the disaster of Carter (economic maliase and all
I think Carter is one of the most underrated Presidents in history. Firstly, people tend to equate the problems of the Carter years with Carter himself, but in fact the problems of that era, notably stagflation, had begun far before the Carter presidency. In fact, it was Jimmy Carter's appointment of Paul Volcker to head of the Federal Reserve board that began to turn the country's economy around. Volcker, who says that he was "sort of a Democrat" was also a known monetary tightener. He curbed growth of the money supply and immediately began to raise interest rates dramatically in October 1979. This sent the economy into a recession that hurt Carter in the election but brought inflation down from its peak- and it would continue to fall ever since. The "Carter recession" of 1980 and the much deeper "Reagan recession" of 1982 were all engineered by Paul Volcker. At the time, he was widely disliked and accused of creating high unemployment, but inflation was finally defeated. Another thing that hurt Carter (and Volcker) but which was beyond his control was oil price hikes set off as the result of the Iranian revolution. These hikes were even bigger than the oil price hikes under the OPEC oil embargo. A glance at a long-term chart shows that Carter and Volcker were trying to steer an industrial economy at a time when energy prices were at pre-industrial levels-- the highest since about 1870.
http://www.wtrg.com/oil_graphs/oilprice1869.gifhttp://www.wtrg.com/oil_graphs/crudeoilprice7281.gifOne interesting thing pointed out by the chart is that Carter announced oil price decontrol. The website says: "The US imposed price controls on domestically produced oil in an attempt to lessen the impact of the 1973-74 price increase. The obvious result of the price controls was that U.S. consumers of crude oil paid 48 percent more for imports than domestic production. Of course U.S producers received less.
Did the policy achieve its goal? In the short term the recession induced by the 1973-1974 crude oil price rise was less. However, it had other effects as well. In the absence of price controls U.S. exploration and production would certainly have been significantly greater. The higher prices faced by consumers would have resulted in lower rates of consumption: automobiles would have had higher mileage sooner, homes and commercial buildings would have been better insulated and improvements in industrial energy efficiency would have been greater than they were during this period. As a consequence, the United States would have been less dependent on imports in 1979-1980 and the price increase in response to Iranian and Iraqi supply interruptions would have been significantly less. "
Thus, price decontrols, plus monetary policy reversal, brought short-term pain that cost Carter the election, but at the long-term benefit to America.
Iranian revolution. Carter came into office much as a result of the corruption of the previous administrations. Consequently, he was the only President to pressure
all of America's authoritarian allies to improve their human rights records, even if it made things more difficult for him (or, say, the Shah of Iran). But Carter's concern for human rights in dictatorial regimes didn't lead to the revolt of Iranian religious leaders-- that came after somebody assasinated a relative of the Ayatollah in Iraq in 1977, and after the Shah's regime published an article mocking the Ayatollah in January 1978. At the time the revolution was actually a broad-based democratic revolution with a wide political spectrum participating. Only as 1979 and the early 1980s wore on did the Ayatollah increasingly eliminate all of his political opponents.
Peaks and troughs. The second oil shock sent prices to record (industrial) highs, and they peaked in January 1981, the same month Ronald Reagan took office. Thus while Reagan had falling oil prices throughout his presidency (they finally fell through the bottom in 1985), Carter dealt with rising oil prices throughout his.
Here are the prices under Reagan. Note that only the change in oil prices leads to inflationary/deflationary pressures; their absolute level does not lead to price presures over the long term.
http://www.wtrg.com/oil_graphs/crudeoilprice8198.gifHostage situation. Throughout the hostage year, television channels kept reporting the number of days the hostages had been in Iran. I read that Walter Cronkite began every broadcast with something like "today is the 339th day..." However this misses the point that the most important thing is that the hostages are not killed and eventually freed. Carter must be credited with taking very seriously the lives of the hostages in the U.S. embassy in Iran, and he was ultimately successful. He managed to negotiate for the release of all the hostages without a single dead. That is quite a remarkable feat considering they were held by a fanatical religious regime in a city in central Asia some 800 miles from the coast. Compare this to Putin's sledgehammer approach in central Moscow last year-- it may have benefitted him politically but it cost 115 innocent lives. Finally, Carter takes the heat for the failure of a military rescue mission, but it isn't the President's job to micromanage the mechanical viability of every helicopter. In this case Carter got unlucky.
Overall, Carter was probably one of the unluckiest Presidents in the 20th century, which is unfortunate because he was also one of the most honest and concerned about human rights.
