Romney’s Mellon moment?

Once in a while I ask the Coolidge-minded reader of this blog to forgive me for commenting on contemporary politics. While the current race (slog is more like it) for the Republican nomination has been a topic before, it was mostly me cheerleading for my dream candidate Mitch Daniels, who turned out to be a non-candidate. His current book, Keeping the Republic, is still highly recommended.

At present, while flavor-of-the-day favorites come and go, Mitt Romney marches on solidly yet somewhat stolidly. And while his penchant for flip-flopping has not endeared him to many, every once in a while he says something that makes me like him (and I really do want to like him – above all, he seems like a decent guy, which is not a bad basic for a candidate or indeed any human being). One such occasion was when he faced down a leftist heckler by stating, correctly and forcefully, “Corporations are people.” And now, he’s done it again – telling the truth about home ownership and foreclosures, even if this is unpopular – or perhaps, as the article suggests in jest, he wanted to give his candidacy some legitimacy by taking just one single unpopular position. Predictably, he immediately got slammed by a Democatic Party ad.

It is a bit of a stretch, but statements like Romney’s “let it run its course” bring to mind the statement attributed to Andrew Mellon, long-serving Treasury Secretary under presidents Harding, Coolidge, and Hoover (some say they served under him) re the Great Depression: “Liquidate labor, liquidate stocks, liquidate farmers, liquidate real estateā€¦ it will purge the rottenness out of the system.” This quote is from Hoover’s memoirs, so they probably and self-servingly overstate Mellon’s point, but it probably does describe Mellon’s view correctly, namely, to let the slump run its course without statist meddling. Hoover, and FDR, veered far from that and today some economists are coming around to the idea that all their meddling and all their cajoling and bashing of business not only did not help end the Depression but may well have needlessly prolonged it. In my view, Romney is likewise correct in implying that there will ultimately be less pain for “underwater” homeowners if corrections run their course rather than being meddled with by the state for populist reasons.