Getting It Backwards

Our esteemed President sticks his foot in it once again

“… -look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own.”


“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 idea President Obama is clearly trying to communicate is that success in the private sector is only possible because of the infrastructure built by the government. How he got it wrong is that the only way all that infrastructure could get built was if there were successful businesses already established to provide the tax money needed to fund the government projects!

History is very clear. Western governments in their present form do not create wealth. Instead they forcibly take wealth from those who are successful. Taking honestly earned profits does not create new businesses or generate new wealth. Instead it destroys what has been created by others.

As Arthur Laffer demonstrated with his famously simple economic model, an honest and restrained government can set up conditions which allow private business to thrive. But it still takes the hard work, canny savvy, and desire to risk it all for greater rewards that the entrepreneur embodies to make it happen.

For some reason, President Obama and his ilk just can’t seem to grasp this extremely simple formula.

History is also very clear in that there is only one way that a government can directly add wealth to a nation. That is by conquering other countries, and plundering the wealth created by foreigners while enslaving the defeated.

Let us hope President Obama and his fellow travelers never figure that one out!

17 thoughts on “Getting It Backwards”

  1. James,

    I would like to disagree but I suspect that doesn’t mean we disagree. It is the government that makes business possible – but Obama doesn’t understand it is ideas that are the rebar that strengthen this country’s foundations, not the things. (Where did he ever get the reputation as an intellectual? Only in Marxist circles is such thinking considered thinking – and that is because they are essentially materialists.)

    If we did not have the rule of law, if we did not have enforceable contracts, if the government and others weren’t restricted from changing the conditions which we count on as we begin our businesses, we wouldn’t prosper and soon we wouldn’t begin.

    That’s all obvious, but Elia Kazan’s America, America brought it home to me recently. It was his favorite movie, probably because it was biographical – following his Greek uncle’s move to America that eventually brought over the rest of the family.

    After yet another raid by the Turks, his Greek family dug up all their hidden treasure, gave it to their eldest son, and sent him off. They were thinking the big city – but he was soon thinking America. Sirico said the big turning moment for him was when he realized the importance of property in terms of natural law. Well, Kazan shows it. To most of us – at least people with business experience – looking at that, our first response might be, why didn’t they take those riches and buy land to farm or start a business? That’s what Greek after Greek in America has done – most of us know some immigrants from that world & they aren’t demonstrating in the streets.

    But then we pause, of course not. Without respect for other’s property and land as well as lives – both externalized and internalized – nothing can prosper. The boy sets off and is robbed repeatedly, sometimes by the local authorities. Nor are those that rob him going to use but rather squander that stolen treasurel; that is their character, of course, but this sytem makes all think little. After a series of misadventures, he ends up on a boat for America. After he lands, he works hard and slowly brings the family over (only the oldest, the father of the family, dies before enough money has been raised).

    The boy negotiates these two cultures – and two ways of perceiving. When I started my copy shop it was on the shoulders of generations of people who had internalized those values – sure, an occasional customer wasn’t honest and sure, an occasional employee wasn’t. But I could count on most of them being honest. I could count (and they could count) on oral contracts in bids, in salaries. I don’t think any of us thought I’d change the price after the job was done or my workers wouldn’t get paid. The city and state assumed I was entering the amounts we made each day correctly and was sending off their percentage. However irritating the council might be, I could bet that their businesses were doing the same. Nor would they think of arbitrarily raiding my business or noticing who I had voted for and starting an audit. It is a government of dependable law enforcement, of dependable respect and protection of basic rights that leads us to thinking that doesn’t need to be coerced – that we have internalized because we know it works best in our relations to others. The government is least oppressive when it is most dependable and least intrusive. Arbitrary government doesn’t encourage business – in this ciimate (between health care and taxes alone) would any sensible person start a business?

    I’m not that much of a libertarian that I’m opposed to the interstate highways and, while it needs such massive overhauling that it is hard to support it very much, I believe in public schools. But those teachers didn’t lead me to start my business – I suspect most would have thought it was a crazy idea. Yes, I guess, I needed to know how to read and add numbers – but most of us learn that at home.

    If Obama realized why – really – business people should be grateful to the government, he wouldn’t jeopardize that system in the many ways he has. But that would require gratitude to the founders and the many after them rather than a reflexive sense of superiority and it would require thinking in terms of ideas bigger and actions more daily & difficult than have ever challenged his mind or his muscles.

  2. I posted a long comment, double posted it, tried to correct it and lost the whole thing. Oh well. Good post.

    [Your comments got stuck in moderation. I published the first one. Jonathan]

  3. ” It is the government that makes business possible ”

    No, here we disagree.

    “If we did not have the rule of law, if we did not have enforceable contracts, if the government and others weren’t restricted from changing the conditions which we count on as we begin our businesses, we wouldn’t prosper and soon we wouldn’t begin.”

