Throughout its history, America has cycled back and forth between two distinct targets of distrust — big business (including Wall Street), and government. In periods when big business is most distrusted, Americans seek protection from it, and reluctantly give government authority to expand its scope. When big government is most distrusted, Americans want less of it, and give big business greater leeway.
Exactly where the pendulum of distrust is located at any given time depends partly on the business cycle. When the economy is heading upward, distrust of big business is muted and the public fears that government will spoil the party; when the economy is heading downward, big business is deemed the culprit and the public looks to government for solutions. The location and direction of the pendulum also depend on headlines documenting self-dealing and corruption — either among business leaders or, alternatively, government officials.
In recent months the plunging economy combined with headlines about Wall Street’s astounding malfeasance have pushed the pendulum far toward one end of its historic swing. Add in the goodwill a new administration brings, and the public seems ready to accept massive government intervention. Quite apart from good economic arguments in favor of it, for example, the public is supportive of a $500 to $600 billion stimulus plan come January.
But two sets of headlines could cause the pendulum to start swinging back even before the new administration takes office.
The first involves the current administration’s massive bailout of Wall Street — the Troubled Assets Relief Program — to which some $350 billion of taxpayer dollars have already been committed. Never before in history has so much money been spent with such little effect. The Government Accountability Office has already made headlines about the program’s inefficacy and lack of transparency; the Treasury Department’s own Inspector General has described it as a “mess.” Even if the current Treasury Secretary doesn’t ask Congress for the second $350 billion tranche, these and related stories could give the pendulum a shove backward.
The second is this week’s headlines about Illinois Governor Rod Blagojevich’s bizarre and brazen plans to profit from selling off Obama’s senate seat. Nothing has been proven yet, but the tapes are incriminating enough. The longer Blagojevich clings to office and the more stories link his plans directly or by innuendo to anyone else in public life, the stronger the push on the pendulum — back toward public distrust in government.
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