good afternoon and welcome to prime interest i'm perry and boring and washington d.c. let's get to today's headlines. and turn the fed is about three years after signing of one hundred three the financial companies that were not banks were finally designated as too big to fail or more if you're your diet lead to similarly important financial institutions the newly christened so called cities are. two thousand a bailout fame capital another insurance giant and lender and prudential financial this is the first round in which entities are being placed under the. ad they'll also have to submit living wills that describe how they would be resolved should they become insolvent or in the case of a i.g.

and capital insolvent again so much for mailing for. and forget hank paulson goldeneye next treasury secretary he threatened to use a bazooka on the markets back in two thousand and eight but the european central bank said it won't be using any big bazooka intervention when it comes to sharp jump starting lending the euro zone market participants had hoped that e.c.b. head mario draghi would bust out with another large money printing scheme of their lives of course but it looks like no dice for the big banks and this is after we reported last week that spanish banks were already going all in with their nation's debt looks like the european lender of last resort will be lending or bailing out much later. and here is what's in your interest.

it was first president kennedy who called a for a federal program to provide federally subsidized mass transportation to americans has a wish came true and one nine hundred sixty four when president lyndon johnson signed the urban mass transportation act and to law and establish what became to the federal transit ministration as a national project injected a three hundred seventy five million dollars and incentives and subsidies to lure of state and local governments to intervene in the transit and history but all support has grown increasingly ever since and in fiscal year two thousand and twelve at the federal transit administration budget request was over twenty two

billion dollars it's included funds for bus and rail were pale repair programs research and development and ministry of expenses among others the urban mass transportation act promised to bring mobility to lower income families but have all the taxpayer funds been productive well earlier i spoke with len gilroy he is the director of government reform at reason foundation who makes the case for privatizing a public transit industry. prior to the one nine hundred sixty s. most urban transit was private run through private companies providing transit services and really after the world war two era when you had the rise of the automobile and you had the rise of suburbanization of people moving out of downtown's their became more and more pressure on the downtowns to. keep themselves going on. and so at the same time you had cities that started to regulate the

private transit operators and in fact they were regulating their fares and not allowing them to charge enough that it would take to recoup the costs of their operations and so in that one nine hundred sixty s. you had the urban mass transit act which came along around the same time as the department of housing and urban development and the goal there was really to you know start making policy moves to improve the downtown so i would say it's less about. you know providing such transit services to the poor and really those moves were more in response to trying to save the downtowns from suburbanization and the army appealed and so one of the things that the federal government did was incentivize cities to actually take over the private transit operations which were already struck starting to struggle anyway because of the limits that cities were putting on their rates and what ultimately happened was cities and governments took

over and essentially monopolized public transit services in the vast majority of this country and according to a study by randall o'toole of plato after the urban mass transportation act was signed into law transit worker productivity declined by more than fifty percent and i have here a graph that shows the number of annual transit trips per operating employee and we can see that since this is the cline by more than fifty percent now one reason like you say that the government entered the mass transportation and history was to bring transportation to people in these unprofitable areas so of course we would expect to see a productivity decrease but do you think that productivity wise can be attributed to any other factor. well i think there are two big factors i mean first of all as i mentioned you have the government monopolization of public transit and just as monopolies tend to do which you tend to have are higher costs and lower quality of services and then the other big factor is that under federal rules public transit

agencies that run their own transit operations have to have unionized workers and again what that brings along with that are limitations on productivity as a result of things like limits on the number of hours for instance transit workers can work and then also the higher costs that go along with the higher salaries and the higher benefits associated with public sector unionisation and now you talk a little bit about bringing competition back into transit how would you suggest doing that. well one of the main ways that some cities like denver and phoenix los angeles san diego have been bringing some competition into public transit is through simply hiring private companies to run their transit operations primarily in bus routes and one of the benefits that you get there is a you can save on the order of on average about thirty percent on your operations and then also places like denver of found not only are they saving about

