Ford & Carter

1. Ford & Carter

2. Economic Crisis of the 1970s

3. Economic Troubles • spending during the Johnson administration had spurred inflation • rising prices of consumer goods • rising costs of oil • rising costs of raw materials • slowing down of industry • an oil embargo

4. Founding members (1960) Iran Iraq Kuwait Qatar Abu Dhabi Saudi Arabia Venezuela Members by 1973 Algeria Libya Nigeria Gabon Indonesia Equador

6. 1973 oil embargo – gas shortage You must drive, 55mhp! Make an Alaskan pipeline!

7. 1986-1997: the result of declining U.S. crude oil production and rising demand

8. Because of high oil prices, consumers conserved energy and switch to other fuels, driving down the import share of total consumption in the late 1970s and early 1980s. • OPEC's share of world oil production • 55 percent in 1973 • 30 percent in 1985 • 43 percent in 1997 • The U.S. share of total world output of crude oil production • 52 percent in 1950 • 10 percent in 1997. • Real U.S. motor gasoline prices • peaked in 1981 • fell to a low of $1.12 per gallon in 1988 • stood at $1.15 in 1997. • U.S. crude oil reserves fell 31 percent between 1977 and 1997, to 22 billion barrels.

9. OPEC’s Oil Embargo: They were angry the US supported Israel in the Yom Kippur War

10. “stagflation” • rising prices and economic stagnation combined to create a new economic problem in the 1970s • Now seen in 2008?

11. Gerald Ford • Our first president…

12. Helsinki accords FINLAND • Signed by 35 nations • A human rights agreement • in exchange for recognition of post-WWII Soviet borders • recognized Soviet control of the Baltic States (Estonia, Latvia, and Lithuania) • All nations agreed to promote personal liberties in their countries. CONTRADICTION?

13. pardon – forgives crimes and penalty • commutation – reduces penalty • reprieve – postpones punishment _____________________________________________ • September 8, 1974: Ford granted Nixon a full pardon for any crimes he might have committed while President. • majority of Americans disapproved of the pardon • Ford's public-approval ratings dropped

14. Draft Dodgers and Deserters • Pardon? • Amnesty? • Clemency? Ford granted conditional amnesty

15. “Cultural Reconciliation” • Carter pardoned those who peacefully evaded the draft • travelling abroad (100K) • failing to register • Deserters could apply for a limited pardon, case by case AMNESTY

16. Jimmy Carter

17. Carter’s popularity • Washington outsider • perceived as honest • Peanut farmer

18. The guiding principle of President Carter’s foreign policy was • human rights

19. Carter’s Promises: • restore morality and honesty to the federal government • government reform • welfare reform • provide national medical care • foreign policy: human rights

20. Camp David Accords(1978) • peace agreement between Egypt and Israel • bitter enemies • Carter’s greatest foreign policy success

21. Panama Canal Treaty • US to return sovereignty of the canal to Panama in 2000

22. Iranian Revolution(1979) • The Shah relaxed censorship laws in 1977 • The writings of Ayatollah Khomeini began to circulate widely • Iran erupted into demonstrations and dissents.

23. Two movements gradually merged • the religious movement • demanded the return to a society based on the Shari'ah and ulama administration. • the liberal movement • wanted Westernization • demanded greater democracy, economic freedom, and human rights. CONTRADICTION?

24. Long Term Effects of the Iranian Revolution • a world-wide panic about oil supplies pushed prices up • prices hurt the developed nations • reinforced links between the oil industry and the Middle East • there were vast changes in the Middle East during the next twenty years

25. Protest • Thousands demonstrated outside the walls of the US Embassy compound • Protesting US protection of Reza Pahlavi, Shah of Iran, who had fled the country 8 months earlier • 300 radical Iranian students stormed the US Embassy to stage a sit-in

26. Iran Hostage Crisis (1979) • - 52 Americans were taken hostage • - 13 Americans - the female and black hostages - were released within days. • - The sit-in hardened into a siege

27. Ayatollah Khomeini condemned the "Great Satan" America. • demanded the Shah face trial in Iran. • "This has united our people. Our opponents dare not act against us"

28. Carter cut diplomatic relations & suspended trade with Iran

29. Christmas Invasion • On Christmas Day, the Soviets invaded Afghanistan • tabled the SALT II Treaty • Carter warned the Soviets that invading the Middle East would be taken as a “direct threat to U.S. national security” – The Carter Doctrine

30. Botched Rescue • 5 months into the stand-off • In a sandstorm, 2 helicopters failed to take off, 2 collided, 8 US servicemen died.

31. On his last day in office, Carter negotiated a deal through the Algerian Government to release $8B of Iranian funds frozen in bank accounts across the world.

32. Carter urged a boycott of the 1980 summer Olympics • In response to the Soviet invasion of Afghanistan

33. Ronald Reagan The oldest president ever elected (age 69)

34. The Reagan Revolution • fiscal conservatives • social conservatives • “Reagan Democrats”

35. fiscal conservatives

36. social conservatives

37. “Reagan Democrats” • white, working-class Northerners who no longer saw Democrats as champions of their working class aspirations, but instead saw them as working primarily for the benefit of others: the very poor, the unemployed, African Americans, and other groups

38. “Reagan Democrats” • national security • immigration • crime • taxes • pornography

39. "Government is not the solution to our problems; government is the problem."

40. March 30, 1981 • 69 days into his presidency • John Hinckley, Jr. • White House Press Secretary James Brady was shot in the head - paralyzed

42. Hinkley was copying a scene from the movie Taxi Driver • He believed this was going to make actress Jodie Foster love him • The bullet barely missed Reagan's heart.

43. Air traffic controllers' strike (1981) • Federal air traffic controllers went on strike, violating a regulation prohibiting government unions from striking. • Reagan declared an emergency according to the 1947 Taft Hartley Act • Reagan fired 11,345 striking air traffic controllers who had ignored his order to return to work

44. 1998: Washington National Airport was renamed Reagan National Airport 1993: Clinton ended the "ban for life"

45. “supply side” economics • budgetary discipline and tax reduction would: • Stimulate investment • Boost productivity • Foster dramatic economic growth

46. Supply Side Assumption • Economic health depends upon maintaining and enhancing incentives for private production

47. Real gross domestic product (GDP) growth recovered strongly after the 1982 recession • grew during his eight years in office at an annual rate of 3.4%

48. Unemployment peaked at 10.8% percent in December 1982—higher than any time since the Great Depression • then dropped steadily to 5.3% by 12/1988

49. 16M new jobs created • inflation significantly decreased. • Net effect of all Reagan-era tax cuts was 1% decrease in government revenues

50. Criticisms of Tax Cuts • The immediate consequence was a deep, though temporary recession • In the 1980s, for the first time in the 20th Century, income gaps widened between the richest and the poorest.