Address to the AFL-CIO at Dearborn, Michigan
Over the last eight years, the Republican Administration has given the American people the worst economic record since the Great Depression.
I have described before the combination of high unemployment, high inflation, and high budget deficits—a combination unprecedented in our history—which has brought layoffs to one-third of our families, imposed the tax of inflation on us all, and lowered the American worker's standard of living for the first time in a generation.
Today I would like to discuss the reasons why. I would like to tell you about the nine economic errors of the Nixon-Ford years—nine mistakes that caused our current economic crisis.
Richard Nixon made the first mistake almost as soon as he took office. He announced in 1969 that the government would take no interest when major companies decided to raise their prices. The result was predictable. Prices rose faster during Nixon's first year in office than at any other time since the Korean War—though not as fast as they would rise later in the administration.
Nixon made his second mistake by overreacting to his first. After less than a year in office, he decided it was time to fight inflation by putting people out of work. High interest rates and tight fiscal policies meant that factories slowed down and workers were laid off. Soon the unemployment rate was up, from 3.4 percent in early 1S69, to 5.9 percent just two years later. During Richard Nixon's first two years in office, 2.2 million Americans joined the unemployment rolls. Later, Gerald Ford was to beat this terrible record.
Having created a recession, the Republicans overreacted again—and made their third mistake. It was called the New Economic Policy, and it was designed to reduce unemployment, while holding down prices through wage-price controls. But it was a short-sighted and poorly-planned approach.
The sudden, sporadic freezes and phases only disrupted the economy and paralyzed its growth. Rigid, over-bureaucratic, control schemes created bottlenecks and shortages throughout the economy. Such poorly designed controls could not last forever, and when they were taken off, prices soared. The aftermath of the New Economic Policy was a 13 percent inflation rate—the worst of modem times.
The fourth mistake came in 1972, when Nixon tried to play the expedient game of election year economics. He tried suddenly to pump up the economy, using massive federal spending and loose monetary policy in an attempt to get people on the job by election day. But this unplanned, careless influx of money did nothing to restore the economy's basic health. It created further bottlenecks and, while unemployment remained high, inflation got even worse.
After the election, Nixon made his fifth economic mistake. Poor harvests around the world, and international shortages of certain commodities, had set the stage for inflation. But instead of relieving the problem, the Republican policy quickly made it worse. The massive, clandestine sale of wheat to Russia cheated the American farmer and left the American consumer totally unprotected against inflation. During the year following the grain sale, food prices rose by 20 percent—more than their increase during all of the Kennedy-Johnson years combined.
Richard Nixon made his sixth economic mistake with a last desperate swing back to fighting inflation. Beginning in the summer of 1973, the Federal Reserve Board tried to cut back the money supply. Interest rates soared. Buying anything on time was expensive, but buying a house was worse. Tight money meant you had to put up a larger down payment than before, and then take a mortgage at 10 percent—if you could get one at all. Between the winter of 1973 and the winter of 1975, the number of new housing units fell by about 60 percent. The unemployment rate in the housing industry is still extremely high, at 17 percent.
When Richard Nixon resigned, Gerald Ford inherited a difficult situation. But in a few short weeks, he unerringly turned difficulty into disaster.
In October 1974, Ford made his first economic mistake—the seventh of the Republican Administration. On the verge of the nation's worst postwar recession, Ford put on his WIN button and asked the Congress to raise taxes. Unemployment soared. By the end of his first six months in office, 2.3 million more people were out of work than when he began. No more was heard of the WIN buttons. If Congress had agreed to these disastrous plans, many more millions would have lost their jobs.
Congress also refused to join in the eighth, and potentially the most disastrous, of the Nixon-Ford errors—the deliberate attempt to raise energy prices. The nation needs to conserve fuel, but Mr. Ford's crude policies seemed designed to save gasoline by making sure that no one had a job to drive to. Unemployment increased by yet another 800,000 people in the second six months of Ford's term. If Congress had agreed with the mistake to hike energy prices, the recession of 1974 and 1975 would have been even worse.
In the last 18 months, Ford has made the ninth, and hopefully his last, economic mistake. His actions have destroyed precisely the programs that could reduce unemployment, and increase productivity, by training and targeting workers for the jobs the nation needs done.
That's the Republican record. The Republicans have had their innings— no runs, few hits, and nine errors.
Mr. Ford says he's proud of that record. Let's look at it more closely. Let's compare the rhetoric with the reality.
Unemployment.—Only a few months ago, Mr. Ford's advisors were predicting that unemployment would be below 7 percent sometime this year. Since then, it has only gotten worse. The unemployment rate reached 7.3 percent in May, and 7.9 percent last month. Only once since the Great Depression has the unemployment rate been higher—and that was also under Gerald Ford, who brought the unemployment rate up to 8.9 percent within his first nine months in office.
