The Governor of Massachusetts, Calvin Coolidge, never really planned, or initially wanted, to be Warren Harding's Vice-Presidential running mate in 1920. During the Republican National Convention, Harding, after ten ballots, became the Republican nominee, and after some maneuvering by Coolidge's key politicos, Coolidge, somewhat reluctantly, accepted the nomination as Vice-President. When Harding died of what was almost certainly congestive heart failure (although there is a conspiracy theory that his wife poisoned him due to his infidelity) in 1923, Calvin Coolidge was thrust into the presidency. In short order, Coolidge ran for President in his own right, easily defeating the Democratic candidate, John W. Davis in theElection of 1924.
After reading Schlaes' biography, I learned that Coolidge focused on two major economic areas during his years as President. First, Coolidge wanted to trim the federal budget down to $3 billion, which, for all practical purposes, he accomplished. President Coolidge regularly met with one his most-trusted advisers (General Herbert Lord), and they, for his entire time in office, trimmed government spending at the federal level. Coolidge believed that the federal government should operate within its means (Coolidge was a living example of a colossally successful person that lived within his means), and he worked tirelessly to trim the budget.
Secondly, he teamed up with his Secretary of the Treasury, Andrew Mellon (quite possibly the second-most famous SecTreas behind Hamilton), and started the process of what Mellon called "Scientific Taxation". The impetus behind this, for lack of a better word, experiment, was the crushing federal government debt after World War I - 75% of the federal government debt was related to the Great War (the worst scandal of Harding's Presidency, in terms of wasted federal spending and embezzlement, was an effort to start a federal system of assistance for U.S. veterans). Mellon believed that if the tax rates were reduced for America's top earners, more money would be spent in the areas of Consumption and Investment. In other words, Coolidge and Mellon predicted that if taxes were lowered in the upper quintile, more money would be spent in the economy, which would then actually lead to more government revenues; and they were correct in their hypothesis. There was some "lag-time", but it became abundantly clear that reducing those tax rates not only encouraged more spending and hiring, but the government was able to bring in more revenue than even Mellon had predicted. Of course, Coolidge and Mellon were not able to do this unilaterally; Congress was involved, and Coolidge and Mellon were not able to enact every aspect of "Scientific Taxation". However, this Congress didn't dilute or eliminate as much as some Progressive Era Congress's may have, so it seemed that Mellon's theory was sound.
The problem with "Scientific Taxation" was that it produced, what Federal Reserve Chairman Alan Greenspan many decades later termed, "Irrational Exuberance". The American economy started to expand at a rapid pace; the Dow Jones Industrial Average skyrocketed to over 300, an incredible figure in those days. Coolidge wondered (and worried) why the value of stocks became so inflated in such a short period of time. The federal government was collecting more revenues than had been predicted, and more-and-more politicians in both parties wanted to spend that excess instead of reducing the federal government's debt (There was constant pressure, for example, to provide a "bonus" for WW I veterans, and for veterans of previous wars). Even the leading Republican not-named-Coolidge, Secretary of Commerce Herbert Hoover, was pressuring for government spending for flood control. In terms of what Hoover wanted, Coolidge was in a tough spot - the Great Mississippi River Flood of 1927showed that states were unable to cope with emergencies of that scope, and Hoover was an advocate of greater government spending for relief and dam-building. Coolidge believed that as horrific as the flood was in terms of the human and financial cost, it was the burden of the states to deal with the disaster - the federal government didn't get involved in the way we are accustomed to seeing (and expecting) today. Coolidge held firm in his stance, even when his beloved home state of Vermont experienced the worst flooding in a century shortly thereafter. The tradition of the federal government "coming to the rescue" after a natural or economic disaster would not occur until the early-1930s when Herbert Hoover was President.
During the summer of 1927 in South Dakota (Coolidge accepted an invitation to have the "Summer White House" near Mount Rushmore, which was under construction), Coolidge announced that he would not run for another term as President. Still incredibly popular, not only within his party, but with most Americans as well, Coolidge decided that he was through. His decision was based partly on his health (he died of a heart attack on 5 January, 1933 - FDR hadn't yet been inaugurated), and also because he felt that he could accomplish no more in terms of trimming the budget, lowering taxes, and expanding the economy.
Before I finish, I just want to mention that this author's research was impeccable, but she is an avowed Coolidge fan (of which there is a lot to admire), and I think she lets Coolidge off the hook at least a little bit in terms of his economic decisions that were part of what caused the Great Depression. That being said, she found primary sources that showed Coolidge, late in his presidency, predicted that if Hoover became president, he would spend too much government money, which would increase the federal government's debt (which Coolidge had worked so hard to reduce to a more manageable level). She also found documentation that Coolidge predicted that if the Democrats took office during a depression, they would spend far too much government money with very little focus for which that money was spent.
Coolidge made those statements, but the "Velocity of Money" in the economy did start to super-heat during his presidency, due in part to his tireless efforts in support of SecTreas Mellon's "Scientific Taxation" strategy. It would have been very interesting, if Coolidge had decided to run for President in the Election of 1928 (he would have easily been re-elected), to see what his decision-making would have been at the onset of the Great Depression.