James Earl Carter (Part Two).
Summary: In Part One of our series, we discussed the persistent attempts on the right to draw parallels between the Carter and Biden administrations. We looked at the rise of James Earl Carter from humble beginnings on a farm, to the Naval Academy and into the governor’s office in Georgia. Each step of his early journey offers insight into the development of his worldview and governing style. In Part Two, we do a deep dive into the first half of the White House years to understand the challenges that faced the new administration, some significant early legislative wins and the undercurrent of trouble brewing on the horizon.
Listen to the full episode here.
Chapter Three: A President assembles his team.
In August of 1974, President Richard Milhous Nixon resigned from the presidency. By December, former Georgia governor Jimmy Carter announced a longshot bid for the White House. Against the backdrop of a scandalized presidency, 7.5% unemployment and 11.7% inflation, Jimmy Carter campaigned from coast to coast throughout 1975 determined to build support for his campaign one vote at a time. Despite being seen as a Washington outsider, Carter had been cultivating some critical relationships as governor and then presidential candidate.
The outsider image was part authentic and part deliberate. Jimmy Carter was never going to be accepted by the D.C. elite, especially in his own party. But he was also keen to separate himself from an increasingly toxic political environment created by Nixon. By the time of his announcement, everyone was pretty much done with Nixon, including his own party. So the idea of being an outsider worked to Carter’s advantage. But, as I said, he wasn’t without some powerful friends.
One such friend was David Rockefeller, heir to the Rockefeller family fortune forged in oil, railroads and banking. Throughout most of his life, David Rockefeller carefully curated a philanthropic personal narrative, pouring money across the spectrum into foundations and efforts that live on to this day. But in 1973, he founded an organization called the Trilateral Commission, which has been the subject of conspiracy fodder since its inception. Not without reason, mind you.
The Trilateral Commission was conceived as a nongovernmental organization, or NGO, that gathered prominent citizens in America, Europe and Japan to work through pressing trade and economic issues that could serve as a template for international negotiations. As we’ll learn later in our story, some of the members of the commission, especially on the American side, would have a significant hand in guiding American foreign policy, often to the benefit of large financial institutions. Not the least of which was Chase Bank, of which Rockefeller was President. More on that later.
For now, what’s important about the timing of the Trilateral founding was that one of its charter members in 1973 was indeed Jimmy Carter. As Bird notes in The Outlier: The Unfinished Presidency of Jimmy Carter, “The Trilateral Commission gave the Georgia governor some foreign policy chops. But, more importantly, he was introduced to Zbigniew Brzezinski and Cyrus Vance, two rising stars of the American foreign policy establishment.”
Both men would wind up in Carter’s cabinet and find themselves in the center of historic events that will eventually come to pass in our tale.
Conspiracists like to paint Carter as a not-so-innocent member of the commission. Perhaps this can be debated. For his part, Rockefeller downplays the significance of Carter’s brief tenure in his memoirs:
“The inclusion among that first group of an obscure Democratic governor of Georgia — James Earl Carter — had an unintended consequence. A week after Trilateral’s first executive committee meeting in Washington in December 1975, Governor Carter announced that he would seek the Democratic nomination for president of the United States.”
Throughout his memoirs, Rockefeller treats Carter as somewhat inconsequential in the history of the commission, though he notes with some optimism that:
“Carter’s campaign was subtly anti-Washington and anti-establishment, and he pledged to bring both new faces and new ideas into government. There was a good deal of surprise, then, when he chose fifteen members of Trilateral, many of whom had served in previous administrations.”
In fact, Carter the anti-politician who famously loathed politicking, made several appointments meant to appease establishment players, though it would never fully ingratiate him in the Beltway. But, it’s important to disabuse this idea that the Carter White House was nothing more than a collection of country bumpkins. While his closest aides and allies were certainly part of his inner Georgian circle, Carter would take great pains to build coalitions, from Ted Kennedy and Thomas “Tip” O’Neill in the liberal wing along with deeply entrenched foreign policy thinkers from Trilateral, to selecting Walter Mondale as his running mate, a rising star within the Democratic Party.
