What the World Needs Now is Another Calvin Coolidge

With the federal debt spiraling out of control, many Americans sense an urgent need to find a political leader that is able to say “no” to spending. Yet they fear that finding such a leader is impossible. Conservatives long for another Ronald Reagan. But is Reagan the right model for the problems that currently sit before us? Reagan was of course a tax cutter, reducing the top marginal rate from 70 to 28 percent. But his tax cuts—which vindicated supply-side economics by vastly increasing federal revenue—were bought partly through a bargain with Democrats who were eager to spend all that (new found) revenue that the Reagan tax cuts generated. Reagan was no budget cutter—indeed, the federal budget rose by over a third during his administration.

An alternative model for conservatives may be Calvin Coolidge. President from 1923 to 1929, Coolidge sustained a budget surplus and left office with a smaller budget than the one he inherited. Over the same period, America experienced a proliferation of jobs, a dramatic increase in the standard of living, higher wages, and three to four percent annual economic growth. And the key to this was Coolidge’s penchant for saying “no.” If Reagan was the Great Communicator, Coolidge was the Great Refrainer.

Calvin Coolidge

Calvin Coolidge

Following the Warren G. Harding/Coolidge ticket’s 1920 victory for the office of the president, President Warren G. Harding’s inaugural address set a dramatically different tone from that of the outgoing Woodrow Wilson administration (and from that of the Barack Obama administration’s today):

“No altered system,” Harding said, “will work a miracle. Any wild experiment will only add to the confusion. Our best assurance lies in efficient administration of our proven system.”

Harding was basically saying that he would be a steward of the American system that had worked just fine in the 130 years of America that preceded his election. Harding was saying—as opposed to what Wilson said—that he didn’t believe he was inordinately gifted in bettering the prosperous model that the founders had created. He was basically saying that he wasn’t the type of “miracle worker” that would step into office with his think tank notions to tell the nation that he has a “new and improved” cure to all that ails us? He was basically telling the American public that he wouldn’t be presenting a “New Coke” formula that no president has thought of before, as most of the “New Coke” formulas presented by brilliant, think tank presidents have been tried and tested before and proven to be as successful as New Coke was. In making such a statement, many would say that Harding was displaying what some call the pinnacle of intelligence by stating that he was knowledgeable enough know what he doesn’t know. Put another way, why would the number one, most powerful nation in the world tinker with the formula that made them number one?  Why would they attempt to create a different Coke?

One of Warren G. Harding’s first steps was to shepherd through Congress the Budget and Accounting Act of 1921. This bill allowed Harding to create a special budget bureau—the forerunner to today’s Office of Management and Budget—where the director of the bureau could cajole and shame Congress into making spending cuts. Unfortunately, some of Harding’s privatization policies, combined with some ill-advised appointments, led to bribery and favoritism, and ultimately to what would be called the Teapot Dome Scandal.

Enter Coolidge

Calvin Coolidge entered office, after Warren G. Harding’s sudden death, and separated himself almost immediately from Harding with his willingness to say “no” to appointees, Congressman, and to various “New Coke” bills. (Coolidge ended up vetoing fifty bills, a total that ends up being more than the last three presidents combined.) Coolidge summed up his penchant for vetoing these bills saying:

“It is much more important to kill bad bills than to pass good ones.”

Calvin Coolidge was the type of president, the type of person, that if you asked them what time it was, he would tell you. Modern presidents get their tongues so tied up with advice from advisers, pollsters, and focus group testing, that they’re almost afraid to tell you what time it is based on the fact that a direct answer might be taken seven different ways by seven different networks that need to appeal to a 24-7 audience.

Within 24 hours of arriving in Washington after Harding’s death, Calvin Coolidge met with his budget director, Herbert Lord, and together they went on offense, announcing deepened cuts in two politically sensitive areas: spending on veterans and District of Columbia public works. In his public statements, Coolidge made clear he would have scant patience with anyone who didn’t go along:

“We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic of undeveloped people, or of a decadent generation.”

Perhaps reflecting his temperament, Coolidge favored the pocket veto—a way for the president to reject a bill without a veto message and without affording Congress a chance to override a veto. Grover Cleveland, who Coolidge admired, used this veto in his day, as had Theodore Roosevelt. But Coolidge raised its use to an art form. The New York Times referred to it as “disapproval by inaction.”

The words “perhaps reflecting his temperament” paint a nice portrait of President Calvin Coolidge, for when given the choice between grandstanding on an issue and quietly advocating or dismissing a bill, Coolidge opted for the quiet approach. When faced with the Hurricane Katrina of his day, the great Mississippi River flood of 1927, Coolidge chose not to appear on the grounds of the devastation fearing that that might encourage federal spending on relief; when faced with the problem of what to do with the powerful Klu Klux Klan, Coolidge quietly avoided appointing any Klan members to prominent positions in his cabinet, and he thereby decimated the power of that group in America; when faced with the dilemma of what to do with farming subsidies, the man from farming country, chose to veto the subsidies. He also vetoed veterans’ pensions and government entry into the utilities sector.

Whereas the current barometer of the presidency is set on how much, and how often, they spend other people’s money, Coolidge exhibited a restraint politicians often reserve only for their own money.

Coolidge and his budget director met every Friday morning before cabinet meetings to identify budget cuts and discuss how to say “no” to the requests of cabinet members. Most presidents give in after a time—Eisenhower being a good example—but Coolidge did not, despite the budget surpluses accrued during his presidency. He held 14 meetings with his budget director after coming to office in late 1923, 55 meetings in 1924, 52 in 1925, 63 in 1926, and 51 in 1927.

