Business Q & A

A conversation with Walter Williams

Walter Williams is a George Mason University economist who thinks that the numerous measures undertaken by the federal government to stabilize the nation's economy will lengthen an already sluggish recovery.

Williams will be in Wichita on Sept. 8, speaking at the Hyatt Regency Wichita on "The Role of Government in a Free Society." His speech is underwritten by the Fred C. and Mary R. Koch Foundation.

Williams is a nationally syndicated columnist and guest on television programs such as "Wall Street Week" and "Nightline" and an occasional substitute host on Rush Limbaugh's radio program.

The Philadelphia native has a bachelor's degree in economics from California State University, Los Angeles, and a master's and a doctorate from UCLA.

He has served on the faculty of George Mason, in Fairfax, Va., since 1980.

What will be some of the key points of your speech?

"At least one of the points, our basic problem as a nation, really it's kind of a moral dilemma ... to use government to take what one person produces or earns to give to somebody else who has not earned it, I think is immoral. And if you look at our federal budget, two-thirds of the federal budget can be described that way. That is, where the government is taking what belongs to one American and giving it to another to whom it does not belong."

Wouldn't the U.S. financial system have collapsed or been in chaos in 2008 and 2009 if the Treasury Department hadn't intervened through programs such as Troubled Assets Relief Program?

"I think... what the government can do, they can conceal the acts of folly by the banking community ... but it still doesn't mean that the banks made huge mistakes, so we're going to pay for it one way or another. (We) pay for it though taxes and also we pay for it through what some people call moral hazard, that is if banks come to expect to be bailed out when they engage in unwise behavior, it's going to increase their incentive to be engaged in unwise behavior."

So should those institutions and companies that benefited from TARP been allowed to fail?

"Business failures are just as vital to the smooth operation of... an economy as business success because what losses mean, 'Gee, you're not doing the right thing.' What profits mean is that you are doing the right thing. And so they're valuable signals in a market."

So you don't think the government should have intervened in financial institutions and automakers like it did a couple of years ago?

"Suppose General Motors had gone bankrupt instead of being bailed out. Does that mean that the productive assets of General Motors —you have the assembly lines and all their tooling and equipment — are going to go poof and disappear in thin air? No, it doesn't. What bankruptcy means is that there is a change of title to these assets. Somebody else will own them and the person who will step up to own them will believe that he can do a better job in the management of them.

"But when government says, 'OK General Motors ... we're going to bail you out,' in an sense that says, 'Keep on doing the same thing.' That is, you still leave these assets in the hands of people who messed up as opposed to making it possible for those assets to move in the hands of people who think they can do a better job."

If you go

Walter Williams’ speech

What: George Mason University economist Walter Williams will speak on “The Role of Government in a Free Society”

Where: Mary Jean Teall Theatre at Century II

When: Thursday, Sept. 8. Reception begins at 5:30 p.m., followed by the speech at 6:15 p.m.

How much: Free to the public. The Fred C. and Mary R. Koch Foundation is underwriting the event. Seating for the event is limited. Reservations are required. The reservation deadline is Sept. 2. To make a reservation or for more information, contact email@fmkfoundation.org or call 316-828-5624.

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