1 No comment.

2 I always list Harding and Coolidge as my favorite Presidents. Most people that I try to discuss this with think that I'm just showing off..obviously the guys on Mount Rushmore, along with FDR, were the best.

3

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4 In '29, after the crash, The Federal Reserve decided to "enforce market discipline." It was like demanding that a heart attack patient get back to work. The Fed absolutely killed a weak economy. Thats why in 1987, when the stock market dropped, the Fed relaxed credit and bank reserves.

5 Axis was less damaging to our economy than the New Deal.

6 **I've been reading a lot on the Great Depression recently. You could argue that it only really came to an end after WWII! Unemployment dropped drastically after the war started - because millions of men were drafted and removed from the labor pool! And after the war there was tremendous industrial capacity in America and huge parts of the world to be rebuilt with it.

This - I have been saying that for a long time. Most people say it ended with WWII, it didn't really. I think it really didn't end until JFK cut taxes in the early 60s.

For a very good read get Amity Schlaes book, The Forgotten Man.

7 and yet, people STILL think FDR got us out of th edepression and did things the right way.

8 I've been reading a lot on the Great Depression recently. You could argue that it only really came to an end after WWII! Unemployment dropped drastically after the war started - because millions of men were drafted and removed from the labor pool!

Good post, though too many exclamation points make you look crazy !!1!

Seriously, I didn't know all that about Harding and am off to read up on my newest Presidential hero.  I'm also serious about the exclamation points ...

9 According to the article they danced their way out of the depression of 1920.

10 Well, Mount Rushmore has Washington and Jefferson. They should be there.

11 Hi there! Anyone seen my corn sombrero?

12

An important question is what % of the economy was represented by govt expenditure at that time.  I would be surprised if it was not a tiny fraction of what we have now.  One other thing that period of time had going for it was that production was pretty labor intensive, so it was a lot easier to soak up the unemployed when things got going again.  This time as things pick up, it's robots and computers that will carry most of the load, not people.  We have to figure out what to do about that.  As long as unemployment remains so absurdly high, consumption will suffer.

13

11Well, Mount Rushmore has Washington and Jefferson. They should be there.

=====

Well, I should.  Tom?  Meh.

 

 

14 Actually it came to an end when the SCOTUS invalidated a lot of FDR's central planning programs. (around the same time as WW2 ended)

15 Two depressions?

What the hell am I -- chopped liver?

16 You can't bail out your friends if you don't print lots of money, fly over their mansions, and let 'er rip!

17

Just got my copy of "Reckless Endangerment" in the mail.

Read thru the "cast of characters" . yikes.

18 When debt exceeds your ability to pay it, you have to deleverage.  It's as immutable a law as gravity.  Trying to postpone it only makes it worse.

19 Nobody ever seems to really understand why the depression ended.  There is ONE reason.  Roosevelt died, and his idiotic policies left with him.

20 Depression...Keynesian stimulus...global war.

Just sayin.'

21 Depression...Keynesian stimulus...global war.

Just sayin.'

And five gets you ten, the next conflagration starts with a Greece fire...

22 Well, the 1920s depression was just being racist.

23 Seriously, I didn't know all that about Harding and am off to read up on my newest Presidential hero...

Posted by: Grammar Maven at June 28, 2011 06:41 AM (zhejI)

Your use of the word and in that sentence is confusing; what associates your knowledge base with a future action? If your meaning is that the unstated object of your hero-worship is Harding, please clarify to render your sentence less distracting. If the sentence is, indeed, combining two unrelated thoughts, then I must emphatically stress a need for further education.

24

 "That he[Harding] has been the subject of ceaseless ridicule at the hands of historians, to the point that anyone speaking a word in his favor would be dismissed out of hand, speaks volumes about our historians' capabilities outside of their own discipline."

Also speaks volumes to our historians' traditional leftist bias when evaluating their subject matter. A vast majority of the best and most accurate history is penned by converted journalists or lay people, anyway. Why do you think "history" is considered so boring by most people?  Precisely because most of it is written by academic PhD/historians who write only for each other!

