Obama's Road Not (Yet) Taken

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the fainthearted, for those that prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things—some celebrated, but more often men and women obscure in their labor—who have carried us up the long rugged path towards prosperity and freedom.

—Barack Obama, President of the United States
Inaugural Address, January 21, 2009

One evening in the Fall of 2008—when Lehman Brothers had just failed and the entire financial system seemed to be on the edge—a former student of mine approached me as I was leaving the School of Public Policy building after teaching my microeconomics course.

The student had a question: What should the government be doing to help small business cope with the financial meltdown?

It turned out that, in this case, the matter was not just of academic interest. The student was a staffer on an key Congressional Committee, and had been tasked to tackle this specific question. In fact, the rest of the staff and committee members were so preoccupied with the rather significant job of making sure that the entire financial system didn't fall of a cliff that she—so far as I could tell from that discussion and subsequent exchanges—was the only person responsible for this task. And she had been given four days to come up with an answer.

The importance of her assignment was evident to both of us. After, as we were both aware, all net new jobs for two decades had come from small business. If small business didn't create new jobs to get the country out of the coming recession, there wasn't going to be any getting out of the coming recession.

That legislative session came to a close without large-scale targeted action to support entrepreneurs. We then had the inauguration of a new president. We had TARP. We had MASSIVE STIMULUS. (Both needed. Some elements of the stimulus—notably, smart grid investments--highly worthwhile.) But a concerted strategy for small business and entrepreneurs? Still nowhere in sight.

In the Spring of 2009 my George Mason colleague Zoltan Acs and I published an essay in The American Interest that took note of the need for government at all levels to make support of entrepreneurs an fundamental policy priority:

Economic growth, or its absence, is merely an indicator on the dashboard of our ongoing national journey. The engine that propels American capitalism forward is entrepreneurship; the fuel is opportunity; the work of foundations recycles the energy of society, making progress and widespread prosperity sustainable. Yet, just as a Tesla Roadster is no Model-T, 21st-century entrepreneurship derives from a formula far more complex than the “1 percent inspiration and 99 percent perspiration” once cited by Thomas Edison. Far-sighted government policies are an essential element within this formula. Political leadership must do more than celebrate the “risk-takers, the doers, the makers of things” who create opportunity and extend the reach of prosperity. It must act in partnership with private foundations to ensure the existence of an environment conducive to their efforts.

Again, months passed. The President's agenda continued to be dominated by exigencies of the moment (Afghanistan) and justifiable legislative priorities (in particular, health insurance reform). But "risk-takers, the doers, the makers of things" that the President celebrated at his inauguration remained sidebars on the President's policy agenda.

And then, in the past three weeks, a change: The Obama Admistration started not only talking about small business and entrepreneurs, but actually proposing specific initiatives to help them continue their role as featured participants in the creation of American prosperity.

This is good news. It could get even better. For example, the Obama admistration could embrace wholesale the outstanding set of recommendations the Kauffman Foundation has advanced recently to drive innovation and advance prosperity through entrepreneurship.

Why do all this? Because what the past America and the next America have in common is entrepreneurship, innovation, and a nation's defining determination to find the practical solutions needed to maintain momentum "up the long rugged path towards prosperity and freedom."

Would Americans everywhere embrace such a story?

Here's hoping the Obama administration helps us find out.