tv MONEY With Melissa Francis FOX Business November 22, 2013 12:00am-1:01am EST
days. neil: really? >> yeah, i do. neil: i guess that will do it. now you have your littletcap. take your cyanide and gunite. if you wake up we will see you tomorrow. ♪ john: i is the season of giving. so where should you give? should you give this man money? what about this man? >> thank you. john: actually, that's me. don't give money to beggars like me. governments must spend more. >> medicare, medicaid, social security. john: this government really helps the poor. >> everybody in cleveland. >> by any measurement this is not working. john: i am glad more people figure that out. >> commerce, entrepreneurial capitalism takes more people out of poverty. john: even some in the mainstream media. >> if you're waiting for the
government you're going to be in for an awful long way. john: if they get it may be seen more people will realize there are better ways to give. real charity. that is our sw tonight. ♪ >> and now. ♪ john: what is real charity? people are in trouble after a disaster or simply when people are poor. americans instead is to think amount and government help. after all, who will help those people is not government? libertarians argue that private charity would step in. individuals really choosing to help. but with enough of us up? most people say no. that is why liberals like newsday columnist say when it comes to helping the need, that is mostly government's job.
>> well, listen, it would be great if people of reach into their heartsnd solved all these will problems. that does not happen. in almost every single case where they're is a government program that exists because the private efforts. when you have 04 enough. john: that is because politicians said they were not enough and we could do better. i would argue that a government did not takes a much of our money the private sector would take care of these problems. >> hold on a second. let's get older americans. the poorest sector of our society. something called social security camelot. medicare came along. all the people really do comparatively fairly well. we had hundred kids spread all across america. those numbers were cut dramatically in spite of the generous churches and nice people. >> programs are trillions in debt. unsustainable. >> maybe we have to tweak. but you can't throw away the idea.
the reality is we need vernment then there. john: food stamps, a couple billionaires' could find that all program by themselves. and a private charity would be better as saying who really needs the food help and to is giving the system. >> i would love that. you know a billionaire who wants to pay to my think we would welcome that. john: did not step in because you're a big fat government is there. people say, oh, the government does that. >> here is the reality in real life. all these private efforts are really important. generous people. we give a lot of money. when the chips are really down and the big thing happens, the typhoon hits the philippines, we love the red cross effort. but they don't have an aircraft carrier with marines on board and rescue helicopters. the u.s. military does. i want them steaming toward the philippines when that's-it's. john: i don't know what will happen. in haiti our government promised billions of dollars, billion of it is not done to the people.
the new york times said there were going to build 15,00 alums, latest target fewer than 3,000. >> your argument is that government sometimes does not do a perfect job. i concede that. john: i want to play along perversion of the clip earlier. to my left-wing colleagues were talking about how after a disaster faith based charities work better and disaster relief and fema. >> there is fema and then there is the fai based fema. >> if you're waiting for the government you are going to be in for an awful long wait. >> talking about the government response after the tornado in oklahoma in may. now 30 churches banded together to help much more quickly and did a better job in government. this happened with katrina. fema was turning away walmart. people were trying to get water. sending its water to the wrong place. >> you're right. as you know, i am a native of new orleans.
there are some thin that the province to well. all those kids,onderful young people who came down, church groups, they did something much better than government. but they were still an awful lot of things that we needed government. remember how angry folks were. no one said stay away. john: walmart and private charities got there. >> maybe one of the things of the privates can do is be more nimble. if you are talking about rebuilding, i don't think you want the government to take a pass. john: i do. let's talk about the war on poverty. lyndon johnson said he would and poverty. here is where the war began. and sure enough it dropped sharply the first five, seven years after that. to then it stopped improving. >> we teach people to be dependent. that was happening before the
war. americans were lifting themselves out of poverty. government continue the progress for five years and then stopped it. >> we should have been more generous, done the other things that government can do to help folks. john: government does not teach a dependency. >> i am not here saying government is profit. government has some bad things, clumsy, bureaucratic. there are things it does really well. hey, private folks, step up. john: these graphs of the test. can we put these up. john: the recession, but it goes up steadily. two lines referred to one is the number of people collecting in the other is the cost. we are teaching people to be passive. >> i will grant you that is something weant to avoid.
