True Libertarian Presidents II: Warren G. Harding

By Dane Larsen | United States

“Warren Gamaliel Harding sweeps country in a GOP landslide” (San Francisco Chronicle, November 1920). After the 1920 Presidential election, the country had high hopes for a man who promised peace, progress and prosperity. Harding won the EC with votes 404-127, and stuck to his vowed code of ethics, by keeping the government out of the economy, bringing peace to the world after WWI, and protecting citizen’s personal liberties. An enormous portion of the United States voted him in so that they could see the results in categories like such.

Economic Freedom

Being preceded by Woodrow Wilson, a man notorious for his blasphemous economic positions, Harding was set up with a massive Depression from 1920-21. It’s not a big surprise that this was one of the depressions that hit us hard, but we never hear about it in the context of some of the worst in our nation’s history. This is because the former POTUS in question had about some of the finest economic stances, that he rarely went back on. Coupled with a post-World War economy, and the creation of the Federal Reserve, Harding was arranged to fail, as the economy as we knew it, was structured on faulty foundation. One future President, and Secretary of Commerce at the time Herbert Hoover, loosely defined himself as a laissez-faire advocate, and pushed for Keynesian tactics in the wake of a 17% GNP fall off, and a raise of unemployment by 8%. Harding ignored this.

Instead, Harding changed everything he could in his power, while keeping the checks and balances in D.C. that our forefathers envisioned, and not stepping over any boundaries. The Federal Income Tax started with a cap at 7% in 1913 but at the end of WWI skyrocketed to 77%. Secretary Mellon of Harding’s cabinet proposed tax cuts that would get the economy going again, with more money in the pockets of Americans in all tax brackets you could imagine. This cut in these taxes eventually led to a rapid growth in the US citizen wealth and all. In the passing years, GNP steadily rose 4.7% annually, and unemployment fell to 6.7% in 1921, then 3.2% in the following year. Furthermore, Harding cut spending of government entities by nearly 50%, and along with his almost 40% tax reduction, him and his administration cut back the national debt, with no bail-outs, government catalyst programs, etc.

Although he did enact a small tariff known as the Fordney-McCumber protectionist laws, he only had good intentions. Only one small crack in an air-tight economist of a President, the man “always decried high taxes, government waste, and excessive governmental interference in the private sector of the economy,” as Robert Murray wrote in “The Harding Era”. He was an honest man, who just wanted to see prominence in the economy of his home country, with the people he legitimately cared about.

Non-Interventionism

Foreign policy is the regard where Hardings reputation begins to become tarnished. He was a product of his time, and it’s hard to envision anybody in power at that particular time not wanting to grab at immediate power when there were so many vulnerable assets up for grabs. The occupations of many satellite colonies in the age of Imperialism was something every power of the Western world partook in. Harding wanted to do as much as he could in power to put these activities to rest, but it’s a shame that he never developed his words into actions. During his Presidency, the affairs regarding control over territories in the Dominican Republic, Haiti, and Nicaragua were still in tact. This cruel behavior was sinister, yes, but in the context of the 1920’s, not uncommon in the slightest. At least then, there was very little conflict or civil disruptions in the territories from 1920-22, besides the D.R. citizens fighting soldiers positioned on sight, which stopped after Harding retracted troops to ease tension.

He was, however, an advocate of world diplomacy, at least when it came to the world superpowers. The Washington Naval Conference was put on by President Harding from November of ’21, to February of ’22, pre United Nations, here Harding brought together a lot of the powerful countries of the World, in another of the conferences of the League of Nations. Along with pushing for disarmament around the globe, being the first world consultation of arms control, it also enacted three main treaties, among others, that stood out as being a type of foreshadowing of things that the world would see in the near future. After a long time coming, China eventually launched an “open-door” foreign trade policy that would stimulate the World’s economy, only following the Nine-Power Treaty introduced and signed by none other than Warren G. Harding. Furthermore, many attribute the breakdown of Imperialism itself to Harding, who knocked over one of the first dominoes with the Four-Power Treaty, which made sure that the members of the star members of the League of Nations wouldn’t exceed their status quo of stationed troops in Oceania during colonization. This was meant as a plea to give the citizens of their homeland some breathing room.

