by John Hawkins | February 7, 2012 2:58 am
John Hawkins:: You do a fantastic job filling in for Rush Limbaugh. Are we going to see a Walter Williams radio show coming up anytime soon?
Walter Williams:: No, I’ve been teaching for about thirty-five years and that would require a career change; I’m not quite ready for it. I’ve been offered jobs a couple of times…
John Hawkins:: Oh really? Would it have been a national show or starting in a big market?
Walter Williams:: It would have probably been syndicated. I was offered that some years ago and I turned it down. Every once in a while someone makes some noises about a show, but I’m very happy doing exactly what I’m doing.
John Hawkins:: Well,I guess that answers my next question. I caught you filling in for Hannity over the holidays and I was going to ask if MSNBC and CNN could use a “Walter Williams show”…
Walter Williams:: (Laughs) Well, they’ve invited me back. Filling in occasionally is great, but to do radio you have to be there three hours a day, five days a week to make it work. Then there’s the prep time, and I love teaching. Teaching may be one of the things that stops me from getting Alzheimer’s disease.
John Hawkins:: Why do you think the left has never been able to produce a “Rush Limbaugh” of their own on talk radio?
Walter Williams:: I’m not quite sure, but I think in general, Americans are moderately conservative and to get a huge audience like Rush has, you have to be moderate to conservative. That’s just a guess though. I think one of the things that has made Rush so successful is that for years and years, Conservatives and Libertarians have been crying in our beer at the kind of things the left does. Rush’s success is I believe because he holds these people up to ridicule and he laughs at them and gets other people laughing at them. I think that has been very successful.
John Hawkins:: Another similar question; there has been a lot of controversy lately over whether the media is dominated by the left or the right. What are your thoughts about that?
Walter Williams:: I think clearly it’s dominated by the left in our country. If you look at the people who are in the media, newscasters, the producers, they always vote Democratic. I’ve seen some numbers as high as ninety percent over the last election voting for Gore as opposed to Bush. I think it’s just a fact of business that they’re for big government and government control as opposed to constitutional government.
John Hawkins:: As an economics professor, you’re well-qualified to give an opinion on the latest Bush tax cut. What do you think about it?
Walter Williams:: Well, I don’t know how well qualified I am, but one of the key things we can do for economic growth in our country, even if we’re not just coming out of a mild recession, is to do things that reduce the cost of capital formation and give people incentive to take risk. One of the things that the Bush administration called for is the elimination of the tax on dividends. Dividends represent return from people taking risks. If you raise the return from people taking risks, then people will take more risks. If you lower the cost of capital formation, more capital will be formed and it benefits the ordinary person.
One way you can explain this is if you see highway construction and you see one employee using a big earth mover and another employee using a shovel, then you say, “who gets the higher pay?” Well, the guy with the earth mover. Why? Not because contractors like earth mover drivers or because they’re unionized, but because they’re more productive. He just produces more in an hour’s worth of work. Why does he produce more? Because he has more capital working with him. The big earth mover is a piece of capital. So anything that reduces the cost of capital will give firms incentive to buy more of it and it benefits not only firms, but workers as well in terms of higher wages. So, the elimination of the tax on dividends, speeding up the depreciation allowances, they are things that will lower the cost of capital. I would also like to see President Bush lead Congress in getting rid of the corporate income tax because the corporate income tax is just a devious tax on the American people. Corporations don’t pay any taxes, only people pay taxes. Corporations are legal fictions, as such they’re tax collectors.
John Hawkins:: How much harm do you think the lawsuit happy culture we here in the US have does to our economy, and would effective tort reform significantly improve the economy here in the US?
Walter Williams:: Hell, yes! I think that the litigiousness of Americans and what judges allow to come to court is really amazing. The costs that lawyers can impose on firms, if the corporations are going to survive, are pushed on to the consumers of the product and the stockholders. It’s a huge cost on our society. We can see that cost by looking at the suits brought against tobacco companies. Some of those multi-million dollars suits have been successful. You’ll see the tobacco company lose a suit, yet its stock does not go down. Why? Because they’re pushing that cost on to the consumers in the form of higher prices. That’s what happens with lawsuits if a company is going to stay in business. So surely, one of the things I’d like to see is some kind of tort reform and maybe if we switch to the British loser pays system, that might help. What that does is give people pause for second thought when they bring frivolous lawsuits. I would surely call all the tobacco lawsuits frivolous. People who smoke know that it causes cancer and other health problems. Those suits people are bringing against fast food restaurants for obesity? For the life of me, I don’t understand how a judge would even allow something like that to come in his court.
