John there are three ways to help people who need help, government can try to do it. Give people money, start programs. Charities do that too, and id say theyre better at teaching people how to help themselves. Theres the saying goes teach a man to fish. Then theres a third way, i think its the best way. Ill get to that later in the show. But first lets debate the first two. When i was in college, president Lyndon Johnson declared allout war on human poverty. He said for the first time in our history, its possible to conquer poverty. I believe him then but i watched his poverty programs create more poverty. Governments spent trillions of dollars and people are still poor. People on the left say the money was still worth it. Look at this chart. He chose that the poverty rate fell sharply after the war on poverty began. Thats great, but wait, he extends the chart back a few years to when data was kept on the poverty rate. You notice it was already falling. Just as fast. But then it stopped falling about seven years after the war on poverty began. History professor david bado says thats because government encouraged poor americans to be dependent on government and stay poor. But my counsel at the Roosevelt Institute says no, we need more government aid. More . You almost want more, you guys. Trillions isnt enough . Lets talk about the balance between charity and government. Theres never been a period where it was just private charity. The governments always been involved whether it was civil war pensions or mother pensions or the poor house or bankruptcy laws. Never a purely private space. John but it was 99 private. The government was tiny. We had a voluntary sector able to provide social insurance. We shouldnt romanticize the past. They provide funeral benefits, maybe sick days, maybe if you are in a big city. And we grew the country, became the most prosperous country in the world. From third world to first world. What destroyed that is the Great Depression, when people couldnt work or find jobs, they need more charity, and charity couldnt raise money at that time. So you saw whole system of voluntary societies trying to balance people against the risks of Economic Life get wiped out. John david, he said that proved that government has to step in . I dont think it proves it at all. You dont want to have governmental policies that cause ten years of double digit employment that you had with hoover and roosevelt and intervention as policies. I disagree about the characterization of the mutual aid organizations that ive written about. Ive looked at 65 fraternal societies, mutual aid groups that provided social welfare. Youve written a book about this. Only five ceased operation during the Great Depression. In fact, at the end of the Great Depression they were devoting more money to social welfare than before the Great Depression. What hurt them was you had ten years of double digit unemployment, so people couldnt pay dues. You cant carry people in the roles. Explain the mutual aid societies. Mutual insurance organizations, you pay membership dues like you do to the American Automobile Club or professional organization. They would provide sick benefits, really from Health Insurance, some had hospitals. Some of them had orphanages. Some had homes for the elderly. John step in when they saw people needed help. They could make judgments. This guy, no, needs to work harder. Government, mike, cant do that. Government just gives money to everybody who qualifies, and hence that chart that shows the poverty rate went down and gone up and down ever since. We taught people to depend on government and we made them passive. Well, one thing that is important is funding does increase, the government takes over the risks of poverty and old age and the real Economic Risks of the business cycle. System may have worked well in the late 19th century, we live in a system where whole industries disappear because of an app on a phone. Economic security has gone up. It doesnt mean that you need a deeper set of pockets in order to sustain peoples ability to transition through jobs, the life cycle and retire with basic decency and basic amount of money to get by. John david, seems all wrong to me. There was not one best system, there were fraternal societies, institutions of selfhelp. There was private old age insurance, into early form of the individual retirement account that was banned during the progressive era called tontine insurance. John otherwise roosevelt wouldnt have created Social Security. Given the circumstances they face during the Great Depression created by Government Policies and prolonged by Government Policies, the Roosevelt Administration and the hoover administration, i think these organization did well. John you love Social Security but its bankrupt. Theres a small spending gap. President obamas proposed cutting it a bit. He wants republicans to raise taxes to cut it in half. Manageable sizable gap. Allows private charity to thrive. When you take the difficult problems of how we solve poverty in old age, how we solve insurance against the business cycle, charity can focus on nimble, targeted, humanistic things, as a theologian would say charity isnt about money, its about actions, brotherhood and lot. You cant substitute that for social insurance which requires a lot of money. John but theres so much more money now than there was during the Great Depression there. Are billionaires who have billions that theyre looking to do something with. And want to donate it to harvard and want their name on an opera. John if there wasnt the bloated welfare