During a Roanoke, Virginia, campaign speech on July 13, 2012, President Barack Obama infamously said, "You didn't build that." During his tenure as president, he invested $7.5 billion of our money in alternative energy companies. These companies would have had no chance of getting the funding to start their businesses without this government money. Most of these companies have either dissolved or are on their way to bankruptcy.
As a small businessman, I'm offended by not only what President Obama said, but also by what he did. I started my first small business in 1989. I didn't borrow any money from the SBA, nor did I take out any bank loans. There were times when I wasn't sure I was going to make it. Over almost 30+ years, I have had to reinvent myself to survive.
Yet, while small business owners like me struggle every day to make ends meet on their own, President Obama had no problem giving billions of taxpayer dollars to multi-million dollar corporations, risk-free — often even guaranteeing payment of those loans to the companies’ investors.
The flaws in the former president’s reasoning are understandable. If in all your life you never had to take on risk or write a paycheck to an employee, you would have no idea what running a small business entails. When politicians become convinced that the nation should take on the risk, rather than private businessmen themselves, trouble always ensues.
Take the case of Solyndra Corporation, one of the green energy companies that the former president took under his wing. Their story represented good jobs for Americans and renewable energy for a better American environment. The government awarded Solyndra $535 million to hire Americans with good paying jobs to build solar panels.
Despite receiving massive amounts of government support, the company couldn't make a profit making solar panels in the United States. Solyndra then closed the plant in America, fired its workers, and moved its manufacturing facility to China. Unable to make a profit manufacturing solar panels in China, the company was forced to file for bankruptcy. All the investors, including the government, lost all of their investment funds.
If you were an investor and you lost your hard-earned money, would the government ever pay you back? Did the government recover any of our money, the $500+ million it gave to Solyndra? The answer is an emphatic NO!
Another example of the government taking risk with our money, on projects that perhaps other investors would not fund, is the funding of Elon Musk’s SpaceX, Tesla Motors, and Solar City. The U.S. Government granted his companies $5 billion in the form of grants, loans, and other guarantees. There is little doubt that if Musk didn't have the government as a financial partner, he would not have been able to build his companies on his own.
Musk does not just depend on government contracts; his businesses also rely on covert protectionism. For instance, in the National Defense Authorization Agreement (NDAA) that the Senate will deliberate this week, there are provisions that will deliberately increase barriers to entry for SpaceX’s competitors, essentially making Musk’s company — which, per The Wall Street Journal, already receives 70 percent of its contracts from the federal government, the only supplier of launch vehicles.
Despite receiving all this government aid, Musk’s big businesses continue to fail. Last year, he had to merge Tesla and Solar City to prevent corporate bankruptcy. His market capitalization continues to drop by billions and his cash-burn ratio recently hit a record high.
Forbes Magazine reported that there are over 28 million small businesses in America and 22 million are led by a self-employed individual. According to The Washington Post, 99.7 percent of all these companies employ 500 employees or less. In other words, only three tenths of one percent, of all the businesses in the United States, are represented as big business. So, President Trump, when we say that the business of America is small business, start thinking more about helping the small business leaders and less about the Elon Musks and Solyndras of the world.
Look at the chart here and see the range of income for small business owners.
What is important in this chart is the section called the All Industry Average salary of $100,436. These are 2007 figures. For all the risk that these businessmen and women take, the return is relatively small. However, they are building jobs for Americans and making America great again, and the great majorities are doing it with no government assistance at all.
Perhaps in his retirement, Mr. Obama will start a business and understand the risks that millions of Americans take every day in securing their own and their family’s futures. At a minimum, though, Congress should stop preventing the Trump administration from fixing the egregious errors of the previous administration.
Dan Perkins is an author of both thrillers and children’s books. He appears on over 1,100 radio stations. Mr. Perkins appears regularly on international TV talk shows, he is current events commentator for seven blogs, and a philanthropist with his foundation for American veterans, Songs and Stories for Soldiers, Inc. More information about him, his writings, and other works are available on his website, DanPerkins.guru. To read more of his reports — Click Here Now.
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