Tomorrow, Thursday, Jan. 9th, the country will observe a “National Day of Mourning” for James Earl (Jimmy) Carter, the 39th U.S. President, who passed away on Dec. 29 at 100. Most federal offices, including federal courts, will be closed. Regular mail service will not be available. Stock markets will also take a day off, so get your trades in. 

Carter or not, most banks and businesses will remain open, including our offices at Paradigm Press. Based on your subscriptions, you should receive the usual array of emails.

With this in mind, let’s discuss those long-ago Carter days, 1977-81, because many events and issues of his era still echo. In fact, as we’ll discuss below, many problems of the 1970s remain squarely on today’s table.

Inflation, Stagflation, De-Industrialization

If you’re above a certain age, you recall Jimmy Carter’s time in the White House. If you weren’t around back then, or perhaps you were too young for it all to register, then you’ve only heard about things via family lore and media myths. 

As a voting-age adult, I recall the times. I remember the inflation of everything from food prices to housing to fuel at the pump. Plus, we lived with stagflation in an economy where things constantly became more expensive, yet jobs were tough to find, and wages didn’t rise. 

I also recall the beginnings of deindustrialization across the country, the bow wave of mill and factory closures from sea to shining sea. This continued for many decades, bringing the U.S. to its current state of affairs as we stare down the barrel of China, Inc., which dominates global industry at nearly every scale.

I remember all this and more from Jimmy’s watch, although, to be fair, many problems of those days were years, if not generations, in the making. Then again, the man did run for president. He asked for it. He got himself elected. And indeed, that was the beginning of his problems.

“Anybody Can Be President.”

This calls to mind a humorous comment from the halcyon 1970s: “In America, anybody can be president. And we’ve proven it by electing Jimmy Carter.” 

People laughed at that quip because they got the joke, everyone in their own way.

One thing to understand about Carter was that he was an outsider, a political activist from Georgia, and not a long-time careerist in the halls of power in Washington. And, if you don’t know what you’re doing in Washington, the political piranhas down there will eat you alive. (For example, see Trump, 2017-21.)

Of more than passing interest, Jimmy Carter was the first Southerner to be elected president since before the Civil War. And yes, okay; President Woodrow Wilson (1913-21) was from Virginia. But in 1912, Wilson ran for president from his perch as governor of New Jersey, so in that sense, he presented himself to voters as a sturdy Yankee Northerner. 

Regarding geographic origins, Carter’s election in 1976 broke a profound historical political barrier. Although he lost the 1980 race to California’s Ronald Reagan, Carter paved the way for another Southerner, Bill Clinton, to prevail in 1992. Beyond American regionalism, Carter was, arguably, the beta test for a much later Obama—a relatively unknown guy from the hinterlands who promised to go to the White House and shake things up. 

Of course, as we all know by now, when a relatively unknown guy arrives at 1600 Pennsylvania Avenue, Washington usually prevails. However, we’ll see about Trump in the coming months and years. 

When it came to shaking things up, in 1977, Carter proposed “zero-based budgeting.” In every budget cycle, federal programs and their political sponsors would be required to justify their funding or be zeroed out. Well, that lasted about 22 seconds in the District of Columbia because Rule Number One is: “Don’t Touch the Money!”

Another angle on the idea of an outsider coming into town is that every administration must staff up with like-minded players. “People are policy,” as no less than Ronald Reagan once quipped. 

However, in 1977, Carter showed up in Washington with a remarkably short list of colleagues from his Georgia days. Sure, he placed a few pals atop those lofty government peaks, figuratively speaking. But to staff up fully, Carter had to populate the slopes and valleys of governance with nominees from deep within the Democratic Party, meaning the left wing. Many of them had their own agendas, not necessarily in tune with the nominal boss.

We recently saw the same personnel debacle in 2017 with Donald Trump. The 2016 election was something of a fluke in that Trump unexpectedly won; it was lightning in a bottle, so to speak. And when Trump hurriedly began to staff up, he included many Washington insiders and wannabes who were not on his side. 

Although it’s worth adding that as 2024 unfolds into 2025, Trump appears to have a genuine political and social movement behind him, along with a long list of names to fill key government positions. Stand by for those fireworks.

It’s the Economy, Jimmy!

We’ll address Carter’s foreign and military issues in a moment. But as I noted recently about the inbound Trump administration, no matter what a president accomplishes, he must always keep the cost of living under control. And there’s no question that Jimmy Carter dropped the ball—and I mean big time. 

To illustrate the point, courtesy of the St. Louis Federal Reserve Bank, here’s a chart of U.S. consumer price inflation that goes back to the 1960s. Clearly, the Carter era, 1977-81, stands out for its long-term and high level of inflation:

U.S. CPI, 1960 to present. Courtesy FRED, St. Louis.

To be fair, Carter inherited an inflation problem from the Nixon-Ford administration (1969-77), which inherited a fiscal and monetary time bomb from the Johnson administration (1963-69). The latter just plain blew out federal spending on both the Vietnam War and the so-called “War on Poverty” at home: expensive, failed policy catastrophes in every respect. Then, the Johnson crowd handed the keys to the White House to President Nixon, who was trapped by those same policies and intractable problems (the Vietnam War comes to mind).

