January 22, 2010 | Commentary on Economy
"I'm from the government and I'm here to help."
Ronald Reagan said those nine words were the most terrifying in the English language. His attitude has long encapsulated the distinctively American view of government: However well-meaning, it was an institution not quite fully trusted. As a result, despite its growth, the government's role in America has always been much more limited than in Europe and elsewhere.
With the inauguration of Barack Obama, it looked to many like that would change. But after the events of the past year, I believe that despite the wishes of the president and his supporters, Americans are no more ready to embrace big government than they were in Reagan's time.
The new president declared in his inaugural address that "the question we ask today is not whether our government is too big or too small, but whether it works." In other words, there was nothing uniquely undesirable about government actions. The statement served as a green light for an enormous expansion of government intervention in the U.S. economy and society.
That expansion, of course, was already under way some time before Mr. Obama was elected. Federal spending and regulation increased significantly during George W. Bush's years in office. And, in the last months of 2008, faced with widespread fears of an economic collapse, Mr. Bush responded with unprecedented government infusions of cash for Wall Street and Detroit.
Thus, as Mr. Obama took office, he found himself at the head of an already expanding government, with crisis at hand. He wasted no time gaining approval of a record $787 billion spending bill, expanding the financial bailouts, and even taking partial ownership of General Motors and Chrysler, in the largest nationalization of industry since Harry Truman's day.
But the Obama administration did not stop there. In short order, the White House launched a cornucopia of initiatives across the policy board. Health-care reform, climate-change regulation and financial-industry reform were all on the agenda, as were new rules for the Internet, more aggressive antitrust regulation, and stricter food and drug enforcement (with the Food and Drug Administration even threatening to regulate Cheerios as a drug, based on health claims made by General Mills).
The pendulum certainly has swung toward activism. But does all this signal a lasting change in the role of government, another New Deal?
The jury is still out on that question. Interestingly, the centerpieces of government intervention during the past year -- the financial and auto bailouts -- are least likely to permanently expand government. In fact, in many ways, the bailoutsturned out to be booby traps for Mr. Obama. Forking out cash to businesses was never very popular, and revelations of outsized bonuses and other excesses at recipient firms sparked public outrage. But the administration's subsequent attempts to impose pay limits on executives were seen as heavy-handed. They only worsened the public's opinion of the program. Meanwhile, the forced takeover of GM and (to a lesser extent) Chrysler furthered the negative impressions, leaving the Obama administration with a black eye. The result: future bailoutswill be harder, not easier.
Other initiatives still promise, or threaten, transformational impact. But these, too, have been troubled. The fate of health-care reform is still unclear, but even if a bill does reach the president's desk, it is likely to be less expansive than most big-government boosters had hoped for. And that battle -- combined with the bailout fiascoes and a slow economic turnaround -- has drained the president's political capital, making other agenda items much less likely to be achieved.
Still, the biggest obstacle to Mr. Obama's taking his place next to Roosevelt is the unpopularity of big government itself. Despite all the talk of change, Americans are still resolutely cool toward government. According to Gallup, some 57% of Americans say government is already doing too many things that should be left to businesses and individuals.
It's true that polls have always shown higher support for specific government programs than for government in general. But the number of Americans saying the government does too much is the highest in a decade. And polls on specific issues reflect the same trend, showing dwindling support for intervention on everything from health care to climate change.
Might support for big government rebound if it became more efficient? Probably. But every president since Herbert Hoover has promised more efficient governance. Such efforts never amount to much. Americans see that every time they visit the post office or deal with the IRS. And for that reason, Reagan's nine little words -- and an enlarged government -- will still ring alarm bells for most people.
First Appeared in the Wall Street Journal