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Confessions of a Media Maverick: Exposing Hucksters, Cheats and Scam Artists
January 30, 2004
||President, The Independent Institute
Good evening, ladies and gentlemen. My name is David Theroux, and I am the founder and president of the Independent Institute. I am delighted to welcome you to our Independent Policy Forum. The Independent Policy Forum is a regular series of lectures, seminars, debates, and panel discussions held here by the Independent Institute, in our conference center, in Oakland, California. Our program today is entitled, Confessions of a Media Maverick: Exposing Hucksters, Cheats and Scam Artists, with journalist, John Stossel, author of the new book, Give Me Break.
For those of you here who may be new to the Independent Institute, you can find information on our program in your registration packet. To provide some background, the Independent Institute is a non-profit, scholarly, public-policy research organization that sponsors in-depth studies on major social and economic issues. The Institutes program adheres to the highest standards of independent inquiry and is pursued regardless of political or social biases. Please also visit our website at Independent.org for further information on our many research, publication, conference, and media programs. For example, on the website, you can read or listen to the programs at past Institute events, and get information on Institute books and other publications, including our quarterly journal, The Independent Review. This is the current issue, and each issue features the very best analysis of economic and social issues.
Also in your packets and on our web site, you will find information on our forthcoming Institute event. This coming Wednesday, February 4th, we will be holding a special seminar entitled The Voluntary City: Restoring Urban Life in Crisis Times, featuring economists Fred Foldvary and Daniel Klein of Santa Clara University and Peter Gordon of the University of Southern California. Now about tonights program.
In his 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, Charles McKay recounts astounding tails of people caught up fervently in myths, phobias, legends and witch-hunts of stunning impact. In the preface to the book, McKay remarks that any proper treatment of this subject would probably run to over 500 volumes, not including religious-based manias. But perhaps modern men and women are not so immune from such foolish and disastrous manias, especially regarding government and politics.
As the great journalist and author H. L. Mencken stated, The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary. This past year for example, we have witnessed the most powerful government in the history of the world launch a pre-emptive war against, and now occupation of, an impoverished Mideast country based on entirely false claims of dire threat. The American public religiously has believed in the claims made by Washington officials, and even today most people still believe that Saddam Hussein was directly responsible for the tragedy of 9/11. And since 9/11, there has been the largest explosion in government power in 40 years, especially in non-defense areas, as politicians take full advantage of a frightened American public. Truth indeed is the first casualty of war and war is the health of the state.
When John Stossel joined ABC-TVs 20/20 in 1981, his peers and an admiring public hailed him as a crusading consumer reporter. His hard-hitting exposés of con artists, corporate liars and crooks won him 19 Emmys and an avid following. But, along the way, he began wondering whether he was missing a far bigger story of scandal, intrigue and foolishness. While so many reporters were focusing on threats from business fraud and championing expanded government power as the solution, John began asking whether such power, and the Nanny State itself, might be one of the biggest scams of all. People from William Bennett to Ralph Nader plead for ever-greater power for government officials as if police powers were somehow saintly, objective and enlightened. The result is truly staggering regarding government waste and incompetence, systemic fraud, welfare for the rich, victimless crimes, and a political culture that demonizes the innocent and exalts an ignorant yet sanctimonious authoritarianism.
In his new book, Give Me a Break, and in the fine tradition of Charles McKay, John Stossel takes on a herd of sacred cows and examines whether in the name of the public interest, politicians and bureaucrats, reporters, scare-mongers, special interests, and predatory lawyers all contribute to the modern phobias, myths, legends and witch-hunts that make life worse, especially for those most disadvantaged.
Our speaker this evening is well known as the co-host of ABCs weekly TV program, 20/20, and the top-rated John Stossel Specials. John has been honored five times for excellence in consumer reporting by the National Press Club, and he is the recipient of the George Polk Award and the George Foster Peabody Award.
Please join me in welcoming John Stossel.
Confessions and Confusions
Im a libertarian, and I find that libertarians hate the subtitle to this book. Im not crazy about it myself, but I trust that my publisher, being smarter than I in book marketing, knows what theyre doing. How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media. Libertarians tend to hate it, because the implication is that this is another one of those conservative books. In fact, I think the book editor couldnt tell the difference. And they think conservative books sell.
But its also interesting because there are some books out now by people of the left who talk about how theres no liberal media. And they are quite serious. And one of the examples they give is ABC. They have these conservatives, George Will and John Stossel, and Stossel isnt even described as a columnist. He does regular reporting and anchoring too. How terrible! And they do consider me a conservative.
Now, I happen to think that homosexuality is perfectly natural. I think the drug war is a mistake, that prostitution should be legal, that you ought to be able to burn a flag if you want to, and that some abortions should be legal. Im against going into Iraq. And they call me a conservative. [Laughter] This says more about the mainstream culture than about me. Why do they call me a conservative? I mean, real conservatives should be insulted, and they probably are. [Laughter] Why do they call me conservative? Because I like free markets? Whats conservative about free markets? Theyre unplanned, chaotic. And yet they call us conservatives because we think free markets are wonderful things.
Whats this about? I still cant come to terms with it. I try in this book a little bit. But capitalism is just hated in the newsrooms that Ive been in and in the academy. What is this about? People hate their employers, and their employers pay them. People like the government, and the government takes a third of their money and squanders it. What is it about commerce that brings out this anger? Im not sure.
