A Conservative Insurgency
Reagan and George BushPresident Carter had failed miserably to deal with economic problems. Public sentiment was that he was unable to solve the nation’s economic woes. In July 1979, in a highly publicized address, Carter told Americans that there was a "crisis of confidence" paralyzing the nation; and that the days of dramatic economic growth were a thing of the past. He had hoped for understanding from the public, but instead got indignation and skepticism. Wrote one Newspaper editor: The nation wanted action, not sermons from the President.
Carter’s failure to resolve economic problems was an opportunity for Republicans to regain the White House. Their nominee in the 1980 election was Ronald Reagan, a former actor and governor of California. Reagan has been characterized as "not a deep thinker;" however, he was very likeable and charming, and an incurable optimist. He was in stark contrast to Carter, who had been dour, and lectured Americans about the virtues of frugality. Carter was a strict moralist whereas Reagan offered a simple message of restoration of pride and prosperity. Reagan proposed to: increase military spending; reduce the "bloated" federal bureaucracy, reduce taxes, and dismantle the "welfare state." He spoke of returning to old-fashioned American ideas of morality, ending abortions, and reinstituting school prayer.Ronald Wilson Reagan had been born in Dixon, Illinois. He attended Eureka College in 1932 and became a radio sports announcer for an Iowa Radio station. He later had a long and remarkably successful career as a Hollywood Actor. One of his most memorable roles was playing the part of George Gipp, the legendary Notre Dame Player who, while on his deathbed at age 25, had asked Knute Rockne to tell the team to "win one for the Gipper." It was a real tearjerker; and one which endeared Reagan to every woman in America. He was considered dashingly handsome by the standards of the day, and played in many Westerns as well as a stint as host of the General Electric Theatre. He was first married to actress Jane Wyman by whom he had several children, but later married his wife Nancy.
The story of George Gipp and Knute Rockne can be found here.
He began his career in politics as president of the Screen Actor’s Guild, and was a liberal and New Dealer, but during the 1950’s Communist scare, particularly allegations that communists had infiltrated Hollywood, he moved far right, saying "I was beginning to see the seamy side of liberalism." He campaigned for Eisenhower in 1952 and 1956 and for Nixon in 1960, but did not switch his party affiliation until 1962. He rocketed to political superstar status in a rousing speech in support of Barry Goldwater in 1962. In 1966, he was elected governor of California by a landslide. Among his other accomplishments in that state, he eliminated free college education, which slowed but did not stop the flow of fruits and nuts into California colleges. During the 1976 Presidential campaign, he had made a serious challenge to wrest the nomination from Gerald Ford, but abandoned the campaign when it appeared that he would not be successful. He then campaigned heavily for Ford.
Reagan’s years as an actor served him well as a politician. He was a captivating speaker with enormous personal charisma. His optimism was contagious, although he frequently railed against the destruction of American virtues, and promised to return American pride and prosperity. At first his rhetoric was a bit raw for national politics, and was a little too much of a "return to the good old days," however the political atmosphere moved in his favor. Thee population grew older, and larger numbers of people moved into the Sunbelt and South. His "back to the basics" message played well with this constituency.
Reagan also benefited from a resurgence of evangelical religion, very similar to the Great Awakenings. Evangelical Christians owned television and radio stations, and operated schools and universities, such as Oral Roberts University and Liberty Baptist College. By 1977, 70 million Americans described themselves as "born again" Christians. Supreme Court Decisions restricting prayer in schools, legalizing abortion, and the teaching of Darwinism had actually helped this return to evangelical religion.
A primary leader of the religious revival of the time was Rev. Jerry Falwell, who led a group called the Moral Majority. They emphasized a return to "traditional morality," and the elimination of Darwinism from textbooks, return of prayer to schools, etc. The Moral Majority was strongest in the South, particularly among Southern Baptists.
The great irony of the Moral Majority movement is that it did not support Jimmy Carter, who was a born again Christian and supported Ronald Reagan who was not openly religious, and was seldom seen attending Church. Not only that, he had been divorced and remarried, which would have been an automatic disqualification for most religious conservatives; however the man’s message, rather than his personal attributes, appealed to them and won him their support.