a third of the cost of running things like us lines but they're actually able to deliver significant improvements in the level of service meaning they're able to expand the bus lines and things like that which ultimately benefit the users of the mass transit systems the mopes in addition to that there are other there are other ways to bring competition to bear and public transit. one of the things that's happened is that cities have affectively regulated away and made it illegal to have competition to the monopoly transit activities that the cities are providing so the things like jitneys in petty cabs and. curbside busses and other types of transit activity. that are used around the world and into a very very limited degree in some cities in the us and those provide more choices and provide more options for users and if you can combine that with things like possibly transit vouchers for low income people which would allow them to spend

those dollars either on public transit or through taxis or through any of these other types of of market activities. that would also be a huge benefit to users who need transit the most so you think that we said deregulate the industry just a bet and i don't think declining productivity you know has to be the trend here and as the reason foundation pointed out in your annual privatisation report three that you don't have utilized competitive contracting after a port in thing never can cause favoring he explains a little bit more how some of the thirty even your study like denver and los angeles and boston are benefiting from competitive contracting. well sure what they're doing is they're basically asking private sector companies to compete to provide transit service it's primarily in the area of bus routes but it also happens to a certain degree on things like commuter rail operations and and even light rail but what they're essentially doing is asking companies to compete on cost and

quality and so what that is able to do is it's also it's providing cities the opportunity to save money which allows them to stretch limited transportation dollars further and it really also allows them some more flexibility in things like worker rules because if a city under federal rules if they're providing their own transit services in-house meaning government workers they have to be unionized but if you contract that out to private companies then you can have more market rates for labor and so that also helps to bring that competition to bear and else drive down the cost and expand transit services and improve transfer. well sometimes when the government call of privatization and. really does end up being the government awarding contracts to their insider earth and some would also say that this brings the last transparency and as a result and when it comes to transportation expect. competitive contracting are we

seeing true privatization here or is this more phony crony privatization government intervention. well cronyism can be a problem if you don't do privatization if you don't do it well the folks who do this well and by and large i mean that's what we've seen in public transit just as we see in most areas government service if you have true competition you have sort of an apples to apples even playing field for competitors where they know the rules of the game and everybody competes on the same measures the same metrics then you're going to get you're going to avoid those problems trying to use them because you're basically saying here are the rules of the game and what we're going to be transparent about how we do this and select the bitters and so that's the way privatisation should be done to avoid that and then the other thing of course is that cities need to be really good at monitoring these contracts and putting performance metrics into the contracts that demand that the the private contractors

live up to their end of the bargain and deliver what they said they were going to deliver and if you get those two things right you have good competition good contracting that goes with that and have those contracts monitored well and measured for performance then you're going to probably ninety nine percent of the time have a good experience and i think are mentioning people in the lower class who really depend on public transportation and a lot of these cash strapped state and local governments that are facing budget challenges they tend to transit services or increase fair prices first to fill budget gaps and you've made the argument that this hurts the lower class the most so can you explain what you were talking about earlier having a voucher or you know rational pricing for transit fare. well sure i mean as as you well know since the recession in two thousand and eight you've had many many fiscal challenges at the state and local level and while the states have been

recovering a bit local governments are still hurting from the impacts of that five years ago and so whenever there's competition for funds you know things in transit in particular what's going to happen is that they're not going to cut the salaries of unionized workers they're going to go and cut bus lines and bus routes and things like that and when you compound the problem by actually trying to invest more money into higher cost options like rail instead of better cost options like bus routes all those dishes decisions are compound ing to make it really difficult on the on the urban poor if you need transit the mugs and so that's why i think more competition more private sector options should be brought to bear and if the other thing that we've sort of done is that you know especially when you're talking about rel is that it's not low income people that are primarily using urban rel it's middle class people so we're having taxpayers subsidize the middle class who could

otherwise afford to pay a little bit more for their transit meaning meanwhile we're cutting the options for lower income people so all of those things are a big problem and that's why something like transit valves bringing more competition to bear on the system would give the poorer and the people who need it the most more options and in transit. and that was the one that gilroy he's the dark director of government reform for the reason foundation and stay tuned because up next we break down the jobs act was passed over a year ago but so far has yet to create any jobs thanks as the foot dragging and prime interest producer bob inglis and i will do all over new currency and burning speeds over the week.

