Is that capitalism . Socialism has contributed to the quality of life in this country. Socialism sucks the life out of people. Socialism or capitalism . Here in hong kong, handing in one form is all i have to do. In defending the market. That is our show tonight. Now it is time for john stossel. John the free market is under attack. Markets lead to wealth disparity. At first glance, rich people getting richer at the expense of others. President obama getting big applause by mocking those of us that they the free market will fix all sorts of problems. The market will fix everything, they tell us. If we cut or regulations and taxes. But heres the problem. It doesnt work. It has never worked. That applause he got the reason that they regulated the market and try to fix it and make it more fair. Laws like obamacare and doddfrank and we need more laws. I would not say more. I am a Firm Believer in the free market and also capitalism. But youdo want more if you want a higher minimum wage, right . Yes, but dont say more as though i is this distance. We want to makesure that people are able to enjoy capitalism and wh about is a country of laws and not just what people want to do. And so dont make this sound so negave. This talks about limited government. Leading capitalism happen. Nobody wants too much. The question is that too much in one place is too little in another and that is why we have this debate and that is why you and i are talking about it. And we cannot have just 1 of the American Population with the majority of the wealth. This is a country that whatever you earn, you deserve. You need to put levels of regulation of those people who abuse this capitalistic system. John what percentage should government be . It is taking place in the congress. John 5 , 10 . Remap percentage doesnt mean a darn thing. Ifyou want to have smaller government, you have to make certain that the dreams and aspirations of the American People have been met. Hadley davis well, we do it by law. Congressman, i assume that you mean well. But i think these laws have unintended consequences and many are bad ideas. And yousponsored a Green Energy Tax credit for electric cars and here you are on the floor of congress. In this endless what this bill will pursue, such as hybrid cars. Was that a good idea . Is a great idea. We should invest in those ideas. But it was people like Mike Huckabee and myself got a free golf cart, the subsidy was so big. A bunch of us got free stuff from you. The individuals have this on their minds. And it doesnt mean that this is bad. This money wasnt supposed to go to people, it was supposed to go to a say standing science. And that is why we have these agencies and the government and that is what they do. Some people are going to be ripped off and we can identify who they are. But when we do about it . We make certain or lease we tried to make certain that we prevent this from happening. But do not allow government to think that it must be small and that its good being small by itself. Its not good. John we are a long way from small government in this country. Congressman, thank you. We can agree to disagree. We are not a small country. John we have a very big government. Sadly i fear most americans agree with congressman ringgold. A lot of people agree with opponents who say things like this enact European Socialism works. [applause] to europeans get full health care overage maternity leave, free college, Public Transportation that doesnt smell like someing bad. John lets turn to our economists. So the europeans are getting all this free stuff. If your content, the European Social state is a great way to go. But if youre in a society where fighters you didnt know what that is, because of the government program, because an entrepreneur envisioned that we might make this better as a result. Big enttlements, things are going great, anthe house of cards came crashing down. We know where the government takes us. Theres this battle in america. John maybe you know, but a lot of people dont know. The pope, of all people, has come out criticizing the market and he is upset that some rich people are so much richer than poor people and the income inequality is just upsetting to americans as well. I share his concerns. Our brothers and sisters in this country and around the world should be helped. But the secret is that in the last 40 years, the number the number of people who were living on a dollar or day or less, thats up by 80 in last 40 years. Thats not because of stimulus money or minimum wage. But its because of the free market. The free market is the best thing to hep them. So youre saying if youre going to lift up the poor, you have to have an equality . One of the remarkable successes about this economy is the income and inequality it is global and narrowing. And in a world where you spend most of your day transferring clean drinking water, that is not a life of meaning or opportunity and we need to elevate this and continue to do that in a free society that is the most effective way to make that happen. John okay, so people lived really lousy lives and only recently since weve had markets and the industrial revolution, have a lot of poor people within themselves higher. But the rich have gotten even richer and this upsets people so what is wrong with that . Heres the thing. If you took somebody from two or 300 years ago and brought them forward the things that wouldve made saddam are the same thing that the poor inamerica already have. A phone, refrigeration. In the airconditioning if you live in the american outh. Those things are the things that make the quality of life better for everyone at the same time and hands down it is a winner for everyone. And one of the reasons john that is a necessary byproduct of freedom in your opinion . Heres the thing john can i get a yes or no . Economic inequality happens. They create value for everyone. And he helped