ht control of the decrepit Marion, Ohio, Star newspaper in 1884 and turned it into a moneymaker. Gentle and accommodating to a fault, editor Harding would gladly withhold a fact or a name from a delicate story lest his newspaper cause unnecessary hurt to a neighbor. He was elected a state senator in 1899, lieutenant governor in 1903 and a U.S. senator in 1914.
Harding’s style of politicking was as easygoing as his personality. What his constituents were for, he liked, too. Peace, harmony and party loyalty were his watchwords. You’d never hear him sniping at a fellow Republican (except once, at Teddy Roosevelt) or even at a Democrat. In Washington, his cigar box, liquor cabinet and poker table were open to good fellows of any political stripe. Present for only slightly more than half of the recorded floor votes during his single Senate term, Harding made time for the little pleasures in life.
Possibly no political figure in Washington bore less resemblance to the austere occupant of the White House than the convivial senator from Ohio. President Woodrow Wilson — moralist, reformer and intellectual — read books and wrote them. Harding made no pretense to living the life of the mind. He liked people better than books, anyway.
And when, at the 1920 National Republican Convention, the hot and exhausted delegates looked for someone who could win the presidency and unite a deadlocked party, they picked Harding. “Everyone’s second choice,” the pundits sneered.
“I guess you have nominated the wrong candidate, if this is the plan,” Harding told the handlers who urged him to attack the, by then, hugely unpopular incumbent, “for I will never go to the White House over the broken body of Woodrow Wilson.” Campaigning from his front porch in Marion, Harding had hardly a cross word for anyone. Rather, he called for lower taxes, economy in government, restricted immigration, an anti-lynching law and responsible enforcement of the Volstead Act, by which America had voted to enforce Prohibition. “Most of all,” wrote Harding’s best biographer, Robert K. Murray, “he advocated allowing the nation to experience a period of tranquility in which it could restore itself and return to ‘normalcy.’ ” Against fellow Ohioan James M. Cox, Harding won in a landslide.
It was an untranquil country he was elected to govern. In the 1918-19 flu pandemic, 675,000 Americans died, more than 10 times the number of U.S. battle deaths in the Great War. In the months before Election Day, consumer prices were rising at year-over-year rates of more than 20 percent, a legacy of wartime spending and borrowing. Partisans picked sides in the Bolshevik Revolution, and capital and labor were at each other’s throats. On Sept. 16, 1920, a bomb exploded on Wall Street, killing or wounding more than 200 people. Normalcy was, indeed, just what the doctor ordered.
Candidate Harding had promised “less government in business and more business in government,” and he was as good as his word. In June 1921, he signed the bill that created the Bureau of the Budget, forerunner to today’s Office of Management and Budget. “There is not a menace in the world today like that of growing public indebtedness and mounting public expenditures,” the new president said. “We want to reverse things.”
Harding uttered these words as prices were collapsing and the nation’s output was shrinking. From top to bottom, 1920-21, consumer prices fell by 8.3 percent, wholesale prices by 40.8 percent and the Dow Jones Industrial Average by 36 percent. The Federal Reserve, founded in 1913 and still new to the job, regarded these dislocations clinically. As prices had skyrocketed in the war, so they should come back down to earth, the central bank reasoned. Besides, the nation was on the gold standard; they couldn’t just print the money.
“[A]fter a year or two of discomfort, embarrassment, some losses, some disorders caused by unemployment,” Ben Strong, the Ben Bernanke of his time, predicted in 1919, “we will emerge with an almost invincible banking position, prices more nearly at competitive levels with other n