Individual Autonomy

Through thick and thin, Americans could cont on Harding pushing for personal freedom in the oval office, on behalf of his supporters, but for the good of everyone in the country. At one time, it was him valuing freedom of speech, when he pardoned Eugene Debs, wrongly imprisoned under the Democratic President Woodrow Wilson for speaking out against the USA’s participation in WWI, whether he agreed with it or not. He thought that through free speech and advocacy of the American people, the federal government could take some notes on how to run the country that gave them their power in the first place. He seems like an honest and good-hearted politician? No wonder it sounds so foreign to us in the 21st century.

Furthermore, in a time of turmoil, post-Emancipation Proclamation and pre-Civil Right Movement, Harding was one who always pushed for legal and God-given rights to all, no matter their skin color, or potential criminal background. On one hand, he endorsed equal political rights for all, especially African Americans. He got rid of double standards when citizens in the South applied to vote. In a campaign speech in Birmingham, a notable Democratic, segregated city, Harding once said “Whether you like it or not… Unless our democracy is a lie, you must stand for that equality”, pertaining to the equal voting rights he proposed.

Furthermore, on the other hand, Harding pushed for legislation on all fronts in favor of rehabilitation over punishment as well. In a more extreme case, the POTUS signed into law an anti-lynching and/or mob violence bill, only to be hated by a Senate filibuster. Although he didn’t push for the death penalty or anything of the sort, he wanted maximum punishment for the type of people who would do these things to other humans. In some cases, lynching was a branch of the punishment, and Harding didn’t approve of such an act in his United States.

A Prosperity Story, from Rubbish to Riches

Harding’s success story aligns itself right up with the story of the USA during his tenure as President. Harding lifted himself up through the ranks of the governmental positions. Born in Ohio himself, he was elected as a State Senator, elected Ohio’s Governor four years later, and the to the US Senate in 1914. He was thought of as a gamble in the RNC and when elected in the primaries, but his fresh ideas served as a springboard for America’s success in the Roaring Twenties.

Known as one of the most prosperous time periods in the United States’ history, economically, socially, spiritually, and in every other category, Harding overlooked and set the states up for a great boom. From WWI and a body count too many to fathom at that time in the War, the USA was coming from nothing. Under Harding, the country was built on a great infrastructure, thanks to his core libertarian beliefs.

“Our most dangerous tendency is to expect too much of government, and at the same time do for it too little.” –Warren Gamaliel Harding


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Libertarianism is not Self-Destructive or Unsustainable

By Mason Mohon | @mohonofficial

A recent article by an unknown guest contributor on the Bilan Report suggested that a libertarian society is unsustainable for various reasons. Among these are the ideas that all personal freedom leads to libertinism, individualism is incompatible with the NAP (non-aggression principle), and the supposed libertarian assumption that all governance is bad. The author makes many misconceptions about libertarianism in their article. In response, this piece attempts to set the record straight on libertarian philosophy.

Continue reading “Libertarianism is not Self-Destructive or Unsustainable”

Months After Damage Began, Trump Reverses Course on Tariffs

By Indri Schaelicke | United States

For months now, it seems that everyone but the president himself has been shouting about the harms of protectionist trade policies. Despite all the outrage, though, the President has stuck to his plan, slapping China and the EU with high tariffs.

Continue reading “Months After Damage Began, Trump Reverses Course on Tariffs”

Deflation: The Cure to the Economic Crisis of Government

By TJ Roberts| United States

The world is sitting on the largest financial bubble ever created. While the economic elite says that we will never see another crisis in our time (just as Keynes said two years before the crash of 1929), we have been living in a bubble for more than a century, and it will inevitably break. This bubble, however, is unlike any economic boom we have dealt with before. The inflated commodity that will cause the future bust is the currency which the US Federal Government forces us to use: the US Dollar, and this is all because of the unnecessary fear of deflation.