to develop what was used in the operating room and the gurney is better in that room and bill gates by one Office Package at the time made life better for all of us in ways that we take for granted because we didnt see good things happening. John the pope apparently does. Income inequality is part of financial speculation and this is a new theory. It requires us engaging with those of us around the world. But if you look at the vernment systems in the Free Enterprise system, it has provided this supported throughout history. One point about fairness. Corporations do things that they say will make life more fair. Heres the commercial from starbucks. Double knockout john it sounds good, we ae at going to pay a little bit more to these farmers. What is wrong with it is tha fair trade is a marketing scheme in that scheme wa designed to play on caring people to get them to shell out a little bit more money than they would otherwise. At the very best, as far as charities go its a very ineffient form of charity because you pay a little bit Better Coffee shop or at the Grocery Store and you hope that the few penny coming to that trickled to ththe Coffee Growers do you hope the little bit of that money. And what is wrong is that the money doesnt go very far. First of all, Th United States could end its ban on sugar from outside of the United States and that could it could stop subsidizing rich cotton farmers in the United States and it gives them access to the market. The other thing you can do is take that extra 25 cents and give it to an ngo that you know its been really effective with their work with the very people youre trying to help in the first place. John i will give you the last word. These arguments and inequality, it takes people off and they want government to step in and fix it. Here is the bottom line. Free markets is about a lot more than money were rich people getting ahead. Its about whats moral. What helps the poor people the most and what gives us opportunities to earn success in two understand that is why our founders came and created this country. Not for stimulus. John if you like to keep this conversation going, go to facebook and use our hash tag free market to let people know what you think. And coming up, it why a few places like chile, slovakia, and africa got richer, while other countries stay poor. If you have a free market, you do better. If you dont, you stapler. John also, i go around the world eking out free markets. Here in hong kong, handing in one form is all i have to do. And the government raising the stakes. I will have that next this is the quicksilver cash back card from capil one. Its not the limit the cash i rnvery month card. Its not the only earn decent rewards at the gas station card. Its the nogames, nosigning up, everydayrewarding, kungfufighting, silverlightninginabottle, bringinghomethebacon cash back card. This is the quksilver card from capital one. Unlimited 1. 5 cash back on eve purchase, everywhere, every single day. So ask yourself, whats in your wallet . Every day were working to and to keep our commitments. And weve mada big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. John one group of americans who were once ardent capitalists are not anymore. American socialism has captured many. And why not . If you grow wheat and rice and corn, you could try support, subsidies, welfare for the rich because farmers today are richer than the average americans. Its a terrible policy that survives because politicians and farmers say that this preserve stability in the market. They protect the food supply. But that is a scam. New zealand abolished farm subsidies years ago and the farmers are better off and unfortunately in america, government officials are clueless about markets and the rules are complicated. So lets focus on one crop. Raisins. I heard it through the grapevine john is not cute . California farmers are good at growing raisins, but shame on most of them for colluding with government and messing with the free market. Bureaucrats have had something called raisin administrative committee, ordering raisin farmers to give the government third of their crop. It is supposed to keep prices stable. Most farmers go along with it, but one said no. So the government find him 650,000. He still says no. If you work for a wage, it wouldve the studio broadcast demonstrations that we need 40 of your wages for our promotions. And how would you feel . John i would be ticked off. I would thin that my competitors have to give reasons as well, and maybe thin will even out. This is arica. What you produce, you should be able to keep. In this case they wanted to take my raisins and i said no. So they couldnt take the raisins and they said if we cant take the raisins, we are going to give you a fine. And i wasnt the only one. There were 60 farmers who said no more and the buck stops here. They came after me and our family and our assets and said you give us the money or the raisins and i said no. John the Supreme Court has gone bounced it down to a lower court. Your opponent, the administrativettee member wouldve come onto the basis while this was being argued. But he did tell us on thehone that before this policy, there were wild swings of supply and demand and then he said during world war ii there was an important security aspect. I like raisins and i dont see the security aspect. In the basic argument you made is that this is a tool that be industrious part of. It has been part of the market that is reducing their supply into the marketplace so how are you going to survive if they give 40 of your crop . Its absurd and i am survivin because i didnt give it to them. A lot of my neighbors dead and a lot of them are broke. We lost about 3000 growers because of this. They took it and they sold it overseas at a subsidized price below the cost of production. And so the europeans and japanese and chinese were getting raisins