The Original Supply Siders: Warren Harding and Calvin Coolidge

Article excerpt

A Republican Congress reduced the estimates submitted by the Administration almost three billion dollars. Greater economies could have been effected had it not been for the stubborn refusal of the Administration to co-operate with Congress in an economy program. The universal demand for an executive budget is a recognition of the incontrovertible fact that leadership and sincere assistance on the part of the executive departments are essential to effective economy and constructive retrenchment.

We pledge ourselves to a carefully planned readjustment on a peace time basis and to a policy of rigid economy, to the better co-ordination of departmental activities, to the elimination of unnecessary officials and employees, and to the raising of the standard of individual efficiency.

--Republican Party Platform, June 8, 1920

Presidents Warren Harding (1921-23) and Calvin Coolidge (1923-29) oversaw one of the most successful and productive economic periods in American history between 1921 and 1928. They attempted to reverse key elements of the statism introduced into the American economy between 1900 and 1920. Their policies incentivized private-sector growth and improved the circumstances of the vast majority of American citizens.

The nation's economic success during this period can be measured in several ways. Production, as measured by real gross domestic product (GDP) per capita, sharply increased. Real wages rose strongly. The unemployment rate fell, remaining below 5 percent after 1924. Income tax rates were lowered. Federal government costs were reduced. The national debt shrank.

These claims conflict with the low esteem that historians have generally expressed for Harding and Coolidge. Three prominent rankings of American presidents by "experts" over the past half-century ranked Harding dead last. Coolidge fares only slightly better, positioned in the bottom quartile of the same surveys (Denson 2001, 5-6).

Largely undone by the New Deal and then forgotten, Harding's policies merit renewed attention because they guided the country out of recession and into prosperity in a remarkably short period. Curiously, modern advocates for a smaller government and reduced taxes look to the recent Reagan administration as an example. Harding's administration was actually the first to successfully apply these general principles.

Although Coolidge's reputation has been partially retrieved in recent years through favorable biographies by Robert Sobel (1998) and Amity Shlaes (2013), Harding's reputation remains badly tarnished. His administration was scandalized by the Teapot Dome debacle and the dishonest dealings of cabinet officials Albert Fall and Harry Daugherty. The most credible biography of Harding dates back to 1968, when Francis Russell penned The Shadow of Blooming Grove, a work that did little to polish Harding's image. John Hicks declared that "the election of 1920 still stands as one of the greatest affronts to the democratic process that the American record affords" (1960, 33). Ironically, Hicks conceded that "voters gave Harding, whose unfitness for the Presidency could hardly have been more obvious, the highest percentage of the popular vote achieved by any presidential candidate since well before the Civil War" (33).

Harding's poor reputation among historians and political experts is understandable given his personal faults, the scandals that tore apart his presidency, and his inability to exhibit strong leadership skills. Did he select his cronies Fall for interior secretary and Daugherty as attorney general? Yes, Harding is guilty on that count. Did the president participate in multiple extramarital affairs? He is also likely guilty on this count. Was alcohol regularly served in the White House during Prohibition? Yes, another guilty verdict.

This evidence rightly highlights Harding's very poor judgment in appointing two unworthy friends to cabinet posts and indicts him on questionable morals and leadership. …