Photo: Charlie Riedel/AP Photo

When the town of Ferguson, Missouri, exploded last month, there was an effervescent moment when right and left agreed on the problem. The problem, Democrats and Republicans concurred, was militarized police. It was the perfect trans-ideological nightmare, combining the right’s fear of centralized authority with the left’s fear of excessive military force.

In point of fact, police militarization bore only the faintest responsibility for the tragedy in Ferguson. At worst, the weaponry at the disposal of the town’s cops made them more aggressive in responding to protesters. But old-fashioned policing tools were all the Ferguson police needed to engage in years of discriminatory treatment, to murder Michael Brown, and to rough up journalists covering the ensuing protests. Police militarization was a largely unrelated problem that happened to be on bright display. Over the ensuing days, it grew apparent that demilitarizing the police might save the government some money but would not address the crisis’s underlying cause, and the momentary consensus evaporated.

The shame of it is Ferguson has exposed a genuine opening for thinking about public life in a way that cuts across traditional ideological lines. The problem is what you might call Big Small Government.

The town of Ferguson, while tiny in scale, is an Orwellian monstrosity. Its racially biased Police Department is the enforcement wing of a predatory system of government described in scathing detail in a recent report by ArchCity Defenders, a Missouri legal-aid nonprofit. The city’s white-dominated council governs a mostly black city, and its oppressive, biased justice system is an instrument of fiscal (in additional to social) domination. Court fines account for a fifth of the city’s revenue. Police officers disproportionately search black drivers, even though they disproportionately discover contraband among white ones. The city issues three warrants per household, and its draconian justice system appears designed to bleed its victims. The report notes, “A Ferguson court employee reported that the bench routinely starts hearing cases 30 minutes before the appointed time and then locks the doors to the building as early as five minutes after the official hour, a practice that could easily lead a defendant arriving even slightly late to receive an additional charge for failure to appear.” While arming these officers with Green Zone–style weaponry may restrict their ability to engage in humane policing, the deeper problem is that they simply don’t want to.

There are not many people who find their freedom so unjustly impaired by the government in Washington as the people of Ferguson are by their local government. And yet while Ferguson—an unusual city populated mostly by blacks and governed mostly by whites—lies somewhat outside the norm, it is hardly a freakish anomaly. Big Small Government is all around us. We simply haven’t trained our minds to notice it.

In very different ways, both right and left have exhibited forms of this mental block. The most concise encapsulation of the dynamite on the right is two sentences that appeared in Rand Paul’s widely ballyhooed opinion piece in Time during the Ferguson protests: “There’s a systemic problem with today’s law enforcement. Not surprisingly, big government has been at the heart of the problem.”

Here was Paul laying bare the mechanics of his ideology. Any problem, by definition, is caused by big government. The most identifiable policy relating to big government at work in Ferguson was a program to arm the local police. Therefore, militarization was the problem.

Paul was expressing an almost axiomatic belief on the right that bad government equals big government, and big government equals centralized government. It is not that American conservatives consistently favor the expansion of state and local government, but merely that they see it as inherently superior to the federal version. (In the words of Paul Ryan, “government closest to the people governs best.”) Thus, conservatives have directed their energies primarily against Washington. The association is so deeply rooted that even figures who are staring directly at a different kind of problem—at Big Small Government—simply cannot see it.

This has frequently left conservatives in the odd position of neglecting to tout powerful cases where their anti-government formula has a genuinely useful application. Consider Texas governor Rick Perry. The once and future presidential candidate has boasted about his state’s economic success and promised to recapitulate the formula at the national level. The success is real. But, as Paul Krugman pointed out in a recent New York Times column, Perry’s formula is all wrong. The actual source of faster growth in Texas, and other Sun Belt states, is that they offer plenty of cheap housing. Indeed, a stream of Americans has steadily flowed from blue states to red ones in order to find affordable places to live.

Why do coastal states lack affordable housing? Because regulations prevent dense construction. City dwellers want to keep out new high-rises. Suburbanites keep out low-rise apartment buildings and townhouses. Housing regulations spread the housing supply too thin. Washington, D.C.’s commuter neighborhoods now extend into West Virginia.

Here is a genuine case of onerous regulation with dire economic consequences. Cities are the engine of American economic growth, yet many of the most productive of them—New York, Boston, San Francisco, to name a few—are starved and drained of workers. And outside of a handful of wonks, neither side has managed to address the problem. Liberals, who dominate the municipal governments responsible for restricting land use, have trouble conceiving of regulatory overreach as a legitimate public-policy issue. They are more often focused on what land-use regulation can do, like preserving historically significant buildings or small-scale neighborhoods that feel like urban villages. Zoning fights tend to fixate on the role of developers, who would, of course, make money by supplying needed housing, which makes them morally suspect. Earlier this summer, Jim Graham, a D.C. city council member, expressed astonishment at the notion that allowing taller housing units in the city—whose demand for housing vastly outstrips its supply—bore any rational relationship to the lack of housing. Those who support development “talk about the need for Washington to respond to the great housing demand,” he complained. “That’s patently absurd. This is about profit.”

