Entrepreneurs don’t deserve the professor’s ire
MEETING WITH voters in an Andover living room last month, US Senate candidate Elizabeth Warren vigorously challenged the idea that Obama Democrats are engaging in “class warfare’’ when they clamor for higher taxes on the wealthy. A YouTube clip of her remarks has liberals cheering; MoveOn.org calls it “The Elizabeth Warren Quote Every American Needs To Hear.’’
Warren claims that raising taxes on those who succeed is justified by “the underlying social contract’’ that made their success possible: Government services gave them a leg up, so they must “pay forward’’ to help others.
“There is nobody in this country who got rich on his own. Nobody!’’ Warren preaches with populist fervor as she addresses an imaginary business owner. “You built a factory out there - good for you! But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory . . . because of work the rest of us did.
“Now look, you built a factory and it turned into something terrific - God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.’’
As an argument for higher taxes, this is an improvement on Barack Obama’s 2008 declaration to Joe the Plumber that “when you spread the wealth around, it’s good for everybody.’’ Nonetheless, Warren’s words reflect the infatuation with government and condescension toward private initiative that have been such hallmarks of the Obama presidency. Her eagerness to minimize the entrepreneur’s achievement while exalting the role of the public sector may win cheers on the left, but it puts her sharply at odds with mainstream voters.
By overwhelming margins, Americans think well of small businesses and those who create them - Gallup found last year that 84 percent of respondents had a positive image of “entrepreneurs,’’ and 95 percent felt positive toward “small business.’’ The public’s view of government, by contrast, could hardly be worse: In a poll out this week, 81 percent of Americans - a record high - express displeasure with their government. Last month, respondents ranked government dead last among 25 business and industry sectors.
Of course that doesn’t mean that some government isn’t necessary. Warren’s implication that Republicans or conservatives who decry “class warfare’’ are unwilling to pay for roads, schools, or police and fire protection is childish. Not even the most libertarian Tea Partier, never mind a moderate like Scott Brown, wants to zero out basic public services. Warren doesn’t need to hector factory owners, imaginary or otherwise, into acknowledging that they benefit from highways and police departments, or that those benefits need to be paid for.
What’s a lot harder to explain is how they benefit from the kind of government incompetence that can turn a $2.8 billion Big Dig project into a $22 billion Big Dig scandal. Or from government loan guarantees that squander fortunes on Solyndra and other ventures in “green’’ crony capitalism. Or from vast government entitlement programs like Social Security and Medicare, with their trillions in unfunded obligations and unsustainable costs. Or from government subsidies for airports nobody uses and broadcasters that can support themselves.
In the video, Warren gestures emphatically each time she repeats her claim that entrepreneurs succeed only at the expense of “the rest of us.’’ Far from refuting the “class warfare’’ charge, her words and body language confirm it. Yet surely she is aware that half of US households pay no income taxes at all. She must have some sense of the staggering array of taxes, fees, and assessments that anyone who develops a successful small business must continually pay to governments at all levels.
And even a Harvard law professor - at least one who aspires to the US Senate - has to realize that most entrepreneurs get rich only when they create value for others.
Yes, there is an “underlying social contract’’ on which civilized society depends. But there are two sides to that contract - and more to its terms than just taxing away ever-bigger “hunks’’ of wealth from people who succeed. When 81 percent of Americans are fed up with their government, and when that government already spends far beyond its means, is it really the risk-takers of the private sector who deserve Professor Warren’s ire?