he gets the candidates one-on-one and talks real substance and issues. >> i just swam up. >> real substance. >> more on the after the show, show, with bass pro shop. >> brenda: forget about this big number on wall street. america's worrying about bigger numbers on main street. pump prices surging over 11% this year alone. grocery bills soaring 5% from the same time last year. and now, some corporate profits are taking a beating amid signs consumers are feeling the pinch. will it be jobs taking a beating next? hi everyone, i'm brenda buttner, this is bulls and bears. let's get to it. the bulls and bears this week. gary b smith, tobin smith. jonas max ferris, along with todd and mike, welcome everybody. and the soaring prices lead to soaring layoffs? >> they will, brenda. look, it's a simple lesson in economics 101. when you're spending more

money for life's necessities such as food, you said we're up 5% in a year, less more other items. corporate profits will take a hit and that leaves corporations with two options, one, you can pass the rising cost on to consumers which we're seeing or layoff people so we have to be prepared. >> well, gary b. and we've seen that with safeway, a lot of times, in a recession, companies will just, you know, their margins will shrink and they won't pass them along, what do you think? >> exactly. i think that will be the case this time. look, i respect todd's macro views and just kind of confirm or deny that i kind of went back through the history, history tracking unemployment rate versus the cpi index, basically, measuring inflation, and i could find no correlation, in fact. in a couple of instances, in the early 50's and the mid 70's, we had very high inflation and the unemployment

rate was very low. now, i'm he not saying that's always going to happen and as inflation perks up now, if it perks up, we'll see, you know, a dip in unemployment, but i don't think they're correlated so i don't think you can make a blanket statement. >> and toby, the pressure on companies. pressure on retailers, pressure on the suppliers. what does that do for jobs? >> it cuts jobs, but at the part of the cycle we're in. we've had all the investments, a trillion dollars in investment in improving productivity. that's been done and now we have an opportunity, a problem. that the company can't buy more productivity so that 70% of normal costs are labor and that's where you now go into the, i can't buy a machine now i have to layoff labor. it's no question, it's mostly correlated. forget about the 70's, those are old time economics, today the buying and selling and-- >> what about the 50's? >> but, jonas labor costs talking specifically about,

they still remain low. >> that's the major cost-- and tobin said, the until the labors costs are of rising, lower rate than inflation, not as much as energy and not as much as food and more inflation than labor cost inflation and ultimately driving labor costs in addition, they just did overtime and not like they added all of these people with 5% unemployment rate and let them go because the economy. there is he' a lot of people working overtime, and they could ease back on without firing them, we're not going to see unemployment rise because consumer prices may rise a little bit and watch labor costs. >> what do you think, do you think we're going to see more out of this all of this. >> and all due respect to toby, it's not old time economics, i have to combree with gary b. while consumers are paying higher prices, somebody is earning that additional income, okay, it all stays within the economy and it it

doesn't necessarily automatically equate to layoffs. i mean, if you look back, as he did, as he mentioned, and over periods of time when we had rising prices, the most recent one was the 2007-2008 period, we had an increase in payroll, we had decline in unemployment. so, until the point when maybe, if it it results in a recession, you know, it's hard to call, that was-- >> the capital. >> that would be problematic, but all things in the economy. >> you have to show earnings growth though, mike, you're not going to see that in your overhang. >> well, no, because the earnings are at an all time record high and it's not really resulted in any boom in employment, so the-- >> 64% of that-- >> hold on, okay, go ahead, todd. make your point. >> look, here, when you start looking at earnings, you have to suspect that corporations have only two options right now, remember, they have a fiduciary responsibility to their shareholders, that's who they're looking out for. at the capital, sad to say,

