CCA 73 Presidents Ford and CCA 73 Presidents Ford and CarterCarterDate DayDate Day American Cultural Fact: Gerald R. Ford American Cultural Fact: Gerald R. Ford

once worked as a fashion model. Ford was once worked as a fashion model. Ford was a model for Cosmopolitan and Look a model for Cosmopolitan and Look magazines in the 1940's.magazines in the 1940's.

This Day in HistoryThis Day in History Class workClass work HomeworkHomework

Changes in the Changes in the American American Economy: Economy:

Under President Under President Ford and CarterFord and Carter

The Energy Crisis, The Energy Crisis, DeindustrializationDeindustrialization

, and the Service , and the Service Economy Economy

Globalization in the Globalization in the 1970’s1970’s

Since the 1970’s, globalization has sharply accelerated its Since the 1970’s, globalization has sharply accelerated its momentum towards a single-world society.momentum towards a single-world society.

Slowly and methodically institutions such as the United Slowly and methodically institutions such as the United Nations, World Health Organization, and World Trade Nations, World Health Organization, and World Trade Organization acquired dominance. Organization acquired dominance.

A global system of governing through multinational A global system of governing through multinational companies extends its interests on a formal and personal companies extends its interests on a formal and personal level level

The manner in which these businesses conducted their day-The manner in which these businesses conducted their day-to-day transactions were significantly altered by technology. to-day transactions were significantly altered by technology. Industries such as Mercedes-Benz, Walmart, McDonalds, Industries such as Mercedes-Benz, Walmart, McDonalds, AT&T, and Coca Cola were staking out more territory on the AT&T, and Coca Cola were staking out more territory on the global landscape. But the deepest roots of globalization are global landscape. But the deepest roots of globalization are found in the financial institutions of found in the financial institutions of The World BanThe World Bank and k and International Monetary Fund (IMF). Other financial trends International Monetary Fund (IMF). Other financial trends toward globalization include the introduction of the toward globalization include the introduction of the Euro,Euro, the “dollarization” of certain Latin American currency.the “dollarization” of certain Latin American currency.

StagflationStagflation Throughout 1970's, the American Throughout 1970's, the American

economy was plagued by the economy was plagued by the unprecedented combination of unprecedented combination of soaring prices, the high soaring prices, the high unemployment, and low economic unemployment, and low economic growth. growth.

Economists dubbed the phenomena Economists dubbed the phenomena "Stagflation," a period of rising prices "Stagflation," a period of rising prices in a stagnant economy. in a stagnant economy.

The high standard of living in the US The high standard of living in the US following World War II suddenly following World War II suddenly began to lag behind that of Western began to lag behind that of Western Europe and Japan. Europe and Japan.

Americans found it increasingly Americans found it increasingly difficult to sustain a middle class difficult to sustain a middle class lifestyle.lifestyle.

StagflationStagflationCompare the rates of inflation between 1972 and 1980 to those of the 1980's and 1990's.

StagflationStagflationIn 1975, unemployment reached almost 9%, the highest level since the Great Depression at that time.

The Oil Crisis BeginsThe Oil Crisis Begins By the late 1950's, the By the late 1950's, the

demand for oil in the demand for oil in the United States United States outstripped domestic outstripped domestic production production capabilities. capabilities.

By 1970's, the US By 1970's, the US imported a third of its imported a third of its oil, making the oil, making the American economy American economy vulnerable to vulnerable to geopolitical upsets in geopolitical upsets in the Middle East. the Middle East.

The Oil Crisis BeginsThe Oil Crisis Begins On October 6, 1973, the On October 6, 1973, the

Yom Kippur War began Yom Kippur War began when Egypt and Syria when Egypt and Syria attacked Israel from two attacked Israel from two sides. sides.

The US airlifted supplies to The US airlifted supplies to Israel, prompting OPEC to Israel, prompting OPEC to levy an oil embargo against levy an oil embargo against Israel's allies that lasted Israel's allies that lasted until March 18, 1974. until March 18, 1974.

Our support of Israel made Our support of Israel made U.S. an enemy to other U.S. an enemy to other Arab nations.Arab nations.

Coping with the Energy Coping with the Energy Crisis Crisis

The oil embargo led to The oil embargo led to dramatically increased dramatically increased prices for all types of fuel, prices for all types of fuel, including gasoline, home-including gasoline, home-heating fuel, and heating fuel, and electricity. electricity.

