REALITY CHECK

REALITY CHECK

A long time ago, thirty-three years ago in fact, I worked for a Reagan appointee.

He was a former Yale Law professor appointed to the US Court of Appeals for the Second Circuit by President Reagan.  He was among the first-wave Reagan appointees -- Scalia, Posner, Bork and Winter -- who were supposed to change the federal judiciary.

I will leave it to the legal scholars to determine whether that, in fact, happened.  On the impact of Reagan, however, my then-employer (and now forever friend) often talked about the impact the new President was having on the nation.  In his view, it was nothing short of monumental.  Reagan -- after FDR and LBJ and the '60s and the explosion of government -- had totally changed the conversation.

So much so, I later thought, that by the mid-1990s a Democratic President proclaimed that the "era of big government is over."

But they were all wrong.

In fact, in 2015, we still live in the era of big government.

And here's why.

First, the conservatives never turned their rhetorical majority into a governing one.  The government actually grew during Reagan's term. Even his much vaunted tax cuts were overcome by his later (euphemistically named) "revenue enhancements."   Reagan at base was a pragmatist.  Anyone who studied him -- especially his two terms as Governor of California -- would have understood that, in office, he lived to pass laws as much as wow with speeches.  In fact, as Governor of California, he signed one of the most liberal pro-abortion laws in the country.

Reagan's history also belied the libertarian idolatry in which he was shrouded.  He wasn't a businessman.  He was an actor, a promoter. He was also a union president.  He knew that life was a negotiation and that labor and management were counter-parties, not adversaries.  He also never confused his self-interest (largely a function of anger at the 90% marginal tax rates that forced him, in his mind, to stop making movies each year at the number four because the rest were more or less being produced for Uncle Sugar) with the larger public interest (even if he said he didn't agree with it).

Finally, and not for nothin', at the time he served, he raised what turned out to be two very liberal kids -- Patti and Ron.

How'd they miss the message?

My guess is that it was never purely delivered.

Second, the problems we now face, and have faced for my entire life, can't be solved -- they cannot even be reasonably confronted -- by small government.  And certainly not by any version of the libertarian variety.  Take a look around.  The unregulated market is not going to confront climate change;  in fact, to the contrary, the market left alone -- in its ubiquitous adherence to time horizons that are always small, because they are ours and ours are small (generally the size, at best, of our lifetimes and, at worst, of our current predicaments) -- will run us into the global warming abyss.

And while the free market marches over the cliff of climate change, this generation's right wing "economists" -- trumpeting Hayek but always ignoring Keynes -- will re-enact in this 21st century the hard-money silliness that led to regular depressions in the last two.  Marx said that history repeats itself, first as tragedy and then as farce, and while his visions of proletarian grandeur were always wrong, his understanding of human nature was not.  The irony -- so my college Professor who taught the course instructed -- was that Marx did not really believe there was any such thing as human nature.

But he was wrong about that too.

There is.

And ignorance is part of it.

Hence our present day farce.

We know why growth in the world wide economy is -- today -- at best anemic.  There is still not enough demand to juice the engines of capitalist production and generate the jobs that put money in the pockets of all those would be consumers.  We also know that we have more or less reached the limits at which monetary policy -- central banks lowering interest rates --  can change this, and that -- in a world of more or less zero interest rates with little growth -- inflation is not remotely the problem.  We know all this because Keynes taught us as much more than eighty years ago, and those in the academy willing to look at the evidence (Krugman, Stiglitz, DeLong, et al.) have confirmed it for us today.

But tell that to the blowhards at CNBC . . .

Or those at the University of Chicago . . .

Or those in the government in Germany. . .

Or those running for the Republican presidential nomination.

They trumpet some version of hard-money, no spending,  limited government when exactly the opposite -- rigorous fiscal policy by big government -- is the needed remedy.

Third, and this may be the realest of reasons, Americans like big government.  In fact, we pretty much like anything that is big.  Big sky (Montana).   Big corporations (Apple).  Big ideas (the moon shot).

Which is why, however much they try, conservative small government types will never win.  No matter how many state governments they run.  

Because, sooner or later, small is insufficient.  

Just ask Kansas.   

Over the last four years they tried the full Monty of tax cuts and shrinkage, and now are facing service implosions and talking about raising taxes.

Sorry, I meant  "revenue enhancements."

Just like their hero.

Ronald Reagan.