savvy these daysic. we know how to go under the hood. neil: we go under the hood. thank you very much. >> see you tomorrow. >> we need smart regulation. >> we to depend on the federal government. >> try to write laws to protect the public.

>> that's our show. whenever there is a problem politicians claim that answer is more laws more regulations, obamacare. will make medicine better. ed do frank will stop problem in banking. this is how bureaucrats and lawyers think they believe paper and procedure will fix things. we need smart regulation to prevent irresponsible behavior. >> start, they always say that. this stuff is smart. but, after the collapse of enron, a law called sarbanes-oxley was supposed to stop financial fraud, but it did not stop madoff for credit bubble, we get more rule, government is a hammer, when you

have the hammer. everyone looks like a nail. there is a better way, i won't go to a 5 an movie any more before going to the rotten tomatoes web site, what i travel, i go to web sites too see what other tourists said about the hotel. libertarian radio host, jason lewis agree, and liberal radio hostal ape -- >> look at all of the trees that died for that prop. >> there are always crooks. if we didn't have collapse in 2008 maybe we would not need fur legislation. >> dodd-frank codified the law we had in place, including steroid, and bailout, if you

make loans to low income people, you are predatorial ending, they had no choice, now the government tells them under dodd-frank, you do we what we say, we'll have an orderly liq liquidoing, code word for bailout. >> republicans and conservatives and libertarians, less government, less regulation, then government collapsed, and dodd-frank corrects them. >> wait, it was lack of regulation that caused credit bubble. >> the lack of regulation that caused the collapse. >> how. >> how? >> yeah, it was a bubble. >> no one was mining the store. you had banks doing whatever they wanted to. they could do all these things there was no defining line.

>> moral hazard was that cause of this, of that government came in there said, we will ensure all these bad mortgages under fannie and freddie. so 1 you tel -- once you tell someone go ahead make a bad loan. now with da dodd-frank alarge bailout. >> where would we be now had they not saved banks. bankss >> we would be better off. >> we would be better off? >> how. >> market discipline, no privileges, no bailouts, if you lose money, you lose your open money. >> the united states is the economic system of the world, it the banks collapsed. >> how many times have we bailed out companies to bail them out again? >> was the chrisly bailout a mistake. >> yes, it was. >> you would have those assets dispersed among profitable

companies. companies. >> let's -- let's move on. to college tuition bubble. costs risee more than double rate of inflation for years, i say that too caused partly by government, increasing student loans pushing people to go to college, now many grads are deep in debt, condition find jobs, president obama has a solution. >> i direct my administration to come up with a new rating system for colleges. >> is that a good idea. >> rating system? >> government rating system. >> yes. >> they have a. >> you think that government can do it better? >> web sites have to meet a market test, if i go to a web site, and they say, this is a

great college, and i go it is not a great college, then -- >> another way government protects us by requiring certain workers to have a license, it started with doctors and lawyers, so now bureaucrat licenses barbers, florists, yoga instructors and tour guides, another good thing in. >> yes. >> you go to a new dentist, do you check his government license in. >> no you ask friends for recommendations. >> you know because you are in united states he is licensed to do business. >> people still cheat. >> anybody is hang up a shingle and a seem a dentist. >> because you would not rely on government you would chick the private listing, did he go to school? there are other testing operations. >> alan has a ., one thing morse -- unlicensed yoga instructor. >> preventing someone from

getting hurt is one thing but what about the stuff. >> like what? >> licenses rules keep the best people out of the profession they out low improvement. i am a stud erider. "the king's speech", he got help, by going to an unlicensed speech therapist, he was told he would speak better if he would smoke a cigarette. >> my physician said it would help the throat. >> they are all idiots. >> no training, no diploma. a great deal of nerve. >> lock me in the tower. >> just tame in a movie but true. a unlicensed guy helped him. >> because of a scene in a movie -- i'm note sure makes the

point we should not have regulations, a consumer knows what they go into a business they are protect, they are not going to to a quack who has not been vetted in some way. >> do you deny rules prevent some new ideas from starting in. >> why. >> because is does not fit the government mold. >> the people that like licensing requirement are those in the be it makes if more difficult for come pet ores to come in. >> i think a bar to century is a good thing. any quack can go to any business they want. >> softball for you, osha. we have to have law and look at this chart. since osha was created workplace fatalities have dropped, all these lives have been saved, a dpriet thing. >> need i make more .? >> yes, you need to, look at this chart, what was going on even before osha.