A Strong Hand
Apart from a carefully cultivated team that combined establishment players and Georgia loyalists, newly elected Jimmy Carter had as favorable of a Congressional support system as any incoming president could hope for. Again, Bird:
“On paper, this Democratic president seemed to hold a strong hand on Capitol Hill. Democrats controlled the House, with 292 votes to only 143 Republicans; Senate Democrats possessed a filibuster-proof majority of 62 senators to only 38 Republicans. But the Democratic majority was itself split between liberals and conservatives, the latter invariably from the old Confederacy.”
Early on, Carter made a decision to involve Vice President Mondale in all key decisions, an innovation that we take for granted in this time. After much deliberation, he appointed Brzezinski, known as “Zbig,” as National Security Advisor and Cy Vance as Secretary of State. There was a question as to whether the roles might be reversed, but Zbig was a polarizing figure both in the White House and on Capitol Hill, so Carter thought better of putting him in the more prominent role. Zbig was of Polish descent and carried with him a deep resentment toward the Soviet Union. He viewed nearly every foreign policy decision through this lens, which could serve as an asset at times, but more often a liability. Thus, most consider the casting of their roles a wise choice by Carter.
He even contemplated replacing the CIA Director with two deep establishment liberals, Ted Sorenson, JFK’s speechwriter, and Bill Moyers, the noted journalist. Both were curious choices for this particular role, but it spoke to Carter’s desire to make good with the New England Democrats. Ultimately, he would select an old Navy buddy named Stan Turner to head the agency. Carter had a mind to actually retain the current director, as he was thought to be a competent chief, and Carter would muse after his presidency whether it was a mistake to replace him.
Oh, George H.W. Bush.
Oh. That’s who.
One small anecdote that speaks to Carter’s respect for tradition was a decorating note. Upon arriving in the Oval Office, he noticed that the President's desk was different from the one President Kennedy used. In fact, he was right. So, his first official act as president was to requisition the Resolute Desk from storage and return it to the Oval Office, where it remains to this day.
Carter tapped a former volunteer turned close associate, Jody Powell, to be his press secretary. Together, with Hamilton Jordan (pronounced Jerden), they were considered the new faces of the White House, which irked several of the media luminaries around D.C. who were unsure what to make of these fresh faced southern boys in blue jeans. Nevertheless, Powell and Jordan, Zbig and Vance, and Carter and Mondale set out to make history and restore faith in the White House.
Oh, and I should mention that there was one more unofficial official who would become a permanent fixture in the White House and at the president’s side. As Carter’s Chief Domestic Policy Advisor, lifelong ally and future biographer once remarked, “The Carters don’t have friends. They have each other.”
Rosalynn Carter cut a poised, stable and earnest presence much like her husband. No one questioned her position in the administration or as her husband’s confidante. She was anything but a yes woman and much more than just a sounding board. Rosalynn Carter was an advocate with a voice, particularly surrounding women’s issues. As Bird writes:
“As a guest on Meet the Press and other television shows, Rosalynn projected a polite, soft-spoken image. But her words were wholly feminist in substance.”
With the team in place, a firm policy agenda and a Democratic majority in Congress, all that was left was to govern.
Chapter Four: It was a very good year.
It’s amazing the things that we remember as a people. The things that stick out in our minds. Read my lips. Tear down that wall. Dukakis’s helmet. You’re no Jack Kennedy. Howard Dean’s scream. Mission accomplished. Grab her by the…
Okay, okay. Point being, sometimes the strangest, most unintentional thing leaves a lasting impression. For better or worse.
“Carter addressed the nation for the first time since his inauguration on February 2, 1977, in a televised speech focused on the need to conserve energy. Carter was wearing a beige wool cardigan. Rosalynn tried to persuade him to ditch the cardigan for a blue blazer, but Carter consciously chose to appear less presidential.”
For all the advice he solicited and took from Rosalynn, perhaps he should have heard her out on the cardigan issue. That said, initially, this was received well by the nation and the media. It’s interesting to note that his approval rating in the first six months was 75%. But Republicans would relentlessly trot out the image of Carter in a cardigan for years to come.
