How Big Government Got Its Groove Back

[marmar]

from The American Prospect:



How Big Government Got Its Groove Back
The New Democrats' intellectual architect argues that today's economy requires an expanded role for government.

William Galston | June 9, 2008



In 1996, President Bill Clinton proclaimed that the era of big government was over. It is now clear that the era of the end of big government is over.

The post–World War II social contract--an expanding public safety net, provision of health care and retirement benefits through a substantially unionized private sector, and robust personal savings--is under severe stress. To respond effectively to our long-term challenges, the federal government must command an increased share of gross domestic product and extend its reach in other ways as well. The public sector will be called upon to provide new forms of insurance against economic risks and volatility and to assume more responsibility for health insurance and retirement security. To the extent that markets cannot police themselves or provide reasonable returns for workers, government will have to step in. Through the public mobilization of capital and will, we must supply the public goods--investment in infrastructure, research, and post-secondary education, among others--that we have neglected at our peril. And many millions of Americans will be unable to save for the future without new forms of public encouragement and support.

As well, we will have to construct a new legal and institutional framework that counters the increasing asymmetries of bargaining power that employees in most occupations now experience. While the right to organize and bargain collectively must be aggressively enforced, the kind of union movement that dominated the field from the 1930s through the 1960s may not be adequate for the 21st century. To the extent that it is not, we will need something to supplement it, such as new legal protections for individual workers. For without effective countervailing power, employees will not be able to negotiate for a reasonable share of productivity gains, median wages and earnings will grow slowly, if at all, and the fortunate few at the top will continue to commandeer the fruits of economic growth. At the same time, the private sector will have to do its part to help finance programs for which the public sector assumes increased responsibility. And individuals will have to shoulder more responsibility, in proportion to their means, for their savings and security.

In short, we need nothing less than a new social contract that reorganizes responsibilities among government, individuals, and the private sector. It will take time, experimentation, and political contestation to hammer out its terms.

This would never have been easy, and it is especially challenging now. With large short-term and long-term deficits looming, clearing fiscal space for new initiatives will be difficult at best. And while the public is demanding change, the current administration's woeful performance since 2002 has reduced public trust and confidence in government's ability to produce change.

But however difficult it may be, we must begin the task of reconciling basic moral commitments with stubborn new realities. The alternative to a new contract is no contract--a society in which the strong take what they can and the weak endure what they must.

***

From June 1982 until November 1984, I served as issues director for Walter Mondale's presidential campaign. The failure of that honorable venture--the last campaign of the New Deal era--propelled me and many others into a period of rethinking that lasted through the remainder of the 1980s and into the early 1990s. We came to believe that the Democratic Party's economic program and governance philosophy reflected an industrial era that was giving way to new modes of production and new technological sources of economic growth. We believed, as well, that the party had come to be viewed as fiscally unreliable and as fixated on redistribution at the expense of broad-based economic growth. These propositions helped shape the economic outlook of the New Democratic movement and the platform on which Bill Clinton ran successfully for president in 1992. And after a slow and controversial start, they contributed to the robust, widely shared growth of the mid- and late 1990s. ........(more)

The complete piece is at: http://www.prospect.org/cs/articles?article=how_big_government_got_its_groove_back

[BridgeTheGap]

1. The post WWII "social contract" was won by Unionists/Veterans

who had just returned from the "Great War" to find their hard won rights chucked out the window during their absence. The period from 1946 to 1950 saw the greatest number of labor stoppages in American history. Much of the work force had been unionized during the Great Depression (nice juxtaposition - Great Depression - Great War) and then went off to war, gaining combat experience.
Combine that with "attitude" (what, exactly, had they been fighting for?) and you get some of the greatest advances for labor ever seen any where.
The assault against that way of life never entirely ceased and now has reared its ugly head with a vengance. Labor knew that NAFTA and GATT did not bode well for Unions and vehemently opposed these so called "free trade" agreements. They were right and now they are paying dearly.