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Dec. 30, 2011 - Rush Limbaugh Program
36:37
December 30, 2011, Friday, Hour #2
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That is absolutely right, Thomas.
I mean, Johnny Donovan, Walter E. Williams sitting in for Rush, who will return January 3rd, which is Tuesday.
And Monday is the best of Rush.
But Rush will be back in person behind the EIB golden microphone on January 3rd.
But right now, ladies, right now, we have Dr. Thomas Sowell, he's on, and he's going to talk to us about his latest book, The Thomas Soule Reader.
And for those of you who are unfamiliar, Thomas Sowell, he's a scholar at the Hoover Institution in Stanford, California.
And he's been a senior fellow there for a number of years, and he's written many, many books.
And this is his 46 book.
Welcome to my show, Tom.
How are you?
Okay, we're doing fine.
And I just want to tell, by the way, Bo Snerdley, the fellow you just talked to, he said, how does Tom Sowell write so many books?
Because he doesn't do anything else.
Well, I normally tell people, well, the guy writes with both hands.
But this is really a masterpiece that you've assembled, Tom, The Thomas Sowell Reader.
And there are a couple pieces I would like to talk to you about in the book.
There's a couple of articles.
Ladies and gentlemen, it's a bunch of articles.
I forget the number of chapters, but it's like 30 articles or 30 or 40 different chapters in here.
And one that we're going to start off talking about is Life at the Bottom.
Oh, yes.
And Tom says that poverty used to mean hunger, inadequate, quote, clothing, and protection against, and inadequate protection against the elements.
And that's what poverty was when Thomas Sowell and I were young.
It's not poverty today, is it, Tom?
Oh, good grief, no.
I mean, most of the people who are below the official poverty line in the United States have color television microwave ovens and own either a car or a truck.
Now, we didn't call that anything like poverty when I was growing up.
Oh, that's right.
And in some cases, according to a study by Heritage Foundation, I think 14, 16% of people who are called poor, who fit the census definition as poor, 14% or 15% have two or more cars.
Oh, yes, yes.
When I was doing research, I found that hundreds of thousands of people with incomes below $20,000 a year live in houses costing $300,000 or more.
Now, as of the time I discovered that, I was living in a house costing less than $300,000.
Now, I think one of the wonderful things about your writing is that, well, you're saying some of these things that we observe in the United States are not unique to the United States, and they're not by no means unique to black Americans.
And this book that you talk about in this particular column is called Life at the Bottom by, what is it, Darman?
Yeah, Theodore Dahlrymple.
Dahlrymple.
He's a doctor in a predominantly white, low-income neighborhood in England.
Yeah, and you're saying that he's talking about the same kind of things about whites, lower-class whites in England that we can say about the lower-class blacks and whites in the United States.
Yeah, and I think it may be easier for some people to understand w what's really involved because so much of what is done in the black community that's counterproductive is taught, is explained away as a legacy of slavery or Jim Crow and all that.
And you see the exact same things happening in these lower-class white communities in England where none of those things apply.
One of the most striking is the beating up of children in school by their classmates when the children are trying to get a decent education.
In fact, Dahlrymple as a doctor has treated many of these kids because they need medical attention.
They've been beaten up that badly.
And when that happens in the United States, they're accusing the black students who are trying to learn of acting white.
Well, the whole racial thing is gone in these lower-class white communities.
So really, this is not something peculiar to the United States.
It's what happens when you have, one, a welfare state that allows people to live a counterproductive lifestyle.
And that welfare state is accompanied by an ideology that accepts, apologizes for, even glorifies that lifestyle.
Yeah, it glorifies and promotes that lifestyle.
And also, we saw some of it in England in Britain during the riots of last summer.
Oh, yes.
Yeah.
Yeah, I mean, I love people who say, well, these riots are the result of anger at poverty and so forth and so on.
And there's never been so much anger as there is today when there's so little poverty.
That's right.
And you see the rioters and sometimes in designer clothing.
Well, yeah, I mean, you know, it's one thing back in the days when poor people were desperate and would steal bread.
In all these riots that I know about, I have never seen anybody break into a bakery and steal bread.
They're stealing television sets and Xboxes and all this stuff.
