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23. THE TROUBLED 1970s

A "MORE MORAL" CARTER

CONTENTS

The American Bicentennial – 1976

Jimmy Carter and the national elections
        of 1976

Carter proposes a foreign policy of
        "Morality"

The surrender of the Panama Canal

The fall of the Shah of Iran

Other international issues during the
        Carter years

American diplomats imprisoned in Iran

Drooping American morale

Volcker's "monetarism" to the rescue?

Other political causes continue to
        advance themselves in America

The textual material on this webpage is drawn directly from my work America – The Covenant Nation © 2021, Volume Two, pages 238-252.

THE AMERICAN BI-CENTENNIAL – 1976

1976 was the year of the Bicentennial, the 200th anniversary of the signing of the Declaration of Independence. It should have been a year of great celebration, of America looking back over the past two centuries to see proudly how well the country had done. But this was not to be.  At the moment America was not feeling very proud. Supposedly democracy had been restored.  But somehow something felt very wrong. America had lost its sense of direction, its sense of purpose. America was on the defensive, in retreat, without any sense of when that retreat might stop.  This silent understanding was quite evident in the lackluster bicentennial celebrations.

JIMMY CARTER
AND THE NATIONAL ELECTIONS OF 1976

1976 was also an election year for the White House.  The Republicans had swung their support behind Ford and nominated him as their candidate for the presidency. But the Democrats had no strong front-runners among the pack of people that could have been considered potential candidates for the presidential nomination. Ted Kennedy would have been the logical choice, given the Democratic Party's love of the name Kennedy.  But Ted had the albatross of "Chappaquiddick" hanging around his neck and he knew that to run he would have to face that issue again. None of the Democrats wanted that tragic (and embarrassing) event brought back up for closer inspection.

The Democrats ultimately chose a virtually unknown one-term governor (1971-1975) from Georgia as their presidential nominee.  The press was totally fascinated with this seemingly humble peanut farmer (but also ex-Navy man) from Georgia, and in short order (from late January to mid-March of 1976) from a virtual nobody he was refashioned into the image of an amazing political genius by the press.  Since so little was known about him, he had only a local political record to draw from, there was no way to fault this image.  In the space of that small time-period Carter pulled smartly ahead of all other contenders, and ultimately received the Democratic Party nomination.1

1It could also be that it served Ted Kennedy's political ambitions to have someone in the White House who had no political foundations of his own to stand on – leaving the way clear for Kennedy to continue to direct American democracy from his seat in the Senate.


Governor Jimmy Carter and President Gerald Ford debating at the Walnut Street Theater in Philadelphia – September 23, 1976


The 1976 Presidential Elections

Carter setting the stage for his more "down-home" administration by walking to his inauguration ceremonies – 1977

Carter taking the oath of office

Jimmy Carter – President  1977-1981

CARTER PROPOSES A FOREIGN POLICY OF "MORALITY"

In his public debates as the Democratic nominee, Carter attacked the content and style of the foreign policy of the Republicans, claiming that with its "secret diplomacy" (such as had taken place in Nixon's early diplomatic initiatives with the Chinese and the Russians) it excluded the American people and Congress from their participation in the shaping of a more democratic American foreign policy.  He attacked America's support of foreign dictators, its huge involvement in arms sales, and its ignoring of human rights abroad.  The Cold War was over (or so Carter claimed) and it was clear that America had no further reason to follow the reactive diplomacy of that era.  Thus he made it particularly clear that he strongly opposed the amoral philosophy of Realpolitik practiced during the previous eight Republican White House years.   He lauded the high Idealism and moral character of America's traditional or democratic foreign policy (such as Wilson's or Johnson's?) – and repeatedly announced the idea that he was going to restore that high-mindedness in American foreign policy.  Among other new policies that would happen under his presidency, America would no longer support dictators simply because it was in some Realpolitik understanding of the "national interest." In particular he put both Iran and South Korea on notice that they must liberalize their governments, or lose American support.

This seemed to impress the American voter sufficiently so that Carter was able to defeat Ford (50.1 to 48.0 percent) and enter the White House in January of 1977, ready to send America off in a new moral direction.

But very quickly Carter was shown the dangers of cutting back on American troops in South Korea – as he had proposed during the campaign (and even NATO troops in Europe as well).  Both the military and Congress were quick to point out the terrible dangers of undercutting our South Korean ally.  So Realpolitik won that issue.

However, he was able to demonstrate some "moral" movement toward a better world in other foreign policy areas.  He was quick to amplify the opening to China started by Nixon and to sign with the Soviets a second round of arms limitation treaties (also started by Nixon) as part of his peace-through-morality crusade.

