When Senator Warren G. Harding accepted the Republican nomination for President on June 12, 1920, the nation was facing a terrible economic recession. The inflation of the war years had sparked high employment and booming industry when the fighting subsided. Until 1920, the nation looked poised to enter the new decade with a renewed sense of enthusiasm.
But by June, things just looked grim. The recession was bad. Inflation stopped. Credit contracted and malinvestment liquidated. Unemployment had doubled over the preceding 12 months, and the Dow had fallen 25 percent since November.
So how did Harding win the nomination, and ultimately the election? Did he promise to ramp up government spending, increase government handouts and bailout failing businesses to minimize short-term damages?
No. He did exactly the opposite. In his 1920 speech accepting the Republican nomination for President, then-Senator Warren G. Harding said the following words:
We will attempt intelligent and courageous deflation, and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend Republican capacity. We promise that relief which will attend the halting of waste and extravagance, and the renewal of the practice of public economy, not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life.
Let us call to all the people for thrift and economy, for denial and sacrifice if need be, for a nationwide drive against extravagance and luxury, to a recommittal to simplicity of living, to that prudent and normal plan of life which is the health of the republic. There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written, except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations.
Hardly something you’d expect to hear from a presidential candidate today, let alone one who would go on to win a general election. Of course, the ins and outs of the 1920 presidential election did matter. Harding’s support among the Republican Party was broad-based, and his opponent, James M. Cox, was stuck having to explain fellow Democrat Woodrow Wilson’s failures. Harding won by the largest margin in 100 years.
But nevertheless, Americans voted for austerity in 1920. They voted for deflation. They voted to reign in the size of government and to suffer short-term pain for long-term gain. And while 1920 might seem like ancient history to young people today, more than a million Americans are living today who were alive when Harding was president. Some may even remember his presidency. In a sense, we’re just one generation away.
Values like those listed by Harding—thrift and economy, denial and sacrifice, work and saving and a simplicity of living—once found mass popular appeal. Millions agreed that they were needed, and that true recovery would not arrive without a commitment to them at the highest levels of government.
The American voter is not as hopeless as some pundits might insist. While the Republican victory last week was hardly a vote for austerity of the degree Harding promoted, it proves that the American people aren’t blind bats following the government carrot-on-a-stick wherever it might lead. They weren’t in 1920, and they aren’t today.