Presidents are never solely responsible for economic policy initiatives. But they can set the tone for the direction if they are solid leaders. President Warren Harding dealt with the most severe economic contraction of the 20th century in the 1920-21 Depression. By every statistical measure it was more severe than the eventual events of 1929, the stagflation of the 1970's or the current environment we have today. The Consumer Price Index fell by over 15%. In contrast, the deflationary pressures of the 1929 depression at its worst point was a decline of 11%. Wholesale prices declined by about 36%. The rate of business failure more than tripled. Among the companies that survived, they saw a 75% decline in profits.
Policy initiatives implemented by the Harding administration would be considered heresy by the academics of today. Gov't spending was slashed initially by over 65%. (Those were actual cuts rather than todays interpretation, which is a slowing in the rate of growth). And later slashed nearly another 50% over the next two years. At the onset Gov't spending coming out of WW1 was about 18.5 billion. By 1922 it was down to about 3.3 billion. Marginal tax rates were reduced substantially and interest rates were actually increased by the Fed. Yet, in 18 short months it was over. And next came the roaring 20's. No other economic contraction and speedy recovery of the era is even comparable.