Central to a functioning democracy is the relation of the federal government to the people it serves. This includes the right of peaceful assembly to carry grievances to government, and the right of citizens to criticize government and those who run it.
Everyone, regardless of political persuasion, can think of things they believe the federal government is doing wrong, and what it should be doing better. Constructive criticism is useful and necessary for government to address changing needs in a changing society.
But none of these shortcomings, real or imagined, make the federal government the enemy.
Ronald Reagan is generally praised, even by Democrats, for his sunny disposition and ability to connect with people. But even he had his downsides, including the Iran-Contra scandal for which he escaped virtually unscathed.
Arguably of more lasting damage was his vilification of the federal government and denunciation of its role. To the applause of conservatives, Reagan declared the nine most terrifying words in the English language, “I’m from the government and I’m here to help.”
Sure, everyone makes fun of, or criticizes the government now and then, and there are plenty of things we all think should be done differently — even though there is little agreement on what exactly should be done. But Reagan’s irresponsible language was an insult to the vast majority of civil servants who devote their careers to public service, and those politicians who take their responsibilities seriously. Reagan opened the door to dismissing the role of the federal government, even making it to be the enemy. Angry conservatives urge that it should “just get out of the way,” and be downsized enough that it “can be flushed down the drain.”
Even Bill Clinton got caught up in the anti-government frenzy, declaring that, “The era of big government is over.” It was not his finest moment.
Anti-government talk, whether by Reagan, Clinton, or today’s conservatives, is politically motivated idle chatter — until something comes along that only the federal government is big enough to address — draught, flooding, hurricanes, and how about a pandemic that flew out of control. In emergencies, even corporate executives who would normally denounce Keynesian economics, approve — even urge — deficit spending to bring the power of the federal government to bear. Absent during catastrophe are Reagan’s further irresponsible words, “Government isn’t the solution — it’s the problem.”
It’s easy enough to appreciate the need for the federal government during crises and emergencies. But the everyday functions of the federal government and need for its competence is easily and often overlooked.
Taken for granted is the function that reasonable people can agree on, namely the role of the federal government to establish and run the institutional framework on which capitalism depends. Establishing a monetary system, rules for operating financial markets, and laws for enforcing contracts are basic necessary elements for capitalism to function.
A more controversial role of government, of current relevance, is provision of public goods. Economists define public goods as those goods and services that provide widespread benefits, but are provided in insufficient amount if left exclusively to the private sector. Education is the classic example used by professors teaching introductory economics. Private schools and colleges provide a useful role. But the majority of citizens rely on public provision of education from grade school through college, and graduate and professional schools.
Basic research is risky, and future returns are uncertain. Therefore, government agencies and universities undertake basic research which the private sector adapts for technological innovations. Computers, GPS, medical advances, and much else originated from federally sponsored basic research.
Traditional infrastructure, including roads, bridges, ports, and canals fit under the aegis of public goods. Current proposed legislation expands traditional infrastructure to include broadband, pre-school education, child care, expanded health care and much else. The controversy over whether this is “real infrastructure” is ridiculous and irrelevant. What counts is whether these necessary items benefit the nation at large. When provided in insufficient amount by the private sector, the federal government has a legitimate role in providing these public goods and services to improve lives of its citizenry.
Another role for government is to adjust output for external costs and benefits. The classic example of external costs introduced to students is pollution. With incentive to keep monetary costs of production low, producers have the incentive to discharge wastes into streams and the atmosphere. These costs are external to the producer, with their real costs borne by the general public. This is the rationale for government-imposed rules and regulations to force these costs back onto the producer so that the true cost of production is reflected in price of the product.
In this changing world, external costs are involved in world-wide problems including climate change and ocean pollution. These issues go beyond national boundaries, requiring international cooperation. The need for international cooperation is no doubt partly responsible for resistance to climate change as a pressing issue. If it’s all a hoax, no need for pesky international treaties and agreements.
The classic example of external benefits has special relevance today — vaccinations. The benefits of vaccination go beyond the individual getting vaccinated. As more people get vaccinated, even those who are not vaccinated are less likely to catch the disease. This is the rationale for subsidizing the process and making it more available. Maximizing vaccinations benefits the public at large.
Yet another crucial role of the federal government under capitalism was not formalized until the Full Employment Act of 1945. This post-WWII legislation mandated that the federal government use its power to moderate the business cycle and promote full employment. The major tools of this process include fiscal policy, implemented by the President and Congress, and monetary policy, implemented by the Fed. Because fiscal policy involves taxes and spending, and monetary policy involves interest rates, implementation is fraught with controversy. But proper implementation can improve the macroeconomic conditions for both producers and consumers.
The functions of government are many. The government is not the enemy, and it’s up to us to support those who try to make it work better.
— John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears Saturdays in the Monroe Times.
