Dems are circulating video of Obama, at a fundraiser last night, offering his most extensive pushback yet against Mitt Romney’s false claim that the President said business owners didn’t build their own businesses:

In the speech, Obama reiterates his belief that individual initiative is what powers business success, but says that’s not imcompatible with also recognizing that a smoothly functioning society partly enabled by government is also a necessary ingredient. And Obama again reiterates his belief that government investment is the best way to secure the middle class’ future.

This sentiment is virtually identical to the supposedly controversial speech Obama gave that included the “don’t build that” quote. And this again gets at the larger falsehood that lurks underneath the lie that Obama “demeaned success.”

Ultimately, what this disagreement is really about is over how jobs are created and what steps should be taken to end the unemployment crisis. Obama thinks that the way to speed the recovery, and to secure our economic future, is with public investments in infrastructure that create jobs in the short term and create more demand for businesses; public investments in education to increase opportunity; and long term deficit reduction that combines less radical cuts to entitlements with tax increases on the wealthiest among us.

Mitt Romney doesn’t believe in short term government investment to create jobs. His policies are geared towards long term growth, and include still more tax cuts for the rich and (as a result) entitlement reform along the lines of Paul Ryan’s plan. Romney says the best way to speed the recovery is to “get government out of the way,” unshackle the potential of the free market, put someone in charge who (unlike Obama) values individual initiative and wants people to succeed, and allow “economic freedom” to power the recovery.

As it happens, mainstream economic consensus is closer to Obama than to Romney on the broader questions here. Many economists believe the stimulus worked (albeit not as well as we’d like); that tax cuts for the wealthy won’t magically create enough growth to pay for themselves; that more spending now would indeed create jobs; and that more austerity now could make things worse. The public’s views on these matters are not nearly as clear cut. But on the question of the relationship between government spending and job creation, Romney’s positions are at odds with mainstream economic opinion. “The debate in Washington has become completely unmoored from this consensus,” Betsey Stevenson and Justin Wolfers write today. “Republicans have pushed their representatives to adopt positions that are at odds with the best of modern economic thinking. “

Romney does not have a plan to fix the short term crisis, in the sense that he’d be proposing exactly the same things if the economy were doing great. But the politics of the presidential race are such that Romney needs to promise that electing him would fix the crisis. To make this case, he has to sell the American people on the idea that government — and Obama’s hostility towards individual initiative and American free enterprise — are to blame for holding back the recovery, and that shoving both of those things “out of the way” will reignite the economy. That’s why Romney continues to falsely claim that stimulus spending only succeeded in growing government and didn’t help the private sector at all. That’s why he continues to falsely claim that Obama “demeans success.” That’s why he continues to falsely claim that Obama thinks only government, and not individual initiative, creates jobs — and that this is why you’re suffering.

These ideas are essential to Romney’s entire argument. Without them, he doesn’t have one.