But I started 33 years ago as a consumer reporter, and Ive shared many of these young reporters feelings. I was out there to bang on business, and I did night after night. I did stories criticizing the Coffee Institute. It was running ads that said, Coffee is the drink that picks you up while it calms you down. What? [Laughter] Exactly. So I called them up and said, How can you say this? Its contradictory. They said, We have research to back this up. Really, whats the research? Well, we surveyed thousands of people, and we asked them what do you get out of your coffee break? Some people said it picked them up, some people said it calmed them down. [Laughter] I reported on the solar powered clothes dryer for just $50, they advertised. We sent in our $50 and we got back a clothesline. [Laughter] It was very clever.
And there were lots of scams like that, and thats why we consumer activists said: Weve got to protect people. How are we going to do it? We need regulation. You need the Federal Trade Commission to get involved. You need attorneys general on the case and lawyers suing. And then I watched them work.
And Im a little ashamed of how long it took me to see the folly of this regulation, how it piled on paperwork. It enriched lawyers. It helps bureaucrats build little empires that took away our freedom, made us fill out more forms. But it didnt affect the crooks. The people selling the penis enlargers and the breast enlargers were still doing it, getting away with it. The government was too incompetent to put even the obvious crooks out of business. Instead, they just passed more rules that burdened everybody else.
The more I watched the market work, the more puzzled I was that it seemed to protect us even in areas where I wouldnt intuitively think the market would. For example, look at the greedy companies that have employed me. Ive worked for all three of the biggest networks, and they get all their money from the advertisers, and yet they paid me to be a consumer reporter, to bite the hand that fed them. Why? Ralph Nader, when consumer reporting began, said this would never happen. He said youd see consumer reporting only on public television because the commercial stations wont want to offend their sponsors. Thirty years later, whats happened? The opposite is true, as is the case with a lot of what Ralph says. [Laughter]
There is no consumer reporting on PBS. The timid bureaucrats who run it are too nervous about offending anybody. But there are consumer reporters on most commercial TV stations, because the market rewards consumers. In this case what happened is, yes, some advertisers got ticked off at what I did and pulled out the accounts. Bristol-Myers, which makes Bufferin and Excedrin, sued CBS and me when I said they were lying in their advertising, for $25 million.
Youd think CBS would have said Stossel isnt worth that. But they didnt. They just said, Look, well fight this, well get it thrown out, and go ahead, do your consumer report. Why? Because the market protected us. More of you, it turned out, wanted to watch a news program that did consumer reporting. And so, yes, they lost some ads, but they made more money because they had higher ratings. The market just works miracles constantly, but we take them for granted. The market protects us in unexpected ways.
Now when I say this, people say thats trivial. When it comes to the serious stuff, whether were safe, then youve got to have the regulations, youve got to have OSHA, and the CPSC, and the whole alphabet soup of agencies we have in Sacramento and Washington, D.C. And intuitively, this does make sense. Were scared. New things are happening. Mysterious chemicals are being used, and we want Big Nanny, with the wise scientists who work in Sacramento, to make the decisions for us. Its instinct. But as I watched it happen, I saw it go awry, because the regulations, by interfering with the wishes of millions of free people, the market always creates nasty side effects. And theyre worse.
Drugs and Government Failure
Lets look at it in the area of drugs, legal and illegal. Illegal first. I have two teenage kids. Intuitively, again, I am pleased that heroin, cocaine, and ecstasy are illegal; they cant zip down to the neighborhood pharmacy and go get high. But does that really deter them? Its not like the drug laws are keeping the stuff out of the country. We cant even keep it out of prisons. How do we think were keeping it out of the country?
Theres the forbidden fruit effect. Maybe the kids are more attracted to it because its illegal. The kids say its as easy to get as alcohol, so I question what the law accomplishes. Maybe a certain percentage of us will try intoxicants, and maybe a certain percentage will abuse them independent of what the law is. I dont know. But I do now know the downside of the law, because now I can see that, and its awful.
There are four things. First and worst is the crime. Almost nobody gets high on these drugs and goes out and commits crimes because theyre high. The crime happens because its illegal, because the gangs cant rely on police protection for their private property, so they form gangs and arm themselves. The buyers have to choose to steal to pay the high prices. Nicotine and heroin, according to the government, are roughly equally addictive, yet no ones knocking over 7-Elevens to get Marlboros. Its the law that causes all this violent crime.
Secondly, were corrupting police forces. Were asking cops who make $25,000 a year to turn down $25,000 bribes. Not all do.
Were corrupting the economy of the ghetto. Were asking kids in poor neighborhoods to take entry-level jobs at McDonalds. Why should I? says the kid. My little brother can make more as a drug lookout. And the role models, the people with the best cars and the best clothes, are the criminals. What a bad message were sending the kids.
And finally, were building unbelievably rich criminal gangs. Its the drug trade that partially funded Osama bin Laden. Now were destroying Colombia. Al Capone was created by alcohol prohibition. The gangs were creating now will soon be able to buy nuclear weapons.
So why are we doing this? Well, to protect us from ourselves. But if thats a good thing to do in a free society, then there is no end to what the government can do. Soon, maybe, theyll have exercise police coming into our homes and making us run laps and do pushups.