below the cost ofur production. And they said that that was helling us . Come on, give me a break. John i like the wind. And yes, it helps americas export business. They say, dont you want to help european and Chinese People . Oh, yes, if they want to pay for it. And at is the issue and thats what our constitution is. If the government wants her raisins, pay for it. Other crop subsidies, corn and cotton, tobacco, and they give them money, peanuts, not the raisin farmer, they took our raisins and didnt give us a dime. They gave us a slap on the back to come back with more raisins next your. John when the ideal world be they dont take your raisins but they dont give the other guys subsidies . We dont need subsidies. We need to get these subsidies off our back and market our own raisins without interference. John marvin horne, thank you very much. My next guest says americans are right to criticize what we call capitalism. And also, Clint Eastwood and his chrysler commercial. We pulled together and motor city is fighting again. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u. S. . At t. Rowe price, we understand the connections of a complex, global economy. Its just one reason over 70 of our mutual funds beat their0year lipper average t. Rowe price. Invest with confidence. With investment information, risks, fees and expenses to read a consider carefully before investing. There has to be some kind of a rebellion between the people that have nothing and the people that got it all. We are here to get the money back to the American People. John that is from the movie called capitalism, a love story. It really is story. More complaints about Bank Bailouts and corporate welfare. Business and law professor says there is a lot to hate about capitalism, as it is often practiced today. What do you make . If you go back as far as adam smith you find in a wealth of nations that he talked repeatedly about how Business People try to use political connections to get wealth and everyone elses expense. Tough to find any reference to business that is positive becae that is how markets work to benefit everyone, not how they can be manipulated people want political pvilege. John ipod capitalism is greedy businesses compepeting. Well, i guess we can use words in different ways. I will not object. If you want to use the word capitalism, but i understand why other people use it in a fairly different way. It. John markets, not capitalism. John the looks at the way in which politically secure privilege distorts markets and make sure they work for the benefit of t politically wellconnected but not necessarily anyone else. John the auto bailout is being celebrated by the president. I save detroit. Most americans would save what is wrong with that . We want a strong american car Manufacturing Industry. This seems to me, if the american car Manufacturing Industry is not release serving American Consumers and consumers around the world than it is a profound mistake to allow the political connections that People Associated with that industry be used to persuade congress and the president to award the huge sums of our money to those folks that that is a story that happens all the time. Politically welconnected businesses make the case that somehow they are essential to everyone elses wellbeing and in so doing are ableo get huge sums of money that could be better invested elsewhere. John it was pretty huge. 50 billion, more than 10 billion. But they paid a lot of that money back. He whole process distorts incentives and sends the message to politically wellconnected corporations repeatedly that they can screw up and count on a helping hand fro the taxpayer. There is a longterm distortion of incentives that this kind of behavior and also the long street bailouts, persistently expected to lead to this. We should be nervous. John your answer is let them go broke . Resources should go to their most valuable use. How can we tell when they will do the most good is a general matter. We can tell by the returns. If resources invested do not yield higher returns, that seems good evidence that the industry does not merit that kind of up lesson. John so if they went broke and the equipment would have been purchased by more Efficient Companies will still get that seems right to meet. John chrysler got Clint Eastwood to the practice a bit in this commercial. Most teams are in their locker room. E second half. People of detroit know a Little Something about this. They almost lost everything. We all pull together. Motor city is fighting again. John we all pull together. Who is weak . The commercial led to the disparity. It is that time in america. People are out of work. They are wondering where all of their money wen. Twelve and a half billion of it went to chrysler, some form of a bailout. John yet americans support that. We have a history, it seems to me, of using the rhetoric of Public Benefit to reallocate resources to the politically wellconnected. When you are politically wellconnected you can get the public to pay the bill. John thank you. I will try to pick up oneour language from now on. Freemarket our freemarket. Capitalism can be government politically managed. Coming up, lessons about capitalism from an 11 yearold. John lemonade for sale. 0. 