Ford's Second Term
Gerald Ford had finally won the office that he had held for over two years as an unelected caretaker. Now the American people had seen fit to bestow upon him the highest office in the land. Election Night 1976 has the highlight of Gerald Ford's life. It would also be the last high moment of his presidency. Buffeted by inflation, an oil crisis, and eventually angry Iranian ayatollahs Ford's term in the White House would be tumultuous and heart breaking for him. He would later be quoted by an aide in a tell all book published in the 1990s that "winning the White House was the worst thing to ever happen".
Ford was elected during a period of stagflation; inflation was skyrocketing while unemployment refused to budge downwards. The economy brightened enough in 1976 to help push Ford over the finish line. But in 1977 it began to trend downward. Inflation would hit 12% in 1978. Ford attempted to rein in government spending through a serious of budgets that slashed government spending, except military, by at least the rate of inflation. However, Congressional Democrats, many of them holdovers from the Great Society days, were not interested in cutting the budgets for what they deemed to be essential programs. Ford and Democrats fought over every budget and eventually Ford had to capitulate, especially after the 1978 midterms when Democrats won a veto proof majority in both houses of Congress. Eventually Ford, stymied by Congress, would appoint Paul Volcker as Fed Chair understanding that he would adopt a tight money policy that would eventually bring down inflation. This led to a race against time for Ford to buttress the economy up enough before tight money sucked away any forward moment he had.
At the same time employment inched upwards putting millions of Americans out of work. One area where Ford was able to work with Democrats was in a joint tax cut bill for the middle class. The idea was that by cutting taxes middle class buyers would fuel an economic boom. Ford wanted a larger tax cut, but settled in 1978 for a moderate one pushed by Speaker Tip O'Neill. However, the Speaker knew that politics was politics and so he gave Ford a sop in a small tax cut for businesses. Ford was able to credit the uptick in the economy in 1978 as a part of this deal. However, given his failure to bring Congress along earlier in the term the credit was largely given to Congress for the economic upswing in 1978-1979.
Ford was ultimately stymied on the domestic front by a series of foreign policy problems.
Israel was feeling hemmed in by its Arab neighbors. However, in the 1970s there was a very real chance for peace between Israel and it's largest neighbor Egypt. However, it would be a missed opportunity. Ford invited Egyptian President Anwar Sadat and Israeli Prime Minister Yitzhak Rabin to Camp David in 1977 in an attempt to build off of the Sinai Interim Agreement. However, Ford's threat to "reassess" American support for Israel during his first term continued to poison the well between him and Prime Minister Rabin. Rabin wanted assurances that the United States would support Israel's right to "defensible borders". Ford saw this as an attempt at Israeli irredentism and strongly encouraged Sadat to demand a return to the 1967 borders as a pre condition for a peace agreement. When Rabin found out that Ford was feeding Sadat lines he became irate and accused the President of tipping the scales. Ford backed off and said that all he really wanted to true peace in the Middle East. This brought Rabin around, but while he had been away an opposition newspaper found out the Rabin still had a bank account in the U.S. from his days as Israeli ambassador. This was in direct contravention with Israeli law. Overnight Rabin's government lost a vote of no confidence and Rabin would resign as Prime Minister. His Labour party would lose the election to the more hardliner Likud Party led by Menachem Begin, and Ford saw no possibility of negotiating a peace between the prickly Begin and Sadat. The Camp David talks would go down in foreign policy lore as arguably the single greatest missed opportunity as Middle East peace.
In 1977 Panama began making increasing threats to the American controlled Panama Canal. The Panamanians saw American ownership and intervention as a direct assault on their sovereignty and General Omar Torrijos was able to focus general unrest away from his undemocratic regime and towards the Americans. Ford sent Secretary of State Kissinger to negotiate a new treaty that eventually ceded control of the Panama Canal back to Panama in 2003, 100 years after America began work. Additionally America would have the right to intervene if the security of passage in the canal was threatened. Torrijos was more than willing to go along with this knowing that the substantial toll fees would be flowing into his country's coffers, and then, coincidentally, his. The Panamanian Congress rushed through approval after the signing ceremony in the Rose Garden in May of 1978. However, the U.S. Senate was far less receptive. Congressional conservatives saw the Canal and the Canal zone as American property. Vice President Baker proved critical to securing the votes needed to get passage. He was able to persuade, pigeonhole, or maneuver his former colleagues into supporting the treaty. In fact, Baker was so successful that most Senators referred to it as the Torrijos-Baker Treaty, rather than the Torrijos-Ford Treaty. Ford took the personal humiliation to gain a political victory. However, conservatives would notch this as a another sin by the President against true Republicanism.
