Where the Power Lies.(presidential power)(Statistical Data Included)

In the era before Sept. 11, people could say with a straight face that businessmen like Bill Gates were more important than presidents. Not now. George W. Bush is the man. He leads an international war on terror, the reconstruction of New York City, the bailout of crippled U.S. industries, the revival of American defense spending and government efforts to stave off global recession. In a world turned on its head by the suicide hijackings, it's worth recalling that it was a Democrat, Bill Clinton, who declared, "the era of big government is over," only five years ago. Now a Republican president, of the party formerly against big government, is bringing it back.

Or so it would seem. It's tempting to forecast a global retreat by free marketers in this time of war, when governments traditionally muscle to the fore, and many pundits have. Not only the United States, but also Germany, France, Britain and Japan are considering new government interventions to avoid recession. The Swiss just bailed out Swissair, their beloved national airline. The United States and Canada last week forced Bayer of Germany to join the fight against anthrax by cutting the price of its antidote, Cipro. Wall Street is newly enamored of companies with ties to government, particularly defense contractors. Even corporate titans admit that they have fallen a peg. "In the 1990s, there was a common belief that corporations ruled the world," says Lord John Browne, CEO of British energy giant BP. "Without security, it's not possible to do business. Government has to set that framework."

Remember the chutzpah of the New Economy? The bottomless ambition of high-tech entrepreneurs had been plugged even before Sept. 11 by the fall of tech stocks. Now the whole idea of "Silicon Valley," a celebration of individualism and deep hostility to government meddling, has all but vanished from the American scene. In its stead comes a long line of auto-rental companies, insurers, theme-park operators and Hollywood producers waiting outside the White House for a bailout. Their logic: the airlines got $15 billion, we should get some, too. No wonder the land of the free market looks to some like the land of the free lunch.

But look behind the surface. What's really remarkable about Bush before and after Sept. 11 is how little his agenda has changed. The day after the attack, pundits were predicting that Bush would put the federal government in charge of airport security, the way most countries do. Wrong. Bush has held fast to the old Republican hostility to nationalizing anything. The Bush stimulus plan is top heavy with traditional Republican tax breaks, by definition the opposite of big government. After bailing out the battered airlines, the White House commissioned Budget Director Mitchell Daniels Jr. to warn other industries against targeting Washington with "opportunistic spending sorties masquerading as emergency needs." The message quickly sank home. "You could say that the Bush administration had two main objectives, to decrease the tax burden and step up military spending," notes Thomas Meyer, chief economist for Goldman Sachs in Frankfurt. Only one thing has changed since Sept. 11, Meyer says: "They are doing both faster than otherwise."

This familiar agenda has prompted a familiar debate with Democrats in Washington, who are also reverting to form. They want to stimulate the economy by raising the minimum wage, extending welfare payments and taking other measures that really do represent a return to big government. That's encouraging in at least one respect: politicians are not sacrificing ideals to the antiterror cause. They can still make reasonable distinctions in crazy times. After the administration proposed virtually unlimited federal powers for wiretapping and detaining immigrants suspected of terrorism, Congress last week granted the powers, but with clear time and procedural limits, on the ground that even wartime does not justify government by Big Brother.

Less encouraging is the ...