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Coronavirus Means the Era of Big Government Is…Back
History shows that national shocks—the Depression, World War II, the
financial crisis—have a way of expanding the role of government in
lasting ways. This one is looking like no exception.
President Reagan spoke of the government as ‘the problem’ in his
inauguration speech in 1981. AFP/Getty Images
By Gerald F. Seib and
April 26, 2020 1:46 pm ET
History shows that big national shocks have a way of changing the role
of government in lasting ways—and any shock as big as the coronavirus
pandemic inevitably will alter political life and philosophies in America.
The crisis has been not just a public-health emergency requiring a
sweeping response, but also the cause of the most searing economic pain
since the Great Depression, summoning forth a multi-trillion-dollar
government intervention into the economy.
Much of today’s new government activism will recede over time along with
the virus. Yet conversations with a broad cross-section of political
figures suggest there is little reason to expect a return to what had
been the status quo on federal spending, or the prevailing attitude
toward the proper role of government.
“The era of Ronald Reagan, that said basically the government is the
enemy, is over,” said Rahm Emanuel, a moderate Democrat who served as
mayor of Chicago, a member of Congress and President Obama’s first White
House chief of staff.
An echo came from the other side of the political spectrum. “The era of
Robert Taft, limited-government conservatism?” said Steve Bannon,
President Trump’s onetime political guru, referring to the Ohio senator
who fought the expansion of government programs and federal borrowing.
“It’s not relevant. It’s just not relevant.”
The U.S. built a social safety net and added government programs during
the Great Depression. Above, a line for new jobs in parks in Cleveland,
Ohio, in 1930.
Photo: Associated Press
The Great Depression produced both a bigger social safety net and a host
of new government programs, World War II led to the creation of a
unified Defense Department and the Cold War spawned an interstate
highway system. In just the past two decades, the 9/11 terrorist attacks
produced new consolidated agencies to handle homeland security and
national intelligence, and the 2008 financial meltdown led to a broad
range of new actions by the Federal Reserve that are being replicated
and expanded now.
Today, both parties and a vast majority of voters have come together
behind a broad and aggressive response at both the federal and state
level, and have accepted a sea of new red ink at a time the federal
budget deficit already was heading toward a trillion dollars annually.
Mr. Trump, more a populist activist than a traditional conservative, has
enthusiastically backed that spending, ordered the construction of
pop-up hospitals, used his authority to order companies to produce
supplies, called for an additional federal infrastructure program and
offered an expansive definition of presidential power, including the
power to strip away regulations and bureaucracy in some instances.
There is bipartisan support for the government's expanded role during
the coronavirus crisis, unlike during the 2009 recovery from the
Source: WSJ/NBC News telephone poll of 900 registered voters conducted
from April 13-15; margin of error +/– 3.27 pct. pts.
In a recent Wall Street Journal/NBC News poll, voters of both political
parties said by a 2-to-1 margin that they approved of the expansion of
government’s role in the economy to meet the crisis.
Oren Cass, who leads American Compass, a new organization devoted to
revising conservative views on economic policy, argued that “one lesson
we can and should learn from all this is that you can’t just flip a
switch on strong, effective government when you need it. Just as you
can’t get rid of the Defense Department in times of peace and then
reconstitute it from scratch when attacked, you can’t push for the
smallest possible government in normal times and expect to be ready with
a competent response in an emergency.”
At the same time, while there was consensus behind government activism
as the crisis struck, a loud and angry backlash now is emerging over
whether the needle has moved too far, particularly on the state level.
Protesters have taken to the streets in recent days, saying that
political leaders, especially governors, have overstepped their
authority by closing down the economy and putting American jobs and
livelihoods at risk.
“We were already headed toward a conversation about whether we’re going
to have a socialist country or a capitalist country,” said Jenny Beth
Martin, co-founder of the Tea Party Patriots, an organization that
sprang up amid grass-roots anger over government bailouts in the 2008-09
financial crisis. “When we get past the virus, we’re going to have that
debate in a new way.” She and others believe a government overreaction
has taken shape in recent weeks, hurting many average Americans along
Road workers on a stimulus-funded freeway project in San Bernardino
County, Calif., in 2009.
Photo: Nick Ut/Associated Press
Similarly, Scott Reed, senior political strategist at the U.S. Chamber
of Commerce, is skeptical Republicans will continue to embrace big
government in the same way they do now. “The size of the government is
going to make Washington more and more relevant to the business
community,” he said. “But long term, I think the right of center, the
Republican Party, is going to want to roll that back some.”
Government spending rises amid crisis, and tends not to drop back to
precrisis levels—at least not for a while. Economists call the tendency
the “ratchet effect.” And while there is academic debate over its
extent, a look back shows that federal spending as a percentage of the
overall economy has never fallen back to its level before 9/11.
The ratchet effect may be more likely in the aftermath of this crisis
because of structural problems layered over crisis spending: an aging
population requiring more social services, aged infrastructure that
needs updating, and the costs of servicing a historically large level of
It is too early in this crisis to predict exactly how the size and shape
of the government will be affected in the long run. For now, perhaps the
clearest impact has simply been a shift in the public’s attitude toward
government institutions, which have been much maligned in recent decades.
Former Iowa Democratic Gov. Tom Vilsack, Mr. Obama’s longest-serving
cabinet secretary, said he expects that the “chants” he’s heard for the
past 40 years about government not mattering and being the problem are
likely to fade.
“This particular circumstance shows the importance of government at
every level and the need for all branches to be better coordinated,” he
said. “We’ve had people denigrate people in the post office and federal
workers. Well, who are the people working today and putting themselves
on the line?”
