tv Erin Burnett Out Front CNN June 13, 2012 11:00pm-12:00am EDT
the ceo gave us all quite a mental image today when he testified in front of the senate banking committee in washington about one of the largest bank in the united states has been open about hits multibillion trade losses. >> we generally are open kimono with the regulators and tell them what they want to know. >> open kimono, sure. but maybe he was open kimono about the things he knew about. but not about things he didn't. like how the trade in question had morphed out of control. >> so, this transaction that you
said morphed, what did it morph into, russian roulette? >> it morphed into something i can't justify. it was too risky for our company. >> it's almost like he's talking about a physical object. but this was a tried, a tried gone terribly bad. he said he didn't know how bad the trades were until late april. you know what he's amazing about this? major financial media knew well before jamie dimon. on friday april 6th, the wall street journal reported on a trade so big that the entire trade market was affected, and the next monday, this aired on bloomberg television. >> now for the biggest story on wall street. in a world where the rule is supposed to stop banks from making bets with their own money, what is a j.p. morgan trader doing in london with positions as big as a hundred billion. >> what were they doing? they told them these press
reports were a whole lot of bunk and dimon trusted his lieutenants. april 13th he shot down questions about the out-of-control trade. >> this is complete tem pest in a tea pot. it's sophisticated but at the end of the day it's our job. over a long period of time to earn income and to offset other things we have. >> days later he learned the truth. that trade, no tempt pest in a take pot. a real tem pest could cost j.p. m morgan up to $5 billion. he didn't make an excuse. >> when i made that statement, i was dead wrong. >> he was very direct and said he was sorry.
here's the problem. apologies aren't really what we need. this doesn't add up. the ceo of the biggest bank in the united states of america should have known. and since he didn't, it seems clear that his bank is too big to manage. jamie dimon's bank is about 50% bigger than it was before the crisis of 2008. its assets? $2.3 trillion. it's 15% of the size of the entire american economy. part of the reason for this is actually a bit ironic. j.p. morgan was the strongest big bank when the crisis hit, so regulators pushed it to bulk up, buying bear stearns and washington mutual. the bottom line, j.p. morgan got bigger and bigger. and it wasn't alone.
america's biggest banks have gone from too big to fail to too big to bail out. the current trading loss is a wakeup call. what if the loss were big enough to threaten the nation's biggest bank and therefore the entire american financial system? think about it. the only thing worse than having to bail out a bank again with taxpayer money might be not being able to bail out a bank where 23 million americans have parked their hard-earned savings. it could make the cries look like a vacation. joining me now steven moore and william cohen. a lot of studies on banks like lehman brothers and how they failed. let me start with you, william. what can we do here? in a sense this a rather damning indictment, whatever you think of the reforms, it doesn't appear they would be able to stop a major bank from major
losses? >> you know, erin, your analysis is spot on. obviously they look to j.p. morgan to buy bear stearns, to buy washington mutual, now it's gotten so much bigger that we have the crisis or this $5 billion trading loss in j.p. morgan is because they had so much excess cash of deposits that jamie dimon said they got through in part of washington mutual that they felt the need to invest that money. they can't make any kind of spread on that money because interest rates are low, so they began by taking risk and nobody knew about it. >> this a tough one. jamie dimon addressed this issue of too big to fail and what he said sort of surprised me. here it is and i'll get your reaction. >> we have to get rid of anything that looks like too big to fail. we have to allow our big
institutions to fail. it's part of the health of our system and we shouldn't prop them up. we should allow them to fail. >> continue to say steven moore that big dumb banks should have big bankruptcies. but the problem is you are the whale. you can't let the guy fail. >> yeah. this is a big problem. as you know, i'm a big free marketeer. but i'm rethinking my position on whether the banks have got too big. the reason is one of the dangers we did back in 2008 and 2009 when we bailed out all of those big banks is we created what we call a moral hazard problem. there's a perception in the market, a perception of shareholders and depos ters that these banks have gotten so large that they have a safety net underneath them. and that's one of the things that unfortunately encourages these kinds of trading activities. i'm not sure what the best solution is, maybe it is, i almost hate myself saying this, maybe you do have to break up
