Walter E. Williams
An American economist, commentator, and author of Liberty Versus the Tyranny of Socialism
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Here's what President Barack Obama said about our high rate of unemployment in an interview with NBC's Ann Curry: "The other thing that happened, though — and this goes to the point you were just making — is there are some structural issues with our economy, where a lot of businesses have learned to become much more efficient with a lot fewer workers," adding that "you see it when you go to a bank and you use an ATM; you don't go to a bank teller. Or you go to the airport and you're using a kiosk instead of checking in at the gate." The president's statements suggest that he sees labor-saving technological innovation as a contributor to today's high rate of unemployment. That's unmitigated nonsense. Let's see whether technological innovation causes unemployment.
In 1790, farmers were 90 percent, out of a population of nearly 3 million, of the U.S. labor force. By 1900, only about 41 percent of our labor force was employed in agriculture. By 2008, fewer than 3 percent of Americans were employed in agriculture. Through labor-saving technological advances and machinery, our farmers are the world's most productive. As a result, Americans are better off.
Last December, I reported on Harvard University professor Stephan Thernstrom's essay "Minorities in College — Good News, But...," on Minding the Campus, a website sponsored by the New York-based Manhattan Institute. He was commenting on the results of the most recent National Assessment of Educational Progress, saying that the scores "mean that black students aged 17 do not read with any greater facility than whites who are four years younger and still in junior high. ... Exactly the same glaring gaps appear in NAEP's tests of basic mathematics skills." Thernstrom asked, "If we put a randomly-selected group of 100 eighth-graders and another of 100 twelfth-graders in a typical college, would we expect the first group to perform as well as the second?" In other words, is it reasonable to expect a college freshman of any race who has the equivalent of an eighth-grade education to compete successfully with those having a 12th-grade education?
A recent Superman comic book* has the hero saying, "I am renouncing my U.S. citizenship" because "truth, justice, and the American way — it's not enough anymore." Though not addressing Superman's statement, Stanford University professor and Hoover Institution senior fellow William Damon explains how such a vision could emerge today but not yesteryear. The explanation is found in his article "American Amnesia," in Defining Ideas (7/1/2011), based upon his most recent book, "Failing Liberty 101: How We Are Leaving Young Americans Unprepared for Citizenship in a Free Society."
Rep. Charlie Rangel, D-N.Y., referring to his race and the Constitution on John Stossel's recent show "The State Against Blacks," said, "I wasn't even considered three-fifths of a guy." The Rev. Al Sharpton, debating on Sean Hannity's show, said, "Any black, at any age at any stage, was three-fifths of a human." Even eminent historian John Hope Franklin charged the Founders with "degrading the human spirit by equating five black men with three white men." Statements such as those either represent ignorance or are part of the leftist agenda to demean the founding principles of our nation by portraying the nation's Founders as racists. Let's look at the origin of the three-fifths clause.
The late South African economist William Hutt, in his 1964 book, "The Economics of the Colour Bar," said that one of the supreme tragedies of the human condition is that those who have been the victims of injustices and oppression "can often be observed to be inflicting not dissimilar injustices upon other races."
Most of our nation's problems are a direct result of our being immune, hostile or indifferent to several moral questions. Let's start out with the simple and move to the more complex. Or, stated another way, let's begin with questions that generate the least hostility, moving to those that generate the greatest.
If a person benefits from a hamburger, a suit of clothing, an apartment or an education, who should be forced to pay for it? I believe the question has only one moral answer, namely the person who benefits from a good or service should be forced to pay for it, that's if we wish to distinguish ourselves from thieves who only care about enjoying something and who pays is irrelevant.
There are a lot of things, large and small, that irk me. One of them is our tendency to evaluate a presidential candidate based on his intelligence or academic credentials. When Obama threw his hat in the ring, people thought he was articulate and smart and hailed his intellectual credentials. Just recently, when Newt Gingrich announced his candidacy, people hailed his intellectual credentials and smartness as well.
By contrast, the intellectual elite and mainstream media people see Sarah Palin as stupid, a loose cannon and not to be trusted with our nuclear arsenal. There was another presidential candidate who was also held to be stupid and not to be trusted with our nuclear arsenal who ultimately became president — Ronald Reagan. I don't put much stock into whether a political leader is smart or not because, as George Orwell explained, "Some ideas are so stupid that only intellectuals believe them."