Lets go on to legal drugs. Here too, intuitively it made sense. I dont want some company to poison me, some snake-oil seller to tell me he can cure my back pain and sell me something thatll get me killed or addict me to something. Thank God the government, Big Nanny, is going to protect me.
And the government protected us from thalidomide. This is what was the big success story of the FDA, and since then theyve grown in size 10 times. Thalidomide was a tranquilizer some women took during pregnancy and gave birth to children with severe birth defects. So Im glad they protected us from thalidomide. But is it worth it? I dont think so anymore, because now it takes 12 to 15 years to get a new drug approved. What this means is there are good things that we could have that might save us that we cant have because of government.
Some years ago they announced proudly, this new beta blocker were approving, this new heart drug will save 14,000 American lives a year. And no one stood up at the news conference to say, excuse me, didnt that mean you killed 14,000 people last year? But it did mean that. We just dont think that way. We dont think of what regulation deprives us of. Its easy to put the thalidomide baby on the cover of Life magazine, as we did. But who would be saved by the new drug? I dont know which one of you to picture.
Right now in this 15-year pipeline, there are fat substitutes, stuff that would let us eat all the ice cream and cake we want and not get fat. Now, theres a tiny chance theres something bad in there, and they want to make sure. But 5,000 people die in this country from obesity every year. Dont they count in the equation? No, they dont count, because we dont know who you are.
And when I say this to less-informed groups, people say: Well, it just sounds too scary. What are you saying, Stossel, not have an FDA? These creeps would poison us, these greedy businesses.
First of all, I dont think companies like killing their customers. [Laughter] But even assuming they did, why in a free society do we meekly sit there and allow the government to be a police agency that says, No, you are forbidden. Why couldnt it be an information agency? The companies that wanted to submit their drug to the arduous process would, and those of us who were cautious would only take those FDA-approved drugs. But if you were dying, if you had a terminal illness, you could try something without having to break your countrys laws and import something illegally from Europe or sneak to some dubious clinic in Mexico. And what we would learn from those trials would save other lives later.
Id go further and say that you really dont need the government to even be the information agency, because as we should have learned from the fall of the Soviet Union, government agencies dont do things well. And if you simply eliminated the FDA, the private groups that government has crowded out would step in and do the job better, quicker, faster, cheaper. Quicker and faster are the same. I have to work on that. [Laughter] I dont know who these groups would be. Its a fatal conceit to predict how the market will work, but maybe Underwriters Laboratories would do it or Consumer Reports. But I bet theyd do it better than the government.
And in any case, isnt leaving us a choice what Americas supposed to be about? Patrick Henry didnt say, Give me absolute safety or give me death. Its supposed to be about freedom.
Lets go on to the other layer of safety protection in America, and thats the trial lawyers. Now I dont like them either, and we laugh about them, but we should like them if we are believers in free markets, because they are a free-market solution. Unlike clumsy one-size-fits-all government regulation, the trial lawyer is a supplement to Adam Smiths invisible hand. Its the invisible fist. [Laughter] The private lawsuit: you behave badly, and we will come and crush you. But the lawyers have gamed the system so it serves only them. And what a horrible system it is now, because they proudly say we get compensation for victims. But what kind of compensation system is this when it takes 15, 20 years sometimes for the victim to get their money? And the people who are often injured dont sue, and the people who collect are often the people who were not victims of malpractice or really injured. And when most of the money goes to the lawyers, not to the victims.
Now, you may say, what do you mean most of the money goes to the lawyers? The plaintiffs lawyers only take 30 percent or 40 percent. But if you take that 30 percent, 40 percent and then add in the court costs and the defense lawyer costs, most of the money is going to the process. This is nuts. Seventy percent to the lawyers? What kind of compensation system is this? Then they say at least we deter bad behaviors; some company is going to think twice about making a dangerous product. And there is some truth to that. There is a role for lawsuits in America. We need lawyers. But we also need nuclear missiles to keep us safe, but we try to avoid using nuclear missiles because they cause a lot of collateral damage. So do lawsuits, and we ought to avoid using them because they cause huge damage. They are taking huge amounts of our freedom and our money.
The least of it is actually the money, the cost of things. The lawyers attack the people who stand on the edge of life and death, and who are best at protecting us and keeping us alive. For example, pacemakers cost $3,000 more just to pay for the lawsuits. They attack the paramedics, the hospitals, the device makers, and the drug makers. But the cost is the least of it. The worst of it is all the good things we dont even get to have, because out of fear of lawsuits people dont dare try things.
Some years ago they sued the vaccine makers, claiming the DPT vaccine was not as safe as it could have been. I suspect junk science, but lets say they were right, and lets say their suit saved a dozen lives a year. I dont think its worth it anymore, because when they sued, 20 companies were researching and making vaccines in America. Now there are four. Are we safer in an age of bioterrorism with four vaccine makers rather than 20? No way. They kill the people we need most.
Now they also kill the information flow. And we need good information so we can make good decisions to protect ourselves. We ought to read labels, for example. Read the label on the antibiotic that tells you, dont take tetracycline with milk, it wont work if you do. But who reads labels anymore? There are 41 warnings on a stepladder. Out of fear of lawsuits, they just smear them everywhere and nobody reads them. Or have you ever looked at the label on a birth control pill? I happened to bring one here. [Laughter] Look at this thing. Tiny fine print, both sides of the page. Its so muchit doesnt make us safer. Even the doctor doesnt read it. And if you read it, you wouldnt need the pill anymore. I was gradually learning that we can protect ourselves better than the lawyers or government can or will.
