On ‘The Case for Big Government’

By Gara LaMarche.  It’s bold of Jeff Madrick, a journalist who writes about economics in The New York Review of Books and elsewhere, to title this book “The Case for Big Government.”  Despite the colossal failures of government in recent years — from the inadequate response to Hurricane Katrina to the 2008 economic collapse —  and, despite the election of a progressive Democrat who has made more muscular use of government than any in his party since L.B.J,  many voters view government as a necessary evil, at best, and, at worst, a very dirty word.

A recent CNN survey found that 56% of Americans believe “the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.”

Even advocates for a stronger state role in the repair of the social safety net tend to be apologetic about their goals. Bill Clinton famously declared “the era of big government is over.”  Barack Obama has flexed governmental muscle through a massive fiscal stimulus package, his handling of the auto industry’s collapse, and in pressuring BP to pony up for damages caused by the oil spill. But at the same time he has worked hard to assure citizens such measures are temporary, unusual, borne of crisis, anything but government business as usual.

In his commencement speech this spring at the University of Michigan, the President put forth a strong case for the role of government. But he began with the usual apologies. “The democracy designed by Jefferson and the other founders was never intended to solve every problem with a new law or a new program. Having thrown off the tyranny of the British Empire, the first Americans were understandably skeptical of government. And ever since we’ve held fast to the belief that government doesn’t have all the answers, and we have cherished and fiercely defended our individual freedom. That’s a strand of our nation’s DNA. “ 

Madrick’s The Case for Big Government was written just before Obama’s election, but makes vital reading for anyone with a stake in the centuries-old debate about the proper scope and role of government – which is to say all of us. Short and accessible – only Paul Krugman, among progressives economists, does as good a job of communicating theory to the non-expert –  the book explores the  frame through which right and left see government, the way the young state fostered progress and economic development through government power, and, examines the current crisis and its roots in anti-government ideology.  

Published as the economic crisis took hold, but before a new administration began to deal with it, Madrick’s critique is slightly outdated. His recommendations for fiscal stimulus (less than the Administration actually did, though criticized as too modest by Krugman and other leftists critic)  and an agenda for restoration (health care reform, re-regulation of finance)  form the core of the Obama administration’s domestic program so far and have been greeted with mixed political results.  For the right, the Obama who wished to transcend partisan divides is the anti-Christ, or at least a Socialist bent on destroying American freedoms by engorging an all-encompassing state. The Left has its own complaints about half-measures.  The true populist, God, who will smote down rapacious banks and oil and insurance companies and bring forth a bright future full of energetic, progressive government, has not yet found his or her way to 1600 Pennsylvania Avenue – or so it would seem, according to Krugman and others.

In the meantime, as the Republican Party, increasingly in the grip of Tea Party sentiment, gets wackier and more virulent each day, Obama remains the only President we have.  And one of the most sobering realities of the last eighteen months is just how much work remains to be done to overcome  three decades of sustained ideological assault on government – the consequence of which is evident in the stupidity of anti-health care protestors who, as the President wryly noted in his commencement address, wave signs to “Keep Government’s Hands off My Medicare.”

Americans for Responsible Taxes, a coalition formed to repeal Bush-era tax cuts, reinstate the estate tax, and close tax loopholes, nicely summarizes the current climate. “Unregulated businesses and the wealthiest individuals were handed a free ride during the Bush administration in the form of trillions of dollars in underserved and unproductive tax cuts.”  With the effective federal tax rate of the wealthiest 400 Americans dropping from 29 percent to less than 17 percent over 15 years, and all taxes on personal income at the lowest rate since 1950, “the economy collapsed, deficits grew, and the middle class’s economic standing eroded.”

You’d think this sordid legacy, combined with the President’s political and oratorical skills, would provide the ingredients necessary to rehabilitate government, but, you would be wrong.  The damage of the last several decades is not easily overcome. Add to the picture the changing demographics of the nation (including the election of the first Black president and the backlash it sparked), mounting economic insecurity, and the long simmering, baseless idea among many white voters that government social programs only benefit racial minorities, and the reform project seems daunting indeed.

Madrick’s addition to the picture is less his unremarkable and even somewhat modest policy prescriptions, than his take on our history, which is vital and important in the current debate. First, he demolishes the myth that before the New Deal, America was a laissez-faire agrarian paradise in which initiative and entrepreneurship flourished because the government was so small that, as Grover Norquist famously put it, you could “drown it in a bathtub.”  In fact, Madrick documents, from the very beginning, our economic growth and success had everything to do with the intervention of the federal government and its investments in “infrastructure,” from roads and highways and the postal service in the first century to health systems, schools and worker protections in the second. “The nation adapted,” he writes, “through the inventive, courageous, and persistent uses of government as much and at times more so than through the adaptive and innovative energies of business from which government policies and institutions cannot be truly separated.”

Madrick also provides an alternative history, evocative of George Bailey’s glimpse in It’s a Wonderful Life, of what the world might have been like without him:“Had the Reagan spirit of government distrust prevailed throughout American history,” he writes, “property in America would probably not have been distributed as equally or equitably as it was in the early years, the free primary and high schools of America would probably not have been built, the highways would have been an uncoordinated and inadequate maze, minorities would not have been as readily included in the economy, and GIs would not have been subsidized to go to college.”

William Galston of the Brookings Institution and a former Clinton advisor, wrote in the Financial Times, “the lack of trust in government has framed, and weakened, the Obama presidency thus far … and rebuilding trust may be the administration’s most important political task.”  Madrick’s short book will be useful to the President if he continues with efforts to rebuild public trust as the potted history too many have swallowed plays a large, distorting, role in the ongoing national conversation.

Gara LaMarche is President of The Atlantic Philanthropies.

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