TOPIC: POLITICS AND ECONOMICS AT THE END OF THE TWENTIETH CENTURY

1. TOPIC: POLITICS AND ECONOMICS AT THE END OF THE TWENTIETH CENTURY • CHAPTERS 39-40 IN BOOK. • THE ELECTION OF 1968 AND THE “SILENT MAJORITY” • NIXON’S CHALLENGES: VIETNAM, CHINA, AND WATERGATE • CHANGES IN THE AMERICAN ECONOMY: THE ENERGY CRISIS, DEINDUSTRIALIZATION, AND THE SERVICE ECONOMY • THE NEW RIGHT AND THE REAGAN REVOLUTION • END OF THE COLD WAR

2. A BIT OF BACKGROUND • Average standard of living declined in the 1970s because: • More teenagers and women are in the work force • Declining investment in manufacturing • Heavy costs of compliance of with gov. imposed safety and health regulations • Shift from manufacturing to service • Vietnam took tax money away from schools, etc…. • By the 1970s Japanese and German manufacturing was more efficient than older American mfg. • Inflation was huge problem • Rising oil prices • Deficit spending of the 60s for the war • Great Society programs with no tax increases • Military and welfare spending are inherently inflationary as they put $ into people’s hands (salary) without creating corresponding goods to spend those dollars on • Cost of living tripled in the 12 years following Nixon’s inauguration in the longest and steepest inflationary cycle in American history.

3. Election of 1968: The Democrats • Johnson was more and more unpopular over Vietnam issues • Eugene McCarthy, Dem from New Hampshire decided to run, then Bobby Kennedy threw his hat into the ring, thus dividing Democratic party – horrible rejection from his party for LBJ. • He announced that he won’t seek re-election, essentially offering himself up as a sacrifice to keep the country stable as in 1968 so much seemed to be reeling out of control with anti-war and civil rights movements. • VP Hubert Humphries is a contender • Bobby Kennedy assassinated June 5, 1968 by young Arab immigrant SirhanSirhan. • Angry anti-war demonstrators show up for Democratic Convention • Humphries wins the nomination

4. The Election of 1968: Republicans • Richard Nixon/Spiro Agnew win Republican ticket • Appealed to conservative southern voters • Victory in Vietnam • Strong anti-crime • Agnew known for tough stands ag. dissidents and black militants • INDEPENDENT PARTY WACKO: George C. Wallace • 1963 he stood in doorway to prevent blacks from attending Univ. of Alabama • “Segregation now! Segregation tomorrow! Segregation forever!” • Called to prod blacks back into their place with bayonets if necessary • Pledged to bomb the North Vietnamese “back to the Stone age”

5. The Results • Nixon/Agnew win very close race ag. Humphries – Dems control both houses – no clear mandate. Country is deeply divided because of war, race, and crime. • Wallace had a respectable showing with 46 electoral votes – best 3rd party showing ever in American history. Carried five deep south states (including Georgia.)

6. Nixon’s Challenges: Vietnam • “Vietnamization”: led to Nixon’s Doctrine • Withdraw 540,000 troops over time • South Vietnam could keep fighting if they wanted to but without American men but with American money and advice. • U.S. would honor its present commitments, but in the future Asians and others would have to fight their own wars. • Nixon wanted to win the war, if not through bloodshed then by other means but… • Lots of antiwar sentiment • Nixon believed there was a “silent majority” who didn’t object to the war • He labeled anti-war demonstrators as “bums” • By Jan. 1970 Vietnam was the longest war in Am. History and the 3rd most costly in lives • Because of draft evasion by college students, blacks were disproportionately represented in Vietnam • My Lai Massacre comes to light in 1970 • Nixon begins bombing North Vietnamese holdings in Cambodia, a “neutral” country – students are outraged… • Kent State: National Guard opens fire on crowd of students, killing four, wounding many more • (Crosby, Stills, Nash, and Young: Ohio “Tin soldiers and Nixon’s coming, we’re finally on our own. This summer I hear the drummin’, four dead in Ohio”

