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Walter E. Williams
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Ending Income Inequality?

Comment

Benefiting from a hint from an article titled "Is Harry Potter Making You Poorer?", written by my colleague Dr. John Goodman, president of the Dallas-based National Center for Policy Analysis, I've come up with an explanation and a way to end income inequality in America, possibly around the world. Joanne Rowling was a welfare mother in Edinburgh, Scotland. All that has changed. As the writer of the "Harry Potter" novels, having a net worth of $1 billion, she is the world's wealthiest author. More importantly, she's one of those dastardly 1-percenters condemned by the Occupy Wall Streeters and other leftists.

How did Rowling become so wealthy and unequal to the rest of us? The entire blame for this social injustice lies at the feet of the world's children and their enabling parents. Rowling's wealth is a direct result of more than 500 million "Harry Potter" book sales and movie receipts grossing more than $5 billion. In other words, the millions of "99-percenters" who individually plunk down $8 or $9 to attend a "Harry Potter" movie, $15 to buy a "Harry Potter" novel or $30 to buy a "Harry Potter" Blu-ray Disc are directly responsible for contributing to income inequality and wealth concentration that economist and Nobel laureate Paul Krugman says "is incompatible with real democracy." In other words, Rowling is not responsible for income inequality; it's the people who purchase her works.

We just can't blame the children for the unfairness of income inequality. Look at how Wal-Mart Stores generated wealth for the Walton family of Christy ($25 billion), Jim ($21 billion), Alice ($21 billion) and Robson ($21 billion). The Walton family's wealth is not a result of ill-gotten gains, but the result of Wal-Mart's revenue, $422 billion in 2010. The blame for this unjust concentration of wealth rests with those hundreds of millions of shoppers worldwide who voluntarily enter Wal-Mart premises and leave dollars, pounds and pesos.

Basketball great LeBron James plays forward for the Miami Heat and earns $43 million for doing so.

That puts him with those 1-percenters denounced by Wall Street occupiers. But who made LeBron a 1-percenter? It's those children again, enabled by their fathers or some other significant male. Instead of children doing their homework and their fathers helping their wives with housework, they get into their cars, drive to a downtown arena and voluntarily plunk down $100 for tickets. The millions of people who watch LeBron play are the direct cause of LeBron's earning $43 million and are thereby responsible for "undermining the foundations of our democracy."

Krugman laments in his Nov. 3 New York Times column "Oligarchy, American Style," "We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only." I'd ask Krugman this question: Who's putting all the money in the hands of the few, and what do you think ought to be done to stop millions, perhaps billions, of people from using their money in ways that lead to high income and wealth concentration? In other words, I'd like Krugman to tell us what should be done to stop the millions of children who make Joanne Rowling rich, the millions who fork over their money to the benefit of LeBron James, and the hundreds of millions of people who shop at Wal-Mart.

I'd like to end this discussion with a bit of a personal note. The readers of this column know that I never make charges of racism. Rowling is an author, and so am I. In my opinion, my recently published book "Race and Economics: How Much Can Be Blamed on Discrimination?" is far more important to society than any "Harry Potter" novel. I'd like to know what it is about me that explains why millions upon millions have not purchased my book and made me a billionaire author. Maybe Krugman and the Wall Street occupiers have the answer.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2011 CREATORS.COM



Comments

15 Comments | Post Comment
Since Rowling isn't an American citizen or, as far as I know, subject to our tax laws, she is NOT part of the 1%. And no one's saying people shouldn't buy products they want to support or find entertaining. To my mind, the issue is not, and never has been, the mechanisms that MAKE people obscenely rich while others struggle to get by. The issue is the mechanisms of government and finance that allow the obscenely rich to avoid making their just contributions to a society we ALL live in--a society that has, as you note, directly contributed to the acquisition of their wealth.