Or consider occupational licensing. Some 29 percent of American workers need a state-issued license in order to legally do their job. In some professions, licensing is needed to protect consumers from quacks. In a great many of them, it serves little or no purpose other than to protect incumbents from competition. Plumbing, teeth-cleaning, hair-cutting, hypnosis, interior decorating, and many other skills cannot be legally sold on the market in parts of the country without a government qualifications test. These rules both make the services more expensive for consumers and close off avenues of potential economic advancement. Income inequality isn’t just about low taxes for the rich and generous compensation for executives; it’s also about the difficulty working-class Americans have getting a job as a barber or a dental hygienist.

These regulations don’t exist because of a popular outcry from voters terrified that the person they hire to help them pick out new drapes may lack formal training for the job. They exist because they serve the narrow interests of tradesmen.

The same holds true of restrictions on taxis that prevail in most cities. By the late 1940s, New York City had issued some 12,000 taxi permits, roughly the same number that exist today, which serves to benefit the owners of such permits but ­neither the taxi drivers nor their ­customers. In 2012, the writer Megan McArdle visited D.C.’s Taxicab Com­­mission to inquire about obtaining a limousine-driving permit. A memo on the wall announced that there was a moratorium on new licenses, that the moratorium had been in effect for years and would continue in­definitely, and that copies of the memo announcing the moratorium were not available to the public. This is a case not so much of incompetent government as of deliberately oppressive government, operating, by design, on behalf of incumbent business owners and against the public interest.

Uber has brought taxicab regulations, unlike other manifestations of Big Small Government, onto the national stage. It has scrambled partisan lines. Republicans have attempted to turn Uber into a symbol of free-market economics that can appeal to young and urban voters. Uber hired David Plouffe, the Obama-campaign whiz, to run its political operations. Plouffe’s hire provoked a wave of recriminations from the left wing of his party—here was another D.C. sellout working for the Man. But Plouffe’s support for Uber could also be understood as a natural extension of Obama-style moderate liberalism. At the federal level, where government power is checked by a hostile Republican Party, liberalism means advocating for subsidized medical care, or funding for science and infrastructure. At the local level, moderate liberalism may in fact be at odds with regulation, and advocates of “more government” are sometimes defending an organized racket.

It may seem intuitive that physical proximity makes a government more accountable. This is the image small-­government acolytes conjure when they praise the virtues of local government against the distant capital. But even if it was once true that geographic space inhibited representation, back when a congressman’s journey to Washington consumed days of travel, it is certainly no longer. Who do you know more about: your senator or your state legislator? How about your city council member?

The political scientist Steve Rogers recently studied state legislative elections and found something disheartening and, if you think about it, utterly unsurprising. Since 1910, state house elections almost perfectly track U.S. House elections. The correlation, to be precise about it, is 0.96. Which is to say virtually none of us—even those of us who bother to vote—form judgments of any kind regarding our state legislators. We respond to the national mood, which is shaped by our response to Washington, mainly the president, whose party we punish or reward depending upon national conditions. This means that state legislators operate almost entirely free of any practical accountability from their constituents. Their good deeds will not be rewarded, and only their most flamboyant corruption or illegality will be punished. Their only electoral incentive lies in belonging to the right national political party. The operating conditions of a state legislature are likely to create good government only by accident, if at all. Predatory government functions that would stand little chance of survival in the sustained glare of national politics thrive at the state and local levels.

The occupational-licensing problem has attracted the attention of a handful of national Republican politicians, who correctly identify it as a potential reform that could uplift the poor without spending money. None of them, though, has laid out a plausible program to fix the problem. Cutting down excessive licensing rules, not to mention other incarnations of Big Small Government, would require overruling the prerogatives of state and local governments—governments with absolutely no interest in reducing their power voluntarily. The paradoxical reality is that ending the most abusive practices of American government requires moving responsibility up the local-state-federal chain, which is the opposite of ingrained conservative impulses. And when national right-wing organizations do plunge into local politics, they generally attempt to replicate Washington-style conservatism. Rather than attack nefarious exercises of state power, they attack the most benign ones. A recent Center for American Progress report sums up incursions by the Koch network into state and local controversies: It is hard at work blocking tiny tax increases, preventing infrastructure maintenance, and shuttering zoos and community centers. Big Small Government is spared its ideological assault.

In larger cities, most or even all of the candidates running for municipal office are Democrats. And though Democrats are far more attuned than Republicans to police abuse, intra-Democratic politics is not optimized to root out most government failure. Democratic voters tend to apply an ideology shaped by high-profile national struggles to their local voting habits; they may, for instance, associate arguments against regulation with the sorts of spurious claims made by polluters, Wall Street, or other robber barons, even if Uber’s argument against intrusive regulations has vastly more merit than the coal industry’s.

The myth of localism is rooted deep in our political psyche. Left and right alike use small and local as terms of approbation, big and bureaucratic as terms of abuse. None of us is equipped to see that the government that actually oppresses us is that which is closest to us.

*This article appears in the September 8, 2014 issue of New York Magazine.