In a conference call with Jewish philanthropists, Coolidge explained his consistency this way:

 “I believe in budgets. I want other people to believe in them. I have had a small one to run my own home; and besides that, I am the head of the organization that makes the greatest of all budgets, that of the United States government. Do you wonder then that at times I dream of balance sheets and sinking funds, and deficits and tax rates and all the rest?”

Speaking of tax rates, in December 1923, Coolidge and Treasury Secretary Andrew Mellon launched a campaign to lower top rates from the fifties to the twenties. Mellon believed, and informed Coolidge, that these cuts might result in additional revenue. This was referred to as “scientific taxation”—an early formulation what would later be called the Laffer Curve. And Coolidge passed the word on:

“Experience does not show that the higher tax rate produces larger revenue. Experience is all the other way,” he said in a speech in early 1924. “When the surtax on incomes of $300,000 and over was but 10 percent, the revenue was about the same as it was at 65 percent.”

The more recent egos that have occupied the tax payer funded seat of president would likely show a blush at the mention of the power and prestige they have achieved by attaining residence in The White House. That humble blush would be shown in the manner a 70’s comedian would show one hand to reject the applause he was receiving, while the other, jokingly, acted in a manner to usher more applause forward. Calvin Coolidge rejected congratulatory mentions of his power completely. When Senator Selden Spencer took a walk with Coolidge around the White House grounds, the Senator asked the president playfully, “Who lives there?”

“Nobody,” Coolidge replied. “They just come and go.”

For all the praise that authors like Amity Shales heap on Coolidge, his critics state that his policies did not prevent The Great Depression.

Shales replies: “That is an argument I take up at length in my previous book, “The Forgotten Man”, and is a topic for another day. Here let me just say that the Great Depression was as great and as long in duration as it was because, as economist Benjamin Anderson put it, the government under both Hoover and Franklin Roosevelt, unlike under Coolidge, chose to “play God.”

Three lessons we can learn from the Coolidge presidency:

Beyond the inspiration of Coolidge’s example of principle and consistency, what are the lessons of his story that are relevant to our current situation? One certainly has to do with the mechanism of budgeting: The Budget and Accounting Act of 1921 provided a means for Harding and Coolidge to control the budget and the nation’s debt, and at the same time gave the people the ability to hold someone responsible. That law was gutted in the 1970s, when it became collateral damage in the anti-executive fervor following Watergate. The law that replaced it tilted budget authority back to Congress and has led to over-spending and lack of responsibility ever since.

A second lesson concerns how we look at tax rates. When tax rates are set and judged according to how much revenue they bring in due to the Laffer Curve—which is how most of today’s tax cutters present them, thereby agreeing with tax hikers that the goal of tax policy is to increase revenue—tax policy can become a mechanism to expand government. The goals of legitimate government—American freedom and prosperity—are left by the wayside. Thus the best case for lower taxes is the moral case—and as Coolidge well understood, a moral tax policy demands tough budgeting.

Finally, a lesson about politics. The popularity of Harding and Coolidge, and the success of their policies—especially Coolidge’s—following a long period of Progressive ascendancy, should give today’s conservatives hope. Coolidge in the 1920s, like Grover Cleveland in the previous century, distinguished government austerity from private-sector austerity, combined a policy of deficit cuts with one of tax cuts, and made a moral case for saying “no.” A political leader who does the same today is likely to find an electorate more inclined to respond “yes” than he or she expects. {1}

The point, I believe, is that in the current climate of “yes” in Washington D.C., we could use a little “no”. In the event of a natural disaster, and there will always be “unprecedented” disasters in a land mass as large as America, “yes” ingratiates the president to the people of the area, the media, the nation, and history, but it is also “yes” that ends up contributing to the national debt, the idea that the federal government is a parent that should clean up the messes of her children, and it discourages smaller scale charity and communities seeing themselves through a disaster of this sort.

“Yes” also lends itself to the already massive egos of those that will sit in our most prestigious seat of representation, and it leads them to believe they can invent “New Coke” formula, until we’re swirling around the drain in it. These massive egos can’t withstand one commentator saying negative things about them, so they start saying “yes” to everything and everyone before them, because “yes” doesn’t have the political consequences of “no”. Saying no to Congressman and Senators can bruise egos and cause negative sentiments and statements; saying no to Governors that ask for state aid will lead to political fallout in the media as every story on that tragedy of the day would be accompanied by their “no”; telling a woman that asks for a car in a town hall debate the meaning of the word no, and telling her exactly what time of the day it is, would lead to utter devastation for that candidate’s campaign. While Coolidge did not face the 24-7 news cycle, a decent search of his history will reveal that his “no” policies did face a relatively intense amount of scrutiny, and he continued to say “no” throughout.

It would probably be a fool’s errand to try and find another person in our current political climate with the temerity and resolve to say no as often as Coolidge did. The nation has stated that they would much rather live in the fairy tale land of yes, even if that means New Coke ideas that lead to greater complexities, and more economic turmoil. The greater question, that appears to be approaching closer every day, is not whether a “a great refrainer” is a better president than one that believes the nation can user tax payer money to spend the nation out of every problem it has with a “yes we can” president, but if the nation will ever be ready to answer that question without the assistance of a cataclysmic economic incident that affects them directly.



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