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Don’t Let a Neoliberal Tell You Otherwise:

                       The Ideological Idea of “Limited Government” is a Myth


                              A Lesson from the American Experience


                                  Adal Isaw


                                        July 25, 2010

There are many ways to sway some people in support of an issue in politics against their own interest.  One such way is by repeating an ideological idea many times until it becomes a disarming material force.  The liberal ideological idea of “limited government” is an example from the American experience that we should discuss in detail—if we’re to fully deploy the legitimate powers of our government to work for we the people of Ethiopia. 


Ethiopia needs strong peoples’ government and don’t let a neoliberal tell you otherwise in defense of his liberal ideology of “limited government.”  The ideological idea of “limited government” is a myth.  And this myth has been used by notable neoliberals to buttress their own grandiose economic policy of working for the haves.  This is not to say that government should not work for the legitimate interest of the haves, but it is to accentuate the fact that government should not necessarily disadvantage the have-nots to work for the legitimate interest of the haves.  A case in point for our discussion comes from a ground shifting economic policy of a notable neoliberal, Ronald Reagan, the 40th President of the US, who “quipped” during his inauguration speech that "Government is not the solution to our problem; government is the problem." 


Blind-sided by trickle-down economic policy of his, Reagan overlooked the fact that government is the solution when it works for the interest of the majority of the people and the problem when it does not.  Of course; a government that overreaches and intrudes in the private lives of its law abiding citizens is problematic and should not be desired; a government that imposes a monotonous  belief system of any kind is also problematic and should be vehemently opposed; a government that deprives the rights of citizens to express, associate, and carry out their aspirations and desires within what the law of the land permits is obviously problematic and should be rejected; a government that hinders ideas from freely floating within the bounds of the constitution is profoundly problematic and should be opposed; and a government that is endowed with a political power by its own citizens  should not at all work against the interest of the very people that it has gotten its democratic power from.  If it does, it’s beyond problematic.  In contrast and most importantly, a peoples’ government should not be limited from fully serving the economic and political interest of a great many citizens it represents.


A “limited government” of the kind that neoliberals aspire is only limited from serving the political and economic interest of a great many citizens that it ought to serve.  It is a government that serves the moneyed interest of the few at the expense of many citizens in need of a social safety net.  It is also essentially the tool of a liberal ideology, under which private interest supersedes social interest; welfare for the rich supplants welfare for the poor; and the legitimate powers of the government is limited to the bare minimum so that corporate and other moneyed interest are set free to “self-regulate”—much like the oil interest and pharmaceutical companies in America wrote their own regulatory bills.  To put it succinctly and mildly, therefore, the liberal ideological idea of “limited government” is to limit a peoples’ government from working hard to satiate the economic and political hunger of a great many of its deserving citizens.


America had great governments that worked hard to make sure that many of its citizens benefited from its abundant wealth.  This was true especially after the Great Depression, an instance of economic collapse in US history that compelled Americans to make queues after queues for a piece of bread and a cup of soup.  Franklin D. Roosevelt, the great American President, literally took it upon himself to put Americans back to work.[1]  He did so, in part by hiking taxes on income more than $3 million in today’s dollar to 91 percent, and by raising corporate taxes to over 50% of profits.  The revenue from these taxes built interstate highways, airports, hospitals, schools, water systems, sewer systems, train stations, railways and dams.  The revenue from these taxes also educated a generation returning from WWII.  It also served to put a cap on obsessively greedy persons from taking so much out of the economy and from depriving millions of Americans their basic needs for life.[2]


A peoples’ government does not last forever anywhere in the world, including in America.  And thus, the rich fought back and won big in the early 1980’s, when a notable neo-liberal, Ronald Reagan was swept to the White House by the power of public anxiety about American hostages in Iran. Ronald Reagan promptly cut income taxes on the very rich from 70% down to 27%.  He also cut corporate taxes so severely that they went from representing over 33% of total federal tax receipts in 1951 to less than 9% in 1983—the lowest in the industrialized world.  This welfare to the very rich devastated America and the Reagan administration soaked itself in red ink so much so it doubled the tax paid only by people earning less than $40,000.00 a year.  Not only that, Reagan borrowed from the surplus this new tax accreted in the Social Security Trust Fund to pay for his “voodoo economics.”  The result; Regan had to borrow more money in eight years than the combined total amount borrowed by all American presidents from George Washington to Jimmy Carter—39 Presidents and almost 200 years’ worth of borrowing that is.[3]


At the end, America became heavily indebted and the new tax cut for the rich threw the roof off on how much wealth can be garnered, giving birth to a new generation of few and powerful superrich Americans—and creating the greatest divide between the haves and the have-nots.  Moreover, the new tax cut for the rich handcuffed America from investing in infrastructure, including intellectual infrastructure.    