what is the solution from a look at the people and say we will take your food stamps a way? up for the best. >> limit the program some of the private sector stepped in. one more example is the rise of disability test people. straht out. you have fewer people doing manual labor, medicine is better , and more people are disabled. >> i am with you on that one. john: if you want to get rid of it. >> no, i don't want to get rid of it. certainly we can look more closely as of the applications. john: cut it way back. there's a place near college of center, a government office supposedly to help people find jobs. i went there. people said,here are no jobs. we then went around 40 job offers, 28 and to build positions, one restaurant owner said, i would hire a dozen people live there would just apply.
>> i would throw we take nine with no experiencen trenton. john: and that the welfare of a steeple told us there are no jobs. >> the plenty of jobs. john: government jobs offices to encourage people to take welfare. as somebody go and ask for help to see if it would help her get a job and they said, no, they just to reach for welfare and food stamps. >> again, it is much smarter to have programs that encourage people to work, don't reward ziness,. john: they all do that. >> i don't know. john: private charities and of any suppression did he tell. >> the answer can be to just cut it back a mechanic? john: get it back. and let the private sector in. we will stop there. thank you. atomize a private charity should replace government. what about the rest of the world? people assum global poverty is a problem. it has to be addressed by
government giving out foreign aid or maybe the wind. the u.s. and contradicts the title of my book by saying, yes, we, governments, working together can end poverty in just two years. while. two years. of course 50 years ago lyndon johnson claimed his war on poverty would end poverty in america. the u.n. will do better. ted turner gave him a billion dollars for this. individual governments and squandered nearly a trillion dollars of foreign aid trying to lift people out of poverty in africa. i say squandered because after they spent trillions for income per capita it went down. that is may because the foreign aid encourages dependency and african kleptocrats government steal much of the money. what is the alternative? michael fay says he has an
answer. wh is yours? >> we are going straight to the port. cash transfers from you directly to them. no middleman, no leakage, no hidden costs. john: the charity, and you have raised about $6 million. just given 27,000 people-the thousand dollars each. >> that is exactly right. a thousand for the households. john: this sounds like a stupid idea. they will justpend it and then it won't have any. >> you are not the only one. the truth is there has been about a decade of research that shows the exact opposite. what are these people missing? a lot of them are missing the capital. we have the old expression teach a man to fish. the truth is they don't have fishing poles. john: so you allow them to b fishing pole or in this case this may have been a guy who got a motorcycle and use it for a taxi service. >> this is a used motorcycle
that he bought with cash and now provides tax to services. john: he gives the people a cell phone with the money. >> that is the way we transfer the money. found the phone. if they don't have a phone them in a deal to get the money. john: and it is easier to check up on them. >> we check, call them, talk to them regularly. john: people build metal roofs. the most popular thing. >> no charity. saves income, clean water, was malaria. we did not think of it, they did. john: before they had that they had at that's true fan is bad about a hundred dollars a year.a business, another person had received training from another charity to be a welder. >> said he was snding there doing nothing. he did not have welding equipment.
john: what makes you think this work? >> we have a decade of evidence, we have done our own third-party valuation. we know income goes up a monstrous level goes down, under follows. john: you donother odd thing. none of your charity board members works full-time for your charity. >> here is the great thing. if it is not working i would not lead to -- need to lie the right attitude my job. john: you could be more honest evaluating it. the charities delude themselves. >> well, i think people have passion and often implies evidence. john: i have hard time accepting i just criticize government pro grams because they don't teach people to take care of themselves. i guess giving cash once and knowing that it ll keep coming is different. >> a onetime transforming event it does not matter who does it. matters what they do.
why buy a cow when the person is to will then. john: to take care of it? look to make the choice. john: i hope it works. i'm glad a lot of these experiments are going on. thank you. if you would like to keep this conversation going go to facebook or twitter and use that has tank. real charity. that people know what you think. coming up, president obama's says the way to help poor people is to give them a free cell phone. ♪ you really love, what would you do?" ♪ [ woman ] i'd be a writer. [ man ] i'd be a baker. [ woman ] i wanna be a pie maker.
