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Yeah it's about.
Unbalanced sometimes these things are not harmful to the economy -- Then I should do this.
And also -- this super.
I'm just going great.
Auto industry if you wanted to go bank.
There we go -- That's our show.
Tonight we explode a few myths about elections.
And natural disasters.
Here's the first.
I'm told hurricanes -- prove we need a powerful federal government mainly -- which provides emergency management.
This just makes sense to people.
-- disaster across state lines -- but the fans can help.
As a New York Times declared this week a big storm require.
Very few politicians are skeptical about that so it's a relief to turn to former presidential candidate Ron Paul.
Doctor Paul you say it's a myth that we need -- I certainly think so because it causes more harm than me in good.
We've badly handled floods and disasters for 204 years before -- -- finger.
In the states -- the volunteers and local committees did quite well you know I've taken this position for a long time is not just recently.
And I've taken it since I was first in office look at getting reelected because people.
In my sister got tired of FEMA only ever had -- say they get locked into their insurance and it's a bureaucracy and I'm trying to help them get through the bureaucracy.
But they just come in and take over.
But it's a big problem it crosses state lines don't the Fed's.
Half to have some role.
No they don't have to what we should have -- you know a -- insurance out the problem is his.
The insurance program causes.
On the many other of the problems because they say -- yeah insurance that the market.
They cared and they won't sell to yet let's tell you something.
It's too dangerous so rich people get insurance subsidized by poor people and they go and build on beaches and have a good time and their houses get washed away in the poor people.
-- to rebuild their houses where it was interesting that this week.
Before the storm hit the president held a press conference not -- offices but at the Red Cross here's a clip.
The reason we're here is because the Red Cross knows what it's doing when it comes to.
So what he's saying there the Red Cross not -- knows what it's still in FEMA -- -- Sounds like he's admitted I was.
-- a good good politics -- unfortunately.
On -- LaMont from my experience here in my district and red cross and others were inhibited by FEMA.
They they would -- and and stop and think about the difference between how to evacuation occurred in New York.
After 9/11 -- volunteer -- votes and things.
Lowell -- of people mayor evacuated.
And -- that opposite happened in -- Katrina.
Because the that -- seen anybody NN had had control.
But that you know this giving up on individuals helping neighbors and local government doing things.
The that is a serious problem in this one of the reasons why we're totally bankrupt because all this money is going to go out here in the next few months because of this storm.
There there's no money in the bank and there's no money really and FEMA insurance is broke.
So they're really just -- and Trinidad and make our pros -- -- incense and centralized that power the power will be.
In Washington in in Washington the city and its bureaucratic and is very inefficient.
-- -- thank you doctor Paula thank you for all you've done to wake people up.
Thank -- John.
I fear he though and I won't have much success convincing people that we need less federal emergency management.
As I -- in that book.
Even old government fail when problems are big our instinct leads us to assume the experts in Washington have the best tools.
That they don't.
They fail all the time.
-- -- constantly.
Years ago after Hurricane Hugo one senator called FEMA is management bunch of bureaucratic -- is that you just get the hell out of the way.
So they said they'd improve it.
But three years later after hurricane Andrew -- even -- New York Times reported it was unclear just who was in charge of the federal relief effort.
Senator Barbara -- -- he said government's response was seen by many hurricane victims as a disaster itself.
And they said they fix it.
Then came Katrina.
Almost 2000 people -- -- often got in the way of rescue efforts.
The Astor hotel hired buses to carry guests such high ground FEMA took the buses and -- the -- to the convention center.
Which turned out to be its own disaster.
Wal-Mart offered flood victims three trailer trucks filled water FEMA turn them away.
-- prevented the Coast Guard from delivering a thousand gallons of fuel.
He might even ordered not to be 1000 tons of ice for hurricane victims but then shipped at the places like Maine and Arizona.
Government bureaucracies almost become incompetent even if they're brilliant when they're conceived over time.
Because everyone has to follow the bureaucracies mind numbing roles -- -- com incompetent.
But Tara Maginnis says I am wrong she and the Center for American Progress and most people say we need team.
But terror they are not competent.
-- Thank you for having me and you know.
I'm not can argue that baton tit for tat when FEMA has done Weller had failed but I think most people think when you were in a crisis.
When -- floods when there fires.