some of these big banks so they don't get so large that we have to bail them out or even worse that the government can't bail them out because they're too large. >> this is the frightening thing about it. one other thing that jamie dimon said today that this was an isolated incident. indeed it does turn out what every ceo of every bank has said when they have had a major trading loss. one thing we've learned is these incidents are anything but isolated. >> and happening -- unbelievably, erin, happening two years, three years after dodd-frank law was turned -- you know, passed. who would have thought that mf global could happen two years
after dodd-frank was passed or that this big trading loss could occur without anybody knowing it. it was a virtual black box. if they hadn't announced this despite what bloomberg and the "wall street journal" reported, very few people would have been clued into this. it's amazing this could still happen, even though we have a dodd-frank law. >> but doesn't that argue against the regulatory approach? we have already, at least four or five major government agencies from the fdic to the federal reserve to the treasury overseeing bank trading and activities. then we passed the dodd-frank bill which was supposed to bring this to an end and we're still seeing these kinds of trades. i think it's a little unfair to say that jpmorgan because they made this bad trade that somehow it's going to require a federal bailout. >> no, it isn't. all i'm saying is we're lucky, right? if this is the wake-up call, what if it was 50 times bigger. >> of course. but when you said that he made a trade that he was dead wrong,
what about the times he was dead right? jamie dimon actually, until this most recent episode, has actually had a very good record as ceo. >> that is true, but here's the thing. i agree with you about the regulatory regime. we don't need it, it's not doing its job. what we need is a reform of the incentives on wall street. what happened here is people in the cio office of jpmorgan will be rewarded for taking big risks in other people's money. that's how they got their bonuses. until you change the incentive system on wall street, you're not going to reform the way bankers and traders behave. full stop. >> thanks very much to both of you. we appreciate it and we want your feedback on this issue and mr. dimon's testimony today. still outfront, are republicans intentionally tanking the economy to help mitt romney get re-elected? it's a damning charge and harry reid is making it. and congress congratulates itself about a new plan to save taxpayers billions and billions and billions. you know we saw that. we said, hmm, that doesn't add up. you'll see. accusations in court that
jerry sandusky actually threatened one of his victims and said that if he told his family, he would never see them again. see, airline credit cards promise flights for 25,000 miles, but... [ man ] there's never any seats for 25,000 miles. frustrating, isn't it? but that won't happen with the capital one venture card. you can book any airline, anytime. hey, i just said that. after all, isn't traveling hard enough? ow! [ male announcer ] to get the flights you want, sign up for a venture card at capitalone.com. what's in your wallet? uh, it's ok. i've played a pilot before.
scroll... tap... pinch... and zoom... in your car. introducing the all-new cadillac xts with cue. ♪ don't worry. we haven't forgotten. you still like things to push. [ engine revs ] the all-new cadillac xts has arrived, and it's bringing the future forward. mcallen, texas. in here, heavy rental equipment in the middle of nowhere, is always headed somewhere. to give it a sense of direction, at&t created a mobile asset solution to protect and track everything.
so every piece of equipment knows where it is, how it's doing or where it goes next. ♪ this is the bell on the cat. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪ well, more and more people are bundling their home and auto insurance with progressive. sure seems and why that way. wouldn't you? you can save on both your home and auto policies. yep. we talked about this. [meow!] [meow!] bundling and saving. now, that's progressive. play rocket cat adventures at progressive.com.
>> that is a heck of a charge. but is there a grain of truth to it? john avlon, riahan are here. the republicans don't want the economy to get better because if it did, barack obama would win. >> i think that's outrageous for this reason. when you're looking at the cbo has said, they have explicitly said when you engage in the short-term fiscal stimulus, it can have a short-term impact but undermine a long-term growth prospects unless you have medium term fiscal consolidation and medium term cuts. if you look at the republican agenda and the laws that the house has passed, they have said let's have medium term and long term fiscal consolidation. let's reform medicare and medicaid and get the country on stable footing for the long-term growth. i think it's the other folks playing politics. the ones who want to goose the economy in the short term at the expense of the economy over the long term.