Now Im not an anarchist. I dont think the market will take care of everything. I think we need government. I think the worst places to live, in Africa, parts of South Americawell, Africa mostlyare the places that dont have enough government, where you cant be certain that your private property will stay yours, that youll be protected, kept safe. Nobody builds a factory if they dont think they can keep it. So we need some government to keep the peace, to guard the borders, and I would argue further, to protect the environment, because theres often no market incentive to behave well. My smoke goes to your yardyour lungs; what do I care? We need pollution laws.
But how much of this government do we need? For most of the history of America, government was less than 5 percent of GDP. America did very well then. We grew fast. We accommodated millions of immigrants. So how big should government be? Do the politicians ever ask this question? No. They just want more. But how big is government? Should it be 6 percent of the economy? 8 percent? 10 percent? What nobody realizes is that its approaching 40 percent now and still growing. President Clinton received thunderous applause in Congress, from Republicans and Democrats, when he said the era of big government is over. But since then, they added 600,000 pages to the Federal Register, another spider web of little rules to take away our freedom.
The government today runs trains, subways, parks, public housing, the war on drugs, and a welfare state. It subsidizes everybodystudents, farmers, Indians, researchers, volunteers, small businessmen, and rich businessmen. Maybe if it werent doing all that stuff badly, it could focus on what it should do, which is keep us safe and not issue visas to the World Trade Center terrorists two months after they were blown up in the World Trade Center.
The Price of Independence
Well, I started reporting such things and saying such things gradually into my career, as I read libertarian literature and started to realize there was another way to think about things. Id like to say I read what the Independent Institute produces, but this peer-reviewed intellectual stuff was over my head. I read Reason magazine. And I was impressed. Wow, these guys understand this better than I do, and they have really thought about it. It was very exciting.
And I started reporting on government and so-called public interest activist groups, and lawyers, instead of just business. And suddenly, I was no longer a good reporter. I won 18 Emmy Awards before I went to the dark side. [Laughter] As the TV writer for the St. Louis Post-Dispatch actually said, When did you go to the dark side? Now I no longer win awards from my peers. Somehow my skill as a reporter has just disappeared. Some of my ABC colleagues, when they see me in the hall, they gothat as a quick turn-away, for those of you in the other room.
CNN, after I did my first special, Are We Scaring Ourselves to Death?, invited me to be in a journalism show, and I showed up and I saw the title of the program was Objectivity and Journalism: Does John Stossel Practice Either? Their argument was that I was not objective because I was taking a point of view in these stories. And I admit it, I do. But I always had.
Id never gone to journalism school. I didnt know what I was supposed to do. I learned through fear. I landed in this job in Portland, Oregon, as a researcher in a TV newsroom, and I just tried to figure out what should people know and how could I tell it to them in an interesting way. My mother said, You better work hard or youll freeze in the dark, and I worked hard.
But I always took a position. I was doing research on products, and I would say, Weve looked into this and this product sucks. So now Im saying Ive looked into this and this government program sucks. But suddenly now, Im a problem.
Howard Kurtz, the media writer for The Washington Post, wrote an article about me then, and he titled it, The Jaded Crusader. He quoted Sidney Wolfe of Public Citizen, saying Stossel was a menace doing a massive amount of damage, and Ralph Nader saying Stossel used to be on the cutting edge, but now hes the most dishonest journalist Ive ever encountered. [Laughter] He talked about my leap from consumer advocate to friend of industry.
But why am I a friend of industry? Industry doesnt like free markets either. Industry half the time tries to game the system to screw their competitors. They want to partner with government to hurt their competitors. Theyre not necessarily friends of free markets. And also, Im no longer a consumer advocate if Im reporting on government? Doesnt government screw consumers, too? You bet.
Media Bias Favors Bigger Government
So where does this attitude come from among my peers, this leftist thinking? Im not sure, but its just the culture that I live in. I live in Manhattan; many of you live in San Francisco, a very similar environment. And its just out there. More safety regulation? Who doesnt want that? Higher taxes to pay for the welfare state? Everybody wants that. More gun control? Of course. Got to reduce gun violence. Its just the way people think, and anyone who doesnt think that way is viewed as selfish and cruel. And if I try to ask my peers about bias, they just look at me blankly. Bias? Its like asking a fish about water. What water? [Laughter]
I think some of this attitude where I live comes from The New York Times. Now clearly, The Chronicle is influential, as are other papers, but The Times is hugely influential. It shouldnt be, because it has a tiny circulation, one million and falling. Compare that to the networks33 million people. But The Times matters because the other media copy it, sycophantically.
When I was a local reporter in New York City, the assignment editor would just take The Times and tear things out and say, Here, go do this. If you look at the network TV shows, theyre often just an evening TV version of The New York Times. Beyond the million circulation, if you think of the absurdity of their power, Page A16 is read, I bet, everyday maybe by 10,000 people. And yet, because its copied, its influential.
