Mr. President: Roads Didn’t Create Jobs; Jobs Created Roads!
July 19, 2012
By Nancy Thorner and Edward Ingold -
Recently we heard President Obama proclaim that if it weren’t for roads and bridges, there wouldn’t be any businesses, no success stories, no one-percenters.
Obama’s speech touched a nerve as it spread out across the Internet. It prompted Fox News commentator and writer, Charles Krauthammer, to rip apart Obama’s business speech by defining Obama as a man — in a tongue and cheek remark — that ran a successful business selling tens of thousands of guns to Mexican drug cartels but who never ran a candy store.
President Obama owes much of his political success by spending money to repair roads and bridges. In his view, this money will flourish and grow the economy, as though planting magic beans under asphalt will somehow sprout into a money tree! So much for the Democrat’s version of Keynesian economics. President Obama’s analogy of equating government with success might be true if history started in a Harvard classroom, but how about in the real world?
When our ancestors came to America they were interested in pursuing the American Dream and the Grand American Promise that if they worked hard and played by the rules, this nation would offer an equal opportunity to make a better life for themselves. Accepting help from the government was an indication that they had failed in reaching their dream and goal. There was great pride in making it here in American through the toil and sweat of hard work or perhaps through the ingenuity of having an idea to start a thriving business.
At that time, the middle class was composed of merchants and tradesmen, predating any government infrastructure beyond the basics. Until the mid-nineteenth century, many roads were in fact privately owned. Tolls were demanded by those owners of travelers between cities. Public roads, outside of cities, came later with the advent of the automobile.
Ed Ingold speaks of his grandparents traveling throughout the midwest and west in the 1920′s and 30′s looking for work, with their five children. Roads weren’t paved, and frequently rutted, turning to mud in the rain. More that once, they were pulled out of the mud by a team of horses. Not many people had cars those days. Ed’s grandfather’s choice was a Chandler, loaded inside and out like the Clampetts moving to Beverly Hills.
The absence of public roads did not deter those seeking work. About the same time back in Detroit, Henry Ford set about building cars for the masses, and it was the industrialists like Ford, along with the people buying those cars that demanded roads and bridges, lobbied their representatives and paid taxes to accomplish that fact.
Money for these projects came from taxes, paid by citizens could afford them because the industrialists hired them to build the cars and forge the steel, training them to do skilled work instead of moving clods of earth, and paying them a good wage in the process. Roads didn’t create jobs; jobs created roads.
Within the Ford success story is this sub plot. Not all labor is equal, and labor itself has no intrinsic value. It is only what labor produces that has value. Businessmen, like Henry Ford, hired people with little skill and trained them to do productive work. Those that learned better and developed skills on their own progressed in that company. Some went on to form their own businesses. This industry created the new middle class as we know it today.
We all build on the accomplishments of those who proceed us. However, it is indeed a dull student who leaves the classroom with nothing more than what he was taught by his teachers, even with dedicated and capable teachers. The greatest joy of teaching is to see pupils develop beyond what you could transmit to them. In essence, you go to school to learn how to learn. How might President Obama pass that thought back to Harvard?
Finally, no road to success is a straight path. Winning also includes some failing. Most successful businessmen have failed more often than they have succeeded. When the marketplace changes, or ideas fail, it is sometimes necessary to terminate the employment of some so that others may continue. This is seldom done in spite, because you lose the skills of those workers along with their good will (and that of the survivors).
Nevertheless, in the time of need, each business must concentrate on what it does best, referred to as its “Core Competencies”. If you don’t need to do something yourself, you stop doing it, or have someone else do it for you. Sometimes that’s called “outsourcing.” Business decisions like this directly benefited the 70,000 GM employees and the 300,000 employees retained by Hewlett Packard.For example, General Motors is great at designing cars, building engines and transmissions, stamping sheet metal and assembling the pieces into automobiles. Yet they buy as much as 60% of the content of a vehicle from other countries. Roughly 70% of GM vehicles are made and sold in China. If GM weren’t doing that, someone else would gladly step up. Hewlett Packard buys hard drives from Thailand (along with everybody else) because they can’t afford to make them and remain competitive.
HP contracts with a Bain Capital client to provide call-in customer service because it’s good business to take care of your customers, often at great expense with little measurable benefit. At the same time, HP offers Asian outsourcing services in IT to other companies.
A clear line has been drawn as the November elections draw near. President Obama and Democrats believe that business can’t survive on its own without society, which is defined as government, and that this nation will rise and fall on how well businesses and government can work together.
Contrast this with the view of Governor Romney and Republicans who believe that private business is at the core of a successful America, as exemplified by the late Steve Jobs at building Apple from the ground up and Ray Kroc with the success of McDonald’s.
A rough and tumble battle is now being fought in anticipation of the November elections. If this country has any chance of remaining a proud, self-reliant, prosperous and vibrant nation where the liberty and freedom we have experienced can be passed along to future generations of Americans, may we all hope that free enterprise, which represents the American can-do spirit, will be the victor in November.
Nancy Thorner is from Lake Forest and Edward Ingold is from Mundelein -