Likewise, he was able to host a bold effort at getting a breakthrough in Israeli-Arab relations, bringing into play the very political "linkage" (horse-trading) that Carter had once condemned in Nixon's (and Kissinger's) Realpolitik – but which Carter eventually began to find to be fully acceptable: full diplomatic recognition of Israel by Egypt as payment for the return of Egyptian lands seized in the 1973 Arab-Israeli war.  So it was that finally Realpolitik helped Carter win on that issue as well.  Nonetheless, all of these were indeed authentic Carter achievements.
THE SURRENDER OF THE PANAMA CANAL

But an early action of Carter's (September 1977) would defy all explanations: Idealist or Realist.  Carter decided to "give back" the Panama Canal to Panama – a country which for $40 million in 1903 had turned control of the canal zone over to America so that America could, at its own expense, build a canal there.  Title to such a valuable piece of property was extended to America in perpetuity – but with the promise of an annual payment to the new Panamanian government that Teddy Roosevelt had just helped set up three days before the canal deal!

Now here was Carter turning the canal over (by various stages of surrender, to be completed on the last day of 1999) to a Panamanian military dictator, General Omar Torrijos – who held power in Panama by military force since his takeover in 1968.  Where were Carter's scruples about not dealing with dictators?  And what was it that he was hoping to gain by giving up a vital American asset that had taken ten years, millions (now equivalent to billions) of dollars and thousands of lives to build?

If he thought he was gaining goodwill among his Latin neighbors to the South, certainly they were glad to see America retreating from its position of dominance in the area.  But this did not increase their respect, nor even their love, for America.  Why did Carter do it?  Certainly also, the Panamanians themselves wanted to own such a valuable asset – and had long desired this.  And why not? But why now?  What was Carter hoping to gain from this?

Anyway, Americans did not know how to react to all this.  None of Carter's "achievements" seemed at the time to be of terribly earth-shaking importance or of any notable national gain to a bleary-eyed America that found greater satisfaction in watching a U.S. hockey win over the Russians in the February 1980 Winter Olympics held at Lake Placid (New York) in February, or a sense of moral or spiritual strengthening in watching the movie Rocky (1976) and a Rocky II sequel (1979).

There was not much else to go on that allowed Americans to feel any pride in their country.  In fact, in the last years of Carter's one and only term in office, America found itself spiritually in terrible, terrible shape.    

As a first act to reduce the image of American "imperialism" Carter decides to surrender the Panama Canal to Panama

Carter explaining to representatives of Georgia and Florida his proposed new treaty to turn the Panama Canal over to Panama –  August 1977

September 1977 – Jimmy Carter agreeing with Panama's President Omar Torrijos to surrender the Panama Canal over to Panama – a sign of our ending the era of American imperialism

Symbolic burning of the 1903 Panama treaty – with Panamanian President Omar Torrijos looking on

THE FALL OF THE SHAH OF IRAN
Carter: From Idealism to Realism in Iran

Carter's policy toward a key ally in the Middle East, Iran, turned out to be much more complex – and ultimately a terrible failure.  Part of the problem was that Carter failed to follow a consistent policy on Iran.

At first Carter took a strong stance with respect to his warning to Iran's Shah (King) Mohammed Reza Pahlavi that the Shah was going to have to make some serious moves to improve human rights in his country if he were to continue to receive American support.  The organization Amnesty International reported that there were some 3,000 people imprisoned in Iran simply for their political views. Carter wanted that situation improved, and demanded of the Shah an opening up of Iran to greater democratic participation or America was no longer going to continue to supply Iran armaments as it had been doing (one of the things Carter had attacked Ford for supporting).  Carter had in mind improving the lot of Westernized intellectuals (of which there were many in Iran) who were clamoring for greater political freedoms.

But Carter soon came to understand (once again) the situation in Realpolitik terms.  Iran was holding in place a very strong pro-American status quo in the oil-rich and highly dangerous Persian Gulf region.  The Soviets had long put pressure on Iran in the hopes of bringing the country under its satellite system, which if successful would have allowed Russia not only direct access to the strategically important Persian Gulf and the Indian ocean, but would have also put Russia in a position to shut down the flow of oil to its rivals in the West.  Indeed, such Soviet pressure was already being applied through the opposition of a number of Iranian intellectuals demanding an end to the Shah's government.  These the Shah had put in prison for wanting to overthrow his government and replace it with a "democratic republic," much like what had happened in neighboring Afghanistan.

