- Frank Knight and the Place of Principles in Economics and Politics - May 13, 2021
- Hayek’s Still Relevant Response to Today’s Paternalist Planners - May 12, 2021
- Biden’s Agenda of “Democratic” Paternalism and Planning - May 3, 2021
“I’m from the government, and I am here to help!” This line has become a cynical joke among large numbers of Americans, and it often cuts across differences of political opinion concerning the role and activities of government in modern American society. This has continued with the government’s response to the coronavirus crisis, and especially the longer it goes on.
The last several months has witnessed a huge explosion in government spending and borrowing, a pattern that is likely to continue for the remainder of 2020, as well as into 2021 and even beyond. In its May 2020 Monthly Budget Review for April of this year, the Congressional Budget Office (CBO) calculated that already for the first seven months of the federal government’s fiscal year that began on October 1, 2019, Uncle Sam ran a budget deficit of around $1.5 trillion, when back in February of this year, the CBO was projecting a deficit of just over $1 trillion for the entire fiscal year.
Under current legislation (including the coronavirus-related planned and implemented expenditures) and the projected likely revenues that will be collected for the rest of this fiscal year from all sources, the CBO estimates the final, total federal budget deficit is probably going to be about $3.7 trillion, with a budget deficit of $2.1 trillion to follow in the 2021 fiscal year.
Are People Pro-Freedom or Pro-Paternalism?
Politicians, media pundits, and government policy “experts” have all insisted that every dime of these extra expenditures is essential to fighting the pandemic and bolstering the financial positions of tens of millions of people who have been negatively affected by the stay-at-home restrictions, the production lockdowns, and the prohibitions on “nonessential” retail shopping.
The public policy arena is filled with proposals for how to handle the remainder of the crisis and for what will follow when it is over. Government’s expanded spending largess is offered as the basis for establishing a “Universal Basic Income” supplied from the political purse; it is seen as the gateway for instituting a Green New Deal to transform how we permanently live and work, in the name of “saving the planet;” it is proposed as a means for guaranteeing a $15 an hour mandatory minimum wage; it is said to “prove” the need for guaranteed national healthcare for all; and to show the desirability for lasting and widened trade protectionism to secure supplies of “essential” goods and to strengthen the availability of “American” jobs. The list is almost endless.
But what do Americans think about all of this and what do they want and expect from the government versus relying on themselves and for solutions through market transactions and the voluntary associations of civil society? In other words, do people want more personal freedom of choice or more political paternalism now and in the future?
Based on the number of public demonstrations and angry insistences by growing numbers of people calling for the end to the shutdowns and the restrictions on people’s movements and interactions that have been imposed by, especially, the state governments in conjunction with the federal authorities, the impression could easily be made that many if not most Americans want government out of the way and less intrusive.
Alas, that is very far from the truth, based on attitudes and views expressed in a variety of public opinion and survey reports about the “mood” of the people and what they think about government in society.
Trust in Government Has Long Been Trending Down
A little over a year ago, when the threat of a global pandemic was far from being on the radar of almost anyone, including most of those in government, the Pew Research Center released its report on “Public Trust in Government, 1958-2019” (April 11, 2019). It explained that when these surveys were begun in the late 1950s, about 75 percent of Americans said they had trust in the U.S. government all or most of the time.
While the annual results have zigged up and zagged down over the decades, the unmistakable trend line has been in the decline. When the Pew survey was done in March 2019, those having such trust in government all or most of the time had sunk to an overall low of 17 percent.
Even when asked in terms of the respondent’s political affiliation, it never reached more than 60 percent of trust in government among Republicans after the 1950s (when it was 80 percent), and that was right after the 9/11 terrorist attack in the first year of the George W. Bush Administration. For Democrats, trust in government briefly reached around 50 percent during the Clinton Administration in the 1990s, but never rose above around 40 percent during Barack Obama’s time in the White House, after there being about 70 percent trust in government in 1958 during the Eisenhower presidency.
The same trend is seen across generational age groups and racial and ethnic categories, as well. Interestingly, about 70 percent of both whites and blacks said in 1964 they had such trust in government, according to the Pew survey, but in general, the trend followed the same noticeable downward movement, though with significant ups and downs over the last 60 years.
