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Justin Vernold

August 4, 2012

There's a gray area between 'job creator' and 'welfare queen'

In an era of bruised American pride, it's not uncommon these days to see political pundits make alarmist predictions of the country's imminent doom. But American Enterprise Institute scholar Arthur Herman raised the bar for overwrought hysteria with his July op-ed titled "America's Coming Civil War -- Makers vs. Takers."

The piece, posted on Fox News' website, paints a stark portrait of a nation divided between those "who create wealth" and "the millions of Americans now dependent on government," stating "it's time for Romney and Republicans to make clear which side they're on" before the war begins.

"Like John Brown's raid on Harper's Ferry," Herman wrote, presumably with a straight face, "ObamaCare has been a wakeup call to what's at stake."

Such paranoia would be laughable if it weren't taken seriously by so many. But there's a sizeable contingent of Americans who subscribe to the notion that Americans can be neatly divided into two camps: those who work for a living and never accept even a penny's worth of government benefits, and those whose entire lives revolve around the public dole.

This argument was made during a Senate Finance Committee meeting by Sen. Chuck Grassley, R-Iowa, who said: "49 percent of households are paying 100 percent of taxes coming in to the federal government." The Rev. Rick Warren also made the case on Twitter, writing: "HALF of America pays NO taxes. ZERO. So they're happy for tax rates to be raised on the other half that DOES."

This myth stems from a misconception that income taxes are the federal government's only source of revenue. A more sober analysis from the nonpartisan Tax Policy Center shows when payroll taxes to fund Medicare and Social Security are taken into account, roughly 86 percent of American households pay federal taxes.

And while the sloth and dependence of working-class Americans is exaggerated, so too is the rugged individualism of those Herman dubbed the "makers" of society. This was exemplified recently when Mitt Romney's campaign pounced on remarks made by President Barack Obama on the campaign trail.

"If you were successful, somebody along the line gave you some help," Obama said. "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."

Taken in context, the phrase "you didn't build that" clearly refers to public infrastructure. But Romney's campaign seized that particular sentence for an ad titled "These Hands," featuring outraged New Hampshire businessman Jack Gilchrist, founder of Gilchrist Metal Fabricating Company.

"My father's hands didn't build this company? My hands didn't build this company? My son's hands aren't building this company?" Gilchrist intoned.

The truth, it turns out, is more nuanced. The Union Leader of New Hampshire revealed that Gilchrist relied on taxpayer funds to support his business, including $800,000 in tax-exempt state bonds from New Hampshire, a loan of nearly $500,000 from the Small Business Administration and almost $90,000 in defense contracts since 2008.

Romney made a similarly misleading argument this week during his visit to Poland, in which he correctly noted that Poland has managed one of Europe's fastest-growing economies (4.3 percent in 2011) ever since it broke free from communism's oppressive yoke in 1989.

Romney credited "economic liberty and smaller government" for Poland's turnaround. But he conveniently omitted the fact that all Polish citizens have access to free state-university education and government-funded health care. As a result, Polish entrepreneurs can rely on a dynamic, adaptable workforce -- and Polish businesses don't have to worry about the cost of employee health coverage.

One of the dirty little secrets of an American society that prides itself on individualism is the fact that no man is an island. Business subsidies and government infrastructure projects have helped fuel the American economy ever since the start of its post-WWII golden age, and this isn't a bad thing. Just ask Germany, Japan and South Korea, which rose from post-war rubble to become economic powerhouses thanks in part to similar public-private cooperation.

In New York, Gov. Andrew Cuomo has sought to stimulate business by offering competitive grants through his Exelsior Jobs Program. By making the funds contingent on firms creating and mantaining a specific number of jobs, the state is able to provide tangible, targeted help for economically distressed communities.

The Cuomo administration provided local yogurt titan Chobani $8.5 million to help with an $88.5 million expansion at its New Berlin facility, and Milford-based Brewery Ommegang was awarded $140,000 to cover part of its $16 million expansion plan.

One might have assumed that when these projects were announced, area residents would be pleased. But when the stories were posted online, The Daily Star's website was inundated with vitriolic comments insisting that no self-respecting entrepreneur would ever dare accept taxpayer dollars.

The essence of entrepreneurship -- and innovation -- is a willingness to take risks. Firms considering expansion should be encouraged to do so, without worrying that the consequences of bad timing or economic forces beyond their control will cripple their livelihood if things go sour. And fears about uninsured medical emergencies or overwhelming student loan debt should never keep young entrepreneurs from pursuing their passions.

Justin Vernold is a copy editor at The Daily Star. Email him at jvernold@thedailystar.com

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