>> oh, come on. define goosing the economy. rebuilding bridges, rebuilding schools. >> how much of the money from the 2009 stimulus sbeent bridges and infrastructure. >> i'm so glad you brought that up. 40% of the $787 billion stimulus bill was tax cuts which republicans love. >> not those tax cuts. those were tax expenditures, roland. >> one second. >> not a single republican vote. >> one second, one second, one second. >> happily, happily. >> why is it that republicans that backed rebuilding infrastructure before president obama now all of a sudden don't want to do it? don't be for it before and then be against it now. >> there's plenty of support for rebuilding infrastructure, the question is how do you do that. in fiscally responsible fashion or through a short-term measure that is primarily pumping money to state and local governments, including extremely inefficient state and local governments. that's a long term mistake that will undermine our growth prospects. >> this is a very valid
conversation. but john avlon, back to this point about the election, it would seem to me, it doesn't matter which party you're in, you're in the party that wants to get office. you don't want the economy to get better before the election. you're not going to purposely sabotage it but you're hoping the jobs numbers is not good. >> when bush was in office, democrats, you could see it were subtly hoping for bad economic news so they could make a case. it's not about rooting against the country. where the worse things are, the better for me politically. we've seen it over and over and a constant drum beat and a direction reflection of the polarization in our politics. >> don't you think that back in 2008 democrats weren't slightly happy with what was happening because they knew that meant obama would beat mccain? >> absolutely, absolutely. >> do you actually believe that democrats were rooting for the financial crisis? >> no, no, no. but what did we also see democrats do when they were presented with the information saying unless you guys in
congress, republicans and democrats, step up and deal with these banks, the whole economy will collapse. they were forced to do things together. you can't have people who before when there was a rip president say this is a great idea, rebuilding infrastructure, create jobs, construction jobs, and now it's a bad idea. if you want to say how to pay for it, fine. i say you get rid of those bush tax cuts for the folks over a million dollars, we can find the money to rebuild the infrastructure. >> that's nowhere close to enough money. >> okay, gotcha. all right. >> let's talk some numbers. >> when you talk about everybody's willingness to do deals and get things done, here's the problem. the 112th congress is on track to pass fewer laws than any previous congress in 40 years. >> all right. >> they also are not at work. >> let's just talk about these numbers for a second because they're important. right now we're at 131 laws passed by this congress. the average over the past decade is 441.
now, eric cantor says it's quality, not quantity. i wish that were true. but math isn't partisan. this is worth fix 8ing on. it is a direct reflection of the fact there has been obstruction. >> but maybe this is his way of saying he likes the health care bill, right? i'm kidding. >> but we've got great big things done in the country in the past with divided government. we aren't anymore. one way you can tell that is there has been a precedent of bipartisan bills supported by republicans in the past in principal, policies that are now opposed. it's very hard to spin that with anything other than aub strukz. >> the house was in session nine days in the month of may. while you want to get americans to work, they're not working. >> you need a very small number of laws. we need a very big reform of the tax code. >> agreed. >> yes. >> you need to do some things on medium term fiscal consolidation. the other thing we haven't discussed is the key thing in
terms of long term economic growth is fixing monetary policy. that's one area where i'll agree that democrats and republicans are getting it wrong. but it's not about the number of laws, it's about getting the big ticket things right and this administration has gotten the big ticket things absolutely wrong. >> we'll leave it there. sabotaging the economy? i'll say ridiculous but hoping that it muddles along and it needs a savior, yes. he worked for koch for years but he's now joining new york mayor bloomberg's war on soda. insider's take from inside the secret formula on how soft drinks are marketed so we drink more and more and more of them. and next the number one song in the country. ♪ hey, i just met you and this is crazy ♪ >> it doesn't add up, okay? it doesn't add up to me. ♪ there's big news. presenting androgel 1.62%. both are used to treat men with low testosterone.
androgel 1.62% is from the makers of the number one prescribed testosterone replacement therapy. it raises your testosterone levels, and... is concentrated, so you could use less gel. and with androgel 1.62%, you can save on your monthly prescription. [ male announcer ] dosing and application sites between these products differ. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or, signs in a woman which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are, or may become pregnant or are breast feeding should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting.