Absolutely.
Now, there's another very interesting article that you have in your book called the Older Budweiser.
And it goes back to way, way back to the Habsburg Empire, where people, the Czechs and Germans, people of Czech ancestry and people of German ancestry speaking different languages got along very, very well up until what?
Up until you got a rising class of Czech intellectuals who resented the fact that they had to learn German in order to get ahead.
Now, this they blamed on the Germans, but they should blame it on history.
The fact is that the Western European nations had written languages centuries before most of the Eastern European nations, mainly because the Germans conquered Western Europe and brought the Romans conquered Western Europe and brought Roman letters.
It was centuries later before they began to have letters for the languages of Eastern Europe.
Well, what that meant was that if you wanted to learn science or any serious subject, you had a better shot at it if you learned some Western European language, in this case German, rather than be confined to the local language.
Yeah, right, yeah.
And the Czech intellectuals, they started telling the people, the Czechs in Budweiser, and Budweis, saying, you know, there had to be cultural identity.
Oh, that is really locking people in a blind alley.
I mean, we call it multiculturalism today.
But to me, multiculturalism is like the caste system.
It means it confines you to where you happen to have been born, regardless of how many opportunities there are in the world for you to advance by learning something else beyond where you were born.
Yeah, right.
And we see that in the United States as well.
Oh, absolutely.
And it's led by the intelligentsia in our country on college campuses.
They even have vice presidents for diversity.
Oh, gosh.
Oh, yes.
I mean, spending millions of dollars all over our country at universities, driving up the cost of the university by having all these offices, nonsense offices that did not exist yesteryear.
That's true, but the vast amount of money that they waste is really the least of it.
What they really waste that's more valuable is the time of the students who, you know, after all, are young and inexperienced.
They may think it's wonderful to sit around and rap about racial issues or glass feelings and all that kind of stuff.
But none of that is going to allow them to have a marketable skill when they leave that institution.
And this is the problem in a number of countries, not just in the Habsburg Empire, but around the world and into the present time.
That wherever you have a newly arising intelligentsia from some group that is poorer, they typically specialize in the softest subjects.
They do not learn science, math, medicine, all that kind of stuff.
They learn all kinds of stuff that's much easier.
And then when they get out into the world and discover there's absolutely no demand for that kind of stuff, then they become identity merchants.
Yeah.
And I think that's one of the things that you're to be complimented on in the sense that you bring an international perspective to many of these problems that we face as a nation.
That is, well, affirmative action is not only a disaster in the United States, but it's a disaster in India.
It's been a disaster everywhere it's been tried, in Sri Lanka and all these other places.
And I think that we gain something if we recognize that, well, gee, these problems, these social problems or economic problems are not unique to any particular culture.
Absolutely.
And most of the countries where they've pushed preferential policies for one group, they argue as if what's something peculiar to that particular country is the reason.
For example, in New Zealand, they say, you know, there's the Treaty of Waitangi in 1843, you know, and that's why the Maoris deserve preferential treatment.
And here it's another rationale.
In India, it's another.
But whatever the rationale, the patterns are just painfully similar.
That's right.
And a scientist would not go from New York to London and saying, well, the law of gravity operates differently in London because of the Roman conquest.
Yes, yes.
And ironically, the Roman conquest is what put England on the map.
That's right.
They took him out of the caves.
Oh, that's right.
Trade show.
Trade School, obviously a British patriot, nevertheless said, we owe London to Rome.
The British didn't build London.
The Romans built London.
Hey, Tom, we're going to take a short break, but after this, we're going to take a few calls.
We'll be back with your calls after this.
We're back, and it's Walter Williams sitting in for Rush Limbaugh and...
And right now, we have Dr. Thomas Sowell.
He's a senior fellow at the Hoover Institution at Sanford University, and we're talking about his latest collection.
It's called the Thomas Soule Reader, and it's available at bookstores everywhere.
And before we get to the phone calls, I want to talk about another article among many, many other wonderful articles in this book, and it's called Ivan and Boris and Us.
Now, it turns out that this little story by Ivan and Boris is a it's about two Russian peasants, and Ivan finds a lamp, a magic lamp, and rubs it, and the genie grants him one-ish, one wish.
