The problem with "government": The rejection of federalism by libertarian centralists
As I've noted before, many libertarians display disregard for or ignorance of the federalist aspect of our Constitution, often manifested as references to federal constitutional limits on "government," where "government" is used to mean state and federal government. Including both state and fed governments in the term "government" is a subtle way to put forward the centralist idea that the Fourteenth Amendment gives all kinds of power to the feds to police state actions. Only if you believe the feds have the constitutional power to strike down any "bad" state law they don't like, would you even think to say that the feds are "allowing" the states to do something when the fed courts, say, decide not to strike down a given law.
Case in point, in the latest Liberty, Tim Sandefur argues that "On June 23, 2005 [in the Kelo case], the United States Supreme Court held 5–4 that government can seize private property and transfer it to developers to boost local economies [italics added]." Notice this use of "government" here in a manner that implies that the feds have the right and obligation to oversee all levels of "government." In the mind of these libertarian centralists, our entire national legal system is like a big pyramid, with the feds and its Supreme Court at the "top". This view is sensible for a normal sovereign state, such as, say, France; or for one of the US States. But this view is utterly wrongheaded when it comes to the federal US system, in which, if anything, the states are supposed to be supreme over and above the feds, as the parties to the compact that created that unique entity. (See, on this, my post on Kilpatrick; 2.)
A more accurate way of wording what Sandefur wants to say would be something like: "the United States Supreme Court refused to interfere with state governments' takings laws." Such a wording would take much of the huffing and puffing, the tone of moral superiority out of the assertion. It would sound little different than saying, "Today, the US Supreme Court declined to take up a lawsuit by a Ugandan man against Uganda challenging Uganda's non-compensated taking of his family home, on the grounds that it lacks jurisdiction over the sovereign country of Uganda." But I imagine centralist libertarians would describe it thusly: "Today, the United States Supreme Court held that governments can seize property without compensation. It is a dark day for property rights. Run for your lives. The world is about to end. Let's get a grassroots campaign going to seize the property of the Justices without compensation, to teach them a lesson."