Never Let a Good Crisis Go to Waste

by Peter G. Klein

Remember the Golden Age of Laissez-Faire, the grand epoch brought to a tragic end by the COVID-19 crisis which laid bare its failures for all to see? Me neither.

And yet, the New Narrative is already being written. “The Era of Small Government Is Over,” writes Jamelle Bouie in the New York Times. US federal, state, and local government spending was 32% of GDP in 1980, 37% in 2018. It peaked at 39% during the Obama stimulus and never fell below 31% during this period. So much for the neoliberal consensus!

No matter how you measure government intervention — number of pages in the Federal Register, tax burden, size of the federal workforce, amount of rent-seeking and private contractors on the government dole, or just qualitative, subjective assessments of the role of the state in private life — we’ve had Big Government as far back as anyone alive can remember. And yet, like former Chicago mayor Rahm Emanuel, you can be sure that pundits, politicians, and professors won’t let the current crisis go to waste.

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