-- when they're worried about their children their safety.
That the government has an important -- I mean people don't call Wal-Mart -- call 911 in these situations and they expect.
Firefighters and first responders.
And backed out from their government that's where we -- and I hit 91 -- local government.
What FEMA FEMA does says you know very well know.
Is that -- in cases like hurricane sandy we saw this week.
The local government is the first responders the First Act but in fact that and when we have a major crisis like a superstar in this that we've seen.
That local governments you know governor Chris Christie.
Calls in checks in with -- says here's what we need here's what we need to backed us up.
FEMA moves to behind local governments go to local government -- -- -- the responders.
I we have huge crises.
And it out as you've seen this week that there are some things that and that -- a huge -- in re big response and I think.
FEMA has stepped in if you look in in this week in particular asked people who believe we need -- smaller government and bigger government.
He will disagree and other political -- -- are all saying the president's team are doing a really great job.
Okay -- that's logical it's what most people believe but economist Steve Horowitz is research disasters he says the private sector helps more people.
Knowing it does it does.
It does when we look at what firms like Wal-Mart and lows and then marry up and McDonald's did in the aftermath of Hurricane Katrina they were major from major forces for -- -- getting resources to people who needed them -- very desperate times.
-- right they help but FEMA is the most important part.
Well we know from what happened during Katrina as you were discussing earlier FEMA was an absolute disaster -- that made that disaster worse.
A FEMA didn't get into New Orleans in some cases for a week or ten days they -- people to help people get trailers that turned out to be toxic.
And as -- says you've told your your your viewers -- blocked a lot of help that was coming in.
Pilots -- -- -- this hurricane 295.
Wal -- were hit by sandy 250 were open within 24 hours they're impressive.
Yes and then then was the same thing that they did during during Katrina.
And Wal-Mart is really effective at doing this because Wal-Mart is really good at moving resources that's what they do you know every day of the year so they're able to get resources into places that are better when there's stores go down they can get resources -- and get him up running again really quick.
Listen I agree with -- I read his study I think it's of one very interesting case study in a complete disaster and a complete failure FEMA.
And where Wal-Mart stepped in an -- act I think Stephen's points at Home Depot -- well into communities was able to deliver hard goods.
But I think if you look at the comprehensive things that happen and disaster delivering water and toilet paper and to citizens.
Is one particular aspect of it there are security and safety aspects to it when you look at a place like New York right now.
And and you have huge amounts of flooding -- in New Jersey.
-- toxins that get released in the water there's a bunch of things that I think Wal-Mart is not qualified to do.
And again if you people are what's -- aren't working mom aren't working at you know someone has to tell Wal-Mart where -- -- Steve.
Not -- they don't have to tell woman wearing a Wal-Mart knew when it where this would Wear their stores were damaged knew where they can get goods and what about the -- cholesterol.
Don't we are getting -- Well there's a difference between FEMA and the police in the earlier discussion -- making the point was made that disaster response is most effective locally and that's true.
And there's no doubt that local police and local folks who have local knowledge about those communities are in fact the best responders and best first responders.
But FEMA is a bureaucracy it's situated in Washington it doesn't understand.
Very well or as well the needs of local communities.
Can I just ask you understand that's on your study fascinating.
-- they can that you make goes back to a very old economist highest grade and he suggested that this is what the market mama -- -- has a special.
Type of knowledge that the government doesn't have because Wal-Mart understands the market.
But -- -- you -- this nodding your report.
-- -- get it -- was giving out these -- for free.
So the kind of market indicators that usually would give these companies that extra edge that the government doesn't have I don't understand how that economic theory applies.
In a -- where we -- doing evil things up for free.
-- they were selling goods and they were giving goods away for free one of the reasons they were giving goods away for free is they understand.
That that might help that there employees live in those communities have by helping people in those communities -- ultimately helping themselves so yeah.
They're -- even people who just want to make a profit.
It's really overblown to suggest that you know it's a real it's not a binary choice that we -- and we are real -- It's not a world where companies run and run the world or the government -- the world.
When government increasingly looks like -- -- in the world run out of time thank you Steve end terror coming up.
You probably think anything terrible thing right well I say what you called gouging is even saves lives.
Alex -- that next.
We've got look it's in the studio electricity.
It's a wonderful.
But just to the south and don't.
