The Domestic Nixon

The images of violence and the impression of things spinning out of control seriously damaged Humphrey’s chances for victory. Many antiwar activists were upset that he won the Democratic nomination without competing in a single primary election, and vowed to change the convention rules that gave so much power to party insiders.

Many loyal Democratic voters at home, shocked by the violence they saw on television, turned away from their party, which seemed to have attracted dangerous “radicals,” and began to consider Nixon’s promises of law and order. As the Democratic Party was a house divided, Nixon successfully campaigned for the votes of both working and middle-class White Americans, winning the 1968 election. Although Humphrey’s popularity improved when he distanced himself from Johnson’s unpopular war policies in the campaign’s final weeks, it was too little, too late. Nixon easily won the Electoral College, gaining 301 votes to Humphrey’s 191 and Wallace’s 46.

Once elected, Nixon began to pursue a policy of deliberate neglect of the civil rights movement and the needs of ethnic minorities. For example, in 1969, for the first time in fifteen years, federal lawyers sided with the state of Mississippi when it sought to slow the pace of school desegregation. Similarly, Nixon consistently showed his opposition to busing to achieve racial desegregation. He saw that restricting African American activity was a way of undercutting a source of votes for the Democratic Party and sought to overhaul the provisions of the Voting Rights Act of 1965. In March 1970, he pronounced that he did not believe an “open” America had to be homogeneous or fully integrated, maintaining that it was “natural” for members of ethnic groups to live together in their own enclaves. In other policy areas, especially economic ones, Nixon was either moderate or supportive of the progress of African Americans; for example, he expanded affirmative action, a program begun during the Johnson administration to improve employment and educational opportunities for racial minorities.

Economic Doldrums in the 1970s

Although Nixon always kept his eye on the political environment, the economy required attention. The nation had enjoyed seven years of expansion since 1961, but inflation (a general rise in prices) was threatening to constrict the purchasing power of the American consumer and therefore curtail economic expansion.

By mid-1970, a recession was beginning and unemployment was 6.2 percent, twice the level under Johnson. Much of the pain from these changes was felt in the Rust Belt, or the manufacturing cities along the Great Lakes and the industrial Midwest, such as Buffalo, Cleveland, and Detroit. A trend that began in the postwar era accelerated during the Nixon years:  As the country entered recession, wages decreased and the pay gap between workers and management expanded, reversing three decades of relative parity between them. At the same time, dramatic increases in mass incarceration coincided with the deregulation of prison labor to allow more private companies access to cheaper inmate labor.

The dismal prospects in the Rust Belt contrasted with the entrepreneurial energy found in the Sun Belt, running from Southern California to Texas to the South’s Atlantic coast. Coined by journalist Kevin Phillips in 1969, the term Sun Belt refers to the swath of southern and western states that saw unprecedented economic, industrial, and demographic growth after World War II. Some of these jobs simply moved North to South; often cheap, nonunionized labor, low wages, and lax regulations pulled northern industries away from the Rust Belt. Skilled northern workers followed the new jobs southward and westward, lured by cheap housing and a warm climate slowly made more tolerable by modern air conditioning.

The flow of jobs from the Rust Belt to the Sun Belt was not the only cause of industrial decline in the northern half of the United States. Postwar industrial development in Asia and Western Europe—especially in Germany and Japan—had created serious competition for American businesses. By 1971, American appetites for imports left foreign central banks with billions of U.S. currency, which had been fixed to gold in the international monetary and trade agreement of Bretton Woods back in 1944. When foreign dollar holdings exceeded U.S. gold reserves in 1971, President Nixon allowed the dollar to float freely against the price of gold. This caused an immediate 8 percent devaluation of the dollar, made American goods cheaper abroad, and stimulated exports. Nixon’s move also marked the beginning of the end of the dollar’s dominance in international trade.

Fuel Shortages

The situation was made worse in October 1973, when Syria and Egypt jointly attacked Israel to recover territory that had been lost in 1967, starting the Yom Kippur War. The Soviet Union significantly aided its allies, Egypt and Syria, and the United States supported Israel, souring its relations with Arab nations. In retaliation, the Organization of Arab Petroleum Exporting Countries (OAPEC) imposed an embargo on oil shipments to the United States from October 1973 to March 1974. The ensuing shortage of oil pushed its price from three dollars a barrel to twelve dollars a barrel. The average price of gasoline in the United States shot from thirty-eight cents a gallon before the embargo to fifty-five cents a gallon in June 1974, and the prices of other goods whose manufacture and transportation relied on oil or gas also rose and did not come down. The oil embargo had a lasting impact on the economy and underscored the nation’s interdependency with international political and economic developments.

