The socialist in chief has spoken. Now I know that is somewhat of a cheap shot, but really, what was the president talking about with the speech he made last Friday? I’ve come to no other logical conclusion that President Barack Obama believes in socialistic ideals.
President Obama spoke on Friday July 13th in Roanoke Virginia in front of historic fire station #1.
Once again it’s obvious with the speech he was pandering to his base. If you want a quick summary of this speech and his presidency, it can be summed up into this one quote.
President Obama, that statement is an outright insult to any small business owner, and I’m offended by that comment. President Obama you have absolutely no clue what it takes to start, and run, a business.
Based upon statements like this, isn’t it obvious why we have the lowest recorded amount of new small businesses created? Small businesses comprise approximately 70% of the US economy. Until they grow (along with housing), no recovery will ever happen. Adding new complex laws (cough, Obamacare) is certainly not helping the situation.
I honestly cannot understand why any small business owner would want to vote for President Obama in the 2012 election. If you are a small business owner and are going to vote for him this election, please make a comment below. Tell me why you would vote for him. What policies will help you as a small business owner?
The speech is typical for Obama and makes numerous references in taxing the rich. Here’s his full 42 minute speech from that event. I’ve included his whole speech, so you didn’t think what I took is out of context. The part of his speech that gets real interesting starts at 33:33.
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.
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.
The president’s statement makes it obvious he never worked in the private sector. There are so many issues with the statement he made, but I’ll only focus on the small business comment.
The points he makes are typical straw man arguments and are in line with the Elizabeth Warren’s argument.
Yes, Mr. President, we understand no man is an island. We also need a stable government and rule of law to ensure the goal line isn’t constantly changing. Without question, we need others when creating a business. I have customers, employees, vendors, consultants that all help me get to where I’m going. Individually we all want something, which causes us to act in our best self interest.
BUT, and this is a big one, they all did it voluntarily. It wasn’t via the force of a gun, unlike our government can yield.
There was a mutual agreement in which I gave something (service, salary, etc.), and they got something in return of equal or greater value to them. Otherwise my business will cease to exist! If I offer a product or service of poor value I wouldn’t be in business too long. If I purposely ripped people off, word would quickly get out.
Keep in mind Mr President, the risk is 100% mine, but the reward is not. Let’s talk about the risk side first.
Who Takes The Risks?
I was the one who took the risk. I was the one who took my own money and invested it. I was the one who determined what business to enter and to work 60+ hour work weeks. I was the one who quit my job from a very successful pre-IPO company to start a new company.
I was the one who decided to sacrifice other things, including time with loved ones, to work instead. YOU, the government, and others did NONE of this. If anything, the government increased my risk for failure.
President Obama (and Elizabeth Warren for that matter) obviously believe people are to serve the government, which is completely bass ackwards. The government solely exists FOR the people. It’s obvious he does not think this way based upon the statements he makes. Tax revenues are not “lost” if taxes are decreased. If taxes are increased they pretty much have to come from productive individuals and given to the government to spend. If they aren’t productive, then there’s no taxes to collect right?
Not that I’m against taxes, mind you, but to put it simply, taxes take money out of the private sector. So instead of individuals determining the best use of their hard earned money, it’s given to the government to spend instead. Who do you think is more efficient in spending money? If unsure, see Milton Friedman.
Who Is Rewarded?
Now let’s talk about the rewards. Forget about the increase in taxes if my business is successful. I won’t even discuss this argument because it’s been done ad-nauseum. Let me just say, with taxes the government becomes your “silent business partner”. They reap all of the rewards, yet take on no risk.
Let’s instead talk about the reward society gets because of my business. I get to create a product or service which helps others solve their problems. By being in business I’m in effect helping society become a better place. If my business didn’t exist, it’s possible an important niche wasn’t being fulfilled. So, therefore, just by being in business I am helping society. This doesn’t even include the vendors I enrich by using their services, and the people I pay by employing them.
Who’s Fault Is It When A Business Fails?
So if I understand President Obama’s pretel logic, if my business fails, then it must be the fault of others, right? After all I didn’t create it.. This then explains why he constantly blames others for the failures in his administration. It isn’t his fault the economy is still bad – it was Bush’s fault. The Solyndra debacle was because of cheap Chinese solar panels – not anything to do a failed business model or energy policy. The high unemployment even after stimulus – the stimulus should have been bigger, and jobs weren’t shovel ready.
