sydney. john: washington is a swamp because insiders use their clout to rig the system. >> i need a bailout. john: those who want to compete with the actual entrepreneur said they get politicians to ban competition. but even entrepreneurs get handouts. $500 million from the government from tesla and 500 million for
spacex. fortunately there are people fighting against the cronies. >> drain the swamp. john: will present a swamp drained the swamp and fight the cronies? that's our show, tonight. >> and now, john stossel. john: when donald trump talks about the swamp of washington is talking about self-dealing between washington insiders and the politically connected. that comes in many forms. the optic high wall street movement was angry because as they see it wa enables corporate greed. [chanting] corporate greed has got to go. john: corporate welfare, that's a different point those protesters have a lot of silly ideas but they are right to
complain about welfare for corporations. after the housing bubble bursts, banks got real doubts with your money. they paid it back but it might not have been paid back and it might not be next time. when big business goes to washington to partner with politicians it really means they seek privilege is from government. subsidies and rules that make it tougher for competitors -- competitors. the result? >> americans understand the bailouts are bad. they want the swamp drained but if you understand much of government that they like ads to the problem. this picture of an iceberg explains it pretty well. bailouts are visible but just as damaging our regulations, subsidies, the expectation of bailouts, loan guarantees, protectionism.
protectionism, donald trump is going to add to that. all of these things are part of the washington swamp that strangles real entrepreneurs. jeff deist says few people understand how bank regulation helps big thanks at the expense of little people. they think it's punishing the big banks and the banks whine about it. >> appointive dodd-frank was to take this contagion and big banks and say let's have a process to break them up if this ever happens again so we don't have to worry about another bank failure. john: that they have gotten bigger since. they haven't broken anybody up. >> we have now the system were too big to fail has gotten edgar and smaller banks that say under a billion dollars capitalization are disappearing at a rate of one or war just since 2008. there has been no new small banks in the country. john: explain that. the idea dodd-frank is to protect us but the best protection is diversification and a diverse economy.
lots of small banks making their own decisions. you would think dodd-frank would watch for the big tanks. why did he kill off small banks? >> is the same regulations across-the-board in banks of all sizes. john: your bank says we can afford to figure this out. >> absolutely one or two compliance officers can be the difference between profitability. john: a much more clear example is something called the export-import bank. >> the government take some of your dollars and most of the companies and government in other countries. it's called the export-import bank. it's a great way for washington to give out favors to companies. good old cronyism. john: a few companies is right. most of the money goes to just a few big companies boeing caterpillar in ge. some principled republicans move to kill this and almost did.
>> they almost did. spin table. it's probably going to be rather rise. john: they can kill anything? >> here's the thing why should taxpayers be on the hook to help the state-owned airline in ethiopia by airplanes from boeing. who decides whether boeing gets a subsidy and who decides whether ge or caterpillar who decides whether ford or chevy could get a? it politicizes the economy and that's a dangerous. john: i ask you on social media what is the worst crania -- cronies and you have. sean says the pharmaceutical industry. price-gouging so nobody can enter and compete. he is right. >> it not that nobody ca compete. it's the fda has total power over which products will not be allowed and to get a new drug or device takes 10 years, billion dollars. that limits competition to the few. recently people got mad because the cost of epinephrine pence
have increased from $100 to $600 each. >> that's because of the psyche price of epi-pens. >> a dramatic price increase for a lifesaving medication. john: why would a company get away with charging so much more so suddenly? >> because it has no real competition. other epinephrine pence were rejected. competitors want to come out with a similar product to invest money for this huge amount of uncertainty whether they will pass inspection and whether they will potentially infringe on my lan's patent so there's a double whammy of overcome the patent system and i would call that cronyism, government decided to winds and loses in an industry. john: and it's an invitation for sleazy dealings for the company instead of focusing on making a superior product to focus on making friends in washington and we will never know what happened with the epi-pen and why the competitors were pushed out but it's interesting that the ceo of
the company who paid herself $19 million is the daughter of a u.s. senator. >> it is interesting that this is a moment where you have both trump people and sanders people starting to come together on these arrangements and there's a lot of anti-f. d a. sentiment not there on the left and right. john: nobody wants to get rid of the fda. they are just saying what more competition happen. >> job i don't want to get rid of the fda. john: none of these politicians are willing to go that far. >> we have have to understand as one grows the other gross and to be clear to the audience we are saying let's get rid of the fta we are not saying let all kinds of perks poison you. we are saying market business would do it better like underwriters laboratory or consumer reports. i wouldn't take a pill unless it's gotten approval from one of those organizations. >> marketplaces the rail
regulator including what should have been allowed to happen with the bankruptcy and liquidation process. john: let them go bankrupt in the banks have made smart ones would do well and the idiots who got bailed out would be even bigger today. >> that's the difference between free-market capitalism. please stay listeners upside for the parties involved and no downside in real capitalism there spoke. john: thank you jeff deist. it's probably misleading to call washington is swamp because well most of it doesn't look like one. >> you can really see when you get to the top. john: are lots of expensive homes here. >> a beautiful gourmet kitchen, a culinary delight. john: skylit. today for the first time most of the richest counties in america surround washington d.c..
