Here's a take on the Great Depression that I hadn't previously encountered: It would've been just another bust, one of many in American history, except that the New Deal—with increased taxes on the rich and new federal programs for the unemployed and the poor—caused it to last longer and hurt more.
Well, Winston Churchill was surely correct when he said that history is written by the victors. And given the 2010 elections, get ready for some revisionist history as seen from the gated communities and penthouse suites of the conservative winners, where the views are never cluttered by society's riffraff.
Garland S. Tucker III's The High Tide of American Conservatism: Davis, Coolidge, and the 1924 Election is just such an entry. When I saw it on the bookshelves at Quail Ridge Books & Music, I couldn't resist a peak at the author's bio. As it turns out, Tucker is a Raleigh man, president and CEO of Triangle Capital Corporation, and he was speaking at the bookstore that night.
Tucker was quite charming, disarmingly so, and low-key. He's an amateur historian and a Phi Beta Kappa graduate of Washington and Lee University in Virginia with a Harvard MBA. His book is a product of the fact that John W. Davis, the Democratic nominee for president in 1924, was a W & L grad.
Davis was also the last Democratic nominee who was a true conservative. He lost badly to Calvin Coolidge, the Republican incumbent and as true a conservative as ever breathed, and after the 1924 election the two political parties set sail on divergent courses.
Until then, Tucker explains, both parties had conservative and progressive wings. Indeed in '24, Republican Sen. Robert La Follette of Wisconsin ran on a Progressive Party ticket and received 17 percent of the vote. But in the ensuing years, the Democrats renounced their conservative side and the Republicans their progressive one. The two parties have battled it out ever since.
There's nothing new in this. What is new—or new to me, anyway, though Tucker referred to several historians I've never heard of who apparently share this view—is the idea of the 1920s as the apogee of American politics.
Like Allan Nevins, a historian I have heard of, I've always considered the Roaring '20s "an era of selfish materialism" that led directly to the stock market crash of 1929 and the subsequent depression. Lesson: In a capitalist system, don't let the capitalists run amok with other people's money.
But the lesson Tucker draws—as a true conservative himself—is diametrically different. The '20s were years of economic prosperity, he writes. They followed a sharp recession at the end of World War I, a recession ended not by government spending or regulation but the opposite. Beginning in 1920, President Harding and, after his death in 1923, President Coolidge, cut federal spending by 40 percent while also slashing taxes for everyone, but especially the rich.
The Revenue Act of 1926, Tucker notes approvingly, "returned over 70 percent of the tax reductions to taxpayers with incomes under $10,000 a year." Sounds good, except that $10,000 then would've bought you 25 Ford Model A roadsters at $385 each. It was a lot of money, in other words. Nebraska Sen. George Norris, a progressive Republican, complained that Andrew Mellon's tax cut alone would exceed those of every Nebraska citizen combined.
Mellon, whose wealth was second only to J.P Morgan's, was secretary of the treasury under both Harding and Coolidge, not incidentally. And Davis, Tucker's hero, was J.P. Morgan's lawyer (and AT&T's) at the famous Wall Street firm later known as Davis Polk.
So we see who's running the country in the '20s, and things are going swimmingly until '29, when there's "a more severe bust" than before. But it's still just a bust as far as Tucker's concerned. "The price of having a free market is that you have ups and downs," he said during his bookstore talk.
On a different night I might've found this maddening, the Depression as just another downer that the masses should have endured while the House of Morgan rebalanced. Instead I was trying to be enlightened about the "high tide" of conservatism and what that term might mean, not just about the 1920s but in the context of the 2010s as the Republican Party intends them.
And while Tucker is not a Republican politician, he was introduced by Chuck Neely, a lobbyist, former state legislator and candidate for the Republican nominee for governor. Tucker's book, moreover, has flattering jacket notes by Steve Forbes—yes, the patrician presidential candidate of yore—and trusty conservative mouthpiece Fred Barnes, executive editor of The Weekly Standard.
In short, this is an approved text for conservatives, and its message is that whatever good you think that government might do in an economic crisis, you're wrong. It can't do anything.
Tucker doesn't come out and say that the Depression would've ended sooner had Coolidge-like tax and spending cuts been applied instead of the New Deal. He does, though, criticize President Herbert Hoover for trying to intervene with federal spending after he succeeded Coolidge in 1929. Under Hoover, the economy got worse, not better, and then Franklin Roosevelt came in and the Depression continued.
The cause and effect is as clear as if you fertilized your lawn and a tree fell on your house.
Beyond the free-market dogma, however, what's most interesting about Tucker's book, and the encomiums about it by Neely, Forbes and Barnes, is its warm embrace of oligarchy. Sure, Tucker said to me as the event was winding down, in free-enterprise systems markets rise and fall, but over time everyone will do better if government stands aside and leaves business alone.
Coolidge and Davis, two self-made men if you don't count their well-off families, understood this not as a political idea but as the bedrock principle of a free society, Tucker says. The purpose of government is to secure order and protect private property. Nothing else. The fact that both men believed this led to a very gentlemanly presidential contest in 1924, which was a credit to them and the country, if not to anyone in need. Coolidge won, and he followed through with tax cuts. Davis also won, though, because back at Davis Polk he got even richer than he was before he ran.
Tucker quipped that Davis said once that he'd "taken all the monastic vows except poverty."
A couple of weeks ago, I heard Rep. Paul (Skip) Stam, R-Wake, tell the Northern Wake Republican Club that, as unpopular as it will be, the new Republican-dominated General Assembly will keep its pledge to balance the state budget with no tax hikes, only spending cuts. Given the $3 billion-plus budget gap ahead, that means deep cuts to education budgets, which will indeed be unpopular, as well as to social services.
Stam, who fell short in his bid to be the new house speaker but will serve as GOP majority leader, was standing on principle.
It takes men of integrity to stand on principle and cut budgets knowing that out there somewhere—if not visible from their country club windows—children's educations will suffer.
John W. Davis was such a man. He denounced FDR, backed Alf Landon for president in '36 and founded the Liberty League, which stood bravely for the rights of giant corporations. Late in life, Davis appeared before the U.S. Supreme Court to defend school segregation in South Carolina in a companion case (Briggs v. Elliott) to the famous Brown v. Board of Education.
To Davis, Tucker says, this was a clear-cut case of states rights and constitutional precedent, "firmly undergirded by the most basic principles of Anglo-Saxon law." Thus Davis was devastated by the court's ruling, "not because of his devotion to segregation, but because he clearly foresaw the danger of the Court's arbitrary loosening of those 'chains of the Constitution' [which were] the necessary restraint on government."
Ah, yes. Principle.
At the "high tide" of conservatism, men of principle were willing to stand for tax cuts and small government, even at the risk of getting richer while the poor suffered. A century later, men of principle are back in charge.