♪ >> the government will pay for you to have a free cell phone with monthly minutes, no credit check and no deposit required. john: of free cell phone. 253 minutes. what the deal. this is to help poor people in need a lifeline. that is reasonable. this is a government program that began with ronald reagan. president obama expanded it, of course. and in just four years the costs tripd and will continue rice can.
>> a minority. you know. he gave up. , no income, disability. john: the more free stuff you get the more you're eligible to get. but eligible is. what did you do? >> i went to all the welfare offices in manhattan and a couple in brooklyn and found out that there are people of their approach you on the street as the if you have your free phone yet. outside the office. john: private entrepreneur. >> and not on welfare. i told them that. i would like to be buried at think a lot of the people would like to be. but that was enough. they ended up giving me not one, not to, but three free phones.
john: the good news is someplace is turned down. >> yeah. they ended up. first of, you are not supposed to have duplicate files which i have already broken and will. there also supposed to check eligibility. they also did not catch the eye and multiple applications and and try to work power to the system again and again. john: and fcc audit, they found 41 percent o the recipients never demonstrated that they were eligible. >> that's about 6 million people. the what you really see is the phone companies have a very perverse incentive to push those bonds and on the street. they get $9.25 per customer per month for this program. the street vendors -- john: is paid for out of your phone bill. if you botred to read the fine print, there is something called the universal service charge. this was under ronald reagan, make sure everybody and a phone line.
universal service. a dollar and two out of every race home built. bison i think that most taxpayers don't know what. i went out and investigated. i didn't know. john: bore people talk to their families. >> the phone comnies of the bad guys in this. this is a huge business. the mexican billionaire, one of the richest people in the world. john: he may be the richest. >> csn bill gates compete. but he got in 2011 alone half a billion dollars from this program. so what turned out to be welfare for the poor is actually corporate welfare plan in simple john and what about my obnoxious question. you don't want to help the poor? >> well, i think maybe there would be justification for a land line. as with a program started out as, but anytime you have perverse incentives for companies to go and no phones combined with the very poor
oversightou he to ask yourself, you creating a situation in which fraud and abuse can just compound? that is what we have. john: it should not surprise anyone that government charity is susceptible to fraud. the contractors doing the work. no one's money. the more they give out the more they get to keep. they get a commission on each give away. the cellphone charities, $2 billion. think about the hundreds of billions spent on medicare and medicaid. much more from there. people work out with all this stuff. one man alone spent $20 million on this diamond jewelry, also a fleet of luxury cars, one after the other. all of which she got because government paid millions for medical treatment that never happened. government health is just extra susceptible to abuse. >> and is definitely what i found. was surprised that i was able to get three of them in violation a
pretty much every program wall, and if i can do it being someone he tells the truth, just a man from the people. actually willing to abuse the program. john: private companies get ripped off. but they have me of an incentive to check. it's their own money. >> that's right. georgia is actually doing reform within the states to try to see if they can mess with that fundamental flaw in incentive structure. ere will start charging $5 for consumers. they have to pay $5 spirit there less likely to god a by. john: thank you. coming up, better ways tell people. ♪ this is the quicksilver cash back card from capital one.