    There, you got it exactly right.

    “Without respect for other’s property and land as well as lives – both externalized and internalized – nothing can prosper. The boy sets off and is robbed repeatedly, sometimes by the local authorities. Nor are those that rob him going to use but rather squander that stolen treasurel; that is their character, of course, but this sytem makes all think little.”


    “The city and state assumed I was entering the amounts we made each day correctly and was sending off their percentage.”

    In Italy, for example, this is not true. Greece also.

    One theory of the Serbian culture of tribalism and of families building fortress-like compounds, as described by Rebecca West in 1937, is the absence of law in the Ottoman Empire. This same force operated in all the Arab countries for 1,000 years. It is more obvious with the Serbs because they are related to the other European cultures, like Croatia, which lived under a Catholic and Austrian legal system.

    Joel Mokyr has written books about the economic consequences of the absence of contract law and property rights. He makes a fair case that the Industrial Revolution could have occurred about 300 AD but for the absence of patent law and property rights. Heron had a working steam engine in Alexandria that was used to open temple doors.

    Albertus Magnus who began Chemistry and Paracelsus, who was using effective medical treatment in 1453, were both from the earlier era.

    Who invented the stirrup ? Who invented the horse collar, probably the most important invention after the windmill in ancient times ? It was in China but the introduction to Europe was more important because dry land cultivation became far more important in Europe. China went to rice cultivation and a lot of the early inventions in China had been lost by the time Europeans got there in the 17th century.

    These devices were developed by anonymous artisans. The mouldboard plow, for example made cultivation of the heavy soil of norther Europe possible. The Mediterranean agriculture of the Romans could not deal with the soil of Germany and northern France. Maybe if laws were available that did not involve feudalism, which came about because of the collapse of society and its laws, progress would have been far faster and we would be living in something like we imagine the 22nd century to be like.

    Albertus Magnus, who began chemistry, and Paracelsus who began clinically useful medicine, were late middle ages scientists. What if they lived in a society of laws ?

    Why did European society have to wait until the 19th century to take off ? We had plenty of government after Rome. Kepler and Copernicus lived in the earlier era. We lacked laws that freed people to own property and keep what they earned. That is why I am a small l libertarian. And probably why my great grandfathers Patrick and Michael left Ireland.

    For example, I have never attended a public school except for one semester of LA City College to take organic chemistry after I had already been accepted to medical school. The rest was Catholic schools and private universities, including private medical school.

  4. Obama’s statement, like Warren’s, was offensive. People who have worked in business, even if only in someone else’s business, realize that the important work in creating businesses and industries is mostly done by a small minority of talented people. Such creative people often take large risks, and when they succeed it is in spite of all kinds of obstacles put up by parasites and naysayers in govt and business bureaucracies. If the talented people fail they get no consideration from anyone else. But if they succeed leftists like Obama are quick to assert that the successes couldn’t have done it without the parasites. It is absurd.

    Obama is like a mediocre employee who inaccurately sees himself as critical to his employer’s business, ignores the business owner’s much greater contributions, effort and risk taking, expects to be rewarded handsomely and is full of resentment when the business owner reaps the rewards of creativity and hard work. The problem is that Obama has power. And like the mediocre resentful employee he has little insight into how successful creative people interpret what he says. He thinks he can fool them, or at least that they will continue to work hard and be creative as long as he is not too obviously hostile. But this is also absurd. When Obama tells business people that they couldn’t have succeeded without govt, the creative business person hears: “Don’t succeed conspicuously or you’ll become a target. Don’t hire if you can avoid it. Conserve capital. Have an exit plan. Look for investment opportunities overseas.” So of course the economy is slow. Nobody with half a clue would expect otherwise.

    And yes, very good post, thanks.

  5. Well said, James.

    And I disagree with Ginny, but also suspect this doesn’t mean we disagree.

    Because, the government is *us*.

    “The Government” isn’t some otherworldly entity that comes out of nowhere and enforces contracts, creates roads, delivers the mail, imprisons badguys, kills foreigners, etc.

    We The People defined what we wanted our government to be. We defined a social contract delegating certain powers to people we elect to wield those powers. And these can only be powers that we individually hold and could rightfully and properly wield ourselves that we delegate to government.

    This is the “unbelievable American system” that allowed this nation to thrive — because, literally, the government did nothing to get in the way of allowing you to thrive.

    Unfortunately, people have discovered that while stealing is illegal, giving someone a badge and a gun is legal, and you can then send that person to take money and property from other people, and invented taxes and fines and public works to spend them on.

    Capitalists realized that free market competition is only the best thing ever when you don’t have competition providing superior products and services to your own, so they invented regulation, licensing, fees, government agencies, and other deterrents to innovation and market entry.

