Was real, really critical to get this thing passed. Gerri appalling. Appalling. When someone associated with the president s signature legislation insults the American People, that is exactly what he did. Now today he is saying, he didnt mean it. He wants to take it all back but the damage is done, with more on this. Paul howard, senior fellow for the manhattan institute. This gets under my skin in a way i cant really tell you, when people insult the American People, we tried to trick them. It worked. We got the legislation passed. That is exactly what we meant to do. What is your reaction . Both parties will play threecard monty when it comes to the big programs like this but gerri this is whole different level. This is whole different level. President making promises the white 6 white house new that was wrong. Gruber said we had to be deliberately obtuse to the cbo couldnt score it properly. Gerri we had to tell the American People it wasnt a tax. That was the really. It was a tax. It was definitely a tax. It wasnt a fee. Theyre adding to our tax burden so the president can claim he got the signature legislation passed. Remember this passed on total partyline vote, razorthin margin with blue dog democrats joining in. If the truth had been understood, those democrats might have dropped out we might not have the law. Gerri an mit fellow. Can only come from somebody out of an Ivy League College background, really welleducated. He calls us stupid. Boy, that was not smart. Only someone so smart could Say Something so insulting to so many people. Gerri and stupid, really, really stupid. I want to talk to you about what is going on with obamacare right now. We have open enrollment approaching. They say theyre doing us a big favor by allowing us to get a sneakpeek what will be available, maybe. Do you believe what will happen this time around, this year, this fall, will be as disasterous as what happened last year . I dont think it could be possibly as disasterous. Theyre low balling expectations. Theyre expecting props. Were expecting lower enrollment than cbo projected by four million people. Theyre trying to get everyone to say there will be problems, lower than expected enrollment. Anybody above that they will say that is gravy. Theyre setting expectations now. Gerri hear Sylvia Burwell setting the expectations. Here is how she is low lowering the bar. This is secretary of hhs. I also know well have things that go wrong. The private sector, public sector, anytime when you have a system this complicated, when you have a product, healthcare is difficult in the employerbased market in terms of people understanding all the different pieces and parts. This is hard. We will have things that wont go right. We will have outages. We will have down time. Gerri seems to me an argument for not proceeding with the law. Everything she said there, it is complicated. It is too hard to do. We cant make it happen. Seems to me at end of the day you should have said were not going to pass the legislation. Thats not what happened though. I want to get you to respond because i think these have been lies all along the way. What gruber says exposes those lies. I want you to hear the president talking about obamacare. Listen to this. For 85 to 90 of the americans who already have health insurance, this thing is already has happened andhei onlmpac i th tir insuncestroner,ette ore sece tn ias befre full sp, tt i they dt hav t wor aut ythg ee. Amican lik ther cside theyill epheirocto. An ifou le yr insance pl y wl keep it. No oe wl bebleo takehat away from you. If youre one of the more than 250 million americans who already have health insurance, you will keep your health insurance. Gerri yeah, keep your health insurance. You can keep your doctor. The beat goes on. Your costs wont go up. All of those lies now. And you know, we sort of soft pedaled and said, ah, they didnt analyze it correctly. They didnt know what they were doing. Reality was they misled us. They knew it. They designed the law that full effects wouldnt be felt until after 2012. The president gets through election, wins and seeing full effect. Nces of law. Employer mandate still delayed. People keeping insurance for a year and then lose that. The Insurance Companies are losing more protections. Well not see impact until 2016, 2017. Gerri a long way to go. Im sure well have you back. Thanks for coming on to talk about. Paul, good to see you. Beside obamacare there is another potential showdown between Republican Congress and president obama, over idea that nobody should get Better Internet service than anybody else, net neutrality. They call it net neutrality, what it boils down to according to my next guest is a bold grab for power and tax dollars. Lear to weigh in Republican Congressman darrell issa of california. He is the chairman of the House Oversight and government reform committee. Congressman, welcome back to the show. Always good to have you on. I got to tell you, this whole idea that the internet needs to be regulated by like a utility scares me because i know just how heavily regulated utilities really are. What is your reaction . Well, first of all it is inappropriate for the president to call on an independent agency to make a decision the way he wants to make it. He already got to a point, three out of five democrats on the commission but, secondly, in washington be be careful