Handsome First Couple, handsome economic performance!
While the title is “Second term unlucky” and the text highlights the historic fact that presidents’ second terms have mostly been characterized by deteriorating economic data, us Coolidge fans can take heart from The Economist’s chart of the day that shows our man doing not badly at all among the exclusive club of 11 two-term presidents since 1901 – the aggregate data for his two terms (more like one-and-a-half, actually) rank among the top.
From the pages of the May 30, 1925 New Yorker, and the pen (or typewriter) of one John C. Emery, a mildly funny bit on how Calvin and Grace Coolidge practice what they preach in terms of thrift:
I have just returned from a week-end in the White House with Calvin and Mrs. Coolidge and of course you want to know if Calvin is as economical in running his household as he is in running the government. Well, he is – or even more so. After two days with him, I thought I’d never go back to my old lavish ways. I mentally resolved to cut out smoking so many expensive cigarettes – think of it, fifteen cents for only twenty of them – but I guess my old habits were too much ingrained. Anyway, I’m smoking Pall Malls now instead of Camels.
The President’s invitation – written on the back of a used laundry list- was not to be denied, of course, and I arrived in Washington early the following Saturday morning and took a cab up to the Coolidges’ although I could just as well have walked.
80 years ago on this day, Calvin Coolidge devoted his daily column to a subject near and dear to his heart ( as it ought to be to ours), namely, government debt.He scarcely could have anticipated the day when the national government would be debating ever more extravagant debt ceilings. I wonder if his thinking really is so old-fashioned and outmoded or whether we might do well to follow his advice regarding the virtues of thrift and economy.
As the income and earning power of the people decline, due to depression, governmental debts and expenses become a real problem. We have been going through an era when nearly all the public debts except those of the national government have been increasing. The expectation was that the general expansion of business would make it easy to pay them. Now the opposite condition prevails.
Ba retiring and refunding its debt the national government is saving nearly half a billion dollars annually in interest. The only other course would have been more extravagant spending or reduction of taxes. Either one of these would have aggravated the present serious situation of the Treasury.
When money is borrowed by a government or an individual to pay current expenses it means living on capital. If carried far enough, disaster results. When debts are paid it means capital is restored. If carried far enough, prosperity and plenty follow. Some of our municipalities borrowed too much in the day of plenty and are not able to meet their obligations. The national government economized some, though not enough, in the day of plenty and is now able to get credit to take care of the day of adversity.
Calvin Coolidge devoted his column of January 17th, 1931 -80 years ago today- to a subject near and dear to his heart both as an individual and as a public person: thrift, which he is careful to differentiate from parsimony and miserliness. I’ve stated before on this blog my belief that the drive for economy or thrift in the operations of the government was perhaps the one big theme of Coolidge’s presidency.
The third week of January has been designated as a time for considering the advantages of thrift, perhaps in part because it follows the birthday of Benjamin Franklin.
Thrift does not mean parsimony. It is not to be in any way identified with the miser. The thrifty person is one who does the best that is possible to provide for suitable discharge of the future duties of life. In its essence it is self-control. Industry and judgment are required to achieve it. Contentment and economic freedom are the fruits.
Most frequently we identify the thought of thrift with various institutions that have been provided to make it effective. We associate savings banks and insurance companies prominently among its agencies. But the main principle is saving today something that will be useful tomorrow. The whole theory of conservation is included. Money is only an incident.
Just at present we need to apply the principle to saving and increasing the strength of our governmental and social stucture as well as our economic fabric. We must not squander those precious possessions. And, above all, a wise thrift now calls for the expenditure of money to save people.
In a statement given at the 7th meeting of the Business Organization of the Government on June 30, 1924, Calvin Coolidge laid out a few basic principles that are well worth remembering today, even if our situation is vastly different (for one thing, he points out elsewhere in the speech that “We are often reminded that we are in the best financial condition of any of the great powers, and we are” — which was true at the time but very likely is not true anymore today).
“There is a most urgent necessity for those who are charged with the responsibility of government administration to realize that the people of our country can not maintain their own high standards, they can not compete against the lower standards of the rest of the world, unless we are free from excessive taxes.
With us economy is imperative. It is a full test of our national character. Bound up in it is the true cause, not of the property interests, not of any privilege, but of all the people. It is preeminently the source of popular rights. It is always the people who toil that pay. (…) Public service is entitled to a suitable reward. But there is a distinct limit to the amount of public service we can profitably employ. We require national defense, but it must be limited. We need public improvements, but they must be gradual. We have to make some capital investments, but they must be certain to give fair returns. Every dollar expended must be made in the light of all our national resources, and all our national needs.”
Calvin Coolidge close up