And turns out that it turns out that Boris has a goat and Ivan doesn't.
And Ivan wishes for Boris's boat.
I'm sorry.
Ivan wishes for Boris's goat to die.
And so Tom was saying that he's suggesting that that vision maybe reflects many Americans.
Can you explain that a little bit?
Oh, yes.
I mean, there are people out there who want millionaires to be taxed higher in a consistent earth taxation.
And if you think it's clear with that, that's not going to do them the slightest good anymore than it would have done Ivan any good to have Boris's goat die.
But this envy and resentment that's being constantly pushed by the Obama administration wins them votes even if it doesn't collect any tax revenue.
Most people are unaware that very high tax rates often bring in even less revenue than the lower tax rate for the simple reason that people have so many who really are millionaires and billionaires have so many options of where to put their money.
And back in the 1920s, they put it in tax-exempt bonds.
And so the vast majority of income of rich people in the early 20s was never taxed because they were in tax-exempt securities.
That's right.
And rich people did not become rich by being stupid.
That's right.
They're not going to stand still like a sheep to be sheared.
Currently, for example, within recent years, instead of foreigners sending more money to be invested in the United States, as has usually happened in our history, Americans are sending more money overseas to be invested to get away from the high taxes.
Now, all you have to do is jack up the taxes some more, and more of it will go overseas.
And all the jobs that could have been created by that money will not be created here.
They'll be created in Europe or Asia somewhere.
Now, tell us something.
I know the answer, but I want you to explain it to the Russian audience.
That it turns out that according to Forbes, the top 10 celebrities, excluding athletes, they earn an average salary of a little bit more than $100 million a year in 2010.
The average, the top 10 CEOs had an average salary of $43 million a year.
Now, there's a lot of hate and criticism of CEOs making millions of dollars, but very little or no criticism of celebrities making much more than CEOs.
Oh, heavens, when I did the research for a previous book, I discovered that the average pay of a CEO of a company, of a company big enough to be in the Standard Fours Index, was 1 30th of what Oprah Winsre makes.
Now, I don't see these big campaigns against Oprah Winsry, nor should there be.
But the point is, uh it shows the utter hypocrisy of what's being said.
If it's the money that's being uh earned by di by different people, then the entertainers and the sports stars ought to be criticized more than the CEOs.
Now, actually, none of them should be criticized because the people are voluntarily paying them for what for whatever service they're providing.
That's absolutely right.
And then also, the politicians, they don't want to take over the jobs of the celebrities.
Oh, they can't.
I mean, what members of Congress could run Oprah Wintry show or do the things that LeBron James does for $43 million a year on the basketball club.
Absolutely.
But they can take over and interfere with companies.
They have done.
They have proven that to a certainty.
Selendra is only the latest example.
Let's take a quick call from Allen in Fort Worth, Texas.
You're on with Tom Soule.
You've got to be quick because we're up against the clock.
Dr. Williams, Dr. Soule, it is my high honor to visit with you today.
You're leading conservative intellectuals, but you have a unique perspective in that you're both black.
And when you look at the state of the black family and when the criticisms of what's happened to blacks in general in America come from people like myself who are white, we're labeled as racists, going as far back as Daniel Moynihan in the 60s.
And what is your perspective on that?
And the second part of the question is, forgive my ill manners, but you're both elevated in age.
Where are the next black conservative intellectuals coming from?
And who are they?
No one predicted where we were coming from, and therefore we can't predict where our successes are coming from.
So I guess one of his questions was, how come non-blacks cannot talk to or be as critical as blacks as we are?
Oh, because so many people intimidate them.
I get letters from people saying, you know, will people be offended if I say this?
I tell them, there are people who are in the business of being offended.
So if you say anything that's truthful that they don't like, immediately they'll play the race clause, just as the Attorney General Holder is doing right now.
You're absolutely right.
And let me ask you this, Tom.
Can you hang on for another few minutes past the break?
Absolutely.
But I have one solution, Tom, about helping people feel less guilty.
And I have a certificate of amnesty and pardon at my website, waltzewilliams.com.
You just click on it, and it's a certificate of amnesty and pardon for all the grievances done by Europeans to our people.
