1270: Sensible Investing & Walter E. Williams, American Contempt for Liberty, Race & Economics, Liberty Versus the Tyranny of Socialism

Yeah, my passion for real estate really has taken over my, my passion for technology. So it's been, it's been really fun, you know, over these six years getting closer and closer into real estate to the point that I can really, you know, that it's my day job now focusing on real estate, you know, hosting, co hosting with you, the Women Investing Network podcast, which is a lot of fun, amazing guests going into that, being able to have the time to participate in the Venture Alliance Mastermin Group, which I adore, and it has added an incredible amount of value to me and then also being able to have the time to go to like I'm going to the Oklahoma City property tour that's coming up and I'm super excited about that. Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1270. 1270 and you know what that means. This is a 10th episode show where we discuss a topic of general interest. And today we have a very famous guest with us, Walter E. Williams. So we will get to him in just a moment. You've heard him on the radio before, he's got lots of writings out there and very prolific guy has been around for a long time. But you know, I was talking the other day on maybe the episode about two days ago or something like that about my longtime theory or not really theory, but statement about the middle class disappearing and how it's being hollowed out in the US and one of our investment counselors, Sarah, just posted an article from the Wall Street Journal about this exact issue. It's entitled Families go deep in debt to stay in the middle class. Wages stalled, but costs haven't. So people increasingly rent or finance what their parents might have owned outright. And that is the way it is. It is a sad state of affairs. It is getting increasingly difficult and complex to hold one's own in this world today, whether that be Time or money or socioeconomic class or really all of the above, because, hey, they're all connected at some level. And that's what we're here to do to help you improve your standard of living and improve your lifestyle. So we will continue to share much more about that. But it's just not as it seems. A lot of times things are more nuanced, more complex than one might think on the surface. And if you happen to see that article, there are a couple of good graphs in there talking about student loan debt and mortgage debt. It's really a sad state of affairs. This is not to be confused with the investment grade debt that I am recommending. This is a completely different topic. This is debt out of desperation, really, rather than investment goals. So very, very different thing. Well, peloton, I was talking about them the other day as well, and how businesses are built on quicksand. Right. And I was reading an article today about it, about how investors really need to see in an IPO like this, the kind of exceptional risk tied up in that. And the way they categorize the business model, it's just. It's just amazing. You know, these. A lot of these businesses are just not even real businesses. They're packaged to basically be split up and sold to Wall street as the executives, like I talked about the other day, taking almost $22 million each every year in their salary on a company that loses money. It's ridiculous. Opportunity zones, we've talked about that many times. And I created commandment number 21. Yes, it was originally 10 Commandments, then it was 20, and now we're up to 21. And I announced that on the show several months ago when we were in Savannah, Georgia, and that was thou shalt avoid manias. Well, one of the manias is this opportunity zone mania. And like I've said, I think it's highly overrated. We've got another episode coming up on that. And sometimes the best investments are the ones you don't do right. And there are a lot of promoters out there promoting this opportunity zone stuff. An article here from Adam Data. We've had them on the show a few times over the years. And Darren Bloom, Bloom Quest with Adam, has spoken at our Meet the Masters event and then one of our other events as well. It talks about how half of the homes in these opportunity zones are far below the national average in terms of home prices. And look, I get it. That's the point of an opportunity Zone, to redevelop and gentrify these areas. Now they Never really talk about all the bad side effects of that gentrification and how it displaces all these people. But forget about that for a moment because that's not really the topic. The real question for investors is will this be a good investment or is it just driven by tax benefits? And the tax benefits really aren't even that great. They're just not, they're just not a big deal. You can get almost the same benefits by doing 1031 tax deferred exchanges, of course. Disclaimer. Check with your tax advisor for details. I am not qualified to discuss taxes in any great degree of detail, but this is just not that great. And a lot of these areas are so blighted that it's a wonder if they ever come back. And we, we've profiled many blighted areas over the years and a lot of them, they just don't come back. And if they do come back, it could take decades, decades. I mean, how much time do you have to wait, right? There are much better things you can do with your money. Just another highly overrated thing. A highly overrated thing. We will continue to discuss that and more stuff on future episodes. But Today is a 10th show, so we're not going to talk that much about real estate and we're not going to talk that much about investing. We're discussing topics of general interest. So let's dive in and go to our guest and talk to Walter Williams. It's My pleasure. Welcome Dr. Walter E. Williams. You've heard his name. He is a professor at John M. Olin Distinguished professor of Economics at George Mason University. He's the best selling author of up from the Race and Economics, Liberty Versus the Tyranny of Socialism and his most recent book, American Contempt for Liberty. Walter, welcome. How are you?

