brenda: steve, let me ask you a question. steve, if gas -- if gas prices come down, does that mean that we can get rid of this tax cut then? if they go up, we have to have the tax cut? >> very, very good question. but i agree, lower rates across the board would be excellent for our economy. what we ought to do is make this tax cut permanent, by taking the cap off the payroll

tax, so that if you make 10 million dollars a year, you pay the same as somebody that makes $50,000 a year, you pay the same rate. you want a flat tax, that's where we should start here, this is the most regress seive tax in our society, let's flatten it out. >> remember, we're talking about gasoline prices and the economy and we know it's corco d correlated. we're using 5% less gasoline because we're driving 5 1/2% less mileage and better mileage. the economy starting to absorb this. why do we put a governor-- why do we dilly dally around the edges and we could have our economy, ramp up, higher tax, lower gas prices, r virtual updraft.

>> can i respond by agreeing? i think it's a matter of political will. let's have the will to just to it all and stop arguing whether it should be more gasoline or more nuclear or renewable. >> brenda: let me. >> we need to be energy independent, do it all. >> brenda: let me ask jonas about that, you answer toby about that? >> that half of the question, sure, you supply more oil, the price will go down, but we're talking about taxes, what the president was talking about, and the payroll tax cuts lead to people having $40 more every two weeks, some of that winds up in the gas tank on the way to the olive garden. >> true. >> we're talking demand side of the high gas prices and tax cuts in the strengthening economy, basically we're running the stimulus where we don't have a recession is going to lead to higher consumption of fuel and higher prices, you can't solve that by doing something else, you've made a problem with the stimulus. the government spends more than they take in, that's the stimulus program, any way you slice it. >> brenda: okay. hold on there. from soaring gas prices to

soaring green subsidies, the white house upping the the ante to sell plug-in cars, but is it time to finally pull the plug? you know the a cavuto gang never pulls any pufrnches at the bottom of the hour. here, income inequality in america is a good thing? >> there is an income inequality in america and always has been and hopefully, and i do say that, always will be. >> brenda: rick getting ripped by saying that. but is he right? we debate, you decide. what's withou?

trouble with a car insurance claim. [ dennis ] switch to allstate. their claim service is so good, noit's guaranteed. [ foreman ] so i can trust 'em. unlike rdy. dolr for dollar, nobody protects you like allstate.

ask me. [ male announcer ] if you think even the best bed can only lie there... ask me what it's like when my tempurpedic moves? [ male announcer ] ...talk to someone who owns an adjustable version of the most highly recommended bed in america. ask me about my tempur advanced ergo. ask me about having all the right moves. [ male announcer ] these are real tempur advanced ergo owners. find one for yourself. try your friends on facebook. see what they have to say unedited. ask me what it's like to get a massage anytime you want. [ male announcer ] tempurpedic brand owners are more satisfied than owners of any traditional mattress brand. [ woman ] ask me why i'm glad

i didn't wait till i'm too old to enjoy this. [ male announcer ] start asking real owners. treat yourself to the ultimate sleep experience and save up to $200 during the tempur ergo savings event. plus visit tempurpedic.com for full details on our 0% apr with 48 months to pay. don't wait. the tempur ergo savings event ends february 26th. visit tempurpedic.com now. tempurpedic. the most highly recommended bed in america. >> hello everybody, private funeral services for whitney houston are about to begin and kelly wright is live outside her hometown church in newark, new jersey. kelly, what can you tell us? uma, today will be what members of new hope baptist church describe as a home

going for whitney houston, one of the greatest musical stars of all time. ♪ and i, i will always love you ♪ ♪ i will always love you >> such an amazing voice and procession of gold limousines, following a hearse carrying whitney houston's remains from the funeral home this morning, remembered for her amazing voice worldwide. and jazz flutist bobby humphreys remembers when whitney was a teenage full of laughter performing with her mother at sweet waters nightclub where she was discovered. >> she had started modeling and there is was always a dichotomy which of the two she was going to pursue. there's a guy by the name of jerry griffith that i'd like to give a lot of credit for. because he was the one who was at the time working in promotions over at arista, and

