Nixon (1968-1973)
- Nixon took office after eight years of Democratic rule. Vice president under Eisenhower before his unsuccessful run for the presidency in 1960, Nixon embraced politics, but without the passion of President Johnson. Distant often appearing ill at ease, he was always calculating his next move. That helped him at first, but finally led to his downfall.
Although Nixon subscribed to the Republican value of fiscal responsibility, he recognized the need for government's expanded role and accepted the basic contours of the welfare state. He simply wanted to manage its programs better.
Nixon confronted a series of economic problems during his presidency. By 1973 the inflation rate was 9 percent; the Dow-Jones average of industrial stocks fell 36 percent between November 1968 and May 1970; and the unemployment rate reached 6.6 percent by the end of 1970. Nixon imposed wage-price controls in 1971, but they did little good.
Factors beyond Nixon's control undermined his economic policies. In 1973 the war between Israel, Egypt and Syria prompted Saudi Arabia to impose an embargo on oil shipped to Israel's ally, the United States. Other member nations of the Organization of Petroleum Exporting Countries (OPEC) quadrupled their prices. Americans faced both shortages and rapidly rising prices. Even when the embargo ended the next year, prices remained high. Higher energy prices affected all areas of American economic life: in 1974 inflation reached 12 percent, causing disruptions that led to even higher unemployment rates. This era of recession and inflation ("stagflation") brought an end to the unprecedented economic boom America had enjoyed since 1948.
While trying to manage the economy, Nixon also sought to restore "law and order." Rising crime rates in American cities and political protests, increased drug use and more permissive views about sex in U.S. universities offended many Americans. Seeking to strengthen his own political constituency, Nixon chose to use government power to counter disruption. He lashed out at demonstrators, attacked the press for distorted coverage and sought to silence his opponents.
That strategy backfired in the Watergate affair. Facing Democratic majorities in both houses of Congress during his first term, Nixon wanted to win an overwhelming re-election victory in 1972 that would bring Republican congressional majorities and end the legislative stalemate. The Committee to Re-elect the President (CREEP) launched a massive fund-raising campaign to collect money before contributions had to be reported under a new law.
Early in 1972, Nixon's team proposed to tap the telephones of the Democratic National Committee in the Watergate apartment complex in Washington, D.C. The attempt failed. When the burglars, carrying money and documents that could ultimately be traced to The White House, were arrested, the administration decided to cover up its involvement. Six days after the discovery of the break-in, Nixon told the Central Intelligence Agency to order the Federal Bureau of Investigation to cease its investigation on the grounds that national security was at stake. In fact, the break-in was just one aspect of a campaign to locate and destroy people whom the administration considered its "enemies." These activities involved illegal wiretapping, break-ins and fundraising. Although Nixon was overwhelmingly re-elected that year, the press, particularly the Washington Post, continued to investigate. As the scandal unfolded, the Democratic majority in the Congress instituted impeachment proceedings against Nixon. As the evidence of his involvement began to mount, he resigned on August 9, 1974.
Gerald R. Ford (1973-1976)
- Gerald Ford, an unpretentious man who had spent most of his public life in Congress, became Nixon's vice president following the resignation of the previous vice president, Spiro T. Agnew, after it was revealed that he had accepted bribes both before and during his term as vice president. Twenty months later, upon Nixon's resignation, Ford became president. His first priority was to restore trust in the government, which had been shaken by impeachment proceedings aimed at removing Nixon from office. Initially Ford enjoyed a great deal of confidence, but it quickly eroded when he pardoned Nixon and thus headed off any possible prosecution in the future.
In public policy, Ford followed the course Nixon had set. Economic problems remained serious, as inflation and unemployment continued to rise and the gross national product fell. Ford first tried to cajole the public, much as Herbert Hoover had done in 1929. When that failed, he imposed measures to curb inflation, which led to a 12-percent unemployment rate, and the most serious recession since the Great Depression. A tax cut, coupled with higher unemployment benefits, led to modest recovery, but still no end to economic difficulties.
Jimmy Carter (1976-1980)
Jimmy Carter, former Democratic governor of Georgia, won the presidency in 1976. Portraying himself during the campaign as an outsider to Washington politics, he promised a fresh approach to governing, but his very lack of experience at the national level complicated his tenure from the start. A naval officer and engineer by training, he often appeared to be a technocrat, when Americans wanted someone more vibrant to lead the way through troubled times.
In economic affairs, Carter at first permitted a policy of deficit spending. When the Federal Reserve Board, responsible for setting monetary policy, increased the money supply to cover deficits, inflation rose to 10 percent a year. Carter responded by cutting the budget to slow inflation, but cuts affected social programs at the heart of Democratic policy. By the end of his term, with deficits still high, the alienation of the business community could be seen in falling bond prices and rising interest rates.
Carter also faced criticism for his failure to develop an effective energy policy. He presented a comprehensive program, aimed at reducing dependence on foreign oil, that he called the "moral equivalent of war." Opponents thwarted it in Congress.
Though Carter called himself a populist, his political priorities were never wholly clear. He endorsed government's protective role, but then began the process of deregulation -- the removal of governmental controls in economic life. Arguing that some restrictions over the course of the past century limited competition and increased consumer costs, he favored decontrol in the oil, airline, railroad and trucking industries.
Carter hoped to reestablish Democratic leadership, but his efforts failed to gain either public or congressional support. By the end of his term, his disapproval rating reached 77 percent, and Americans began to look toward the Republican Party again.
In economic affairs, Carter at first permitted a policy of deficit spending. When the Federal Reserve Board, responsible for setting monetary policy, increased the money supply to cover deficits, inflation rose to 10 percent a year. Carter responded by cutting the budget to slow inflation, but cuts affected social programs at the heart of Democratic policy. By the end of his term, with deficits still high, the alienation of the business community could be seen in falling bond prices and rising interest rates.
Carter also faced criticism for his failure to develop an effective energy policy. He presented a comprehensive program, aimed at reducing dependence on foreign oil, that he called the "moral equivalent of war." Opponents thwarted it in Congress.
Though Carter called himself a populist, his political priorities were never wholly clear. He endorsed government's protective role, but then began the process of deregulation -- the removal of governmental controls in economic life. Arguing that some restrictions over the course of the past century limited competition and increased consumer costs, he favored decontrol in the oil, airline, railroad and trucking industries.
Carter hoped to reestablish Democratic leadership, but his efforts failed to gain either public or congressional support. By the end of his term, his disapproval rating reached 77 percent, and Americans began to look toward the Republican Party again.