Maybe I’m being too hard on the President’s statements and should see his movie “The Obama Effect“. Unfortunately, it’s not playing anywhere near where I live. Though like this administration, the movie is a work of fiction.
Update: Some have suggested this was a gaffe. From Obama’s “truth team” (you cannot make this stuff up), he was referring to the roads and bridges with this comment, not businesses. Though if you watch the video, it appears the context is about the business. Also the correct grammar to refer to “roads and bridges” is ‘those’, not the singlar ‘that’.
Even if the reference were true, businesses DO help build the roads and bridges via the taxes they pay. So even in that context the statement is still false. Let me add, the DOD created ARPNET (the first version of the Internet) for the purpose of military communication and was NOT for commercial use.
I can say, as a small business owner, that I’m equally offeneded by his comments. I didn’t create it? It’s not successful because I’m intelligent and hard working? I need to give all the credit to the American System? Bullshit! The “system” creates more failures than sucesses. Does Obama take credit for all the failures (cough Solyndra) under him? I am the reason my business has succeeded where others have failed.
I’m glad you included a bigger quote b/c it puts things in better context.
I think his main point is this:
“If you were successful, somebody along the line gave you some help.”
I’m so thankful to have the infrastructure we have in America to allow small businesses to succeed. I just hope to have more streamlined taxes and hoops to jump through as the government continues to grow, and grow, and GROW!
S
Yes we all understand this and again is a straw man argument. Those should be a given in any modern society, and USA isn’t the only country who fits those basic needs. The government certainly did NOT assist in creating my business, if anything hinders it. After all you also stated how complex it was to Inc your business in CA right?
So based upon previous comments I can assume you’ll vote for Obama? If so why? How will he help you? You’ll get more regulations and increased taxes.
Let me even put it in a broader term so we aren’t talking about the individual. How will Obama help society prosper and grow? All I see are more regulations, more taxes, and more crony capitalism. Not to say Mittens is perfect, but blows away this guy 1000%.
All politicians are bad Larry. We know this.
It all depends on where you are at. If you are retired, you want as much redistribution of wealth as possible. If you are working, you don’t.
Most people are not small business owners, but are employed by small business owners. That’s how you get votes! Math.
Then they get what they voted for, and then can’t complain how it sucks.
I for one will be voting for the lesser evil.
I’m not complaining anymore. I’ve decided to do something about it and get my income below the attack level and pay less taxes and enjoy more free time. It feels good now!
Otherwise known as “going Galt”. It’s the logical thing to do.
Right on Larry! Thanks for standing up and telling the truth. Capitalism, free markets, religion, and speech are all under attack by this administration. We must fight back or lose our freedoms!
As a former business owner for 11 years I find that comment insulting. How stupid can Obama be? I am sorry to say but I built my business from the ground up with no government help at all and ran it successfully for 11 years. And maybe he should remember where government money comes from – the hard working tax payers of this great nation which is has done nothing for as far as I am concerned. He is a laughing stock. He needs to go out and run a business for 10 years or so and then maybe think about being president.
Great post!
This country gets worse every day we have big government socialists in office (Democrats and Republicans). We won’t be back on track until we start rewarding production and stop rewarding “need” (aka laziness).
Larry,
What are your thoughts on Republicans who make less than $250,000 per household. What is the main beef against the gov’t, especially if they are not small business owners, since they aren’t being the ones targeted for tax increases.
Thanks for your perspective!
Sam
My guess is encroaching limits of freedom – Real or imaginary. That the ability to increase in wealth is becoming much more limited than previously. The fact is currently 80% of millionaires are first generation, they did not inherit it from their parents. At least in my case I can say I’m concerned about my children’s economic future, and what it will be like to live in the USA.
Though places like NY or CA $250k isn’t that much. A salaried married couple can hit that easily.
OK, so that does make sense from a worrying about your children’s future.
Most couples don’t make more than $250,000, hence one can conclude most Republicans don’t make more than $250,000 per household. So, it is curious to understand the thoughts of those whose income isn’t being garnished.
I understand the disatisfaction with the ever growing big government which is why i have a category especially for this topic.
Keep in mind my case I don’t speak for Republicans. I’m technically an independent/Libertarian. ie. I’m all for gay marriage, or other social issues a democrat loves. To put it another way; socially progressive, fiscally conservative. Since this is a site about finance I try to keep it on topic and hence why many confuse me for a Republican.
