Jimmy Carter, former Democratic governor of Georgia, won the presidency in 1976. Portraying himself during the campaign as an outsider to Washington politics, he promised a fresh approach to governing, but his very lack of experience at the national level complicated his tenure from the start. A naval officer and engineer by training, he often appeared to be a technocrat, when Americans wanted someone more vibrant to lead the way through troubled times.

In economic affairs, Carter at first permitted a policy of deficit spending. When the Federal Reserve Board, responsible for setting monetary policy, increased the money supply to cover deficits, inflation rose to 10 percent a year. Carter responded by cutting the budget to slow inflation, but cuts affected social programs at the heart of Democratic policy. By the end of his term, with deficits still high, the alienation of the business community could be seen in falling bond prices and rising interest rates.

Carter also faced criticism for his failure to develop an effective energy policy. He presented a comprehensive program, aimed at reducing dependence on foreign oil, that he called the "moral equivalent of war." Opponents thwarted it in Congress.

Though Carter called himself a populist, his political priorities were never wholly clear. He endorsed government's protective role, but then began the process of deregulation -- the removal of governmental controls in economic life. Arguing that some restrictions over the course of the past century limited competition and increased consumer costs, he favored decontrol in the oil, airline, railroad and trucking industries.

Carter hoped to reestablish Democratic leadership, but his efforts failed to gain either public or congressional support. By the end of his term, his disapproval rating reached 77 percent, and Americans began to look toward the Republican Party again.

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Source: U.S. Department of State