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welcome back recently we heard many complaints about implementation of the jobs act with criticisms over the speed in which the f.c.c. has completed rules at the march confirmation hearing of mary jo white who is the new f.c.c. chairwoman she assured congress jobs act of imitation is a priority. if you can do them well and smartly and still get them out quickly i can't give you an exact date but i guarantee you that i'm going to be focused on that if confirmed from day one. so what exactly has been going on with the jobs act this act president obama hailed as necessary to help entrepreneurs well this bill also known as the jumpstart our business startups act as a law that eases security and exchange commission regulations on businesses that

raise money from investors the act was signed into law in april of last year and it's not to be confused with the american jobs act which was a bill proposed by president obama to sustain the state and local government employment let's take a look at some of the major provisions of the bill first we have crowd funding which allows firms to raise up to one million dollars the internet in small amounts at a time now many senators have held this as one of the key parts of the bill. funding legislation which will help young entrepreneurs get access to new capital and create jobs something i hope the immediately come up with the rules so these people can start creating jobs again raising money. there are already businesses operating and they crowd funding sphere so just kickstarter but they raise money with donations or by selling products they don't sell stock in the company the jobs act is different and what allow a type of kickstarter for equity funding where people can receive

a return on their investment however even though the f.c.c. has yet to write crowdfunding rules there are still limitations that arise from the way the law was written for instance a business is get raise more than one million dollars at any and a twelve month period and companies that use crowdfunding need to file documents with the f.c.c. plus all crowdfunding must be done through a registered broker dealer or funding portal and because of all these restrictions some have claimed that the crowdfunding exemption in the ads will do little to help small businesses raise capital so another major provision of the jobs act is emerging growth companies which are also you one of the most debated sections of this bill there are businesses under one billion dollars in revenue if a company qualifies as an emerging growth company they can produce two years of audited financial statements for an i.p.o. filing rather than three they are exempt from rules requiring

a non-binding shareholder vote on executive compensation they are exempt from the requirement of hiring outside auditing firms to check their financial statements and the act also allows interaction between securities analyst broker dealers and emerging growth company management so this bill basically reveals parts of serbians x. oxley which is intended to prevent securities analysts from becoming spokesman for their investment banking divisions also many of the firms looking to qualify as emerging growth companies are unlikely to create any u.s. jobs. for example manchester united and english soccer club was able to go public as an emerging growth company and several blank check companies or shell companies which have no employees have filed to go public under the jobs act finally we have amendments to regulation these are offerings that would allow private companies to raise money by advertising to the general public simply having

a website that discloses details of an offering is considered advertising and is currently prohibited under most private offering rules the new advertising rule would limit investments to sophisticated so-called uncredited investors these investors would have to prove a net worth and income. now the f.c.c. has yet to implement many of the jobs act provisions so we'll have to wait and see how all this shakes out but that's what's going on in the breakdown of the jobs act . and it's time for the daily deal with bob i've got money on my mind how about you well we've got some polls yes there is a poll it was

a report in vanni vanity fair it asked the question if you could ask for one of these presidents to be the face of a new bill would you choose and the results are kind of interesting we made a graph what they came up with and it shows that only two percent would vote for george h.w. bush bush the first and then four percent for george w. george it was interesting that more people want to as i view them. anyway climbing the ladder we got jimmy carter bill clinton barack obama and ronald reagan is the favorite why do you think that is i really have no idea because ronald reagan was very conservative so why they would want to put his or his i mean i think the gipper has been his legacy has been built up after he got a lot of all those people remember certain things about him maybe they're not necessarily true but people generally have fun recollections of the eighty's after all that was the beginning of the great bull market you know inflation was kind of killed at the very beginning of the decade so it wasn't a bad time but he wasn't known as

a great spend. i think on the dollar you have to understand he actually was quite a great spender he would know he signed almost every spending bill they call any time that really did increase the size of the government when he wasn't known as a great singer and compared to everyone else we had been in reality right on that's what i mean as a fundraiser and a campaigner he definitely was greater and he was a great speech writer for a speech giver anyway how the writer as well so ok who would your choice before you're carrying around a ten dollar bill who would you want to see on their. face of a morning and why not just go all right yeah i mean that's going to be his legacy and. printing the money exactly well moving on i think we have we dug up some images here of large denomination bills where i guess someone made. a comment on facebook saying it seems like the presidents are the trophies on the money and you know maybe this person is kind of spot on we found here we have salmon ph case he

