Time for Another Harding?
How a much-derided Republican president actually succeeded in cutting the budget and fixing the economy.
The presidential campaign was heating up, and the progressives in office were nervous about their chances of holding the White House. It was unclear at first which contender for the Republican nomination would get the nod, but when the candidate eventually was chosen they denounced him as “a confirmed and hopeless reactionary.”
The year was 1920, and they were talking about Warren G. Harding. The editor of the New Republic foresaw dark days: Though no fan of the Democratic candidate (James Cox), Herbert Croly expected Harding’s Republicans to concede nothing to the progressives. The United States, he wrote shortly before the election, was about to enter eight years of “reaction, prolonged and untempered.”
And indeed, Warren G. Harding has come to be thought of as one of the worst presidents America has ever had. Yet the truth about his presidency is quite the opposite. He achieved a good deal more in the two and a half years he served before his sudden death than many presidents accomplish in a full term. A popular newspaper publisher and senator from Ohio, Harding won the presidency in a landslide, with 60 percent of the popular vote, the highest share ever recorded up until that time. The handsome, warm, gregarious, and modest Harding was a natural politician, known in the Senate for his ability to bring opposing sides together. He was as different from his predecessor—the by-then unpopular Woodrow Wilson, perceived by many as a rigid, unapproachable ideologue—as one could possibly be.
The outlook was certainly bleak for America when Harding took office in 1921. The country’s entry into World War I in 1917 had resulted in an economic bubble. Wartime demand kept employment, wages, and profits high, while the Federal Reserve inflated the money supply. Under Wilson, not only the Army and Navy but the entire federal government grew at a fast clip, and the national debt skyrocketed, from around $1 billion in 1914 to $24 billion in 1920.
When the war ended in November 1918, Wilson’s lack of planning for demobilization meant that four million soldiers were sent home under chaotic conditions with little money and few benefits. Demand fell, bringing bankruptcies, business closures, and rising unemployment. During the depression of 1920 to 1921, industries cut back production, many of them running half-time. The drastic drop in wholesale prices hit farmers hardest, causing the price of farmland to collapse. When African-American soldiers returned home after fighting abroad for democracy and couldn’t find jobs, they felt they were once again being relegated to second-class status. The result was race riots throughout the Midwest’s industrial belt.
Harding promised to heal the nation and return it to prosperity—to “normalcy,” as he called it. He would turn things around by lowering taxes from their wartime highs, reducing the debt, balancing the budget, and making the government smaller and more efficient. Taxes, he thought, had become so high they were counterproductive, preventing the revival of business. Harding had campaigned on this platform, and once in office he faithfully carried it out.
To Harding, America was an exceptional country whose citizens enjoyed equal opportunities to develop their abilities, and whose success ultimately depended on a dynamic free market. At no time did these principles stand in such stark relief as in 1920, three years after the Bolshevik Revolution. During the campaign, Harding delivered his message to over 600,000 people who traveled to Marion, Ohio, to hear him speak from his front porch. Some of them were African Americans, a majority of whom supported the Republicans, the party of Lincoln. He told them:
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