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tv   Sugar Pandemic  CSPAN  December 1, 2013 2:50pm-4:41pm EST

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and you addicted them to the one drug, and then you expose them to a second drug they have never seen before, and they are addicted to that one. the dopamine receptors are the same. once you down regulate them, you down regulate them for all substances of abuse. that is called across- sensitization. in animals, we have slamdunk evidence shown -- showing that sugar is addictive. what about humans? it is really hard to determine this in humans. number one, everyone has a baseline. there is nobody who is naïve. number two, we cannot grind up people's games -- brains. number three, it is very hard to show causation, especially with our current diet. here are the criteria for addiction -- tolerance and withdrawal -- here are all the psychological dependencies great if you read through this, this reads just like obesity.
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this is what obese patients tell us. the question is, is sugar addictive? has anybody seen this movie? i've got another clip. i'm hoping this one works. yes. >> [indiscernible] i'm feeling really, really sick and unhappy. i started eating and over eight. -- over ate. i felt so good, it was crazy. >> now, does everybody know the story? morgan spurlock was a vegan because his girlfriend was a vegan chef. he started eating mcdonald's for 30 days nonstop every meal. this is day 18. he just described withdrawal. it can happen to anybody. if you down regulate those dopamine receptors, you're going to need a bigger hit in order to do that. that is called abuse. finally, externality, in
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negative impact on society. societal intervention says that your abuse of a substance has to affect me in a negative way for us to regulate it. for instance, nobody is saying we should regulate caffeine. your use of caffeine does not affect me. if you smoke or drink or take drugs, that is bad for me, because of secondhand smoke, car accidents, declining housing prices when your house turns into a coke den. also work productivity and absenteeism. these are the reasons we regulate these substances. how does your obesity affect me? 274 million extra for jet fuel. that doesn't quite do it. discomfort on the subway? sinking of boats due to the weight?
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2003, the late george very -- ferry coded for 25 190-pounded else, and the ship capsized. it ain't going to do it. a $65 billion decrease in work productivity. a 50% increase in health insurance premiums. currently, we are at $2750 per employee for obesity, whether the employee is obese or not. it is breaking the bank. employers know this is unsustainable. we spent $245 billion for diabetes. that is one third of the entire medical budget, for diabetes and dementia. obesity is a threat to national security. on a seven percent of recruits cannot pass the physical education exam -- 27% of recruits cannot pass the
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physical education. the government pays twice, for corn subsidies and er visits. we are going to take 30 to 6 -- 32 million sick people onto the rolls, and we cannot stop the heart attacks or the dementia. it is going to break the bank. medicare will be broke by the year 2026. this is why your obesity affects me. we have toxic substances that are not abused. everything is toxic in the right dose, even water will kill you. here are some substances that will definitely kill you. iron, vitamin d, oxygen, pseudoephedrine, water. these are all toxic substances that are not abused. we don't have to regulate them. we also have abused substances that are not toxic thomas like caffeine.
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nicotine, until the towers are added. you can buy nicorette gum and walgreens, and it is no problem. when you have toxic substances that are abused, now you've got a problem, like morphine, heroin, amphetamine, cocaine, and ethanol. guess what? sugar meets all the same criteria for all the reasons i just laid out for you. the question is, what are we going to do about it? the american heart association says, this is a problem. they said -- i contributed to this scientific statement, that we currently consume 22 teaspoons of added sugar per day. we need to reduce that to nine teaspoons per day for males and six teaspoons per day for females. that is a reduction by two thirds to three quarters. is that achievable? can we do that in america today? what does the sugar industry say back to this, what is the politics of this? here we go.
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what they say is fructose for glucose exchange studies showindifference, and if you look at issa caloric -- were you just change the fructose for the glucose at the same level of -- of calories, you see no change. that is what they point to. if you look at hyper caloric trials, people over consuming, which is what we all are -- we are over consuming by 275 calories per day -- you start seeing these effects. that is what we are dealing with. what they say is, everybody, eat moderately. the problem is, you cannot eat moderately because it is being abused. we are all addicted. they also say it shows a muslim indifference, but the problem is, oral fructose absorbs poorly. the amount of factors that goats turned into liver fat is quite low. it is not fructose for glucose. it is fructose and glucose.
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sugar and high fructose corn syrup is sugar -- is fructose and glucose. when you do the studies with fructose alone, you don't get much. and you do them together, not a liver fat jumps and triples. if you double the amount, it goes up six times. the more sugar you consume, the lower liver fat you make, especially in the hyper-caloric state, which is what we are all in. this is a problem. they also say, fructose doesn't raise blood sugar. it has a low glycemic index. who here knows about glycemic index? so, the glycemic index is the amount of blood sugar rise that 50 grams of carbohydrates will give you. that means the amount of insulin rise that will come with that. fructose doesn't stimulate blood glucose. why? it is fructose. it stimulates fructose instead.
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the question is, is that dangerous by itself? the answer is, absolutely yes. it causes cardiovascular disease by itself, because it binds to the proteins in your arteries and causes them to become less flexible. that is what starts the foam cell process. it has nothing to do with your blood glucose. a little fructose has been shown to improve insulin secretion, like alcohol, but that is dose- dependent. as long as you stay under that goes, it is ok. the problem is, we are over that goes by a lot. information on total sugars is available on the food label for everyone to see and for everyone to make their own judgment -- choice. it is the nanny state arguments. that is not really true. here is why. the nutrition labeling and education act of 1990 lists total sugars. that includes glucose, galactose, and fructose, altogether. that is how it works. the reason is, they don't want
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to tell you about added sugars. they want to obfuscate what they have added to the food, because they say that that is proprietary. if we told all of our customers how much added sugar we put in all of our foods, processed foods, our competitors could duplicate our recipes. this is proprietary information. you can't know it. that is a problem. yogurt is a perfect sample. -- example. how many grams of sugar in it, granite yogurt? does anybody -- in a pomegranate yogurt? 19. many of those are lactose and how many of those are added sugar? you can't know. you are not allowed to know. how many grams of sugar are there in a plain yogurt? seven. that means that 12 grams of added sugar to that pomegranate yogurt. that is the same as a bowl of captain crunch.
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when you have a pomegranate yogurt, you're having plain yogurt plus a bowl of captain crunch. are you ok with that? is that what you bought it to? is that what you expected when you purchased that item? yogurt is supposed to be healthy. not only that, but there are 56 names for sugar. that is on purpose. they do not want you to know that sugar has been added. yogurt is a perfect example. evaporated cane juice. does anybody know what that is? [laughter] what happens when you evaporated cane juice? you get sugar. evaporated cane juice is not a sweetener by the fda. ecj is not one of them. this is ms. branding could 30% of foods and the american grocery store today are 30% of foods and the american grocery store today are misbranded to keep you from knowing what is going on. here is the list of the 56 names in case you thought i was a little hyperbolic. the question is, where is the sugar, and what foods?
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one third of the sugar we consume is and beverages. we know about those. 16, desserts -- 1/6, desserts. that means fully one half of the foods that have sugar we didn't know had sugar, like salad dressing, yogurt, and mayo sauce, crackers, other products, all things we didn't know. does anybody like wheat thins? check it out. [laughter] and next, they say, we were wrong about that. we also do, fat was bad, and now you are telling me, it is sugar.
