1928 vs. 2008

By Tim Holland

The Election of 1928, in hindsight, had quite a few thankful people on the losing side and considering the different approaches that were presented by each of the political parties, something that was also a hallmark of the 2008 election; I suspect that there may be quite a few thankful people out there today as well. Admittedly they are not particularly vocal since it would make them seem turncoats to a certain spectrum of the losing side, but they are probably sleeping a bit better than they might have had their candidate won.

In 1928 the Republican Party was in power and led by President Calvin Coolidge; his Secretary of Commerce was Herbert Hoover. However, even though Coolidge was elected in 1924 with an almost two to one majority over his Democratic Party opponent, John W. Davis (15,725,003 votes to 8,385,586), and his re-election to a second term seemed secure, prosperity was reported to be everywhere, he decided not to run for a second term. Now there’s a man that was surely thankful.

But why would Coolidge not run? Did he see something on the horizon that others did not see? In fact, there is a quote commonly attributed to Mrs. Coolidge in 1927 that would indicate the President’s feelings: “Papa says there’s going to be a depression.” Actually a great many people saw what was coming or, at least, had a nagging suspicion that all was not as it seemed.

Not unlike the election of 2008, there was a belief among the majority of the country’s leaders that the economy was basically sound, as evidenced by the booming stock market and the profits being reported by the financial and industrial sectors. However, in hindsight, then as now, there were many storm clouds on the horizon and the comparisons between the two eras reveal many similarities.

The prosperity of both the Coolidge and Bush presidencies was clearly not built on a solid foundation; it was poorly balanced whereby speculators had amassed fortunes while the incomes of wage earners were static. Also, industries and businesses reaped huge profits but purchasing power had declined.

Herbert Hoover was elected in 1928 on a platform of “don’t rock the boat.” He claimed that the fundamentals of the economy were strong and the country was prosperous and would stay that way if it wasn’t meddled with.

The concept of not “meddling” was to be carried into the Hoover presidency. Even after the stock market began to crash in October of 1928 it was considered a mere aberration and the market would right itself. Capitalism would serve the country best if it was not interfered with and the avowed conservative administration of Hoover, which strongly believed that any form of government intervention would lead the country down the road to Communism (the Communist and Socialist-Worker candidates received more than 150,000 votes in the 1928 election) sat on its collective hands and watched the recession of 1929 turn into the depression of the 1930’s.

In the election of 2008, we saw a similar beginning with the excesses of an unregulated Wall Street again serving as the economy’s Achilles heel. The administration’s response, as well as the Republican Party’s candidate, was the same in claiming the fundamentals of the economy were sound. Let Capitalism perform its function of righting itself; don’t meddle.

The difference this time around is that the party in power lost at just the right time.

Changes in governments are good. There is a built in arrogance that develops when any political party dominates for too long and then something goes wrong. They tend to circle the wagons rather than admit they are lost and ask for a new set of directions (I suppose that’s a genetic problem with male dominated government – now if we can just get Garmin to build a political GPS system – perhaps that would do the trick).

Consider where we would be if we did not have a philosophical change in the executive branch – a change that said everything has become too big to be left alone.

Consider if not only Lehman Bros. was let to fail but within a three month period AIG failed, Bear Stearns failed,

Citigroup failed, Wachovia failed, WaMu failed, Bank of America failed, Merrill Lynch failed. Now add in the auto companies, the airlines, and a variety of insurance companies and we haven’t even mentioned real estate.

Does anyone really still believe that we would all be better off if the government didn’t meddle?

Could it be possible that John McCain is thankful that he was not in the position to appoint Phil Gramm of the “whining American” quote to be Secretary of the Treasury?