During the 1980 Republican Convention, Reagan publicly courted Gerald Ford to be his Vice Presidential Running mate. The thought of a former president (still eligible for at least one term as President) as V.P. was appealing, but ultimately Ford declined. He reasoned that it would be undignified for a former President to suddenly be number two.
During the Campaign, Reagan pushed the idea that America’s greatest economic accomplishments were yet to come. His promises were reminiscent of Franklin Roosevelt’s "Happy Days are Here Again" approach. His speeches were often peppered with one liners and witticisms.
A typical Reagan quip: "A recession is when your neighbor loses his job; a depression is when you lose yours; recovery is when Jimmy Carter loses his."
Reagan won a resounding victory in the Electoral College, 489 to 49, although his margin in the popular vote was substantially closer. Carter conceded the election before polls closed in California, which may have skewed results somewhat. Remarkably, only 28 per cent of registered voters participated in the election. Most of those who did not vote were typical Democratic voters, who apparently felt deserted by the party, and stayed home .
Reagan’s First TermIn his inaugural address, Reagan stated that "Government is not the solution to our problem, government is the problem. He recalled Calvin Coolidge and Andrew Mellon and said they demonstrated that reducing taxes and easing government regulation of business would boost the economy, as it had during the heady days of the Coolidge Administration. The key to economic recovery, he said, was reduced taxes and federal spending. This, he said, would make the economy grow, which would generate more income, and thereby produce more government revenue through taxes. The theory was, fewer taxes meant more economic activity, which would generate more income, which would increase government revenue. The tax rate would be less, but net tax paid would increase.
This is an economic theory known as supply side economics. It is the exact opposite of Keynesian Economics.
Ø Keynesian Economic Theory : Developed by John Maynard Keynes (1883-1946) an English economist, who in his Book, The General Theory of Employment, Interest, and Money, argued that during slow economic times, massive, even deficit government spending was in order. During boom times, government should increase taxes and reduce government. Unemployment is a bigger problem than inflation; therefore the cure for economic stagnation is massive government spending which puts people to work. It involves massive government "fine tuning" to make the economy hum. This was the philosophy followed by Franklin D. Roosevelt and his "brain trust," and led to his numerous New Deal programs, all designed to put people to work at government expense. A similar philosophy was followed by Lyndon B. Johnson in his Great Society. However, that spending, coupled with enormous government spending for the Vietnam War actually caused such a massive government deficit that interest rates and inflation ballooned, causing even more unemployment, as businesses were crippled by high interest rates. The result was "stagflation," a situation that economists had not seen before. Although many would say it proved the inaccuracy of Keynesian Economics, it would be more accurate to say that when followed to the extreme, it causes more harm than good.
NOTE: Economics is an extremely sophisticated and esoteric social science. The above explanation is woefully simplistic, and would earn an "F" in any basic College sophomore economics class. It should be noted that many brilliant economists disagree on the proper theory of economic operation. However, for purposes of understanding the difference between Keynesian and Supply-Side economics, this grossly oversimplified explanation will have to suffice.
Ø Supply Side Economics: A much simpler theory than Keynesian theory. It has several tenants:
§ People naturally respond to incentives: lower prices, less risk, greater return, etc. will create more spending and investment.
§ The end point of the entire economic process is consumption. People must buy and consume to make the economy hum.
§ This works best in an open market where prices adjust relatively easy.
§ Tax and monetary policy should be geared toward a pro-growth economic environment. Economic growth and price stability are complementary, not opposite to each other. After all, say the supply-siders, the definition of inflation is "too much money chasing too few goods."
§ The key is increasing supply, because money is made when goods are supplied, and sold. Excessive taxes reduce the incentive or people to spend, much less save and invest. With less paid in taxes, individuals have more money to spend, and will do so. As a result, with more money spent, the economy will accelerate.
In a Nutshell: Keynesian Economics calls for massive government spending during times of economic downturn to improve the economy and end unemployment. A key feature is often deficit spending—spending more than the government collects in revenue. Supply-side economics calls for reduced taxes and governmental intervention during times of economic downturn. The reduction in taxes is and lowering of regulation will allow the market to improve, production will increase, which puts people to work, and puts money in their pockets.
