Squeeze the Producer: America’s “Statist” Quo

By Daniella M. Augenstein.

Applause and cheers of “yes!” and “that’s right!” echoed throughout the venue in Roanoke, Virginia on Friday as President Barack Obama spoke to hundreds about the deficit, cutting spending, the golden years of the Clinton administration, and the fact that business owners are not actually responsible for what they have created and earned.

Wait … what?

Yes, you read it right. In his speech, Obama dismissed outright the idea that business owners have a justifiable claim to the successes of their own businesses. Instead, he had this to say:

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.

He is right about one thing: there are, indeed, many smart and hardworking people out there.  And many of them would be much more successful by way of those qualities if they were free to succeed, and benefit from their actions. Alas, we live in a system where those who are successful must work within a system that punishes the achievement of the ever more elusive American Dream.

This is particularly true for those whose success is financial. Many Americans, at the prompting of statements like the President’s, reserve a special flavor of disdain for the wealthy in America.

The premise of this section of Obama’s speech is this: because others have come before you, and have achieved things themselves, you cannot lay claim to your own successes. According to this line of reasoning, they – not you – are responsible for your success. I suppose he would say the same thing about them of their ancestors. Or would he?

Human knowledge builds on the knowledge of previous generations. Nobody is denying this; indeed, they would have a very hard time of doing so if they were. But in recognizing that credit must be given where it is due, it is also necessary to recognize the value and utmost importance of the entrepreneur’s singular vision in the creation of her business. Perhaps she had a wonderful teacher who taught her the value of proper budgeting and long-term planning, and perhaps this knowledge lent itself to creating a sound budget for her business. While helpful, however, it is not critical. Indeed, the only aspect of the business owner’s creation that is truly irreplaceable is the vision of the mind that created it.

Past knowledge is used for present and future endeavors, but something new is always added – something that nobody has done before. That is, after all, what makes it new. Without that teacher, the proprietor may have gone about budgeting a different way. But without that proprietor, the business would never have existed in the first place.

Nobody is more directly responsible for the existence and subsequent success of a business than those who envisioned it, took risks, made the proper choices, and brought that idea into the world. And, unlike the employees who are compensated for their work with a regular paycheck, the business owner often takes a loss well before he makes a profit, only paying himself once all other expenses (including payroll) have been tended to. The only compensation that is not guaranteed is his own.

Here, we must be clear: there is a reason that the President takes the view that he does, and it is critical not to lose sight of this point. It is not because it sounds good (though to his base, it does), or even because he believes it (though he may). It is because it sets him up to take the position that what the business owner has earned is not his own.

This is not about credit. This is about compensation. President Obama premises his position on the notion that what you have earned was not really due to you, thus you cannot really lay claim to it. He ignores entirely the fact that, if all transactions and agreements were made freely and voluntarily to the satisfaction of all parties involved, then just compensation has already been established.

The idea that the business owner makes his millions off of the sweat and tears of his toiling workers is hyperbolic and, frankly, ridiculous. And the President knows it. He also knows the grip that such a view still claims over much of America. He – like so many before him – uses the vernacular of emotionally driven class warfare in his battle to vilify those who produce.

Barack Obama does not wish to be committed to the view that nobody has earned anything, and thus cannot claim anything. He seems to be attempting to toe this line by asserting that it simply is someone else who earned the money, or is otherwise responsible for one’s business:

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.

He clearly wants to be able to say that somebody is responsible, and can lay claim to your success. It just isn’t you.