Comment: #1
Posted by: Laura
Tue Nov 29, 2011 3:13 AM
Voluntary exchange is the heart of freedom and of capitalism. The nitwit protesters should be screaming at forced transfers, like the $180 billion the government took from those who earned it, and simply gave to insurance giant AIG. They ought to be protesting the government's taking from those who are productive, and giving to those who work against productivity, in most areas of government and regulation. They ought to protest against those who take from those who are productive, and bring it home themselves, in their lifetime pensions and medical care for the ruling class.

Rowling, Wal-Mart, and James all provide something that people voluntarily pay for; government simply takes, and their favorites get something for doing something negative!

There ought to be protests, but the smelly squatters are protesting against the wrong people and the wrong ideals.
Comment: #2
Posted by: Tim Kern
Tue Nov 29, 2011 8:53 AM
Laura, some of the rich made their money through crony capitalism -- that is, government subsidy or favoritism of one sort or another. Crony capitalism should stop, which basically means government meddling in the economy should stop. Other rich people became rich through the sorts of productive activities Dr. Williams points to. What you would do well to realize is that they have ALREADY contributed mightily to society through those very creative activities, namely, by making available goods and service that people were happy to buy. And they have every right, then, to allocate their property as they see fit, including passing it along to their heirs. I can't imagine why you think that's any of your business.
Comment: #3
Posted by: Allan Walstad
Tue Nov 29, 2011 10:33 AM
"The issue is the mechanisms of government and finance that allow the obscenely rich to avoid making their just contributions to a society we ALL live in--..."

By what mechanism do the recipients of government largesse contribute to society? Do they not also have a responsibility to society to improve themselves and become contributors instead of takers? Every day there is more evidence that the government wishes to control people's lives. Thoses on the dole have acquiesed to this concept, they do not want to accept responsibility for life decisions they make. Government plays to the self interest of business and these takers with vote buying on both ends; large donations from corporations grateful for favor, and votes from those dependant upon government ability to redistribute wealth to the non-productive. No one wants to cut off all aid to those justly deserving of it, but both ends of the scale have become to dependant upon handouts. No where can you find a constitutional justification for either a corporate or citizen welfare state.
Comment: #4
Posted by: Tom
Wed Nov 30, 2011 5:44 AM
As our federal government grew and began taking on more and more responsibility, beyond the parimeters of our Constitution, it opened itself up for corruption. We permitted this to happen...we the citizens of this free nation allowed ourselves to be duped by self-serving career politicians who have grown to have little regard for the Oath of Office or the purpose for which they were to 'represent.' We must not forget that corporations, banks and et al are made up of people like you and me. Open to temptation and suduced by power. By eliminating the size and impact of our federal government we can go a long way to reducing the conflicts felt in the 'income inequality' notion being protested today.
Comment: #5
Posted by: Stevetheartist
Wed Nov 30, 2011 7:58 AM
The problem isn't that the unproductive citizens are getting handouts. The problem is that the productive citizens are barely squeaking by, while the CEO's profit obscenely. Production in the US keeps rising; wages keep falling.
Business is a great idea. By all means, work hard and profit by it. Invent something cool, become rich. This is not about creative people profiting from their work. It's about (among other things) people who profit off the sweat of others. In my experience, a CEO will go into a company, fire half the employees, funnel resources into short-term gains, make it look like business is booming so stocks go up; meanwhile, business infrastructure and employee expertise has been ransacked, and employees are forced to work double time just to keep their jobs and keep the business afloat. CEO departs the company with an enormous severance package worth hundreds of thousands or more, and the company either bites the dust or struggles on, staying alive only from the sweat of the employees who barely profit by their work.
Comment: #6
Posted by: Zucchini
Wed Nov 30, 2011 8:42 AM
Yes, Rowling is rich as a result of her books. She's written a good tale and millions of people enjoy them and the movies, posters, etc. that resulted. However, that $15 novel probably cost $3 to print, that $8 movie had a real cost per customer of $1, and the $30 disc might have run $5 to produce and distribute. The additional money taken in (the profit) goes to Rowling for her imagination and creativity and to the publisher, the movie-makers, and so on. I have no quarrel with them making money, but why so much?

