Obama Republicans

Legacy of the Gingrich Revolution and the Era of Small Government

“The era of big government is over”, proclaimed President Bill Clinton in his January 1996 State of the Union Address. The US thus shed its embrace of government and, amongst other things, began accumulating a net foreign debt of almost US$4 trillion.

This self-styled „Gingrich Revolution“, named after the eponymous former Speaker of the House, emerged from the ashes of the 1995 Midterm Elections, in which the Republicans regained control of the House of Representatives for the first time in forty years. Swayed by the torrent of public opinion, President Clinton relented. The Republicans‘ seminal political ideology had percolated into the mainstream.

But suddenly, we all witnessed the events of September 11, 2001. Our faith in small government was shaken. For it was not investment bankers or corporate lawyers who would be deployed to remote corners of the Earth to fight in its aftermath. Nor were their institutions those which were called upon to rebuild nations ravaged by the ensuing conflict.

The second harbinger was carried on the tides of Enron’s collapse. The world could no longer trust corporations and individuals to rise beyond their own interests when a greater social predicament was at stake. Even the nebulous concept of corporate social responsibility was widely argued to be nothing more than rebadged notion of heightened corporate self-interest, the sanctity of which was defiled by its inherent arbitrariness.

The third signal that Clinton’s prophesy was wavering arrived amidst the winds of Hurricane Katrina. The Bush Administration’s diabolical response illustrated the dire need for a coordinated response, one which so abysmally failed the people of New Orleans.

The financial markets‘ meltdown has hastened the demise of the small government, unregulated market ideology. Alan Greenspan himself admitted before a congressional committee last week that his actions as Federal Reserve Chairman for the past decade may have been predicated upon a misplaced faith in the ability of financial markets to self-regulate their activities. Dick Meyer rearticulated the concept in more emphatic terms, criticising the hypocrisy and greed of the rich:

When the interests of the very-monied class were threatened, it was damn the torpedoes of Reaganism, full bailout ahead! The more regulation the better! And why not go for just a little bit of nationalization while you’re at it?

Prior threats to small government didn’t make the rich sweat. And as the country learned from Vietnam, the elites can stomach a lot of injustice, inequity and incompetence until their own kin (via the Vietnam-era draft) or their own wallets (today’s meltdown) are threatened.

President-Elect Obama’s victory has signalled the final step towards negating the pre-eminence of small government. His campaign pledges to roll back the Bush tax cuts, reform healthcare, subsidise alternative energy research, and increase regulation of the financial industry gravitate towards a larger role for government institutions in his administration.

These five events have signalled a new paradigm, one in which government will play a greater role. For individuals alone cannot resolve our problems. They require the concerted efforts of a larger administration because, borrowing a soliloquy from Sorkin’s The West Wing,:

… government, no matter what its failures in the past and in times to come for that matter, government can be a place where people come together and where no one gets left behind.

But change is never painless. It will require higher government spending in the order of hundreds of billions of dollars. This must eventually translate into higher taxes, most likely by means of a federal sales tax on consumer items.

What is certain is that the Gingrich Revolution is now obsolete. The era of big government has returned. Only through a collective voice, as expressed through government institutions, can we successfully confront our most odious challenges. All our futures depend on it.

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