when i was in high school, no one taught me. that's our show. see you next week. but lying won't make it better. that does it. >> raise the minimum wage to a living wage. john: democrats push equal pay for equal work. >> they take our money, they take our jobs and we get nothing. yawn * many people believe it's good to buy locally. >> they think it connell comes within 100 miles of you? >> the middle class has disappeared. >> my tax plan enables you to fill out your taxes on a postcard. john: is that possible while poll figures prop is subsidies

that will lower the price of everything? >> i want to bring it down to zero. john: these people live in fantasyland. much of what they believe about economics is magical thinking, myths. that's our show tonight. >> announcer: now john stossel. john: can americans and president candidates really believe economic myths? yes, they can. and they do. many candidate believe a min municipal wage won't kill jobs. at least one believes trade helps other countries at our expense. many people believe prices are set by business and rich people get rich at the expense of poor people. none of that is true. recently in our website called

cafe hyaak wrote his purpose in life is to dispel wrong beliefs about the economy that most of this students hold. most? >> most before they take my classes. john: minnesota believe myths. >> most listen to the mainstream media and politicians who perpetrate the myths. john: they say the interest of the business person are counter to the working person. it's a war. >> in order to make money you have to please consumers. and the more consumers you please, the wealthier you become. john: trevor wool think writes the myth that the market's zero

up. that's that as one man gets richer another gets poorer. i would say most people believe that. >> look at history. ordinary people today, poor americans are instantly richer than ordinary people a few hundred years ago. wealth is created. john: where did that money come from? >> it's not money, it's real goods and services. john: a post, the myth that private wealth belongs to the state so the state decides how much you get to keep. >> most politicians believe that. private wealth belong to the people who produce it. the presumption is the money belongs to the government, not the people who pro diets. the government doesn't produce that money and the government is

basically a predator on that. john: you are a pro-business shill. >> i'm pro market, i'm pro consumer, i oppose any toast protect businesses from competition. when businesses compete consumers and workers benefit ultimately. john: if they don't get help with export import. >> that's what enriches not on the successful entrepreneurs, that enriches the masses. john: big-spending politicians says government needs to invest more. >> you a these investments and innovation and education and infrastructure will make america a better place to do business and create jobs. >> that justified the $800 billion stimulus. my understanding is the stimulus didn't create real growth and

much of the money was wasted. but presidential candidates tell me of course it worked. creating millions of jobs at a time when we desperately needed those jobs. john: no it didn't says don. let's bring in a obama stimulus supporter, news day columnist, the step up plus was a great thing. it was better than what was happening before. remember how stuff tumbled so painfully? john: we had a boom and a bust. >> thank goodness we had activist politicians. we just had 8 years of terrific job growth. you should be clearing that, right? >> it's one of the slowest recoveries in modern times. bush was an activist president. i actually like to go back to

1920. the recovery happened in a matter of months. >> we had president roosevelt who wasn't sitting around waiting for things to happen and ringing his hands. we got out there and spent some government money and got america working again. >> it takes a little while to ramp up. you cannot say that activist government has not rescued our economy. some of the toughest times. >> yes, i can and i do. john: i'm afraid ellis and his socialist cronies are winning this argument. >> i'm announce an ambitious new plan to bring count cost of community college tuition in america. i want to bring it down to zero. john: they applaud forever. they are so excited.

that's why we are losing this art. people like this. >> they like crazy talk. that's what it is. you can't reduce the cost of college by having other people pay for it. that on raises the cost of college. >> those people understand the current system, the market that's suppose to be providing this isn't. private colleges are $50,000 or $60,000 a year. most people can't afford to go to places like that. the current system isn't working even for middle class people. >> the current system is the result of a long history of government supplied education and government subsidies to education. >> we let you drive down the street. we don't charge you for every time do you that with a toll. we do all kinds of things the government provides. and education might be one that's important, i would argue. john: how is that work out.

k-12 they tripled spending and it's bad. >> i don't know if it's bad. most americans across this country get a pretty darn good education. >> that's not what i hear. john: income inequality has lots of people angry these days. they say the rich get rich errant poor get poorer. suze orman said it on her tv show. >> the rich are getting rich errant poor getting poorer and the middle class has disappeared. john: put you have the charts of income gains since 1979. yes, the rich have gone the richer, but the poor got richer, too. >> that's not the way most people are feeling it. >> you say people are feeling. shouldment politicians and tv hosts quote accurate statistics?

