>> real quick, do you like it? >> i just think prices way ahead of their earnings and i think it's going to do nothing for quite awhile. >> love boeing and also love the cost of freedom that continues on the place for business. don't change the channel, fox. america's middle class is no longer the richest in the world. and get this, the same study that says this says that the middle class is shrinking because the u.s. needs more liberal policies like a higher minimum wage, more unions and more government spending on education but some hearsay those are the policies that are actually pulling down the middle class. who is is right? hi, everybody, welcome to "forbes on fox" let's go in focus. well, john, first of all, let's look at what this study's conclusion is which is other countries are are growing their middle class like canada for

example but not the u.s. why? >> well, the reason the u.s. is not growing is because government has grown too large. it's become too intrusive in our lives. americans aren't lazy. they haven't run out of ideas and initiatives. they suffer government barriers to economic growth by definition. if you want to reverse this. if you want to restore the middle class, there's basic things to do. abollishing the capital gains tax which penalizing investment in new jobs and companies would be a good idea. i'd also love to see the dollar stabilize but this is simple to reverse. >> what gets me and by the way the middle class has been shrinking more since the end of this study. but the obama administration spent six years pulling the country to the left and then blames the right for the middle class shrinking, i don't get it. >> well, look, i'm going to try a different approach to this. one thing we can all agree on is we have this problem with income inequality. we had it for a very long time which is why i wonder if we

should be approaching this from left and right. you can go back from the 70s. that's when this started to kick in. we've had conservative administrations and liberal administrations and no matter what kind of administration we have, we're not fixing this problem. let's look at different explanation. for instance, the ability to send jobs overseas in the modern era. how much is that impacting on this? the fact that we have so many public companies today that have an obligation to shareholders over workers and the fact that because we have open foreign markets, perhaps we don't care enough. >> a lot of those factors are effecting countries like canada. that's growing but we should note by the way since 2006 canada has been run by the conservatives. we're running to the left. our middle class is shrinking. >> the middle class is under pressure everywhere around the world. >> canada and sweden were two

countries in that article. their corporate tax rate is down to 15% and sweden has been cutting taxes in recent years so. the solution is obvious. when you look at those other countries in terms of minimum wage and things like that, germany has no minimum wage. their unemployment is 8%. france has a big minimum wage and their youth unemployment is 20%. >> we have an experiment here in the united states because each state tries a different pattern. we see illinois and california raising taxes and we see wisconsin and texas lowering regulations and taxes. it's the latter two that are doing better than the former two. >> that's right. the example i think your citing is texas. a lot of the net new jobeen cre >> let's spell it out. one third of all new jobs created over the past ten years have been created in texas and they have been dramatically lowering regulations in texas. >> plus the legislature in the state meets every other year. that's a great idea.

and also add to the list that steve rightfully put forgot. >> he cut taxes in half. he cut government spending in half and the economy, boom, grew 7% a year under calvin coolidge. tell me which hike creates a middle class job and the interesting statistic. >> easy for you to say. >> exactly. >> i'm speechless by this. you have rarely seen median household incomes decline through a recovery as has happened under this president. >> median household income in 2012 by the way, according to the latest census, it was about $51,000. mow, guess how much money you get if you're in hawaii on welfare? you get so much money -- you'd have to make $61,000 in salary, which is more than the median income to equal the amount of money you get on welfare if you

happen to live in the state of hawaii. something is askew here. >> well, when you have a size of government as we do that is about 23% of gdp, it should be about 18% of gdp. study after study proves the economy grows best when it's smaller at about that range but we're subsidizing all kinds of things. i don't want to beat up on welfare recipients. why are we subsidizing houses. >> it has a higher rate without those subsidies. those people opt out of social security -- we should let young people opt out of social security and save for their future. >> that's a great point but sabrina, there's nothing wrong with using the word welfare. i would include corporate welfare. i would include the welfare, for example, we just expanded the welfare program with regard to health care enormously in this country. everybody that is empowered by the government, whether they're

on a corporate level or an individual level has expanded. the rich people are getting richer. the government empowered are getting bigger. the middle class is getting squeezed. that's how i see it. >> no, i think you're right david and one of the problems is that we have democrats and progressives that look back to the golden area of the mid sen ri, post war where you had strong unions and manufacturing jobs that don't exist in the numbers they do today. but now we live in an information age. with very to change our tactics and one of the big things left out of the conversation and what made that mid century middle class so strong was the strong civic society. everything was solved by more legislation or more policy. you know, pelosi and others should go back and read and remember how important it was to have a strong community. so much of what we look to government to do today from child care to education was taken care of by our communities. >> and there's another point in terms of getting back to growing the middle class, where ever we

take the individual away from responsibility for his own self and family whether it's in education, unions, minimum wage, health care, whatever happens, that's when we get in trouble. when we try to plant the individual responsibility for government responsibility, right? >> absolutely. we have to remember, individuals comprise the economy. the economy isn't some blob. so when you increase incentive for individuals to thrive they will do so. a good example i think is china. i was just there thanks to forbes. 30 years ago the chinese were starving. today they were becoming millionaires and billionaires by the day. what's the difference? not the water they're drinking. the difference is government got out of the way. freed them up to grow economically. free up individuals. you reverse these problems. >> approximate the communist chinese can do it, why can't we? >> i have to take exceptions to some of the things i've heard. texas, it's great they're growing jobs. good for them. good for their governor but what they're really doing is moving

