Stossel's "Myths, Lies and Nasty Behavior"

Most of the money goes to real farms big agribusiness, actually. But politicians talk about family farms.

Some subsidies do go to family farms, like one run by Fred and Larry Starrh. But does that entitle them to $3.5 million of your money? That's what they've received over seven years.

I called them welfare queens -- and they objected. "Change it to king," Larry Starrh joked, "Welfare kings. Because 'queens' is bad in California, believe me."

The Starrhs grow mostly cotton on their 12,000-acre spread in California. It's hard to think of them as needy with all that land, but costs have increased faster than prices. Subsidies, they say, are just a small part of their income, but they and their 100 employees depend on them. Without them, they say, they can't make a profit.

Now most businesses that can't make a profit go out of business. Woolworth closed. So did TWA. So do 20,000 restaurants every year. It's that freedom to fail that's helped make America as prosperous as she is, because it frees people to do more productive things.

But subsidized farms get different treatment. When Fred and Larry can't make a profit, taxpayers give them a handout.

"I don't look at it as a handout whatsoever. I absolutely refuse to accept that," Fred Starrh said.

But it is. It's welfare.

Fred Starrh said he looks at it as "a way to maintain a viable agriculture in this country."

That's the myth. Subsidies don't maintain a viable agriculture. Lettuce isn't subsidized. In fact, most crops are not. Not peas or potatoes or tomatoes. Not plums, peaches, broccoli, green beans. There's no shortage of any of these. Yet Fred and Larry say farming can't survive without subsidies.

"If I can't grow my 6,000 acres of cotton because the subsidy's gone …Where am I gonna go with that acreage? Do I just idle it?" Larry Starrh asked.

I don't know. Where do I go if "20/20's" ratings go down? That's life.

Subsidies are a like a heroin fix. They feel good, but they lead to more subsidies. The first subsidy makes cotton more expensive. That causes a problem for manufacturers, so we give them another subsidy. That subsidy hurts poor farmers worldwide, so we send them more money in foreign aid. But that's not enough for our cotton farmers. We give them another subsidy for the water they use and another subsidy to advertise their cotton overseas.

If they can't make a profit, I don't think they deserve a gift from taxpayers just so they can keep farming.

"Well I totally disagree with you John, and the legislature is with us at this point, so we're winning, and you're losing," Fred Starrh said.

He's right. And you're paying for it.

No. 4 -- MYTH: Outsourcing Is Bad for American Workers

We've been hearing a lot lately about how American workers are suffering because companies are "outsourcing" their jobs to other countries. During the presidential campaign, both President Bush and Sen. John Kerry, D-Mass., told voters they were concerned about keeping jobs here at home. And CNN anchor Lou Dobbs has made complaints about outsourcing a running theme of his nightly news program.

Dobbs' new book, "Exporting America," says the government should limit free trade and immediately outlaw outsourcing of government contracts.

"Just because of cheap labor, we're destroying our middle class. That is just stupid," Dobbs said, adding, "Being stupid is un-American."

Wait a second. It's restricting outsourcing that would be un-American and stupid.

You may not like it that someone in India takes your customer service call, but outsourcing helps the middle class by bringing lower prices and faster service. Take E-Loan, for example. It gives customers a choice of whether to get their loan paperwork processed in America in 12 days or in India in 10 days. An incredible 87 percent of customers in the United States choose the faster loan processing offered by sending their paperwork to India.

And look at clothing -- lots of it is made abroad these days -- and Lou Dobbs sees that as a terrible thing. "This country cannot even clothe itself. Ninety-six percent of our apparel is imported," he said.

But that's OK. We have more choices for less money. The Labor Department's price index for clothing has been going down and down over the past decade.

But still, what about all those American workers who lose their jobs to people overseas? We asked the AFL-CIO labor federation for some of their best examples of outsourcing and the first people they referred us to were Shirley and Ronnie Barnard. They both lost their jobs when a Levi's plant in Powell, Tenn., closed down two years ago and moved production to Mexico.

The Barnards say keeping their heads above water has been a struggle. Shirley told us about her frustrations, saying, "You've done something for 20 years, got up, went to work every day, and then all of a sudden you don't have any place to go and nobody needs you anymore."

Tough Business Realities

Bill Portelli, who runs the California-based company Collabnet, says outsourcing has helped him keep his company alive in the United States. He has hired programmers in India who are paid less than half what he would have to pay American programmers. "It doesn't cheat Americans out of jobs. If I hadn't hired the people in India, I would have had to lay people off," he said.

