While the latest claim making the rounds of academic circles touts the return of a wealth gap between the richest and poorest not seen since… you guessed it, the time of Calvin Coolidge, namely the year 1928, it falls short of what is actually going on now and what was happening then. The case of Picketty, Saez and Zucman, relying on a couple statistics on which to build an entire template of interpretation, omits the full picture in order to make their argument. Predating the welfare state, as Burtless observes, and discounting the role of a very different governmental social and tax policy in place today, the claim stripped of its scholarly veneer falls more into the realm of policy recommendation, even historical wishful thinking, than an accurate comparison to the supposedly greedy, wasteful and vapid “Gatsby” Twenties.

The following charts illustrate a fuller sense of the people behind America’s wealth in the Twenties. It was the last time a sustained growth was paired with fiscal discipline and the combination made for an exceptional progress reaching into even the poorest neighborhoods in the land.

Coolidge shaking hands with a fellow citizen, as he boards a train for New York, February 3, 1924. Courtesy of Getty Images.

Coolidge, ever aptly, places this key distinction between then and now, in perspective. The wealth of America belonged to the people. It was not a flagrantly rich few exploiting the Ninety-Nine percent, it was a nation of owners, millions experiencing opportunity and higher living standards than Americans had ever known before. It was no less real because more regular folks were buying stocks on margin or engaging in installment purchases as the decade came to a close. Coolidge’s constructive economy enabled less money be taken for government, and more kept in the hands of people to save, produce, risk, and consume, as they saw fit. Just as the roar of the decade began to ramp up, he declared, “Our country is an exceedingly good example of the fact that if production be encouraged and increased, then distribution fairly well takes care of itself. Other countries, by their actions in stopping production, in penalizing industry and economy, and rewarding indolence and extravagance, have been able to bring about a very general and equal distribution of misery, but no other country ever approached ours in the equal and general distribution of prosperity” (June 19, 1923). By 1928, in his last annual message, he would note without hyperbole, “The country is in the midst of an era of prosperity more extensive and of peace more permanent than it has ever before experienced. But, having reached this position, we should not fail to comprehend that it can be easily lost…The end of government is to keep open the opportunity for a more abundant life. Peace and prosperity are not finalities; they are only methods. It is easy under their influence for a nation to become selfish and degenerate. This test has come to the United States. Our country has been provided with the resources with which it can enlarge its intellectual, moral and spiritual life. The issue is in the hands of the people.” Finally, in retirement, Coolidge maintained the soundness of ownership by the people, writing in 1932, “If there is anything to criticize about the property rights of this country it does not seem that it can be claimed they have been too exclusive. Whatever advantages they carry have been open to all the people. When we examine the development of modern business we find the great corporations. But they are no longer the property of a few large stockholders. They are divided up into shares so numerous as to be beyond comprehension, by which the people at large can and do become owners and partners in these enterprises…” The Twenties had proven the proliferation of ownership to levels not known before. This work would continue but only after many hard years learning the truth of Coolidge’s warning in 1928: the spiritual and moral must come first. Responsibility accompanies prosperity.

To compare the gap between rich and poor, closing in Coolidge’s day, to the widening distance underway now hardly defines how dire conditions are — inferring we are in for another decade like those obviously disastrous and failed Twenties (wink, wink). We all know it is bad now, Saez seems to say, but it is simply a throwback to those despicable Twenties when the “filthy rich” owned everything off the backs of the “regular guy.” Saez and company conveniently avoid the high tax burden progressively placed upon those comprising the top quarter of income earners while the lowest incomes paid little or nothing at all. Never mind that this latest criticism of the wealth gap implicitly blames the Obama administration. To paint with so broad a brush about the past, leaving out essential particulars, is but the latest attempt to malign the genuine accomplishments of the Coolidge Era with a prejudiced correlation to our current situation. It may be a comforting reaffirmation to academia, but it is hardly a faithful appraisal of what Burtless, Steinbaum, Samuelson, and many more, know the Coolidge years teach.

The President working at his desk, August 1923.

Courtesy of the Associated Press.

A prosperous and vastly freer Cuba greeted President Coolidge when he arrived on the island nation in 1928, to address not only the Pan-American delegates assembled in Havana but also to deflate the rumblings in his day to marginalize American influence and roll back her exchange of goods and services here and throughout Latin America. This was the last time a sitting President visited the island ninety miles to our south. Coolidge’s position, emphatically declared in his speech and through the American delegation led by Charles Evans Hughes, won the argument in his day. It would be another thirty years until the curtain fell on freedom, public order and due process, the openness that had been a hallmark of Cuba’s extraordinary rise from squandered Spanish conquest to sovereign republic. To condone the repression of the Cuban people by her own rulers — lifting America’s embargo without concessions — is a betrayal of our responsibilities, another occasion to debase the heritage of trust, independence and sound leadership on which our nation’s credibility has been built. America’s role in this hemisphere aspired to greater principles, against suppressive regimes and socialist economics. Instead Coolidge is part of the honorable legacy that stood for liberty, civil rights under the law, and freedom through capitalism for so long…until now. Yet, by displaying our new enforced condition as an “average,” unexceptional country, we are actualizing the current President’s concept of reality, the identity he has had in mind for us all along, a nation which has had it too good at the world’s expense for too long. Never mind that so many unprecedented opportunities for success and upward mobility exist by virtue of America’s answer to the call of service. Coolidge truly would not recognize these times.

President and Mrs. Coolidge visit the estate of Cuba’s president at the time, General Gerardo Machado y Morales, whose wife, Elvira, stands to Coolidge’s right, January 19, 1928. Courtesy of the Associated Press.

Commenting on this visit in his press conference the following day, President Coolidge summarized his impressions, “There is nothing I can say about the Pan American Conference that occurs to me, that has not already been said. Naturally our Government is pleased with my reception at Havana. One of the most pleasant opportunities that I had there was going out to the country place of the President, which gave me an opportunity to drive through quite a number of miles of Cuban territory where I had a chance to observe the people and see something of the progress they are making. As I left there it seemed to me that the conference was in a position to do very much excellent work” — January 20, 1928 (The Talkative President, Quint and Ferrell, p.251).

The Hardings and Coolidges at Union Station in Washington, prepared to begin a new administration together. Courtesy of the Library of Congress.

From the Vice Presidential years, here are the next three in our series, featuring “The Limitations of the Law,” delivered in San Francisco, California, in August 1922, “The Price of Freedom,” given at Evanston, Illinois, in January 1923, and finally, “The Things That Are Unseen,” given before Wheaton College in Norton, Massachusetts, June 1923.

Stay tuned for more to come.