25 16 Two depressions? What the hell am I -- chopped liver? Posted by: 1907 Oh, look. It's the cute little Panic. You want to play with the big boys?

26

"Two depressions?

What the hell am I -- chopped liver?"

And don't I count?

27 Can we start a fiscal justice movement to counteract tha social justice parisites.

The Tea Party is this I think but everytime some bastard says they want social justice the response should be if we have fiscal justice social justice will follow.

Mostly I just hate the way they use social justice as a lever to empty my pockets.

28 And yet Harding gets trashed solely on the basis of Teapot Dome and all the other scandals.  Perhaps in the grand scheme of things he was not so bad.

29 WWII Did Not End The Great Depression Also, 29 Can we start a fiscal justice movement to counteract tha social justice parisites. The Tea Party is this I think but everytime some bastard says they want social justice the response should be if we have fiscal justice social justice will follow. ... Posted by: Buzzsaw I almost jumped when I saw the "fiscal justice" phrase in Harding's speech. I am so pissed off at this whole "social justice" crap that seeing a counterpoint even mentioned cheered me up.

30 It's already been mentioned but another vote here for reading The Forgotten Man. Takes the entire "FDR is a hero" thing and smashes it into a billion pieces by pointing out what actually happened. People are saying now that we have evidence that Keynesian economics doesn't work but we had a couple of decades worth of experimentation as evidence already that has been spun in history class that its only benefit is in political terms for the ruling class who especially at the time could keep the wool pulled over the public's eyes.

Obama could learn an awful lot from that book although he would probably stop reading after page 34 because he would realize that it's not a book about himself.

31 The Tea Party is this I think but everytime some bastard says they want social justice the response should be if we have fiscal justice social justice will follow.

The commies will just change the meaning of "fiscal justice" from "no stealing what's mine" to "taking what everyone (except for approved party members) has and sharing it out 'equally' amongst the peasantry."

32

Thanks to Mellon we worked our way of the the frist depression in a short time.

In 1939 businesses were still going belly up.  Franklin Roosevelt, who's hero was Joseph Stalin (Uncle Joe), or as Roosevelt would say when covering for Joe, " You have to break a few eggs to make an omelet". Roosevelt played with the economy for ten years, and kept blaming all his problems on Hoover.  He had a lot of characteristics similar to today's Obama.  It was always soneone else's fault. The war ended the depression, but those were not "Happy days" for anyone.

  

33 I'm a Harding Republican now. Man, that doesn't sound cool at all.

34 *nods*

35 Obama could learn an awful lot from that book although he would probably stop reading after page 34

Probably, but it's considered a crazy conspiracy theory to recognize that keynesians have openly stated (let alone been transparent) that their goal is to destroy/dissemble our society and replace it with Marxism. Thereby, Bammy is quite the learned one....

36 I'm just livid. The only thing I was taught about Harding in school was how much he sucked, and how nothing of note at all happened during his Presidency except for maybe the invention of the radio which he had nothing to do with. The fact that his response to the economic crash of 1920 (Which wasn't covered) led to the growth in roaring 20's (Which was covered) is totally a rewrite to the progressive agenda.

37 Debt is the key to understanding depression. Debt levels where way to high in 1920 and 1929, and 2008. Depressions are simply periods of deleveraging that debt. Now the question is how fast do you deleverage? During the great depression we deleveraged very slowly over a 15 year period. In the 1920s we deleveraged the national debt/private debt in about 18 months. Right now we are trying to pump the debt bubble back up through massive government spending. Hang on folks, this might be a 50 year depression with either these clownish party's in charge.

38 Per H. G. Wells "Outline of History" written in the 1930's, one factor stirring things up in the 20's was Germany's WWI war repartations, with the European winners looting Germany to prop up their own shaky economies.  And we know how well that turned out.  

39

I have to echo MikeTheMoose, in that I cannot remember if I was even taught about the depression of 1920, yet alone the governmental non-intervention that led to its rapid end.  I remember Teapot Dome, and that Harding died, and that's about it until the big buzzkill of '29 hit.  I also need to check out The Forgotten Man it sounds like.

