♪ ♪ >> and now it is time for john stossel. and. john: whenever there is a problem, politicians claim that the answer is more laws and more regulations. obamacare will make medicine better. dodd-frank will stop problems in thinking. and this is how bureaucrats and lawyers believe. they believe that will fix things. america's lawyer in chief leaves that. >> we need smart regulations to prevent irresponsible behavior. john: smart regulations. they always say. apparently this is smart except after the collapse of enron they also we supposed to stop financial frauds like bernie madoff and others.

government is a hammer and government is force. when you have a hammer, everything looks like this. but there is a better way and they private sector way. the power of reputation. i won't go to a movie anymore without checking iran's maeda' website. when i travel i look at what other people say about the hotels. a test is more than a certificate of approval from the department of business regulation. jason lewis agrees and alan colmes says this as well. >> look at all the trees that died without. [laughter] >> stop financial fraud. >> dodd-frank quantify the loss that we codify the laws that we have in place them and put them on steroids including bailouts come in telling lenders that if

you redline or discriminate the doj is going to sue you. if you make loans to low-income people than you are predatory lending. >> they had no choice and now they are selling them under dodd-frank. if you do we wll have an orderly liquidation. note that is code for in dodd-frank is a bailout. >> the regulation that cause the economic collapse, republicans for years and conservatives and certainly libertarians has said less governmenand less regulation because dodd-frank corrects them. >> it caused the economic collapse less regulation and less government and how to that cause the collapse? well, it was a bubble. >> and we had these banks doing whatever we wanted to do in merging the banks and credit unions i could do all these different things and there is no

development. and the moral hazard was the fact thathe governmentame in and said that we will ensure all of you bad mortgages under fannie and freddie. and for once you tell someone go ahead and make a bad loan -- they tend to make albums. with dodd-frank now this is the large bailout and they're going to take these rest on more risk. >> really now? george w. bush, a conservative, if he wouldn't have prompted up we would be better off? how is that the case be one no privileges, no mail outs, if you lose money, he lose your own mon. >> the united states at the center of the economic system of the world trade it would've affected the entire country. >> how many times have we buildout companies to bail them out agai?

and you have all of the assets that would be disbursed among private companies. >> let's move onto another level. the college tuition bubble that has raised more than double the rate of inflation for years. partially caused by government. pushing people to go to college and now these graduates are deep in debt and can't find jobs and president obama has a solution. >> i'm directing my administration to come up with a new rating system for coleges. >> is a good idea? a rating system for college? why should the consumer know what they are getting whether it's colleges? >> they have new rules and reports. let's just go online to somone said that we don't know much about them we don't know who know who is running a careless to say that we don't need that we need websites and the government to do it better. >> sometimes the websites actually have to meet a market test. i go to website and it turns out

to be a great college or not to be a great college, then the government makes a mistake and who gets fired. john: another way the government supposedly protects us is by representative hiring certain workers to have a license. it started with doctors and lawyers and government always grows. some how bureaucrats licensed dozens of perth fashions. yoga inssructors and interior designers and tour guides. another good thing is you go to a new dunst dentist and you check in government license? now. you do not do that. >> you know becausehe as a license and is licensed to do business. >> people still cheated. people are just like at. >> so anyone can say they are done this without any regulation whatsoever enact. >> becau he wouldn't lie on government you would check a private listening. there would be other operations out there that would be better.

>> there's only one thing worse is an unlicensed yoga instructor. [laughter] >> whaabout all the good stuff that we don't get to have because of this? license and rules keep some of the best people out of the profession and they outlaw improvement. do you rememberthe movie the king's speech? at the talked about how he got help for his stuttering because he went to an unlicensed speech expert. the license individual said that his speech would be better if he smoked a cigarette. >> the fed, they are idiots. john: at first the king criticizes his new key speech therapists. [inaudible] >> so it is just entertainment in the movie but it is true that it was an unlicensed guy who helped him. >> because of a scene in the

movie, not sure tt it makes the point that we shouldn't have any regulation spread the consumer knows when they get into businesthat they are protected and they are n going to a quack job who has not been vetted somewhere. >> you deny that the rules prevent new ideas from starting? them out why would they prevent new ideas from starting? >> because it doesn't fit the government hold. the people in the business make it much more difficult for competitors to come in so they cancharge more and you don't have a market competition. how's how is that a good thing? >> i think having a bar to entry is a good thing. otherwise any quack can do business with em. john: want more example is osha. [laughter] >> okay, factories are dangerous. since osha was creted with workplace fatalities that were recorded have dropped. in all these lives have been saved now look at this chart. it shows what was going on even

