Transcripts For FBC Stossel 20150109

But the private sector does things better. That is our show coming up tonight. No. Now it is time for john stossel. John trusts. A lot depends on it and families often succeed because we trust families more than strangers. Government works and people trust the government rules are fair. Commerce works when Customers Trust that it will work. These are delicate relationships developed sometimes over a million years, but sometimes the internet is changing things for the better. I would argue that here is one example. Do you need to mop the floor, by the groceries and milk the cow . Task rabbit helps you get stuff done, first you post your task and then include all of the relevant details like location and price and other important information. It will blast out an sos to those in your neighborhood letting you know that your task is underway. And you are done. Really . A stranger coming into your house mopping the floor and buying groceries . Why would i trust the stranger . The owners say that their rabbits are professionals who go through a rigorous application process. You can rest assured that they are reliable and trustworthy. John really . Why would i believe that max wyman people trust total strangers herriot the book argues that the internet has given more of us reasons to trust total strangers. Julian smith runs a business that is based on trust. Before we talk about your business, lets just talk about task rabbit. Tasks are personal. Why would people trust some kid to come in and do that. Is a really good question. The reality is i think when we see people on the internet now im alesia phase and their reputation. John what you mean by reputation . People before you doing tasks, mopping the floor and so we have an impression that is from looking at their reputation. John this is what we used to learn from family and friends and neighbors. We used to live in small villages and we trusted everyone. Recently over 50 we are surrounded by strangers and we ended up with the systems in place that progressively get billed and those systems say should i trust this person for this thing because its impossible for us to be constantly making that decision over and over again. John your business is based on that and you Share Office Space. I run a Company Called reader that provides temporary office space for people at a moments notice. So that means all customers are going to places theyve never been. Youre walking up and there are strangers. So in our case we ask where the real menace and they point to the back and that is it. We trust each other even though we have never met. John if you can set it up so people can share offices, why not cars . Most of our cars suck up our car payment money. They dont go anywhere. Why cant i share my car the way that this lets people Share Office Space . Companies like get around allow people to earn money by sharing their car. We are enabling people to make money off an asset that cost them a lot of money. John that is just one of the companies doing it. There are a a lot of companies doing it and essentially this is even more implement because of some of these car. So first of all youre walking into a strangers car, it should be clean and nice and a better run while, otherwise you could end up in a bad situation. What if i run my car to someone who cracks it up . If the driver kills somebody, you could be held responsible. We have 5 million in insurance on every space that we have. And it depends on the company but that kind of stuff matters. Because at the end of the day youre trying to build a respectable business and that means treating people well on both sides of the equation. Protecting people through readings and repu is new. Otherwise we see government regulation with huber and lift and all of these other companies. So how i know that this guy is save . I dont know that this taxi driver is safe just because he passed a test from a bureaucrat. That is a great example. Drivers may not be perfect, but they get raided every 20 minutes on uber. John every time someone takes a car and you get to read it right there. People are reading each other the whole way. John lets expand this discussion to the rest of the world. One reason people stay poor is because its hard to establish trust. Many people say africa or south america or russia are free to build a business because they dont trust that once its built they will get to keep it. Maybe the dictator of the country will just take it from them or maybe a mob of thugs will steal what they make. People want to trust that contracts will be enforced and honored and that is why we are lucky to live in america where we have a pretty trustworthy system. But Michael Strachan has spent the last decade in places that dont have a trustworthy rule of awe. What do you do there . I have two projects. One is working to develop Legal Systems that actually provide the trust where you have and you know that the government will not take your money and the other is helping entrepreneurs and talented individuals develop the skills and get online so they can engage in contracts. Its an online world where they can build the trust right now and then we also want to help them on the