Today and in part, the economic and ideological blunders of the Reagan years are inundating the Obama administration in a polarized pool of politics.  The ideological polemics have sharpened.  Anger-filled blame is directed against an assumed peoples’ government that Obama is feared entertaining.  The teabaggers, the haters, and the ideologues of American politics are asking for more laissez faire; “limited government/small government,” and for spending cuts on social services for the needy and etc.  All of these, in a dire attempt to fight an assumed peoples’ government that neoliberals would like to label socialist and or a communist—the duet nightmarish labels that an American political psyche would not tolerate for a second.    


Republican lawmakers, some of whom are well-known out of leash neoliberals, despise government so much so they believe that no government is good government.  This is not because they want anarchy to prevail but because they want the moneyed interest to rule America, uninhibited by legislation that may restrain it from making a bottom line killing with authority.  In contrast, most democrats who’re inclined to support a peoples’ government of some sort, no matter how faint the support may be, want to restrain the moneyed interest from ruining the lives of a great many citizens of America.  Understood from this relatively differing political role played by sizeable Democrats and Republicans of America, the liberal ideology of “limited government” is thus merely a myth since whoever is in power inevitably works to garner as much power as it can to execute its political and economic plan on hand.  To explicate the mythical ideological idea of “limited government,” therefore, one should look at two conflicting interests—the interest of a great many citizens and that of the very few superrich Americans. 


The conflict between the haves and the have-nots has a push and a push-back cycle.  For example, President Obama’s approach to strike a harmonious balance between two polarized ideologies of a government is instigated by the push-back political gesture of  the superrich—a superrich reaction after knowing quite well that Obama is testing the waters, to bring forth few of the goodies from older America under FDR.  Working to end the tax breaks for the superrich, with a plan to hike taxes on those Americans making over $250,000.00/ year; yearning for a legislation with some biting teeth, to put a handle on casino-like financial institutions; and Obama’s willingness to invest in infrastructure development, to put America back to work, surely mimics to a degree the economic policy of FDR after the Great Depression.  These actions indicate  that America is at least back to a point where the interest of a great many of its citizens has now  become a serious issue that a sitting President is willing to entertain.  It is hard to tell whether President Obama will be successful in his public-centered endeavor since America is now a highly polarized nation where who wins or loses to create either a peoples’ government or otherwise is a toss-up call.


The great lesson to take home from this American experience is this: “limited government” of the kind that neoliberals embrace is being challenged by many democrats and also by progressive forces of America.  It is true; President Obama is not close to what the progressive forces of America would want him to do to ameliorate the misery of “middle-class” Americans.  Mr. Obama is also far from doing anything humongous in terms of transforming his administration to the likes of FDR.  Instead, the peace maker that he is, President Obama continues to preside slightly left off center on the spectrum of American politics.  Obama’s politics may eventually shift further to the left, provided that the economy recovers in time before he’s due for re-election.  If measurable economic recovery becomes apparent, especially in terms of employment, President Obama will come swinging to the left to leave his mark as the peoples’ President of the USA since FDR.  And he is likely to do it by rejecting strongly than he does now, that the ideological idea of limiting the powers of government from fully serving the economic and political interest of a great many citizens of America is unacceptable.  Remember, whoever is in power inevitably works to garner as much power as it can to execute its political and economic plan on hand—making the liberal ideological idea of “limited government” just a myth.


[1] FDR was so popular; he won four presidential terms that led to the passage of the 22nd Amendment of the US Constitution, restricting presidents to only two terms.

[2] Read Thom Hartmann  Thom is a progressive who argues for similar economic measures under FDR. BTW Thom is also a great admirer of Ethiopian food.

[3] Read Thom Hartmann and there are ample other articles that describe this tax issue in detail.

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