bureaucracy, they would step in and fix that, too. If you talk to food banks in new york after the sequestration cut food insurance, theyre worried about cuts to food stamps, they dont think private money is going to automatically flush in. You eliminated social capital which has spillover effects. You have rich social networks in the neighborhoods. Many of the networks no longer exist precisely because of the rise of the welfare and regulatory state, where you destroyed a lot of job opportunities. John if there wasnt all this government, do you agree that the private sector would just leap in . I think it would, people are resourceful. Blacks after the civil war, freed from slavery recently, but they created twoparent family systems. They had a network of mutual aid organizations they created. Very vibrant. Despite the fact theyre incredibly low incomes, not ideal by any means, but i think people are more resourceful than we give them credit for and find that among the immigrant groups as well who created mutual aid organizations. John if you listen to the media and the political class, mike has won, at a time when almost every politician says Something Like this. Create jobs and make sure that wages and benefits are such that families can rebuild a little bit of security. We have a plan to lift people out of poverty. The last guy from straliasm the instinct of the politician to say this is the governments job, and people believe that. This is the way politicians win votes and win elections. These can exist and work together. I think we do a disservice to put the state and charitable sectors in strong opposition, theyre good partners in building an economically secure system. John as state grows, it doesnt shrink . Charitable giving make a huge difference and building up individuals and communities. Its not having to worry about things like how do we provide sick days for people, which is a difficult process for small individuals to do in small groups. John government should require that. We see that it largely works elderly poverty john largely doesnt work, but thank you, mike and david to join this debate. Tweet me at fbn stossel and use the hashtag real charity, or like my Facebook Page so you can post on my wall. We want to know what you think. As i said, Big Government crowded out a lot of charities and mutual aid societies, but many like the masons, the red cross are still around, and one of the biggest and most respected is the charity this woman is raising money for, the Salvation Army, its a great charity. And this woman is clearly happy in her work, the Salvation Army runs afterschool programs, day care programs, rehab programs and much more. James betts is general secretary in new york. James, i think youre more effective than government because when people come to you, you can make a judgment. This person really needs help. This person maybe is trying to freeload. You dont have to treat everyone the same. We dont treat everyone the same, were very excite to have an opportunity to figure out who they are and what their needs really are. And hopefully as a result of meeting them and having time to talk with them, we can begin to help them become part of community, and i think a lot of the help for people that goes beyond our resources is when neighbor is able to help them or Family Member or someone that cares about them. Makes a big difference. John you will go with them and try to introduce them to neighbors who might help . It can be that, sometimes that is the case. Sometime were in the homes of the folks were work with and sometimes its a community that happens at the Salvation Army. May be through soup kitchen, not just folks who are hungry that are there, but sometimes fellowship and looking for community and frankly relationships, they may be sitting next to someone who has an ability to help them. John so a wealthy person can ask for free food, you wont turn them away. If they come during hot meals program, thats a thing. A lot of the time senior adults who live alone or looking for fellowship. Certainly we wouldnt turn them away. We need not only the people in need but people that are able to help those in need as well. And as long as our programs involve both sides of that fence, we believe a lot of the Solutions Come out of relationships. John if a family gets evicted, you dont take them down to the Welfare Office and try to get them Government Housing . There will be times well help them access the resources in existence. We dont have enough resources to provide for every Single Person that comes through our door. Well help them to access those resources, but there are other times were able to help them before they get evicted to catch up on a rent or make a payment, and at the same time, sit down and figure out what got us here. John you made them pay a months rent and help them get a job. Absolutely, we may pay a months rent, figure out is there a pattern here, Something Else going in life causing difficulty that we might be able to address. John youre a christian group, to volunteer or get services do you have to pray . Absolutely not. We want to make sure that all of our services are available to everybody without discrimination, regardless of what someone believes or agree with me and everything they believe, at the end of the day, were called to be our neighbors keeper, called to watch out for those struggling to watch out for themselves. John thank you, james. Next time someone pays me to give a speech, ill give you guys the money. I know you will use it well. Ive researched these charities and if you look