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what makes you think you are right now? we need more research. indeed, we do. i don't argue that. do you know what that is called? that is called the pessimistic meta-induction theory. look it up on wikipedia. this says that whatever we thought 10 years ago is already wrong hum and whatever we think today will be wrong 10 years from now. true. i have seen these cycles come and go in medicine. the question is, why should we do anything if everything is going to be wrong anyway? why should we change anything? do you know what that is?
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that is moving the goalposts. that means we will never do anything. it means we might as will stick with the dogma of the day, because everything will be wrong. ask galileo. that is what they wanted to do with him. the question is, what level of proof do we need in order to make change? 90% of what we know today in medicine today is causal medical inference. only 10% is scientific proof. but the food industry says we need scientific proof to make any change. why? because they know we will never get it. finally, regulation is tantamount to the nanny state, like michael bloomberg, the nanny. that fact is, we have already
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been told what to eat. it is too late. everyone says, keep your hands out of my kitchen. fact is, your kitchen has already been invaded and you have already been told what to eat. of the 600,000 items in the american supermarket, 80% have added sugar. added by the food industry for their own purposes, not for yours. you've already been told what to eat. this is not about big brother. big brother is here. so the big question is -- who do you want in your kitchen? do you want government, who will take your money and your freedom? or do you want the food industry, who has already taken your money, your freedom, and your health? that is your choice. everything else is a false choice. and the question is -- how does the food industry stay where they are? well, this is published by michelle simon, a former graduate of uc-hastings, and a former research associate. and now a word from our sponsor.
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and a-n-d is very specific -- academy of nutrition and dietetics. are america's nutrition professionals in the pocket of big food? that is who is paying their bill. how about this? co-opting health professionals. i give a talk at the american academy of pediatrics in october, 2009, and i had this slide. and the american academy of pediatrics said if you show the slide, we will not let you on the dais. i had to take it out, but i'm showing it now. here is what has happened to our food dollars. 1982, 30 years ago, 2012. meat down 10%, because we were told to go low-fat. fruits and vegetables exactly the same. everyone tells us, we need to get more. we are eating all the fruits and vegetables we can. grains and baked goods.
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up 1%. not even a big deal. dairy products down from 13% to 10% because we are all lactose intolerant. finally, processed foods and sweets. 11.6% to 22.9%, a doubling in 30 years. that is where the money went. that is what you are paying for, and that is what is causing the chronic metabolic disease you're looking at. and this is a war, because what is good for them is bad for us. what's good for us is bad for them. there is no middle ground. it's a war. the question is -- who's winning? here is the stock price of the s&p 500 against mcdonald's, coke, and pepsi for the last five years. here is the economic downturn of 2008. mcdonald's, coke and pepsi are doing quite well, thank you. and here is monsanto, hormel, adm, general mills, con agra, procter and gamble, kraft, they are all doing better than the s&p. if you want to make money,
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invest in a food company because they have a winning formula. they have a formula that cannot miss, because it is legal and addictive. the problem is, we are all dying in the process. so this paper just came out a couple of months ago in lancet. profits and pandemics. the prevention of harmful effects of tobacco, alcohol, and ultra-processed food. they make the argument, and i subscribe to this, that we use to practice old medicine which was about infections. and the vector was microbes. that is what i learned. now the new medicine is something else entirely. it is about chronic disease and the vector is multinational corporations who have figured out how to game the system. now, what are we going to do about it? this is a public health problem, and that means we need a public health solution.
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take a look at all of these diseases. every disease on this list was a personal responsibility issue before the sheer gravity of the problem made it a public health crisis. as we talked about hiv, as an example. how about guns? is that a public health problem? except that it is a personal responsibility problem, isn't it? depends who you ask. if you asked the supreme court, it is a personal responsibility problem. but it's not. it is a public health problem. and i would put sugar right down there as well. so here we have with the government is doing right now. it is called the let's move campaign.
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michelle obama's campaign to try to reduce obesity in a generation. what she says his focus on individual, focus on the family, and focus on the community. but she leaves government and the food industry out. now, anybody remember her very first speech after let's move was rolled out in 2010? it was to the grocery manufacturers association of america. and she pointed directly at them, just as i am to you right now, and said, this is your fault. you see this on youtube. this is your fault, and you have to come up with a solution. she never said it again. not once. why is that? why? she's been muzzled by her own administration because they do not want this fight. and i know they do not want this fight because they told me they do not want this fight. sam caste is michelle obama's personal chef and her point person to her obesity task force, and he told me after reading the new york times article, everyone including the president said they are in agreement and they will do nothing about it, not a wink, not a nod, because they have enough enemies. that is what this is about. and you'll notice, anita dunn who founded let's move now lobbies for the food industry.
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and now a word from our sponsors. the question i will leave you with -- can our food environment to change without government or societal intervention, especially for potentially addictive substances? did just say no work? does education work for substances of abuse? the answer is no. question two -- can we afford to wait when health care will be bankrupted to chronic metabolic disease? we have got 13 years, people, and we have to do something now. not wait for more research. we have the research.
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we have what we need. policy what do we do? there is called targeted prevention. that is treat the patient, right? treat the obese person. except for one thing. we've just learned that there are more nonobese people who are sick. it is targeted to the individual. the benefit to risk ratio is high. the weaknesses is the medicalization of prevention, which is hard. behavior medication, which is impossible. cost feasibility and limited success across the board. but it is not targeted. it is public health prevention we need. what are the strengths there? it is radical.
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it is going to work because we will make it work. it's powerful, because everyone is onboard. environmental modification, fix the environment, not fixed behavior. that is what our data show about obesity, fix the environment. the limitations are the libertarians, -- limitations of acceptability, the feasibility, and cost. what can we do? we could tax and restrict access and intervene. i am not suggesting we intervene. we tried that with alcohol. it was a disaster. you cannot have storm troopers invading people's homes for baking an apple pie. that is not going to happen. i do not even suggest it. because my wife would be the first one they would have to take away. what we need to do, like we have with every other substantive abuse is come to peaceful coexistence. we have to find the right amount of legislation, regulation to be able to manage the problem rationally, like we tried to do with tobacco.
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we can argue about the wisdom of that, especially worldwide, and alcohol. no interdiction but plenty of taxation and restriction of access as needed. so what factors contribute to increased soft drink consumption? price. since the 1980's, the price has and the introduction of high fructose corn syrup, the price has only increased 50% versus food. food has gone up higher than sodas have. sodas increased only 20% against fruits and vegetables. we are supposed to be eating fruits and vegetables. sodas are cheap and fruits and vegetables keep going up because they are not subsidized. we've allow the serving size to rise. in most developing nations, soda is cheaper and safer than water. until potable water is cheaper than soda, we cannot solve this global health crisis.