Sadly however, the Shah had not made any kind of distinction between those who wanted to overthrow his government and those who simply wanted to reform it. In any case, Carter now began to appreciate the pressure that the Shah was under.  He also came to understand that a similar overthrow of the Afghan Shah and its eventual replacement by a "democratic republic" in Afghanistan had turned out to be no more than a move of the Russians to set up another Soviet puppet regime.  And because of this Communist takeover in Afghanistan, the Soviet Russians had advanced ever closer to the dream of dominating south central Asia, the Persian Gulf and the Indian Ocean.  Carter finally understood the dangers to America and the West of a failure to support the Shah.

The Shah moves back and forth

Now that Carter was beginning to see the Iran situation and the Shah from a new perspective, he began to drop considerably his talk of human rights reforms. Indeed, Carter made sure, in a huge trip to various European countries (and India) at the end of 1977, to also include Iran in the event, celebrating New Year's Eve in Tehran with the Shah, even publicly praising the Shah's Iran as "an island of stability in one of the more troubled areas of the world."

But by this time the Shah had already made many concessions to his political opponents, fearing the loss of American support.  Nonetheless, now that Carter was singing a new pro-Shah tune, the Shah interpreted this as permission to tighten back up on the Iranian situation.  But in the meantime, the brief window of opportunity for rising expectations to develop that he had given his opponents helped embolden and organize their opposition.

And when he then backtracked on their liberties, his opponents exploded in violent protest.  Things in Iran began to unstick, though Carter had such poor intelligence informing him of the internal situation in Iran that he was unaware of the extent of the Shah's mounting problems.

Too Late

Could the Shah's government have been saved at this point?  Probably not. Anyway, the problem had been building for a while.  The 1973-1974 quadrupling of oil prices had made Iran a very rich country.  But sudden wealth can be terribly destabilizing to any political status quo.  Saudi Arabia's royal family (a strong American ally that Carter had also once criticized as being dictatorial) had seen to it that all Saudis got a good share of the oil wealth that turned this Arabian desert kingdom into one of the wealthiest countries (per capita) in the world.  But the Shah had not bothered to do that, merely letting the few families that controlled the Iranian oil industry take much of that vast new wealth.  That was truly a huge social blunder.  Also, heavy financial inflation had hit Iran no less than elsewhere in the world – hurting deeply multitudes of Iranians.

Iran's huge farming population lived off the profits of the farming industry, not the oil industry.  The price of fertilizer and the fuel prices for their trucks and machinery had risen with the price of oil.  But the price for their farm products, pegged to the world market's food pricing (determined largely by the massive share of American food products on the world market), had not increased any at all.  Thus Iran's farming population had actually become much poorer since the onset of the oil bonanza.  The farmers who had once adored their modernizing Shah now felt him to be indifferent to their plight, and concerned only with the showy wealth of his family and close friends.  They began to see an evil conspiracy in the whole setup.

Likewise, the voices of the farmers were joined by multitudes of bitter young Iranians from Iran's rising Middle Class, graduates from engineering colleges in the West (America, Germany, England, France, etc.), unable to find work back in Iran. Sadly, the oil extraction business did not really require the professional services of many engineers.  Thus when these young Iranians returned home and were greeted with the sad news that there were no jobs in Iran needing their advanced schooling, they too saw some kind of evil conspiracy as responsible for their plight.

During the days of economic growth and expansion that touched most every Iranian in the 1960s the Shah was actually a very popular figure in Iran.  The fact that he was modernizing or Westernizing Iran seemed to be a very good thing to all, except the Muslim clergy and some of the bazaaris (bazaar shopkeepers) who resented this Western intrusion into their traditional Muslim culture.  But mostly the latter were ignored as being voices of "backwardness," and irrelevant to Iran's future. 

But that assessment of the Muslim clergy and conservative Muslim faithful would change considerably in the 1970s.  The idea of an "evil conspiracy" fit well with the Shi'ite Muslim worldview of the great dichotomy in life between the forces of good and the forces of evil.  The Muslim clerics, led by their ayatollahs, and in particular the Ayatollah Ruhollah Khomeini in exile in Iraq (and finally Paris), who was sending sermon cassettes by the thousands back to a growing following in Iran, seemed to more and more Iranians to make the most sense of an otherwise desperately confusing situation.  God was punishing Iran for having allowed itself to fall prey to the evil ways of the infidel West, and in particular to the Great Satan, America

The fall of the Shah's pro-American government

But Carter did not see that last factor brewing.  America had left its intelligence gathering in Iran in the hands of the Shah's secret police, who had learned long ago not to send forward any information that might displease the Shah.  Thus Carter was completely blindsided by events brewing in Iran.  By the end of the summer in 1978 strikes were paralyzing Iran, and they only continued to worsen as the year approached its end.