About a fourth of Manhattan is still dark so people need flashlights.
This morning we found a store selling flashlights for thirty bucks involved want.
Curious -- thirty dollar flashlight.
See it says right here on the thirty -- 299 known.
Are you kidding me.
Pet -- must have raised its prices just because of the store it was trying to get out customers taking advantage of a disaster.
That's usual and illegal in 31 states.
Businesses cannot use hurricane sandy as an excuse to make an unfair profit if you see this happening -- called the attorney general's office.
New York's attorney general put out a press release warning businesses you better not -- New Jersey's Chris Christie tweet -- anyone found to have violated the law will face significant penalties.
-- locked up -- But economist -- -- -- now this is just stupid thinking what politicians called gouging is really a good thing.
So art why.
Well John this is straight off of the economics exam to my students are getting ready for right now.
Price -- very very very valuable signals about what's really really -- what's really really needed.
And what is really really really hard to come by in disaster prone areas.
Price is allow us to engage in the kind of economic triage.
Where we see the -- of a thirty dollar flashlight we -- we might think twice about some of the silly -- to might do with flashlights and say well maybe we should pass on this one.
And leave those flashlight for people who really really need them.
When we have price controls we create shortages.
In other words people want form or flashlights.
And people -- willing to bring to the market at the control price.
When we let the price rise it's like a signal flare that says bring flashlights to New York.
Bring flashlights New Jersey.
Bring flashlight so -- -- Jersey really really need Chris Christie I thought he's a free market guy he doesn't get this he wants to lock people up.
Apparently doesn't apparently well apparently stuff that is basic basic basic economics is a little bit -- advance for the governor of New Jersey.
Now one other point the store that sold justice thirty dollar flashlight wasn't having an easy time they didn't have power they were.
Pumping water from their basement at the time -- I could see why they would want to charge extra just to remain -- open.
Yet they could be trying to play 5000 dollars if they raise the price they claim they didn't at the homes sold for third.
Right that's an important point for the store owner.
It's pretty obvious that they've got some other issues to deal with like pumping up their basement by allowing the signal flare.
That prices are.
By allowing prices to rise we send a signal to the person could sell the -- like -- right there -- a lot of people who want flashlights now.
Would you please divert your attention from some other things you can be doing.
To making sure the people in New York have flashlights.
One example from Hurricane Katrina.
After the hurricane John -- -- of Kentucky bought nineteen generators.
Yes family and -- you hall drove 600 miles to part of Mississippi they had no power.
Offered to sell his generators for twice when you pay for them.
People were eager survive but the police arrested him confiscated his generators.
And -- he'd stayed in jail for four minutes.
And who wins from the -- with friends like that the people in Mississippi don't need enemies.
As an economist I think these people should be lauded as heroes why because they're -- they're taking scarce resources.
From areas of relatively low.
Need to areas of relatively high need in the case the generators nobody got generators after the guy was arrested.
But what about the poor -- when you allow people raise prices and maybe that's the only reason I was able to get a flashlight.
The -- come out rich people win but merely.
Passing a law saying you're not allowed to charge more than say ten dollar so a flashlight that's not gonna guarantee that poor people get flashlights in fact.
A law against price gouging.
Is -- -- prevent people from bringing more flashlights to the market ultimately.
Which would bring everybody's down and make them more accessible to poor people thank you art carbon -- her firm price challenging.
I would just call it.
Flexible price is coming off election mess and also how I thanks to a disaster -- personally.
Rip fuel off.
And got to live in this -- -- Now let's expand our debate about myths to myths about the election Tuesday.
I'm told the president will be chosen this year by a small percentage of still undecided voters.
-- these people Huffington Post column says they're idiots.
And this is a common belief if you do a Google search on the word on this site didn't.
Google now helpfully prompts you to search undecided voters -- -- So are they.
I suspect they are they still haven't to -- -- by now but both my guess who are smarter than I.
I and new research this say it's enough that the undecided voters are -- Matt Welch is editor in chief of reason magazine Ira Stoll edits the blog future of capital -- -- Ira.
I understand you're undecided you must be -- -- it.
Well I don't hold myself out as some kind of genius but I went to Harvard -- following this stuff for a living and I don't like to make my decision until I step right into them.
Polling Booth I -- have just you know procrastinators follow it for a living -- you pay attention there must speak.