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i totally agree with that. access. what is available worldwide, especially in schools. 50% of flavored milk, that is chocolate milk, is available in schools. and marketing. in 2006, food marketer spent $1.05 billion to marketing, half for soda, to children and adolescents. the question is -- our children a rational target? is that acceptable? why is alcohol so relevant to this question? i think the analogies between sugar and alcohol are very strong. and we should look to alcohol control policy. and my colleague and i and allen taylor, a visiting professor at georgetown, are planning to write a book on exactly this shortly. both are nutrients, but aside from energy they have no health
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value. metabolic and central pathways in the brain are similar. both are substances that produce when overused. there is little danger from moderate consumption. the problem is what is moderate and how do you keep things moderate when they are abused? and the burden of harm falls disproportionately on the poorest people who can afford the problem least. here are the strategies that have actually been shown not to work. governmental guidelines are useless. we keep saying, let's come up with new guidelines, like every five years. like the dietary guidelines advisory committee. it is garbage. it is not going to work. public information campaigns have not worked. warning labels on product packaging have not worked. vis a vis smoking. school-based education programs. everyone wants this to work. everybody says, let's put the money into school-based education. all the data so far shows salutary effects almost nonexistent. menu labeling. everyone says, let everyone know what they are eating so you can decide for yourself. let's look at menu labeling. i like this one. here is the adult menu labeling study in new york city.
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a historical, cross-sectional study. we had data before labeling and after. what happened? nothing. nothing happened. mean calories did not change. they went up. three major changes showed very small decreases. 15% of the respondents reported using the caloric information, and those that did purchase 106 fewer calories than those that did not, but that is all most none of them, because when you go into a fast food restaurant, you were going for taste, and they say so. they may say they're going in for salad, but they buy the burger and fries. and there is a reason for that.
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349 children and adolescents, most accompanied by their parents, and most from racial minority groups, no significant differences in calories purchased before after labeling. 35% ate fast food six or more times per week. 57% noted the labels. but only 9% reported using the information indeed. and 72% reported that taste was the most important factor. do you think that knowing what is in your food changes what you eat? not at all. so, education. how are we going to do that? which nutrients will we educate people about? you think the total fat on the label actually matters, because there are good fats and bad fats and they are all crushed in together. how are you supposed to know? what about salt. we have had long discussions about salt and whether or not salt matters in the american diet. what is the target and what is the message? if it is about total calories, we are sunk. we will never get past this. that is what we have done for 30 years. the definition of insanity is doing the same thing over and over again and expecting a different result. we have done the same thing over and over again for the last 30 years. somehow, somebody in washington
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still expects a different result. good luck. food labeling. add sugar content. could we put the number of teaspoons in teaspoons on the front of the label and would it matter? maybe labeling has not worked in new york city. education alone has not worked for any other substance abuse. why would you think this would be enough? i think it is necessary. i think people need to know what they are consuming, but it is not sufficient. necessary but not sufficient. what about strategies that might work? controls on advertising and marketing have been talked about. counter advertising campaigns. anyone ever see new york city's man drinking fat commercial. it is on youtube. it is disgusting. it is fantastic. i love it. and it has not changed soda consumption in new york city at all. finally, industry self- regulation. really? in 2007 in istanbul, 52 european health ministers got together and agreed that we needed to cease marketing of junk food to children.
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i agree. i approached the fcc director under george w. bush with this exact same issue after this meeting had occurred, and she said "i expect the food industry to police itself," which is exactly what they have been doing all this time. it is hands off. the food industry -- hands off. the corn refiners association, you may remember last year, they tried to rebrand hfcs as corn sugar and the fda told him no. they have done it anyway. you know what? they will get away with it. why? because the fda does not have an enforcement arm. the enforcement arm is the department of justice. they got better things to do. they do drones and other things. how about on a community level?
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santa clara and san francisco in 2010 instituted the toy ban? why should you coerce a child into buying a happy meal for the toy. let's disassociate the two. if you want the toy, by the toy. makes perfect sense. well, since then three states have banned toy bans. not really getting rid of that. i don't know why it does that. let's go back. \ok. and finally, the campaign to retire ronald. which is ever continuing. how about things that are likely to work? pricing strategies are likely to work because people care about price. controls at the point of sales. bundling strategies. government agency action. those are the things that will work. those of the things that worked in the past. the problem is you need people on board.
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you need government on board in order to be able to enact those. let's talk about pricing. soda taxes. canada and europe already do this. they have the general services tax, the value added tax. the price elasticity on a can of soda as very small. price elasticity is how much of a change in consumption you will see with the one percent change in price. it does not change much. a 10% price increase only increases consumption by 2%. that is not very good. that is what we talk about -- a penny an ounce. existing taxes on soda so far have not resulted in soda consumption. at 3%. this fits this. soda taxes, are they for programs or to reduce consumption? if they are for programs and not consumption, do you know what will happen? soda companies will say, it did not work. worse yet, some unscrupulous politician will take the money and use it for general funds or
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personal funds and that is what everybody is worried about because that is what we have seen already with tobacco. large taxes are necessary to reduce consumption. the rand corporation says we need a 36% tax to effectuate a 25% reduction in consumption. we need to double the price of a can of soda. do you think anybody is ready for that? where should we tax the ingredient instead of the product? should we tax the sugar before it goes into the food, rather then tax the food itself? the problem is you would need that to be national. you would need congress to do that. only they can levy such taxes. you could not do that state-by- state because of commerce clause. finally, restriction, controls on the point of access. age limits. maybe we should card kids for
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coke. if their parent wants their kid to have a coke, let them buy it for them. and that would cost nothing. we could do that tomorrow. we do that for beer. zoning controls over the number of sales. why is there a convenience store within 500 feet of every single school in america? because the kids are target. and they know it. how about use permits that control hours of operation? maybe they cannot sell soda between 7:00 and 9:00 in the morning at 3:00 and 5:00 in the afternoon when kids are coming to and from school. we have said is out of school in california, we had sb19, in the last study said that obesity rates are stable. maybe it is because of this, we do not know. and there is the big gulp ban that was struck down as arbitrary and capricious by the appellate court in new york state. citing a case in 1986, boreali v. axelrod. this case was about public smoking.
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the thing was it was 1986. in 1990, we learned about secondhand smoke. if boreali have been decided four years later, there was no way it would've been decided in this fashion. we have the secondhand smoke of obesity and sugar consumption. it is called health care disaster. the fact is, using boreali as a reason to strike it down made no sense. this would ultimately be appealed to the new york state supreme court. here's what happened to sugar sweetened beverage access within schools. you can see it here in terms of purchasing in sixth and eighth grades. look at the arrows. in the schools where sugar sweetened beverage sales have
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gone down, sales have gone down. that is great, except for one thing. here is the total consumption -- it has not changed. why? they get it on the way home or at home. until we change the entire food environment, concentrating on schools is not going to work. how about bundling. how about differentials differential subsidization. why can't we tax the bad food and subsidize the good food? could we subsidize broccoli, so that it would be in the best interest of the food industry to promulgate it. we could modify behavior through pricing. we always do. the nordic countries have subsidized low alcohol beers and taxed hard spirits in an attempt to solve alcohol problems. they have been successful in terms of car accidents and cirrhosis of the liver. they have done this over 30 years. differential subsidization. we could discount diet soda and tax sugar soda. i am not sure that diet soda is any better, but it sure is not a whole lot worse. this is the thing to remember. the iron law of alcohol policy says reducing the availability of alcohol will reduce alcohol
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consumption and reduce alcohol- related health harms. the same holds for sugar. the problem is -- how do you get there? how about government agency action. regulation in the food industry by congress is a nonstarter. they are not touching this. there is no way in the world anyone in congress will go out on a limb for this. but why can't the farm bill subsidize real food instead of food ingredients? that is what it used to do. food stamps. bloomberg try to remove food stamps from snap and he was rebuffed by the usda because the usda is in the pocket of the food industry. several other states have applied and the usda has rebuffed them. but the question is why is the usda in charge anyway? that is like the fox in charge of the hen house. the usda sells food, it is hhs's job to keep us healthy. shouldn't this be an issue for them? not an fda issue.