Finally in mid-January 1979 the Shah went into exile – and at the beginning of February the Ayatollah Khomeini returned from Paris to Iran.  By mid-February the last of the pro-Shah forces had been crushed.

Then almost immediately a deep break in the anti-Shah ranks revealed itself as Khomeini began to move to undercut a secular "provisional" government, a government supported by the huge, fully modernized (and rather pro-West) portion of the population, that had initially taken charge of the country. Immediately the Muslim crackdown on the voices of liberal dissent got underway.

Iran was not going to become a communist democracy or even a liberal democracy.   It was going to become a fiercely traditionalist Islamic Republic, a fully Shi'ite society with an elected government, but one which was ultimately answerable to the all-powerful religious leaders, the ayatollahs, and in particular to the Supreme Ruler, the Ayatollah Khomeini.   Thus the new governmental design was put before the Iranian people for approval.   And America, unwittingly (or by careful design by some Iranians), would help swing Iranian approval for the new Islamic Republic.

Carter and his cabinet meet with the Shah of Iran – November 1977 (Carter, 2nd from the right ... with his secretary of State Cyrus Vance to his right and his National Security Advisor Zbigniew Brzezinski to his left ... discussing with the Shah the political reforms the Shah must undertake in order to continue to enjoy American financial support)



Carter arrives in Tehran in time to celebrate New Year's Eve with the Shah (December 31, 1977)


1978 – Iranian students protesting the Shah's government

Iranians celebrating in Tehran on January 17, 1979, after the Shah's departure

Iranian welcome the returning Ayatollah Ruhollah Khomeini – January 1979

February 1, 1979 – the Ayatollah Khomeini arrives in Iran

Followers of the Ayatollah Khomeini celebrating his return to Iran from exile – Feb. 1979.

The Ayatollah Khomeini arriving in Tehran – February 1979

Gas station attendants watching Carter's July 15, 1979 energy speech

CAMP DAVID, CHINA, SALT II, AFGHANISTAN, AND IRAN (ROUND TWO)
The Camp David Accords between Egypt and Israel (1978)

In September of 1978 Egyptian President Sadat and Israeli Prime Minister Menachem Begin (yes, the one-time leader of the murderous Israeli terror organization Irgun!) met with Carter for almost two weeks at the Camp David presidential retreat, to work out some kind of diplomatic agreement to bring the Arab-Israeli standoff to an end.

Despite various United Nations resolutions and back-and-forth diplomatic discussions going on between Israel and its Arab neighbors, nothing had changed in the status quo since the 1973 October War.  Egypt was having economic hard times and Sadat was determined to get some movement on the return of the Sinai Peninsula to Egypt as some kind of political offering to his people.  He thus decided to break from the Arab front and do his own separate negotiating with the Israelis (secretly of course).  At the same time, Israel found dealing with a single Arab nation rather than the broad Arab front, and the possibility even of breaking up that front, to be a distinct political advantage, and consequently received probes about a new Egyptian-Israeli rapprochement gladly.  Thus in November of 1977 Sadat totally surprised the world (including Carter, who had no advance warning of this development) by flying to Jerusalem and delivering a speech before the Israeli Knesset (Parliament), calling for new Egyptian-Israeli relations.

Carter was at first reluctant to get involved in the Byzantine complexities of Arab-Israeli relations, but finally was convinced of the need to participate in, even sponsor, formal talks between Begin and Sadat.  Besides, Sadat had put himself in a very vulnerable position within the Arab world, and some kind of payoff from this diplomatic initiative needed to be soon forthcoming, or a rather pro-American Sadat would find himself in deep trouble.  Thus Carter called for the gathering at Camp David.

But the biggest problem was what to do about the Jordanian West Bank and Gaza Strip (Palestinian territory) issue.  Sadat was interested mostly in the status of Egypt's Sinai Peninsula (still under Israeli occupation), which was not of critical interest to the Israelis and thus easily negotiable.  But the issue of Palestine (also still under Israeli occupation) was very much of critical interest to Israel, though not vital to the interests of Egypt.  However, it was a matter of critical interest to the broader Arab front, whose shadow constantly hung over the efforts to work out a peace between Egypt and Israel.  And Carter was insistent that there be a Palestinian agreement accompanying any Egyptian-Israeli agreement over the Sinai.  Thus negotiations dragged on at Camp David day after day.

