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Coolidge, Hoover, and the Myth of Businessmen Presidents

Author: Amity Shlaes, Former Hayek Senior Fellow for Political Economy
July 1, 2011
Bloomberg.com

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Americans like the idea of a business president. Someone who can grow the economy seems especially desirable these days, with all the talk of a jobless recovery and double-dip recessions.

But the historical record suggests that a president who is good for business isn't always the same as a president who is a businessman.

This becomes clear when you scrutinize the record of Calvin Coolidge, who shares a birthday with the country, July 4.

Coolidge, who served from 1923 to 1929, was definitely pro-business. He called factories "temples." He famously declared that "the chief business of America is business." During the Coolidge presidency, real wages grew. Growth averaged more than 4 percent a year, in real terms. Unemployment stayed below 5 percent. Union membership dropped. The standard of living rose, as people purchased Fords and radios and got their homes wired for electricity.

Most interesting to us today, perhaps, is Coolidge's budget feat. He was a masterful budgeter who dedicated enormous political capital to curtailing spending. Although a child of Vermont dairy land, and the son of a struggling cheese-factory boss, he vetoed aid for farmers with the famous comment, "Farmers never have made much money." The result was something every politician today can envy: The budget was lower when he left the White House than when he came in.

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