♪ but here's my number, so call me baby ♪ >> this is the video that really changed things for jepson. justin bieber is in it, selena gomez, ashley tisdale and the boys from the current big boy band big time rush, dancing and goofing off to the song. it has more than 40 million views on youtube and has propelled the song into a hit, thanks to bieber. we were actually surprised to find out this song isn't new, it was released in september. it's been out for nine months and only got to number one now. so we went looking for a few songs that took a long time to get to number one. the number is 20. that's how long it took for the song "red red wine" to hit number one. it peaked at number 62 but it was the ub 40. ♪ red red wine >> it was number one back in
1988. the song was on the chart 25 weeks before it got to number one and i'd be willing to bet it's going to be stuck in your head for a while. it's better than "call me maybe." ahead on outfront, russia points the finger at the u.s. over the conflict in syria. the u.s. pointed the finger in russia. who is actually doing the arming. disturbing testimony in the jerry sandusky child rape case. why chest hair brings horrible flashbacks for one victim. isn't it time the automobile advanced? introducing cue in the all-new cadillac xts. the simplicity of a tablet has come to your car. ♪ the all-new cadillac xts has arrived. and it's bringing the future forward. [ slap! ] [ slap! slap! slap! slap! ] [ male announcer ] your favorite foods fighting you?
fight back fast with tums. calcium rich tums goes to work in seconds. nothing works faster. ♪ tum tum tum tum tums focus lolo, focust sanya let's do this i am from baltimore south carolina... bloomington, california... austin, texas... we are all here to represent the country we love this is for everyone back home it's go time. across america, we're all committed to team usa. >> announcer: this is the day. the day that we say to the world of identity thieves "enough." we're lifelock, and we believe you have the right to live free from the fear of identity theft. our pledge to you? as long as there are identity thieves, we'll be there. we're lifelock. and we offer the most comprehensive identity theft
protection ever created. lifelock: relentlessly protecting your identity. call 1-800-lifelock or go to lifelock.com today. [ male announcer ] research suggests the health of our cells plays a key role throughout our entire lives. ♪ one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage.
we start the second half of our show with stories we care about where we focus on our reporting from the front lines. first, montreal police have confirmed to us that dna from body parts delivered to vancouver schools last week all belong to jun lin, the chinese student who was killed and dismembered last month. luka rocco magnotta, the man suspected of killing lin is still in german custody awaiting extradition to canada. the massive wildfires continue to burn in northern colorado tonight. fire officials have ordered hundreds of residents to evacuate. the u.s. forest service commander heading the effort told us they are gaining on the fire. it has scorched 46,000 acres. already hundreds of structures
have been lost to the blaze and it's only 10% contained. the county sheriff's department says some residents could go back to their homes tonight. and john edwards is a free man. free and clear, everyone. the justice department formally dropping charges against the former democratic presidential candidate. edwards, of course, accused of using about $1 million in campaign contributions to illegally cover up his affair with his then pregnant mistress, rielle hunter. less than two weeks ago a north carolina jury found edwards not guilty on one count and remained deadlocked on the remaining ones. in a statement to "outfront" an attorney for edwards says we are confident that the outcome of any new trial would have been the same. and the u.s. anti-doping agency late today bringing new doping accusations against lance armstrong. these charges could cost him his seven tour de france titles. the u.s. ada also sent notification letters to three doctors and two officials that
used to work on armstrong's cycling team. this was first broken by the "washington post" today which says it alleges him being involved in doping rings for as long as 13 years. in a statement to "outfront" armstrong denies the charges calling them baseless and motivated by spite. it's been 314 days since the u.s. lost its top credit rating. what are we doing to get it back? and now our third story outfront. russia today fighting back at american accusations that it's supplying attack helicopters to the syrian government. the foreign minister of russia ironically, who was visiting his pals in tehran, said it's america doing the dirty stuff. >> translator: they are providing arms and weapons to the syrian opposition, that they can be used in fighting against the damascus government. >> the u.s. denies it. but this isn't the only accusation the obama administration is facing overseeria. jobi warrick joins me now. so what really is the story