But in the end neither Begin nor Sadat wanted to alienate Carter with his strong American position on the matter, nor return empty-handed from the talks. Consequently Begin agreed to respect U.N. Resolution 242 in all its parts, and pull back Israeli occupation troops from both the Sinai and the West Bank and Gaza regions, and transfer authority over the latter region to the Palestinians, over a five-year period (Syria had not participated and thus the Golan Heights were not included in the agreement).

Not everyone in the larger or international world was happy.  Some were, including Norway's Nobel Committee which awarded both Sadat and Begin the 1978 Nobel Peace Prize for this diplomatic breakthrough.  Israeli settlers in the Sinai however were deeply angered by having to pull out of homes they had built there.  Likewise, stiff opposition to the agreement came from the United Nations, because it did not include all the territory, and because it had not included the other neighboring Arab governments in the deal (which actually would have made any agreement impossible, as had long been the case).  In the end, Carter chose simply to ignore the outcry.

But Sadat paid a big price for his action.  Egypt was kicked out of the Arab League, lost its position as something of the leader of the Arab world (which then prompted Saddam Hussein of Iraq to aspire to the same position), and in the end cost Sadat his life – when some of his own disenchanted troops (members of Egyptian Islamic Jihad) were able to assassinate Sadat in 1981 during a review of his troops.  But nonetheless, the agreement held, and General Mubarak, in replacing Sadat, would continue to follow the lines of the original Sadat agreement.

Carter also believed that moral persuasion might also bring the Arab-Israeli crisis to a peaceful resolution. But Egyptian President Anwar al-Sadat beat him to the punch by flying to Israel to offer Egyptian terms of peace with Israel.

Israel's Prime Minister Menachem Begin welcomes Egyptian President Anwar Sadat to Jerusalem – November 1977

Carter then moved to sponsor a meeting at the President's Camp David retreat where he intended to see some serious negotiations take place.  Begin was dragging his feet on some kind of compromise with Sadat ... putting Sadat in political trouble back in Egypt the longer Begin held out.   Carter would have to lean on Begin a bit to get him to move forward.


Begin, Carter and Sadat at Camp David – September 1978

Anwar Sadat and Menachem Begin embracing while Jimmy Carter looks on – September 1978

Anwar Sadat, Menachim Begin and Jimmy Carter at the end of the Camp David talks – September 1978

Menachem Begin and Anwar Sadat

Egyptian President Anwar Sadat, President Jimmy Carter and Israeli Prime Minister sign Camp David Accords in 1978

China

Ever since Nixon's visit to China in 1972 and the establishing of the U.S. Liaison Office in Beijing in 1973, America had attempted more or less normal relations with China.  Then in 1977, Carter saw the opportunity to further strengthen Chinese-American relations (he now understood Realpolitik quite well), sending his National Security Advisor Zbigniew Brzezinski to China in August to start up a new round of diplomatic talks, principally about the sticky problem of America's ongoing support of Taiwan.  Eventually U.S. negotiators accepted a full severance of diplomatic ties with Taiwan, but under the promise of Beijing that America would be allowed to continue freely its commercial relations with Taiwan.  This agreement thus led to Carter's invitation to Deng to visit Washington in January of 1979 where together they could sign the new diplomatic accords, preliminary to the formal recognition of China later that year.

Carter also makes the decision to extend formal diplomatic recognition to the Communist Government in Beijing ... confirming the fact (set in Nixon's presidency) that America recognized Taiwan as actually part of China ... under the promise from Beijing that America could continue to trade freely with Taiwan.

Carter receiving a visit in January of 1979 from Chinese leader Deng Xiaoping

A meeting in the White House of Carter and Deng Xiaoping and their diplomatic teams – January 1979

SALT II and the Soviets

Carter also wanted to follow-up on Nixon's arms-limitation talks with the Soviets
Carter and Soviet Premier Brezhnev's SALT II Treaty (1979)

Then in June of 1979 Carter and Soviet Premier Leonid Brezhnev met in Vienna to sign a SALT II Agreement, updating the 1972 Strategic Arms Limitation Treaty (SALT) signed years earlier by Nixon and Brezhnev.   Weapons technology and production levels had advanced tremendously in the intervening seven years and thus the purpose of the new agreement was to bring nuclear delivery devices (notably the MIRV missiles capable of carrying multiple nuclear warheads) under some kind of restriction or balance.  But there were also political motives behind the agreement, Russia becoming a bit nervous over the serious improvement in Chinese-American relations (China and Russia were more adversaries than Communist allies at that point).  And, with the Soviets seeming to be pushing ahead of America in the arms race, Carter was concerned about one-sided self-limitation in weapons development, a self-limitation on weapons development that he himself had once supported strongly.  Thus here too, Realpolitik was now directing Carter in his conduct of American foreign policy.

