This is from the Financial Times, sent to me by my Porsche-driving California-based Silicon Valley high school friend who finds it his mission in life to complete my day with the worst of Donald Trump. The certainty is that if I returned the favour, my email account would be instantly blocked, but I let it continue for its interest. He is a perfect representation of the anti-Trump madness and is highly instructive. The cartoon is from him as well, and truly puts you in mind of the mindset. The story today is from the Financial Times in London, comes with the heading, “Trump, Kushner and the businessman fallacy” and this is how it starts.
When Warren Harding was 19, in 1884, he bought a small Ohio newspaper, probably for $450. By the time he ran for president in 1920, it had made him rich. Harding campaigned as an entrepreneur, promising “less government in business and more business in government”. He is often described as the worst US president, until now.
C’mon, we’ve had Carter and Obama since that time, but as with all media, for the past hundred years the best Republican is automatically ranked lower than the worse Democrat. But as it happens Harding was among the best, and it was his handling of the recession of 1920-21 for which he is best remembered, or by the likes of my mate and the Financial Times, best forgotten. Try this instead: How Government Inaction Ended the Depression of 1921.
Warren Harding was philosophically inclined to oppose government intervention and believed a downturn of this kind would work itself out if no obstacles were placed in its path. He declared in his acceptance speech at the 1920 Republican convention:
We will attempt intelligent and courageous deflation, and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend Republican capacity. We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life.
Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations.
Harding, that least fashionable of American presidents, was likewise able to look at falling prices soberly and without today’s hysteria. He insisted that the commodity price deflation was unavoidable, and perhaps even salutary. “We hold that the shrinkage which has taken place is somewhat analogous to that which occurs when a balloon is punctured and the air escapes.” Moreover, said Harding, depressions followed inflation “just as surely as the tides ebb and flow,” but spending taxpayer money was no way to deal with the situation. “The excess of stimulation from that source is to be reckoned a cause of trouble rather than a source of cure.”
You know the Roaring Twenties. With PDT as president, we may end up with our own version. Harding died in 1923 so this period of prosperity is attributed to Coolidge, but it was Harding who set the prosperity in place. As for the Financial Times, like with my Californian mate, ignorance gives them peace of mind, but hopefully is not contagious.