And so I give them forgiveness so they stop feeling guilty and stop acting like fools.
Good idea.
But ladies and gentlemen, I'm on with Dr. Thomas Sowell.
He's going to stay with us for a few minutes, a few more minutes past the break.
And we're talking about different articles in his book, The Thomas Sowell Reader.
We'll be back. We're back.
Walter Williams sitting in for Russian, who will be back on Tuesday.
But right now, we're on with Dr. Thomas Sowell, and we're talking about his new book, The Thomas Sowell Reader, and it's available at your bookstores everywhere.
Tom, one more topic that you and I, we've talked about for a very long time, and that has to be the minimum wage.
And you have a discussion in your book about the minimum wage.
Now, how do you find, you know, for example, you can find that the labor unions, they want a minimum wage, and they spend millions and millions of dollars lobbying for increasing minimum wage because they reduce some of their competition in the labor market.
But there are many people out there who are priests, who are good people, and they also support the minimum wage.
How can you possibly explain the people with polar opposite interests coming up with the same policy?
Well, I think a great deal of the blame belongs on the economics profession because, you know, outside of economics, most people, even most faculty members at leading universities, have no conception of the minimum wage.
They simply think, you know, it'll raise the pay of people who are at the bottom, and that's a good thing.
Well, what it really does, as you pointed out, probably more so than a whole lot of other people, is that it prices low-skilled, inexperienced people out of a job.
I mean, I remember when I was a teenager, I had my first job.
I thought my boss was very harsh.
In retrospect, I don't know how the man put up with my incompetence.
You know, I mean, I certainly wouldn't put up with anybody who was that incompetent.
But he was paying me some very low rate if he had had to hire me at the rate for an experienced adult worker.
There's no way in the world he would have wasted his money like that.
That's absolutely right.
And also, the same thing was with me.
I've worked since I was 12 years old at all kinds of jobs, cadding on golf courses, delivering mail during the Christmas holiday, and many, many jobs.
And if it had been for, if there were a high minimum wage, I might not have had those jobs.
And the early work experiences that kids have, it teaches them things that go well beyond a little bit of money that they can earn.
Things like, well, you come to work Thursday, even though you got paid Wednesday.
You can't spit in the foreman's face and still keep your job.
And many young people growing up in poor households and going to rotten schools, they don't have the opportunity to learn things while they're young and make mistakes while they're young that will make them a more valuable employee in the future.
Oh, absolutely.
I think the loss of the job, to me, the biggest loss when you price teenagers out of a job is not the little bit of money they could have made.
It's the experience on the job.
Doing things that we take for granted, you know, when we're middle-aged, not realizing how long it took before many of us finally got it when we were teenagers.
You know, my gosh, I mean, I probably cost the poor man I worked for money.
Well, I knew I cost him money because I would cause the beer to explode.
So he was really giving you charity.
Again, I was very indignant at the time when he shooed me out.
I said, you know, anybody can make a mistake.
Actually, I made that same mistake more than once.
And, you know, and also what people don't realize is aside from destroying job opportunities, the minimum wage law has been and continues to be one of the most effective tools in the arsenal of races everywhere around the world.
Oh, absolutely.
And again, you would know this from having been in South Africa during the apartheid era, that the white labor unions wanted minimum wage laws and equal pay for equal work, not because they wanted to help blacks, but because they wanted to price blacks out of a job and keep the jobs for themselves.
That is absolutely right.
And you see, I think in 1975, a white laborer on a construction project, he was getting $1.91 an hour, and a black laborer would get the same thing for, would do the same job for 39 cents an hour.
So there's a lot of incentive for contractors to disobey the job reservation laws and hire blacks because they just, you know, it was a lower cost.
Well, that, of course, was the thing behind, as you well know, behind the Davis-Bacon Act of 1931, that black construction workers from the South were coming up north, and the construction companies were underbidding the local unionized labor to get contracts because they had non-union labor from the South.
And, of course, the law then priced blacks out of a job.
That's right.
Yeah, right.
And matter of fact, if you look at the congressional testimony during that time, congressmen actually said that.
Congressman Allgood from I believe it's Alabama or Georgia.