two people know more about how they got rich than peter schweitzer the author of printing cache the book that exposed many of the clinton foundation sleazy dealings. so i feel sorry for you. your book was going to be big for four years and now she is not elected. nobody cares anymore. >> people care. washington d.c. is a target rich environment as far as exposing cronyism and corruption. never-ending source unfortunately of those kinds of stories in that kind of information. john: than let's show some more pictures that show how much money as is sloshing around the washington swamp. washington, once a sleepy part-time home for politicians now resembles versailles. powerbrokers work in buildings that look like palaces and after work they go home to castles. >> it all helps one understand why people spend millions to win
jobs here and then. >> once people come to d.c. they never leave. john: that was the realtor selling houses and why should they leave when they can make so much money off of us? peter, it didn't used to be this way when washington was smaller. >> washington d.c. has changed. it's become a place of wealth creation off of government. it's not producing a whole lot but you also see a lot of corporations and companies now john that are locating there because they see the advantage of being close to the seat of power and getting favors from the federal government. it's a very rich city and now it's the wealthiest city in the united states which to me is very troubling. john: president-elect trump says he will not allow his staff or lobby for five years after they leave the executive branch and he will propose up to a five-year ban on lobbying former members of congress and their staff. >> i think it's a great start.
his pledge to drain the swamp to the problem is, it's a pledge. they are basically making a promise in washington d.c. unfortunately a lot of promises get broken all the time so it has at this point no force of law. john: after writing clinton cashier came up with your own reform plan and i will rather quickly. one, lifetime bans on lobbying for members of congress and their families. bank robbers and from taking any donations from defense contractors and lobbying firms. three, no campaign contributions while congress is in session. this sounds good but i'm skeptical and i wonder how fair is that because as government has grown and grown more evil in many ways you are right to talk back if you are company and say please don't put us out of business. this law will kill us. it kind of depends on having access to congress.
>> e i mean look the ultimate solution of cronyism is to shrink the size and scope of government but hopefully that will happen someday. i don't think it's going to happen anytime soon. if you talk to most corporations , not all but most corporations in silicon valley and elsewhere they would rather not have to hire lobbyists. they would rather not have to make campaign contributions. they feel like they need to any sense because because it's more like extortion then it is rivalry. politicians are creating a demand for their services by creating laws or circumstances that in a sense force corporations to make campaign contributions and hire lobbyists. my reform is not a silver bullet in and it doesn't fix everything but i think it would disrupt this influence marker place in washington d.c. and change the dynamics in a positive way. john: i suspect one government is that big people would ban family members. people would get divorced just so they could go back to lobbying.
you pointed out something called tax extenders and a good example of how the system works. >> a great example is the tax deduction or tax credit the corporations get for investing in research and development. this is a good thing and encourage his innovation by american corporations. it's been on the books since the reagan administration that he gets react to every couple of years. why is it not permanent? why is congress not making a permanent? if they made a permanent they would not have a reason to get major corporations to give the money every time it's up for renewal so it's kind of a hostage situation. we are going to stand up for a couple of years for two years and now we are going to come back to you asking for donations so we will pass this again for another two years and we can redo it all again. that's the kind of craziness you get with this kind of business model of crony capitalism by politicians. john: some people pour more money into this one.