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the efsa, the european food safety administration, could influence the court of public opinion to make sugar less appealing. cigarettes went from fashion to filthy habit in a few years when people got on board that there was a problem. the fda could revisit the nutrition labeling education act. instead of total contents, labeling should reflect the degree of processing of the food. so what was added and taken away because all food is inherently good.
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it is what we do to the food that is not. if we add something, that is a problem. if we take something away, that is a problem. tell us what you did to the food instead of what is in the carton. the fta could re-examine their 1986 grasdetermination. generally regarded as safe. one of the reason we're in this mess is because sugar is generally regarded as safe. this is something determined in 1958 with no data. the results were inconclusive in 1986 that a mean dosage of 50 grams per day. our current dosage is 80 grams per day. we did not do it at that dose. and the issue with -- is intended use. no one intended for sugar consumption to be this high. the sugar industry took that information and so the government gave them a clean bill of health when it was only inconclusive. there are lots of problems with this document. it was based on a 1978 survey at 53 grams, no data on excessive consumption. no data on high fructose corn syrup back then. and fruit juice was considered
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fruit, not sugar, which it is. so who knows what the real story is? that this is what the 1986 document said, and the person who wrote that document is now a consultant to the corn refiners association. and there is no dietary reference intake for sugar. there is the nutrition facts label. there is a percent daily value for everything. nothing for sugar. it is not listed. why? sam cast said, why would you need a dri for something that is not a nutrient? something that is not a nutrient? he is actually right, because sugar provides no nutrition. it only provides energy. you do not need sugar to live. there are people who have the disorder in their liver called hereditary fructose intolerance. if they consume sugar, they die.
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we figured these patients out when they're six months old when they get their first dose of juice, and to become hypoglycemic down to 5. and they are sugar free for the rest of their lives. and they are the healthiest people on the planet and they consume no sugar. why? but is it a nutrient. it is a toxin and we treat it as such. same thing here. how about legislative options, advocacy, attempt to apply pressure on the government? good luck. center for science in the public interest is doing that, but nothing has happened so far. legislation has a very long on- ramp. it takes a long time to make anybody do anything in congress. and part of that is due to corporate lobbying. other strategies, so far nothing. how about the farm bill? price subsidies create market distortion. it would be much better to get
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rid of all the subsidies and let every foodstuff reach it's appropriate market capitalization. that would work nicely. the problem is, the food industry would have a cow. the question is -- is that ok? is it ok for the food industry to have a cow? i think it is. finally, legal actions. this is the statement that got me to law school. the hyderabad statement. from an indian public health for. all significant advances in public health require and involve the use of law. when i heard that, i went, yes. that is exactly right. and that is why i came to hastings to get my masters. much shorter on-ramp. you can actually make something happen.
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you can do regulation through litigation. it is the most bang for your buck if you have court support. first question -- who is the defendant? is it the corn refiners or any sugar producer or is it the distributors and the and manufacturers? hard to know. that is a big question. many companies -- theories to ascribe culpability -- market share, coke would pay for 29% of the diabetes in the world. take responsibility for a contribution to edit sugar in the environment. these are questions yet to be answered. would you do this to individual plaintiffs or at the state or federal level? they were not successful against tobacco. 845 individual actions brought against big tobacco. only two were successful and both were overturned on appeal. how do you think this would go with something like sugar? it would be even harder. there are so many different defendants. how about class-actions? they were great idea until at&t mobility v. concepcion which
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said the supreme court does not want to hear these cases anymore. they are not interested, but but there are still 12 states that have this. misbranding is going on in the superior court of california because there are 56 names for sugar and total sugars are on the label not added sugar. which is what we need. what about liability. this is a big question. is soda a defective product? what do you think? if used as directed, does it kill you? yes or no? what do you think? 11 fold increase in diabetes. what do you think? yes or no? other products contain nutrients, so they would be unlikely to be considered defective. but soda. ain't nothing in the soda you
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need. everything in it is something you do not. and finally, failure to warn. it turns out latinos are susceptible to this. and they get the worst nonalcoholic fatty liver disease and the worst incidence of diabetes. 50% of california latinos get diabetes. they have a genetic polymorphism that makes their liver susceptible. they need a warning label on every can of soda, saying, latinos, you will get sick from this, because they will and they do. and i have to take care of them. so where is the label? and finally, the parents parens patriae. the state is the parent. how the mississippi attorney general sued big tobacco. because the state is more than a nominal party. they stand to lose big. they are losing $1.5 billion for diabetes and the state of california every year. there is no requirement for tort liability. all you have to do is show the economic harm.
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and the state is not a nominal party, which is easy to do. we could recoup medicaid for diabetes and other diseases as well. all sorts of academic papers and more academic papers. and then non-academic. fat chance, which you can purchase today. this will be out in six days. an e-book that people can use to go into the store and use it to shop properly because it lists the added sugar in each food in the supermarket. and finally, in january, we will be releasing the cookbook. in order to turn this around, people have to learn how to cook again. the question is -- how do they do that and what is it they will make and how do they do it fast? everyone one of these recipes was vetted by a high school student. if they can make it, so can you.
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and they are good. lastly, we have started a nonprofit organization to provide medical nutritional and legal analysis and consultation to promote personal and public health versus big food. called the institute for her -- institute for responsible nutrition. responsiblefoods.org. come join, sign up. we will let you know what is going on and you can contact me for more information. i want to thank all of my collaborators at uc-hastings. in particular, david, marcia, john diamond, pat davidson, and my colleague who did the heavy lifting on the statistics on the diabetes study. and kristin kerns who is the person who is basically doing the sugar documents in the same way as the tobacco documents. and stan, who is mr. anti- tobacco, and has realized that noncommunicable disease whatever it be is the problem of the 21st-century.
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we need to solve it, and we're going to need all of you in the room to get on board and help us do it. with that, i want to thank you all and i would be happy to answer questions. [applause] >> if you have questions, if you make your way over to the microphone and introduce yourself. >> i answered everyone's questions? that is pretty bad. happy to answer any questions. >> hi. >> go ahead. you bet. >> many questions. try to limit to a couple.
