You're right that the factory or office building might not be built near your diner, but history has shown us that fewer costly regulations and lower taxes does lead to more private investment, so the factory or office building might be built near some one else's small business, but it will likely be built.
I agree that allowing free markets to make investment decisions carries risks as well as the potential for prosperity, but historically taxing and regulating away the incentive for private investment and allowing the government to make investment decisions leads to a stagnant economy and higher unemployment. Reagan's tax cuts and deregulation spurred the robust economic growth of the late 1980's and the 1990's but it also led to much higher public debt and to the tech bubble of the late 1990's that wiped out so much of the retirement savings of working Americans, and while the Bush tax cuts probably staved off an earlier recession, unfortunately the private investment they spurred was largely in over priced real estate and, largely because of the failures of the FDIC, the FED and Congress to exercise their oversight responsibility to prevent banks from investing so heavily in risky loans, they also led to the recent financial crisis and recession.
So incentivising private investment and allowing free markets to make investment decisions carries the potential for both risk and reward, and no one has yet figured out how to eliminate the risks and still realize the reward. In 2012 we will have the choice between four more years of a stagnant economy, high unemployment occasionally relieved by temporary jobs financed by higher taxes or higher debt or we can choose to try to regain our confidence in ourselves and our country and return to the kind of free market economy that built this country. Romney, the likely Republican nominee, has had a long and successful career taking on failing enterprises in both the public and private sectors and returning them to success and profitability. Obama, on the other hand, has failed to accomplish anything on significance in any job he has ever had. Why would anyone want to vote for failure a second time?