they'll be cutting off people people. look, you saw that with sisco, they always experienced double digit earnings growth and they had to layoff 30,000 people. >> todd, todd, some companies are earning that income as a result of higher prices. it stays within, you know, in the aggregate. it doesn't change, to shift from one sector of the economy to another, that's all. >> what's that mean to jobs, toby? >> with all due respect to mike, you know. >> brenda: and it's-- >> there's a bigger issue here, which is that, you know, could see jobs in the private sector, the public sector are already, you know, being cut right now, because look, lower expenses and those people are not finding new jobs. the reason why they're not. they're not trained to do the stuff we're doing in the private sector. there are some areas in this world, particularly energy that can can't find enough people, but for the vast majority we have a misallocation of people, people that are getting fired are not just going into

somebody else's job. >> what's that got to do with inflation though? >> a weak demand in general. i mean. >> you can't have it both ways. >> the economy is growing. >> and 2% is not big growth and remember, 50 more percent of the actual earnings for the corporations are from overseas and that's where they're actually adding people and here is where they're cutting back. >> you look amazed, gary b. what are you saying? >> i'm not amazed. mike made the key point. you saw in the the opening graphic, safeway, safeway is facing higher costs, not all of which are able to pass onto the consumer. to say they've paid higher costs for canned goods or avacados, who gets the higher prices? the avacado producers and the canned goods so they get more revenue to them and they're able to hire more workers, and that's mike's point. that's why the inflation is not necessarily correlated to the employment rate. >> using that logic though gary b. then say they eliminate at

that product and then it's the former over there producing that can of goods, then they have to start laying off people and that's the ripple effect and the ancillary effect. >> and spends money in another area. they don't just go from 20,000, sku's to 10,000. >> it's pure assumption. >> boys and girls, we're a little deep in the weeds here, the average american is taking him or herself, yeah, yeah, and average american is saying, look it, my prices are going, they know that. the corporations don't feel it as much because we've had no gains in costs to employees. we've now hit that point that if they can't get passed through, they can only do one thing and that's lower the overhead. >> if any of the customers don't know. that's the point that gary is making, they're eating some of the costs and a healthy margin. >> pardon the pun. >> they have a little margin to eat some of the rising costs and there's a point where the rising costs doesn't lead to profit and inflation

where they try to keep the unemployment low and generating inflation and much higher than now. and it's the profits and it becomes a real problem and the stock market-- >> companies that got over their fear of firing, guys, in '08, '09. fired people and never thought they could do it and-- >> no, but jonas is saying, we're getting to that point and it's not there yet. is that what-- >> presumably, and stop it from getting out of control. they are he' trying to engineer unemployment. doesn't work at that well yet. at the cost of a little inflation and that's the balance of the federal reserve has been and sometimes they screw it up and it doesn't work and high inflation and high unemployment. they don't have that yet. >> that does it it for the trading tips this week, and prices aren't the only things spiking so are the number of people not paying income taxes, why the cavuto on business gang is saying, forget about the 1% and pay attention to the 49 1/2%. and that's at the bottom of the hour, and that's here

first, and pump prices switching higher and what's the president pushing to bring them down? algae, is this green agenda only going to bring more pain at the pump next. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business.

>> good morning, everyone, live from america's news headquarters, i'm jamie colby. two american advisors reportedly shot dead in afghanistan and the new reports this morning say an afghan policeman, upset over the burning of korans shot them both in the head. this comes as protests spread into neighboring pakistan. earlier this week n.a.t.o. admitted to troops burning the holy books after finding secret messages from extremists in them. and at least 28 people have been killed in protests since then, including two u.s. soldiers in kabul under the muslim faith, writing inside the koran is also not acceptable. now, here at home, both sides

trading gap over prizing gas prices the president saying there's no quick fix, but needs an energy plan beyond oil. and republicans arguing his policies are to blame for the price at the pump. i'm jamie colby, keep is right here on fox. >> brenda: talk about double trouble. gas prices just about doubling since president obama took office. and this week, the president doubling down on his green energy agenda. including using algae to have you paying less at the pump. gary b. you say this should drive up prices more? >> well, i tell you what, brenda. if obama's assignment was to increase or help increase gas prices, i give them a-plus. he must have been sitting in the oval office, how can i raise gas prices, i'll raise taxes or current to on the oil and gas industry making it