In 1979 the crisis that effectively ended Ford's presidency happened, the Iranian Revolution. The dictatorial regime of the Iranian Shah had not kept pace with the young, increasingly unemployed populace of Iran. While they were some of the best educated people in the world they had little opportunity to use their education to better themselves or the economic situation. Ayatollah Ruhollah Khomeini was able to use this unrest to explode the nation. Protests, sponsored by Khomeini, grew over the summer of 1979. The Shah was increasingly indecisive. At first he attempted to meet the demands of the protesters by increasing government subsidies and university placements. However, as the protests continued and grew larger the Shah began ordering SAVAK and Army intelligence units to begin rounding up and disappearing leaders. This only turned the protests violent which pushed the Shah away from ordering a full scale military crackdown which may have saved his regime. He allowed Khomeini to return in October. This, however, did not cease the protests, but instead turned them into something new. Khomeini began demanding that the Shah step aside and that an Islamic Republic be established. The Shah refused initially, but as the protesters became more and more violent he was eventually forced out in November and fled to the United States. Protesters learned of this and began attacking the American Embassy in April 1979 taking 55 hostages. This surprised even Khomeini, but with hostages now taken Khomeini played along as part of the plan to punish the Devil who backed the Shah, the United States.
Ford was irate and almost ordered an immediate attack upon Iran. Vice President Baker and Secretary of State Kissinger talked him down. Eventually a covert operation was planned to rescue the hostages. However, Operation Freedom was a failure leading to the deaths of 13 Navy SEALs when their helicopters ran into an unplanned sandstorm. Ford's popularity plummeted. Secret negotiations began which would eventually free to hostages on January 21st, 1981 over a year and a half after they were taken.
The fall of the Iranian monarchy sent the world oil supply into a tailspin while demand immediately shot up in reaction to the crisis. All of the sudden gas lines became an common occurrence across the United States. Waiting two-three hours every other day to put a quarter of a tank of gas in your car became the symbol of America in 1979 and 1980. In 1980 this frustration boiled over and in many places across the U.S. Ford was burned in effigy over the energy crisis.
To top it all off in 1980 the Soviet Union invaded Afghanistan to prop up a friendly government. The CIA, led by George H.W. Bush, was completely blind sided and so was Ford. It continued to play into the narrative of a Presidency careening for crisis to crisis. Ford was eventually able to pass sanctions through Congress in response to the Soviet Union's aggression, but it was seen as a weak kneed response.
President Ford could not run for another term given the 22nd Amendment, and truly did not want another term even if he could have run. However, Vice President Howard Baker entered the field essentially as a proxy for the President. However, the Vice President did not have the field to himself. Former California Governor Ronald Reagan once again threw his hat into the ring as did former Texas Governor John Connally, Congressmen Jack Kemp, John Anderson, and Phil Crane and Senators Bob Dole and Larry Pressler. It was a raucous race with all sides accusing the other of not being sufficiently Republican. Reagan's attacks were particularly devastating as he asked Republican party members if the "party was better off than it was 4 years ago?" However, Reagan was seen by too many as too old and too Barry Goldwaterish. Eventually Vice President Baker was able to eke out an win and as a sop to the conservatives nominated Bob Dole as Vice President.
The Democrats had an equally large field. 1976 Vice Presidential nominee John Glenn was the frontrunner, but Senators Gary Hart, Walter Mondale, Birch Bayh, Lloyd Bentsen, Congressmen Morris Udall and Governors Jerry Brown and Terry Sanford all threw their hats into the ring as well. Glenn had offended no one in 1976, but the party faithful knew that 1980 was their best chance to end 12 years of Republican rule. Senator Hart, a relative unknown was able to use his charisma, charm, and honesty to win primaries across the United States starting with Iowa. He essentially had the race sewn up by March. Knowing that he was a young liberal he chose Senator Lloyd Bentsen of Texas as his running mate and did not discourage the Kennedyesque connections that were drawn.
The Hart/Bentsen ticket started out 10 points ahead in the opinion polls and they held that lead through out the campaign. Ford essentially stayed put in the White House knowing that he was toxic on the campaign trail. Baker and Dole held their own in the debates and the polls tightened somewhat but on election day Hart/Bentsen romped winning 311-217.