Occupying a strategic location on the southern border of the Soviet Union, Iran was a major supplier of oil and an importer of American military equipment. At the end of 1977, Carter traveled there to help celebrate the shah’s rule, causing the internal opposition to become more and more anti-American. Early in 1979, a popular revolution inspired by the exiled Muslim cleric Ayatollah Khomeini overthrew the shah and declared Iran an Islamic republic.
The Iranian revolution marked an ideological shift in opposition movements in the Middle East from socialism and Arab nationalism to religious fundamentalism. This would have important long-term consequences for the United States. More immediately, when Carter in November 1979 allowed the deposed shah to seek medical treatment in the United States, Khomeini’s followers invaded the American embassy in Tehran and seized fifty-three hostages. They did not regain their freedom until January 1981, on the day Carter’s term as president ended. Events in Iran made Carter seem helpless and inept and led to a rapid fall in his popularity.
Another crisis that began in 1979 undermined American relations with Moscow. At the end of that year, the Soviet Union sent thousands of troops into Afghanistan to support a friendly government threatened by an Islamic rebellion. In the long run, Afghanistan became the Soviet Vietnam, an unwinnable conflict whose mounting casualties seriously weakened the government at home. Initially, however, it seemed another example of declining American power.
Declaring the invasion the greatest crisis since World War II (a considerable exaggeration), the president announced the Carter Doctrine, declaring that the United States would use military force, if necessary, to protect its interests in the Persian Gulf. He placed an embargo on grain exports to the Soviet Union and organized a Western boycott of the 1980 Olympics, which took place in Moscow. He withdrew the SALT II treaty from consideration by the Senate and dramatically increased American military spending. In a reversion to the Cold War principle that any opponent of the Soviet Union deserved American support, the United States funneled aid to fundamentalist Muslims in Afghanistan who fought a decade-long guerrilla war against the Soviets. The alliance had unforeseen consequences. A faction of Islamic fundamentalists known as the Taliban eventually came to power in Afghanistan. Tragically, they would prove as hostile to the United States as to Moscow.
Television gave extensive coverage to the plight of American hostages in Iran in 1979-1980, leading many Americans to view the Carter administration as weak and inept.
In an unsuccessful attempt to bring down inflation, Carter had abandoned the Keynesian economic policy of increased government spending to combat recession in favor of high interest rates. He had cut back on social spending and the federal government’s economic regulations, while projecting a major increase in the military budget. By 1980, detente had been eclipsed and the Cold War reinvigorated. Thus, many of the conservative policies associated with his successor, Ronald Reagan, were already in place when Carter’s presidency ended.