|Economic Freedom is a mind-set!|
I am often asked which U.S. presidents pursued the best and worst economic policies. My answers may surprise you. In evaluating a President, I believe it is essential to look past his popularity, party affiliation and family background. During the twentieth century, there were several presidential standouts - both good and bad. I want to discuss one of each. In both cases, their policies changed the direction of the entire nation, affecting the lives of millions of Americans.
Calvin Coolidge was Vice President under Warren G. Harding, who became President in 1921. At the time, the United States was in a deep depression. Unemployment was at 20 percent, taxes were high and federal debt was ballooning. Harding insisted on cutting taxes, reducing the national debt and cutting the federal budget (the opposite of what his predecessor, Woodrow Wilson, had done). Following Harding's sudden death in 1923, Coolidge wisely chose not only to maintain many of those policies, but to extend them.
In his first address to Congress, Coolidge called for further tax cuts, fewer subsidies and avoidance of foreign entanglements. "Perhaps the most important work that this session of the Congress can do," Coolidge said, "is to continue a policy of economy and further reduce the cost of government." Coolidge had a deep understanding of the need to limit government growth. His belief in property rights was reflected in his commitment to cutting taxes. "I want taxes to be less," said Coolidge, "so that the people may have more." Coolidge signed into law Revenue Acts that lowered income tax rates from 73 percent to 24 percent. He, together with Harding, also cut federal expenditures in half. "Anybody can reduce taxes," Coolidge said, "but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible." Where were the results of these policies?
It is no coincidence that the Harding/Coolidge era was one of the most prosperous in U.S. history. Gross National Product, wages, profits, productivity and the overall standard of living rose substantially. Although he was quite popular and faced no term limits, Coolidge refused to run for re-election in 1928. Today, it is rare to find any politician who wishes to self-limit his time in office.
When Coolidge decided to step down, Herbert Hoover - who was Secretary of Commerce for both Harding and Coolidge - secured their party's nomination and went on to win the presidency. Hoover served just one term in office. During those four years he essentially reversed the course of federal policy. Hoover pushed for higher taxes and farm subsidies, and proposed costly pension entitlements. He also signed the infamous Smoot-Hawley tariff bill, a protectionist policy that helped cause global economic depression.
Under Hoover, federal spending roughly doubled and personal income tax rates jumped from 25 percent to 63 percent. He raised corporate taxes, too, and doubled the estate tax. Hoover also pressured business leaders to keep wages artificially high, contributing to massive unemployment. By the time he left office, the U.S. economy was in shambles and the Great Depression had arrived.
Hoover is rightfully blamed for much of the economic calamity that left millions of Americans unemployed and penniless. But it is wrong to say he caused the Great Depression by following free-market principles. Hoover did just the opposite. He undermined economic freedom. Those mistakes were then compounded by Franklin Delano Roosevelt's "New Deal," which prolonged the Great Depression. Rex Tugwell, an architect of FDR's policies, wrote: "we didn't admit it at the time, but practically the whole New Deal was extrapolated from programs Hoover started."
The United States is not electing a president this year, but hundreds of other important offices will be on the ballot Nov.2. When evaluating a candidate for public office, I ask a simple question: Does the candidate support economic freedom? Economic freedom does not "belong" to any political party. After all, both Coolidge and Hoover were Republican. Candidates of any party who believe we need bigger government, more regulation, higher taxes, increased spending and borrowing, and more centralized decision making are threats to economic freedom. Like Hoover, their policies leave all of us - especially the poor - much worse off.
Candidates who support economic freedom realize our government is already too big and intrusive, and is spending, borrowing, taxing and controlling too much. They support a strong and efficient government, but one that operates within strict Constitutional limits and in the best long-term interests of society. If you are concerned about creating jobs, growing our economy and enhancing our quality of life, then you need to be concerned about electing candidates that support freedom. This is true everywhere and at all times, not just in the United States this November.