>> if you cannot deny the paramount statistic, that a larger and larger part of the income wealth is held by fewer and fewer people. >> i can deny that poor are getting poorer. the number of families today earning over $100,000 is about 25%. in 1971 it was only 8%. americans are getting richer by and large. ordinary americans. even poor people are getting richer. >> a lot of middle class people i talk to are having a tough time. john: that's the reason they are attracted to socialism, it sounds nice. it will make things more fair. it sounds like a policy that will make things equal and take care of the poor. here is college professor francis rock piven. >> our first imperative is equality, is it not?

our first demands is to redistribute. >> it's just fair. ellis is saying that, too. redistribute from the filthy rich people. >> equal treatment under the law which does not mean taking from people who produce and giving it to people who don't produce. so much of it is in so few hands. john: there are more education opportunities, people are rising from the bottom to the top all the time. >> when we expands those opportunities -- you don't want to keep kids out of community college. you want them alto have that opportunities. >> when you look at things corporations supply the prices continue to fall. >> where it works well, let's stick with it, but there are

some places where it doesn't. education is one and wealth distribution is another. john: a guaranteed income, that's what this college professor wants. what will lower income people do with that money? here is her answer. >> with that income some of us will write poetry, so of us will do some work. >> i don't know that professor piven needs to be subsidized. we are decent people so in a way we have a minimum income already in this so tight. most people believe in that. john: i'm conflict about you being a decent person. personally you are. we share go sentsy. we don't -- we share decency.

by and large the market does a good job most days of doing that. but sometimes government does need to step in and lend a helping hand. >> usually when it does that the helping hand turns into a flip. john: coming up, senator rand paul. >> perhaps you shouldn't regulate jobs and force them to go away. john: people don't understand the unintended consequences. what these protesters call wage theft and other economic myths next. when heartburn hits

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john: they want a $15 per hour minimum wage right now, and their protest has brought result. all these cities have voted to raise their minimum wage sharply. now the democrats want the entire country to follow suit. >> we must raise the minimum

wage to a living wage, $15 an hour. off course we have to raise the minimum wage. john: of course? i'm so sick of their smug, ignorant pronouncements. the idea a minimum wage will lift people's wages. fit works we should have a $100 min municipal. if you raise the cost of workers, some of those workers will lose jobs and not get them in the first place. aaron shannon understands that and studied small business. congratulations to you in seattle you got a $15 minimum wage. >> washington has been sort of ground zero of the 15 now movement. we have two cities with the $15 minimum wage. john: it's not $15 yet, it's $11

now and they upped it by 2017. so what? give people more. >> yeah, except for the unintended consequences of this. this is not free money that dwroas on the tree. this is money you are take from he ploirts who would with otherwise use that money to invest in their business, grow more business, create more jobs. their cost of labor increased 50%. with that comes tough decisions, those decisions are tough prices, reduce your labor cost in the for of fewer workers. >> i recognize that having more money is important. >> unfortunately he will on enjoy that bigger paycheck for a few more months.

the pizza shop is shutting down. john: she explained what she tried to do to keep her business open before she felt she had to close it. >> i don't pay myself. and i have raids my prices a little bit. there there is in other way to do it. john: is this typical? >> we have one company who moved 10 off their lowest-skilled manufacturing jobs to nevada. john: the union is saying you can always actually to quote them, the advocate to the mire min municipal wage says restaurants are opening and closing all the time. >> the job growth in the industry, the restaurant industry, has ground to almost a halt. the rest of the state has had about a 7% increase in job growth. seattle on the other hand less than 1%.

john: one group said 1,000 jobs had been lost. but forbes say the was a gain of 1,000 between may and june and another thousand again september and october. maybe people will adjust and everything is wonderful. >> the average increase has been in the 3,500 to 4,000 range. so when you look at that difference. we are not talking about maybe jobs lost but jobs that are no longer being created. john: unions are saying exempt us. that happened in washington, too. not just in washington. it's been half a dozen cities around the nation. labor unions have spent tens of millions of dollars, higher p.r. firms to figure out what message works with people to support a $15 an hour living wage. they go in and say you need to exempt us. we need the freedom to negotiate.

