Friday, December 12, 2014

The Coolidge Way (Part I)

Coolidge was probably the most underrated and unappreciated president in our history. Many historians are misguided when they blame Coolidge for the Great Depression. Coolidge was also criticized by politicians for being quiet – this was equated to ignorance. And Coolidge was also chastised by politicians for being simple and not necessarily understanding the procedures of big time politics. But some of these things are what sets Coolidge apart from other presidents. Coolidge may have been “silent”, but he was a listener. Coolidge may have been simple and gaffed in political settings, but that was what made him more like the common man.

Coolidge evolved as a politician. Coolidge started his career as a progressive Republican willing to compromise on legislation and grow government. But Coolidge finished his political career as a staunch conservative unwilling to compromise on matters such as national security, fiscal issues, unions, and state rights.

John Kennedy coined the phrase: “Ask not what your country can do for you, ask what you can do for your country.” However, Coolidge coined dozens of these types of individualism phrases a half century earlier. No president believed in the individual more than Coolidge and hence, he did not believe in government intervention.

Coolidge was not the best math person, but he had a simple mathematical philosophy when it came to government spending and the economy. He wanted to minimize government spending while at the same time maximizing the size of commerce. While president, his budget director, General Lord maintained a government budget around 3 billion dollars each year. To do so, Lord had to be so detailed he would limit lawmakers to one pencil at a time. To increase commerce and expand the economy Coolidge and Treasury Secretary Mellon believed in a form of scientific taxation (similar to the Laffer Effect). After a huge legislative fight over several years, Coolidge and Mellon, were successful at dropping the income tax rates for all Americans and the top rate went from 60% to 25%. Scientific taxation supporters (Laffer Effect) believed by lowering tax rates there was more money for commerce and it would result in more government revenues. His plan worked, even with the top earners paying a much smaller tax rate, the government received considerably higher tax revenues because businesses were booming. In 5 years of the Coolidge presidency, he cut a 28 billion dollar national deficit (mostly from WWI) down to 17 billion dollars.

Coolidge made a name for himself as governor of Massachusetts. When the entire Boston police force went on strike, Coolidge did not negotiate or compromise with union leaders for higher wages instead, he fired the entire force. Boston went into chaos and crime because of the callous action of unions and Coolidge’s move to fire the entire force was supported by then President Woodrow Wilson because they both called it a national security issue that risked the wellbeing of Boston citizens. People hailed Coolidge and his popularity skyrocketed nationally.

Coolidge was also immensely unpopular with Democrats and Republicans for his stance on many issues. Coolidge refused to vote for a veterans bonus pay and his veto was eventually overridden. This angered Coolidge’s political enemies because he had to find more budget cuts to keep to his 3 billion dollar budget level. Coolidge also failed to provide any significant assistance to flood stricken states and individuals. There were two significant floods – one in the South and one in his home state of Vermont. Coolidge believed in state rights and individualism to overcome difficult times. Coolidge instead raised money through charities in the private sector to help those inflicted by the natural disasters.

Coolidge could have won a 3rd term (his first term was only 2 years when he took office after Warren Harding died). He decided not to run and later Coolidge opined that the longer administrations are in power the more susceptible they are to scandals. Coolidge knew this all too well because he had to fight Harding scandals throughout his administration. Harding, unlike Coolidge, placed more unqualified people into his cabinet because they were his friends. Coolidge would never do such a thing. The Teapot Dome and VA scandals of the Harding administration sound eerily similar to Obama scandals of today.

It should come as no surprise that Coolidge was not viewed well by historians. After all, he battled and defeated unions, he refused to expand the size of the federal government, and he lowered taxes on the wealthy. Coolidge said the “the business of America is business” and did everything to support private enterprise without any government interference. These are not views that are popular in academia today. Hence, Coolidge was blamed in part for the Great Depression.

1 comment:

  1. Interesting post, Patrick!

    Too many so-called “historians” are really propagandists at heart, so I am very distrustful of them.