Nevertheless, the Carter team went to work on Capitol Hill to try and log an early win. Given it was his first major pronouncement, Carter had a lot riding on an energy bill. From a legislative and allegorical perspective, it’s a great place to start, because it truly captures the complicated nature of energy policy, the legislative process, special interests and Carter himself.
It took months to wrestle an expansive, but muddled bill through Congress. In October of 1978, Carter got his energy bill. The bill created the Department of Energy and provided incentives for domestic energy production, with a particular emphasis on coal. This reflected the nation’s ongoing desire to break from the dependence on foreign energy sources, which was heightened due to the first Arab nation supply shock earlier in the decade. Because coal was still so cheap to produce relative to natural gas—hydraulic fracturing, or “fracking,” didn’t take off until the early 2000s—it led to a spike in coal and domestic oil production. That’s something that’s largely lost in the discussion from the Carter years.
The balance of the measures in the bill were designed to build a renewable energy infrastructure and encourage large scale conservation. It gave incentives to utilities to conserve energy, required efficiency standards for home appliances, penalized the automotive industry for emissions and provided seed funding for wind and solar to get off the ground.
It was classic Carter. Part ideological, mostly practical. And, without much thought about the impact it would have on the larger economy, so long as it didn’t expand the federal deficit. As Bird writes:
“Carter generally believed in market-driven solutions. He stubbornly resisted pressures from Senator Kennedy and other liberals to consider imposing price controls on oil and gas. His policies pushed oil prices higher, which in turn promoted higher domestic oil production, and that eventually resulted in a decline in oil imports.”
As much as the energy bill was a mixed bag, up until this point, the U.S. didn’t have much of a policy to speak of. In hindsight, the upside was the investment in a renewable future that would slowly persist, despite the Reagan administration’s reversal just a few short years later. One can only imagine how much further along we would be without the interruption of subsequent administration policies.
On the other hand, Carter’s belief in the market would allow further shocks down the line without price controls. And yet again, if you’re in the oil and gas industry, you generally have Carter to thank for the decades of growth they experienced, something that is completely lost in retrospect.
One last note on Carter the environmentalist. While he is generally seen as a green president famous for installing solar panels on the roof of the White House and pressing the nation into developing renewable energy sources, these factors were less about environmentalism and more about conservation. Something that completely fits Carter’s frugal persona.
Playing Small Ball
Carter’s ability to wrestle difficult subjects into legislation was quickly earning him a reputation as a technocrat and a wonk. One way to reflect on how the nation viewed their president in the early days is through the lens of pop culture. For example, there’s an infamous episode of Saturday Night Live where John Belushi as Walter Cronkite hosts a call-in show with Dan Akroyd’s Jimmy Carter. Throughout the sketch, Carter fields calls ranging from how to operate a “Marvex 3000” sorting machine at a post office to talking down a 17-year old caller on a bad acid trip.
There are a couple of insights to glean from this impression of Carter at the time. The first was the belief that Carter seemingly knew everything about everything. It was lighthearted and well-meaning at the time, to be sure. But it would also provide a glimpse into another aspect of his personality that would become increasingly detrimental and, over time, stick to the president in a negative way. And that’s myopia. Oftentimes, it seemed as though Carter focused too much on details better left to others. Every briefing that crossed his desk was not only read but contained his notes in the margins, lest anyone think they could get away with a half assed memo.
One of the early stories that came to symbolize Carter’s myopia was a rumor that he personally signed off on every request to use the White House tennis court. Though debunked by the White House Secretary, it was true that requests had to be made in writing because of the sheer number of tennis players in the West Wing. It was just another example of Carter efficiency and attention to detail. Though it wasn’t him signing off on these requests, the mere fact that a form even existed was enough to provide fodder for the White House Press Corp.
It might seem like a bizarre example to include in a series on Carter, but it’s illustrative of his relationship with a Press Corp bound and determined to find fault in the Georgian at the helm. Tennis request forms, solar panels on the roof, a cardigan sweater. These pieces would begin to paint a picture of a man who appeared small in the face of large problems.
Nevertheless, Carter’s first year in office saw the president continue a legislative winning streak if winning is judged by volume and activity.
