Lesson 1: Nixon's Domestic Policy

Lesson Focus

Explore President Nixon's domestic agenda, where 'new' economic ideas met 'old' political tactics. We'll see how he battled rising inflation, unemployment, and a growing energy crisis on the home front.

People to Know

Richard Nixon

Learning Objectives

• Explain President Nixon's 'southern strategy' to win over southern voters and his conservative appointments to the Supreme Court.
• Describe how Nixon's administration responded to major economic problems like inflation, an energy crisis, and a growing trade deficit.

President Nixon believed the federal government was too powerful and distant from the people.
His administration created new federalism, a policy designed to shift responsibility back to state and local governments.
Congress passed revenue-sharing bills, which gave federal funds to local agencies to spend as they saw fit. This change empowered local communities to address their own unique problems, reducing their dependence on decisions made in Washington, D.C., and was a domestic success for Nixon.

To win over traditionally Democratic southern voters, Nixon developed a southern strategy.
As part of this plan, he appointed conservative judges like Warren Burger to the Supreme Court and tried to slow down school desegregation.
Though this made the Court more conservative, it did not stop desegregation. Instead, the Court affirmed busing to achieve racial balance, a policy Nixon openly opposed, which intensified controversy across the nation.

Nixon inherited high inflation and a budget deficit from the costs of the Vietnam War and social programs.
His first plan to fix the economy by cutting federal spending and the money supply backfired, causing unemployment to rise.
This failure worsened the economy, leading to a growing balance of payments deficit and a large trade deficit, showing that the United States was losing its dominance in global markets like automobiles and textiles.

With his initial policies failing, the U.S. faced recession, a dollar crisis, and a massive trade deficit.
In a bold move in August 1971, Nixon announced a 90-day freeze on all wages and prices, placed a 10% tax on imports, and devalued the dollar.
Pay special attention to this: these drastic actions offered some temporary relief and boosted exports by making U.S. goods cheaper, but they did not solve long-term inflation and unemployment.

In the fall of 1973, Arab nations imposed an oil embargo on the United States to protest its support for Israel.
This action triggered a severe energy crisis, causing gasoline shortages and price hikes. Nixon responded by calling for conservation, lowering the speed limit to 55 mph, and approving an oil pipeline in Alaska.
Note that even after the embargo ended, the oil cartel OPEC continued to raise oil prices, which plagued the American economy for years.

During the 1970s, suburban growth created a need for new community centers.
Developers built large, enclosed shopping malls that combined department stores, specialty shops, and restaurants, creating a new focus of community life.
These malls replaced the traditional "main street" as social hubs where people shopped, gathered, and even held events like proms. They became so central to public life that they also became sites for protests against the Vietnam War.