Faced with high fuel prices, American consumers panicked. Gas stations limited the amount customers could purchase and closed on Sundays as supplies ran low. To conserve oil, Congress reduced the speed limit on interstate highways to fifty-five miles per hour. People were asked to turn down their thermostats, and automobile manufacturers in Detroit explored the possibility of building more fuel-efficient cars. Even after the embargo ended, prices continued to rise, and by the end of the Nixon years in 1974, inflation had soared to 12.2 percent.

Figure 1. The oil shortage triggered a rush to purchase gasoline, and gas stations around the country were choked with cars waiting to fill up. Eventually, fuel shortages caused gas stations to develop various ways to ration gasoline to their customers (a), such as the “flag policy” used by gas dealers in Oregon (b).

Although Nixon’s economic and civil rights policies differed from those of his predecessors, in other areas, he sought continuity. President Kennedy had committed the nation to putting a man on the moon before the end of the decade. Nixon, like Johnson before him, supported significant budget allocations to the National Aeronautics and Space Administration (NASA) to achieve this goal. On July 20, 1969, hundreds of millions of people around the world watched as astronauts Neil Armstrong and Edwin “Buzz” Aldrin walked on the surface of the moon and planted the U.S. flag. Watching from the White House, President Nixon spoke to the astronauts via satellite phone. The entire project cost the American taxpayer some $25 billion, approximately 4 percent of the nation’s gross national product, and was such a source of pride for the nation that the Soviet Union and China refused to televise it. Coming amid all the struggles and crises that the country was enduring, the moon landing gave citizens a sense of accomplishment that stood in stark contrast to the foreign policy failures, growing economic challenges, and escalating divisions at home.

Nixon the Diplomat

Figure 2. President Nixon and First Lady Patricia Nixon visited the Great Wall on their 1972 trip to China. The Chinese showed them the sights and hosted a banquet for them in the Great Hall of the People. Nixon was the first U.S. president to visit China following the Communist victory in the civil war in 1949.

Despite the many domestic issues on Nixon’s agenda, he prioritized foreign policy and clearly preferred bold and dramatic actions in that arena. Realizing that five major economic powers—the United States, Western Europe, the Soviet Union, China, and Japan—dominated world affairs, he sought opportunities for the United States to pit the others against each other. In 1969, he announced a new Cold War principle known as the Nixon Doctrine, a policy whereby the United States would continue to assist its allies but would not assume the responsibility of defending the entire non-Communist world. Other nations, like Japan, needed to assume more of the burden of defending themselves.

Playing what was later referred to as “the China card,” Nixon abruptly reversed two decades of U.S. diplomatic sanctions and hostility to the Communist regime in the People’s Republic of China, when he announced, in August 1971, that he would personally travel to Beijing and meet with China’s leader, Chairman Mao Zedong. Nixon hoped that opening up to the Chinese government would prompt its bitter rival, the Soviet Union, to compete for global influence and seek a more productive relationship with the United States. He also hoped that establishing a friendly relationship with China would isolate North Vietnam and ease a peace settlement, allowing the United States to extract its troops from the war honorably. Concurring that the Soviet Union should be restrained from making advances in Asia, Nixon and Chinese premier Zhou Enlai agreed to compromise on several issues and ended up signing a friendship treaty. They promised to work towards establishing trade between the two nations and eventually establish full diplomatic relations.

Continuing his strategy of pitting one Communist nation against another, in May 1972, Nixon made another newsworthy trip, traveling to Moscow to meet with the Soviet leader Leonid Brezhnev. The two discussed a policy of détente, a relaxation of tensions between their nations, and signed the Strategic Arms Limitation Treaty (SALT), which limited each side to deploying only two antiballistic missile systems. It also limited the number of nuclear missiles maintained by each country. In 1974, a protocol was signed that reduced antiballistic missile sites to one per country, since neither country had yet begun to build its second system. Moreover, the two sides signed agreements to allow scientific and technological exchanges and promised to work towards a joint space mission.