8.14 Society in Transition

In June 1972 burglars connected to President Nixon's reelection committee were arrested breaking into Democratic National Committee offices in the Watergate complex in Washington. Nixon won reelection in a landslide that November, but reporters (especially Bob Woodward and Carl Bernstein of the Washington Post), a federal judge and Senate hearings uncovered a cover-up reaching the White House.

Investigators learned that Nixon had secretly taped his Oval Office conversations. When Nixon refused to hand over the tapes, the case reached the Supreme Court. In United States v. Nixon (1974), the Court ruled unanimously that executive privilege did not let him withhold evidence needed in a criminal case. The tapes showed Nixon had ordered the cover-up. Facing almost certain impeachment, he resigned on August 9, 1974, the only president ever to do so. His successor, Gerald Ford, pardoned him a month later, which many Americans resented.

Congress followed with reforms on campaign finance and government ethics, and Senate hearings in 1975 (the Church Committee) exposed abuses by the CIA and FBI. Public trust in the federal government, roughly three-quarters in the mid-1960s, fell to around a quarter by 1980.

Stagflation is high inflation and high unemployment at the same time, something economists had thought rarely happened together. Causes included Vietnam-era spending, the oil shocks (8.13) and growing competition from Germany and Japan. Inflation reached about 11 percent in 1974 and 13.5 percent in 1980, and unemployment averaged 8.5 percent in 1975.

Factories in the Northeast and Midwest closed or moved to the South or overseas, beginning the 'Rust Belt'. Nixon tried wage and price controls in 1971 and ended the dollar's link to gold; neither Ford nor Carter could tame inflation.

Jimmy Carter, elected in 1976 as an honest outsider, emphasized human rights abroad. He negotiated the Camp David Accords (1978), a peace deal between Egypt and Israel, and treaties returning the Panama Canal to Panama by 1999. But in November 1979, after Iran's revolution overthrew the U.S.-backed Shah, Iranian students seized the U.S. embassy in Tehran and held 52 Americans hostage for 444 days. A rescue attempt in April 1980 failed. Combined with inflation and the Soviet invasion of Afghanistan, the crisis made the U.S. look weak and helped Ronald Reagan defeat Carter in 1980. The hostages were released on January 20, 1981, the day Reagan took office.

• Intellectual roots: William F. Buckley's National Review (1955) and Barry Goldwater's 1964 campaign built a conservative movement opposed to big government and communism.
• Religious Right: evangelical Christians, angered by rulings on school prayer and abortion (Roe v. Wade, 1973) and by changes in family life, became politically active. Rev. Jerry Falwell founded the Moral Majority in 1979.
• Social issues: Phyllis Schlafly's campaign helped defeat the ERA (8.11). Court-ordered busing to integrate schools, as in Boston in 1974, provoked angry protests from white parents. In Regents of the University of California v. Bakke (1978), the Supreme Court struck down racial quotas in admissions but allowed race as one factor.
• Tax revolt: California's Proposition 13 (1978) sharply limited property taxes and inspired anti-tax movements nationwide.
• Sun Belt growth: suburbs and fast-growing Southern and Western states became conservative strongholds. Many white Southerners shifted from the Democrats to the Republicans, a realignment that began with the civil rights era.