before osha. workplace fatalities were already dropping. how much more with osha? >> the slope align is the same. >> not in every single case. workers deserve to be protected if you look back into how many centuries ago or how many decades ago and we can trust every manufacturer and replace a worker would go. because we could n trust employers. >> in the 19th century kids were working on farms and it was horrible. because he bulwark trying to survive very through capitalism when society is prosperous and all of a sudden kids can go to college and people have a better work ways. i think that is what is happening. john: thank you both very much. please stick round. i want to ask about your new

project. finally a virtual economy that allows you to join forces with people who share your values and not the government. >> i'm talking about a sort of a facebook plus been around me application to organize the way the left is organized. john: i expect you are a conservative libertarian, but this is a libertarian social network? max the bottom line is that they believe in smaller government that has done out organizand you go to an city council meeting or the left will be there and they have an institutional liberalism and the academy and public unions and we don't have that. so it's an attempt to make sure that people go to one place and then they can basically form a network within a network based upon the market functions in the more people to get to join the cause the more productive you will be and the more coins you will do it.

john: okay.org or.net. they got taken. >> it's a little shorter and different and it got taken. john: you ad big success in your trying to raise $250,000 in the race hundred thousand dollars? >> yet heard it's been remarkable. there has been a reputation or this. >> we're not going to tell people problems are going to win, that is going to be a function of te marketplace. once that causes out there, what people will be interested in is this. john: thank you, jason lewis. let's go to another website this one is already operating in its called crust clou it gives it more ways for you to understand if we can trust someone or not.

i could check out your credit score, but that only tells me so much. so trust cloud was introduced. >> it helps you to collect all of your trustworthy data that you have generated online on the website and on your mobile devices. if you are on linked in or facebook or twitter comment with the one place that you can use always. you don't have time to google somebody or do abackground check on someone. and in the past are lucky enough to have a referral from a friend. now these are hundreds of millions of people out there on the web. meaning the reviews that people make of each other and the

transactions that they have completed can all go into trust clouds be one you evaluate this into a credit score? >> yet. >> accountability, efficiency. >> that is what is beautiful of the idea of big data. john: shiva from 502,000. [laughter] >> this is jus the computer and the drills through all of this? >> yes. so we are a technogy company and we have algorithms that go through these pieces of dataaand we apply the different filters that do not look at the contents of your e-mail. we look at the overall behavior and then compacted and discourse. i want to hire someone i can get their score in 30 seconds and a

credit score they change it once a month. and the big needs are trust and safety and to have tt trust scored next to this is really going to help us out. john: thank you for this chat about reputation and twitter. use the hash tag reputation and let people know what you think. coming up look at the luscious brunch. people are having fun. some central planners are upset about this. >> 80 people sharing a meal and a stranger's home and insiders welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makes my life easier.

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john: are you a good cook? do you cook for more people more often if you have more money? are you traveling or do you like home-cooked meals more than restaurants? both of you can have what you want. this home in new york city is the home of a woman who likes to cook for people. >> i renisce back to the days when friends would get back together for a dinner party and

then maybe with some friends -- there's a lot of food and alcohol and great conversation. >> she was happy when she discovered this website eatwith.com. it allows hosts to connect with strangers who'd like to meet new people at a dinner party. she says her previous dinner party events have lead to lasting friendships. >> when i would host dinner party events for friends, it would be really great to get the other people determine.

>> this includes the power of reputation who founded the website and how did you come up with this idea? i traveled to greece and it was such a profound and amazing experience and i thought, let's share this moment withillions around the world. john: with the patform that people can rate the home and the cook d sasay they had a good experience. >> yes, we see trust and safety very fundamental as well. and the invitation that is coming in as well.

>> i'm often stunned by the way that my profession embarrasses itself. and here ispart of an undercover investigation. >> eight people sharing a meal in a stranger's home and insiders tell us that they are completely unregulated.

>> completely unregulated strangers and bringing in a camera. like this is a crime and it must face bureaucratic regulations. and a regulator has usually let this, working with a lawyer for thes kinds of experience to happen. john: i couldn't have a social dining experience advisable to my house. you must be regulated because someone is making a buck? >> so far this industrious part of this.