you can't hold us to such a high wage because we might have to reduce our health benefits. we need the freedom to negotiate. john: aren't they embarrassed by that double standard? >> not really. john: coming up, the donald trump trade myth. >> they suck us dry, they take our money, our jobs, they take everything, we get nothing. the biggest challenge for business today is not

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republican frontrunner at the election betting odds.com, it's upsetting to know that he believes such things or at least says them. i'm not sure what trump believes. anti-trade myths are usually something pushed by democrats. >> i think it's wrong that we have unfettered free trade, manufacturing in this country goes down, we lose millions of jobs and you can't buy a product manufactures here. is this true? >> it's completely false. the assertion that manufacturing decreases is totally wrong. we manufacture more. it's true that chinas numbers have gown but that's great. you are talking about hundreds of millions of people who have gone the more productive. we get nothing? absolutely not. we get so many value-added products from producers in china, we have the opportunity in turn to sell what we produce there.

trade is a win-win situation. donald trump's notion that they are sucking us dry. the idea in trade somebody wins and somebody losse loss -- -- sy loses. every time you buy a tube of toothpaste it's a double thank you moment. john: because it's a valley trade, it does happen news both think you win. >> why should we tell consumers you can't buy a product that makes sense for your life. why would you want to stop that? john: if china is dumping something at below cost, then some americans who were making that thing can't compete and they will lose their job. >> dumbing is tricky. but -- dumping is tricky. but when a country overinvested

like china has. john: if they rip off their taxpayers to give us cheap stuff, we benefit. >> we are benefiting from bad policy in china. is it going to reduce jobs in the steel industry? technology is already doing that. we found different ways to produce steel at slower costs. we are conserving resources for other valuable uses. john: donald trump says we'll get apple to build their dam compute -- their damn computers in this country. >> that's hugo chavez politics. the net result of trade is we create more jobs both here and in the country we are trading with. that's good news for everybody. john: eating locally. i went to times square and asked people. is it good to eat locally? >> yes, support small

businesses. >> local delis, local farms. >> is it important to eat things nearby? >> eat things that only come within a hundred miles of you. john: it's kind of like the donald trump argument. >> if you think you are eating something that was totally grown local. maybe the apple grew on a tree five niles from your house but there was no wait wheel bare poe or the truck or the fertilizer was produced local. those things are coming from all over the world. it's a surface-level localism that sounds nice. john: you have might get poisoned at chicago pot le eating bacteria-laden food. >> do you want every product to come locally. can your neighbors make

everything you enjoy in the ties you wear, the shoes you wear, the phones you have use? if we buy it from china it's still win-win. they get jobs and we get jobs. >> don't you want to see americans and people in china get great jobs and more people trying to solve the world's problems? i do. john: senator rand paul on regulations that are supposed to protect us but instead wreck people's lives. >> if you don't get off the property we are going to find ♪ there's no one road out there. no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes

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john: i won 19 emmy award when i

was a left-wing reporter delanding in more regulation. it took me a long time to realize government regulation rarely works it doesn't make life better con consumers. it often makes it worse. one rare politician who gets that is senator rand paul. your father taught you? >> i think i infringively blanch at the idea of the government telling me what to do, particularly when i note government screws up most of the thing they do. if they say it's a reasonable regulation. within days, weeks and years it becomes something onerous. the clean water act says you can't discharge flutants into a navigable stream. where it went too far is when they decided dirt was a

llpoant and your backyard was a navigable stream. john: they say a pulled is a waterway. most people don't understand how cruel these rules can be. jack and jill baron own people that is being flood because a nearby government-owned drainage ditch was clogged. they cold my husband we are backed up. if you can clean it ditch, do it. he removed the losing and the water powered off the land and we were cited for cleaning the ditch. the state government floods your property and the federal government charges you with a felony because you have a

wetland. john: did the regulators admit they were wrong and back off? no. they threatened to sue them in civil court. >> if you don't get off the property we'll find you civil. reporter: what does that mean? $37,500 a day. john: they had to sell their home. the government agreed not to sue once they gave the government 3/4 of their property. >> if you think this is the exception to the rule you would be wrong. a hundred fairian immigrant began putting dirt on his land, and he picked up all the trash. there were 7,000 tires in the drainage ditches that cause it to flood. it was a so-called wednesdayland because the ditches were full of junk.

