And now, john stossel. Stossel one great thing about america and Free Enterprise is that for the most part, people can only get rich by helping others in some way. Thats because capitalism is voluntary. No one is forced to buy from you. And thats great. Most of life fortunately happens this way. But on now now in america we have people that can use force. They enrich themselves by using government to force people to give them money. David bows of boaz of the Cato Institute calls this parasite economy. Thats from his libertarian mind. Theres two ways to get rich in any society. You can make it and trade with others or take it from people who have produced something. And i call making it the economic means of wealth, and taking it, the political means. And some of the people who take are criminals. They they rob you. They embezzle from you. But more importantly are the people who use government to take from you. Stossel and thats growing numbers. And what do you mean parasite economy, whats whats the scam, judge the scam is youre not producing something of value yourself stossel or enough value to get people to voluntarily give you money. You might use a tariff to prevent people from buying from your foreign competitors or get the government to give you a subsidy. You might get them to pass a law so that they cant compete with you. Youre glomming on to the wealth they produce. When parasites attack us, we have to spend some effort fighting them off. And the fighting them off means lobbying. I mean, some of it is just evil. Lobbying to get money. Much of it is lobbying just to say dont crush my business. Probably a smaller part. Youre absolutely right. Over the past 15 years ive watched microsoft, apple, google sit out there in the west coast, making stuff we voluntarily decided to buy, then you have politicians coming to these companies and saying, hey, nice Little Company you got there. Too bad if something happened to it. Then they start suggesting that maybe you need to make some campaign contributions. Maybe you need to hire some lobbyists. Maybe well run an antitrust investigation and limit your supply of overseas engineers. All these things drag these companies into washingtons lobbying cultures. Theyre less creative than they once were. The ceo cant focus on innovation. Hes focusing on manipulating washington. And thats an important impact. The most valuable thing we have in our economy is brilliant creative people. And if brilliant creative people are making iphones and software and automobiles and new ways of getting around the city. Then thats a good thing. And if they are distracted into fighting off peoples lobbyists or hiring their own, then thats a net loss for society. It means fewer Innovative Products and more lobbyists. Stossel lets go to some examples. You include the militaryindustrial complex. We need a national defense. That requires weapons. Even the weapons we need, we have to recognize, they will be sold to the government by lobbyists and theres going to be a problem in overbuying. We just spent in the latest omnibus spending bill, 470 million on f35 fighters that the pentagon doesnt want. Stossel you have farmers. Veterans. Unions. The ethanol industry. The aerospace industry. Trucking. Theyre all in d. C. Trying to get something for nothing. Well, they ask why do you rob banks . Because thats where the money is. For a lot of people, where the money is is in washington. Thank you david boaz thethe Cato Institute. Lets focus on green energy. Think about all the money that was invested in the whole green energy market. Billions of dollars to green energy. Mostly wind power and solar power. Also, bio fuels like algae because certain people in government decided those are better. Andrew agrees they are better. Because of extreme weather, Companies Make a big pivot towards green energy will make money and do good. David of the Heritage Foundation says, no, the Green Energy Industry is a parasite. And andrew, arent Green Energy Companies that get government help really parasites . Well, its kind of its kind of an odd word for any industry that gets money from the government. That would cover almost every industry. Stossel i will include any company. Fine. The amount of subsidies going to fossil fuels dwarfs the renewable globally about 500 billion up to 2 trillion a year going to fossil fuels. Stossel i have to stop you. Because we have this chart that talks about Energy Subsidies for different fuels. And wind and solar per kilowatt produced dwarfs the fossil fuels. Well, youre talking about the beginning of Certain Industries and how much money. I want to take you back a little bit to the 1960s. The government, in particular the military spent a ton on semiconductors. They drove the cost down. Thats part of the role of government. First of all, that 500 billiondollar number is bogus. It includes the subsidies to petroleum that the Oil Producers like iran and venezuela pay so their citizens can pay gasoline for a quarter of a gallon. We shouldnt pay subsidies for windmills because theyre on subsidies for their gas consumers. Stossel there should be no subsidies for anybody. We agree. I think we can all agree on that. If we price energy the way it needs to, and all the externalities, all the costs. Stossel the externalities. Meaning because fossil fuels cause Climate Change . Well, thats one. If you want to take it more specific, they cause health issues. 