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so the last, the last piece of information you shared with regards to latinos and a higher likelihood of metabolic disease given exposure. i wonder if you could talk a little bit more about what we know about that, or where we could find more information about that. we do have a community group here in san francisco interested in health equities impacting latino community, who want more information with regards to that. >> i gave a talk two years ago at the latino health forum on this question. it is a huge problem, especially in san francisco. what we know is that sugar gets converted to liver fat but there
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are certain things that go on in the liver that can make that worse. there is a gene, pnpla3, it is a gene. and if you have certain polymorphism, which 19% of latinos have, 19%, a little sugar makes a lot of liver fat. way more than if you have heterozygous or homozygous for the wild type. in addition, there is another polymorphism for another gene, which is one of the molecules that helps the mitochondrial function properly. if you have a polymorphism in that, which latinos carry, you are not going to be able to put enough energy through the mitochondria, which means the backup will get turned into liver fat as well. so both of these are known risk factors for developing nonalcoholic fatty liver disease which is a cause of type 2 diabetes, and latinos are
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susceptible. the point is that latinos of all ethnicities have to be careful about their sugar consumption. the fact is that latinos are the least careful about the sugar consumption. they do not even drink water. they drink aqua fresca. they have more names for sugared beverages in spanish than virtually there are in english. and i have actually compose a list of those and published it in the journal of pediatric nutrition in 2012. it is pretty ridiculous. [speaking spanish] the list goes on. it is pretty astounding. kids, they tell us, they drink
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it because it tastes good. yeah, i know. but this does not mean it is good for you. and we have a real hard time convincing parents, latino parents, of the hazards of this practice. so we have a lot of work to do. >> thank you. i hope there are folks working on that locally. we have a lot of work to do. one more question, since there is not anyone else at the microphone yet. my name is roberto vargas, i work at the clinical and translational science community and health science program at
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ucsf. with regards to differential prices, you pointed to the example in nordic countries. subsidization of -- subsidizing beer, heavy taxes on alcohol. do we have any other examples of that? has there been any testing of that with regards to sugar beverages? >> no, there has been no testing. not that i know of. what i can say is that there is one study out of harvard where they change the price in the hospital cafeteria to see whether or not they could get people off sugar sweetened beverages. they had to change the price to to change the price significantly. we are about to embark on the study at ucsf that the head of food services is the principal investigator on, where we will try to do the same thing in a hospital setting, which is very
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different than the general setting. but hospitals have to start this. the bottom line is -- it used to be the people smoked in hospitals. and now they do not. in fact, hospitals were the first place is to ban smoking entirely. and we will probably have to be the first phase is to ban sugar sweetened beverages entirely, too. >> hi. can you just say a little, a few words about the reversibility of the condition? for instance, what is the duration of exposure for a child at risk? let's say they stop their soda consumption when they turn into, the age of 20, smokers will ultimately go back to the risk for lung cancer over many years. what happens to children -- >> there are two issues. there is the nonalcoholic fatty liver disease and the diabetes issue.
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the nonalcoholic fatty liver disease issue, if it is just fatty liver, it is eminently reversible. it can take time, but it is reversible. we are doing a study at ucsf where we are isocalorically taking sugar away and substituting complex carbohydrates for 10 days. i am blinded to the results, so i cannot give you the answer to that, but we anticipate that we will reverse their fatty liver disease during that time, because we have data in adults that 14 days of doing the same thing was effective. 38% reduction in liver fat during that time. if -- sorry? >> what is the duration of exposure that would bring about fatty liver and the child? >> two weeks. two weeks. heavy drinking -- >> of soda. >> and you get it in alcohol, too. three sodas a day will get you there. in terms of the scarring that occurs, the cirrhosis. once that occurs, that never gets better. once you go from fatty liver to fatty liver plus inflammation, that never improves. five percent of the patients with fatty liver go on to develop cirrhosis over time. you can slow it down by getting
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rid of the substrate and by using antioxidants, but it is a progressive lesion from that point on, which will ultimately kill you or require a liver transplant. now diabetes is eminently reversible. type ii diabetes is reversible in most patients. problem is, not with our current diet. but people who go on the paleo diet see all of the medications go, they do not need their medications with in 8 weeks of starting the diet. once they actually change their diet and their composition. so i think that diabetes is eminently reversible. if you do the right thing. >> dr. lustig, what is the role of ethnic communities, what plans do you have for translations in other languages to be able to make it accessible? >> the thing i am most upset about is that there is no spanish version of fat chance. if anybody here is a spanish-
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language publisher, come talk to me. we have tried to get various publishers interested in in publishing a spanish-language version. and there are all sorts of problems with that. it is in norway, slovenia, turkey. it is in new zealand, in korea. it is in the u.k. and australia. but that is in english. it is in a lot of countries. it is not in latin america and not in mexico. and the reason is because no spanish language publisher has picked it up and i cannot tell you why. i cannot publish the book, it is copyright, i cannot publish the book myself. that would be really good. we have all sorts of materials that we hand out in our clinic
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that are in spanish language, very specifically because that is the audience that needs it. we worked very hard to make sure that they get the message. the bottom line is, we do not go home with them. they ultimately do what they do. we do the best we can. education has never fixed any substance of abuse. >> thank you very much, dr. lustig. the last comment you made, education not fixing an addiction abuse situation. in a stressful society, sugar serves a role. it is comforting, it triggers dopamine. so i am curious about that. is there any possibility of creating -- if you take something away, what will you
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give them? >> this is like the holy grail. the $64,000 question. if you take something away that gives pleasure, while they search for something else pleasurable instead? could it be that they substitute something even more dangerous in its place? they go back to smoking, they go to cocaine. these are very concerning. these are worrisome issues. i do not know the answer. i do know that something has to be done because we cannot afford health care associated with this. this is an unsustainable model. if you think about what happened with tobacco, let's talk about tobacco for a minute as sort of the flip side. when did smokers die? average age, 64. that is what the actuarial analysis says. the average age was 64. do you know what happens at 64? you pay in to medicare and pay into social security. and you die. and you do not get anything out.
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this is actually a sustainable model. in addition, when you got lung cancer, how long did you have before you were dead? 6 months. how much money could you spend out of your health care dollars in six months of lung cancer? not that much. so, you paid in. you did not get out, and you did not cost society a whole lot. now, we do not smoke. or we have cut down smoking at least by half. so what are we doing instead? addiction transfer. we have chosen an addiction which seems safe, except that it is not. and worse yet, it is causing adolescent type 2 diabetes. and these patients are going to be sick for 20, 30, 40 years before they are dead, and their productivity is going to be nil. and they are going to chew through all of the health care
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resources of this country and they are not going to be productive. they are going to be on the dole, because they will not be able to work. so the question is -- is this a better model than what we had before? what i say is, let's get everybody smoking again. [laughter] i say that tongue-in-cheek. >> you said that education alone would not work, but maybe a pricing policy or something more hard, plus an educational model. >> absolutely. for every substance of abuse, we have needed both personal intervention, which for lack of a better word, we can call rehab, and we need societal intervention which we can call laws. for every substance of abuse, we have needed both. rehab and laws. that is what we had for alcohol
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and nicotine and for cocaine. that is what we have for heroin, etc. for sugar, which meets all the criteria, we have nothing. so the question is, how are we going to do that in order to salvage our health care system? that is the big question. your point is absolutely -- the holy grail. what is going to happen if you reduce sugar consumption? if that is a matter of pleasure. one thing on that subject. do you remember tolerance? down regulation of the dopamine interception? if you reduce consumption, what happens to that dopamine receptors? they go back up. you get more pleasure. we could find a peaceful coexistence with sugar that would ultimately provide the pleasure and still keep our health care costs down. i say the answer to that is
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assuredly yes. >> so what is the nature of pleasure? oxytocin is, how do we substitute goes to create behavioral states. and training that is a societal issue. the anatomy and physiology of medicine but also law. what is responsibility? what is self generation of behavior? from a legal perspective. >> this is the new ethics of health care. is how do you balance personal responsibility against societal needs? and that is i why went to law school was for exactly that. public health law. jacobson v. massachusetts, 1905. there was a pastor in cambridge who refuse to get vaccinated for smallpox. said it was a religious objection. the supreme court said, too bad. you live here, you are getting vaccinated. tough luck. the bottom line is there is a point at which every person responsibility issue becomes a
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public health one. and the question is -- where is the line and what are the legal doctrines that govern the crossing over of that line? i would submit to you that we have surpassed that for this problem. yet we have not enacted any societal interventions that are meaningful to try to fix it. that is what needs to change. >> thank you, dr. lustig. i was wondering if you could speak little bit to other disease in addition to obesity, such as autoimmune disease. >> autoimmune disease is a grab bag. this is being televised, taped. and i am about the science. the science on auto immune disease is very much an open question. so i am a little loathe to tell you how all of this might tie into autoimmune disease, other than to say that people are working on it.