Confused? Don’t worry. Economists can’t agree, so why should you have the answer to all the world’s problems. The main idea is whether massive government spending, or unregulated markets are the key to economic recovery.
Important: Reagan’s theory of supply-side economics, or "trickle down" economics, was quickly renamed "Reaganomics" by his supporters. The term stuck, and is quite often used on AP tests to identify Reagan’s economic program.
Reagan was intrigued by the Laffer Curve, named for economist Charles Laffer at the University of Southern California. He took the truism that a tax rate of neither zero percent or 100 percent would produce income, somewhere in between lay the magic point: that tax rate at which a person’s incentive to earn more income is reduced. One should get as near that point as possible without reaching it……sort of like the speed limit! Following this idea, Reagan at once abandoned price controls on oil, and ended an embargo on wheat sales to the Soviet Union. Again, reduced government influence—allow the market to find it’s equilibrium point. He also planned on a tax reduction.
The House of Representatives had a Democratic majority, which obviously did not agree, and it appeared doubtful that Reagan’s plan would pass. His popularity sagged as a result. Then, on March 30, 1981, Reagan was shot in the lung by a deranged young man who wished to impress a movie actress with whom he was obsessed. The attack occurred outside a Washington hotel. Several persons were wounded, the most serious of whom was Reagan’s press secretary, James Brady, who suffered a debilitating brain injury.
Reagan’s injury was much more serious than the public was led to believe, in fact he came very close to dying while undergoing surgery to remove the bullet from his lung. His injury was much more serious than that sustained by either Presidents McKinley or Garfield, who both died. The difference appears to be modern medicine, which was more capable of handling his injury. Otherwise, Reagan would have been the fifth president assassinated. Ironically, the attempt happened in a zero year. Every president between John Adams and Reagan elected in a zero year died in office.
Reagan’s courage and wit (while being gurneyed into the hospital trauma room he quipped about his doctors, "I hope they are all Republicans") earned him amazing sympathy and popularity. Liberal and centrist congressman were too frightened by his popularity to oppose his programs, and as a result, passed the Economic Recovery Tax Act which cut personal income taxes 25% over 33 months, lowered the maximum rate from 70% to 50%, and cut capital gains tax rates from 28% to 20%. Other tax concessions were included.
As a result of Reaganomics, the income of wealthy Americans increased substantially. (Again, very Hamiltonian – the idea that the welfare of the nation depended upon the welfare of the rich, as they had the most money to spend).
Reagan’s economic policy, though styled on that of Calvin Coolidge, departed from Coolidge’s theory in one major respect: defense spending. Earlier supply-side presidents, such as Coolidge, had limited government spending; Reagan increased it, primarily on defense programs. Also, Congressional Democrats were reluctant to cut domestic programs, so the federal deficit increased substantially.
Reagan and his advisers had hoped that there would be enough wasteful spending and fraud to make up the difference in revenue caused by the tax cuts, but it didn’t happen. It became necessary to cut a number of very popular government programs. Under Reagan, cuts were made in food stamp programs, school lunch programs, and the National Endowment for the Arts, as well as Public Broadcasting. Plans for synthetic fuel projects were cancelled completely. At the same time, oil imports rose.
Reagan also attacked the "welfare state," arguing that many people on public assistance could work, if the net were pulled out from under them. In 1981, he stated that Aid for Dependent Children (AFDC) would end after four months after one joined the "working poor." He further stated that every dollar earned working would be reduced by one dollar in government benefits. More than 400,000 people lost AFDC benefits, including Medicaid benefits. The idea was to coerce people to work and support themselves. It backfired, however. Many working mothers wanted to be self-reliant, but felt that working full time would penalize their children, and therefore refused to work, and returned to welfare fulltime.
The bottom line was, the plan was not working; government spending was going up. Reagan’s chief economic advisor, David Stockman, begged him to cut Defense spending, but Reagan refused. Deficits continued to grow, the stock market worried that increased public debt would drive up interest rates, and stock and bond prices fell. A business slump developed in 1982, and the result was a rapidly increasing budget deficit, and the worst recession since the 1930s. It became known as the "Reagan recession."
