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Amid this discouraging international news, the mood of the American people seemed equally downbeat. The economy of the United States was in recession, with high inflation and an unemployment rate of about 8 percent. Gasoline shortages raised the prospect of rationing and federal limits on automobile use. Watergate, the Vietnam War, and the energy crisis had shaken faith in the ability of government to accomplish anything. The president of the United States, Jimmy Carter, had offered his own harsh critique of the national state of mind. During a speech broadcast by the three major television networks in prime time, the president warned that the United States faced an invisible threat: “a crisis in confidence.” Old-fashioned American optimism had been replaced by a despairing, self-absorbed worship of consumption. “Piling up material goods,” Carter said, “cannot fill the emptiness of lives which have no purpose or meaning.” The speech ended on a more practical note, outlining half a dozen steps to support renewable energy and eliminate the dependence on foreign oil. The underlying message, however, was that the nation’s most important problems could never be solved by Congress or the president, and Carter urged viewers to assume responsibility for their own fate. “All the legislation in the world,” he said, “can’t fix what’s wrong with America.”

Many Democrats and Republicans disagreed. They thought that Jimmy Carter was the problem, not some vague, existential crisis of the American soul. It was a presidential election year, and Carter had gained the Democratic nomination after a bitter primary fight with Senator Edward M. Kennedy. Despite the victory, Carter’s approval ratings plummeted. The Iranian hostage crisis brought more bad news every day, and an official report on the failed rescue attempt — describing how eight American servicemen died and half a dozen U.S. helicopters full of classified documents were abandoned in the desert — raised doubts about the readiness of the military. Although Carter was a devout Christian, a newly created evangelical group, the Moral Majority, was attacking his support for legalized abortion and a constitutional amendment to guarantee equal rights for women. A midsummer opinion poll found that 77 percent of the American people disapproved of President Carter’s performance in the White House — a higher disapproval rate than that of President Richard Nixon at the height of Watergate.

The Republican candidate for president, Ronald Reagan, had a sunnier disposition. “I refuse to accept [Carter’s] defeatist and pessimistic view of America,” Reagan said. The country could not afford “four more years of weakness, indecision, mediocrity, and incompetence.” Reagan called for large tax cuts, smaller government, deregulation, increased defense spending to confront the Soviet threat, and a renewed faith in the American dream. A popular third-party candidate, Congressman John B. Anderson, described himself as a centrist, labeling Reagan a right-wing extremist and Carter “a bumbler.” Anderson agreed that things had gone fundamentally wrong in the United States. “People feel that the country is coming apart at the seams,” he said.

The nation’s underlying anxiety fueled sales of a bestselling nonfiction book in late September: Crisis Investing: Opportunities and Profits in the Coming Great Depression. A number of bestselling novels also addressed the widespread fears about America’s future. The Devil’s Alternative, by Frederick Forsyth, described a Soviet plot to invade Western Europe. The Fifth Horseman, by Larry Collins and Dominique Lapierre, described a Libyan plot to blackmail the United States with a hydrogen bomb hidden in New York City. The Spike, by Arnaud de Borchgrave and Robert Moss, told the story of a left-wing American journalist who uncovers Soviet plans for world domination but cannot persuade his liberal editor to publish them.

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