here? you've got the u.s. saying russia is flying in attack helicopters, giving them to ba -- bashir al assad. >> there's definitely truth that russia has been providing arms to syrians for some time. they have been providing helicopters, all kinds of small arms, that much is true. the united states denies that it's providing any material support in terms of weapons to the opposition. they certainly are providing humanitarian aid and other logistical support. what's awkward about this is these new accusations that we've been a little hypocritical in our support, saying we don't support these helicopter sales. >> let's talk about these helicopter sales because this is where it does get hypocritical. here's the numbers. the u.s. army actually has a $375 million contract with russia's state-owned arms dealer. the arms dealer that is
supplying a lot of helicopters to afghanistan. russia is a crucial country that buys a lot of american-made weapons. so if russia is selling them, we're still supplying them, right? >> and we're buying stuff from them and this is the awkward part. we're telling cup trees around the world you shouldn't support syria in any way. we're not doing business with syria as a country but we are supporting a russian company that's providing the very weapons that syria is using to kill its people. these are attack helicopters, lethal machines. it's not just small arms, these are pretty serious systems and we're basically with taxpayer money underwriting these big companies that are providing these weapons to syria. >> and how common is this, that the u.s. is really -- ultimately it's u.s. weapons that come and go? how far the u.s. is the largest arms dealer in the world. we're the largest arms dealer to the middle east. i would imagine a lot of these weapons floating around out there sometimes being used by what are, quote unquote, bad guys, are ours.
>> it gets really crazy and incestuous. after the fall of the afghan -- the taliban government in afghanistan, we've provided all kinds of weapons to the new afghan army. and these are typically east european weapons. ak-47s manufactured by some of the same companies that we attack and criticize and this is what we deliver to the afghans and have done it to other countries as well. >> well thanks very much. pretty interesting to look into who is doing what. now our fourth story. testimony today that jerry sandusky, the former penn state football coach charged with sexually abusing boys threatened one of his alleged victims, saying if the boy told anyone, he'd never see his family again. this, as three more men testified about what sandusky did to them as children. and another eyewitness of an alleged molestation took the stand. beth karas is at the courthouse and has been covering the trial for "in session" for trutv. she was in listening to all of the testimony today.
also with us, ann bremner, former sex crimes prosecutor. beth, let me start with you. we're hearing about more victims testifying today and also about this witness. i guess, first, let's start with the witness who allegedly saw another act. who was it? what did the person say they saw? >> okay. this was a janitor at penn state university, continues to work there. he says that he went into the shower area of the athletic building to clean one evening. it was around 9:00 or show. he heard the shower going and he looked and he saw two sets of legs. he saw hairy legs and little skinny hairless legs. now, because somebody was showering, he sort of backed away. he didn't look into the showers. he left. but shortly after that another janitor he knew was in there cleaning the toilets, a mr. calhoun, came out really
distraught and told him what he had seen. that testimony came in. he had seen a sex act occurring between sandusky and this boy. mr. calhoun is now incapacitated. he's hospitalized. his words came in through that other witness today. >> and, beth, what about the other -- the other -- the victim that testified today saying that jerry sandusky had threatened him that if he told anyone or told his family, he would never see them again? >> okay. there were three of these accusers that testified today. the one you're talking about is known as number ten. he's now 25 years old and talked about what happened to him when he was 11. all three of the ones that testified today were all 11 when they talked about the sex acts. he said that sandusky, they said these sex acts occur between them about five or six times at sandusky's house and in 1998
sandusky did say to him once if you tell anyone, you'll never see your family again. he said he later apologized, sandusky did, for saying that and told him he loved him. but he didn't say the time frame for that apology, whether it was later that night or the next day. that was pretty frightening. it was the only threat we have heard so far. there are three more accusers still to testify but the other two today were also very compelling. >> i want to ask you about those in a moment. but first, ann, what is your take on the direction this is going? obviously these charges haven't been proved, this is in a court of law. we're still saying this is alleged. but these testimonies are damning and our understanding is that none of these victims have talked to each other before but story after story after story are equally, if not even more each time than the last horrific. >> well, absolutely. and it's kind of a textbook case of a multiple victim prosecution, erin. when the defense tries to plant these seeds of doubt by saying you have a financial bias or came up late with reporting, et
