“If you’ve got a business – you didn’t build that”

When Obama is speechifying on the campaign stump before an usually receptive crowd, he often goes off script and his words reveal his true self. That happened a couple of weeks ago when he was stumping before a gushing crowd of adorers in Roanoke, Virginia – a must win state for Obama. His comments subsequently created a rage and backlash from entrepreneurs and small business owners around the country whom he let know deserved no credit for their business accomplishments. The government deserves the credit:

… 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.

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.

Let me deal with the Internet lie straightaway – in fact, I may blog on “the government invented the Internet” horse hockey in the future and include Al Gore’s claim to have helped bring it into existence.

Gordon Crovitz wrote a piece in the Wall Street Journal soon after Obama’s “government research created the Internet so that all the companies could make money off [it]” hogwash. The Crovitz editorial triggered teeth-gnashing among the “yes but” liberal bloggers, articles, and apologists with transparent government sympathies. To them and others who believe that a benevolent and enterprising government ever created anything so others could make money off of it, my offer a couple of blogs ago to sell them the Golden Gate Bridge still stands. My question for them is this: where would government get the capital for such an undertaking since the government possesses no money of its own? Private citizens, of course. Moreover, why and how would government find the economic motivation and managerial ability to create such a commercially successful project as the Internet? This is the same government that can’t run a postal service or Amtrak profitably! This is the same government that invested a trillion dollars of the people’s money in Solyndra, Beacon Power, Spectra Watt, Brightsource, Eastern Energy, Raser Technologies, and an unending list of snake oil schemes, all of which are bankrupt.

The tree of technology has many branches. Technology develops – indeed morphs – by borrowing the fruits of lower branches and using them to make something quite different than where the lower branch was headed. Henry Ford, for example, combined well proven technologies – the meat packing industry (disassembly), the canning industry (continuous flow production), cereals and granaries (conveyors and hoppers), and the machine tools industry (interchangeable parts) – to create the automobile and its continuous flow manufacturing process. That Ford had no government help doing this is notable. Moreover, by his own admission, he invented none of these technologies. Yet only a fool would deny that Ford’s borrowing from the technology tree and his reconfiguration of existing technologies into a new thing was not an “invention.”

That’s the way technology and business breakthroughs develop. If the meat packing or canning industry were to claim that they invented the auto and assembly line, it would be laughable. In like manner, the ARPANET and modern Internet are distant cousins, but it’s ludicrous to claim – as the government apologists do – that the ARPANET became the Internet and, therefore, since the government financed the development of ARPANET (for a totally different reason and with taxpayer money to boot) that the government should be credited as the creator of the Internet.

Continuing, it is outrageous for Obama to claim that entrepreneurial achievements pale because “somebody invested in roads and bridges. If you’ve got a business – you didn’t build that.” Uh, say again? The “somebody” who invested in roads and bridges would be individual and business taxpayers last time I checked. The builders of the roads and bridges would be private designers and contractors. The rationale for building roads and bridges would be the over-regulated, over-taxed commercial activity created by the sweat and risk-taking of private businesses, last time I checked. Absent private demand for infrastructure, you’d have another Amtrak government boondoggle – a train that no one uses and whose continued losses are foisted on taxpayers.

Obama’s socialist worldview, which slipped out in the Roanoke speech, comes from his own experience. Obama naturally thinks others are the fount of every blessing because that’s the way it was in his life. Without well-heeled, influential, and often white sponsors to shepherd him into privileged opportunities, make doors open, arrange influencers to throw their connections behind him, where would he be? He has never held a real job. He has never accomplished anything of particular merit. He’s not even managed anything in government such as a city mayor or state governor must do. All of his life, Obama has been a taker, not a maker. All of his accomplishments – including fundraising and campaign management – were done by others. Even as President, he didn’t manage his own political agenda. ObamaCare was delegated to Harry Reid and Nancy Pelosi and in effect Obama said, “Let me know when it’s done and I’ll sign it.” A guy for whom all the doors are opened and the heavy lifting is done by others would obviously think that that’s the way it is in business formation – all of the important work is done by others including the federal government.

