"We Have a Lot of Work to Do"

ABC's John Stossel on defending the market from within the liberal media and his upcoming collaboration with Reason.tv

John Stossel is the best-known libertarian in the news media. As the co-anchor of the long-running and immensely popular ABC News program 20/20, auteur of a continuing series of specials on topics ranging from corporate welfare to educational waste to laws criminalizing consensual adult behavior, and author of best-selling books such as Myths, Lies, and Downright Stupidity, Stossel brings a consistent message of liberty to millions of viewers on a weekly basis.

It wasn't always this way. Born in 1947, Stossel started out as a standard-issue consumer reporter, working in Oregon and New York before joining the staff of Good Morning America and, later, 20/20. He did scare stories about everything from pharmaceutical rip-offs to exploding coffee pots. Then, in the 1980s, he encountered Reason, which radically changed his thinking about the benefits of laissez faire in economics and personal lifestyles.

"It was a revelation," he writes  in his 2004 memoir, Give Me a Break. "Here were writers who analyzed the benefits of free markets that I witnessed as a reporter. They called themselves libertarians, and their slogan was 'Free Minds and Free Markets.' I wasn't exactly sure what that meant, but what they wrote sure made sense."

Reason caught up with Stossel in January in Los Angeles, where the newsman was filming a special episode of 20/20 based on six Reason.tv documentaries featuring Drew Carey. Among the topics: the desirability of open borders, the need to reform the nation's drug laws, and the case against universal preschool. Ted Balaker, a Reason.tv producer, talked with Stossel about bailout mania, his hopes for the Obama years, and his attempt to educate a generation of school kids with a video series called Stossel in the Classroom.

Audio and video of the interview, including audio and video podcasts, related links, and embed code is online at reason.tv/stossel.

Reason: What do you think of the bailout mania that's sweeping the country?

John Stossel: I think it's disgusting. They keep saying everybody agrees that we have to bail these people out and the feds have to spend trillions of your tax dollars guaranteeing this and that. It's just so irresponsible. We've got a $35 trillion Medicare liability already that they're not facing. Now they're going to throw more trillions of dollars to stop this recession, like we're not allowed to experience any pain in America. There are recessions. There are booms and busts. Bubbles have to pop.

In this case, there are smart people, like [former Treasury Secretary and Goldman Sachs chief] Hank Paulson, making the argument that this is different: You've got the credit lock. The whole system is at stake. That is possible, but what I've learned over 30 years of consumer reporting is that the people closest to the problem panic. And when they panic, that is an invitation for government to get bigger. It's not only war that is the friend of the state. Any crisis is the friend of the state.

The mad cow disease doctors were convinced we were all going to have holes in our brains and anybody who ate meat was at risk of these horrible diseases. The Y2K technicians were convinced all the planes were going to crash. Now it's the Wall Street investment bankers, who unfortunately are allowed to spend trillions of our dollars in their panic.

Click above to watch John Stossel discuss the desirability of open borders, the need to reform the nation's drug laws, and the case against universal preschool.

Let's take a quick look back at the Bush years. Spending has exploded to historic proportions. Regulations exploded too. Yet people look back on the Bush years and say it's a failure of free market policies. What do you say to that?

Stossel: I say bullshit. There was no deregulation under Bush. People don't know that, yet everybody says, "See, your libertarian ideas, they're wrong and this proves it." First of all, there was no real deregulation. [The repeal of the Depression-era banking regulation] Glass-Steagall was done under Clinton, and he rightly defends that. Banks that had more options after Glass-Steagall were not the ones that got into trouble. Under Bush, the regulators have added more pages of rules than any administration ever. The cost of regulation has gone up more under Bush than any president before. And yet, because of the bad media coverage and assumptions about Republicans, people think it was laissez-faire.

I'm sure there are some people at regulatory agencies—at least I hope there were—who said, "You know, a lot of these rules are bad and we're going to be less aggressive about them under Bush." But that's not what caused this bubble. The bubble was the government saying: "Lend more, lend more. You're discriminating against poor people; you're racist. Lend to more people." That's not deregulation.

Reason: What are your hopes and fears for the Obama years?

Stossel: My fear is that they'll spend us all into bankruptcy and we'll be like the people in the Weimar Republic, running around with wheelbarrows full of cash because inflation is so bad. We're trillions of dollars in the hole for just Social Security and Medicare. They won't have the guts to raise taxes. Well, maybe they will, but they won't be able to raise taxes enough to pay for Social Security and Medicare because you'd have to take just about all people make, and that would totally destroy the economy. They won't cut the programs because we older people want the best of medical care, and we're going to demand it, and the politicians can't say no to anybody.

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