 This is Mises Weekends with your host Jeff Deist. All right, ladies and gentlemen, welcome. Once again to Mises Weekends, we're very, very pleased to have a special guest this weekend, Amity Schles, who is a good friend of Bob Lutty, one of our board members. Many of you probably know her writing and outlets like Wall Street Journal and Forbes. She has apparently four New York Times bestsellers, including the Forgotten Man, which our listeners will enjoy hearing about as a bit of a revisionist history of the Great Depression period. But today our topic relates to Calvin Coolidge, someone upon whom she is an expert. She sits on the board of the Calvin Coolidge Foundation, but she's also written a book about him just entitled Coolidge, which was again a bestseller in the New York Times. And it really goes into the man in some ways that most libertarians probably have not. So that said, that mouthful said, Amity Schles, thanks so much for your time today. Oh, thank you, I'm glad to be here. Well, I wanna start with some big picture stuff. It's interesting how today, especially in our presidential politicians, we expect omniscience and we expect hubris almost. I wonder if being taciturn almost hurt Hillary Clinton. In other words, Calvin Coolidge was very unlike the archetype of a politician today. In other words, he displayed humility rather than hubris. Well, that's right. And he wasn't alone. I mean, this came out of an ethic that was quite common in the period, basically the American ethic, which is that we serve, whether it's our church or our business or our family or our community. It's a focus and service, sort of like thinking of a country that's all Boy Scouts or tries to be. It's interesting though that he, the time that he served in the White House, here he is wedged between these two progressive avatars in between Woodrow Wilson, whom a lot of libertarians hate and FDR. And in many senses, he was the antithesis of both of them in his sense of what government could do. Well, Touche, the, I think, can you have a triple sandwich? She sandwiched along Theodore Roosevelt, Woodrow Wilson, and Franklin Roosevelt. So Theodore Roosevelt was the first modern activist who said, get action. He actually said that. And he was quite impulsive and believed in jumping in and making decisions late as the mood struck him. Wilson had a theory or two, especially regarding international relations, but basically also believed in activism and that through action, we change the world. If we need a world treaty, so that we won't have a war again, everyone has to sign it. He didn't look to individuals, but rather to signature statesmen and groups. And after Coolidge was Franklin Roosevelt, who focused almost exclusively upon groups and giving them political rewards and thought of America as a series of coalitions of groups who needed action, political and economic in order to thrive. Coolidge is completely different. I mean, if he were a sport, he'd be a wind surfer because the wind surfing looks so easy. It's all about holding still. When you try the inaction of wind surfing, you find it's very hard on your core, right? He held still and therefore the country moved forward like a sailboat or a wind surfer. And what he demonstrated or reminded us is that inaction is tough when you're a chief executive because everyone always pushes the button, wants you to act. Coolidge was quite conscious of this. He said, I've never been hurt by anything I didn't say. He pointed out that when rocks come rolling down the road at you, nine out of 10, rolling to the ditch before they get to you, he actually told his father, while he was still mayor of Northampton, Massachusetts, where Smith College is, and his father was a lawmaker in the capital of Vermont, Montpelier, that it is better not to sign a bad law. It's better to stop or block a bad law than to sign a good one. That's pretty strong. To view yourself as a blocker, in a different sense than we use it today, and to see walking as full of merit. Well, the other interesting thing about him, of course, is that World War I was still hanging in the air. And he used the term post-war normals. See, talk a little bit about that and how we don't seem to be able to reach that in America anymore. Wars don't end. Wars don't end, that's right. And if you look, we don't have a chart today, but if you look at what happens to governments after wars, and some of our friends have done this quite well, what you see is the government usually gets a new normal, which is a bigger government after each war. So the government gets bumped up with each war and then bumps up some more with the next war and there's never a full-scale retreat. Coolidge restrained government more than other leaders following a war, in his case, World War I. And he did that consciously. What's fantastic about him, especially now when you look at what lawmakers are able to achieve, what presidents are able to achieve is that Coolidge served 67 months, and that would be from 1923 to 1929. And when he left government, the government was actually smaller than when he came in. And being a sophisticated audience, our listeners will say, oh, Amity, is that per capita? Is it real? No, of course it's real, it's also nominal, but in addition, he didn't just restrain the increase Coolidge. He actually shrank the government so you don't need to do that per capita stuff. He shrank the government. How did that happen? And that goes back to his 50 vetoes. He vetoed like crazy, which is tough to do. It makes you unpopular. So just to clarify, he left office with a nominally smaller annual federal budget than when he entered. Is this correct? That is correct. Wow. Well, coming out of World War I, the Federalist website published this great speech he gave at the American Legion in 1925, where he actually did use the term America first, but then he draws it out a little bit and he talks about not viewing