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Blaming government for business failures

Date Published: 04/28/2010

Author: Dane Smith, President

ST. PAUL LEGAL LEDGER CAPITOL REPORT

Trust in federal government is low—and bad news for the party in power—but historically normal. We should recover.

Much ado was made recently over a new national survey, which widely was reported as evidence of a “new low” in the American public’s trust in the federal government.

Even the most responsible news media, including National Public Radio, got a little breathless about the findings. And as a recovering media person, I completely understand the allure of a fresh sky-is-falling angle.

But historical context almost always provides a calming effect. And Tea Party enthusiasts need to cool their jets if they think that some unprecedented revolutionary moment has been reached, or that this poll result is all about a rejection of federal health care reform.

A more careful look at the details provided in the report, by the highly regarded Pew
Research Center (http://people-press.org/trust/ ), reveals that this “new low” is actually about the same as it was toward the end of the deep recessions of the early 1980s and the early 1990s.

Moreover, the chart shows that faith in government tended to recover as the private sector and job growth rebounded, unfair as that might seem to those who value the government’s role as both watchdog and frequent savior of the private sector.

(Apparently we may never regain the public trust we had before 1965—before Civil Rights unrest and profound social change divided the country—and before Watergate and our defeat in the Vietnam War. President Nixon and the two Bushes presided over the steepest downslopes, while Reagan and Clinton were faith-builders.)

In 1994, as now, in “trust” surveys taken by Pew and other reputable pollsters, only about 20 percent of Americans said they trusted the “government in Washington to do the right thing … all or most of the time.”

According to the Pew chart, the all-time low of 17 percent approval occurred twice: In June of 1994 as President Clinton was still struggling under a weak economy and trying unsuccessfully to enact health care reform, and in October of 2008, right after the Wall Street meltdown and the immediate bailout initiated under President Bush.

Faith is still close to bottomed out, following the bruising battles over health care reform and as unemployment remains high.

Notably, almost all the decline leading to the current low point occurred during the Bush administration. Faith in the federal government dropped steadily during the brief and weak economic recovery in mid-decade, and as enthusiasm waned for the war in the Middle East and in the wake of the Hurricane Katrina debacle.

This correlation between hard times in the private-sector and faith in the government is paradoxical. Although the public sector and government play the role of regulatory watchdog—and the role of a rescuer obligated to clean up the messes left by private-sector failure—the government apparently gets blamed just as much for joblessness and the collapsing bubbles as the capitalists themselves.

In 1994, as now, the stock market actually was recovering under a fairly new president. But many or most ordinary Americans then and now were still hurting from a severe recession that began under the administration of the previous president.

In the immortal words of Clinton political strategist, James Carville, “It’s the economy, stupid!” that drives everything.

Then as now, it wasn’t government officials who were laying workers off by the millions and defrauding or bankrupting investors. Then as now, the economy was brought low by a combination of irrational exuberances, a speculative “bubble,” and outright stealing and illegality by some business moguls.

We do live in a mixed public-private economy. Government and Federal Reserve Board management of the economy deserves some measure of responsibility, along with congressional actions that set up incentives for unsustainable home mortgages, among other errors.

But blaming the cops entirely for the behavior of the robbers, as some free-market ideologues do, doesn’t make perfect sense.

Also in 1994, as now, irresponsible anti-government talk-show hosts were foaming at the mouth, conspiracy theories about black helicopters were proliferating and right-wing militia groups were forming in Idaho and Montana.

About this time in 1994, Timothy McVeigh, motivated by hatred of the federal government, was planning his attack on the Oklahoma City federal building.

This is the scariest dimension of the declining faith in government. Polls also show a decline in faith in almost all institutions, from churches to big corporations, and wholesale cynicism and despair can lead to desperate and irrational violence.

Anti-government bile was so prevalent that I was inspired in early 1994, as a Star Tribune reporter, to write a three-part series, “The Good that Gov’t Does.” I dusted it off recently,
and was immediately struck by how the more things change, the more they stay the same.

The series pointed out that polls showed most Americans were actually fairly satisfied with the individual services and investments that government provides—from schools and colleges, to roads, to Social Security and Medicare, to state and federal help for our elderly with their nursing home assistance, to parks and the National Guard.

Simultaneously, I noted, anti-tax attitudes were pervasive and “this conflict (between demand for government and hostility to taxes) is a conundrum that befuddles politicians from the township board to the U.S. Senate.”

Citizens actually want and expect their government to provide intervention and economic relief in hard times, even as their trust in that institution declines.

Or as Atlantic Magazine writer Derek Thompson asked in commentary on the Pew survey: “What does it mean that we’ve become a country that expects a government we don’t trust to provide growing benefits from taxes we don’t want to pay?”
 

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Dane Smith is president of St. Paul-based Growth & Justice, a progressive research organization that focuses on economics and state-and-local budget issues. He also spent 30 years as a writer for the Star Tribune and Pioneer Press, where he delved into state, local and federal governments and politics.


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