Estimates say that as much as 98% of the value of the US Dollar has disappeared since the Federal Reserve claimed a monopoly power over currency in the United States. The only reason the Dollar has not collapsed already is due to legal tender laws, which requires businesses to deal in US Dollars within the US.

So, how did it get so bad? As alluded to in the first paragraph, it is because the government is terrified of deflation. They fear that since prices have a tendency to decrease, people will hoard their money since they can make a profit by simply refraining from spending in the present. Since consumers hold on to their money, firms earn less revenue, which causes them to decrease their spending. This leads to a decrease in employment, and therefore production. With this loss of production, those who make the factors of production also lose revenue, leading them to cut spending, thus decreasing production and employment. With the loss of employment, consumers spend even less. This ultimately leads to a complete collapse of the economy according to the Keynesians (see Chapter 12 of John Maynard Keynes’s The General Theory of Employment, Interest, and Money).

Deflationary Spiral will not destroy the economy

The process outlined in the prior paragraph is known as a “deflationary spiral,” in which deflation causes the entire economy to disappear. This, however, is an economic myth. In truth, a deflationary spiral can only occur under special circumstances. The reason why Keynes is wrong in assuming a deflationary spiral will happen is two-fold.

First, it is not possible for human beings to reduce spending externally. Although money does possess deflationary tendencies when unregulated, this does not mean that people will hoard their money indefinitely. Humans have basic needs, namely food, water, and housing. It simply isn’t possible for the people to cease all forms of economic activity.

The second reason why a deflationary spiral will not destroy an economy is time preference. Time preference is the concept that human beings prefer present goods to future goods. If one offered you one thousand dollars today or one thousand dollars in one month, people will typically take the money today. This is why we have an interest in society. Interest gives an incentive for one to refrain from present consumption so that they may have even more future consumption.

People, however, have varying degrees of time preference. The lower your time preference is, the more willing you are to forego present consumption for future consumption. Simply because something is cheaper in the future does not guarantee that someone will wait to consume it. If the price drop is high enough, then they will wait, but that only applies to those with low enough time preferences to be willing to wait. Those with higher degrees of time preference will still consume and the economy will not totally disappear.

What are the causes of deflation?

There are four immediate causes of deflation.

  1. An increase in the demand for money will cause deflation. If the demand for money increases relative to the demand for goods, then price deflation will occur. Money will have an increased purchasing power due to the increased demand for money.
  2. A decrease in the supply of money will lead to price deflation. If less money is in the system, then people will marginally value money more than goods. Simply put, with less money in the system, people will be able to purchase more goods for less money.
  3. A decrease in the demand for goods. If the demand for goods decreases relative to the demand for money, then money becomes more valuable and deflation occurs.
  4. An increase in aggregate output. In other words, an increase in the supply of goods will cause price deflation because production has become more efficient.

The commonality among these causes is that it leads to the decrease in the price of goods.

Deflation is caused by economic growth

The fourth cause of deflation, an increase in aggregate output, is simply economic growth. Economic growth, in fact, is inherently deflationary. When the people can afford more for less, there is growth. This compels more production, more innovation, and more prosperity, especially among the lower classes.

The only examples in which economic growth was not deflationary was in times of war. In times of war, the State forces an increase in production through inflationary policies that allow the government to “afford” these wars. This inflation, of course, always leads to a bust in the future.

Inflationary growth is unsustainable.

Under inflationary growth, the government utilizes their power to dictate the devaluation of their currencies. This leads to vast misallocations of resources. By devaluing the currencies, governments redistribute wealth to political entrepreneurs who position themselves to receive money straight from the printing press. Major banks and corporations are among the most prone to doing this.

The growth these firms experience, however, is vastly unsustainable, whereas it is built upon wealth that did not exist in the first place. In true growth, firms cut their costs in order to produce more efficiently and maximize their profits. Under inflation, however, the exact opposite happens. An inflationary monetary policy, especially one based on a fiat currency in a system that tolerates fractional reserve banking, will lead to a boom that must be corrected.

