In the middle of the 1970s the United States faced multiple crises. The Watergate Scandal had damaged the nation’s political prestige. The Watergate scandal was a scandal during and after the 1972 Presidential Election.

Frank Wills, a security guard, discovered clues that former FBI and CIA agents broke into the offices of the Democratic Party and George McGovern months before the election.

The US also faced crises like the defeat in Vietnam, which had demoralized the military. The economy was reeling from high oil prices and high unemployment.

Indeed, defying economic theory Americans suffered stagnation and inflation at the same time, as interest rates rose to over 17%.

Gerald Ford and Jimmy Carter
Jimmy carter "Crisis of Confidence" speech
1980 Presidential Candidate Debate

1980 Presidential Candidate Debate
Reagan only received 50.1 % of the vote, but a more liberal Republican congressman got 7%, leaving Carter with a mere 41%.

Many blue-collar workers abandoned the Democrats, while the Republicans consolidated their strength in the South. The shift right meant that the Democrats also lost control of the Senate for the first time since 1952.

Carter had not found a way to turn the economy around. He also had faced an intensification of the Cold War, as the Soviet Union invaded Afghanistan and apparently threatened the oil fields of the Middle East.

Relations became so sour that the US boycotted the 1980 Moscow Olympic Games. Carter also inherited a crisis in American-Iranian relations. For a quarter century the US had supported the Shah of Iran.

When a coalition of liberals and fundamentalists overthrew the Shah, the US gave him asylum and medical care, while Iran demanded his deportation to stand trial.

The diplomatic crisis spun out of control when an Iranian mob stormed the American Embassy and took its staff hostage.