ground have a legal system where trust is possible. But you are exactly right. The people in developing countries can be trusted and they could remain poor. John they cant trust that if they expand their house that someone will come in and say that you dont really own that house. So why add the floor or renovate reign. Most developing governments one way or another offer regulation and or rule block. Most countries it is a little or a lot risky to invest capital for those reasons. John you train the workers in the third world and many find the work in faraway places. Here is a commercial promoting the idea that people can work without going to any office. My commute to work was an hour and a half of my day in my car. Are used to have to fly a million miles per year. John it is very exciting that these Global Online labor markets allow people anywhere bright and talented people anywhere to actually engage in International Commerce and in addition we are going to a smart contract level where more sophisticated arrangements can be automated using lock and Chain Technology so that entrepreneurs and investors in the west can hire people in countries without rule of law and use this technology to put funds in escrow and pay them wants the job has been completed and reliable way. John these people feel more assured that they will be willing to do the work . Exactly. That sort of Technology Allows for International Trust at a scale where its never been possible before. John on the flipside, some work for minimum wage in america to establish trust in hopes that they will get paid more later. We are working with people in rural uganda were a College Graduate makes a hundred dollars per month. And so if we can help a College Graduate aramaic 180 per month or 200 per month, doubling your income, we need to ignore developed wages and focusing on doubling or tripling the incomes of developing world people quickly and easily by means of giving them access to the global labor market. John the internet gives entrepreneurs and ways to raise money. People used asked to go to the local bank and the bank would ask if this person was trustworthy. And maybe you would have enough of a reputation and they would loan you some money. But now a Company Called Funding Circle says that you can do better. Theyre from commercial features Small Businesses doing well. So well that he wants to open a second location. To help make that possible he wants a loan. The problem is that banks are not making loans to Small Businesses like rubber. They are stuck in her old ways and are bogged down by regulation. John that is often true. Increased regulation before doddfrank has made it tougher for entrepreneurs to get money from banks and banks are not the only option. Other Specialty Finance firms are willing to make loans, but it is harsh terms. Now Small Business entrepreneurs have a new option. Funding circle. Funds come from other successful entrepreneurs and organizations that want to invest in Small Businesses. John it sounds like a scam to me. Most financial regulations prevent Startup Entrepreneurs from accessing capital and it makes it easier for the big guys to get capitals. The webbased approaches will allow for startups to have more diverse sources of capital at lower rates and as a consequence we will see a lot more small Startup Entrepreneurs obtain the financing that they need. John how can the Investor Trust that the money will not be squandered or stolen . Theres a company that actually provides three times the rates from friends and family. If her friends and family trust you, then they will put three times as much in because they figured that those people havarti video. Theres another online source that will provide revenuebased financing. What we fear is that there are lots of people finding diverse ways to identify trustworthy entrepreneurs and putting money into their companies so that they no longer are dependent upon the banks, which are the last place anyone goes to for money anymore. John you told me about internet celebrities who i have never heard of, they just appeared on facebook and they somehow were so appealing and trustworthy to their fans that Companies Pay them thousands of dollars for short videos to plug in products and one woman talks about makeup. She has millions of you as. A lot of people are happy with that new mechanism. John the kids that watch or trust or because they like her and they will buy the product . Its interesting that in the blogging world there is this thing about disclosure and making sure that we know that it really is something thats being paid for or that it was a free something, we dont know what it is. I dont know what the rules are for this particular person, but generally the more transparent they are, the more that person ends up being trusted and the more opiate or secretive it is. The last trust occurs over time. John to join this discussion join me at stossel were like my Facebook Page and you can post on my wall. We want to know what you think. Coming up next, what if your coffee shop had no one to behind the counter if no one was watching, would they pay . You would be surprised. If youre taking multiple medications does your mouth often feel dry . A