what you wish for. He says he wants the internet regulated like a utility. Well, guess what . Your electric utility charges you by the watt that you buy, but if you buy peak watts, they charge you more. If you buy off peak watts you get a deal. You know you can can regulate like your electric utility and discover, guess what . It can be worse, not better. If you look at your phone bill, you know, congress and government and fcc mandated crazy special rates and lifelines. The internet works because there is competition. The internet works because they innovate. If you let the fcc do this power grab, you will stifle any kind of real new technology. Gerri here is what people say who are in favor of this. They say look, look, we need rules, we need road sipes. We need people to understand how theyre supposed to play on internet. You say what to that. First of all, there is no limit to competition. When you want to take a road you say i have to have it because this is the road. This is the public road. In in case youve got cable, youve got the dish networks and other satellites. Youve got the phone Companies Directly both wireless and wired. And you have opportunities for additional ones. Power companies can get in and use transmission lines. There is no limit to the amount of competition that is possible in this space. So it is not like if you will, a road. The truth is, the Less Government has regulated this industry, more it innovated for all of us. There isnt an example which government government involved in something and increased the speed of innovation, just the opposite. When the government spun off the internet and privatized it, is when it went from esoteric thing went between universities and government age is, and it went to something that is revolutionized the world. If you want to continue that revolution, stay out of the way. Gerri congressman, a lot of venture capitalists and Silicon Valley disagree with you. They say, hey look, we need a chance for Small Companies to compete and thrive and we cant do that when Companies Like netflix are hogging all the bandwidth. Should there be a government solution to that problem . What should be the solution to that problem . Buyer can determine what they want. If the buyer is buying netflix and the seller, quite frankly, the seller is, lets say the wired or wireless carrier, they can come up with schemes that make sense for them to maximize their bandwidth and get revenue. The truth is, yes, netflix and other entities right now are using up a lot of the space. You know, candidly, thats okay because they are causing drive to increase bandwidth from 2 256k to a meg, to one meg and 20 meg the truly the speeds well see are a result of large users. Without the large users, you wouldnt get larger pipes. Without the larger pipes you wouldnt get all the brand new innovative products. You have to ask the question, are the pipes big enough . Because in europe and other places we find even faster speeds. How do we compete with that . Well you know the interesting thing people are always talking about governmentdriven speeds. Korea at one time was a model but we passed them. The fact is we have a lot of opportunities in this country. We have done some things perhaps that the fcc should look at. One of them is, what we think of as wifi or 802. 11. They need more bandwidth. This is bandwidth you cant sell. This is free bandwidth. If you open up more wifi space which connects to these cable and other high speed connections suddenly there is huge additional capacity for all of us. Now that is something where the fcc, instead of trying to sell to make a couple of billion dollars, should provide unlicensed space and if they did so, we would be talking about huge increases in amount of capacity available for everyone. Gerri wow. It is in the fccs lane. They can decide to make more available to the public for free, instead of trying to pick up a couple of billion dollars more against the deficit. And as a result, instead of Public Service you get something for sale. Those are areas where i think that president should be weighing in and saying, the people deserve more of their bandwidth available to them for free and he could help the fcc do that. Gerri but, if the fcc does come in and say, hey, were going to regular heat the internet like a utility, what are you going to do . What action might you take . I believe it is outside the legitimate jurisdiction of the fcc i think its a power grab. Remember one thing, antitrust laws already are in place. If there is competition, competition will take care of essentially anyone who cuts a bad deal. Someone else will come in to cut a better deal. If there is an antitrust situation, if a Cable Company or someone else is using monopolistic techniques, then in fact the courts are already available. We should use the laws we have, and not try to create, if you will, a new form of regulation as though government created the internet. Government only made the internet go to a few kilobytes per second of the fact is, innovation in the private sector and demand, including the netflixs of the world, have, are in fact what is driving the companies to invest hundreds of billions of dollars in increasing speed. Those investments need to continue. The fcc and the president are on the wrong track. Gerri on the wrong track. Congressman, thanks for coming on. Thanks for