For decades, everyone was behind the idea that the U.S. federal government needed to be managed better, optimized, right-sized, choose your own favorite term. In contrast to the fabled protector and guarantor of individual liberties, the federal government that most people recognize is a tax collector. Or an inspector. Or a faceless imposer of cold justice. People see the feds as indifferent to common sense, indifferent individuals’ beliefs and values, and too big to fight.
All of the proposed remedies to big government have seemed to be derived from the world of business – and why not? From 1980 to 2020, with some brief but memorable breaks, U.S. economic growth was vigorous and sustained. Business worked and the government stalled. Most individuals appreciated the improvement in the quality of their lives during those decades, and they attributed those improvements to greater economic freedom. They did not give thanks to the federal government for setting it in motion.
Deregulation of industries was the major factor in that sustained growth: airlines, banks, telecommunications, insurance, oil-and-gas, and utilities are some of the economic sectors that gained more autonomy and more revenue during the past 45 years as the regulations shaping their activities devolved.
All those deregulated businesses have grown and reconfigured over the decades, breaking up and recombining, being acquired and spun off again. As long as there is some competitive activity in an economic sector, there is benefit to individual consumers – and that has fueled economic growth.
But in one sector after another, businesses recognize that maintaining competitiveness can be more expensive than managing a satisfactory market share. So they focus on renewals and upgrades. They introduce features that will allow them to raise fees. They acquire the start-ups and IP to provide the innovations they have not developed. They manage their scale rather than grow.
In short, businesses behave more and more like government departments, defining their own areas of activity and declaring their own policies that cannot be altered to address consumers/citizens circumstances. They have the waivers and documentation on their side.
No longer protecting citizens from business, the federal government simply became larger and less responsive to public concerns. The effort to regulate corporate behavior was redirected at controlling consumer choices, industrial and commercial development, and personal freedom. Officials could declare the “the era of big government” to be over, but still dictate automotive design or impose a new federal department to inspect the bags and bodies of shoeless travelers.
Calling for some reform of this growing federal bureaucracy was simple because it was never going to happen. No one could describe clearly how to do it, because no one could grasp how expansive the new regulatory state had become. No one knew how to begin to do it, and no one made any serious effort at it.
Are we now set for the inevitable conflict? When the federal government deregulated industry – turning it loose to cut inefficiencies and maximize value – it created a new kind of adversary, one that is accustomed to getting its way in the end. That adversary also developed the intelligence and tools to determine what has value and what presents an obstacle. And by the twists of politics there are allies in government now willing to make that deal with business.
Some businesses want the government to protect their domestic markets, and others want access to resources, or to information. Most of them want some more liability protection.
Their offer seems to be a renewed dimension of economic growth – and cutting through the many thickets of federal oversight is their proposal. Is the undoable now feasible?
No one will speak up for the takeover target here, but knowing how business works we should want to know how government would work – and who benefits from this unregulated activity.