The next highest temporary zig up before zagging back down for whites was during the 9/11 crisis, when it reached 60 percent. For blacks, it never rose above 40 percent, even during the Obama years. In March 2019, when the latest Pew survey was taken, trust in government all or most of the time among whites was 17 percent, 9 percent among blacks, and 28 percent in the Hispanic community.
People Want More and More Government Spending
However, at the same time, and in spite of this low degree of trust in government in early 2019, sizeable majorities (52 percent to 72 percent depending on the policy issue) in an accompanying Pew survey, still wanted government to take responsibility and spend more for a wide variety of programs, including education, veterans services, highway and bridge infrastructure, Medicare and related healthcare programs, the environment, and scientific research. A significant number of respondents, in the 40s percentage range, wanted enlarged government expenditures for Social Security, assistance for “the needy,” and anti-terrorism activities.
Only small minorities of the respondents wanted less government spending on these types of programs and activities. Support for cutting spending in these areas was mostly less than 20 percent of those surveyed, and in many cases in single digits. Not too surprisingly, those labelling themselves as Democrat or Democrat-leaning were among those most wanting more of these types of government expenditures (except for anti-terrorism and military defense spending). Republicans and Republican-leaning people surveyed were less supportive of some of these spending categories, but when it came to education, veterans benefits, infrastructure, anti-terrorism and military expenditures, they, too, responded with majority percentages for more dollars to be spent in these directions.
Overall, respondents in the 2019 Pew survey were evenly divided on the general issue of the size and scope of government, with 47 percent, respectively, saying they were for or against bigger versus smaller government, with more or fewer government services.
People Expect More from Government in the Virus Crisis
And what about now, a year later and several months into the coronavirus crisis? In a new Pew survey, “Most Americans Say Federal Government Has Primary Responsibility” (May 12, 2020) for handling aspects of the response to the virus, more than 61 percent consider it Uncle Sam’s job to be overseeing and providing the needed testing for the virus. That number is 78 percent among Democrats and only 42 percent of Republicans. On the other hand, 57 percent of Republicans said testing is the responsibility of local and state governments, while that view was shared by only 21 percent of Democrats.
Republicans and Democrats in the high 80s percentages think hospitals and medical centers have been doing excellent or very good jobs in dealing with the Coronavirus. Both give 60s percentages to local and state government officials, though Republicans are more positive about them. Concerning those in the news media, 64 percent of Democrats considered that they are doing an excellent or very good job in reporting on and analyzing the coronavirus crisis; Republicans only give the media a 25 percent positive rating. And, perhaps, least surprising, 77 percent of Republicans think President Trump has been doing an excellent or very good job in handling the health crisis, while only 11 percent of Democrats feel the same way.
While both Republicans and Democrats consider that the coronavirus is having a major effect on the U.S. economy (88 and 89 percent, respectively), only 43 percent of Republicans view the coronavirus as a serious health concern to the people of America as a whole (and only 27 percent consider it to be a personal risk), while 82 percent of Democrats view as a serious health risk to the whole country (while 47 percent of them considered it to be a risk personally).
Mistrust and Cynicism About Government in the Crisis
Doing their own limited public opinion survey in late May 2020, The New York Times (May 23, 2020) highlighted the double-mindedness of the Americans with whom they spoke. Most of their respondents thought government should be doing more in providing health services, supplying cash money and financial subsidies to tide people over that have been negatively impacted by the coronavirus; but almost all of them, at the same time, said that they do not have trust or confidence in the government to solve the problem or give them the helping hand for affected people needing or wanting it.
The corporate “big guys” are getting the lion’s share of the trillions of dollars of federal money, while the “little guy” gets crumbs or nothing, one responder said. An Iraq war veteran said, “I don’t trust these people [politicians], I don’t believe them. The people whose interests they represent are donors, power brokers, the parties.” A Democrat planning to vote against Trump, despaired, “Me voting for Joe Biden isn’t going to change any of that. That’s what’s frustrating.”
Reflecting these sentiments were the results of a Gallup opinion poll emphasizing that “U.S. National Mood Shows Little Improvement in May” (May 19, 2020). Among the people surveyed during the first two weeks of May, 40 percent expressed disappointment with the government and its poor political “leadership” in handling the coronavirus crisis. The only number coming close was the 24 percent of people concerned with the U.S. economy’s tailspin during the last several months.
