During the 1973 Yom Kippur War between Israel and the nations of Egypt and Syria, Arab oil-producing countries flexed their economic muscles through the embargo of oil sales to countries which provided aid to Israel. On October 16, 1973, Saudi Arabia, Iran, Iraq, Qatar, Kuwait, and Abu Dhabi all slashed oil production while simultaneously raising prices. By the end of the year, oil prices in the United States skyrocketed. By early 1974 the price of oil in the United States quadrupled. Worse, as far as consumers were concerned, was the lack of gasoline and heating oil. Long lines of automobiles formed at gasoline stations, often to find no gas available.
President Richard Nixon asked for gasoline stations to stop selling gasoline on Saturdays and Sundays, and about 90% complied. The measure, intended to discourage recreational driving, brought an end to the American tradition of a Sunday drive, enjoyed by suburban families since the 1950s. Several states imposed rationing, with odd-even days, based on the last number of a customer’s license plate. Plates ending with odd numbers allowed the vehicle to be fueled only on odd-numbered days. The federal government imposed a national speed limit of 55 miles per hour, a law that remained in effect until 1995. Throughout 1974 shortages of gasoline and heating oil threatened all aspects of the economy and daily life in the United States and in many European countries as well.
In the United States, the year 1979 unfolded in rising despair. American international prestige suffered a blow when the Shah of Iran fled his country, and the former American ally of Iran devolved into a geopolitical enemy. American diplomats were seized by Iranian revolutionaries who took over the embassy in Tehran. An attempt to free them using a military operation turned into a catastrophe in the Iranian desert the following year. In July, the Skylab orbiting space laboratory fell back to Earth, generating fears of its impact causing catastrophic damage. President Jimmy Carter achieved a major diplomatic victory with the Camp David Accords between the United States, Israel, and Egypt, but in domestic affairs, he came to be regarded as inept and weak.
Throughout the year, oil shortages which followed the Iranian Revolution and which were exploited by OPEC again produced heating oil and gasoline and diesel fuel price increases. Interest rates on auto loans and mortgages negatively impacted the automobile industry and housing market. Interest rates on thirty-year mortgages climbed into the double digits. Inflation spiraled prices for consumer goods out of control. The following year the economy stalled, unemployment jumped, and prices and interest rates remained high, as the hostage crisis in Iran dragged on throughout the year. For many Americans, 1979 marked the beginning of the end of the American dream, and the conservative coalition between the right-wing conservatives and Christian fundamentalists emerged as a potent political force in the United States.
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