The idea that inflationary policies can lead to growth in the short run is just another example of the broken window fallacy. As mentioned before, political entrepreneurs who receive money straight from government printers benefit, but those who are not politically connected suffer since they cannot pay the higher wages and other costs. This leads to unnatural growth at the expense of others.

Inflation is fraud.

When the government implements a fiat system, they have the ability to manipulate the currency to deceive the masses into believing out economic condition is better than what it really is.

deflation vs inflation
Annual inflation (in blue) and deflation (in green) rates in the United States from 1666 to 2004.

Fractional Reserve Banking

Perhaps the most egregious form of inflationary fraud is fractional reserve banking (FRB). FRB is a system in which banks loan out the deposits of its customers, keeping only a fraction of their nominal reserves in the bank. This leads to unnaturally low-interest rates and thus high levels of debt.

If a shock in the economy occurs, bank runs will happen. When it comes out that the bank can’t give its customers their money, the bank goes under (or gets bailed out due to government intervention), and the people lose everything.

FRB is a clear instance of fraud in which a bank claims to have more money than it truly has. It is loaning out its customers’ funds, leading to credit expansion, which leads to business cycles.

Of course, we can dodge this by returning to the gold standard and punishing those who partake in fractional reserve banking.

Deflationary Spiral punishes parasitic frauds.

Inflation must come down eventually. And the only way to do that is through deflation. This is not to be feared but celebrated. It is the market’s way of correcting the malinvestments caused by government manipulation of money. Deflation is a means by which the economy returns to the real world. In addition, it halts the centralization of power under governments that have cartelized the monetary system of their nations.

Firms that are deeply in debt, which have certainly taken advantage of the fraudulent fiat and fractional reserve banking systems, will go under. The power elites of the State will be humbled as they will lose the foundation on which they rested. Deflation purges our society of the parasites and frauds that have been manipulating the economy to their advantage since 1913. By this, of course, I mean the central planners and political entrepreneurs who have propped up the Federal Reserve and the federal government. For they have delayed deflation for more than a century. For liberty and prosperity to return, we must have a deflationary spiral to rid us of the wealth that the State holds, which never existed, to begin with.


Originally published on freedomandeconomics.org.

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Progressive Commentator Praises Rand Paul, Criticizes Bernie Sanders on Russian Collusion

Kenneth Casey | United States

Last Thursday, Independent Senator from Vermont Bernie Sanders introduced a resolution in the Senate that would according to him “accept the assessment of the United States intelligence community with regard to interference by the Russian Federation in our election”, “protect the election systems of the United States from interference by the Russian Federation”, “demand that the Sanctions enacted against the Russian Federation be fully implemented”, “will not accept interference with the ongoing investigation of Special Counsel Robert Mueller”, and “declares that the president must cooperate with the investigation”.

Rand Paul declared enthusiastic opposition to the resolution on the Senate floor, declaring “The hatred for the president is so intense, that partisans would rather risk war than give diplomacy a chance”, citing President Reagan sitting down with Gorbachev to lessen nuclear tensions as a prime example. He made it clear he was not defending Russia’s involvement in our elections, but he would “rather that we still have open channels of discussion with the Russians”. Rand is echoing the position his father Ron Paul shares on sanctions and has been vocal on for many years: Sanctions are an act of war, and diplomacy is always much preferred.

You would think that Bernie being the anti-war progressive that he is would take a position similar to Rand’s, to prevent war at all cost with Russia and oppose the sanctions. Instead, he naively stated that his resolution had nothing to do with curtailing relations with Russia, which is factually incorrect considering his resolution calls for enforcement of sanctions against Russia, and sanctions are enacted in order to express displeasure with a country.