he began putting dirt on his own land. three years in prison and $250,000 in fines. he came to this country seeking freedom and we put him in jail for putting dirt on his own land. john: you proposed a law that would limit this kind of thing. >> if you are going to have regulations, you shouldn't put people in jail for them. a fine, if you don't do what you are supposed to do. but jail? we have people being for jail for regulatory paper crimes than some violent criminals do. john: they come in armed. >> 42 federal agencies have s.w.a.t. teams including the department of education. full helmets, body gear, semiautomatic weapons. i guess they are thinking the more onerous it gets the more resistance they will meet.

if you burst into people's houses at 1:00 in the morning there will sometimes be errors, sometimes you will be in the wrong house and people will be shot and some people will think it's a burglar breaking into their house. john: fish and agriculture come in guns drawn. >> they had a predawn raid of an amish farmer for the crime of selling milk directly from the cow. there is this act that you got passed through the house. but it looked like only republicans voted for it. the opposition, hang johnson from georgia says this bill will undermine agency's ability to protect the public interest. it's a deregulatory train wreck. >> all it does is say if regular nations are written, it would cost the economy a certain amount. that they have to be voted on.

that's why i think it's a good government bill. by the's about separation of power. the president doesn't get to write the rules. if he does write onerous riews that would affect the economy they have to come back to congress to be passed as a law would. there is a great deal of separation between the parties. there are no democrats in the senate that will vote for anything that would approximate that bill and say regulations have to be approved by congress. not one democrat. they have a greater belief everything the government does is good and it's helpful. that's why i try to tie it back to jobs. many say they want american jobs. you want to keep companies here, treat them better. john: i fear our scepticism about regulations put us in a small minority. this person on msnbc.

>> corporations left to their own devices will not self-regulate. john: corporations won't self-regulate. >> i think self-regular laying does work. if you come to my restaurant and get sick i won't make money. john: it the not even necessarily that you are a good guy. competition is that if you poison people you will lose customers. >> there are occasion when government can be involved. but they are few and far between. they shouldn't get to the point where you beleaguer business. that's where we are. we are at the point where do the none do we beleaguer business, but we make it difficult to start businesses and people are going other places. the thing you did with going to india and hong kong, we are become more like the india where it's hard to start a business in america anymore. john: in hng congress i could do

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class, they cannot have it all. they are going to start paying their fair share of taxes. john: yeah, rich people ought to pay their fair share. warren buffet says he pays a lower percentage than his secretary, that's disgusting, right, steve moore? >> if you are an economist, this is a prevalent myth. it's been around for 10 years, warren buffet keeps saying it. he's not -- what does warren buffet do? he owns companies. the companies pay a lot of tax. if you take into account all those taxes warren buffet tax rate is higher. john: according to forbes * the secretary makes between $200,000 and $400,000 a year.

>> most of this money comes from capital gains. he's not paying a lower tax rate than his secretary. john: people say if you raise taxes on the rich, i will have more equality. >> we have a great experiment on that. we have 50 states with different tax rates. the states with high tax rates like california and new york have more income inequality than the states with zero income tax rates. john: why would that be? >> i think it's because there are fewer opportunities. if there aren't rich people there are fewer opportunities to make money. i don't understand why we want to villianize the people who are the backbone of the american economy. >> how high would you go? >> we haven't come up with an exact number yet, but it won't be as high as the number under

dwight d. eisenhower which was 95%. socialist eisenhower. >> he doesn't want to go to 90%. hooray. john: people say the was 90%, we did okay. >> nobody paid the 90%. i want a flat tax. get rid of all those deductions and loopholes. the rich are the people who take advantage of all this stuff. clear out the deductions and they will pay their fair share. john: i ask my social media followers for myths that bother them. dean tweeted the myth that higher tax rates mean more revenue for government. this is counter intuitive. >> sometimes you can raise tax rates and get more revenue.