at Salvation Army, almost all the money goes not for paperwork but goes to the people who need it. Next, another charity that works better than government did. Im forever grateful, and i promise to make the best of this new life. [ applause ] and coming up, that thing that works better than both government and charity. Ha . I came a long way from being in the streets, being a destructive young man, and im going to become a positive role model to a lot of the guys in the School Building. John and that School Building is in a prison. The government used to offer pell grants to prisoners but mostly stopped because 20 years ago president clinton decided that taxpayers shouldnt be forced to fund college for prisoners. So a charity called hudson link stepped into offer courses in some places. Heres one of their professors. You know whats great about it, you walk into the classroom, theyre all in place. Theyve done the reading, theyre prepared and theyre excited and interested and really want to discuss what theyve read. As a teacher thats great. John thats english professor joanne and teaches at sing sing, you are also a College Professor and the prison students are more into it . They are, i think theyre more interested because they know this is the oasis in a long stretch of being in prison and know this is the four or maybe five years that theyll have to study, and they love it, and they get everything out of it that they can. They Read Everything two or three times. John it wasnt always this way, when government just granted money for schools and prisons, what was different . They went to class because it was something to do, it was an entitlement, wasnt costing them anything, they took classes they thought would be interesting. A time to get together with their friends and maybe they did well and maybe they didnt. John they didnt try . Yeah, it was something to do. John the current head of the charity was once a prisoner at sing sing himself, he took College Classes in prison but didnt work hard. He did when the charity took over. You have to want to be there. Its not forced on you, youre not even encouraged to take it. You have to fight to get in. The waiting list is three years long. Each man has to pay 10 per semester. That doesnt sound like much, when you are making 18 cents an hour, thats 75s perfect the regular income. John now they have to work harder but compete to get in the program . They do, they have to be two years ticket free, two years without disciplinary infractions in an institution where john this is a maximumsecurity prison. Maximum security. Two years ticket free, they have to have a job, they have to be employed went facility. We have a threeyear waiting period. They also give up their yard time, which i think is significant, in addition to paying the 10 per semester from their own money for tuition. Theyre giving up fun time. I make them accountable for what theyre doing, someone is donating to go to school and they take it seriously, appreciate it very much. Theyre very respectful, and its wonderful for them to know that somebody believes in them. Somebody believes that they can succeed and they do everything they can to measure up. John sing sing and hudson link and Mercy College hold their Graduation Ceremony at the prison. You may notice a familiar face in the audience here. Hudson link lifted me up into life full of education and revived me and gave me a Second Chance at life. Hudson link had mercy on me. Im forever grateful, and i promise to make the best of this new life. John that graduate is now out of prison, got out a few months ago and was accepted into grant school, and the people we saw in the audience, Warren Buffett and his sister doris, she is our biggest donor, she believes in these men, started to do it for a couple of years to help those who were already going to school when the pell grants were taken away, and one of our professors is a friend of doris buffet and told her about it, she agreed to help them finish up and was so impressed that she continued to donate to the program and shes our biggest supporter. John when i hear about the prison programs, im skeptical, because the recidivism rate is so high. Were going to train them, but again and again they end up back in prison. Not your graduates . No, the national recidivism rate is 68 after three years, 68 of parolees are in prison after three years. 77 after five years. But our program, 1. 4 . We had 272 graduates have been released and only three have gone back in 15 years. John and 96 are gainfully employed . Yes, 96 gainfully employed. John that is great, charity is a good one, jo ann, later in the show, a better way to help you. Next, whats the right way to raise money for charity. Could do you this . Ah ah ah . John if you did, my next guest says you probably didnt really help anyone. Grow a mustache for movember this year. And be sure to tell your friends this mustache is a movember mustache. John last month, celebrities told men to grow mustaches to raise awareness for mens health. Idea started in australia and caught on globally, its supposed to get people to talk about Prostate Cancer and mens mental health. The website asks people to donate to movember, mustachenovember, and the Video Campaign reached lots of people, not me, ive had this thing for years, but lots of men tried mustaches in november, but how many donated money . Most didnt. And thats why the founder of this social media website sumpto calls Charity Contributions like that slacktivism. Its where people replace a monetary donation with social post. For example, if you