The Growth of American Government, Revised and Updated Edition: Governance from the Cleveland Era to the Present

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American government evolved over the generations since the mid-nineteenth century. The changing character of these institutions is a critical part of the history of the United States. This engaging survey focuses on the evolution of public policy and its relationship to the constitutional and political structure of government at the federal, state, and local levels. A new chapter in this revised and updated edition examines the debate about "big government" over the last 20 years.

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1. Governing the Cleveland Era

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AMERICANS FACED A PERIL, Grover Cleveland warned in his annual message of 1887. This danger, the president continued, threatened widespread disaster and a “brood of evil consequences.” Phrased in such foreboding terms, the peril must have seemed formidable. The modern mind envisions horrors on the scale of a 9/11 attack or the unchecked spread of a virulent flu. But those were not the kind of hazards that Cleveland saw. His menace was surplus revenue, and the source of the problem was a tariff, which the president repudiated as a “vicious, inequitable, and illogical source of unnecessary taxation.”1

Viewed from our own time, Cleveland’s alarm seems quaint and a bit puzzling. Chronic deficits have been government’s normal way of operating since the 1930s. Modern critics complain about excessive spending and mounting debt. Cleveland fretted about government having a surplus of cash. He recognized that government had to collect some revenue, for no public regime can survive without a reliable income. Benjamin Franklin captured the essence of this truism long ago in his observation that “nothing is certain but death and taxes.”

 

2. The Course and Causes of Growth

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EIGHTEEN EIGHTY-SEVEN symbolizes the dawn of modern governance, when older ways of transacting civic affairs came into conflict with new demands on the uses of power. Grover Cleveland’s attack on the tariff in his 1887 address demonstrates the continued vitality of traditional axioms about good government. Wrapped in the rhetoric of republicanism, the president’s denunciation of public favoritism and high taxation showed his devotion to classical American ideals of limited government, fiscal parsimony, and strict dual federalism. These principles underlay his vetoes of spending bills and his passive reaction to the economic depression of the middle 1890s. To many contemporaries then and most historians later, Cleveland has been typed as a conservative whose style of leadership embodied “laissez-faire” government.

Yet the twenty-second president showed another side to his political personality, one that anticipated tendencies exhibited by later chief executives. Signs of this modern style appear in Cleveland’s State of the Union message in 1886. The president’s constitutional responsibility in the annual address includes the recommendation of measures that the chief executive deemed necessary and expedient. Cleveland drew up a long list of suggestions for Congress’s consideration. He urged better fortification of coastal and Great Lakes cities, modernization of the navy, extension of postal service, construction of the first Federal prison, reorganization of the Federal courts, and a policy that would induce American Indians to abandon tribal living. The president wanted legislation that would stop fraudulent acquisition of public lands, enlarge the Labor Bureau and authorize it to arbitrate worker grievances, arrest an infectious disease afflicting cattle, and fill the void created by the Supreme Court’s rejection of state regulation of railroads engaged in interstate commerce. He defended his vetoes of individualized pension bills for Civil War veterans by advocating a generalized program where “relief may be claimed as a right.” And he recommended Federal compensation for depositors in the Freedman’s Bank, a private institution whose financial collapse had stripped thousands of former slaves of their hard-earned savings.

 

3. The Transition Era

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JULIAN WEST GAZED in amazement at his native Boston. It was not the city he remembered. Marvelous public structures adorned an immaculate landscape where hovels once stood. Doors were left unlocked because burglars no longer prowled the night; with “care and crime” abolished, thieves had vanished. The reconstruction of society had closed the chasm between the “wanton luxury” of the rich and the “general misery” of the masses. Now all members of a classless community shared equally in the nation’s expanded bounty. Who managed this utopia, Julian West asked? Government, his host replied. “The nation guarantees the nurture, education and comfortable maintenance of every citizen from the cradle to the grave.”1

This was Boston in the year 2000, more than a century after Julian West had fallen into a “mesmerized” sleep. The America he remembered had been torn by economic warfare, in which greedy entrepreneurs battled for financial survival. The winners of these wars had accumulated fortunes befitting royalty, but the cost of their victories was high. Economic titans had swallowed up competitors, allowing the control of industry to fall into “a few powerful hands.” In this “era of corporate tyranny,” many businesses transformed themselves into trusts and monopolies by forming syndicates and fixing prices. In this drive to crush rivals, corporate cutthroat competition had caused the “maim and slaughter” of workers and the waste of talent and resources. Capitalism of the Cleveland era thrived on the “brutal side of human nature.”

