Transcripts For FBC Stossel 20140628

In the world has an authority. That is the way the system works. And that is our show tonight. Now it is time for john stossel. John capitals have let entrepreneurs raise money so they can get their products and services to more people. Free competition poses the best idea in the best and cheapest products and services are split fine wine. Thats why capitalism is great. And then there is crony capitalism, crapitalism, where they give your money to capitalists. I call a corporal welfare or crapitalism they give out grants and so does the Energy Department. We know about giving out gifts. The biggest government supporter is the export import tank. And heres what they had said about it. Enabling exporters of all sizes to increase their sales, protecting and exporting with confidence. That sounds good, who can object to that . The chairman of the House Finance committee. Deadheads doing. Congressman, why . Wide ledge at . John yes. Hink its pretty clea. You have a pretty clever term. Its corporate welfare at the end of the day. The one who has received a financial benefit with fortune 500 company in who could easily finance the things themselves. And so you have the exim bank thing they create jobs, but we just heard testimony that when these banks help boeing to sell a jet, it hurts delta airlines. Thousands of pilots that they cant help. Weve also heard from my state of texas that the bank helped, for example, ge and others to build an oil refinery in turkey and it hurts the domestic refining industry. For every job they create, they kill an american job domestically. So its not helping a. But what people can see, what you are up against, you can see the job created at boeing. And they have a concentrated interest in lobbying. Maybe the guys, you have this example. The Smaller Companies dont know whats happening to them. I think i know what the challenges are ahead of me. Anybody like this has now gotten a contract to lobby in favor of this. But its just not fair. And i know a lot of people havent heard of it, but i have a Small Business in my district run by a guy. And yet its my taxpayer money being spent in places like china and russia in places where there are human rights abuses . Lets respond to what the bank says here. With the Export Import Bank, the u. S. Exporters can turn possibilities into realities. International Building Systems of texas makes prefabricated houses and their buyers range from the slums of nigeria to the desert of algeria and letters are wary of spending loans because of the countries involved. So they felt reassured. Isnt that wonderful . What we hear is that lenders know it is the taxpayers money thats on the line and then they quit doing due diligence. And last i looked, the National Debt is 17 trillion and increasing. We will keep it going in our committee and i dont think the taxpayer once was on its balance sheet. And its all about kind of the washington insider economy versus the mainstream competitive economy. I mean, the base is going to be some Small Business in my state. But the true beneficiaries are fortune 500 companies that can easily finance this themselves and instead they are financing a lobby effort to keep this thing going. And you cant even say that they create new jobs. And we just had testimony from Congressional Budget Office that if xm was using main street accounting, and gas accounting, will be called fair value accounting, they are losing money for the taxpayer. Its not right and its not fair. We should end corporate welfare to get you my friend say the only way we can help is with subsidies. John and what about the republican friends as well . Macro credibly a number of votes. We are helping them to inform their discretion in their knowledge at the moment. But we have the highest Corporate Tax rate of any industrialized nation in the world area if we want a level playing field, lets bring down the worker tax rate. John thank you, congressman. I agree with you. Only Free Enterprise is moral. So lets hear now from the other side, brad sherman is also in the finance committee, congressman, you just listen to your committee chair. I know that you oppose reauthorizing this bank. Two people on one side, one on the other. In the argument for extending this is more than twice as good. So it is a fair price. The fact is that we dont live in the novels of ann grande. There is no exim bank in those books. Also, germany doesnt have this, japan doesnt have the, china doesnt have one, and neither do south korea. What we are talking about here is unilateral military disarmament. I see a lot of them accused of this, and this is the first time that republicans are so anxious to engage in it. But we dont promote exports, buyers are smart and they will not necessarily go for the best products but for the best financing. John so if others are jumping off a bridge, we should as well . Is in this what our parents warned us against reign. Germany hasnt exim bank three times as large as ours. Three times as large as ours. And their economy is doing much better than ours is. Their manufacturing is making more than ours, and they are not running the huge trade deficit. Johansson will talk about the National Debt that he keeps the clock running on. He wants to cut taxes, and then he wants to get rid of the exim bank, because it makes money for the taxpayer and returns the money for the treasury. Fannie