August 29, 2012

In bashing Obama, GOP ignores federal role in business

In their zeal to counter President Obama’s statement that businesspeople “didn’t build that,” Republicans at their convention this week are rushing so far in the other direction that they’re all but denying any government role in American history.

In their zeal to counter President Obama’s statement that businesspeople “didn’t build that,” Republicans at their convention this week are rushing so far in the other direction that they’re all but denying any government role in American history.

The Republican National Convention devoted a portion of Tuesday night to blast Obama’s handling of the economy, using the president’s line as a rallying cry while trumpeting the virtues of up-by-your-bootstraps American entrepreneurship.

The role of the federal government — what it does and doesn’t do — has become a flash point on the campaign trail. Obama and Democrats generally contend that government should lend a helping hand to businesses and individuals who might not otherwise make it on their own.

Republican presidential candidate Mitt Romney and his party maintain that Washington policy plays a limited role in entrepreneurial success, and is often more of a hindrance than a help.

In pushing that theme this week, though, some of the speakers have left out part of the story.

In a convention floor speech Tuesday night, Oklahoma Gov. Mary Fallin boasted that people rushed into her state in the Great Land Run of 1889 with only their own grit to thank, and no help from the federal government.

“And in 1897, eight years after the land run, a handful of adventurous pioneers risked their own money — not the federal government’s money — to drill Oklahoma’s first oil well, the Nellie Johnstone,” she told conventioneers.

However, Fallin’s characterization omitted major chunks of federal government involvement, including the Dawes Act of 1887 and other measures that forced Indian tribes onto reservations, freeing “open” surplus lands for white settlers. Oil later was found on some of that land. The Homestead Act of 1862 provided the method by which the land was distributed to settlers.

“Those pioneers who came to settle in Indian territory were benefited by federal government largess at every hand,” said historian W. David Baird, dean emeritus of Pepperdine University’s Seaver College. “The federal government … surveyed the raw land into sections, ranges and townships so than individual plots could be legally described. In 1889 and subsequently, the U.S. Army orchestrated the dramatic runs for 160-acre parcels of land or town lots, which were then registered with a U.S. government land office.”

Fallin’s characterization was intended to be a Republican rebuttal to Obama’s view of how some businesses succeed. Romney’s campaign and the party say that the president said in a speech that owners of successful businesses “didn’t build that.”

Obama said in a speech in Roanoke, Va., in July that “if you’ve been successful, you didn’t get there on your own.”

“If you were successful, somebody along the line gave you some help,” he said. “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 companies could make money off the Internet.”

Truncated or no, Obama’s remarks have become a rallying cry for Romney and other Republican candidates who disdain big government and embrace the up-by-your-bootstraps ideal of American entrepreneurship.

“It’s a great ideal, but it’s not true,” said Darrell West, the vice president and director of governance studies at the Brookings Institution, a policy research center in Washington. “A lot of companies and businesses get help. Government builds the infrastructure; the government helps in about every sector.”

Sher Valenzuela, a Republican candidate for lieutenant governor in Delaware, disagrees. She joined Fallin in the parade of Republicans at the convention who blasted Obama’s remark.

Valenzuela offered herself as Exhibit A that it’s people, not government, who grow successful businesses. She and her husband took their upholstery company, First State Manufacturing, from a kitchen table idea to a business with 70 employees and a 70,000-square-foot factory.

“We defied the odds,” Valenzuela told conventioneers. “We rolled the dice on losing — or gaining — everything. We didn’t listen to the experts. We grew our dream.”

But she didn’t mention that the federal government had helped them achieve their dream through small-business loans and government contracts. According to The News Journal of Wilmington, Del., First State Manufacturing began with the help of a $25,000 federal loan and “survives on government contracts.”

The paper reported that the business financed its huge factory with a $301,000 loan backed by the American Recovery and Reinvestment Act, part of Obama’s federal stimulus bill. In addition, the company has received $15.2 million in federal government contracts, largely from the Defense Department, since 2001.

Valenzuela put together a PowerPoint presentation last May for Wilmington Women in Business titled “Connecting, Networking and Succeeding: How I Did it and You Can Too.”

“Bidding on government contracts has never been easier, and it’s getting easier all the time,” a section of the presentation reads. “That’s because government agencies are mandated to work with all small businesses. … That’s why nearly all government agencies have special small business programs to ensure success of business owners just like you.”

Sen. Rand Paul, R-Ky., continued with the theme Wednesday night, accusing Obama of insulting “every American who ever got up at the crack of dawn … any American who ever put on overalls or a suit.”

“When the president says, ‘You didn’t build that,’ he is flat out wrong,” Paul said. “Businessmen and women did build that. Businessmen and women did earn their success. Without the success of American business we wouldn’t have any roads or bridges or schools.”

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