Prices for virtually Prices for virtually everything else rose in everything else rose in response to high energy response to high energy costs, causing record costs, causing record inflation. inflation.

Long lines for gasoline Long lines for gasoline became everyday became everyday occurrences.occurrences.

Coping with the Energy Coping with the Energy CrisisCrisis

The presidents of the 70’s and 80’s The presidents of the 70’s and 80’s appealed to the nation to make appealed to the nation to make sacrifices in the name of conserving sacrifices in the name of conserving energy. energy.

They warned that the country was They warned that the country was "heading toward the most acute "heading toward the most acute shortages of energy since World War shortages of energy since World War II.”II.”

The presidents asked Americans to The presidents asked Americans to reduce air travel, reduce work, reduce air travel, reduce work, school hours, turn down thermostats school hours, turn down thermostats 6 degrees, reduce highway speed 6 degrees, reduce highway speed limits to conserve energy.limits to conserve energy.

Coping with the Energy Coping with the Energy CrisisCrisis

Leaders urged the use Leaders urged the use of coal and nuclear of coal and nuclear power rather than the power rather than the limited commodity of oil.limited commodity of oil.

Congress was urged to Congress was urged to approve measures for approve measures for increased exploration increased exploration and extraction of and extraction of domestic oil and to relax domestic oil and to relax environmental environmental standards that impeded standards that impeded energy requirements.energy requirements.

Economic Policies of Economic Policies of President FordPresident Ford Gerald Ford inherited an Gerald Ford inherited an

economy in crisis when replaced economy in crisis when replaced Richard Nixon in August 1974. Richard Nixon in August 1974. Ford lacked the economic vision Ford lacked the economic vision to curb the effects of stagflation.to curb the effects of stagflation.

Ford attempted to initiate a Ford attempted to initiate a grassroots anti-inflation grassroots anti-inflation campaign, but the Whip Inflation campaign, but the Whip Inflation Now (WIN) program was little Now (WIN) program was little more than a public relations more than a public relations maneuver. maneuver.

Skeptical Americans began Skeptical Americans began wearing the red and white WIN wearing the red and white WIN buttons upside down to stand for buttons upside down to stand for "No Instant Miracles." "No Instant Miracles."

After a few months, the WIN After a few months, the WIN effort was abandoned.effort was abandoned.

Economic Polices of Economic Polices of President FordPresident Ford

As a Republican, Ford believed As a Republican, Ford believed that a balanced federal budget that a balanced federal budget and reductions in government and reductions in government spending were the best way to spending were the best way to curb inflation. curb inflation.

Democrats in Congress favored Democrats in Congress favored increased federal spending as a increased federal spending as a stimulus to economic and job stimulus to economic and job growth. growth.

Ford admitted in 1975, “the state Ford admitted in 1975, “the state of the Union is not good.”of the Union is not good.”

Ford vetoed more major bills than Ford vetoed more major bills than any president in the 20th century.any president in the 20th century.

Despite the legislative battle, Despite the legislative battle, recessionary pressures eased recessionary pressures eased somewhat by 1976.somewhat by 1976.

DeindustrializationDeindustrialization "Deindustrialization" refers to "Deindustrialization" refers to

a shift away from a a shift away from a manufacturing-based economy.manufacturing-based economy.

In the United States and In the United States and Europe, deindustrialization has Europe, deindustrialization has preceded a shift to a service-preceded a shift to a service-based economy. based economy.

The trend toward The trend toward deindustrialization began in deindustrialization began in the 1960's and continues into the 1960's and continues into the present day, as the service the present day, as the service sector overtakes the sector overtakes the manufacturing sector.manufacturing sector.

DeindustrializationDeindustrialization During the 1970's, the oil During the 1970's, the oil

crisis and the falling crisis and the falling productivity of the US productivity of the US manufacturing sector sped manufacturing sector sped the decline of several the decline of several industries, including steel, industries, including steel, automobiles, and automobiles, and electronics. electronics.

The industrial production The industrial production index measures the total index measures the total output of US factories. A output of US factories. A decline in production decline in production indicates slow economic indicates slow economic growth. growth.

