A Century of Big Government

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Franklin D. Roosevelt making a national address at the White House in 1936. (Library of Congress)

The epic nature of the political struggle unleashed by the ambitious Biden agenda is perhaps best understood through its historical context, as illuminated by the records of four presidents—Franklin Roosevelt, Dwight Eisenhower, Lyndon Johnson, and Ronald Reagan. Together they personify most sharply the great American contention of the past 90 years between those who favor ever greater federal power and economic redistribution, on the one hand, and those who have been resisting this liberal agenda, on the other.

What becomes clear from this historical approach is not just how relentless and expansive the American left has been in pushing its vision but also how much resistance it has encountered from voters at crucial times through the decades. The Biden forces now plan to end the struggle once and for all with an ultimate political conquest—a liberal ascendancy so complete and so divorced from consensus that voter resistance will become meaningless for years or decades. They want America to enter its last great definitional epoch and embrace the kind of democratic socialism that has been the European model for much of the past eight decades.

The political drama begins with FDR. In creating his New Deal in the 1930s, he harked back to the governmental activism of his distant cousin Theodore Roosevelt and the subsequent presidency of Woodrow Wilson. But those presidents, though fervent governmental activists, never achieved the expansion of federal power that Roosevelt brought to America during a crisis surpassed in U.S. history only by the Civil War. Real per capita GDP had contracted by nearly a third. Foreign trade had collapsed. Some 83 percent of the stock market’s shareholder value had vanished. Unemployment hit nearly 25 percent. Crop prices dropped below subsistence levels for most farmers. Many lost their land to banks that were themselves facing insolvency. The nation’s social fabric began to unravel.

In addressing this crisis, FDR presided over annual GDP growth rates of around 7 percent through his first term, while manufacturing production increased by 50 percent and unemployment, though still punishingly high, dropped to below 17 percent. It isn’t surprising that the American people responded with widespread appreciation and even some veneration. They comfortably accepted the balance-of-power shift that favored federal intervention over federal forbearance.

All this was reflected in Roosevelt’s audacious legislative activity: the National Industrial Recovery Act, the Agricultural Adjustment Act, the Glass-Steagall Act creating the Federal Deposit Insurance administration and curtailing financial activity deemed too risky, the Public Works Administration, the Tennessee Valley Authority, rural electrification, the Securities and Exchange Act, Social Security, and the Wagner Act establishing new roles in collective bargaining. This represented a stunning augmentation of entrenched federal power through the creation of a new political class of governmental officials (part of the “Managerial Revolution” explored by James Burnham shortly afterward) and the emergence of new national constituency groups beholden to Roosevelt’s party and intensely devoted to it.

The voters rewarded FDR with a stunning reelection triumph. When the dust settled, his Democratic Party controlled 75 Senate seats to just 21 for the opposition, while the House was Democratic to the tune of 331 seats to just 89 for Republicans. It was an electoral mandate nearly unmatched in American political history. Then Roosevelt squandered the mandate with his effort to “pack” the Supreme Court and alter its power balance in favor of his efforts to protect and expand his New Deal.

Much has been written lately—in the wake of Democratic calls for a similar action to favor their party today—about FDR’s humiliating failure to get congressional approval for his initiative, clearly an unsavory power grab. Less noted is the impact on his plans for New Deal expansion: The power grab and the political capital FDR expended on it, combined with a 1937 slip back into recession, essentially froze the New Deal in place. No more expansion. In the 1938 midterm elections, Democrats lost 71 House seats and six in the Senate. With war on the horizon in Europe and Asia, Roosevelt wisely turned his attention to foreign affairs, with his domestic plans pretty much completed. Regarding the New Deal revolution, the voters said in 1936 and after: “Thank you. That’s enough for now.”