less attractive to the industry, but, oh, gee, if you decide to spend in the industry i'll be the the most restrictive president ever allowing permits and off shore drilling and ways for them to access to their resource and finally, i will divert all of my-- the money from taxes, the public tax dollar at least most of the money, into industries that have yet to turn a dollar profit like wind farms and algae and all of that other stuff. this president has definitely gotten an a-plus in the ability to raise gas prices. >> we love your sarcasm there. mike, you've got a fish tank. >> if algae is becoming so valuable. look, here is the thing, there's not a lot of correlation between what we're seeing now with alternative energy in terms of ethanol, electric vehicles, and all of these other things that are actually causing gasoline consumption to come down, all right, and new production of

oil domestically, but the price continues to go up. that's outside any of the normal rules of economics. and there's only, in my opinion, there's only one reason for it and that is speculation. >> brenda: here we go. >> raising its ugly head just like 2008. and i don't know why we have to talk, have the the discussion whether or not it's contributing. it's absolutely contributing, every economic factor tells you gas should be coming down and not up. >> brenda: he's in another room, and i hear him going, so wrok, so wrong. >> it's supply economics. humans consume 85 million barrels of oil each day, we only pump out 87 million barrels out the either each day. if you have globalization that is taking place, and not entire barrel crude is used for petroleum based products. 10% goes to plastics. when you have former underdeveloped countries like india and china that are now

economic super powers and they consume more nonpetroleum based products that need oil and that's it. >> and the point, todd, i think you just said we produce 87 million and consume 85 and the math right there. >> mike, you know. >> and economics are going up in this country. we have a supply glut right in cushing right now. get out of here. >> come on. >> brenda: go ahead, toby. >> if mike's point is correct and speculation. >> it is. >> i know that, mike, thank you so much. >> proven. >> and six times more oil contracts than there are oil out there. if that was right, why is it we have 20 times more bond contracts out there than we have 10-year bond and interest rates have gone down. if that was right, we have 14 more bond contracts up for natural gas and natural gas prices are going down. you can't blame the speculators. what you can blame, however, gary b's point is that the impetus, the emotion of buyers right now at the margins. >> first of all, oil--

>> hold up. >> brenda: mike, hold on for a minute. >> oil you consume, you burn it up. >> brenda: mike, mike, just a minute. we know you think you're right. okay? >> i think i'm right. i am he' right. >> brenda: that's fine. please have jonas talk. jonas, please. >> bail us out. >> first of all, let's say the excess bond money would send interest rights down. >> talking about the futures. >> brenda: okay. >> getting back to the-- look, alternative energy, if the government wants to waste money on alternative energy not economically a good idea. could lower the price. a lot of what the government does in theory lowers demand. when he they raise cars need to drive 50 miles per gallon and it's not a good way to run an economy, but it will do that. if they sink a lot of money into ethanol it might be wasteful of taxpayer money, but becomes in the mix of the fuel and artificially lower the price at the pump. >> oh.

>> brenda: okay. all right. thanks, guys. now, can you guess who these guys are talking about? >> requires boldness, it requires clarity, and it requires courage, tremendous opportunity and the spirit. >> taking risk and innovating. >> that's what americans are looking for, they're looking for someone who they can trust, who is authentic. >> brenda: and that someone is, our very own neil cavuto. tune in for our one stop shop for tuesday's arizona and michigan primary coverage first at 4 p.m. eastern on fox news channel and then neil is back at it then starting at 8 p.m. eastern on fox business network, until a winner is declared. he's the only one covering the races as the polls close and markets opening here, there, everywhere, your money is primary and neil is on it. coming up here first, higher unemployment. lower wages and more money out of your pocket. and why all of this could happen from a proposed tax cut. we explain.

you decide. erhing. but why energy? we've got over 100 years worth. is it safe to get it? but what, so we should go broke with imports? look, i'm just saying. well, energy creates jobs. [announcer:] at conocophillips, we're helping power america's economy with cleaner, affordable natural gas. more jobs, less emissions. a good answer for everyone. we gotta be careful. it's cleaner. it's affordable. look, if it's safe, i'm there. [announcer:] conocophillips.