thank you peter schweitzer. coming up for the green creature better known as elon musk. why is he a rock star savior? he. >> is the crony capitalists who pays up democrats. next, the military swamp. what does a fighter plane costs? >> they don't come cheap. the helmets alone cost hundreds of thousands of dollars each.
wow, x1 has netflix? hey, drop a beat. ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, marseille, the fall ♪ ♪ in the same place as my basketball? ♪ ♪ narcos, fearless, cooked ♪ the crown, marco polo, lost and found ♪ ♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. anything with a screen is a tv. us 40,000 on demand tv shows and movies, all on the go. you can even download from your x1 dvr and watch it offline. only xfinity gives you more to stream to any screen.
download the xfinity tv app today. >> guard against the acquisition of unwarranted influence whether sought or unsought by the military industrial complex. john: the military industrial complex. eisenhower said this 50 years ago. it's much bigger now. defense spending is a massive swamp of wasting cronyism because the bureaucracy paid in there just a few suppliers. 20 years ago the defense department agreed to by 2000 new fighter planes from lockheed-martin called f-35's. >> muster heading to the airport and they don't come cheap to the helmets alone cost hundreds of thousands of dollars each. the pentagon says the f-35 is a top dod priority. john: that's fox's lea gabrielle
she knows a lot about fighter planes began she is to fly them in the navy. when you were a pilot you saw plenty of ways. >> at the end of each fiscal year they send us all out to fly for example virginia beach to pick up lobsters and fly home. i flew to san francisco and back in the reason they do this is because if we didn't burn our gas the money we were given for gas for that year we wouldn't get as much the next year and that comes down to congress. that's because of the act. john: use it or lose it. >> there's no incentive to save that money for something different or give it back to the government. we have to use it or read to lose it. john: let's return to that fighter plane. congress first ordered years ago. >> the development of stretch to 15 years at costs of more than doubled from original estimates. john: despite the double cost the f-35 still has lots of
problems. >> they have problems with maintenance diagnostic software sensor fusion shortfalls fuel system problems. john mackey goes on and on but he still wants the plane as do you. >> yes. the talk about john mccain for a minute. he spent five years in a p.o.w. camp because he got shot down by a surface to air missile. this is a man understands why we need the pilots have the best technology possible. we send our sons and daughters and the combating wants to make sure we have the first look and to get the first look to get the first kill. as with the f-35 does. the visionary airplane of the future that basically takes sensors and puts the entire picture together and are helmets. john: its waiver budget and has all these problems maintenance diagnostic software. do you assume this will get solved if they spend enough money? >> it was this big. my computer was this big and now my computer is like an iphone.
john: this plane keeps getting more expensive. >> technology is changing we have to continue to work with what we developed to make this the best aircraft that's ever been belt. it's visionary and people equated to having an internet in the sky that brings the battle space into one picture wherever one can share it but it does cost money. we have to have equipment that's going to give our fighter pilots and our soldiers in air men and sailors the absolute stecality. john: what makes you think the bureaucracy is going to get there? >> i agree the military has to be better about how they spend in their ways to do that. kimmie teacher contractors to negotiate better? yes. can we teach the managers of these programs to manage better? yes but we need to put more pressure on congress to do a better job of appropriating money and writing laws that actually incentivize. john: people it said this for years and never happens and not trump wants to spend much more on the military.