Nonetheless, there was a huge reaction (especially among Republicans) that the arms limitations levels agreed on in Carter's new treaty merely placed limits on arms production if one or the other of the parties was willing to make such limitations (which Carter was, as part of his general philosophy), without any clear enforcement provisions if one of the parties (namely the Soviets) chose to push ahead in weapons development.  But it ultimately came down to the fact that America was going to have to decide whether to go ahead and trust Carter on this matter of enforcement, or not.

Consequently, the debate on SALT-II in the U.S. Senate dragged on endlessly, until December of 1979 when the Soviets invaded Afghanistan.  This abruptly killed the prospects for the ratification of the treaty.  The following month Carter simply withdrew the treaty from further Senate consideration. SALT II was not completely dead.  But from this point on, only something of a diplomatic "understanding" on this matter existed between America and the Soviets, sometimes respected, sometimes not.

Carter and Brezhnev

Carter and Brezhnev sign SALT II in Vienna – June 1979

HOWEVER ... Carter withdrew the treaty from Senate confirmation in January 1980 after the USSR invaded Afghanistan.

Afghanistan

The Soviets, in late December of 1979, had sent their own special forces into Kabul, the capital of Afghanistan, taking over the governmental offices and presidential palace.  This was accompanied by a larger and broader ground invasion of Soviet troops.  The Soviets were attempting to take over directly the governing of Afghanistan.

The Afghan government had been in a state of turmoil since 1973 when the Afghan King Zahir Shah's cousin, Mohammed Daoud Khan, ousted the Shah and announced the creation of the Afghan Republic, with himself as president.  But Daoud's government was much too secular for the tastes of the very conservative Afghan Muslim society, and he failed to establish popular support for his government.  Also he tried to follow a neutral foreign policy in the Cold War, succeeding only in alienating the Soviets who considered Afghanistan as part of their sphere of influence.  Two competing Afghan Communist parties, with help from the Soviets, finally got their act together and started putting pressure on Daoud, who reacted strongly.

In April of 1978 the Communists acted.  Daoud was assassinated and a Communist "Democratic Republic" under Nur Mohammad Taraki was announced. Taraki began moving swiftly against his opponents, especially the country's conservative leadership and pro-Western intellectuals.  Perhaps 27,000 of the country's leaders were arrested and executed in Afghan prisons over the next year and a half.

By October of 1978 a full rebellion in the Afghanistan countryside was underway, spreading quickly to the outlying Afghan cities as well.  Much of the Afghan army soon went over to the rebels.

Taraki now called on the Soviet Union for help (December).  Then in mid-1979, Carter began to send secret aid to the rebels (so much for "open diplomacy"!)  The situation for the Communist government only worsened through 1979 and thus it was that another Communist leader, Hafizullah Amin, decided to try to save the situation by getting rid of Taraki (murdered) and taking over the government. But the Soviets immediately began to have suspicions about Amin being a reliable ally.  Also the United States basically appeared to be merely lukewarm in its ultimate interest and minor in influence in the region, and the Soviets thus supposed that they had no reason to fear any kind of a serious reaction coming from America.

Thus it was that in December of 1979 they made their move to take direct control of the country.  Amin was assassinated (KGB) and Babrak Karmal was now installed as the new president, who in turn "invited" the full military assistance of the Soviet Union.

The Soviet War in Afghanistan was on.  But the Soviets were about to find out what the Americans had discovered in Vietnam, but apparently had not learned from the experience (nor had the Soviets learned from their own experience in defeating Hitler's invasion of Russia).2  Fighting local militia or guerrilla warriors with conventionally armed troops is an unbalanced contest, favoring heavily the local forces.  It was going to take massive numbers of soldiers and supplies to bring the Afghans under Soviet rule, something at that time that the Soviets were increasingly less able to afford.

2Nor had America learned from its own War of Independence against the English King and his troops back in the late 1700s.