ourselves as superior to the rest of the world. So give us sort of your thoughts of his foreign policy. Well, Coolidge, that's a wonderful speech and you want to think particularly where it came from in the period where the Ku Klux Klan still existed in meaningful form, was still killing people where he was with the more restrictionist party, Coolidge, the Republican party. His party was for immigration restriction. It was not, I would say as close to the Ku, I mean, obviously it's not as close to the Ku Klux Klan as the Democratic party, but it was a restrictionist party and in that speech Coolidge said, I'm going to read it to you. Whether one traces his Americanism back three centuries to the Mayflower or three years of the steerage is not so important as what we do when we are here because once we are here, now I paraphrase it, but this is what he said, we are all now in the same boat. Anyone who lives in America is in the same boat and that's a wonderful worldwide signal from Coolidge. America is a model where everyone is in the same boat. We don't have social classes here. That's the point he's making. In terms of foreign policy, Coolidge was not a neocon. He was not an intervener. He pretty much believed that staying out of conflict was the best thing for the United States. He got tangled in a few Latin American conflicts, even one in Nicaragua with the people who later became the contras, but he didn't jump in with two feet the way, say, Theodore Roosevelt had. But this wasn't just a policy thing. This almost seems intrinsic in his worldview that government power should be used judiciously and that includes trying to remake or fix other parts of the world. Of course. Remember, the US is an island at that time. There weren't airplanes. In his life, in his presidency, he saw Charles Lindbergh cross the Atlantic and celebrated that, but there weren't routine flights. So he thought, well, maybe that's okay that it's an island and let's see what we can do here. Domestically, he was, of course, an enormous non-intervener. Let's mention some of the things he vetoed farm subsidy twice and that wasn't easy because he's from an agricultural place, Vermont, right? Cheese, his father had a cooperative cheese factory in Plymouth Notch and we hope your listeners will visit us there because the cheese factory is still open and the cheese is pretty good. Anyway, so you might imagine an ag situation and an ag situation where ag isn't easy, you know what people say about Vermont? They say that the farmers there farm rocks. It's very hilly, it's not happy soil, it's not good for wheat. It had a terrible downturn when the Midwest was discovered that is in the 19th century and everyone saw how much easier it was to get grain out of an acre of land in the Midwest or farther west. The people of Vermont went away to the Midwest and eventually also to the South and to California. So Coolidge well understood agricultural hardship and yet he vetoed twice agricultural subsidy because he thought once the trend started, it would never end and he was right. There's some funny descriptions of interactions with Coolidge. One was when some farming lobby came to see him and Coolidge was rather silent, right? And he had a lot of, he would use the pause in his rhetoric. So he would say something like, sorry, he did say, he said, when they asked, well, farmers never have made much money. Pause. Don't suppose they ever will. Pause. Don't suppose there's much the government can do about it. You wanna contrast that with the action plans both parties have had vis-a-vis farmers today. Another area of serious vetoing was pensions. He foresaw what entitlements would do to the United States and he opposed that and therefore Coolidge vetoed veteran pensions, which were sort of the beginning of what we would call social security. And that was tough too because the veterans had only one leg, remember very close to World War I. They didn't have penicillin, their wives didn't work, they needed pensions, but Coolidge just said this trend will be too much for our government to bear and therefore I'm going to veto this legislation. Well, the other thing that was of course fairly new at the time was the central bank that Fed had only been created about a decade earlier. Talk about what was then a very new concept even monetary policy, give us his views or his thoughts on money. Well, he didn't have a lot and he wasn't sure though it was his job to take care of money. Remember, for example, the Securities and Exchange Commission didn't exist yet. So who regulated the stock market in New York? Well, New York State with the Martin Act with various laws. So when it came to the Treasury and the Fed, we had a different Fed law from what we have today. The Treasury was more involved, but Coolidge believed in delegation and he had the world's best Treasury Secretary, the world's best debt rearranger, the world's best refinancer, Andrew Mellon, at the Treasury post. So whatever Andrew Mellon said, Coolidge thought was fine and most of us would as well. Remember that the era has been criticized as being one that was too easy, that is interest rates were so low that therefore, therefore, therefore, there was a bubble and then the bubble pops and the Great Depression and we hear that a lot. Well, what were those really easy interest rates that the United States had? They were over 4%. So what are we today? So, you know, in Coolidge's time, except for the stock market and the real estate market in Florida, it was hard to find huge inflation. You could, some people even see deflation and things went pretty well. When the stock market got too high, which was towards the end of the Coolidge presidency, when I'm trying to remember, but I believe when he left office, the Dow was about 280. Coolidge was disturbed and he thought there'd be a crash, but there had been many, many crashes, four or five in his lifetime without