DeindustrializationDeindustrialization Increases in foreign Increases in foreign

industrial efficiency allowed industrial efficiency allowed Europe, Asia, and Latin Europe, Asia, and Latin America to effectively America to effectively compete by producing compete by producing quality goods for a lower quality goods for a lower cost. cost.

Many American companies Many American companies began outsourcing labor to began outsourcing labor to foreign countries to remain foreign countries to remain competitive. competitive.

This chart illustrates the This chart illustrates the balance of trade. The balance of trade. The United States increasingly United States increasingly imports more than it imports more than it exports. exports.

DeindustrializationDeindustrialization Structural unemployment Structural unemployment

often spikes during often spikes during deindustrialization. deindustrialization.

In this case, "structural In this case, "structural unemployment" refers to unemployment" refers to unemployment that occurs unemployment that occurs during the transition from a during the transition from a manufacturing to a service manufacturing to a service economy because workers economy because workers lack skills, education, lack skills, education, experience, or proximity to the experience, or proximity to the new types of jobs available.new types of jobs available.

The Decline of Organized The Decline of Organized Labor Labor

AFL-CIO lost over AFL-CIO lost over 4 million members 4 million members between 1970 and between 1970 and 1982. Along with 1982. Along with declining declining membership came membership came decreased political decreased political power for power for organized labor. organized labor.

Membership in AFL-CIO Unions

The Service EconomyThe Service Economy Economies in the developed Economies in the developed

world typically change over world typically change over time. Agrarian economies first time. Agrarian economies first transition to industrial, then transition to industrial, then develop into service develop into service economies.economies.

Service industries include Service industries include retail, wholesale, banking, retail, wholesale, banking, public utilities, entertainment, public utilities, entertainment, etc.etc.

This graph shows the eclipse This graph shows the eclipse of the manufacturing sector of the manufacturing sector by the service sector by the by the service sector by the early 1980's. The trend early 1980's. The trend toward deindustrialization toward deindustrialization resulted in a service-based resulted in a service-based economy. economy.

The Rustbelt and the The Rustbelt and the SunbeltSunbelt

The Rustbelt and the The Rustbelt and the SunbeltSunbelt

The economic region known as The economic region known as the Manufacturing Belt became the Manufacturing Belt became known as the Rust Belt by the known as the Rust Belt by the 1970's, as manufacturing and 1970's, as manufacturing and heavy industry declined due to heavy industry declined due to high energy costs and foreign high energy costs and foreign competition. competition.

Cities in the Rust belt were Cities in the Rust belt were subject to unemployment, subject to unemployment, underemployment in low-underemployment in low-paying service jobs, "white paying service jobs, "white flight" to the suburbs, and flight" to the suburbs, and general out-migration as general out-migration as manufacturing jobs moved manufacturing jobs moved south and abroad.south and abroad.

The Rustbelt and the The Rustbelt and the SunbeltSunbelt

Meanwhile, Sunbelt states Meanwhile, Sunbelt states in the West and Southwest in the West and Southwest continued to enjoy the continued to enjoy the economic growth trend economic growth trend spurred by Cold-War spurred by Cold-War defense spending and an defense spending and an influx of retirees. influx of retirees.

The South profited from a The South profited from a booming agribusiness booming agribusiness industry and the industry and the California's Silicon Valley California's Silicon Valley became the hub of the became the hub of the technology industry. technology industry.

As population in the Sunbelt As population in the Sunbelt increased, so did the increased, so did the region's political influence.region's political influence.

Working Women Working Women High inflation, a High inflation, a

series of recessions, series of recessions, and the changing role and the changing role of women in society of women in society encouraged more encouraged more females to enter the females to enter the workforce throughout workforce throughout the 1970's. the 1970's.

Working women Working women became the norm, as became the norm, as more households more households depended on two depended on two incomes. incomes.

Working WomenWorking Women Women, especially Women, especially

women of color, continue women of color, continue to make substantially to make substantially less money than their less money than their male counterparts. male counterparts.

Several factors account Several factors account for this wage gap, for this wage gap, including discrimination including discrimination and female and female concentration in low-concentration in low-wage, non-union wage, non-union industries.industries.

The Feminization of The Feminization of Poverty Poverty

Despite increased participation in the labor force and the Despite increased participation in the labor force and the progress made during the women's movement, women progress made during the women's movement, women experienced a decline in economic status during the 1970's. experienced a decline in economic status during the 1970's.