dry mouth can be a side effect of many medications. But it can also lead to tooth decay and bad breath. Thats why theres biotene available as an oral rinse toothpaste, spray or gel. Biotene can provide soothing relief and it helps keep your mouth healthy too. Remember, while your medication is doing you good, a dry mouth isnt. Biotene, for people who suffer from a dry mouth. John privatize everything privatize the Fire Department and the police department, privatize everything and make them responsible. Go get them. I love it when a hollywood or get something right. Americans just assume government must be in charge of things like road maintenance and garbage collection and ambulance services. Murdered bacher raised peoples consciousness about that. Two the government has a duty to get the best deal. Margaret thatcher deftly said herpes. We have plenty of politicians in america who want to run everything. More cities have woken up to the benefits of an alternative. Private management. This individual of the Reason Foundation talks about the reason privatization report that tracks what is working and what is not. What is working . We have lots of routine services where citizens interact everyday, wastewater, pothole repair, that sort of thing things in the backend of government i. T. Payroll where those sorts of functions, we have other things in the private sector. John how does it work to why does the private sector do it better or cheaper . They are in a system where they have to compete and that creates lower cost and Higher Quality compared to government which tends to be a monopoly where there is no competition with lower quality and higher cost. One person says that everything government buys big pay above market for and deliver belowmarket service. Often there is very little incentive to be efficient in that system where there is no tension in the system rocklike competitions. The privatization cites this. Yes, it is a great story, its one of those states that was financially distressed and went into a emergency manager control because of the high debt and chronic budget deficit. The manager stepped in and took over the decisionmaking from the politicians and they ended up contracting out the private sector with 20 Different Services including trash collection and public works and if they cut the budget in half and city stopping by 90 they cut the debt load by 70 . John private ambulance service. How does that work . Across the country they can contract out their inulin services. John who pays . If you go in the inulin, they hand you a bill. Its different in her jurisdictions when 911 says you have to pick someone up, you do. John they send you a bill afterward and maybe medicaid will pay for it amax. Insurance, medicaid and medicaid, other subsidies we want. That includes private sector financed rebuilding and maintaining over a long time 558 bridges veteran faster and cheaper than the traditional way of procuring things and they will save 20 on the cost of delivering and maintaining each bridge. John in chicago they may privatize the park parking meters. Yes, they were the first to privatize the parking meters they got some things right and other things wrong. One thing they were criticized on if they got a billion dollars of fun, for 75 years. The politicians spent eight. So that falls more to the privatization and other cities and jurisdictions have followed since then. John in indianapolis a privatized parking meters that were making 519,000 before privatization. Almost 3 million after because the government meters usually were broken and it took days or weeks to fix them. That is right. They would sit on meters that were broken for weeks. They have to keep those things up and running and they get calls to go and 6 meters. The utilization is much higher. John despite these successes lots of people hate the idea of turning Government Services over to forprofit companies. They want to privatize everything. They dont want to pay for the roads in the and the dams and the rivers and the protection of our environment. John it is just stupid because we do want to pay for it and we need to get our moneys worth. Thats what you can do through competition and privatization. John one thing people think has to be done by government is airline security. The two cities dont use the government for that. Its actually 20 cities today. Most of them small, but San Francisco and kansas city have never gone to a tsa lead screening operation. John the we went to San Francisco who went for the private screening and people said that these screenings are different. I think that they are more into spending. John even though the private screeners were friendlier and quicker, tsa tested them private screeners found many more items than the government screeners. Why is that . Here they are gracing this together and then this screener passes over 2000, there is even dramatic effect. The tsa also screened people and trains them. Searching bags and identifying for bidden items. John the government doesnt do this, the private Company Knows that they have a good reputation and they might it they mightget it. They have a natural builtin incentive versus the tsa where there is no incentive because they