7. Vietnam, cont. • War Powers Act of 1973 • Required President to report to Congress within 48 hours after committing troops to a foreign conflict, or “substantially” enlarging American combat units in a foreign country. • Signals “New Isolationism” • Nixon withdrew troops in Cambodia after 2 months. • Senate repealed the Gulf of Tonkin blank check that Congress had given Johnson in 1964. • After 1972 election escalation of bombing due to North Vietnamese busting through demilitarized zone • 3 months later, US leaves Vietnam • Secret bombing of Cambodia: • 3500 bombing raids on North Vietnamese positions

8. Nixon and Diplomacy: China and USSR • Soviets and Chinese had bitterly different interpretations of Marxism: NOT FRIENDS • Nixon believed he could play off the tensions between them, to pressure North Vietnam into peace. • Henry Kissinger, National Security Advisor, secretly met with North Vietnamese in ‘69 to try and end the war • Nixon announced he would visit China the following year: Shocking! • Visited in Feb. 1972. China wanted US to back out of supporting Taiwan • Then Nixon went to Moscow in May, 1972: Soviets worried that US would become pro-China and so were ready to come to the table • Beginning of Détente – lessening of tensions • US agreed to sell Soviets at least $750M wheat and other cereals • Agreed to anti-ballistic missiles • Agreed to series of arms-reduction talks (SALT: Strategic Arms Limitation Talks) to freeze # of long range missiles for 5 years.

9. Tricky Dick gets in trouble: Watergate • Agnew resigned Oct 73 for accepting bribes • Gerald Ford appointed – not elected – VP • Nixon – executive privilege – tapes – Supreme Court ordered Nixon to hand over tapes • Resignation August 9, 1974 • Gerald Ford is 1st non-elected President • He granted Nixon a full pardon • June 5, 1972 five CREEPS were arrested in the Watergate building while attempting to bug the Democratic HQ • August 1974 Nixon resigned

10. KIDS: This is important stuff! • A President believed he was above the law, but the process the founding fathers had used in writing the Constitution worked. • Americans felt they couldn’t trust government. • This incident also demonstrated the inherent value of the republican system of government. No blood was shed, no political coup, but a peaceful implementation of the system that resulted in the first non-elected President ever to take office. • Nixon was a victim of his own hubris, a real tragic figure, who never understood why the people didn’t love him. See Frost and Nixon

11. Changes in the American Economy: Energy Crisis • 1973 Syrians and Egyptians launched surprise attacks on Israel to regain territory lost in Six Day war in 1967. • Kissinger went to Moscow to persuade Soviets to stop sending arms • US sent $2Billion in war materials to the Israelis • Brought a cease-fire to the “Yom Kipper War” but it also brought the wrath of OPEC on the US. • OPEC: Organization of Petroleum Exporting Countries • OPEC announced an embargo of all oil shipments to US • Triggered a recession – gas prices pushed up, prices went up, unemployment went up • Congress approved Alaska pipeline • National speed limit set at 55mph to conserve oil • End of abundant oil era. • Smaller cars, lower thermostats, change in life for Americans

12. Changes in the American Economy: Deindustrialization • After WWII American’s didn’t spend much investing in new manufacturing • By the ‘70s, the Japanese and Germans had become much more efficient, introducing manufacturing concepts such as JIT, Supply-chain management, etc…. While the Americans scoffed at “foreign” made products. • When the Energy crisis hit in 1974 the Japanese and Europeans already had smaller, more fuel efficient cars, so buyers began to flock to those markets, leaving American manufacturing to suffer • Unions also helped to cripple American competitive edge in manufacturing • Products were cheaper to import than to manufacture • Kind of scary today how much stuff we import and how little we actually manufacture here in the US. Could it potentially be an issue of National Security???

13. Changes in the American Economy: Service Economy • Pretty self evident. • We don’t make stuff anymore. • We “do” stuff – “services” – and even those are being outsourced to low-cost countries like India.

