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Chapter 28: Decline and Rebirth (1968–1988)
Important Keywords
Southern Strategy: Political strategy implemented by President Richard Nixon to win over Southern whites to the Republican party; the strategy succeeded through administration policies such as delaying school desegregation plans.
Détente: Foreign policy of decreasing tensions with the Soviet Union; this began in the first term of the Nixon administration.
Watergate: Series of events beginning with the break-in at the Democratic party headquarters in the Watergate complex in Washington, DC, that led to the downfall of President Richard Nixon; Nixon resigned as the House of Representatives was preparing for an impeachment hearing.
Organization of Petroleum Exporting Countries (OPEC): The group of 14 countries that produce most of the world’s oil and, by determining production quantities, influence worldwide oil prices.
Camp David Accords (1978): Peace agreement between Israel and Egypt that was mediated by President Jimmy Carter; many consider this the highlight of the Carter presidency.
Iranian Hostage Crisis: Diplomatic crisis triggered on November 4, 1979, when Iranian protesters seized the U.S. embassy in Tehran and held 66 American diplomats hostage for 444 days. President Carter was unable to free the hostages despite several attempts; to many this event symbolized the paralysis of American power in the late 1970s.
Religious right: Right-leaning evangelical Christians who increasingly supported Republican candidates beginning with Ronald Reagan.
Iran-Contra Affair: Scandal that erupted during the Reagan administration when it was revealed that U.S. government agents had secretly sold arms to Iran in order to raise money to fund anti-Communist “Contra” forces in Nicaragua.
Those acts directly contravened an ongoing U.S. trade embargo with Iran as well as federal legislation limiting aid to the Contras. Several Reagan administration officials were convicted of federal crimes as a result.
Key Timeline
1968: Richard Nixon elected president
1971: Nixon imposes wage and price controls
Pentagon Papers released
1972: Nixon visits China and Soviet Union
Nixon reelected
SALT I signed
Watergate break-in
1973: Watergate hearings in Congress
Spiro Agnew resigns as vice president
“Saturday Night Massacre”
1974: Inflation peaks at 11 percent
Nixon resigns; Gerald Ford becomes president
Ford pardons Richard Nixon
WIN economic program introduced
1975: South Vietnam falls to North Vietnam, ending Vietnam War
1976: Jimmy Carter elected president
1977: Carter signs Panama Canal treaty
Carter issues Vietnam-era draft amnesty
1978: Camp David Accords
1979: Americans taken hostage in Iran
1980: Ronald Reagan elected president
1981–1982: Major recession
Assassination attempt on Reagan
1981–1983: Major tax cuts instituted
1983: Reagan proposes “Star Wars”
Americans victorious in Grenada
1984: Reagan reelected
1985: Gorbachev assumes power in Soviet Union
1986: Additional tax reform measures passed
Iran-Contra Affair
1987: “Black Monday”
1988: George H. W. Bush elected president
The Presidency of Richard Nixon
Nixon's 1968 comeback was one of the greatest in American politics.
After losing the 1960 presidential election and the 1962 California governor's race, Nixon's political career was done.
After the second setback, he warned reporters, “you won't have Nixon to kick around anymore.”
Nixon was brilliant but difficult.
He wasn't a "people person" and didn't like huge voting groupings.
He thought major media and government forces were against him after a turbulent political career.
H.R. Haldeman, his chief of staff;
John Ehrlichman, his , and
Henry Kissinger, his national security advisor, were his valued aides.
Domestic Policy
Nixon took office in 1969 as the post-World War II economic boom was ending.
Inflation and unemployment were growing.
The trade imbalance was rising and the GDP was stagnating.
Some of these issues stemmed from the American economy's outdated industrial infrastructure.
Lyndon Johnson's unwillingness to compel taxpayers to pay the entire cost of the Vietnam War and his costly Great Society initiatives, which created a significant government budget deficit, angered some.
Nixon first balanced the budget by raising taxes and cutting expenditure.
It hurt the economy. The president then took serious action.
He froze prices and salaries for 90 days and set required rules for raising them.
Nixon's deficit spending resembled Franklin Roosevelt's during the Great Depression.
Nixon’s Southern Strategy
By 1968, the “Solid South,” which had been reliably voting Democratic since Reconstruction, was finally beginning to crack.
Eisenhower had won some Southern states in the 1950s.
In 1968, George Wallace, the combative former governor of Alabama, ran a third-party campaign for president as the candidate of the American Independence Party.
He received 13.5 percent of the popular vote and won the electoral votes of five Southern states.