are the monopoly. John thank you mr. Gilroy. Next, would you trust a group of strangers to be your doctor . I would not. I researched a new company to let strangers do that. Stossel my knee hurts. Not sure why. I could go to more doctors, but theyre expensive, and they always make me wait, and often, they dont know whats wrong. Will the internet help . I could go to google. Put in knee pain if it. This gets me all kinds of advice. Heres a doctor that concluded that theres a better way. The better way is not going to his office. Physicians think all Health Care Decisions should be made only in the hospital. And clearly thats not the case. Stossel hes a medical detective, they call him, for a Company Called crowdmed which advertises heavier medical problems solved by the crowd. You submit your case, which means listing your medical problems. Here dixie from New Hampshire says she has pain, muscle cramping fatigue. She sounds like a hypochondriac. How would anyone sort out these symptoms via the internet . She offers a 200dollar reward to anyone who does. I wouldnt trust the internet diagnosis. Would you . Jared says we should. Hes the founder of crowdmed. Why . We put a lot of work into creating the right mechanism to harness the wisdom of crowds to find the wisdom of the world. To bring the right answer to the patients while suppressing the bad answers. Stossel and the crowd is usually wiser on any one expert. Studies have been done on that. But you have these people on the site with these myriad symptoms are they helped . Our average patient has been sick for eight years and incurred 50,000 in medical expenses. Despite the difficulty in these cases, more than 60 of the time our crowd brings them closer to a correct diagnosis or a cure. Neil and you started this because your little sister had trouble with this. My little sister spent three years with a difficult, chronic undiagnosed medical condition. She saw almost two dozen different doctors. My family and our Insurance Company incurred six figure medical bills. No one could figure it out. I wanted to create a website to help patient is like her. My sister had been diagnosed finally. Although it take way too much time and physicians. We wanted to see maybe if a crowd of people could have come up with her cure much quicker. Stossel she needed a harmony hormone patch. The treatment was very simple. Hoarhormone replacement therapy. She was back to normal. Neil you put. Stossel you got the same answer on your site . We put her case on our site giving the community the exact information that her doctors had before she was diagnosed. The Community Came up with the correct answer in just a few days. It showed us, theres something to this whole crowd sourced medicine. Stossel how does it work . You have community of medical detectives. Twothirds of our detectives work in or study medicine. These are most commonly doctors, medical School Students nurses. We want a Diverse Community to get lots of different perspectives. Acupuncturists cairo chiropractors. We have dixie she lists her medical history. Tests shes had done. The results. The medications she uses. Diagnoses that have been excluded like lyme disease. The average case gets 16 case solvers to collaborate on it. High success rate. Stossel eric has severe motion sickness. Checklisty haschristie has dry everything. What if if they get bad diagnoses . Well, the way we see it, first of all we make clear that we are not in the practice of medicine. Our job is to provide a short list of the most probable diagnostic and solution suggestions for the patient to suggest with their doctor. Its up for the doctor to determine the diagnosis and treatment plan. The way i view, worstcase scenario, the patient is no better off than where they started. Bestcase scenario, our crowd and community provides insight that could lead to their cure. Stossel some people offer rewards to their detectives. We have detectives who have won several thousands of dollars. Not quite a livable wage in the u. S. Their primary motivation is not cash. By the way the average active detective spends nine to ten hours solving cases on our site. Essentially its a volunteer. Thats per month. And we asked them. They mention cash like fifth or sixth on their list. The main things they mentioned are the intellectual problems to solve the complicated medical mysteries. Stossel hard to believe this would work. Thank you, jared. Next, what will happen when politicians destroy our trust in our money . Stossel if you look at the money in your pocket, youll see it says in god we trust. But right below that is a picture of the white house. Apparently, god is not in charge of preserving the dollar of value of the dollar. Politicians are. I dont know about you but i dont trust them. They have destroyed currencies in country after country. The value in russian fell nearly 50 . People who saved all their life just lost half their money. Given the way our politicians spend, i worry that will happen here. So how can i protect myself . Heres one way. Bitcoin is the first decentralized currency. Its kept in your digital wallet on your computer or mobile device. Its transferred from person to person via the net without going through a bank