post something on facebook, you may value that at 10, if i tweet about something, value that subconsciously at 20, and subtract that amount to the reasonable donation to the charity. John really . For the first time in our lives, social media profiles, facebook, instagram are a direct reflection who we are offline, when people post something about charity, they think theyre donating when sometimes they are participating. John i like this ad from unicef. Like us on facebook, thats what you do, like it. Like us on facebook, well vaccinate zero children. Definitely. It was a headon marketing effort, smart, and it was saying if you want to help, donate money, dont like us on facebook, follow us on twitter. Likes arent going to save a children, monetary contributions will. John still this stupid movember Mustache Campaign did raise 22 million dollars. Definitely, celebrities have done amazing markets effort and people get behind it because its fun, and guys can relate to it. Use an excuse to grow a mustache. However, it has almost diluted the message, and the message is saturated that people forget what its all about, and why theyre doing it. John but they get the money. The most famous slacktivism campaign is the ice bucket challenge. Nominated by zack and eric, here we go. Ah ah ah [ laughter ]. John once youve been challenged, youre supposed to pour ice water over your head within 24 hours. If you dont douse yourself with ice water you donate 100 to the als association. Lots of celebrities did this. [ screaming ]. John and some also did donate money. Thousands of noncelebrities did this too, and yet if you ask people. What does als stand for . I didnt know for sure. You got me now. Als, i know the ice bucket challenge, als maybe not. John lot of people didnt know, but they raised money. Yeah, over 100 million. John compared with which is 20 times the previous year, but that was the campaign. It was amazing campaign, for a variety of factors. John how can you criticize that . Im not criticizing it. All im saying is awareness to a certain extent doesnt really do much. Think of a glass and water is awareness, once it starts overflowing, the awareness doesnt have that much impact. Whats your fun, going on donate screen, click on donate, no one pats out back, no one says great job. I can go on facebook, create a video, tag my friends, get the social encouragement. Thats a lot more fun. John promote myself. Selfpromotion, instagram, gram and it didnt happen, take a picture, didnt happen. Thats where we are as a society. However, people forget to actually donate a monetary contribution. John before the als campaign, the biggest example of slacktivism was the coney 2012 video. It is said to be the most viral video in history, getting more than 100 million views in just under a week. One day, hell kill us. He has an army, okay, and he takes children from their parents and gives them a gun to shoot, and he makes them shoot and kill other people. John and kony does this. What does he accomplish . Right when social media was exploding, a great way for people to be connected with fans and celebrities. You saw these amazing celebrities tweeting about the video, and fans were sharing and retweeting it, they felt like they were a part of something. As humans we yearn to be part of the communities, feel part of something bigger than ourselves. Really didnt contribute that much. People didnt fully understand it. John kony is still unfound. Yeah, unfortunately, but it does show when people come together, we can make great things happen as weve seen in previous charitable campaigns. But nothing great happened here. In this case, people learned saying maybe instead of posting about something online, i should become informed about it and on top of that donate. John the United States has several hundred soldiers searching Central African republic for kony, so far unsuccessfuly. Thank you, ben kosinski. Coming up, the best way to help people, better than government, better than charity, too. Ha music. The getaway vehicle for all the confidence you need. Td ameritrade. You got this. Our home, planet earth, and humanity, face something more incredible than anything the ancient mayans predicted. Nothing can turn back the time. Life as we know will end. John how can we teach anyone to fish if there are no more fish, but actually. Our world is getting better. Poverty rates are in decline, crime rates are falling and fewer people are dying of cancer. Across the globe, people are living longer, making more money and working less. Conditions for everyone have vastly improved and continue to do so. John that video is on the website human progress. Org, marianne runs the site. Human progress for making progress. Making progress across the board. Human progress tries to bring together as many statistics on human wellbeing as possible, some of them are known to most people, longevity is increasing, higher rates of education even in places like afghanistan. John because of free markets . Because of free markets. The martha, lous us to communicate with one another, Exchange Ideas and learn from one another. And this interaction that we are able to produce ever more goods and ever more sophisticated goods for more people at a cheaper price. John and americans view the free market as ruthless competition, you grew up in czechoslovakia, which was envisioned as we, the people, the communists were all in this together. Yes, it was slightly different Economic System than we have here in the United States. And as a kid, i remember empty shops, you know, misery everywhere and, of course