Mohammad Daoud Khan



Nur Mohammad Taraki






AMERICAN DIPLOMATS IMPRISONED IN IRAN
America's further humiliation delivered by Iran

Meanwhile, in October of 1979, the ousted Shah, who had developed cancer, was under consideration by Carter for admission to the U.S. for treatment.  On hearing this, Muslim students in Iran went wild, and members of the militant Revolutionary Guard in early November invaded the American embassy, seizing the staff and displaying them to the world, tied and blindfolded as their sign of contempt for the United States.  The Iranians loved it, and a month later, amidst a huge swell of Iranian patriotism, they easily passed the referendum approving the establishment of their new Islamic Republic.

For Carter this was the ultimate humiliation.  He was taking hits from the economy as well, because the Iranian upheaval had severely cut back on Iran's oil production.  And oil prices, as well as inflation, climbed for the second time in the decade of the 1970s.  As a sign of how bad things were for Carter, Ted Kennedy, who was now feeling more confident about a presidential run of his own, was unabashedly loud in his attacks on Carter's presidential performance.


Iranian youth climbing over the wall of the American Embassy – November 4, 1979

Some of the 90 hostages taken at the US Embassy – November 4, 1979

American embassy staff taken hostage in Tehran by Muslim radicals – November 4, 1979

American embassy staff taken hostage in Tehran by Muslim radicals – November 4, 1979 

US Black hostages released by Khomeini in November (he also released the women hostages as well)
The disastrous rescue attempt in Iran (April 1980).

In an attempt to rebuild his reputation (especially as he was facing a re-election bid that year), Carter gambled on an attempt to rescue the American hostages with a Special Forces raid on Teheran, the Iranian capital (Operation Eagle Claw).  His plan was to drop his Delta troops by eight helicopters outside of Tehran, convey them by truck at night into a darkened Tehran (Americans also having first shut down Tehran's electrical grid) to round up the fifty-two American hostages at the embassy, and then fly them out of the country.

The raid however turned out to be a total disaster from the start and never got any further than just inside southern Iran before it disintegrated in a combination of sandstorm and mechanical failure of three of the helicopters, and, after the decision to withdraw, the collision of another of the helicopters with one of the six C-130 transport planes (involving the deaths of eight American troops).

Now Carter's humiliation grew even worse – monumentally worse.


Wreckage at Desert One, Iran, where eight Americans died – April 24, 1980


A burned-out and abandoned US helicopter in Iran (Operation Eagle Claw)

Carter ready to deliver a nationally televised speech (April 25, 1980) announcing the failed rescue mission in Iran

DROOPING AMERICAN MORALE

America was feeling the sting of failure abroad and economic worries at home.  The oil crisis had thrown the economy into another recession of industrial slowdown and rising unemployment, accompanied at the same time by an inflation set off by fast-rising energy prices.  Americans were hurting.  The misery index was rising rapidly as the summer election season was approaching, and Carter was seeking re-election.

Carter's boycott of the Moscow Olympic Games

Carter only made the situation worse for himself when he returned to his "moral politics" agenda and announced that the United States would not be participating in the Moscow summer Olympics (July 1980) if the Russians had not pulled out of Afghanistan by then.  It was a strange threat, for there was little likelihood that the threat was going to result in anything except that American athletes were not going to be able to compete in the big event they had been training for (the Soviets returned the favor by boycotting the 1984 summer Olympics in Los Angeles).  In the end it made Carter look petty and desperate.  It only worsened his image as a national leader.

VOLCKER'S "MONETARISM" TO THE RESCUE?
"Stagflation" (Economic Stagnation and Financial Inflation)

But ultimately what guaranteed that the Carter presidency would be a one-term presidency was the economy.  Carter's own appointed Federal Reserve Chairman Paul Volcker decided in the latter part of 1979 to attack the high inflation set loose by the huge three-fold oil price hike (caused by Iran's withdrawal from the international oil market) – and the need of the rest of the industrial economy to raise prices on their products in order to maintain some degree of profitability in the face of the new energy costs.  Volcker decided that he was going to solve the problem of runaway inflation – by the Federal Reserve's putting into play a huge tightening of America's dollar reserves, driving interest rates astronomically high. He believed that this would indeed kill inflation (if it didn't also destroy the American economy!).

Thus by cutting back severely the amount of dollar reserves available for lending to America's banks, Volcker drove the Federal Reserve discount rate all the way to 20 percent, in turn forcing the large commercial banks (all of whom borrowed from the Federal Reserve to maintain their own supply of lending power) to have to set their prime rates at 21.5 percent, for even their best industrial customers. This strategy Volcker called "monetarism."

Volcker's "monetarist" (tight money) strategy was designed to make Americans feel poor enough that they would stop spending, and thus presumably force down prices, and supposedly inflation with it.  This was also supposed to strengthen the dollar.  At least that was the theory Volcker was supposedly working under.