people from poor toward middle class. that's gate. i love it. but it doesn't speak to income inequality among the middle class if they aren't paying those people enough money and they aren't. also -- >> how do you know they're not? >> steve, you said it's obvious -- >> how do you know that. >> guys, let me finish. you said it's obvious all we have to do is lower taxes. raising taxes hasn't addressed this problem. i'll give you that but we have had tax cuts over these 50 years. >> but hold on there, steve forbes there is, better than any poll is what people do with their feet. they vote with their feet very often and they're not moving out of texas, they're moving into texas. they're moving out of the places raising their taxes like california and like new york. >> businesses are. >> and david, one of the things that hurts people is an unstable weak dollar. we trashed gold and made the dollar weak and that's when the inequality gap started to grow and you have a huge payroll tax,

huge estate taxes now. so that's why it takes two incomes to have a middle class existence. >> now radicals have cut the government cut taxes. we have a government bubble going on. 2 trillion in cash parked over seas. that's the cheapest stimulus. >> got to be the last word. thanks gang. coming up next in the dog house, a government watchdog caught altering his investigations at the request of senior administration officials. is this proof the administration is trying to bypass the checks and balances on big government? >> we pound out that this inspector general charles edwards had very close relationship with senior officials in the department of homeland security, totally inappropriate for inspector general. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer.

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nato suffering the single deadly yesterday in afghanistan after a british helicopter crashes in the southern part of

the country. five nato troops killed but their nationalities not known at this time. the taliban claims it shot down the helicopter. but nato says it's investigating. violence has been increasing in afghanistan as coalition forces prepare to with draw at the end of the year. president obama getting a royal welcome on his arrival in malaysia. it's the third stop of his asian tour and the first by an american president in almost 50 years. topping the agenda, trade, defense, and maritime security in the pacific. president obama will hold a town hall style forum which young people and is expected to offer condolences for the tragedy of malaysia might 370. i'm kelly wright. i'll see you back here at 1:00 p.m. for america's news headquaters. now back to "forbes on fox." >> one of the things this country has to keep power in check are the inspectors general. these are independent watchdogs meant to keep government

agencies honest. but a bipartisan senate panel says the former ig for the department of homeland security altered and delayed investigations at the request of senior administration officials. steve, is this administration trying to avoid the checks and balances on power? >> absolutely. every chance they get. it's like having a supreme court justice to get instructions on the next decision. you see it with epa. you see it with the national labor relations board. health care almost every day. you see it in finance and everywhere. laws aren't for them. they just do what they want to do. executive orders. in other countries they're called decrees. >> this administration has a policy trying to go around the checks and balances. >> every administration has that policy. look, let me say that right from the outset. absolutely wrong. this guy was kissing up to get a bigger job. they went along, wrong. >> we should mention, he has been put on administrative leave. go ahead and talk while we put up the statement of the sector of homeland security.

>> what the guy was doing was wrong. what he was asked to do is wrong. but it does grate a little bit when this all of a sudden becomes this big obama administration thing. when everybody sitting here knows this goes on in every single administration. i don't care what party they're from. >> but sabrina look at the examples. this is more than administrative action, executive action that we have seen more of in some other administrations. the changes in obamacare, for example. >> right. >> 38 changes and delays in obamacare. 38. this is not executive action. these are ways of going around congress. >> and it's not insignificant either. james madison had it right. if men were angel there is would be no need for government but government needs to control itself. you have corruption and you have problems. i think the real reason, to rick's point that people are look at the administration and criticizing it is this is a president that ran on transparency and change and making washington better. yet every week there's another

lie or corruption and another misleading stat and another change to existing laws. >> and despite all of those promises we had a good friend, he came out with this report in 2010, by the way, suggesting ways you can go around congress to accomplish what you want. he said the ability of president obama to accomplish important change through these powers should not be underestimated. nobody underestimates them now. >> well, it's definitely bothersome but i tend to agree with rick here oddly must have that this isn't an obama administration thing. presidential administrations tend to look out for themselves. they don't like this kind of oversight and that's where i agree with sabrina. this is a problem with big government. if government is doing too many things there's going to be scandals and attempts to avoid oversight. shrink government and you'll shrink the number of these scandals. >> but we do have, we have specific measures in our system designed, despite the growth of government, designed to stop

administrations from abusing their powers and i inspectors generals are one. we saw the abuse from this guy. we also saw the administration trying to really smear the reputation of the ig for the irs who spotted a lot of misdoings there. so there is a pattern here, no? >> well, there's a pattern and i think sabrina put her finger on it in a strange way by quoting james madison and the problem is that obama's people do think he was an angel. he was elected in 2008 to save us from waters rising and all of these kinds of things. now he has a poll rating in the low 40s. he's going to lose the senate in the fall and they're circling the wagons and i will disagree on this, i think there's a least transparent, sneakiest administration since nixon. >> wow. >> do you agree? >> since nixon. where is the hhs ig? tuz that person even exist. >> right. >> we have a fraud waste and

