Does President Obama Hate Entrepreneurs?

There’s a big controversy over remarks President Obama made about entrepreneurs on the campaign trail a few days ago, and it goes to the heart of the differences between him and his Republican opponent, former Massachusetts governor Mitt Romney.

The exact words he said in Roanoke, Virginia are important, so I’ll reprint as many of them as I can:

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…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.

The Romney campaign, relieved not to be talking about Bain Capital or the candidate’s refusal to release any more of his tax returns, pounced like a mountain lion. He called the president’s comments “insulting to every entrepreneur, every innovator in America.” He continued:

The taxpayers pay for government…We pay for [services] and we benefit from them and we appreciate the work that they do and the sacrifices that are done by people who work in government. But they did not build this business.

The campaign also released a controversial new attack ad in which it accused the president of saying “If you’ve got a business, you didn’t build that.” Which he did say, except the “that” referred to roads and bridges and “the unbelievable American system” that allows new businesses to develop as in few other places.

The Romney attacks are out of context and probably unfair—the president has often spoken in praise of individual initiative, enterprise, and hard work—but they hit a nerve. Clearly there’s a profound philosophical difference here.

Romney, who spent nearly his entire career building and dismantling businesses in the private sector, is far more in tune with what makes that happen than the president is, and has embraced a full-throated laissez faire approach.

The president is more communitarian—or the right would say “collectivist”—stressing that there’s a social aspect behind individual enterprise and government can play a positive role, in his mind. So, we’re all in this together.

President Obama after CNBC jobs town hall meeting in September 2010. Official White House Photo by Pete Souza.

Ironically, the president has launched some very helpful initiatives for entrepreneurs. In September 2010, he signed the Small Business Jobs Act, which included:

  • Expanding the number and size of small business loans offered by the Small Business Administration
  • Zero capital gains taxes  on small business investments held for five years
  • Immediate expensing of capital investments up to $500,000 and in some cases, $2 million
  • Boosting the amount of start-up expenses small businesses could deduct

These were all excellent ideas, and this program got too little coverage. I wonder how many businesses it helped keep going during 2010 and 2011.

Also, earlier this year, the president supported and signed the bipartisan JOBS Act, which rolls back  a lot of the reporting requirements small businesses face in going public and makes it easier for start-ups to raise money in the private market.

So, in this area, the president’s deeds are far better than his words. He may walk the walk, but he doesn’t talk the talk, and that’s given Mitt Romney an opening after a very bad couple of weeks for the challenger.

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