3 billion a year in health costs. Stossel david, what about that . Fossil fuel companies theyre killing us. Theyre not killing us. The studies used to back up those numbers have been undercut by other studies that show stossel coal is nasty stuff. We clean it up. Lets go back to the subsidies. Thats the straw man they put out. Everybody gets them. When the windmill industry had a temporary lapse in the windmill tax credit, the industry shut down. They didnt build any of them. This was recently. Stossel subsidies were supposed to for these new industries. Solar and wind. Theyre 30 years old now. Theyre over 100 years old. Weve had solar panels 100 years ago. The subsidies werent there 100 years old. But the industries are much older. They havent competed because theyre not as viable. Well, thats not true anymore. The cost in solar dropped 70 to 80 in the last five years. Its cheap if you dont include the fact its intermittent. Im as happy as i can be lets get rid of the subsidies, the mandates, the portfolio standards. All that stuff throw it out the window. Let it compete. Dont let washington involved. Absolutely. Okay. Weve agreed. Weve seen when you got rid of it, it shuts down. Europe the electricity rates are two and a half to three times the rates we have here. Stossel parts of europe did what you want and didnt work out so well. Nuclear was not with renewables, but lignite lignite stossel let andrew respond. What germany did that is almost physically responsible, theyphysicallyimpossible, they were trying to move away from everything. You dont want subsidies. You point to germany thats heavily subsidized. The taxpayer pay for it. The industry is getting ready to shut down. Moving. Leaving. They cant pay three times the price for electricity as our competitors in the u. S. It doesnt just go to wind power. Government gives it to all kinds of fringe businesses. One makes jet fuel from algae. The us pays much more to buy this fuel. 150 per gallon. More than 60 times what standard fuel costs. One environmentalist tried to convince sean hannity that was a good idea. The u. S. Navy is one of the forefront leaders in Climate Change. Why would we pay 60 times the amount for jet fuel when were laying off brave men and women to protect our country . This is the price we pay for progress. The price we pay . Stossel andrew, this is progress, to throw all this money to makers of algae fuel. It is progress. I dont know where the numbers are from. I talked to the navy. I dont know where that number comes from. They signed a contract for 4 a gallon for blended fuel. Thats probably more than theyre spending now. I go back to the fact that the military invests in new technology. They always have. Theyre investing in things that get off oil. This is smart for them. It would be swamped to buy a single big platform in the gulf of mexico. Stossel last month californias governor promised in 15 years california would get much more electricity from green sources. Increased from one third to 15 , are electricity derived from renewable sources. Stossel listen to the applause. This is government enforced. Youre for that . The government always sets standards. Things like safety standards. Fuel efficient standards. I agree with the statement, the criticism that government shouldnt pick winners. Saying we want a certain amount from a certain category of fuels is not the same as picking winners. Thats the industry can innovate and meet the standard. If its not picking standards, what is it . You have to get it from this type of energy. Theyre not saying you have to get it from the cheapest one. You started off saying you dont want any mandates or subsidies now youre applauding the mandates they want in california. Stossel thank you david and andrew. To join this argument. Follow me fbnstossel. Use that parasites. Like my Facebook Page to post on my wall. We want to know what you think. Coming up, how ive been a parasite and how big banks are parasites eager for their next fix. Stossel most people dont want to be parasites. We want to support ourselves without taking from others. But what if theres a business thats really important to everybodys welfare and suddenly because of an unexpected change in the market that business cant pay what it owes, it if it doesnt pay innocent people will go broke. Business after business might collapse. It will lead to tremendous suffering, maybe another great depression. That was the fear six years ago when politicians gave hundreds of billions of your dollars to americas biggest banks. The governments top Economic Experts warned that without immediate action by Congress America could slip into a financial panic. Stossel a panic cant have that. But wait a second. Arent those banks parasites. Why do they deserve your money . They made stupid risky investments. They believed housing prices could only go up. They should have been allowed to fail. They would have lost their own money, not yours. Thats what i say though few people agree with me on that. One who does is Hedge Fund Manager peter shift. When i say that, people say, no, this was too big. If we let it go down, the world would have been crushed. Well, it would have been really difficult. No question about it. But i think it will be worse now because we did bail them out. First of all, you have to realize, why did the banks make those risky loans . Why did they act the way they did . It was because the government created the perverse incentives by guaranteeing the mortgages. The banks acted restlessly. In a free market, they wouldnt have taken those risks. The moral hazard by the government everyone was taking risks. Stossel government funded freddie and fannie and said low down payments. It was the government guarantee that corrupted everything and led to the financial crisis. Stossel the housing government all lobbied the you have to support housing. Every business will go to government looking for a subsidiary. We have to limit the power of the government to provide those. . stossel if the banks failed and credit froze, what do you think would have happened . It would have been worse than it was. But we would have a much safer, sounder system today because we would have made real reform. Instead, we made the system worse. We have the government more involved in the housing market. I think the crash coming will be much worse than the one in 2008, and the financial crisis much