    People employed by the government began to see that they only have jobs if they can justify their existence, and so they started competing with the private and charity sectors, trying to provide by force what other people could provide more cheaply and more effectively, and the government began outlawing private competition with public services.

    So where government used to be US, government is now US vs. THEM, with Obama there epitomizing the worldview that he and his czars are a power separate from us, that they allow, finance, stimulate, and create the private sector and its jobs, and that without them, the rest of us would be eating dirt in the cold.

    But what else do you expect from a guy who’s never actually held a job or created anything of value? He didn’t even earn the presidency – he was put into the Senate by his handlers, where he voted “Present” until his handlers put him in the oval office.

    It’s why the only thing he’s clear on is the “You didn’t get there on your own” bit, because he hasn’t gotten anywhere on his own.

  6. Thanks, Jonathan.

    Can anyone imagine Obama doing without a salary so he can pay his employees ?

    I have been there and so has almost everyone who has ever started a business. Doctors used to be small businessmen. And women but not so many then. That is no longer the case and their politics will shift accordingly.

  7. I agree it is “us” – and that’s what works. We’ve internalized our respect for one another’s ideas, property, etc. and that is what “we” feel – indeed, we don’t feel the government gets to define what we as a community have defined. For instance, we understand why the government shouldn’t enlarge its reach through eminent domain – or at least hardly ever. We understand that undercuts contracts (as did some of the bailouts, etc.) It is our communal wisdom that traditionally considered such contracts important. Obama seems intent on making investors wary and soon only the government and those whom the government protects will invest.

    I’m just more cynical than Kennedy and James – I see (perhaps incorrectly) the Ottoman Empire’s tribalism as the default; I suspect crony capitalism, nepotism, irresponsible turf building and power grabbing are temptations always hovering in the background. When our culture doesn’t ostracize the practices and practitoners (how the hell did we get someone like Geithner in there, for instance – or Holder, should we have expected difference after his time with Clinton?), the unattractive but necessary fallback is government: preferably lean, honest and just – even if, naturally, imperfect.

  8. I think the tribalism is default but we came out of that through rule of law and private property. In the middle ages, only the king owned anything. Feudalism involved obligations for every bit of personal property from droit du seignior to military obligations of the nobility.

    Boy the cat is amongst the pigeons in the lefty sites like TPM. Obama has really stepped in it. I think this story will have legs because it explains him so well.

  9. From the TPM link:

    “Obama is referring specifically to government investments like the Internet, which enabled the rise of countless successful businesses even though the businesses themselves “didn’t build that” any more than UPS built the highways it uses to deliver its packages”

    The analogy is misleading. The government funded the research leading to ARPANET, and funded the noncommercial buildout of the early Internet for scientific, educational, and military applications. The commercial networks which today comprise the Internet were created and funded by private companies, including PSINet, UUNET, and ANS, running on top of underlying communications technologies which had been put in place by AT&T and other carriers.

  10. ” The commercial networks which today comprise the Internet were created and funded by private companies, including PSINet, UUNET, and ANS, running on top of underlying communications technologies which had been put in place by AT&T and other carriers.”

    And the software was originated by Marc Andreessen although I guess you could say the graduate school helped him.

    an American entrepreneur, venture capitalist, software engineer, and multi-millionaire best known as co-author of Mosaic, the first widely-used web browser, and co-founder of Netscape Communications Corporation.[3]

    Obama just doesn’t understand and this gaffe may really hurt him. It says so much about him that it will stick.

  11. Ginny has it right. The word which comes to mind for this vile man is INGRATE. He has no appreciation for what makes civilization possible. He should rot in some third world hellhole.

  12. What Obama really means is that a vague “you didn’t get there on your own” means parasites like Obama have an unlimited claim on your wealth and property.

  13. Let me start here:

    There are two competing political theories in the western world. One is identified with the theorists of 17th, 18th, and 19th Century England, Locke, Smith, and Mill, most notably. Her is what Locke wrote in his “Second Treatise of Government”:

    “§. 131. But though men, when they enter into society, give up the equality, liberty, and executive power they had in the state of nature, into the hands of the society, to be so far disposed of by the legislative, as the good of the society shall require; yet it being only with an intention in every one the better to preserve himself, his liberty and property; (for no rational creature can be supposed to change his condition with an intention to be worse) the power of the society, or legislative constituted by them, can never be supposed to extend farther, than the common good; but is obliged to secure every one’s property, by providing against those three defects above mentioned, that made the state of nature so unsafe and uneasy.”