If the book sold for $5, could Rowling be happy with half a billion instead of a whole one? If the movie was $3 or the disc was $10, could the movie-makers pay their CEOs less, and let me keep a little more in my pocket? Maybe then I'd be able to pay for my own child's college education instead of scrounging for government financial aid. Maybe then I'd help create a job or two, by hiring my out-of-work neighbors to fix my disintegrating fence and work on my 17-year-old car.

On a similar note, why can't Wal-Mart pay their manufacturers a decent price (and help eliminate sweatshops, both foreign and domestic), and their employees a decent wage (so they don't have to rely on food stamps and Medicaid)?

Why does LeBron need $43 million? His fans would just as willingly plunk down $25 for tickets.

Again, I have no quarrel with talented, industrious individuals making money. But why do they have to take every last dime they can get away with? Just because they can?
Comment: #7
Posted by: KC
Wed Nov 30, 2011 9:03 AM
KC, I agree as long as you hold government to the same standard. 35% income tax + another 10% in various taxes and fees means that for slightly less than a half of a year we are working solely for the benefit of government. Do they have to take every last dime they can get away with? If you believe yes you should occupy some city. Just because you can.
Comment: #8
Posted by: Tom
Wed Nov 30, 2011 11:27 AM
Doesn't anyone study history anymore? ... I guess unless it's on the evening news it's not important? ... The Depression of the '30's shows that when FDR, et al, taxed the people making over 300,000 (millionaires by our standards), the number of "millionaires" dropped by almost 2/3 !!!

The rich simply had their brokers put their money into tax-free bonds and that was that. The tax did absolutely nothing except help prolong the Depression that actually didn't end until a war forced us back to Capitalism.

The more frightening point of that period is that as long as FDR kept promising more Welfare, he kept getting re-elected !!!
Comment: #9
Posted by: Billy
Wed Nov 30, 2011 3:54 PM
Zucchini, why even hire CEOs at all? Have you considered going into that line of work? I don't really get it myself, but it sounds like you do. Alas, you are probably too ethical to fire people. I hope that comes across as playful with only a hint of sarcasm.

KC, nobody knows for sure how successful their work will be or how long it will last. Some people even lose money on their projects and investments! Crazy, but true. The only way to tell what something is worth is to ask people what they are willing to give for it.
Comment: #10
Posted by: Kevin
Thu Dec 1, 2011 1:01 PM
Re: Zucchini
Those poor employees can always leave this "sweatshop" and go elsewhere since we aren't totally under the Commie system yet.
Comment: #11
Posted by: Mandy
Thu Dec 1, 2011 3:55 PM
Re: KC
People or companies can't take money away from you that one obligingly gives to them when one makes a purchase. It is one's choice to pay these prices and that is what captialism is. Supply and demand. Apparently, many others can and do pay the prices you are complaining about so perhaps the answer that no one has suggested which is to either get a better paying job or get two jobs. When I grew up, many people worked two jobs.....I have worked two jobs and my parents did at times. Suddenly, people don't even want to work one job in this country anymore. As for the high cost of a college education, why aren't you blaming the over-paid, tenured profs and college admin. Plus many kids don't need a college degree and could make a better living doing a/c work or some other manual labor. I have a nephew making tons more (with a paid truck) than my other nephews who wasted their parents money attending college. This country has become nothing but a tiring bunch of whiners.
Comment: #12
Posted by: Mandy
Thu Dec 1, 2011 4:04 PM
Walter, is this supposed to a joke? Social inequality "rests at the feet of the world's children and their enabling parents"? I agree it's not Rowling's fault that we liked her books and bought them. I agree we shouldn't blame Rowling - she worked hard and her creativity delivered her from poverty. But you don't see a difference between earning and sustaining one's wealth through creativity and hard work, and earning and sustaining one's wealth by gambling with the money of others or manipulating politics and our financial system to his or her own ends? OWS isn't upset about wealth - it's greed that is the issue. The wealth discussion is a calculated distortion. Yes, children and their parents buy things, but how did children and their parents have anything to do with the continuous lowering of taxes for the top 1% of people in the U.S., or the looking the other way regarding tax havens, or the giving of subsidies to industries showing record profits, or the gambling with the housing market that cause the 2008 collapse? This discussion seems to be nothing more than a way to stir up controversy using a household name author in order to draw a parallel to yourself and suggest your own "socially superior" book in the process to like-minded anti-OWS readers.

