Commentary: A Different View of Our Economy

The president’s comments about business owners was an insult to untold millions of this nation’s businessmen and women, writes Michael Steele.

Posted: 07/20/2012 08:15 AM EDT
Michael Steele, Barack Obama and economy

President Obama starkly underscores this presidential election’s central debate—the benefits of the free enterprise system versus stifling big government—by declaring in a Roanoke speech: “If you are successful, somebody along the line gave you help….If you’ve got a business, you didn’t build that. Somebody else made that happen.”

What an insult to untold millions of this nation’s businessmen and women. Obama’s remarks display an utter lack of appreciation for the risk-takers and dreamers who still believe in the American Dream enough to start a business or to create a job. “I’m sure every small business owner who took a second mortgage on their home, maxed out their credit cards or borrowed money from their own retirement to start their business disagrees strongly with President Obama’s claim,” the National Federation of Independent Business said in a heated response.

Far too many Americans, including the president, have fallen into the habit of second-guessing the value of our proven capitalist market system to the point of either treating business success as something almost criminal or worse, tying such success to expanding government and its infrastructure. They gloss over or outright ignore the individual initiative and competitive free-market system that made this country the economic envy of the world.

As Andy Kessler points out in the July 17 Wall Street Journal, productivity results in more employment by attracting capital to satisfy new consumer demands. “In a competitive economy, productivity—doing more with less—always lowers the costs of products or services; $5,000 computers become $500 tablets. Consumers get to spend the difference elsewhere in the economy.”

Big-government, high-tax liberal ideologues like the president offer us a different view of our economy. But such a view often becomes clouded and distorted by the growth in government spending and new programs that stifle and indeed stagnate true wealth creation. For them, the government and its “infrastructure” produce everything from the cell phones they use and the cars they drive to the food on their table. But there is another view when it comes creating jobs and stimulating economic growth. It is market capitalism.

Market capitalism provides the incentives to innovate (cell phones), the means to manufacture (autos), and the capacity to provide the necessities of life (farm production). The reason there is so much innovation in a private sector-based market system as compared to a government-centric system based on “fairness” (where the government defines what is fair) is that profit provides the motive for innovators to take the risks necessary to come up with new products. Imagine running a business just to break even. First, you’ll never grow much beyond the day you opened your doors and more importantly, at some point you’ll get up one morning, say "screw it” and go back to bed.

Without profit, much of what we take for granted in our great free-market economy—conducting research, promoting demand through advertising, using that demand for increased production and lower prices, creating jobs and paying taxes—would be impossible! If that free market economy continues to be dismantled or as some have suggested, “reorganized” under Obama administration policies, we could soon see the end of capitalism as we know it.

In light of this, Kessler asks a compelling question: “With all the iPads and Facebook and cloud-computing growth, why is unemployment still at 8.2 percent and job creation stalled?” Kessler maintains that productivity is always happening “but swims upstream against those that fight it.” Aside from the Obama administration, he names as other culprits fighting productivity “unions, regulations and a bizarre tax code that locks in the status quo.”

Our over-regulating, high-taxing government needs to get out of the way, and the unreasonable demands of union bosses in the face of crippling state budgets need to be reined in if politicians regardless of party can find the will to do so (Republican Gov. Scott Walker of Wisconsin could serve as an important role model in this regard).

So why does all of this matter? It matters because it speaks to whether our elected leaders are truly capable of confronting the tough choices and making the even tougher decisions necessary for true economic recovery.

Market capitalism is the key to the wealth of the middle class and the source of lifting communities out of poverty. In order to begin to turn the corner on the morass that is our economy, you and I must first answer some fundamental questions: What price are we prepared to pay for a strong national defense and better schools? How much are willing to spend for our children’s healthcare and to secure our nation’s borders? What amount of funding and which programs are we prepared to cut to get our financial house in order?

How we and our next president answer these questions and so many others relating to the prosperity of future generations will determine whether we still agree that the central economic driver of American business over the past 200 years has been and will be the small business owner, not the government.

Michael Steele served as the first African-American chairman of the Republican National Committee. He is a former lieutenant governor of Maryland and a political commentator. He will be providing commentary on all things politics for BET.com each week.


The opinions expressed here do not necessarily reflect those of BET Networks.



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(Photo: AP Photo/Susan Walsh)


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