President Donald J. Trump’s economic policy, while seemingly foreign to today’s Republicans and conservatives, is rooted in a Republican and conservative tradition. President Trump, in an economic policy speech in Michigan arguing for the need to resurrect American manufacturing, called for a “new economic model — the American model. In his many speeches, President Trump often recalls the economic nationalism of past presidents, such as Abraham Lincoln. As President Trump noted: “Our great Presidents, from Washington to Jefferson to Jackson to Lincoln, all understood that a great nation must protect its manufacturing, must protect itself from the outside….”
President Trump’s American model of economic policy is not necessarily new policy or ideas, but a rediscovery of the older Republican tradition. Patrick J. Buchanan wrote that “in leading Republicans away from globalism to economic nationalism, [President] Trump is not writing a new gospel. He is leading a lost party away from a modernist heresy — back to the Old-Time Religion.”
Republican presidential administrations, especially before World War II, followed an economic approach that was based on ideas similar to those of President Trump. President Trump can look to past Republican presidents such as William McKinley, Warren G. Harding, and Calvin Coolidge for guidance as examples who followed an “American model” of economics. Perhaps the best example for President Trump to follow is the administrations of Presidents Warren G. Harding and Calvin Coolidge.
President Warren G. Harding inherited a national economy that was suffering from an economic depression with high unemployment, high tax rates, and a large national debt. The response of President Harding was to cut taxes, reduce spending, and begin paying off the national debt. President Calvin Coolidge continued Harding’s economic policies. President Coolidge believed that the best economic policy was based on a balanced budget, keeping spending in check, and lowering tax rates. He also supported sound money. Perhaps most controversially, Coolidge supported a restraint on immigration and the protective tariff.
The decade had started in depression, and by 1923 the national economy was booming because of the Harding and Coolidge policies. Industries such as radio and the automobile grew tremendously. Reflecting on the economic impact of the Harding and Coolidge administrations, Patrick J. Buchanan wrote: “Unemployment, 12 percent when Harding took office, was 3 percent when Calvin Coolidge left. Manufacturing output rose 64 percent in the Roaring Twenties. Between 1923 and 1927, U.S. growth was 7 percent a year. At decade’s end, America produced 42 percent of the world’s goods.”
Ivan Eland, a Senior Fellow and Director of the Center of Peace and Liberty at Independent Institute, wrote that President Trump should use Presidents Warren G. Harding and Calvin Coolidge as an example when formulating fiscal policy: “Mr. Trump and the Republicans should adopt the Warren Harding-Calvin Coolidge route to tax cuts. Those presidents believed in robust, old-fashioned spending cuts, thus enabling them to also slash taxes while at the same time reducing the then-substantial national debt left over from World War I.”
The best solution for a sound economy requires wisdom from the past and following the Constitution. Policymakers can learn much from the Harding-Coolidge economic blueprint. Certainly, the United States cannot return to the 1920s, or even the 1950s, but that does not mean President Trump cannot utilize those principles and policies to generate a new era of economic growth and opportunity for all Americans.