Presidents Ford and Carter
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Transcript of Presidents Ford and Carter
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Presidents Ford and CarterChapter 28
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Economy of the 1970s•Prosperity widespread after WWII in US
•Mid-1960s (Johnson Admin.)▫Widespread spending on Vietnam War and
Great Society▫Inflation occurs (loss of the value of money)
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OPEC•Organization of Petroleum Export
Countries▫Mostly Arab nations▫1973: Arab-Israeli Conflict
Oil becomes political weapon Embargo on Israeli supporters
▫Raised price of crude oil by 70%, then another 130%
▫Crude Oil Price (by barrel) 1973: $3 1980: $30
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Economic Stagnation at Home•Aging US manufacturing plants
•1971: US imports > US exports▫First time since 1889
•Stagflation▫Nickname for a combination of inflation
with a stagnant economy and high unemployment
▫Economists confused
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Economists Dilemma•Spending to help end recession?
▫Increases inflation•Raising taxes to slow inflation?
▫Recession continues
•Nixon’s decision: Control inflation▫Cut spending▫Raise taxes
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Post-Nixon Economy• 1975: Unemployment approaching 9%
• Ford urges American changes▫Reduce dependency on oil/gas▫Raise interest rates
• Big changes under Ford▫Cut government spending▫Vetoed 50 bills▫Balance the budget▫Keep taxes low
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Ford’s Foreign Policy•Sec. of State Kissinger pursues détente
with communist states•Helsinki Accords:
▫Borders of Eastern Europe accepted▫Soviets will uphold basic human rights
including migration Soviets did not follow agreement US turns against foreign policy
•Cambodians capture Mayaguez cargo ship▫Marines attack, 41 die
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1976 Election• Ford
▫ Continued tax cuts▫ Continued economic
recovery programs▫ Bad public image
• Carter▫ Former GA Governor▫ Promises to restore
integrity to US▫ Promote energy
development▫ Tax Reforms▫ Welfare Reforms▫ Nationalized health care▫ “Outsider” in Washington
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Electoral Vote: Carter 297Ford 240
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The Carter Administration•Priority #1: Fix the economy
▫Increase Government Spending▫Cut Taxes
•Result: Inflation surge▫Ended tax cuts and vetoed spending
programs he proposed▫Reduce money supply and raise interest
rates•Result: Failed to stop inflation and
recession
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Oil and Carter•Foreign Oil Dependence
▫Energy usage concerns▫Conserve Oil; Promote Coal and Renewable
Energy▫Create Department of Energy▫Deregulation of oil companies
Agreed to by Carter, but with “windfall tax”▫1979: Middle East instability causes fuel
shortage
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Jimmy Carter’s Policies • Domestic Policy
▫ Energy concerns
▫ Inexperience and Outsider Status hurt relations with
Congress Blocked Proposals Didn’t Reach Out
▫ Public Polls show unease
• Foreign Policy
▫ Be honest with other nations
▫ Latin America Interventionist Panama Canal to
Panama after 60+ years
▫ USSR Human Rights Imprisonment of
Protesters Afghanistan Grain Embargo Boycotted Olympics
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Carter and the Middle East•Camp David Accords
•Iranian relationship▫US Supported Shah
Oil Anti-USSR expansion
▫Iranian discontent with Shah Western reforms Repression
▫Shah forced to flee, new administration takes over
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The New Iran• Ayatollah Khomeini takes over
▫Religious leader▫Islamic republic
• Distrust of US• November 1979: US Embassy
taken over ▫52 Americans taken hostage▫Carter administration fails to
negotiate release▫April 1980: Rescue mission▫January 20, 1981: Hostages
released after 444 days in captivity