 

40 I also need to check out The Forgotten Man it sounds like.

Absolutely, and the good thing is most libraries have it for check-out.

41 Yeah, I have an old friend on Facebook who keeps insisting that FDR solved the depression, that the New Deal was a success, and that government had to spend our way out (and, by extension, should do so again now).

He'll be voting for Obama again next year, of course.

42 Harding / 1920 depression isn't the only instructive example. 

At the end of WW2, Truman and "mainstream" economists feared that the economy would lapse back into the Depression.  Why didn't it?  ArthurK has not hit upon on the real reason.  It didn't, because in an inexplicable fit of good sense, conservative Democrats allied with Republicans to thwart Truman's Big Government plans, cut the budget and cut taxes - again like Harding.

43 I will let Burt and Anita Folsom tell more of the story:

<blockquote>
Â… Harry Truman, in a 16,000 word message on Sept. 6, 1945, urged Congress to enact FDRÂ’s ideas as the best way to achieve full employment after the war.


Congress—both chambers with Democratic majorities—responded by just saying “no.” No to the whole New Deal revival: no federal program for health care, no full-employment act, only limited federal housing, and no increase in minimum wage or Social Security benefits.

Instead, Congress reduced taxes. Income tax rates were cut across the board. FDRÂ’s top marginal rate, 94% on all income over $200,000, was cut to 86.45%. The lowest rate was cut to 19% from 23%, and with a change in the amount of income exempt from taxation an estimated 12 million Americans were eliminated from the tax rolls entirely.

Corporate tax rates were trimmed and FDR’s “excess profits” tax was repealed, which meant that top marginal corporate tax rates effectively went to 38% from 90% after 1945.

Georgia Sen. Walter George, chairman of the Senate Finance Committee, defended the Revenue Act of 1945 with arguments that today we would call “supply-side economics.” If the tax bill “has the effect which it is hoped it will have,” George said, “it will so stimulate the expansion of business as to bring in a greater total revenue.”

He was prophetic. By the late 1940s, a revived economy was generating more annual federal revenue than the U.S. had received during the war years, when tax rates were higher. Price controls from the war were also eliminated by the end of 1946. The U.S. began running budget surpluses.

Congress substituted the tonic of freedom for FDRÂ’s New Deal revival and the American economy recovered well. Unemployment, which had been in double digits throughout the 1930s, was only 3.9% in 1946 and, except for a couple of short recessions, remained in that range for the next decade.

</blockquote>

44

So folks, add up the examples.

- Harding cuts government in response to the Recession of 1920 - it works.

- Hoover and Roosevelt greatly increase government in response to the Recession of 1930 - it fails.

- Truman's opposition cuts government at the end of WW2 - it works.

- Kennedy cuts taxes in the early 1960s - it works.

- Johnson, Nixon, Ford and Carter grow government - and the economy suffers.

- Reagan cuts government in response to the recessions of 1979-82 - it works.

- Bush cuts taxes, BUT he otherwise grows government (spending and regulation, e.g. Sarbanes-Oxley) in response to the recession of 2000 - it kinda works, but at a cost of higher debt and a financial crisis to come.

- Obama greatly increases government in response to the recession of 2008 - it doesn't work.

Lesson: Big government fails, small government works.  Fiscal irresponsibility fails, fiscal conservatism works.

45

All the Beck devotees already knew this.  But big props for ejumakating the masses, Arthur.  This is a staggering piece of info when you finally learn about it.

It's still not too late to get in on the low rates for a subscription to GBTV, which will air from 5-7 p.m. Mon-Fri after the official start-up on 9/12.  He's going to have politically incorrect news, a news comedy show (like Jon Stewart's), kid's programming and movies that he's optioned from books. 

I believe it's 4.95/month and will be viewable through your TV the same way MLB TV is.  Since I don't sucscribe to MLB, I have no idea how this works yet.

46 You have to give Roosevelt credit for one thing.  He forced the concentration of the Pacific fleet at Pearl Harbor in 1940 over the vigorous protestations of Admiral Richardson who feared the inadequate air and naval defenses there.  Richardson was finally relieved of command for daring to question this brilliant move.