As Bird notes:
“The administrations’ first six months were not without substantial accomplishments on the domestic ledger. Economic growth for much of 1977 was running at a robust 5.2 percent. Early in May, Congress enacted Carter’s $20.1 billion economic stimulus package, and soon afterward the president won a job bill for poverty-level youth and a one-year extension of the Comprehensive Employment and Training Act.”
This was the type of red meat the Democratic Party was hoping for. Domestic initiatives to combat poverty had taken a back seat from the LBJ years, and the Democrats were keen to restore their image as defenders of the poor and working class. So, from this standpoint, it was a solid first six months for the Carter team. In addition to these measures, the administration expanded the number of food stamp recipients and Carter began an all out progressive assault on the judiciary, appointing a record number of women and black judges to the courts.
But not all of Carter’s proposals would age well in progressive circles. For example, it’s largely believed that Ronald Reagan was the great deregulator determined to set the markets free. In reality, Carter was really the one to pull the regulatory threads, as he was a believer in the markets. In June of ‘77, he began the process of deregulating the airline industry, which brought down prices and increased competition in the marketplace for several years. Of course, as we now know, it eventually led to massive consolidation in the industry and would leave the government powerless to intervene during periods of abusive behavior.
Notching Wins Left and Right
So far, so good. The country was generally approving of their strange and calm new president. Carter seemed on top of everything. He was getting along with the Democratic Party enough to wrestle key pieces of domestic legislation through Congress. Inflation had cooled out slightly. Jobs were returning. Poor people were back on the agenda and there wasn’t a whiff of scandal, much to the chagrin of the press. As Bird remarks, “Every reporter in town wanted to emulate Bob Woodward and Carl Bernstein.”
Carter continued his legislative agenda unabated with the passage of an amendment to the Social Security Act. It was risky, but necessary. Because prior administrations were loath to increase Social Security deductions, they were falling desperately behind inflation, and there was a fear that the funds would eventually run out. Carter’s amendment increased the tax on anyone earning more than $25,000, something Republicans would characterize as the “largest peacetime tax increase in American history.” They weren’t necessarily wrong. But there’s no question that it was essential to protect the fund.
He would also make the difficult decision to cancel a very expensive defense initiative that everyone knew was a bust, but no one previously had the courage to confront. The disastrous B-1 bomber contract. The B-1 program was outdated, and even the military knew the planes were substandard in the modern era. Yet canceling any military program was seen as heresy. Frugal Jimmy Carter had no such qualms, and so he handed the Republicans yet another eventual talking point by doing the right and difficult thing. On the flip side, as there always is with Carter, he stopped short of cutting the military budget and instead increased it by 3%.
Domestic reform continued to roll, but not always in the direction that the liberal wing of the Party favored. For example, he signed a civil service reform bill that reduced protections for workers by implementing merit based rewards. He also failed to veto a tax bill that made its way to the Oval Office for signature despite being furious that it had gotten this far, saying he couldn’t “tolerate a plan that provides huge tax windfalls for millionaires and two bits for the average American.”
He countered with a proposal to increase the capital gains tax, but found little support in either party. Carter believed that tax cuts in any form would ultimately stoke the flames of inflation. Again, he was a balanced budget hawk who believed in austerity. In hindsight, it seemed as though Carter’s instincts were correct, even though we know that inflation reared its ugly head again more due to the oil shock of the coming Iranian Revolution. But in this way, Carter created a narrative that stuck to him rather than the circumstances; and it seemed like he participated in resurfacing inflation rather than quelling it.
Carter used words like “hard choices” and “austerity” exactly at the time the government needed to ironically invest in the economy, not tighten its belt. As Bird notes, “It was not so clear that government deficits were the major cause of inflation in the 1970s. Labor Secretary Ray Marshall pointed out that the fiscal deficit in 1974 was only $5 billion and yet the inflation rate was 9 percent. Two years later, the deficit had spiked to $66 billion and the inflation rate had fallen to only 5 percent.”
These are the types of historical inconsistencies present in Carter that would ultimately lay the foundation for his demise. But in the immediate, it was an astonishing record of legislative victories unrivaled since LBJ.