>> i don't think you can equate spending more on the military with more waste because we are becoming a more complex and dangerous world. john: what about when congress buys things for the military that the military doesn't want? this happened with the abrams tank. >> congressmen and women want to keep the jobs in their districts and keep the money going into the local economy. they want to be reelected. john: the army says we do want this tank so you are going to have it anyway because it's built in ohio. >> we will give me the f-18 and it comes down to the parts. john: thank you. coming up people to fight the crony's biggest they're angry about what cronyism does. >> it's criminal to make them pay more for food. john: up next the cronies attack great innovation. >> they think they know how to
>> this is the government thinking that they know how to run a ridesharing business better than the two most successful ridesharing businesses in the world. john: she said she's a dissenting politician austin texas where bureaucrats ran ridesharing companies out of town. my mayor in new york city tried but failed. >> what we have agreed to is the limit we needed so we could make sense of a complicated situation. john: such a weasley hustler. politicians routinely don't like new ideas and they really don't like new ideas that compete with people who give them money. in this case the regulated taxi business. uber is largely one but it's an
ongoing battle. author of uber posits a consumer's benefit is the politicians move in new companies when an and that's jared meyer. but the politicians are supposed to be there for the public interest. they are supposed to but when you have their private interest in the case of maher de blasio getting half a million dollars from the tax industry and they stand up at a news conference and say this about uber. >> they are looking out for their corporate bottom line. they're putting their profits overall the considerations. john: yeah that's what businesses tend to do and says they can can't make a profit unless they serve their customers well pursuing profit is better consumer protection than the mayor will ever be. >> uber was clever about fighting the mayor. if you clicked de blasio option you were told you might have to wait forever for a card.
lots of uber customers complained and the mayor caved in. fossa politicians have tried to kill a uber but most fail. one big city however did force a uber out, austin texas even after the police chief testified what her people. >> the worst that could happen would be to lose 10,000 options for our citizens. [applause] john: they applaud that they lost and uber and austin band uber so what's happening in austin? >> it's chaos especially after football games. the city is and what you're seeing is austin put the cap on the number of cabs the conservative city. austin is only 900 and the city that has most bars per-capita downtown, you are not trying to get 900 the road to get home all the drunk partiers every night.
that's not going to work and it's sadly going to lead to real consequences for people driving under the influence and unfortunately dying from this decision. john: it's not like these don't exist. there are all these new businesses ride off's's and instaride get me ride get me aunt they have facebook ridesharing group with 8000 people. >> i was just down in austin and i had to take a taxi because i could not find a single ridesharing app that would work. it's a nonprofit. take away the profit motive and try do a charity in the customer service starts to suffer. we need uber and lyft to be operating or other private companies that care about making a profit. more portable rides more transportation more dynamic for higher vehicle market.
it's insane that the politicians get in the way. the uber can beat them because uber was successful immediately. they didn't have a big infrastructure. all they had was an app to put on the phone and they had a billion dollars and a million customers so they could fight maher de blasio but i feel sorry for audio the businesses. what if you're trying to start a chemical plant or a nuclear power plant or bring a new drug to market? you can't do anything anything unless to get permission first. >> it's great to see companies like uber outsmarting regulators innovating around their own regulations but i do just like you feel for the other entrepreneurs who work in a more regulated sector that they don't have a luxury that uber was able to have. john: we don't know what innovations we have missed. thanks to the internet people can share more than car services. they share apartments like an air bnb.
dianne feinstein said those companies are operating illegally. protesters had invaded every be claiming an air bnb deprives them of cheap apartments. [chanting] they are arguing that the landlords are renting to people through a b&b and therefore housing prices are higher and it shouldn't be allowed? >> that's the argument that the number show a completely different story and before we start or want point out that senator feinstein doesn't have a multi-million dollar hotel chain so everything she says should be taken with a grain of salt. john: that's the swamp. >> that's part of the swamp but one thing or look at what they are b&b -- john: i have to believe it's not just about the money for her comments about the hotel unions the issues of them at that and the unions on the democrats.
>> you see hotel chains going to conferences tied about how they care about affordability and affordable housing. if anything you could make the same argument for hotels. rental properties or affordable housing off the market yet you don't hear people making those connections. there's an alliance between the hotels, their union and the affordable housing advocates. john: thank you jared meyer of the manhattan institute. next, the incredible awesomeness of elon musk. if he is so awesome why does he need so much taxpayer money? >> $500 million from the government
the alignment government gives the green technology handouts. >> by better value for tesla. snake it provides collector hookups at the tennessee truck stop. john: washington doles the money up if they want to save the environment by supporting green energy. but how do they know which energy company will do something good? the obama administration had a billion dollars to these companies which later filed for bank c.. with taxpayers paying for them. even my colleagues on the left are distressed by that. >> clearly it looks like the in the deal as a taxpayer. john: as usual. of course not every loan recipient failed through tesla motors got a loan and tesla is booming. tesla was founded by elon musk and the media loved musk. rock star savior, the incredible awesomeness of elon musk.