Mr. Ford says there's a recovery. He says he should be elected President because he has turned the economy around. But there are 50 percent more people out of work now than on the day he took office. And there are 500,000 more out of work now than there were three months ago.
The reason unemployment remains high is that this administration is willing to tolerate it. Despite all their talk against welfare, they have become the party of welfare rather than work.
Inflation.—The Republicans say they are the party that can control inflation. Yet the last eight years have brought us the worst inflation in a generation. During the entire period from 1949 to 1969—through war years and peace years, Democratic years and Republican years—the inflation rate averaged only 2.2 percent a year. The Republican Administration produced six percent inflation in 1969—their first year in the White House. We still have that six percent inflation rate today. If we judge them by their record— as they ask—we can only assume that the Republicans will continue to rob our people with six percent inflation as long as they are in office.
Balanced Budgets.—The Republicans say they are the party of fiscal responsibility. But their record shows the worst fiscal mismanagement in our history. The White House budget alone has increased by over 350 percent during the past eight years. The deficit for the year just ended is $65 billion. That is the largest deficit in our history. It is larger than the deficits of all eight Kennedy-Johnson years combined.
Housing.—The Republicans say that housing is one of their campaign issues. But they have plunged the construction industry into a depression. The cost of a new house has increased by more than 50 percent, from an average of $30,000 in 1968 to an average of $46,000 in 1976. Interest rates are also up 50 percent. When Lyndon Johnson left office, more than half the families in this country could afford their own homes. Eight years later, less than a third of our families can.
Economic growth.—The Republicans say they support strong economic growth. But the economy has grown more slowly during the last eight years than at any time since the Great Depression. The real value of the Gross National Product actually declined during each of Mr. Ford's first two years in office. The average worker's weekly pay check buys less than it did in 1968.
I understand that my opponent makes his kickoff speech tonight elsewhere in Michigan, and some people are saying that tonight marks the official opening of the campaign of 1976.
I'm glad to see his emergence, but I think in a larger sense this Presidential campaign began a long time ago. My opponent and I, and the two parties we represent, do not exist in isolation, but are part of the currents of history.
In that sense, this campaign was underway in 1932, when his party nominated Herbert Hoover and ours nominated Franklin Roosevelt.
This campaign continued in 1948, when his party nominated Tom Dewey, and ours nominated Harry Truman.
This campaign continued in 1952, when his party nominated Dwight Eisenhower, and ours nominated Adlai Stevenson.
This campaign continued in 1960, when his party nominated Richard Nixon, and ours nominated John Kennedy.
This campaign continued in 1964, when his party nominated Barry Goldwater, and ours nominated Lyndon Johnson.
This campaign continued in 1968, when his party nominated Richard Nixon—a second time—and ours nominated Hubert Humphrey.
This campaign has been joined a hundred times, whenever our party has fought for legislation that would benefit the average American—for Social Security, for the minimum wage, for rural electrification, for voting rights, for Medicare—and our opponent's party fought against that progress.
This year the lines are drawn with special clarity, for my opponent, in his long career in Congress, has distinguished himself not by legislation that bears his name, but by his tireless opposition to all the great legislation that bears the names of Democrats who cared for people and were not controlled by special interests.
There has never been an American election quite like this one. We have had economic problems before. We have had poor leadership before. But never before have we had such widespread lack of trust in our government.
Because of a war our people did not want, because of scandals our people did not want, because of economic mismanagement our people did not want, millions of Americans have lost faith in our government.
We feel we have lost control of our own government, that it has become our master instead of our servant, that we are being ruled by special interests, and by politicians who don't care about us. To a tragic extent, that is exactly what has happened.
That is what this campaign is all about. We as Democrats must give our people faith in our government again by giving our people control over our government again.
Government by the people—that is the issue this year. Once the people rule again, we can solve our economic problems. Once the people rule again, we can have a fair tax system. Once the people rule again, we can reorganize our government and make it work with competence and campassion.
Once the people rule again, we can have a foreign policy to make us proud again.
It all depends on the people.
This is why we are going to win. Because we have gone to the people. Because we have listened to the people and learned from the people. Because we take our strength and our hope and our courage from the people. Because we owe the special interests nothing. Because we owe the people everything.
So let us go forth to this campaign gladly and proudly and bravely. Let us go forth in the spirit of Franklin Roosevelt and Harry Truman and John Kennedy and Lyndon Johnson and all the others who have made us proud to be Democrats.
And let us always put our faith in the American people, for as long as we do, no power on earth can ever prevail against us.
Jimmy Carter, Address to the AFL-CIO at Dearborn, Michigan Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/347538