In the aftermath of the turmoil of the 1960s and the disillusionment of Watergate, Americans turned to Jimmy Carter in an attempt to return to small-town values. But Carter's inability to deal with the overwhelming social,economic and political problems paved the way for a new conservatism led by Ronald Reagan, and the jubilation of the 1976 Bicentennial Celebration gave way to the despair and embarrassment of the Iranian Hostage Crisis. This episode examines the mid and late 1970s and some of the major events of the era such as the energy crisis, racial unrest, the rise of the "Me Generation," unemployment and inflation, and the problems with Iran.