Note that Roosevelt didn’t opt for the nationalization of industries that some liberals advocated during the Depression. He chose regulation instead, even involving the banks that were failing in ominous numbers as he entered the White House. And, in creating his big Social Security system, he pointedly refused to make it a transfer-payment program, paid for with income taxes, and opted instead for a safety-net approach, supported with payroll taxes tied to the benefits. That rankled, and still rankles, liberals. Jill Lepore, who divides her time between Harvard and the New Yorker (take a guess on her political views), has expressed disdain for this approach because it doesn’t sufficiently satisfy her yen for income redistribution through tax policies. What she misses, but what was well understood by the brilliantly political Roosevelt, is that he never could have achieved enactment of Social Security if he had fashioned it as an income-redistribution initiative. The American people wouldn’t have gone for that.

In any event, that’s pretty much where the country stood on the axis of governmental intervention vs. governmental curtailment when the Republican Eisenhower became president in 1953, amid calls from some top party figures that he dismantle key parts of the New Deal. Eisenhower said no. He understood that FDR’s handiwork was too popular and well entrenched for such an initiative. Besides, that would have insulted the American people. Voters don’t like to be called idiots by their elected officials for how they vote. But Eisenhower also never sought to build on the New Deal. His biggest domestic initiative was the Interstate Highway System, a highly beneficial infrastructure program that didn’t significantly enhance federal power vis-a-vis the states and the people. A new equilibrium in the balance-of-power struggle regarding governmental prerogative had been struck.

Until Lyndon Johnson, who sought to leverage the Kennedy assassination to transform America through governmental expansion. It began, though, with the Kennedy tax cuts, which were not of the redistributionist kind favored by Lepore but rather across-the-board reductions that didn’t increase the progressive nature of the tax system. The result was salutary: 4.3 percent GDP growth in the year of enactment (1964) and 5 percent the following year. Next he turned to the overdue imperatives of citizen equality with the landmark 1964 Civil Rights Act. Then came the Equal Opportunity Act, linchpin of his “Great Society” vision of combating poverty.

Taken together, write academic Alan J. Lichtman and journalist Ken DeCell, these initiatives represented “the most significant domestic-policy initiative since the New Deal.” Then came big second-term initiatives such as the Voting Rights Act of 1965, Medicare and Medicaid, and a host of direct-benefit programs in housing, education, nutrition, and the like. Altogether, according to the Bill of Rights Institute, LBJ submitted 87 bills to Congress, and it passed 84 of them. It was a frenzy of domestic legislation that inserted the federal government more and more into the lives of citizens.

Leaving aside the civil rights legislation, which the country embraced as overdue and necessary, much of the Johnson legacy ultimately lacked the staying power of FDR’s New Deal. On poverty, the reality of dashed expectations contributed to race riots in major industrial cities that killed dozens and unnerved the American people. According to one study, the government spent $22 trillion on antipoverty programs between 1967 and 2014, and yet the poverty rate remained generally the same at around 14 percent during that time (though it had come down substantially between 1950 and 1967, without any targeted federal initiatives). Further, Johnson’s resolve to spend huge sums on domestic initiatives while also waging his expensive Vietnam war ultimately strained the economy so severely that it unleashed a wave of intractable inflation, then something worse called “stagflation,” simultaneous high inflation and low or negative growth. That led ultimately to the presidency of Ronald Reagan.

Reagan assumed office amid dire economic circumstances. The week of his inauguration, Newsweek announced from its cover: “The Economy in Crisis.” Inside, the magazine said the new president faced “the most dangerous economic crisis since Franklin D. Roosevelt.” The numbers were bad. Unemployment: 7.4 percent. GDP: declined by 1.5 percent in the previous year. Prime interest rate: a commerce-crunching 21 percent. Inflation: running at 13 percent. Economist Walter Heller declared, “What the Great Depression was to the 1930s, the Great Inflation is to the 1980s.”