Reagan’s aides persuaded him that he needed to reassure the public about deficits and inflation, and that the government needed "revenue enhancements." (This was a fancy euphemism for tax increase.) The Tax Equity and Fiscal Responsibility Act of 1982 increased federal revenue by $98 billion; but the slump continued. By November, 1984, unemployment was at 10.4 percent, and the Republicans lost seats in the midterm elections.
Reagan’s priorities were substantially different than those of his predecessors. His policies and cabinet appointments indicated as much:
Ø He appointed James Watt as Secretary of the Interior who frequently spoke against environmentalists. He rather indiscreetly proposed turning federal lands (many protected environmental sites) over to the states for commercial development. He also made remarks about affirmative action appointments that were so offensive that Reagan was forced to ask for his resignation.
Ø The administration danced on the edge of potential conflicts of interest. Ethical decisions were often fuzzy at best. A number of outright scandals affected the administration. Administration insensitivity to such issues was called the "sleaze factor." Even so, Reagan himself was never touched by a hint of scandal. He was tagged the "Teflon President," as nothing stuck to him.
Ø Union membership and influence also suffered. Reagan had used his former leadership of the Screen Actor’s Guild to his advantage in the election, and had won the votes of many Union members even though Union bosses opposed him and directed the rank and file not to vote for him. This broke the political power of the AFL-CIO. Also, in 1981, when Air Traffic Controllers walked off the job, he called the strike illegal, and fired all of them, which ultimately destroyed the union. Reagan publicly criticized Unions and union policy, and membership declined sharply as a result.
Ø He cut programs that favored feminists, including welfare programs, and opposed the Equal Rights Amendment and abortion on demand. He also opposed equal pay for women in jobs of comparable worth to men.
Reagan attempted to stem the tide of criticism from women’s groups by announcing that his first Supreme Court appointment would be the most qualified woman he could find. He kept his word, and nominated Sandra Day O’Connor to the Court, the first Woman Justice. This did little to pacify the women’s movement, however.
Ø Blacks and other minority groups were also targeted. The staff of the Equal Employment Opportunity Commission was sharply reduced. Only 8 percent of his appointments went to women and blacks. When the IRS granted tax-exempt status to fundamentalist schools, which practiced racial segregation, the Reagan administration supported them in court; but was ultimately overruled by the Supreme Court 8-1.
Reagan on Defense and Foreign Policy: Reagan firmly believed that all the world’s troubles originated from the Soviet Union. It has been said he feared that Americans had "over-learned the lessons of Vietnam, and forgotten the lessons of Munich"). He insisted the U.S. must use military force to protect its interest, and promoted a major buildup of nuclear and conventional weapons.
Interestingly, in many of his movie roles, Reagan had been something of a "cowboy." He apparently still liked playing the part.In 1983, Reagan proposed the Strategic Defense Initiative (SDI), a program soon dubbed "Star Wars." The idea was for a complex defense system that would destroy enemy missiles in outer space before they could reached their targets. He reasoned that it would "kill weapons, rather than people." This would be a welcome departure from "mutually assured destruction." Many scientists were skeptical that such a system could be built; but the Soviets bought into it wholesale. As a result, they began their own research into defense, just to keep pace.
Central America soon claimed Reagan’s attention. He sent arms and advisers to El Salvador to help put down a revolt there, which he believed was caused by communist subversion. He also supported Nicaraguan rebels (called "Contras") who opposed the Sandinista government in that country, which Reagan also opposed, as he considered it leftist.
In the early 1980’s problems in the Middle East exploded. It was a tangled confusion of disputes between Sunni and Shi’ite Muslims, Israelis, and the Palestine Liberation Organization. (PLO). Problems arose when Israelis shelled PLO positions in Beirut, Lebanon, and the U.S. sat mute. Later, Israeli troops ignored the slaughter of Muslim women and children by Christian militia. American forces entered as "peacekeepers," but were attacked by Muslims. American warships and planes bombed and shelled Muslim positions in Beirut, which only intensified Muslim resentment. On October 23, 1983, a Muslim suicide bomber drove a truck full of explosives into Marine Headquarters, and killed 241 American GI’s. Despite his protestations to the contrary, Reagan quietly pulled troops out of Lebanon and kept American troops on warships offshore.