He didn't end up laying any Americans off as a result of outsourcing, because outsourcing saved Collabnet so much money the company was able to expand in America. "Basically I've created jobs in America. I built better products, created jobs, been able to raise salaries," Portelli said.

A Dartmouth study found that outsourcers actually create jobs in America at a faster rate than companies that don't outsource. The same study found that companies that outsourced abroad ended up hiring twice as many workers at home.

Allowing outsourcing creates opportunity. It's easy to see the pain of the workers who are laid off; it's harder to see the benefits of free trade, because those benefits aren't news.

It's true that in the last four years, America has lost more than 1 million jobs, but those were years when we had a recession. Look at the big picture. Since 1992, America has lost 361 million jobs, but during that same time we also gained 380 million jobs. Millions more than we lost.

That should be hopeful for people like Shirley and Ronnie Barnard. While it's true that they had to dig into savings and still worry about their long-term security, last year Shirley Barnard eventually found a new job as a secretary. The new position pays more than her old job at Levi's, and the Levi's work was harder -- hot, noisy and physically difficult. She says that her new job is much easier.

Her husband and some other former co-workers are still looking for work, but she told us some of her former Levi's colleagues are now working in better jobs than they had before. "Some of them have got, really got excellent jobs that they would never have even left Levi's for if the plant hadn't closed," she said.

And what happened to that Levi's plant? It's now being converted to a college. There will be new jobs for faculty and administrative staff, and right now there are construction jobs for workers building the new campus. This won't be talked about on the evening news, but these jobs are a product of outsourcing too.

Still, people like Lou Dobbs talk about the outsourcing crisis. However, in reality outsourcing is not a crisis. The crisis will only come if we try to stop it.

No. 3 -- MYTH: Public Schools for Poor Kids, Not Politicians' Kids

Sadly, it's also a myth that the people who fight for public schools always send their own kids to those public schools. You'd think they would. They're so passionate about the public schools. But, no.

This is one of those do as I say, not as I do things. Politicans who promote public schools don't always send their kids to them.

Sen. Hillary Clinton, D-N.Y., has called public education the "cornerstone of our democracy." But when she and her husband lived in the White House, they sent their daughter, Chelsea, to the elite Sidwell Friends private school.

When asked about it, President Clinton told ABC News, "We had to make the decision just for our daughter."

Well, sure he did. All of us want to do that, but not everyone can afford a private school. So what do you do if you're poor and live where the public schools are bad?

Are your kids just trapped?

Last month a student at an Ohio school videotaped his friend beating up a classmate. The teacher didn't notice because she was helping other students.

Sylvia Lopez lives in one of the most dangerous cities in America: Camden, N.J., where her kids heard scary things about public school.

So, Lopez scrapes together what little money she has to pay for a private school. But Ivan Foster can't afford to do that for his two kids.

"Something needs to be done now. You cannot take my tax dollars and tell me you're not going to help me help my children," Foster said.

He wishes he could take his tax dollars and use them to send his kids to a private school.

It's not that the Camden schools are starved for money. The district spends almost $15,000 per pupil. Even assuming as few as 20 kids per class, that's almost $300,000 per classroom. Think about that -- $300,000! Think what you could do with that money for one classroom. Hire five good teachers? Where does the government-run school money go? I don't know. But, if parents aren't happy with how that money's being spent, shouldn't they be allowed to take that money somewhere else? Say, a private school.

That's an idea many politicians oppose. President Clinton, for example, said, "I'm unalterably opposed to a voucher system to give people public money to take to private schools." But that didn't stop him from sending his own daughter to a private school. In fact, nearly half of members in Congress with children send or have sent at least one of their kids to a private school.

Sens. Lincoln Chaffee, R-R.I., and Edward Kennedy, D-Mass., for example, sent their children to private schools yet they opposed proposals to let money follow the student to whatever school they choose.

The senators and most of the congressmen would not agree to be interviewed about this, but Rep. Jesse Jackson Jr., D-Ill., would. His father, the Rev. Jesse Jackson, sent him to high school at the exclusive St. Alban's school in Washington, D.C. -- that's the same place that former Vice President Al Gore sent his son. Tuition there is now more than $23,000.

But even though Jackson enjoyed the benefits of a private education, he votes against vouchers that would allow parents with less money have what he had. He says we should focus on fixing the public school system.

"When I went to high school, my parents did not have access to a voucher," he said.