No Brain, No Headache

At Harvard, and to a lesser extent, throughout the United States, Texas Gov. George W. Bush's intellect has become the running joke of the presidential campaign. And let's face the facts: Dubya is no Albert Einstein. But more to the point, when it comes to brains, he isn't exactly Vice President Al Gore '69 either. Even a cursory glance at economic history, however, reveals that intelligence does not generally translate into prosperity. In fact, if the American people are smart, they may want to elect a president who is dumb.

By all accounts, Jimmy Carter was a pretty bright guy. He studied nuclear physics at the U.S. Naval Academy in Annapolis and could read over 2000 words per minute. But Carter's presidency was disastrous for the American economy. As ordinary people were subjected to high tax rates originally intended for the wealthy alone, unemployment and growth sputtered while inflation soared into the double digits. Richard M. Nixon's intelligence was recognized by California psychologists at an early age--Nixon was one of the "termites" in the famous "Terman Study"--but this didn't prevent the Golden State prodigy from undermining the Constitution and destroying the international monetary system. In addition, his bizarre scheme of wage and price controls resulted in an unprecedented series of peacetime shortages. It is difficult to fathom such apparent ignorance of market economics from a man whose IQ scores were above the 97th percentile. In fact, to find a president of comparable mental stature, one must go all the way back to Herbert Hoover.

Hoover is an interesting case because there are a number of important parallels to Gore. A man of science and technology, Hoover was known in his time as the "Great Engineer," both for his entrepreneurial successes in the extraction business and his progressive commitment to "social engineering." He assumed the presidency at a time when economists spoke of a "new era" from which recessions had been banished. The federal reserve was held in high esteem. The stock market was robust. Unfortunately, his extra-presidential talents notwithstanding, Hoover's one term administration proved astoundingly incompetent. Ever the tinkerer, when the Crash of '29 struck, he strove to intervene, mounting what "progressive" economists dubbed "a new attack on poverty." Big businesses were prodded to keep wages high, resulting in massive, intractable unemployment. The infamous Smoot-Hawley tariff was enacted, leading to the implosion of international trade. And tax rates were hiked drastically on both incomes and profits, driving the private sector ever further into the red.

Hoover's mistakes should be noted by those who take today's prosperity for granted. Today, Gore pledges to raise wages above market levels through a host of pro-union legislation aimed at temp agencies, low productivity nations and the working poor. What is more disturbing, Gore refuses to foreswear the option of raising taxes if there is a recession. When asked whether tax increases during a recession are wise, Bush economist Lawrence Lindsey's response was curt and ominous, "That's what Herbert Hoover did."

In stark contrast, many of America's greatest booms have taken place against a backdrop of unimpressive presidents. Ronald Reagan's intellect was always held under high suspicion, yet Reagan knew enough to remove the confiscatory tax rates and inflation that were squelching investment and entrepreneurship under Nixon, Carter and Gerald R. Ford. The big posthumous tax cuts proposed by John F. Kennedy '40 made the 1960s the first decade without recession. Warren G. Harding and Calvin Coolidge, both "do nothing" presidents not renowned for mental prowess, were the stewards of the great 1920s boom when GNP increased by more than half in under a decade. Coolidge simply repealed the war time tax rates and let the good times roll. And who guided America through the tripling of incomes of the post civil war, pre-Teddy Roosevelt era? Who indeed.

Clearly, not all smart presidents have failed miserably and not all "dumb" presidents have succeeded. But while brains may make the man, the historical record is very clear: Brains don't make the economy. America's system of free enterprise works best when the man in the White House knows how to leave business alone. Perhaps it is more than a coincidence that brainy workaholics are often not the individuals best suited to this task.

Steven R. Piraino '02 is an economics concentrator in Leverett House.