Mitch Daniels – the Coolidgean candidate?

For a blog that normally focuses on Calvin Coolidge, I have sneaked in a number of mentions of Indiana Gov. Mitch Daniels lately. I was going to be all defensive about it, but on second thought I don’t think there’s a reason to be.

Because for someone who has been following U.S. politics from afar for more years than I care to recount, Mitch Daniels comes closer than any other prominent politician of either party in recent decades to the Coolidge mold, and that includes Ronald Reagan. In the years following the First World War, when the national debt hit record highs, Coolidge focused laser-like on reducing government spending, using the savings to pay back the debt and to reduce taxes. For numerous reasons, not all of which were of his own doing and some of which are eminently excusable, Reagan cut taxes first, but never seriously got around to cutting spending.The concept was “starve the beast“, but the beast was still getting fatter, as William Niskanen has observed and empirically demonstrated.

Coolidge favored the term “constructive economy”, indicating his intention not merely to make every tax dollar sweat, but also to be more innovative. And indeed, many times a crisis or budget crunch has precipitated creative and innovative ways to get by or even get better results while spending less. I see Gov. Daniels as just the right man for an update of this approach today.

Gov. Daniels appears to be inching closer to declaring his candidacy (and here), even while naming valid obstacles – most important among them his wife’s reservations about the grueling race and the impaired quality of life for himself and his family during, and especially after a successful run. Should he decide not to run, we who see him as ideally qualified, will have to respect that decision. As long as he hasn’t made that decision, I’ll keep hoping…and occasionally using this tiny corner of the world wide interwebs to tout him and his program 😉

Update: excellent speech given by Gov. Daniels at CPAC…love the phrase “morbidly obese government”!

 

Stay tuned… regular COOLIDGE blogging will resume shortly 🙂

From pride to disappointment – Coolidge’s final speech to the Business Organization of the Government

On January 28, 1929 – just a few weeks before leaving the White House – Calvin Coolidge spoke at the 16th and, as it turned out, last meeting of the Business Organization of the Government. Looking back on 8 years of reining in a government structure “permeated with extravagance”, the president listed the stunning accomplishments, chief among them the unprecedented reduction in the national debt and the concurrent tax reductions. Beyond mere statistics, the speech clearly shows that this project was Coolidge’s major opus, the cornerstone of what he wanted to accomplish in office and what he intended to leave as his legacy. Yes, it must have rankled sometimes to be accused by some of “considering nothing but the material side of life” or charged with “advocating a penurious and cheeseparing policy.” But ultimately, having inserted “a golden page in our history,” this least war-like of presidents was justified in stating that “peace hath its victories no less than war.”

Characteristically, Coolidge cautions near the end of his speech that “the margin between prosperity and depression is very small,” urging continued vigilance against extravagance and waste. Not very much later, that depression really was at hand, and Coolidge’s successors chose to follow policies much different from his. Today, economists and historians debate whether their frantic actions, resulting in a huge expansion of government rather than “constructive economy”, prolonged and worsened rather than shortened the Great Depression. Be that as it may, Coolidge himself later stated that he felt out of touch with these new policies. It is poignant to me to note how proud he must have felt at the time of giving this speech, and how devastating it must have been later, when this proudest of his achievements was dragged down by the Great Depression and indeed his own policies were blamed as causes of the economic downturn.

The Business Organization of the Government

Incredible as it may seem, procedures for government spending up until the early 1920s were mostly fairly haphazard. The Treasury Department submitted yearly estimates of expenses for all government departments, which resulted in as many as fourteen separate appropriations bills. In 1919, President Wilson had called for the establishment of a national budget system as Congress was separately working on such a proposal, but a compromise worked out between a House and Senate bill was not satisfactory and ultimately vetoed by Wilson.

Wilson’s successor Warren G. Harding had the good fortune to secure from Congress a budget measure that gave the president complete authority over all budget matters. Charles  G. Dawes, who had been Harding’s first choice as Secretary of the Treasury, was named as the first ever Commissioner of the Budget. Dawes warned Harding that “you must realize that you are the first president to tackle the job of a coordinated business control over the departments. I doubt if you recognize the strength of the 150 years of archaisms which you must fight.” Nevertheless, Dawes accepted the job, on the proviso that it be for only one year.

Successive budget directors Charles G. Dawes (left) and Herbert M. Lord in 1922

Harding and Dawes inaugurated the Business Organization of the Government, which first met on June 29, 1921. All members of the cabinet and 1200 bureau and divison chiefs met in the auditorium of the Interior Department. Harding told the assembly that “there is not a menace in the world today like that of growing public indebtedness and mounting public expenditures…we want to reverse things.” With something close to evangelistic fervor, Dawes then spoke for an hour, indicating his specific goal as the removal of “fat” and extravagance from the government. He concluded by requesting all those in the audience upon whom he could depend in this quest to rise – the entire audience rose. Harding later commented that Dawes was the only man he had ever seen who while talking could keep “both feet and both arms in the air at once.”

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