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Obama’s war on business: “You didn’t build that!

Written on Tuesday, July 24, 2012 by

obamabusi

 

“If you’ve got a business, you didn’t build that. Somebody else made that happen.”—President Obama

“Do we believe in an America that is great because of government? Or do we believe in an America that’s great because of free people allowed to pursue their dreams to build their future?”—Mitt Romney

On July 13, the Marxist-in-Chief made a huge oral blunder, in confirming what we have long known about him.  This Community Organizer, who has never had to meet a wage bill or even run a lemonade stand, has always been an advocate of government taking more of what we earn, to “spread the wealth around.”

Fortunately, this has energized his opponent Mitt Romney, a self-made multimillionaire whose strength has always been his business skill.  For a long time, a lot of Patriots have been concerned that Romney would mount as lacklustre and milquetoast a campaign as John McCain did last time, with the same results.  But Romney’s response is more like Reagan—clearly explaining to Americans what has made their country the greatest in the world, and contrasting it with Obama’s policies that are more like the bankrupt socialist states of Europe, such as Greece.

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Let’s analyze all the flaws in Obama’s statement.

Money doesn’t start in government

The most glaring fallacy is that Obama has reversed things.  Government has no money of its own.  The only money it can use is that which it takes from the people who earn it.  Without these earners, government would have no money to do the things Obama praises. It would be more correct to say, “If you have a road, the government didn’t build that.  Somebody made that happen.  Productive businesses and workers paid the taxes that made that possible.”

And who paid most of this?  The “rich,” who Obama demonizes (see previous Patriot columns “Obama’s latest class warfare demagoguery,” Part 1 and Part 2). It should be well known that the top 10% of taxpayers pay 70% of taxes, although they earn only 45% of the income.  Thus the business owners profiting from the roads and other infrastructure are likely to have paid the most to build and maintain them.

Government role

Certainly nowadays, the government does build a lot of roads and other infrastructure.  In a case of picking one’s battles, one can make a case that infrastructure for now is a role of government, and Romney is not disputing that.  But this is a long way from all the huge expansion of government under Obama, such as the Spendulus with no “shovel-ready jobs” after all, the half-billion–dollar Solyndra bungle, Obamacare, free contraceptives to wealthy Law students who won’t control their behavior, and now $12 trillion more spending on welfare without any work requirements.   Successful businessmen owe nothing to these.  Indeed,  these government boondoggles suck money out of the infrastructure projects that Obama was praising.

Another irony came just after the Obama quote at the beginning of the article:

“The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

Actually, the Internet was developed first by the military!  They wanted to build a network of computers to talk with each other, even if some major nodes were lost. (It’s an urban myth that they were designed to survive a nuclear strike, although later work did emphasize network robustness that would come in handy in case of an attack destroying many computers).  The predecessor Internet was ARPANET (Advanced Research Projects Agency Network) funded by the Defense Advanced Research Projects Agency (DARPA) of the United States Department of Defense, which started in the late 1960s.

Yet defense of the nation really is a legitimate role of the government, since this guarantees our freedoms (see Patriot column Remembering our soldiers). But this is one role that Obama wants to curtail and cut funding.  Further, in a previous column, I showed that Obama’s hero FDR badly weakened our military by all his spending on social(ist) programs, leaving us woefully unprepared for Pearl Harbor.

Government is not needed

It’s not so well known that much infrastructure was built by private initiative.  Economic historian Burt Folsom writes:

“James J. Hill built the Great Northern Railroad with no federal subsidies. And his high quality transcontinental railroad never went broke. But the federal government chose to subsidize the building of the Union Pacific, the Central Pacific, and the Northern Pacific Railroads, all of which used their federal aid to compete with Hill. The Union Pacific went broke several times and cost the taxpayers more than $30 million. Then after Hill established his supremacy in the railroad business, the federal government broke up his company with the Sherman Anti-Trust Act, after Hill had bought the failed Northern Pacific Railroad. And then the federal government used the Hepburn Act to force Hill to change the rates he charged–which were already incredibly low.”

Folsom also documents that the great Vanderbilt shipping line was likewise built privately.  This was better and cheaper than the rival Collins Mail Steamship Company which received huge subsidies from the government, which as stated, means money coerced from taxpayers.

The same goes for air transportation.  In the early years of the 20th century, the government bestowed huge funding to Dr. Samuel Langley, director of the Smithsonian Institution, to build a heavier-than-air flying machine.  He failed miserably, despite all this money and all the staff he hired.  Naturally, Langley blamed inadequate government funding—despite a grant of $70,000, which would be about $1.7 million today.

But only nine days after Langley’s last disastrous attempt, a couple of unknown brothers who ran a bicycle shop made the first successful flight at Kitty Hawk, on December 17, 1903.  Wilbur and Orville Wright funded this with $2,000 of their own money (almost $50,000 today), and worked in their spare time.  Quite a fascinating contrast in the superiority of private initiative over government bureaucracy, which you can read about in Air Transportation: More Government = Less Safety.

 

Control experiment

Last, we should do what scientists do: control for all the other factors.  If it was all down to government spending, why isn’t everyone a successful businessman?  Indeed, socialist countries like Cuba and the former Soviet Union also have roads and schools.  But they produce none of the entrepreneurs that have done so much to improve our lives.  Rather, the governments get in the way.  That’s the way Obama likes it, too. He has imposed over $38 billion in new major regulations, and wants to increase taxes—and what employers have to pay in taxes and regulations is money they can’t use to hire people!

Obama’s in denial

Evidently some on Obama’s team see the damage he is doing to what he loves best: his own election prospects.  So they have resorted to damage control in the following ad:

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As can be seen, from 0.11 seconds into that clip, Romney cites the President saying, “If you’ve got a business, you didn’t build that. Somebody else made that happen.”  Then the caption intones snidely: “The only problem? That’s not what he [Obama] said.” But not too much longer, at 0.37, Obama is shown saying exactly what Romney quoted him saying.

Obama has later claimed: “What I said was together we build roads and we build bridges.” That won’t do—he quite clearly says that people didn’t build their own businesses—in the quote at the top, grammatically, the pronoun “that” must refer to the noun immediately preceding it, “business.”

Conclusion

Governor Romney has it exactly right.  The president’s remarks were “not a gaffe.  It was instead his ideology.”  Romney continued:

“The president in fact believes that people who build enterprises like this really are not responsible for it, that in fact it is a collective success of the whole society that somehow builds enterprises like this. In my view we ought to celebrate people who start enterprises and employ people.”

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