You will learn enough.
Learn that lesson that there are flaws would both of the candidates and that.
It simpler than just voting for the one who's -- save us from all the trouble and map there is actual research on this about who these people are and they're not.
Don't are not at all actually be Associated Press -- a poll in October.
And it showed in this is consistent finding some other polling organizations.
It showed that undecided voters or more likely to votes they are more likely to read campaign information they're more likely to be informed and enthusiastic about the process.
They're just undecided.
But the New York Times ran an op Ed about them and headline that idiots the life of course because people who work totally invested.
In partisan politics which the New York Times definitely is.
Tend to think that those who do not share their own proclivities must be somehow -- them dishonest or just not Smart.
-- let's move onto another commonly held belief and that's that the evil super pacs corrupt the election.
Right ten million dollar tracks.
You've got -- super pacs that are just.
Just don't -- The headlines say it's a dangerous weapon evil.
Well let's take the broad view here you know it these are people who were outside -- politics.
Trying to influence the way politics is -- -- his spending their money.
What on earth is wrong with that as an idea because they have too much power -- the rich those people have too much power -- incumbent politicians who win consistently 8590%.
Of the time for reelection.
One of the only ways to unseat incumbents is to have people willing to spend money to try to run advertisements against -- there -- super pacs that are dedicated to bipartisan unseating all the incumbents to it inject political competition we -- -- had a long Republican primary.
At all if it wasn't for the existence of super pacs backing Rick Santorum.
And new green -- making it more competitive we should all be invested.
In political competition super pacs are a way to have more and not less competition.
An airplane -- -- -- for rich people lose elections I mean we have president Perot we haven't but California governor Meg Whitman if just having more money won the election and just to be clear about the money the super pacs -- spending more than a billion dollars this year.
But the campaigns are spending five billion.
An American spends seven billion potato chip -- Now let's move back to disaster myths we I'm told need a federal warning system for disasters like.
Hurricane -- you know I mean think about -- most radical and positive communications breakthrough in.
Possibly history are certainly our lifetimes.
It's my veto -- you decide to show -- but it's the Internet which is by definition a bottom up.
User kind of -- -- grassroots thing Internet and then also -- we can have a communications device you carry with you everywhere this allows people to access real time information constantly.
What did you do during the storm -- you work.
Waiting for Barack Obama to tell you what was going on.
You -- refreshing Twitter like a madman probably -- the Drudge Report or listening to the radio -- Looking at the weather channel like everybody else.
We are all accessing information we don't need a top down system to suddenly and tell us we have what we -- learned an hour and a half of and actually during the storm.
Some emergency warning.
A big -- -- -- about to hit it Qaeda and they and -- history of this it's never been used successfully in 1971.
Issued false alarm.
Accidentally played -- on tape on September 11 it was not activated we heard about that from television and radio.
It was tested in November of 2011.
It worked on some but not all TV and radio stations some people heard leading -- -- music on the system because of some mistake.
It's government incompetence but they spend hundreds of millions of dollars and nobody is talking about we have to get rid of that.
Well it's a classic governments creep right emergency response almost always works better at the local level so if you can hear and know what the special sounds are for you know New York.
Kind of disaster relief then -- -- much better informed than you are by president or some kind of federal system.
Thank you Ira Stoll and Matt Welch coming up -- -- a big -- Destroying things.
-- more election minutes did you know.
It's possible on Tuesday.
That the president and vice president might be from two different party.
Now more election minutes president Obama's director opinion research says.
-- -- don't matter.
Reporter about the actors I've been fooled by polls in 1980 every pollster missed the Reagan landslide.
Is -- a myth that polls accurately predict who was likely to win.
Let's take that criticism to someone who runs a big polling company Scott Rasmussen.
So polls get trashed.
All the time.
Of course they get trashed all the time do you usually wrong what -- usually get trashed by the team that's losing they don't like the results of the -- can't trust the polls you know we got some secret information somewhere.
The truth is we're shocked when a poll really gets -- wrong in 2008.
The entire industry -- Hillary Clinton's win in the New Hampshire primary and the reason people were shocked is becomes they've come to expect.
Those things don't happen.
And I must say I was looking for -- mistakes they hit you at hand there and -- and that's what really named the film one that I was about that the -- was the other was 1948 but I wasn't around then when they won't always be true lies so we've improved since that.