and freddie made money. The difference there is that you have a fair reserve calculated and they say this is the way to get job hunter and jobs. Subsidizing all kinds of people. I think the exim bank should get a bit bigger. And ultimately what we need to do is make it a negotiating point to shrink there is an ours simultaneously. So the only way you get disarmament is if you get the ability to go into this with arms. You dont sing kumbaya. Not even George Mcgovern proposed. And i dont think you should propose a woman comes through the efforts of foreign government. Maybe we can get rid of theirs and the exim bank. We are in negotiations now to downscale and illuminate the export authorities of this type. And it will be difficult negotiations. But if we throw away before we go into this negotiations, you can guarantee that. John what about the side effects . You do give it a special break a man that hurts americans. That cost about a thousand jobs. So when delta is deciding to get away from those aircraft, they look for so how are we going to be able to sell our planes abroad if Even Delta Airlines is looking for export finances . They dont tell you that. We live in an imperfect world. What do you think . Keep the bank . Fox business, john stossel. And coming up, the cronies explained why the bank is so great. Banks. We have all made a big mistake. That is the way the system works. what is this place . Where are we . This is where we bring together the Fastest Internet and the best in entertainment. We call it the x1 entertainment operating system. It looks like the future he has a phaser its not a phaser its my phone he can use his voice to control the tv. You can use your woice . My voice. Your woice. My voice. Vuh, voice. His voice. Your woice . Look. Watch scifi. [ female announcer ] the x1 entertainment operating system, only from xfinity. Im taking off, but, uh, dont worry. Im gonna leave the tv on for you. And if anything happens, dont forget about the new xfinity my account app. You can troubleshoot technical issues here. If you make an appointment, you can check out the status here. You can pay the bill, too. But dont worry about that right now. Okay. How do i look . Thanks. [ male announcer ] troubleshoot, manage appointments, and bill pay from your phone. Introducing the xfinity my account app. Eidetic, the loans are actually subsidies for big corporations. That is right. When it comes to picking winners and losers, who has more experience . John it is a government, of course. And the group that made the cartoon is at best that it steals opportunities for myung younger people like them. Picking winners is something that Many Americans want their elected politicians to do. Someone needs to decide which industries deserve american support. So we can analyze every company to decide which is were they. That is why we elect politicians. So what is wrong with this logic . Was asked the economist who congressman pence shilling says he sometimes quotes. So i have a life, i cant decide what companies are better and should get some export support. It is the free markets job. The direction of resources is determined without consumers spend their money and competitions work it all out. They do it much better and they do it with a lot less favoritism. But the politicians, both of them saying look at how all of these people have been helped. Because without costing jobs over here, youre taking money from over here and its easy to see that. These people pretend the lawsuit doesnt exist. John and what you dont see the money taken. Thats right come you have some american firms that are not able to expand. You can point to those. They will lose the business to this European Company which subsidizes even more. Other american firms gain business and the resources will be allocated and it will direct how the resources the expense. The cartoon video points out that the bank has been going on for 80 years. Is giving a helping hand out for some Great American companies. No vote could mean fewer contributions to the next Election Campaign to i had not thought of that. That is a big part, that those Companies Give money to the politicians who supported. Yes, it is crony capitalism. John crapitalism is my word. I like that word. Paying foreigners to consumer products. It creates jobs and housing cost america a penny. We should find it using better accounting methods. John but they get to use this phony accounting method. Yes, that is true. Other companies subsidize exports. But they probably say, if other kids jump off the bridge, would you do . They heard those economies. And it is inflicting wound on ourselves. As you mention, willingness have the money by far. Write down the list is ge. The u. S. Government can really go out there and support u. S. Companies as they support american workers. At the end of that, your imagination at work. Way that the politicians in washington choose. Thats not a good thing to imagine. They dont each have a lobbyist making the case. That is right, they dont, but boeing doesnt he does. They believe in us. They say this is my job, to support american people. I dont doubt that its good for their jobs. Next, coming up. Corruption at the exim bank. When folks think about what they get from alaska, they think salmon and energy. But the energy bp produces up here creates Something Else as well jobs all over america. Engineering and innovation