June 13 (Bloomberg) -- Widespread U.S. unhappiness with the government would seem to call for a blockbuster election, such as the one we had exactly a century ago, when both candidates offered sweeping plans for public renewal.
An election fought over such visions makes more sense than our current jobs-growth donnybrook. The president has far more control over the federal government than over the economy. The 1912 election even provides a template for contention, with one candidate urging a Hamiltonian platform of reform through big government, and the other supporting (at least in the campaign) a progressive libertarianism.
Today, just 19 percent of Americans say they trust the government most of the time or more. Only 41 percent agree that “the government is really run for the benefit of all the people.”
President Barack Obama was elected in 2008 as a reformer who connected the recession with the absence of “sensible oversight” that can occur “when special interests put their thumb on the scale.” Two years later, the Tea Party rode a similar surge of anti-governmental anger fueled by the financial bailout and health-care reform or, as Sarah Palin put it, “the collusion of big government and big business and big finance to the detriment of all the rest.”
This unhappiness mirrors the mood in 1912, when a swath of the U.S. also believed that special interests had subsumed the state. Woodrow Wilson and Theodore Roosevelt were Progressives who railed against “the shaping of our legislation in the interest of special bodies of capital and those who organize their use” (Wilson’s words) and politicians “serving the great special interests of privilege” (Roosevelt’s words). More than 75 percent of the U.S. votes cast in 1912 went to Wilson or Roosevelt or the Socialist Eugene V. Debs. The Republican candidate, William Howard Taft, received less than a quarter of the votes.
The election was the culmination of a wave of reform in the late 19th century, fueled by the malfeasance of politicians such as Boss Tweed. His archenemy, Samuel J. Tilden, ran on the 1876 Democratic ticket pledging to fight the “corrupt centralism” that had “infected States and municipalities with the contagion of misrule, and locked fast the prosperity of an industrious people in the paralysis of hard times.” For Tilden-era reformers, government would be fixed if civil-service reform replaced bad people with good people.
By the late 19th century, reformers came to blame the whole system, not just individual politicians. Muckrakers, such as Lincoln Steffens, uncovered the business leaders who funded the political machines. The transport magnate Robert Snyder, for example, paid $250,000 to St. Louis legislators in return for a traction franchise that he rapidly resold for $1.25 million. Corporate chieftains were rumored to run the U.S. Senate, as depicted in a splendidly vicious 1889 Puck cartoon. Some fad-like reforms sought more democracy, such as the referendum and judicial recall powers, and some involved less, such as replacing elected mayors with professional city managers.
Today, antipathy toward Wall Street’s political clout and the bailout gets mixed together with essentially unrelated claims of other financial-sector misbehavior, such as credit-card fees. A century ago, hostility toward bribery and influence was also combined with resentment of other corporate misdeeds, such as Jay Gould’s stock-market manipulations and Andrew Carnegie’s strike-breaking at the Homestead mill. Ida Tarbell lavished poisonous ink on John D. Rockefeller and his Standard Oil Co., which used its alliance with the railroads to shut out rivals.
Some reformers such as Jane Addams and Louis Brandeis espoused conventional liberal views, favoring minimum wages, maximum-hour laws and restrictions on child labor. Other bona fide progressives, such as Teddy Roosevelt’s Bull Moose running mate, Hiram Johnson, would find common cause with Tea Partiers eager to get tough on illegal immigration. As governor of California, Johnson signed the Alien Land Law that prevented “aliens ineligible for citizenship” from owning farmland.
In 1912, Roosevelt and Wilson served their country well by providing alternative visions of reform.
Wilson, the Jeffersonian from Virginia, favored a New Freedom: “I have never found a man who knew how to take care of me.” He wanted to eliminate trusts, because “when I am fighting monopolistic control, therefore, I am fighting for the liberty of every man in America, and I am fighting for the liberty of American industry.”
Influenced by Brandeis, Wilson wanted smaller corporations, but he also wanted limited government, particularly lower barriers to international trade: “The protective tariff has been taken advantage of by some men to destroy domestic competition, to combine all existing rivals within our free-trade area, and to make it impossible for new men to come into the field.” As president, Wilson greatly extended the government’s reach, but in the campaign, he seemed to espouse almost libertarian progressivism.
Teddy Roosevelt, the Hamiltonian from New York, believed in protective tariffs, as long as they were set by “a permanent commission of nonpartisan experts.” He thought that trusts were inevitable, and that they should be managed by “an inter-State industrial commission, which should exercise full supervision over the big industrial concerns doing an inter-State business into which an element of monopoly enters.”
This was his New Nationalism, inspired by Herbert Croly: Big government would control business and retake the country from the “special interests.” This vision would come to fruition in the administration of his distant relative, Franklin, who used the National Recovery Administration to control, not dismantle, big business
Today, left and right hunger for change. The Tea Party Core Belief No. 4 is that “special interests must be eliminated.” They mean business interests as well as labor unions. The Progressive Democrats of America similarly seeks a “government controlled by citizens, not corporate elites -- with policies that serve the broad public interest, not just private interests.”
Obama began his presidency with a “commitment to making government work for the people, not the special interests.” But after the financial bailout and the health-care plan, many see him as comfortably accommodating powerful industry groups. As the Republican rival, Mitt Romney would like to be seen as offering a clean sweep, but both his character and the situation lead him to fixate on the economy, over which he as president would possess only limited power.
What would a campaign of competing reform visions look like?
Obama’s natural role is as heir to both Roosevelts, a leader who wants to clean up government by making the public sector more powerful. To claim his predecessors’ aegis, he needs regulators both strong and smart enough to tame the banks. He must demonstrate his own independence from traditional Democratic interest groups, and show how his pet programs, such as infrastructure spending, will tame “crony capitalism.”
Romney has more space to leap because his campaign has never presented him as a reformer. He can plausibly argue that less government can mean better, more honest government and usher in a New Freedom. He can argue that health-care spending enriches medical companies, and that infrastructure spending only funnels cash to connected contractors.
If he doesn’t want a large regulatory bureaucracy overseeing the financial sector, then he needs to embrace the Brandeisian step of making sure that banks stay small enough so they can fail, or find some credible alternative. He must acknowledge the problems of undue influence, and then offer a plausible form of libertarian progressivism.
Just as in 1912, the public sector needs to become more effective and less wasteful. The current focus on jobs growth is unfortunate because neither candidate can guarantee economic expansion.
The country will be best served if both candidates deliver credible visions, one emphasizing change through big government, and the other delivering reform through limits on the public sector. If Romney feels skittish wearing the reformer’s cloak, he might remember that the victory in 1912 went to the candidate promising small government, not the candidate of big government or big business.
(Edward Glaeser, an economics professor at Harvard University, is a Bloomberg View columnist. He is the author of “Triumph of the City.” The opinions expressed are his own.)
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