Harding was Right

Mona Charen very correctly points to Warren G Harding's administration as the alternative to the Bush/Obama approach to saving the economy. Paul Krugman would call Harding's approach the type of bad idea that caused the Great Depression. I have to agree with Mona and Warren. The critical point though is that the depression of 1921 ended quickly and the economy boomed throughout the twenties. The Great Depression dragged on up until World War II despite the New Deal. The Fed of the 1930s did do things that most modern economists would never support such as tightening rates during a massive downturn but the massive fiscal stimulus of the New Deal did not really work. Japan in the 1990's also had massive stimulus but they had ultra low interest rates and their economy remained sluggish for a decade. It think that's what we're in for, if not worse.