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By Larry Schweikart

Ever hear of the Great Depression of 1920? No, me either. Do you know why? Because the recession that began shortly after World War I ended never deepened and never became “great” (as though any depression is great). There is a history lesson in that story that our leadership in Washington should keep in mind today.

As the United States, and the world, came out of World War I, the economies of the warring powers had been cranked up to full production to meet wartime demands. Suddenly, in 1918, the Armistice was announced, and within a year, troops began returning to civilian life. The influx of millions of soldiers worldwide introduced sudden unemployment, and thousands of farmers came back to farms that were already at or near full capacity, causing farm prices to fall. In the United States, Woodrow Wilson’s hand-picked successor, James Cox, the newspaper magnate from Dayton, Ohio, ran on a platform of reducing America’s wartime debt through a policy of maintaining Wilson’s outrageously high wartime tax rates.

The Progressive President Wilson had been in office when the Income Tax Amendment was passed—a story in itself. While the goal of the Progressives who favored an income tax was first and foremost wealth redistribution (not raising money to run the government), the income tax itself was largely sold to the American people on two major positive features. First, its rates were (by current standards) ridiculously low. Most people paid no income taxes at all, the bottom bracket paid only about 1%, and the very richest Americans paid only 6% (today, many states have higher income tax rates than that!). As a Vegas comedian would say, “What’s not to like?”

But it only took Wilson a couple of years of war to jack up the top rates to an astounding 73% (near confiscation) and hike the bottom rate to 25%.

Now for a little sidebar: how often have you heard that “World War II got us out of the Great Depression?” Probably more times than you can count. What is often forgotten is that when your very survival is at stake, as it was from 1941 to 1945, people will submit to most anything—rationing, confiscatory tax rates, muzzling of civil liberties. This is laudable and natural. But it is wholly unnatural and oppressive for a government to seek to maintain wartime tax levels and intrusions on civil liberties in peacetime. Hence, to return to our story, Wilson “got away” with the outrageously high tax rates during the war because . . . it was a war! Once the threat was over, however, Americans expected their country back.

Cox’s opponent, Warren Harding, also of Ohio, ran on a platform of returning the country to its pre-war “normal” economy and freedoms. While he didn’t explicitly endorse a tax cut, voters rightly inferred that’s what he meant, and sent him to the White House instead of Cox. In perhaps his shrewdest move, Harding asked Pittsburgh millionaire Andrew Mellon to be the Secretary of the Treasury. When Mellon told him he “didn’t want the job,” Harding knew he had the right guy. Mellon finally gave in, and immediately studied the recession, which was severe.

Various estimates of the 1920-1921 recession suggest that Gross National Product fell anywhere from 2.4% to a whopping 6.9%. Estimates of unemployment put the rate at between 7% and 8%. Interestingly, while most economists correctly identify the issue of returning troops as a “shock,” few note that the extremely high tax rates dragged the economy down faster than “Bernie” behind the boat (reference to “Weekend at Bernies,” if you haven’t seen it).

Mellon performed a review of another phenomenon: even though Wilson’s boys consistently pushed up tax rates, the relative return from those rates fell steadily. Without knowing it, Mellon had come up with an early version of the “Laffer Curve,” which says that at a certain point, raising taxes will result in less revenue to government, because people will silently revolt and either cease work or go into the black market. Mellon convinced Harding to ask Congress for a radical tax cut. Of course, many in government opposed. In a stunner, the New York Times of 1909 had actually warned that “when men get in the habit of keeping themselves to the property of others, they cannot easily be cured of it.”[1] Harding died in office, but his successor, the great Calvin Coolidge, remained committed to steeply reducing tax rates. Mellon, Harding, and Coolidge succeeded in reducing the top rate from 73% to 25%, and the bottom rate from 25% to 5%. There are two observations one can make: a) that’s an astounding drop, and all three men are to be commended, and b) it was still many times higher than the pre-war rates!

Nevertheless, the economy quickly recovered. Unemployment rates fell, down to 5%, then 4%, then finally, in 1926, to 1.6% according to one study. Even more shocking, the share of taxes paid by the rich . . . skyrocketed. Those earning over $50,000 (a “supermillionaire” back then) had only paid 45% of the total taxes when the rates were sky-high, but after the Mellon cuts paid 62%. Those in the “Bill Gates” category of “so-rich-they-wouldn’t-pick-up-a-$100-bill-on-the-sidewalk” rich ($100,000 at the time), saw their share of taxes paid almost double, from 28% to 51%.

We call what happened next the “Roaring ‘20s,” because the economy absolutely went nuts. Average Americans came to own cars, radio, have appliances and the electricity to power them (electricity use rose by almost 300% between 1899 and 1929), telephones, and a myriad of other products once considered luxuries.[2] Ford’s Model T, once considered revolutionary for its low cost and simplicity, now was out; General Motors, with its different car line for every income class was in. And they say tax cuts don’t work? Tell that to the Americans of the Roaring ‘20s.”