Thus you have to give Roosevelt credit for our entry into the war that ended the depression.  Problem solved.

47 45 ... … Harry Truman, in a 16,000 word message on Sept. 6, 1945, urged Congress to enact FDR’s ideas as the best way to achieve full employment after the war. Congress—both chambers with Democratic majorities—responded by just saying “no.” No to the whole New Deal revival: no federal program for health care, no full-employment act, only limited federal housing, and no increase in minimum wage or Social Security benefits. Posted by: ILoveCapitalism Another thing about post-war era. During WW2, due to the U-Boat blockade, Britain had food shortages and food rationing. After WW2, the rationing and shortages continued for ... YEARS. I've never even heard an attempt at an explanation. I mean, the U-Boats weren't sinking the merchant marine anymore. And, due to all the war construction, there were a lot of transport ships floating around. And Britain couldn't get enough meat. Hmmm. Britain institued the NHS shortly after WW2. They were pretty damn interested in socialism then. I think the PM installed after they booted Churchill was socialistic. I wonder if that had anything to do with it? (unusually for me, I'm not being saracastic in that last paragraph. I really don't know.)

48

A greater historical irony is hard to imagine.  By doing almost nothing, Harding prevents a catastrophe, which then becomes a historical non-fact -- the thing that didn't happen. Ergo, he gets no credit at all for it.  And since he died early in his term and since his point of view is anti-progressive and anti-statist, the historians hang the misdeeds of his underlings around his neck.

Roosevelt, faced with a similar situation takes "bold action" (grows the state like a fatty tumor) and retards the recovery from the Depression for a period of eight years, as opposed to Harding's one year recovery.  Roosevelt goes down in the minds of Americans as one of the greatest presidents ever; Harding is a punchline to a joke. 

49 Roosevelt goes down in the minds of Americans as one of the greatest presidents ever; Harding is a punchline to a joke.

Amazing what decades of liberal media and historians will do isn't it.

50

#346:

Bush the Elder caves in to Demunists in Congress--everything but defense in government grows--and the economy suffers.

Clinton (1993-1994) initially raises taxes and proposes socialized medicine--and the economy suffers. Clinton allies in Congress routed in 1994.

Clinton (1995-2000) cuts capital gains taxes in half, backs off all new government programs--and the economy booms.

51

I majored in Economics in College back inthe Seventies, and I can tell you -- the Great Recession of 1920 and it's incredibly rapid recovery was never mentioned in any Economics lecture or Economics text.  Not once -- which aint so surprising because the study of Economics has been all Keynes all the time for generations

Indeed, I only became aware of it in the last two years when the example of Harding's successful policy of non-intervention was brought up by the likes of National Review.  This topic warrants vastly greater dissemination because it was an eye opener, even for a conservative like me

 

52

Out of the $862 Billion Obama Stimulus, only 10% went to infrastruture. Thats was a major mistake, because our Civil Infrastructure is falling apart, and large scale construction projects provide lots of jobs, they have a natural trickle down effect, and they set up the atmosphere for future economic expansion.

The $862 Billion Obama stimulus should have went to (5) main areas.

1.) Infrastruture

2.) Unemployment Saftey Net

3.) Tax Cuts to Small Business

4.) Technology and Business Loans

5.) The Tapping of our own sovreign natural resources

 

53

Britain institued the NHS shortly after WW2. They were pretty damn interested in socialism then. I think the PM installed after they booted Churchill was socialistic. I wonder if that had anything to do with it?

Totally. Atlee's Labourites implemented socialism. Subsequent Tory governments (Eden. MacMillan, Heath) didn't have the fortitude to undo it.

54

#54: It actually did go to your item #2 and #4, in spades. #2 happened so much that for many recepients, it is preferable to working grunt jobs. So when they talk about "illegal aliens doing the jobs americans won't do", keep that in mind.

The rest of it? Your #4 consisted of environmental impact reports for the weenie wonks, and "green job" corporate welfare.

The rest consisted of payments to the states to keep their welfare programs alive. Unsustainable federal spending propping up unsustainable state spending.

