Sunday, July 29, 2012

Four Little Words

"You Didn't Build That"

It's amazing how much trouble can be stirred up by four little words.  President Barack Obama, in a speech in Roanoke, VA made comments widely seen as disparaging of American entrepreneurship and small business.  His general theme, that business owners owe some part of their success to the availability of infrastructure provided by local, state, and federal government (roads & bridges, electricity, phones & Internet, etc.) is quite correct; in the narrowest sense, no business can succeed without such.

However, he really put his foot in it when he went "off prompter" to continue, "I'm always amazed by these people who say that 'well, if I'm a success, it must be because I'm smarter than someone else'.  Let me tell you, there are a lot of smart people out there. Or, 'it must be because I worked so much harder than everyone else.'  There are a lot of hard working people out there.  If you've got a successful business, you didn't build that!  Someone else made that happen."

Really, Mr. President?  They "didn't build that"?  Just who, exactly, did?  Were those roads and bridges paid for by the 47% who pay no Federal income taxes, or by the business owners who pay as much as a 40-50% rate and the ten percent of earners who pay more than 70% of total Federal Income Taxes?

Contrary to the President's claim that the Internet was created by the government to provide a way for business to make money, the Internet was built as a Defense Dept. project to enable computers to connect with each other over a network.  The idea of the modern day Internet was the brainchild of a group of techies who used the network to converse and trade & collaborate on ideas via chat rooms.  The initial coding of the program that gave rise to the Internet was written by a single private researcher, while the market potential of this new creation wasn't seen by the government (they actually sat on the technology for decades ofter it's initial creation at the Dept. of  Defense), but was, instead, a product of the vision of various entrepreneurs working together to create the most remarkable invention of the 20th century, a product that has resulted in the greatest expansion of personal success and wealth in world history.

This project wasn't government funded.  It wasn't the result of some government committee, using taxpayer dollars to debate and "come to a consensus" of what form this new technological wonder would take, setting up a system of user fees and taxes.  It arose organically from the efforts of the individuals involved, keeping and expanding what worked while eliminating what didn't.  The expansion and build up of the physical infrastructure that brought the 'net to the public was piggy-backed at first on the existing public communication system, but it was augmented by private investment and expense, incidentally providing the government with additional tax revenue in the process.

Mr. Obama's comments, taken along with past comments of "I just think that when we spread the wealth around, it's better for everyone" (to Joe the Plumber) and telling companies that "There will be a time for profits and bonuses, but that time is not now." illustrate the beliefs of an individual at odds with the American system of free enterprise, one more in line with the belief in government controlled and directed economies.

Everybody has access to the same government provided infrastructure.  Everyone uses the same roads and bridges. Everyone has access to phone and Internet, sewer and water and lights.  Then why is it that everyone is not a business success?  Why is it that everyone isn't a millionaire?  If it's true that "You didn't build that", how is it that some succeed where others don't?  It has to have something to do with the individual.  Maybe they aren't necessarily "smarter"; maybe they are simply better at spotting opportunity.  Maybe they don't necessarily "work harder than the other guy", maybe they find or develop ways to work smarter and leverage their efforts.  In any event, Mr. Obama's unscripted remarks reveal an individual that doesn't believe in or appreciate the system of private business and free enterprise as practiced in the United States; an individual that believes in greater government control and provision.

Many people, from television pundits to radio personalities to politicians to bloggers of all stripes have opined that the President is not-so-secretly advocating for a quasi-Marxist/Socialist system, where the government has an active role in regulating economic activity and taxation in the name of "equality" and "fairness".  His off the cuff remarks now, then & in the future, will only give further credence to such beliefs.

He may be sincere.  He may honestly believe that government needs to step in to "make things fair" for those who can't/won't succeed on their own merits.  The problem is that he's wrong.  His approach has never worked as advertised.  The capitalist system, free from overbearing government interference, has proven to be the single best avenue to the creation of independent wealth and financial security in human history.  The top-down approach has only ever resulted in tyranny and despotism, with great wealth and power for a few, broad-based poverty and lack of opportunity for the majority.

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