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john: one of the richest people in the world is warren buffett. is the jeep? he is one of many billionaire sue until recently gave very little to charity. he used his money to try to make more money. he said he would give it away when he died. his fellow billionaire ted turner told me buffett was being cheap. >> she should give some away now john: turner just made a big splash b giving a billion dollars to the wind. now he said he wanted to shame other richeople into giving more. >> what he said is bad and the stupid. john: that was his answer. >> what he should do is take his money and invested. he can help people in the other better way into invested and have the companies in building in plans that creating the investment creates jobs and wealth and products for other people. john: really? is it better if a money maker uses money to make more rather than give to charity? i think s. add to that question back to ted
turner. >> bill gates says, and get it making money. john: that try to argue this, but he wasn't buying it. john: and i wrong in thinking that i am happy if he gives that the charity? >> when you be happier if he did? you alleges -- this is what people don't like these men. i know your dirty tricks. there is nothing more say. goodbye. i am walking out john: he did not want to talk about it. let's take that same question to an economist to rise a free-market institute at texas tech. >> i am not bothered if they don't give more of it away. they make their money by making allies that. they are helping pple. often that is the best with a can help. john: and then make a profit than they hire people, those jobs live on for years. people use it to educate there kids and feed their family. there is a multiplier.
these guys may not even begin dexterity. we know they're good at making money. stick to what your specialty is. >> it's about the results. if leeson to do the things that we want them to do. of course the real reason is that creating t products and services that make our lives better, but as a byproduct they create jobs that make other people better off. it is what is fundamentally responsible for the high standard of living we enjoy. john: said most of them, i would say to my don't feel good about all the wealth they create in their business and guiltily give to charity. even bill gates is now working full time on charity he says he thinks most charity has to come from government. >> a lot of the money that is supporting these coming from the private sector,
people like you and less from the government. john: governments are the backbone of this. >> no, no, no. he isood as computers, not it is social policy. just last week had a research paper presented about the great chicago fire of 1871. what happened afterward, there was no fema. it was private charity and civil society organizations the banded together and help get people out of the city who lost their homes, brought in new shelter, clothing. judging from what i was hearing from my work to haggle a lot better than fema of ordering people when they can and cannot go and buts in the process to behalf of. john: a recent edition of forbes magazine, the richest people's list featured philanthropy. so how they are now reading billionaires' by how much they give. a kind of want my heart. let's have a comtition.
>> there is nothing wrong with people giving money to the causes a thinker valuable. not every good or service will be produced for profit. some of it can come from this segment of society, and it's fine that we recognize that t as long as we don't demonize those who aren't doing it and think there's something wrong with them pursuing profit because there is not. that osmanli makes us better off john: there are these tycns from previous years cornelius vanderbilt and john rockefeller and people who vilify them. they did some charity work. they were evil robbers. >> they fundamentally transformed the lives of americans and raising living standards. rockefeller brought us well and made profits. by the way, he probably is also responsible for saving the whales because he pushed down the price of oil it was no longer profitable to how best to extinction henry ford makes jeep
automobiles. it does not matter that is motive was profits. he made automobiles affordable for the average middle-class american. the same is true of most of these so-called robber barons of the late 19th and early 20th century. john: thank you. up next, if i put on a fake beard and chemistry of people
to these docratic efforts. pull the eight out. what the heck. less than 1 percent of the entire budget of the united states of america. john: it's pretty close to 1%. $35 million. i say we can't afford that. gregory adams runs of sam's 80 effectively says we should spend more. a giant charity it tries to fight poverty over the world. i say, fine. if you want to do that, you raise the money he believes government out of it. >> the issue is that there are some things that charities just can't do. despite the iact that they have around the world, and we are proud of the work that we do with money raised from average americans, there is only so much that we can do with our own projects. some places government needs to step in. john: all right. government needs to make sure aids workers and of being murdered on the way to where they're going. and i should say that you don't
take government money from the united states. to other countries. but you call for government to spend more on foreign aid. why when so much has been squandered? >> it is important to know that we're calling for more of the right kind of a. john: this is going to be the right kind. >> there are some things that we think the united states government is doinghat we think is not a good use of money. particular, food aid is in desperate need of reform. we miss about half of the value of every dollar that we spend because we require it to be shipped in american vessels, delivering food rather than buying food at the source. john: you also wanted to spend more. >> we want more of the right kind. there are good programs, the millennium celebration that invest in success. the best performing countries rather than subsidizing failure. we want to see more aid given
directly to helping small farmers grow more of their own food and you want to see more aid used to support the anti-corruption efforts. john: but what are the odds that that will happen? that the aids support the corrupt dictators as much as half the food aid center at the molly is diverted to corrupt ccntractors, is like militants, local un staff. >> somalia is a difficult environment. john: i will go on. zimbabwean authorities confiscated truck filled with american food aid for school kids and handed it out to supporters of president robert mcgowan boy and a political rally. >> this is one of the problems when the only tool you have is bags of food. john: but by calling for more government aid you are calling for more of the aid that despite all the promises of reform has ended up in the hands of corrupt dictators. >> we are not just calling for
more government aid. john: i understand that, and you do some brave work. why do you call for it at all? >> a lot of misconceptions. one of the biggest is that most u.s. assistance actually goes to governments. in fact, that is not true. most goes to u.s. based charities, ngos, contractors. john: and the u.n. >> there is portion that goes. we are very clear that they are not the solution. people on the solution to poverty. john: let's hear from an african entrepreneur. a business and american. but she tried operating a business in her own company -- country of senegal. you agree. >> the combination. foreign aid. government. >> i have a very hard time. the african union itself is admitting it is being siphoned through corruption. john: the swiss bank account.