Last fiscal year, California went without a budget for nearly four months. Yet the state kept running on "American Reinvestment and Recovery Act" (sic) or "ARRA" funds. This is how the private contractors to the state (hospitals, construction, etc.) were also paid.

I was there, doing the books. I saw it.

55 > 55 Totally. Atlee's Labourites implemented socialism. Subsequent Tory governments (Eden. MacMillan, Heath) didn't have the fortitude to undo it. Posted by: Curmudgeon I meant, did that have something to do with the food issues? (I assume) there were food shortages in 1946 - before the socialist policies were implemented? Or was it that by the time the wartime central planning controls were rolled back, the socialist stuff and been installed?

56

I meant, did that have something to do with the food issues? (I assume) there were food shortages in 1946 - before the socialist policies were implemented? Or was it that by the time the wartime central planning controls were rolled back, the socialist stuff and been installed?

Wartime price controls were kept in place even after the war. Price controls = and --> (equal and lead to) shortages.

57

Been saying it for years.  Coolidge and Harding were right.  Hoover and FDR were wrong.  Hoover was a stupid Rino.  FDR didn't care that he was wrong - he liked the power and loved getting tips from Mussolini and Stalin.

The Depression ended when FDR died.  WWII just outsourced the unemployment into the military.  As mentioned above, there was a push for a post-war New Deal 2.  If FDR had lived, he would have seen it through Congress. 

Once FDR was dead, businesses were safe from aggressive regulations, arbitrary changes to the tax codes, etc...  Then they could start planning again. 

Our present Depression will end when Democrats are driven from power and the regulatory agonies are de-fanged and put under control. 

 

58 - Reagan cuts government in response to the recessions of 1979-82 - it works.

Reagan cut taxes but he certainly didn't reduce the size of government - quite the opposite. Gross federal debt tripled during the Reagan administration, Ford & Carter together only doubled it. Budgets for the Depts of Energy & Education exploded. The number of Federal employees skyrocketed. If Reagan were running today, 2/3 of the commenters here would be calling him a RINO.

59

Obama didn't care that he was wrong - he liked the power and loved getting tips from Wright and Ayers.

Updated, rather than fixed, for you.

60 In addition to Amity Shlaes excellent book The Forgotten Man, Milton Friedman and Ann Schwartz wrote The Monetary History of the United States, which detailed the Fed's misstep during the 1930s.  Keynes was a fraud!

61

@56

Curm,

I totally agree, and that's the point. I think it was O.K. for an unemployment saftey net, but when that saftey net turns into a permanent thing we have a major problem. And yes my #4 did happend but it wasn't focused properly, and there was political motivation and cronyism behind it.....that's a problem!

The rest of your comment I believe to be correct also, and we shouldn't have done that because all we did was extend and probably worsen the pain that is coming.

The point being, I don't mind using some of the Keyensian Theory when the time is right, but if we don't stay focused on getting the spending corret, more uneccessary damage is done to the economy as a result, and the Democrats have a lot of explaining to do. Reagan even used a little Keyensian Theory to get us out of a pretty bad recession, but it was focused well, and had goal that made since. The money we put into technology made sense and paid off big time in the 90's.  

62 Some commenters have said that Harding did nothing, which allowed the economy to turn around so quickly. That's not true. He did a couple of very important things, both of which were part of Andrew Mellon's (Harding's and then Coolidge's Treasury Secretary) economic plan: He cut taxes and he cut the size and scope of government. In other words, Harding and Mellon did what Obama said last week at Carnegie Mellon (As in Andrew Mellon. Isn't that ironic?) last week could not be done. They cut their way to prosperity.

I wrote about it at my blog just three days ago.

63

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64

Ilovecapitalism has it right.

The father of Ben Stein won over the Democratic Congress. The New Deal was not re-instituted by President Truman.  In the United States people had gone five year without buying anything. They had money from working 12 hour a days, 7 days a week.  Now they wanted new cars, new washing machines, and new homes. Europe wanted food and American farmers had it. With cash on hand and demand sky high.  Things boomed!