jobs. Advanced Safety Systems technology. Shipping and manufacturing. Across the United States, bp supports more than a quarter million jobs. When we set up operation in one part of the country, people in other parts go to work. Thats not a coincidence. Its one more part of our commitment to america. This, and definitely this. And that means this, so if youre looking to buy a car, dont wait because the savings have already begun. Just make sure before you buy to go to truecar. Com or use the truecar app for guaranteed savings. Happy fourth of july. John taxpayers should not have flown 140 billion to politically connected companies. Its just wrong. Government is lousy at picking winners and losers, but free market does it much better. More important than efficiency, it is immoral. Government has no business taking your money and giving it to certain companies. The exim bank should be killed certainly because its wrong in principle. However, this week they gave politicians another reason. The wall street journal reports that Bank Officials are being looked into for taking bribes and kick ax. It often happens when Government Agency ends out big money. Reporting on that, we have cam. Start with the latest Washington Examiner column. Saying that there is a petri dish of corruption and graft. I dont think that they are full of a bunch of white collar criminal is. But i think it is the nature of the bank when you provide government power and private property. And you are youre asking for corruption to happen. In this case, a Bank Employee took cash to help a Florida Company get alone to send Construction Equipment to latin america. We also have three other unnamed officials for things like taking gifts from companies who are getting subsidies. We know in one case they gave plane rides to officials with where they went ahead and got a subsidy from the Export Import Bank. So you say its not just the bank, but they did take a survey of the employees in 2013. So what about leaders maintain standards of integrity. 42 disagree, 29 agree. We end up in a situation where a bunch of people are handing out money. Every player gets the subsidy. Only less than 2 get a subsidy. So youre going to get questions about honesty and integrity and there will be such an opportunity for kickback. John one congressman about kabul is william jackson. What did he do . He was william jefferson, he was caught with 90,000 in his fridge. He had a 13 year sentence on bribery charges. One of the things he did was demand bribes from a Nigerian Company and from u. S. Company and he brought them together as part of what they were paying them for. So when that deal fell apart, he found another company and product together again taking bribes at the exim bank. They got to the bank. Because they were indicted for taking this bribe, and she worked at the bank. Yes, thats right. There was a bank official. She just got wired 100,000. The nigerian businessmen said this is a facilitation payment for helping us get money. John but yesterday the congresswoman Carolyn Mccarthy said some corruption is no surprise. They did the investigation and they let him go. That is the way the system works. Anybody who understands any business, there are always going to be people who will try to break the system. Thats the way the system works when you have the government involved and bureaucrats providing profits to private players. Sometimes you need a certain standard and you get the tax break. But those dont provide the opportunity for corruption at the Export Import Bank. Politicians and bureaucrats are picking winners and losers deciding who gets a subsidy and who doesnt. John fannie and freddie provide the opportunity as well. An executive was fired for taking kick ax and you wrote about that. Yes, in 2013, an executive was let go in there was a criminal scheme were some of the middlemen who got involved it was another one of these situations where there is a government owned business was playing with other peoples money and once youre doing that, you are handing out someone elses money and youre putting the person in position to demand this bribe. Every time the bank is reauthorized, there is the promise of reforms. Were going to stop giving all of our money to the 10 big businesses order to stop with manufacturers and they never really successfully follow through and it doesnt do what they want. If you want to get rid of the corruption in the opportunity for the kick ax committee only way to do it is to justify it until the Export Import Bank. John i hope that they do. Hey everybody Heart Disease affects one in every three women in america. T you can fight back. Theres no time to lose. Mothers, sisters, daughters, families and friends, its time to shout louder, stand stronger and demand change. Lets go. To the batmobile. Dang it. To the invisible jet. Dang it. Together we can put an end to Heart Disease. Its time to go red for women. I could use your help. Yay learn more from the American Heart Assocation at www. Goredforwomen. Org the exim bank finances by wealthiest and most Profitable Airlines in the world with huge amounts of our treasury dollars. John that was the ceo yesterday saying that the government rips off taxpayers. He is one of the few Corporate Executives want to speak against the bank. All that delta lobbied orient. And this should come as no surprise. This is a principle of concentrated and if its