 

4. The Great Depression and Economic Policy

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PHOTOGRAPHS CAPTURED THE tragedy of the Great Depression. Bleak expressions of men slouched on park benches, small groups huddled around ashcan fires near closed factories, lines queued for blocks outside food kitchens, families with their belongings bundled onto ancient autos, shacks in the shadow of city skyscrapers. These poignant images are unmistakable signs of hard times in the 1930s. Yet the pictorial record only hints at the wounds the Depression caused. Survivors of these years remembered the frustration, humiliation, and despair. The trauma of joblessness immobilized some, who became recluses; others got on by stealing food and clothes and by adopting, one recounted, “a coyote mentality.” A few could not face the personal failure of unemployment or financial ruin and found a way out by suicide. Most Americans, however, chose less extreme remedies. They coped with hard times, as people generally do, by becoming cautious, tightening their belts financially, and postponing major decisions such as marriage and children. Many dreams of becoming a doctor, a scientist, a writer evaporated in the struggle to earn a living.1

 

5. The Managed Economy since the New Deal

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MAN, IT WAS the war time. There was jobs all over.” That’s how Muddy Waters remembered Chicago in 1943. On the day he arrived in the Windy City, Muddy found work at a box factory.1 The prospect of a steady job at decent wages had lured him out of Mississippi and the poverty that enveloped black farmhands in the river delta region. What Muddy Waters really wanted, however, was a paying audience to hear him play the blues. So he followed tens of thousands of blacks who quit the cotton fields along the lower reaches of the Mississippi River and went north in search of a better life.

Success to Muddy Waters was snaring a gig in a west side tavern at five dollars a night. Economists saw the mass migration of blacks out of the South as the tendency of labor to flow from low- to high-wage areas. World War II magnified the economic imbalances between regions, which in turn spawned internal migration. Government orders for military goods opened up new positions for men and women in the factories of the East and Midwest, in the shipyards of coastal cities, and in the aircraft plants of California. The creation of well-paying jobs induced a massive relocation of blacks and whites. This reshuffling of people across America was one of several momentous changes caused by the war.

 

6. The New Income Security

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I SEE ONE-THIRD of a nation ill-housed, ill-clad, ill-nourished.” That sobering observation was the keynote of Franklin Roosevelt’s second inaugural address in 1937. Despite the improvement in conditions during the first four years of the New Deal, the president admitted that millions of individuals still scratched out an existence “on incomes so meager that the pall of family disaster hangs over them day by day.” Most Americans in 1937 did not need a reminder that depression lingered in the land. But announcement of such widespread poverty seemed a contradiction in a country renowned for opportunity and plenty.

Difficult too for some to accept was the president’s recommendation that government should “provide enough for those who have too little.” Was it Washington’s obligation to assist people who were in need? Who would be eligible for public benefits? How much should they receive and for how long? These questions raised some of the most intractable policy issues in modern American history. In the eyes of some if not most people in the 1930s, financial help from government subverted time-honored reliance on individual initiative, private charity, and local responsibility. And if income assistance was accepted as a legitimate exercise of national authority, the thorny problems of who deserved help and what was an adequate level of support remained. The national government had begun to consider these issues several years before Roosevelt reported on poverty. During the next sixty years the United States constructed an array of economic security programs upon this foundation. Yet the polity never achieved a philosophic consensus about income inequality or government’s responsibility to ensure a decent standard of living for every individual.

 

7. The New Equality

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ONLY SIX HUNDRED miles lay between Clarksdale, Mississippi, and Chicago, Illinois. For the aspiring bluesman Muddy Waters and other African Americans who left the delta region for the Windy City, however, the two areas were worlds apart. Whether their destination was the upper Midwest or another location, the refugees fled the South’s four curses: social segregation, the denial of political rights, poverty, and violence. These outcroppings of racial oppression had hardened into a comprehensive system of discrimination in the South during the half-century after Plessy v. Ferguson (1896). Racial prejudice among whites existed nationwide; in the South discrimination was legal.

Racial segregation symbolized the South’s traditional legal culture. State statutes and local ordinances created a network of Jim Crow rules that kept blacks physically separated from whites. These laws applied both to privately owned establishments, such as factory washrooms and restaurants, and public facilities, such as city parks and schools. Seventeen southern states mandated that black children attend separate schools, which received a fraction of funds invested in schools reserved for whites. An analogy existed in the North, where public officials colluded with realtors and bankers in erecting racial barriers to property transactions, which put entire communities off-limits to African Americans. Even the Federal government had allowed racial discrimination, most conspicuously in the military (until 1948) and in certain programs (such as wage agreements under the New Deal).