cetera, victim number ten never got a lawyer, never wanted money, or anything else, and they also described and discussed textbook grooming, especially when they're naked in a shower. that's when sandusky really made his pass, his act, when he would groom them with these boundary violations where they get in the shower and it would be natural for him to do what he did. some of the descriptions that were so just kind of rang so true from one of the victims, he would have his hairy back -- or chest on me. to this day i can't stand that. you know, just that image you have from the child saying that made me sick. it still makes me sick that he's harkenning back to the abuse. excellent case for the prosecution. textbook. >> beth, what about the other two victims that testified today, the things that really stood out the most to you. >> well, what anne just mentioned was victim number seven.
when he said that sandusky -- when he would stay at sandusky's house, he would stay upstairs in one of the extra bedrooms and he would come in while he would read himself to sleep. he would crawl into bed with him, he didn't want him in there. he was 11, 12 years old. and he would sort of wrap his whole body around him and that's when he would feel the chest hair up against his back and it so grossed him out he can't stand it to this day. and he would tell sandusky to leave. and when they showered, sandusky would try to do what others have testified he succeeded in doing. he would dry himself and he was much more assertive than the other adolescents and sandusky shut him off, shut him down. he used to go to ball games and his mother had to call up sandusky and say what happened, because mom didn't know this was going on and she didn't know what her son had done to all of
a sudden no longer get sandusky's attention. but also it was number five. talked about one incident which, erin, is really important because it was august, 2001. and it was a shower situation in the lash building six months after the mcqueary incident, what mike mcqueary saw happening, where sandusky was supposedly told, listen, don't bring boys into the showers at penn state athletic facilities anymore. this is six months later he was still doing it, according to number five, who was the last of the accusers to testify today before that janitor, and he was so compelling. he was crying as he told his story, and he paused and told a little more as though he were reliving it. he brought us, erin, into the showers today with him. it was as though we could see it happening as he described it. he was wiping his eyes, wiping his nose. he was 20 -- he's 23 years old, he's a man now.
and he was going back in time to when he was 11 years old in august, 2001. it was just really heart-breaking. >> thank you very much. outfront next, a man whose job was to convince you to drink more soda has turned against his former job. the insider's secrets to how you are being marketed. and congress pats itself on the back for a plan to save $24 billion for taxpayers. we see that, we say does it add up? no. the real story is next.
♪... ♪... ♪... choose the perfect hotel with less chronic osteoarthritis pain. imagine living your life with less chronic low back pain. imagine you, with less pain. cymbalta can help. cymbalta is fda-approved to manage chronic musculoskeletal pain. one non-narcotic pill a day, every day, can help reduce this pain. tell your doctor right away if your mood worsens, you have unusual changes in mood or behavior or thoughts of suicide. antidepressants can increase these in children, teens, and young adults. cymbalta is not approved for children under 18. people taking maois or thioridazine
or with uncontrolled glaucoma should not take cymbalta. taking it with nsaid pain relievers, aspirin, or blood thinners may increase bleeding risk. severe liver problems, some fatal, were reported. signs include abdominal pain and yellowing skin or eyes. tell your doctor about all your medicines, including those for migraine and while on cymbalta, call right away if you have high fever, confusion and stiff muscles or serious allergic skin reactions like blisters, peeling rash, hives, or mouth sores to address possible life-threatening conditions. talk about your alcohol use, liver disease and before you reduce or stop cymbalta. dizziness or fainting may occur upon standing. ask your doctor about cymbalta. imagine you with less pain. cymbalta can help. go to cymbalta.com to learn about a free trial offer. go to cymbalta.com morning, boys. so, i'm working on a cistern intake valve, and the guy hands me a locknut wrench. no way! i'm like, what is this, a drainpipe slipknot? wherever your business takes you, nobody keeps you on the road like progressive commercial auto.