14. The New Right and the Reagan Revolution • Some stuff that happened between Nixon and Reagan: • Last Americans left Vietnam in April, 1975 after South Vietnam fell to North Vietnam. Missing POWs was an issue for years. Antiwar movement had fizzled out. • Feminist Movement had victory with Roe vs. Wade in 1973 • Backlash with people like Phyllis Schafly who opposed ERA which was never ratified • Presidency of Democrat Jimmy Carter, peanut farmer from Plains, Georgia. Very moral upright intelligent man. Elected by country wounded by corrupt politians, ready for a trustworthy man. Unfortunately for Carter, many things conspired against him and he lost re-election. • He did have Democratic majorities in both houses • Did broker a promising peace negotiation between Israel (Beghan) and Egypt (Sadat) • Pushed through a treaty to give the Panama Canal back to Panama in 1999.

15. But, poor Carter… • Inflation was growing upwards of 13% by 1980 • Particularly hurt elderly and those on fixed income – Prime Rate rose to 20+%! • Iranian Crisis: Newly fundamentalist Iran mad that US harbored ailing deposed Shah and thus stopped oil flowing to world markets, causing another energy crisis • Carter retreated to Camp David for 10 days with top thinkers “Mountaintop” • Gives “Malaise” Speech, chiding Americans for being too materialistic • Fires key cabinet members, surrounds himself with his “bubbas” from Georgia • Washington outsider…he never was successful at dealing with the political machinery • November 4, 1979 Iranians stormed the American Embassy, took all there as hostages for 444 days. Released on Reagan’s Inauguration. Seen as total failure by Carter. Botched rescue mission. • Dec. 27, 1979 Soviets blitzed into mountains of Afganistan – beginning 10 year war • Carter calls for embargo on all exports of grain and high tech material to USSR • Proposed re-instatement of draft – including women • SALT talks with Soviets died • Détente seemed over • Carter lost re-election to Ronald Reagan

16. Neo-conservatism and the Gipper • Championed free market capitalism – liberated from government restraints • Anti-Soviet positions in foreign policy • Questioned liberal welfare programs • Smaller government, less bureaucracy, freer markets • Ideological and practical buddies with Margaret Thatcher, 1st female PM of UK • “Boll weevils” Southern Conservative Democrats who followed Reagan • Cut $35 Billion in gov. spending – many social programs are affected like food stamps • Radically cut taxes. Taxes for rich went from $70% - 50% - 28%. • Big believer in Supply Side Economics: “Reaganomics” • Idea that combo of budgetary discipline and tax reduction would stimulate new investment, boost productivity, foster dramatic economic growth and eventually reduce the federal deficit • But recession hit hard – auto industry suffered because of Japanese imports • Worst recession since the 1930s – unemployment at 11% • Was result of Federal Reserve Board’s anti-inflationary “Tight Money Policy” in 1979 • Economic recovery in 1983

17. Military spending to the rescue. Good-bye Cold War! • Reagan spends massively on Defense – leads to economic recovery in 1983 • STAR WARS • Cold War ramps back up • Solidarity in Poland • Korean Air plane shot down • USSR and Soviet bloc countries boycotted US Olympics in LA • In 1985 Mikhail Gorbachev becomes Soviet Leader • Champions Glasnost “Openess” and Perestroika “Economic reform” • By necessity they stop military spending • IMP (Intermediate Range Nuclear Forces) Treaty banned all such missiles from Europe. Signed in 1987 • 1989 Reagan says “Mr. Gorbachev, tear down that wall!” It comes down. • Cold War is Over!

18. Social Neoconservativism or Hello Jerry Falwell! • Believed 1960s had produced a decline in moral standards and respect for authority • Believed that well-intentioned social programs did more harm than good • Believed that welfare had failed to alleviate poverty, encouraged single motherhood and undermined the work ethic • Rise of the Religious Right in the 1970s • Evangelical Protestantism flourished • They demanded reversal of Supreme Court decisions banning prayer in school, protecting porn as free speech and legalizing abortion • Jerry Falwell created the “Moral Majority” devoted to waging “war on sin” and electing Pro-life, Pro-family, and Pro-America candidates to office • Particularly troubled by sexual revolution: ERA, gay rights, abortion