Two Roads Diverged: Jimmy Carter’s Speech - July 15, 1979

By Nomad

Few people recall that night in July 1979. With uncompromising directness, President Jimmy Carter laid out the truth for the American people. It was time to choose between the two ideas of progress.

Crisis Abroad and Panic at Home

The year was 1979. By this time, it was clear that the protests in Iran which had begun a year earlier were not going away. Indeed, the revolution of the long-time US ally, Iran, was becoming an international crisis.  Protests throughout Iran had led to the dethroning of the Shah of Iran and in his place, Ayatollah Khomeini- a fundamentalist cleric- became the leader of the nation.

The revolution had thrown oil production into decline and, this, in turn, had driven up prices.

To make up for this loss, Saudi Arabia, and other OPEC nations boosted their respective production; however, the cartel had also announced that a series of oil price increases would accompany this increase. Gasoline prices skyrocketed and the perception of a shortage had led to widespread panic.

Beginning in California and spreading eastward, the panic soon turned to anger from the American public and this hostility was primarily directed at the Carter administration. One of the reasons for this was Carter’s decision to cut all imports of Iranian goods, following the seizure of American hostages when students raided the American embassy in Tehran.

A President in Search of Redemption

Carter's approval rating had dropped to 25%, even lower than Richard Nixon's during the Watergate scandal. Following an exhausting summit in Tokyo, the one thing President Carter desired most was a break. He had planned to travel to Hawaii for a vacation.

However, his chief of staff took a look at the poll numbers and warned him that his chances of re-election would be in serious doubt unless he took some action immediately.

You Cannot Deny Women..

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American Dreams: My Father, Karl Marx and the Man who Sold the Rope 2/2

In part one of this two-part series, I wrote of how the American dream had changed since my father's time. The promise of ever-increasing prosperity seems to belong to a shrinking minority. History had played an ironic joke on the West. While the Soviet Union was collapsing due to the pressure of union labor, the United States under Reagan was signaling to corporate America that unionized labor was to be discarded on the ''scrap heap of history.''

And Then The Slow Decline

Now let's take a look at the consequences of this policy and who actually benefited.

At one time, when the main challenge to capitalism was Communism, leaders of the free world touted rising consumption afforded by rising wages as a measure of its success.

Starting around the 1980s, however, real wages and productivity, which once went hand in hand, decoupled. No longer did harder work mean higher wages. Productivity continued to rise- adding to the wealth of corporations- while wages remained steady. This trend has continued to the present day.

Additionally, access to easy credit has allowed the American citizen to shop and shop, giving, at least, the illusion of prosperity. But buying a lifestyle built on credit is a gamble because credit assumes that tomorrow will be as good or better than today. Life could be pretty good with a high credit limit. Especially with the flood of cheaply-priced merchandise on offer, all of it made possible by non-unionized workers in Asia and elsewhere.

Consider these facts.

Before credit became so widely available, personal savings rates were rising steadily each year. In 1960, Americans were saving 5.4% of their total income, It reached a high of 14.6% in 1975, and by 1982, it leveled off at 10.9%. But all that changed in the mid-1980s under Reagan when consumer credit became more commonplace.

At that point, personal savings began dropping hitting an all-time low of just .09% in 2000 and it stayed low until the last few years. After hitting depression-era lows, it has been slowly rising again since 2008.