Bernie Sanders’s resolution and statements regarding Russia received criticism from well-known, highly-regarded progressive commentator Kyle Kulinski on Tuesday. Kyle, who is the host of Secular Talk on YouTube, an affiliate of the far-left online news organization The Young Turks, made a video on his YouTube channel regarding Paul’s and Sanders’ back and forth on the resolution, asserting “hope you’re sitting for this one, Rand Paul is right and Bernie is wrong.”, and goes on to point out the hypocrisy that Bernie openly admits the resolution increases sanctions, and “acts like that’s not an escalation of tensions”. He goes on to say Rand’s statement that this round of sanctions is “hyperbolic”, but that it’s “definitely the direction that it’s going in”, and criticizes the denseness in Bernie’s statement “Who’s against Diplomacy? Nobody is.” which was a response the Senator gave to Rand Paul when he pointed out the bill damages diplomacy. “Really Bernie? Really? You’re acting like there aren’t people who are against diplomacy when every time Trump sits down with Putin there are screams of he’s doing treason and he’s a traitor?”

Kyle is by no means a libertarian. He endorsed Bernie Sanders in the 2016 presidential election, supports Medicare for all, a $15 minimum wage, protectionism in trade, and even helped with the founding of a group that was key to Alexandria Ocasio-Cortez’s primary victory in New York. However, he’s been one of the few progressives to point out that Bernie is wrong on the issue of sanctions on Russia and it’s incompatible with the anti-war position held by progressives. He even went at it with The Young Turks founder and host Cenk Uygur on Twitter, stating Cenk was “prodding Trump to be more hawkish on Russia” after Cenk had complained that Trump noticeably used harsh language on Iran but not Russia.

Kyle has been one of the few commentators from the left that has not become convinced that Trump concluded with the Russians in the 2016 election, and thinks that Democrats should focus on actual issues rather than a talking point with zero policy substance. Although I disagree with Kyle on a lot of issues, I admire the fact he’s consistent with his principles and views on policy when so little few others do as such.

There’s no doubt that the “issue” of Russia interference in our election has been one of biggest talking points in the American political landscape ever since President Trump was elected in November of 2016. The dialogue regarding the issue arguably reached its apex in the aftermath of the 2018 Russia–United States summit in which President Trump met with President Putin of Russia, which occurred on July 16th.

Establishment Republicans and neoconservatives shared pretty much the same view as corporatist Democrats regarding Russia. They all want tougher action and less effort towards diplomacy. John McCain called it “One of the most disgraceful performances by an American President in my memory”. You can also take a recent bill introduced by neoconservative Lindsey Graham and corporatist Democrat Bob Menendez on the Senate floor as an example. The proposed bill would slap new sanctions onto Russia, targeting their “debt and energy and financial sectors”. Some notable senators to come out in favor of the bill include Republicans Bob Corker, Marco Rubio, Mitch McConnell, and Democrat Chris Van Hollen.

This proposed bill would add onto the U.S. sanctions on Russia that overwhelmingly passed Congress in July of 2017 and was ultimately signed into law by President Trump (although he did send out a tweet in opposition to the sanctions in 2017, but even if he were to veto it, Congress had enough votes in favor to override the president’s veto). The bill only received five Nay votes in the Senate and House combined: 4 from libertarian-leaning Republicans Senator Rand Paul and Representatives Justin Amash, Thomas Massie and John Duncan; and one from an Independent Senator: Bernie Sanders.

Yes, the same Bernie Sanders that introduced a resolution in the Senate that would enforce the previously “overwhelmingly passed sanctions against Russia” was one of 5 Congressmen to vote against the sanctions in the first place. Welcome to Washington, folks.

In Bernie’s defense, he did say at the time of his vote against the sanctions he would support individual sanctions against Russia, but the thing that doesn’t make sense to me is that his reasoning for opposing the sanctions was it included additional sanctions against Iran and North Korea, and he thought that America should play a more “even-handed-approach” in the Middle East and be less reactionary in our policy towards Iran. Why doesn’t he apply the same logic towards Russian sanctions? That doesn’t make a whole lot of sense to me.

With so little non-interventionist and anti-sanction advocates in Congress, it’s really good to see Rand Paul step up and be a leader on the issues.


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