In context: ‘If You’ve Got a Business, You Didn’t Build That’

At ABC News, Jake Tapper says that we should look at Obama's comments  about business at Roanoke last Friday, in "full context."  Below is the "full context," with my comments interspersed:

We’ve already made a trillion dollars’ worth of cuts.  We can make some more cuts in programs that don’t work, and make government work more efficiently…We can make another trillion or trillion-two, and what we then do is ask for the wealthy to pay a little bit more …

His claim to be a big budget cutter is just delusional. This is what Obama has done to the budget deficit (click to enlarge):

Obama continues:

There are a lot of wealthy, successful Americans who agree with me, because they want to give something back.

"Give something back"?  Democrats are under the illusion that economics is a zero-sum game.  It isn't.  A successful business is positive-sum: not only does it provide jobs for employees and business for its suppliers, it also provides customers with a product that they thought was worth buying.  Businesses have already "given back."  If you studied economics, you will recognize this plot showing that both consumers and producers (and, if you extend the analysis, employees and suppliers and ...) all enjoy a positive-sum under a free market:

In contrast to free market activities, government actions can be negative sum.  Obama would know that if, in school, he had studied economics instead of Marxism.

Obama continues:

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.

Here Obama is just clueless: no one works harder than business owners.  It is not like some no-show government job in Chicago.  On the day his advisers should have come to brief him on this, Pres. Obama might have been out playing one of his 102 rounds of golf.

The next paragraph is where he claims that "if you’ve got a business. you didn’t build that. Somebody else made that happen":

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. [Emph. added]

Here he retreats to the "roads and bridges" defense.  If the government stuck to things like "roads and bridges," we wouldn't be having this conversation and Obama should know that.

The internet example is also a bit off.  It is true that DARPA funded key parts of its development but the Defense Dept. is the one area of government that Obama does want to cut.  (A full discussion of how technology best transits from a researcher's thoughts to development to industrial production is beyond the scope of this post.)

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

Here, he goes back to straw-man arguments.  Republicans are not proposing the elimination of fire departments and Obama knows it.

So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together.  That’s how we funded the GI Bill.  That’s how we created the middle class.  That’s how we built the Golden Gate Bridge or the Hoover Dam.  That’s how we invented the Internet.  That’s how we sent a man to the moon.  We rise or fall together as one nation and as one people, and that’s the reason I’m running for president – because I still believe in that idea.  You’re not on your own, we’re in this together.”

The US Constitution was written because history shows that (a) there are, as Obama says, "some things we do better together" but that also (b) there are some things best done locally or individually.  Foreign policy and defense strategies are best done "together" and the Constitution gives those roles to the Federal government.  Other things, such as intrastate commerce, are best done at the state level and the Constitution grants those powers to the states not to the Federal government.  Other things, such as speech or the press or worship, are best left to the individual.  The framers of the Constitution decided these issues after examining the lessons from thousands of years of human history.   Obama shows no evidence of having put more than ten minutes of thought into his version.

Obama also misses the bigger picture: without successful industry to tax, there would be no money for government projects, no "Golden Gate Bridge or... Hoover Dam."  His mention of a dam is also particularly galling given that his administration is making every effort not to build dams but to actually tear them down.  The original progressives stood for "progress" in the sense of building things, like bridges and dams.  By contrast, Obama-era Democrats, with their Federal agencies creating an ever-expanding network of regulations, stand for the opposite: stasis.  This is why, as Obama discovered much too late, there is no such thing as a "shovel-ready" project.  If he had taken that lesson to heart, he wouldn't have given this foolish speech.