why elon musk is my hero. but he is not my hero because lots of his money came from us taxpayers. i think he is a crony capitalist but an economics professor i respect says i'm wrong. he is a freeloader. >> john i love you but i think you are wrong on this. there are certain things that they get tax waivers on that other companies don't get that we have too differentiated tax waiver with a subsidy. when people say oh they got $5 million if you look into it a lot of it is nevada promising not to tax certain things for a few years or in other cases the customers can wave, lower their income taxes. these are not subsidies. they are not a direct subsidy for tesla got a $4.9 billion loan from the government. >> it's all wrong. they did get a half a billion
dollar loan but they paid it back so here we have a small amount of subsidy in terms of -- john: why should they get any? why shouldn't government treat everybody the same? >> i totally agree with you on this but given their taxes in the world i don't see why it's wrong for a company like tesla to pursue jurisdiction and to sell products that have lower tax rates than other people. john: i don't blame them for doing it. i wish they put their energy into improving the car rather than money out of washington but tesla's are expensive to in california they get a 7000-dollar tax credit from the fed and another 2500 from california. the cheapest tesla is $66,000. this is welfare for the rich. >> is like a mortgage interest induction. you get to lower your taxes. john: richer people have more. >> banks are giving out mortgages helping people lower
their total tax burden. just because they're helping people lower their tax burden i don't think we should be calling them a crony. they are not drawing money from projects of the government. they are simply letting people lower the taxes. that's not cronyism. john: in fairness to musk i should point out spacex the rocket ship company charges five times less for satellite for competitors in the government. >> my understanding is they rely more on government contracts than tesla does that still you see private enterprise doing something that we assume has to be done by nasa. 94% qualifies as great. i will give them an a may be an a. john: the left will never give up on subsidies for their favorite causes. here is juan williams on special report. >> there has to be a role for government in alternative energy. you look at germany and look at
china and brazil, they are all investing in the alternative energy. >> i'm totally on board. there should not be government picking winners and losers especially in industry but even without government picking winners and losers we would still see this company being successful. the amount of value-added of tesla is phenomenal and they are not doing it on taxpayer's dime. john: i will keep an open mind about tesla but juan says these open subsidies germany and many these companies have now figured out oh my goodness electricity cost so much and they are cutting back on the subsidies while we keep them going. >> i think subsidies in general are a disaster. their take money out of the productive or of the economy subsidizing things that wouldn't be produced in the marketplace but if you see a company that is successful that most of its money is coming from the private sector, that's good.
we also see them facing -- if you are a restaurant and you sell some of your meals to a government official who all of a sudden we consider you a bad guy? i think we need to look at what they survive on the free market and if the answer is yes we should be giving them a big pat on the back. john: okay, that is edward stringham's opinion. next this woman just $125,000 which you will use to fight cronyism that hurts poor people. >> we go to use the money to
john: that woman is trying to win $25,000 by a six minute pitch convincing these judges that she is a project worth funding. her project aims to get rid of rules in her country in indonesia rose that raise the cost of food. >> i buy rise for $30 in chicken or fish for $35. when i come home all i have left is $30. john: she works in the libertarian think tank in indonesia.
>> she came to america because it was a non-profit that promotes freedom around the world held a shark tank like contest for international think tanks. alice gets $25,000 every year to the best idea. when one think tanks entered the contest. a panel of illiterate judges chose the winner and this year they chose her. >> this is amazing. why is it so expensive and indignation at? indonesia is even more for crony invested swamp in america. >> you would have a special license. to get that license you would have to be a state-owned enterprise and once you do get that license you would have to wait for the president literally to tell you how much quality can import. john: glad that doesn't happen in america, accepted does.
>> i give to everybody. when a i call i get then you know what when i need something from them two years later, three years later i called them and they are there for me. it's a broken system. >> would you get from hillary get from hillary clinton and nancy pelosi? >> with hillary clinton i said get my wedding and she came to my wedding. she had no choice because i gave to a foundation. john: so sleazy. still cronyism is worth in other countries and that's why the atlas hosted the competition. it's important to spread these ideas around the world. >> definitely. these are universal values. they are not american values. we believe everyone deserves liberty and it's fantastic that so many organizations that embrace this mission. john: why did she win? >> she represents our partner in indonesia and pinpointed its an amazing opportunity to lift 25 million families out of poverty.
