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President Gerald R. Ford

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Nixon, because of the Watergate scandal (break-in of Democratic National Committee headquarters and the cover-up) and other issues, resigned in August of 1974. Vice President Gerald R. Ford became President.

Ford Years (8/1974-1977) …

President Gerald R. Ford was not exactly an expert in the area of economic issues. Unfortunately, his advisors did not seem to be much better. Urging people to wear WIN buttons (win inflation now) was not exactly a serious attempt to improve the economy. Stagflation (the result of a nasty mixture of inflation, unemployment, and slow economic growth) was the economic environment during much of Ford’s term.

Upon taking office, Ford faced a worsening economy. A steep recession coupled with an inflation rate
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When Ford left office in 1977, as mentioned above, the inflation was slightly less than 6% and unemployment was approximately 7%. The economy was growing at approximately 5% and would continue to do so through most of 1978. However, the 1973-75 recession was followed up by an OPEC repeat in 1979. The economic residue left over from the 1973-75 recession, plus the 1979 OPEC repeat, reduced investments and caused the majority of Carter’s years to be tarnished by high inflation, high interest rates, oil shortages, and modest economic growth.

With inflation in 1978 rising to approximately 7%, Carter responded with several actions. One of Carter’s first moves involved the phasing out of federal regulations regarding the airline industry. This was designed to increase competition and gradually lower prices for consumers. Carter also deregulated the beer industry. As a result, by early 1979, unemployment had declined to less than 6% and real median household income had grown by approximately 5%. With investments and industrial production growing, these factors made people feel that the worse was over.

However, the oil crisis of 1979 changed that picture. Higher inflation and higher interest rates resulted. Jobs started disappearing. Economic growth first slowed then declined. Gasoline shortages developed. By the end of 1979, inflation
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