RIP The Era Of Small Government

Commentary

One of the stranger statements President Bill Clinton ever made was, "The era of big government is over." It came during Clinton's 1996 State of the Union address, shortly after Democrats were thrashed in midterm elections that gave the Republicans control of the House of Representatives for the first time in generations.

They said it was a revolution, a Gingrich Revolution. Never one to fight the tides, Clinton went with the flow.

More than a dozen years later, we can say: Never mind.

Welcome to the Era of Huge Government.

After Hurricane Katrina washed away the illusion that government didn't matter, David Wessel, The Wall Street Journal's brilliant economics writer, also made a declaration: "The era of small government is over. Sept. 11 challenged it. Katrina killed it."

Almost.

The fatal nail in the heart of the era of small government came only with the recent financial panic and the piercing dagger of greed. Ideology and free-market theology lasted for about five days of full market crash before it collapsed in its own true motives.

When the interests of the very-monied class were threatened, it was damn the torpedoes of Reaganism, full bailout ahead! The more regulation the better! And why not go for just a little bit of nationalization while you're at it?

Prior threats to small government didn't make the rich sweat. And as the country learned from Vietnam, the elites can stomach a lot of injustice, inequity and incompetence until their own kin (via the Vietnam-era draft) or their own wallets (today's meltdown) are threatened.

In the aftermath of Sept. 11, it wasn't the children of investment bankers, M&A lawyers and mortgage lenders who would be sent to Afghanistan and Iraq. In the wake of Katrina, it wasn't corporate bankers, hedge fund managers and GOP congressmen who were left homeless.

The actions taken to freeze the meltdown guarantee an era of huge government, not just big government. The deficit alone will consume something like 5 percent of the gross domestic product for the next couple years. Spending on bailouts — acquiring "toxic" assets and bolstering banks with government capital — will match wartime spending from other eras. There will be "stimulus" spending. And if all this doesn't help curb the market panic soon, there will be much more.

This locks in huge government. It is loaded on top of an entitlement system (Social Security and Medicare) based on Ostrich Accounting: Stick your head in the sand and wait for the next generation to deal with it. It is piled on top of enormous military spending. It doesn't even contemplate coping with health care spending.

Know this: The greatest contemporary enemy of the Era of Small Government was George W. Bush.

It was Bush who insinuated the federal government into education on a mass scale; before Bush, schools were for states and municipalities. It was Bush who created a new and whopping homeland security agency after Sept. 11. It was Bush who took a balanced budget and turned it into Reaganesque deficits. And it was Bush who called off the regulatory dogs in a pioneer of Wall Street buccaneering that at least contributed to the mess we're in now.

It is Bush who added insult to the current injury. His obliviousness to his own profligacy and his incessant, ineffectual, hypocritical whining about congressional spenders has ensured that he is not a lame duck but a quadriplegic duck in his final daze.

The idea that an economy serving 300 million souls in a dangerous world can be well-served by a "small government" was always silly — as silly as the idea that more government automatically solves more problems.

The modern federal government will and must be big, but it ought to be as little as possible, too. The American take on statecraft is to be wary of bureaucracy, sensitive that taxation is a curb on liberty, respectful of local authority, wary of centralized planning, and impressed but not blinded by the virtues of free markets and uncomforted by Big Brother. Common-sense adherence to these civic impulses is what constricts the vices of big government, not just the size of budgets.

It is precisely the lack of that common sense that has brought us to the Era of Huge Government, where our capacity to flexibly deal with new and unforeseen problems will be sorely constrained.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.