members of congress patting themselves on the back and celebrating bipartisanship. all over a plan that they say will add $24 billion in savings to you, the taxpayer. we see savings for taxpayers and bipartisanship and get excited. we run the numbers. does it add up? not really. dana bash does the math and is outfront with the bottom line. >> reporter: hans schmidt is a third generation farmer and ever since he can remember has gotten cash payments from the federal government to help manage the risk of farming. how much? >> about $35,000 a year. >> reporter: that's right, he gets $35,000 a year, even in
good times when he doesn't need it. but for schmidt and over a million farmers across the country, that could come to a screeching halt. >> welcome to our home. >> thank you. >> reporter: these two senators want to end those payments to farmers in place since the great depression. the democrat and republican sat at this committee table and made the decision together. >> what do people say back home? people say back home all the time, whether it's michigan, kansas, any state, why can't you folks get along and do something instead of spinning your wheels and pointing fingers. >> reporter: bipartisanship we rarely see these days. their farm deal kits $24 billion in spending. >> almost 24. $23.6 billion to the deficit. >> reporter: a significant savings to taxpayers but does it add up? $5 come from ending direct payments but create a new $3 billion program to help farmers with crop insurance. watchdog groups warn the cost to taxpayers could actually explode in bad crop years. senators scoff at that.
>> these are real cuts. crop insurance makes sense. it's like any other insurance. it's there when you have a loss. >> reporter: at the farm, schmidt says he's okay with losing checks from uncle sam he doesn't always need. >> if it's going to help to get our country' fiscal responsibility back in order. >> reporter: but he says new government help for crop insurance is critical. even now a good year, problems. this idle combine was supposed to be cutting wheat when we visited. >> we were hoping we would be combining today but the moisture on the grape is too high. >> reporter: another criticism, pork in the farm bill in the form of popcorn. yes, popcorn growers made sure they too get government help for crop insurance. here, no apologies. >> i have to ask you about popcorn. >> i love popcorn actually. >> i guess i would call it a specialty crop. and there is demand for it, just go to the movies or just go any place at home.
>> if you don't have a history, then you can't grow and collect -- you can't get subsidies. >> reporter: as he bales a more traditional crop, hay, hans schmidt is diplomatic. >> do you consider popcorn a crop? >> not here. >> dana joins me now. you look at farm income and the farm bill itself is so enormous. farm income close or at record highs around the country. doesn't pretty much everyone in congress say, look, giving these guys more money is a waste of federal money, of taxpayers' money? >> reporter: that's a question i asked the senators and both parties. last year it was a record profit for high grain and soybeans, $109 billion. their answer is basically this is the way this farmer put it, we all have to eat. the fact of the matter is that they feel that if the farming industry goes down across the board, and if there is no risk
management, they call it, then this country will spiral into a very, very even worse economic crisis than we're in now. yes, they say that agriculture has sort of been the shining bright spot in this terrible economy, but unless the congress -- doesn't give them direct payments anymore, which is what they're trying to do, change that, but making sure that the risk management is there for them, that is absolutely critical they say for long-term thinking. because they also say that coming does sort of throw money out the window when there's disasters and that ends up costing ultimately a lot more than making sure that their insurance companies is basically there. >> thanks very much. numbers didn't add up there. now our fifth story. michael bloomberg's team of health experts is urging him to nix super sized snacks.