Pro-Spending Policy Views Have Been Building Up for Decades
Friends of freedom concerned with an increased “drift,” in the direction of far more government regulation and redistribution due to the policy responses to the coronavirus, need to realize that that trend had been picking up speed for a long time in the United States. The current health crisis is merely accelerating that movement.
Back in 1938, the classical liberal essayist and author, Garet Garrett (1878-1954), pointed out to people that “The Revolution Was.” The theme of his monograph was that those concerned about a collectivist and paternalist shift coming in the United States missed the reality that that shift had already been going on ideologically and politically for many decades in the United States. Franklin Roosevelt’s New Deal response to the Great Depression merely brought out through more direct and comprehensive government controls and plans the political-philosophical “revolution” that already had happened in America by that time.
The seemingly loud clamor today for more government spending and increased redistributions to “save” people drowning in the tidal wave of failing businesses and rising unemployment really is merely an intensification of the same ideas and trends that have been at work during the decades preceding the arrival of the coronavirus.
The Pew Research Report from 2019 on people’s insistence on “more government” in education, healthcare, retirement, infrastructure, assistance to “the needy,” and in environmental matters, as well as anti-terrorism and national defense spending, even while expressing their distrust in government and those holding political office, shows that these attitudes, beliefs, and demands were already there and at work. The coronavirus has simply added to the amount of more government intervention and redistribution at an increased speed that is wanted by, unfortunately, far too many of “the people.”
The Uncertain Costs of These Increased Government Burdens
Bernie Sanders with his call for “democratic socialism,” Donald Trump’s slogan about “Making America Great Again,” and Joe Biden’s feeble-minded (yes, there is a double meaning here) call for more spending, more regulation, and more interest-group pandering, are demonstrations that these are not new or “alien” ideas, but reflections of the already existing climate of opinion in the United States.
There is little or no way of knowing for sure how long this coronavirus crisis will continue, or how extended over time will be the full recovery from the negative output and employment effects caused by the government lockdowns. Nor can we be sure, looking to next year and beyond, what will be the final financial bill that will have been added to the U.S. national debt.
Neither do we know, looking ahead to a year from now, what the rate of price inflation may be, given the Federal Reserve’s decision to open the money-creation floodgates to upwards of $4 trillion or more of central bank lending power through traditional banking instruments and more direct “loans” to designated and selected business sectors and enterprises. With the latter, financial markets are threatened with a dangerous increase in the politicization of investment decision-making.
Wilhelm Röpke’s Cautious Optimism at Times of Pessimism
It is easy at times like these to become overly pessimistic and despondent about the political and economic shape of things to come. But friends of freedom have been here before. This was certainly the case during the Great Depression of the 1930s, with rising totalitarian collectivism on the continent of Europe in the forms of Soviet socialism, Italian fascism, and German National Socialism (Nazism), with the expanding role and presence of government in American social and economic life with the coming of the New Deal, and the changing political sentiment that all of this was inescapable and inevitable.
In the middle of that earlier decade, the free market economist, Wilhelm Röpke (1899-1966), who had been forced to leave his native Germany due to Hitler’s rise to power in 1933 and into exile at first for several years to university teaching in Turkey before finally settling in Geneva, Switzerland, published an English translation of his work, Crises and Cycles (1936).
In the new introduction that Röpke wrote for this English-language edition, he told the reader that it is easy to fall into the belief that all is lost, that one is living through an epoch change in the social order and the economic system, and that liberal society and its accompanying market economy is at their end in the face of the rising tide of collectivist central planning and the government command and control that was visible all around.
What was essential, Röpke argued, is to not lose historical perspective. Yes, such turning points in human society have happened in the past and the events of the present may forebode the coming of another such epoch change. But it is just as possible that it is not such a time, and that when the existing crisis and trends have run their course for a period of time, much of the liberal society and its market economy may be left standing in place, surviving the collectivist challenge and continuing its interrupted path toward liberty and prosperity after a period of intellectual and policy recovery. Or as Wilhelm Röpke expressed it in 1936:
There is another danger of which both author and reader must beware: that of viewing the matter in the wrong perspective; that is to say, attaching too much importance to the events of the moment and consequently failing to see things in their historical perspective.