>> wait until someone gets poisoned and they will pounce on your. >> and at that party, everyone said that they were thrilled and wanted to do it again. >> i loved coming into someone's home and seeing the cooking going on when we were dining out. it was a unique experience and getting to know other people as well. john: in fairness looking at the website, everyone has reported a great experience. coming up, i just learned that a wonderful prediction market might come back. and also how technology and reputation will cure universities of the problem in the movie highlighted in the movie highlighted in ghostbusters [ male aouncer ] we all think about life insurance.

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john: one important part of america is a reputation that seems to have little impact one teacher is paid as much as every other teacher. and that is about to change, says the author of this book, the new school. >> it has already changed and the reason that it is is because people have alternatives. and it went very well and she

graduated early at 16 years old area your property values go up or down with a particular schools disict you want to go on vacation with your family have to wait until some bureaucrat says that you can and if you would rather not get up at the crack of dawn to tke your freaking kids to school then that's your choice. >> i was amazed at how much for your i felt. >> this will alsopply to colleges? >> colleges have their own problem. people have been talking about a higher education bubble and traditional college model like the k-12 model is impoted from

germany circa 1920. looking obsolete. people spena great deal of their livesoking for this. a lot of times when they graduate. according to the gallup poll, they wind up with a job that they could gone without a college degree anyway. the difference between a starbucks breast of that ent called him on the did in his $100,000. the one pushback on these online courses, the best professor is getting 100,000 students based on his reputation and only 4% of students finish. >> i don't think that's so bad. we would be a lot better off if traditional education continues year after yer. but the mportant thing is if there is a learning curve than with traditional education is not. john: now the best guys might

have a hundred thousand students and make a mllion dollars. >> oh, absolutely. all based upon reputation and that is not so bad. one thing that gives people an incentive to be better is lacking from the current system. where dan aykroyd is explaining why he wants to seek a life elsewhere. >> you have never been out of college, you don't know what it's like out theee. i work in the private sector. >> there hasn't been much change, but you say that it's going to happen suddenly. that the rubber band will pull i poneman will break? >> yes, and i think that it's starting to happen now. enrollments are faling you're seeing more and more people look at alternatives to college and especially employers like this that shows something is concret. john: thank you, glenn reynolds. i can't wait for technology to rescue students.

coming up next, the wonderful prediction market that lets people bet on things like the academy awards or natural disasters and predicted outcomes better than pundits and polls. her control freak government shutting trade down, but it's coming back sort of. coming back sort of. th[ doctor ] and in a inical trial versus litor, crestor got more high-risk patient bad cholesterol to a goal of under 100. way to go, crestor! yh! tting to goal is a big dl, especially if you have high cholesterol plus any of these risk factors. because you could be at increased risk for plaque buildup in your arteries over time. so, when diet a exercise aren't engh to lower cholterol, adding crestor can help. go, crestor! ♪ ♪ oh, yeah [ female announcer ] crestor is not right for everyone, like peoplwith liver disease or women who are nursing, pregnant, or may become pregnant.

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john: oh, yes, another wonderful new thing that was not to the liking of our fussy regulators. the prediction market website where people could bet on most anything and thanks to those individuals putting their own money where their own mouth is, people knew more about the future.

predictions weather about oscar winners or elections or the capture of saddam hussein were much more accurate than predictions made by pundits. i beeve it's 51 to 45. and it was banned by the new president's bureaucrats. the commodity futures trading commission says that it is unlicensed and contrary to the public interest is the one they

escapedand they were still shut down by american regulators. >> yes. and we have a new structure that doesn't fall within the remittance of the cftc and therefore our new structure will alw us to accept american customer. >> and you're just doing this? >> we are going to begin with sports and there's no reason why we can do a all types of content categories. >> 's already there is fantasy football that has some form of a sports betting. >> instead of a bat we have a contest structure so it's not one person against any other one person. it is a contestant competing against all other contestants and it could also extend to the american idol show were grammy awards are things like that.

and the cftc says this is contrary to the public interest. >> it could affect election results that many things can affect it, including unrestricted spending on television. >> this s what your former ceo said about american regulaons and why he would ot visit the united states. >> i've been tolthat i don't want it in an orange jumpsuit. >> after he said that, something worse happened to him, he tried to climb out at rest and died. >> just in its very tragic. weekly put the company into a management else been. >> the business relied on american customers and they would say that the presidential elections like the super bowl of politics. and there just wasn't enough business to keep the prediction markets going.