In August of the year 2000, The Times put a picture of the North Pole on the cover and said the North Pole is melting. The thick ice that for ages covered the Arctic Ocean at the pole turned to water, something that presumably never before has been seen by humans, and is evidence that global warming may be real and already affecting climate. Ten days later, The Times apologized, saying it misstated the normal conditions of the sea ice, and about 10 percent of the Arctic Ocean is clear of ice every summer. But by then, it had been copied by The Washington Post, USA Today, the AP, National Public Radio, of course, TV networks, Canadian TV, and newspapers in London. Many used in their articles the exact same global warming expert The Times used. Now its not that theres a conspiracy to sellwere going to sell the public on global warming. Its just the groupthink that the media live in, the mainstream media.
Even basic free market principles are doubted, if not mocked. One of my worst battles with ABC legal review was over a Give Me A Break segment I did on rent control. Now even The New York Times editorial page editorializes against rent control. And even they get it. And, of course, no economist thinks its a good idea.
My story, I thought, was fairly simple. I talked about how Mia Farrow and Carly Simon and Alistair Cooke have these grand apartments they pay seven cents for, while everybody else had to pay a fortune or couldnt find anything because the market had stagnated because of rent control. And I interviewed Walter Williams, who said, Short of aerial bombardment, the best way to destroy a city is through rent control. But this economically illiterate ABC lawyer kept blocking the story, kept saying, This cant be right. You have to soften it; you have to interview other economists. This would kill the poor if rent control were abolished. I later learned he lived in a rent control apartment.
Lies, Myths, and Stupidities
But anyway, I plunge ahead, and ABC, God bless them, let me write this book and lets me do, against conventional wisdom, stories on television. Last Friday I did one called, Ten Lies, Myths, and Stupidities. Number six was, Republicans shrink government. [Laughter] Number five was, Rich people dont pay their fair share of the income tax.
For that one, I invited in the Democratic Presidential candidates to talk about it. The first one to show up and agree to talk about it was Reverend Al Sharpton. I wanted to ask thembecause I had a hunch that they didnt even knowwhat rich people paid when they were complaining the rich didnt pay their fair share. So I said to Al, What should they pay? And he said, Fifteen percent. [Laughter] Isnt that good? I said, The top 1 percentthey should pay 15 percent? He said, Yes. And they dont pay 10 percent, they dont pay 5 percent. And I said, But Al, they now pay 34 percent. The top 1 percent pays 34 percent of the income tax. And hes brilliant. He just changed the subject without it seeming like he was changing the subject. [Laughter] Im not going to fall for that, so I ask him again about 18 times, and 18 times he slimed away perfectly. [Laughter] But there were some good moments in there.
Myth number three was that guns are evil and that gun control will reduce violent crime. So we talked about how the CDC [Centers for Disease Control and Prevention] hasnt found that it has. And again, I had fun with the Reverend by saying; What if we had a law that said anybody over 21 could carry a pistol on their person, hidden? And he said, Oh my God, thered be carnage, it would be a reign of terror. Because he had no clue that 36 states already have right-to-carry laws. I bet many of you dont know that in 36 states its legal. And theres no more violent crime in those states, because the surveys show that what felons fear most is not the cops, not prisonits that the woman theyre about to mug is packing.
So those are some of the myths we covered, and the show did very well, and launched my book. Unfortunately, it has now fallen to number three on the non-fiction list. But its early; its the first week. The good news is that it will be number 10 on The New York Times bestseller list inThe Times is so late with thisin two weeks, but that represents what happened the first week, and the first week was only a half week. So the publishers all excited about that. And I have to get it on the bestseller list, number one, ahead of Al Franken [Laughter] or Im going to be very upset. So Im delighted to sign your books, and I hope you get more than one and give them to all your friends. Though if you buy them at a bookstore, please no more than five at a time, because otherwise it doesnt count towards the list. Thats how they try to eliminate people from manipulating the list by buying 300 books.
The reason I wrote the book is that Im upset that we know what workslimited government and market capitalism. It has lifted people out of the mud and misery. It created wonderful places like America, Hong Kong. We know it works; yet four billion people on Earth continue to live on a dollar or two a day. And in the academy and newsrooms, this system that could lift them out is vilified. This is wrong. I thank you for fighting for the liberty that makes peoples lives better. Thank you very much.
Audience Member #1
You mentioned youre a libertarian. What do you think about the libertarian political movement in this country? And also, do you have any particular thoughts on Objectivism?
If you think Davids over my head, Objectivism is over my head too. These two warring factions of descendants of Ayn Randwhat are theyre fighting about? David Kelly and the other groupI cant even follow it. Its beyond me.
Libertarian? Im reluctant to identify myself that way because people dont know what it means. They think it means libertine. Classical liberal? The Cato Institute tried, and maybe thats better. I wish we had a better name.
I think the Libertarian Party has gotten a bad reputation because they have run some wacky people like Howard Stern for office. And if you go to a Libertarian Party event, there are some people who are pretty far out there, and that scares off a lot of people. Plus, America has a tradition of these two parties. Its hard to break. I always had the most hope that the Democrats would embrace the libertarian ideas.
And they once did.
And they once did. But Im struckI went to get blurbs for the book, and whore they from? Bill OReilly, Sean Hannity, Peggy Noonan, Steve Forbes, and Bernard Goldberg, author of Bias. The liberalsIm icky to them just because I like capitalism. Yes?