He said, see that contract over there?
He uses cheap colored labor and puts them in cabins and is labor of that sort that's in white with white, that's in competition with white America today.
Now, of course, the rhetoric behind today's support of the Davis-Bacon Act has changed, but the effects are the same.
That is, the Davis-Bacon Act tends to discriminate against non-union labor, and most blacks in construction are in the non-union sector.
One of the things that I think most people have no inkling of, and the media never tells them, is that during the period of the late 1940s, when the national minimum wage law was passed in 1938, in the 1940s, you had runaway inflation, so that by the late 40s, even an unskilled worker was making a higher pay than the minimum wage law required.
So, in other words, the minimum wage law had, for all practical purposes, been repealed by inflation.
And at that time, unemployment rates for black teenagers were a fraction of what they were at any time since then, because in 1950, they started increasing the minimum wage to catch up with inflation and spread the coverage.
And that's when you got these double-digit unemployment rates for black teenagers, even during the height of prosperity.
Oh, that's right.
And today, I think black teenage unemployment is 55%.
And back in 1948, black teenage unemployment was less than white teenage unemployment.
Namely, it was, I think, 9.2 compared to 10.1.
Yeah, yeah.
But I mean, we haven't seen those kinds of low unemployment rates for teenagers in the past half century.
That's right.
And it's because of labor market restrictions.
In addition to the minimum wage laws, things like various labor laws.
To keep kids safe.
That is, my cousin and I, when we were 13, 14 years old, when there's a snowstorm, we would shove off train platforms for the Redding Railroad Company.
Now, well, the unions don't want to see a kid getting $30 for a job that they can get $100, and so they're able to use laws and various regulations to deny that opportunity.
The other thing is that if you even talk about reducing the child labor laws, people are horrified.
And we're talking about kids going into coal mines and so on.
Well, what's the child labor law?
At one time, that was a real issue.
Today, we have big strapping black and white, for that matter, teenagers who are not allowed to work in air-conditioned offices because they're too young.
Well, I don't think anything is going to happen in an air-conditioned office that's going to do them any harm and a lot that will do them some good.
That's right.
Now, let me kind of wind up by saying that I think that the major message that you've been trying to put across through a lot of your academic writings is that reality is not optional.
Yes, that's right.
But we try to pretend that reality is optional, that you can take it or leave it.
But that's not the case.
No, absolutely.
People seem to think that prices are just arbitrary things that happen, and the the prices are conveying a reality.
Now, you can control the prices, but that doesn't mean you're controlling the reality.
I mean, you you can refuse to pay doctors what they would normally get on the say Medicare, but of course, all that's going to do is cause more doctors to not treat people who are on Medicare.
That's right.
Yeah, yeah.
Hey, well, look, Tom, good luck on your book, and I thank you very much for coming on, talking to talking to all of us and kind of spreading the word out and trying to get people to think.
Thank you for having me.
Take care of that.
Thank you.
That was Dr. Thomas Sowell, and we'll be back with your calls after this.
We're back.
And ladies and gentlemen, that was my very distinguished colleague, Dr. Thomas Sowell, talking about his new book, The Thomas Sowell Reader, which is really a collection of a lot of the things that he's done in the past and includes some of his current material.
And it's very instructive.
And it's a kind of fun book to read because most of the articles are just two or three or four pages, but they're packed with a lot of wisdom.
Okay, I promise to go to the phones.
And let's go to Isabel.
Welcome to the show.
Thanks for holding, too.
Hi, Walter.
It's a great honor and pleasure talking to you.
What I'd like for you to elaborate is: I used to work at a state university here in Illinois, and we had a state retirement system where all our Social Security money, and I know you were talking about this earlier in the program, and that's what brought this to mind.
All my Social Security and retirement money went into this state, this university plan, which is sort of what I considered a privatized plan.
We could invest the amount, however amount of money we wanted to put into a retirement into the companies that they had available, whether it was Vanguard, Fidelity, et cetera.
And despite our economic issues that have occurred in our country since 9-11, I haven't had a problem with my money.
As a matter of fact, it's done fantastic.
I have it in Fidelity, and I talk to my advisors and how to best invest it and have the money do as best as it can according to the circumstances.