>> swiss bank accounts, real estates in the south of fnce, the son of the dictator of a equarial guinea. he was busted by french customs. his plan was intercepted, and they found in the plane 27 fancy cars. i don't know how many furry some bentleys, rolls-royces. john: the only way to stop that is said keep government out of it. you can get a bunch of people who want to give their own money they won't give it to dictators. >> well, not of governments of the same. we actually work with a lot of anti-corruption and human rights activists in countries around the world who are actually working to try to get their governments to govern more accountable. they're interested in u.s. standing with them in joining this fight. too often we take such an approach to u.s. assistance, we try to make it -- we focus on much and a boarding corruption these activists in telling us that they want to us stand
together to fight corruption which means that we need to be their standing with them in solidarity working together. john: why the need government aid? why the need government aid? >> government said the only tool that can work to solve some of these accountability problems. it is like asking why the bears need an offensive line. at some point you need these other tools. it will be entrepreneurs who solve the problem of african poverty. but you also need government to do other things. john: you need governments. >> unfortunately at least in most countries in africa government has been the problem. they basically say, as an entrepreneur government does nothing but slow me down on a regular basis. officials bribing me all along. the fact that my truck is parked on a regular basis. and i have to pay a single time in the delays.
john: government aid will help fight the corruption. >> i'm sorry. the me you're feeding this huge government the more you choke me from the other end. that is at least the phenomenon that i am awareness of. and the more you give to them the more that is what happens to me. john: we do think that there is role that government can play. in a lot of the places we actually find there is a government deficit. people have to dl with -- john: why do you believe government aid would provide that? has not so far. >> that is actually not true to a lot of success stories. a lot of african countries that the scene. john: to racine them. thank you. coming up, w our man came up to me on the street and said are you john stossel?
has said the spd said to my hope you guys in. so what is this hatred about? it turned out he was what people call and anti-poverty lawyer and did things like sue landlords t. in his world here in new york capitalism is the enemy, and the only thing that keeps poor people from being totally impressed his government. so because i call for less government and evil. this town, we libertarians are selfish people. and a good guy is called a bleeding heart liberal. so what is this website about? bleeding heart libertarians. talks about social justice and free-market. georgetown university philosophy professor regularly contributes to the site. why? >> the idea is to recapture the
soul of libertarianism. what they can and should do is embrace theonceptf social justice. john: what does the phrase even mean? i am for social justice. >> right. john: for a lot of people it does not meannything. it just means socialism. there is a real meaning. course of institutions that you expect other people to live by. john: laws, property rights, family rules come anything like that, one of the tests of those institutions should be that you expect when people live and abide by them attend to produce goodonsequences for everybody. you can show whether you care about this by asking a question like this. imagine that marxists were right. imagine there were a disaster, they left the overall majority of people destitute. would you still advocate markets? i think most libertarians would
say i would at least have some reservations. the fact that they work matters in the justification. if you think that the new advocate whether you know not what philosophers are calling the social justice. john: i'm rand said that do not consider charity a major virtue. selfish. >> what she means is not what most people mean. even if she thinks that i don't think she speaks for most people most are humane, they give to charity, the care that markets work and their work for everybody. the minimum wage, if you did not think that matter why would you argue that because on one. you don't beat you say that the minimum wage causes unemployment among the most laura will people in society and that is part of the reason to oppose it which means that you care of the consequences for the poor. john: the website, bleeding heart libertarian, categories like aocating nurses caring versus helping.
