A Historian Looks At Republican Support For Big Government

Julian E. Zelizer, professor of history at Princeton University’s Woodrow Wilson School, has reviewed how the GOP’s rhetoric about small government is hollow. I’ve often pointed this out, including in this data comparing spending under both Democratic and Republican administrations. Zelizer made the easy case with regards to spending under George Bush but didn’t stop there as he also reviewed spending under prior Republican presidents.

I’ve often argued that support for limited government is more important than the question of big versus small government. With all the functions it performs, the federal government will remain large regardless of whether the Democrats or Republicans are in office. What is more important than concern for the size of government is limiting the power of government. Republicans fail badly here as Zelizer wrote:

Bush and Cheney also embraced a vision of presidential power that revolved around a largely unregulated and centralized executive branch with massive authority over the citizenry. This was a far cry from the days of Ohio Sen. Robert Taft, a Republican who constantly warned about the dangers of presidential power to America’s liberties.

After the 2008 election, Cheney was not apologetic. He explained that “the president believes, I believe very deeply, in a strong executive, and I think that’s essential in this day and age. And I think the Obama administration is not likely to cede that authority back to the Congress. I think they’ll find that given a challenge they face, they’ll need all the authority they can muster.”

Importantly, the marriage between conservatism and a robust federal government was not unique to the Bush presidency. The roots of Bush’s comfort with government can be traced to the Republican Right in the 1950s, members of Congress who called for an aggressive response to domestic and international communism.

Both the Democrats and Republicans haves supported a large federal government. Where we hope to see a difference is in the amount of presidential power and the break down in checks and balances during the Bush years. There is the danger that any president will be reluctant to reduce their own power. While Dick Cheney could turn out to be right on this, I would not put much stock in predictions from the man who predicted that Iraqis would greet Americans with flowers.

Republicans also supported bigger government with regards to the areas in which they allowed the government to act, especially as they embraced the agenda of the religious right. Republicans have supported bigger government with their intervention into end of life decisions in the Terri Schiavo case, as they attempt to restrict abortion rights and sales of contraceptives, and in their ballot proposals to ban gay marriage. The Obama administration has also supported less federal government intrusion in the lives of individuals, as well as the actions of state governments, in pledging to respect state laws legalizing medicinal use of marijuana.

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31 Comments

  1. 1
    Eclectic Radical says:

    I have to agree with Cheney’s statement that President Obama is not likely to simply hand all that power back.  It is very difficult to give up power once you had it. Jefferson was a tremendous advocate of strict constructionism and a weak executive until he was president, and then he used Hamiltonian language to do the things he believed the government needed to do and justify his ability to do so. Jefferson opposed the way the executive was strengthened under Washington and Adams, but he didn’t give all the power back.

  2. 2
    Ron Chusid says:

    Considering human nature, it is possible Obama will not give up all the additional powers. It is likely he will institute measures to reduce risk of abuse of power, along with reducing executive power in some areas. He has already given up torture, and surveillance of Americans should be greatly reduced. It is also far less likely that his signing statements will propose such blatant disregard for the law.

  3. 3
    Eclectic Radical says:

    I agree with you. I believe he has already done good, strong work to begin to repeal the worst abuses of the Bush White House and that he will continue to do so. As a friend of mine in Israel said to me, we may have all those American freedoms we’re so proud of back in a year or two.

    I’d note, however, that recanting the abuse of power and recanting the power itself are very different things. I don’t think we’ve seen the end of the imperial presidency just yet.

  4. 4
    Ron Chusid says:

    I agree that considerable power will remain in the presidency, as was the case even before Bush took office. The question is over the increased presidential power grabbed by Bush and Cheney.

  5. 5
    Eclectic Radical says:

    Well, the Obama Justice Department has defended some of those powers even as the president himself has recanted the way they were used. This raises the possibility that there may be a belief in some circles that it was not the power Bush claimed but the way he misused it that was the problem.

  6. 6
    Ron Chusid says:

    I think it is too early to say what Obama’s legacy will be on some of these matters. I think that so far their primary motivation in their defense of some of these powers has been to avoid prosecution based upon past offenses. I suspect that there is still more to come with regards to where Obama defines these executive powers.

  7. 7
    Eclectic Radical says:

    I am certain that you are right about there being more to come. Nor am I willing to say that you are wrong about the substance of what is to come. I am usually a proponent of the ‘wait and see’ school of thought myself. My natural cynicism creeps through a lot on some of these issues.