Richard Nixon hoped to permanently weaken the hold of the Democratic party in the South.
His “Southern Strategy” aimed at wooing conservative Southerners into the Republican party.
Nixon sought to find ways to ease the transition to desegregation in the South.
He also criticized enforced school busing after courts had mandated its use to further desegregate Northern cities like Boston.
Nixon attempted to appoint two Southerners to the Supreme Court, but their nominations were rejected by the Senate.
Despite these setbacks, Nixon appointed four judges to the Supreme Court, including Chief Justice Warren Burger.
The court became generally more conservative, though in 1973 it endorsed a right to abortion in Roe v. Wade.
Foreign Policy
Foreign policy was Nixon's specialty.
Foreign policy was his administration's strongest suit.
Nixon oversaw the most delicate diplomatic discussions from the White House with Henry Kissinger, his national security adviser and secretary of state from 1973.
Nixon's most major diplomatic endeavors were represented by Kissinger.
Kissinger secretly met with the Communist Chinese and helped negotiate the Paris Peace Accords with the North Vietnamese.
Nixon's foreign policy success was mending ties with the Soviet Union and China.
Nixon's anti-Communism was well known.
He could negotiate with the big Communist states because of his cold war record.
Nixon established "détente" with the USSR.
Nixon felt that reducing cold war tensions would lessen the chance of global war and allow the US greater diplomatic influence in dealing with problems like Vietnam.
Nuclear war was Nixon's goal. Limiting nuclear proliferation was his goal.
In 1972, Nixon and Soviet Premier Leonid Brezhnev agreed to limit their nuclear arsenals.
The SALT I accord ended the cold war's armaments race, a historic occasion.
A 1972 trip by Nixon may have been more significant.
Since the 1950s, Nixon has supported Nationalist China— the non-Communist territory established by refugees from the Chinese civil war on the island of Taiwan.
Against "Red" China's aspirations, he advised caution. Nixon altered his mind.
By the time he became president, Nixon and Henry Kissinger were realpolitik advocates.
Nixon and Kissinger saw Communist China's emerging influence through the lens of power politics and understood the US had to recognise it.
They also felt that a diplomatic approach to China may push the Soviet leadership, who now saw the Chinese as adversaries.
In February 1972, Nixon and Kissinger visited China.
Mao Zedong and other senior leaders visited with them.
The parties engaged in commercial and cultural exchanges.
Nixon's visit cleared the groundwork for US-China diplomatic ties.
The Watergate Scandal
In 1972, President Nixon's foreign policy successes helped him win reelection.
As the election approached, high poll ratings showed he had seized the political center.
South Dakota Senator George McGovern, an antiwar liberal progressive, campaigned for the Democrats.
In 1972, Nixon won approximately 61% of the popular vote and all except Massachusetts and the District of Columbia's electoral votes.
Nixon's political victory was short-lived. Soon, a scandal would terminate his presidency.
Nixon's 1972 reelection makes the Watergate Affair's actions incomprehensible.
Nixon's political paranoia influenced them.
Nixon created an "enemies list" and had the Internal Revenue Service wiretap and harass some of the persons on it, believing, with some reason, that the media establishment, government bureaucracy, and Democratic party were implacably opposed.
The White House Plumbers were formed in 1971 after Daniel Ellsberg, a former State Department employee, leaked the Pentagon Papers.
Former CIA and FBI agents were in this group.
Looking seeking harmful information, the Plumbers trashed Daniel Ellsberg's psychiatrist's office.
The Committee to Reelect the President (CREEP) used shady persons to "dirty trick" Democrats.
These operatives lied about Democratic candidates and ordered 200 pizzas to a Democratic campaign headquarters.
On June 16, 1972, five CREEP members stormed into the Democratic National Committee's Watergate headquarters in Washington, DC.
By duplicating papers and installing electronic "bugs" in workplaces, they hoped to collect information on Democrats.
The political thieves were apprehended.
They were instantly connected to CREEP. Watergate began with this.
The Watergate break-in was not premeditated by President Nixon.
Nixon's worst political impulses set in and he started to cover up CREEP's deeds.
The president denied a White House link to the burglary.
He also advised CIA officials to persuade the FBI to drop the break-in probe.
As the investigation progressed, CREEP leaders lied about their Watergate activities. To keep them quiet, thieves received "hush money."
Bob Woodward and Carl Bernstein of the Washington Post pursued the Watergate story.
They received scoops from "Deep Throat."
Mark Felt, the FBI's assistant director at the time of the Watergate break-in, was their informant in 2005.