Audience Member #2
You mentioned the war on drugs, and I really appreciated your perspective on how this is also a problem at a governmental level. What is your awareness around the drug treatment industry, about how that is a part of what you mentioned?
The drug treatment industry is truly hostile to liberalization of the laws. When Ive done shows on legalization, they are the most hostile. A lot of them were addicts. They are of the belief that they were helpless, and if only drugs could be banned, that would save people. I think theyre so focused on what they do; they dont get the big picture.
Audience Member #3
Hi, John. First of all, I want to thank
Let me actually stop you. I think when its a group like this, you live in the same neighborhood, and its nice to get to know your neighbors. So why dont you say who you are before you ask your question?
Audience Member #3
Well, I live in the neighborhood about 120 miles south of here. Im David Henderson, and Im an economist down in Monterey. First of all, I just want to thank you for everything youve done. Its tremendousI mean, Friday night is special.
Thank you. David wrote the Fortune Encyclopedia of Economics.
Audience Member #3
Thank you. And the secondthere was that threat to your careerI think it was the summer of 2000, something like that. There were a lot of people trying to get you off the air over some little mistake you made, and they were trying to blow it up. I dont want to rehash that, but Im wondering, is that an ongoing threat, or are your fairly confident that the market will work and you will be in this kind of job, whether its this network or another?
Im pretty confident I could get a job at some cable network. I am not confident that I can stay at ABC. The market speaks sometimes. This last special got great ratings. I think it went much higher than a regular 20/20and it may be the top-rated ABC show for the week, which is just surprising. I think people like these top 10 lists. And that comforts me, but Im not confident all right. Ill give the complicated economic explanation, because its kind of interesting. I dont know that there is a future for news in commercial television anymore. These days, we get minute-by-minute ratings, so you get a graph of the show. If you try to do serious subjects, rather than Paris Hilton, it tends to go down.
Its just a lot of pressure to appeal to the younger people, because all the advertisers care about is the 18 to 49 age group, because people our age may be wealthier, but were not about to change our brand of car or shampoo, or even if we do, were going to die soon and not buy so many. [Laughter] So all they care about is the young people, to the point that they dont even give us the rating results for people my age. So theres now all this pressure to get these younger viewers.
And Im doing pretty well, but if they can replace 20/20 with a reality show, they will. But I think eventually, therell be a Home Box Officelike channel for news, and thatll be the new home for serious news.
Audience Member #4
What is your prediction for this election coming up? [Laughter]
I dont have any greater expertise on predicting the election than anybody else, so I wont even try. Sorry.
Audience Member #5
My name is Arlene D. And John, Im curious. You were talking about collateral damage, and the fact that in looking at some of the government regulatory processes, nobody really looks at the collateral damage thats involved.
And I was reminded some years ago, I was a guest at Stanford Law School, at the first ever course on childrens rights, and it was an experimental course with the Stanford Law students. And the thing that struck me most was that, in their zeal to save children, the approach was so laser-beamed focused and so linear that everybody elses rights kind of fell by the wayside and became totally unimportant in the process, so that theyre looking only in one tiny angle.
So when you were talking, that flashed in my mind, and I was thinking, when you start talking with your peers, with your colleagues who have, in the past, respected you and suddenly are turning aside, can you ever get to them in terms of the collateral damage or side effects kind of issues? Are they at all open to looking at that? Thats a generalization.
No. [Laughter] Youre asking someone to give you a lot of time to listen to the collateral damage, which is a long list; its a little dull. And its worked on my wife, but Ive been hammering at her for 20 years, [Laughter] and shes starting to come around. But no, my colleagues dont want to listen.
Audience Member #6
What about your children?
My children are there. Its exciting. My daughter is a freshman at Wesleyan. Wesleyan is a campus named by Mother Jones magazine as the number one activist campus. And shes not very political, but shes hanging in there and saying wait a second often enough to make me proud.
Audience Member #7
Hi, Jarret W. I was wondering if you had considered doing something on airline and security. At the same time were getting studies showing that as many weapons are getting through now as they were before 9/11. People are smuggling packages on planes, writing notes to the FBI and saying, Hey, Ive got a box and a knife and a gun on the plane, and it takes them three months to find it. At the same time, theyre going into these CAPPS IIcomputer-assisted passenger pre-screening systemand so far theyve already done things like preventing a Los Angeles comic, who was very critical of Bush, from boarding, searching his pregnant wife, preventing a nun from boarding because she wrote an anti-war newspaper.
So youre surprised that theyre incompetent? [Laughter] Last months Reason magazine has a wonderful cover story on the insanity of what the TSA is doing. And I did a give me a break on it when they came out with the color-coded thing. Pointing out that remember the Emergency Broadcast System? This is a test of . . . It annoyed us for years. This is the governments warning system. It has never been used. And its just as well because the private media get the word out better. But it was supposed to be for an emergency. Wasnt September 11th an emergency? But its never been used, but they still pay $1 million for it.
So after September 11th, the Senate voted 100 to zero, and Congress almost unanimously, to federalize airport security. And Tom Daschle said you cant professionalize if you dont federalize. [Laughter] And everybody bought it. So I did a Give Me a Break [20/20 segment] pointing out that in Europe they tried federalizing it, it didnt work, and they went to federal supervisionthem setting the standards and private contractors competingbecause you can fire the failing private contractor but you cant fire the government.
