1. The Ford and Carter Years
Chapter 32.3

2. Review:
What is Stagflation?

3. Stagflation is when the economy has high levels of unemployment and high levels of inflation.
In other words…
1. The economy stops growing
2. Lots of people are without jobs
3. The value is money goes down

4. Review:
What is Realpolitik?

5. Realpolitik
Realpolitik was an American foreign policy designed by Henry Kissinger in which America chose its allies based on their military strength.
This was different from the previous foreign policy that saw the U.S. choose its allies based on ideology
(Capitalism vs Communism)

6. After Vice president Spiro Agnew resigned over Watergate, Richard Nixon nominated Gerald Ford to become Vice President.
After Nixon resigned, Gerald Ford was moved up to the Presidency.

7. President Gerald Ford pardoned Richard Nixon two months after the Watergate Scandal. Ford urged Americans to “put Watergate behind them.”

8. By the time Ford took office, America’s economy had gone from bad to worse.
Ford’s approach to fight stagflation was to cut down military spending, urge Americans to ration their use of oil and gas and to take other energy-saving measures.
It didn’t work.

9. Realpolitik continues
Henry Kissinger continued to oversee American foreign policy and the continuation of Realpoltik.

10. In 1974, Ford helped 35 nations sign the Helsinki Accords – which increased cooperation between Eastern European nations and continued to thaw the cold war.

11. “I’m a Ford, not a Lincoln.”
In 1973, Ford asked Congress to help South Vietnam after the Vietcong violated the ceasefire agreement – they refused, and South Vietnam fell.
In 1975, a Cambodian seizure of an American ship created bad press for Ford. He responded with a military show of force. 41 US troops died saving the 39 crew members – critics argued that the mission cost more lives than it saved.

12. The Election of 1976
Ford barely fended off Ronald Reagan for the Republican nominee and faced off against mostly unknown Jimmy Carter, a peanut farmer and former governor of Georgia.
Carter was able to win the Presidency because he seemed like a man of integrity. The Vietnam war and Watergate scandal made many Americans cynical to the “Washington Establishment” and they welcomed an outsider.

13. Carter stayed in touch with the American people by having Roosevelt-like “fireside chats” on radio and television.
He was very popular with the American people, but not very popular with Congress because he refused to play the “insider game of deal making.”
His unpopularity in Congress turned even some of his own party against him, and Carter had a hard time getting much done politically.

14. To fight stagflation, Carter put forward more than 100 proposals on energy conservation and economic reform – but oil and automobile lobbyists were able to team up with his opponents in Congress to kill his ideas.
Carter was unable to solve the economic and energy crisis, and going into the Election of 1980 – he would pay for it.

15. Carter did however, do a lot of Civil Rights.
His administration included more minorities and women than anyone before him.
He appointed civil rights leader Andrew Young as U.S. ambassador to the United Nations…and much more.
**Jimmy Carter also re-committed the United States to protecting and advocating for human rights around the world.

16. The Return of the Panama Canal to the Panamanians – Since 1914, the U
The Return of the Panama Canal to the Panamanians – Since 1914, the U.S. had owned the Panama Canal. Panamanians resented having their country split in two by a foreign power. In 1977, the Carter administration agreed to return the Panama Cancel to Panama – but not until December 31, This improved the relationship between the two countries.

17. The Collapse of Détente – Carter’s firm stance on human rights and his pointing out of the human rights violations occurring in China and the Soviet Union brought a return to the increased tensions of the Cold War.
Crisis in the Middle East – Americans had become all too aware of this part of the world due to the oil prices effect on the economy. In the Middle East, Carter would win a huge victory and suffer a terrible defeat in the eyes of the public.

18. The Camp David Accords – Carter helped to forge a peace-deal between long-time enemies Israel and Egypt.

19. The Iran Hostage Crisis – By 1979, the Shah of Iran, an ally of the United States was in a lot of political trouble. Many Iranians resented his regime’s widespread corruption and dictator-style leadership.
In January of 1979, revolution broke out in Iran. The Islamic religious figure Ayatollah Ruhollah Khomeini led the rebels in overthrowing the shah and establishing a theocracy based on strict adherence to the Qu’ran, the sacred book of Islam.

20. President Carter allowed the Shah to enter the United States for cancer treatment – which infuriated the Iranian rebels. On November 4th, armed students seized the U.S. embassy in Tehran, Iran and took 52 Americans hostage. They demanded that the U.S. return the Shah to Iran. Carter refused.
A painful yearlong standoff followed in which the U.S. continued quiet but intense efforts to free the hostages. Carter personally worked all through the night and day of Ronald Reagan’s inauguration. Finally, the hostages were released after 444 days in captivity.

21. Let’s Dispel some Modern Political Myths:
Today, Republicans will say that Jimmy Carter was the “worst president in history” because he caused the economic crisis and failed in the Iran Hostage Crisis. They will also say Ronald Reagan “saved the economy” and “the Iranians released the hostages right when Reagan got elected!.”

22. The Truth:
The economic problem of stagflation was a result of: overspending on the Vietnam War, foreign dependence on oil, and the emergence of Europe and Asia’s ability to compete economically with the U.S.
President Carter is the one who negotiated the release of the hostages. Ronald Reagan had nothing to do with it.
Although it is true Carter failed to solve the economic crisis, this is mostly due to the coalition of Congress and “Big Business Lobbyists” working against him.