The size of government is a debate as old as the country itself.  At the time of the Founders,  there was a broader consensus in the propriety of a much more limited federal government, from which the Constitution is an outgrowth.  But the New Deal ushered in a new era of faith in a strong, centralized federal force that can cure many of society’s ills.  From this point, big government began to be associated with helping the disadvantaged — first  through Social Security, then through Medicare and Medicaid.  Small government, in turn, has come to be known as the stingy, anti-poor, pro-rich and pro-corporate group that generally couldn’t care less about the little guy.

This dichotomy, which still persists to the present day, is the fundamental advantage possessed by big government liberals.  They are seen as political Robin Hoods, fighting for the poor and disadvantaged against the corporate elites with the small government politicians in their pockets.  No matter what lies beneath this superficial classification, they always seem to harp back on the theory that small-government conservatives want to take from the poor and give to the rich.

At the end of the day, everybody wants policies in place that benefit the poor, elderly, and jobless.  The central disagreement is over how best to get there.  Small government conservatives have the challenge of defending policy positions where the help provided disadvantaged groups is much more attenuated and indirect (though some would argue nonexistent).  They defend policies rooted in individual choice and bank on humanity’s inherent self-interested nature to guide them toward making the right decision for themselves.  Big government liberals have a more paternalistic approach; for example, people will either not save for their own retirement or might be subject to a string of bad luck, so we should ensure a safety net through Social Security.  Medicare and Medicaid provide somewhat similar examples.

It should be clear that the liberal big government position is easier to defend in light of  its seeming moral superiority.  But does this mean that it accomplishes its own objectives better than policies advocated by small government conservatives?  My hunch is that the latter will always have to work a little bit harder to convince others that they’re right — but that doesn’t mean that they’re not.

George Will’s wise skepticism of Uncle Sam meddling both in the domestic economy and in foreign affairs distinguishes him as one of today’s very few pundits who isn’t schizophrenic about the perils of power (“Is it America’s duty to intervene wherever regime change is needed?” March 22).

Most modern “liberals” believe that domestic economic problems are caused chiefly by unsavory characters – “business people” – who impose their destructive rule on masses of innocent workers and consumers yearning for more prosperity, and that the best solution to these problems is government force deployed using armies of regulators to subdue these bad guys and to keep close watch over them and their successors.  Failure to intervene is immoral.  These same “liberals,” though, believe that foreign problems are typically the result of complex forces that can be understood only poorly by American-government officials; it is naïve to suppose that even well-intentioned foreign intervention by Uncle Sam will not have regrettable unintended consequences.

Most modern conservatives believe that domestic economic problems are typically the result of complex forces that can be understood only poorly by government officials; it is naïve to suppose that even well-intentioned economic intervention by Uncle Sam will not have regrettable unintended consequences.  These same conservatives, though, believe that problems in foreign countries are caused chiefly by unsavory characters – “dictators” or “tyrants” – who impose their destructive rule on masses of innocent people yearning for more democracy, and that the best solution to these problems is government force deployed with armies of soldiers to subdue these bad guys and to keep close watch over them and their successors.  Failure to intervene is immoral.

Talk about a conflict of visions.

I’ve always been skeptical of the intellectual consistency of contemporary conservatives and liberals.  For example, there is no reason why the religious right stakes a more rightful claim to an interventionist foreign policy.  After all, the “right to life” doesn’t really sit comfortably with a relative eagerness to go to war, commonly associated with conservative Republicans.  Likewise, liberals go as far as support partial-birth abortion, but then cry peace and love and call soldiers “baby-killers” when the topic is war.  I’m sure this contradiction is intellectually justifiable in one way or another, but I think it requires a bit of strain regardless.

With regard to Boudreaux’s example, I think it’s pretty plain that people are rarely so rational in their ideological stances as to base them on government competence.  For whatever reason, conservatives have married free-market economic thought with an aggressive form of patriotism.  They think that America should be relatively less hesitant to intervene internationally, not because we’re competent enough, but because we’re awesome enough.  Liberals are more humble when it comes to international intervention because they tend to respect things like borders and autonomy a little bit more.

Most of this is the result of a two-party system that generally gives the average person two sets of options.  There are certainly other policy-preference combinations other than the standard Republican/Democrat checklists.  To give due credit to libertarianism, that line of thinking typically is intellectually consistent in the sense that it’s based on limited government in all realms, both domestic and international (for better or worse).

It’s obvious to anyone who has eyes in this country that teabaggers, the 9/12ers, these separatist groups that pretend it’s about policy, they are clearly white identity movements; they are clearly white-power movements.  What they don’t like about the President is that he’s black, or that he’s half black.  What also is shocking is that people keep pretending that this isn’t the case with these people . . . It’s weird that whenever this comes up in conversation, so few people are willing to say that it’s racism . . . What if black people showed up bearing arms at a McCain rally?

First thing’s first: bringing guns to presidential rallies is stupid. Any philosophical point that the gun-toter is trying to make is significantly outweighed by the message of violence toward the president that the gun sends. But bringing race into this seems equally silly.  Call me crazy, but I’m pretty sure that the guy in this video who brought a gun to an Obama rally is not white.

Second, Garofalo is quick to paint an entire movement with a racist brush – a movement that, on its face, is not about race, but about the philosophical direction of this country.  She’s willing to peer into these peoples’ souls (a la Bush peering into Putin’s) and conclude that they are motivated by a racist agenda; a collective disgust that a black man is President.  But isn’t it possible that these people are motivated by the grievances they actually cite?  Last time I checked, there’s a real ideological divide in this country about the proper role of government and, last time I checked, this divide is as old as the country itself.   Surely the fact that a black man is President shouldn’t turn this centuries old debate into one dominated by race.