The thieves were convicted and imprisoned in January 1973.
By this time, Congress had enough questions to investigate.
The Senate Select Committee on Presidential Campaign Activities started its work in February.
John Dean, the White House attorney, acknowledged a Watergate cover-up during the committee's proceedings.
A tape device captured Oval Office chats, according to a presidential aide.
After the political uproar, Attorney General Richard Kleindienst and presidential advisors H.R. Haldeman and John Ehrlichman resigned.
Watergate was investigated by a special prosecutor Nixon hired to preserve his presidency.
Nixon then opposed Archibald Cox's attempts to get the White House recordings.
Nixon instructed Attorney General Elliot Richardson to dismiss Cox for persisting.
He and his deputy attorney general resigned.
On October 20, 1973, the "Saturday Night Massacre" occurred with Cox's resignation and dismissal.
The president's approval ratings were falling at this moment.
Impeachment proceedings were investigated by the House Judiciary Committee.
When President Nixon sent Leon Jaworski modified transcripts of his Oval Office recording, many were horrified by the president and his colleagues' harsh language.
Vice President Spiro Agnew resigned in October 1973 due to corruption accusations from his Maryland political career, compounding Nixon's problems.
Under the 25th Amendment, Congress approved Nixon's choice of Michigan Congressman Gerald Ford to replace Agnew.
Nixon couldn't stop demands for his resignation after losing credibility.
He released other recordings in April 1974, but the cloud remained.
In July, the House Judiciary Committee authorized three articles of impeachment.
Nixon was accused of impeding justice, rejecting House subpoenas, and misusing presidential authority.
At this time, the Supreme Court ordered the president to hand up the other recordings.
One contained a 181-minute gap, and another showed Nixon was complicit in the Watergate cover-up a week after the break-in.
Nixon's political destiny was determined by this "smoking gun."
Nixon was warned by Republican leaders that he would be impeached if he stayed in office.
On August 9, 1974, Nixon resigned.
In his inaugural speech, Gerald Ford announced that “our long national nightmare is over.”
The Ford Administration
After America's worst political crisis, Gerald Ford became president.
Ford was a well-liked House Republican minority leader.
He was the only vice president and president who was never elected.
On September 8, 1974, Ford pardoned Richard Nixon for any presidential offenses, which tarnished his reputation.
Ford feared that a lengthy prosecution of the former president would unduly prolong the national pain over Watergate. Many opposed this choice.
Ford was harshly condemned, and Democrats gained big legislative majorities in 1974.
Later, even his enemies saw Ford's pardon as intelligent and bold.
North Vietnam started their decisive onslaught against South Vietnam shortly after Ford took office.
Ford tried to get Congress to assist Saigon, but he failed.
Most Americans backed Congress' hands-off approach because they wanted to forget the Vietnam War.
Ford maintained Nixon's foreign strategy and kept Kissinger as secretary of state.
He also visited Japan and China.
Economy ruled Ford's presidency.
America's economy faltered.
Inflation and unemployment were unusual combined.
Stagflation was the 1970s economic problem.
Tax cuts and expenditure cutbacks were the president's conservative economic responses.
Inflation persisted and unemployment reached 10%.
Ford's Whip Inflation Now (WIN) button campaign failed to promote morale and economic confidence.
Ford defeated former California governor Ronald Reagan's bid to the Republican nomination to run for president himself.
The Democrats nominated Georgia governor Jimmy Carter.
Carter promised, “I'll never lie to you,” appealing to the post-Watergate public.
Ford harmed himself in a televised discussion by seemingly denying that the Soviet Union controlled Eastern Europe.
Carter narrowly won by appealing to traditional Democratic demographics and gaining back Southern Democrats who had backed Richard Nixon in 1968 and 1972.
The Carter Administration
Jimmy Carter was an outsider, but it cost him as president.
Even several House Democrats hated the president's criticism of Beltway politics.
Carter claimed to have been "born again" as an evangelical Christian.
Some politicians found his overt religion off-putting.
Carter wore sweaters to televised public appearances and traveled with his own baggage.
He also hired more women and minorities for his crew.
Carter, like Nixon and Ford, failed to fix the economy.
Stagflation persisted.
Carter tried to reduce inflation by decreasing government expenditure, which angered liberal Democrats.
The president persuaded the Federal Reserve Board to limit the money supply to fight inflation, which raised interest rates and slowed the economy.
Carter departed office with inflation at 12% and unemployment at 8%.
OPEC's efforts to raise crude oil prices in the 1970s exacerbated America's economic problems.