or clearinghouse. Stossel presumably theyll hold their value. We wont go into that today. But i trust the algorithm more than i trust american politicians and so far my trust has been wellplaced. I bought my bitcoins when they sold for 120 bucks. Now theyre worth more than twice that. Though, you can see there was a big bubble in between. I wish i sold my bitcoins when they were worth 1,000. Anyway bitcoins like most new things scares politicians. Some are upset because americans use bitcoins to buy illegal things. Heroin, cannabis. Senator chuck wants bitcoins restricted. You name it, they have it. Codeine. Black tar heroin. Theyre all listed. Oh, my goodness, we must stop that. Governments must ban bitcoins says ej who wrote this article about how bitcoins are used by international criminals. Naomi of the Bitcoin Center says dont blame bitcoin for what criminals do. You want bitcoin regulated so few of us will use them. We dont want to get rid of it. We want it to abide by the same things that cash has to. To. Stossel so you have to tell the government. If i show up with 5,000 in cash, theyll have to fill out paperwork filling out who i am and asking a few questions. Stossel whats wrong with that. Its interesting he brings up criminals. Its the us federal treasury. The Medium Exchange of choice, cash for criminals. We actually see these industries are still succeeding in transferring money. I would like to know why ej stossel most cash money is not even in america. Hundred dollar bills are overseas. Hundred dollar bills. The treasury printed 1. 2 trillion in cash. Most of that is in 100dollar bills. I dont understand why hes going off the mom and pop down the street, bitcoin which is a fraction of that amount. We worry its cash on steroids. Most of them are done in cash. Theyre small scale. Hard to move large amounts of cash overseas. Very difficult to put in a bank account. Very difficult to pay people a lot of zeros. Its just bad Law Enforcement to go after the medium of exchange. Go after the criminals. Find a good way to go after the criminals not something innocent people are using as well. Silk road did allegedly a Million Dollars stossel theyre out of business. They were shut down in an old school sting operation. Stossel why blame bitcoin . People did business on the internet. Why not blame the internet. Bitcoin allowed people to wire large amounts of money the people wiring the money to know who they are doing business with. Stossel i dont want the government to know everything im spending money on. Were worrying about people that are oppressed. Every single authoritarian regime in the country theyre trying to steal money from their citizens and hide it abroad. Bitcoin represents a way they can do it in a much greater volume with much greater none anonymous than before. You go go to nigeria corrupt politicians laugh at our politicians how little money theyre able to steal. People in nigeria are becoming multi millionaires off of just theft. You want transparency. What better way to get transparency than for the government to use bitcoin. Its an open ledger system. You can see where your tax dollars with are going. You can see the incredible waste. . its actually accurate. Stossel were out of time. Ej and naomi. Coming up, stores that trust people to pay for what you buy. They have no cashier. Dont they get ripped off . Stossel some people cheat. Some steal. Thats why stores have cashiers near an exit to make sure you dont sneak out without paying. But what if there were no one there to check . This coffee shop in north dakota has no one behind the counter. The thing thats amazing is that people have been extremely honest. When i add how much has been taken and how much is in the till, at the end of the day, people are 15 more generous than thieving. Stossel more people overpay than underpay. Of course, thats north dakota. Heres a california business that trusts its customers. Swanson berry farm sells jams with no cashiers. Jim who runs that farm stand says they dont rip them off. The customers dont . No. Its amazing. Its really quite a phenomenon. We do thousands of dollars worth of business every day. Its quite amazing to see people experience it for the first time. Stossel at first you did this because you were busy. There werent that many customers. You couldnt afford to have a cashier there all the time but now you have all these customers. Youre leaving change available in the open 50 to 100. And people are honest . Yeah. And sometimes somebody from germany or chicago will show up and start scratching their head. And another customer will come up and say heres how you do it. You make your change here. They go through a period of disbelief. And then they finally get adjusted to the idea, and sure enough, they do it. Then, of course they want to have their picture taken next to it. Stossel some say this is because your farm is in a small town. The tea company honest tea ran honest tea experiments. We installed racks of tea in all 50 states and a sign that has a dollar a bottle honor system. We have the box where people can put money in it or not. We watch the results. Alabama was the most honest states. They were joined by tennessee and alaska as well. Blond was the