The continuing relevance of the 1920s

In an interesting episode of The DMZ on bloggingheads.tv, the astute Kristen Soltis argues that Democrats won the presidential election in part because of their ability to communicate the benefits of voting their ticket. Republicans offered their standard program of lower taxes, less government, and less regulation, and voters were left to translate that into what it might mean for their own personal well-being and prosperity, while Democrats were able to offer specifics as to how their policies benefitted individuals. In a sense (although Kristen takes pains to disavow Romney’s “gifts” statement) and in a nod to public choice theory this does mean that Democrats offered more immediately tangible benefits (free contraception, anyone?) and access to the public trough, while Republicans stood for the longer-term benefits of growing the economy.

In this context the experience of the 1920s does take on some relevance. Distant to and different from our time as they may seem, the 1920s  are a prime example of an administration standing by a program of lowered taxes, debt reduction and governmental austerity, which led to an unprecedented burst of productivity and prosperity. Progressives counter this by claiming that these policies and this prosperity somehow was responsible for or at least resulted in the Crash of ’29 – a causal link that has, to my knowledge, not been scientifically proven and even Jill Lepore, in her paean to the income tax in this week’s New Yorker, is careful to state this claim as a fact. Going forward, Republicans might do well to remind people of the “chicken in every pot” prosperity that ensued when Republican administrations and congressional majorities enacted tax rate reductions. In the tug of war for the GOP’s soul that is unfolding now, some are saying that the bold tax-cutting message of yore has had its day. But maybe the way forward is to educate a new generation about the historical facts.

One thought on “The continuing relevance of the 1920s

  1. I’m no economics expert, far from it, but from what I have read it was the excessive speculation on the stock market which caused it to crash; too much money available due to low interest rates, which was encouraged to be invested in stocks and inflated their values way beyond their worth. Please correct me if this is misguided, but if correct, how does one blame that on prosperity and a government seeking to live within its means, which is what President Coolidge sought and what progressives seem to find so blameworthy?

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