Governing from the Middle
The one piece of the puzzle that frustrated Carter was his effort to pass the Labor Law Reform Act, which would have aided union recruitment and penalized corporations who attempted to thwart unionization. It was a terrible fight. Corporations enlisted support from Republicans and southern Democrats to block the law in the Senate. After months of trying to revive it, Carter had to finally relent.
A comprehensive energy plan.
Shoring up Social Security.
Appointing black and female federal judges.
Amnesty for Vietnam-era conscientious objectors.
Cancelation of an expensive and unpopular military program.
There wasn’t a lot of sex appeal, to be sure. But it was the hard work of governing that was required to provide stability and accountability in the nation. And, it seemed as though the nation and economy were responding positively to this renewed sense of calm and capability. Unemployment came down by 1.5%, inflation fell to 4% and GDP increased by an eye-popping 5%.
But the seeds of discontent were already in the ground. The media just couldn’t bring itself to be overly positive about this exceedingly banal White House. The New York Times tepidly praised Carter’s nuts-and-bolts approach, but also called his administration “dull, terribly dull,” as if that mattered. Perhaps more troublingly, however, was the cool reaction Carter and his team continued to receive from the liberal wing of the Democratic Party. As Bird writes:
“To the consternation of many liberals, Carter seemed to be governing more as a Teddy Roosevelt Progressive Republican than a Franklin Roosevelt New Deal Democrat… Carter’s instinct in the face of a growing federal budget deficit was to balance the budget, and that inevitably alienated his liberal constituencies.”
There is a good deal of truth to this sentiment, as we’ll cover. The Carter team lived somewhere in the no-man’s land between Keynesian theory and the ideas developing out of the Chicago School of Economics. And, perhaps Carter would have challenged himself to dig deeper on economic policy and do a better job of reading the economic tea leaves, if he didn’t fall so deeply for a mistress that many had warned him about.
Chapter Five: The Lure of the Siren’s Song.
Carter’s foreign policy aspirations were remarkably clear and incredibly lofty for a peanut farmer from the plains who hadn’t served in any federal capacity. Sure, he had ZBig and Vance, along with the support of several Trilateral Commission members. But his appetite for foreign policy exceeded nearly everyone’s expectations. On his list upon taking office was ending apartheid in South Africa, making human rights a condition for U.S. financial and military support, strengthening detente with the Soviets, and truly opening trade relations with China. Oh, and he wanted to bring peace to the Middle East. Just a run of the mill “to-do” list for any new president who had only ever served as a governor.
Before tackling any of these ambitions, however, Carter would get his PhD in foreign affairs with a prickly issue a little closer to home.
It was an issue that no one really wanted to touch. Since its construction, the Panama Canal had been a thorny subject. Many consider the deal to forge a pathway through Panama a crowning achievement of Teddy Roosevelt’s administration, though it was mired in controversy from the beginning. Hailed as one of the most important economic and infrastructure achievements of the 20th Century, the Panama Canal paved the way for trade to increase demonstrably in the western hemisphere. Roosevelt pitted Nicaragua against Panama and kept nearly everyone guessing as to where the canal would actually be built. For several reasons, Nicaragua was favored, as it seemed more feasible from a negotiation standpoint. But Panama was by far the more logical route. Ultimately, Roosevelt pulled off what many consider to be a diplomatic coup by signing a deal to construct the canal through Panama. The only problem of historical note is that no one in the Panamanian administration countersigned the treaty. Because it wasn’t really yet a sovereign territory, it technically belonged to Colombia. A bloodless coup, quick change of hands over the isthmus and an executive declaration later, and Roosevelt had his deal.
Over the decades, as one might imagine, this was quite a contentious issue for the Panamanians, who viewed this as a brazen act of imperialism. I thought it worth a quick history review, because it plays into an important part of Carter’s personality and why he fought an uphill battle to essentially give the canal back to the Panamanians.
Carter proposed a treaty that would allow the United States unfettered access to this important trade route, but hand ownership back to Panama. There were many, not exclusively Republicans, who saw this as a sign of weakness. Forget how we got it, it was ours. There was a legitimate concern on all sides that any new treaty with the Panamanian government could be dicey considering its leader, Omar Torrijos, had come to power under a military coup. And you know how we feel about coups that we didn’t start.