What this actually meant was that industrial enterprises, facing a three-fold increase in their energy costs in their operations, now found themselves also having to make huge interest payments on the bank loans on which their businesses depended.  To survive at all, to meet skyrocketing operating costs (now both energy and interest expenses), they were forced to have to raise (not lower!) prices on their products quite considerably – to make enough money just to barely stay in business.  In short, Volcker's monetarist strategy served to drive inflation even further upward.

But far worse, with car loans and house mortgages borrowed from American banks now running at Volcker's new rates (forcing the banks' 30-year mortgage rates to run at about 16 percent and industrial prime lending rates up to 21 and 22 percent), Americans decided to hold off buying a new car or buying that new home.  Thus now with few customers coming through their doors, businesses found themselves in deep trouble.  Soon these businesses began to shut down, one by one.

Consequently, everywhere the economy not only slowed down, as Volcker intended, it plunged downward in a death spiral.

But Volcker was determined to hang tough until he single-handedly had "shaken the last of inflation out of the economy" (or so he said).  That was except for the brief period over the summer of 1980 when Volcker dropped interest rates, to release the economy from his imposed restraints and thus get it up and moving again in time to get Carter re-nominated to the Democratic Party ticket.  The economy immediately responded by picking up again.

But before the November elections rolled around, Volcker decided to take the interest rates right back up again, plunging the economy back into deep recession, which in turn had the Americans going to the polls feeling very grumpy.  This helped produce a very humiliating Carter defeat in the 1980 general elections.

But tragically Volcker's monetarist strategy also helped worsen what were at this point already shaky American heavy or basic industries (steel, chemicals, cloth, construction), forcing many businesses either to shut their doors, never to reopen, or go "offshore" with their operations (to Japan, India, Thailand, etc.), never to return to America.

And banks, at first making huge windfall profits on the basis of the new interest charges imposed on their customers, soon found that they too were losing customers – as no one came to the banks looking for mortgages or car loans.

And commercial and industrial bankruptcies were not what the banks wanted either.  Commercial bankruptcy now got pushed onto the creditor banks who had formerly funded these now-bankrupt companies more than they were now worth. True, the banks received title to these bankrupt companies.  But what were the banks to do with these companies?  They could not sell them to investors willing to take them off their hands.  There were no such investors willing to take on the financing necessary to purchase even these bankrupt companies.  Thus it was that American banks now found themselves also in debt.  They could, of course, borrow from the federal reserve.  But what bank was foolish enough to take on federal reserve loans running at times almost at 20 percent interest?  Within short order, American banks also began to fail one by one.

Thus it was that the only thing that Volcker's monetarism actually achieved was first the ruination of the American industrial sector and then the collapsing of much of America's financial sector as a follow-up.

America now fell into a deep recession, one that American businesses and consumers had no idea of how to climb out of.  Certainly Volcker's federal reserve bank was of no help in addressing the problem.  At this point it was one of the chief causes of the problem!

Once again ... long lines to the gas pumps

Federal Reserve Chairman Paul Volcker

IN THE MEANTIME, A NUMBER OF OTHER POLITICAL CAUSES CONTINUE TO ADVANCE WITHIN AMERICA ITSELF

Environment versus Energy priorities create a festering sore


On March 28, 1979, large amounts of reactor coolant and radioactive gasses were released into the atmosphere, forcing the abandonment in a 20-mile radius of 140,000 people from their Pennsylvania homes.   Cleanup took four years ... and greatly advanced the cause of the anti-nuclear protest groups.

The shut-down Three-Mile Island nuclear power plant – April 1979

A tragedy that had nothing to do with American politics was the Jim Jones massacre in Guyana



The "Christian" cult leader Rev. Jim Jones (mid 1950s to November 1978)

900 dead of self-inflicted (or forced) cyanide (grape-flavored "Kool-Aid") poisoning at the "Peoples Temple" at the Jim Jones Compound, "Jonestown" November 1978 ... ordered by the cult leader Jim Jones (he took his own life in the process as well).  Also killed (shot) were US Congressman Leo Ryan and several news reporters as they were leaving the area following a visit to investigate
rumors of massive abuse.

The program was a Jones-developed offshoot of a "Christian socialism" program which originated in Indianapolis, Indiana ... which extolled the social virtues of living in a "communal" world similar to the Soviet world (which Jones constantly extolled and even gifted lavishly financially).



Go on to the next section:  A Deepening Cultural Split

  Miles H. Hodges