abuse commission ichl. it's supposed to be congress. we have a record number of czars and executive orders. a record amount of time spent circumventing the constitution. who is watching the watchdog? nobody it seems. >> and steve, the thing is even when they're doing stuff that a lot of people in congress agree with, instead of going through congress, they'll do it by executive action or some other means. >> yes, they have to be called to account. there's a case coming up in the way they abused the law in terms of health care exchanges. ultimately the supreme court is going to rule on that. they're going to rule on the national labor relations board abuse. they're going to get into action and start to pay this back but congress has been on this. >> that's the last word. coming up, the epa chief's first week tour as environmental and the cashing in gang agree on one

thing. that at the bottom of the hour. parents pull out your wallet. moms and dads getting slapped with a fee when junior gets slapped with detention.

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with premium service like one of the best on-time delivery records and a low claims ratio, we do whatever it takes to make your business our business. od. helping the world keep promises. coming up action punishing parents when their kids get detention. is it right or wrong? is it right or wrong? the performance review.

that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. go to comcastbusiness.com/ checkyourspeed. if we can't offer faster speeds or save you money we'll give you $150. comcast business built for business. maybe this will bring a little bit of disciplines back to our schools. a charter school group in new orleans charging parents a $25 fee every time their kid is punished with a saturday detention. sabri sabrina, you think is a good idea. >> i can go along with this. if your child is disruptive enough that they have to be sent

to a saturday detention, parents should know that. i suspect these are charter school kids. they're a self-selective population of parents that want to know what's going on. i think this might be a good policy for this school. >> by the way, the reason this charter school says they have to impose the fines is because it costs money for the detention centers. they say it includes counseling for students and parents to address the root causes of the behavior. they're spending money. the parents should pay for it. >> i don't know when money gets involved when you have these local bureaucrats then maybe doing a lot of detention just to make the money. there's another way too. some charter schools that i'm aware of, my god daughter teaches at one, they force a parent to attend detention with the student. >> that's an interesting idea. what about that? >> substituted the fine for forcing the parents to go into detention with the kids. >> i think both are great ideas and i would add a third. you know, make the kids earn minimum wage by sweeping the

floors. look, charter schools exist because there is a lot of disorder and too many public schools. so they have to take disruptive students very seriously and get the message to parents. >> well, john, by the way, if you use rich's example that the kids would probably go union. you know, now that they are unionizing college football players. if you sweep the hallways, you could probably join the union. but go ahead. >> no, i like this. education should be local and i say the biggest problem with schools today are unruly students and parents that don't care. so anything that makes parents want to be more involved and get more out of their kids. make them take it more seriously leads to better educational outcomes. >> well, that's the point. i was a teacher in chicago and the kids that parents weren't involved never did as well. >> i think that's indisputable. of course that's true. i do have to say to rich, when i was in high school, the job i went to after detention, when i got done with detention, i would have liked sweeping the floors for minimum wage a whole lot better. >> unfortunately, steve, we went

back to the old days. we had the teachers that would grab you by the lapel and throw you up against the locker. i don't think we're ready to go back there yet. maybe we should but we're not ready. >> why pay the kids to sweep the halls. if they have done something wrong. no money. how about pulling weeds. that's a good punishment? how about taking the graffiti off the wall. scrubbing. so no money. just have the punishment. >> but steve, you're a good capitalist. you know the importance of money as an incentive. if parents are forced to dig into their pocket and pay out every time their kid is in detention i'm beginning to think maybe that would have an effect. >> it would have an effect and if they want to try it go ahead but in terms of a punishment, pulling weeds, scrubbing the walls, sweep the halls, no kid likes that. >> by the way, sabrina, the school is offering an alternative to paying the fee or going to detention which is suspension. so if the kid wants to be suspended. in my eyes, they're offering enough alternatives to make this

a pretty legitimate thing. >> do you know what also works is social pressure. sometimes at the younger ages, they say if one kid does something wrong the whole class suffers. sometimes that actually works and it may work at the older age too better than pulling them out on a saturday. >> good last word from sabrina. 73% of americans say they're still fearful of investing in the stock market. fear not. our informers have the stocks ready to calm your nerves. ♪ ben! well, that was close! you ain't lying! let quicken loans help you save your money.

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>> he's brilliant. >> watch out for a slippery ride though. >> could be a slippery ride. >> buy low folks. that's it for forbes on fox. have a great weekend. the number one business block continues with cashin in. >> obamacare is going to get a whole lot worse and that's not conservatives saying it. that's a massachusetts democrat saying it. >> it's going to hit the fan. >> smelling trouble with the president's health care law. time to start swimming. but you guys inside. remember my battle with bill o'reilly over green companies getting taxpayers green. now one of those companies is spending our green in china. does that prove i am smarter than the king of cable? >> i share the priority in dealing with the issue of climate change. >> no, really, if the epa chief really cared about the climate, why did she