By late 1970's, after a recession under Ford, general inflation in the US resumed. The bill for oil skyrocketed, as much of the dependence was on foreign oil at this point. America's balance of payments reached an unprecedented $40 billion dollars in the red. This made many Americans realize that a policy of economic isolationism simply won't ever work; at least no as long as we are dependent on foreign oil. In other words, if we are purchasing lots of oil from overseas, we will need to be selling a lot of something to be making back that money. In the late 1970's that just wasn't happening. The deficit in the federal budget reached a whopping $60 billion in 1980.
As a result of inflation, the elderly and those living on fixed incomes really suffered. Others coped with the economic conditions by investing their money. As the value of the dollar plunged, interest rates reached 20% by early 1980. Carter decided the problem was the dependence on expensive foreign oil. He pushed for energy conservation, although Americans, forgetting the long lines at the gas pump in 1973, didn't seem to care.
In Iran, oppressive dictator Mohammed Reza Pahlevi, who was put into power by the American CIA in 1953, was overthrown in 1979. The people of Iran, angry at the United States, put the plug on oil exports from Iran. OPEC (Organization of the Petroleum Exporting Countries), now dealing with an oil shortage, (shortage might be an exaggeration, let's just say they had less oil than before) hiked up prices. Like in 1973, there were long lines at the gas pumps for Americans. Discontent with Carter among Americans skyrocketed. Then, in his famous Malaise Speech, Carter scolded Americans for being too concerned with "material goods" and claimed this nation was in a "moral and spiritual crisis."
I find it quite perplexing as to why a president would say that our capitalistic economy is too materialistic. It seems like trying to give philosophical solution to a quite tangible problem. Sure, one could argue our society is too obsessed with material things, but that seems like something a president wouldn't speak about publicly. It appears to me as if Carter was losing control of the economy, and was trying to find a scapegoat. What are your thoughts on how Carter dealt with the oil crisis? Comment below!
I think Carter was pushing a small idea of energy conservation and making it too much of a big deal. If he thought about it for a while, he probably would have come up with a more political solution. However, Carter wasn't wrong. Americans were consuming much more than before. So I think Carter was making a small but true statement into the big problem of the US.
ReplyDelete