One is viewed as among America’s greatest presidents; the other perhaps the worst of all. One is hailed as a savior; the other as a failure. One is given memorials to enshrine his name for all time; the other is pushed into the sea of forgetfulness.
Driven by academia, this is where American history has placed Franklin Delano Roosevelt (in office 1933-1945) and Warren Gamaliel Harding (in office 1921-1923). It is impossible to see FDR absent a “great presidents” ranking; it is likewise impossible to see Harding absent the lowest rungs.
Both men came into office with an economy in tatters and both men instituted ambitious agendas to correct the respective downturns. Yet their policies were the polar opposite of one another and, as a result, had the opposite effect. In short, Harding used laissez faire-style capitalism and the economy boomed; FDR intervened and things went from bad to worse.
Despite these clear facts, in C-SPAN’s latest poll ranking US presidents, FDR finished third in the rankings, while Harding finished 37th. Surveying how both handled the economy, scholars ranked FDR third in that category, while Harding came in at 32. This is a tragedy of history.
America in 1920, the year Harding was elected, fell into a serious economic slide called by some “the forgotten depression“. Coming out of World War I and the upheavals of 1919, the economy struggled to adjust to peacetime realities, falling into a serious slump.
The depression lasted about 18 months, from January 1920 to July 1921. During that time, the conditions for average Americans steadily deteriorated. Industrial production fell by a third, stocks dropped nearly 50 percent, corporate profits were down more than 90 percent. Unemployment rose from 4 percent to 12, putting nearly 5 million Americans out of work. Small businesses were devastated, including a Kansas City haberdashery owned by Edward Jacobson and future president Harry S. Truman.
The nation’s finances were also in shambles. America had spent $50 billion on the Great War, more than half the nation’s GNP (gross national product). The national debt jumped from $1.2 billion in 1916 to $26 billion in 1919, while the Allied Powers owed the US Treasury $10 billion. Annual government spending soared more than twenty-five times, from around $700 million in 1916 to nearly $19 billion in 1919.
Harding campaigned on exactly what he wanted to do for the economy – retrenchment. He would slash taxes, cut government spending, and roll back the progressive tide. He would return the country to fiscal sanity and economic normalcy.
“We need a rigid and yet sane economy, combined with fiscal justice,” he said in his inaugural address, “and it must be attended by individual prudence and thrift, which are so essential to this trying hour and reassuring for our future”.
The business community expressed excitement about the new administration. The Wall Street Journal headlined on Election Day, “Wall Street sees better times after election”. The Los Angeles Times headlined the following day, “Eight years of Democratic incompetency and waste are drawing rapidly to a close”. Others read “Harding’s Advent Means New Prosperity” and “Inauguration ‘Let’s Go!’ Signal to Business”.
The day after Harding’s inauguration, the Times editors predicted “good times ahead”, writing, “The inauguration yesterday of President Harding and the advent of an era of Republicanism after years of business harassment and uncertainty under the Democratic regime were hailed” by the nation’s business leaders. I. H. Rice, the president of the Merchants and Manufacturers Association, told the press, “Good times are now ahead of us. Prosperity is at our door. We are headed toward pre-war conditions … Business men are well pleased with President Harding’s selections for his Cabinet and by the caliber of men he has chosen we know that he means business”.
Under Harding and his successor, Calvin Coolidge, and with the leadership of Andrew Mellon at Treasury, taxes were slashed from more than 70 percent to 25 percent. Government spending was cut in half. Regulations were reduced. The result was an economic boom. Growth averaged 7 percent per year, unemployment fell to less than 2 percent, and revenue to the government increased, generating a budget surplus every year, enough to reduce the national debt by a third. Wages rose for every class of American worker. It was unparalleled prosperity.
Ryan S. Walters, “The Two Presidents Whose Economic Policies Are Most Misunderstood by Historians”, Foundation for Economic Education, 2022-03-05.
February 21, 2026
QotD: Warren G. Harding’s successful depression-breaking policies
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