work place fatalities were already dropping. >> how many more with osha. >> the slope of the line is the same. >> not in every case, workers deserve to be protected, looking back to how many decades ago, and we could trust every boss, and manufacturer and every place, a worker would go. that is why we developed unions, we could not just employers. >> the 19 century you had workplace accidents kids were working on farms, people were trying to survive. 1 the society through capitalism got profitable then all of a sudden kids can go to college, people have a better workplace. >> that is what is happening now. >> capitalism. >> regulation? glue no because of. >recession. >> no, i want to ask about your new project. a virtual economy that allows to

join forces with people who share your values not big government. >> what are you talking about in. >> galt. io . this is a libertarian social i. >> bottom line those of who believe in smaller government have been out organized. you go to a city council meeting a school board meeting, the left will be there. they have a instutional liberalism in the media and adem me, so this is an attempt to make sure people can go to one place, put up their cause, and form a network within a network based on market funks, the mor functions. >> john galt.

>> it is fun, shorter and different, but yeah. >> kick-starter you had big success trying to raise $250,000. you raised $600 thousand. >> it has been remarkable, a real appetite for this. >> your reputation and how many people support and like you that will help new this site? >> we're not telling people what causes will win, that is the market place. once the cause is out there, what people are interested in will be determined at galt. io . >> another new web site, trust cloud, i say reputation solves problem, trust cloud gives people more ways to determine someone's reputation. you top borrow money from me. neil: do you want to borrow mean from me, why should i trust you? are you reliable, do you show up on time? do you pay your bills?

how do i know? i could check your credit corps, that just telling me so much but shin chung invented trust cloud. >> helps you collect all your trust wordy data, you generated on-line, on the web, on your mobile device, linked in facebook, twitter, and puts it in one place. that you can use anywhere. when your thumb is hovering over the buy button "on the go", you don't have time too google, you don't have time to get their social security number, to do a background check. >> i don't top give that to you. >> in the past, you were lucky enough to have a referral from a friend. now, your friends are hundreds of millions of people on the web. meaning, the reviews, that people make of each other, the transactions they completed to the marketplaces, can all go

into trust cloud. >> you evaluate this to one score like a credit score. -- >> that is what is beautiful about, idea of big data. >> your ranking from 500 to a thousand. not that high. >> actual that's is pretty good. >> okay. this is just somehow the computer, it drills through all this information. >> what we have is we're a technology company, and we have alga rhythms that go through the pieces of data, we apply the different filters that don't look at the contents of your e-mail, we look at overall behavior then compact it to scores. >> if i want to hire somebody i can get their trust score in 30

seconds. >> and big needs are trust, and safety, to have that trust score, next to the buy button, is really going to help us out. >> okay, thank you shin chung. >> thank you, john. >> we'll continue this about reputation on facebook or twitter use that hash tag reputation, let people me know what you think. coming up, look at this lushou ous brunch. a home cooked meal, people are having fun. did you know some central planners are upset about this? >> 8 people sharing a meal in a strain jere' jere's home, insiders are tell us they are unregulated. ♪ [ male announcer ] how did edward jones become one of the bgest financial services companies in the country? hey. yours? not anymore.