In 1983, in response to a leftist takeover of the government in Grenada, Reagan sent troops to the island, overturned the new government, and evacuated a small number of American medical students. It was basically an elephant stepping on a gnat, and was condemned by the United Nations, but was immensely popular at home, as it made Reagan look decisive.
Reagan’s Second TermThe economy had improved by 1983, and problems within OPEC had caused oil prices to decline. When the 1984 election rolled around, Reagan’s approach was if it ain’t broke, don’t fix it. The Democrats nominated Walter Mondale, who shot himself in the foot (if not in a more painful part of his anatomy) when he declared in his acceptance speech "Mr. Reagan will raise your taxes and so will I. He won’t tell you, I just did." (Actually, Reagan had just quietly signed the Deficit Reduction Act of 1984 that raised taxes $50 Billion, but Mondale failed to capitalize on it.
Mondale set a precedent by nominating a woman, Geraldine Ferraro of New York, as his running mate. Although immensely qualified, she was forced to defend a number of questionable financial dealings by her husband—something no male candidate had ever had to do. One sage put it well: "The pioneers take all the arrows."
Reagan answered Mondale’s challenge by saying he would never raise taxes and criticized Mondale. In the election, Reagan won 59 per cent of the popular vote; and lost only Minnesota and D.C in the electoral college. He gained 15 seats in the House (not enough for a majority) and lost two in the Senate.
In 1985, Reagan met with Soviet Leader Mikhail Gorbachev in Geneva, Switzerland, and signed a series of agreements for cultural and scientific exchanges. Later, they met in Reykjavik, Iceland for two days to discuss Arms limitations; however neither side was adequately prepared, and when Gorbachev proposed an outright ban on nuclear weapons (particularly SDI) Reagan was unprepared to respond, and the talks failed.
1986: This proved to be a bad year for the Reagan administration. It began with a tragedy when the Space Shuttle Challenger exploded shortly after takeoff, killing all seven crewmen, including a female schoolteacher, Christa McAuliffe. In the mid-term elections, Democrats gained control of the Senate and increased their margin of control in the House. The worst was yet to come.
The Iran-Contra Affair: A Beirut newspaper reported that the Reagan administration had been secretly selling arms to Iran in hopes of securing the release of American hostages held in Lebanon. Reagan had repeatedly said he would not negotiate with terrorists; and knew of this angered many Americans who remembered the Iranian storming of the American embassy in Teheran during the Carter Administration. For many, this was "dealing with the devil." But, it got worse:
It appeared that a series of covert operations had been carried on in the White House. Oliver North, a Lieutenant Colonel and aide to the National Security Council who fancied himself a war hero had been running secret operations from the White House basement. Most damaging was a scheme to use the profits from the sale of arms to Iran to finance Contra activities in Nicaragua. Congress had voted to ban such aid, so any aid to the Contras would have been illegal.
North’s plans had been approved by several higher ups, including Robert Poindexter, National Security Adviser, as well as his predecessor, William McFarlane. Also involved were William Casey, director of the CIA. Secretary of State George Schultz and Secretary of Defense Casper Weinberger both objected, but their objections were ignored, and later they were kept in the dark…..treated like mushrooms, as it were.
Shultz called the whole thing a "pathetic scheme," and threatened to resign three times. When word finally leaked of the scheme, McFarlane attempted suicide, Poindexter resigned, and North was fired. William Casey denied involvement, and resigned from the CIA for health reasons. Shortly thereafter, he died from a brain tumor.
The White House assumed something of a siege mentality, reminiscent of the Nixon White House during Watergate. Televised hearings were held by a joint House-Senate committee chaired by Republican Senator John Tower. The hearings lasted for months and revealed a series of problems including the shredding of incriminating documents, missing money (in the millions) and a bit of profiteering on the side. North testified before the committee in full military regalia, stated almost proudly that he had, in fact, lied to Congress, and presented himself as the ultimate patriot, who was not only following orders (shades of Nuremberg!) but also was acting as a dedicated American. (Shades of MacArthur – the "old soldier who did his duty as God gave him the light to see that duty!).
North was ultimately indicted on six charges, but convicted of only three minor charges, presumably because he was "just following orders." His conviction was later reversed on a technicality. Only John Poindexter went to jail on a charge of lying to Congress. Later, President George Bush pardoned all involved. The question of Reagan’s knowledge or involvement has not been resolved as of this writing.