  8. 8
    Ron Chusid says:

    It is also a matter of what you are expecting. Those who expect Obama to do everything they want with regards to decreasing executive power are going to be disappointed. On the other hand just being better than Bush isn’t enough. Obama will be somewhere in between Bush and a perfect record on these issues. It remains to be seen exactly where he will wind up.

  9. 9
    Eclectic Radical says:

    I have to agree with that assessment, yes. I am doing my best to have no expectations at all and see what happens as it happens, sometimes it is hard, simply because one is glad Bush is gone and wants the world. Generally, I have a good differentiation between what I want and what I expect, though. 🙂

  10. 10
    Miraj Patel says:

    It really is an ironic situation because hypocrites such as Bush said they were free market capitalists and small government people, yet all of their policies were quite the opposite. We really gave it to the Democrats this time because they can criticize the neocons for saying they were small gov’t people (when in reality they weren’t) and tying it with the nation’s current problems. What they need to realize is that Bush was a big government man and those policies are what have fueled this crisis. You admit yourself in this post that Bush increased the size of government. So why do so many Democrats flinch when people say big government was a huge driver in this crisis?

  11. 11
    Ron Chusid says:

    Agreeing there was big government and agreeing that this was the cause of the crisis are two different things. Big government is such a vague term. With all the things government is now involved in we are going to have big government regardless of which party is in power. The differences are in what they do with the big government.

  12. 12
    Eclectic Radical says:

    The economic crisis is primarily a result of government being too small in the wrong places. Many of Bush’s other messes are the result of government being too big in the wrong places. The big knock on the Bush administration is not the problem of big or small government, but the problem of a theory of government that says ‘government exists to serve the needs of the ruling class and what’s good for the ruling class will be good for the country by default.’ 

  13. 13
    Ron Chusid says:

    Besides the questions of being too big or too small there’s also the problem that Bush tried to do much of it on credit.

    Out of power conservatives promote a fantasy that the government can be shrunk to a small size and we can still live in the modern world. Inevitably once in power they not only are unable to shrink the government but generally wind up enlarging it.

    A major motivation for supporting smaller government is having lower taxes, which is an entirely understandable desire. Republicans started trying to please everyone by simultaneously enlarging the government and lowering taxes. Voodoo economics does not work. If only George H.W. Bush had both continued to spread the message he was spreading before joining the Reagan administration and had taught this to his son.

  14. 14
    Miraj Patel says:

    @Ron I agree that big government and whether it was the cause of the crisis are different things. Either way, look at the role Fannie and Freddie (which are part of government) and the Federal Reserve played in this mess. And then of course there is the whole debt issue caused by big government…

    One thing that I think you need to clear up is what you think conservatives are. These people that claim they are conservatives, yet double the size of government and start wars when they aren’t necessary are not true conservatives because true conservatives believe in small government and anti-war policies. These people are hypocrits, many of them a part of the neoconservative movement- there really is a difference between real conservatives and hypocrits/neoconservatives.

  15. 15
    Eclectic Radical says:

    The role that Fannie and Freddie played in the crisis was as victims. Both agencies are forbidden by law from making sub-prime loans. The ‘prime’ rate, in fact, is the rate that Fannie and Freddie charge a bank to back a loan that meets their standards. Those standards are very strict. They suffered when the housing market tanked because of the general collapse, many of the banks who had borrowed money from Fannie and Freddie to secure prime rate mortgages were unable to pay Fannie and Freddie back for even the ‘safe’ loans because they were so over-invested in sub-prime loans themselves.

    I realize that current neoconservative talking points paint Fannie and Freddie as the villains of the piece, but this is simply not true and the facts and the rules by which Fannie and Freddie operate by bear this out.

    The Fed’s role in the crisis was not an issue of ‘big government’, it was an issue of government failing to govern. The Federal Reserve failed to regulate both sub-prime loans and the resultant securities market in mortgage insurance and mortgage funds properly. The SEC also abdicated its regulatory duties in regard to the securities resulting from these mortgages.

    In this sense, bigger government (or at least active government fulfilling its responsibilities) would have mitigated or prevented the financial crisis.

