“Entrepreneurs embody the promise of America: the idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country. And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs.” – President Barack Obama, January 31, 2011
The recent White House announcement of a new government program to promote entrepreneurship must signify that the Obama Administration finally “gets it” about job creation and economic recovery, right? Certainly free-market conservatives can agree with the President’s inspiring words. But …
The problems, as always, emerge in the details of the program. This “coordinated public/private effort” appears to be just another head-fake in the direction of capitalism with the intention of growing more government. Just look at the program’s goals:
- “Expand access to capital for high-growth startups throughout the country”: An almost perfect definition of the government picking winners and losers and a sure-fire recipe for corruption. To add insult to injury, it turns out there is more than one federal agency in the game. Check out what the Small Business Administration is doing to identify “gazelle” (high-growth/high-impact) firms. The Department of Energy has been at it longer.
- “Expand entrepreneurship education and mentorship programs that empower more Americans not just to get a job, but to create jobs”: New government spending opportunities here, for sure. The government cannot create jobs (at least not jobs that generate more taxes than they consume).
- “Strengthen commercialization of the about $148 billion in annual federally-funded research and development, which can generate innovative startups and entirely new industries”: Does “commercialization” mean that the government is trying to use taxpayer funds to take “market share” away from private banks and venture capitalists?
- “Identify and remove unnecessary barriers to high-growth startups”: Barriers like high taxes and over-regulation? Regulation is undoubtedly a hurdle to business growth and formation, which is an area this Administration could not disagree with more. The health care reform law of 2010 is the clearest example of this lack of understanding. Heritage papers point to the health care law impacting the business sector negatively—beyond the standard 1099 provision.
- “Expand collaborations between large companies and startups”: Why does the government need to be involved in that?
Looks like any funding for “Start-Up America” should be added to Congress’s bucket list of wasteful government programs ripe for pruning. As Heritage experts have reported, only private entrepreneurs, investors, and small businesses can truly “lay the foundation for a lasting economic recovery.” Government spending programs that do not increase demand for goods and services but simply redistribute demand within the economy – such as Start-Up America – should be the first to go.
This piece originally appeared in The Daily Signal