Now, the only catch is as it's retirement.
I cannot take it out without it being taxed.
And I think Bush, in his first term, he even mentioned privatizing a very small portion of the Social Security.
I think it was maybe a 2% to 4%, but I'm not, I won't, I don't remember exactly.
It was round.
It was less than 4%.
But you're taxed on your money going into 401ks and IRAs because you were forgiven taxes on it when it first went in.
That is, you did not pay taxes on the earnings that went towards the 401 or the IRAs.
Well, and so now you have to pay taxes, and you must withdraw it when you're 70 and a half years.
Right, exactly.
But in the meantime, the government doesn't have access to the money.
I've been the one that has been with my financial planner, diversifying it accordingly.
And I was kind of curious as to why a lot of Americans prefer, because I think when Bush had mentioned it of privatizing this very small amount, I think the Democrats and a number of Republicans, they kind of did not like this, and people started panicking of what Bush was going to do.
And I was kind of curious as to why would people not want to have at least a portion of that privatized where they manage the money on their own and what would be the cons.
Well, at some point in our history, in the future history, and it's not that far away, people are going to want to have it privatized because young people will be paying into Social Security.
That is, somebody who is 30 years and under today or 40 years and under, they will pay their entire life into Social Security, increasing amounts into Social Security, and when they retire, they will not see one thin dime because the system is going to collapse.
And to give you an idea, I think conservative estimates are that for Social Security to pay the same benefits that are paid today to live up to its promises, the Social Security tax alone will have to be somewhere around 20%.
The unfunded liability, these things are destroying our country.
The unfunded liability of Social Security, Medicare, and prescription drugs is $106 trillion.
In other words, what that means is that Congress has made $106 trillion promises to the future generations of our country.
And to create reserves against that promise, Congress would have to put in $6 trillion in the bank today, earning at least a 4% rate of interest to be able to pay out those obligations.
And you know, Congress is not about to put $6 trillion in the bank today.
I don't think so either.
That far exceeds the budget.
So we're going to face a massive problem in the future.
But here's the kicker, though: the beneficiaries of Social Security, those people who are 65 years old and over, they'll be dead by the time the system collapsed in 2030 or 2040.
The congressman who they're voting for, he'll be dead.
That is, if any congressman, any congressman talking about doing the kind of things that's good for the future of our country, he'll be run out of town on a rail by the American people, just like Paul Ryan got into a whole lot of flack when he's making some sensible things to do that we should do about entitlements.
And so a politician, it's political suicide for a politician to do what's good for our country in 2030.
A politician has to look to tomorrow, to next year when he's up for re-election.
That's his time horizon.
But he doesn't care anything about 2030 or 2040.
We'll be back with your calls after this.
Walter Williams sending in for Rush and...
And by the way, he'll be back on January 3rd.
By the way, when I was on with Tom Sol and we were talking about poverty in America, there's one thing that I failed to mention, and that is we hear a lot of stuff about the declining middle class.
Well, it's turned out that, and it's referenced at a column on my website, it's called Poverty in America, and I wrote it in 19, I'm sorry, November 16th this year.
Anyway, it shows that the median income and consumption rose by 50% in real terms between 1980 and 2009.
And it turns out that median income and living standards of Americans have increased over the last three decades.
This business that mostly put out by the left and by the leftist media says that there's a disappearing American middle class.
That is just plain nonsense.
And then there's another thing having to do with income mobility.
That is, When you look at a group of poor people, let's say 1996, and then you look at the same group of people, the same individuals, it turns out that somewhere between 50 and 75% of them moved to some other income class.
And in some cases, people have moved from the bottom income class to the top.
There's a lot of income mobility in our country.
And that's one of the great things about our nation.
That is, just because you know where somebody ended up in life, you can't be sure about where he started.
That is, there's so much income mobility in our country.
That is, the multi-billionaires today, they're not the Rockefellers, the Goulds, the Carnegies.
It's all new money like Steve Jobs and Bill Gates.
And we want to preserve this kind of income mobility.
We don't want to take it away.
But it will go away if you go for today's propaganda that there's a disappearing middle class and we're all becoming worse off.
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