January 08, 2009
Jim Powell of the Cato Institute has an interesting article at NRO arguing that Warren Harding, not FDR, has the best record of any president in leading the country out of a serious economic downturn. Harding inherited from Wilson an economy that had shrunk 24% from 1920 to 1921, as well as a federal debt that had grown nearly 25 times from 1916 to 1919. Harding reduced income taxes, reduced federal spending, and led the country to its lowest level of peacetime unemployment ever, 1.8% in 1926. Mentioned only in passing by Powell is the fact that Harding “supported tariffs.” In fact, Harding signed the Fordney-McCumber tariff, which doubled the average tariff rate to 38%. In asking Congress to raise tariffs, Harding stated, “I believe in the protection of American industry . . .it is our purpose to prosper America first.” It is thus clear that a high tariff is perfectly consistent with smaller government and strong economic growth, and Americans looking to Harding’s policies for guidance today should not overlook his administration’s trade policy.
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