Welcome Back Carter!?

2009 September 18
by drdog09

Approximately half the population of the US now predate by birth the period of the Jimmy Carter Administration. So I thought it might be instructive for those BJGers who have not experienced what Carter has wrought to bend an ear. The rationale of course, it looks like Obama is in large chunks generating the same results.

Carter term of office was 1977-1981.

A backgrounder first of all. Carter’s ascendancy to the White House was facilitated by a couple of factors. The US involvement in Vietnam had only ended 4 years previous. Nixon had been kicked out of office due to Watergate. Carters’ opponent, Gerald Ford, having pardoned Nixon had not a prayer. The country was just not in the mood for the same ole crowd. Then as now the populace was Hoping for a Change.

This was the time of detente. The Soviet Empire was still intact though cracks were showing around the foundations. But they were still causing problems in major parts of Africa, Balkans, and Middle East. The Shah was having internal issues that later precipitated into the Iranian Hostage Crisis. In the cauldron of all this mischief Congress was reducing military funding on a large scale.

Hence on the Domestic Front —

Oil Embargo/Gas Lines.
Ironically the Oil Embargo was triggered under Nixon. Bled through Ford and ended at the end of 1974. But it changed every thing. Where before the embargo a barrel of oil hovered around $4-5/bbl after it was $10-12. Just for reference in 1972 a gallon of gas cost .30¢, by the time it was all over it was .50-70¢ a gallon.

Well if this all happened during the Nixon/Ford years why is Carter painted with it. Simple lack of action is why. Nixon has applied price controls that were lifted soon after but Carter did not apply any rational industrial policy to get the country out of the economic funk that you will see later. The sole move Carter made was in his first term to the founding of the Dept. of Energy. The function of that agency? To make the US energy independent, Hrumph!

Economy.
With Nixon having applied price controls the flexing of price adjustments stopped. It would have been common sense that once they were lifted prices of various goods would self adjust — UPWARD. The irony was the shift was not immediate. By the middle of the Ford Administration we were seeing the effects. Prices were rising, in fact pretty fast under Ford. But the employment situation was remaining steady.

However by the time Carter was in office, though the inflation rate had moderated the employment situation had cratered.

By Carter’s 3rd year in office unemployment was rising at a near vertical ascent. When Carter left office it was over 10% and still rising. The result was the deadly combination of stagflation. Prices were rising to float their norm reacting to the release of price controls and the quadrupling of oil costs. At the same time unemployment was spiking and industrial output was spiraling downward.

Interest rates.
In Carter’s third year of office, interest rates on 1st position mortgage notes was 15-15.5% nationally. Having moved to Texas at that time, the local market was seeing 20-21% first mortgages. Worse yet, in many cases short term corporate loans were just not available at any price.

Housing.
Housing is what you would expect under an environment where interest rates were 15% on average. In the DFW area at the time people were literally willing to give you the keys if you would assume their 18% first mortgage lien. That is how desperate things were in the Oil Patch at the time. Under Carter the housing went bust twice. Once at the start of his term and towards the end of it.
Iran.
The US embassy was seized during Carter’s first year and was to dog him the balance of his Presidency. Little known now days is the fact that Carter precipitated most of it by rebuffing the Shah.
Unable to control the domestic situation the Shah was increasingly isolated. Vacillated on the release of prisoners, then relented. The seizure following soon after.
Military.
The Democratic Congress was well on the way to cutting defense appropriates by the time Nixon left office. However its lowest point was exactly during Carter’s Administration. Not to rise again till Reagan took office. Nor did Carter seem to object to the defunding going on.

That was ongoing under the backdrop of Soviet expansionism. The Soviets invaded Afghanistan in 1979. The Soviets also deployed their SS-20 theatre based ICBM’s in forward areas of the Warsaw pact. Carter also sought to shift from a confrontation strategy with the Soviets to one of peaceful negotiation in the Middle East. Carter nearly bungled it. At the same time the Soviets were laying the groundwork for what is our current situation in places like Somalia, and Yemen.

