Daily Archives: July 21, 2012


If you’ve got a business — you didn’t build that

Someone who doesn’t listen carefully, posted this snippet of the President’s remarks in Roanoke Virginia.


If you have a hard time catching what the President said, match it up with this transcript from the White House web site.  The transcript seems accurate to me.

 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.

I started to hunt this down, when a certain Boston newspaper reported Mitt Romney mocking the phrase, “If you’ve got a business — you didn’t build that.”  It took them over 20 column inches before they  put some context around the phrase:

In Virginia, Obama’s blunt “you didn’t build that” was accompanied by, “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.”

For several days, I have taken The Boston Globe at its word  and had to admit that Obama did not state his case very well.  Reading more in the UK Guardian made me start to have doubts about even the Globe’s belated attempt to set the record straight.  So I finally found the video and transcript above.

Nothing in the whole Boston Globe article makes it clear that in the quote “If you’ve got a business — you didn’t build that.”, the word that does not refer to the business.  It refers to the roads and bridges that the business person most assuredly did not build.

Even the person who posted the video clip still managed to misinterpret what the President said.  If you want to believe the President said it the way Mitt Romney and The Boston Globe imply that he did, then there is nothing I can do to stop you.


The American Election Is Really A Battle For The Future Of Capitalism

I found the article The American Election Is Really A Battle For The Future Of Capitalism in the British web site of The Guardian. I first liked it for the opening:

‘Look, if you’ve been successful, you did not get there on your own. When we succeed, we succeed because of our individual initiative but also because we do things together.” So said President Obama, campaigning in Roanoke Virginia, last week. He went on: “If you were successful, somebody along the line gave you some help”.

This British newspaper adds more detail about what Obama actually said in Virginia than made it into the Boston newspaper that I quoted in my previous post In Roxbury, Romney hits Obama’s business message. In the Boston paper’s version, the enough of the President’s words to make his meaning clear did not come until over 20 column inches into the story.  I guess you have to read the British press (not Murdoch) to find out what is going on in the U.S. country.

Beyond the opening remarks, I also liked The Guardian story because it explains the impact of Romney style capitalism.

The public understands that if you finance buying a house with a bank providing 90% of the asking price, and the house doubles in value, then your own 10% stake multiples elevenfold. Romney would apply the same logic not to the wealth-generating activity of starting innovative companies but to buying existing companies. Banks were only too keen to lend vast sums of money for such schemes, as they did right up to the financial crash in 2008. The companies’ own profits would service Bain’s debt.

Bain Capital would make the company more valuable – taking production offshore to low-cost countries, selling off redundant land, slashing research and investment budgets. And the general rise in property prices would help matters still more. When the companies’ profits had risen, they would then be floated on the stock market for a much higher price and, hey presto, everybody got very rich.

If you need someone to do the math of how you get an elevenfold increase in your investment when the asset doubles in price, just ask, and I will provide.  Otherwise, consider it as an exercise for the reader.  If you fail the exercise, you ought to seriously consider whether you are qualified to comment on capitalism and economics.  (Look at the numbers 200, 110, 90, and 10 to see if you can find the elevenfold relation there somewhere and what those other numbers have to do with it.)


Mitt Romney channels Barack Obama

I knew Mitt Romney knew more than he was letting on.


Mitt Romney agrees that to build a business, people need roads, education, fire and police departments, and that we have to pay taxes to support those things.

According to a certain local newspaper as quoted in my previous post In Roxbury, Romney hits Obama’s business message.

In Virginia, Obama’s blunt “you didn’t build that” was accompanied by, “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.”

So essentially Romney’s closing remarks amount to “Take that Barack Obama, I agree with what you meant, but not the way you said it.”

Romney even admits that people in government service aren’t created out of thin air. We pay taxes for those people, and he just doesn’t want to do that anymore. As Elizabeth Warren says, he believes, “I’ve got mine paid for by the people who came before me, so why should I fund anymore for the people who come after me? What’s in it for me?”


Robert Reich: The Problem Isn’t Outsourcing.

This excellent article’s full title is The Problem Isn’t Outsourcing. It’s that the Prosperity of Big Business Has Become Disconnected from the Well-Being of Most Americans.

The American economy has moved way beyond outsourcing abroad or even “in-sourcing.” Most big companies headquartered in America don’t send jobs overseas and don’t bring jobs here from abroad.

That’s because most are no longer really “American” companies. They’ve become global networks that design, make, buy, and sell things wherever around the world it’s most profitable for them to do so.

As an Apple executive told the New York Times, “we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing profits big enough to continually increase our share price.”

Forget the debate over outsourcing. The real question is how to make Americans so competitive that all global companies — whether or not headquartered in the United States — will create good jobs in America.

I think the headline to the story makes an extremely important point that gets lost in the article itself. No matter how well we educate American workers or workers in any part of the world, these companies do not have an obligation to solve the problems of middle-class wages and lifestyles.

A situation where all the world’s people were highly educated and were able to be good workers at low wages would make all the corporations happy.  Well, maybe that would require Martians with good incomes to buy all the stuff that the people of Earth produce, but that is not the worry of any single company.

We all have to remember that there are interests and values that transcend the individual corporation.  In a purely capitalist economy, there is no entity whose job it is to promote these important human values.  This is one of the reasons for people to band together in the form of national and international governments to create that entity. This is the entity to promote the human values that have no assigned promoter in capitalism.

This is not to disparage capitalism for not covering this aspect of humanity.  It is only to point out that to have a whole society, we must make sure that there are entities in place to promote each of the human values that need to be promoted.


Which CEO made $5 million stealing your kid’s lunch money?

I was surprised to see that Massachusetts is one of the states involved.


ALEC is working to ensure that public education dollars get diverted to private profits. Their approach is working — for them. Not so much for the students who pay the price in the form of a subpar education and poor performance.

If our economy is going to be competitive on a global scale via a more educated work force, then we cannot afford to play games with our educational system.

Of course, the fallacy that education is the way to keep middle-class wages high is the subject of other blog posts on this site. Which is to say that a better educated work force is necessary to keep us from falling behind, but it is not enough to keep us ahead.

Sharon tells me that she has seen ads for the corporation mentioned in the above video.