I pointed out that you can go to a foreign country and stick a piece of plastic in a wall and a bank will give you $600, and you can give a stranger this same card, and he doesnt even speak your language, and hell rent you a car. What a miracle of the private sector, and we just take it for granted. The government cant even count the votes in Florida. [Laughter] It was the government that screwed up on September 11th. It was legal to bring those little knives on planes. There was no law against open cockpit doors. They had information that Arab men were going around to flight schools, trying to learn how to fly planes. They didnt do anything. So it was government failure that caused it, and our response is to say, Oh my God, weve got to bring in the government! Its just what we do.
All my colleagues laughed at the Give Me a Break, they said that was great, but of course we have to federalize it. It just bewilders me. But on the other hand, yes, maybe theyre sneaking in more guns now, but lets not get hysterical over terrorism either. It was horrible what happened, but 3,000 deaths, it hasnt happened since, and we lose 3,000 people to car accidents every month, and we live with that. So lets not bring in more police to the air traffic control. I think TSA stands for Thousands Standing Around. Sorry for that long answer.
Audience Member #8
My name is John C. I wanted you to expand on your environmental beliefs, because you were taking about the drug laws, how they dont do anything. Why do you believe environmental laws would do any better?
Because catalytic converters have made the air cleaner. Because sewage treatment plants have cleaned the waters. I jumped in the Hudson River last week to illustrate that water is cleaner than it used to be. I dont see how the private sector is going to do that on its own with community property like the Hudson River.
We have a book coming out.
So the Independent Institute has a book coming out that may explain it to me if I can understand it. [Laughter] I think we have enough rules. I think we could get rid of half of them and the air and water would still be gradually getting cleaner. In rich countries, people care about the environment and we do better. Every time somebody buys a new car and junks an old one, the air gets cleaner. So I dont think we need more laws, and we have some insane laws. And Ive reported on some of them. But I do think its a roleI dont see whos going to do it besides the government, until I read this book I guess.
Audience Member #9
Someone asked earlier how do your peers feel. It just so happens that what you do for the public, I do for the medical profession. And my peers are the source of the worst feelings that I could possibly get. I blame it on jealousy. As popular as you are, I bet youve got a lot of peers that dont like you and will not help you. Is that a fair statement?
It is a fair statement. There are a lot of them, and thats why I dont win the awards anymore. Its funny. My smarter, older brother who is in your professionhes a research scientisthas sort of come around to this way of thinking and hes reading Hayek and has debated Marsha Angel on these conflict-of-interest rules. The amount of hatred of capitalism in medicine is just silly. And the doctors may kill the golden goose there.
Audience Member #10
Hi John, Im Shannon, Im a big fan. [Laughter] Im a registered Libertarian, and the one area that Ive always had some conflicted personal views in is the death penalty. Can you give me your opinion on the prison system and the death penalty?
The prison system, I think, we have too many people locked up, and a lot of that is because the drug laws. I dont have a strong opinion about the death penalty either way. Abortion and the death penalty are where Libertarians are all over the place. If you believe its a life, you may say no abortion. I kind of think life begins at conception, but a woman has a right to kill anybody whos living inside of her. [Laughter] That is not well received by a lot of people. [Laughter]
Audience Member #11
I do. My name is Phillip M. In Britain, the BBC has apologized and two people got fired, and my understanding is that in English-law countries if somebody makes an actual false statement, even about a politician, they can be taken to court, and if proven that they were slanderous, the person who made the slanderous remark has to pay all the court costs and reimburse the person. And I suspect that BBC decided that Blair might take the BBC to court and sue their ass. Do you know anything about that or have any comment?
I dont know anything about that case. I do know that the media are quite frightened of British libel laws. Free speech, as we know it, does not exist in the same way there because it is so easy to sue.
Audience Member #12
OK. Im Sue K. I want to know how much influence you feel youve had on other reporters in changing their liberal bias, and if you feel you havent had much, why not, and how could you get more? Im really looking for a ripple effect from you.
Me too. [Laughter] When I did, Are We Scaring Ourselves to Death? I naively thought my colleagues were going to watch this and say, oh, my goodness, I know that bar graph really shows the comparative risk. But it got no attention, it made no difference. It got some attention in Sweden for some reason. But it made hardly a dent.
Ive repeatedly done these stories, and around ABC the producers are a little more sensitive to hyping silly risks. But as again, changing peoples minds about these things is remarkably tough. I have been arguing with my wife intensely for 22 years and finally Im making some progress. Im not making progress with my colleagues.
Audience Member #13
My name is Hartland. You mentioned thalidomide in your speech. Did you know that last year thalidomide in the United States had revenues over $100 million?
Yes, they have brought it back and theyre using it for other things now. But theyre warning pregnant women not to take it, and thats how it should be. At least theyve allowed it to come back. They arent as crazy about that as they are about DDT for example.
Audience Member #14
Do you have any sense of how long thalidomide was kept off of the market by the FDA when it might have saved tens of thousands of lives? Because it is now being used in cancer therapy.
Audience Member #15
Hi, my name is Sondra E, and I saw you in Portola Valley when you were involved, or you still are involved, with a foundation called Media in the Classroom. Could you tell us a little bit about that, because I felt it was quite worthwhile, and we donate to it, and I think its a wonderful idea and people should know more about it.