On the left, the crisis already is putting new energy behind calls for a
nationalized health-care system. Sen. Bernie Sanders has argued that
“the pandemic puts an even brighter spotlight on the shortcomings of the
current corporate-run system,” and his followers are pushing the argument.
The crisis is “expediting” a move toward a more progressive Democratic
Party agenda, said John Della Volpe, the polling director for RealClear
Opinion Research and Harvard University’s Institute of Politics.
Others are skeptical the crisis will fuel something so dramatic as
Medicare for All, the progressive proposal that got so much debate in
the Democratic primary race. “Clearly, inside the party, that discussion
will continue,” said Jim Messina, a Democratic strategist who ran Mr.
Obama’s 2012 campaign. “I don’t think it affects the views of swing voters.”
TSA was created and became part of the new Homeland Security department
after 9/11. Above, Los Angeles International airport.
Photo: mario anzuoni/Reuters
On the Republican side, the big government response in the current
crisis stands in stark contrast to the view articulated by the party’s
longtime hero, the late President Reagan, in his first presidential
inaugural address in 1981. Then, amid an earlier dark economic downturn,
he declared: “In this present crisis, government is not the solution to
our problem; government is the problem.”
Many Republicans argue that the current economic crisis is fundamentally
different because it was caused by government orders to shut down
businesses and public places to prevent the spread of the coronavirus,
which means aggressive and expensive government action is justified to
rectify the resulting problems.
“Because government action is the cause of what is going on, this action
is much more acceptable in response, in Republican ranks,” said Eric
Cantor, formerly the second-ranking Republican in the House.
Christopher DeMuth, distinguished fellow at the Hudson Institute, a
nonpartisan think tank influential among conservatives, has argued that,
by clearing away regulatory hurdles for private companies seeking
answers for the virus, Mr. Trump has actually given a conservative,
deregulatory twist to the bout of government activism now under way.
The government is winning broader approval during the coronavirus crisis
than in 2009.
In the same vein, Sara Fagen, political director in President George W.
Bush’s White House, said that in its response to the health crisis
“government was clunky and slow, but companies quickly turned it on, so
there is some argument for free enterprise.”
In addition, Republicans have been willing to embrace the recently
enacted, $2 trillion economic rescue plan because a main feature was the
Paycheck Protection Program, which provides relief to small businesses.
Republicans consider small businesses the economic force more compatible
with their political philosophy than the big banks that were the main
beneficiary of the 2008 rescue package.
“Why is it that Republicans are willing to defend PPP?” asked Karl Rove,
chief political strategist for Mr. Bush. “Because it serves the
interests of their constituency, small businesses. Their view of a
modern society is not one dominated by large corporations, but one where
there is opportunity for small entrepreneurs to thrive and move up the
ladder of success.”
Share Your Thoughts
Do you approve of the government’s expanded role in the economy? Join
the conversation below.
As the country moves through and beyond the crisis, there will be a
debate about whether renewed government activism, whatever its extent,
ought to come at the national or state level. Governors and state
governments were widely seen as more nimble in responding to the
coronavirus pandemic at the outset, and have taken on an added
prominence that seems likely to persist.
Traditionally, Republicans have tended to prefer a federalist approach,
which seeks to move government power away from the national government
in Washington and out to the governors and the states.
Mr. Trump’s sweeping declaration this month that he, as president, has
“total authority” to decide when to order governors to loosen
social-isolation restrictions and reopen their economies runs directly
counter to that traditional conservative mind-set. Though he
subsequently backtracked on trying to exercise such powers, the tone he
struck was decidedly different from Mr. Reagan’s frequent invocation of
the Constitution’s 10th Amendment, which reserves for the states or the
people powers not explicitly granted to the federal government.
Long before this crisis struck, Mr. Trump had been moving the Republican
party away from its Reagan-era embrace of traditional conservative
precepts and toward a more populist view of government’s role. That
populist philosophy isn’t shy about using government power, or the
government’s checkbook, to the benefit of working-class Americans.
A demonstrator in Olympia, Wash., protested stay-at-home orders this month.
Photo: Elaine Thompson/Associated Press
Thus, in the midst of the crisis, the Trump administration declared that
the federal government would pay the coronavirus health bills of any
Americans without health insurance—and reimburse health-care providers
at the rates paid by the Medicare health program for the elderly. That
step appeared to offer at least a glancing nod toward a Medicare for All
system long advocated by the Democrats’ left wing.
Moreover, in direct contradiction to traditional Republican antipathy to
deficit spending and a growing national debt, Mr. Trump has explicitly
argued in favor of borrowing, at a time of low interest rates, to
finance a new, $2 trillion bill to rebuild and improve the nation’s
infrastructure. Even before the crisis, there was a push for a larger
national effort to build out a 5G wireless network, a cause that seems
even more relevant now that much of the nation’s work and learning has
Mr. Bannon argues that voters will see a powerful central government as
essential as the U.S. moves into a long-term era of confrontation with
China, where the coronavirus originated. A broad period of tension, he
said, “is going to change the focus of government.”
In the long run, the impact of the crisis may depend on how quickly or
how slowly the economy bounces back. Voters’ reaction may break not
along ideological or personality lines, but rather in favor of more
competent government at all levels—government that efficiently builds
stockpiles of needed supplies for use in a national crisis, for
instance, and responds quickly and efficiently when one strikes.
“The way the pendulum swings, the quieter, competent leaders might be
more in fashion,” said nonpartisan pollster J. Ann Selzer.
Write to Gerald F. Seib at jerry.seib-at-wsj.com and John McCormick at
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