So how do you sample.
You know that the theory is you just call thousand phone numbers at random and it all works out what you do now because first of all you have to make sure you place a lot more calls -- a place like California than Wyoming because there's a whole lot more Californians.
We also know that women answer the phone more than men and older people more than younger people one whites more than non whites.
So you have to call and areas to make tree trying -- pretty representative sample and Italy do all that you have to do what we call -- the sample to make sure you have the right mix of men and women young and old.
-- how do you wait a sample.
Well I think that's -- a little statistics courses that a lot of people hated.
But basically the concept is if we know that were supposed to 52% of women live in a particular state we want to make sure that our sample matches out 52% -- All right criticism.
I'm told do you favor Republicans time magazine says your conservative.
Leaning in the near times 538 blog says.
Rasmussen polls were biased.
There's always criticism of Apple's.
And it is all the pollsters in senate is always to get it right I mean we have nothing to gain by gaming the system.
But if you have a reputation for getting it right you make more money people trust to try if you have a reputation for getting it right you get more people that action to.
Going on in his criticisms you speak with the first person who answers the phone rather than a random selection.
You know there's an old academic theory about how to do a poll would show back in -- -- the 1960s and seventies when Gallup than in the just a few other pollsters are -- anywhere near as many pollsters is -- are today.
They would say I'd like to speak to the oldest male or the youngest female that would rotate within a -- -- that was a very good technique.
Everything has changed since 1970s and the -- you may have heard we have Twitter we have cable news we have.
-- few other things homeless and have to do with -- it has everything to do with -- when people don't communicate the way they used to.
One of the big issues in polling today has to -- -- cell phones it's not just a question he says you don't call cellphone actually we don't we reach people who abandon land lines through an online approach I mean I have two sons.
They don't even -- you can talk on a cell -- they think it's for tweeting and texting.
We need to find new ways to reach people where they are communicating five years from now there will be no more phone -- How do you get the information I mean you -- the Internet but.
Where will look -- very select group that might -- -- I don't respond -- of these people -- -- -- -- the answer is we don't know the answers were backed the way things were in the 1930s when you're trying to experiment with different -- are firm this year is going to be doing some polls -- -- these these are internal experiments.
Using entirely different techniques so we can measure them up against the election results to see how well we do.
He also says in the 2000.
Bush when you were off.
Way off pro Republican 5% higher than it was.
You know we did we missed in the bush year we showed the president winning by or that then governor bush winning by more than he did.
We also then went back in this is the way pollster works you compare what -- actually found.
To the actual results in you learn from so -- 2004.
We were within a half a percentage point of both pushing carries total.
We -- miss with Obama we predicted he would win 52 to 46 he ended -- winning 53 to 46 but that's -- pretty small.
And on his behalf I have to say I -- -- was looking for stuff to confront him with and the bulls were the only good examples I could find.
I don't know what we make mistakes every pollster makes mistakes.
It is part of the process even polling fear Reese's.
One result -- -- -- will be off by more than the margin of error so that is part of the process and that's why you wanna look at a variety of polls look for the common ground.
Or even better given the pollsters can make mistakes I would say the heck with all you guys and look at the people who bet.
And the wisdom of crowds and where people bet on these things like in trade dot com.
What I'm here that's even that's the most accurate thing better than -- hey listen I trust the wisdom of crowds I would trust the American people more than their politicians any day of the week.
-- trade though he's driven a lot by conventional wisdom and by polling data it's a fairly thinly traded market.
So I so much for the presidency that's not as much was still relatively fit and -- traded the and is very very good.
I don't but I don't mean despaired of but it is not a replacement -- -- -- we'll find out next in New Hampshire well let's move -- -- one last minute I assume most people assume that the vice president and the president.
Are going to be from the same party and I thought that may be in that.
Well if this year's election ends up in the electoral apology 269.
-- it's a long shot maybe 200 to one against.
But if that happens the house picks the president which -- more likely be Mitt Romney and the senate picks the vice president which would be Joseph Biden.
And it's unlikely but possible I was surprised looking at the totals how close they've been.
Brother for -- won by one electoral vote in the 1876.
More recently bush gore.