 

8. Paying for Modern Government

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MODERN AMERICANS GRUMBLE when they must add a dime or more sales tax to the cost of a doughnut and a cup of coffee. The approach of April 15, when income tax reports are due, can bring on apprehensions. Life in the Cleveland era had its annoyances too, but paying taxes was not one of them for most people. The average worker paid no direct levies to the government. The explanation for this astonishing situation lies in the way government used to raise its revenue. In the late 1800s the public sector levied two principal taxes—one on property and the other on imported goods. Of the two, only the property tax was levied directly on individuals and then principally on the owners of real estate. But most Americans in 1900 did not own a home or land. Roughly two-thirds of householders in the cities, where most workers lived, were renters. And a third of all farmers were tenants working and living on land they did not own. Property taxes applied to business property too, but only a small fraction of the workforce owned commercial real estate and most who did were also homeowners. Simple arithmetic shows that only a minority of Americans paid property taxes, the largest levy in the republican era.

 

9. The New Faces of Power

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J. EDGAR HOOVER lived in the nation’s capital for all his seventy-seven years. Washington, D.C., still retained a southern flavor in 1895, the year that Hoover was born. The sturdy Victorian houses that lined Seward Square, his boyhood neighborhood located a five-minute walk from the Capitol, reflected the middle-class gentility of his sector of the city. The only nonwhites encountered in the area commuted daily from the district’s black ghettos to work in the homes on Seward Square. J. Edgar’s roots were firmly planted in this city and in its culture, which Federal politics and administration helped to shape. Both his father and his grandfather had been employees in the print shop of the U.S. Government’s Coast and Geodetic Survey. Following graduation from high school J. Edgar worked at the Library of Congress as an order clerk by day and studied law at night. He lived with his mother until her death in 1938 and supported her financially in widowhood. Here in turn-of-the-century Washington Hoover formulated a social outlook that epitomized white middle-class Protestantism. Its values were the standards that Hoover worked for decades to uphold as America’s most famous law officer.1

 

10. The Reagan Era and the Restrained Polity

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REMINISCENT OF GROVER Cleveland nearly a century earlier, Ronald Reagan warned about the crisis of his time. Rampant inflation, unfair taxation, and chronic budget deficits, he said, were sapping the nation’s spirit and stifling its economic growth. “Government is not the solution to our problem,” the president stated in his inaugural address (1981); it “is the problem.” Citing the “unnecessary and excessive growth of government” as the cause the country’s troubles, the president proposed to “curb the size and influence of the Federal establishment.” Reagan entered the White House declaring war on the modern polity.

Mimicking Cleveland’s attack on the tariff and unnecessary taxation, Reagan’s plan of action began with Federal finances. “The Federal budget is out of control,” he said, and “we face runaway deficits.” Reagan urged the reduction of taxes, spending, governmental waste, and counterproductive regulations as ways to lower the cost of government and stimulate private enterprise. Removal of impediments to entrepreneurial incentive would promote economic growth and, according to “supply-side” economic theory, generate greater public revenue even with lower taxes. “Wasteful administrative overhead” should be scaled back by shifting programs to state and local control and to private management (“privatization”).1 Reagan’s vision of a scaled-down Federal establishment, a decentralized political system, and economic policy based on free-market principles would have pleased Grover Cleveland.

 

11. The Debate over “Big” Government

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READ MY LIPS: no new taxes.” Taking a cue from a Clint Eastwood movie, George Herbert Walker Bush pledged to hold the line on taxes in his presidential nomination acceptance speech at the Republican National Convention in 1988. Bush’s promise is among the most memorable political remarks uttered in recent decades. His antitax stand echoed the advice of his predecessor Ronald Reagan and probably helped him beat Michael Dukakis, the Democratic presidential candidate, in 1988. But his “Read my lips” remark came back to haunt the president, who angered supporters by agreeing to tax increases in 1990. Although the president proposed to lower the budget deficit by both a reduction in spending and an increase in revenue, conservatives saw Bush’s budget maneuvering as a betrayal of his antitax pledge. Here was evidence for the Right that the president was not a real conservative. This resentment cost George H. W. Bush votes in 1992, when he lost his reelection bid to Bill Clinton and to Ross Perot, the billionaire independent candidate who focused on the deficit issue.

 

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