This raised gas and other petroleum costs, "fueling" inflation.
In 1977, President Carter promoted the creation of the Department of Energy.
In 1978, Congress deregulated the oil and gasoline markets and promoted energy conservation through the National Energy Act.
Carter pushed deregulation in other areas to boost the economy.
He deregulated the aviation and brewery sectors.
In the 1980s, Ronald Reagan expanded this economic deregulation initiative.
Carter's foreign policy centered on human rights.
This idealism contrasted with Nixon and Kissinger's realpolitik.
Carter signed a pact with Panama to restore the Canal Zone to Panamanian sovereignty in 1999.
Ronald Reagan and others called this deal a betrayal of American interests.
China was officially recognized by the president.
Carter and Soviet leader Leonid Brezhnev struck a SALT II agreement in 1979 to restrict their nuclear arsenals.
The U.S. Senate did not ratify this pact.
Afghanistan was invaded by the Soviet Union in December.
Carter withdrew from the 1980 Moscow Summer Olympics because to this action and what seemed to be a Soviet push into the oil-rich Middle East.
He considerably raised the military budget. No more détente with the USSR.
The Camp David Accords, mediated by President Carter, were Israel's Menachem Begin and Egypt's Anwar Sadat's greatest diplomatic triumph.
This accord laid the groundwork for a lasting peace between these nations.
Egypt acknowledged Israel's right to exist after Israel restored the Sinai Peninsula, which it had taken in the 1967 Six Day War.
In 1979, a revolution deposed the Shah of Iran.
Fundamentalist Muslim clerics took control the revolutionary administration.
Ayatollah Khomeini became Iran's leader.
Carter's humanitarian act enraged the Khomeini dictatorship.
On November 4, government-instigated protesters stormed the American embassy in Tehran.
The 66 Americans working there were kidnapped.
For 444 days, Iran kept the captives.
After the first attack on the embassy, President Carter broke off American commerce with Iran and froze Iranian assets in the US.
He worked with other parties to arrange hostage release.
Carter ordered a military operation to free the prisoners when the Iranians refused to negotiate.
Sandstorms caused several helicopters to land early or turn back, ruining the operation.
Two of the planes crashed and detonated at the meeting site in Iran, killing eight soldiers and ending the rescue mission.
Carter had to publicly take responsibility for this shameful blunder.
The Carter administration seemed ineffective and weak because it could not liberate the hostages, and the Iranians tightened their grip.
After Ronald Reagan's inauguration, the hostages were freed in January 1981.
The Election of 1980
In 1980, President Carter campaigned for reelection despite the Iran crisis and a weak economy.
Senator Edward Kennedy, brother of John F. Kennedy and Robert Kennedy, challenged him for the Democratic candidacy, but he won.
Republican nominee Ronald Reagan was a conservative veteran.
Reagan slammed Carter and promised to lower taxes and rebuild the military. Reagan vowed to give states control back from the federal government.
He publicly appealed to traditional conservative ideals like patriotism and respect for the nuclear family, which appeared unappreciated after Watergate.
Reagan won the popular vote and the Electoral College due to his message's appeal.
1980 was a pivotal election.
The New Deal Democratic alliance that had controlled national electoral politics for over half a century started to come apart.
Because of his liberal views on abortion, sexual freedom, and affirmative action, Ronald Reagan earned the support of many Democratic blue-collar workers.
Reagan effectively linked liberalism to 1970s cultural disruption, economic stagnation, and foreign shame.
The religious right, upset by threats to conventional morality, began voting Republican in large numbers.
White Southerners, who tend to be more conservative politically and culturally, maintained a historic transition from the Democratic to Republican parties.
These broad political themes helped win a Republican Senate majority and Ronald Reagan in 1980, establishing the New Right's dominance on American politics.
The Reagan Administration
Ronald Reagan transformed American politics with his communication skills.
He utilized his Hollywood acting abilities from the 1930s and 1940s to successfully design and communicate his message to various audiences.
Reagan formulated overall policies and delegated implementation to skilled subordinates.
Reagan's economic plan was ambitious.
In 1981 and 1982, he convinced Congress to decrease federal taxes by 5% and 10%, respectively.
"Supply-side economics" was the president's philosophy.
He felt tax cuts would allow richer Americans to invest more in the economy, boosting economic development and job creation.
Prosperity would increase tax collections even at lower rates since there would be more money to tax.
Capital gains taxes were decreased to encourage investment.
The Reagan government also deregulated banking, cable TV, and long-distance phone service.
Reagan's economic policies angered liberals.