By the early 1970s, Johnson’s bills were coming due, and on August 15, 1971, President Nixon “closed the gold window,” as the saying goes. He had little choice because the U.S. government could no longer afford the Bretton Woods arrangement. Nixon removed the U.S. from a monetary standard with a firm link to gold and fiscal discipline. 

After Nixon left Bretton Woods, the post-1971 U.S. dollar began its half-century purchasing power slide with the associated drip-drip-drip of inflation. And to understand the present, it helps to go back to the Carter era.

People write books about what happened to the dollar in the 1970s. But for us, the takeaway is that Carter and his administration failed to come to grips with the blowout spending he/it inherited and added fuel to the fiscal fire with its own boondoggles. Indeed, during the Carter era, several spending practices came into vogue, such as automatic increases in federal budgets every year, essentially placing increased spending on autopilot. 

Along these lines, inflation under Carter was not a discrete phenomenon. It was structural and cumulative. By 1977, when Carter entered office, the dollar was untethered to any anchor, such as gold, and no one in the Carter circle was about to re-establish a hard link to the yellow metal. 

Then, the U.S. economy had to deal with increased energy prices across the 1970s, when a barrel of oil went from about $3.00 early in the decade to near $40 by 1980. On a personal note, I worked for the old Gulf Oil company at the time, and I recall how we marveled at the price people paid for that liquid gold we pumped out of the ground in West Texas. 

Again, to illustrate those Carter days, here’s a chart of gold prices, 1970-79. And look at that uptick after 1977, when Jimmy came to town.

Gold price, 1970-79. Courtesy SD Bullion.

In 1977, when Carter was sworn in, the gold price was about $150 per ounce. And by the end of 1979, with still a year left for Carter’s term, the price of gold had more than tripled to over $500 per ounce. 

Of course, this is similar to what we saw under President Biden (2021-25), when gold moved from about $1,800 per ounce to over $2,700 recently. That’s with the Fed and other large central banks worldwide working feverishly to mask the dollar's purchasing power decline. Those central banks want gold to stay relatively cheap while they buy it hand over fist. 

Then There’s that “Foreign Policy” Stuff

Now, let’s leave the domestic and spending side of Carter and briefly outline his foreign policy debacles, many of which still live on. 

On Carter’s watch, the Shah of Iran fell; more accurately, the U.S. pushed him out. Soon after, Ayatollahs replaced the Shah. Ever since, U.S.-Iran relations have languished on a scale somewhere between really bad and totally awful. Currently, Iran is on the cusp of becoming a nuclear power with intercontinental-range missiles.

On Carter’s watch, the U.S. began a long-term effort to support China’s Beijing government, to the point of de-recognizing Taipei/Taiwan as a national-scale, independent entity. And, of course, over the past 45+ years, much water has flowed under the bridge in many respects. But current tensions between the U.S. and China over power dynamics in the Western Pacific speak for themselves. 

On Carter’s watch, the U.S. ginned up the treaty with Panama that ceded the U.S.-built Panama Canal to that nation. And again, while much time and many events have passed, the Panama Canal issue is in the news under the incoming Trump administration. We’ll see what happens. 

On Carter’s watch, Communism made vast gains in Africa, in nations such as Angola and Rhodesia/Zimbabwe, and in Central America in Nicaragua. In a post-colonial world, the Carter administration failed to advance U.S. interests in many emerging nations. Again and again, in place after place, Carter’s policies ceded power to hard-leftist governing regimes. 

On Carter’s watch, for some bizarre reason, the CIA began a destabilization effort in Afghanistan, which led to Soviet intervention there. And that Soviet move into Afghanistan prompted the U.S. to support Islamic militants against the Red Army. That is, the U.S. began a program to arm the militant Taliban, who much later came back to create new troubles across the Middle East and the rest of the world. 

Indeed, even after leaving office, Carter meddled messily in foreign affairs. In 1994, he somehow became a “negotiator” for the U.S. in dealings with North Korea, which almost led to a war on the Korean peninsula.

Later, in 2004, Carter was instrumental in “certifying” elections in Venezuela that brought Communists to power, from which position they have never left. 

Carter Comes Full Circle

But now, we should wrap it up because, as mentioned above, the U.S. government will stage a state funeral for President Carter this week. We’ll see flags at half-staff, hear military bands playing somber music, and listen to churchy speeches at the National Cathedral. And no matter what you think of the man or his tenure in power, this is one of those national things our country does for former leaders. It’s ceremonial, to be sure, focused on unity, and generally not a bad idea.

Of course, people will eulogize Jimmy Carter and say kind words, reflective of the ancient maxim, “De mortuis nil nisi bonum,” (of the dead, speak nothing but good). The principle is that it’s inappropriate for the living to speak ill of the dead, who cannot defend or justify themselves.

Meanwhile, amidst funeral pomp, America’s life and story go on. The country moves ahead. And as the nation bids farewell to President Carter, President Biden is also prepping to leave town; not soon enough, some might say. And Trump is inbound; again, not soon enough, others might opine.

How does all of this impact our current issues and our lives? Well, as in the late 1970s, we still grapple with inflation, stagflation, de-industrialization, and America’s place in the world—all of this and much more. 

The future is wide open to make of it what you will. Except that, in many ways, we’re also prisoners of past decisions, many of which date back to the tenure of James Earl Carter. 

And with that, I’ll end, wish you well, and thank you for subscribing and reading.