David said shes not a plant. [Laughter] She actually is kind of a plant because when I was autographing her book, she asked about it and I said, oh good, if I dont bring it up maybe you could ask about it. [Laughter]
Its called IntheClassroom.org, or thats how you find it on the Web, or StosselintheClassroom.com. Teachers have written me saying, oh I wish I had taped that show, it would have been great to show my students to explain free markets to them. And Bob Chitester, who helped do the Free to Choose series on PBS with Milton Friedman, came to me and said, Why dont I try to get ABCs permission to buy these things and get them into classrooms? What a great idea, I thought, and I said, Go for it, knowing the ABC lawyers would eat them alive, and they would never allow it, but it was worth a shot.
And he patiently beat on them for two years until he got their permission. He has established this charity and through contributions from generous people and brilliant and wise people like you, Sondra, hes now gotten these tapes into a quarter of Americas high schools and many colleges. Two million kids watch them every year with some text that goes along that explains capitalism and free markets. Its a wonderful thing. If any of you want to participate, talk to Sandra or just go on the Web to IntheClassroom.org.
Audience Member #16
Hello, my name is Larry H, and a friend of mine learned that if you do a lot of top 10 lists, you get a letter from Letterman, appropriately. But on your top 10 list, what was the number one?
We interviewed a bunch of people for it, and the person in this case, who I didnt think was going to be good for television but who turned out to be, was Steve Moore, who is head of the Club for Growth. And he co-wrote a book called, Things Are Getting Better All the Time. And myth number one was that life is getting worse. And so we talked about all the kids are scared about crime, and people are whining about poverty when, in fact, were getting richer, crime is going down, and the air and water are getting cleaner, which is why I jumped into the Hudson to try to illustrate. So that was number one.
Audience Member #17
I wanted to just make a couple of comments regarding government and the legal profession from my own perspective. One thing I would like to say is that being a local counsel member for 20 years, I really feel that people that live in a community can have some influence on change at the local level, and I think thats where you could really see it. I think when it gets to higher levels, it tends to just go on its own, and people do not really have a chance to influence it so much.
The same is true of the legal profession. My husband and I own a law practice, and we do litigation, and in your comments about how lawsuits really take away from the person that needs itI think people have to take more of a responsibility with their local government, and with their own situation, to have the right person and the right people to help them, and that you can have an influence on the local level and your personal level if you take responsibility.
Thank you. And lets just do a few more questionsIm getting tired, Ive had a long dayand then Ill sign some more books, and that will be it. Yes?
Audience Member #18
You talk about how when the media speaks theres always a slant, and there are very few objective media stories. One of the things that comes to mind is that a few years ago, they reported shark attacks, saying sharks were on the rampage. Later that year it turned out there were fewer shark attacks than during the previous five years. It was just a slow news summer so they focused on shark attacks. Is there some kind of media outlet that is objective that doesnt put a spin to it? Is there one that you would recommend?
I see three points that feel sort of separate. Its funnyI do this too but I dont even understand this myself. We talk about biasliberal, right-wing, left-wing biasand then there are the irresponsible scare stories like the year of the shark. By why are they the same thing? Why is it the liberals tend to do the scare stories? Im not sure, but it does work that way.
But to answer piece by piece, and theres a lot on the sharks in here. It actually was not true that there were fewer attacks that year. There were a high number of attacks that year, more than average, but not by a lot, and there were just as many a few years back. But a few years back was an election year, so the press had something else. And then there were just as many about five years back, but that was the year of the OJ trial. So it was just a slow news summer, and its a dramatic story. And its not that the reporter is biased, theyre just intellectually lazy, and its dramaticOh, a shark attackand they just get caught up in the frenzy and they dont really check it out.
Is there one source thats objective? I dont think thats how it works. I mean, I trust Reason and I read everything and I get different bits from everywhere. But I think thats what you have to do, just not rely on any one source. Go back and forth because everybody gets it wrong sometimes.
Audience Member #19
My name is Bill D. You talked about how youve been at your wife and trying to convince her for the last 20 years. How did you get into libertarianism and who was instrumental getting you involved?
I just saw that the regulation wasnt working, and I was reading The Times and the other publications respected by the people in my peer group, and it just was whiny, welfare state, bigger government stuff that didnt make sense. I was reading the conservative press, and they seemed to be sort of mean-spirited and they wanted to police the bedroom. And then I discovered Reason magazine. My thinking had come around, but thats what gave me the courage to fight ABC on some of these things, because I knew I wasnt alone. There were people who had thought about it more than I had, and there was an intellectual basis for what I was thinking.
One last question. Yes?
Audience Member #20
All right. When Barbara Walters leaves, are you going to take over her soft lens? And what will happen to the show?
Um[Laughter] Am I going to take over her what? Her soft
Oh, the soft lens. I see. No, she gets the same lens I get. Its the same camera.
I would like to take over. Im narcissistic enough to want to host the show all by myself, and I hope I will get to do that. [Applause] ABC will decide in May what they will do. I hope the show will go on. If the ratings stay up, I think it will. Last weeks show was very encouraging. I hope to do it myself. And thank you, very much. [Applause]
Before you get up, for those of you interested in copies, theyre upstairs. And John, as he said, would be happy to autograph. We look forward to your joining with us next time. Thanks for joining with us tonight.