Well, thank you. I'm doing fine.

It's good to have you on the show. Does America really have a contempt for liberty? Watching the news, it would sort of seem so.

We have a deep moral problem in our country. And the moral problem is that most Americans think that it's okay for the Congress of the United States to forcibly use one American to serve the purposes of another American. And indeed, that accounts for roughly 2/3 to 3/4 of the federal budget. That is when I say forcibly using one American to serve another, I mean that is Congress is taking the earnings of one American and giving it to farmers, giving it to food stamps, bailing out businesses, foreign aid, and that's the forceful use of one person to serve the purpose of somebody else. And indeed, the forceful use of one person to serve the purpose of somebody else is a fairly good working definition of slavery.

Couldn't agree more. You didn't mention health care, but of course that's all over the news for the last decade. You know, people somehow think they have a right to that, a right to force other people to pay for their health care.

That is right. A lot of people don't know the what a right is versus a wish. That is a right is something that exists simultaneously among people and it does not impose an obligation on you. That is my right to free speech imposes no obligation on another person except that of non interference. But if you say I have a right to something I did not earn, well, that does impose an obligation on another. That is, it requires another person not to be able to keep as much as he did earn because the government takes it away from him and gives it to me. And so it's a misuse of the term right. Matter of fact, if we use my rights to free speech, if we use the same term that people say, rights to health care, well, my right to free speech would require others to provide an auditorium for me to provide a microphone, my right to require others to, to pay my airfare, hotel accommodations, etc. Etc.

So yeah, absolutely. I mean, we also have the right to peaceably assemble. But that doesn't mean that when you want to have an assembly or a demonstration that other taxpayers have to pay for your travel to get there and your hotel room to stay there. Right?

That is absolutely right. So when people say about health care, I like to see the terminology that they wish everybody had health care. And I also wish that as well.

Yeah, absolutely. You know, is there any going back from the world we live in now? It just seems that we've gone. The pendulum always swings back and forth throughout the decades, throughout the centuries. But it seems as though, as Bill Bonner says, politics always lists like a ship listing a sailboat, you know, to the left, right. It doesn't seem like there's really any going back because once you have this situation where people have voted themselves the treasury, nobody's going to ever give that up. Right. You have these iron triangles that just, they just can't be broken.

It seems like, yeah, I think you're right. And some people ask me, well, what can be done? And I asked the question, I threw a question back at them. I say, are American people any different as human beings from the Romans, the Portuguese, the Spanish, the British? These are great empires of the past, but they went down the tubes mostly for the same reason. Bread and circus. And are the American people any different? And I suggest that American people are no different from people who were citizens of those great empires in the past.

Right, Yeah, I would agree, but people are gonna argue, look, we're a rich country. I mean, you know, nobody should be without healthcare. Nobody should be living on the street. We have enough. And interestingly, the people who say that they don't seem to want to contribute their own money to a cause. That's right.

I personally believe that we should help our fellow man. And helping one's fellow man by reaching into one's own pockets to do so is praiseworthy. Helping one's fellow man by reaching into somebody else's pockets is worthy of condemnation. And for the Christians among us, they have to remember that when God gave Moses the eighth commandment, he did not mean thou shalt not steal. Unless you got a majority vote in the United States Congress.

That's a good way to put it. I love it, but it's so sad. In other words, it would be funny if it weren't so sad.

And by the way, in 1887 at Queen Victoria's jubilee in London, if someone had suggested that Great Britain would become a third rate nation challenged on the high seas by a six rate nation, Argentina, and almost lose, you would have been put in the insane asylum that is. It was inconceivable at the time that Great Britain would ever go down the tubes. It was the mightiest nation on the face of the earth. They used to say that the sun never set on the British crowns.

