By now most Americans have heard that President Obama spiced up a campaign speech with the words,
If you’ve got a business — you didn’t build that. Somebody else made that happen.
This remark brought a deserved round of criticism, especially from Mitt Romney. President Obama’s allies in the media immediately disparaged the critics, insisting the words were lifted out of context. But in the context of this speech and the larger context of his policies and economic philosophy it’s clear Barack Obama does not understand or respect business owners.
As a public service Liberty Works herewith provides the context and as one who owns a small business and has operated another for absentee owners I will interpret the President’s remarks, in context. These words, copied directly from the official White House transcript, came immediately after and were intended to justify the President’s call for increased tax rates on high income Americans:
There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.
This is an example of the President’s favorite debate tactic, inventing absurd claims supposedly made by others and then rebutting them. Obviously he doesn’t know the private thoughts of millions of successful people. Of those who do discuss their experience, virtually none are so vein as to explain their success in such simplistic terms as “I was just so smart” and “worked harder than anyone else.” In fact almost all are more humble than he would acknowledge. Obama continued…
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. 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.
Again, the purpose of these assertions was to justify higher tax rates imposed on high income Americans, most of whom are business owners. Obama hopes to plant the perception in the mind of his audience that business owners are freeloaders who take advantage of the generosity of government to enrich themselves.
But Obama ignores the harsh reality:
- Business owners take enormous personal risk that employees – and politicians – don’t. Entrepreneurs put their homes at risk to secure loans to start or expand small businesses.
- Most entrepreneurs wrestle a business up out of the ground with virtually no financing from any source. For every one who is eventually financed by a venture capital investor there are hundreds who squeak by by maxing out credit cards.
- Most owners have had to go without compensation for themselves while continuing to pay their employees.
- Every successful business owner has had to claw his or her way back from adversity and financial disasters.
- Small businesses often find themselves squeezed between creditors or tax collectors who demand immediate payment and customers who are slow to pay their bills.
- The most successful business owners pay the highest possible tax rates on their profits, and then reinvest after tax profits to expand and create jobs.
- Almost all business owners have at one time or another unwillingly discovered the ultimate tax avoidance strategy: No income.
President Obama, and the Progressive movement he represents portray government as a magnanimous benefactor, enabling business owners to succeed by providing fire stations, roads and schools. Because he is determined to convince us they should pay higher taxes he never acknowledges the burdens government heaps upon business Owners.
Instead of demanding even more from business he should apologize for imperious regulatory agencies with their inspectors and auditors who have the power to conduct searches and seizures without warrants and impose punishments without due process of law. Progressives who give government the credit for the business owner’s success always seem to forget government’s myriad regulations, licenses, fees, fines, taxes, assessments and levies.
Yes, some business owners were fortunate to have had inspiring teachers. But so were some who don’t own businesses. Yes, business owners benefit from police and fire departments and roads. But so do the 90% who never assume the burdens, and never put their personal security on the line to start or expand an enterprise that serves customers, provides jobs and produces the profits and wages that government will then tax.
Government doesn’t do the work or assume the risk to start a business and doesn’t bail out small businesses when they struggle. Government ignores new businesses until they become big enough to pay significant taxes. Then, the most successful business owners, those who emerge from years of hard work and sleepless nights to to score a profitable year and a measure of financial security are rewarded with the privilege of paying a wildly disproportionate share of the cost of government.
In context of this speech and all his policies and tax demands the most obvious interpretation of the President’s words is that he does not appreciate or respect the role of entrepreneurs who make American society prosperous and provide the resources politicians squander with such abandon.
And by the way, as this timeline shows, the assertion that “government research created the Internet” is a laughably simplistic distortion of reality. Perhaps the only things government does efficiently are taking credit for anything we like and deflecting blame for whatever annoys us.