most honest hair color. Women were more honest than men. Stossel in new york city, 98 of the people were honest. The least honest were montana and idaho. So just no pattern. It would be interesting for somebody to look at what is going through peoples minds. I have to say, it makes them happy. It makes us happy. We love coming through the farm stand and seeing the happiness that people have and its really fun. Stossel this doesnt work everywhere. New hampshire farm stand said it had to close because of theft from the cash box. Stephen king wrote a novel under the honor system. Pay a dollar only 75 of the readers paid. Fewer than 50 of readers paid. Have you been been robbed ever . People take the money ever . Oh, sure. Of course, we have. But its been rare that weve noticed it. We do beginning inventory and ending inventory. And we have an idea how much product weve sold. And, you know, the interestingly enough, we do get variations. On average, it works to just about right. Stossel thank you jim. A British University ran a trust experiment in a coffee station. They put a poster on the wall showing eyes staring down. No one was watching, but the eyes poster alone led coffee and tea drinkers to leave twice as much money. Next, who is more trustworthy . Government or business . Stossel whom do you trust . Businesspeople . No. They just want to make money. They dont care about me. Thats why americans are inclined to trust people who enter public service, you know, politicians and regulators because theyre more trustworthy. I did not have sexual relations with that woman. Well, im not a crook. Read my lips. [applauding] if you like your doctor, youll be able to keep your doctor. Stossel or maybe not so trustworthy. Still, people in government are not trying to profit by selling this stuff. My instinct says be wary of the people trying to sell profit. I know businesses cant be trusted. Im dr. Love. Trust me. Im a doctor. Stossel these dr pepper ads poke fun at advertiser deceit. Trust doctor. Stossel thats why we cant trust business. Except we can. When i was a consumer reporter in a single city for portland, oregon, and then new york city. I found scams every week. When i moved to Good Morning America to report on national scams, i couldnt find as many. Thats because wherever markets are mostly free, the way to get rich is to serve your customers will so theyll want more stuff. There will always be some scams but they rarely grow big. Word gets out. The Bad Companies at go down. Big ones grow. Now thanks to the internet, your reputation is out there. . i wont go to a movie now without checked the Rotten Tomatoes site first. When i travel, i look at what tourists write about hotels where i might stay. I trust these ratings much more than any certification of approval from the department of business regulation. Once i made some money working as a driver from lyft a company that lets ordinary people become a taxi driver. Before i could pick people up, lyft made me put this stupid pink mustache on my car. Welcome. Im supposed to give you a fist bump. Where are you going . Stossel why would i trust that strangers would pay me . Why would women get in my car and trust they were safe . Because we rate each other right on our smart phones. Ill rate tim. I liked him. Ill give him five stars. Thank you, sir. Stossel have a good day. These ratings make everyone vigil about maintaining a reputation. Reputation protects us better than government ever will. Even google and wikipedia all by themselves offer more Consumer Protection than government or thousands of consumer reporters. Want to check me out . Its all public on the web. John stossel. According to wikipedia, john s. Stossel is an American Consumer television personality, author stossel all right. You get it. Information protects us. More consumer regulation is bureaucratic and useless, sometimes harmful because it stops entrepreneurs from trying new things. One cool business is eat with. Com. It allows people to buy a homecooked meal in someones home. Have a dinner party with strangers. Thank you for having us. This is so nice. Some people like to do this. Government always slow on the uptick barely knows that these services exist. The regulators will panic and demand regulations. Fools in my profession will encourage that. They have already done a hidden camera on underground dinner parties completely unregulated. Give me a break. Eat with customers. Always a risk. They trust their hosts because they have reputations to protect. Government pretends it must have a place at the table. But ill trust the power of reputation over regulation any day. Thats our show. This week. See you next week. Extraordinary. Catch the show 9 00 p. M. In the meantime lou dobbs. Lou good evening, everybody. Breaking news tonight. The manhunt for two radical islamist terrorist brothers who murdered 12 people in france yesterday, that is now a manhunt focusing on a Forest Region over 50 miles northeast of paris. A rea nearly twice the size of paris itself. Heavily armed antiterrorist forces going doortodoor in the woodland villages looking for the brothers said and cherif kouachi. Hours after the brothers were spotted. Were learning the younger brother cherif