Of course, realizing how politically and utterly stupid Obama’s Roanoke comments were, his handlers went into full damage control mode, telling the press that the outrage sparked by his remarks was due to “out of context” reporting by the media. No it wasn’t. The text of the speech is posted by the White House Press Secretary’s Office online. Inconveniently, the speech video is also online dismissing any argument that the text of the speech said one thing and the actual speech said another.

It’s plain to see in the video that from the outset, the adoring crowd and the gushing periodic interruptions of “Four more years” became the Siren’s Song that lured Obama into revealing the real deal Obama – the Obama without the fraudulent façade of his public persona replete with polished, teleprompter-fed rhetoric. Ah! Would that Obama had used beeswax as Odysseus and his fellow seafarers were encouraged to do, for he revealed that he really does believe business creators are undeserving of the success of their accomplishments – that lots of smart people and lots of hard working people labored out of sight, unrecognized for their contributions, and were exploited by the guy who gets the glory – Henry Ford, Steve Jobs, Charles Schwab … you name them – because that’s the way Obama’s world works.

Now don’t get me wrong. I’ve never met a successful entrepreneur who believed that his success was a solitary accomplishment. Not only did they know that their success was helped by others, but also they made sure to reward the helping hands, in some cases making the key contributors very wealthy. But without Steve Jobs there would be no Apple, I don’t care how many smart, hard working people might have been employed there. Without Bill Gates, there would not have been a Microsoft despite the contributions of others. Without Fred Smith there would have been no Federal Express and who knows where American business would be today if his “Absolutely, Positively, Overnight” had not replaced the glacially incompetent performance of the postal service.

Curiously, Elizabeth Warren, the Harvard professor of Cherokee Nation fame, whose bush league senatorial campaign to oust Sen. Scott Brown (R-MA) from Teddy Kennedy’s old seat is funnier to watch than old Laurel and Hardy movies, personifies the same anti-business instincts of Obama. A speech she delivered last September sounds as if Obama plagiarized it. Listen to her:

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

“The rest of us?” You mean there is one group that uses the roads, the educated workforce, the police and fire protection – the apparent “takers” – and then there’s “the rest of us” – the “makers” – who paid for these munificent blessings? Pray tell, Professor Full of Gas – or whatever you call yourself when imitating a real Cherokee – who paid for roads, education, and public safety? Uh? A little louder Full of Gas, I can’t hear you. Ah, the taxpayer, you say. Well, that eliminates half of the workforce because they pay no taxes. So “the rest of us” would be the other half, i.e. private businesses and the workforce they created – society’s real makers – wouldn’t you agree? In fact, half of “the rest of us” would include the 400 people who pay 50% of all taxes paid. Why, I could put 400 people in my office building, Gas, and still have room to spare.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

I don’t think entrepreneurs need risible investment advice from Elizabeth Warren, who’s never created a single job or created wealth for others, to tell them to “pay forward for the next kid.”

The entrepreneurs I know feel an enormous debt to society and devote their wealth and expertise to generous giving for a good part of their lifetimes. Andrew Carnegie, who sold his steel business to J.P. Morgan’s U.S. Steel Company and became the richest man in the world as a consequence, gave most of it away before he died. In 1889, he wrote The Gospel of Wealth, whose homilies advocated that all personal wealth beyond what was needed to care for one's family should be regarded as a trust fund administered for the benefit of the community.

When I hear Obama, Warren, and people of that ilk talking about achievement, private enterprise, the economics of equitable distribution – subjects that are light years outside of their expertise – I’m reminded of Dr. Samuel Johnson’s observation of a dog walking on his hind legs – it’s not done well and it’s surprising that it’s done at all.

President Ronald Reagan got it right when he said in a June 1983 speech to the National Federation of Independent Business

The character and conscience of small business built this nation. … They are the heroes of economic life and those who begrudge them their rewards demonstrate a failure to understand their role and their promise. Well wouldn’t it be nice to hear a little more about the forgotten heroes of America? Those who create most of our new jobs like the owners of stores down the street, the faithful who support our churches, synagogues, schools and communities. The brave men and women everywhere who produce our goods, feed a hungry world, and keep our families warm while they invest in the future to build a better America. That’s where miracles are made. Not in Washington DC.

