Jeff Madrick: Rediscovering Government

Today we launch a new initiative and a new conversation about the purpose and possibility of government in the lives of Americans.

The discourse about the positive purposes and possibilities of government has been barren for a generation in America. What discussion there is has been dominated by proposals and philosophical disquisitions on how to make the most of less government, but rarely about new avenues for government action or new possibilities for social improvement. Since the Reagan years, there has been almost no new social policy that required a substantial outlay of money. George W. Bush’s program for drugs for the elderly was the one major exception, and it was riddled with concessions to the private market. Obamacare is a second. Both are clouded in controversy that is in good measure ideological.

Even the conventional language about the “role” of government is misleading. Do we talk about the “role” of parents in their children’s lives, or the “role” of children in their parents’? One doesn’t exist without the other. You don’t talk about the role of water in swimming or the role of the ball in soccer.

In short, there is no economy without government; there is no America without government. If all this seems a little elementary, it serves a point. The language we use suggests at the outset an assumption that government should be limited. Note we don’t talk about the role of business in America. Business is generally assumed to be the senior partner.

Let me make this one point clear: There is no capitalism without government, either. Like Keynes, I’d like to enable the country to enjoy the benefits of capitalism but also the benefits of government safeguards, investments, and efforts to develop everyone’s “capabilities” to benefit, if they so choose and if they do their share, from a full life.

America started losing its way, I’d argue, precisely when it began to lose so much faith in government back in the 1970s. Why this happened is complex. The nation has always been individualistic in its orientation, given its history as a rebel against totalitarianism and its small population compared to available resources, including an open frontier. But community action and responsibility also had a larger part in America’s development than current mythology suggests. Trust in government is at a low today, but surveys suggest it started to fall rapidly under Lyndon Johnson after the surge in such faith after the New Deal and World War II. It fell further under Nixon during the Watergate scandal.

But the nation was still moderately confident in government. In the early 1970s, many new regulatory agencies, such as the Environmental Protection Agency, were started, Social Security was expanded, and welfare programs were expanded. A tax revolt in California led by Ronald Reagan was put down in early 1973.

But the economic devastation from 1973 through the early 1980s seemed to be a primary catalyst in causing Americans to doubt government. Americans were confused, frustrated, and angry. By 1978 there was a major tax revolt. Soon talk was all about cutting taxes, reducing social programs, and freeing business of regulations. Anti-trust became an almost archaic term. In ensuing years, few economists of any political stripe argued against undoing Glass-Steagall, which had separated investment and commercial banks in the 1930s. Higher unemployment rates were thought to be the ideal path for controlling inflation. The Democrats began talking about how free markets can supply social goods more efficiently than government. Unions increasingly were thought of as villains, not the providers of a middle class for workers. Hard-won gains on Social Security and Medicare were readily sacrificed in the name of fiscal responsibility, while raising taxes in the almost lowest-taxed rich nation in the world was considered anathema.

But government has brought some of this disillusion on itself. Some of it needed taming and pruning. Promises and hopes were at times excessive. And it has too often failed to do what it is supposed to do well. But one reason was also that those in charge often didn’t believe in government. Reagan, for example, slashed budgets for key agencies. Increasingly, appointees saw government as a path to a good job once they left. Regulatory “capture” was widespread. Tax expenditures, like the home interest deduction, benefited the well-off far more than the rest. Companies enjoyed not merely loopholes but wonderfully lucrative and poorly administered government contracts. Democrats are not to be exonerated. They were leaders, for example, in deregulating key previsions that could have prevented the financuial crisis that began in 2007.

Maybe most sad, however, is that government stopped looking forward. I published a book a few years ago, to be found in our website’sLibrary,” The Case for Big Government, that emphasized that government was a primary, and arguably the most important, agent of change. One of the myths that dominate America is that in the 1800s we had a laissez faire government. That is far from true. Government built the all-important canals when commerce needed them and the remarkable free and high-quality public school system when it became clear education was imperative both to freedom and a prosperous economy. Government built the municipal sanitation and water systems. Government financed the railroads. In the next century, it built the highways, financed research in health and technology, and subsidized college attendance. Oh, yes, it also picked up the garbage, sent the mail, and fought a couple of major wars.

None of this was anticipated. The tasks could not have been written into the Constitution. Times change, economies grow and become more complex, and our knowledge changes as well. Today, we know that early childhood education is key to full lives. We didn’t always know that. Government should support it. We know that women need family support programs to join the workforce. And we know that markets don’t cure racism on their own, even though some Nobel laureates claimed they would.

One final point. I find that many people I speak to underestimate how deep and dangerous the conflicts among the American people have been over the nation’s history. I am not only talking about slavery, though that is obviously primary. But Thomas Jefferson had profound battles with John Adams and Alexander Hamilton about basic civil rights — remember the Alien and Sedition Acts — so much so that Jefferson felt obliged to assuage the differences in a famous State of the Union address. Andrew Jackson threatened to send in troops to force South Carolina to abide by new tariffs in the 1830s. Populism almost split the nation in two in the 1890s. America sent in troops to Arkansas in the 1950s to integrate schools.

This has not been an easy nation to run. Many were opposed to financing the canals, public education, and the municipilization of sanitation and water. These were all ideological battlegrounds, but fortunately the victory was usually in favor of community action, government support. Among America’s remarkable achievements has been an ability to resolve conflicts, not always peacefully, that almost rent the nation asunder. Post-partisan good will does not well define most of American history. Government was needed to resolve differences and proceed forward. None of that progress was ever inevitable.

Today, we are launching a new web site called It is the conversation locus for our new Rediscovering Government Initiative. We aim to restart a public discussion about the purposes and possibilities of government. We aim to present a counter-narrative to the cynical anti-government ideology that has dominated the nation since the 1970s. We do not want to tell people what to think. But we want to give them a place to think, comment, and argue. We will have open public discussions through presentations around the country, and our web site will be the repository of key information, news, research, and books on relevant subjects you, the reader, may miss. This blog will ideally be the cite of a new American conversation. We welcome all to participate. We will be open, searching, curious, and humble in pursuit of a healthy new discourse on how to govern ourselves.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Cross-Posted From The Roosevelt Institute’s New Deal 2.0 Blog

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

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