versus diverse costs. And it pays to spend money to lobby, but it might when you are a multimillion dollar loan. But when you pay for the, may be a few hundred dollars, its not worth it. Hence we get the lobbyist Industrial Complex in government hands out money. That will create an industry of those devoted to grabbing the money in one of those people is john hardy. Employment through expert. Its a great sounding name. You are number five on this list of lobbyist between or blogger company and bankers. And so why is this a good thing, what you do . You are a pierside feeding off the taxpayer. These are companies that facing severe competition overseas areas it levels the playing field. You have export credit agencies from all of the Major Companies with which we compete. The only way in which we can lower the financing plainfield is by enabling the xm to provide comfortable financing so that the buyer can focus on the quality. The buyers pay for the financing that is available. More recently returned to the treasury. Since 2006 the bank has returned this. My federal Flood Insurance made money until they didnt know they are 20 billion in the red. It is conservatively managed. It is point to 3 , less than one or 1 . The private sector, after the financial crisis is now in a situation that is subject to new regulatory constraints and they simply dont have the liquidity and what liquidity they have is far more expensive. Because they now have Additional Capital reserve to provide and at the same time we are in a situation where these markets are exploding and we have elions of new people moving into the middle class and there are tremendous opportunities there. With a private bank, i would think they would fund it. Boeing has 4 billion and its finance. One of the dilemmas is a tie on liquidity and low in return. So the bottom line is that commercial banks will not be effectively investing is not a have to make more of a return to their shareholders. This regulation meant to protect us, we have to suggest more companies . We are not subsidizing. They are operating consistently with this arrangement. The one agreement with the other agencies are now working under to provide is established conditions. The one argued against it, that is delta airlines. Heres more with the ceo said yesterday. I have had many conversations with the ceos of the most Profitable Airlines in the world. And they tell me, look, i really dont need the financing, but its so cheap, i might as well take it. This is effectively a free airplane. All i want is a level playing field. John hes taking with a level playing field. We are not subsidizing the competition. The reality is that there is a new International Agreement on aircraft, which is made for financing, its made it a better credit airline. Far more extensive. And the reality is that it is now less expensive to get it financed through the private sector than it is to users. But theres one problem that i mentioned before. There is no liquidity because the commercial banks are not prepared to invest the magnitude of capital. And we are talking about widebodied aircraft. Im glad you raised this issue. There is always another party on the other side of the table. They have export credit agencies. They are very aggressive and more aggressive. John if they throw money off a cliff, we should throw money off a cliff. But are we in a position where you actually want this to actually sell aircraft . John they say that they will keep going. Its not just about them, but the whole spectrum of toptier manufacturers in the United States trying to compete in market places all over the world in major export credit agencies without government, so that is my opinion. John thank you so much. So the lobbying odds are stacked. There are a few freemarket groups that lobby back and punish politicians that support this. We will talk about that coming up next. John not every lobbying Group Lobbies to get them for themselves. But if you just believe in something. One of them defends economic freedom. They oppose all special favors to business and all mail outs. And later the obamacare backs his opponent who eventually became a senator. We know that it is important. The club supporting marco rubio, and now they are fighting the exim bank. Barney keller works for the club. And i admit that i have been a fan of you guys for a long time. Ive attended them of your meetings. So might this really be a turning point when republicans stop feeding at the top and say enough already . You know, its a little known agency that has become the symbol for crony capitalism in america. I think that people are turning to realize that theres a difference between being probusiness and profree market. Those two things are not always the same and we have seen this in the debate. On one side you have the chamber of commerce for crony capitalists that has supported the stimulus and the wall street journal. They also do some good things yes, but they also support Big Government programs a lot of times. And on the other side you have the profreemarket side that believes that this leads to wealth prosperity for all americans. And thats why we have to stop things like this, the Export Import Bank. John exxon mobil got funded after paying for a trip for some employees. Yes, its just another example what everyone hates about washington. People with wellconnected lobbyist, they can go there and hire