Calvin Coolidge was President of the United States during a period where the U.S. economy performed at a remarkable rate. It has become to be called the "Roaring Twenties". His Presidency was marked by a remarkable lack of action. He instead relied on the concept of "laissez faire" and stood out of the way while the economy thundered along. Coolidge's record is remarkably light besides the economy that he presided over. Yet, at the time, the economy was doing so well that he was considered a very popular President. These days the economy is described in sophisticated and nuanced terms...
The Roaring Twenties are traditionally viewed as an era of great economic prosperity driven by the introduction of a wide array of new consumer goods. The NorthAmerican economy, particularly the economy of the US, transitioned from a wartime economy to a peacetime economy; the economy subsequently boomed. The United States augmented its standing as the richest country in the world, its industry aligned to mass production and its society acculturated into consumerism. In Europe, the economy did not start to flourish until 1924.In spite of the social, economic and technological advances, African Americans, recent immigrants and farmers—along with a large part of the working class population—were not much affected by this period. In fact, millions of people lived below the poverty line of US$2,000 per year per family.
Except to understand the economy of the 1920's, one only needs to understand the rules of stock trading then and what those rules allowed speculators to do. At the time, rules allowed folks to buy on margin only putting down 10% of the stock's value. In other words, if an individual bought $3000 worth of stock they only needed to come up with $300. More than that, most of the folks that bought on margin never actually had the full amount of the investment they were buying. In other words, for all the sophisticated talk, the roaring twenties were propped up by a boiler plate speculative market.
That speculative market came crashing down on October 24th, 1929. The same forces that had pushed the economy forward throughout the twenties had caused the market to crash. All of those margined investments, began to be called by the investment house when the market turned. Since no one actually had the full amount, all of these investments were sold off and the market crashed. The stock market crash of 1929 showed to twenties to be nothing more than a mirage built on the excesses of irresponsible speculators and on that day Coolidge's legacy as a President was sealed.
Bill Clinton also presided over a period of incredible economic growth. His Presidency coincided with advances in the internet and other technologies like cell phones. During the 1990's, what we saw in the stock markets was movement away from traditional valuations like earnings and moves towards finding companies that explored revolutionary technologies. Microsoft had gone several years with not only positive earnings but growing earnings before they were allowed to go public. Those sorts of paradigms were no longer in play in the 1990's. Instead, companies went public with not only negative earnings but frankly with little or no revenues. The speculative market that drove the economy in the 1990's also came crashing down when the Fed raised rates unexpectedly. Suddenly, all those companies that had no earnings were exposed as paper thin, and within months most of them went out of business. Three trillion dollars were lost in the stock market in paper profits in the last nine months of 2000. That crash lead directly to the recession of 2001.
Whatever differences there were in the 1920's and 1990's, the similarities were that the economies were built on the excesses of irresponsible speculative markets. History has not been kind to Coolidge's legacy which was built on excess that was on discovered after he left office.
So, here we have Bill Clinton and his legacy. Obviously, I will let history and historians judge his Presidency, however I am always amused by the deference that Democrats give Clinton. Besides the superior performance of the economy, they are at a loss for pointing to any tangible accomplishments of the Presidency. Besides raising taxes, which frankly, did absolutely nothing to create growth, Clinton merely presided over an economy built on the excesses of speculators. Furthermore, it was exacerbated by several high profile companies cooking their books. If Coolidge's legacy is not very kind, and his economic record is similar to Clinton's, well that is a good indicator of Clinton's legacy.
Of course, Clinton has one more significant negative that Coolidge didn't have. He has the stain of impeachment and other scandals. Whatever Coolidge was, one thing he was not was a man of questionable character. If Clinton's economic legacy will go by way of Coolidge's, then all he will have left is the legacy of impeachment. If that is the case, then Clinton's legacy will be quite unkind.
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