That's for sure. That's for sure. We've got this huge problem. You know, you talk in the book about the national Ponzi scheme. Are you referring to Social Security or just the general financial mismanagement of the country?

No, Social Security. Social Security is a, is a Ponzi scheme and it would be illegal if it weren't done, if it was done by anybody else other than Congress.

Bernie Madoff actually made a comment that that's where he got the idea. I don't know if he was just being sarcastic, but it's pretty interesting. So talk to us a little bit about the economic side of the equation because this all plays into economics and many of our listeners are interested in that. You know, these politicians, as you talk about, exploit economic ignorance. They think it's just give out goodies and get reelected. That's basically the game. Buy votes. Where are we and where are we going? Is the tide turning at all with the present administration.

I don't think the tide is turning. I think if anything, it's getting worse. And it doesn't have anything to do so much with the present administration. But it turns out that among so many Americans, socialism is becoming increasingly attracted to them. Bernie Sanders is pushing it, and you look at the former governor of Colorado said that socialism is not the way. And he got booed out of the.

I saw that. I saw that clip. That's unbelievable.

Yeah. And the issue is, is that people don't know what socialism is. That is, socialism is government ownership and control over the means of production. And wherever that has been tried, it has led to ultimate disaster. And we see it in our own backyard, in places like Cuba and most recently Venezuela. And you see it all over the world. And, you know, like the Nazism, Hitler was the National Socialist Labor Party. That's what Nazis stands for.

Everybody forgets that Hitler was a socialist and came to power with a lot of free. With a lot of promises. Yeah, well, I mean, socialism and its ugly big brother communism are responsible for the deaths of easily over a hundred million people in the last century.

Oh, yeah, easily, yes. Well over 100 million people. And matter of fact, the greatest murderers were Stalin and Mao Zedong. They murdered more people such that it makes Hitler look like a boy scout in terms of the number of people that were murdered. And a lot of people will say, well, no, we're not talking about the Soviet Union and China. We're talking about places like Sweden or Denmark. And the prime ministers of Denmark and Sweden have said, we're not a socialist country. That is, they have a market, but they have a huge welfare state, but they have a free market economy. Matter of fact, America's socialists would not like very much the way Sweden operates. That is, Sweden has a voucher system, a school voucher system. And that's the last thing that American socialists want.

They don't want people to have any choices for their education. Right?

That's right. Except with abortion. That's what they. Their idea of choice is with abortion. But Sweden has relatively little regulation. It's easy to get a license to operate and get in the business. And same thing with Denmark. And so socialism has been a disaster. And I think one of the things about it is that it sounds so good. That is everybody from each according to their ability and to each according to their need. That just sounds wonderful. But. But where it was tried, it does not work very well.

It's failed every place on earth and every time in history. It's totally oppressive, obviously. But it seems like people can make a better argument for some degree of redistribution. When you have this situation we have now in America where the middle class is getting hollowed out. It seems to be under attack from all sides. The rich are like the super mega rich nowadays. Is it fair to say if you have over $100 million, you should pay a wealth tax of 3% of your net worth every year or something like that?

Well, it all depends whether you earned it. That is, if you earn something, that's determinants of agreement. That is, if you look at the wealthy people in our country, for the most part, they did things that satisfied their fellow man. They did things that made their fellow man's life better off, such as Bill Gates. And with all the work that he's done with Microsoft and all this kind of stuff, he became rich. He didn't take anybody's money. They voluntarily forked over $400 for his windows program and other programs. And so people who make their fellow man better off make his life more livable, make his life longer. I don't think that they should be held up for ridicule and scorn and mistreated. The big thing in our country or anywhere in the world is that in a free economy, in a free market, one becomes wealthy by serving his fellow man. That's what you're doing. That's what I'm doing. We work and we do things that make our fellow man better off. And so the people who should have ridicule and scorn heaped upon them are the parasites in our society. The people who seek to live at the expense of other people, the people who seek the business bailouts or crop subsidies or food stamps, those are the people, the people who are parasites. Those are the people who should have scorn heaped upon them. And by the way, when people talk about redistribution, that's what thieves do. A thief redistributes income, that is, he takes from you and puts it in his own pocket.

