Former President Bill Clinton told the Democratic National Convention that President Obama has a plan to rescue the economy but that Republicans have stood in his way. From this you might think that the economy requires government intervention to create jobs. But history tells a different story.
For the first 150 years of this country's existence, the federal government felt no great need to "do something" when the economy turned down. One of the last "do-nothing" presidents was Warren G. Harding. In 1921, when unemployment hit 11.7 percent — even higher than it has been under President Obama — Harding did nothing to stimulate the economy.
Far from spending more money to try to "jump start" the economy as tax revenues declined during the downturn, Harding actually reduced government spending.
This was not a matter of neglecting the economy. Harding deliberately rejected the urging of his own secretary of commerce, Herbert Hoover, to intervene.
As a result, the 11.7 percent unemployment rate in 1921 fell to 6.7 percent in 1922, and then to 2.4 percent in 1923.
Again, under Ronald Reagan unemployment peaked at 9.7 percent early in the his administration. Like Harding, Reagan did nothing despite outraged an outcry in the media. And again, the economy revived on its own.
Now there is reason to believe the Fed is ready to once again "stimulate" the economy essentially by printing money. It is hard to understand how the present administration can ignore economic history.
What more justification do we need to make a change?
Benedict Frederick Jr., PasadenaCopyright © 2014, The Baltimore Sun