Gerald Ford became president after Nixon's resignation and struggled with stagflation as inflation and unemployment rose. His attempts to cut spending and raise interest rates caused a recession. Ford also failed to get support from Congress and lost Vietnam. In the 1976 election, Jimmy Carter was elected as an outsider who promised to restore integrity, but struggled with a weak economy as inflation increased due to rising oil prices set by OPEC. Carter achieved the Camp David Accords but his presidency was hurt by the Iran hostage crisis and a failed rescue mission.

2. Gerald Ford becomes President
II: unsuccessful with fixing the US economy
A. Inflation and unemployment continue to rise
1. OPEC raised price of oil,
a. energy costs rise
b. inflation climbs from 6%-10%
2. His solution was to ask Americans to save energy
a. didn’t work

3. B. Tries to fix inflation with a “tight money” policy
1. cut spending
a. made unemployment worse
2. asked Federal Reserve for interest rate hike
a. caused a huge recession
b. Worst since Great Depression (up to that time)

4. III. Could not get along with Democrat Congress
1. asked for money to help S. Vietnam
a. Congress said no
b. all of Vietnam is taken over by Communist
IV: Failed at rescuing Americans on merchant ship Mayaguez
1. 39 Americans rescued
2. 41 soldiers die in the operation
President Ford
More President Ford

5. ELECTION of 1976

6. Carter Presidency
I: Elected in 1976
A. People elected him because he was an “outsider”
1. Promised to restore integrity to Presidency
2. “down to earth” style – frequent fireside chats and tv speech

7. B. Too much of an outsider to get along with Congress
1. all of his advisors were from Georgia
2. refused to “play politics” and make deals
3. managed to upset both the Republicans and fellow Democrats

8. US loses economic dominance during 1970s
I: Foreign competition
A: Booming economies of Germany and Japan cut into US markets
1. US factories had to cut production and lay off workers
a. steel, iron clothing
b. automobiles
II: increase in technology and computers force layoffs
III: US industry changes from manufacturing to service economy
A. service jobs pay less
2. require more education to get the few high-paying service jobs
IV: less earning=less spending so less spending =big recession

9. Carter’s domestic plan
I: Reduce dependence on foreign oil
A: asked Americans to conserve
1. set example by keeping White House cold during winter
2. Americans didn’t care
B: National Energy Act
1. tax on gas guzzling cars
2. removed price controls on US oil and natural gas
a. price immediately shot up
b. 1977 coldest winter on record

10. C: OPEC increases oil prices again
1. inflation increases from 7.6% to 11.3%

11. O.P.E.C. EMBARGO:
U.S. Support of Israel

12. II: Fix the nations economy
A. All of his ideas failed
1. OPEC angry for his support of Israel
a. raise oil prices again
2. Puts Paul Volker in charge of federal reserve
a. raises interest rates to fight inflation
b. causes a recession
3. increases govt spending to fix recession
a. increases national debt

13. B. American people felt he had no economic plan
1. gave speech about “malaise” and “crisis of spirit” hurting econ
a. made people feel he had no faith in the country
C. Economy continues to worsen
1. inflation increases to 14%
2. standard of living decreases
a. slips from 1st to 5th in the world

14. Carter’s domestic successes
I: appointed record numbers of minorities to govt positions
A: Andrew Young– first African American ambassador to UN
B. Federal courts
1. 28 African Americans
2. 29 women
3. 14 Latinos
II: promoted the idea of “affirmative action”
A. Federal courts were turning against affirmative action at same time
1. Bakke case– cannot use quotas to determine college admission
but race CAN be a factor

15. II: Advancing human rights
A: cut off military aid to friendly nations with civil rights abuses
1. Brazil
2. Argentina
3. Nicaragua
B: refused to deal with Soviet Union b/c of their human rights record

16. Carter’s foreign policy successes
I: Camp David Accords (1977)
A: negotiated peace between Israel and Egypt
1. Israel would give back Sinai taken in earlier war
2. Egypt recognizes Israels right to exist
a. Egyptian leader, Sadat, killed for this

17. Carter’s foreign policy failures
I: Giving the Panama Canal back to Panama
A. Done to improve relations in S. America
B. Most Americans hated the idea
C. Worked out in the long run, (but seen as a failure at the time)
II: Refusal to get along with Soviets b/c of Human rights abuses
A. Delayed SALT II talks
1. talked about reducing nukes but accomplished little

18. B. Doesn’t allow US to compete in Olympics b/c of Soviet invasion of
Afghanistan
III: Iran hostage crisis
A. Ayatollah Khomeini overthrows US supported Shah of Iran
B. Carter allows the Shah asylum in US
C. Iranians take Americans at US Embassy hostage
1. want to exchange hostages for the Shah
2. Carter refuses
D. Rescue effort fails
1. Hostages held for 444 days
2. Released after election of Reagan

19. America becomes concerned about
Environment:
I: Publication of Silent Spring by Rachel Carson
A. Warned of the dangers of pesticides
B. Led to the outlawing of DDT and other pesticides
C. Helped Americans see how they impacted the environment
II: First Earth Day (1970)
A. Bring awareness to environmental issues

20. III: Creation of the Environmental Protection Agency
A. Power to set and enforce pollution standards
B. Govts main instrument in dealing with environmental issues
IV: Other Environmental legislation
A. Clean Air Act
B. Endangered Species Act
C. Limits on strip mining
D. Alaska Native Claims Settlement Act
1. gave millions of acres of land to Native Americans for
conservation and tribal use

21. IV: Concerns over nuclear energy
A. Provided cheap energy and use less foreign oil
B. Nuclear waste harmful to environment and people
1. 3 mile island disaster
a. reactor melted down
b. some radiation released into atmosphere
c. nuclear regulatory commission strengthened safety
standards
V: Government continues to struggle to balance jobs and progress v
environmental concerns