There are multiple ways to discuss President Obama’s “you didn’t build that” comments. One discussion centers on whether Mitt Romney is fairly representing Obama’s words, which is related to, but not quite the same as, a debate about what Obama meant. Then there’s a deeper philosophical debate about liberal and conservative views about the proper role of government. I’d like to touch on all of these.
Liberal Washington Post blogger Greg Sargent had an item up this morning attacking Romney’s latest ad for taking Obama’s comments out of context. Do I think that Romney edited Obama’s words to maximize political advantage by making them seem as bad as possible? Yes. But I also see it as an inevitable part of politics. In 2008, Obama infamously plucked John McCain’s statement that the “fundamentals of our economy are strong” out of context to portray him as out of touch. Sargent, writing for Talking Points Memo at the time, favorably promoted a DNC ad and an Obama speech seizing on the quote. So, we could all wish for a less crude political culture in which candidates always give full context when attacking one another, but the reality is that the Obama campaign is willing to use any of his opponent’s words against him and it would be unilateral disarmament if Romney didn’t do the same.
That said, I think commentators and bloggers, even those with ideological leanings, aren’t candidates or campaign officials and should address these issues in a more nuanced manner. This brings me to the next issue, which concerns what Obama meant.
Yesterday, I described my interpretation of Obama’s remarks. Basically, I think it’s debatable whether the “that” in “you didn’t build that” refers to business owners or “roads and bridges.” Slate’s Dave Weigel argues that Obama’s body language in the video makes it clear he was talking about “roads and bridges.” But as I wrote, even conceding that, the fuller context of the speech is still damning to Obama because he scolds business owners for thinking that their smarts and hard work had more to do with their success than it actually did. (Read more here).
As I noted at the outset, there’s a deeper philosophical debate here, and because it’s so important, I want to be as charitable as possible in presenting Obama’s comments in the way liberals believe they should be interpreted. That is, businesses wouldn’t be able to succeed without a government creating the foundation for that success through investing in physical capital (roads and bridges) and human capital (public schools). But the national political debate isn’t really about whether there are outside factors that play a role in individual success. Most free marketers would acknowledge this, just as honest liberals would acknowledge that individual initiative is important. The real debate is over degree.
When explaining why certain individuals succeed, conservatives weigh factors such as ingenuity, intelligence and hard work much more heavily than liberals do. Liberals, on the other hand, place more emphasis on factors outside of individual control than conservatives do, such as income status at birth, race and pure luck. This basic difference is at the heart of most domestic policy debates between liberals and conservatives. If you believe that individuals have less to do with their own success, you’re much more likely to support welfare programs, whereas if you think that people have it within them to overcome difficult circumstances through hard work, you’ll tend to be skeptical of those programs. More relevant to the point Obama was initially trying to make in his remarks, if you believe that government and society had a large role in individual success stories, you’ll think that government has a greater claim on those individuals’ earnings. But if you think that individual effort was more important to that success, you’ll want to limit the amount of people’s earnings the government can take.
The problem for liberals is that the nation is currently dealing with the natural consequences of the explosion in the size and scope of the welfare state over the past 80 years. The reason why America no longer does the big things that Obama likes to talk about – put a man on the moon, build the Golden Gate bridge or interstate highway system – is not that wealthy Americans aren’t paying enough taxes, but that government spending on programs such as Social Security, Medicare and Medicaid is strapping federal and state budgets.
Obama is trying to sell the fantasy that if the government simply takes a tiny bit more from the wealthiest of Americans that the nation can tackle the debt, invest in infrastructure, rescue entitlements and improve the economy. In trying to sell one fantasy, he’s creating another fantasy – that wealthy Americans have been freeloading off of the government and now it’s time for them to repay their debt. But for government to construct roads and bridges, invest in research, or build public schools, it needs taxpayers – and successful business owners not only pay taxes themselves, but they hire workers who also pay taxes. As I’ll reiterate, according to the Congressional Budget Office, the top 1 percent earned 13.4 percent of income in the U.S. in 2009, but (under the Bush era rates) paid 22.3 percent of all federal taxes. The top 20 percent, who earned 50.8 percent of income, paid 67.9 percent of taxes.
American businesses owners might well say to Obama, “You didn’t build that pile of tax money. Somebody else made that happen.”