Is It Government and Luck? Or Hard Work And Skill?

Posted by Jeff Carter
on July 15th, 2012

Yesterday, President Obama said that the rich in the US were lucky. They didn’t get to where they got by anything other than being helped, and a little luck.

This is a slight bending of the truth.

Big government types like to point out how a teacher helped, how people get to work because of roads or rails or planes, and how the government or government program paved the way for them. The idea is all they had to do was show up.

They are wrong.

It is enormously difficult to be highly successful. It takes A LOT of work. Dedication, preparation, intestinal fortitude, and living with the ups and downs of running a business. When I speak with entrepreneurs, I tell them that there are plenty of other people with their idea-success or failure will depend on how they execute.

For example, here are three companies trying to do similar things: 5 Degrees, Brewster, and Full Contact. There might even be more that I don’t know about. Is government involved at all? No. The company that grabs the lion’s share will out execute the other. Is it luck? No, it’s very difficult work. As a matter of fact, government is not paving the road for entrepreneurs, but through various policies it’s putting up roadblocks.

From the left I consistently hear how lucky the rich are. Sure, they are lucky. They started their business in America, the most economically mobile country in the history of mankind, and they were successful. They accepted a lot of risk. They built their businesses and were rewarded with some money. But, even when they reach the top of the mountain, there is no guarantee they will stay there. How many hedge fund managers have gone broke in the last four years?

The reality is that the people consistently pointing out how the government had something to do with the success or failure of a person are two things: envious, or crony capitalists wondering who they bribed or paid off to get there.

Obama grew up in the Chicago machine. There are a lot of well off people in Illinois simply because they put themselves in the right spot in the machine. They didn’t create any value for anyone, but paid off the right people, and voted the right way. There wasn’t a nit of merit to their success. That’s the way it is with machine politics.

Most of the time I find that the people that don’t get ahead limit themselves. They won’t accept the risks that you need to accept to become successful. They won’t do the necessary things you have to do to get ahead. There is no free lunch in economics, and there is no free lunch in success either.

Back in 2008, a friend of mine told me the only way I had become a good trader was via luck. I was incredulous. Luck had nothing to do with my success, or failure as a trader. Believe me, I have done both. Independent traders are no different than entrepreneurs starting a business. They assume a shitload of personal risk. They work without a net. No one will be there to pick them up and write a check to make sure their personal finances are in good shape if it all blows up. I like to tell people that somedays my wife shops at Hermes, but the next she might be lucky to shop at Walmart. Success isn’t luck, it’s hard work.

In the US, we aren’t lucky that the country developed the way it did. The Founders planned it. Americans took big risks to build it. The US Constitution and subsequent revolution was one of the riskiest things a group of people ever decided to do. Back then, colonists were divided as to whether to do it or not. At various points in our history, Americans went “all in” to preserve it. The Civil War and World War Two are just two examples.

America is the greatest lean start up story in the history of mankind. Once we became a country, American businessman accepted risks without guarantees. Our society is the most innovative in human history, and it has very little to do with government, and everything to do with the American ethos that our society was founded on.

Equating success and government is an insult to the integrity of people like Tom Edison, Henry Ford, Steve Jobs, Bill Gates, Cyrus McCormick, Ben Franklin, The Wright Brothers and legions of others to think that luck had anything to do with it. They worked their asses off and failed over and over again. The US government didn’t send them a check when they failed. There wasn’t a government program to give them money to insure them in their defeat.

All the time we hear about people wanting a “hand up”. How about they help themselves up? Usually, this can be translated into, “I want a hand out.” Winners make their own breaks. Winners never quit. Everyone is given ability. Some people choose to use it. John Wooden said, “Ability is a poor man’s wealth.”. The US right now has never had more ability. It’s time for us to use it and stop whining about who has more or less. Envy will kill ability. Many in the US are wallowing in self pity. Pick yourself up. You can do it.

If you think you are beaten, you are;

If you think you dare not, you don’t.
If you’d like to win, but think you can’t
It’s almost a cinch you won’t.
If you think you’ll lose, you’ve lost.

For out in the world we find
Success begins with a fellow’s will:
It’s all in his state of mind.
If you think you’re outclassed, you are:

You’ve got to think high to rise,
You’ve got to be sure of yourself before
You’ll ever win that prize.
Life’s battles don’t always go

To the stronger or faster man,
But sooner or later the man who wins
Is the one who thinks he can.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.