Did Big Government Get Smaller in the 1980s and 1990s?
In a recent Wall Street Journal news story titled “New Climate, Tech Bills Expand Role of Government in Private Markets,” senior writer Jon Hilsenrath notes that with two recent bills, the Biden administration “has grown the federal government’s imprint on major sectors of the US economy—including semiconductors, energy, and health—and further buried the idea once widely held in Washington that private markets should be left alone, without government involvement.”
Hilsenrath is correct that Biden has grown the federal government and he correctly identifies the domestic areas in which he has grown it the most. (I’m leaving out Biden’s “imprint” on foreign policy in Eastern Europe.) He’s also correct that Biden has further buried the idea that private markets should be left free of government intervention. But is he right that the idea of refraining from intervening in free markets was “once widely held in Washington”? If “once” referred to, say, the first decade of the twentieth century, he might have had a point, although even then we were well into the Progressive era. But Hilsenrath is referring to the 1980s and 1990s. While the rhetoric in the 1980s and 1990s was more pro–free market, the follow-through was tepid. Government grew in the 1980s and 1990s also, but just more slowly than it did under Bush II, Obama, and Trump.
I’ve followed Hilsenrath’s reporting in the Journal for many years. He has traditionally been good at sticking to facts, although now, as a senior correspondent rather than a reporter, he gets to put more of his interpretation on the facts. And in this article, that’s where he gets into trouble.
This is from David R. Henderson, “Rhetoric Aside, ‘Big Government’ Only Gets Bigger,” Defining Ideas, August 25, 2022.
Hilsenrath’s absence of evidence:
Consider Hilsenrath’s evidence for his claim that the idea of leaving private markets alone was widely held in Washington in the 1980s and 1990s. It consists of only three pieces of evidence. First, Milton Friedman’s case for small government was “taken up by Mr. Reagan and the Republican Party.” Second, Friedman’s case was embraced by middle-of-the-road Democrats, including Bill Clinton. Third, Clinton “declared in a 1996 State of the Union address that the era of big government was over.”
That’s it. That’s his evidence. What’s missing? Any evidence that politicians in Washington, either in the 1980s or in the 1990s, actually followed through on those views. If a bank robber told us yesterday that he had reformed but a camera caught him stealing from a bank today, we would say that he hadn’t reformed. Similarly, to make the case a view was embraced, you need to show evidence that the “embracers” acted on it. Hilsenrath doesn’t. He doesn’t even try.
Read the whole thing.