Five electoral votes so this could happen this time if it could I think we're headed to a close election were headed to a close -- in the electoral college and you've got to remember we have a fragile system.
The government today really struggling to earn the legitimacy the American people.
And -- the way the election process is playing out is not helping that at all.
Thank you Scott Rasmussen -- not coming up.
I'll show you how big government program won most people think is good allowed me to get you to pay for my -- -- This game.
We'll bust some -- minutes.
Now a disaster -- -- an election -- I hear from all kinds of people with the destruction produced by hurricane sandy might not be bad for our economy.
Sometimes these things are not harmful to the economy because there's so much extra work involved in rebuilding reconstruction.
At least one analyst says the storm -- some long term benefits that the benefits of the reconstruction.
Them and instead we've heard that before.
Paul -- claimed 9/11.
Might be good for the economy.
And after the earthquake in Haiti Nancy Pelosi said this I think that this can be an opportunity for -- real boom economy in hate to.
A real -- This is an appealing concept for the simple minded.
I want to help America's economy -- really -- so what should I do well I -- via.
I'll do rest.
So -- -- create jobs spike destroying things.
What's wrong with this logic well let's ask economists David Henderson and Sally.
Stimulate create economic activity.
-- like the hurricane.
It's a student at some level we recognize that -- -- -- something in the studio without your permission on B Rex didn't.
The problem is that even when you mean I'm kind of pleased -- with.
Let me radio and he convinced that I shouldn't -- thing.
When you reply stings.
It looks like it might add to the economy better and we -- more activity eight but the results is he used to -- things might otherwise have been used for law.
Creation -- small constructive reasons.
I -- that's the thing that eludes Paul Krugman and Nancy Pelosi and these others that the money has stick come from somewhere right there.
-- -- would only out of -- something else exactly.
-- you both argue that politicians have been wrong about many of their economic points during this campaign.
Absolutely yes President Obama says -- stimulate.
The economy with green jobs Mitt Romney says with defense job.
Right they -- if it assists and principle absolutely same principle led to spend it on different programs but is -- priorities are different all they think.
-- -- just priorities are different but it's a sign concept if the government gets involved and spends money.
Then it will create jobs.
But it's a -- concept does when you smash something when you -- that money the government takes it from other uses a tight exit from taxpayer is.
Businesses consumes it just -- distributes -- -- doesn't create anything.
So David your point is that it may be a good thing to pay more for defense or for green jobs but it matters how the money's spent.
Well you should judge -- by the outcome even when someone brags that he created one million jobs he's bragging that his program is very expensive.
Because that's one million people who could have been doing something else so was always suspect when someone justifies a government program.
Based on jobs created.
-- let's move on to other myths I was struck win in the last debate Mitt Romney said.
You know ever we need regulation.
-- can't start a bank he -- Iraq.
So what's wrong with that it's.
Well actually it as you know probably Hewlett and Packard did start a major company in the garage jobs and Wozniak started apple in their garage.
And so the point is there are lots a company should be starting garages he's right you can't start.
A bank in your garage but that's because a regulation.
So maybe that should make -- question not garages but regulation.
You ought to be able to start -- -- in your garage.
I think so and by the way to take a more serious example Wal-Mart is having all kinds of difficulty starting a bank with various regulations -- third facing.
I would love to see the kind of creativity but Wal-Mart could bring to banking who knows how much -- a -- -- might be -- -- consumers.
Next myth government had to save GM.
And GM is saved it's wonderful but if the government -- now they'd be about 25 billion dollars in the hole and when all we hear is that they've been paid back but in fact they're 25 billion.
In the hole for one thing -- but don't forget again they've taken those resources from taxpayer is from consumers so -- -- the economy as a whole as well as soft.
That's not -- C industry.
It's auto industry -- in Ohio and and Detroit they might have kind of created more jobs will save jobs then but what about the jobs in tennis Taylor in Indiana.
-- on the come and you factor is.
Unless left -- -- Toyota or Honda working in America it's.
GM and Chrysler were -- but it's not like the auto industry -- the all those jobs would have disappeared.
Not a model it's not even clear that GM and Chrysler wouldn't have been saved the point is there's bankruptcy we have airlines that go through bankruptcy even as they fly.
And so that.
There's a high probability that those companies would still exist and they would be scaled down.
Last meth Sally this one for you.
We're losing manufacturing.