Economic Woes: The 1980’s saw the largest amount of corporate mergers and acquisitions in American history. Many takeovers were hostile, with corporations hijacking others, even some larger than themselves. A number of "corporate raiders" would buy out public stockholders with borrowed funds, which were to be repaid by the company’s future earnings. They then underwrote huge amounts of "junk bonds" (bonds whose potential redemption were questionable at best), which paid high rates of interest. The high rate of return made the bonds very attractive. When the bonds could not be repaid, the company filed bankruptcy. The original stockholders made a handsome profit, the raider made big bucks, but those left with the bonds—and preferred stock in the companies, issued to raise revenue—were left holding the bag.
Among the poor misguided souls who lost money in one of these ventures was one Larry Edward Gates, Jr. –yours truly—who at the behest of a stockbroker purchased $6,000.00 of preferred stock in First Executive Corporation, which had issued numerous junk bonds to finance itself. Whilst dining one night, I overheard Dan Rather say that the biggest insurance failure in the country had happened that day—First Executive. My entire investment was lost—gone with the wind.
AT the same time, Savings and Loan Institutions, organized to help Americans buy homes, were allowed to invest in non-residential real estate, and later in stocks and bonds. The profit craze led them to invest in office buildings, junk bonds, and other questionable investments. Most notorious were Savings and Loans in Texas and California. California allowed its S and L’s to invest 100 percent of their assets in speculative ventures. Texas, where oil prices plummeted, saw S and L’s investing in gigantic office buildings, many of whom had no tenants, leading to the euphemism that they were "see-through" real estate." Many raiders bought out S and L’s, and used them as play-toys, buying airplanes, expensive homes, etc. in the corporate name. All of this, of course, was financed with borrowed money—the American way.
Increasing debt as a means of improving lifestyle and standard of living was the order of the day. Personal and corporate debt continued to increase, as well as the Federal deficit. The national debt tripled from 1980 to 1989. Needless to say, the bill was going to come due one day and it did on October 19, 1987, "Black Monday," when the bill collector came knocking. In a single day, the stock market fell 508 points, 22.6 percent of its total value. (The percentage loss on October 28,1929 before the Great Depression had been only 12.* percent). Almost $560 Billion in paper assets (more than the GNP of France) was wiped out in a single day. The great Bull Market had been gored.
There was much speculation about the cause of the crash, but most economists have stated that Americans had accrued too much debt, were consuming more than they were producing, importing the difference, and paying for the difference with borrowed money. Foreign investors had lost confidence in Reaganomics, and would no longer invest in American bonds, stocks, etc. As a result, the whole structure crashed.
Hardly anyone expected another Great Depression, there were too many safeguards; but Reagan did come under attack from business leaders and economists. He commented that "the underlying economy remains sound" (shades of Herbert Hoover!). He agreed to work with Congress on a deficit reduction plan, but the eventual plan was so modest that investors were not impressed. Said one Republican senator, "There is a total lack of courage among those of us in the Congress to do what we all know has to be done."
Social Problems: Although the 1980’s were portrayed as a time of roaring prosperity (which it was for the chosen few) there were the forgotten. Property owners had converted low income housing to high-end condominiums ( a process called "gentrification"), a shortage of low-income housing resulted, and many people, including many mentally ill people who were no longer kept institutionalized, were forced to live on the streets, often in doorways or cardboard boxes. Many kept warm by sleeping on heat grates on public streets. (One might draw an interesting contrast between the homeless and the Hoovervilles of the Great Depression).
It was at this time that Acquired Immune Deficiency Syndrome raised it’s ugly head. Those especially at risk were gay men and intravenous drug users. The disease was traced to Africa, and could only be transmitted sterilely, usually by sterile transmission of blood or body fluids. The Reagan administration showed little interest in the problem, because it was considered a "gay" disease. It was often called the "gay plague." Said Patrick Buchanan, Reagan’s director of communications, "homosexuals have declared war on nature, and now nature is exacting a terrible revenge." By 1988, however, it could no longer be ignored. Over 270,000 Americans died from the disease, and it soon spread among the heterosexual population. It became the leading cause of death among men aged 25-44. The disease has an exceptionally long incubation period (up to seven years) and led the Surgeon-General to implement a controversial public education program on "safe sex" through the use of condoms.