was on the ten thousand dollar bill we actually featured him on our first show here right right he was lincoln's secretary and what was the connection between this well ok back in the eighteen when the civil war started. like you said he had been in congress and then he was implemented as the u.s. treasury secretary and the government needed a lot of money so he and lincoln got on this wiley scheme of printing money that was one of our first forays into extreme money printing and it did cause a lot of price inflation not nearly as much as we saw in the south but after a few years they decided to throw in the towel and they did something a bit different which was they can structure that they constructed a national banking structure that would be the predecessor of the federal reserve and the very basis of this was that these banks now had to buy u.s. treasury debt so that's how we got our modern system where kind of laid the groundwork for the federal reserve. and a few decades after that we got a terrible depression as one of the worst panics up to that time in u.s.

history because of some of these policies. implemented attempt after the civil war a lot of changes to the banking system went on but. i mean that was really him saying that they put the treasury secretary on the bill and only with the president or postmaster general like benjamin franklin. so we also want to go back to bring a new species over the weekend at princeton we got a collection of some one liners one but here's one that ended. this was the end of the speech i think. and here's how he ended it no to journalist this is not a joke from princeton expires in two thousand and five he says completely mocking well there is a lot this in i don't know if he was mocking his position i think you know if he's if he's going to give a speech to princeton graduates and he's a former professor there he should be able to throw some jabs at himself and the university there but he had some other thing to say too right but that was an

official federal reserve document on the federal reserve's website you know if you read the form see transcripts you can there peppered with these little laughter statements these guys do a lot of chuckling behind closed doors so it's i say it's par for the course i'm sure that's not all they're doing. well we can a lot of i'm saying i'm a show here yes lots of laughter. and i think we also had something in reference to the student loan industry right we got a clip from that point on. the experience of like buying a new cadillac every year and then driving it off a cliff. and that was in reference to a friend of his who supposedly put supposedly put three of his kids through school and yes it is very expensive why is it expensive because the government is buying that but also because of the parts inflation the very price inflation that bernanke and his predecessors have caused to right i mean is really interesting that he would i think you said if there were a car off the cliff and then they would do it all over again well it's reminiscent

of the bailout of the auto industry in two thousand and eight and two thousand and nine isn't it right and i think we also had another clip relating to the i don't i mean i can even bring up the broken window or broken cadillac because there. most of us would agree that people who have say little formal schooling but labor honestly and diligently to help feed clothe and educate their families are deserving of greater respect and help if necessary and many people who are superficially more successful. and there also more fun to have a beer with. that's all that i know about sociology well these little things they have made it is like knowledge and sociology well and he's always trying to portray himself as a man of the people he went on sixty minutes and they went through his childhood his you know supposedly common upbringing but this guy is an extreme elitist and a lot of people forget sometimes that this guy is the guy he's like the wizard of oz so. i wonder if you can actually we're doing very. well about all the time

thanks for weighing and you guys want to follow us on facebook facebook dot com slash prime interest you can follow bob on twitter at english p.r.i. and my twitter handle is perry an artsy thanks for joining like you've heard. it's been a day of name calling on rhyme and just as stock decided to designate a id potential and g.e. capital to systemic to not regulate well but the fed that is and the e.c.b. i wouldn't say anything about what is going to do with the bazooka like now when

gilroy called the public transit sector for not incorporating the efficiencies of the private sector and when we broke down the jobs act we had to call it a nonstarter at least for the time being and then bob and i said the prospects for a new bill are anything but is that actually pleasing finally when we looked at bernanke use princeton speech we have a college just plain called israel because we're setting sail for less the looted monetary waters thanks for watching come back tomorrow from everyone at prime interest and hairy and boring have a great night. let

me i want to know what all let me ask you a question from. here on this network is what we have in the bank we have our knives out for. the previous the cycle to the bank staying there to get here in the situation where the united states talk about the surveillance me.

according to the law usaid is allowed to procure up to seventy five percent american products and transport them only on american ships. and that means that the shippers have a lot of interest in food aid policy and have been an incredibly effective lobby to fight.