Wednesday, January 15, 2014
Coolidge, The Anti-Obama
His face may not be on Mount Rushmore (although he was president when it started), and he may be all but unknown to most living Americans, but Calvin Coolidge is an underrated president and a 180 degree opposite to President Obama.
We all know that Obama is a huge advocate for massive government spending and pandering to special interests. He has no qualms with spending more than the government collects in taxes and would love to increase the taxes paid by rich people.
Calvin Coolidge could be the poster child for a small government conservative. Elected as vice president in 1920, he became president in 1923 following the unexpected death of Warren Harding. The government had grown larger than ever during World War I and Coolidge acted to bring it down in size.
Where Obama's never found a federal spending program he didn't like and has continued to lobby for expansion of long term unemployment benefits, Coolidge believed in not spending money the government did not have. For example, WWI vets were demanding a bonus from the federal government. Coolidge opposed it. A major flood of the Mississippi River in 1927 caused untold damage. Coolidge opposed using federal funds to pay for it. When a flood damaged a large area of his native Vermont, he also opposed federal interference. He felt local government and private charities could do a better job.
When first in office at the height of the housing fiasco recession, Obama saw just about all of private industries take actions to stay in the black. Many managers and employees went without pay raises or even took pay cuts. Meanwhile Obama took little to no action to put a hold on federal government salaries. By comparison, Coolidge met on nearly a daily basis with his budget people to find ways to cut back on government spending. One example is that up to that point, all government documents where delivered tied up with red tape. Coolidge approved the change to ordinary string. One year he directed all his departments to lower spending by 2%. His goal was to make the federal budget smaller, year after year.
If Obama could wave a magic wand, he would make rich people pay higher taxes, ¨to be fair.¨ Calvin Coolidge and his Secretary of the Treasury Andrew Mellon did not believe that the interests of the country were best served when there was high taxes on the rich. During WWI the top tax rate was over 70%. Coolidge and Mellon believed that lowering the rate would actually increase economic activity and bring in more revenue. Over a few years, the top tax rate was lowered to 40% and then to 25%. The results were just as Mellon projected, even better. The economy exploded (the Roaring 20's) and even though tax rates were down, the tax income went up, even higher than Coolidge wanted. He was concerned that Congress would spend the unexpected income. Coolidge ordered extra refunds to tax payers to reduce the tax income. No president has been able to match the 3% unemployment rate and 1% inflation rate that Coolidge presided over during his years of president. He was able to pay off one-fourth of the federal debt.
Amity Shlaes, who wrote a must-read book about the Great Depression, The Forgotten Man, is the author of Coolidge, the 2013 biography of Ronald Reagan's favorite president. Coolidge did not live the most exciting life, so the book is not as fun to read as a biography of George Washington or Theodore Roosevelt. Nevertheless, the sections of the book that cover the presidential years of Coolidge's presidency are eye opening. It makes you wish we had a fiscally competent president in the White House now, one who would leave the country in better shape than when he started.
Sadly, Barack Obama is no Calvin Coolidge.
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