The outcome is predictable —

Lacking resources and a coherent plan the mission was doomed. For example what was discovered later is that there not enough long range helicopters to provide sufficient spares. So if the mission lost more than 1 of the machines it was a scrub.

The theme should sound familiar to you.

Western Europe.
Though International Answer was active through out the Carter years the biggest and most significant protests happened in Poland at the Gdansk and Lublin Shipyards. Carters support for the Union leaders was lukewarm as discussions on SALT were ongoing. They did not want to upset the ‘environment’ for any possible treaty with the Russians. To my mind it puts a stain on Carter’s contention as a humanitarian.

So what is the link to Obama? None except if you look at his actions or inactions.

  • We are still a oil dependent nation and ‘green shoots’ are not going to get us out of it anytime soon. Not only that but his policy if he has one is no nukes.
  • The same unwillingness to consider military matters of a primary importance.
  • A neo-appeasement strategy rather than a strong defense posture. Hit the reset button and all is cured.
  • A willingness to indebt the nation. Johnson/Nixon did by not really funding the Vietnam War. Obama is doing thru $787Bn bail plans, and Fed Reserve monetization of the debt.

I will let you draw your own conclusions to where it all leads.

19 Responses leave one →
  1. 2009 September 18 4:10 pm
    [1]
    MFG permalink

    I had a friend who had an 18% negative amortization mortgage

    Ended up losing his house

  2. 2009 September 18 4:10 pm
    [2]
    MFG permalink

    Obama will be much, MUCH worse than Carter

    And Carter was a disaster on wheels

  3. 2009 September 18 4:13 pm
    [3]
    justrand permalink

    MFG…Carter was a disaster on wheels, with four flat tires!

    and yes, Obama is worse. What Carter did thru ineptness, Obama is doing intentionally!

  4. 2009 September 18 4:18 pm
    [4]

    What Carter did thru ineptness, Obama is doing intentionally!
    jarhead

    Exactamundo!! One cannot build a socialist utopia without first destroying the old. These marxist nihilists are playing with fire.

  5. 2009 September 18 4:45 pm
    [5]
    rightwingyahoo permalink

    I was a kid during Carter. My dad was not to cool with it. He voted Ford in 1976 and it was close. He managed to stay employed thruout the Carter years, although the economy sucked. Got laid off in 1978 but re-hired.

    We had a fixed rate home mortgage signed in 1971, so interest rates were not that big a problem for us.

    But they were wiping out local developers. Our neighborhood was surrounded by apartment complexes, homes and roads that were unfinished, just abandoned mid-job. It was 5 years, like early 80s, before they were completed.

    What a time the early 80s were. I remember how happy our family was during that time.

  6. 2009 September 18 4:57 pm
    [6]
    drdog09 permalink

    RWY,

    Pretty much the same with our family. Though we did have to pinch pennies, my dad being in the wholesale building supply biz at the time.

    The worse thing was the gas lines or not having any available. To this day, I still have the habit of not permitting the gas gauge to drop below 1/4th.

  7. 2009 September 18 5:37 pm
    [7]
    justrand permalink

    I was proud to be in the Marines in the 1970s…and ashamed that Carter was at the top of my chain-of-command when I got out.

  8. 2009 September 18 5:56 pm
    [8]
    drdog09 permalink

    Damn well you should be, JR. Your service is a reflection on you, not the dork who be CIC.

  9. 2009 September 18 6:06 pm
    [9]
    RepublicanPundit permalink

    When Mother Carter realized JImmy Earl would not be re-elected, she called a family meeting and asked them: “What job can we have jimmy do when he comes back to Plains (Georgia)? No-one could offer anything,until brother Billy spoke up and said “He could run the Gas Station.”

    After thinking for a few seconds, Mother Carter said to Billy: “Now, Billy, you know that Jimmy is not smart enough to run the gas station”

  10. 2009 September 18 6:08 pm
    [10]
    RepublicanPundit permalink

    JR, I feel your pain, I was in the Air Force, and it was bad. We had to yell out Ack, Ack, Ack because we had no ammunition to run exercises.

