Andrew W. Mellon

[[File:Andrew mellon stamp.JPG|upright|thumb|165px|Andrew Mellon on a 1955 US postage stamp.]]{{Economics}}
'''Andrew W. Mellon''' {{lived|1855|1937}} was an [[United States|American]] [[business]]man who is best known for serving as Secretary of the Treasury under [[Herbert Hoover]], whom he managed to terrify with his [[crank]]y [[economic]] advice. Mellon is often cited as one of the grandfathers of [[Reaganomics]] and the [[Laffer Curve]]. 

He is excellent proof that being a good businessman [[Ultracrepidarian|doesn't necessarily make you a good economist]].

== Pre-Depression ==
Mellon was appointed Secretary of the Treasury by [[Warren G. Harding]] in 1921 because Mellon claimed to be a deficit hawk who would pay down the debt left over from [[WWI]]. It was at this point Mellon helped develop proto-Reaganomics, with his claims that lowering [[taxes]] (especially on the wealthy) would result in an increase of total revenue for the government, because he thought people would be more willing to pay the lowered taxes as opposed to trying to get out of it. Mellon's tax plan was fairly [[radical]] for the time:

*[[Tax cut|Lower taxes on the rich]] because Mellon believed this would result in a net gain in revenue for the government, since the rich would (supposedly) be willing to just pay their taxes if tax rates were lower. It was at this point Mellon developed the proto-Laffer Curve, believing that if the tax rate was above 25%, the rich would try to get out of paying their taxes and there would be a net loss in revenue generated by the government. [[PIDOOMA|Where the 25% number came from is anyone's guess]].

* Lower the income tax on the lowest income earners, from 4% to 0.5%. 

*Reduce the [[estate tax]], because rich people would be more willing to pay their taxes instead of moving their money into [[tax-exempt]] shelters. He didn't go into great detail about why they wouldn't move the money anyway, since they'd still get out of paying taxes.

The result of this is that by 1929 Mellon had managed to lower the top marginal tax rate to 24%, though he only got the [[income tax]] rate for the lowest income earners down to 1.5% by the same time.

==The bust==
When the [[Great Depression]] hit, Mellon had to clean up his mess. The lowered tax rates managed to pay down some of the public debt during a booming economy, but when this easy revenue couldn't be counted on anymore he panicked and gave [[Herbert Hoover]] his now infamous advice. He told Hoover to:

{{cquote|[[Austrian School|Liquidate  labor,  liquidate  stocks,  liquidate  the  farmers,  liquidate  real  estate]]. … It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more [[moral]] life. Values will be adjusted, and [[Social Darwinism|enterprising people will pick up the wrecks from less competent people]]|||''The Memoirs of Herbert Hoover: The Great Depression, 1929-1941'' by Herbert Hoover (1952) The Macmillan Company<ref>[https://hoover.archives.gov/sites/default/files/research/ebooks/b1v3_full.pdf</ref>}}

The Mellon-owned Mellon Bank was in competition with Chase National Bank, which the Rockefeller family had a controlling share in. If you're a cynic, then you might say that advice was part of the feuding between those two families.<ref>[https://newrepublic.com/article/93808/the-case-andrew-mellon "The Case of Andrew Mellon"], New Republic 19 January 1926.</ref><ref>Fuller, Helen, [https://newrepublic.com/article/93523/tax-corruption-evasion-reform "The Tax Thieves of 1951"], New Republican 11 November 1951.</ref>

Hoover, thankfully, regarded Mellon's advice as [[insanity]] that would cause even more economic instability. Mellon's advice earns him a special place among some economists, who use his last name as a neologism (Mellonism) that refers to a particularly cranky, [[sociopath]]ic economic theory or act.

[[FDR]], hating Mellon, basically harassed him for the last two years of his life by having his administration [[Irony|accuse him of tax fraud, for which he was repeatedly taken to trial]].

==Revival==
Despite being almost universally regarded as one of the worst, if not ''the worst'' Secretary of the Treasury, Mellon has enjoyed something of a revival among certain [[think tank]]s, from both [[Heritage Foundation|right-wing]] and [[Cato|libertarian]] institutions.<ref>[http://www.cato.org/publications/commentary/1920s-income-tax-cuts-sparked-economic-growth-raised-federal-revenues Look at the growth and revenue generation!] Forget the massive aftershocks!</ref> These 'Mellonites' usually just ignore the fact that he sat through the era leading up to the Great Depression and the beginning of the depression itself. If they do acknowledge it, they will blame the [[Amity Shlaes|'socialist' Herbert Hoover]] (!) for causing the depression, or blame FDR’s [[New Deal]] for allegedly [[bullshit|worsening the depression]].

One of the more popular [[talking point]]s is that the tax cuts [[Correlation does not equal causation|''caused'' the booming economy]], which usually involves ignoring the actual causes of the economic boom such as the introduction of hire-purchase credit (which would later backfire), [[advertising]], and the widespread increase of electricity which made mass production easier to pull off. [[Europe]] being in shambles after the [[Great War]] would also work to America's benefit thanks to less competition in investing.

Oh, and the similarity of [[Richard Mellon Scaife|this guy's]] name is <u>not</u> coincidental as he was Mellon's nephew — I guess [[wingnut]]tery runs in the family.

==References==
{{reflist}}

{{DEFAULTSORT:Mellon, Andrew W.}}
[[Category:Business]]
[[Category:Economists]]
[[Category:Former U.S. Cabinet Members]]
[[Category:Great Depression]]
[[Category:Tax]]

Categories: Business, Economists, Former U.S. Cabinet Members, Great Depression, Tax