1. The First Unelected President August 1974 – Gerard Ford became president – Only person never elected – had been appointed to vice presidency when Agnew resigned – Seen as unintelligent college football player September 8, 1974 – Ford pardoned Nixon for any crimes committed as president – Democrats and the public were outraged – Made it unlikely Ford would be elected in 1976

2. The Bicentennial Campaign and the Carter Victory 1976 – US’s 200th birthday Republicans – Nominated Gerald Ford Democrats – Nominated Jimmy Carter – Ran against Nixon and Watergate as much as Ford “I’ll never lie to you.” – Untainted by corruption and scandal in Washington Results of the 1976 election – Carter won close election with 51% of the popular vote; electoral vote of 297 to 240 97% of blacks voted for Carter

3. Carter’s Humanitarian Diplomacy Carter’s Christianity influenced his foreign policy (concern for human rights) September 1978 – Camp David peace accords between Egypt and Israel – President of Egypt and Prime Minister of Israel invited to presidential retreat in Maryland – Israel agreed (in principle) to withdraw from territory conquered during 1967 Six Days War – Egypt promised to respect Israel’s borders – Both sides promised formal peace treaty within 3 months

4. Economic and Energy Woes Unprecedented economic problems hit US economy under Carter – Inflation (double-digit) – Increased foreign trade – Huge budget deficits – High interest rates Carter believed most of US’s problems came from dependence on foreign oil – 1977 – made proposals for energy conservation – US public refused to conserve – “malaise speech” – I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel... I have seen the strength of America in the inexhaustible resources of our people. In the days to come, let us renew that strength in the struggle for an energy-secure nation. (malaise – out of sorts, uncomfortable)carpoolspublic transportationspeed limit

5. Economic and Energy Woes January 1979 – Iran’s shah overthrown – Shah had been installed by CIA in Iran in 1953 and ruled as brutal dictator Westernized and secularized Iran, kept good relations with Israel and US – Muslim fundamentalists overthrew government – Iran’s oil stopped flowing during revolution OPEC raised prices Americans experienced 2nd gas shortage during 1970s

6. Foreign Affairs and the Iranian Imbroglio Panama Canal Treaty- 1978: Transfer of ownership Dec. 31, 1999 Panama Canal Treaty- 1978: Transfer of ownership Dec. 31, 1999 June 1979 – Carter signed SALT II agreements with Soviets – Limited levels of strategic nuclear weapons – US Senate never ratified SALT II, although both sides honored the agreements November 4, 1979 – anti-American Muslim militants stormed US embassy in Iran – All the occupants were taken hostage – Muslims demanded the exiled shah be shipped back to Iran for trial

7. Foreign Affairs and the Iranian Imbroglio December 27, 1979 – USSR invaded Afghanistan (next door to Iran) – Done in order to prop up communist government against Muslim militants – Appeared that USSR was surrounding Middle East to control area’s oil Carter’s reaction to Iran and Afghanistan – Embargo placed on grain and technology to USSR – Boycott of summer Olympics in Moscow – US would use “any means necessary, including force” to protect Persian Gulf against Soviet invasion Threat never materialized because USSR met stiff resistance in Afghanistan (“Russia’s Vietnam”) – Proposed “Rapid Deployment Force” to respond quickly to crises in faraway places – Registration of young people (including women) for possible draft

8. Foreign Affairs and the Iranian Imbroglio The Iranian hostage crisis – 52 US citizens held captive for 444 days in Iran – Nightly TV news showed Iranians burning US flags and spitting on effigies of Uncle Sam – Carter ordered a tactical team to rescue the hostages (Ross Perot) Equipment failures forced the team to withdraw 2 of their aircraft collided, killing 8 Carter’s powerlessness in rescuing the hostages perfectly summed up the national mood

9. 1980 Election results

10. Reagan Public Approval Ratings (The Teflon President)

11. Reagan’s Clarity Strong Defense - SDI Cut taxes – “Trickle Down” Cut Spending – Xcept military Balance the Budget – couldn’t accomplish

12. Economic Philosophy OLD Keynesian Economics “Demand Side” Economics New Deal NEW Chicago School – little regulation with gradual increase in Money supply “Supply Side” Economics Reaganomics (The Reagan Revolution)

13. Economics Effects of Reaganomics From 1981-1989 – GDP increased 33% – Inflation fell from 10% to 4% – Interest rates dropped from 18% to 10% (today it is 4.875%) – Unemployment fell from 8% to 6% – Trade went from surplus of $2.3 billion to deficit of $99.5 billion – Public debt went from $909 billion to $2.868 trillion (by 1992 = $4 trillion) The “Twin Towers of Debt”

14. Realignment New Deal Coalition Democratic South African-Americans Union members Urban North Immigrant/newer ethnic groups Farmers Reagan Coalition Midwest small towns Wealthiest Americans Hawks on foreign policy Blue Collar in North and Midwest (union and non- union) White Southerners Evangelicals Yuppies