I fall into the less than $250k category. I don’t want “rich” people to pay more. I want government to spend less. I know it’s a worn out expression, but we don’t have a money problem, we have a spending issue. How many more people do we need up there to convene at a summit to decide what problem to attack, determine what the actual problem is, discuss who should study that problem, etc. etc. Meanwhile, nothing gets done. Less is more. How much more can we give? We shouldn’t be giving a dime more. They have enough, they need to figure out how to make it work with what they’ve got, that’s what the rest of us do. Give me the budget, it’s not that hard. If you don’t have the money, you don’t get to do it. Pretty simple concepts.
While I typically don’t like to venture into political arguments after reading the full quote it is clear (to me at least) that Obama was referring to the American system. I think the wording is sloppy but I don’t think he meant to disparage small business owners. I have started five small businesses in my life and will likely start a few more before I am done and I know that I have worked hard, been lucky, and have had support from others along the way. And none of this would have been possible in a dictatorship or in another country that represses economic freedoms. Put me in Sudan, Zimbabwe or Cambodia and I don’t think I would have been nearly as successful.
If this were the first time he’s made a statement like this fine I would completely agree, but there are many other similar references by him and his administration to state otherwise. It’s a common thread from his speeches, I really don’t know how it can be interpreted any other way. How many other “Joe the plumber” moments do we need?
Biz = bad, govt = good has always been his theme. And watching the video makes it appear he’s referring to businesses.
Even then, business DO help the American system. They do so by paying taxes to help pay for teachers, roads and bridges.
Full disclosure. I voted for Obama in 2008, and will NOT be voting for him in 2012.
Peter,
How many people do you think looked over that speech? Sloppy wording? I can’t buy that.
I just found this article today about Obama working in the private sector and called it “working for the enemy”. Pretty damming if true, but would not be surprising.
http://washingtonexaminer.com/york-obama-saw-corporate-job-as-working-for-the-enemy/article/2500325
Ok. This is my last comment on this subject. I read the above mentioned article only to find this is a comment he made in 1983! Come on. I assumed it was something he said recently. He may well have hated working for a business back then, he may have hated many things but he was a freaking 22 year old. To assume that every opinion a 22 year old person holds to be the same as when that person is 50 is making a bit of a leap.
Look, given Obama’s history I would assume he is much more comfortable in the non-profit or government sector than he is in business. But to paint him as someone who “hates business” is ludicrous. Let’s get rid of these black and white opinions and realize that the truth is going to be grey. Obama is a Democrat – he is not going to be as pro-business as most Republicans but to assume he is anti-business is a stretch. Of course, if you read any article expecting and anticipating that opinion I am sure you will find lots of confirmation.
Hi Peter,
This is an open discussion and it’s fine someone disagrees.
While I agree with you on the timeframe, do keep in mind they also did the same with Romney with the bullying. All is fair game IMHO.
Though if you know Obama’s history in detail, this character trait has been with him all along. These aren’t one time incidents, but a consistent show of his character is what my issue is. There are plenty of legit material (videos, articles, etc.) of similar rhetoric coming from this administration. So it’s not like I’m making it up.
It’s fine if you disagree with my belief, but Obama is anti-business IMHO. The latest statement seals the deal. The only pro business I see him is with crony capitalists. Even the late Steve Jobs made a statement to Obama about his anti-biz rhetoric. Steve Jobs who’s always been a Liberal.
Peter, I just found this article today. Here is more of the same from Obama. This one is from 1995.
“In America,” Obama says, “we have this strong bias toward individual action. You know, we idolize the John Wayne hero who comes in to correct things with both guns blazing. But individual actions, individual dreams, are not sufficient. We must unite in collective action, build collective institutions and organizations.”
http://www.chicagoreader.com/chicago/what-makes-obama-run/Content?oid=889221
The same collectivism statements.
Who made your business?
Who researched, developed, and built the phone lines you use to make phone calls (developed in the military and under a monopoly which was PacBell)? The internet (30 years of R&D in the state department, government funded) you use? The microchip which enables most technology? (state department, again)? Airplanes which you use to commute and receive goods? (Wrights and others made science fair projects, the Army made it viable – all commercial aircraft today are barely modified military aircraft). The internet, where did that one come from as well? How about the State Department?
Where would your business be without police, hospitals, schools, roads, airplanes, computers, the internet, telephones, and microchips?
If you want to live off of your own effort, move to an island with none of this technology and start from nothing.
And since you’re so interested in having “earned” everything you have alone, I assume you have paid back your parents with interest for the years dedicated of free healthcare, food, shelter, protection, education, and nanny services?