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♪ ♪ john: are you a good cook? would you cook for more people more often if you could it airgas to cover your costs? >> do like home-cooked meals more than restaurants? both whether you can have what you want. this is this woman's home in new york city. she likes to cook for people. >> i reminisce back to the days when friends would get together

for a dinner party and then maybe meet some new friends. magical things happen on the table when you put people with food and alcohol and great conversation. reporter: so she was happy when she discovered this website. eat with.com. it allows coax to connect with strangers who would like to meet new people at a dinner party. >> thank you for having us. this is so nice and might she says that her previous dinner parties lead to lasting friendship. >> we have the most entertaining conversation or in fbn we would just hug one another. john: she said she would've liked to of years ago but she couldn't afford it. >> when i would host dinner party for friends it would've been nice if we could have covered the $200 or however much it cost. reporter: thanks to eat with.com, each guest paid $39. john: it seems good to me.

one more good thing made possible by the internet and the power of reputation and how did you come up with this idea? >> i traveled to greece and i happen to be invited over and i had such a profound experience. and i thought let's share this with millions around the world. john: with the platform people can rate the home and a coke the cook and say that i had a good experience. >> we see the trust and safety and this includes raising reviews and giving the just ability to reject the invitation if they need. and everything is put together so both sides feel comfortable

and safe. john: she charged $39 and other people charge $40 or more? >> yes, it's a free marketplace and we're adding a mall marketplace as well. john: 15% come you can make a lot of money on it. >> some charge 20 or 30%. john: summer $20 and some are $150. >> some people have an eight course meal. john: years later here is part of a consumer undercover investigation from one of my successors. >> eight people sharing a meal and a stranger's home. insiders say that they are completely unregulated.

>> oh, my goodness. strangers and a home and she brings in a hidden camera. like this is a crime. >> people are coming to the u.s. and working with lawyers to find the right framework for these kind of social dining experiences to happen. >> i couldn't have a social dining experience and invite people to my house. you must be regulated simply because someone is making a buck? >> i'm not sure if we will be regulated or look into it.

john: what if they pounce on you? >> well come out that is why we have insurance. john: at that party, everyone afterwards said that they were thrilled and they want to do it again. >> i think this is my new favorite restaurant. >> i loved coming into someone's home and being part of their space. seeing the cooking going on while you are dining, it is such a unique experience and of course getting to know other people as well. john: in fairness, looking at the website, everyone is having a great experience. john: coming up, i just learned that the wonderful prediction market in trade my comeback. and also how technology and reputation will cure universities of a problem highlighted in the movie ghostbusters. >> personally i like the

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john: one important part of america, k-12 education. every teacher is paid the same. they're teaching reputation doesn't matter. even if a teacher is known for throwing kids out of the window, your kids are at stop with her and she's paid as much as every other teacher. that's about to change is the author of "the new school", the information agent how will save american education from itself talks about. so why will education change? >> the reason is that people have alternatives. my daughter went to online high school and it was not homeschooled. it is fully accredited trade.

john: you didn't teacher? >> no, i did not. it went really well and she graduated early and did let her work with the way she wanted to work with three intense weeks and then move onto the next class. something you couldn't do a public-school. john: until that happened he didn't realize how controlled you were by the government. >> and so tool. you are under the thumb of the public-school in so many ways. even if it means a long commute for you try to get to the good schools burgher property values go in or out due to a school system. you want to go on vacation coming have to wait until a bureaucrat says you can. if you want to get up to future kid to school at the crack of dawn coming out to do that. you want so your daughter enrolls in this whimsical and your for your? >> i was amazed. john: you say that this applies to colleges? >> yes, colleges have their own problem. people have been talking about higher education and the traditional college model like the k-12 model and it's looking

kind of obsolete. the a lot of times when they graduate, they wind up in jobs they could have gotten without a college degree anyway but they are in debt. but the the difference between starbucks for is the difference between starbucks president win the calder limited and wanted it in his $100,000 worth of debt. john: i heard that the best professor was giving 100,000 students and based on his reputation. i thought that was great. then i read in "the new york times" online courses are rethought after setbacks. university of penn online courses from only 4% finished. >> i don't think that's so bad. we would be a lot better off if traditional education was being rethought. but the important thing is that there is a learning curve and with traditional education there is not. john: now the best i might have

100,000 students make a million dollars. >> oh, absolutely. all based upon reputation. john: there hasn't been much change since 1800. do you say that it's going to happen suddenly? the rubber band to pull and pull and break if you look at the statistics, as opposed to a diploma which could mean him as

anything. john: coming up, the academy awards on natural disaster. predicting the outcomes better than pundits for polls. and our control freak government shutting trade down and it's coming back. that's coming up next cer ] e new new york is open. open to innovation. open to ambition. open to boldids. that's why n york has a new plan -- dozens of tax free zones all across the state. nd here, that's why n york or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and ows more businesses... we're open to it. start a tax-free business at startup-ny.com.