John Hawkins:: Can you explain why the minimum wage is a bad idea?
Walter Williams:: First, Congress can indeed legislate that people get a higher wage. But, they can’t legislate that people are more productive. For the most part, in a free market economy, wages are related to a worker’s productivity. For example, if a worker can produce six dollars’ worth of productivity per hour, if that’s all he can produce, and you legislate that he must be paid eight dollars an hour, then it’s a losing proposition to pay someone eight dollars an hour when he can only produce six dollars’ worth of value. So the employer may have several different responses. Either he’s going to discriminate against the employment of low skilled workers who can only produce six dollars’ worth of value and hire someone who can produce eight dollars worth of value or he’s going to automate. Both responses mean lower employment for low skilled people. So, the minimum wage law discriminates against low-skilled people.
Minimum prices in general tend to discriminate against the lesser skilled person or the less preferred item. Let’s say ten workers show up and you only can hire five. Well, you can’t discriminate based on price because you have to pay them all eight dollars an hour. So you may hire according to what you like. So if you prefer Catholics to Jews or whites to blacks, you’ll have a tendency to indulge your preferences. You can apply that phenomena to anything.
If we made a law, let’s call it a “minimum steak law,” that is, filet mignon and chuck steak both sell for $10. Well, the cost of discriminating against chuck steak would be zero, because you have to pay $10 anyway. The way that less preferred things compete with more preferred things is by having a lower price. Even though people prefer filet mignon to chuck steak, chuck steak doesn’t have any problems selling at all.
As a matter of fact, I wrote a book a number of years ago called “South Africa’s War Against Capitalism” and in that book I give quotation after quotation from white, racist unions that would never have a black as a member of their unions. Yet, they were the major supporters of minimum wage laws for blacks. Their stated reason for doing that was because they said they wanted to protect white workers from having to compete with low wage, low skill black workers. Of course, the rhetoric behind the minimum wage in the United States is different, but it has the same effect.
John Hawkins:: Let me ask you a related question about South Africa. I saw apoll: about a month ago and it said there were a surprising number of people in South Africa who said life was better under apartheid. Is that surprising to you?
Walter Williams:: Not that they were for apartheid, but it’s not surprising to me that some blacks would say they were better off under apartheid. Indeed, during the time of apartheid, the South African government had the same problem on its borders that we have today. They had huge immigration into South Africa from Mozambique, Zimbabwe and other countries, and they weren’t coming there to vote, they were coming there for a higher standard of living. Matter of fact, during Apartheid, some blacks from other countries were fleeing to South Africa seeking political refuge, which is a sad statement about the rest of the continent. That is, they found more freedom in South Africa than in their home countries. So no, I’m not surprised at all.
John Hawkins:: There was a lot of controversy last year about the steel tariffs that George Bush approved. Do those tariffs specifically, and tariffs in general, hurt or help our economy?
Walter Williams:: They help some steel workers keep their jobs, but it turns out to be a losing proposition on balance. The reason why steel workers and their companies want tariffs on foreign steel is so they can raise the price of steel produced by U.S. companies. So, it will save some jobs in the steel industry, but one has to look at the “steel using industry.” The companies in the U.S. that buy steel to produce their products are hurt by the tariffs. You find unemployment in those areas because of the higher costs of their inputs, which makes them less competitive on world markets. So what one has to look at is not the seen, but the unseen. Yes, you can see as a result of tariffs that more jobs are saved in the steel industry. What goes unseen are the jobs lost elsewhere because of the steel tariffs. Tariffs save some jobs at the expense of many, many other jobs.
John Hawkins:: The Democratic party has had a stranglehold on the black vote at least since the seventies. In your opinion, what can Republicans do to up their percentage of black votes without compromising the principles the party stands on?
Walter Williams:: Well, actually say it goes further than the seventies. I’d say the Democrats have had the black vote since the Roosevelt administration and thereafter. Well, George Bush has the bully pulpit and he can say things like, “It was the Republican vote that got the Civil Rights Act of 1964 passed.” As a matter of fact, Lyndon Johnson thanked the Republicans in the Senate for voting because the mostly Democratic South did not vote for it. They can also point out that the racism in this country was for the most part, the Democrats back then. People like Bull Connors, these people were Democrats. I think that information needs to get out. The Republicans need to talk about the grossly fraudulent education black Americans are receiving in public school system cities run by Democrats — for the most part, Democrat mayor, Democrat city council, etc., etc. I think there has to be a little bit of education and I think at the same time the Republicans need to be principled and they should not get into the business of racial preferences and catering to racial demagogues. Like Jack Kemp telling Trent Lott that he ought to seek an audience with Kweisi Mfume, the head of NAACP. That is just horsecrap, excuse the expression, in my opinion.
