The Business That Government Built

Jacob Laksin is a senior writer for Front Page Magazine. He is co-author, with David Horowitz, of The New Leviathan (Crown Forum, 2012), and One-Party Classroom (Crown Forum, 2009). Email him at jlaksin@gmail.com and follow him on Twitter at @jlaksin.


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Like most office seekers, President Obama has been relentless in professing his support for small businesses, which he calls the “backbone of America’s economy.” So it was revealing when the president went off-script in Roanoke, Va., recently and announced that to the extent that businesses succeeded in the marketplace, the credit belonged elsewhere.

“If you’ve got a business — you didn’t build that,” Obama explained. “Somebody else made that happen.” He went on to lecture entrepreneurs that “you didn’t get there on your own … somebody along the line gave you some help.” As to who that “somebody” was, the president’s emphasis on government funding for roads, bridges and the Internet spoke volumes. Even as he confined himself to praising the “unbelievable American system that we have that allowed you to thrive,” it was patently clear that Obama’s conception of entrepreneurial success was predicated at least in part on the benevolent hand of government.

On one level, the president’s comment is unobjectionable. It is doubtless true that government funding for transportation infrastructure has made it easier to do business in America, though that ignores the obvious corollary that taxpayers, including business owners, financed it. But on another level, the president’s insight is remarkably tone-deaf, ignoring both the tremendous personal sacrifices of time and money that small business owners and entrepreneurs make to start and sustain their ventures, and the considerable hurdles that the government erects to their success.

Though it might surprise the president, many successful small business owners did “make that happen.” To do so, they made an investment of time, financial resources and intellectual capital that was both tremendous and unaided by government assistance. They incurred massive amounts of debt. They took out second mortgages or borrowed money from their retirement accounts. They worked punishing hours to make their businesses profitable. They gave up paychecks in order to pay their employees. “We hear that narrative a lot from our members,” says Cynthia Magnuson, a spokesman for the National Federation of Independent Business (NFIB), which represents small businesses.

Their risk has not always brought reward. From January to June of this year, over 30,000 businesses filed for bankruptcy — a stark reminder of what those who start businesses have to lose, especially when one bears in mind that the numbers represented a significant improvement on recent trends. At a time when capital is scarce – more than two of five small business owners have been unable to find funding in the last four years when they have needed it – starting a business amounts to a great gamble. One might suppose that the president would want to applaud those who brave the odds and the harsh economic climate to start a business. Instead the president wants to tout the government’s alleged role in their success.

That role is in any case vastly overstated. Small businesses often succeed despite government, not because of it. A December 2011 survey by the by the NFIB found that 19 percent of respondents cited government “regulations and red tape” as their biggest business problem – trailing only “poor sales” and “high taxes.” It’s not hard to see why. If there is one task at which government is unrivaled, it’s creating cumbersome new regulations. Every year some 80,000 pages of new rules and regulations are added to the Federal Register. The Obama administration has been no slouch in this regard, imposing 106 new major regulations, at a cost of $46 billion annually.

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  • oldtimer

    And Mitt Romney is out of touch with the middle class!!! Business owners, stick together, protest this idiotic statement. As a former business owner, I had no help from the government or anyone else. I sold possessions, used my savings and my retirement money to get my business going. And my excessive taxes are what paid for the infrastructure and the government that Mr.0 says was the reason I succeeded. @$%^(#……

    • fiddler

      We have to yell louder than his fauning media! I'm going to make a bumper sticker with Chris Matthew's picture that says: "Don't trust 'journalists' with a 'thrill running up [their] leg'"!

  • Rifleman

    Businesses and people can and have built their own roads, power generation, security, and schools. Government can't buy, pay, do, or enforce anything without the money of the governed or ruled (as the dp/left/msm prefers). There are millions of proprietors that can do obama's job better than obama can, but obama has no clue how to do theirs jobs.

  • Where'sTheBigBoss!!

    Where are these GOVERNMENT HELPERS listed in my corporation papers? I can only find MY NAME listed anywhere. All these 35 years in business I thought that I was the one responsible for either success or failure!
    Was the Government liable also for any liability that might be incurred by "our" business?? Now that Michigan businesses have sunk to the bitter bottom and I'm hanging by my fingernails where is the cell phone number that I can call for help from my Silent Partner????
    P.S. None of the Highways, or Bridges are responsive to CALLS for HELP either!!!!

  • Johncdavidson

    If Obama gives up using the teleprompter and starts using his brain, he'll really reveal his ignorance to all of us.

  • Spider

    What businesses have the Government created: The welfare Industrial complex by FDR and L. Johnson, The lottery i.e. numbers racket, The IRS – extortion and theft ring, the Race Racket i.e. afirmative action and mortgage set assides that caused the housing bubble, EPA i.e. thugs to stop private industry and kill jobs, Immigration policy i.e. modern day slave trade, Obama Care i.e. Lousy medicine for all just like Cuba, State Education i.e union make work project with only 50% sucess rate, The Post Office i.e. least efficient business in history, Social Security i.e. Ponzi Scheme, FBI i.e Stazi like organization that now can issue its own search warrants, — Shall I go on?

  • Boston

    I received this joke in 2008 just before the clown that got elected as President took office. Too bad it didn't turn out to BE a joke.