50. Outside the studio i once tried selling lemonade legally. I found that the new york laws make that nearly impossible. I found it nearly impossible to try to understand the rules. I need an assistant. The government said i had to take a 15 hour food protection class. Bicycle injuries. I dont have bicycles. When i was a kid, selling lemonade was how you learned about capitalism, but i cannot now legally sell it in my town. It is not just new york. This month in oregon and a 11 arold plant trees to pick mistletoe. She then tried to sell the mistletoe so she could help pay for her braces. Authorities told her, you may not sell it to people on the streets. It is illegal. The authorities then told her, you can bank. That is legal. Her father then sent us this videotape. If people want to work along with them work. Amazed that people cannot work hard, but they can be purchased lazy. It. John a lesson to teach kids. I am glad that she and a few others appreciate the benefits of free markets. In kentucky loren hansen, she and her father, wrote this book about teaching capitalism to american. So you are 13. What do you care about capitalism or free markets . Children my agent by school, anywhere, they dont understand it. When they hear it john people my age dont understand it. I dont think anyone does completely unless the kind of read about or hear about it from somebody. John what do you understand . I g is really kind of crucial to our society. Her charity in jobs and the taxes for the government. It is just really important. John you have details in your boat like chapter 30. Starting to hire people, making a difference in their lives. We kind of wanted to say that capitalism is more than just making money or jobs. I mean, yes, every business is first goal is to make a profit and to stay in business because if they make a profit than they can help grow our capitalism and make it better. Overall they help our society as ahole. John you did not do this yourself. You were helping . You are a lawyer. Absolutely not. I am a defender of business. We worked on this together over her summer break. It was always a level of love to write about capitalism and support business and trust. John why . This is selfish. And yet businesses will provide her with your future opportunities. Quite extensive in terms of the impact in our students just dont have a good handle on i in these. John they dont. I agree that they should learn something. I have a nonprofit that offers teachers free videos from fox and abc to try to explain freemarket. The term freemarket is better because capitalism sometimes means crony capitalism. A few weeks ago the Prime Minister of britain gave a speech saying capitalism should be in the classroom. I want to make sure we reach students everywhere. John good for the Prime Minister. It is unfortunate that he makes that an announcement kirsten a tuxedo at a fancy dinner reenforcing everyones idea about freemarket for fat cats. Well, i like it. As you said, the bully pulpit we wrote the book in order to try their regions clearly a lot o our adults dont understand capitalism. If we can reduce the students there is hope. John but you dont learn this in school. I have not learned it particularly yet, and my brother has not. He is about to go off to the university of kentucky. John he learned about quilting in english class. He told me a lot about that. I think that students should learn. I mean, our education haseen great, and i loved learning about elvis. All of my teachers taught me writing skills which overall helped me write this book and make a difference. What i hope this cooling to be a future generation of capitalism. John i hope you make a difference. Thank you. Coming up, why are some up xccx÷most, john america has problems, we do pretty well. 7 billion people on merit, 2 billion struggle to live on the dollar or two would day, fewer than 1 billion have anywhere near our level of wealth, comfort. Why did we do so well when most of the world did not. He knows the answer. He studies economies around the world. The secret is to allow experiments, millions of people to try out there are lines the fine them new businesses in the innovations. Its about Economic Freedom, giving people a chance to get ahead. And you just returned from a trip for around the world where you made a documentary featuring pockets of success that he found which will run on pbs. Lets play a part of what you say. A stunning example of what can happen when a country embraces Economic Freedom. In 1975 it was nexttolast among stall the countrys ranked by the treasury board. Todais a much the worlds top ten. John this happened because the chilean dictator hired a group of young economists from the university of chicago, students influenced by chicago. They persuaded him to try freemarket reform. Implementing an open trade policy, returning businesses to private ownership and private nuys the pension system. The poverty rate was than 40 . Today it is 14. John in reference, something called the fraser report. That is an attempt to objectively measure Economic Freedom of the country to try to come up with the amount to a mathematical formula where we use the statistics. And with the help of that we came up with a ranking. And with that we can correlate and look at other things. John the best places to live on the freest countries. The United States used to be number two. No it has fallen to number 17. Why did that happen . The world has been liberalized. This creates a very, very great and opportunities. I think in the United States. One problem is that you take well for granted. When you have had it for generations you stop thiing about where it came from, the productive forces, investors kept to out investments, entrepreneur should. John we pass more rules. Harder to start a business, taxes are higher. That dropped as. The bailout the automote industry and do not respect the property rights. All ofhose things are dangerous to read the reputation of the countrys taste for quite a while but takes a lot of time to build it, to make people certain that in the long run if i invest in the future i will get ahead. My children will need a better life. If you start to mess with that too much with too much are richer Government People are much more shortterm. That is dangerous. John nd your model of success. Done very well. Now i here ere are about to elect a leftist government. They dont understand why they are doing well. People dont get it. The struggle is always an uphill battle. In the long run you always think it is easier