Whackonomics and wealth redistribution

Walter Williams:

For the U.S. Congress, news media, pundits and much of the American public, a lot of economic phenomena can be explained by what people want, human greed and what seems plausible. I'm going to name this branch of economic science "wackonomics" and apply it to some of today's observations and issues.

Since July this year, crude oil prices have fallen from $147 to $64 a barrel. Similarly, average gasoline prices have fallen from over $4 to a national average of $2.69 a gallon. When crude oil and gasoline were reaching their historical highs, Congress and other wackonomists blamed it on greedy oil company CEOs in their lust for obscene profits.

But what explains today's lower prices? The only answer, consistent with wackonomic theory, is easy: Oil company CEOs have lost their lust for obscene profits. Or, maybe, since many of these CEOs are getting up in years, they might have begun to heed Matthew's warning (19:24), "It is easier for a camel to go through the eye of a needle than for a rich man to enter into the kingdom of God."

Speaking of CEOs, there are the "unconscionable," "obscene" salaries they receive, in some cases more than $10 million a year. Wackonomics has an easy answer for these high salaries: It's greed. However, CEOs don't have the corner on greed. There are other greedy people we don't scorn but hold in high esteem. According to Forbes' Celebrity 100 list, Oprah Winfrey receives $275 million, Steven Spielberg gets $130 million, Tiger Woods $115 million, Jay Leno $32 million and Dr. Phil $40 million. I need to talk to these people and learn their strategy. I've been making every effort to get that kind of money. I go to bed greedy, dream greedy dreams, awaken greedy and proceed through the day greedy. Despite my heroic efforts, it has all been for naught; I earn a pittance by comparison.

Wackonomics can help us understand what some people call income distribution. The logical extension of wackonomic thought is that the unequal or unfair distribution of income is the handiwork of a dollar dealer who distributes dollars. The dollar dealer might deal one person a million dollars a year while dealing most others a mere pittance like $10,000 or $20,000 or $30,000 a year. Thus, the reason why some people are wealthy while others are poor is because the dollar dealer is a racist, sexist, a multinationalist or just plain mean.

Economic justice requires a re-dealing of the dollars, income redistribution or spreading the wealth, where the government takes the ill-gotten gains of the few and returns them to their rightful owners.

Wackonomics might have a greed-based explanation for income inequality. There is a pile of money called income and greedy people got there first and took their unfair share. Similarly, economic justice requires a redistribution of income.

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Walter Williams is one of my favorite economist. I think he is more deserving of the Nobel prize that Paul Krugman. In fact using the reasoning of Bob Herbert below, the only reason Williams has not gotten it is because he is black and the Nobel committee must be racist.

I have never heard a liberal economist answer Williams' question about why entertainer earnings are not the result of greed.