>> coming up. ever think these guys would need a be

>> american workers at risk of a tax cut? >> i've never seen a tax cut in sheep's clothing. the idea that they're going to blow out the other pieces of the tax code means most corporations would pie higher tax rates than last year and we know from all economic sta it it tis particulars, when you raise those rates, by definition they're going to cut costs which means labor and which means jobs.

we've seen it time and time again, no reason we shouldn't see it now. >> brenda: mike. >> two things, tax revenue collected by the federal government as a total percentage of total revenue is at the lowest level in history and it hasn't done squat for creating jobs. >> corporations are simply keeping the profits. >> brenda: two things. >> number two, sings i hear all of these people complain about it. >> brenda: you're right, okay. >> we find out they haven't been paying any taxes to begin with, and that's why they're complaining. >> mike's wrong again. the problem with this, with this plan is the idea that he's going to end up taxing foreign revenues and hit our multi-nationals, companies like mcdonald's, coca-cola and prevent hiring down the road. >> brenda: jonas, even you have some questions about this. >> i have some questions, the overall content of lowering the corporate tax rate which we need to do to be competitive. >> brenda: they're not. >> they are, and there are some companies who get breaks in the tax code and get the tax rate increase. >> a lot. >> too bad for them. yes, they might fire people

because of it and everybody else will see lower rate with less deductions, which is a good thing and there are issues when you raise them. >> gary b. you like simplifying the tax code. does this do it? >> i do, brenda, but, first, just an announcement. i'll be appearing on the mike norman show which starts after this show. >> which is going to be a pick. >> but apart from that, no, this is horrible and toby had it right. this is not a tax increase as jonas would like to say, overall it raises corporate taxes and the other thing, he talks about eliminating loopholes, there are so many more new loopholes not the which is favoring some industries the at the expense of others, this is hair brained and dumb just like all the other economic ideas. >> there have been studies on this, toby. >> yes, i've referred to a couple of them. the one is almost dollar per dollar and actual taxes and i'm sorry, jonas, but the actual numbers why we get through all of this gobbledygook, is higher and means less jobs. >> brenda: all right. that's the last word.

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>> predictions, geri b. you're up. >> i don't like gas prices, but they're going to rise and might play the surge with exxon. xom. and i see a 30% gain by the end of the year. >> brenda: mike, a bull or bear. >> i like it, but 30% wishful thinking. >> brenda: what do you like? >> 28-something. >> brenda: mike, your prediction. >> it's quiet around here. and volatility, the vix index. i think the market is going to have a correction soon. 30% off by april in the vix. >> brenda: todd, a bull or bear. >> a bear because it's a mike norman pick. >> oh. >> brenda: and all right. mike, okay.

>> give some love. >> brenda: and toby, what's your prediction. >> all right, well, my theory here is that i-max, the big theater guy is going. i don't like the oscars, but i like i-max in china and india, up 30%. >> brenda: oh, jonas, you love the oscars. >> and not growing fast. >> because they're going into india and china, my man. >> brenda: and your prediction, jonas. >> and having a thoord time, and they might stop saturday delivers, 20% in one year, post office. >> brenda: bull or bear. >> i'm a bear, i like fed ex bet sneer what do you like, todd, your prediction. >> i love victoria's secret. i have to tell you limited brands going to be up 25% and everybody is going to buy their lady something nice-- >> this is a great prediction nine months ago, man and. >> it's always a good prediction. >> brenda: gary b. bull or bear on