my favorite example is in the reagan years when ronald reagan came into office. the highest rate on rich people was 70 percent. that's a 2/3 deduction. the rich actually paid more tax not only did they pay more taxes, about twice as much. but they have maid a higher share of the taxes. sometimes, not always. sometimes cutting tax rates and getting rid of loopholes -- >> they paid more maybe because they have worked harder? and they stopped putting their effort into cheating and hiding. >> if we want to balance the budget and get more revenues into the government, we'll need a lot more rich people. we'll need more rich people. rich people pay the preponderance of the taxes. imagine more millionaires and billionaires and we create more rich people and we can use that money to balance the budget.

john: you admit it's a mixed bag. >> sometimes you get more revenue and sometimes you don't. john: another economic myth from bernie sanders. >> major corporations year after year pay virtually zero in federal income tax. >> i kind of agreed with him on this. corporate taxes is so messed up right now that you have some companies like general electric, some years they don't pay any tax. john: how can that be? it's 40% in the united states, less in france, japan, germany. much lower, half the price in the united kingdom. >> we have the highest business tax right in the world yet it doesn't raise much revenue. john: how can they not pay it? >> because they take advantage of tax credits and loopholes.

that's why we have k street is just flood lobbyists. what do you think they are lobbying for? tax carveouts. john: coming up we move from myths to outright lies. >> ordinary americans are working longer hours for lower wages. ♪ i don't want to live with the uncertainties of hep c.

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s. >> i would work quickly to present to the congress my plan for creating more jobs, clean energy, raising the minimum wage and guaranteeing he wall -- equal pay for women's work. john: they applaud over her froims guarantee equal pay for women. how clueless can all her audience be? not only would that free stuff bankrupt america but no government can guarantee he quality among different people. for every buck a man earns, women and average make 78 cents. but that's because men and women make different choices.

if women were really underpaid, the way to get rich would be to start businesses that hires only women. since women are underpaid, they will be able to produce stuff much more quickly and they will get rich. that's a myth, but it doesn't stop the ignorant from a.m.erring about it. here is another myth. hillary will lower the cost of healthcare by ... >> putting a cap on the out of pocket and description care cost -- prescription drug costs and it the drug business and health insurance business on a more stable florida platform. john: give me a break. capping prescription drug costs? we'll put the drug business on a more stable platform? catching prices makes businesses less stable.

and we get furiousful drugs fan fewer life-saving drugs. there is no free government lunch. government can't even count accurately. bernie sanders is especially ignorant. he says things like this. >> ordinary mayor once are working longer hours for more wages. john: longer hours, lower wages. neither claim is true. americans work fewer hours these days. quite a bit fewer. also they don't work for nor wages. yes the rich made even more, but poor and middle income people got richer to. all these numbers are adjusted for inflation. when politicians aren't lying they engage in magical thinking. they promise affordable college tuition and when it comes to the cost of community college ... >> i want to bring it down to

zero. they applaude like crazy. he can't get his next words out. if they only had some economic education. in the case of college tuition they tried. federal spending of college aid has doubled and doubled again. but as government aid grew so did tuition. inflation was 160%. we are upset healthcare costs grew more, 400%. but college tuition rose 750%. government aid drove up the costs because it destroys price competition. there are so many economic myths. the rich get richer at the expense of the poor. the prices and wraings set by businesses. price increases after natural

disasters should be stopped by laws against price gouging. rent control makes house affordable. business taxes are paid by business. these are all just lies. i stole that list and much of this show from cafe hayek. he teaches economics to college student. he says if i do my job well, by semester's end each of my students understand the world is much more complex and reality less obvious than he or she believes. that's my goal for this tv show. for high school students i started a charity called "stossel in the classroom." that offers free video that inoculates student against economic myths.

when i was in high school, no one taught me. that's our show. see you next week. from the snow coming down to the ups and downs on wall street, hi, everybody. this is bulls and bears. despite some ugly days the markets finally seeing an upweek in 2016 but they're still down for the year and now two thirds of ceos are warning that it could get worse if d.c. buries them in regulation. is that what's really hurting the economy? let's ask the bulls and bears this week. welcome to everybody. suzy, this is your issue, girl. job creators say government