    A Japanese doctor says, 'Medicine in my country is so advanced that we can take a kidney out of one man, put it in another, and have him out looking for work in 6 weeks.'
    A German doctor says, 'That is nothing. We can take a lung out of one person, put it in another, and have him out looking for work in four weeks.'
    A British doctor says, 'In my country, medicine is so advanced that we can take half a heart out of one person, put it in another and have both of them out looking for work in two weeks.'
    The American doctor, not to be outdone, interjected, 'You guys are way behind. We're about to take a Muslim with no brains, put him in the White House, and then half the country will be out looking for work in one week.'

  • http://www.facebook.com/mike.villano.71 Mike Villano

    Obama is an uber parasite boy with big ears.
    He's never earned a penny of his own money in his life and he couldn't manage a lemon aid stand much less a 7/11.

    He's totally clueless about how working people live or what advanced industrial economies need to function.

  • kong.ming

    What exactly does Washington bring to the table when we build a new bridge or road? Grafting? Corruption? Waste? Higher taxes? Private industries design and construct them anyways upon contract award after the bureaucrats wet their beaks.

    I can see only one possible use for Congressmen in construction projects: using Diane Feinstein, Charles Schummer, Barney Frank and Jerry Nadler's fat selves to balance out the crane when lifting hundreds of tons.

  • fiddler

    It never fails to amaze me that Harvard "professor"-turned community organizer-turned-(brief) Senator-turned POTUS somehow has the intellect and "vast" experience to be able to discern the risks and rewards of owning a small business entails. Of COURSE! If you have HIS background, you have intellectually arrived! You are the ubiquitous leader. As the venerable Chris Matthews says, he is the "perfect American".

    The issue here is the Left "knows" the pie size is static. Therefore, it must be carved up differntly (read re-distribution). Capitalists believe in the pie growing, where each piece becomes larger and guess what? Tax revenues increase as a result. That was Regan. Time to get the OJT president out. He was never qualified from the standpoint of understanding wealth generation, and weilds power as taken as some kind of whimsical entitlement. He thinks he is a monarch.

  • fiddler

    I recall seeing on I believe the History channel how (William?) Boeing struggled to keep his fledgling company alive while the industry was born. I am incensed that such men were/are denigrated as nothing more than "greedy white men".

  • kendrick1

    Our gullible and easily programmed public has been successfully indoctrinated in entitlements and is perpetually open to anything "free"! Obama is sowing the seed and laying the groundwork for sharing more wealth with the parasites, due to the proposition that ALL contributed to roads and other infrastructures which enabled successes for others and therefore, lead the "entitlees" to believe that ALL should share in any successes! Our businesses!

    This "entitlement" mentality was started in the 1960's and has permeated our society ever since. It contiues to grow, without abatement!

  • "gunner"

    let's go back a bit, there was once a black man who had an idea, "sleeper cars" for railroad passengers on long trips. working hard, with no help from "the government" he convinced railroad owners to try his plan and got sleeper cars built to be leased to railroads. in the proccess george pullman created a "black man's job". no goverment intervention, pullman company policy, and he brought black men out of the rural sharecropper economy, into the industrial north to find greater opportunity and better wages. all done by private enterprise, beginning with one man's dream. an almost forgotten bit of history, ignored by the fans of the welfare state.

    • Steeloak

      Only problem with your post is that George Pullman was white.

  • Richard Ahern

    Since when did government crreate wealth-Without tax dollars they can do nothing- This country was built on Free Market Capitalism and inveatment. People whom invent things, which creates jobs

    For example by law, our government cannot invest its money for profit and compete with free enterprise. The rule of law, not the rule of men. Our Constituion was built on natural law which is eternal http://www.judgenap.com http://www.wastewatchersinc.org

  • "gunner"

    about those "greedy white men" does the "progressive" left remember men like andrew carnegie, who built free public libraries, open to the public, with the stated goal of increasing and sharing knowledge for all, doing it with his own money earned as a steel maker.

  • 080

    Things are much simpler than convoluted explanations. Society itself consists of social co-operation under the division of labor. Of course we are all dependent upon each other. But we were paid for that co-operation. No-one got anything for free. Police, bakers, teachers, butchers etc. were all rewarded for their services. The president seems to suggest that they were entitled to something more than they received under their contractual obligations. If people are entitled to more that would be surplus value. This brings us back to the old labor theory of value. That revives the mistake that the classical economists made including Adam
    Smith. That theory was developed by Karl Marx. It was long ago refuted by economists and explained by the marginal theory. Not only that but the system of economic freedom, capitalism, is entirely dependent on those entrepreneurs who break; new pathways while others follow.

  • Ghostwriter

    I believe that statement's going to haunt President Obama for a long,long time. People are going to remember that when they go to the polls this November.

  • clarespark

    We are only dimly aware of the process by which communists and progressives became interchangeable with one another. I tried to contrast the earliest Progressives with the small p progressives that became synonymous with the most extreme forms of statism here: http://clarespark.com/2012/07/19/communist-ideas-…. It reviews related blogs on the website.

  • Sage on the Stage

    And Obamacare is a poison pill for a very important small business–Doctor-owned hospitals. The PPACA saddles doctor-owned hospitals with so many regulations, that it is now impossible for many of them to expand. If they can't expand, doctor-owned hospitals won't be able to take new patients. REPEAL IT–ALL OF IT.

  • http://www.facebook.com/jude.oconnor.14 Jude O'Connor

    There's a reason Obama uses the prompter, his past history with drugs is the answer. Past drug users find if difficult to stay on the subject and there are also moments of silence which they are not aware of while they are speaking to you. Once you are aware of this pattern it's easy to pick it out of casual conversations. It's sad that youth think that their once drug use is a thing of the past and not a factor of the present.