The latest Social Security Trustees Report tells us that the program will be insolvent by the year 2037. The combined unfunded liability of Social Security and Medicare has reached nearly $107 trillion in today's dollars. That is about seven times the size of the U.S. economy and 10 times the size of the national debt. Those entitlement programs, along with others, account for nearly 60 percent of federal spending. They are what Congress calls non-discretionary spending. About half of discretionary spending is for national defense. Each year, non-discretionary spending consumes a higher and higher percentage of the federal budget.
William J. McGee, the consumer advocate on the Department of Transportation's Future of Aviation Advisory Committee wrote "Forcing the F.A.A. to Fly Blind" in The New York Times (April 9, 2011), where he laments Congress' cut in the FAA budget, saying, "A $4 billion cut will necessarily reduce the work force further. And it's hard to imagine this will not diminish safety." Mr. McGee suggests there will be shortcuts in aircraft maintenance.
Here are a few facts and then a question. Each Boeing 747 costs $317 million, its 777 goes for $284 million and its 737 sells for $80 million. Airbus' giant 555-plus passenger A380 sells for $375 million. Here's a true or false statement: If it weren't for the FAA, airline company CEOs would not take the necessary measures to ensure that their aircraft took off and landed safely.
The liberal vision of government is easily understood and makes perfect sense if one acknowledges their misunderstanding and implied assumptions about the sources of income. Their vision helps explain the language they use and policies they support, such as income redistribution and calls for the rich to give something back.
Suppose the true source of income was a gigantic pile of money meant to be shared equally amongst Americans. The reason some people have more money than others is because they got to the pile first and greedily took an unfair share. That being the case, justice requires that the rich give something back, and if they won't do so voluntarily, Congress should confiscate their ill-gotten gains and return them to their rightful owners.
As if more proof were needed about the minimum wage's devastating effects, yet another study has reached the same conclusion. Last week, two labor economists, Professors William Even (Miami University of Ohio) and David Macpherson (Trinity University), released a study for the Washington, D.C.-based Employment Policies Institute titled "Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases."
During the peak of what has been dubbed the Great Recession, the unemployment rate for young adults (16 to 24 years of age) as a whole rose to above 27 percent. The unemployment rate for black young adults was almost 50 percent, but for young black males, it was 55 percent.
Here's a non-rocket science question: If you expect a reduced harvest of wheat, corn, rice or any other commodity some time in the future, what would be the wise thing to do about your consumption today? I bet that the average person would answer: Consume less now so that more will be available in the future.
But how in the world can people be encouraged to consume less now? Enter the futures market, which consists of a worldwide group of millions upon millions of traders, often called speculators. Speculators, betting on a future shortage, buy up wheat, corn and rice today in the hopes of making money selling it for a higher price when the bad harvest hits. As speculators buy more and more wheat, corn and rice, they drive up today's prices. As today's price gets higher, people consume less, but more importantly, people do the intelligent thing without bureaucratic edicts. The vital role of the futures trader, or speculator, is to allocate goods over different time periods. And, it's not just wheat, corn and rice that must be allocated over time but all commodities including oil.
Smugglers are heroes of sorts. The essence of what a smuggler offers is: "Government tyrants want to either prevent or interfere with peaceable voluntary exchange among individuals. I can reduce the impact of that interference." Let's look at smuggling, keeping in mind that not everything illegal is immoral and not everything legal is moral.
Leading up to our War of Independence, the British, under the Navigation Acts, had levied taxes on a wide range of imports. One of those taxes was on molasses imported from non-British islands. John Hancock, whose flamboyant signature graces our Declaration of Independence, had a thriving business smuggling an estimated 1.5 million gallons of molasses a year. His smuggling practices financed much of the resistance to British authority. In fact, a joke of the time was "Sam Adams writes the letters (to newspapers) and John Hancock pays the postage."
The average American, as parent, student and taxpayer, has little idea of the academic rot at so many of our colleges. Save for a tiny handful of the nation's colleges, what distinguishes one college from another is the magnitude of that rot.
One of the best sources of information about our colleges is the New York City-based Manhattan Institute's quarterly Web magazine, Minding the Campus, edited by John Leo, former columnist for U.S. News & World Report.
I've often said that I wish there were some humane way to get rid of the rich. If you asked why, I'd answer that getting rid of the rich would save us from distraction by leftist hustlers promoting the politics of envy. Not having the rich to fret over might enable us to better focus our energies on what's in the best interest of the 99.99 percent of the rest of us. Let's look at some facts about the rich laid out by Bill Whittle citing statistics on his RealClearPolitics video "Eat the Rich."