The Feminization of The Feminization of PovertyPoverty

Low pay and inflation combined with increased rates of divorce and Low pay and inflation combined with increased rates of divorce and teenage pregnancy led to a phenomena known as "the feminization of teenage pregnancy led to a phenomena known as "the feminization of poverty," as females became increasingly economically marginalized. poverty," as females became increasingly economically marginalized.

Economic Policies of Economic Policies of President CarterPresident Carter

As a rhetorical device during 1976 As a rhetorical device during 1976 presidential campaign, Governor presidential campaign, Governor Jimmy Carter combined the rate of Jimmy Carter combined the rate of inflation (6%) and unemployment inflation (6%) and unemployment (8%) into a "Misery Index" of 14. (8%) into a "Misery Index" of 14.

At first, Carter modeled his At first, Carter modeled his economic recovery program after economic recovery program after FDR's New Deal by advocating tax FDR's New Deal by advocating tax cuts, public works, and cuts, public works, and employment programs to stimulate employment programs to stimulate the economy. the economy.

The Democratic Congress The Democratic Congress responded with legislation in responded with legislation in accordance with the President's accordance with the President's plan, but as unemployment plan, but as unemployment decreased, inflation continued to decreased, inflation continued to rise.rise.

Economic Policies of Economic Policies of President CarterPresident Carter

In response, Carter tried an almost opposite approach. He attempted to In response, Carter tried an almost opposite approach. He attempted to curb inflation by slashing government spending, deregulating industries, curb inflation by slashing government spending, deregulating industries, and implementing wage and price controls. and implementing wage and price controls.

Many Democrats were alienated by what they perceived as a shift to the Many Democrats were alienated by what they perceived as a shift to the right in presidential policies. right in presidential policies.

Despite the President's sincere efforts, the "Misery Index" soon rose to Despite the President's sincere efforts, the "Misery Index" soon rose to 21. 21.

President Carter and the President Carter and the Continuing Energy Crisis Continuing Energy Crisis

Although the oil embargo had Although the oil embargo had ended and gas lines had ended and gas lines had ceased by Carter's presidency, ceased by Carter's presidency, the threat created by US the threat created by US energy dependence loomed on energy dependence loomed on the horizon. the horizon.

Carter characterized the Carter characterized the energy crisis as "the moral energy crisis as "the moral equivalent of war," which equivalent of war," which critics derisively nicknamed critics derisively nicknamed "meow." "meow."

His calls for sacrifice and His calls for sacrifice and conservation were opposed by conservation were opposed by the influential oil and auto the influential oil and auto industries, and accordingly industries, and accordingly the subsequent National the subsequent National Energy Act of 1978 focused on Energy Act of 1978 focused on increasing domestic increasing domestic production rather than production rather than conservation. conservation.

President Carter and the President Carter and the Continuing Energy CrisisContinuing Energy Crisis

Carter was successful in creating the Department of Energy as a cabinet-level Carter was successful in creating the Department of Energy as a cabinet-level position, and he continued to try and set an example for citizens by conserving position, and he continued to try and set an example for citizens by conserving energy in the White House.energy in the White House.

President Carter had solar panels installed atop the White House in 1979 President Carter had solar panels installed atop the White House in 1979 (which President Reagan later removed). (which President Reagan later removed).

President Carter and the President Carter and the Continuing Energy CrisisContinuing Energy Crisis

Following the 1979 Islamic Following the 1979 Islamic Revolution in Iran, Ayatollah Revolution in Iran, Ayatollah Khomeini stopped all oil Khomeini stopped all oil shipments, further exacerbating shipments, further exacerbating US energy woes.US energy woes.

In July the president delivered a In July the president delivered a televised address that became televised address that became known as the "Malaise Speech," known as the "Malaise Speech," in which he entreats Americans in which he entreats Americans to share the responsibility of to share the responsibility of energy conservation. energy conservation.

The public and the press The public and the press responded defensively and responded defensively and Carter's approval rating Carter's approval rating plummeted.plummeted.

Although the speech was a frank Although the speech was a frank diagnosis of the country's ills, diagnosis of the country's ills, Carter was criticized for Carter was criticized for "blaming" the American people "blaming" the American people and offering few solutions. and offering few solutions.