Despite the domestic problems of his administration, Ronald Reagan’s most notable accomplishment occurred in foreign affairs, notably with the signing of a treaty with the Soviet Union to eliminate Intermediate-range nuclear missiles. The treaty was signed in Washington, D.C. on December 9, 1987 amid much fanfare. It was only a small reduction in total nuclear missile count on both sides; however it did represent a move towards ending the arms race. A substantial factor in the treaty was the enlightened attitude of Soviet Premier Mikhail Gorbachev, who had worked to liberalize Soviet domestic life and improve relations with the U.S. A notable accomplishment was the withdrawal of Soviet forces from Afghanistan.
At the end of his term, Reagan had not lessened the federal bureaucracy and left the nation with a greater national debt than when he came into office. He also had not implemented many programs favored by the religious right, such as school prayer, and a ban on abortions. He had, however, maintained an amazing popularity as the "Great Communicator." He renewed the basic optimism of Americans; presided over the longest period of sustained peacetime prosperity in the nation’s history, and helped began the process, which would mark the end of Communism in Eastern Europe. By so doing, he framed the domestic and foreign agenda for conservatives, and placed the Democratic Party on the defensive.
The 1988 Election: Democrats had eight different contenders for the nomination, but finally settled on Governor Michael Dukakis of Massachusetts. Dukakis narrowly averted a challenge by Jesse Jackson, who would have been the first black nominee for President. Republicans nominated Reagan’s Vice President, George Bush. Although Dukakis had an early lead, and the Democrats pictured Bush as a preppie wimp
In an address at the Democratic National Convention, Gov. Anne Richards of Texas, Bush’s adopted home state, quipped: Poor George, he can’t help it; he was born with a silver foot in his mouth." Bush had the last laugh on this one. He not only won the election but his eldest son, George W. Bush, defeated Richards in the next Texas Gubernatorial election, and was himself elected 43rd President of the United States; the only father-son Presidents since John and John Quincy Adams.
Despite the Democrat’s attempts to smear him, George Herbert Walker Bush was a decent man. Although he had been born to a prominent New England family (His father had been a prominent U.S. Senator) he was an upright and decent man. He was a genuine hero in World War II, (unlike JFK who was a contrived hero) having been shot down over the Pacific. He was, in fact, the last President to have served in World War II. In his acceptance address at the convention, he stated that he wanted a "kinder, gentler nation," which won him tremendous support. More ominous, and perhaps foretelling his downfall was his promise that when Congress came to him for more taxes, he would say, "read my lips, no new taxes.
In the election, Bush attacked Dukakis as a closet liberal. Dukakis public opposition to the death penalty became an issue. The Bush Campaign got much mileage out of a paroled killer, Willie Horton, who killed again. Horton had been paroled in Dukakis’ home state under his watch. In an attempt to show himself as a supporter of a strong military, (unlike Bush, he had no military record), Dukakis had himself filmed wearing a military helmet and operating a Sherman Tank. The commercial made him look like a fool.
Bush defeated Dukakis 426-111 in the electoral college, capturing 46 per cent of typically Democratic votes. The most telling statistic of the election was the fact that voter turnout was the lowest since the Coolidge-Davis election of 1924. Most ominous: two-fifths of those who were eligible to vote and did not were under age 30. This indicated a declining interest in government on the part of younger Americans.
As President, Bush inherited a number of problems left behind by the Reagan Administration. He considered himself a caretaker President, not prone to bold initiatives, but did work to clear up leftover problems.
· To solve the Savings and Loan Crisis, Congress consolidated the FDIC, which covered commercial banks, and the Federal Savings and Loan Insurance Commission, (FSLIC) which had insured the S and L’s. The Resolution Trust Corporation (RTC) was created to sell off the assets of failed trusts.
· At the time Bush took office, the National debt stood at $2.6 trillion, three times its 1980 level. The only possible method of reducing this would necessarily include a tax increase, which Bush reluctantly accepted. This, of course, violated his campaign pledge, and he defended the move by stating that the Democratic Congress had forced him to accept the language. This backfired, as it made him appear as a President who was not a strong leader, reminiscent of the Presidents of the late 19th century.