John Hawkins:: Related question, The US Supreme Court is going to be ruling on a University of Michigan program that gives preferences to minority students. Do you think they should abandon the program or keep it in place and…
Walter Williams:: I think they should abandon it, 100%…
John Hawkins:: …And also do you think those sorts of programs are overall a help or hindrance to minorities today?
Walter Williams:: Racial preferences have been on balance a hindrance to black Americans & Hispanic Americans. Look at the University of California, Berkeley back in the seventies and eighties. Close to seventy percent of black students who were admitted there did not graduate. The SAT scores of these black students who were admitted there were slightly higher than the national average. But the problem was, the rest of the students at Berkeley were getting twelve and thirteen hundreds on the SAT. So, the black students there were in over their heads and just could not make it in that high powered academic setting.
On the other hand, at Cal State-San Jose, which is not that far from Berkeley, roughly seventy percent of the black students there didn’t graduate either. Here’s what the problem was. The problem was that the black students who would have graduated from Cal State-San Jose were recruited to Berkeley to become failures. There was an academic mismatch. You find the same thing at MIT. Black students in the engineering department, they score in the top 5% nationally in the quantitative portion of the SAT. However, close to 50% are on academic probation or flunking out at MIT. What’s the problem? Well, the rest of the students in the engineering department are in the top 1%, which puts the black students at MIT near the bottom of the student body. So those black students who are being turned into failures at MIT, if they’d gone to engineering school at the University of Pennsylvania or Cornell, they’d be on the Dean’s list.
So it’s kind of like you’re saying to me, “Walter, would you teach me how to box?” Then, the first fight I get you is with Lennox Lewis. Now you might have the potential to be a good boxer, but you’re going to get your brains beaten out before you learn to bob and weave. So, the question for black people is, “Do we have so many youngsters who score in the top 5% nationally that we can afford to have them turned into failures at MIT in the name of diversity and multiculturalism?” For me, my answer is no.
John Hawkins:: As a long time college professor, do you think that the general perception that most colleges tend to be very liberal as a whole is correct? If so, why do you think that is?
Walter Williams:: I think that is correct. In general, professors tend towards the left end of the political spectrum. Now, why that is, I just don’t have a very good answer for you. But, in general, the intellectual elite of the world have a contempt for individual liberty and they’ve always supported government control. If you look at movements around the world, leftist movements, Nazi-like movements, much of it originated in the universities no matter what country you go to.
John Hawkins:: Do you believe voucher programs would significantly improve the quality of education in America? Why so?
Walter Williams:: I think to the extent that vouchers will introduce competition, I think that’s where we’ll see academic improvement. They’re not a panacea, but if you look around our country and around the world, you’ll see that people are most satisfied in activities where there is competition. Those activities that people complain about are where there is monopoly, particularly a government monopoly. Look at the delivery of first class mail, education, garbage collection, police services, in areas where you find a monopoly, you’ll see complaints. So to the extent that vouchers will put more power in the hands of parents, I think that can bring some salutary changes in the education system. Indeed, even for black Americans, if you go to black neighborhoods and you’re looking for little, tiny islands of academic excellence, you’ll find them in black owned and operated private schools such as Marva Collins Preparatory Schools in Cincinnati, Chicago, Milwaukee and Kenosha, Wis.; Ivy Leaf School in Philadelphia; and Marcus Garvey School in Los Angeles. It’s a no-brainer that competition produces higher quality at the lowest prices. In areas where there is ruthless competition, we find prices falling and where there is monopoly we find prices rising. The same thing applies to our schools.
John Hawkins:: There is going to be quite a fight about Charles Pickering’s nomination in the Senate fairly soon. Have you looked into his record, do you have an opinion about him?
Walter Williams:: No, I don’t. But, now that Republicans control the House and the Senate, the major achievement that they can make for our country is to appoint judges who support the Constitution of the United States as opposed to making their own opinions law. That is, we need law abiding, constitutional judges on the Supreme Court. Now, I don’t know that much about Pickering, but the litmus test for judges should be, “Do they believe in and revere the Constitution of the United States?” Of course, they will tell you that they do, but some of them are lying through their teeth, so we need to have evidence that they’ll uphold the United States Constitution.
John Hawkins:: Is there anything else you’d like to say or promote before we finish up?
Walter Williams:: No, that’s about it.
John Hawkins:: Thank you very much for your time, Mr. Williams.
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