Jobs we have to do something.
Politicians love told -- that manufacturing -- -- fetish they have but somehow making things you can -- on your foot is more valuable and services.
It's a -- for a few reasons.
Those who are on one level the American economy is illustrious service based economy -- -- most people in most kind of economic results is a devotion to.
Making things you can't necessarily say that's terrible he can't see it it's not real exactly but in fact a dollar and and so -- is not -- less valuable than a dollar and in manufacturing.
The problem is it's simply not true manufacturing is doing quite well.
Here we have a chart of that and manufacturing output is actually.
The politicians don't get that speak well but -- they might get it but I don't -- -- -- -- manufacturing is huge in some of the -- singer actress it's big in the swing states.
Thank you -- James and David Henderson up next how politicians -- -- -- Got you have paid to replace my beach house.
Years ago I decided to build -- -- chaps my father told me he's not on the edge of an ocean.
All the stands between you and rule and is some say and don't do it.
It's foolish to build X two and -- But I build anyway.
Why because -- my builder said I couldn't close the ocean took my house Uncle Sam would pay to replace it.
Well yes under that program called national flood insurance.
You even have to pay for their hands.
Hey they've got flood insurance.
Go online to flood Smart dot -- Flood Smart -- -- but -- still but -- got.
Because of government flood insurance which guarantee that I couldn't lose I -- beach house.
There it is that's younger me up there on the back.
I didn't have to pay insurance premiums -- the government if they were cheap few hundred bucks a year.
Now why would Uncle Sam offer me cheap insurance on this house built on saint.
I once asked the head of FEMA about there.
James Lee -- -- FEMA for Bill Clinton at the time he told me if this insurance wasn't here.
People would build in those areas anyway and it would cost taxpayers more.
That's government logic since we always bail -- everyone let's get some money up front by selling insurance.
Doesn't occur to the politicians that there's a reason why private insurers are reluctant to offer cheap insurance on the edges of oceans -- rivers.
Well the politicians in their arrogance said the private insurers just want too much profit.
But floods -- are rare event a government insurance program won't lose money our experts will price it correctly.
As usual they were wrong government has lost your money the programs billions in the red even before this -- -- Compounding the evil government insurance encourages us -- peeled on the edges of oceans the rivers.
Governments now the biggest underwriter of property insurance the sweet deal goes to a movie stars in Malibu.
Rich people who vacationed here this summer homes Mitt Romney George Bush John Kerry in the Kennedy family compound in Hyannis half.
Now we taxpayers are on the -- for more than a trillion -- At least they've now put limits on the payouts they'll only pay you a third of a million dollars.
And after your house floods four times they won't cover you anymore.
-- -- Nevertheless the politicians are still so generous with your money that they didn't raise my premiums when shortly after -- build my house.
The storm surge swept away my first floor -- then bought me a new first floor.
Thanks I never invited -- my beach house but you pay really appreciate.
I asked the head of FEMA why taxpayers should have to pay for my new first floor he said should we just walk away and say we're not gonna help you.
Well yeah government should walk away and let us risk takers take risks with our own money.
And I would've thought worked carefully about where -- built.
By the way a few years later another storm took out my whole house everything that's -- I was upset but financially I made out fine you paid again this time for the whole house.
I'm not proud I took your money but I thought or -- -- and turn it down.
Governments dumb enough to give me money I'd be a soccer not to take it.
But I won't do it again and I sold the property and I think I'm more responsible.
Or at least I won't rip you off on federal flood -- sure.
I do collect Medicare.
And that monies based on an unsustainable pyramid scheme so Social Security so not collect that.
And government guarantees my savings accounts and money market account and my farm if I handle it.
And then there's Obama care.
Everywhere kind and generous politicians are for guarantees.
That seemed to make us safer.
But they really make us less safe because they destroy.
They invite people to be reckless.
When I confront beachfront homeowners about flood insurance they yell at me.
One said our beach community produces jobs jobs for shafts and waiters.
Gimme a break that's as dumb as Vice President Biden saying -- -- -- we got to go spend money to keep going bankrupt.
Energy answered John.
Wow spend to keep from going bankrupt.
Personally understood hinted that when he comes from somewhere.
By their logic we should just go around and smash things.
Although -- We got to educate these people.
That's our show.
We'll be back next week.
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