    Contrast this with the French theorist, Rousseau, who is the grandfather of all communist, socialist, progressive and fascist theory. Here are a couple of key quotes from his “Social Contract”:

    Book I Chapter VI “If then we discard from the social compact what is not of its essence, we shall find that it reduces itself to the following terms: “Each of us puts his person and all his power in common under the supreme direction of the general will …” At once, in place of the individual personality of each contracting party, this act of association creates a moral and collective body, composed of as many members as the assembly contains votes, and receiving from this act its unity, its common identity, its life and its will.”

    Chapter VII “In order then that the social compact may not be an empty formula, it tacitly includes the undertaking, which alone can give force to the rest, that whoever refuses to obey the general will shall be compelled to do so by the whole body. This means nothing less than that he will be forced to be free; for this is the condition which, by giving each citizen to his country, secures him against all personal dependence.”

    Chapter IX “Each member of the community gives himself to it, at the moment of its foundation, just as he is, with all the resources at his command, including the goods he possesses. … For the State, in relation to its members, is master of all their goods by the social contract, which, within the State, is the basis of all rights;”

    In Locke, governments are formed to protect the property (life, liberty, and estate) of the citizens. Citizens precede and create the state as their instrument.

    Rousseau claims that once the social contract has been activated, individuals are abolished and the state is the only person. Scary isn’t it?

    Where does the United States fit into this argument?

    The Declaration of Independence says:

    “… they are endowed by their Creator with certain unalienable Rights … That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.”

    The Founders followed by adopting a Constitution, to which they added the Bill of Rights.

    Amendment IX. The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.

    Amendment X. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    The United States is established on thoroughly Lockean principles. It was established to protect pre-existing rights that are not surrendered to the United States upon its creation. And the Constitution says, in no uncertain terms, that the United States is an instrument of the people.

  14. I am sorry about the length of the previous post. It just reviews some basic theory.

    Obama’s speech is based on a slight of hand. He speaks of “we” as if the United Statest were Rousseau’s unitary State a “moral, and collective body” into which the individual has melted.

    But his rhetoric gets really gummed up when he tries to be specific. He mentions education which is a state and local responsibility, and which 60 years of Federal involvement has made worse. He mentions roads and bridges, another state and local responsibility, that is funded by user paid excise taxes, not the income tax he is campaigning for.

    “Government research created the Internet so that all the companies could make money off the Internet.”

    Actually, the first predecessors of the modern internet were created with experimental funds from DoD, which wanted to research methods of communication that could survive and function after a nuclear attack. But those technologies were just part of the picture. WWW was created by scientists at CERN in Europe who needed to communicate their data faster. Commercialization, “companies could make money” came after the baby was kicked out of its nest and involved hundreds of private companies building billions of dollars of infrastructure.

    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.”

    Actually that is the way Ben Franklin organized Philadelphia to fight fires. Fire fighting is another quintessentially local responsibility, handled in many parts of the country by voluntary associations not government.

    “we funded the GI Bill.” Of course that was two generations ago. It was done to repay the returning WWII veterans. This is something no one would quarrel with. Payments to veterans have been part of the American scene since the Revolution.

    “we created the middle class. That’s how we built the Golden Gate Bridge or the Hoover Dam.”

    I realize that these two sentences don’t form a logical entity, but what the hey. He was on a roll. References to enormous public works projects that occurred a long lifetime ago are just sad. Mark Steyn pointed out:

    Let me quote one Deanna Archuleta, Obama’s Deputy Assistant Secretary of the Interior, in a speech to Democratic environmentalists in Nevada: “You will never see another federal dam.”

    And big bridge building projects moulder in environmental hell:

    “That’s how we sent a man to the moon.” Fifty years ago. Of course on his watch the US has now reached the point of having to pay the Russians millions of dollars to get our men to the ISS, a long way from the Moon.

  15. He sometimes distiguishes “negative rights” from “positive” ones – another “sleight of hand” althugh it is so silly it’s easy to catch. He seems to scorn the God-given rights you describe – ours because our nature is autonomous. By the way, does this guy know nothing about history? Or the Constitution?

  16. Where I live a single family bought up the bottom 2/3rds of what became our town. It was virtually worthless swamp land. And being the good dutch immigrants that they were, they started digging drainage. They got rich off of draining the wetland and selling the land to farmers at far higher prices than they paid for it. That was private infrastructure which has since been municipalized. When the farmers sold out their land to the developers, the developer paid for water, electricity, and sewer to be brought in to the land. The government didn’t lay out for that. And today when your public sidewalk cracks because of a tree root, who pays to repair it but the homeowner?

    A lot of private people paid for a lot of that “government” infrastructure.

  17. A friend of my father’s bought a golf course in Indiana. It was one of those country clubs that failed in the Depression and needed a lot of work but was a good design. The waterhole in the middle of the course was swampy and overgrown. He started to dredge it and discovered that the bottom was rich loam that he could sell. When he finished dredging the waterhole and sold all the loam recovered, he had paid for the golf course. Now, who built that one ?

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