Zach again you bring up the straw man argument. No one suggests they are an island. The collective ‘we’ certainly did NOT build the business I own. Yes I used the infrastructure that everyone else used, but also paid much more taxes than others.
Did I use that infrastructure more than others?? Or as the president implies, did I take advantage of it and was just because of ‘dumb luck’ I was successful?? It wasn’t because of better skills I had, better application of my skills, I studied harder in school, I worked hard? Please! Obama’s complete statement is an insult to any business owner, or anyone who tried to better themselves.
Why better yourself? After all, YOU didn’t do it. It’s a complete smack in the face of what capitalism and free enterprise is about. Individualism has been shown to always improve society. Please explain to me how socialism does this?
The bigger question is who paid for all of the government services? The government? No. Our taxes!
All the stuff you mention exists because of companies and individuals paying their taxes. They do NOT exist because of the government. Without our taxes the government would cease to exist.
Though commerce will always exist regardless if a government exists, and easy to prove this.. How can you explain all of the underground transactions (ie illegal drugs) that occur without government involvement? The transaction still occurred. An exchange of services still happened. The government, with rule of law, helps increase commerce, and makes sure it happens smoothly. But again you do NOT need government for a transaction to occur.
Let me give you another example. Even in communist Russia people were bartering for Levis and was a popular item back then. Tourists would import them in via their suitcases and sell them to citizens even though they were forbidden to buy them. How do you explain this??
And to relate back to ever more rules, regulations and taxes by our government. It will just cause commerce to be pushed underground. Because commerce will occur in spite of government regulations.
I think the small business owners in America had been sitting on the sidelines until Mr. Obama said those nine words: “If you’ve got a business–you didn’t build that.” It’s the word “that” that has business leaders so pumped up. And no one really knows for certain, except Mr. Obama, if his use of the word “that” was referring to business owners not having built our businesses or we didn’t build the roads and bridges (which we paid for) that we rely on to conduct our business, which he spoke of earlier in his speech. Call it a gaffe. But, for me, it’s a lot like walking into a dark room. At first I see nothing and after a few moments, my eyes start to adjust and I begin to see what’s around me. What I see is I am either in the wrong room or the room has changed a lot…and I don’t like it.
Those nine words when added to the rest of Mr. Obama’s speech send a chill up my spine because they give us a peek into the direction he is taking us and where he wants us to go. And where he wants us to go is not a place I want to be. A place where the individual pursuit of happiness and success is second to the government’s. So, it’s time to flip the switch, start seeing and understanding the threat before us and get to work at fixing things before it’s too late.
I’m not going to jump into the argument, but I just wanted to note the quality article.
The one thing I will say is that it makes it really hard to vote when you are, as you put it, “socially progressive, fiscally conservative.” It’s hard to prioritize when the choices are between two candidates who split the issues. Almost like a lose-lose situation.
At least for me I’ll choose the fiscal side always first, especially in the current economic environment.
Larry,
I enjoyed your article, but the comment discussion is even better. Like you, I am a registered Independent voter, who is fiscally conservative and socially moderate. I also get accused of being a Republican by people who are more liberal than me. The partisan bickering and lack of quality candidates make me sick. Luckily, more and more people consider themselves Independent and are starting to realize our two politcal parties are the primary cause of this country’s problems.
I have already posted about the President’s comments and the discussion has gone back and forth a million times, so I would like to put a new argument into play. Here it is:
* The 46% of Americans who pay zero in income taxes use the infrastructure.
* Huge corporations, make billions, pay very little tax and use the infrastructure.
* Why are we trying to raise taxes on the people who pay the highest effective rates?
* How can we expect unemployment to come down if we target the job creators?
* Shouldn’t we instead raise taxes on those who aren’t paying their fair share?
What do you guys think?
Hi Bret,
We need both tax increases AND drastic spending cuts (long term). It’s not sustainable. At the current deficits, we could tax people making $100k and higher 100% and we still wouldn’t cover the deficit. So we clearly have a spending problem, not a revenue issue.
I go into more detail in a previous post:
http://investorjunkie.com/7857/revenue-problem-spending-problem/
I agree with you 100% about the spending problem.
Entilelments now consume 65% of the Federal budget. This is by far the largest percentage in history and it has increased dramatically in the past couple of years. Any proposal that doesn’t address the explosion of entitlelment costs, isn’t a valid solution.