he was the one who convinced the great clive davis to hear this young lady and the rest is history. >> reporter: 1500 invited guests at the baptist church and hear about the history and whitney's impact on american music, uma. >> definitely an emotional tribute indeed. thank you very much. we invite you to watch coverage of that, jon scott and i are here for the coverage, 11:30 eastern time. i hope you'll join us. >> brenda: rick santorum raked over the coals for saying this. >> there is income inequality in america, there always has been and hopefully, and i say that, there always will be. why? because people rise to different levels of success based on what they contribute to society and the marketplace, that's as it should be. >> brenda: gary b, you say he is absolutely right? >> 100% right, brenda. in fact, income inequality are

the ability to achieve income inequality is what made america great. it allowed people or people like henry ford or andrew carnegie and bill gates even to go out there and take a log the risk so they could earn a lot of money and they did so and they brought great innovation and productivity to the country. and people that want income inequality, you have to look at america in the 30's, we had great income inequality then and it was a terrible time or look at the soviet union, look at communist china. china now, no, brenda income inequality means that people, rick santorum can get ahead and thrive and grow, best for america. >> and your brother, gary b, mr. smith, may be richer than you, but you're not jealous about that. >> far from it. i would just say this, obviously, what income-- if you take the term literally, i think that people were saying that somehow that

was about discrimination and that's not what rick santorum was talking about. and to the point, how many years you go to school, how much risk you want to take, and not everybody wants to make a million dollars a year. not everybody wants to make $100,000 a year. part of our system, you are free to make those decisions, this is about a meritocracy issue and that's the point that santorum makes and that, to gary b's point, is what has made america great. >> brenda: steve, has it? >> absolutely. if i'm supposed to quote from the communist manifesto and to ye he, everybody to his knees, when it's based on merit, yes. when it's based on whose womb you came out of, i don't like it. here is the problem with income inequality. gary b was absolutely right. we had income equality going into the depression, everybody was poor or actually 30%, but in the 30 years after the war, we had our greatest period of

economic growth and the benefit of that was spread out to all social classes basically because could you work at a factory at that point in time, obviously and earn a good income. the last 30 years, that's not the case. middle class stagnant. no income growth in the last 30 years and the top 1%, i say that statistically has tripled in the last 30 years, that's a problem. >> brenda: bob, i bet your statistics tell a different story? >> well, look, it's the basic foundation of this country, you know, it's what puts the fire in the belly. creates the motivation. why would anyone ever work hard, why would anyone ever want to get ahead if they're not getting paid for compensated for that. the inequality. that's what it's about. the ability to say, i can improve my life. i can improve my quality of living, if i work hard, take these opportunities, they're not going to be handed to you, if it was easy everyone would do it and that's the whole system, that's in place. and it's there for everyone. and everyone that wants to make themselves a better

quality of life and living, they can do it in this country. >> brenda: jonas, i'd like to hear what you have to say about this. >> while it's true to only a communist dictatorship does everybody have the same income, they're looking at this the wrong way. because every country has income inequality, if that itself was a necessary thing, why isn't mexico building into a bigger country than america. we have less income inequality and other countries and to meritocracy point you have the ability more so than other countries to climb in this country to higher levels, just on skill. we see more billionaires created without college educations, than we have in the past and even in our own country and other countries. so, don't confuse the order of business here. >> that's got to be the last word, thanks, guys. u.s. banks put on warning that the downgrade could soon be coming, all thanks to those new costly regulations. could this derail america's economic recovery next? . does any mother evefeel like their kids are adults?

i have twins, 21 years old. each kid has their own path. they grow up, d they're out havingheir life. i really started to talk to them about e things that are important that they have to take nership over. my name's colleen stiles, and my kids and i did our wills on legalzoom. [ shapiro ] we created legalzoom to help you take care of the ones you love. go to legalzoom.com today and complete your wil in minutes. at legalzoom.com, we put the law on your side. my high school science teacher made me what i am today. our science teacher helped us build it. ♪ now i'm a geologist at chevron, and i get to help science teachers. it has four servo motors and a wireless microcontroller over the last three years we've put nearly 100 million dlars into american education. that's thousands of ks learning to love science. ♪

isn't that cool? and that's pretty cool ♪ do you enjoy winter even more when you know it's just about over? then check out the savings at bass pro shops and at basspro.com, like... when i'm on overtime. when i'm in over my head. when i have to be sharp... no matter how many time zones i've crossed. when i'm on my feet for hours. when it's game time. when the day's only half over but my energy is all gone. when i need the energy to start exercising. every day. every day.