john: the company best known for its presidential election is in hot water with the fed. another new thing that was not to the liking of our fussy regulators or a year ago american bureaucrats had a prediction market where people could bet on anything. things to those individuals, putting their money where their own mouth guard. people knew more about the future.

predictions about oscar winners or elections or even the capture of saddam hussein. they were much more accurate than predictions made by pundits. and polls. like before the last election, bob beckel was smart to cite the betting. >> first of all, i think that they should stop with the gallup poll. fifty-one to 45, that is the gallup poll the didn't tell it all. john: but it was banned by the new president bureaucrat by the cftc. the commodity futures trading commission. saying that it is unlicensed contrary to the public interest. rather than to try to fight the american government. and ron bernstein plans to start it up again.

>> yes, that's right. we still think that there is a need for prediction market. it was still shut down by american regulators. john: you are in new jersey. how are you going to do this in new jersey? >> we have a new structure that doesn't fall within the cftc. therefore our new structure will allow us to accept american customers. john: you are just doing this? >> were going to begin with sports. there's no reason why we can't do all parts of content categories. john: already to fantasy football, why is your is different? >> and it's not one person against any other one person. if the contestant against all other contestants that could also extend to american idol or grammy awards where the oscars are things like that in the cftc

services contrary to the public interest. john: exhibit it could affect election results? >> yes, including unrestricted spending. here is what your former ceo said about american regulations and why he would not even visit the united states. >> i've been told that i don't look good in an orange jumpsuit. after he said that, something worse happened. he tried to climb out of rest and i. john: yes. very tragic. >> put the company into a management tailspin. >> the business relied on american customers. the presidential elections were like the super bowl of politics. there just wasn't enough business to keep the prediction markets going. john: as far as the value of prediction markets, why they are the etter is part of the wisdom

of the crowd? and when you get a bunch of people together, the crowd usually knows better than anyone expert. you see this one a contestant is stumped she can call an expert. >> i'm going to ask this geographically oriented audience. john: or she can pull the audience. >> to get the answers right about two thirds of the time. but they get the answer right 91% of the time. john: this is what you want to expand? >> yes. there are some alternatives and there is a prize of $5000 and you can bet on things like obama's approval numbers. >> yes, not a contest. >> that is okay somehow. john: in ireland, hiding from

the american autocrats, there's something called prediction.com was taken. it is pretty similar but doesn't have as much action as you guys do. >> is based in ireland. one important prediction is that it uses a bit point and we love that you love the idea. but the part that we have a problem with is that we learn from our own experience in regulatory avoidance isn't a good business modee. >> it may work for a while and the government may crush at. >> contraction picks up an awareness picks up come more people honestly pay attention. john: thank you. as you said, predictions exist because it takes a form of currency. pro basketball teams, las vegas he knows, when we return, more good news about bit coin. >> they have started accepting

bitcoin

>> i believe this is yours.

[laughter] john: something different this year for christmas. i bought gifts for my family without going to a store. now, i didn't give my credit card number to an online retailer like amazon. i didn't even use dollars and this year i bought this with bitcoin. here is an explanation. >> one of the? it's an invincible form of currency and gold for nerds. the only thing that gives it value is people believing that they have value. john: why but i believe that? i believe that i have bought coins. >> bitcoins minus powerful computers to solve complex math problems spewing. john: a computer algorithm makes it valuable.