Larry Schweikart

Professor of History, University of Dayton

co-author, A Patriot’s History of the United States


[1]. Quoted in Arthur B. Laffer, Stephen Moore, and Peter J. Tanous, The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let It Happen (New York: Threshold, 2008), 49.

[2]. See Larry Schweikart and Lynne Pierson Doti, American Entrepreneur (New York: Amacom, 2009), ch. 9.

Everything comes down to the two Senate runoffs in Georgia. If we lose both races, we lose the country. Democrats know this and are pouring in millions to usher in a Marxist agenda.

As the Left tries to hide how radical the two candidates really are, Glenn takes us inside the Democrat war room to expose the wolf in pastor's clothing, Raphael Warnock, and America's Justin Trudeau, Jon Ossoff. Socialism, the Green New Deal, and "defund the police" are all on the table. And Glenn warns of what's to come if conservatives don't activate: Chuck Schumer will weaponize the Senate, and the radical Left will launch an all-out assault to ravage the Constitution.

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Sen. Ted Cruz (R-Texas) joined the "Glenn Beck Radio Program" to explain how mail-in ballots are typically disqualified during recounts at a far higher rate than in-person, Election Day ballots, and why this is "good news" for President Donald Trump's legal battle over the election.

"One of the things that gives the greatest cause for optimism is, this election ... there's a pretty marked disparity in terms of how the votes were distributed. On Election Day, with in-person voting, Donald Trump won a significant majority of the votes cast on in-person voting on Election Day. Of mail-in voting, Joe Biden won a significant majority of the votes cast early on mail-in voting," Cruz explained.

"Now, here's the good news: If you look historically to recounts, if you look historically to election litigation, the votes cast in person on Election Day tend to stand. It's sort of hard to screw that up. Those votes are generally legal, and they're not set aside. Mail-in votes historically have a much higher rate of rejection … when they're examined, there are a whole series of legal requirements that vary state by state, but mail-in votes consistently have a higher rate of rejection, which suggests that as these votes begin being examined and subjected to scrutiny, that you're going to see Joe Biden's vote tallies go down. That's a good thing," he added. "The challenge is, for President Trump to prevail, he's got to run the table. He's got to win, not just in one state but in several states. That makes it a lot harder to prevail in the litigation. I hope that he does so, but it is a real challenge and we shouldn't try to convince ourselves otherwise."

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Fox News senior meteorologist Janice Dean is perhaps even more disgusted with New York Gov. Andrew Cuomo (D) for his coronavirus response than BlazeTV's Stu Burguiere (read what Stu has to say on the subject here), and for a good reason.

She lost both of her in-laws to COVID-19 in New York's nursing homes after Gov. Cuomo's infamous nursing home mandate, which Cuomo has since had scrubbed from the state's website and blamed everyone from the New York Post to nursing care workers to (every leftist's favorite scapegoat) President Donald Trump.

Janice joined Glenn and Stu on the "Glenn Beck Radio Program" Tuesday to ask why mainstream media is not holding Gov. Cuomo — who recently published a book about his leadership during the COVID-19 pandemic — accountable?

"I'm vocal because I have not seen the mainstream media ask these questions or demand accountability of their leaders. [Cuomo] really has been ruling with an iron fist, and every time he does get asked a question, he blames everybody else except the person that signed that order," Janice said.

"In my mind, he's profiting off the over 30 thousand New Yorkers, including my in-laws, that died by publishing a book on 'leadership' of New York," she added. "His order has helped kill thousands of relatives of New York state. And this is not political, Glenn. This is not about Republican or Democrat. My in-laws were registered Democrats. This is not about politics. This is about accountability for something that went wrong, and it's because of your [Cuomo's] leadership that we're put into this situation."

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As America grows divided and afraid to disagree with the Democrats' woke plan for America, Megyn Kelly is ready to fight back for the truth. For nearly two decades, she navigated the volatile and broken world of the media. But as America leans on independent voices more than ever, she's breaking new ground with "The Megyn Kelly Show."

She joined the latest Glenn Beck Podcast to break down what's coming next after the election: Black Lives Matter is mainstream, leftists are making lists of Trump supporters, and the Hunter Biden scandal is on the back burner.

Megyn and Glenn reminisce about their cable news days (including her infamous run-in with then-presidential candidate Donald Trump) and to look into the chaotic and shady world of journalism and the growing entitlement it's bred. For example, many conservatives have been shocked by how Fox News handled the election.

Megyn defended Fox News, saying she believes Fox News' mission "is a good one," but also didn't hold back on hosts like Neil Cavuto, who cut off a White House briefing to fact check it — something she never would have done, even while covering President Obama.

Megyn also shared this insightful takeaway from her time at NBC: "Jane Fonda was an ass."

Watch the full podcast here:

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