· He appointed William J. Bennett as "drug czar" over the Office of National Drug Control policy, with Cabinet member status, but no department.
George Bush had substantially more foreign policy experience than many previous presidents, having served as American Ambassador to the United Nations and also to the People’s Republic of China. He also became President at a fortuitous time in history when Communism collapsed under its own weight. On November 9, 1989, the Berlin Wall was torn down, (in many places, people used their bare hands). Communist governments across Europe fell with amazing speed. The most dramatic change was the collapse of the former Soviet Union as one by one, fifteen individual republics that had comprised the USSR proclaimed their independence.
In late 1991, the dying days of the USSR, President Bush ordered the destruction of Intercontinental Ballistic Missiles in the U.S. and Russia, and took long-range bombers off 24-hour alert status. Gorbachev reciprocated in the waning days of his premiership. The Cold War was at last over.
Ronald Reagan as well as Pope John Paul II have been widely credited with the destruction of Communism and the end of the Cold War. It would appear more correct to cautiously assert that Communism as an economic and governmental system simply did not work, and ultimately collapsed. Once its collapse began in Poland and Rumania, a domino effect resulted. Only North Korea, Vietnam, China and Cuba remained under Communist control. The last three adopted amazingly capitalist systems, which allowed them to survive as a hybrid communist-capitalist system.
The Bush Wars: As President, George Bush engaged in two dramatically successful foreign military exercises:
· Panama: The country’s government had been taken over by strongman Manuel Noriega who had been indicted by an American Grand Jury of drug smuggling and racketeering. The Panamanian National Assembly, under the control of Noriega, ousted the President and declared "a state of war" with the United States. December 16, 1989, four American servicemen in Panama were stopped at a roadblock. A shootout followed during which one Marine was killed. Bush then ordered an invasion of Panama to capture Noriega and return him to the U.S. for trial on drug charges. He was indeed captured and convicted on several charges. During the invasion, 23 American soldiers were killed. The entire invasion lasted only a few days.
· Kuwait: Iraqi dictator Saddam Hussein was offended when his wealthy neighbor, Kuwait, produced oil in excess of OPEC quotas. This caused a drop in oil prices worldwide, which reduced Iraq’s revenues substantially. Iraq was already in serious debt. He demanded that Kuwait reduce oil production and cancel $30 million in Iraqi Debts. He made the same demand of Saudi Arabia.
When Kuwait refused, Hussein invaded and declared Kuwait an Iraqi province. The United Nations passed a resolution strongly condemning the Iraqi aggression. The U.S. and Russia issued a joint statement of condemnation, and the resulting resolution passed with Cuba and Yemen abstaining. Such unanimity would have been unheard of during the Cold War days. Troops from various nations, including the U.S. were dispatched to Saudi Arabia in Operation Desert Shield and am embargo was imposed on Iraq.
When Hussein refused to relent, Congress authorized the President to use force to oust Iraq from Kuwait. The resolution passed after heated debate, and passed the Senate by a vote of 52-47; the House by 250-183.
On January 16, 1991 Operation Desert Shield became Operation Desert Storm. Defense Secretary Richard Cheney signed the deployment order. Hussein stated that the result would be the "mother of all battles," but the entire campaign lasted only six weeks. American fatalities were 137; the lowest estimate of Iraqi fatalities, military and civilian, was 100,000. The most serious damage was to the environment. In an attempt to slow the Allied Advance, Hussein had tankers in the Persian Gulf dump oil into the ocean, and set fire to oil wells in Kuwait as he withdrew. He also fired Scud Missiles at Israel, hoping to provoke Israel to retaliate, and thus fragment the Arab alliance that opposed him. Israel did not strike back, and the entire exercise was a miserable failure for Saddam Hussein.
The Gulf War victory made George Bush amazingly popular, with an approval rating of 90%. Still the Middle East remained a volatile and problematic area which could not be repaired with a "quick-fix." After The British attempted to carve up the old Ottoman Empire at the end of World War I, a missionary told one of the British planners, "you are flying into the face of four millenniums of history." His words were prophetic.