any Great Depression, right? They had to panic and to snap back and Coolidge had no reason to believe that wouldn't repeat itself. One thing that's worth knowing is that when the crash happened, of course, under Herbert Hoover and Hoover acted more like a Democrat than a Republican as far as response to the crash. He believed in easing, he believed in spending to stimulate, he believed in pushing wages upward in a downturn so that the worker will spend and stimulate the economy. He believed in heavily regulating Wall Street and also chastising it for a downturn. These were not concepts that were too Coolidge would have agreed with or understood. Isn't it great though that he had this sort of homespun wisdom on money as this great quote that you give in a Forbes article, inflation is repudiation. They didn't have this technocratic view of monetary policy. They thought inflation was bad and they actually thought deflation was good whereas today we imagine all kinds of powers at the Fed. Right, they thought deflation was good and they weren't used to a lot of inflation the inflation after World War I took them all by surprise. Coolidge had observed that what the policy was in the downturn of the early 20s, well, perceiving the downturn and fearing it, the government raised interest rates and cut the government cut itself in half. That's not what we do today. And that terrible downturn of the early 20s went away pretty fast and it's the forgotten depression. Jim Grant even wrote a book called that. So take from that what lessons you will. In our conversation Coolidge probably wouldn't have spoken of inflation so much as of credit. That's the way they thought of it. Credit from banks, credit in the marketplace, too much credit, too little credit and there's some merit in that as well. He didn't know much about the Fed. It was a new entity, no one knew what the Fed might do or could do. This is just the beginning of when we were beginning to think about what we would call open market operations today. Right, but as you mentioned, there was no dual mandate. The Fed was a different thing back then and I imagine that he saw it as some sort of backstop, a banker's bank, to eliminate troubles or provide liquidity in a crisis and not much more than that. And of course he was trained in law, not economics per se. I think monetary policy conceptually was a new thing. Yes, it was a new thing and I don't think they dreamed of managing the economy through the monetary but you'd wanna interview Andrew Mellon here. I mean go back and look at that. One, in defense of Mellon, you know, a lot of monetary books say of Mellon well, he got too close to England, the head of the New York Fed, Benjamin Strong, which was more influential then, got too close to Montague Norman in England and it was all about this special relationship and the US led by Benjamin Strong and in the background, Mellon did too much for England and all that, that's nice. I mean, that's a very interesting book. Lester Chandler wrote it but there's another argument which I think was more central to Mellon and to everyone, which is the following, Europe owed the US money. It might go bankrupt, it might default these European nations. Optimal or at least better would be to somehow help the European nations to refinance, right? So if you make credit easier for them, they're less likely to default and set a terrible precedent regarding contracts. That was the thinking, better to refinance than to default and with that goes easier monetary policy and interest rates do go down. So that was very helpful to many European nations. Where I would kind of, where I would assail, where I would complain is at the same time, the US had tariffs and tariffs hurt the very countries you're trying to help. So it was a hypocritical policy seen from economics. But since the income tax was fairly new and only afflicted the very wealthy higher income earners at the time, didn't Coolidge like most Americans have a different view of tariffs than we do now? Because that was the primary source of income to government, federal government at least. Well, you're explaining the political basis for pro-tariff policy of the Republican party but tell that to a German car maker who's trying to recover from the Treaty of Verstai. He needs to sell the car to help the country pay the debt. The Weimar Republic is struggling and we blew them off, no question, no question. We blew them off and therefore it became easier for them to succumb to fascism. I wanna correct something I said earlier. Of course it was the Sandinistas who were involved in Nicaragua at the time. What became the Sandinistas, Sandino, whom the US was concerned about? Well, so by today's standards, would you term Coolidge somewhat of a protectionist relative to at least the rhetorically free trade GOP of 2018? Not just somewhat, really a protectionist. He was really at all, the GOP was all protectionist. That Coolidge is warped. It's unattractive but he wouldn't have been true to his party if he hadn't been a protectionist and he wouldn't have been able, one can doubt that he might have been overridden if he had vetoed protectionism and as it happens, the big protectionist laws were before and after him. So you have Ferdinand McComber in the early 20s and Smooth Holley under Hoover. But Coolidge could have done more to curtail protection, he didn't. What do you think his presidency, what role do you think it played in what came after? I mean, obviously FDR is a bigger name. He's considered a transitional president, whereas I think a lot of critics would say Coolidge was a placeholder. Why do you think he doesn't get his due? I'm feeling a little guilty here. I spoke of Coolidge's war but not his beauty. His beauty was that he cut the taxes dramatically multiple times in the face of opposition, bringing the top marginal rate after many battles down to 25%. So that's below Ronald Reagan and