Contrast Reagan’s view with Obama’s as shown in the farcical Life of Julia appearing on his election campaign website. Julia’s partner in life is not a husband, although she does decide to have a child; her partner is the federal government à la Barack Obama. The all-wise, ever-nurturing, deep-pocketed avuncular government cares for Julia from cradle to grave. Why, it’s just like “Whistle up a Rainbow”! Whenever you’re in need just clap your hands and the government Genie is there to help. This is the way Obama sees life – the Life of Julia, a production co-starring government and people incapable of taking charge of their own lives.

There’s no room in that picture for Howard Schultz, who took a commodity – coffee – and turned it into Starbucks, a multi-billion dollar business. There’s no room for András Gróf, a Hungarian Jew who survived Hitler’s “Final Solution,” the Soviet Red Army invasion of his homeland, the Hungarian uprising, and who came to the US at age 20 with essentially no money in his pockets and unable to speak English. He taught himself English, maneuvered his way through three college degrees, including a Ph.D., anglicized his name to Andrew “Andy” Grove, and joined Robert Noyce and Gordon Moore as the third employee of a start-up company that became Intel, which he would guide as CEO through its most productive years. About 90% of the computers made today run on Intel microprocessors.

In Obama’s view of the world there could never be a Clarence Birdseye who, at the beginning of the 20th century, was taught by the indigenous Inuit of Labrador and Newfoundland to ice fish in temperatures 40 degrees below zero. He noticed when he caught fish, they froze immediately in the frigid air and when they were defrosted, sometimes much later, they were as fresh as the moment they were caught. With $7 in capital he developed the process of flash-freezing, went bankrupt, and started over building a second company. Distribution was a problem because grocers had no way to hold frozen food, so Birdseye had to invent the entire distribution chain, including the refrigerated rail cars and retail frozen food display cases in order to have a successful venture. Clarence Birdseye pioneered the frozen food we eat today and his company is still with us as the Birds Eye Foods division of General Food Corporation.

People like Birdseye, Grove, Moore, Noyce, Schultz, Jobs, Gates, Schwab, Fred Smith – people who changed the quality of American life and with it the world – have no place in Obama’s world or speeches because they weren’t co-productions of government. In contrast theirs are stories of failure and determination, under-capitalization, and hard-earned success, often after combatting interference by incompetent government.

To wit:

As he waxed eloquent in his Roanoke speech, Obama claimed government credit for building the Golden Gate Bridge. He obviously hasn’t read Kevin Star’s book, Golden Gate: The Life and Times of America's Greatest Bridge. Not only did the federal government not build the bridge as Obama claimed but it did everything to prevent its building for almost a decade. It’s a tale that would make Kafka envious.

Most local San Franciscans wanted a bridge but the property for its logical end points was owned by the government – more specifically, the Department of War – which wouldn’t sell. Political pressure eventually forced the sale, but the government refused to sell to a private contractor. The only acceptable buyer would be a state commission. Federal unions held up the project even longer as they tried to elbow their way to the table for a cut of the action. The advent of the Great Depression of 1929 finally called a halt to government silliness as bond financing dried up and doomed the project. Or so it seemed. Enter Amadeo Peter Giannini, Chairman and President of the Bank of America, who made private capital available to build the bridge without union labor, which contributed to bringing it in under budget. Not a dime of government money was involved. Not an hour of government participation occurred. The Golden Gate Bridge was a production of private enterprise.

Now you know the rest of the story.

The novelist and philosopher, Ayn Rand, was strongly individualistic. She is best known for her works, The Fountainhead and Atlas Shrugged. In a lecture given in late 1961 she observed:

Every movement that seeks to enslave a country, every dictatorship or potential dictatorship, needs some minority group as a scapegoat which it can blame for the nation’s troubles and use as a justification of its own demands for dictatorial powers. In Soviet Russia, the scapegoat was the bourgeoisie; in Nazi Germany, it was the Jewish people; in America, it is the businessmen.

Vote November 6. And send this blog link to your friends asking them to do likewise.