Absolutely.

And so Congress does the same thing, but we put a nice name on it. Redistribution of income.

Yeah, right. And I certainly agree with you, Walter, with everything you're saying. We all know, though in practice it's a lot more complicated. Right? Things do get more complicated than these principles. Look, well, here's what I'm saying. Just hear me out for one second, okay? And listen, I agree with you, okay? But the concept of monopolistic practices, crony capitalism, this all just gets really watered.

Down and that's wrong. Crony capitalism I agree, of course.

I don't either, but it happens. And a company like Microsoft, because you use the example, these companies nowadays, because of the way technology has changed, they can develop such incredible scale. I mean, just take it into this realm and I have a feeling we might agree on this. The big tech companies, right? It seems like there's arguments on both sides of the aisle to bust these companies up. And I have to tell you, I agree with it. I think they're just too big. They're bigger than a lot of countries. They control our speech. You have no recourse against Google. If they deplatform you, Twitter, they can just decide they don't like what you're saying. And it's not like the government, you have no free speech rights.

Well, the point is, if you're looking for monopoly, the greatest monopoly and the abuse of power is in the federal government.

Well, of course it is. Of course it is.

However, we support that. To help you understand where I'm coming from. When I think about things, my initial premise starts off with we each own ourselves. That is, I am my private property and you are your private property. Now if you make the assumption of self ownership, then certain things are moral and certain things are immoral. The reason why rape and murder is immoral is because it violates private property.

Yeah, right.

To interfere with peaceable voluntary exchange violates private property. And so these companies that are very, very big, if they became big through the marketplace as opposed they're becoming big through special advantages heaped upon them by government. I have no problem with bigness. That is, the bigness shows that they've been successful in serving their fellow man.

That is no question.

Google and others, while we like everything that they do, they've been relatively successful and they. And so long as the government does not prevent others from entering the market to compete with them, then that's the name of the game.

Well, interestingly, Mark Zuckerberg is calling for regulation. And you know, I think he's doing that because regulation always has the consequence, intended or not, of keeping other new entrants out of the market. Look at Wall street.

We need to fight.

Yeah, exactly. There's no startup culture on Wall Street. There's no one that's going to come and compete with Goldman Sachs. There's just very little innovation because there's no startup culture. You know, and so Facebook, now that they're huge and they have the money to comply with the regulations, they're just gonna say, well, regulate us. And then, you know, nobody else can Start their own thing, you know, to compete.

So who would you blame for that?

Right. But on the way up, I agree with you. You know, they have a product that the public wanted, et cetera, et cetera. But now that they're big, they're abusive. That's all.

They become abusive because they're able to use government to rig the rules of the game.

They've got lobbyist galore. It's disgusting. Google, Google and Facebook, especially Google, has. They have lobbyists coming out of their ears in that company. It's ridiculous.

They're lobbying, Lobbying government.

The handout capital of the world is Washington, D.C. of course.

Well, look, look, we elect these people to office and the congressmen are allowing themselves to be lobbied and persuaded by these big interests. You blame the Congress, you blame the politicians?

Oh, absolutely. Yeah.

But, you know, you can't blame a company. You might say, well, gee, they shouldn't do that. But if they can use their power to do it, well, you have to fight the people who give them the power to do it. It's just like people blame politicians for our problem, but politicians are doing precisely what the American people elect them to office. Do the American people elect politicians to office to give them something that belonged to somebody else or give them a special privilege that's denied another American? So we could say that politicians should be more of a statesman, but that's what they do. And any politician who does not do what the American people want him to do, he'll be run out of office. One example I'll just ask you, I'll do it very quickly. Is that if I were running for the Senate from the state of Virginia, and I go back and forth across the state of Virginia, I say, look, I read the Constitution. Don't expect for me to bring back aid, higher education, highway construction funds and farm subsidies, et cetera, et cetera, because it's not in the Constitution. Do you think I would get elected to the office from Virginia?

Yeah, right.