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i am very interested, but i am not willing to go public on it. not until we have hard science. so i'm going to have to beg the question right now. sorry. >> dr. lustig, i just wanted to make one brief comment about the idea of if you are taking something away, what are you giving? if you take away sugar, what is the reward? >> i have never said take it away. >> reduce exposure. >> reduce availability. to a manageable level. i never said take it away. a lot of people say i say that, but i have never said that. do not put words in my mouth. >> if we reduce the exposure to added sugars, in a very small sample size, mostly middle-aged
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midwesterners in the united states, i can say one of the main rewards that these people are getting in a health education program i am running on this topic is reduction, and when you reduce your waistline circumference, people start to notice and you start getting a lot of compliments. and people respond to that. and it keeps them going. i know it is not the only answer, but behavior modification is one piece when people start to be rewarded by observation. and i can speak from being a midwesterner myself and seeing a lot of people in this area of the country and this age group specifically respond very well to that. >> i do not disagree with you at all. my mother had a famous saying -- a minute on your lips, forever on your hips. i got that a long time ago. still, that is the way it goes. the bottom line is -- you can only change your behavior if the
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environment allows for it. when 600,000 food items have 80% adulteration by added sugar, it is awfully hard to change her behavior in a toxic environment. the toxic environment has to improve in order for you to be able to manifest those changes in behavior. that is what i would say. >> and to sustain them over time. that is all, thank you. >> that is all the time we have. i would like to remind you -- rob will stick around a little bit to sign his book. finally, i would like to thank him. >> thank you. [applause] [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute] >> i have a few questions.
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next "washington journal," what to expect from healthcare.gov after a few fixes to the website. scott wilson joins us. onbrings emily etheridge health care exchanges compared to the federal exchange. in recognition of the 150th anniversary of the false claims act, a discussion of the law and dealing with whistleblowers. live at 7 a.m. eastern on c- span. >> george washington has this numbers and experience problem. at the low point he had 3000 troops. success was success at bunker hill. they gave boston, they go to
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canada to recoup, washington said he knew when they were coming back, and that they were coming back to new york, he knew that he could not be them head to head, he had to use espionage and guerrilla warfare, be smarter than them, be able to anticipate them, so it was only logical to bring it to him meeting his own cia. you find out that he has this you just the background. of his way to brush up on those skills. hey, brigadier general scott, there is more that we need to do . find these people to help me out . >> brian k meade on how a little-known spy ring may have saved the revolution, tonight at 9:00 on "afterwards." .n c-span 2 >> next, entrepreneurs in the finance and banking sectors
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speaking out at the annual chicago ideas week on the impact of ideas on their industries. this is an hour and a half. >> ladies and gentlemen, please welcome the founder of tastytrade, tom sosnoff. >> i get to look at a picture of myself. they say you come up after gop. i said what is that? grace of god. a huge discovery. how are you? thank you for coming out today. today. it is going to be an incredible show we have. five amazing speakers, entrepreneurs, interesting people. you will enjoy them. it is all about -- and giving
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the last couple of people a few seconds to come out. my name is tom sosnoff and i have been in the chicago money world for a pretty long time, almost 33 years. i started and built sink or swim and now we have a media company called tastytrade. i'm excited to be here. a little bit different. i have been on the road 13 years talking about financial engagement opportunities empowerment. now, i am talking about the benjamins -- kind of cool. never talked about money before. try to keep it light. i want -- i know everybody wants to have fun. thank you for coming out. some people i know and work with as a people i just met for the first time. an incredible assortment. i hope you enjoy it.
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i would like to start out with a fun little story. when brad called me up and said, would you like to speak at chicago ideas week? i had never done it before and was the first time they asked. i said, what is the topic? they said all about the benjamins. i was like, that sounds interesting. let me figure it out. they said you a grand total of five minutes. ok, cool. my average speech is one hour, 45 minutes. how can i squeeze that into five minutes? even for me, that's a tough one. just to keep it fun and light. a couple of weeks ago, i am getting on a flight. we do eight hours of live programming a day on the internet every single day along
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with live shows. i hop on a plane to go out to arizona. i have a show in scottsdale. there about 1000 people. i've been working since 3:00 or 4:00 in the morning. i get on a plane heading out to arizona, probably 6:00 in the afternoon. i get on the airplane, there's a guy sitting in my seat. i go, that is my seat. the guy looks at me and goes, i was hoping we could maybe negotiate. have you ever been on a plane and somebody asked if you could negotiate? he gets up and looks at me and says, i thought, maybe i could do something for you. i can appear homeless -- [laughter] i am not really, but i appear it. i'm one of a few people that can pull this off. he thinks i got the free upgrade and he can buy the aisle seat. he looks at me and says, it is all about the benjamins.
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this is right after i got this gig. i said this cannot be happening. this would not be the topic of my conversation. he looks at me and the first thing he does, his wallet is full of money but not all american money. he pulled out a $20 bill. i have been trading since 1980. i am used to negotiations as certain arrangements. he pulled out a $20 bill. the whole line is behind me. i look at them, i say uh uh. he pulled out a $50.
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he said, what will it take? a benjamin? i said, you do not have enough money. you do not have enough money. he pointed to my wallet and asked how long -- how much will it take? i said this. this much. he goes, he moves over the seat. the funny thing about this, as we are doing that, i sit down and it was the flight that had directv. we look at the monitor and it has cnbc. i am building a network that competes with other financial networks. that's my biggest nightmare. i am next to a drunken guy from korea who has been on for 24 hours. he looked at me and asked what do i do? the funny thing is, we created a
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show about finance and we gave it to them. the show was on and it is sponsored by sink or swim. i said i work for them even though i do not anymore. he looks at me and goes, that is cool. my bag says sink or swim. he goes on. he is trying to talk to me but i am ignoring him. he said, i cannot believe you do not take the money. he keeps saying, benjamin, benjamin. we are sitting there and he is
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getting antsy. the plane starts to taxi. he started googling me. he shows me his ipad. he said, you prick. i know why you did not take the money. he has a picture of me. he waves down the flight attendant. he has to go to the bathroom. he's threatening to go to the bathroom. all three came. they push a button. they look at me and say, keep your friend in a line. [laughter] or we are going to tell the pilot to go back to the gate. i said i do not know this guy. this guy is smart. he said, we worked together at sink or swim. we have been friends for x number of years. they said we do not care what you are up to. he looked at me and said, you should have taken the benjamin. [applause] that flight got diverted.
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when we finally landed, he said you are a good dude. we have an amazing show. enjoy it and we will be back and forth. it will be great. thank you. [applause] coming up next, we have adam -- are you there? adam erlebacher. he is from a company called simple.com and they are changing the world of online banking to do it yourself banking. [applause] >> i work at a company called simple and i'm excited to be here.