frankly i barely get it, yet i was able to invest my money with a number of this account. i trusted them because of their reputation and i trust them more than the politicians in these things. i feel that american politicians will the value these. and i bought mine when each was worth about 140 abuse. now each is worth and more than than $800 i'm so glad that i am smart and put all my money in there. okay, i didn't at all my money there, that would be dumb. but all currencies are based upon reputations. and so far the reputation has held up. here to educate us about this is the creator of the shop. she has been called the queen of

bitcoin. >> what was your interest? >> i was living in silicon valley and learned about it. it was one of the few things i saw that could disrupt and resolution eyes a financial institution. away we spend money. john: and more stores are taking it all the time? >> yes, including others. the ones you work for nasa with your partner and you decided to start a bit like with amazon. >> that is right. last april and we trusted that the gifts would come. >> business is based upon trust and reputation. you have to grab people's confidence and make sure that they get what they ask for. and your accent suggest you're from a former european communist

country? >> i'm from the proxy republic. >> we need more of you people, you have a healthy skepticism of government control. >> correct. john: is that why you are interested in it as an alternative. >> all, oh, most definitely. one of the biggest advantages. it is a global currency that no government has control over. >> why does it take so long and is so expensive to send money? >> it is the equivalent of a text message to many this or convinced that it's here to stay. but i'm stuck by how many people sneer at the idea especially when the price drops. >> this thing is a joke. be beyond the georgetown professors that i wrote an article that i would not trust my savings to a mysterious computer algorithm created by shadowy characters. >> that does he hide his money

under his bed. even in our country, your savings could have been taking it. >> you you'll be keeping the bitcoins with your reputation and your wallet which has a good reputation. which means it's not connected to the internet. and i like the cover. so this would be my wallet and my book title name on it. >> the only way someone couldu y took it from you. so you don't have to worry about hackers in that regard are in.

>> they just want to prevent money laundering. >> he doesn't buy things online. these are the people making the decisions about a virtual currency. beyond the political regulator never buys anything online. coming up, how i learned that reputation works must -- better than regulation. the on coming out with what is new friday night, buddy.

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>> we need new laws and to reregulate. the government has a right to regulate. >> the conceit of these people, politicians claim more lives are the answer. it cripples our future. don't they see the damage it causes? if you are shallow and you don't think very hard, it's natural to assume a law and the government force is the way to solve the problem. >> they have come out with natural rat poison. >> boobs, that is me years ago

when i was a crusading consumer reporter. >> calling these people up makes me think that you are a crock. >> i chase down people and i tried to confront them. >> i am john stossel from abc news. >> i'm not interested. >> most women talk to me. >> so then i demand government action. consumers don't have the time or resources to investigate everything. it seems logical. government has to great product and services and punish bad businesses and find them and shut them down. unsold government created a consumer protection agency and i was instrumental in creating this one. then came the consumer product safety commission and the financial crimes enforcement network and so on. but what was weird is that i

soon saw his government regulators that made almost no difference. years ago they convinced people that if you pay a fee they are having a week stuffing envelopes but the rules don't matter. >> the patchwork systems have failed to present these abuses.

>> mccook hires a lawyer in maybe two or three years later you will find a consent order. were they say that i do not admit to doing anything wrong but i won't do it anymore. then he goes on to a new scam under a new name in another state. once i realized that i gathered my thoughts which i put into this book which argued that competition in the free market protect consumers much better than government anywhere. and now we have the internet. feedback on the web offers this much more. it allows people like me to offer taxi rides to strangers

and i can trust my passengers in the trust me because we greet each other on our smart phone. allowing strangers to rent to other strangers safely all because of reputations who established on the web and it keeps improving. movie rating sites, restaurant reviews thomas on. they did better as more people participate. even google by itself offers much more protection and i provided in consumer reports. more than the government will ever provide. we need some government protection. prosecution and repeat offenders. but most government consumer protection regulations are bureaucratic and useless. even harmful because it stops the entrepreneurs from trying anything. the millions of three people

making the choices and letting others know about their experience. including reputation over government any day. that is our show and see you next week. r tonight "willis rep" thank you for joining us and don't forg to dvr our show. lou: good evening, everyone. it is official. this will not be the year of action on immigration like the nation. the republican leadership today announced that after flirting with the idea of an the that the house of representatives will not take up the issue this year. speaker john boehner listened to his constituents on caucus and apparently tooseriously the thoughts to his speakership. we'll have the story tonight and also the department of justice refusing a congressional request for the we doj investigator to appear before congress. among our