the rate had been over 50% even though the income tax was young in the 20s, it was already a powerful tool and the treasury recognized that it's like getting a new race car for the treasury to get this income tax and they wanted to use it. So with great effort, Coolidge cut the tax back in face of also opposition within his own party because remember at that time the Republicans were the progressives and he gets a lot of points for that and he did it, he waged war to lower taxes the way other presidents wage wars abroad. He bent his energies as he said to the tax cut and it was followed accompanying by and followed by strong prosperity. So anyone who studies taxes should have a look at that 20s reform of Coolidge. Please note the statistics of income which are online they will show that the government made more money back receive more revenues than expected. So supply ciders can find some evidence for their argument in the 20s. About the 30s, the way that we look at presidents is sort of like sports players, like athletes, you know, sports stars, we rank them. So if somebody's top, somebody else has to be bottom ranking is zero sum. You can't just have two tops. You're forced to make a choice and since Coolidge was the antithesis of Roosevelt had to be a hero, Coolidge went down. The evidence that Coolidge offers that policies other than Rooseveltian policies have merit is disquieting to people who wanna argue for active government. So they consciously or unconsciously will usually unconsciously will suppress it. And why is Roosevelt so popular? I've been forgotten man my book, I talk a lot about this. Well, one reason is he had a first class temperament very lovable and another was he led our country in a war most Americans believed was necessary and he did that well. So if a president is a war hero and stop the Nazis you're gonna forgive him his econ. Because there's a general consensus Roosevelt's econ wasn't so awesome and that didn't stop the Great Depression which went on so many years. But studying Roosevelt must have given you a lot of insights for that book and I'll recommend it again to listeners. It's called the forgotten man and it is apparently a bit of a revisionist view of the Great Depression. And it's been attacked by no less than Paul Krugman which is a badge of honor for our listeners. Oh, well I'm very fortunate. I mean the book is taught all over the country. So I don't have anything to complain about. It wasn't a bit of a revision. It was a serious revision. My current book, The Great Society is also a serious revision. But the econ in it is pretty square. Econ is just pre-war econ. It's not, I know that in your world you have wonderful books. Perhaps you have Benjamin Anderson, Economics and the Public Welfare. The pre-war econ warrants study. It makes sense when people raise wages that's nice. When people force companies to raise wages well those companies hire fewer people. That's absolutely true. Modern econ tends to deny that. So the basic truths are so obvious. Those were coolages and therefore it's interesting. Well, I wanna finish up just by talking a little bit more about coolage, the man. This is so great. We tend to think of presidents almost as demigods now. And when they leave office they have these big lives. He didn't have a big life, did he? He just went home to Vermont and he has this great quote that you give. This is so untrumped. I do not choose to run for president in 1928. I mean, what a self-effacing guy. Am I understating it? Oh no, it's wonderful. Well, I think it's always a little bit of a decision when you're president with the others say I should run, I might. But I think he's saying this is my choice and I don't want it. By the way, I do choose to run Coolidge Road Race this fall at Plymouth Notch and we invite you to travel to the Notch so that you can experience Coolidge yourself. That's Saturday, October 6th, 10 a.m. in Vermont, Plymouth Notch, a 5K. New Hills, you get an apple at the local apple festival. We also have the, I do not choose to run walk for those who choose to walk. So yeah, he did say that. And in his autobiography, he said, I'm paraphrasing because I don't have it in front of me, but to the effect that it's useful for the American people, even a safeguard to know that their president is not a great man, that he comes from the people and returns to the people. Very different attitude from that of today, whether Democrat or Republican. Today, we treat not only presidents as demigods, demigods and royalty, but we also treat senators that way or they appear on TV, like little demigods. So what a different view. The Coolidge's went back to their house, which was half of a two family in 1929. Fortunately, they couldn't have any peace because tourist Coolidge was popping. So tourists drove by in their automobiles to see the president on his porch and eventually the Coolidge had to buy a house, the first house they bought elsewhere in Northampton, which had a fence and a garden. So they were a bit set back from the Coolidge tourists. Well, all I can say in closing is unfortunately today, we insist on electing and running megalomaniacs for public office, especially president. We want people to be able to solve climate change in Syria and Ukraine and stock markets and monetary policy. And there's just no humans who are equipped to that. God knows we could use just a quiet, competent administrator these days. That said, Amnesty, thank you so much for your time. Again, she is the chairman of the board of the Calvin Coolidge Foundation, which is actually in the middle of a capital campaign. It's a big organization raising about $60 million. So it's far more active than you might think. And again, encourage you to check her out on Twitter at Amnesty Schlage. So ladies and gentlemen, have a great weekend. Subscribe to Mises Weekends via iTunes U, Stitcher and SoundCloud, or listen on Mises.org and YouTube.