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America needs you, Warren Harding?

Posted by B. Daniel Blatt at 12:48 pm - July 13, 2011.
Filed under: American History,Economy,Real Reform

America needs you/Harry Truman,” sang the band Chicago in 1974.”  They added later that the straight-talking Missourian knew “what to do.”‘

Over at Powerline, Steven Hayward paraphrases “Those Were the Days,” the theme song to the 1970s hit sit-com, “All in the Family,” so suggest that given Herbert Hoover’s predilection for government solutions to the Great Depression, we could instead use a man like Warren Harding again.  Hoover, he reminded up, citing Dan Mitchell and others

. . . increased government spending 47 percent in his one term, raised taxes, and signed off on the disastrous Smoot-Hawley tariff, which first caused Franklin Roosevelt to run against Hoover’s profligacy, but later caused Rex Tugwell to say later that “practically the whole New Deal was extrapolated from programs that Hoover started.”

Turns out that to confront the recession he “inherited” (to borrow a word) from his predecessor, the Ohio Republican

. . . cut government spending sharply and rapidly (by almost 50 percent), began cutting tax rates across the board, and allowed asset values and wages to adjust freely as fast as possible.  Harding’s administration, Paul Johnson observed, “was the last time a major industrial power treated a recession by classic laissez-fairemethods, allowing wages to fall to their natural level . . .  By July 1921 it was all over and the economy was booming again.”  The Cato Institute’s Jim Powell offers a more complete summary of Harding’s soundness on economic policy, but suffice it to say that Harding’s traditional approach prevented the depression of 1920-21 from becoming a Great Depression, and in fact set the stage for the roaring twenties.

Seems like the incumbent should look to the example not of FDR, but of Warren Harding if he wants to “jumpstart” the American economy.

Seem America needs a little of Warren Harding’s common sense right now.  That Ohioan really knew what to do.

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5 Comments

  1. Or in other words, Harding treated government like a business that is facing a major loss of customers and revenue. He cut discretionary and low-value spending and he lowered prices.

    Barack Obama and his Obama Party supporters like Counterfail, Serenity, Levi, Cas, Auntie Dogma, and others have never run a business – or for that matter, even managed a budget. All they’ve ever done is clamor for a welfare check and then scream “racist” or “homophobe” if they don’t get it. When they wasted their money and had nothing left, they sponged off the welfare net. It’s like the woman whining about not having the money to pay the electric bill and demanding “help” while she stood in front of her $3,000 TV set.

    Barack Obama does not understand even basic economics. All he knows is that, if he throws a tantrum or namecalls, he gets what he wants. And that’s all he’s doing: throwing a tantrum and namecalling because his money source is no longer willing to finance his reckless spending.

    Comment by North Dallas Thirty — July 13, 2011 @ 1:20 pm - July 13, 2011

  2. On Smoot-Hawley.

    I read recently that the repeal was inconsequential. The reason why? The amount of foreign trade we did in that period was inconsequential, it wasn’t nearly as much as we do now. I believe this was Milton Friesman’s position as well….

    Will have to look it up.

    Comment by Sonicfrog — July 13, 2011 @ 2:51 pm - July 13, 2011

  3. Please don’t insult Warren Harding like this. Obama is much more corrupt already…

    Comment by Bruce (GayPatriot) — July 13, 2011 @ 3:09 pm - July 13, 2011

  4. One luxury that the Harding Administration enjoyed was the lack of today’s massive entitlement and social welfare programs that drain the Federal Treasury inversely to the Economy.

    In those days the US Postal Service and the Customs Service were the two largest Federal bureaucracies. And their size and the income they generated moved lock-step with the Economy.

    Comment by Ted B. (Charging Rhino) — July 13, 2011 @ 3:13 pm - July 13, 2011

  5. Interesting stuff. The self-made newspaper publisher didn’t beat around the bush, for sure.

    Comment by Ben — July 14, 2011 @ 1:26 am - July 14, 2011

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