Reagan entered the White House on the wing of an entirely unconventional concept for that time: This was a crisis foisted upon the people by big government. It couldn’t provide the solution to the country’s problems, he said, because it was the problem. He sought severe curtailments in federal spending—and succeeded for a time before liberal opponents mobilized a counterforce against further spending cuts. Consciously sidestepping the New Deal, he went after as much of Johnson’s Great Society as he could get his hands on. He slashed tax rates, which had been rising inexorably and ensnaring more and more people in higher tax brackets through inflationary “bracket creep.” He embraced the Kennedy concept of across-the-board reductions to avoid redistribution.

In general terms, it all worked. Once Reagan got beyond the severe recession induced by Fed Chairman Paul Volcker to crush inflation (initiated with Reagan’s blessing), he gave the country consistently robust GDP growth rates, including 6.2 percent in his reelection campaign year of 1984 and an annual average rate of 3.4 percent during his second term. The American people embraced the Reagan narrative and his policies in huge numbers, as reflected in his 58.8 percent reelection triumph and his Electoral College victories everywhere save Minnesota and the District of Columbia.

Reagan’s staying power was reflected in the early actions of Bill Clinton, elected president four years after Reagan left office (following George Herbert Walker Bush’s middling one-term performance). Clinton declared upon taking office that he intended to “repeal Reaganism,” thus succumbing to the mistake avoided by Eisenhower: insulting the voters by telling them that their previous electoral decisions had reflected a certain ignorance. By 1994, after sputtering through his first two years in office and having his head handed to him in that year’s midterm elections, he reversed course and declared: “The era of big government is over.” He governed creditably from there and turned in a solid presidential performance overall.

Of course, nothing is ever over in politics, but the kind of FDR-LBJ activism of the 1930s and 1960s was not to be seen again for a considerable time. Barack Obama managed to pass his Affordable Care Act and sustain it through subsequent GOP efforts to gut it or kill it. But Obama failed in his effort to address the energy issue through substantial augmentations in federal power. Donald Trump talked a good game in the antigovernment vein but proved himself incapable of sustained action on anything.

And so now we have Joe Biden. Enjoying no mandate of the kind that buoyed Roosevelt and Reagan and making no effort to place his initiatives into a broad context of historical necessity, he sets about to accomplish what the American people have thwarted for nearly a century—namely, establishing the federal government as a true leviathan, with unchallenged tentacles stretching into nearly all aspects of American life, fueled by a redistributionist ethos that FDR himself foreswore.

The president projects some $6 trillion of new spending atop an annual budget of only around $4 trillion. Among the spending targets are clean-energy subsidies, electronic-vehicle charging stations, free child care, free pre-kindergarten education, free community college education, free family and medical leave, and the underwriting of incomes in a host of ways, most of which don’t require any work. Biden also would employ the regulatory state to thwart banks from investing in old energy projects and toward greater diversity. As the Wall Street Journal puts it, Biden “seeks to insinuate government cash and the rules that go with it into all the major decisions of family life.” He wants to “make Americans rely on government and the political class for everything they don’t already provide.”

Note the words “the political class.” This is essentially an elitist agenda, bolstering the power and influence of the country’s meritocratic elite, which will administer all this and derive ever greater power and wealth in the process. And, because Biden enjoys no mandate of the kind that fueled the FDR and Reagan programs, he’s fixing to attack fundamental institutions in ways designed—like Roosevelt’s court-packing scheme—to tilt the playing field in favor of the elite agenda. That’s the significance of the budding initiatives to kill the Senate filibuster, pack the court, and give statehood to Washington, D.C., and Puerto Rico.

The history of America since Roosevelt’s first term provides little evidence that the American people have hungered for this kind of grand governmental aggrandizement and intrusiveness. Indeed, that history suggests the American people have always been wary of going that far. And nothing in the country’s recent political expression indicates anything approaching a serious groundswell now for the Biden vision. The president was elected leader of a nation roiled by passionate discord and disruption, reaching almost frightening intensity. He has unleashed upon his constituency a program that can only make it worse.

Robert W. Merry, longtime Washington journalist and publishing executive, is the author of five books on American history, including Where They Stand: The American Presidents in the Eyes of Voters and Historians (Simon & Schuster).





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