I'm always slightly shocked by how those in favour of a big state are shocked by how a big state operates. Take the Marxist (or perhaps Marxian is more accurate) Professor Wolff, writing in The Guardian:
The so-called economic "recovery" since mid-2009 was chiefly hype, a veneer of good news to disguise and minimise the awful underlying economic realities. The few (large corporations and the rich) who bear much of the responsibility for the crisis made sure that the government they finance used massive amounts of public money to support a recovery for them. The mass of the population was excluded from the government-financed recovery for the few.
But why would anyone expect anything else? Large government has a large ability to determine who does and who does not make money. Large government will therefore be infested by those trying to use large government to make money. We've various names and phrases for this, Smith's "businessmen seldom gather together" is part of it, we might talk of regulatory capture and the interaction with public choice economics or we might just quote PJ O'Rourke: when legislators decide what can be bought and sold the first thing to be bought and sold will be legislators.
There really is no great mystery to this. When fortunes can be lost and made by the twitch of a legislators' or regulators' pen then fortunes will be spent on influencing the twitching. And there's no way out of this either: except that one true path, the classically liberal one.
A government large enough to do the things which absolutely must be done by government but one that's not large enough to do any of the things that don't have to be done by government. If no one's going to make any money out of changing the rules no one's going to spend money to do so.
We might of course hope for rule by sea-green incorruptibles but after the drugs have worn off we all really know what the only possible solution is. A government that's small enough that it's not worth bothering trying to buy.