Here we go again — it's the countdown to Election Day, and so we have to watch one anti-business shibboleth after another paraded out to enrage and confuse voters. The latest is the outrage over Donald Trump's taxes. But that is, frankly, just part of a much larger national conversation that reveals just how ignorant much of the press — and the left in general — is about business in the United States. So here are a few talking points for Trump, Mike Pence and anyone else who'd like to defend the contributions that business makes to this country.
1. Even successful businesses lose money.
A few days ago, in reference to Donald Trump's $916 million loss in 1995, Hillary Clinton tossed out another one of her insults: "What kind of genius loses a billion dollars in a single year?" Well, let's see. How about Jeff Bezos, founder and CEO of Amazon. He lost over six times that amount in a single day .
Lots of companies lose money. Sometimes it is because they fail to respond to changes in the competitive landscape. Sometimes it's because of global events. Eleven businesses lost $4 billion or more in 2015; eight of those were in the energy sector, affected by the tumbling price of oil. Other times it is because new technologies grab the public's attention before it's clear how to monetize that interest. Facebook is a great example, but it is hardly the only one. Companies like Snapchat, Twitter, Instagram, Pandora and Zillow have rock-star status in the public's mind, and they are valued in the billions despite being unprofitable.
2. Businesses DO create jobs, wealth and economic growth.
This isn't Clinton's first display of appalling business ignorance. How many remember her now-infamous quote from two years ago? At an event for failed Massachusetts gubernatorial candidate Martha Coakley, Clinton said, "Don't let anybody tell you that it's corporations and businesses that create jobs. You know that old theory, trickle-down economics. That has been tried. That has failed. It has failed rather spectacularly."
Cue the laugh track. First of all, the idea that businesses create jobs isn't "trickle-down economics;" it's fact. Has Clinton bothered to check with the Bureau of Labor Statistics? Out of about 144 million Americans working today, 116 million are employed in the private sector. According to the most recent economic census data, there are 29 million firms in the United States. The vast majority of those are very small businesses. Only about 5.7 million firms employ anyone other than their owners. But small employer firms (those with fewer than 20 employees) create a disproportionate number of net new jobs every year. By the same token, very large companies (those with more than 500 employees) employ more than half of those 116 million Americans. So, yes, corporations and businesses do create jobs.
3. The world is looking to replicate America's business success.
The Global Entrepreneurship Monitor is an organization that has been studying entrepreneurial behavior and economic development for 17 years. More than 500 scholars in 300-plus institutions conduct research in more than 100 countries. The results are quite clear, and reflect a growing global consensus: Entrepreneurship, business creation and business growth are indispensable to a healthy, vibrant economy that lifts people out of poverty.
Indeed, we have powerful proof. The Millennium Development Goal of getting half of the world's poorest out of poverty between 1990 and 2015 was accomplished five years early: By 2010, the number of people on the planet living on less than $2 day had been reduced by nearly a billion people. As The Economist noted three years ago, "Most of the credit ... must go to capitalism and free trade, for they enable economies to grow — and it was growth, principally, that has eased destitution."
Finally, on a more pedestrian note...
4. Business losses are tax-deductible.
Yes, you read that right. If a business loses money, it is permitted to deduct those losses from its taxable income. A big enough loss could result in — grab your smelling salts, dearies — paying no taxes. That is what the U.S. Code and IRS regulations permit.
An absolutely critical part of any entrepreneurial economy is to encourage responsible risk-taking. Every new business is a risk; some ideas will pay off, and some will not. We need people who are willing to take those risks — we all benefit when they succeed. Tax deductions for business losses, like our bankruptcy laws, are among the devices that minimize the impact of those losses on those who fail.
To an extent, it's understandable that Clinton doesn't understand business, since her primary source of income over the past three decades has been a salary paid by taxpayers, or six-figure speaking fees. So maybe she thinks that everyone gets a quarter of a million dollars for 45 minutes of work.
So enough with the trumped-up (couldn't resist) outrage, Hillary Clinton. No one's insisting that you go start a business or create a few jobs. But we are demanding a lot less indignation and a lot more gratitude for those who do.