This year, Congress will spend $3.7 trillion dollars. That turns out to be about $10 billion per day. Can we prey upon the rich to cough up the money? According to IRS statistics, roughly 2 percent of U.S. households have an income of $250,000 and above. By the way, $250,000 per year hardly qualifies one as being rich. It's not even yacht and Learjet money. All told, households earning $250,000 and above account for 25 percent, or $1.97 trillion, of the nearly $8 trillion of total household income. If Congress imposed a 100 percent tax, taking all earnings above $250,000 per year, it would yield the princely sum of $1.4 trillion. That would keep the government running for 141 days, but there's a problem because there are 224 more days left in the year.
The terms affirmative action, equal representation, preferential treatment and quotas just don't sell well. The intellectual elite and their media, government and corporate enthusiasts have come up with diversity, a seemingly benign term that's a cover for racially discriminatory policy. They call for college campuses, corporate offices and government agencies to "look like America."
Part of looking like America means if blacks are 13 percent of the population, they should be 13 percent of college students and professors, corporate managers and government employees. Behind this vision of justice is the silly notion that but for the fact of discrimination, we'd be distributed equally by race across incomes, education, occupations and other outcomes. There is absolutely no evidence that statistical proportionality is the norm anywhere on Earth; however, much of our thinking, laws and public policy is based upon proportionality being the norm. Let's look at some racial differences whilst thinking about their causes and possible remedies.
One of the requirements to become a Dayton, Ohio police officer is to successfully pass the city's two-part written examination. Applicants must correctly answer 57 of 86 questions on the first part (66 percent) and 73 of 102 (72 percent) on the second part. Dayton's Civil Service Board reported that 490 candidates passed the November 2010 written test, 57 of whom were black. About 231 of the roughly 1,100 test takers were black.
The U.S. Department of Justice, led by Attorney General Eric Holder, rejected the results of Dayton's Civil Service examination because not enough blacks passed. The DOJ has ordered the city to lower the passing score. The lowered passing grade requires candidates to answer 50 of 86 (58 percent) questions correctly on the first part and 64 of 102 (63 percent) of questions on the second. The DOJ-approved scoring policy requires potential police officers to earn the equivalent of an "F" on the first part and a "D" on the second. Based on the DOJ-imposed passing scores, a total of 748 people, 258 more than before, were reported passing the exam. Unreported was just how many of the 258 are black.
Economic lunacy abounds, and often the most learned, including Nobel Laureates, are its primary victims. The most recent example of economic lunacy is found in a Huffington Post article titled "The Silver Lining of Japan's Quake" written by Nathan Gardels, editor of New Perspectives Quarterly, who has also written articles for The Wall Street Journal, Los Angeles Times, New York Times and Washington Post.
Mr. Gardels says, "No one — least of all someone like myself who has experienced the existential terror of California's regular tremors and knows the big one is coming here next — would minimize the grief, suffering and disruption caused by Japan's massive earthquake and tsunami. But if one can look past the devastation, there is a silver lining. The need to rebuild a large swath of Japan will create huge opportunities for domestic economic growth, particularly in energy-efficient technologies, while also stimulating global demand and hastening the integration of East Asia. ... By taking Japan's mature economy down a notch, Mother Nature has accomplished what fiscal policy and the central bank could not."
Within the past decade, I've written three columns titled "Deception 101," "Stubborn Ignorance," and "Exploiting Public Ignorance," all explaining which branch of the federal government has taxing and spending authority. How can academics, politicians, news media people and ordinary citizens get away with statements such as "Reagan's budget deficits," "Clinton's budget surplus," "Bush's budget deficits and tax cuts" or "Obama's tax increases"? Which branch of government has taxing and spending authority is not a matter of rocket science, but people continue to make these statements. The only explanation that I come up with is incurable ignorance, willful deception or just plain stupidity; if there's another answer, I would like to hear it.
Let's look at the facts. Article I, Section 7 of the U.S. Constitution reads: "All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills." Our Constitution grants the president absolutely no authority to raise or lower taxes. The president is permitted to propose tax measures or veto them. Congress can ignore proposals and override vetoes.
Whether Americans realize it or not, the last decade's path of congressional spending is unsustainable. Spending must be reined in, but what spending should be cut? The Republican majority in the House of Representatives fear being booted out of office and are understandably timid. Their rule for whom to cut appears to be: Look around to see who are the politically weak handout recipients.
The problem is that those cuts won't put much of a dent in overall spending. The absolute last thing a Republican or Democrat congressmen wants to do is to cut handouts to, and thereby anger, recipients who vote in large numbers. To spare myself ugly mail, I'm not going to mention that handout group, but members of Congress know of whom I speak.