    The debt issue is a separate issue, and is less a problem of ‘big government’ than of reckless tax cuts and irresponsible budget decisions. I’d go into more depth, but the comment would risk running longer than Ron’s post and I am trying to stop doing that. 🙂

  16. 16
    Fritz says:

    Eclectic, I believe you are incorrect.  For example, take a look at this 2007 press release from Freddie Mac in which it announces tougher standards for subprime loans before it will buy them.  If Freddie Mac could not buy subprime loans at all then why would it announce tougher standards for buying subprime loans?

    http://www.freddiemac.com/news/archives/corporate/2007/20070227_subprimelending.html

    McLean, VA – Freddie Mac (NYSE: FRE) today announced that it will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. First, Freddie Mac will only buy subprime adjustable-rate mortgages (ARMs) – and mortgage-related securities backed by these subprime loans – that qualify borrowers at the fully-indexed and fully-amortizing rate. The goal is to protect future borrowers from the payment shock that could occur when their adjustable rate mortgages increase.

  17. 17
    Eclectic Radical says:

    Thee question of the purchasing of loans is a different kettle of fish. Freddie and Fannie normally operate by ‘guaranteeing’ a bank loan, loaning the bank the money to make the loan. The interest they charge the bank is the ‘prime’ rate.

    The buying of sub-prime loans was a management decision, and a poor one, but one made in good faith under prevailing market conditions and under a certain degree of political pressure from the White House. Freddie Mac toughened its standards in 2007 to make doubly certain it was protecting the tax-payers who fund it, in fact the toughening of these standards is an argument against the ring wing talking point that Fannie and Freddie are somehow at fault for the credit crisis.

  18. 18
    Fritz says:

    Eclectic — Actually, I believe that there is a lot of documentation that much (perhaps most) of the pressure on Freddie and Fannie to lower standards came from Congress.   Nobody wanted the party to end.

    In the real world I doubt if it made all that much difference whether Freddie guaranteed a subprime loan to begin with or whether the loan company originated a subprime loan and flipped it immediately to Freddie.  In both cases, Freddie and Fannie provided an incredibly-deep pocket of money for bad loans.

    It’s pretty clear that cleaning up their act in 2007 was way too late.

  19. 19
    Eclectic Radical says:

    We can probably argue about it round and round, but Republican statements that it is the fault of Democrats in Congress, minority loan programs, and ACORN fall into the ‘talking points to get people off our ass’ category. They simply aren’t true.

  20. 20
    Miraj Patel says:

    At the end of the day, Fannie and Freddie still backed these loans and government restrictions on the company really hurt them. You said it yourself. Now look at Sallie Mae, the education loan backer, which was privatized some years ago. Ever since it was privatized it has been a lot more profitable and a lot more successful. Just an example of how the government shouldn’t have been involved in the first place- you can say there should’ve been more “governing” or more regulations, but at the end of the day those hurt the bottom line even more and make these government sponsored enterprises even less efficient compared to their private counterparts.

  21. 21
    Eclectic Radical says:

    At the end of the day, Fannie and Freddie backed those loans because of the lack of proper ground rules restraining them from doing so and the prevailing mood of ‘the market’ by which free marketeers swear.

    Sallie Mae is still not wholly ‘privatized’ and its privatization has greatly damaged the federal loan programs it exists to secure and contributed to the increase of education costs around the nation.

    At the end of the day, regulations telling banks they cannot provide sub-prime mortgages prevent banks from providing sub-prime mortgages and destroying the bloody economy. If that doesn’t make sense to you yet, then I cannot explain it more clearly.

    Let me repeat:

    At the end of the day, government regulations preventing private business from tanking the economy for the next decade prevent private business from tanking the economy for the next decade!

  22. 22
    Eclectic Radical says:

    Any attack on regulations in the interest of ‘greater efficiency’ entails the desire to take more risk in order to make more money. I’d say prohibitive risk that does massive damage to the economy is less ‘efficient’ that regulations managing that risk. One cannot blame the government for the decisions made by banker, brokers, and investment counselors. One can question why there were no regulations to prevent those bad decisions and blame the government for repealing or failing to enact them.

    With Fannie and Freddie, one cannot blame ‘the government’ for decisions corporate officers made according to the mood of the market. One can question why the ground rules did not restrict those decisions from being made and blame the government for the lack of clear ground rules.

  23. 23
    Fritz says:

    Eclectic — one (by all means not the only one) of the factors in the mortgage disaster was that regulations were enacted that increased the risk. 

    I understand that that is now a “conservative talking point” and it certainly can be (and is being) over-emphasized, but it is also true.

    Frannie and Freddie were time bombs because they had the leeway to act as if they were private firms but there was the clear expectation (now realized) that if their schemes did not pan out the government would bail them out.  This kind of hybrid system is inherently unstable.  The bailout enthusiasms of both the Bush and Obama administrations have made this far more dangerous.