coming in. Come back soon. Will do. Gerri still a lot more to come this hour including your voice. Your voice is important to us. Thats why during the show we want to you facebook me or beat me gerriwillisfbn. Send me an email. Go to gerriwillis. Com. At the government hour i will read your tweets and emails. Next one of the biggest names in investing. Vanguards founder, father of the index fund, jack bogle sits down to discuss market investing and whether the 401 k model as we know it is broken. Wait until you hear what he says about the markets. Stay with us. You owned your car for four years. You named it brad. You loved brad. And then you totaled him. You two had been through everything together. Two boyfriends. Three jobs. Youre like nothing can replace brad then Liberty Mutual calls. And you break into your happy dance. If you sign up for better car replacement, well pay for a car thats a model year newer with 15,000 fewer miles than your old one. 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Expect, i would say, over next decade, dont expect looking shorter term than. That expect decade of returns shorter than, lower than historical norms. Historical norms 9 a year. Six to 7 will be more likely over next decade. It is not as glowing. But i think highly likely that rational expectations for stocks in the range of 6 to 7 , will be better than the returns on bond. Bonds are not good today. We have to hold them. We need the protection but theyre offering a yield of less than 3 . And i think stocks will probably do around twice that well. So dont get out of the market. Be prepared for big bumps. I cant tell you that the market wont go down 25 or 35 over the course of the next 12 months. How coy tell you about that . Dont worry about it. Gerri i dont worry about it, i heard you say before. Tell some of our viewers in retirement relying on bonds, what should they be doing . If youre relying on bonds, had them for a long time, you probably gotten much higher yield than todays yield which i say, runs around 2 1 2 , 3 , very low. Long term norm is more like 5 . I want to talk to you a little bit why you see that decline in stock market returns at this point. It seems right now u. S. Very strong economy. Possibly strongest on the planet. And yet youre saying you expect lower stocks market returns. Why . Well, the reason really is, simple as this. What creates stock market returns is not the market. The stock market is a derivative. Stock prices are derivative value created by corporate america. That value today is giving you a 2 initial yield. And if it grows by four or 5 . That is where my six or 7 return comes from. In, in the past, that 9 , was about 4 1 2 earnings growth, about half. And 4 1 2 dividend yield. Well, dividend yield, at 2 , instead of 4 1 2 today, that is a 2 dead weight loss. In future returns. So it is pretty clear to me that the math isnt going to justify very high future returns. Gerri okay. Talk about one of your favorite topics which is niece. Fees. You doesnt like them. As a matter of fact, your index fund, you opened very first index fund, s p 500 index fund in way back in 1974. Seems to me, lots and lots of individual investors are following your advice and moving from actively managed funds to index funds. What do you have to say about that . Seems like you have been proven right. Seems like, you know, Public Opinion is on your side . Well, Public Opinion and warren buffett, as you probably know. He is, leading, all the money he is leaving to his wife, 90 in the vanguard 500 index fund. So im not sure that, with all due respect to warren, i think its a great judgment but there is no certainty in all this. What were seeing, and it worries me a little bit, to be honest, were seeing such a great year for s p 500, this year, 2014 is almost going to go into the record books. The index, s p 500 index is up around 11 . The average large cap fund, kind of comparable to the index is up about eight. The average small and midcap are up maybe 3 . Gerri good times. Only a quarter of the index and International Market is down. So the index, s p 500, is going to look better than it will look over the long term in the future this is a great year but dont take it for granted is what i would say to the index shareholders. Gerri so, i wanted to ask you about bill gross. And what happened at pimco. I think of you as the father of mutual fund investing. These were mutual funds. Bill gross famously leaving pimco for another company. Lots and lots of assets flowing out of pimco. What does that tell us about the state of the Mutual Fund Industry . The Mutual Fund Industry will have to change. The Mutual Fund Industry has a problem. That is most of the fund groups, the large fund groups and Small Fund Groups alike are owned by private enterprise people, and theyre owned by corporations, giant conglomerates. They have public shareholders. And they have got to appease or please the shareholders and management company, at the same time theyre pleasing shareholders of the fund. Often written, you may have seen this somewhere. No man can serve two masters. In our industry the master is being served, is the management company. Weve got to make a big uy, 180degree uturn and start focusing on shareholders where in vanguard a big advantage. Were owned by our own Fund Shareholders in this mutual structure enormously valuable to the