the lack of political freedoms. But now, thanks to the free market reforms that have taken place over the last 25 years, central and eastern europe, not to mention india and china are doing much better than the past. John human progress, they have charts documenting this perhaps. This is the most impressive, Life Expectancy, what measures things better than that. For years, people died at age 30, only recently, once you got private property and Economic Freedom does the line go up to 65. Prior to the Industrial Revolution, throughout the history of our species, Life Expectancy was around 25 years, but once Industrial Revolution took people off the land, we were able to generate much more energy and, of course, feed many more people. You know, the population of the United States has increased by 21,000 between 1600 and 2010, and yet, 98 decline in the number of people who work in agriculture. John and their lives are better, and yet few americans get that free markets make life better. Many looked at me like i was nuts when i asked this. What helps people more . Capitalism or charity . Capitalism might be the problem that creates so many poor people. John capitalism is the problem . Why dont they get it . A number of reasons, the most obvious is education, when children taught from early age that capitalism is not only destructive but immoral, much less likely to support it. But also capitalism is a process and an outcome of trillions of decisions made by billions of people that came together in a spontaneous kind of way, so it is a little amorphous. John invisible hand. It is the invisible hand and its very difficult for a mind of a hunter gatherer to see. Our minds have evolved, tens of thousands of years ago when we lived in small groups of between 50 and 200 people. Anticapitalist impulse is going back to the hunter gatherer mentality, understanding the complexity of the market today. In a sense, the complexity of the economy has outpaced our ability to understand it. John we cant see how we benefit from the actions of strangers . It is a little abstract but benefit from the benevolence of strangers driven by the profit motive, driven by supply and demand and the price mechanism. John and when people really get involved in the aid world and bother to study the data. Some understand that markets are superior, superior to charity. Heres the singer, bono. Rock star preaches capitalism. Wow sometimes i hear myself and i cant believe it. [ laughter ] commerce is real. Aid is just a stopgap. Commerce, entrepreneurial capitalism takes more people out of poverty than aid. Of course, we know that. John took me a long time to get it. I give money to a charity in central park where he had a nasty bike accident. I hope you recover. But most people dont get this. Its very difficult to see people change their minds, when you see it, when people have the courage to do that. Its amazing to see. The original justification for foreign aid is meant to increase Economic Growth in africa. That didnt happen. John we spent trillions, it hurt Economic Growth. It was a disincentive reform. If you have money coming from the west, there is no reason the african government should take the hard decision to deregulate the economy, and in exchange be accountable to that little class and the private sector. Many african governments have preferred to rely on foreign aid and keep autocracy, dictatorship and centrally planned economies which produced nothing but misery. John and individuals are less likely to make shoes if big American Shoe store is giving free shoes to everybody in the neighborhood. Thank you, marian. Another way capitalism helps people more than government or char. John what helps people more, charity or capitalism . I think the two can be connected. John right, where theres a real free market, no government privileges, capitalism does more than charity, certainly more than Big Government. The premise of obamacare is that government must guarantee Health Insurance, but Health Insurance isnt great. It distorts markets, it raises prices. Fortunately some medical clinics dont take Health Insurance. I sent producer ricky ratliffe to check one out in oklahoma. Reporter dr. Keith smith runs the Surgery Center of oklahoma, a private surgery clinic that posts prices online. In the waiting room, you look at menu and go okay. We dont get a health care menu in other places. Yeah, to know going in everything is covered and parenthetically i didnt have to pay for 100 aspirin. Isnt that cool . Reporter shoulder surgery costs 6,000. It would have cost five times that at the hospital. People can find out what the hospital will charge. We couldnt get a price quote from other hospitals. We would call and they looked at us with a blank stare, no one would give us a price. One day someone gave us a quote of around 15,000 and the price for this surgery was a third of that. Reporter he needed his bicep reattached after a canoeing incident. It was cheaper to pick up and move and pay rent in Oklahoma City for two months and pay for cabs and buses than stay in New Hampshire and get surgery there. Reporter luke carter needed knee replacement. After searching for 40 hours he found one hospital that wanted a 26,000 deposit. Wasnt another facility that would call me back and give me a price. Reporter dr. Smith charged less than 8,000 for both knees. A hospital told linda, removing her gallbladder would cost 22,000. This was a fifth of the cost. Reporter the founder of the clinic joins us now. You must cut corners to be so much cheaper. I always like to hear that, because the prices