to redistribute wealth, to take from the rich and give to everybody else. It is in great idea that we can all liv off of everyone elses expense. The problem is that is not the way it happens. That is not where we came from, and that is oneeason why people in the region talk about the migration out of the region from a poor countrynto a developed country. That is a dangerf they have starting to regulate and distribute in this way. If you want people to stop being hungry the midst of being poor, you need to liberalize the economy. John there is also more wealth disparities. The ri get rich which makes people uncomfortable. And that is what you see in the short run. Would you do not see is how the pie is growing so that the smaller share of a larger pie can be much, much greater. Yes, you are more equal if you live in a country like one of the examples an hour documentary. But i wod rather be poor in south korea. On average 11 the freest countries that are among the poorest, you are ten times more and the poorest in the least freak injuries. Stow inequality, so important. Yes, it is. If you made love more than you hate poverty. That is what is really about. If you hate poverty you might go for a more unequal society. John lets move on to a more recent successtory. In africa you went to ambia. In 1995 this landlocked nation was one of the lowest ranked countries. Today it is one of the most economically free nations. In just 15 years this impoverished african nation as increase its Economic Freedom to a level comparable to poland and france, Opening Doors for people like sylvia. Her First Official business was to open a small oneroom restaurant. From ts modest beginning she expanded her business to include extensive catering. A school for Restaurant Service workers, and the processing of nationwide distribution. John could for her, but are people doing well . It is africa. No, they are not, but there are taking a for steps. That is an incredibly important step. People used to say that africa was a hopels continent and came up with all sorts of eight to five explanations, history, cultur. But will we see is that when some african countries began to liberalize and give people a chance, you know what, they begin to make progress as well. What we need is the creativity, hardworking people. John thank you. Coming up, Economic Freedom means allowing peopleory something new, like a new business, prosperous countries make that easy. Which countries are those . I try to open businesses in delaware, new york from india and hong kong. And hong kong. I will tell you what happened every day were working to be an Even Better Company and to keep ouour commitments. And weve made a big commitment to america. Bp supports nearly 250,000 jobs here. Through all of our energy operations, we invest more in the u. S. Than any other place in the world. In fact, weve invested over 55 billion here in the last five years making bp americas Largest Energy investor. Our commitment has never been stronger. John lemonade for sale. 0. 50. I tried to do that legally, but i gave up. The regulations are and listen would have taken me at least two months to wade through them and passed the food safety test commit the approved fire extinguisher. Fortunately it is easier in delaware. I am told it is wonderful. John i was able to get permits to open a store in wilmington. You want to buy a tshirt . Not right now. John delaware and nevada are the states that make it easiest for but that does not been i had to register with the delaware secretary of state, the division of corporations get of federal identification number. But this can be done in just a few days. And it was good i had done it legally. The scout came over to make sure i had my vending permanent. It cost me 10. They will beat you. John getting permission did take about a week, and that is too long. Whatetter than new york. By contrast, in hong kong i could start a business in one day. Handing in one form was all i had to do. The next day i was in an Indoor Shopping Center running my own business. It was a stupid business. No one wanted to buy the frisbee and yoyos, but this ability to illegally trying a business is why places like hong kong and america, years ago, prospered. People were not desperately poor just a few decades ago. Today they are not as rich as we are. It happened because the limited government allows people to try stuff. Americas piles of regulations make that very difficult. And it is getting worse. We are becoming more like india. I try to open a business in calcutta, but i quickly gave up. Cummins hostile to markets, thousands of rules. People who want to obey the rules wind up to deal with the bureaucrats. It is all well intended. Rules to make sure the food is clean, the building safe. The result is that so many good ideas die as forms bumbled and stacked on shelves already cluttered with bundles from other people who are waiting. That is why in the is a sport. India is beginning to figure that out. Sadly in america we keep passing more rules. Maybe some day american politicians to will figure out it is not more rules that make life better. It is free markets and allow people the freedom to experiment , try things, and thats let people that lets people prosper. Even the poor because the rising tide of prosperity lifts all boats. That is our show. See you next week. See you next week. [ dave gentry ] hello, im dave gentry. Welcome to small stocks and big money intro music intro music intro music intro music [ dave gentry ] for all of our new viewers its nice to meet you and for those of you who are already members of the redchip nation, thank you for being part of the Fastest Growing community of smallap investors in the world. Whether you are watching on fox business in seattle or new york or las vegas. Europe, rome, somewhere in croatia, or austria, portugal,
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