Saturday, September 15, 2012

"Government Investment" = Money Laundering

In "Obama's Right: Business Needs Government Investment," NJ Star-Ledger letter-to-the-editor writer Barbara Wolfe wrote:

   President Obama is right when he says small businesses have been built because of government investments, not solely by the hard work of the business owner. The Romney campaign has taken his comment — "If you’ve got a business, you didn’t build that. Somebody else made that happen." — out of context.
   Consider the investment made by the government in the 1980s to create the internet. Since then, major companies including Facebook, Google, Amazon and many others were launched by entrepreneurs, who have created thousands of jobs and made billions of dollars. But these businesses required the internet. So, who built these businesses? Mark Zuckerberg did not build the internet, and he never could have built Facebook without it.
   Romney is the candidate who doesn’t understand how the economy really works, because he refuses to acknowledge the important role that the government has always played in nurturing the private sector.

Here are my comments:

There is no such thing as “government investment,” as Barbara Wolfe thinks. The money government “invests” is private money taken by force of taxation, and then handed out to private individuals who do the work. The government produces nothing, by its basic nature as an instrument of legalized force.  
In regards to the internet, infrastructure, basic research and development, and other “investments,” the government is nothing more than a political money laundering operation. The only reason it can operate its laundering mechanism is because of the wealth generated by private individuals working, creating, and trading in an environment of relative economic and political freedom. It’s absurd to believe that if government hadn’t taken over those fields, we would have no research, roads, or internet. The government didn’t create the people who built them, or the people who earned the money that funded them. It merely usurped the rights of the people who did earn it to spend and invest their own money as they see fit.  
Obama got one thing right, though. Government does perform one vital function; ensuring the “unbelievable American system” of individual rights, including property rights—however imperfect—that enabled a thriving private economy. That is key, as noted in the Declaration. History is dominated by dictatorships of all stripes, so if government can create wealth, history would have been one long economic boom. Instead, history is dominated by grinding, relentless poverty—including today in third world countries—except to the extent where capitalistic freedom exists.  

Yes, many businessmen like Zuckerberg owe a debt of gratitude to the people who built the internet, who in turn owe a debt of gratitude to people who created electrification and the fossil fuels, nuclear, and hydro power that makes its mass generation possible, who in turn owe a debt of gratitude to other achievers that came before, and so on and so on. There is a hierarchical structure to industrial progress and each contributor deserves full credit for what he/she contributed to that structure—i.e., the part that he built—and we as “consumers” owe a debt of gratitude to them all. But let’s give credit to whom it belongs—productive people and free enterprise—not the political money launderers. Wolfe should learn basic economics, so she could learn how the economy really works.  

As to the idea that Obama's comments were taken out of context, I recommend re-reading the speech in its entirety. But here is the relevant section:

     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.  (Applause.)
     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.
     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.
     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.  (Applause.)
     So all these issues go back to that first campaign that I talked about, because everything has to do with how do we help middle-class families, working people, strivers, doers -- how do we help them succeed?  How do we make sure that their hard work pays off?  That’s what I've been thinking about the entire time I've been President.

While by "you didn't build that," by "that" Obama was referring to government programs, his ridicule of "hard working" and "smart" people makes clear that he believes luck is the predominant factor in business success. The proper application of one's intelligence and work through good judgement and choices--not to mention one's character, values and goals--have no reality in Obama's worldview.

Obama's "together" theme is one of an ant colony, where all people are indistinguishable from one another. It is not one of individuals each possessing a unique character performing his work and being paid according to his own abilities, ambitions, and contributions to a cooperative effort geared to a common goal.

Related Reading:

Obama's Way vs. the American Way

"More Prosperity" of "Shared Sacrifice"

"You Didn't Build That"--Obama's Ode to Envy

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