Let us not be too hasty in expressing the opinion that Providence is doing us a special favor by allowing us to witness (or even to be instrumental in introducing) a new epoch of world history . . . Only people devoid of historical sense could so quickly forget that it is a mere matter of fifteen years since the [First] World War brought greater suffering to humanity than the present world crisis has done. . .
At that time, too, there were people who were quick to assume that the wartime economy had come to stay, who . . . predicted the end, once and for all, of the competitive economic system, and the definite bankruptcy of Liberalism. And yet, after the war, with almost elemental force, all that was said to be dead – world economy, the gold standard, capitalism and liberalism – came into being again, and swept away the hysteria engendered by the war as if it had been the figment of a dream!
It would be well if we at the present time were to keep cool and collected, and to behave in such a way that when in the days to come we look back upon the vortex of this crisis we need not blush at the recollection of our hysteria. We may venture, without undue optimism, to predict that those who have let the outcry of loud-mouthed prophets and reformers turn them from their belief in the lasting validity of the principles which have given the economic and social system of the West all its greatness will be proved right in the end. We must at least reckon with the possibility that after this devastating crisis, as after the war, most of what is today being so loudly decried and reviled will come into its own again.” (pp. 2-3)
Opposing the Political Paternalistic Trends
Röpke added that, “even if we were utterly pessimistic for the future of our economic system, we might still be driven to mobilize all our energies in favor of an economic policy directed against such a disastrous [collectivist] development . . . Everything depends on the question as to whether the economic system can be preserved if only man will bring his efforts to bear.”
Too many of our fellow citizens have come to take it for granted that governments are there to take care of us, seemingly, from cradle to grave, in both good times and in bad ones such as the present. They falsely turn to and expect “leadership” from those in political authority and power to direct taxed or borrowed or created money in their directions, with little or no thought of upon whom the tax burden is to fall to fund such fiscal largess either in the present or in the future when debts accumulated are supposed to come due. Or what might be the consequences at some point later on when all the paper money created may cause currency depreciation and diminished wealth and purchasing power from significantly rising prices.
And, yet, the opinion surveys also show that frustration and lack of trust among large numbers of the American citizenry concerning the motives and actions from politicians and those gaining from the corrupt redistributive plunder that accompanies the interventionist-welfare state. Promised manna from heaven, many Americans find themselves played for suckers by those who use government for their own interested purposes under the cover of altruist rhetoric coming from politicians and bureaucrats and dispassionate “experts” saying that they are guiding the ship of state for the benefit of the common man, for the “little guy.”
Openings and Opportunities for Making the Case for Freedom
This becomes the opening and the opportunity for friends of freedom. First, to explain as persuasively as we can that there are no free lunches at the feeding trough of the government. There are socially high and economically debilitating costs associated with dependency upon and control by those in government, even at times of serious hardships like those being experienced by many in America today.
This leads to the second explanation that we must share with our fellow citizens. However serious the dangers from the coronavirus for the physical health of the society as a whole and those, especially, in certain age categories with medical preconditions, or in particular racial and ethnic groups, the economic nightmare has been man-made by those in political power on the basis of incomplete scientific knowledge and faulty best-practice methods of dealing with the virus through harsh and counterproductive forced quarantining of huge sections and segments of the society. The economy and all of us participating in it have been, at least temporarily, severely damaged due to a disastrous social policy forced on us all through misguided government command and control.
And, finally, we must reason with our fellow countrymen that the corruption and abuse of the trust that too many have started out with having about and expecting from government is inseparable from and inescapable in any system of political paternalism. It is the nature of the beast.
If government has the authority and the power to command and control; if it has the legitimacy of using its power of coercion to tax away from Peter to hand over to Paul, or to restrict or regulate the peaceful and voluntary associations being carried out by Jack to benefit Jill through market restrictions, fiscal subsidy, or trade protection, those who anticipate gaining the most by “playing the system” will do so, and always at the expense of most others in society who do not have the connections and financial pull as the more well-positioned ones in society usually have.
If there is a chance to not only pull society away from the social and economic abyss towards which it is moving, but return it to a path more in the direction of personal liberty, economic freedom, and equal individual rights under partial rule of law and constitutionally limited government, it requires resisting the pessimism that all is lost and irreversible, and having the courage and willingness to try to restore the free society.