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i am going to talk a little bit about what we are doing at simple. and hopefully leave you with food for thought. how many folks are familiar with simple? wow. any customers? all right. cool. for those who do not know much about simple, let me give you a little background. it replaces your bank with a smarter way. when you sign up for simple, you get a card in the mail.
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this card is attached to an account that is fdic insured. what is different is when you swipe your card, we automatically reorganize all of your transactions in real-time. you can set aside money for things like your cell phone bill or rent or groceries. we show you this number we call safe to spend which is how much money you can safely spend without hurting yourself tomorrow. we spent a lot of time and think about customer experience. try to do things differently and try to make every interaction -- when you sign up, you get in the mail and it's normally a card, it comes in an envelope and you open it up and your card is attached to a white piece of paper with gum and glue. you take it out and you play with it. the rest is horrific. we wanted to do something differently. we have a card carrier that snaps into and have become say minimal wallet.
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we operate in the banking and payments industry which is really, really complicated. it is quite a mess. in order for us to provide the customer experience that we want to provide, you have to rip out lots of the technology that was there before us. the legacy stuff to rip out. to get us the data that we need to build the customer experience that we want to offer. the reason why we do this is because every single year, there are three things that top the
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new york -- new year's resolution. people want to save more and spend less and pay off debt. the big challenge specifically in this country is that the banks fundamentally make money by keeping customers confused. i'm not trying to be overly controversial. maybe a little bit. when the bank's incentives is to make money from overdraft fee and they actually make over 50%, their interest are not aligned with yours. when it comes time to get advice or time to have clean interfaces that allow you to understand how much money you have, it is the bank incentive to charging the overdraft fee -- there's a mismatch of incentives. even if you go outside of your bank to try and find a budgeting
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tool, it is not the best experience either. there are a few reasons. the first is, they rely on third-party data sources. they do not have access to the underlying data. they get it from aggregators that only provide prefilled data for every transaction you make. normally, they will get merchant names and the amount. with that, they have to figure out, how to categorize this transaction? was it the pharmacy transaction, restaurant? merchant names have lots of junk that gets sent on the wire. i have to figure out if it's a
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coffee shop next door or a target and there are usually lots of junk. it is not really their fault because that's the data they get. you have to go back with all your transactions and recategorize. if you ever use any of the tool you are from million. the other thing is they are not real-time. if you are swiping and might have a rent payment coming out, these tools are not good at showing how much money you have. if you are going to the store and if i have money to spend, you do not really know. lastly, it does not solve the underlying problem of banking incentives. they are running on top of that bank experience. how did things get so screwed up? if you look at the payment network, there are lots and lots of different layers. at the core of it, some really old payment technology that got
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it working well and do not break but not the most innovative things. when you strip everything down to the actual metal, money only moves in three ways. it is not like paypal or other innovative services. there are three of them. operated by the federal reserve. it's called fedwire which is real-time service. a large dollar amount and if i send $100 to you, you can send $120 and that full amount is processed. it is a bank to bank network. the national settlement service, also ran by the federal reserve. if i owe you $100 and you owe $120, only the $20 gets sent. they wait for a period of time before they process all of the transactions. it is not real-time and for larger dollar settlements. typically credit card transactions and atm is settled. lastly is chips.
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if you were around in the 1980's, the most stylish and exciting. it is actually the clearinghouse interbank payment service system. this one is a private network and not to the federal reserve. it is run by and operated by the banks. the problem with all of these services is that while they work really, really well, they were not architected to support millions of transactions going between individuals. for the most part, they are not real-time.
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most of the banks that have built technology on top of these networks because the underlying networks were not looking about real-time either. the real-time was not a big deal until mobile devices came around when you go pull it out of your pocket, it estimates how much money you have and transact. now that is something we all want to do and we are handicapped by the old technology that underlies the systems. if you think about your bank experience today, and even earlier, you would walk into the branch. and be able to talk to a teller to get your questions answered. it was not so much of a problem back then, it was a teller mediated experience. the teller you can talk and can help you and interpret what you needs are by going to the belly of the core of the systems that the bank offered.
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that became more and more difficult as banks merged. a huge wave of deregulation and a lot of banks merged. you have a few really large banks and 7000 smaller banks right now. because that merger wave, a lot of the technology had to get integrated. it was a difficult thing to have two screens in front of the teller showing one customer from this bank and one from that bank. they can mediate. when the internet came around, they had to integrate the systems and exposed this crusty old legacy data directly to the customers. that customer was looking at the nastiness with the product of all of these mergers and old technologies. they built a boat but now the
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boat that they built -- that is really, really hard. this quote that evan williams said at the xoxo conference, "it is a giant machine to the people what they want." it resonated with me. when you think about the banking, the banking world is not designed with that in mind right now. people want to pay off debts, they do not have the tools that they need today. this is just something that gets sent to you every single month. this is insanity to me. maybe you guys are way more i financially responsible that me. this drove me insane. the first thing says note. to make sure your register is up to date.
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there's an extra space between additions. [laughter] it is so careless and they cannot get this column of dollars lined up. then, they give you -- step two. it is like filling out an irs form. why does it have to be this hard? computers are really good at adding and subtracting and that sort of thing. at simple, how do we improve this experience?
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we want to start with the customer. what do they want? once you kind of figure that out, the question is, what is the data that we need so that we can build the experience for the customer? what is the required architecture so we can get the data out? like i was saying in the opening, we have to rip out a whole lot of stuff. when you rip out a bunch of stuff, you get to the underlying as exciting and the data you
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need to build something really cool. this is a screenshot of our web experience. we built this with data we are getting directly from our processors. we get the standard feed which gives us 30 different fields. with that, the merchant name, the timestamp, the code whether a restaurant or whatnot, that is problematic and we have to clean that. we code all of the transactions by adding more data onto the data we are getting across the wire. this is just about the experience. we want to make sure customers can engage with their finances and get immediate answers
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without pulling out an excel spreadsheet or spending hours a day. we have a search feature. it actually works and you can search and it returns useful information. we store all of customers' transaction data. it is cheap. it fits in the cloud. banks never thought of this. i am going to search for something. i will search for -- search for dinners. dinners. how do we know it is dinner? we are getting all this great data. if it was between the hours of 6 p.m. and 2:00 a.m. a.m., it was probably dinner. we can show you how much money you spent. if you want to see it on a chart, we can show it to you and you can see what your spending patterns look like. maybe you are spending too much at mcdonald's.
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we are giving the data to form your decision-making. you can make those trade-offs and understand what they look like. you can get fancier. how much did i spend on dinner this year? we understand the search and we will show you what you are spending. money drop is another feature we recently announced. it is not yet available. it allows you to transfer money to a friend. it's a lot like cash. take your thumb and transfer the money. you drop money on their face. [laughter] it is like the most fun you'll ever have paying somebody back. that is really what i wanted to share with you today about simple. i would just say that if you're looking at an industry that is really complicated, that is where the opportunity lies. health care, finance, banking, these are complex industries and
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are screaming out for help. if i could leave you with one thing, seek out the complexity and simplify it. [applause] >> all right. i'm not very good at listening to other people. i am used to talking. it is kind of weird. next up is alex mittal. let's go. this will be fun. from the funders club. how are you? >> no more plane stories. >> i met him for the first time. we had a chat and it was good. tell everybody what you do. >> we are the world's first venture on my capital firm. i saw some common themes with our last speaker in the sense that we were taken on industry that hasn't changed in decades. any founders in the audience who have raised capital afford? was it an enjoyable process? [laughter] it is incredible, but the entire financial underpinnings of growth in economy is decades old.