Anyway, Carter took a two-step approach to the deal. The first was to sign a treaty that would place the canal itself in a permanent state of neutrality, but allow the United States to intervene militarily in the event of any threat to this status. The second was to gradually sunset U.S. ownership and hand full ownership and operation of the canal over to the Panamanian government by the year 2000. Many Democrats saw this as an unnecessary risk, especially in the first year of Carter’s term, where it seemed like everything else was coming along just fine. Republicans pushed back hard against the treaties by attempting to add poison pill amendments throughout the process. Ironically, one of the staunchest supporters of the treaties came from one of the most conservative voices in Hollywood. John Wayne, whose first wife’s family had close ties to Panama.
After a pitched battle, the Treaties were ultimately ratified, and Carter had his first foreign policy victory. It was important on several levels. First off, it projected an anti-imperialist shift in U.S. policy that stood in stark contrast to the Soviets. Some, however, would view this as U.S. capitulation and weakness, as Republicans both feared and took advantage of. But, it also served notice that this president would be undeterred and push forward with unexpected savvy to right what he personally viewed as a historic wrong. It also helped build credibility in foreign policy circles that the United States had grown more rational in the post-Machiavellian Kissinger days and that it was ready to do business fairly.
The popularity of the deals was certainly relative. Senators in more conservative districts would pay a heavy price, losing their seats in their next elections, in large part because of their support for the treaties. Ultimately, though, Carter would pay the heaviest price indirectly. This deal would be seen as yet another chink in Carter’s armor when it came to projected toughness when it mattered most in the second half of his term.
A Growing Appetite
Carter’s success in navigating contentious canal treaties through the Senate emboldened him. The steady hand and beyond-his-years wisdom of Cyrus Vance and the pugnacious chirping of Brzezinski awakened Carter in a profound way. No matter how many had warned him, the lure of the foreign policy siren song was too tempting to ignore. Like so many U.S. presidents and other world leaders before him, Carter was intoxicated by the prospect of healing international wounds and righting historical wrongs.
Carter would go on to learn the hard way that foreign nations had their own minds and interests. He may have been more of a gentle soul with an empathic view of the world, but he was still the leader of the United States. And the United States had accumulated some baggage over the years.
Jimmy Carter’s appetite for foreign policy was boundless, bordering on arrogant. Many of the issues he tackled were well beyond his control and above the pay grade of those around him. One particular weakness was the lack of a sophisticated intelligence apparatus. The Carter team was too often surprised by popular sentiment in other nations, and instead willing to take the word of their diplomatic counterparts. Sometimes they ignored real, on the ground intel from their own ambassadors. Sometimes, they misjudged the sentiment of the American people with respect to certain issues.
But to Carter, everything was possible if done with love, an open mind and kindness. It was a complete reversal from the Nixon/Kissinger days that preceded them. When Carter surveyed the globe, he saw historic possibilities. Just a few years prior, Henry Kissinger had opened a secret backchannel to China. Now, Deng Xiaoping was signaling a willingness to open relations with the U.S. under Carter. The Shah was still firmly ensconced in Iran and bending to Carter’s admonitions to do better on human rights. Egyptian President Anwar Sadat was open to negotiating with Israel, thus laying the groundwork for the historic Camp David Accords. Fidel Castro was interested in communicating with the new U.S. President, whom he viewed as genuine and authentic. The Soviet Union appeared ready to soften its Cold War stance.
Everything seemed so utterly possible. If only the world would cooperate and everyone would just see things Jimmy Carter’s way.
Here endeth Part Two.
Office of the Historian, Foreign Service Institute: The Panama Canal and the Torrijos-Carter Treaties
The New York Times: Jimmy Carter’s Unheralded Legacy
The Atlantic: The Passionless Presidency
Vox: The Republican myth of Ronald Reagan and the Iran hostages, debunked
Politico: The Humiliating Handshake and the Near-Fistfight that Broke the Democratic Party
Brookings: Today’s global economy is eerily similar to the 1970s, but governments can still escape a stagflation episode
Kai Bird: The Outlier: The Unfinished Presidency of Jimmy Carter
David Rockefeller: Memoirs