To further address your argument that it's the "99-percenters'" fault for the current economic inequality, Walmart is a terrible example of a business that we as consumers put in its current position of success. Consumers are are not the cause but the effect. Of course we want to buy things at the lowest prices, but Walmart uses lack of regulation to squeeze suppliers, put competitors out of businesses, and force manufacturing overseas in order to provide way lower prices than anyone else. Walmart spends a lot of money in congress to make sure regulation of their job-killing practices remains low in the name of low prices. It's easy to have the lowest price when you monopolize the retail market and squeeze out the competition. But of course it's children and their poor parents' fault that every time they buy a $1.00 24 pack of paper towels from Sam's Club instead of paying $6.00 at the local grocery store down the street, they could be shooting their own jobs in the foot. Who is supposed to protect them?

As a few final thoughts, JK Rowling is not an American citizen so she really isn't one of the 1% decried by OWS. This was mentioned by another commenter, but I think it's worth reiterating because even though that really doesn't matter much for the sake of an argument regarding millionaires in general, it really makes her a strange example for you to use as the focus of your article, especially when Rowling, a "former welfare mother" is such an obvious example of why social welfare is a valuable investment and why we shouldn't be cutting social programs so drastically. Finally, using the last paragraph of your commentary as a clear advertisement for your recently published book ruins any serious credibility anyone could give to your opinion. If your book is written anything like this article (with a lack of any real evidence or perspective) I think that's reason enough why no one is reading it.
Comment: #13
Posted by: EM
Fri Dec 2, 2011 3:13 PM
Walter, Walter, Walter. You know this better than I. Your stories are not lovable, intriguing and just oh so compelling as Rowlings'.

Now if you wish to contact me about a thriller set in an Econ-Terror-Take-over the world format, please don't hesitate to reply. We both have plenty to contribute.

Love you buddy!
Comment: #14
Posted by: John Rosengren
Sun Dec 4, 2011 11:08 PM
I would like to comment about the minimum wage.. Please those of you like Walter Williams that do not believe in a minimum wage do not spread misinformation about it. Did you know Walter that in states where their minimum wage laws mirror the federal minimum wage laws you can hire and pay anyone under the age of twenty 4.25 hour for the first ninety days that they are employed. Let me repeat that Did you know Walter that in states where their minimum wage laws mirror the federal minimum wage laws you can pay anyone under the age of twenty 4.25 hour for their first ninety days that they are employed. Well now you know Walter ok. Did you know that most states make exceptions for very small companies that have sales below 1 million dollars a year. These companies are not even required to pay the minimum wage. This would most likly be over half of all small businesses in other words over half of all the small businesses in the country are exempt from paying the minimum wage. Well now you know Walter. I would suggest a simple solution to the minimum wage issue. Instead of requiring a company to pay the starting minimum wage of 7.25 hour allow them to phase it in by simply starting a employee out at 6.00 hour 5.75 for anyone under eighteen and than increasing their pay by 25 cents a month until it reaches 7.25 hour. It will take five months to reach 7.25 hour by doing this it will give the employer a little bit of time before they are required to pay the full amount. In other words while the employee is learning the job and is not yet as productive as the more experenced employees they can be pay a lower rate of pay for up to five months. I would also make exceptions for seasonal workers that are employed only for 60 days or less they can be paid 6 dollars an hour for up to sixty days. 5.75 hour if their under eighteen. I believe that this is a very reasonable compromise between the employee and employer. One other thing their is overwhelming public support for the minimum wage. Illinois had a referendum on increasing the minimum wage on the ballot over 85% of the voters supported increasing the minimum wage.
Comment: #15
Posted by: Dennis The Menace
Sat Dec 31, 2011 5:38 PM
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