Short Answer 
The Iranian Hostage Crisis, which began in 1979 with the taking of 52 Americans hostage, significantly impacted President Carter’s popularity and contributed to his defeat in the 1980 election. Additionally, the Iranian Revolution caused oil production disruptions, leading to rising gasoline prices in the U.S. and highlighting the relationship between Middle Eastern events and American economic challenges.
Step 1: Understand the Iranian Hostage Crisis
The Iranian Hostage Crisis started in 1979 when 52 American diplomats and citizens were taken hostage by Iranian students. This event became a significant political issue for President Carter, affecting his popularity and reputation. The crisis lasted for 444 days, severely impacting U.S.-Iran relations and playing a key role in Carter’s loss in the 1980 presidential election.
Step 2: Analyze the Impacts of the Iranian Revolution
The Iranian Revolution, which led to the overthrow of the Shah, caused a major disruption in oil production. This drop in production resulted in a significant increase in gasoline prices across the United States. American citizens faced economic challenges as fuel prices soared, highlighting the interconnectedness of Middle Eastern politics and American economics.
Step 3: Conclude the Effects on U.S. Politics and Economy
The combination of the Iranian Hostage Crisis and the economic fallout from the Iranian Revolution had profound effects on U.S. politics and the economy. President Carter struggled to address these issues during his campaign, contributing to his defeat in the 1980 election. Thus, the turmoil in the Middle East directly affected U.S. domestic issues, illustrating the broader implications of foreign events on American life.