The Politics of Boom and Bust
Three Republican presidents – Warren G. Harding, Calvin Coolidge, and Herbert Hoover . . . In a
retreat from progressive reform, Republicans . . . cooperation with big business. . . .
Meanwhile, foreign policy . . .
II. President Harding
When he won the election with the biggest landslide ever in 1920, he was a likeable guy, a
newspaperman by trade, a lieutenant governor of Ohio, and a Senator . . .
The “Ohio Gang” . . . Charles Evans Hughes was his Secretary of State, . . . Andrew W. Mellon
was the Secretary of Treasury . . . Herbert Hoover was the Secretary of Commerce . . .
But thee were some bad choices too – Secretary of Interior was a Senator Albert B. Fall, and Attorney
General Harry M. Daugherty would become infamously known as the “Ohio Gang.”
All together their dream was not “laissez-faire” but to have government guide business along the
path to profits.
This was made easier as Harding got to appoint 4 SC judges during his 3 year presidency, and the
Court would cut away at different progressive legislation. For instance in Adkins v. Children’s Hospital
(1923), the Court reversed Muller v. Oregon . . .
Domestically, the President did several things.
As I stated earlier, Mellon sought to lower taxes for the rich, did away with the inheritance tax,
but in the process he did NOT lower the rates for taxpayers earning less than $66,000!! . . . Mellon also
sought to balance the budget and reduce the national debt, . . .
He did not raise the tariff with the Fordney-McCumber Tariff Law from the 27% of the
Underwood Tariff of 1913 to about 38.5%! , , ,
With both the tax reductions and the raising of the tariff, Mellon and Harding ran into opposition
from Midwestern Republicans and southern Democrats, who combined to form the Farm Bloc.
But Harding and later Coolidge were undeterred . . . . Thus they used their powers to convert
regulatory bodies like the ICC and the Federal Reserve Board into pro-business agencies.
Trickle down economics