>> this explains what is going on with people when they think that libertarians are selfish. if you are on the lefty probably believe that your policies are the only sensible expression of benevolence. you probably think they must disagree with your values and only care of their pocketbooks. that is never really make sense because we have real arguments but also advocacy is cheap. i advocate that we have a 90% marginal tax rate, income over 100,000, if i advocate that it does not cost me anythg. if i give money to charity -- john: governments should have a bigger anti-poverty program. >> that costs you nothing but you get the warm glow of altruism when you say yo advocate that. put your money where your mou is. does it actually does something. i know your concern. if you're advocating ting income from other people or yourself and that is all you do your not really showg me that u care. john: it is easy to be generous
so i saved. but when my career took off and i started getting paid money to make speeches i decided to donate the money to charity, and it changed my life. i realize that i like giving money away. it makes me happy. research on what makes people happy backs that up. on average people who give to charity, whether they give them money or just time, they are happier. so death. it is did for us and get for them. though that depends whom you give to. i put on a fake beard and tried begging in new york city. people gave me money. they gave me money when my cardboard sign said thomas and cold, and even gave when i chased it to needed bier. thank you. thank you. john: when they asked givers why they gave people said things like this. >> he looks pretty neat, i suppose.
john: i just beg for an hour, but i did well. but did this for an eight hour day and would have made $90 a 23,000 year. tax-free. that is the reaso social workers say not to give to beggars. often it is a scam plan very often you are an enabling. by giving cash to ssidize the biggest drug or alcohol habit. by not giving you may encourage them to give real help. a few respectable charities illicit on the streets. but most were begging or running scams. >> i need your help. i am homeless. john: new york attorney general said this pitch from a group calling itself uned homeless is a scam. its director keeps nearly all the money comes bins it on things like his weight watcher bills. i hear you keep most of the money. >> we are homeless people.
john: the pages it is going to shelters. >> am i supposed to run a nonprofit and not get money? >> all the people donate absolutely know where the money goes. john: it is hard to find out where your charity money really goes. we can check charity rating services like charity navigator. it is better than nothing. the ratings are not perct. so charities are not perfect, and rating services sometimes did coned. i give my charity money to groups that i can check out myself, a group that rehabs ex-con and attics. i decided they do a good job because i could see these men. they call them men in blue, ready, willing, able. the clean-air bill york city streets. what is hot is that they do is bring in a step in look cheerful and work fast. i thought whoever is working with these guys has done something right, taught them to take pride in work.
i give them money in a couple of other groups that back and watch. while i give to what i think are good charities, we should not forget about the people of, capitalists, on this once. but job creators do much more good for the world that politicians. and more even than that do-gooders' working for charity. i am delighted that the singer bought of figure that out after spending years calling for government to spend more in foreign-aid flop. now he says the best hope for the four is free markets. >> preaching capital. >> sometimes i hear myself, and i just cannot believe it. commerce is real. just a stopgap. >> commerce and on to panera capitalism takes more people out of poverty. we know that. john: politicians don't know that. many americanson't know it. it is time that they learned.
entrepreneurial capitalism takes more people out of poverty and a never well. that is our show. see you next week. ♪ [dave gentry] hello, i'm dave ntry. welcome to small stocks and big money. [dave gentry] for all of our new viewers, its nice to meet you and for those of you who are already members of the redchip nation thank you for being part of the fastest growing community of small cap investorin the world. whether you are watching on fox business in los angeles, denver, minneapolis, new york, boston;
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