$6 billion annually for the sector. our judges ate it up saying it's an amazing investment. john: she won because she had an idea that would bring a return on investment. >> there's a lot of work to be done to make sure all goes according to plan and the opportunity to make this happen in indonesia. john: is the fifth time you posted this competition. whether ideas worked? >> the first that was really memorable is won by a group called the taxpayers alliance and they had this idea of fighting against what's called the beer tax which was scheduled for a regular increase. they use the prize money to produce thousands upon thousands of what they called coasters to you and i. john: we have a picture up there. buying around? don't forget one for the tax
man. sin when they did the math they realize every time you were in a pub fined two pints attacks on it and you could have had a third that in fact that has gone to some bureaucrat so that was able to create a public moment to to make it's a scheduled increase in the beer tax and it went down a little bit after the big campaign where they got some of the british tabloids to come on board an amplified the message. a little project on a shoestring budget means more beer for british taxpayers in the less money for bureaucrats. it's a big win. john: and these think tanks in how many countries? >> 96 now. john: and you get a sense that liberty is winning? >> there are some places where we have seen some exciting come to fruition a lot of energy among young libertarians in brazil. they have toppled the government so there is some good signs that
things are moving in a positive direction. this nice feel like the berlin wall is coming down but a lot of partners are getting rid of little regulations that prevent entrepreneurs from creating well and that's how you create prosperity. john: let's do it here. thank you brad lips. next, politicians and lobbyists get so cozy. candidates always promised they will change the culture but they don't. i promise it's not going to happen to me.
>> drain the swamp. [applause] john: president-elect trump says he is uniquely qualified to drain the swamp and washington's cronyism because he understands how it works. other politicians promise to change the culture that once they get to d.c. they decide they like it. >> they got to washington and something happened. i promise it's not going to happen to me. john: i want to believe it but even if he's an utterly principled man do you believe that? but assuming he is, it's tough for anyone to constantly say no to people. if you are politician people ask you for money all day.
i need a grant for my charity. we do so much good. my business needs a subsidy. we employ lots of people. we don't want to fire them. almost no one bothers to go to washington to answer spending cuts. the congressional hearings, 99% of the testimonies from people who want more stuff. these insurance company lobbies want more government guaranteed flood insurance. her career may depend on lobbyists. our care roe wasn't allowed into here that talk. maybe that congressman made a mistake by meeting with lobbyists because this election she lost her seat to another republican in the primary candidate who promises on his web site elected officials need to have courage to say no to special interests and to lobby for subsidies. really? people will vote for that?
may be the crony culture is changing and maybe donald trump will change things. but i doubt it is even the worst parts of the swamp like dodd-frank and the consumer financial protection board have a constituency scads of lobbyists who make money off of those laws. they will fight tooth and nail to keep them. solyndra got half a billion dollars from president obama. with government handing out subsidies like that is well worth it for companies to invest in lobbyists and fixers who dive into the swamp but for taxpayers it only cost each of us a couple of bucks. to then go to washington to bonk your congressman a few bucks? probably not. >> i guess this is just another lost cause. john: draining the swamp may be a lost cause. thomas jefferson said as the natural progress of things for liberty to yield and government
to grow. i want to believe donald trump rally says this. >> drain the swamp. john: draining that swamp means killing things like the abrams tank. there are more than 500 subcontractors based in lots of states who are helping to build the tanks and dozens of senators and congressmen who will fight for their constituents. likewise draining the swamp means killing dodd-frank and obamacare. will they kill these? every word in here has a special friend, a lobbyist for 20 of them who will defend it, who will fight hard to make sure everything in here stays the same. good luck getting rid of this mr. president. i hope you will succeed. but i won't bet on it. that's our show.
see you next week. good night from new york. kennedy: donald trump ripping democrats for refusing to let obamacare go and calling their senate leader a clown. we'll break down state senate hearings on the hacks. i'll talk to director peter berg on his film about the boston marathon bombings. tomorrow president obama officially gives his two weeks notice and what a glorious 8 years it's been. just ask him. a presidency that started with