The Reagan government slashed domestic initiatives including urban housing, education, and the arts in anticipation of decreasing tax receipts.
Reagan increased the military budget by $13 billion.
His pricey Strategic Defense Initiative (SDI), dubbed "Star Wars," also drew criticism.
This program developed missile defenses to stop hostile missiles from hitting the US. Reagan's ambitious missile defense program eventually succeeded.
New Federalism was another controversial Reagan program.
His administration offered states more autonomy over federal spending in their boundaries.
When he decreased EPA money, environmentalists were furious.
Labor activists were furious when Reagan fired air traffic controllers who struck against a federal law.
Reagan wanted to fix 1970s American foreign policy.
The US might win the cold war, he thought.
His military buildup was meant to restore American military superiority over the Soviet Union.
Despite opposition, he stationed American cruise missiles in Western Europe to counter Soviet short-range nuclear missiles in Eastern Europe.
He called the Soviet Union a "Evil Empire," but voters liked his honesty.
In 1983, Reagan sent troops to Grenada to quell a Marxist civil war. The US easily won Grenada.
241 American peacekeepers died in a suicide truck attack in Lebanon.
In 1984, Reagan's reelection bid was strong.
The economy boomed after a 1981–1982 recession.
Reagan remained popular.
After being shot by a deranged assassin in 1981, his bravery won over many.
Jimmy Carter's vice president Walter Mondale was Reagan's Democratic opponent.
Mondale chose Congresswoman Geraldine Ferraro as his running mate, the first woman on a major party's presidential ticket.
Mondale said he would raise taxes and criticized Reagan's supply-side economics.
"Morning again in America" was Reagan's campaign slogan.
Prosperity and Reagan's nationalistic revival of American pride at home and abroad made him politically irresistible, and he defeated Mondale with almost 60% of the popular vote and all electoral votes except Minnesota and the District of Columbia.
In his second term, Reagan cut taxes further.
The wealthiest Americans' federal tax rate dropped from 50% to 28% under the Tax Revenue Act of 1986.
Unemployment and inflation continued to fall during this period.
Reagan wanted conservative Supreme Court justices.
William Rehnquist was his chief justice nominee. He nominated justices Antonin Scalia, Anthony Kennedy, and Sandra Day O'Connor, the first woman on the Supreme Court.
In his second term, Reagan faced challenges.
Stock prices fell 20% on "Black Monday," October 19, 1987.
It was troubling, but it didn't stop economic growth.
Due to tax cuts and defense spending, the federal deficit rose, which was concerning.
The US imported more than it exported for the first time since World War I.
Iran-Contra rocked the Reagan administration in 1986 and 1987.
In Lebanon, Iranian-backed Shiites held Americans hostage.
The Reagan administration sold weapons to Iran to secure the release of these hostages, violating an official trade embargo.
This "arms for hostages" scheme was used by National Security Advisor John Poindexter, Lieutenant Colonel Oliver North, and other administration officials to aid Nicaragua's "Contras" rebels.
This covert funding of the Contras violated congressional limits on Nicaraguan rebel support.
Congress held nationally televised hearings after discovering these activities.
Several administration figures were fired and prosecuted.
Reagan claimed he was unaware of his subordinates' Iran-Contra dealings.
This made Reagan look like a detached figurehead in his own administration, and his poll numbers plummeted.
Since the 1981 Gulf of Sidra incident, when American naval jets shot down two Libyan jets that challenged them, relations with Muammar al-Gadhafi had been poor.
In April 1986, Gadhafi was blamed for the Berlin discotheque bombing that killed an American serviceman and wounded many others.
Libyan military targets were bombed by Reagan.
The Soviet economy was collapsing by Reagan's second term, making it harder for the Soviets to compete with the US.
Mikhail Gorbachev, the Soviet Union's younger leader, sought better relations with the US.
The Intermediate-Range Nuclear Forces (INF) Treaty, signed by Reagan and Gorbachev in 1987, required both nations to eliminate an entire class of missiles.
In Berlin that year, Reagan demanded, “Mr. Gorbachev, tear down this wall!”
By January 1989, Eastern Europe's Communist dictatorships were crumbling.
Modern president Ronald Reagan was successful.
Many Americans saw him as a great leader who revived American pride, defended "traditional" American values, revitalized the economy, and won the cold war.
Reagan's economic policies were criticized for favoring the wealthy and widening the wealth gap. This argument failed in 1988.
Vice President George H. W. Bush's biggest advantage in that year's election was that he continued Ronald Reagan's policies.