Interestingly enough, Garofalo is much more careful about her generalizations when the conversation shifts to Hollywood’s support of Roman Polanski.  After Bill Maher lists some names who have pledged their support for the director and voices his frustration with greater Hollywood over this, Garofalo chimes in as follows:

Hollywood is not this monolith of like-minded people.  Hollywood is not this entity that moves with one mind.

Here, I agree with her 100%.  There’s no reason that the decisions of Woody Allen and Martin Scorcese to support Polanski should rub off on all of Hollywood.  But why can’t she give an equal benefit of the doubt to tea-baggers?  True, some of them might be racist.  But a portion of any mob might be racist, regardless of what they’re preaching.  And, even so, why should the racism of a few rub off on the rest of a group, especially when the grievance they explicitly cite isn’t racist?

Let me explain myself a little more here.  I’m no tea-bagger, 9/12er, or any other member of a partisan/ideological organization.  Nor am I a fan of large demonstrations like the ones we’ve been seeing.  Strategically speaking, they tend to strangle their own causes, no matter how legitimate, by opening themselves up to accusations of craziness, racism, etc. (as evidenced by this post).  But I do think it’s possible to parse through some of the hysteria in these movements and find a legitimate point worth addressing and debating.  And when I hear certain people make accusations of racism in, what seems to be, an effort to discredit anything that the movements stand for, I start to think these people just don’t have a real answer.

Perhaps the fundamental problem with economics is that the numbers only get you so far.  There comes a point where empirical testing cannot prove or disprove economic claims.  Instead, ideology acts as the final piece of the macroeconomic puzzle – the point where the various schools part ways.  When it comes to depressions, economic liberals see them as demonstrative of capitalism’s inherent flaws, while conservative economists see them as the product of unnecessary governmental intrusion into the market.  This leaves both Washington and the public without any real confidence in their understanding of how the economy works, since almost any economic explanation or claim can be rebutted by an opposing school of thought.  All of this has contributed to the public’s confidence in the trade dwindling to a historic low.  In the words of the Economist, “an arrogant profession has been humbled.”

Yet, as is often the case in depressions, there may be a silver lining.  The current condition has already encouraged some of the most loyal free market economists to begin to think outside of the box.  For example, Ben Bernanke supports the economic stimulus – a program that is straight out of the Keynesian playbook.  He seems to have come to terms with the fact that monetary policy alone is not enough to bring a country out of depression.  In light of the government’s action during both the Great Depression and the current crisis, one must conclude that a more active role for the government in filling the void left by falling demand during severe economic downturns is essential, and seems to suddenly emerge as a unifying notion between the historically warring economic sects.

The danger, of course, is the replacement of one evil with another.  If Keynes blindly becomes the heart of American economic policy, then another economic calamity may well await us once we dust ourselves off from the current mess.  The trouble with societal shocks as significant as the one we are in is that it has the potential to shift the pendulum too far in the opposite direction.  Nobody wants to be too close to a source of distaste.  And the speed of the economic profession’s shift from free market principles to Keynes might prove that the intellectual underpinnings of the profession are unstable.  If they are unstable, then they’re capable of being pushed and pulled by changing tides.  Both the public and Washington must dispassionately come to terms with economics.  We cannot substitute the exaggerated virtues of free market economics with a blindness to its benefits.

Unified action during severe economic downturns is only one piece of “Milton Keynes.”  The true test of lessons learned may not come for decades – when the next asset bubble begins expanding.  Will future administrations ride the next bubble in the hopes of maximizing the political advantage that comes with economic prosperity?  Or will they have the foresight necessary to sacrifice immediate prosperity for long-term stability?  The idea behind Milton Keynes is the decreased reliance upon outdated ideologies and the rediscovery of economics as a non-partisan tool of decision-making, the principles of which appeal equally to all parties.  After all, no party has an interest in seeing its policies create economic instability.  And the entire country has an interest in Washington relying less on ideologies and partisan interests and more on the science of economics as evidenced by the past.

Ideology is a common thread that runs through almost all policy judgments. It is difficult, if not impossible, to analyze or articulate policy without the application of some broader framework that acts as a preconceived paradigm for how the world works. The ongoing economic crisis is a significant example of just how blind ideology can lead a country astray.

The twentieth century witnessed free market, capitalist principles emerge as the bedrock of American values. The private sphere, fueled by its self-interested, profit driven, rational actors became the great driver of the capitalist economy.  Real successes derived from deregulation and privatization helped nurture this American ideology, as did the collapse of the Soviet Union and the negative impacts of constrained economic freedoms in the Third World.

And as Posner writes, this mentality was not unique to any party.  True, the champions of the free market are generally thought to be the American Right.  But its principles are engrained in the policies of various administrations and thus virtually confine American policy within its parameters. It is the Clinton Administration that, in one of its final acts, legalized credit default swaps after they had been prohibited for nearly a century.  This collective commitment to the infallibility of the market blinded government officials to the potential of market failure and hindered the development of contemporary solutions to an unprecedented economic challenge. Ideology acted almost as intellectual shackles, constraining decision-makers in a realm of thought where the discovery of appropriate solutions was impossible.

Ideology has its uses.  But applying general principles to the particulars of novel problems leaves you inherently short of solving those problems. Good policy formulation needs to be tailored to the specific circumstances that may exist. This does not mean that ideology cannot coexist as a general value from which the particulars of individual policies may depart. We can have a strong collective faith in the free market – in the ability of self-interested players to make rational decisions through profit motive that spur growth and benefit the economy and in the overall power of the individual – and at the same time regulate that free market in order to guard against potential, even if unlikely, catastrophic side-effects. To believe in general, underlying economic principles is not to strictly adhere to them at every conceivable turn at the expense of economic stability.