>> are dubious crowdthat can be more like ao and when you have a bunch of people together, the crowd knows that her than anyone asked her. >> you see this when a contestant is stumped, she can call an expert. >> i'm going to ask this geographically oriented individual. >> she can also pull the audience. >> they get the answers are in about two thirds of the time but they get the answer right 91% of the time. >> you can bet on things like obama's approval numbers and where they will be. >> .is a contest and it legally fits in the room.

and there is something called predictions.com and it was taken on the internet. it is pretty similar to an trade but doesn't yet have as much action as you guys do. >> is based in ireland and i think that's a coincidence. but i think that it uses bitcoin and we love the idea of that coin. john: thank you, and that as he said, predictions exist because it's a new form of currency and more businesses take it now. when we return, more good news as well. >> they have started accepting

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[inaudible] >> i believe this is yours?

john: i did something different this year for christmas. i bought gifts for my family without going to a store. no, i didn't give my credit card number to an online retailer like amazon and i didn't even use dollars this year i bought gifts with bitcoin. what are they? well, here is n explanation from wall street journal reporter. >> what is it? it is an invisible form of currency what is called old for nerds. the only thing that gives them their value is people believing that they have value. >> why would i believe? guess i did believe and here is why. >> governments can't just print more currency. and they use powerful computers to solve complex math problems. >> a coomputer algorithm eliminates the number that makes it aluable.

and frankly i barely get any i was willing to invest my own money touy lists from this new company. it was one of several that offer the account. i don't know anyone who works there. i trusted them bause of their reputation. i trust the entrepreneur is more th the politicians who have power over these things. i fear that american politicians will devalue this. each is worth about 140 vias. and i am so smart and i'm glad i put on my money anditcoin. okay, i didn't put all my money there because i that would be dumb. but all currencies are based upon reputation. insofar bitcoins reputation has held up.

so what is your interest? >> well, i was living in silicon valley and it was one of the few things that i can disrupt and you have to make sure that they get what they asked for it.

>> it is a global currency that no government has a control over. >> we are used to seeing that baylor sending text messages and e-mails. >> yugos are ardently convinced that it's here to stay. bed?es he hide his money under

even in our country during the depression rcs they've been taken. >> the only way someone can steal from you is that they take it from you.

and there is a big adventure. >> apolitical regulator never buys anything online. okay, thank you. coming up ext, how i learned that reputation works much welcome back. how is everything? there's nothing like being your own boss! and my customers are really liking your flat rate shipping. fedex one rate. really makesy ife easier. maybe a promotion is in order.

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>> caing people up makes me think that you are a cook. >> the way that you are putting it, it is true. it does appear to be so. >> to chase down people and tried to confront them. john: most would not talk to me. so then i demanded government action. consumer don't have the time and resources to investigate everything. as alan combs says, government needs to punish that businesses and shut them down. and so government created consumer protection agencies. i was instrumental in creating this one. then came the consumer product if the commission and the financial crimes and oarsmen network and the consumer financial protection bureau and so on.

but what was weird is that i soon saw that the government regulators made almost no difference. years ago common convinced people that if you pay a fee to make $500 a week stuffing envelopes at home. >> can you introduce me to any of these people? >> not in the next 20 minutes. >> i will weight. >> i can show youorders. >> that con artist is gone another rules against what he did that the rules don't matter. cheaters will cheat. make money from home scams have not gone away. and then a politician says that we have to close the gaps in passmore rules. >> the patchwork systems and regulations that we have now has failed to prevent these abuses. >> so they strangle us with more red tape and accomplish nothing. well, not nothing.

sometimes the attorney general or the postal inspector is one of thendividuals hired by her last republican president. both parties were eager to regulate. maybe two orthree years later you will find a consent order. a legal document where the cook says a government doing anything wrong but i won't do it anymore. and then he goes on to a new scam under a new name they be in another state. i gathered my thoughts and put it into this book which argued competition in the free market protects consumers much better than government anywhere. now we have the internet. feedback offers much more consumer protection than government does. so much more that companies like list allow people like me to

offer taxi rides to strangers. i know that i can trust my passengers and they trust me because we read each othe right on our smart phones. and room ranting sites allow strangers to rent other strangers safely all because of a reputation that we establish on the web. and the feedback keeps improving. they get better as more peoe rticipate and even google by itself offers much more consumer protection than i provided in 20 years of reporting and more consumer protection than the government will ever provide. so w need some government protection and repeat offenders

see you next week. jeff: jeff flock here. >> this week on across america, we go kayaking and fishing with one of the wealthiest and most successful women in america. >> we take an inside look at america's most storied office furnituremaker. what happens when a 300 pound person sits on a milr chair for three years? this machine is finding out. we unveiled the newest and fanciest outlet mall in america and get the wisdom of the visionary who started building it in the worst recession in history.