  11. 2009 September 18 6:17 pm
    [11]
    justrand permalink

    RepublicanPundit, I am deeply afraid for our military now. Obama is going to put them in an impossible situation soon. His Foreign Policy is, as was stated on the other thread is:
    – un-winning the Cold War
    – surrendering our technological edge
    – pissing off and away our TRUE allies (Poland, for example)
    – aiding our enemies (Venezuela, Russia, Iran, et al)

    and more! The reault is that our military will be forced to fight at a massive disadvantage, for one or more things we had already won!

    Then again, Obama may “save” them from fighting…by simply surrendering.

  12. 2009 September 18 6:26 pm
    [12]
    justrand permalink

    did I mention the Cold War? HatTip Powerline:
    http://www.powerlineblog.com/archives/2009/09/024550.php

    Former Secretary of State Madeline Albright spoke at a forum in Omsk, Siberia. Pravda reported that her speech “surprised the audience.”
    Madeleine Albright: “America no longer has the intention of being the first nation of the world.”
    -and-
    democracy is not the perfect system…it can be contradictory, corrupt and may have security problems

    And you tell me,
    over and over again my friends,
    that you don’t believe
    we’re on the Eve of Destruction!

  13. 2009 September 18 6:27 pm
    [13]
    mulletover permalink

    excellent post, drdog. Brings back memories like the others here.

    I was a young married, with an infant and a 13% mortgage. Had just gotten my CPA and was working about 70 hours a week during tax season, and traveling out of town the rest of the year for not very much money. Paying my dues, I guess. Stressful. Those who didn’t live through it wouldn’t believe it.

    I fear worse coming in the next few years. As soon as the stimulus spending stops here and globally, the markets are going to hell, and the $ printing presses will create a huge inflation tax on the people. Politicos in Washington don’t know or don’t care, but today’s excesses will be paid by tomorrow’s misery.

    Count on it.

  14. 2009 September 18 6:29 pm
    [14]
    rightwingyahoo permalink

    I fear worse too, and a lot worse.

    JR, the US mil will quit, and join us. Bitter, after all their sacrifice and devotion, but we will not turn them away.

    Please, soldiers, remember who your friends are, and don’t shoot us.

  15. 2009 September 18 6:36 pm
    [15]
    JustMary permalink

    #14 They do know who their friends are, RWY. I believe this in my heart, truly.

  16. 2009 September 18 7:11 pm
    [16]
    rightwingyahoo permalink

    We will soon see, I am afraid.

  17. 2009 September 18 8:21 pm
    [17]
    RepublicanPundit permalink

    JR. It is a pity we cannot join again to help fight our enemies, both foreign and domestic.

    We someone smart enough on this page to tell us where we are on the Misery index.

  18. 2009 September 18 10:03 pm
    [18]
    mpthompson permalink

    After the royal screwing we just gave Poland and the Czech Republic I would not be surprised if Japan, Taiwan and South Korea aren’t busing right now reevaluating their need for nuclear weapons. After all, could they trust the US to be there should China come calling?

    What did we get for screwing these two countries?

    Peace in our time.

  19. 2009 September 18 10:29 pm
    [19]
    mpthompson permalink

    Hmm, I found the following page from Nov. 4, 2008 using Google to be very interesting:

    Poland wants Obama – Nov. 4, 2008

    Thirty-eight per cent of Poles would like to see Barack Obama elected US president while just 13 per cent say they prefer John McCain and 49 per cent do not express an opinion.

    Poles are divided on whether America’s relations with the world would improve if Obama were elected US president (33%) or whether they would largely stay the same (31%), though just 4 per cent feel they would become worse. Poles most commonly would see relations staying the same under a McCain presidency (41%), while 12 per cent say relations would improve and 6 per cent feel they would become worse.

    Sad to say, but I guess payback truly is a bitch. As I read on another blog: Another country of rubes that were thrilled when Owe-bama got elected. How’s that working out for ya now Poland?

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