No, I wouldn't. And the tragedy of it is that the people of Virginia would be doing exactly the right thing by not electing me to office. Because if. If I don't bring back billions of dollars of handout money, it doesn't mean that Virginians will pay a lower federal income tax. All that it means is that North Carolina will get it instead. That is, once legalized theft begins, it pays for everybody to participate in it.

Yeah, it's pretty scary. I mean, we need. The idea of lobbying is people have the right to address the government. Right. And to get the government's ear. But with these giant companies with the corporate interest, it's been. It's just the whole thing's been maligned. I mean, hardly any individuals go to Capitol Hill to lobby. Right. It's all commercialized.

You know, here's my question to you. Should congressmen be in the business of creating favors for some Americans and denying them to other Americans?

Of course not.

Okay, so that's where you focus your energy on these people who are granting favors and special conditions to some Americans because they're giving a lobby, they're contributing to their political campaigns. That's what we need to go after.

Yeah.

And. But we think we're going to blame the companies for using their lobbyists to try to get a special favor from the Congress. And so what we should do, we should get Congress out of the business of granting special favors. Matter of fact, I was talking to a very famous economist, he's long deceased, Friedrich Hayek. And we were having dinner and I said, what do you think we should do? What's the best thing? If you can make one law that would help all Americans, what would it be?

Yeah. What would Hayek say about that? I can't wait to hear.

He said he would enact a law that Congress cannot do for one American. What it does not do for all Americans. That is, he said, he gave an example. If Congress pays some people not to raise pigs, then it should give money to everybody in the country that's not raising pigs.

Right. That's a great point. Yeah. The subsidy, the farm subsidies would just go to everybody, not just the farmers. Right. Because I'm not making cheese. So why don't I get some money for not making cheese? Right. That's right.

See what we ignore? We ignore the fact that all these lobbyists, they're in Washington not because of the weather, they're in Washington, too. Twist the arms of congressmen, say, if you do this for us, we'll do that for you. And it just does not benefit all Americans equally.

Yeah. No question about it, Walter. Give out your website.

Walterewilliams.com and there's a lot of my publications there and videos and things like that that might be interesting to the listener.

Are you still filling in for Rush Limbaugh? I haven't been listening to his show lately. But do you still fill in for.

No, I did that for 20 years. 20 years is enough.

I always enjoyed you and Mark Stein a. Yeah, there you go.

Yeah. Mark Stein still does it.

Yeah. Yeah. Fantastic. Just want to ask you I kind of ask you a lot of questions, threw a lot at you. But is there anything you want to say to people? Just wrap it up for us with anything. Maybe I didn't ask you or whatever comments you have.

I say that we'll solve our problems. Only way we can solve our problems as a nation is to convince our fellow Americans on the moral superiority of personal liberty. And the main ingredient for personal liberty is limited government. That's exactly what the founders of our nation visualize. A federal government that was limited in power and scope. And it was Thomas Paine who said that government under the best of circumstances is a necessary evil under the worst, an intolerable one. And that's what we're facing. We're facing an all powerful government. We're encountering some of the problems that you're mentioning. We're encountering the, the lobbyists and getting special favors and government spending. And just one final point. You know, if you read the Federalist Papers, the Federalist Papers were written by Madison, John Jay and Hamilton to try to convince the American people to ratify the Constitution, which was not a very easy job to do. And In Federalist Paper 45, James Madison was trying to tell the nation what was in the Constitution, what the Constitution would provide. And I'm virtually quoting him. And all these quotes are on my website. He says that the powers that we have delegated to the federal government are few and well defined and restricted mostly to external affairs. Those left with the people and the states are indefinite and numerous. Now, if you turn that upside down, you'd have what we had today. That is the powers of the federal.

Government are numerous and those of the.

People in states are restricted.

That is a sad case. And I hope that tide turns because it is, it is just ridiculous the way it's gone so far. But I'm glad there are people like you out there, Walter, spreading the word. So thank you so much for coming on.

Okay. And thank you for inviting me.

Yeah, my pleasure. And it's WaltereWilliams.com right?

That is right.

All right, everybody check out his, his great books and all that's on in all the usual places. And thanks for joining us. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out the show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own. And if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to itunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you you on the next episode.