someone like that and they can get a loan or a subsidy from the government that isnt available to you and me. Government workers ran of 97,000 traveling in the south pacific. Eleven months later they approved 3 billion in financing. The biggest gift loan in the agencys 75 years. Yes, ebony goes to boeing, they are the company that is lobbying most to keep the bank. Thats what is wrong with washington. Thats why americans, part of why they dont trust politicians anymore. One more example that you can talk about. Its harder to see the jobs lost. It hurt iron ore miners in america. Basically would have been if they wanted to send money at them into the Richest Woman in ostrow the. So they provided these loan guarantees a 700 million. Exactly. And these miners are saying, wheres my hand out, now youre making it one competitor with us. So why are we the ones one of the ones getting the subsidies. So they dont have lobbyists. They dont have good ones. John thank you so much. Barney keller. We appreciate you being here. Coming up next, why i think this is a remarkable turning point. More politicians realize theres a difference between capitalism and crapitalism. And crapitalism. When folks think about what they get from alaska, they think salmon and energy. But the energy bp produces up here creates Something Else as well jobs all over america. Engineering and innovation jobs. Advanced Safety Systems technology. Shipping and manufacturing. Across the United States, bp supports more than a quarter million jobs. When we set up operation in one part of the country, people in other parts go to work. Thats not a coincidence. Its one more part of our commitment to america. This, and definitely this. And that means this, so if youre looking to buy a car, dont wait because the savings have already begun. Just make sure before you buy to go to truecar. Com or use the truecar app for guaranteed savings. Happy fourth of july. Like a night in a forest like the mountains in springtime like a walk in the rain like a storm in the desert like a sleepy blue ocean you fill up my senses come fill me again come let me love you let me give my life to you let me drown in your laughter let me die in your arms let me lay down beside you let me always be with you come let me love you come love me again john the exim bank is one of several bureaucracies they give you money to favor business. Sometimes we hear about it. When the money is squandered. Sometimes we hear that the Energy Department lost 500 million on slender. But we hear little about the other losses like the triad ethanol plant, and so on, the list is long. And then we tune out and people get scandal fatigue. But even when there isnt a scandal, government has no business handing out loan guarantees to companies. Its just wrong. Corporations should pay their own way. The ever caught her department gives 200 million to the pet food institute, the wind institute, in return, politicians get campaign contributions. Its disgusting. Even a Small Business in ration is an embarrassment and they loaned a Million Dollars to a dealership that them close and 3 million tulip rolex dealer. And this is where your tax money should go . But the name Small Business administration, it just sounds the government says the situation existed protect the interests of Small Business. How can i argue about . Does america need a Small Business policy and an export policy and so on . Well, no, we are to have one, its called the market. Its great at determining which exports are worthy and which are not. Those that attract customers and work and make a profit and the mason for themselves. Some of us need not be involved, especially in this sense. There is a bureaucracy called the Economic Development association that gives out 3 million a year. Spending your money on so much Economic Development that they even pay for things like a wine tasting room and a gift shop. Really. One fiscally conservative congressman came on the show a few years ago to complain. The Economic Development takes about 400 million a year from you, the taxpayer, bring the money to washington dc. And it is part of Economic Development. They are political animals. John they are, and they shouldnt exist. The congressman said that he try to kill it, but he failed, he didnt even come close. And check out this other politician who promised that he put it into both them and the epa. I dont believe we should defend every Government Program just because its there. There are some that dont work like the exim bank that has been a little bit more than a fund for corporate welfare. John now, instead of getting rid of it, the president wants the bank to loan out even more of your money. Give me a break. Once they get to washington and breathe and all the money and power, politicians love spending other peoples money. Except maybe, just maybe, the tea party changed things. If they do kill the Export Import Bank and then stop other corporate welfare, its a first step to saving america. That is her show and we will see you next week i am on to you. Have a great weekend and we will see you on monday. A you. Kennedy the world was once a series of perfectly positioned giants. The middle east has evolved into a brand of chaos unrecognizable to her sensibility. Who are the teams and the players and what on earth are the rules and do we have any boundaries and who is isis, and where do we go from here . This is