    It is also obvious that there is a systemic failure in corporate governance — in theory (but clearly not in practice) board members are supposed to reprsent the owners of banks and other firms and keep CEOs honest.

  24. 24
    Eclectic Radical says:

    The problem with ‘theory’ is that it does not include human elements. Now I actually agree that Fannie and Freddie should not have been allowed to buy sup-prime paper in the first place. However, Fannie and Freddie were not ‘time bombs’ because of the hybrid system of their management anymore than AIG was a ‘time bomb’ because it was a private firm. Lenders of all stripes made poor decisions because the proper system of law and order to prevent reckless endangerment of the economy did not exist.

    Lots of things are supposed to work in theory. In theory I am not supposed to take a gun and kill my neighbors. In practice, however, we have laws and police to deal with the possibility than I might take a gun and kill my neighbors. The situation of our economy over the last eight years is similar to the situation in Chicago during Prohibition: the police have been ‘ on the payroll’ of the very people who were ‘breaking the law’. The SEC, the Fed, and Treasury were staffed (or at least managed) by people uninterested in doing the real job of those institutions, who believed their job was to get out of the financiers’ way and let them do their thing. That did not work.

  25. 25
    Fritz says:

    Eclectic —  you see AIG, et al, as a failure of regulation and I see them as a failure of the structure of ownership.  That’s a pretty vast gulf.   AIG should have been put into bankruptcy court — IMO the consequences would have been dire but would have been over far more quickly than what we now will face (which, IMO, will be multi-generational).

    Unfortunately, we will probably come out of this disaster (for some definition of “come out of”) with much clunkier and more burdensome regulations but with no meaningful improvement in corporate board responsibility.

  26. 26
    Fritz says:

    So in that train of thought, why are the board members of AIG not under felony criminal indictment?  They were sworn to bear fiduciary responsibility to the owners of the corporation — a duty they failed in miserably. 

  27. 27
    Eclectic Radical says:

    I agree, they should be under indictment. So should the board members of more than one other company. The only reason they are not is that both the neoconservatives (Republican AND Blue Dog) and the New Democrats have the same view of ‘capitalism’ in this instance: which is to say they don’t believe in it.

    Honestly, though I think what President Obama is doing is better than nothing, I think more along Paul Krugman’s lines than the White House’s lines on these issues. I would like to see a far more robust, New Deal era response to the financial crisis: temporary nationalization of banks, arrests and indictments of corrupt management, and let AIG go broke.

    I actually agree with you about letting AIG fail, though not for the same reasons. The excuse for bailing out AIG is that it is necessary to save the banks, yes? Yet we are bailing out the banks. So why do we care what happens to AIG if we are already taking care of the banks ourselves?

    I don’t expect you to agree, I just don’t want you to think I am endorsing the current administration’s line all the way. .. if from the precisely opposite direction.

  28. 28
    Fritz says:

    The board of WaMu should be in the slammer also.  And I’m sure we could come up with a number of others.

    Seriously, public trading of corporate stock requires that the stock holders have honest representation. 

  29. 29
    Eclectic Radical says:

    I think we are both in full agreement about that. It’s just everything else we disagree on. 😉

    Seriously, though, I think that the way the public trading of corporate stock is handled right now is a great part of the problem. The purpose of stock is to raise capital to pay for business operations, in return for a share of the success or failure of the company. Does it ever seem to you, these days, that the stock price has become more important than the business operations and the latter are driven too much by the former?

  30. 30
    Fritz says:

    Eclectic, once more we find ourselves in violent agreement.  This is becoming a dangerous trend.

    During the dotcom bubble I was astonished at the insane stock prices for companies that never had shown a profitable quarter and had no intention of ever handing out a dividend.    It seems like yet another game of “last person holding the bag loses”.

  31. 31
    Eclectic Radical says:

    It works is reverse as well. The fall of the stock price can have drastic affects on business operations even when a company is perfectly profitable. How often do we see layoffs, cutbacks, and pronouncements of doom when the market crashes when the companies whose stock has fallen are perfectly healthy and profitable before the stock crash? If my stock sells for eighty dollars a share and a market correction drops the price to thirty dollars a share, but my company is doing the exact same business it was doing before the correction, do I have any reason to panic and lay people off? My company is still profitable. Artificial measure drove the stock up and pulled it back down, nothing about my company has changed.

    Yet drops in stock prices are often treated with an exaggerated sense of doom by both company boards and private investors.

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