every day is a 5-hour energy day. 5-hour energy. every day. >> oh, just as we see signs that the economy is percolating, credit agencies, paying for the new

>> u.s. banks back in the hot seat. credit agent moody putting them on warning for potential downgrade. one of the reasons, soaring costs to cover the new regulations, toby, we're seeing signs the economy is improving and the dow close to 13,000, would a downgrade of this magnitude derail the recovery? >> yes, it would and two reasons, number one at the margin when you raise credit card rates and small business loans, you make them less available. those companies that are at the margin then start to slowdown. we are starting to pick up

momentum. the way you kill momentum is cut the legs out of the people just coming out of recovery, that's what happens when the prices go up. >> jonas, do you agree? >> i think the rating agencies is screwed up so bad they're trying to make up ahead of it by the down grades, u.s. government, foreign government and banks and causing mischief. we need confidence in our banking center and it's critical. the economic recovery and everybody should take it off the banks, five years after the crash and the financial, in the real he estate market. you know, we don't blame the tech companies in the 2000 crash of jds uniphase, let it it go. >> are they an easy target, steve? >> we had an absolute separation under glass-steagall for 80 years, and between the banking and investment functions, how did they make any money, they're ronning about it. the regulations aren't as tough as glass-steagall. >> gary b? >> and tell you what, the financial industry is 8% of our sector, just from pure,

from a macro standpoint, if you more heavily tax 8% of the sector, and move those funds to a less effective form, which is basically the government taking the money, it's always going to be less effective than the private sector, you're going to have a drag on the economy. it's as simple as at that and it's silly and toby makes the point. financial sector is the life blood of the economy. don't shut it down now. >> bob, does it take us back into recession, do you think? >> it puts us on the verge. if you look at financial services industry, it's that one industry that touches every other industry and there's no other place like it. so it does have a greater impact than any of the other sectors out there and to be the most ironic part of it. now after the rating agencies, watch the banks destroy all of these investors net worth and now they're saying you know, we think we might downgrade them. it used to be a leading indicator and now a lagging

indicator, this is a-- >> and the cow has left the barn, i believe. >> and that's a good one. >> i mean, do you think it's-- don't the banks need to bear some of this responsibility though? >> well, yes, they do. remember, we're talking draconian regulations and talking about gomez, for instance, having 70% less profit, you know, other banks having 50% less profit because the operations are curtailed. when they have less profit. they have less capital. it's a one-to-one correlation. >> all right. and-- >> and we could go overboard. we went overboard and we always do, just like with sarbanes oxley and get back to reality. it's a complete overreaction on this legislation. >> all right. thanks, guys. and thank you to steve for joining us, we appreciate it. >> our pleasure. >> prices on nearly everything, going up. but there is one thing you're not hearing about, that's actually going down. and there's one name, about to take because of it. what's this? it's progresso's loaded potato with bacon.

it's good. honey, i love you... oh my gosh, oh my gosh.. look at these big pieces of potato. ♪ what's that? big piece of potato. [ male announcer ] progresso. you gotta taste this soup. but does bringing a floor back to life really make us heroes? [ chuckles ] yes. yes, it does. ♪ call 1-800-steemer

>> predictions? gaur i-- gary b, you're up. >> gm came out with great earnings. but it's ford for cause or effect, in the driver's seat. >> brenda: bob, red or green light on that one. >> it's a red light. i don't like the industry, i just don't like the american automobile. >> brenda: what do you like? what's your prediction, bob? >> i want you to show me the love all year long, hershey, unwraps, unwraps, 33%. >> oh, i like that. >> brenda: jonas, i know you love chocolate, bull or bear. >> not as much as the american auto industry. >> brenda: and your prediction, jonas? >> verizon is the winner in the battle between time warner and the knicks over msg and the jeremy lin hysteria, they solved it, 20%. >> brenda: toby. >> i don't like msg, i like comcast.