Jimmy Carter's Economy: Policy in an Age of Limits

Jimmy Carter's Economy: Policy in an Age of Limits

Jimmy Carter's Economy: Policy in an Age of Limits

Jimmy Carter's Economy: Policy in an Age of Limits

Synopsis

The massive inflation and oil crisis of the 1970s damaged Jimmy Carter's presidency. In Jimmy Carter's Economy, Carl Biven traces how the Carter administration developed and implemented economic policy amid multiple crises and explores how a combination of factors beyond the administration's control came to dictate a new paradigm of Democratic Party politics.

Jimmy Carter inherited a deeply troubled economy. Inflation had been on the rise since the Johnson years, and the oil crisis Carter faced was the second oil price shock of the decade. In addition, a decline in worker productivity and a rise in competition from Germany and Japan compounded the nation's economic problems. The resulting anti-inflation policy that was forced on Carter included controlling public spending, limiting the expansion of the welfare state, and postponing popular tax cuts. Moreover, according to Biven, Carter argued that the ambitious policies of the Great Society were no longer possible in an age of limits and that the Democratic Party must by economic necessity become more centrist.

Excerpt

After the voters had spoken on November 4, 1976, in what turned out to be a close election, the attention of the nation centered on Plains, Georgia. a stream of experts made the long trek to the tiny village where Jimmy Carter had grown up and still made his home. They came to consult with the president-elect and to advise him on the details of the new administration's policies. They also came to play their roles in a ritual enacted every four years — the ritual of selecting those who will fill the posts in the new administration.

They arrived from points around the country, first to the Atlanta airport and then by way of chartered bus for the three-hour trip to Plains. They came in groups — experts on national defense, on foreign affairs, and on economic policy — to Miss Lillian's Pond House, the modest home of Carter's mother just outside Plains near a small pond which gave it its name. Most of the sessions were held there, a setting that must have seemed strangely disorienting to those accustomed to the well-appointed offices of Washington and New York.

Early in December a group of leading economic figures gathered in Plains in a meeting I referred to earlier. Charles Schultze, soon to be chairman of the Council of Economic Advisers, was there as was Michael Blumenthal, the new secretary of the treasury. Two members of the Economics Task Force, Lawrence Klein and Richard Cooper, were there. Walter Heller, chief economic adviser to John Kennedy, and Arthur Okun, chairman of the Council of Economic Advisers under Johnson, represented continuity in the Democratic tradition of economic advice. a succession of meetings followed to iron . . .

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