Warren G. Harding.
Under him, the U.S. recovered handily from the post-WW I recession, which was very serious, and a long period of prosperity ensued.
In foreign policy, the Washington Naval Treaty ended a potentially ruinous "battleship race" with Japan and Britain, and stabilized the balance of naval power for 15 years.
I'm not saying he was a "great" President - but he has been vilified as a corrupt nincompoop. This is IMHO because he died about when the Teapot Dome scandal broke, and he was a convenient scapegoat. And a matter of style: he was the sort of middle class small town midwesterner that "clever" people like H. L. Mencken loved to mock.
In the past when I discussed Harding online, it was to defend him against his detractors, and especially against the absurd rating of him by some historians as the worst president in history (which is obvious nonsense when one considers that Pierce and Buchanan made either disunion or a bloody civil war all but inevitable) and to call attention to his real accomplishments.
However, more recently I have had to dissent from what has become a popular theme among conservatives and libertarians--the idea that Harding was an economic genius who cured the 1920-21 depression through wisely applying laissez-faire economics, cutting spending and taxes, and declining to use "interventionist" measures like those used by Hoover and FDR in the Great Depression.
For a critique of this Austrian-school Hardingolatry, see Daniel Kuehn, "A critique of Powell, Woods, and Murphy on the 1920-1921 depression" in *The Review of Austrian Economics*, Volume 24, Number 3, 273-291. To oversimplify, Kuehn's main point is that in order to curb inflation the Federal Reserve steeply raised interest rates before the Depression--and then helped end the Depression by lowering them. Under those circumstances, Kuehn argues, fiscal stimulus would not, even by Keynesian standards, be appropriate. Kuehn also notes that the budget-balancing and spending cuts began with Wilson, not Harding, and that while federal income tax *rates* were cut in 1921-2 this was offset by an expansion of the income subject to taxation at any given rate:
"As Woods (2009) points out, President Harding agreed with the Federal Reserve on the need for 'intelligent and courageous deflation' (Harding 1920). However, the Harding administration's role in the facilitation of price deflation was marginal at best. By the time Harding called for 'intelligent and courageous deflation,' the New York branch of the Federal Reserve had already raised the discount rate to the 7% plateau that would be maintained for the ensuing year. Harding's election in November of 1920 roughly coincided with the halfway point in Strong's high discount rate policy. The trough in industrial production was in March 1921, the month that Harding was inaugurated. Thus, despite his forceful campaign rhetoric, Harding did not play a significant role in the painful, but necessary, deflation of 1920-1921. The emphasis that Powell (2009) and Woods (2009) place on Harding's role in liquidating malinvestments with a contractionary fiscal policy is therefore consistent with Harding's personal outlook on economic policy, but it is historically inaccurate. Instead, the impact of the Harding administration during this time period must be assessed by examining his fiscal policy during the recovery, rather than the initial deflation.
"While active monetary policy seems to have had the most decisive influence on the 1920-1921 deflation, the fiscal policy of the Wilson administration should also be taken into account. Wilson's most important contribution to the deflation was to balance the federal budget. The 3-month moving average of the difference between federal expenditures and federal tax receipts turned and remained positive (indicating a budget surplus) in November 1919. Thus, net federal borrowing ceased 7 months before Harding vowed to 'strike at government borrowing,' 12 months before he was elected to office, and 24 months before Harding passed his first budget.
"Although modern Keynesians place greater emphasis on the federal deficit than on federal spending, an almost identical narrative is provided by spending data; the Wilson administration cut expenditures dramatically before the 1920-1921 depression and before Harding took office. The claim of Woods (2009) that 'instead of 'fiscal stimulus,' Harding cut the government's budget nearly in half between 1920 and 1922' obscures the fact that federal spending was falling precipitously over the course of 1919 and 1920. When Harding took office in March of 1921, the Wilson administration had already reduced monthly federal spending to 17% of its war-time high. The bulk of this reduction was achieved by the end of 1919. While it is certainly true that the Harding administration would reduce spending further, the cuts were not as substantial as the cuts made by the Wilson administration immediately prior to the downturn. The use of annual data of Woods (2009) instead of monthly data is misleading because spending was still being winnowed down over the course of the 1920 fiscal year. It gives the false impression that most of the adjustment to federal spending occurred during the depression, when in fact most occurred well before the downturn began...
"Powell (2009) and Woods (2009) suggest that the Harding administration's decision to cut income taxes was instrumental to the recovery which began in 1921 and continued in earnest the following year. This is a misleading account of the Harding administration's tax policy. The Harding administration did cut tax rates for higher income families in 1922 the highest bracket's rates were reduced from 73% to 58%) and implemented an across the board rate reduction in 1923 (from 58% to 43.5% for the highest bracket and from 4% to 3% for the lowest bracket). However, these rate cuts were accompanied by a considerable expansion of the income taxable at any given rate (Internal Revenue Service 2010). For example, while the top bracket's rate was reduced by 15% points from 1921 to 1922 in Harding's Revenue Act of 1921, the income taxable at that rate was expanded from all income over $1,000,000 to all income over $200,000. Therefore, while the tax rates were lowered, the amount of income that these tax rates were assessed against was considerably increased by the Harding administration. The net effect was that from 1921 to 1922, the period of the initial Harding tax 'cut,' the percent of individual income collected as revenue through the income tax actually increased from 3.67% to 3.95% (Internal Revenue Service 2010). While this expansion of the tax burden under Harding is not particularly large, it belies claims by Powell (2009) about a tax cut during the economic recovery. After 1922, further rate cuts assessed on the same income brackets did result in a decline in the tax burden from 1922 to 1923. The early Harding administration saw increasing income tax burdens for a variety of reasons, not the least of which being the restored economic growth, which pushed more families into higher tax brackets. However, the statutory expansion of these tax brackets in Harding's Revenue Act of 1921 represented a deliberate, though modest, tax increase in the interest of maintaining a balanced federal budget...[The] brief decline in the tax burden that occurred in 1923 came too late to be considered as a factor in the recovery from the 1920-1921 downturn.."
http://www.springerlink.com/content/5683j4v650187261/fulltext.html
