You are seeking personal liberty by dismantling the social structures that limit the ability of the extremely wealthy from taking your liberty for profit ... The government needs to be BETTER, not larger or smaller. ... I agree with many libertarian ideals, but the agenda should not be to dismantle the government.
I feel that's a glib description of what Libertarians and libertarian-leaning people have in mind. Don't attack labels or even people - attack specific ideas. You say you agree with many libertarian ideals, so we probably have more in common than we know.
Going back to the "robber-baron" topic discussed by you and the AC... today's "robber-baron" is the multinational conglomerate corporation. PepsiCo... Apple... WalMart... Berkshire Hathaway... basically any Fortune megacorp. Which system of government do you feel would be easier for the megacorps to influence at the cost of the American people's liberty? A single government entity with jurisdiction over all the land, or 50 smaller entities concerned only with their own land? A corporation that wants to engage in regulatory capture wants a government with a pyramid-shaped corporate structure to match its own. Forcing a national corporation to comply with a different set of regulations for every state in which it operates places a huge tax on it that it cannot simply lobby away. Okay, so maybe it can, but the lobbying would be about 50 times more complicated, and it would likely still have to fragment its supply chain and business offices to comply with state-by-state differences with respect to things like banned materials. Decentralized government favors smaller, localized corporations more effectively and permanently than any decree from some bureaucrat's office in DC. I think this is approximately how many people arrive independently at the conclusion that smaller, locally-limited government leads to better overall government with near certainty.
You mentioned that we don't need more or less regulation, just *better* regulation, and I agree with you, but how do we achieve better regulation with a strong centralized government? Be ensuring that "only the right people" are placed in charge of the inevitably massive social machinery? And what do you do when a malicious person eventually gets control of the levers of power? Raise a stir among the 300+ million people who have the authority to reign him/her in? What are the chances that the electorate will even find out about it amidst the million-and-one other things the monolithic government is doing? Our federal government long ago exceeded any kind of human scale, it is not managed by people as originally intended but by institutions like the Aspen Institute, massive corporations, and its own bureaucracies. To take one example, there is no one human being who knows the entire US Tax Code. Does raising money for a government really need to be *that* complicated? Rule by institutions is poisonous to personal liberty; it shifts control of decision-making away from individuals and towards conference rooms full of career politicians and K Street lobbyists who all used to be drinking buddies at Yale and Harvard.
Today, a national government (and a matching national corporate culture nuking and paving regional tastes and values... "I'm lovin' it") has us thinking of ourselves as "Americans" concerned with national matters, and not just "Iowans" or "Californians" concerned with our own matters. Evolution takes place faster in small populations. With centralization, we are all but surrendering ourselves to an indefinite status quo of homogeneity. With a strong centralized government, if you're in the 49% minority on an issue that's important to you, your *only option* is to get hundreds of millions of like-minded people behind you. Good luck. Sure, you can always move to another country, but world superpowers have a way of imposing their laws on other countries. With a decentralized government, if one state goes sour, its people can move out and deprive the state of tax revenue and members of US Congress, starving the dread state of victims, decreasing any influence it might hold over the nation, and eventually causing it to collapse on itself. I think that's the whole idea the anonymous coward was trying to convey to you with his link to the Myth of The Robber-Barons - we need to be prepared to let bad institutions (corporations, governments, whatever) die a lonely death instead of using other (fallible) institutions to regulate them into eternity.
I submit to you that it's impossible to know or care very much about people who don't live in the same area as you, and that this sharply limits the virtues of strong national governments. For example, I've lived in Iowa my whole life and I've never met anyone from New Mexico. A strong central government gives me a say in New Mexico's government, but how can my ability to govern New Mexico even come close to that of a New Mexico resident? I feel like it's impossible to justify a strong central government's inherent flaws without accepting as given that most people just aren't capable of ruling themselves, and that they require a professional national managerial class to place them in one big playpen to better ensure they don't misbehave. I'm guessing (hoping) you'll disagree with that, and I'd be interested in reading your rebuttal.
This argument is getting long-winded, so I'll try to sum up my frustration with centralization in four words: "Too big to fail."