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we realize that. we have set out to say what would venture investing look like if they were invented in 2013 if it was approached from a user experience point of view? what do people really want? how do you make it less friction in this experience? >> i have started a couple of companies. we do not know what raising capital was all about. we had no idea that they're supposed to be a process. it is only the last couple of years that i've learned that there was a process you are supposed to follow. i just went out and kept bugging people until they give you as much dollars as you needed. you have commoditized it for small companies. we get on average a couple of hundred e-mails a year that say hey, i have got a great idea. how do i get started? >> that touches on one of the key problems we saw that exist
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today. if you are out there raising capital, what are you not doing? you're not talking to your users or your customers. we are not building your product or services. fundraising becomes a huge process come a huge effort. it is a process. to break it down and make it real for you and give you a sense, while you're barely keeping your head above water as it is, you are also willing to meet with groups such as angel groups or vc firms. you sit in a room and they ask questions and you say thank you very much. you have a little side conversation.
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you get all of the checks together. if you're lucky, you are able to wrap it up and keep going. clearly, that is not how founders would design experience. i started a couple of companies. i have raised $30 million of venture capital. it really opened my eyes to the good and the bad that was out there. >> there was a take away.
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to a certain extent, i'm an angel investor. a lot of people come to me and say, will you invest in the company? i know i want to invest in this person. i like the idea. our -- i will invest x if you get a certain number. if you get half of the order filled, i will take the next 10%. i do not know how else to get a deal on my own. i think what you guys do is make that process.
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you do a lot of the editing work for us -- betting work for us. >> i went on to become a start up investor with my c-founders. his core initial issue was knowing what to invest in and understanding how to do due diligence on opportunities. what is quite shocking is in this country today, there are 10 million credit investors. these are people who have high net worth and are legally allowed to invest in startups. if you are not high net worth, if you're not -- that is for another panel and topic. of the 10 million people, only 250,000 of them, something like 5% -- the reasons are partly for what you are talking about. we are trying to increase the level of transparency and lower the bar and review opportunities and understand and have a group that is not reliant just on your own ability to bet a deal. >> i also think as an investor, one of the things that you do, if i want an investment, i have to go through a private equity firm. i have to select a private equity firm and a have to trust their pick. from that point, go forward and make a decision.
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i can do that through your site. what is the minimum? >> i will address what you are saying. the venture capital industry as a whole is a quite humbling -- on average, vc funds do not return capital to investors. >> are you allowed to say that? >> i'm happy to share the facts. because of that, clearly they are being paid. a lot of people are asking, hey, if i am paying capital and they're not making a return on my capital, maybe i should deploy it myself. it is sort of in the way there are investors who pick certain strategies or even specific stocks in the public markets. we make that possible. that is a very dramatic difference.
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there are so few angel investors or investors to invest in startups. the minimum to invest are really high. it is like $25,000 or $50,000 or $100,000 at the seed stage. if you're putting capital in one company for one year, it is probably not a sound or diversified portfolio strategy. how can we slice and dice that though there is an entity that can be the investor who is supplying a large amount of capital, but where individuals can provide a figure it at a time. >> you see so many companies. you have invested in 50 or 60
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companies. >> 51. >> that is only last summer. talk about some of the deals you have seen at early stages that makes this whole exercise really exciting for you. >> sure. the reason we created this in the first place is because we truly believe that there is so much potential out there in the world for people to get involved and start new things. there really isn't as much capital out there to support efforts as there could be. only 5% of people who could start startups, if you could get enter entrepreneurs to try -- if does come it would be half $1
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trillion in the u.s. a year. we do not pick favorites. they are all wonderful. some are more interesting. there is a company that is mobilizing gesture motion input. the mouse and touchscreen and keyboard, they have created a device that you wear and it reads your muscle signals. it knows before you even move your muscles what you're going to do with your fingers. >> that is what i need. [laughter]
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>> riding around and looking like -- [laughter] >> ideas like that are making accounting more understandable that plugs into all of your banking systems, checking accounts, savings accounts, etc. and rather than working with quickbooks and give your updated balance sheet -- everything in between. >> in order to change and transition and industry, you have to be transparent and make their products available to a lot more people.
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it sounds to me this idea that american investors, consumer investors and even credit investors, have the strive for mediocrity. we are happy with average because we do not lose. it supports everything we have said about the returns. is what you are doing going to change that entire approach to investing in startups? it does not necessarily hey, i'm doing this or taking a free shot.
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>> i truly think so. on the check size front, when you used to be employing $50,000, that is a gamble. still pick and choose, but diversify. spread across just like professional investor professionals have portfolios. once you start to enable diversification, you are able to mitigate risk. we're not proposing that people spend their life savings. because of that, it is more for diversification. >> define high-risk? >> you could lose all of your money. [laughter] >> where are you going? what is the statistical chance? >> there are at least 4000 startups in the u.s. seeking capital. there is no way that 4000 merits that capital within that time. as an investor, you have to be careful of where you are putting your money towards. the aggregate trends say it is something like one in 10 will
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eventually be there 10 years later. it do something like that. it is a fraction. >> is this the new frontier? when i got to chicago in 1980, the new frontier was the markets exploding because you had all of this derivative marketplace. that was the new frontier. is this the new frontier? are the new frontier startups able to acquire capital and make it more mechanical than it has been for the last four or five years? >> i should point out that my advice to entrepreneurs is not to raise money if you don't have to. get product market before you got there. >> my advice is exactly the opposite. take as much money as you can get if anyone is willing to give
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it to you. [laughter] because when you need money, you can get it. we don't need money, everyone wants to give you money. >> you should've taken the money. >> always. the way i think it is the new frontier is it is not like the new wild west and it is such fun. it brings the concept of startups investing and creating more of a dialogue. there are people here. they're trying to change the system. you are bringing 10 million people in the u.s. alone who have never been able to. how many of those do? that remains to be seen. it is raising the profile around
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this entire group of companies. >> individual investor does not have an opportunity anymore to really invest in companies when they are first starting out like twitter or facebook. we were going up in the same era. we could invest in apple. >> and the ipo is sort of high growth. and facebook with their ipo -- that would have been unheard of 10 years ago. the changes that have occurred are creating this pressure from regular investors who used to be able to participate in that innovation and value creation on the public market. there are not many mechanisms to participate in what they used to be able to. >> alex has built an incredible company. it is an awesome site. you should check it out. >> thanks. [applause] >> i will need that sometime. alright. coming up next, we have two amazing women that i have had the pleasure of working side-by-
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side with for the last decade. first up is christie. the cfo of a company. they asked me to recommend some people in finance and technology. i did not go further than our own backyard. she is now the ceo of dough.com. you introduce to you the next generation of finance on the local platform. hey, kristi. >> hey. [applause] >> thank you. thank you for coming out. as tom said, i am the ceo of dough. in my background, i came from sink or swim. i have 20 years of experience in around the trading industry. i would say that these last two years, i have been in financial media.

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