you see on our website of what it costs to take care of patients. Thats one of the big lies weve all been told and many believe is that health care is very expensive, when it really doesnt cost that much. John how can you do knee replacements for two knees for 7,000 when the hospital is charging 50,000 bucks. Theyve got to come up with the money for the Extracurricular Activities somewhere. And the paperwork, and massaging the government, and they pay their people more . Do you have a higher infection rate . We have almost nonexistent infection rate we publish online. High prices indicate lack of competition, low prices indicate the healthy competition. John when you first opened, you were surprised many of your patients were not from oklahoma, they were from canada. The first people who showed up, the first patients almost six years ago were canadians, they had Health Coverage but didnt have care, and coverage doesnt mean care, and they found that out the hard way. John and on the phone, you told us when government gets involved, those charged with delivering care line their own pockets, what do you mean . When government gets involved to ostensibly help the poor, the poor are seldom the beneficiary of the program. Its the big hospital where the folks are lining their pockets with all of this money. Our prices that we have lists online are less than what medicaid pays the big hospitals. Theres a lot of money to be made from these Government Programs that supposedly take care of the poor and their health care. John and now that youve done this, say we dont take insurance, we post prices five other places near you began posting prices. Yeah, there are so many now, we formed a national association. Theres over 200 members of outfit called the free market medical association. These facilities are popping up all over the country, embracing the wisdom of the free market and applying that discipline to their own practice model. John thank you, dr. Smith. Coming up, where i give my Charity Money . Hope they dont squander it. . You fill up my senses like a night in a forest like the mountains in springtime like a sleepy blue ocean you fill up my senses come fill me again come let me love you let me always be with you come let me love you come love me again. John not everyone can be taught to fish. The sick, the mentally ill and the truly helpless need to be taken care of. But why do most people assume government must do that . Why not private charity . Government doesnt do things very well. I thought there was too much poverty for private charity to make much of a difference, now i realize there is plenty of money, and private charity would do much more if government didnt discourage it. Today, there are fewer mutual aid societies because people say why do it myself . Why try, when we have the big welfare bureaucracies . My taxes are paid for, obamacare, food vouchers, va, job training, loans for remedial education and so on. Government poverty programs have so many rules, if i do it myself, the department of paperwork may say i did something wrong. Ill let the professionals handle it. But this is a bad idea because the professionals in government do such a lousy job. Since charity usually does it better, i try to find charities that will use my money well when i give to this charity which provides free dvds of some of my videos of free markets and give it to class and debate the principles behind them. A teachers guide suggests lesson plans and worksheets, you might argue, stossel that is selfserving, youre promoting yourself. You have a point. I also give to other charities. How do i know theyll teach people to fish and spend my money well. There are Charity RatingServices Like guide star, the Better Business bureau but not always accurate. Some arent rated at all, and the Rating Services can get conned like the rest of us. Scores rely on the data from the charities themselves. So i try to give my Charity Money to groups that i can check out myself. Charities i can watch, its where i give to the dough fund that does work with exconc, addicts and kids aging out of foster care. Instead of giving handouts, they retrain people to take responsibility for their own lives. They dont allow you to get food stamps or anything like that. They want you to be independent. John i decided the dough fund did a good job, i could see the men, they call them men in blue, ready, willing and able, they do jobs like cleaning city streets. What struck me is they seem to do it without the usual reluctance. They had a spring in their step and worked pretty fast. I thought, whoever works with these guys does something right. They taught them to take pride in work. I give the dough fund money, and a couple other groups i can watch. This is the season for giving. Dont forget charity doesnt just help others, it helps you, too. People who give feel happier, so give. But also lets not forget that the people who do the most for the poor are capitalists. Honest once, the majority who create things rather than feeding off government. They do more good for the world than charities and much more than the politicians who promise public service. Thats our show. See you next week. Think ive got it. Merry christmas. Kennedy its that time of year. If you are making yourself crazy by buying useless things, no one will ever use or want, we are counting down freedom. We have made it all the way to our top 10 and im sure you will disagree with some of the choices we have made. And the most important thing is to celebrate the people against so many odds and let them know that this is the