Jimmy Carter: The First Reaganite

In 1976, American voters registered their anger at Watergate, Richard Nixon, the Republican Party, and the Federal government generally by electing as President Jimmy Carter – with a term each in Georgia’s State Senate and Governor’s mansion and no experience of Washington D.C. whatsoever. 

Carter frequently denounced “Washington” on the campaign trail and did little to discern between the city’s Republicans and Democrats. “All of them done stole my water,” George Wallace, who pioneered anti-Washington rhetoric, complained of both Ronald Reagan and Carter, “They’re drinking out of my dipper.” Challenging President Ford for the Republican nomination, Reagan warned that, in a country seething with anger at “Washington,” a man who had served in Congress for 24 years before appointment to the White House was at a significant handicap against the Georgia peanut farmer. So he was. 

Carter was, too, a Democrat from an increasingly Republican region who had learned to trim his sails accordingly. “I stated during my campaign [for Georgia governor in 1970] that I was not in favor of doing away with the right-to-work law, and that is a position I still maintain,” he wrote in 1971. In 1976, he told union leaders:

This, he claimed, “has always been my position since 1970.” Many voters see him as “vague, two-faced, too political,” and Democratic “liberals” distrusted him. One reporter wrote that “old -time Democratic politicians greet him more often than not like a naturalized Martian rather than as a fellow soldier.” This culminated in Edward Kennedy challenging Carter in 1980. 

If Carter could be ideologically supple, he was not a blank slate. Jules Witcover wrote that:

Carter’s skepticism towards Federal jobs programs stemmed from a broader critique of the role of government. “We need patience and good will,” he told Congress in 1978:

This was a break with the “liberalism” of “The Great Society.”

As recovery from the recession of 1974-1975 faded and the economy worsened, Carter largely rejected the Keynesian remedies of more money printing and government spending. Despite claiming ignorance of the causes of or remedies for rising inflation, he acted as though he did grasp that inflation was, in the popular formulation, “too much money chasing too few goods.” 

If that was the problem, one half of the solution lay on the supply side by increasing the number of goods on which the money could be spent. To this end, Carter deregulated the airline, trucking, rail, and telephony industries. “These actions,” Susan Dudley writes, “allowed new entrants into the markets, increased efficiency, lowered prices, offered consumers more choices, and likely contributed to declining inflation.”   

The other half of the solution lay on the demand side by reducing the amount of money. Carter appointed Paul Volcker chair of the Federal Reserve in 1978. “We needed a new approach,” Volcker wrote, “Put simply, we would control the quantity of money (the money supply) rather than the price of money (interest rates).” As money growth fell, interest rates soared. The economy shrank in 1980, and unemployment hit 7.2% but inflation would fall from 13.5% to 3.2% in 1983. By then, Carter was out of office and Reagan was cruising to a landslide reelection due to an economic boom thanks, in some small part, to Carter’s deregulatory and sound money policies. 

The economic chaos of the 1970s forced even center left governments, like James Callaghan’s Labour government in Britain, to acknowledge the death of Keynesianism. The global shift towards economic freedom in the 1980s and 1990s was not the result of some nefarious ideological coup, but of a widespread realization that the alternative simply didn’t work. In some respects, Jimmy Carter was the first Reaganite.