bigger. Stossel but if we let it fall then people would have worked out new things. Maybe if you couldnt borrow from the bank you would have used paypal. The Community Banks would have reappeared that werent overextended. Absolutely. Instead, some of the Smaller Banks that actually should have been rewarded. That should have been allowed to grow their market share, they were actually punished. The toobigtofail banks. Theyre hard to compete with. Theyre all bigger because we bailed them out. Stossel the bailout and the parasite behavior takes two forms. It wasnt in the billions of dollars that bush gave them. They gave them 700 and they only took 400 billion. But the fed printed 4 trillion. A dozen men i guess its a woman in there. A dozen old people got together and said well just have 4 trillion sloshing around the economy. It didnt slosh around the economy. It sloshed around wall street. Were not producing more stuff. Were just borrowing and consuming. People are getting wealthier on paper, but a lot of this will evaporate when this bubble bursts. Stossel it hasnt burst yet. The inflation hasnt happened. We will have it. Sometimes you see things early. I was warning about the housing bubble for years before it burst. And i think im early when it comes to inflation. But i think the rate of increase will accelerate at some point when we eventually have a dollar crisis. And it will be much, much worse than what it would have been had we taken our medicine in 2008 and learned from our mistakes instead of repeating them and actually reformed. And much of this money that the fed created comes from something called quantitative easing. Few people understand what this means. I like this cartoon for that. Did you hear about the fed . No, what about the fed. They announced more quantitative easing. It means they will make large asset purchases. It means they will expand their Balance Sheet and buy treasuries. What does it mean . It means they will precipitate a ton of money. Print a ton of money. There has never been a country that went down this road and it went well. Stossel coming up, i want to thank you viewers. You helped me build a beach house. You paid for it. Twice. I disgust myself. But not as much as these people disgust me. Stossel so ill criticize parasites, i better criticize myself because i was once a parasite. I fed off you. The government currently employed me to be a parasite. And i took the bait. Years ago i built this beach house. Thats younger me there. The house was on the edge of the atlantic ocean. A risky place to build, but i build anyway because a federal Program Guaranteed my investment. Protect your home with Flood Insurance. Congress created government Flood Insurance to help foolish people who dont buy private Flood Insurance and lose their homes when the water rises. Eventually the storm swept away my first floor, but i didnt lose a penny. Thanks i never invited you there, but you paid for the first floor. Then my whole house went. Government Flood Insurance paid for it and others. Thank you for paying. Now that im educated, i have to say, im sorry. This is a scam. I wont do it again. Government encourages people to build in dangerous places. If insurance were left to the private market, Insurance Companies with their own money on the line would price the insurance properly to cover the real risk. That would discourage foolish risk taking. We dont have that because big government, the parasite in chief destroyed the market by offering cheap get rid of the subsidiary. Thats what i say. But jimmy says, no, we need the federal program. We just should reform it. Why do we need it . John, ill tell you. Theres no question that the Current NationalFlood Insurance program isnt a sorry mess today. And the fact that folks like you were able to buy heavily subsidized insurance to rebuild beach homes is an absolute mess and not okay. But when it comes to the Flood Insurance its unique because of the concentration of the risk. You have so many people in the floodplain who get damaged at the same time. That risk is correlated in a way that you dont find in risk when youre talking about an auto accident or fire in your home. Stossel Insurance Companies would charge more for that. Theyre national companies. Theres not a flood all over america at once. So what he has. Youre right. Were not allowed to charge what wed like to charge. However, when it comes to Flood Insurance prior to 68 when they began the program, we had no Flood Insurance policy in america because the pricing was so high, people chose not to get. The federal government bailed them out and paid for all of it. Stossel people are reckless and they academy like parasites then. Well create a program that will help more of them act like parasites. Since then, people build in risky places. The incentive is perverse. You need to reimage the government. Stossel thats what we do on this show. We try to reimage our government. Theres a good case to be made john, that by having a wellfunctioning national Flood Insurance program you would save taxpayers money. We know and you know that members of congress after a disaster stand locked in arms singing kumbaya, well pay for everybody. Well give you money. If we can get insurance in their hands and price it accurately, thats where it doesnt work, if they price it accurately and the rate matches the risk, we wouldnt have the problem we have today. Stossel true. And only the private market can price anything accurately because they compete and have their own money on the line. After the last disaster and the Insurance Program was 20 billion in the red the bigger waters Flood Insurance were passed. That was supposed to fade out the subsidies over a fiveyear period, but they didnt stick with it. They didnt stick with it because theyre chicken. Your average member of congress will put good politics over good policy. The private sector can set rates accurately. We