Walter Williams on the 2012 Election and Sound Money
by Walter E. Williams: Legal
Williams has been a professor of economics at George Mason University
in Virginia since 1980. He is the author of many books, hundreds
of articles and a weekly syndicated column. You may have caught
some of his many radio and television appearances a champion
of free-market economics speaking out against socialism and intrusive
government. He has described laissez-faire capitalism as the
most moral and most productive system man has ever devised.
Good morning, Dr. Williams. I was immensely relieved to learn
that you were not the author of the recent article No Matter
What, purporting to explain why, no matter how bad things get,
President Obama would win a second term. The article was widely
circulated, however, and I have some concern that a lot of people
were misled but never learned that you had not written it.
Of course the article was a hoax. When it first came out and people
started sending it to me, I sent it to the Creators Syndicate that
handles my column. They contacted the website that ran the article,
and that website ran an apology.
I am happy to have the opportunity to help set the record straight
and to share your views with our readers. Can President Obama be
defeated in 2012?
Oh yes. According to a recent poll, if the election were held today,
Mitt Romney would beat him. Its hard for a president to win
reelection with a high unemployment rate. It looks like there is
no way in the world, between now and the election, that unemployment
will drop substantially. That does not bode well for Obamas
I believe official unemployment now stands at about 9% and that
its actually even higher because of how unemployment statistics
The midterm election and the Tea Party movement sent a strong message
to Congress and the president. Voters want less spending on less
government, but Congress and the president still seem to think voters
will accept business as usual. Are they right?
They could be. We can blame politicians a little bit, but the bulk
of the blame lies with the American people. That was kind of an
epiphany for me. During the 1980s, I would occasionally have lunch
with Senator Jesse Helms from North Carolina. He knew that I was
highly critical of agricultural subsidies, handouts to farmers.
Helms told me at one of our luncheons made me realize some things
I had not realized until then. He said, Walter, I agree with
you 100% that these farm subsidies ought to be eliminated.
But then he asked, Can you tell me how I can remain the senator
from North Carolina and vote against them? If I do what you say,
I would be voted out of office.
observation today, we can note that the biggest expenditures by
the federal government are Social Security, Medicare, Medicaid and
prescription drugs. Along with other entitlements, these expenditures
amount to almost 60% of the federal budget. The beneficiaries of
these programs vote in large numbers. Politicians who talk about
cutting these programs are going to run into trouble. We have to
get the American people, as much as politicians, to respect the
It seems that we must overcome some significant misconceptions before
we reach that point. For example, some smart people have asked why
we cant just live on credit, why cant the Fed just continue
to print money? Youve been an economics professor for over
30 years. Do you have a sense of what it would take to teach the
average American that living on credit does not work for the federal
government any more than it would for individuals or families?
We have to ask ourselves, Are the American people any different
than the Romans, the British, the French? Are they different from
Spain or Portugal? These were all once great empires that
went down the tubes for bread and circuses, for huge spending. There
is every indication that Americans will go the same way. They want
politicians to enable them to live at the expense of other Americans.
That seems to be a recurring message during elections: I will
give you what you want and make someone else pay for it.
That is absolutely right. In my opinion, it is nothing more than
legalized theft. If there is slight hope on the horizon, its
that the Obama administration and Congress have been so brazen that
Americans, like never before in our lives, are arguing about the
attorneys general are suing the federal government over Obamacare.
State legislatures are passing Tenth Amendment resolutions [state
sovereignty resolutions affirming that the US Constitution
gives the federal government only specific enumerated powers and
that all other powers remain with the state and the people]. Texas
is telling the TSA to keep your hands off our people.
North Dakota has nullified the health care bill. So the point is,
if there is hope on the horizon, it may be this slight groundswell
of rebellion. The question is, is it too little, too late?
The US dollar was once redeemable in gold or silver but now it just
says, In God We Trust. The US monetary system is based
on trust, but that trust has been breached and the dollar is in
decline. Americans will be wondering whom to hold responsible as
we lose the privileges we have enjoyed as custodians of the worlds
Very seldom are people willing to blame themselves for the problems
they create. They always want to blame someone else: the Chinese,
Republicans, Democrats. Its a natural, normal human response,
but blaming someone else does not solve the problem.
I mentioned those who have asked why we cant just live on
credit. What about those who really should know better, like Fed
Chairman Ben Bernanke and members of the Joint Economic Committee
in Congress do they truly believe in Keynesian economics?
For example, does the Fed chairman believe that one more round of
quantitative easing will actually get the economy back on track?
Williams: Keep in mind something that Richard Nixon said to
John Ehrlichman, who warned that Milton Friedman, an economist and
Nobel laureate, advised against the policy Nixon was pursuing. Nixons
response was, Milton Friedman is not running for reelection.
These people in Washington have commitments and responsibilities
that I dont have. I dont owe anybody anything, so I
can be perfectly honest. When you are trying to get reelected, or
appointed to a high-level position, or hoping to have a high-paying
job when you leave government, you just cant say the sort
of things I am free to say.
Will we ever return to fiscal responsibility when there is no constraint
on how many dollars can be produced?
The gold standard is a discipline for the monetary authorities.
It restricts their ability to print money. Without a gold standard,
the only restriction is the political arenas restraint that
has been shown around the world to be insufficient. Our founders
feared fiat money.
Americans seem to have forgotten that.
Williams: Not so much forgotten as just observed that such a
restraint on government limits my ability to live off my fellow
Americans. At the Democratic National Convention in 1896, William
Jennings Bryan, one of the first so-called progressives,
gave a speech the Cross of Gold speech
condemning the high rate of silver-to-gold convertibility. [Bryan
called for the inflationary free coinage of silver at a ratio of
16:1 to gold. His answer to the demand for a gold standard: You
shall not press down upon the brow of labor this crown of thorns.
You shall not crucify mankind upon a cross of gold.] At that
time, we had presidents like Grover Cleveland, who fought against
the weakening of the dollar and against moving away from the gold
Thats certainly not a cause championed by Barack Obama.
No, its not. As to that article on Obamas reelection,
I dont think any of it makes a lot of sense. I appreciate
your efforts to get the word out that it was not written by me.
My pleasure. Thank you very much, Dr. Williams. I appreciate you
taking the time to talk with me.
are just now learning about the perils of fiat money and the impossibility
of living indefinitely on credit, some saw the handwriting on the
wall years ago
and began preparing. Theres still time
to join them
but not much. Register for The
American Debt Crisis, a free, online video event that
will be held September 14 at 2 p.m. EDT to learn
how you can survive, and even thrive, during the growing crisis.
E. Williams is the John M. Olin distinguished professor of economics
at George Mason University, and a nationally syndicated columnist.
To find out more about Walter E. Williams and read features by other
Creators Syndicate columnists and cartoonists, visit the Creators
Syndicate web page.
© 2011 Casey
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