an unlikely ally says bloomberg is on the right track. and 66% of americans at this moment are overweight or obese according to the cdc. todd put man is former executive for coke cola and we all know people get riled up, last year, coke spent $4 billion getting people to quote, unquote, choose their products. we wanted to play a quick ad. here's an ad during the super bowl by coke using polar bears.
with lovely, endearing sweet polar bears. but then i think it's my free choice, huh? >> now that you mentioned coke spending, but you add the entire category, about $7.3 billion last year, excuse me, in 2011. that's a lot of money directed at sugar-based soft drinks. >> it's an incredible a lot of money. i coke executive said to "usa today" last week, quote, there's no scientific evidence that connects sugary beverages to obesity. now i don't think that that's true. the california center of public health advocacy says a child's chance of obesity increase with servings of soda.
adults are 27 more likely to be obese. that's a connection. >> yeah. there are many studies, the american heart association, the yale study also contributed a link to sugary soft drinks to obesity. there's a link. >> what can you done about this? when you looked at coke, did you look at these sorts of studies? were you aware of it? >> no, the health issues and certainly obesity was certainly not on our radar at all piets not something that we thought about. what we thought about is to market to people to get them to drink as much product as possible. that was the strategy. >> coke talks about you, referring to you, todd, because you're really under their skin. you left coca-cola 12 years ago, taking action to sofl the obesity problem. this is the statement they gave us. rather than pointing finger, all of our beverages are healthy and can fit in people's diets.
not all their beverages are healthy, right? are they going too far here? coke knows not all their beverages are healthy. >> yeah, there's no doubt. many of their products that have absolutely no nutritional value at all. but the point i want to make is i think we can learn from the power and thinking of soft drink marketers and begin to apply that to healthier food and beverages. the healthy guys need to try to market these products in an emotional versus a rational way. people don't like to be told what to eat. they like to be shown and connect. that's the point i've been trying to make over the last couple of days. >> that's right, there's a choice. there are options that are good if for you. for decades, people have told men something about their health that didn't really add up. an old wives tale. tonight, the facts. in here, gres a great presentation. so at&t showed corporate caterers
how to better collaborate by using a mobile solution, in a whole new way. using real-time photo sharing abilities, they can create and maintain high standards, from kitchen to table. this technology allows us to collaborate with our drivers to make a better experience for our customers. [ male announcer ] it's a network of possibilities -- helping you do what you do... even better. ♪
helping you do what you do... even better. it doesn't look risky. i mean, phil, does this look risky to you? nancy? fred? no. well it is. in a high-risk area, there's a 1-in-4 chance homes like us will flood. i'm glad i got flood insurance. fred, you should look into it. i'm a risk-taker. [ female announcer ] only flood insurance covers floods. visit floodsmart.gov/risk to learn your risk. and then treats day after day... well, shoot, that's like checking on your burgers after they're burnt! [ male announcer ] treat your frequent heartburn
increase their fer tulty. now it goes from briefs to boxers. it was always considered an old wives' tale, but now a study proves that it's true. according to 2,000 clinics across the uk found that men who wore looser fitting undergarments are more likely to have a higher number of sperm. optimum fertility occurs at temperatures below your own body. so breathing room really does improve production. but everything doctors are telling you guys isn't true. according to this study, quote, the study overturns much of the current advice given to men about how they might improve their fertility. many common lifestyle risk may not be as important as we thought. a man's weight, use of alcohol and tobacco and recreational drugs and use of fertility. so the bottom line, it's just a
matter of time before mayor >> big money politics is the president caught in the middle between wall street and main street. plus explosive jerry sandusky charges from the pulitzer prize-winning authors who say penn state coaches were culpable. >> i believe the coaches knew what was going on and they didn't care. it was all about winning. >> and jimmy fallon, the man of a million voices. >> who buys these? no guy wears them to the beach. >> and including, very worrying, my own. >> he goes bonkers doing jim morrison. ♪ take a look it's in a book ♪ a reading rainbow >> and in