July 27 (Bloomberg) -- The flap over President Barack Obama’s “you didn’t build that” gaffe -- playing endlessly in TV ads and sure to be a major theme of the Republican National Convention in late August -- is at once sillier and more significant than it seems.
It’s sillier because fair-minded observers -- including neutral fact-checking referees -- agree that the president’s words are shamelessly being taken out of context. For Romney to base so much of his campaign on bogus editing is lame.
Yet the uproar is significant because -- properly framed -- this election offers a stark choice between do-it-yourself libertarianism and Whig capitalism, between Ayn Rand and Warren Buffett.
Here’s what the president actually said in Roanoke, Virginia, on July 13:
“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.”
Obama’s awkward “that” referred to “roads and bridges,” not businesses. But the president wasn’t at his best that day, to put it mildly. He needed to match his point about collaborative success with paeans to those he saluted in his inaugural address (and in many other speeches) as “the risk takers, the doers, the makers of things.” His failure to bring business executives into his White House and use them as surrogates means he has to handle damage control on his own, which looks bad.
But the comment -- in any context -- was hardly the insult “to every entrepreneur and every innovator in America” that Romney alleges. The Republicans who pounced on this misstep remind me of Democrats who took Romney’s “I like being able to fire people” line as proof that he enjoys laying off workers. It was no such thing, as even the Obama campaign recognized. Romney was simply referring to the consumer’s ability to fire insurance companies that provide poor service.
These gaffes don’t open a window on the values of the candidates, only on the vapidity of the process.
Still, a larger question has been left dangling: Was the president right that business has received critical help from the government over the years?
On this, the evidence is in. Alexander Hamilton’s federally chartered Bank of the United States; the Whig “internal improvements” of the early Republic; the transcontinental railroad; the land-grant colleges; the Interstate Highway System; the Internet and other government-backed transportation, communications and education endeavors aren’t just examples of “government spending” long supported by both parties. They have proved essential to the creation of thousands of small enterprises.
All major energy sources have received government help in one form or another, as have aviation, biotech, real estate and scores of other industries. Even companies that don’t get direct assistance from the federal government receive plenty of downstream benefits through the tax code.
We all should know that business can’t thrive without an educated workforce and the fair application of the rule of law. Even regulation -- the bogeyman of conservative business interests -- is a necessary condition of a stable business culture. The countries with the least regulation have the most corruption, and vice versa.
Romney may understand this but the party that he represents doesn’t.
Republicans in Congress have moved repeatedly to strip away the underpinnings of a productive business environment: When it comes to education, they favor slashing student loans and research funding for higher education; on infrastructure, they oppose many construction and transportation projects that many conservatives supported until recently; on immigration, they oppose comprehensive reform that business backs as essential to a dynamic workforce, and on transparency, they oppose the Disclose Act, which would help expose the kind of crony capitalism that rots society.
The Republican agenda is essentially a down payment on a libertarian America in all areas except defense and national security. (Representative Paul Ryan of Wisconsin, whose budget is the party’s tax-and-spending blueprint, is a longtime devotee of Ayn Rand). Anyone who doubts this should read the Ryan plan, which guts social programs for the poor to pay for another 20 percent tax cut for the rich and does nothing to balance the budget. It passed the House twice and could become law if Romney wins the White House and the Senate goes Republican.
Romney said the president’s gaffes reflected his “strange” views, and supporters such as former New Hampshire Governor John Sununu said such beliefs were “un-American.” In fact, it’s the DIY libertarians -- who deny our 223-year nexus between government and business -- who are out of sync with U.S. history.
Buffett, an Obama supporter, likes to say he’s a member of “the lucky sperm club.” He notes that if he were born under a different system, he couldn’t have been as successful.
Like it or not, our private sector has always operated with at least some indirect government help. And it’s perfectly legitimate for the president to point that out.
(Jonathan Alter is a Bloomberg View columnist and the author of “The Promise: President Obama, Year One.” The opinions expressed are his own.)
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