I had not planned to comment on the president’s “you didn’t build that” gaffe, but as it echoes in the blogosphere it becomes difficult to avoid. It’s not so much his original statement that has me thinking, but the various ways in which people on both sides have interpreted it—most have it wrong. Let us explore. For the innocent bystanders, here is the section of his speech in question:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there. 

     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.

     The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires. 

There is no hiding that Obama said “If you’ve got a business, you didn’t build that.” Was it out of context? That depends on how one interprets the context. But there is no way to spin this where Obama comes out clean. There are three possible meanings:

Meaning #1: If you’ve got a business, you didn’t build that
This is the more literal interpretation some have jumped on because, well, that’s exactly what he said. Even looking at the context, it seems to be pretty cut-and-dry. Unlike Mitt Romney’s supposed “I like firing people” comment, which was both misquoted and taken out of context throughout the media (actual clip here). But I really do not think this is the best interpretation, because I do not think Obama is an idiot. Wrong? Absolutely. But not so dumb that he would claim something so obviously false. More likely, he was saying that business owners didn’t build the roads and bridges. Even then, he should recognize that it is the private sector that builds the wealth to pay the taxes to build the roads. The next interpretation suffers from the reverse problem: it’s obviously true.

Meaning #2: People depend on one another
Obama’s defenders have taken to this spin on his remarks, that he just meant we are all in this together—we live in a complex social world where success requires that we interact and support one another, standing on the shoulders of our fellow man. That’s lovely and inspiring, but who is arguing with that? Conservatives are not claiming that we literally succeed on our own. The most ardent anarcho-capitalist still believes that we benefit from a dense network of social interdependence. Obama’s statement was meant to claim a position in contrast to his political opponents, who are specifically calling for less government and more free-market solutions. We should interpret his remarks in the context of that general debate. If somehow he did mean it this way, then he is being incredibly disingenuous about what his opponents actually believe.

Meaning #3: Government help is the key to economic success
Given Obama’s worldview when it comes to economic/social justice, I have no doubt that what he intended to suggest was that people who are successful only achieved it because of help they received—directly or indirectly—through government programs.

To illustrate “help” he points to teachers, firemen, statesmen, and “investments” in roads and bridges. What do these have in common? Government. They are examples of people acting in a collective sense, rather than as individual participants in the non-political society. Most interpretations have missed this point—he is not talking about community in the general sense. He does not cite parents, friends, bosses or role-models. He doesn’t bring attention to supermarkets, cell phones or the computer. And he only mentions the internet insofar as the government had a role in its early development (which had nothing to do with what it looks like today, thanks to private enterprise).

Our president believes economic inequality is morally wrong because some people get “help” and others do not. For him, success is a game of chance and favors that should be leveled out by government. The role of the state, therefore, is to create and redistribute wealth and opportunity. It becomes our nurturing mother and our god.

After LBJ’s “Great Society” programs and four years of the Obama administration, America now has 1 person living off of government for every 1.25 people paying into it through private-sector work. Our government debt is now greater than the combined annual incomes of every American citizen. In fact, by 2016 we will have the 5th highest debt-to-GDP ratio in the world. I would say this president has been successful in bringing us closer to his vision of America, and he is campaigning on taking it further.


Update: Obama and his supporters have come out strong, attacking Republicans for taking his words out of context, and insisting that what he meant was that “we’re all in this together.” As I pointed out in this blog, there’s more to that than meets the eye. He has a very political understanding of what being “in this together” entails. This speech was about taxes and spending, not families and communities.

Is Price Gouging Immoral? Should It Be Illegal?

The folks at LearnLiberty.org are creating some excellent and rather entertaining videos on liberty and free markets. This short video shows how price gauging during an emergency—an act commonly viewed as inspired from the devil himself—is merely a function of the market finding a way to deliver goods to the people who need them most.

I heard a great EconTalk podcast a while back with Russ Roberts and Mike Munger on this very topic. Paradoxes like these are one reason I enjoy economics. The bigger reason is learning how to actually help people in need instead of making situations worse.

Every so often you run into a piece of news that epitomizes everything that is wrong with leftism. Today’s anecdote: a Chicago school has banned children from bringing their own lunches.

The reason is simple—the principal wants to “protect students from their own unhealthful food choices.” Let’s assume that means the parents too. Perhaps banning certain types of food was not far enough; people simply shouldn’t be allowed to make their own choices. It’s far preferable to restrict them only to the approved items.

The second phase of leftist policy, once you’ve restricted choice, is to make the authority the sole supplier. This way, intellectual elites can manage our lives and make them better. At this school, “most students must take the meals served in the cafeteria or go hungry or both.” Hmmmm…. did you catch the “or both” part? Why would someone take the meals and go hungry? As it turns out, when you force people into something they don’t want, they’re less likely to value it and take care of it. If the students brought what they wanted from home, their lunch would be full of whatever they or their parents think is best, and the food might actually be eaten (especially since they bear the full cost). In economist terms, individual preferences would ensure that resources are allocated efficiently. But “individual” is a dirty word in this miniature academic utopia.

But there’s a greater reason why food is being thrown away, and it’s the same reason hundreds of thousands of decent used cars were destroyed last year (which caused used car prices to skyrocket. All in the name of helping the poor, of course). Many of these lunches are subsidized by federal dollars. The government draws a line and says anyone earning below that line can get free or discounted lunch. Imagine yourself walking into the cafeteria, someone behind a counter hands you a tray of food that you may or may not like, at no charge. If you don’t like it, you’ll just toss it. Even if you do, it’s no loss to you if you don’t finish. But if you’ve ever heard of the phrase “There’s No Such Thing as a Free Lunch,” you’d know that it is a loss to someone… just not anyone you know or care about.

But we do know exactly who is getting paid. Chartwells-Thompson is the district’s food provider, who gets a fee for each lunch, and if parents don’t pay, the Federal Government taxpayer does. The paradox of restricting the free market for the sake of equality and fairness is that it is rarely equal and never fair. Governments pick winners and losers—it’s part of the job, as it is with anyone who has the power to choose one thing over another. And in this case, the winners are the food provider and the school; the losers are the students, parents and taxpayers.

But some parents do think it’s a winning situation. “The school food is very healthy,” one parent said, “and when they bring the food from home, there is no control over the food.” And that’s precisely the mentality that drives leftism: if people are left to decide for themselves then “there’s no control,” and control is just so alluring.

One point brought up in the article is that this actually will cost some parents more because they can pack lunches themselves at a lower cost. It won’t be long before someone pushes to have the difference covered by the state. And that would only be fair, given the circumstances.

What you have here is an intention to encourage healthy eating. The result is wasted food, unhappy and hungry students, and poorer parents. And who’s to say that what the school offers is healthy anyway, especially given our genes and lifestyles vary widely. Sure, some kids will eat healthier… but more importantly, they will never have to learn how to provide for themselves or anyone else. Living on the public dole will soon be the American modus operandi. And for the left, they can imagine no better future.